Federal Workforce Savings Made Easy

BY QUIN HILLYER , Center for Individual Freedom
THURSDAY, OCTOBER 27 2011

No good reason exists, none whatsoever, for Congress’ budgetary “supercommittee” to fail to identify at least $1.2 trillion in ten-year cuts without raising taxes. Wisconsin’s freshman Republican U.S. Sen. Ron Johnson alone has recommended ways to save $1.4 trillion over ten years just by more sensible management of the federal workforce. Almost all of Sen. Johnson’s recommendations are eminently reasonable.

Johnson’s plan contains 58 separate proposals for savings. Let’s just take the 12 easiest to understand. For instance:

Cut the federal workforce by 15 percent through 2015 and freeze pay for federal civilian employees through 2015. Since Barack Obama took office, the feds have added 192,000 jobs. About 400,000 federal civilian employees are now eligible for retirement. If just over half of them retire without replacement, the workforce reduction will be achieved. Meanwhile, total compensation for government workers is more than 30 percent higher than compensation for comparable private-sector jobs. A three-year pay freeze (not including raises for promotions) is surely reasonable. Savings: $248 billion.

Reduce the government’s “match” for the Federal Employee Retirement System’s defined benefit plan. This will blow your mind: Right now the government provides about $14 in “matching funds” for every dollar contributed by the employee. In the private sector, and even in Social Security and the federal thrift savings investment plan, the usual match is 1-to-1. FERS also should reduce its match to 1-to-1.Savings: $133.27 billion.

Phase out the FERS Basic Benefit Plan. The basic plan, says Johnson, “is no longer comparable to private sector retirement plans that afford greater flexibility and cost savings through 401(k) and stock option plans.” Anybody already in the system can remain, but Johnson would close it as an option for new federal employees. Savings: $75 billion.

Change the calculation of the baseline for FERS basic benefits. The retirement benefit formula now is based on the three highest-salaried years of an employee’s tenure. Most state governments and private plans base their benefits on the average of the five highest years instead, which tends to be lower. The feds should do the same. Savings: $5 billion.

Freeze bonus pay for the Senior Executive Service for three years. These professionals already rank high on the federal pay scale, and the perks are excellent. In a time of busted budgets, it makes sense to eliminate bonuses, just as happens in the private sector during bad times. Johnson claims savings of $50 billion; perhaps it might make sense to allow small bonuses to encourage excellent work, so let’s cut this estimate by just a tad. Savings: $40 billion.

Cut the federal civilian travel budget by 75 percent. Ever heard of teleconferencing, or Skype? Sen. Tom Coburn, R-Oklahoma, has detailed the reasons this is a reasonable reform in his publication “Back in Black.” Savings: $43.3 billion.

Change the cost-of-living-adjustment (COLA) for the Civil Service Retirement System. This change, often suggested for programs throughout government, would adjust payments based on price inflation rather than wage inflation. The Congressional Budget Office endorses it. Savings: $24 billion.

End duplication at the Department of Homeland Security. When DHS was created by combining 22 agencies, there was no reason for each agency to keep separate, full public affairs offices, procurement offices, civil liberties offices and numerous other separate sinecures for functions that, under one department, can now be consolidated. Savings: $10 billion.

Repeal the Davis-Bacon Act. Okay, this one will be tough to accomplish against determined union opposition, but it really makes sense. Davis-Bacon requires that government construction workers be paid at the locally “prevailing wage.” In practice, this means such workers get paid as much as 62% more per hour than they otherwise would. Savings: $6 billion.

Reduce the federal vehicle fleet by 20 percent. Governors and state legislators nationwide have found that most governments own far too many cars for government employee use, so reduction of vehicle fleets has become a favorite savings measure. The federal government hasn’t made such reductions, even with cars sitting on lots, unused. It should. Savings: $5.6 billion.

Reduce government printing. Again, technology should ride to the rescue. There’s often no need for automatic printing of paper documents now that so much can be done online. Savings: $4.9 billion.

