Dropping the Second Shoe. It's been about two weeks since OMB Director Mick Mulvaney issued his memo on 'building government from scratch,' and while that ambitious goal may be a bit hyperbolic, we should all appreciate the sentiment … this has been a long time coming, and it's sorely needed. You see, the 'hulls of' government (bad pun intended) tend to accumulate lots of bureaucratic barnacles over time, the aggregate result of myriad, well-intentioned but largely disintegrated acts of Congress, the courts, and the executive branch, and every once in a while those barnacles need to be scraped off.

That's at least part of what this effort is all about, and as a general matter, OMB seems to be going about it in just the right way … rationally, objectively and relatively free from preconceived notions and anti-government rhetoric. Take the hiring 'frost' (it never really was a freeze, was it?). When RUMINT about it was rampant, lots of people expressed lots of concerns, but when it was imposed, it had enough exceptions and loop-holes — I believe by design rather than accident — that no agency or program should have been egregiously impacted … especially since it was explicitly temporary, a stage-setter for the memo and guidance that have just been issued.

Blending Politics and Administration. Experts will argue about its merits, but those debates notwithstanding, the details of this initiative represent an example of what can be accomplished when a new administration's appointees work collaboratively with their senior career civil servants.

Even though those new appointees had every opportunity to view those civil servants with some skepticism (a natural phenomenon, and something that happens in every transition), it's clear that OMB's new political leadership had the foresight to ask — and more importantly, to listen — to their career staff, and the fact that they did so early in the administration is especially gratifying.

It sometimes takes years for new appointees to accept and acknowledge the value of the career employees who serve and support them, but in this instance, the learning curve was rapid, and the results spot on.

What and How. That is not to say that some agencies won't be adversely affected, in some cases historically so, by the so-called 'skinny budget' that must be read alongside the OMB guidance. And that's precisely why many agencies have extended the hiring 'frost' beyond its official, governmentwide expiration date. They're wisely positioning themselves for the exigencies of that skinny budget, but they also know that as Draconian as it may be for some of them, that's just the first move in the annual (perpetual?) budget game.

Congress will have much to say about the final fiscal outcome for FY 2018, and no one is in a position to accurately predict that result, but it makes sense to hedge against the worst-case risk even while arguing for relief.

Thus, while the 'what' of the FY 2018 budget remains uncertain, the 'how' of it — as articulated by the OMB memo — is pretty clear and straightforward. And it's pretty good, at least as far as it goes. However, as OMB and the agencies consider their next steps, especially in meeting the memo's June and September submission milestones, here are some lessons learned from previous major government transformations over the last couple of decades:

  • Ban Salami-Slicing. First, and most importantly, if there are to be cuts — and with DOD, DHS and VA growing (at least in part), that’s not universally the case — OMB and agency leaders should steel themselves to base their budget and workforce reductions on more surgical, programmatic decisions, and not default to an across-the board, ‘salami slice’ approach.

    To be sure, salami-slicing is the easiest, least painful way to cut; after all, it ensures that every program and office suffers equally. But not every program and office was created equally, and its long-term effects (like ‘hollow’ programs and staffs that can no longer fully function) send exactly the wrong signal. And a workforce reduction plan that ignores that fact for the sake of ‘equality’ ultimately does a disservice to taxpayers.
  • Balance Mission and Mission Support. Second, agency heads should avoid the temptation to cut mission support jobs — in such unsung but no less vital functions as budget and finance, acquisition, HR, and IT — in favor of filling front-line positions.  This is enticing … after all, it’s the frontline mission that counts, right? However, if agencies disproportionately neglect those ‘back office’ functions, eventually front line operations will suffer.

    We saw that in the late 1990s, as the government slashed procurement staffs, only to find out that it was those very procurement professionals that held contractors accountable. And I personally saw this after 9/11, when the Intelligence Community was so busy hiring thousands of analysts and collectors that we (almost) forgot that it took those support functions to sustain that surge.

