Could Paul Ryan’s cuts to the federal workforce cost taxpayers money?
Paul Ryan’s budget takes an ax to the federal workforce, reducing the head count by 10 percent by 2015, freezing pay and requiring workers to pay more into their pension plans.
Ryan estimates that such changes will save $368 billion over the next decade and says the plan “reduces the bureaucracy’s reach by applying private-sector realities to the federal government.” But outside experts and advocates for the federal workforce say that simply focusing on reducing the head count and expenditure numbers fails to address the fundamental inefficiencies within the federal government and could hamper performance, ultimately costing taxpayers money in the process.
“It’s really easy to take costs out of the federal workforce. It’s hard to do that without diminishing performance,” says Max Stier, executive director of the Partnership for Public Service, an advocacy group for federal government recruitment. Stier agrees that the federal workforce needs to be massively overhauled and brought in line with the private sector, pointing out that its fundamental structure — based on a rigid pay scale — has remained unchanged for more than 60 years. But simply reducing federal workers’ pay and head count won’t enact the “private-sector realities” that Ryan praises, says Stier. Instead of blanket reductions, he adds, the government should be able to set pay scales according to the market realities, “so we don’t pay more or less than what we need” and measure performance more effectively.
Without such broader reforms, enacting Ryan’s cuts alone could result in a “dramatic” reduction in government effectiveness and outcomes, Stier concludes. “There is no question the federal government has to be much more sensitive to cost, but this is pennywise and pound-foolish.” Together with Booz Allen Hamilton, Stier’s group recently issued a report that suggested alternative ways for the federal government to save money through enacting delivery system reform and allowing individual agencies more flexibility in implementing workforce cuts.
Dan Helfrich, head of Federal Human Capital for consulting giant Deloitte, agrees that Ryan’s blanket federal workforce cuts don’t get “to the heart of the problem.” Like Stier, he believes that the government should focus on recruiting talent and better measuring performance if it truly wants to get more bang for its buck — and save money in the process. Helfrich points to individual government agencies like the FBI that have proactively used voluntary early retirement and voluntary separation — approaches that have not only saved money, but also resulted in upgraded skills and improved performance. “Saving money is a byproduct of an intelligent talent strategy,” he concludes.
Democrats have generally opposed such broad-scale cuts to the federal workforce, and Obama has pushed for a federal pay increase in 2013 after two years of a pay freeze. But Helfrich and Stier point out that neither party has proposed a comprehensive overhaul that would truly modernize the federal workforce and make it more cost-effective in the long term. Instead, the federal workforce has turned into a football at the center of a protracted political debate that has resulted in incremental cuts along the way. “It penalizes the efficient agencies, cutting muscle and bone,” concludes Stier. “Any organization begins with quality of people, and this conversation is only taking place on one side — the cost side, not performance.”