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Workforce cuts today may cost taxpayers more in long term

Jun. 9, 2013 - 01:44PM   |  
By ROSSLYN KLEEMAN   |   Comments

For federal employees and those following the government, it’s rare if the conversation these days doesn’t turn at some point to the budget and sequestration. There are plenty of ideas floating around to deal with the fiscal situation, but one that comes up time and again is finding budget savings from the workforce itself: through attrition, early-outs and buy-outs; altering employee compensation and benefit arrangements; and increasing employee retirement contributions. What’s missing in the conversation is a discussion of the long-term effects of these short-term, cost-saving Band-Aids.

Fortunately, a look back at the contraction of government in the 1990s and the National Performance Review (NPR) may be instructive. Undertaken by the Clinton administration, the NPR called for a reinvention of government and a reduction of personnel, among other things. However, when the Coalition for Effective Change (CEC) examined the effects of the NPR, it is unclear whether the NPR met intended goals or whether shrinking the workforce actually undermined agencies’ abilities to meet their missions effectively and ended up costing taxpayers more over the long term.

Similar to sequestration, agencies under the NPR were forced to meet workforce reduction goals in a relatively short amount of time, which led to a lapse in strategic personnel planning in favor of the quickest cuts, which, in turn, produced unintended consequences. The cuts reduced the number of supervisors but also front-line employees, creating a backlog in services — especially at customer-service agencies such as the Veterans Affairs Department and the Social Security Administration — that raised costs in the long run, as agencies eventually had to hire more people to address backlogs. This also led to a massive increase in the size of the contract workforce — at last count, costing $535 billion in fiscal 2010, compared to the civilian federal payroll of $167 billion. Without the correct staffing levels in place or a strategic plan for targeted personnel reductions, agencies may have ended up spending more in the long run to fix a broken system of service delivery.

Although there are differences between the fiscal circumstance and proposals of the 1990s, there are enough similarities to make the NPR a useful guide for informing current budget discussions. In a longer paper released in March, CEC took a more in-depth look at the NPR and subsequently encouraged lawmakers to examine the lessons from the NPR. Among the CEC’s suggestions:

■ Federal policy-makers should take into account that a budget reduction is not the same as a reduction of programs or federal responsibility. Cutting budgets alone may simply shift more work to employees who may already be at maximum capacity. And such cuts often target heavily the training and tools needed by those employees to fulfill their agency’s mission.

■ Congress and the administration should engage in a discussion of the fundamental role of government and what services it should provide. Once there is some level of agreement, then Congress should fund and staff agencies appropriately — this may mean increases in some areas and reductions in others, but it would be based on informed and strategic personnel and programmatic decisions made through in-depth analysis.

■ Congress and the administration should look at the entire composition of the workforce, including the number of political appointees and contractors to determine the proper ratios.

The bottom line is that an effective government requires an effective workforce. Indiscriminately cutting the size of the workforce, without regard to the job that we want or need the government to do, is a recipe for disaster. The Coalition for Effective Change urges government leaders to have an honest dialogue with the American public about the size and role of government and the workforce that it requires.

Rosslyn Kleeman is chair of the Coalition for Effective Change, which was formed in 1993 to bring together associations representing current and retired federal managers, executives, professionals, and related groups to work on reforming the government and good government initiatives.

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