Ronald Reagan's first official act as president--an immediate and retroactive federal hiring freeze--wasted tax dollars, disrupted government services and failed to make any substantial cuts in the size of the federal bureaucracy, a new report by the General Accounting Office says.
The freeze, announced within hours of Reagan's swearing-in ceremony, was cited by the new administration as an example of how it planned to take charge of the federal bureaucracy.
But Reagan's hiring freeze, like three implemented by President Carter, merely created "an illusion of control on federal employment and spending," the GAO said.
While the freezes "helped create an impression that they substantially reduced the size and cost of government," the GAO said, the hiring limits actually "were ineffective."
Rep. Geraldine A. Ferraro (D-N.Y.), who requested the GAO study, told the agency not to follow its usual practice of seeking comments from federal agencies mentioned in its report. A spokesman for the Office of Management and Budget said he had not seen the study and therefore would not comment on it.
The GAO said that from January to March of 1981, the federal work force declined by 2,358 permanent full-time positions, and another 4,613 jobs subject to personnel ceilings. (The agency said it could not determine the reduction for the full five months of the freeze, from November to March.) GAO discounted that reduction, however, saying the jobs would have been cut anyway by reductions in force later in the year.
GAO estimated that the Reagan freeze, combined with a freeze President Carter imposed in March, 1980, caused the government to lose $222 million in tax revenues that the Internal Revenue Service could have collected if it had been at full staff. GAO also said the government wasted an undetermined amount of money when it was not able to meet employment commitments made between Election Day and Inaugural Day. For example, the IRS reported that it had hired 460 employes, recruited at a cost of up to $3,500 each before Inauguration Day, who lost their jobs because of the freeze. However, after the freeze was lifted, about two-thirds of them were rehired, GAO said.
GAO said federal agencies were able to get around the first freeze Carter ordered in 1977 by hiring temporary and part-time workers. The four-month freeze caused 9,354 jobs to go unfilled, but those savings were negated, GAO said, by the 67,412 temporary and part-time employes hired during that period.
When Carter called his second hiring freeze, during 1978-1979, OMB issued a stern warning about part-time help. That freeze was the only one during the Carter administration that reduced the size of the federal work force: 22,968 jobs went unfilled and only 7,331 temporary employes were hired.
In March, 1980, Carter implemented another freeze that lasted until Reagan became president. The third freeze resulted in 8,874 positions going unfilled, but 18,626 part-time workers were hired. The GAO said many agencies simply ignored the OMB warning.
The Office of Personnel Management issued "inaccurate and incomplete" figures twice during the Carter era to make the freezes look like they were cutting the federal work force, GAO said. In 1980, OPM began issuing monthly reports about Carter's drive to cut 20,000 jobs. By the August monthly report, OPM said the freeze had cut 23,775 jobs. Had OPM continued its reports one more month, it would have shown a 7,901 increase in the federal work force, GAO said.