A War on Bureaucracy?

0 Comments | Insight on the News, Feb 15, 1999 | by Donald Devine

Twenty years after Ronald Reagan's declaration of war on the welfare-state bureaucracy, and five years following its consummation with a Republican majority in both houses of Congress, big government won the battle. Total federal-government workforce just hit nearly 17 million, according to a new study by Paul C. Light of the Brookings Institution, reported in the January edition of Government Executive magazine.

You thought Washington's civilian civil service only was 2 million (1.9 million employees in 1996)? But one must include the uniformed military (1.5 million) and the semiprivate U.S. Postal Service (850,000), for a total direct employment of 4.25 million. But Light, for the first time, developed a refined estimate of the "shadow government" personnel of private contractors for the federal government (5.6 million), grantors (2.4 million) and the state, county and local government employees encumbered by federal mandates (4.7 million). This represents an army of 16.96 million who directly or indirectly work for the feds.

Comparable pre-Reagan numbers for the whole domestic shadow government do not exist, but we do know the direct domestic civil service doubled since President John Kennedy's days, from 760,000 to 1.1 million, and nondefense contractors and grantors increased by 1.6 million since 1984. The year 1960 was approximately when the modern conservative movement was created as a means to control a "runaway" domestic bureaucracy. It has been a losing battle, and not just in people and dollars.

Presidential-candidate Reagan promised to reduce the size of the domestic bureaucracy and he did have some success. Between 1981 and the end of his first term in 1984, nondefense federal fulltime-equivalent employment went down by 78,650, exceeding his preset goal. The decrease in number of employees -- the "head count" -- actually was down 105,484. Significantly, about 90 percent of the decrease had been achieved by the end of the first year. Early, bold and determined action (in the form of a total freeze on employment, followed later by a more flexible managed freeze and rigorous monitoring) allowed his targets to be achieved.

By the end of Reagan's second term, reductions in the core Great Society agencies generally held firm, but other nondefense employment edged up nearly to the levels under Jimmy Carter. The problem was that the political energy of the first term largely had dissipated and clear plans and goals were not set, so the natural forces of bureaucratic growth reasserted themselves.

George Bush said he, too, would cut the bureaucracy, but he never made clear beforehand what programs were to be targeted, even in the general terms of the second Reagan administration. Nor did he detail plans specifying how or to what degree this should be accomplished after he entered office. Consequently, the domestic bureaucracy under Bush actually increased 24,283 (more if budget sleights of hand are corrected), while uniformed military personnel went down 275,079 and civilian military employment decreased 5,900.

Interestingly, Bill Clinton made larger reductions: 53,028 nondefense cuts and 184,828 overall by 1996. Even with the large Clinton nondefense cuts, his domestic bureaucracy still was 49,904 higher than the 1984 low point under Reagan because so much had grown back under Bush and the Democratic Congress. Indeed, by the end of 1996, nondefense employment was only 28,746 below the point at which Reagan began in 1981 -- barely worth the effort. And the domestic shadow government actually increased. At the same time, the military that Reagan increased to win the Cold War bore the brunt of the Clinton reductions. While the 1994 Republican Congress clearly tried to restore the Reagan domestic cuts and military increases, it would have had to pass its vetoed 1995 budget plan to return to 1984 levels.

Reagan's success was to shrink domestic discretionary spending permanently, declining as a share of gross domestic product from 12.7 percent in 1962 to 6.6 percent by 1998. But the big reductions in money and personnel after Reagan were in defense, while entitlement programs exploded leading to a large increase overall, giving the feds today the highest share of taxation since World War II. Unable to justify open increases in Washington's budgets, politicians have had to rely more on mandates upon local governments and the private sector to force them to do what Washington wills.

While big-government legions keep taxing and mandating community and business institutions, below the surface a new localism is restoring the decentralized America envisioned by its Founders. The question is, how long will the creative locals keep feeding the ravenous troops gnawing at the roots of their energy and productivity?

Donald Devine is former director of the U.S. Office of Personnel Management, a columnist and a Washington-based policy consultant.