In the Crosshairs

Federal executives look ahead to a tough two years.

President Obama's announcement on Nov. 30 that federal civilian workers would go without raises for the next two years was the first of many moves that will test federal managers in the months ahead. This year and next could see pay cuts, furloughs, reductions in force, termination or downsizing of federal programs and agencies, and new challenges to such heretofore impregnable bastions as the Federal Reserve and the military services.

Deficit study commissions have proposed sweeping reforms. The chairmen of the presidentially appointed National Commission on Fiscal Responsibility and Reform recommended changes that would affect virtually every American by imposing higher taxes and cuts in the major entitlement programs. With their original thinking and comprehensive plan, chairmen Alan Simpson and Erskine Bowles gained 11 supporters among their 18-member commission in final voting on Dec. 3.

The year-end tax and unemployment insurance package that Obama and congressional Republicans negotiated focused on stimulating the economy at a cost of $1 trillion in the next two years. But this huge new addition to the national debt can serve only to ratchet up the GOP-led drive to cut back on federal spending programs as budget bills move through Congress this year.

Independent budget experts do not believe the entitlement reductions that are a key ingredient of the Simpson-Bowles package can command majorities in the new Congress. But proposals to curtail the federal workforce and agency budgets seem more likely to proceed, since they can be accomplished through must-pass appropriations bills.

The commission proposes a three-year freeze in federal pay and a 10 percent cut in the federal civilian workforce-a head count reduction of 200,000 to be accomplished gradually by hiring only two new workers for every three who leave. These ideas will be music to the ears of incoming Republicans in Congress, as will the commission's proposal for "serious belt-tightening" at federal agencies. Budgets will be frozen for most, and some will see substantial reductions. By 2015, discretionary spending would be 16 percent below what's projected in the 2011 federal budget.

Such House firebrands as Reps. Paul Ryan, R-Wis., and Darrell Issa, R-Calif., the incoming chairmen of the House Budget Committee and the Oversight and Reform Committee, are itching to shrink federal roles and responsibilities. While Ryan sets spending limits, Issa will be wielding subpoena powers during the extensive investigations he plans of federal activities. Issa has said his committee will "focus on places where money can be saved, where we can literally close agencies or subagencies or programs," and he has talked of enlisting agency inspectors general in his hunt for duplication and waste.

So how will this radically changed climate affect the working lives of the men and women whose careers are devoted to the federal government's missions?

When I put that question to panelists at a recent National Academy of Public Administration budget discussion, William G. Hoagland, for years a leading budget expert on congressional staffs and now an executive at CIGNA Corp., lamented the fact that "the first target is the federal employee," while Norman J. Ornstein, resident scholar at the American Enterprise Institute for Public Policy Research, offered the view that "it will be terrible to be a public administrator over the next two years." Civil servants, they observed, could suffer not only from direct attacks on bureaucratic norms but also from budget uncertainties for much of the year and the absence of political cover for decisions in many agencies that are short Senate-confirmed appointees.

Still, unloved though they might be, federal managers must take heart in the incontrovertible fact that their knowledge and skill are essential to identifying efficiencies and innovative practices in the new drive for a more modest government that begins this month.

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