Our Big Fat Federal Government

If you want to be president of the United States, it is a good thing to tell the electorate that the federal government is too big and you will shrink it. Yet if you are president, you may find this impossibly hard to achieve.

The problem has two dimensions. First the great sprawling bureaucracy that is the U.S. Civil Service has very low productivity. Second, the population is always calling for more government services not fewer.

In the private sector, the size and cost of the federal government could be reduced by demanding higher productivity and dismissing poor performers. But in the federal bureaucracy, it is nearly impossible to do so. In the private sector, the possibility of losing your job is an ever-present factor. Federal employees have de facto lifetime employment. Unable to introduce the fear-of-firing as a disciplinary tool, reformers have instituted performance bonuses to shake up the federal bureaucracy. But they have not worked.

The problem inside the federal government is that those who calibrate performance are the immediate superiors of employees. These managers have found it nearly impossible to hand out poor grades. Poor grades do not cause the under-performers to leave government service, they simply affect morale. Most federal government managers, who have to live cheek by jowl with those who they supervise, know that pointing out incompetence only builds up department-wide resentment against themselves. Most working groups in the federal government are communal operations, and they are not subject to the normal managerial discipline that abounds in the private sector.

The tolerance of incompetence in the federal government is particularly hard on those who strive and care about what they are doing.

If you work in Washington, it is very difficult not to know something about the incompetence factor in the federal government. An acquaintance of mine who works in national security shakes her head despairingly about what she sees every day: sloth, indifference, incompetence and defeatism. An auditor acquaintance in the Department of Health and Human Services decided that he would make a lot more money in the private sector. He did not: He was fired twice. He went back into the federal government, drawing a salary of more $100,000 a year. Now, in retirement, he is consulting to the federal government for even more money.

Political appointments do not solve the problem; they complicate it. Only in the Department of State can high-performers really rise to the top positions. Many ambassadors are drawn from the ranks of career Foreign Service officers.

But there is no such ladder of opportunity in most of the federal government. Ergo, the only incentive to perform well is to improve your grade, but you cannot hope to manage an agency. In that way, it is a little like working for a family corporation.

It is hard from anecdotal evidence to gauge how overstaffed the federal government is and where the overstaffing exists. Air traffic controllers are overstressed and do a superb job. But there is evidence that the departments of Labor, Housing and Urban Development, and Education have a high percentage of the slothful.

Yet they are all politically protected. If they work in Washington, and live in Maryland or Virginia, federal government employees are catered to by their elected political overseers. The same thing happens if you get a concentration of federal employees elsewhere. If you want to see how it works, look at base closings. Federal jobs are good jobs–and jobs are the opium of the political class.

The larger question of reducing the federal government divides over what people say they want and what they demand. They say they want smaller government, but they demand more federal services year after year. Every national crisis spawns a new bureaucracy: a buildup of personnel that becomes permanent and immutable. Today the buildup is in national security, immigration management, border security, safety standards for Chinese imports, global warming, and arcane but real problems like the shortage of honeybees. As society grows more complicated, the demand for the government to do more increases exponentially.

So if you were president, what could you do to reduce the size of the federal government? You could close the departments of Education, Energy, and eradicate more than 1,000 programs. But most of the functions of the axed departments would be glommed onto other departments; and most of the programs would reappear elsewhere in the bureaucracy.

Every president tries to reduce the size of the federal government, and mostly they fail.