Government and Poliltics

Dec 1996- March 1997

Failures of Clinton Administration Reinventing Government Program

One of the benefits of President Clinton's "reinventing government" plan was curbing abuse, fraud and mismanagement. Recent reports, however, indicate this has not taken place. Indeed, documents from the General Accounting Office indicate that executive branch agencies finished only a quarter of the National Performance Review's "action items" by the start of this year.

  • The Department of Agriculture was hit for thousands of dollars in telephone bills, including one contractor's bill of $50,000 to international charges, and others to phone sex lines, in part, according to the report, because "USDA does not know how widespread telephone abuse and fraud is"" since it doesn't review phone bills or phone credit card bills.
  • A May GAO report found that the Central Artery Tunnel project in Boston will cost more than $1 billion a mile (90 percent from federal coffers); the price tag for the 10-mile tunnel is nearing the total cost of the 30-plus-mile tunnel under the English Channel linking Britain and France.
  • The Environmental Protection Agency spent far more promoting a Local Government Reimbursement program than it handed out to local governments through the program: $300,000 to manage the program versus $95,000 handed out to local governments.
  • While NPR is supposed to focus on service, service at the Internal Revenue Service has dropped sharply in recent years: only one of 12 people who called the IRS for tax help actually got through.

Another problem came from abuse of the NPR recommendation to shrink the federal work force. The goal was cutting the number of managers in half. But the ratio of managers to workers has stayed about the same, and most of those who took the buyouts took regular or early retirement -- getting both the buyout and a pension. Others stayed on longer than they would have just to get the buyout. To complicate matters, the buyouts were mismanaged, the report said, leaving many agencies without enough qualified workers to do the job.

Source, John Merline, "Waste, Fraud and Abuse -- Again," Investor's Business Daily, December 2, 1996.

Government Payroll Increases

Government has been the third-fastest area of employment gain in the U.S. this decade -- just behind the service and construction sectors. Government jobs have grown faster than employment in manufacturing, mining, finance, insurance and real estate combined, according to the Bureau of Labor Statistics.

This is a reversal of the trend under President Reagan.

  • When Reagan left office in 1989, there were 1.6 million more Americans working in manufacturing than there were working for the government.
  • Today, there are 1.3 million more workers in government than in manufacturing.
  • There are 400,000 more federal workers today than there were when John F. Kennedy was president.
  • Moreover, unionized government employees -- particularly at the state and local levels -- typically receive salaries and benefits that exceed comparably skilled private-sector workers' compensation by 30 percent or more.

Employment has fallen at the Department of Defense.

  • Civilian employment there has fallen by 160,000 or 18 percent since President Clinton came to office.
  • Department of Defense employment has fallen from 32 percent of total federal employment in 1989 to 27 percent today.
  • Nine out of every ten federal jobs eliminated over the past four years were military.

According to the Wall Street Journal, many civilian employees who have been let go from their federal jobs were either temporaries or part-timers -- often replaced later by contract labor. Today, more than 22 million people work for companies that do business predominantly with the federal government.

Source: Stephen Moore (Cato Institute) and James Carter, "Government Hiring Binge," Washington Times, December 12, 1996.

Capping Government Spending

Advocates of small government want spending at all levels capped each year at the growth rate of real gross domestic product -- or real gross state product. They content that this would reward government for real higher growth rates -- rather than for inflation.

  • In the period 1980 to 1989, GDP grew an average of 2.8 percent annually -- while federal spending was increasing 8.6 percent and spending at all levels of government was up 8.7 percent.
  • During the first half of the 1990s GDP growth has been hobbling along at 1.9 percent; but federal spending has increased 4.7 percent per year, and spending at all levels was up 5.9 percent..
  • Over the past five years, linking spending to GDP growth would have reduced the 11 percent average annual growth in Medicare spending.
  • If federal spending growth had been held to three percent a year from 1982 to 1988, the Reagan tax cuts -- by accelerating employment, income and tax revenues -- would have furnished a $92 billion budget surplus heading into the Bush years.

Source: David L. Littman, (Comercia Bank in Detroit), "To Measure Government Downsizing," Investor's Business Daily, December 23, 1996.

