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Don't Just Cut: Re-Engineer

Federal employees are about to find out how much protection their union dues buy.  The answer will probably be: not very much.

The supercommittee is under pressure to deliver big savings without touching the programs voters love.  The easiest way out?

Cut the civil servants.  Cue the Washington Post:

…however you slice the numbers, federal agencies will take a hit. And when agencies take a hit, it’s the federal workforce that feels the pain more than anyone. When budgets are cut, measures to cap or cut the workforce, including layoffs, aren’t far behind…

Expect the committee also to consider other budget-reduction tools aimed specifically at federal employees: extending the two-year pay freeze, reducing retirement payments and charging employees more for health insurance are among proposals previously suggested.

I am all for saving money, but management by supercommittee is a bad way to do important business.  What we really need is a much smaller federal government.  Some functions should be devolved to the states, some should be bid out to contractors, some should be eliminated completely, and the government like all big bureaucratic institutions needs to be reshaped and re-engineered to take advantage of the productivity improvements that better management and better use of IT can bring.

When all that is done, I think we should pay federal employees reasonably well.  Good employees save money in a well managed organization, and a smaller, better focused federal government will need strong staff to get the job done. We now have a crazy system in which relatively poorly paid, unskilled and unmotivated federal workers hire consultants to figure out how to do their actual jobs.  It might be smarter and cheaper to attract better workers into the government, reward them for performance, cut the insane levels of bureaucratic red tape and tell the beltway bandits to take a hike.

What is likely to happen instead is a dismal nickel and dime approach that creates more paperwork and more bureaucratic positions (Offices of Austerity Compliance and Bureaus of Cheeseparing) and drives competent federal workers out of the system, leaving the drones in place.

Short of term limits that fill the halls of Congress with experienced businesspeople rather than professional blowhards, it is hard to see how this can change, but until it does, Americans are going to pay too much for a government that doesn’t work.

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  • WigWag

    Professor Mead nails it.

    The proper implementation of new technology could allow government to be dramatically streamlined and downsized; services would actually improve not deteriorate.

    The problem is that the systems analysts, software designers, computer hardware experts and other personnel needed to effectively implement these new technological fixes are all members of highly paid professions and no one worth their salt in any of these fields will work for government; the pay is simply too low.

    One of the reasons that the Federal Government and states from New York to Texas cannot efficiently implement these new technologies is that they are chock full of employees making $60,000-$80,000 per year. It is simply impossible to recruit technology professionals competent enough to implement systems that effect millions of people and cost tens of millions or even hundreds of millions of dollars at salaries that are so modest. Governments at all levels end up recruiting the least talented and least experienced technology workers because that’s all that government salaries will allow. Is it any wonder then, that government computer systems are always so antiquated that they can’t enable that type of productivity improvement that Professor Mead is blogging about?

    Some people think that outsourcing the development of new MIS systems to private companies provides the answer, but it doesn’t. Even managing an RFP (request for proposal) process for complicated technologies is way beyond the expertise of a person making a salary in the high 5 figures or even low 6 figure range. The problem is compounded by the reality that the federal and state governments are obligated to select vendors who submit the lowest bid and the lowest bidder is not necessarily the company with the product or expertise to produce the best solution in a rapidly changing technological environment.

    Where we end up is in a Catch 22 situation; the solution to a less expensive but more efficient government is obvious-we need to increase government productivity by instituting the same systems that have improved efficiency in the private sector. The problem is that government is not currently staffed in a manner to make the implementation of these new technologies possible. Current calls for downsizing government is only likely to make the situation worse.

    It’s all quite sad, really. Instead of downsizing government in the right way which would actually improve government services we are almost sure to end up with a smaller government that is even more inefficient than the one that we already have.

    Democrats and Republicans share the blame for this as do the idiotic policies that are pervasive in both red and blue states.

  • Roz

    About 3% of employees in the private sector get canned each year for failure to perform. In the federal bureaucracy that number is about .55%. That suggests telling each department to get rid of 2% of its workers won’t seriously damage function. In fact it might actually boost the morale of the remaining employees. Nothing is as frustrating as knowing a co-worker hasn’t been pulling his or her weight for years.

  • Jim.

    The insanity of most systems is this:

    If people have the right expertise, things go very smoothly and effectively.

    When things don’t go well, process is imposed — paperwork, double- and triple-checks, etc — to try to make it go well.

    This could be avoided if there were some effort to instill the right expertise in employees. But any training the employees are likely to get these days doesn’t have anything to do with expertise — it’s about how to comply with the paperwork that is made necessary because of the lack of expertise!

    Technology companies claim that they have a whole lot of jobs going begging because their HR department Google searches can’t come up with people who have the right keywords on their resume’s. Clue, guys — hire someone with related experience, then **devote some actual funding to training them in the expertise you want them to have, instead of wasting valuable training hours with teaching mind-numbing, productivity-sapping, and morale-killing paperwork!**

  • Fred

    The problem, though, Roz is that it won’t be the least productive that get the axe. By the time you factor in seniority, EEO laws and policies, nepotism, etc, you’ll end up with a smaller work force that looks pretty much like it does now, perhaps with even fewer competent people.

