Civil Service Reform


Mr. Chairman, thank you for the opportunity totestify here today on the issue of civil service reform goals. Inorder to comply with the Truth in Testimony laws, I will note forthe record that neither I, nor the Cato Institute, receive anyfunds from the federal government. Nor have we ever received suchfunds.

As a non-profit, educational institution, the Cato Institutedoes not, of course, endorse or oppose any specific piece oflegislation. And as is always the case when our policy specialistspresent 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 principlesthat we who are strong believers in limited, constitutionalgovernment would find desirable in any overhaul of the federalcivil service system.

As a general rule, those of us at Cato believe that thebest government reform would be a rather dramaticreduction in the size and scope of government. In our CatoHandbook for the 105thCongress,we make the case for shutting down the Departments of Education,Commerce, Labor, Energy, Agriculture, Interior, Transportation andVeterans Affairs, and privatizing many other agencies, such as theTennessee Valley Authority, Amtrak and the FAA.

There are plenty of people here in Washington who are content totry and make the government-owned trains run on time, and of coursethere's nothing intrinsically wrong with efficiency. But we'dprefer privatizing the railroad, and getting the government out ofbusinesses where it doesn't belong.

Nonetheless, the federal government has legitimate corefunctions, and ensuring that the civil service bureaucracy carriesout those functions effectively is an important public policygoal.

I was a non-career member of the Senior Executive Service fornearly eight years during the Reagan Administration, and believestrongly that political and career civil servants are both veryimportant to the functioning of government in a constitutionalrepublic. And I believe that a number of the reforms you areconsidering would highlight their distinct roles in ways that wouldserve the public well.

Political appointees are, by design, transient members of thefederal work force. They hold their positions because they sharethe President's views on public policy. They are willing and ableto articulate those views to Congress and to the public on thePresident's behalf, and work to see that they are implemented atthe agency level insofar as law and regulation permit. Together,the President and his (or her) political appointees perform acritical function: working to translate the issues the Presidentcampaigned on into policy initiatives. When the occupant of theWhite House changes, they must change, too.

Career civil servants perform a very different role. Theyimplement policy, rather than make it. Theyprovide continuity and specialized expertise based on institutionalknowledge and experience. Traditionally, at least, many spend theirentire working careers in government, although that ischanging.

These roles are separate, and it's important to do all we can tokeep them separate.

Most political appointees understand the temporary nature oftheir role quite well. But in some ways, we seem to go out of ourway to tempt them to stick around. It's altogether too common forpolitical appointees to "career in" as an Administration is comingto an end, and there's absolutely no reason why we should permitthat. People who hold political appointments should not be allowedto compete for career positions until a new Administration hastaken office. And I think it goes without saying that White Houseofficials should no longer have a Ramspeck-like opportunity forautomatic conversion to career jobs.

A factor that has long reinforced the temptation for somepolitical appointees to stick around is the structure of thefederal retirement system, and establishing a portable retirementsystem for them, involving individual 401K-type accounts, would bean important step.

Frankly, though, I would strongly recommend moving to a systemof individually-owned retirement accounts for all federalemployees, political or career. The "golden handcuffs" ofoverly-generous federal employee pay and benefits aren't quite whatthey once were. But moving to a system of individual retirementaccounts would make the choice to consider employment outside thegovernment easier for employees who find themselves in jobs they nolonger find satisfying, or where further opportunities foradvancement are few. I don't think here's anything worse for civilservants or the public they serve than for them to be trapped in aposition they hate by a compensation system that's hard to walkaway from. The American work force has become much more mobile inrecent years. Few people regard working for a single employer foran entire career the "default option" any more. Our economy is muchthe better for it. And there's no reason why the federal work forceshould be any different.

I should add that the present national discussion on the futureof the Social Security system may soon overwhelm the discussion ofwhat sort of retirement system we have for federal employees.Allowing workers to take that 12.4 percent of payroll and put itinto private retirement accounts instead of the Ponzi scheme thatthe Social Security system really is would allow everyone,government and private sector worker alike, to accumulate personalwealth and enjoy retirement incomes that are far higher than SocialSecurity will provide.

Let me touch briefly on several other reform opportunitiesworthy of note.

Limiting assignments under the Intergovernmental Personnel Actto other government agencies at the state or local level is longoverdue. Allowing career civil servants to accept IPA assignmentsat non-governmental organizations has led to many situations wherethey engage in advocacy at the taxpayer's expense. If careeremployees want to get into the business of policy advocacy, theyshould be changing employers, not office locations. The IPA wasdesigned to give government employees the opportunity to see howthings work at other levels of government, to broaden theirperspective. Heavy-handed federal regulation can look quitedifferent when you're on the receiving end at the state or locallevel, for example. But the IPA should never be used to beef up theresources of a private group that's busy trying to push publicpolicy one way or the other.

Finally, I encourage you to curb recent trends that underminethe process of assessing performance of the federal work force. Thegrowing popularity of so-called "pass/fail" performance appraisalsystems in federal agencies threatens to make appraisals virtuallymeaningless. It's important for managers to make the sometimestough judgements about the performance of their employees on aregular basis. And it's important for employees to know how theirwork is being assessed by management. There is nothing moredamaging to the morale of a hard-working, high-performing employeethan to receive the same performance rating as some unmotivatedschlump who's barely getting by. It's even more devastating to seethe schlump hang on to his job in a reduction in force while otherswho've worked harder and outperformed him get cut.

It is crucial that pay and retention be tied to performanceappraisals. There's got to be a reward that goes beyond a pat onthe back. Granting within-grade raises automatically seriouslyundermines the principle of pay-for-performance. Managers should beable to make within-grade determinations without facing an arduousappeals process that extends beyond the agency administrativereview system. And good performance ought to count for more than itdoes in RIF retention.

Mr. Chairman, I consider it a truism that we're awfully lucky inAmerica that we don't get all the government we pay for. Paringback the size and scope of the federal government should be a toppriority of this Congress. Where the federal establishment isproperly within its constitutional bounds, the citizens of theUnited States deserve a civil service where performance excellenceis valued and rewarded, where the compensation system is fair whileenabling mobility, and where the roles of political and careerfederal workers are crisply defined and carefully separated.

Patrick Korten

Subcommittee on Civil Service
Committee on Government Reform and Oversight
United States House of Representatives