Commentary

Bush Firm on Labor Flexibility

By Chris Edwards and Tad DeHaven
This article originally appeared on FOXNews.com on October 10, 2002.
President Bush has made a bad habit of putting special interest demands ahead of the general public good on issues such as farm subsidies and trade protectionism. But on the current battle to create a new Department of Homeland Security, it is the Democrats who are kowtowing to the special interests.

The DHS bill is stalled in the Democrat-controlled Senate, which is opposing crucial reforms to ensure that the new 170,000-person department has a flexible workforce. The Senate stalemate prompted Bush to take a dig at his union-backed opponents by observing that “the Senate is more interested in special interests in Washington and not interested in the security of the American people.”

Bush wants to ease the rigid federal labor rules to allow easier hiring and firing so the DHS can respond effectively to security threats. Unfortunately, Sen. Daschle and others fear any loosening of the union grip on the federal workforce. Yet federal labor rules currently put up so many barriers to removing bad employees that few supervisors ever try. The administration has noted that it takes 18 months or longer to fire a poorly performing federal worker. The performance enhancing “stick” of firing is almost completely absent from the federal workplace.

Indeed, Office of Personnel Management figures show that only 434 government employees-or .025 percent of the total federal workforce-were removed for poor performance in 2001. By contrast, the firing rate in the private sector may be as high as 4 percent annually, although accurate figures are not available. Certainly, corporate CEOs get canned at a rapid rate. One study found that 37 percent of departing CEOs of the largest U.S. companies in recent years were fired rather than leaving voluntarily.

Easing the rules for the new DHS to get rid of the bad eggs is only part of the solution. More efficient hiring practices are needed as well. Administration data indicate that it takes an average of five months to hire a federal employee, yet new hires may have key abilities useful on crucial security projects right away.

Once hired, federal workers have no functioning “carrots” to encourage them to perform the best that they can. That’s because the federal merit pay system is dysfunctional. For example, new data show that fully 84 percent of federal executives received the very highest performance rating in 2001. For federal workers in general, only 619 were denied a pay raise last year because of poor performance. Thus, federal employees are given little incentive to stand out because excellence and incompetence are rewarded the same.

Certainly, most federal workers try to do a good job because they are proud of their work. But numerous high-profile blunders by the INS, FBI, CIA, and other agencies in the wake of Sept. 11 tell us that pride is not enough. Almost no heads have rolled in the wake of what is one of the greatest failures of our government. Yet if the policymakers lining up against workforce reform have their way, the new DHS will not have the tools needed to prevent the next disaster. While we need workplace reforms in every federal department, it is crucial that we start reforms with the DHS.

Beyond increased flexibility for hiring and firing, a Homeland Security bill must give the president the ability to waive union agreements when national security is at stake. Recognizing that every president since Jimmy Carter has had such power, Sen. Miller, D-Ga., asked senators still blocking the DHS bill if they would “tie the hands of our president, or give him the same unfettered flexibility other presidents have had before him?” While union-backed senators ponder that question, Bush seems committed to not allowing labor privileges to trump national security

Chris Edwards is director of fiscal policy and Tad DeHaven is a fiscal researcher at the Cato Institute.