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There’s No ‘Easy Button’ for Cutting Government

As tempting as they are, across-the-board budget cuts and hiring freezes are the worst way to reduce the size and cost of the federal bureaucracy.

It’s budget season again, this time with the added drama of debt ceiling relief, and once again we are faced with congressional proposals to cut the size and cost of the federal government—even the Defense Department isn’t immune. This, we are told, can be accomplished just by pressing the “easy button”—across-the-board budget cuts, coupled with workforce reductions by attrition and hiring freezes. After all, that’s the least painful way of getting at all the waste and bloat that’s allegedly embedded in the federal bureaucracy.

But the truth is nothing could be worse than this approach.

Speaking as a former director of civilian personnel for DOD, and later one of the Office of Personnel Management and the U.S. intelligence community’s most senior civil servants, I would implore those responsible parties on Capitol Hill and in the White House to avoid this seductive but insidious temptation. Experience and history have shown that hitting the easy button is a supremely bad idea, one that may seem painless in the short term but has major adverse impacts over the long term, starting with national security.

Across-the-board, nonprogrammatic cuts—what we used to derisively call “salami slicing” in the Pentagon—may seem painless compared to the hard decisions involved in cutting specific programs, and then following them up with targeted reductions-in-force. That’s especially true when the voluntary attrition of employees in an institution as large as the federal government can approach 100,000 people a year. But all this does is hollow out the workforce and postpone the inevitable reckoning of severe skills imbalances.

Treating civil servants as a cost to cut—instead of a resource to be husbanded—is a huge mistake.

Deja Vù All Over Again

Here’s a history lesson. When the Cold War ended in the early 1990s, the country and Congress expected a “peace dividend” to take fiscal advantage of the situation. It was time to reap the benefits of over 40 years of budget-straining vigilance. And given that most of DOD’s budget was—and still is—devoted to military and civilian personnel costs and the infrastructure associated with them (such as installations), these became targets for cuts.

The military side was relatively easy, at least on the surface. All DOD had to do was stop its recruiting pipeline and let existing military enlistments and commissions, all term-limited, expire. As they did, the people who held them simply would leave the service. Contract cuts also were thought to be relatively easy. DOD could just cancel contracts “for the convenience of the government” and reduce its costs accordingly. (This, too, is a myth, but that’s another story.)

But the department’s large civil service workforce was a different matter. DOD civilians—there were over 1 million at the end of the Cold War—represented the department’s institutional memory and a source of continuity that contrasted with (and balanced out) the military’s constant change. In addition, as others have pointed out, DOD civilians provided the skilled labor for naval shipyards and aircraft and ammunition depots, as well as the knowledge workers to manage its huge, complex installations and infrastructure. They also did the inherently governmental things (like procurement) that only government employees can do. They were also hard to fire—maybe too hard, although that’s another story as well.

Still, they were a large and tempting target for Congress, especially with a voluntary attrition rate of around 5%. That translated to over 50,000 resignations per year in DOD alone, all without breaking a sweat. But from a capability standpoint, the attrition was random, unplanned and unmanaged. And not only were many of those who left not replaced, but the organizations they left behind became hollow—viable on paper, but in reality unable to perform their missions.

The same would later become true for the rest of the federal government, as Congress hit the easy button there, too. The problem is that over time, only the best, most highly skilled, most marketable employees voluntarily leave, whether from DOD or the federal government writ large. This is something every government leader, policymaker, human resources manager and union official knows—or should know.

Lessons Learned—And Apparently Forgotten

Most of those who championed the easy button approach in Congress and the Office of Management and Budget were long gone by the time its adverse impacts began to manifest themselves. This approach, replete with its own resplendent central bureaucracy around hiring freezes and exceptions, turned out to be the worst way to go about reducing the size of a workforce.

The best way is also the most difficult: make cuts based on hard decisions about specific programs. Follow them with RIFs that are tied and targeted to those programmatic reductions, as well as cuts in the support “tail” that comes with them: long-term research and development, procurement, information technology systems, program implementation, maintenance, infrastructure and more.

But at the risk of stating the obvious, these are exceedingly hard, and in the 1990s, Congress and the White House wanted a painless way to slash big government. So across-the-board cuts and attrition-focused workforce reductions became the order of the day. And despite the warnings of us career executives to the contrary, they went the painless route, and we saluted smartly.

I wish we hadn’t. The resulting skills imbalances were not just a temporary phenomenon. They persisted over the long term—just look at how unprepared we were from a human capital standpoint on Sept. 12, 2001—and we’re still paying the price today.

Program-based cuts are difficult and painful. But that’s no excuse for across-the-board salami slicing. Instead, we should take a hard, bipartisan, bicameral look at the federal budget, cut it if and where we must, but with specificity that is translated into corresponding employment levels. That’s neither easy nor painless, but it’s the right thing to do.

Ron Sanders is a fellow of the National Academy of Public Administration and a retired career member of the Senior Executive Service. He also served as director of civilian personnel at the Defense Department, chief human resources officer for the IRS, associate director of OPM, chief human capital officer for the U.S. intelligence community, and chairman of the Federal Salary Council.