  • Corlyss

    Sometime I wonder about the air around stately Mead Manor. The laird talks about the government workforce as if he didn’t know about the vigor with which the civil rights community has prosecuted what he himself has noted as the minority havenness of government employment. In the early 70s civil services tests became victims of a systematic effort to remove winnowing standards from the government’s hiring kit. Standards were prejudicial, we are told, and therefore illegitimate. Thus the government ended up with lower grade employees who couldn’t spell or write a complete sentence or even answer a telephone without growling in a threatening manner, as if they were gatekeepers for the local drug dealer. Once in, if any training is to be done, everyone in the office from college-educated professionals to the intended functionally illiterate had to be sent to training because to single out those who needed training was discrimination and therefore illegitimate.

    Training itself, whether professional or merely window-dressing, is often a gimmick designed to promote favored think-tanks or former employees who’ve gone on to start businesses based on supplying “services” to their old agencies. That is, the “training” is completely bogus. I still recall the AIDS awareness training I where our entire office was compelled on the threat of disciplinary action to sit thru an hour of indoctrination, including a lively segment during which a nurse who had AIDS went thru the catalog of flavored KY jellies. I had clients that needed legal opinions but instead of working on them, I had to attend my mandatory “training.”

    Not too long ago, the Laird spoke movingly of how federal minority business contracting requirements led to mentoring of small business entrepreneurs. Transfer of technical capability which added value to the economy and all that. As a 35 yr federal contracting professional, I can assure you that about 90% of those minority businesses are front organizations wherein the work is done by a big business that’s been strong-armed by the federal government into serving the government’s ends of transferring money to incompetent minority firms interested only in the money, not the learning. The only thing “learned” by the minority business entrepreneur is the phone number of his congressman’s and senator’s constituent services office, how to fill out an SF 1034 (Public Voucher for Services Other Than Personal) i.e., a standardized bill for cost type contracts, where to bill, and their SBA desk officer’s phone number. The contracting agency is not really allowed to vet these firms because the contracting agency, with a mission to fulfil, is more likely to discover they are fronts. By law, vetting has to be done by SBA. Now, a minority firm owner would have to actually shoot her SBA desk officer to obtain an “unqualified” assessment. So this minority contracting “mentoring” idea is just a load of . . . um . . . propaganda disguising another costly Blue Model welfare program.

  • Jacksonian Libertarian

    UNDERPAID! With cadillac healthcare plans, pensions 4X the size of the private sector after only 20 years so you can double dip, generous Paid vactions, sick days, and holidays, job security where you never get fired no matter what your productivity, as well as base pay 20% higher than a similar private sector job. How is this UNDERPAID?

  • Jacksonian Libertarian

    And another thing; The reason the Government Monopoly [is] so bad, is that it lacks the feedback which competition gives to free enterprise, and results in continuous improvements in quality and service. The only solution is frequent cuts, and limiting the size of it.

  • Corlyss

    “The reason the Government Monopoly [is] so bad, is that it lacks the feedback which competition gives to free enterprise, and results in continuous improvements in quality and service.”

    That’s not exactly true. There’s plenty of feedback from private enterprise. What you need to understand is that with the exception of DoD and it’s little brother, NASA, government agencies are not really about a mission to fulfill. They are about 1) congressional control of a specific part of the budget and 2) hiring employees. E.g., with 50% of its workforce being data entry clerks and an office in almost every Congressional district in the US, IRS is trying to exceed the number of civilian personnel in DoD. That’s why electronic data processing in IRS will always be analogous to computerized voting: it’s too efficient and can’t be manipulated to obtain a specific result, therefore it can never be allowed to happen. Every IRS commissioner has to promise the National Treasury Employees’ Union and its congressional patrons that no jobs will be lost as a result of any automation effort. Of course people who bank on-line daily and who never get their receipt for gas purchases could file their taxes and vote more simply and efficiently and securely on-line. That’s why it will never happen.

  • Toni

    “Much smaller federal government”? Devolving and outsourcing? Dr. Mead, are you edging to the conservative side? Heavens be praised!

    Re the supercommittee, remember Bismarck’s 1867 observation: “Politics is the art of the possible.” Obama and other liberal Dems have full faith in Big Government. They had to be backed into the debt ceiling corner before they agreed to any cuts at all. And if the supercommittee fails to find an acceptable solution, automatic cuts had to be locked in. Democrats have a long, long history — back to Tip O’Neill, if not before — of promising future cuts that never materialize.

    Remember, too, that Obama created the Bowles-Simpson debt commission and promptly ignored its recommendations. We’ll see if he does come up with a substantive plan with enough specifics for the CBO to score it. Obama has a long history of overpromising and underdelivering — not least on specifics.

