This Is Not a Horror Story

There is a lot of garment rending and teeth gnashing going on with respect to the impact that a sequester in FY 2014 might have on the civil servants working in the Department of Defense. Two weeks ago, somebody leaked a Pentagon memo to Tony Capaccio at Bloomberg, which says the DOD might not use furloughs next year to deal with the budget cuts. Instead, the memo says, the Pentagon might put 6,272 jobs on the chopping block, using a Reduction in Force (RIF) to eliminate personnel altogether.

This makes for a good headline, but maybe the headline is more meaningful than the story. We are, as I have said many times, in a defense drawdown. During a drawdown, everything gets smaller. The uniformed military gets smaller, the Pentagon’s civil service gets smaller, the number of carrier battle groups, brigades, and air wings all decline. It is what happens after a war.

In reality, 6,272 people in a total civil service workforce of roughly 800,000 don’t constitute much — about three quarters of a percent. During the drawdowns after the Korean War, the Vietnam War, and the end of the Cold War, the civil service in the Pentagon shrank between 16 and 34 percent over 10 years. It is a normal event, not a horror story. But like the Pentagon’s chilling readiness stories, and the initial warnings about furloughs, horror sells in a budget war.

As I have argued for months, the Pentagon ought to be planning for the drawdown, sequester or not, including by shrinking civilian employment. It is worth noting that, while the level of active-duty personnel stayed relatively flat — 3-percent growth — over the past decade (the Army and Marines grew, but the Navy and the Air Force shrank), the civilian workforce at the Pentagon actually grew roughly 17 percent.

Good public policy says that level of personnel need not stay the same, with recent wars ended or ending. Better public policy says the DOD should not be warning of RIFs, but instead be doing the same force planning on the civilian side that it is doing on the military side, assuming that personnel will continue to decline over the next decade. The civil service is part of the Pentagon’s very large "back office" — the 42 percent of the budget that goes to management and administrative infrastructure, but not the "point of the spear."

Shrinking the back office needs to start now, aggressively. And not in a ham-handed "we may have to RIF you" way, but through careful force planning. This means starting by asking, "What do we do that we don’t need to do?" And then, "Who is doing it?" If the DOD does this right, it may not even have to RIF people to achieve the savings.

Doing it right, in part, means avoiding the rhetoric of "suffering readiness," which is a red herring. In reality, as the Congressional Budget Office has verified, much of the Pentagon’s overhead (roughly 60 percent) is in infrastructure, not in "readiness." The back office workforce is in administration, with finance and accounting, personnel policy and administration, and base operations. It runs training and education establishments, service-wide agencies, and supply management. This is where the digging needs to be done, not in readiness.

After deciding which jobs are needed and which are unnecessary, the first management tool to use is attrition. According to Office of Personnel Management data dug out from Fedscope by my colleague John Cappel, about 11-12 percent of the Pentagon’s civil service are "attrits" — people who, in the normal course of each year, leave, retire, are terminated (the largest part), transfer, or, sadly, die. That’s somewhere between 80-95,000 civil servants per year, well above the 6,272 the Pentagon is talking about RIFing. And according to the Washington Post, older civil servants are heading for the door in larger numbers these days. It may be a very propitious moment to accept attrition at the Pentagon for jobs deemed unnecessary.

Additional personnel management tools the administration can use or ask for include buy-outs for people who can be let go, and bonuses for those whom the Pentagon wants to retain. Moreover, it could deal with the roughly 700,000 contractors who work for the Pentagon, many of them side-by-side with civil servants doing essentially the same jobs. This "ghost" workforce, combined with the civil servant base, adds up to 1.5 million, in support of an active-duty uniformed force of 1.4 million — an awkward and wasteful ratio of personnel. Really, the Pentagon ought to be using the force management approach across all of its back office personnel — the military staff who are performing non-core administrative jobs, the civil service, and the contractors sitting with them, as Nicholas Schwellenbach of the Center for Effective Government has argued.

Needless to say, the unions have focused on contractors. American Federation of Government Employees President J. David Cox recently asked, "Why is the administration threatening to fire 6,300 civilian defense workers and leave its much larger and costlier contractor workforce almost untouched? Have they learned nothing from the furlough fiasco when fat cat contractors sat around and did nothing while the people who actually repair the weapons and train the troops were forced out on the street?"

Cox has a point: It is easier to manage this part of the workforce; contracts can simply be ended, without buy-outs. In reality, though, both workforces will need to shrink.

The first step is to get past denial, and past the sequester. Assume, realistically, that a defense drawdown is the issue at hand. For personnel — both civilian and military — it is time for the planning to begin.