The Misguided GOP Attack on Government Bureaucrats

The government really is wasting taxpayers’ money, just not on bureaucrats. It’s the contractors that people should be pissed about.

Joe Davidson wrote in the Washington Post over the weekend about a key figure in the ongoing Republican effort to decimate the federal workforce: Trump’s labor adviser James Sherk. Before his White House role, Sherk went to the conservative Hillsdale College and spent three years in the economics program at the University of Rochester, but came away with only a master’s degree. Then he spent more than a decade at the conservative Heritage Foundation, where he authored a series of papers arguing that federal employees are overpaid. (Other frequent topics included the beauty of right-to-work laws and the dangers of raising the minimum wage.)

Josh Marshall summarized Sherk’s resume less charitably:

You can get a good sense of what the Trump administration has in mind by reading a paper Sherk co-authored for Heritage in 2016, titled “Why It Is Time to Reform Compensation for Federal Employees.” The paper proposes a variety of ways to cut civil servants’ pay and benefits. It builds off of Sherk’s earlier research purporting to show that federal employees are wildly overpaid compared to similar private-sector workers—including benefits, he claims, they make between 30 and 40 percent more.

That number is almost certainly exaggerated, but it does seem true that federal workers get a compensation premium relative to the private sector—16 percent, according to the nonpartisan Congressional Budget Office. But is that so bad? We want government to attract top talent. And the typical American worker has seen almost zero annual wage growth since 1973. Maybe the problem is that private sector employees are underpaid. If federal employees make more than workers in the private sector, why should we put a stop to it?

The only answer Sherk’s paper offers is, “to save money.” He notes that using the CBO’s estimates, paying federal workers market rate would have saved $47 billion this year. On the one hand, that’s not nothing. On the other hand, the federal government spent around $3.65 trillion this year. The deficit alone is $666 billion, and the GOP tax plan will likely more than double that over the next decade.

We know, thanks to that tax plan, that the modern Republican Party and its appendages like Heritage don’t really care about the deficit. So why the persistent focus on cutting labor costs? The most obvious answer is that it’s an extension of the right’s general anti-government ideology. Government is bad, the private sector is good, so we should fire all the bureaucrats—or at least cut their pay—and privatize as many government functions as possible.

Another answer, which I’ve come to think may be just as important, is that complaining about overpaid bureaucrats is a convenient distraction for conservative politicians. They scapegoat civil servants and public-sector unions, convincing white rural and working-class voters that these employees are getting rich off of public money while working cushy white-collar jobs. Wisconsin Governor Scott Walker made his whole career on this brand of politics, which political scientist Katherine Cramer calls “the politics of resentment.”

If Republicans really cared about saving money, they’d hire more federal workers. One of the most overlooked stories about government of the last half century is the fact that the size of the federal workforce hasn’t budged since the 1960s, even as the country’s population and federal spending have grown massively. While politicians of both parties have paid lip service to shrinking government, they have presided over an extraordinary expansion of a shadow government of private contractors. And while federal employees may make a good living, it costs much more to hire a private contractor than a direct employee. Here’s how I put it in a piece from our summer issue:

A 2011 study by the Project on Government Oversight…found that, benefits included, the average federal employee makes about 20 percent more than a comparable worker—not a contractor, just any old person—in the private sector. But here’s the crucial part: in thirty-three of the thirty-five categories, according to the report, hiring a contractor costs the government nearly twice as much as an employee…In some cases, it’s much more: hiring a contractor to do “claims assistance and examining” costs nearly five times as much as hiring a federal employee.

The government makes it very hard to figure out exactly how many contractors it employs or how much they’re paid. But according to the best available estimate, there are between 600,000 and 800,000 “service contractors,” meaning people who do the same kind of work a federal civil servant could do. And because contractors are so expensive, the government spends more on these service contractors than it does on the entire federal work force—2.1 million people. Breaking this expensive and constitutionally dubious reliance on private contractors is the government reform we should really be talking about. And Democrats should take a page out of conservatives’ book. Sometimes resentment is justified. The government really is wasting taxpayers’ money, just not on bureaucrats. It’s the contractors that people should be pissed about.

Speaking of wasting money, here’s a suggestion for a really good way to spend yours: on a tax-deductible donation to the Washington Monthly. See, it’s only thanks to months of in-depth reporting over the summer that I’m able to share these insights about overpaid contractors and the underfunded federal bureaucracy. If you value that kind of time- and labor-intensive policy journalism, I hope you’ll consider chipping in to our end-of-the-year fundraising drive. Give whatever you can between now and New Year’s and your contribution will be matched by three generous foundations. However much you can afford to give—whether it’s $10 or $50 or $500—your contributions are vital to our ability to keep investing in serious policy-focused journalism. Thanks for giving what you can.

Gilad Edelman

Gilad Edelman is editor of the Washington Monthly.