We will impose a net hiring freeze on non-security federal employees and ensure that the public sector no longer grows at the expense of the private sector.1
A Pledge to America
The promise sounds good, but even if the GOP has the opportunity to fulfill their pledge to freeze federal hiring, it will freeze too little and come much too late. Nothing short of a comprehensive civil service reform bill comparable in size and scope, and just as intrusive, as the health care reform bill is going to have much of an impact on the disaster created by excessive public sector wages and benefits.
Employees in the private sector pay taxes that compensate state and local government workers an average of $12.10 per hour more than they earn themselves.2 43.3% of local government workers are union members,3 so taxpayers also pay to guarantee their salaries when legislators buckle to union pressure, and decide to spend billions to bail out highly unionized local government positions.
Uncle Sam cautions that it is difficult to compare compensation between the public and private sectors, in part because much of private industry is composed of manufacturing and sales, while two-thirds of state and local government positions are professional or administrative support functions.4 Unfortunately for our sagging economy, administrative support in the service of bureaucracy does not create wealth. Manufacturing creates wealth.
Government payrolls are enormous. State and local public payrolls were over $70 billion in March 2010, up $229.3 million from the previous year.5 As of December 2008, we paid to support 2,768,886 federal employees, with a combined payroll of over $15 billion.6
We have been told repeatedly that the costs of maintaining government employees at current levels are not sustainable. In August 2010, Ben Bernanke warned of potential liabilities exceeding $2.5 trillion for state retiree pension and health benefits:
Estimates of states’ unfunded pension liabilities span a wide range, but some researchers put the figure as high as $2 trillion at the end of last year….
… one recent estimate suggests that state governments have a collective liability of almost $600 billion for retiree health benefits. These benefits have traditionally been funded on a pay-as-you-go basis and therefore could entail a substantial fiscal burden in coming years as large numbers of state workers retire.7
Taxpayers are on the hook for funding these benefits, but legislators insist on going down a fiscal path that guarantees catastrophe, refusing to accept that only massive, painful changes will fix this problem. Washington is fond of “comprehensive” legislation, so here are a few ideas for a comprehensive civil service reform bill:
- Index public sector wages to the private sector.
- Index public sector retiree benefits to the private sector.
- Index public sector health care benefits to the private sector.
- Replace public pension plans with 401(k)s.
- Enact a prohibition on bailouts for civil service jobs.
- Renege on pension and benefits guarantees. The benefits were passed by law, they can be changed by law.
Few legislators will summon the courage to even consider such a bill, forgetting that we have passed equally far-reaching legislation many times, including the Patient Protection and Affordable Care Act, the Social Security Act, the Medicare Act, and an income tax amendment. If the Democrats succeed in maintaining control of Congress, we will probably pass a comprehensive amnesty act, as well. There is no reason we cannot pass a bill to make the civil service affordable. We just need to want to do it badly enough. Forcing the burden of excessive government employee pay and benefits on taxpayers by using the excuse that the law requires it can no longer be tolerated because we cannot afford it.
UPDATE January 26, 2017: More than five years after this was posted on October 6, 2010 we have a Republican president and a federal hiring freeze. It didn’t require an act, bill, or anything else from Congress, only an executive order from President Trump. Thanks, Obama. You taught us well.
UPDATE March 26, 2017: Democrats were too quick to jump on Trump’s hiring freeze in part because of its impact on veterans’ health care.
The appalling revelations about how veterans were treated under Obama are brushed under the rug and long forgotten. Instead, two senators from the ex-president’s home state turned their sights on Trump:
Our nation’s veterans should not be made to sacrifice any more than they already have while you review federal hiring.8
Had they not been so eager to condemn the president they could have read the Veterans Affairs memo about exemptions from the hiring freeze that included:
… anyone it deems necessary for public health and safety, including frontline caregivers,” Acting Veterans Affairs Secretary Robert Snyder said.9
Are politicians who preemptively blame the president for the consequences of a hiring freeze even aware that the federal workforce has been steadily declining with or without a halt to additional hires? Annual figures can be viewed at the Office of Personnel Management website.
1. “A Pledge to America.” p. 22. Retrieved from http://pledge.gop.gov/resources/library/documents/pledge/a-pledge-to-america.pdf.
2. Bureau of Labor Statistics. Employer Costs for Employee Compensation. June 2010. p. 1. https://www.bls.gov/news.release/archives/ecec_09082010.pdf.
3. Bureau of Labor Statistics. Union Members Summary. January 22, 2010. p. 1. https://www.bls.gov/news.release/archives/union2_01222010.pdf.
4. Bureau of Labor Statistics. Employer Costs for Employee Compensation. Op. cit.
5. U.S. Census Bureau. Annual Survey of Public Employment and Payroll Summary Report: 2010. January 2012. p. 2. https://www.census.gov/prod/2012pubs/g10-aspep.pdf.
6. U.S. Census Bureau. Federal Government Civilian Employment by Function: December 2008, Revised December 2009. https://www2.census.gov/govs/apes/08fedfun.pdf.
7. Board of Governors of the Federal Reserve System. Chairman Ben S. Bernanke. Challenges for the Economy and State Governments, August 2, 2010. Retrieved from https://www.federalreserve.gov/newsevents/speech/bernanke20100802a.htm.
8. “Duckworth & Durbin Federal Hiring Freeze Threatens to Harm Veterans & the American People.” Tammy Duckworth. January 26, 2017. https://www.duckworth.senate.gov/content/duckworth-durbin-federal-hiring-freeze-threatens-harm-veterans-american-people, retrieved March 26, 2017.
9. “Statement from the Department of Veterans Affairs on federal hiring freeze.” U.S. Department of Veterans Affairs. January 27, 2017. https://www.va.gov/opa/pressrel/pressrelease.cfm?id=2856, retrieved March 26, 2017.