Magazine October 20, 2014, Issue

A Leviathan That Works

Bring Back the Bureaucrats: Why More Federal Workers Will Lead to Better (and Smaller!) Government, by John J. DiIulio Jr. (Templeton, 186 pp., $12.95)

There aren’t enough bureaucrats in Washington. That’s the argument of John J. DiIulio Jr., a political scientist and former Bush-administration official. Before you laugh: President Eisenhower’s federal government spent, in inflation-adjusted dollars, about $600 billion a year, while directly employing around 2 million civilian workers. President Obama’s federal government spends about $3.5 trillion a year, and directly employs . . . around 2 million civilian workers.

DiIulio argues that this is partly the explanation for, and suggests the solution to, the complete dysfunction of American governance. When you combine federal spending with that of state and local governments, the U.S. spends about the same share of the economy on government as wealthy European social democracies do — 40 to 50 percent of GDP — and gets a lot less for its money. This is partly because Americans like it that way. They don’t like financing or employing big government, but they do like cashing its checks, getting its health care, and taking its tax preferences. This has entailed debt financing of our entitlements on a scale not seen in other countries, and, more important, massive outsourcing of nearly every federal-government function, from food stamps to Superfund cleanup.

It has also meant bizarre allocations of responsibility: The federal government spends huge amounts of money every year in grants and tax expenditures on the nonprofit sector without considering what it really gets in return. State and local governments act essentially as vassals of Washington, relying on federal aid and hamstrung by federal mandates.

DiIulio describes this dysfunctional settlement as “Leviathan by Proxy.” (He once refers to it, more zestily, as “Big Government in drag,” but the author being the first head of the White House’s faith-based-initiatives office, “Leviathan by Proxy” is the term he sticks with.) He nicely describes some of its incredible imbalances: Ninety percent of Department of Energy dollars are spent on contractors. The Department of Defense employs nearly as many contract workers as it does civil servants. The Centers for Medicare and Medicaid Services, which disburses more than $500 billion a year in claims, has just 5,000 employees, as many as Harvard University, which has a $4 billion budget. Conservatives may not thrill to the idea of hiring more people for the agency that’s implementing Obamacare, but DiIulio also cites some problems that might sound more familiar and urgent to those on the right.

Medicare and, to a lesser extent, Medicaid are quintessential parts of Leviathan by Proxy: Beneficiaries get nominally private services, while taxpayers bear all the inefficiencies and perverse incentives of government programs. Both make tens of billions of dollars in improper payments every year, partly because there are limited resources in the health-care bureaucracy to stop them, or even to measure them.

Remember the EPA official who called for “crucifying” particular violators of environmental regulations, making them into examples? DiIulio doesn’t mention the case, but he traces that attitude, a zeal in making an example of violators, to underfunding of the EPA bureaucracy: As the agency’s responsibilities have grown, the ranks of its employees have shrunk. There are 16,000 legal pesticides in America, for instance, and just 20 EPA managers to oversee them. The agency’s confrontational and legal-battle-based approach to regulation differs from that of European environmental regulators, who enforce rules uniformly and invite business groups to consult on them. The EPA, with so few inspectors and regulators, instead relies a lot on outside nonprofits’ bringing suits and on extracting penalties from environmental scofflaws, a practice known as “sue and settle,” that is a scourge of corporations and free-marketeers everywhere. It does seem that nonprofits and courts are displacing bureaucrats; but whether the shortage of EPA officials really accounts for the agency’s caprice is a tougher question.

So how did we end up with this mess? It has much to do with general American skepticism of government, but DiIulio could have done more on the details. Beginning in the 1980s, there have been very specific efforts to control or reduce the size of the federal work force, as part of the overall attempt to make government better, smarter, and cheaper. The smaller number of direct employees we’ve ended up with, DiIulio argues, has made almost no progress toward that goal.

Of course, everyone knows that bureaucrats are naturally inefficient. The problem with resorting to contractors and proxies instead is that no one knows whether they’re efficient either. There was sound theory behind President Reagan’s obsession with privatization, DiIulio admits, but government contracting in practice is nothing like privatization. The federal government has almost never bothered to assess whether contracted versions of programs are more efficient than completely bureaucratic ones. Individual contractors and contracts are assessed even more rarely — past performance of specific firms is barely even considered when awarding new contracts.

DiIulio doesn’t argue that contracted services are hugely wasteful (as, for instance, some liberal critics of private health insurance do). In fact, at one point, he takes pains to point out that paying for the implementation costs of transfer programs — which account for much of what the federal government does — are quite low. But the level of fraud and the lack of efficacy across all federal programs are also disappointing, and he expects more of government.

