Bush Plan Could Cut Federal Workers

By Ellen Nakashima Washington Post Staff Writer Sunday, August 26, 2001; Page A1

President Bush yesterday rolled out a government plan that could shrink the 1.8 million-strong federal civilian workforce through $25,000 employee buyouts, early retirement incentives and increased competition between the private sector and federal employees to deliver services.

The buyouts and retirement incentives are part of a series of legislative proposals that also include a form of merit pay for federal workers. And, perhaps most controversial, they would give Bush "fast track" authority to scrap laws that agencies deem a hindrance to their mission if Congress missed a deadline for repealing or reaffirming those laws.

"Americans demand top-quality service from the private sector," said Bush, who campaigned on a pledge to erase multiple layers of federal management, in his radio address yesterday. "They should get the same top-quality service from their government."

The personnel legislation will be introduced after Labor Day, senior administration officials said. The fast-track bill, to be introduced later this fall, is likely to be a hard sell as it can be seen as "stepping into congressional prerogative," said Sean O'Keefe, deputy director of the White House Office of Management and Budget. It would free agencies of laws "that get in the way of work," such as one that bars the Agriculture Department from shutting a state rural development office, he said.

The "Freedom to Manage" legislation is part of a broader 14-point government plan, elements of which were outlined in Bush's April budget. In it, he takes aim at government waste and inefficiency, noting that the government spends $45 billion a year on computers and technology – more than on highways – but "unlike private sector companies, this large investment has not cut the government's costs or improved people's lives in any way that we can measure."

Many of the initiatives are not new – like cutting waste in the student aid program – or already have been announced by the administration. They include eliminating barriers to delivery of government services by faith-based programs, expanding e-government and improving financial management. The Clinton administration also tried buyouts and early retirement incentives to downsize government.

But the legislation, which also includes hiring and retention bonuses, would take those tools government-wide. It is the latest, most concrete sign that the Bush administration is serious about reshaping the federal workforce. Reformers say the government is experiencing a "human capital" crisis: Half of its workers will be eligible to retire in the next few years, the average employee age is 46, and many agencies suffer from imbalances of available talent and needed skills.

"If the White House is going to come forth with a series of proposals that will help the government work better, than we'll work with them," said David Schlein, national vice president for the American Federation of Government Employees, which represents 650,000 government workers. "But the real problem is federal employees are comparably behind the private sector in pay. This package isn't going to do anything to address the real problem of pay in the federal sector."

The administration's modified merit pay proposal would establish "pay banding" to replace the government's 15-step General Schedule with a simpler system based on a handful of job classification "bands." Managers would have the flexibility to award raises based on performance rather than on longevity, something the IRS is trying. Employees would no longer advance step by step and grade by grade based on time served, but would move up and receive more pay based on what they have accomplished.

"Pay banding is a gimmick that doesn't address the real problem that exists in the federal pay system," Schlein said. Congress and the administration are at odds on the issue, with the administration sticking by its 3.6 percent proposed pay increase for civilian employees for next year and Congress supporting a 4.6 percent raise, the same increase proposed by the administration for the military.

Federal workers are also concerned about Bush's push to increase "competitive sourcing," or putting government jobs up for competition with the private sector. It is so important that Mitchell E. Daniels Jr., director of the Office of Management and Budget, has said it is his top management priority. "We'll introduce greater competition into government and make government more attentive to citizens," Bush said yesterday, echoing comments he made on the campaign trail.

O'Keefe said the public sector wins 60 percent of the competitions, a number disputed by federal unions. However, the administration has made clear it intends to greatly step up the practice. Already, agencies have been ordered to put up for competition at least 5 percent of their jobs deemed commercial. The mere process of competition, O'Keefe said, leads to efficiencies and savings.

But Schlein blasted the approach as "wasteful and ultimately noncompetitive." He said: "They refuse to allow federal employees to compete for jobs that have been turned over to the private sector. It is destroying the civil service and turning it into a spoils system for corporate contributors."

Experts say what is missing from the plan is an analysis of how the contract and civilian workforces together deliver services. "This may be rearranging deck chairs on the Titanic if we don't account for reform and control of the far-larger contract and grant workforce," said Dan Guttman, a government expert at Johns Hopkins University, referring to the "shadow government" of an estimated 8 million grant and contract workers.

Bush's management package is but one in a series of attempts to remake the government bureaucracy over the years, from Jimmy Carter's civil service reform to Ronald Reagan's Grace Commission to Al Gore's "Reinventing Government" project.

Bush said yesterday his effort is "focused, targeted," which O'Keefe said marks one difference with the Gore plan. Another difference, O'Keefe said, is that "there are some very active, extremely engaged champions of good government" on the Hill and at the General Accounting Office who are committed to seeing the changes become reality.

Bush has also asked Cabinet secretaries and agency heads to name a chief operating officer, accountable for that agency's performance. The officers will comprise the President's Management Council, an organization created under Clinton to address agency management issues. Bush's management agenda, without the legislative proposals, can be found at

www.omb.gov.

-- Anonymous, August 25, 2001