Public Goods Post
thinking about the public economy
Our Hollowed-Out "Big Government"
On January 23, the President ordered a hiring freeze of all non-military federal employees, having his press secretary cite a "dramatic expansion of the federal workforce in recent years.” To many, this may seem like a shrewd move, particularly if the claim of workforce growth were remotely true. 
But there has been no such expansion of the federal workforce.
Claims about “big government” are in keeping with a widespread narrative that government – usually meaning federal government – has been burgeoning for decades, that taxpayers have been saddled with paying for rank after rank of civil servants and that privatizing or contracting-out more of government would save taxpayers money. In reality, the federal civilian workforce has not grown in a half century. In reality, federal government spending on goods and services has not increased as a percentage of GDP. In reality, contracting-out often costs much more than federal workers providing services directly.
The American public has been subject to a mind game that operates in favor of private business.

What has grown in the last several decades is the number of corporate contractors. For several decades, we have been handing over the reins of government to corporations. And the new Trump administration promises to accelerate that process enormously, proclaiming that the “deconstruction of the administrative state” has begun.
The Non-Increasing Federal Workforce
Claims about “big government,” uncontrollable growth and implicitly, the inefficiency of government, rarely rely on data. The reality is that the federal government workforce has not increased in absolute numbers in half a century. Not only is it the same size now as it was in the 1960s, since the 1980s it has shrunk. There are actually fewer government employees now than there were under Reagan even though the population has grown by over 30%.

What’s more, as a percentage of the total US workforce, the federal workforce has been declining since the 1950s and is now less than 2% (see the graph below). But misconceptions abound. One study, in Louisiana, found that many people think the federal government employs 40% of American workers.
For years, it seems that the press has been under the sway of the "big government" mind game, and as a consequence the public has seen almost no reporting about the actual data. Recently, however, that has begun to change. In January the Washington Post ran a story on the “whopper” that the “Trump administration just told about the size of the federal workforce.” It observed that “the number of federal employees is nearly the same today (2.8 million) as it was when Barack Obama took office (2.79 million)…and lower than at any time during the Reagan administration.”
If we take another approach and look at the record of federal expenditures, rather than the record for the federal workforce, we continue to see that the stories about explosive growth are not just misleading: they are plain wrong.
Consider an article in business-oriented Forbes Magazine with the ambiguous title, Has The U.S. Government Gotten Bigger Or Smaller? Yes.” Their graph (below) shows two methods of national bookkeeping.

By the “GDP concept,” government spending at all levels as a share of GDP is at its lowest in six decades; by the “budget concept,” which includes economic support programs like Social Security and Medicare, it is only slightly higher. This is in stark contrast to the constant claims we hear about exponential, unstoppable government growth. What has grown, and what almost no one talks about, is government by corporate contractor.
Handing over the basic work of government to corporate contractors
According to an important report by POGO (Project on Government Oversight), "since 1999, the size of the federal employee workforce has remained relatively constant at about 2 million, while the contractor workforce has increased radically—from an estimated 4.4 million to 7.6 million in 2005. In other words, the federal contractor workforce dwarfs the federal employee workforce nearly four-fold."
This massive third-party workforce has been mostly hidden from public view, kept intentionally out of sight by corporations and their lobbyists who have the most to gain, as well as by elected officials who want to claim that they are not growing government. Moreover, federal corporate contractors operate behind a shield of secrecy, enabled by their de facto exemption from the Freedom of Information Act (FOIA), and ensuring that they can operate without public scrutiny.
False Economies:
Contracting Out Actually Costs More 

As taxpayers supporting government-by-contractor, we are spending more for public services and products while receiving less. Research has shown that contracting out is often more expensive and results in inferior performance than if the work was conducted by public servants. 

According to POGO's Bad Business report, "the federal government approves service contract billing rates … that pay contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the total compensation paid in the private sector for comparable services."

In a recent essay in the Public Administration Review, John DiIulio writes that on the "2015 list of the 32 federal programs that the Government Accountability Office (GAO) considers ‘high-risk’ because of waste, fraud, abuse, cost overruns, persistent performance [and] management failures … 28 of those 32 high-risk federal programs work through proxy or hyper-proxy administrative arrangements.” 

Citing OECD data, the Volcker Alliance estimates that $2 trillion is spent annually on procurement (i.e. purchases by government of goods, services and work). That amounts to over 10% of the U.S. GDP. Such a significant number, if close to accurate, would surely deserve public debate, but the corporate shell game thus far has assured a virtual silence in the media and the halls of Congress.

Hiring a corporate grounds-keeper to mow public lawns may make sense. But what about hiring a corporation to screen government security workers or to write Congressional testimony?

The president's federal employee freeze won’t accomplish the stated goal of cutting government or saving taxpayers money: the more costly contractor workforce will remain, and likely grow, paid for by taxpayer dollars. The hiring freeze is not about cutting government but gutting government. With further moves toward privatization on the near horizon, the reins of even more of our government will be handed over to private corporations.
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The Public Goods Post has been created by June Sekera, 
Founder and Director of the Public Goods Institute; and Research Fellow at the 
Global Development And Environment Institute, Tufts University.

The Public Goods Post is produced by Daniel Agostino, Digital Media Producer and Editor.

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