Reviewing the Administration's Government Reorganization Proposal


Senate Committee on Homeland Security and Governmental Affairs

Chairman Johnson, Ranking Member McCaskill and members of the Committee, thank you for allowing NTEU to share its thoughts on the Administration’s plans to reorganize the federal government. As National President of NTEU, I represent over 150,000 federal employees in 32 agencies and I appreciate the opportunity to discuss this important issue.

As the committee is aware, on June 21st, the White House released a report detailing its plans to reorganize the executive branch entitled, “Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendations.” The report is in response to the President’s March 2017 Executive Order directing the Office of Management and Budget (OMB) to propose a comprehensive plan to reorganize federal agencies. The report highlights 32 proposals, which impact the following agencies with employees represented by NTEU: Health and Human Services (HHS), the Department of Energy (DOE), the Department of Agriculture (USDA), the Food and Drug Administration (FDA), and the Consumer Financial Protection Bureau (CFPB).

Reorganization Proposals

The Administration proposal would separate Food and Nutrition Service (FNS) voucher programs from the Department of Agriculture’s commodity-based programs. Specifically, the Administration proposes to move the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Assistance Program for Women, Infants, and Children (WIC), the Child and Adult Care Food Program (CACFP), and the Farmers’ Market Nutrition Programs into the Department of Health and Human Service’s Administration on Children and Families (HHS-ACF). USDA, whether with a smaller FNS or a different division, would continue to administer the commodity-based programs, including the National School Lunch and School Breakfast Programs, the Emergency Food Assistance Program, the Commodity Supplemental Food Program, and others. The Administration also proposes to rename HHS the Department of Health and Public Welfare. It is unclear from the Administration’s plan what the impact would be on the UDSA/HHS workforces, and whether employee reductions and program elimination are in fact the main goals.

A new Federal Food Safety Agency would combine the “food” duties of the Food and Drug Administration (FDA) with the USDA’s Food Safety and Inspection Service. This new Food Safety Agency would become part of USDA. Following the food reorganization, FDA (which would be renamed the “Federal Drug Administration”) would focus on drugs, devices, biologics, tobacco, dietary supplements, and cosmetics. The proposed consolidation would merge approximately 5,000 full-time equivalent (FTE) employees and $1.3 billion from FDA with about 9,200 FTEs and $1 billion in resources in USDA.

The proposal calls for a reorganization within the Department of Energy, with an emphasis on consolidating currently existing applied energy research programs offices and programs including the Advanced Research Projects Agency-Energy (ARPA-E). However, there are few concrete details. It is important to note that Congress has continued to recognize the value of, and the role of ARPA-E, the Office of Energy Efficiency and Renewable Energy (EERE), and the Office of Science in maintaining our nation’s current capabilities and competitiveness in scientific research.

The Administration also proposes to require the Department of the Treasury to develop recommendations for federal financial literacy and education activities that would be shared with OMB before October 1, 2018. The Federal Deposit Insurance Commission (FDIC) and the National Credit Union Administration (NCUA) both perform valuable distinct financial research and education, while the Consumer Financial Protection Bureau (CFPB) performs significant and important work on financial literacy. NTEU is concerned that overall policy differences with the mission of the CFPB could be a reason for its inclusion in this reorganization proposal.

In addition, the report proposes to break apart the Office of Personnel Management (OPM), moving core employee policy divisions to the White House. Additionally, retirement policy and the processing of annuities, as well as the administration of the Federal Employees Health Benefits Program (FEHBP), would move to a renamed GSA, the Government Services Agency, and federal employee background investigations would be transferred to the Department of Defense. While NTEU does not represent OPM employees, we are concerned about the breakup of retirement and health care policy and operations, and the loss of needed independence from all White Houses for federal employee and workforce management policy-making and decisions. The White House’s Office of Presidential Personnel has rightly been responsible for the selection and hiring of presidential appointees; however, OPM’s independent authority over the career civil service-and employing agency human resources’ actions and decisions-must be maintained for our government not to revert to the spoils system.

