Bad Leftovers

Why there's little hope for a solution to Congress's budget woes.

Amid the Syria fracas, budget politics are reportedly "warming up" on the Hill. But is it really just a case of "reheating the leftovers" and hoping someone will still find them appetizing?

From the White House side, the president is still holding out for a deal and is willing to talk. The trouble is, he has been talking with Senate Republicans who cannot make a deal on the budget. For a couple of weeks, Sylvia Mathews Burwell, director of the Office of Management and Budget, and sometimes Denis McDonough, the White House chief of staff, sat down with a new gang of eight, including people like Sen. Bob Corker and Sen. John McCain who have no jurisdiction to cut a budget deal. Where was Patty Murray, chair of the Senate Budget Committee? Where was Jeff Sessions, ranking member of that committee? Where was Mitch McConnell? (Answer: off fighting a right-wing primary challenger.) Or Barbara Mikulski, Richard Shelby, or even Harry Reid?

They certainly were not in those talks, and nobody from House Speaker John Boehner's crowd was in the room either. It is hardly surprising that, after a couple of weeks, everyone declared failure and disagreement and scheduled no new meetings.

While negotiations continue to flounder, the forces that would divide and conquer -- or, perhaps, just lead straight over the cliff to a government closure in October, debt default the same month, and another sequester in January -- are actively looking for ways to jump, Syria or no Syria. The conservatives that Boehner cannot control are working on the first step: a continuing resolution that would keep the government open but provide discretionary funds at the same level ($988 billion after the 2013 sequester) that agencies have been trying to manage this year.

Some folks, particularly the right-wing Americans for Prosperity (AFP), supported by the Koch brothers, are calling for an even deeper reduction: $967 billion for discretionary spending. AFP has suggested it will take names and remember them well if House members vote for anything above this level.

What's more, Treasury Secretary Jack Lew told Congress in late August that the government would run out of room under the current debt ceiling in October, earlier than expected. So that fight and the budget fight may get blended as deadlines approach. The Syria debate may just push everyone to sign a short-term deal, but that will just mean continuing to fight about the same issues up to and perhaps through a looming fiscal 2014 sequester this coming January.

Frankly, short of a turnaround by those House Republicans who are determined to get spending cuts come hell or high water, it is hard to see a way out of the dilemma. Although perhaps a step in the right direction, more talks with people who in fact can make a decision would not necessarily deliver the votes.

In a way, letting a sequester happen may be the only politically viable outcome. It's automatic, nobody has to make a tough decision, and everyone can blame the process. It is in some ways similar to base closures, whereby we create a commission, let it come up with the closure list, and then force the president and Congress to accept or reject the list as a whole. No one in office decides what gets closed, and everybody gets to blame the commission.

It should be an interesting fall, consuming all these familiar budgetary leftovers. But it is not clear much will change, once we've finished digesting.

Photo: JIM WATSON/AFP/Getty Images

Gordon Adams

This Is Not a Horror Story

Why you shouldn't worry about the Pentagon cutting personnel.

There is a lot of garment rending and teeth gnashing going on with respect to the impact that a sequester in FY 2014 might have on the civil servants working in the Department of Defense. Two weeks ago, somebody leaked a Pentagon memo to Tony Capaccio at Bloomberg, which says the DOD might not use furloughs next year to deal with the budget cuts. Instead, the memo says, the Pentagon might put 6,272 jobs on the chopping block, using a Reduction in Force (RIF) to eliminate personnel altogether.

This makes for a good headline, but maybe the headline is more meaningful than the story. We are, as I have said many times, in a defense drawdown. During a drawdown, everything gets smaller. The uniformed military gets smaller, the Pentagon's civil service gets smaller, the number of carrier battle groups, brigades, and air wings all decline. It is what happens after a war.

In reality, 6,272 people in a total civil service workforce of roughly 800,000 don't constitute much -- about three quarters of a percent. During the drawdowns after the Korean War, the Vietnam War, and the end of the Cold War, the civil service in the Pentagon shrank between 16 and 34 percent over 10 years. It is a normal event, not a horror story. But like the Pentagon's chilling readiness stories, and the initial warnings about furloughs, horror sells in a budget war.

As I have argued for months, the Pentagon ought to be planning for the drawdown, sequester or not, including by shrinking civilian employment. It is worth noting that, while the level of active-duty personnel stayed relatively flat -- 3-percent growth -- over the past decade (the Army and Marines grew, but the Navy and the Air Force shrank), the civilian workforce at the Pentagon actually grew roughly 17 percent.

Good public policy says that level of personnel need not stay the same, with recent wars ended or ending. Better public policy says the DOD should not be warning of RIFs, but instead be doing the same force planning on the civilian side that it is doing on the military side, assuming that personnel will continue to decline over the next decade. The civil service is part of the Pentagon's very large "back office" -- the 42 percent of the budget that goes to management and administrative infrastructure, but not the "point of the spear."

Shrinking the back office needs to start now, aggressively. And not in a ham-handed "we may have to RIF you" way, but through careful force planning. This means starting by asking, "What do we do that we don't need to do?" And then, "Who is doing it?" If the DOD does this right, it may not even have to RIF people to achieve the savings.

Doing it right, in part, means avoiding the rhetoric of "suffering readiness," which is a red herring. In reality, as the Congressional Budget Office has verified, much of the Pentagon's overhead (roughly 60 percent) is in infrastructure, not in "readiness." The back office workforce is in administration, with finance and accounting, personnel policy and administration, and base operations. It runs training and education establishments, service-wide agencies, and supply management. This is where the digging needs to be done, not in readiness.

After deciding which jobs are needed and which are unnecessary, the first management tool to use is attrition. According to Office of Personnel Management data dug out from Fedscope by my colleague John Cappel, about 11-12 percent of the Pentagon's civil service are "attrits" -- people who, in the normal course of each year, leave, retire, are terminated (the largest part), transfer, or, sadly, die. That's somewhere between 80-95,000 civil servants per year, well above the 6,272 the Pentagon is talking about RIFing. And according to the Washington Post, older civil servants are heading for the door in larger numbers these days. It may be a very propitious moment to accept attrition at the Pentagon for jobs deemed unnecessary.

Additional personnel management tools the administration can use or ask for include buy-outs for people who can be let go, and bonuses for those whom the Pentagon wants to retain. Moreover, it could deal with the roughly 700,000 contractors who work for the Pentagon, many of them side-by-side with civil servants doing essentially the same jobs. This "ghost" workforce, combined with the civil servant base, adds up to 1.5 million, in support of an active-duty uniformed force of 1.4 million -- an awkward and wasteful ratio of personnel. Really, the Pentagon ought to be using the force management approach across all of its back office personnel -- the military staff who are performing non-core administrative jobs, the civil service, and the contractors sitting with them, as Nicholas Schwellenbach of the Center for Effective Government has argued.

Needless to say, the unions have focused on contractors. American Federation of Government Employees President J. David Cox recently asked, "Why is the administration threatening to fire 6,300 civilian defense workers and leave its much larger and costlier contractor workforce almost untouched? Have they learned nothing from the furlough fiasco when fat cat contractors sat around and did nothing while the people who actually repair the weapons and train the troops were forced out on the street?"

Cox has a point: It is easier to manage this part of the workforce; contracts can simply be ended, without buy-outs. In reality, though, both workforces will need to shrink.

The first step is to get past denial, and past the sequester. Assume, realistically, that a defense drawdown is the issue at hand. For personnel -- both civilian and military -- it is time for the planning to begin.