Upwardly Mobile Blacks in the Army

Fifteen years ago, when the United States' volunteer army was being formed, there were fears among some that the infantry would be composed predominately of the poor and black. But while 30 percent of the U.S. Army is now black -- compared to 11 percent of the population -- blacks primarily occupy office jobs and other support services.

  • The administrative branch now has more black soldiers than white.

  • But only 9 percent of the new infantry -- which generally suffers the most casualties in wartime -- is black.

  • In 1995, 79 percent of the new troopers were white -- compared with 74.3 percent of civilians.

Only 5.3 percent of the army is Hispanic, compared to 10.6 percent of the civilian population.

There are changes in educational levels also.

  • While barely half of army recruits had high school diplomas or their equivalent in 1980, about 99 percent do today.

  • About 40 percent of all officers and 90 percent of all colonels and generals hold postgraduate degrees.

Surprisingly, nearly half of those who try to join today's army are rejected.

Source: Thomas E. Ricks, "U.S. Infantry Surprise: It's Now Mostly White; Blacks Hold Office Jobs," Wall Street Journal, January 6, 1997.

Democratic Think Tank Pushes Market Policies

The Progressive Policy Institute, the think tank of the Democratic Leadership Council, which was formerly headed by Bill Clinton, has published a sequel to its 1992 book Mandate for Change entitled Building the Bridge: 10 Big Ideas to Transform America.. The book is introduced by Vice President Al Gore and written by various PPI authors.

According to the PPI, "It introduces readers to the New Progressive approach to governing which transcends the exhausted left-right debate."

Among the ideas on PPI's public policy agenda:

  • Reform Social Security by placing surpluses into mandatory private savings accounts that workers themselves would manage.
  • Convert the Medicare and Medicaid programs into market-priced subsidies to purchase health care and extend health coverage to the uninsured.
  • Allow choice and competition among public schools with diverse providers, so long as they adhere to a common core of high standards.
  • Revitalize inner cities through economic development rather than income transfer social services.

The PPI authors also want to replace "command and control" environmental regulations with clear national goals, performance-based compliance agreements and tax incentives for pollution reduction. They want to decentralize decision-making to communities.

And they have a pro-family agenda that includes a family-friendly tax code, "children-first" divorce procedures, second-chance homes for teen mothers, a million mentors for children, and a radically revamped foster care system.

Source: "Building the Bridge -- And Raising the Debate," January 15, 1997, Democratic Leadership Council and the Progressive Policy Institute, 518 C Street, NE, Washington, DC 20002, (202) 546-0007.

Government Performance Pay

Pay increases reflecting employees' performance levels -- fast being adopted by private companies -- are coming to the public sector.

  • Workers at four U. S. Air Force laboratories will, next month, begin getting salaries based on actual results.

  • The plan is part of a five-year test involving 5,000 scientists.

  • About one-third of major U. S. firms now have some sort of alternative compensation system -- up from zero in 1991, according to the consulting firm of Towers Perrin.

  • Forms of the so-called "new pay" include team-based pay, skill-based pay and gain -- or profit -- sharing.

The U. S. Central Intelligence Agency is researching a pay-for-performance strategy and the Department of Veterans Affairs will launch a pilot program at its New York office later this year. The U. S. Postal Service began its Economic Value Added program last year, tying bonuses to performance. At year end, some 63,000 USPS employees got bonus checks ranging from $1,600 to $12,500.

Source: Ellen Neuborne, "Pay-For-Performance Plans Enter Government Service," USA Today, February 10, 1997.

Government Employees Lobbying

Perhaps it should come as no surprise, but the vast majority of all witnesses called to testify before Congress these days are direct recipients of funding from federal taxpayers. Heritage Foundation researchers reviewed the backgrounds of 3,400 witnesses who testified before 15 House and Senate Committees in 1995 and here's what they found.

  • More than a third of all witnesses were federal employees.

  • Nearly one-quarter were from organizations that depend directly on federal grants.

  • Among the remaining 43 percent, at least half testified in favor of more government spending or increased governmental power.

  • Overall, witnesses favoring more expensive government outnumbered their opponents by a ratio of four-to-one.

Ken Weinstein and August Stofferahn, the study's authors, recommend that witnesses be directed to disclose up front the amount and source of their government funding -- since almost none of them do it now.

Source: "Don't Cut That -- Lobbyists Will Starve in the Streets," American Enterprise, March-April 1997.