It is clear the majority of the Administration’s reorganization proposals will require congressional action, and that further details on the impact on the workforce and programs are needed before serious consideration can occur. NTEU has always supported efforts to improve agency performance and eliminate government waste and inefficiencies. However, previous reform and reorganization efforts failed to accomplish these goals. Instead, we’ve seen overly ambitious efforts to reform the civil service that eroded employee rights and employee morale or haphazard efforts to reduce the number of federal workers by cutting an arbitrary number of personnel, implementing a hiring freeze, or failing to replace employees who had retired resulting in gutted agencies and largely contributing to the looming retirement crisis facing the federal government today. In fact, one of the biggest lessons and failures of the Clinton-Gore Administration’s so-called “Reinventing Government” initiative was the hollowing out of positions, leaving agencies unable to conduct proper workforce planning, and without a skilled workforce in place---which devastated agency’s abilities to effectively perform their responsibilities, opening up federal agencies and workers to criticism. Under this Administration, it is unfortunate that there has already been a lost opportunity to improve government by not engaging with, and including, frontline employees in ways to improve agency functions and operations from the very beginning.

Agencies Consulting with Employee Representatives

Effective government management does not attempt reform efforts in a vacuum. Senior agency officials and political appointees do not have all of the relevant information or ideas on where to focus reform efforts. Rather, we believe that only by having senior officials working closely with front-line employees and their representatives will real positive reform take place.

Front-line federal employees and their union representatives are an essential source of ideas and information about the realities of delivering government services on-the-ground to the American people.

In 2009, President Obama issued Executive Order (EO) 13522, Creating LaborManagement Forums to Improve Delivery of Government Services. As E.O. 13522 makes clear, pre-decisional involvement (PDI) is an important component of the implementation of labor management forums, and therefore calls for agencies to involve employees and their union representatives in pre-decisional discussions concerning all workplace matters to the fullest extent practicable. Front-line employees and their union representatives have essential ideas and information about delivering quality government services to the public and the PDI process allows employees, through their labor representatives, to have meaningful input resulting in better quality decision-making, more support for decisions, timelier implementation, and better results for the American people.

According to the October 2014 Labor-Management Relations in the Executive Branch report, there are numerous instances where PDI and employee engagement efforts have been successful. These examples demonstrate how PDI has increased agency productivity as well as significantly increased employee satisfaction and morale. I see no reason why similar success cannot be had with this new government-wide reform effort.

Suggestions for Agency Reform Plans

The President’s March 13, 2017 EO tasked the Director of OMB, to formulate a proposal to reorganize Executive branch agencies, components, and functions. Notably, the EO also required agencies “to develop a long-term workforce reduction plan.” Additionally, the EO directed OMB to evaluate whether a program is federal in nature, whether programs and functions would be better out-sourced to the private-sector, whether agencies or programs are relevant or duplicative, whether internal, administrative operations are necessary, efficient, and duplicative, and whether the costs to continue current operations, or to close or merge agencies are justified, and in the public interest. The OMB Director was also directed to include any personnel costs associated with the impact on “affected agency staff.”

Following release of the March EO, in May of 2017, I met with then OMB Senior Advisor Linda Springer and discussed our desire to be part of the Administration’s reorganization planning. I also discussed how our chapter leaders were engaged in soliciting reform recommendations from our members. However, we did not hear back from OMB regarding our request to have OMB counsel agencies to reach out and involve front-line employees. We fear that such reform efforts without employee involvement will fail; adversely impacting the morale of the federal workforce as well as the services we provide to the American people, and ultimately wasting taxpayer dollars. Not deterred, I then sent a memo to our chapters, asking them to provide ideas I could share with agency heads. I am pleased to say that the response from our members was overwhelming. After collecting these ideas, I then wrote letters to agency heads summarizing our members’ suggestions and offering a meeting to discuss them in depth and answer any questions they might have so that they could fully appreciate how these recommendations would improve Agency and employee performance. Unfortunately, other than a meeting with Customs and Border Protection (CBP) and a perfunctory response in a few cases, we did not hear back from agencies, nor were we consulted about the proposals they submitted to OMB. While we held no illusions that all of our ideas would be accepted, it is important for agencies, the Administration, Congress and the public to understand that when it comes to meeting the public’s expectations for their government, front-line federal employees have much to offer.

In June, I sent letters to CBP, the Internal Revenue Service (IRS), Commodity Futures Trading Commission (CFTC), the Environmental Protection Agency (EPA), the Social Security Administration (SSA), and to HHS, among others, to share our members’ recommendations for the agency reform plans. Although the recommendations were specific to each agency, they fell into similar themes.

