# Civil Service Reform

by Patrick Korten and cato.org
Subcommittee on Civil Service
Committee on Government Reform and Oversight
United States House of Representatives
This testimony was delivered on June 24, 1998.
Mr. Chairman, thank you for the opportunity to testify here today on the issue of civil service reform goals. In order to comply with the Truth in Testimony laws, I will note for the record that neither I, nor the Cato Institute, receive any funds from the federal government. Nor have we ever received such funds.
As a non-profit, educational institution, the Cato Institute does not, of course, endorse or oppose any specific piece of legislation. And as is always the case when our policy specialists present testimony, the views that I express here today are my own. But I'm glad to be able to share with you some of the principles that we who are strong believers in limited, constitutional government would find desirable in any overhaul of the federal civil service system.
As a general rule, those of us at Cato believe that the best government reform would be a rather dramatic reduction in the size and scope of government. In our Cato Handbook for the 105th Congress, we make the case for shutting down the Departments of Education, Commerce, Labor, Energy, Agriculture, Interior, Transportation and Veterans Affairs, and privatizing many other agencies, such as the Tennessee Valley Authority, Amtrak and the FAA.
There are plenty of people here in Washington who are content to try and make the government-owned trains run on time, and of course there's nothing intrinsically wrong with efficiency. But we'd prefer privatizing the railroad, and getting the government out of businesses where it doesn't belong.
Nonetheless, the federal government has legitimate core functions, and ensuring that the civil service bureaucracy carries out those functions effectively is an important public policy goal.
I was a non-career member of the Senior Executive Service for nearly eight years during the Reagan Administration, and believe strongly that political and career civil servants are both very important to the functioning of government in a constitutional republic. And I believe that a number of the reforms you are considering would highlight their distinct roles in ways that would serve the public well.
Political appointees are, by design, transient members of the federal work force. They hold their positions because they share the President's views on public policy. They are willing and able to articulate those views to Congress and to the public on the President's behalf, and work to see that they are implemented at the agency level insofar as law and regulation permit. Together, the President and his (or her) political appointees perform a critical function: working to translate the issues the President campaigned on into policy initiatives. When the occupant of the White House changes, they must change, too.
Career civil servants perform a very different role. They implement policy, rather than make it. They provide continuity and specialized expertise based on institutional knowledge and experience. Traditionally, at least, many spend their entire working careers in government, although that is changing.
These roles are separate, and it's important to do all we can to keep them separate.
Most political appointees understand the temporary nature of their role quite well. But in some ways, we seem to go out of our way to tempt them to stick around. It's altogether too common for political appointees to "career in" as an Administration is coming to an end, and there's absolutely no reason why we should permit that. People who hold political appointments should not be allowed to compete for career positions until a new Administration has taken office. And I think it goes without saying that White House officials should no longer have a Ramspeck-like opportunity for automatic conversion to career jobs.
A factor that has long reinforced the temptation for some political appointees to stick around is the structure of the federal retirement system, and establishing a portable retirement system for them, involving individual 401K-type accounts, would be an important step.
Frankly, though, I would strongly recommend moving to a system of individually-owned retirement accounts for all federal employees, political or career. The "golden handcuffs" of overly-generous federal employee pay and benefits aren't quite what they once were. But moving to a system of individual retirement accounts would make the choice to consider employment outside the government easier for employees who find themselves in jobs they no longer find satisfying, or where further opportunities for advancement are few. I don't think here's anything worse for civil servants or the public they serve than for them to be trapped in a position they hate by a compensation system that's hard to walk away from. The American work force has become much more mobile in recent years. Few people regard working for a single employer for an entire career the "default option" any more. Our economy is much the better for it. And there's no reason why the federal work force should be any different.
I should add that the present national discussion on the future of the Social Security system may soon overwhelm the discussion of what sort of retirement system we have for federal employees. Allowing workers to take that 12.4 percent of payroll and put it into private retirement accounts instead of the Ponzi scheme that the Social Security system really is would allow everyone, government and private sector worker alike, to accumulate personal wealth and enjoy retirement incomes that are far higher than Social Security will provide.
Let me touch briefly on several other reform opportunities worthy of note.
Limiting assignments under the Intergovernmental Personnel Act to other government agencies at the state or local level is long overdue. Allowing career civil servants to accept IPA assignments at non-governmental organizations has led to many situations where they engage in advocacy at the taxpayer's expense. If career employees want to get into the business of policy advocacy, they should be changing employers, not office locations. The IPA was designed to give government employees the opportunity to see how things work at other levels of government, to broaden their perspective. Heavy-handed federal regulation can look quite different when you're on the receiving end at the state or local level, for example. But the IPA should never be used to beef up the resources of a private group that's busy trying to push public policy one way or the other.
Finally, I encourage you to curb recent trends that undermine the process of assessing performance of the federal work force. The growing popularity of so-called "pass/fail" performance appraisal systems in federal agencies threatens to make appraisals virtually meaningless. It's important for managers to make the sometimes tough judgements about the performance of their employees on a regular basis. And it's important for employees to know how their work is being assessed by management. There is nothing more damaging to the morale of a hard-working, high-performing employee than to receive the same performance rating as some unmotivated schlump who's barely getting by. It's even more devastating to see the schlump hang on to his job in a reduction in force while others who've worked harder and outperformed him get cut.
It is crucial that pay and retention be tied to performance appraisals. There's got to be a reward that goes beyond a pat on the back. Granting within-grade raises automatically seriously undermines the principle of pay-for-performance. Managers should be able to make within-grade determinations without facing an arduous appeals process that extends beyond the agency administrative review system. And good performance ought to count for more than it does in RIF retention.
Mr. Chairman, I consider it a truism that we're awfully lucky in America that we don't get all the government we pay for. Paring back the size and scope of the federal government should be a top priority of this Congress. Where the federal establishment is properly within its constitutional bounds, the citizens of the United States deserve a civil service where performance excellence is valued and rewarded, where the compensation system is fair while enabling mobility, and where the roles of political and career federal workers are crisply defined and carefully separated.