Budget office predicts hiring reforms would cost $40 million

The Congressional Budget Office estimates federal hiring reforms would cost about $40 million over the next five years -- a bargain, according to supporters.

"It sounds like we could easily get a great return on that investment," said John Palugta, vice president for policy at the Partnership for Public Service, which has long advocated hiring reforms. "So I'm encouraged by that."

The 2009 Federal Hiring Process Improvement Act, S. 736, would streamline the hiring process and eliminate the knowledge, skills and assessment portion of the online job application process. In addition, it would require agencies to be more proactive about filling vacancies and to draw up workforce development plans.

In a recent report on the bill, CBO said agencies would spend about $40 million from 2010 to 2015 -- mostly to gather and analyze hiring statistics to identify their staffing needs and to submit reports to Congress.

"Most of the provisions of S. 736 would codify and expand the current recruiting and hiring practices of most federal agencies and would not significantly increase the costs of carrying out those activities," the report stated.

Although the report does not mention possible savings through hiring reforms, Palguta said he expected there would be long-term rewards for the short-term investment.

"When you're dealing with people issues, it's difficult to quantify," he said.

As the bill moves through Congress -- it was approved by the Senate Committee on Homeland Security and Governmental Affairs on July 29 -- the Office of Personnel Management plans to implement some of the provisions through administrative action.

In another report, CBO predicted legislation that added a Roth investment option to the Thrift Savings Plan will bring in about $2.5 billion in new tax revenues during the next 10 years. The provision was tucked in a larger bill, H.R. 1256, which gave the Food and Drug Administration the power to regulate the tobacco industry.

The Roth account allows participants to pay taxes on their TSP contributions initially, so they can withdraw their funds tax-free upon retirement. Because these participants would otherwise be making tax-free contributions, the implementation of a Roth account will give the government a short-term windfall of tax revenue. This initial influx of cash will help pay for FDA's mandates under the legislation, and will leave enough left over to decrease the deficit by about $1 billion between 2010 and 2019, according to CBO.

The report does not estimate the cost to the government when participants withdraw tax-free funds from their Roth accounts.

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