Increase telework and/or hoteling to reduce real estate costs and wasted travel time

At the IRS, we recommended eliminating the requirement that employees report to their assigned posts-of-duty (POD) at least two days each pay period. Many employees report that they do not have any work-related need for reporting physically to work, and that it is sufficient that the Agency have the ability to direct telework-eligible employees to report to their POD on special circumstances. In addition, it would also include expanding the “Home as POD” program to include any employee who volunteers to telework full-time and is willing to surrender their permanent office space/cubicle. These changes would increase employee morale and reduce Agency rent expenses.

Similarly, at the CFTC we recommended an increase in telework. With increased telework, CFTC could promote office sharing and reduce rented office space. In addition, one additional telework day per week could save up to an estimated $300,000 per year in transit subsidies. We also recommended increased flexibility in work schedules, which would increase productivity and staff retention as well as reduce the amount the Agency spends on transit subsidies.

Consolidate Management Layers

According to the OMB memorandum, as part of their reform plans, agencies are to consider consolidating higher-grade positions, downgrading management-level positions, and ensuring that they have the fewest amount of management layers needed to provide for appropriate risk management, oversight and accountability.

For example, at CBP we continue to see a top-heavy management organization. In terms of real numbers, since its creation, the number of new managers has increased at a much higher rate than the number of new frontline CBP hires. CBP’s own FY 15 end of year workforce profile (dated 10/3/15), shows that the supervisor to frontline employee ratio was 1 to 5.6 for the total CBP workforce, 1 to 5.7 for CBP Officers, and 1 to 6.6 for CBP Agriculture Specialists. Prior to 2003, supervisor to frontline ratio was closer to 1 supervisor to 12. It is also NTEU’s understanding that nearly 1,000 CBP Officers are serving either at CBP headquarters or nonOffice of Field Operations locations. This means that nearly 4,000 CBP Officers are serving in supervisory positions.

The tremendous increase in CBP managers and supervisors has come at the expense of border security preparedness and frontline positions. Also, these highly paid management positions are straining the CBP budget. CBP’s top heavy management structure contributes to the lack of adequate staffing at the ports, excessive overtime schedules and flagging morale among the rank and file and is something we have routinely raised with CBP leadership.

In another example, units such as the National Case Assistance Centers (NCAC) in the Office of Field Operations (OHO, formerly Office of Disability Adjudication and Review) at the SSA have four layers of management ranging from GS 13s to GS 15s. First line supervisors are GS 13s. They directly interact with and supervise bargaining unit employees. The group supervisor reports to a unit manager, who reports to an associate director, who then reports to the Director. The multiple layers of management in these offices are not only wasteful, but also make communication less effective and efficient.

In addition, the Baltimore NCAC was initially set up to manage approximately 300 employees. Due to transfers and attrition, the Baltimore NCAC employs approximately 181 employees. Despite the reduction in the frontline workforce, NCAC management remains at the same level. The Baltimore NCAC, as well as the St. Louis NCAC, have four levels of management- 1 Director, 1 Deputy Director, 2-3 Unit Managers, and a number of Group Supervisors. NTEU proposes eliminating the NCAC Unit Manager position. These are GS 14 positions and the resulting savings would total $698,495 to $778,338 annually. NTEU also proposes eliminating the two NCAC Deputy Director Positions, which would result in additional saving totaling $208,794 to $271,437 annually.

At OHO, NTEU proposes eliminating the Quality Review Officer (QRO) positions in the Regional Offices and shifting oversight of the quality review specialists to the Regional Attorney. The Regional Attorney position description outlines that one task to be performed is to “coordinate and evaluate the work of Attorney Advisors and other support staff.” Often Regional Attorneys review cases sent to them by hearing offices asking for guidance on issues identified in decisional drafts. They provide guidance and feedback to the hearing offices. These duties go hand in hand with the duties performed by the QRO, which results in duplicative processes. QROs are GS 14 positions. Eliminating the 6 QRO positions would result in savings ranging from $598,710 to $779,338, based on the Rest of the US pay scale.

Furthermore, at the IRS Office of Chief Counsel, we recommend eliminating the approximately 200 non-bargaining unit (NBU) GS-15 905 Senior Technician Reviewer and Special Counsel, and Special Trial Attorney positions in Chief Counsel and converting these positions to bargaining unit (BU) GS-15 Senior Counsel positions. These positions are not used or needed for management functions, but are needed for performing complex legal and review work. The Office has too many GS-15 attorneys designated as NBU who are not really managers. These employees generally do not perform or are not needed to perform managerial functions. They act as reviewers and lead attorneys and work on the more complex matters. Essentially, they perform functions that are substantively indistinguishable from Senior Counsel BU attorneys. All of these positions should be converted to a single Senior Counsel bargaining unit position both in the National Office and the Field offices.