Re-allow privatized airport security. Federal law allows airports to contract out screening services to private companies, and a number of airports did so without danger to the public. The Department of Homeland Security, however, halted the program by administrative fiat. Travelers reported confidence in the private screeners, plus better, friendlier customer service. Savings: $2 billion.

Cut the number of limousines owned by the government. Gotta love this one. Self-explanatory. Savings: $115.5 million.

Total ten-year savings, even after modifying one item downward: $597.1855 billion. Johnson has 46 other suggestions – concentrating on merely one small segment of the federal behemoth. The question shouldn’t be whether the supercommittee can find $1.4 trillion in savings; the question should be why it can’t find at least twice as much.

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Op-Ed: Why the Senate needs to return to requiring supermajorities

By Ron Johnson, Published: October 21

Our Founding Fathers recognized how the unchecked power of a majority would be a constant threat to individual liberty. They acknowledged that government was necessary, but they also knew that a government elected by a majority could easily trample the freedoms of the minority. They and their ancestors had come from dictatorial monarchies, and they fully understood that, more often than not, government was something to fear and should therefore be limited.

This month Majority Leader Harry Reid and his Democrat colleagues voted to change the Senate rules with a simple majority vote of 51 to 48. Most people would simply shrug and think, “So? Isn’t that the way democracy is supposed to work?” For the past 222 years in the U.S. Senate, the answer to that question has been no.

Historically, if the minority objects, Senate rules dictate that a supermajority vote of two-thirds is first needed to cut off debate, before a simple majority vote can change the rules of the Senate. This requirement was established to protect the rights of the minority in the Senate, just as our Constitution was established to protect the rights of a single individual — the ultimate minority. Instead of using the formal rules change procedure — requiring a two-thirds hurdle vote — Reid used a parliamentary maneuver to set a new precedent, with a simple majority vote.

The limited government envisioned by our Founding Fathers and prescribed by our Constitution was never designed to manage 25 percent of our nation’s economy.

Quite the contrary, checks and balances were established to prevent one branch of government from overpowering the other two — primarily to ensure that government’s influence over our lives remained limited so that our liberties would be protected.

The Senate, in particular, was designed to limit the growth of government. Legend has it that George Washington remarked to Thomas Jefferson that the Senate was meant to function like the saucer under a cup of tea — to cool legislation. For 111 years, the Senate was a legislative body of unlimited debate. As long as a single senator, or group of senators, was willing to hold the floor debating an issue, they could prevent that issue from ever coming to a vote. This was a very potent device for blocking the expansion of federal power. Apparently, it was too potent for some.

In 1917, in response to the understandable frustrations with unlimited debate, the Senate changed its rules by instituting the “cloture vote,” which could end debate with the agreement of two-thirds of all senators voting. At that time, the federal government’s budget represented only 3 percent of America’s economy.

The cloture vote made it easier for government to grow, and, guess what, government grew. There were many reasons for this expansion in the 20th century — the passage of the income tax, two world wars, the Great Depression — but the introduction of the cloture vote has certainly proved effective at hampering the Senate’s ability to limit the size and influence of government.

In 1975, not satisfied with the restriction of a two-thirds threshold (67 votes at that time), the Senate again amended its rules to reduce the cloture threshold to three-fifths (60 votes). It took another 34 years before one of our political parties obtained that supermajority representation in the Senate (Democrats in 2009).

We are now living with the results. Obamacare — rejected by a majority of the American public — passed the Senate without a single Republican vote last year. The $787 billion stimulus bill, Dodd-Frank financial regulation and a three-year cumulative budget deficit totaling $4 trillion were made possible by 1975’s lowered cloture threshold.

At the beginning of this Congress, there was an effort by a few Democratic senators to change the Senate rules and muzzle the minority by a simple majority of 51 votes. That effort failed in January but has essentially succeeded in October. If you are like me, and believe that the root cause of our economic woes is the size, scope and cost of government, this is not a good sign.

Washington has proven itself to be incapable of managing 25 percent of America’s economy, much less more than that. Congressional mismanagement has gotten so bad that it has been more than two years since the Senate passed a budget. Instead, we are now operating our $3.6 trillion-a-year government on a “continuing resolution.”

