OMB head: Federal workers could face more sacrifices

As the government looks to make more budget cuts, federal workers could be in for an unpleasant surprise.

"We're not going to be in a place where we can say that there's nothing else that will happen regarding federal workers, as the plan we put forward last week demonstrated," said Jacob Lew, director of the Office of Management and Budget. "I think federal workers understand that in times of fiscal constraint, there are tough decisions all around."

Lew made his remarks Sept. 27 at the Partnership for Public Service’s offices in downtown Washington, where he was discussing a new report that highlights lessons learned from the government downsizing efforts of the 1990s. The Partnership for Public Service and Booz Allen Hamilton's report, “Making Smart Cuts,” outlines the best and worst strategies for budget reductions and workforce reshaping and offers guidance for today’s federal leaders.

It's "really, really easy to take costs out of a budget but really hard to do it in a way that doesn't diminish mission impact," said Max Stier, the partnership’s president and CEO, in his opening remarks.

"You have to have a vision about what's important, what you're trying to achieve, and you have to have leadership engaged in that in order for that cost-reduction exercise not to simply result in a stripping of capacity," he said.

In discussing the 1990s’ most-employed strategies to cut budgets, Stier highlighted personnel reductions as a sometimes inevitable approach but one that has serious implications.

The 1990s efforts to reduce personnel resulted in long-term damage to agencies, Stier said. Agencies were unable to produce in the ways they needed to, leading to issues that later had to be remedied, he added.

As an example of a hiring freeze gone wrong, Stier cited NASA, which froze hiring in 1987 and several times after that. In 1989, 18 percent of the agency’s employees were under the age of 30. By 2004, that number had fallen to 4 percent, Stier said.

He said efforts to recruit talented employees cannot be disregarded.

"We can't shut up shop on recruiting talent in government, we can't shut up shop in developing the talent that we already have, or else we're not going to get where we need to go," he said.

Lew took the opportunity to address the public's declining trust in government in the middle of what he called "extraordinarily real" budget cuts. Given political gridlock, a sluggish economy and an aging infrastructure, confidence in the government is "probably at an all-time low right now," he said.

"There is a deep-seated tradition in our country to have skepticism in government," Lew said. "It's a strain of American thought that runs really back to our founding. But over the past several decades, there has been a relentless effort to make the case that government is actually part of the problem and not part of the solution. And I think that has had an impact on public opinion."

Managing the federal workforce is "obviously more complicated than private-sector workforce management," Lew said. Officials need to address the fact that the federal workforce is aging and must have a strategy for replacing retirees, he added.

"Getting the balance right between the pace of reductions and making sure that the federal workplace is an attractive place for young talent to come to start a career is as important as 'where do we get the savings?'" Lew said.

About the Author

Camille Tuutti is a former FCW staff writer who covered federal oversight and the workforce.

Reader comments

Wed, Mar 7, 2012

Pension plans are ponzi schemes!!! All pension plans should be rolled into 401k plans today!!!

Mon, Oct 3, 2011 -B

Unilaterally changing a contract without approval by both sides could raise legal issues. (changing retirement benefits for existing participants instead of grandfathering in the changes.)

Mon, Oct 3, 2011 Dave K

I've said it before and I'll continue to say it... If you allow them to convince you this is a Govt Employee vs. a Contractor Employee issue, you're already screwed. The real issue, which both Congress and the Administration, refuse to look at, is this: What is the role of the Federal Govt in the United States? Why are ANY tax dollars being spent on any agency created outside the bounds placed on teh Federal Govt by the constitution? If you want to save money, don't look for FWA in agencies that are already undermanned, and doing their best with the resources they've got, look instead at closing entire agencies that shouldn't exist, and moving the resources (including human) to other agencies that need them.

Mon, Oct 3, 2011

Not sure where the comments on retroactive cuts come from, but they have cut pensions in the past, when Congress mandated that new hires go play the stock market to benefit Wall Street using the 401K plan. My sister was pressured for many years to convert to that plan but resisted. She is now retiring while those who succumbed to the pressure and converted over to a 401K are nowhere near retiring.

Wonder why the congressional, court, and presidential benefits are not being talked about cutting back first? What ever happen to the "lead by example" philosophy? And on the link to Booz Allen Hamilton, did you notice that "more than 30 current and former senior federal officials and government experts" are the basis for the recommendations? The ones who are isolated from the realities of the work force, and in many cases may never have worked at anything below a SES level.

Mon, Oct 3, 2011 Concerned Ohioan OHIO

Here we go again. The Congress and The President pass Obamacare which is DIDN'T want; they are financially irresponsible; and now AGAIN the hardworking Federal Workers are asked to bear the burden. What a way to add to the homeless list! You are are NOT solving a thing. Why not work on a decent budget where tax is raised on all the millionnaires who are not even paying the rate of their secretaries 35% for secretaries and 10-15% for millionaires if that; those who are not paying taxes; and bring our JOBS HOME. When a person calls a technical computer line, we get INDIA. It takes 5 hours to discuss what could take 30 minutes or less in the United States. All we are trying to do is schedule an appointment for someone to fix our computers -- it is a crying shame when we have people in OUR COUNTRY losing their homes. Our people would be happy to schedule an appointment at minimum wage -- it's better than "zero" dollars. Why not penalize the companies who take their jobs out of the United States? Stop taking it out on the Federal Government Workers!!!!! Remember everyone, ELECTIONS are coming! Time to vote everyone out and start fresh!!! Concerned Ohioan.

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