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February 22, 2005

Privatization and the New Spoils System

Even as progressives have been lambasting social security privatization, there has been relatively little discussion of the expanded privatization of federal jobs -- replacing government employees with private businesses and employees unprotected by civil service rules against political retaliation if they don't follow the administration's partisan line.

Against most rhetoric, the number of government jobs has been rapidly expanding over the last four decades, they've just been doing so as employees of private contractors. As a Brookings institute study found, the true size of the federal workforce is 17 million people, including 5.6 million jobs created under federal contracts, 2.4 million jobs generated under grants, 4.6 million jobs covered under mandates to state and local governments, on top of the formal civil service workers and uniformed military.

And those privatized jobs are increasingly manipulated to shake down contractors for political donations. Take the recent inaugural; five of the bigggest donors to the inaugural received $286 million or more in federal contracts last year, including United Technologies Corp. (contracts worth $1.2 billion), Exxon-Mobil Corp. (120 contracts totaling at least $649 million), AT&T ($366 million in contracts), Michael Dell of Dell Computer (federal sales of $362 million), Ford Motor (government sales of $286 million). This is just on top of the more obvious partisan deals running through defense contracts-- from Halliburton to security deals handed out to previously small businesses run by GOP partisans-- who have in some cases ripped off the government for millions of dollars.

All of this is bad enough, but it's likely to get worse.

However much abuse an administration might want to engage in, many decisions on such contracts are decided by government employees protected by civil service protections. But now, the Bush administrations wants to allow supervisors to withhold raises from any employee based on subjective evaluation of their performance. This will open up a whole new realm of coercion to direct contracts to political allies of the administration. A New York Times oped this week noted this transformation of federal employees from direct service providers into contractor managers:

The federal government now spends about $100 billion more annually for outside contracts than it does on employee salaries. Many federal departments and offices - NASA and Energy, to name just two - have become de facto contract management agencies, devoting upward of 80 percent of their budgets to contractors....

It must be recognized that involving partners to produce government services places more - not less - responsibility on public officials. It requires them, often with declining resources, to provide more public service than before, but produce less of it themselves.

With those government employees now subject to retaliation if they don't hand contracts to allies of the administration, we have seen the de facto return of the spoils system to our government, as contractos can anticipate massive returns on their contributions in elections and, most ominously, their employees can be told that they either support the electoral choice of their company or they may face retaliation themselves.

Posted by Nathan at February 22, 2005 08:34 AM