In Stealing You Blind, I calculate the total size of the federa-government workforce at about 20 million people. However, it is important to note that most of these are not direct employees. Almost 6 million of them are contractors — far more than the 2 million civil servants. Yet these contractors are not recorded by the Office of Personnel Management. The murky world of government contracts is one that should be paid far more attention.
An example of why surfaces in today’s Daily Caller, which alleges that a State Department contracts officer has funneled $52 million of taxpayer money to a firm owned by her husband and daughter. What makes the story even more interesting is that the officer herself is a contractor:
McGrade works for a company called ATSG, LLC, a State Department contractor that handles the disbursement of federal dollars. A secretary at ATSG and State Department spokesperson Andy Laine confirmed for The Daily Caller that McGrade works on-site at the State Department.
Laine added that, though she handles disbursement of taxpayer money, McGrade is not personally paid with taxpayer funds. ATSG writes her paychecks. The owner of ATSG refused TheDC’s request for comment for this story.
Now, obviously the federal government should use a certain amount of contracts, otherwise we get in the position of the feds making dentures for veterans like it used to, but there is now so much money sloshing around in the form of
federal contracts that it takes close to 6 million people to work on them. Many of these contracts are directly related to the size of the government and the military, so shrinking the size of government will shrink these size of the shadow government too.
I do not deny that this will hit certain areas, like Northern Virginia where I live, pretty hard. Northern Virginia, however, is home to the wealthiest congressional district in the nation (VA-11), has some of the best housing prices in the nation, and one of the lowest unemployment rates. The area is rich simply because so much money is sent here from the rest of America. Perhaps it is about time that the area felt the rest of the country’s pain.
totally off point of the post's main point, BUT, it is interesting that the author says "BEST" house prices to describe HIGHEST house prices. This is a common mistake and institutional bias in this post 2008 bubble pop, to think that housing prices readjusting to rational numbers is bad, when it means bad for older people and investors who've over-bought, not for younger people shut out of the housing market by the bubble.
Reply to this commentLinkReport AbuseIain, you're on the right track...but this is two issues, not one.
The first is the growth of contractor support to the Government. We're not talking about people selling widgets and gadgets, we're talking about rent-a-worker shops. In theory, they provide a way to get temporary help and expertise. In fact, many of these support contrators are semi-permanent employees. Who cost considerably more than they would as Civil Service personnel, since the contractor charges the Government both the worker's pay and a management premium.
The second issue is graft, both soft and hard. The example you cite is classic hard graft, the sort that people go to prison for. But soft graft is also an issue. Too many people in the Federal Government are angling for a lucrative post-Government job...and will steer business and policies to get one. How many Congressmen have family members who are lobbyists? How many former Presidential appointees head into private life making twice what they made before entering Federal employ? Far too many. Solve that, and you might have a reasonable shot.
Me? I believe that honest government must be paid for. Its scope should be kept to a minimum (I firmly believe that Defense spending should never account for less than 50% of the Federal budget - there are NO other legitimate big-ticket items), but the people doing it need to be paid well...with the limit that Uncle Sam gets a veto over your post-Government employment. We'll cheerfully pay for honesty, but WILL get what we paid for.
Reply to this commentLinkReport AbuseThis is going to be unpopular in the circle of well-connected Republican interests getting rich off the feds.
Reply to this commentLinkReport AbuseWe have to distinguish contracts for goods (e.g. warships) and services (e.g. overnight package delivery) from contracts for personnel to perform work at government sites (which is, I believe, what the 6 million folks are). The total headcount goes much higher if you count all forms of government contractors.
The onsite support contracts would be illegal under the restrictions against personal services contracting were it not for the fact that such contractors are hired in large enough batches that their supervisors are included under the contract. This is the legal distinction that allows the regulations to be violated in spirit if not in letter - who supervises a worker is taken to be the determining factor in whether a worker is providing personal services.
Eliminating such contractors (as has been occurring under the present administration) by federalizing their positions is admirable from the point of view of conforming to the spirit of the law, but it drives costs up rather than down (the federalized employees have comparable base pay, better benefits, and myriad non-base-pay streams of supplemental remuneration) and locks costs in by replacing dismissable workers with non-dismissable ones.
Reply to this commentLinkReport Abuseregular joe, excellent point. NoVA housing prices continue to be entirely cost-prohibitive for younger people who didn't buy before the bubble. Great for long-time homeowners; terrible for kids whose parents both have to work full-time jobs plus commute 2 hours a day to keep a (NON-McMansion) roof over their heads.
Reply to this commentLinkReport AbuseAs one of those on-site contractors being maligned above, let me add a couple of points. Since I work for a fee-for-service part of the Gov't--we get our money from other parts of the Gov't instead of direct appropriated funds--we have real good numbers on the cost of employees.
1 - Contractors have a much higher applied labor rate than Civil Servants (>95% versus 66%). Civil Servants have much more overhead activities (training, meetings, etc) than than the contractors. It takes 3 Civilians to do the work of 2 contractors.
2 - Civil servants are more expensive than the contractors. Not if you only include labor, but when you add in benefits they are more. Ask the DoD. Their "in-sourcing" experiment was a costly failure.
3 - It's much easier to get rid of poor performers if they are contractors vs civil servants
Just keep these things in mind while we are deciding where to cut. If you want to cut the size of the Federal Gov't, start in DC. Many of us out here in the field produce real benefit to the taxpayers and citizens.
Reply to this commentLinkReport AbuseWhile I think it is important to include contractors when assessing the size of the federal workforce, the response is to reduce the size/scope of the federal government overall, not the number of contractors. Shifting contractors over to full-time federal positions is more costly, especially since the bidding process for government contracts allows the feds to pay competitive rates for such services.
I realize this is entirely consistent with the point Mr. Murray is making, but I thought it deserving of some added emphasis/clarification.
Reply to this commentLinkReport Abuse