In addition, NTEU recommends reducing the number of front line managers in the Field Offices, Associate Area Counsel (AAC), and Deputies/Assistants NBU GS-15 905 positions at the IRS and converting them to BU Senior Counsel positions. Field attorneys should continue to perform litigation functions and not only administrative managerial tasks. The Assistant Branch Chief or Assistant to the Branch Chief NBU GS-14 position could be eliminated.

Hire more support staff

For many agencies, we recommended the hiring of additional support staff so that staff members with more complex work could spend less time performing administrative functions. At OHO, for example, we believe that by simply focusing on hiring more Administrative Law Judges (ALJs) without the support staff of Attorney Advisors and Decision Writers is counterproductive to reducing the backlog.

Empower front-line decision making

We believe that by empowering employees, agencies breed individual and group confidence, enabling people to work both more efficiently and more effectively. When employees are confident within their work and with their employer, they are more willing to identify problems and suggest ways to improve the quality of their work.

Fill existing vacancies

While this recommendation may seem counter to the goals of the agency reorganization efforts by the Administration, we believe that efficiencies can be achieved by fully staffing agencies so that agencies can meet their missions. For example, we recommend OHO staff approximately 200 unfilled Senior Attorney Advisor (SAA) positions via promotion. Filling these SAA positions with current Attorney Advisors will allow a number of significant tasks to be performed which will improve case processing.

A Senior Attorney can conduct prehearing conferences with unrepresented claimants just about anywhere – using the phones or video hearings or other modalities. Feedback indicates that unrepresented claimants appreciate the opportunity to talk to someone about their appeals and what to expect. This provides excellent public service and the data we have seen indicates prehearing conferences reduce the numbers of no shows/continued hearings to obtain representatives, allowing ALJs to be more efficient. Moreover, rocket dockets for unrepresented claimants can be set with Senior Attorneys and after a prehearing conference type meeting, could go to an ALJ hearing when appropriate or possibly an on-the-record (OTR) recommendation. At the IRS, we recommend increasing the number of Department of the Treasury, Office of Tax Policy GS-15 docket attorneys to expedite work on published guidance regulations and legislation. The Office of Tax Policy attorneys in TLC (Tax Legislative Counsel), BTC (Benefits Tax Counsel) and ITC (International Tax Counsel) work with IRS Office of Chief Counsel attorneys in publishing tax guidance including regulations, revenue rulings, notices and announcements. Inadequate staffing in the Office of Tax Policy results in a bottleneck in issuing tax guidance to the public. Hiring attorneys for very short-term tenures (1 – 2-year stints) further exacerbates the problem.

Another option is to insource work currently being performed by contractors. Contracting companies charge overhead costs while contract employees lack the accountability, expertise, and institutional knowledge of federal employees. Moving these contractor responsibilities in-house would translate into improved productivity, better work product, and savings in overhead costs. The CFTC currently has just under 700 full-time equivalent employees and 400-600 contractors and could realize significant savings by insourcing work.

Concerns Over Outsourcing

Relatedly, one of the major concerns NTEU has with reorganization efforts is that such plans often are intended as a way to increase the outsourcing of government functions. In fact, the 2017 OMB Reorganization Memorandum states that agencies should consider leveraging outsourcing to the private sector when the total cost would be lower. It also states that agencies should consider government-wide contracts for common goods and services to save money and free-up acquisition staff to accelerate procurements for high-priority mission work.

NTEU has long maintained that federal employees, given the appropriate tools and resources, do the work of the federal government better and more efficiently than any private entity. When agencies become so reliant on federal contractors, the in-house capacity of agencies to perform many critical functions is eroded, jeopardizing their ability to accomplish their missions. It has also resulted in the outsourcing to contractors of functions that are inherently governmental or closely associated to inherently governmental functions.

Over the years, we have seen at agencies delivering vital services, contractors perform critical and sensitive work such as law enforcement, government facility security, prisoner detention, budget planning, acquisition, labor-management relations, hiring, and security clearances. According to the Government Accountability Office (GAO), the Department of Homeland Security has used contractors to prepare budgets, develop policy, support acquisition, develop and interpret regulations, reorganize and plan, and administer A-76 efforts.