  • Give Credit Where It’s Due. Third, some agencies have already shrunk their staffing levels, in some cases quite dramatically. The Pentagon comes to mind … it has been subjected to several years’ worth of mandated headquarters staff reductions (and accompanying freezes), and while there may have been fat there at one time, I would argue that DoD should be given some credit for the relatively draconian personnel diet it’s been on.

    Others may be in the same boat, and OMB’s ‘Master Plan’ should credit their efforts to date.
  • Provide More Tools than Just Attrition. Fourth, give every agency all of the tools that they need to resize and reshape their workforces the right away. Others have documented the adverse effects of an attrition-only reduction plan — for example, the randomness of it, the exodus of those with the most marketable skills and talent, and the resulting ‘reverse retention’ of the lowest performing employees, etc. — and they are all legitimate.

    Agencies need every tool the White House and the Congress can give them to minimize these adverse impacts. In this case, that means extending DOD’s newly-enacted increase in Voluntary Separation Incentive Pay (a.k.a., buy-outs) to every agency, so they too can incentivize the ‘right’ people to leave … such as those with surplus or obsolete skills, or who may be in under-performing units or programs.

  • Don’t Fear the R Word. And dare I say it, that tool kit has to include RIF … even that ‘last resort’ option must remain on the table. Thus, while attrition (even managed attrition) is the least painful and disruptive way to reduce the workforce, that doesn’t mean that it’s necessarily the best way.
    When it comes to reshaping it to best serve taxpayers — and that should be the litmus test here — some programs, functions, offices, and staffs may need to be eliminated altogether. As harsh as it sounds, that means RIF, and as any good HR specialist knows, they can be targeted to mitigate ‘collateral damage’ to other employees and offices.

    Here again, DoD has just received statutory authority to make performance the most important criterion in RIF — as it should be — and other agencies should be allowed to do the same, if that last resort becomes necessary.
  • Use the PMC for an ‘Enterprise’ Approach. Finally, while the OMB memo and guidance are clearly telling individual agencies to ‘clean up your own houses,’ when it comes to eliminating overlap and redundancy, that doesn’t begin to get at all of those that are interagency in nature. And that’s where most of the real inefficiencies are.

    OMB seems to set itself up as the principal arbiter in that regard, but I believe that that’s problematic.

    Many of the redundancies — food safety inspections, job training programs, background investigations, the list goes on — require a more cross-cutting, corporate (or ‘enterprisewide’) approach, and the one body that should have it is barely mentioned. That’s the President’s Management Council. Comprised of agency chief operating officers (typically deputy secretaries and equivalents), it was created for just this kind of challenge, and I would strongly recommend that Director Mulvaney use it in that capacity, in order to ensure that these decisions are based on ‘whole of government’ needs, not those of individual agencies.

Above All, Leverage Career Leadership.

Some might argue that the PMC is not the appropriate forum for this, at least not now. That’s because only one cabinet-level PMC principal has been confirmed in this capacity; almost all of the rest of its members are ‘acting’ career executives. However, I don’t think that’s a liability. Rather, it is an opportunity for those career executives to show their stuff.

And these are no ordinary career executives … they are some of the federal government’s most capable, seasoned leaders like Bob Lightfoot from NASA, Lee Loftus from Justice, Dave Tillotson from DoD, and others. No one knows more about the need for dramatic reforms — or where all the bureaucratic bodies are buried — than this group, and along with DHS Deputy Secretary Elaine Duke (the one Senate-confirmed PMC principal as of this writing, and a former decorated career executive in her own right), they personify the best of the career executive corps. So if anyone can bring a ‘whole of government’ mindset to the table, it’s them.

OMB ought to give them the chance to do so. Personally, I’m quite confident that they are up to the challenge, and in so doing, they have the opportunity to demonstrate to others in the Trump administration what OMB Director Mulvaney clearly knows already … that when political and career leaders work effectively together, even the biggest, hairiest problems can be solved. And that’s exactly what’s facing us today.

Ron Sanders is a vice president and fellow with Booz Allen Hamilton, but as a former fed with almost 40 years of public service (and nine presidential transitions), he apologizes for still thinking like a civil servant.  

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