The Senate was designed to make sure that Washington never became this large and intrusive. Successful efforts to curtail this limiting function have resulted in a federal government that is out of control and virtually unmanageable.

Our top priority must be to reestablish control if we are going to prevent the bankrupting of America. The Senate should reverse the new precedent Reid set this month, and begin to return to its constitutional role.

The writer, a Republican, is a senator from Wisconsin.

This ran in The Washington Post.

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Senator Johnson Talks Jobs on Kudlow Report

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Regulations stifle economic growth

By: John Allison and Sen. Ron Johnson

Most people go into business because they want to make the world better by building something — and, of course, to make money for themselves and the people working with them. Yet business leaders today are routinely treated as guilty until proven innocent by the bureaucrats in our regulatory agencies.

Our regulatory state strangles economic growth. Regulations bar many voluntary agreements and subject businessmen to constant micromanagement.

At the federal level alone, business is subject to tens of thousands of regulations. The federal regulation code, which lists them, currently stands at 160,000 pages. Over the past 15 years, business has been hit with almost 60,000 new federal rules, to say nothing of state-level regulation. Compliance costs alone surpass $1.75 trillion annually, according to the Small Business Administration.

This explosion of new regulations dramatically reduces job creation. The more costly it is for businesses to meet regulatory demands, the fewer workers they can hire. When government ramps up regulations in unpredictable ways — see Obamacare, Dodd-Frank Wall Street regulations and the Environmental Protection Agency under Lisa Jackson — businesses are more likely to build cash reserves than they are to invest and hire.

Small-business owners are asking why banks won’t make loans to help them expand and create jobs. The answer is simple: The banking regulators have radically tightened lending standards. Ask any community banker.

Regulatory bureaucracies also stifle innovation, which is the key to economic growth but requires defying convention, experimenting, making mistakes and correcting them. That isn’t compatible with the regulatory state’s demand for obedience to mind-numbing rules. Half the challenge for innovators now is getting past the regulator. As a result, many avenues of exploration just aren’t pursued.

Perhaps the regulatory state’s toughest burden, however, is that it discourages our best entrepreneurs. Productive individuals face a daily grind of trying to comply with an endless number of rules — often arcane, arbitrary and contradictory. By treating entrepreneurs as latent criminals, the regulatory state crushes the creative spirit — and wastes the energy and talents of the job producers and the prosperity producers.

A recent series of studies by the Institute for Justice examined the morass of regulations strangling commerce in many U.S. cities. In Los Angeles, for example, people who want to open a restaurant may spend months, even years, jumping through regulatory hoops before they’re able to serve their first customer. There are business licenses, zoning requirements, scores of permits and approvals and a seemingly endless number of taxes and fees.

All told, L.A. restaurateurs have to go through at least a dozen government agencies before opening their doors. The process is so complex, the city published a 147-page handbook to explain it.

Would you be willing to go through that to start a business? When America’s businessmen find themselves discouraged and dispirited, we all lose. We lose out on jobs, new products and a rising standard of living.

Building a business is hard work. As retired businessmen, we can attest to the long hours, sleepless nights, overloaded schedules, ongoing setbacks and other daunting challenges that go into creating a successful business.

To persevere, business men and women need the freedom to run their businesses by their own best judgment. They cannot function if they have to spend a quarter, a half or even more of their time taking orders from bureaucrats.

It’s time to stop the parade of new regulation until we can begin to roll it back. The new regulation moratorium bill is a good first step. It would block new regulations until unemployment falls below 7.8 percent — the rate when President Barack Obama took office.

There’s a lot of talk today about how to “stimulate” the economy. A free economy does not require “stimulation.” It is fueled by the passion and creativity of profit-seeking business leaders.

The problem is not lack of stimulus but the suffocating weight of government intervention. If we want to revive the economy, it’s time to liberate the victims of our regulatory state.

John Allison is the retired chairman and chief executive officer of BB&T, a financial services holding corporation and a member of the Job Creators Alliance. Sen. Ron Johnson (R-Wis.) is the author of the Regulation Moratorium and Job Preservation Act.

Article on the Politico web site.

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