Weak!(Cover story)

• Author: Edelman, Gilad

DONALD TRUMP AIMS TO DECIMATE THE FEDERAL WORKFORCE. THE RESULT WILL BE A BOOM IN FEDERAL CONTRACTING AND A COSTLIER, OLDER, AND MORE DYSFUNCTIONAL GOVERNMENT.

As you know, Donald Trump won remarkably few policy victories in the first six months of his presidency. The courts have blocked his Muslim ban. Obamacare repeal and replace is on life support in the Senate. Tax reform seems a distant prospect. Funding for a border wall remains hypothetical.

One item on his agenda, however, is moving right along: cutting the size of the federal workforce. You don't hear as much about this one, in part because Trump himself doesn't talk much about it. But it's clearly a priority--one the administration has billed as a way for Trump to make good on his promise to "drain the swamp." His "Contract with the American Voter," released a couple of weeks before last November's election, began with "Six measures to clean up the corruption and special interest collusion in Washington, DC." Item number two was a hiring freeze "to reduce the federal workforce through attrition."

Trump instituted the hiring freeze in one of his first acts as president. In March, his administration put out a budget outline that called for a $54 billion increase in defense-related spending offset by major reductions at other agencies--a budget that, if enacted, could result in a net cut of as much as 9 percent of the federal workforce, according to estimates by the chief economist of Moody's Analytics, Mark Zandi. In April, Trump lifted the hiring freeze, but his budget director, Mick Mulvaney, circulated a memo--titled "Comprehensive Plan for Reforming the Federal Government and Reducing the Federal Civilian Workforce"--asking every government agency to develop a plan by September to cut staff in line with Trump's budget objectives.

Of course, Congress, not the White House, decides the budget, and some leading Republicans have signaled their discomfort with how far Trump's proposed cuts would go. Still, GOP lawmakers are likely to sign on to cuts that are plenty deep. Indeed, decimating the civil service is one of the rare policy areas where Steve Bannon and Paul Ryan see pretty much eye to eye. Last year, Republican majorities in the House and Senate agreed on a nonbinding budget blueprint that would cut the nondefense workforce by 10 percent and direct agencies to hire just one employee for every three vacancies. (Barack Obama promised to veto any such spending bills.) The Senate can mandate workforce cuts through the filibuster-proof reconciliation process.

Even without Congress, Trump has a lot of power to force administrative agencies, which are under his control, to shed staff. Congress decides how much money agencies can spend on personnel, but the Office of Management and Budget (OMB) generally gets to tell them how to spend it. In response to the April memo, Veterans Affairs Secretary David Shulkin announced that his agency would leave more than 4,000 vacant jobs unfilled, and Secretary of State Rex Tillerson is reportedly planning to cut 2,300 jobs, or 9 percent of his whole staff, through attrition and buyouts.

The Trump/GOP effort to shrink the civil service plays on a narrative the American people have been hearing for decades: the federal workforce is bloated. As Mulvaney s guidance put it, there are "too many Federal employees stuck in a system that is not working for the American people." Press secretary Sean Spicer, announcing Trump's executive order in January, explained that the hiring freeze "counters the dramatic expansion of the federal workforce in recent years."

The only problem with this narrative is that it is the exact opposite of the truth. As a share of the U.S. workforce, the federal civil service is actually smaller than at any time since before World War II. In absolute terms, it has been about the same size for half a century. In 1966, there were about 2.1 million executive branch civil servants (not including Postal Service employees). Since then, the country's population has increased from 196 million to 323 million. The annual gross domestic product, along with annual government spending, more than quadrupled. And the workforce? In 2016, there were still only 2.1 million federal employees.

There's no rule that says the number of civil servants has to rise in lockstep with the population or the economy. Many federal jobs in the 1960s were clerical positions that computers have made obsolete. But still. In 1966, there was no Environmental Protection Agency, no Department of Homeland Security, no Federal Emergency Management Agency. Medicare and Medicaid had been signed into law just a year earlier. It's hard to believe that the same number of people we had in 1966 can run such a radically larger government enterprise.

