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As Surplus Grows, Agencies Feel Pinch as Never Before

The Budget

From The Post
  • Some Republicans Seek End to Budget 'Gimmicks' (Sept. 17)

  • 'Congress Has a Rendezvous With Obscurity' (Sept. 16)

  • GOP Has No Luck on a Budget Breakthrough (Sept. 15)

    On Our Site
    Transcripts:
  • GOP Reps. Ehrlich, Watts, McIntosh, Portman and Thune on the Republican tax plan.

  • Democratic Reps. Frost and Cardin discussed the Democratic side.

  • White House spokesman Barry Toiv discussed the White House position.


  • By Stephen Barr
    Washington Post Staff Writer
    Tuesday, September 21, 1999; Page A17

    For federal agencies, this was supposed to be a season of plenty, thanks to growing budget surpluses and what many bureaucrats had hoped would be an easing of the spending restraints that governed their lives in recent years.

    Instead, a number of departments find themselves under the knife once again as congressional Republicans scramble to squeeze domestic spending within tight restrictions for fiscal 2000, which starts in two weeks.

    The Small Business Administration could face a cut of as much as $87 million from last year's budget. The Environmental Protection Agency could lose $196 million in funding for key drinking water and clean air programs. The State Department says it needs a $100 million boost just to maintain its current level of operations--but both the House and Senate have approved cuts instead. If strapped for cash, officials said, they might close overseas posts and furlough workers.

    Congressional cuts in the State Department are making the United States a "joke" around the world, Secretary of State Madeleine K. Albright said last week. "It is very simple," Albright told an employee group. "There is just no money to do the things we need to do."

    Such statements are, to be sure, a staple of the bargaining and posturing that typically accompany the end-of-the-fiscal-year scramble to complete the 13 spending bills that finance the day-to-day operations of the federal government. At the end of the budget process, lawmakers suggest, many agencies will have enough funds to carry out their basic functions.

    GOP leaders already have decided to fully fund the Internal Revenue Service next year after first proposing about $135 million in cuts. Agencies once facing drastic cutbacks--the House proposed NASA get $1 billion less than it did last year--have received more generous allowances from the Senate.

    But the federal government is clearly smaller than it has been in years. From January 1993 to January 1999, the Clinton administration shed 371,747 civil service jobs, reducing federal government employment to 1.8 million, part of an ongoing effort to do more with less.

    Many experts, moreover, fear some agencies have already been damaged because of the decade-long effort aimed at closing the once-giant federal deficit. While the experts caution that it is difficult to generalize about an enterprise as large and fragmented as the federal government, they suggest that budget restraints have eroded its foundations.

    To protect their programs and services, many agencies have cut back on employee training, curbed travel, postponed purchases and stopped hiring. Some agencies have tried to do more with less, while others do today's work but do not focus on tomorrow's.

    "Some [agencies] have been leaner than others and some could afford the leanness," said Rosslyn Kleeman, a specialist in civil service issues at George Washington University. "I think the problem is that the leanness is not always in the right place. . . . We will pay for it eventually. There are many agencies I talk to where the young people who have been in for just a few years are discouraged. That is sad, really sad."

    Brookings Institution researcher Paul Light said many agencies have learned to "starve themselves at the margins and continue to do program work."

    In any given year, the marginal cuts "don't add up to much . . . but over time it weakens the core capacity of these agencies."

    The Justice Department's Civil Rights Division, for example, has been stuck with about $64 million in budget money since 1995. The division asked for an additional $13 million for next year to tackle new, congressionally mandated responsibilities, such as investigating police misconduct, hate crimes and violence against health clinics that provide abortions.

    But the division's funding will probably remain flat for the next year, even though officials need extra money to prepare for a rush of congressional redistricting cases after the 2000 census.

    Or consider the Small Business Administration, which makes up about four-tenths of 1 percent of the federal budget.

    In 1990, SBA had 4,102 employees, provided $4.2 billion in loans through one of its largest lending programs and counseled about 800,000 small businesses. Congress gave the agency $928.3 million.

    In 1998, the latest year for which data are complete, the agency had a smaller staff--3,133 employees--provided $9 billion in loans, and counseled more than 1 million small businesses. Congress appropriated funding of $820 million.

    For fiscal 2000, SBA requested $994 million to finance its increased workload and to replenish the coffers in its disaster loan program. But the House would give SBA only $734.5 million and the Senate even less, $720.6 million, for the coming fiscal year.

    If asked to absorb deep cuts, Debra Silimeo, the SBA spokeswoman, said the agency would lay off a substantial number of workers and stop making loans. "We would just manage our current portfolio," she said.

    The prospect of spending cuts, at a time when analysts project growing budget surpluses, can be traced back to efforts in the 1980s to attack the federal deficit and subsequent agreements to set spending limits and live by the numbers.

    By 1997, when Congress and President Clinton were struggling to forge a deal on reaching a balanced budget by 2002, both sides embraced the notion of assuming deeper cuts in discretionary spending rather than carve into entitlement programs and risk a political firestorm. Just as important, Congress and Clinton lost budgetary maneuvering room this year by pledging not to use surplus money taken in by Social Security to finance government operations.

    However the two sides resolve the budget this year, the spending restraint seems to have pinched federal agencies. Data collected by the Senate Budget Committee suggest that spending on nondefense programs has remained virtually flat this decade. In 1990, nondefense spending amounted to 3.5 percent of the gross domestic product. In 1999, it was about 3.4 percent of the nation's economic output, the Senate figures show.

    Federal agencies have coped with the era of limits by relying more on automation and by reorganizing how work gets done--but at a price.

    "No question we put extraordinary demands on our attorneys and they do it because they believe in civil rights enforcement," said William Yeomans, chief of staff at the Justice Department's Civil Rights Division. Travel demands lead to staff burnout and departures, he said, "but many derive satisfaction from the work and stay a long time."

    Even when staffs work harder to offset no-growth budgets, inefficiency still results, one official said. "You fix the roof that is leaking but do not take the steps to preclude a leak in another building next year," said a State Department official, faced with a shortage of maintenance funds for 12,000 embassies, houses and warehouses abroad.


    © 1999 The Washington Post Company

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