Cutting Federal Workforce Costs Money?

John Gravois writing in the Washington Monthly makes the case that reducing the federal workforce may actually cost more money than it saves:

The problem is that, as employers go, the federal government is in fact pretty exceptional. A corporation can shed workers and then revise its overall business strategy accordingly. A strapped city government can lay off a few street sweepers and then elect to sweep the streets less often. But federal agencies are governed by statutory requirements. Unless Congress changes those statutes, federal agencies’ mandates—their work assignments—stay the same, regardless of how many people are on hand to carry them out. ... “It raises the hairs on my neck when I hear people say we’ve got to do more with less,” says John Palguta, a vice president for policy at the Partnership for Public Service, a nonprofit focused on the government workforce. “The logical conclusion is we’re going to do more with nothing.” ...

[I]f Congress and the White House agree to substantial cuts in the federal workforce but don’t also agree to eliminate programs and reduce services, the end result could be more spending and deficits, not less. Strange as it may sound, to get a grip on costs, we should in many cases be hiring many more bureaucrats—and paying more to get better ones—not cutting their numbers and freezing their pay. Because in many parts of government, the bureaucracy has already crossed that dangerous threshold beyond which further cuts can only mean greater risk of a breakdown. Indeed, much of the runaway spending we’ve seen over the past decade is the result of our having crossed that line years ago—the last time there was a Democrat in the White House, a divided government, and calls for slashing the federal workforce in the air. ...

The average voter may imagine federal bureaucracies as overstaffed, full of people leaning on their rakes and sharpening their pencils. But the truth is, most agencies are, if anything, understaffed. The government has grown tremendously in its spending and scope since the 1960s, and the population of the nation has grown by a margin of 100 million people, but the size of the federal workforce has remained remarkably static at about 2 million. Since coming into office two years ago, the Obama administration has bumped up staff levels by about 100,000, in part through “in-sourcing”—bringing back into the civil service inherently governmental work that had been farmed out to contractors. If this leads to better management, it could well mean a stanching of some of the cost overruns and regulatory failures that have been causing the government to bleed red ink. Today’s mindless demands for austerity, however, could reverse this trend.