In an address at Georgetown University in Washington, Kerry said the growing deficit could become a "fiscal cancer," and said he would attack the problem partly by "reducing or eliminating government programs that don't work."
"For example, we'll freeze the federal travel budget, reduce oil royalty exemptions for drilling on federal lands, and cut 100,000 contractors employed by the federal government," Kerry said. "We'll streamline government agencies and commissions and reduce out-of-control administrative costs by 5 percent. And when we're done, the federal government will be smaller but smarter, more effective and less expensive."
Kathy Roeder, a spokesperson with the Kerry campaign, said these proposals were inspired in part by research by Paul Weinstein, a senior fellow with the Progressive Policy Institute, a left-leaning Washington think-tank. In a February paper, Weinstein estimated that eliminating 150,000 federal consultants could save $67 billion over ten years.
Federal contractor groups criticized the idea of cutting contractors, saying it could make it more difficult for agencies to function. "I don't think the point ought to be to cut any number of contractors or federal employees. Staffing levels are determined by the size of the government's mission," said Stan Soloway, president of the Professional Services Council, an Arlington, Va.-based contractor association.
Chris Jahn, president of the Contract Services Association, questioned whether Kerry intended to hire more federal workers to replace contractors. "If Senator Kerry's real plan is to hire 100,000 new government employees, then he should say so," he said.
Roeder disputed this argument, saying some of the work performed by contractors could probably be eliminated. "Cutting the size of the workforce doesn't need to mean you shift employees from the private sector to government sector," she said. She added that Kerry's speech was focused on deficit reduction, and was not a "detailed reform agenda on the nuts and bolts of how government functions."
Angela Styles, an attorney who ran President Bush's competitive sourcing initiative from 2001 until last September, said that cutting contractor positions could hurt the military, which is largely reliant on contractors, and lead to job losses. "There also might be a serious economic hit by firing 100,000 contractors," she said.
"Kerry can create jobs by getting our economy back on track. Cutting the deficit is a key part of that," replied Roeder. She added that Kerry does not intend to cut contractors that support the military.
John Gage, president of the American Federation of Government Employees, praised Kerry's plan as a shift from Bush administration policies. "A pledge to reverse the Bush administration's ruinous policy of wholesale privatization will be strongly supported by all taxpayers," he said.
Agencies spent $245 billion on contracts worth $25,000 or more for goods and services in fiscal 2002, up more than 12 percent from 2001. In 2002, federal contracts generated 5.17 million jobs nationwide, according to calculations by Paul C. Light, a senior fellow at the Brookings Institution.
Agencies spent more than $10 billion on travel in fiscal 2002, the most recent year for which figures are available. That was an increase of nearly 12 percent over fiscal 2001 and $1 billion more than agencies had planned to spend on travel. There have been other such increases in years past, though not in the double-digits. And in fiscal 2001, after years of promises, agencies actually trimmed their travel budgets -- albeit by only 0.4 percent.
Weinstein proposed freezing the federal travel budget at $8 billion per year in his February paper, a move that would save $10 billion over ten years. He also advocated a 10 percent cut in the federal workforce at every agency except the Defense and Homeland Security departments, an idea that was not endorsed by Kerry Wednesday.
In his speech, Kerry pledged to cut the deficit in half within four years. He said doing so would likely force him to postpone several of his own initiatives. He singled out his proposals to expand national service programs and to make preschool education available to all American children as projects that would likely have to be slowed down or phased in over long periods.
The presidential hopeful also pledged to enforce budget discipline by implementing spending caps and reinstituting "pay-as-you-go" budget rules, which require cuts in spending or increases in revenue to offset proposed spending increases.