Should contractors count when feds want to cut heads?

The size of the contractor workforce is again drawing the attention of Capitol Hill.

A House hearing held May 26 to examine the size of the federal workforce resulted in no clear conclusion about whether the number of federal employees should be reduced. However, what did become more apparent is that discussions about the size of the workforce might need to include contractors.

The House Oversight and Government Reform Committee's Federal Workforce Subcommittee held the hearing, titled “Rightsizing the Federal Workforce.” Subcommittee Chairman Rep. Dennis Ross (R-Fla.) called the current federal workforce “bloated” and “fiscally unsustainable.”

But Democrats on the panel argued that any debate over the size of the federal workforce must include contractors.

“It’s obscene that we’re focusing today on the 2.5 million employees of the federal government, while completely ignoring the 10.5 million contractors … that work for this government,” said Rep. Stephen Lynch (D-Mass.), the subcommittee’s ranking member. “If we’re serious about reducing costs, we need to look at the contractor community.”

Rep. Cynthia Lummis (R-Wyo.) and Rep. Thomas Marino (R-Pa.) testified about recent bills they have introduced that would shrink the size of the federal workforce through attrition.

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Lummis’ bill, the Federal Workforce Reduction Act of 2011, would put a hiring freeze on all federal agencies except the Defense, Homeland Security and Veterans Affairs departments. The legislation would take effect in fiscal 2012 and would require the government to hire only one replacement for every two federal employees who retire or leave the government.

Marino’s bill, the Federal Hiring Freeze Act of 2011, would freeze most federal hiring until the director of the Office of Management and Budget “determines that a federal budget deficit no longer exists.” The bill would allow for “common-sense exceptions,” Marino said, during times of war and for national security concerns.

Lummis and Marino said their bills are not intended to be an attack on federal employees. And Marino explained that these legislative proposals are just one step in the process of getting the nation’s fiscal house in order.

“A hiring freeze is not the silver bullet that will unilaterally lead us out of this crisis,” Marino said. “It is a start.”

But other witnesses, echoing Lynch, said that contractors -- who are paid from taxpayer funds as are agency employees -- might need to be included in any measures that affect the workforce. At the least, the witnesses said, the question should be part of the discussion.

Andrew Biggs, a resident scholar at the American Enterprise Institute for Policy Research, agreed that there is not enough known about how the contractor workforce functions. He added that although he is confident that the government could function with a smaller workforce, looking at only one group of employees to bring down costs is "sort of kidding ourselves."

William Dougan, national president of the National Federation of Federal Employees and chairman of the Federal Workers Alliance, also said contractors need to be included in the workforce size debate.

But Dougan explained that what concerns him most is that lawmakers have only been talking about saving money without accounting for the work that will not be completed if the workforce is cut. “There is no accountability for what is the impact [on] services,” Dougan told lawmakers. “What are we not going to do and what are we going to do less of.”

Although Dougan expressed opposition to what he described as the “arbitrary staffing limitations” that would be imposed by Lummis’ and Marino’s bills, he said he is not entirely against downsizing. However, he said that the first piece of business in the size debate should be determining what government services will no longer provide if the workforce does get smaller.