And, in fact, they don't.

While the number of federal employees has basically flatlined for a half century, the government has ballooned if you include another group in your tally: private contractors. As the size and scope of federal programs grew, but the number of civil servants stayed fixed, that labor had to get done by someone. Congress's answer has increasingly been to contract with the private sector. So when Trump and the Republicans say they're going to shrink government by cutting federal workers, do a mental autocorrect. What they're really saying is, we're going to be shoveling a lot more money out the door to federal contractors.

This means that the federal government is about to get considerably costlier and more dysfunctional. Despite the claims made about the efficiency of the private sector, hiring for-profit contractors costs taxpayers a lot more money than paying civil servants does--to the tune of hundreds of billions per year. Meanwhile, an understaffed government is one that screws up more often as shorthanded agencies struggle to manage programs, monitor all the contractors, and prevent Hurricane Katrina-type disasters. And the addiction to contractors at the expense of adding federal employees means that these agencies are staffed overwhelmingly by people at or nearing retirement age, with no young talent coming up through the ranks behind them.

Ever since Ronald Reagan said "government is the problem," Republicans have been happy to outsource-even though it wastes money--because it lets them look tough on "big government" without actually cutting the programs their constituents like. Democrats, meanwhile, have gone along with growing this shadow government as a way to make sure federal programs are administered without opening themselves up to attacks that they are growing the bureaucracy.

In other words, Trump didn't create this problem. But if he follows through on his threats, he may push it to a breaking point.

No one knows exactly how many contractors the federal government uses at any one time--more on that later--but Paul Light, a public service professor at New York University and the leading expert on what he calls "the true size of government," puts the number at around 3.7 million as of 2015, down from a much larger total at the height of the Iraq and Afghanistan wars. (That's in addition to 1.6 million grant-funded nonprofit employees.)

This phenomenon has received some attention in the context of the wars. George W. Bush--followed by Barack Obama--needed more bodies to serve overseas than the military could provide. Rather than reinstate the draft (politically impossible) or entice more volunteers with higher pay (politically risky), the government turned to private contractors. That helped hide the true size of the war effort. News reports on the number of troops left in those countries don't include the enormous contractor force. As of 2016, per Foreign Policy, there were about three contractors (28,626) for every uniformed soldier (9,800) in Afghanistan. When contractors are killed--and they are, more often than U.S. troops--they aren't included in the official casualty numbers.

Very few Americans realize that this exact phenomenon--using contractors to hide the true size and cost of a government mission--is not even close to being limited to the military. It's ubiquitous. There has been a de facto political cap on federal workers since the 1970s, and every administration since at least Jimmy Carter's has used contractors to get around it. Bill Clinton, who announced that "the era of big government is over," harvested the end of the Cold War to cut 400,000 federal jobs, mostly in defense. But big government was only over if you ignored the contracting workforce, which kept rising by the hundreds of thousands. The Bush administration took things to another level, as contracting morphed from a way to sneakily expand government to an ideological goal in itself.

The Department of Defense (DOD) employs around 740,000 full-time civilians--and an estimated 700,000 contractors. In 2010, Department of Homeland Security (DHS) officials told Congress they had more contractors (about 200,000) than direct employees (188,000). At the United States Agency for International Development, the ratio of contractors to employees is nine to one.

Government contracts broadly fit into two categories: goods--like fighter jets and office furniture and copy machines--and services. A service contractor is, in essence, someone brought in to do the kind of work that could be done by a federal employee, from cybersecurity to mopping the floors at a VA hospital. Walk into any federal agency office, and you'll see service contractors and civil servants sitting side by side, doing the same work, indistinguishable other than the employer listed on their badges.

NYU's Paul Light estimates that there are between 600,000 and 800,000 service contractors; the government spends more on them than it does on the salaries of the entire civil service, which has three times the number of people. Contracting accounted for 40 percent of all discretionary spending in 2015, and service contracts...