Rightsizing the Federal Workforce

5/26/2011

House Committee on Oversight and Government Reform

Chairman Ross, Ranking Member Lynch and members of the Subcommittee, thank you for the opportunity to submit this statement on behalf of the 160,000 federal employees represented by NTEU. I appreciate the opportunity to discuss the important contributions our federal employees make to serve the public in towns and communities all across the nation, including every congressional district represented by members of this subcommittee. Eighty-five percent of federal employees work outside of Washington, D.C. Your constituents and the public at large deserve the excellent services their government has promised them, whether it be in the national security area, in those areas that affect their health and well being such as in social security and safe food, or through safeguarding their financial systems. The United States has the most successful corruption-free civil service in the world, and its employees must continue delivering the services the public relies on. To downsize for the sake of political expediency is unwise and will only hurt our nation in the long run.

Unfortunately, some in Congress, have proposed radically reducing the numbers of employees in the federal government to achieve deficit reduction, despite the fact that federal employees are not responsible for the nation’s deficit, and are the only group already singled out and working under a 2-year pay freeze. Should bills be enacted as proposed by Representatives Lummis (H.R. 657), Brady (H.R. 235), Jordan (H.R. 408), and Marino (H.R. 1779) – bills proposing downsizing and freezes through different formulas and complicated attrition schemes –the federal government, and most importantly the public will suffer the consequences. According to the Office of Personnel Management, in 2012, 45% of the workforce will be eligible to retire. By 2016, almost 61% will be eligible to retire. Should these talented public servants, who best know how to deliver services from their agencies, chose to retire, this is the worst time for freezing and eliminating the spots behind them. Most assuredly the public will pay the ultimate price in reduced services when there is no one on duty to do the work. NTEU opposes these bills and urges the subcommittee to reject them.

We also reject the notion that an across the board cut in the federal workforce of ten percent that was included in H. Con Res. 34, the Ryan House-passed budget resolution, is warranted.

NTEU believes there are two fallacies associated with the downsizing bills as well as the Ryan approaches: 1) the size and work load of government is misrepresented; and, 2) shifting work to expensive contractors is not counted.

Size of Government and Work Load

Proponents of hiring freezes and federal downsizing like to say that there are more government workers today. Yet, according to the OPM Director’s testimony of March 9, 2011 before this very subcommittee, “Despite the complex challenges we face, the Federal civilian workforce is virtually as small today as it has been in the modern era. In 1953, there was one Federal worker for every 78 residents. In 2009, it was one for every 147.” According to OPM’s historical tables the total executive branch in 1968 had 2,289,000 non-postal executive branch employees and in 2009, it had 2,094,000, almost 200,000 fewer. Interestingly, three cabinet departments – the Departments of Defense (DOD), Veterans Affairs (DVA) and Homeland Security (DHS) account for about 60% of the total executive branch civilian workforce as of December, 2010 (CRS RL34685). Proponents of the bills under consideration would have the general public believe that government size is inflated and is causing the deficit to soar. While one of the bills under consideration (H.R. 657) exempts the three big agencies, and NTEU certainly supports our security agencies and veterans, the idea that the remaining 40% of employees would be responsible for deficit reduction is misguided and unrealistic.

In addition, authors and proponents of the bills considered today make no mention of the “hidden workforce,” an estimated 10.5 million jobs that are accounted for by federal contracts and grants, according to Paul C. Light, an expert in government personnel. From 2004- 2005 alone, the expansion in contracting employees accounted for $50 billion. (FedDaily, October 18, 2006) Surely, the “hidden workforce” should be examined by the subcommittee prior to moving other bills to cut or freeze the federal civil service workforce.

In addition, the federal government has many more responsibilities today. Many federal agencies, including those represented by NTEU, are already hindered in efforts to meet rising workloads by a lack of sufficient staffing. For example, since the beginning of the economic downturn, social security claims and disability appeals have skyrocketed. In the 25-month period ending in October 2010 the number of claims pending a disability medical decision rose from 556,670 to 851,812, an increase of 53 percent. Wait times for disability claims were reduced from 532 days in August, 2008, to 377 days in October 2010. Cutting personnel will likely halt that progress.

In 1995 the IRS had a staff of 114,018 to administer the tax law and process 205 million returns. Today, they have just 94,346, yet must process approximately 236 million much more complicated tax returns. The IRS continues to bring in record amounts of enforcement revenue despite enforcement staffing that remains almost 20,000 below mid 1990 levels. In particular, the number of revenue officers and revenue agents – two groups critical to closing the tax gap and thereby reducing the federal budget deficit –shrunk by more than 15 percent. Revenue officers went from 8,139 to 6,142 and revenue agents fell from 16,078 to 14,264. Clearly, further cuts to the IRS workforce will increase, not decrease, the deficit since every dollar spent on the IRS returns four dollars to the Treasury.

