Why More Federal Employees Means a Smaller Federal Government

Would you believe that the best way to shrink the federal government is more federal employees?

That's the case made by John Dilulio, who served as the first director of the White House Office of Faith-Based and Community Initiatives under President George W. Bush. He argues that the current federal government is run by outsiders, which makes the government bloated and inefficient. He says the key is to hire more federal workers – which would save money.

He says slowly cutting spending on these for-profit outside companies that currently run government would make marked improvements in the long run.

Members of Congress and blue-ribbon panels calling for cuts in the federal workforce are missing the real problem. We don’t need fewer federal workers; we need more of them — a lot more. More direct public administration would result in better, smarter, more accountable government.

Right now, that administration is too diffuse. Look first at the states, where the federal government spends more than $600 billion per year on more than 200 grant programs for state and local governments, a 10-fold increase, in constant dollars, since 1960. And while the post-1960 federal civilian workforce has remained steady, the state and local government workforce has roughly tripled to more than 18 million. Many state workers function as de facto federal bureaucrats. For instance, the largest single item in most state budgets is the federal-state Medicaid program, and Washington covers about half of that program’s administrative costs. And more than 90 percent of EPA programs are administered by state and local agencies that together employ many times the EPA’s workforce of less than 20,000.

The federal government also spends more than $500 billion a year on contracts with for-profit firms. The Pentagon alone obligates more than $300 billion each year to private contractors, much of it through more than 100,000 single-bid contracts. The contractors do everything from design and deliver major weapons systems to supply on-the-ground security forces. The Defense Department has roughly 800,000 civilian workers — plus the equivalent of about 700,000 full-time contract employees. In 2010, it was revealed that the Department of Homeland Security had more contract employees (about 200,000) than federal bureaucrats (about 188,000). And the Energy Department spends about 90 percent of its annual budget on private contractors, who handle everything from radioactive-waste disposal to energy production.