As President Obama's administration winds its way to a January finale, the federal workforce can reflect on eight years of dizzying highs and daunting lows.

The 44th president came into office with aims to bolster the nation in the wake of near economic collapse and will leave with the federal bureaucracy at a crossroads of both modernization and identity.

Federal Times looks back at some of the significant events that shaped the Obama administration's relationship with the federal workforce and how they will inform the next president.

Sequestration
One defining moment in the history of the Obama administration will undoubtedly be the sequester.

Originally devised as a poison pill to force budget negotiations in Congress as part of the Budget Control Act of 2011, the austerity budget cuts — called the "Fiscal Cliff" — became very real on March 1, 2013, when they capped discretionary spending across the federal government.

The cuts were projected to total $85.4 billion in reduced budget authority in the first year with subsequent, fluctuating cuts over the next decade.

The rippling effect took hold largely in agency spending and projects, but the budget caps defined how the government would do business for the remainder of Obama's second term and possibly contributed to a declining federal workforce, though not through immediate layoffs. 

The legacy of the sequester gave rise to the perception that discretionary spending and agency budgets would be flat at best, requiring feds to provide more services with fewer resources, pushing the drive for more innovation to deliver on government solutions.


Pay freezes and $16 muffins

One erroneous tale of overpriced breakfast pastries may not have been the beginning of pay freezes for federal employees, but it became the posterchild of the climate they faced during the Obama years.

In a 2011 inspector general’s report detailing spending by the Justice Department on conference planning, the salient claim was the agency spent $4,200 on 250 muffins — or $16 per muffin — at an Executive Office for Immigration Review conference held at the Capital Hilton in Washington, D.C., in August 2009.

The $16 muffin became emblematic of excessive waste in the executive branch, except it wasn’t true.

Investigators later discovered additional documentation that showed the Justice Department didn’t commit exorbitant muffin-procurement, though its components had spent more than the Justice Management Division allowed in its guidelines.

But the muffin narrative gained steam and fueled the perception of wasteful government spending.

Happening concurrently with the muffin scandal was an ongoing freeze on federal pay that began in 2011.

Seeking to quell concerns over deficit spending and then-weak economic recovery, Obama announced a two-year pay freeze for federal workers meant to save $5 billion toward the budget. The freeze was extended for another year in March 2013 in a deal to avert the possibility of a government shutdown.

The freeze ended in 2014, when the White House proposed a 1 percent bump for employees under the General Schedule and matched it in 2015. The Obama administration secured locality pay increases in 2016 to move employees to 1.3 percent, followed by a proposed 1.6 percent in 2017.

But the gains did little to quell the disenchantment of federal employee unions, who demanded at least a 5 percent raise to make up for the three pay-freeze years.

While the freezes didn’t result in layoffs in the federal workforce, employment numbers fell from an administration-high of 4.4 million workers — including census workers — to 4.18 million four years later, a 6 percent drop.

The 2013 shutdown

The gridlock between the Obama White House and Congress came to a head in 2013, when the federal government shut down for 16 days after factions in the GOP sought to defund the Affordable Care Act during 2014 budget negotiations.

While health insurance exchanges launched on Oct. 1 and were not impacted by the shutdown, federal agency operations ground to a halt.

The contractor community was also affected when work on government projects stalled unless they were pre-funded.

Furloughed federal workers were awarded $2 billion in back pay, but only after the shutdown ended on Oct. 16. Estimates at the time said that the shutdown took $24 billion out of the economy.

The shutdown coincided with the rocky launch of HealthCare.gov, the digital face of the ACA, which saw frequent crashes and frustration for users attempting to sign up for health insurance through the website.

The Affordable Care Act

The signature legislative achievement of the Obama administration is also the principle ground on which many of legislative battles of the last eight years have been fought.

The health insurance law has been tied to 67 repeal efforts in the House, numerous Supreme Court decisions, one government shutdown, was a significant issue in two presidential elections and will likely impact in the 45th president’s administration.

While the law reduced the number of uninsured Americans from 16 percent of the population in 2010 to 8.9 in 2016, even the impact on some federal employees was rife with controversy.

While most feds remained under the Federal Employee Health Benefits program for their required insurance, Congress was not originally required to set up its own health care plan, creating the perception of an "exemption" for the legislative branch.

Congressional staff were required to buy insurance through the D.C. small business insurance exchange, but an Office of Personnel Management regulation requires Congress to pick up the employer contribution of the insurance cost, entitling them to employer subsides. Sen. David Vitter, R-La., said the OPM regulation stands in contradiction to federal code.

Vitter proposed an amendment to remove Congress from the employer contribution and increasing insurance costs as a result. The amendment passed the Senate in 2015, but it has yet to become law.

As a result of the regulation, Vitter has held up the nomination of acting OPM Director Beth Cobert to become permanent director.

The law’s implementation also lead to the creation of the U.S. Digital Service — established by the team brought in to fix HealthCare.gov — and, later, similar teams, like the General Services Administration’s digital consultancy 18F.

The talent gap

The future of the federal workforce may be determined more by one issue than any future president’s policy: age.

Nearly half of federal employees will be eligible to retire in the next five years, leaving the government with a potential dearth of talent and no deep bench to replace it.

Further complicating the issue are efforts to retain the next crop of talent for the workforce: Millennials. The Obama administration made recruiting and retaining Millennials a key part of its policy goals.

The White House launched both the Presidential Management Fellows and the Presidential Innovation Fellows to bring in recent college graduates and top technologists to help revolutionize the federal government.

The Obama administration focused on the use of metrics and data to take the engagement temperature of the current workforce and improve morale at federal agencies.

In creating the website UnlockTalent.gov, OPM sought to provide managers with the data needed to inform their approach to employee engagement, drawing on Federal Employee Viewpoint Survey numbers and encouraging active involvement with the workforce to ensure communication was a priority.

To recruit the next generation of federal workers, the administration launched the Recruitment, Engagement, Diversity and Inclusion (REDI) plan — later rebranded as Hiring Excellence.

The plan focuses on collaboration between HR departments and hiring managers to hire the right talent, but also includes metrics-based strategies like resume mining.

The OPM hack

In 2015, OPM discovered that its personnel and background investigation files had been accessed in a devastating cyber breach, exposing the information of 21.5 million employees.

The hack brought the topic of cyberwarfare to the forefront of the national conversation, prompting the Obama administration to not only develop cybersecurity policies, but also jumpstart information technology modernization initiatives.

As part of his Cybersecurity National Action Plan, Obama laid out strategies to both improve the country’s cybersecurity posture and develop a plan to update the government’s IT infrastructure.

While CNAP’s legacy will stretch into the next administration, the impact of the OPM hack has proven that previously deemed "soft-targets" — including federal employees’ personal information — would now be seen as critical elements of cybersecurity.

Executive orders

While the outsourcing of federal services expanded with the Clinton administration, efforts by the Obama White House to regulate contractors increased in the past eight years.

Obama crafted executive orders to expand overtime, paid sick leave, reporting requirements and other issues that added new regulations for federal contractors.

These — coupled with immigration policies and six weeks of family leave for federal employees — represented the administration’s strategy of governing through the executive order as a workaround to the intransigence of Congress.

Many of the executive orders were designed to roll back the level of outsourcing of services provided by the federal government, but also saw a number of court challenges, with some being overturned.

History will continue to interpret the impact of the Obama administration, but for federal employees, it marked a period filled with promise, tumult and revolutionary change.

Even as the next president takes office in January, the significance of Obama’s policies for the federal government will continue to play out long after his term ends.