FDA’s enormous responsibility to monitor our food supply has been seriously challenged, as the recent scares with tomatoes; lettuce, spinach and pet food have shown. In 1978, resources allowed 35,000 food inspections. Last year that declined to approximately 7,500. FDA’s Medical Device Center personnel, shrunk from over 1,450 in 2003, to just 1,350 last year.

The Transportation Security Administration, (TSA) and Customs and Border Protection (CBP) – two agencies with enormous homeland security responsibilities – already face a lack of adequate staffing. At TSA, staffing levels are so low that baggage personnel are routinely pulled off the line to help screen passengers at the checkpoints when lines get long. That leaves baggage dangerously understaffed. At CBP, the Government Accountability Office visited seven major points of entry to the country and found “(insufficient) staff, morale problems, fatigue, lack of backup support and safety issues when officers inspect travelers—increasing the potential that terrorists, inadmissible travelers and illicit goods could enter the country."

Shifting Work to Expensive Private Contractors

The second fallacy in the argument of those who wish to downsize, freeze, and reduce personnel, is that many agencies will simply contact out the work to private companies – raising, not lowering costs— and that is overlooked. The bills under consideration today propose to use savings to help reduce the deficit. Yet the fact is that any savings generated would simply be shifted to private contractors who generally cost more, are less accountable, and are unable to do the work of the federal government as well or as efficiently as federal workers.

Under the prior administration, the jobs of federal employees were targeted for public-private competition. Competitive sourcing was one of its top initiatives. As part of that Administration’s efforts, the rules of competition were overhauled, quotas set for competed jobs, and grades given to agencies on their efforts in conducting competitions. The changes undoubtedly had the desired effect: since 2001, spending on Government contracts has more than doubled, reaching over $500 billion in 2008. The explosion in contract spending has also led to a drastic increase in the size of the contract workforce which increased by more than 2. 4 million between 2002 and 2005, and now exceeds the size of the federal workforce. According to OMB, this excessive reliance on contractors has eroded the in-house capacity of agencies to perform many critical functions and has undermined their ability to accomplish their missions. In its final recommendations, the Deficit Review Commission did recognize that the contractor workforce was far larger than necessary and recommended cutting back the workforce by 250,000 at a savings of more than $18 billion.

Alternative to Hiring Freezes and Personnel Reductions

NTEU believes there are better ways to save. We recognize that in the current fiscal crisis, it is critical that the federal government look for ways to maximize its resources and to root out waste, fraud and abuse wherever they find it. One way in which NTEU believes that the federal government can best accomplish this is to reform the broken competitive sourcing process, and bring contracted work back in-house. By ensuring federal employees are able to compete for work with contractors on an even playing field, and identifying areas in which the government could perform this work more effectively and efficiently, the federal government will be better able to provide high quality services and will save taxpayer dollars. The Office of Management and Budget has already begun to reform federal contracting by requiring federal agencies to cut wasteful contract spending, reduce overreliance on contractors, and improve oversight and accountability. These efforts are expected to result in $40 billion in annual savings by the end of 2011 which could be used to ensure agencies have the necessary resources and staffing.

NTEU strongly opposes efforts to freeze or cut the federal workforce. We oppose the bills under consideration and believe that such action will not produce savings, but will shift and increase costs by expanding the use of expensive, unaccountable contractors.

Conclusion

NTEU cannot support the hiring freeze bills; bills to replace two or three retirees with only one or two workers; bills to bring the federal workforce down to the 2008 levels or lower; bills to target federal employment cuts to deficit reduction schemes; or similar bills, which will only have the effect of raising costs to the federal government through unbridled contracting out. These include H.R. 235, H.R. 657, H.R. 1779, and H.R. 408. NTEU also opposed adoption of the Ryan Budget Resolution which also freezes federal pay for five years, cuts the workforce by 10%, and increases employee contributions toward their pensions for up to a 6% pay cut. Instead, the subcommittee should look for savings in the contractor world, where jobs are bid low and finished at high, while frequently delivering inferior work. Billions of dollars in savings can be found there.

Federal employees are already working under a two year pay freeze, and doing their best to contribute their enormous talents to our country. They are delivering services to your constituents. Federal employees are working on processing tax refunds, protecting the food supply, safeguarding our borders, processing social security disability claims, and much, much more. Yet they are being called lazy, selfish and greedy, and now they are told they should handle their jobs with far fewer staff. I urge you to reject the downsizing bills before you today.

NTEU members understand that the country faces challenges and although they did not cause the fiscal crisis, they are willing to work to help solve it. Federal employees have good

ideas about how to do the work of the federal government more efficiently. They care deeply about successfully accomplishing the missions of their agencies. These bills would make that much more difficult.