One of the most egregious examples of the outsourcing of inherently governmental functions was the 2006 IRS private tax collection program. The program, under which private collection agencies were paid to collect taxes on a commission basis, was an unmitigated disaster. The program resulted in a net loss of almost $5 million to the federal government and lead to taxpayer abuse. Further, at one juncture in the program, the IRS had to assign 65 of its own employees to oversee the work of just 75 private collection agency employees. Given the obvious failures of this undertaking, and in the face of strong opposition by NTEU and a broad range of consumer and public interest groups, Congress voted to cut off funding for the program. Then, in March 2009, after conducting a month-long, comprehensive review of the program, including the cost-effectiveness of the initiative, the IRS announced it was ending the program.

Yet, Congress reinstated the program in late 2015 to offset the costs of the long-term highway funding bill, and NTEU remains highly concerned by the use of private collection agencies, which not only are costly to taxpayers, but run the risk of exposing the public to scam artists. According to a recent analysis of the program's first year by the National Taxpayer Advocate, these private tax collectors who are collecting tax debts on a commission basis, have been forcing many taxpayers into payment plans they simply cannot afford. The National Taxpayer Advocate’s analysis found that of the taxpayers put into payment plans by these private collectors, 43 percent had income lower than their allowable living expenses. The Taxpayer Advocate was so concerned about this finding that it issued a directive on April 23, 2018 that the IRS stop assigning to private collection agents any cases where the taxpayer had income below 250 percent of the federal poverty level. NTEU is pleased with bipartisan legislation that passed the House in April as a first-step to limiting the damage, but continues to believe that Congress must act to allow only fully-trained IRS professionals to handle debt collection and payment duties.

The aggressive targeting of federal jobs for public-private competition is not new. During the Administration of President George W. Bush, competitive sourcing was one of its top initiatives. As part of their efforts, we saw the rules of competition overhauled, quotas set for competed jobs, and grades given to agencies on their efforts in conducting competitions. The changes undoubtedly had the desired effect: between 2000 and 2008, spending on contracting doubled, since 2001, reaching over $500 billion in 2008. The explosion in contract spending also led to a drastic increase in the size of the contract workforce in addition to waste, fraud and abuse.

The Obama Administration, noting several issues with the A-76 process, instilled a moratorium on outsourcing while it looked to improve the competitive process. I urge this Committee to ensure that the current A-76 moratorium be continued. In addition to the concerns with the A-76 process and issues with cost overruns and proper contractor oversight, ethical issues are also of concern as contractor employees are working for the benefit of their employer company—not the benefit of the American people. Such initiatives also have a demoralizing impact on the existing federal workforce as they wonder if their job is the next to be outsourced.

By ensuring that the outsourcing process is fair and that federal employees are able to compete for work with contractors on an even playing field, federal agencies will be better able to provide high quality services and will save taxpayer dollars and achieve the goals for the OMB Memorandum. NTEU strongly supports both the House Appropriations Committee’s FY 2019 Financial Services and General Government (FSGG) measure, and the Senate Appropriations Committee’s FSGG FY 19 bill, that would maintain the A-76 moratorium.


There are many challenges facing the federal government, including a need to invest wisely in the federal workforce, and to provide agencies with stable, timely, and adequate funding resources. The Administration’s plans to re-shuffle, or to eliminate offices and programs, coupled with previous stated goals of reductions to the overall workforce--without real input from frontline federal employees, require serious congressional review and ultimately approval. We remain deeply concerned with directions to agencies requiring reductions to their workforces, based only on proposed budgets or plans. Overall, we fear the potential for a real opportunity for change will be wasted, along with taxpayer dollars, subjecting federal agencies and employees to further charges of being a failed bureaucracy, when it will be one of failed leadership. The proposed pay freeze for January 2019 during a time of a robust economy, FY 2019 budget proposals to slash earned retirement, health care, leave benefits and workers’ compensation, the recent May 25th EOs to decimate representation and collective bargaining rights of frontline employees, and the lack of action to invest in training and professional development for federal workers, all serve to demonstrate an Administration that fails to understand that agencies cannot hope to successfully implement federal programs and policies without providing for and valuing a skilled workforce. Thank you again for the opportunity to share NTEU's views.