CBO Lays Out Pros, Cons of Hiring Freeze

The latest CBO report on deficit-cutting options lays out, without taking sides, arguments for and against a partial federal hiring freeze. On the pro side, it said, “some agencies could continue to provide crucial services with a smaller workforce by working more efficiently and by eliminating services that are not cost-effective. The number of management and supervisory positions has increased in many agencies as the workforce has aged, and research suggests that, in some cases, the additional layers of management hamper performance. This option could encourage agencies to reduce the number of managers and supervisors through attrition as people in those positions retired over the next few years. Research also suggests that federal workers earn more in occupations that do not require a college degree than do their counterparts in the private sector. If private-sector compensation is indicative of the value of those positions, then the savings generated by trimming that part of the workforce would exceed the value of the services that those jobs produce.” On the counter side, it said, “trends in federal employment suggest that the federal workforce may already be under strain from cost-cutting measures and that further reductions could impair the government’s ability to fulfill parts of its mission. The federal civilian workforce is about the same size as it was 20 years ago, although both the number of people the government serves (as measured by the population of the United States) and federal spending per capita have grown substantially since that time.” Also, the reductions “would probably reduce the quality and quantity of some of the services provided and could have other negative effects, such as increasing the amount of fraud and abuse in some government programs. Moreover, because this option would be phased in as workers left their positions, federal agencies would have little control over the timing of the workforce reduction.”