#page#How does he think we can get it? Revitalize good government by hiring enough people to do all the jobs Americans want government to do. He suggests hiring 1 million more federal civil servants by 2035; pushing the presidency to become a less political, more managerial office; rethinking what services subsidized nonprofits are expected to provide in government’s stead; reforming federal contracting; and freezing and then undoing many joint federal–state aid programs.

The idea of splitting up responsibilities in existing federal–state programs, such as Medicaid, has been around for a while: It’s not as original as some of DiIulio’s others, but it’s no less controversial. Fair-minded liberals know that programs with clear lines of responsibility work better, and they therefore tentatively support, say, splitting up Medicaid or devolving education; but interest groups resist such proposals. Some conservative legislators have more-revolutionary ideas: Senator Mike Lee (R., Utah) has proposed essentially getting rid of federal transportation spending and leaving the responsibility to the states.

Similarly, DiIulio is hardly the first public-policy scholar to say that federal contracting should be fixed, but some of his specific proposals are creative, e.g., hiring many more federal employees to oversee and assess goods-and-services acquisitions, and implementing better assessment metrics. The latter idea is not without appeal on the right: The blueprint that Paul Ryan unveiled this summer for reforming anti-poverty programs included proposals for federal programs to support evidence-based policymaking.

The book gives space to a liberal, E. J. Dionne, and a libertarian, Charles Murray, to respond to DiIulio briefly. Murray bluntly points out that, if the federal-contracting state is hugely inefficient and incompetent, so is the purely federal state. But DiIulio does emphasize that hiring more bureaucrats should come with reforms to pay and work rules; he should do more to make the case for this idea.

And doesn’t aim to replace the entirety of Leviathan by Proxy with more bureaucrats. He also wants more bureaucrats to oversee and procure the huge parts of the federal government that will still be contracted out. As with DiIulio’s overall proposal, it’s hard to say whether this would succeed — whether this really is the way to fix the appalling federal procurement processes. But reform is absolutely necessary, and DiIulio deserves credit for admitting that it may be impossible without more resources.

So DiIulio has some interesting, if unproven, ideas. (This small volume will be followed by a larger book by DiIulio in 2015, in which, one expects, he will lay out more of his case.) Why should conservatives care about them? We all want good government, of course, and the moral case for an efficient, competent welfare state is a powerful one (perhaps one that should get more respect on the right). But is there a reason to think DiIulio’s suggestions will also help conservatives achieve their broader goal of a limited, constitutional government?

He says yes: It simply would have been much harder to extend the federal government into every aspect of our lives if the government hadn’t seemed, in some ways, to remain the same size all along. He also makes a separation-of-powers argument: A too-small federal bureaucracy delegates far too much interpretation and enforcement of our laws to federal courts and subcontractors, where conservatives certainly don’t think it belongs. Unfortunately, while both of these arguments seem plausible, DiIulio fails to make either of them very convincingly or clearly.

And there are two recent developments that may make the let-a-thousand-bureaucrats-bloom proposal less appealing, especially to conservatives. DiIulio argues that some of federal bureaucrats’ worst behavior and biggest failures are the result of being overworked, and surely that is sometimes the case. But this explanation rang hollow for many when, in 2013, IRS officials tried blaming their targeting of conservative groups for extra scrutiny on lack of resources. At the very least, the episode seemed to suggest that important parts of the federal bureaucracy are filled with people instinctively hostile to conservative ideas and organizations.

Meanwhile, it’s possible that even the Veterans Affairs department is understaffed, but it has more civil servants (over 300,000) than any department except the Pentagon itself. Yet we learned this year that corruption and lack of accountability reigned there just as they do elsewhere, with deadly consequences.

E. J. Dionne, in his reply to DiIulio, scoffs at the practicality of his suggestions, including the idea of a managerial presidency. Some of his ideas do seem utterly impractical, such as substantially expanding the federal bureaucracy when trust in it is at historic lows. But for a presidential candidate to run on better, leaner government and the idea of a manager-as-president is not risible. Indeed, Barack Obama did a good bit of the former and Mitt Romney may have been best when he was doing the latter. Still, good and efficient public administration is currently way down the average voter’s priority list.

As the federal government continues to grow, as our population ages into federal programs such as Social Security and Medicare, and as fiscal realities require us to start paying the bills for big government, maybe good governance will become marginally more important in the minds of voters. If that’s what it takes to awaken the citizenry to revulsion toward Leviathan and appreciation of democratic governance, though, it would come a little too late for the Right.

Patrick BrennanPatrick Brennan is a writer and policy analyst based in Washington, D.C. He was Director of Digital Content for Marco Rubio's presidential campaign, writing op-eds, policy content, and leading the ...

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