    Did you know that the last federal budget the Democrats proposed and Obama signed was in APRIL 2009? And they’ve never produced another?

    That’s right, the federal government has been operating with no official budget, only by Continuing Resolution, for fiscal years 2011 and 2012. After Republicans took control of the House, they courageously passed the Ryan budget. Senate Democrats and Obama haven’t passed anything.

    In April, Obama did make a speech about a budget framework. Asked by the House about what effect the “framework” would have, the CBO director deadpanned, “We don’t estimate speeches. We need much more specificity…” In May, Obama submitted a budget proposal so ludicrous that the Senate voted it down 97-0. Of course, Senate Dems also rejected the GOP House’s budget.

    Dr. Mead, the short version: Paul Ryan and other fiscally conservative Republicans really are the adults in the room. The supercommittee was required to get any sure budget cuts at all.

  • Toni

    A separate point: Don’t be too sure that federal workers are underpaid.

    Anecdotal evidence: My brother-in-law was a Tulsa IRS agent for decades and quit a few years ago. My 65-year-old sister, his wife, quit her clerical job maybe a decade ago. Their primary hobby is working on their home — which has been quite lavishly overhauled over the years, including landscaping.

    Besides collecting his government pension, my brother-in-law now “consults” for the corporations he used to oversee for the IRS, presumably helping them avoid taxes and resolve disputes with his former coworkers.

    My sister has had health problems for many years. Visiting me in Houston, she nearly died from an arterial nosebleed. (No, I also didn’t know an artery runs behind your nose; hers was evidently weakened by long-ago radiation therapy.) She was in ICU for several days. After she was discharged from the hospital, she and her husband had to stay in Houston for a further week in case she had to go back in.

    Since my home hasn’t room, they stayed in a hotel all that time. Between his income and health benefits, I don’t believe the calamity made a dent in their finances. I do believe they’re both Democrats, perhaps liberals.

    *Of course* we want those enforcing our tax laws to get decent pay and benefits! But perhaps not so lavish, given their post-IRS prospects. And also not so many of them, if Congress does enact comprehensive tax reform — as Obama’s debt commission recommended, all of whose recommendations he ignored.

    The same is doubtless true of many other skilled federal workers, who can leave their jobs for similar work in the private sector. Whether they’re already receiving their pensions or not.

  • WigWag

    Jacksonian Libertarian (September 9, 2011 at 5:30 pm) exclaims,

    “UNDERPAID! With Cadillac healthcare plans, pensions 4X the size of the private sector after only 20 years so you can double dip, generous Paid vacations, sick days, and holidays, job security where you never get fired no matter what your productivity, as well as base pay 20% higher than a similar private sector job. How is this UNDERPAID?”

    Under other circumstances his incredulity might make sense, but in the case of high tech workers the situation is different; they are a class onto themselves.

    There are significant shortages of talented workers across the realm of high tech; that’s one of the reasons that companies like Microsoft have lobbied so hard for an increase in the quota for immigrants with high tech skills to be allowed into the United States. Naturally, the result of this shortage is that the salaries for high tech workers, especially the best, tend to be quite high.

    How many software engineers for Google, Apple or Oracle do you suppose would be willing to leave their jobs to work for the states of South Dakota, Texas, Missouri, Connecticut or Maryland?

    How many MIS professionals would leave their jobs at Verizon, J.P. Morgan Chase, American Airlines, or MasterCard to work for cities like New York, Birmingham, Las Vegas or Denver?

    How many systems analysts at Motorola, Amazon, Wells Fargo or Wal-Mart would leave their jobs to go to work for the Immigration and Naturalization Service, the Social Security Administration or the IRS?

    The answer is that very few would; which is why when it comes to recruiting people with the high tech skills needed to implement the computer systems that could dramatically increase government productivity, we have failure after failure. It’s why Professor Mead’s dream about government doing more and better with less, as private industry now does, will probably never happen.

    Remember, government needs systems as large, robust and technologically advanced as private industry does. If anything, government agencies serve as many or more people than the largest companies do.

    With only the bottom of the barrel when it comes to high tech employees it is impossible for government to develop these systems in house and it is even difficult or impossible to effectively select vendors from private industry to do the job.

    None of this bodes well for a leaner, smaller and more efficient government.

  • Jordan

    I agree with WigWag 100%.

    It’s telling that in the middle of the Great Recession, Microsoft across the board raises salaries [1] and Google gives everyone a 10% raise [2].

    I don’t see how any software engineer would want to work for govt (and leave Silicon Valley or other nice areas that engineers seems to like to live) when experienced developers are making well over $100k and likely closer to $200k in the valley. To say nothing of the perks that come with the job, gov’t health insurance not withstanding.

    I agree with WRM that software-tizing gov’t would be great, but I just don’t see how it will happen.


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