A recent article by two notable scholars of government, Don Kettle and Paul Glastris, reminded me of my old preoccupation with what Americans erroneously call “privatization.” I began to research the issue after watching the very uneven results of then-Mayor Goldsmith’s love affair with the concept. (A search for the term “privatization” through the archives of this blog will return a number of detailed posts on the subject.)
My skepticism begins with the misuse of the term; unlike actual privatization–which would involve selling off government operations and allowing them to sink or swim in the marketplace (a la Margaret Thatcher), Americans use the term to mean government “contracting out” for goods and services. There are obviously times and tasks where contracting makes sense. My concern is that government isn’t a very good judge of when and what those are. Contracts with units of government are qualitatively different from contracts between private actors, and those differences make it far more likely that the contracts ultimately negotiated will be unfavorable to taxpayers.
And of course there’s the predictable “crony capitalism,” contracts rewarding campaign donors with lucrative contracts at taxpayer expense.
A few years ago, I came across data suggesting that the federal government actually pays the salaries of some 17 million full-time contract workers who aren’t technically government employees.
A number of the problems created by extensive federal contracting are the subject of the linked essay, titled (tongue in cheek) “To AOC: Only you can fix the federal government.”
You and other progressive leaders have bold ideas for how government can help people and save the planet. The Green New Deal. Medicare for All. Free college. A massive investment in public housing. We aren’t in full agreement with that agenda, but that’s not our point. Our point is that to achieve your goals, you’re going to need a federal government as robust as your ideas. And right now, you don’t have it.
Instead, the government agencies you’ll need to carry out your policies are a disaster waiting to happen. Like the infrastructure you and others rightly say needs rebuilding, our federal bureaucracies are a patched-together mess that can barely handle the weight of the burdens already placed on them.
The essay pointed to specific examples, including the GOP’s assault on the Internal Revenue Service.
In 2004, George W. Bush’s administration turned the job of collecting the hundreds of billions of dollars that tax scofflaws owed Uncle Sam over to private collectors, with the idea that they could do a better job than federal workers. The private collectors brought in money—but just $86 million, and most of that was from easy-to-collect cases that began running out after just a few months. Then the IRS brought the work back in-house, and its agents collected almost two-thirds more money in just a few months, and it came from the harder cases the private companies had left behind. Relying on private tax collectors actually ended up costing the federal government money.
But the Republicans weren’t done. They slashed 20 percent of the IRS’s budget and 22 percent of its staff from 2010 to 2018. For people making more than $1 million, the number of tax audits dropped by 72 percent—and the money the IRS collects from audits fell by 40 percent.
Government operations stymied by a lack of skilled in-house personnel include–among other things– the government’s inept handling of refugees and the (mis)management of Medicare and Medicaid ($103.6 billion in improper payments in 2019 alone).
The list goes on. Click through and read the litany, if you want to set your hair on fire…
What the essay makes clear is something that far too few citizens recognize: it isn’t enough to have good policies. Passing a law to do X or Y is only the start; the unit of government charged with administering the law or program needs sufficient resources to do so. Those resources include adequate numbers of well-trained employees and skilled supervision– virtually impossible when contractors are providing the bulk of the services.
We’ve long relied on service contractors beyond the point of reason. We now have contractors who do more or less the same work as civil servants, sitting in the same offices, for years on end, typically at far higher cost, often using government email addresses so it’s impossible for anyone on the outside to know whether they’re dealing with a government official or a contractor. We have contractors who oversee contractors, contractors who write policy for government officials, and federal contract managers who are too few in number and too outgunned in skills to manage it all.
The hollowing out of government’s management capacity is the result of the GOP’s persistent attacks on the civil servants who work for it.
It has to change.