How big gov­ern­ment dis­guises its growth

The Washington Post Sunday - - SUNDAY OPINION - GE­ORGE F. WILL georgewill@wash­

In 1960, when John Kennedy was elected pres­i­dent, Amer­ica’s pop­u­la­tion was 180 mil­lion and it had ap­prox­i­mately 1.8 mil­lion fed­eral bu­reau­crats (not counting uni­formed mil­i­tary per­son­nel and postal work­ers). Fifty-seven years later, with seven new Cab­i­net agen­cies, and myr­iad new sub­Cabi­net agen­cies (e.g., the En­vi­ron­men­tal Pro­tec­tion Agency), and a slew of mat­ters on the fed­eral pol­icy agenda that were vir­tu­ally ab­sent in 1960 (health in­sur­ance, pri­mary and sec­ondary school qual­ity, crime, drug abuse, cam­paign fi­nance, gun con­trol, oc­cu­pa­tional safety, etc.), and with a pop­u­la­tion of 324 mil­lion, there are only about 2 mil­lion fed­eral bu­reau­crats.

So, since 1960, fed­eral spend­ing, ad­justed for in­fla­tion, has quin­tu­pled and fed­eral un­der­tak­ings have mul­ti­plied like dan­de­lions, but the fed­eral civil­ian work­force has ex­panded only neg­li­gi­bly, to ap­prox­i­mately what it was when Dwight Eisen­hower was elected in 1952. Does this mean that “big gov­ern­ment” is not really big? And that by do­ing much more with not many more em­ploy­ees it has ac­com­plished prodi­gies of per-worker pro­duc­tiv­ity? John J. DiIulio Jr., of the Uni­ver­sity of Penn­syl­va­nia and the Brook­ings In­sti­tu­tion, says: Hardly.

In his 2014 book “Bring Back the Bu­reau­crats,” he ar­gued that be­cause the pub­lic is, at least philo­soph­i­cally, against “big gov­ern­ment,” gov­ern­ment has pru­dently be­come stealthy about how it be­comes ever big­ger. In a new Brook­ings pa­per, he demon­strates that gov­ern­ment ex­pands by in­di­rec­tion, us­ing three kinds of “ad­min­is­tra­tive prox­ies” — state and lo­cal gov­ern­ment, for-profit busi­nesses, and non­profit or­ga­ni­za­tions.

Since 1960, the num­ber of state and lo­cal gov­ern­ment em­ploy­ees has tripled to more than 18 mil­lion, a growth driven by fed­eral money: Be­tween the early 1960s and early 2010s, the in­fla­tion­ad­justed value of fed­eral grants for the states in­creased more than ten­fold. For ex­am­ple, the EPA has fewer than 20,000 em­ploy­ees, but 90 per­cent of EPA pro­grams are com­pletely ad­min­is­tered by thou­sands of state gov­ern­ment em­ploy­ees, largely funded by Wash­ing­ton.

A quar­ter of the fed­eral bud­get is ad­min­is­tered by the fewer than 5,000 em­ploy­ees of the Cen­ters for Medi­care and Med­i­caid Ser­vices (CMS) — and by the states, at least half of whose ad­min­is­tra­tive costs are paid by CMS. Var­i­ous fed­eral crime and home­land se­cu­rity bills help fund lo­cal po­lice de­part­ments. “By con­ser­va­tive es­ti­mates,” DiIulio writes, “there are about 3 mil­lion state and lo­cal gov­ern­ment work­ers” — about 50 per­cent more than the num­ber of fed­eral work­ers — “funded via fed­eral grants and con­tracts.”

Then there are for-profit con­trac­tors, used, DiIulio says, “by ev­ery fed­eral department, bureau and agency.” For al­most a decade, the De­fense Department’s full-time equiv­a­lent of 700,000 to 800,000 civil­ian work­ers have been sup­ple­mented by the full-time equiv­a­lent of 620,000 to 770,000 for-profit con­tract em­ploy­ees. “Dur­ing the first Gulf War in 1991,” DiIulio says, “Amer­i­can sol­diers out­num­bered pri­vate con­trac­tors in the re­gion by about 60-to-1; but, by 2006, there were nearly as many pri­vate con­trac­tors as sol­diers in Iraq — about 100,000 con­tract em­ploy­ees, not counting sub­con­trac­tor em­ploy­ees, ver­sus 140,000 troops.” To­day, the gov­ern­ment spends more (about $350 bil­lion) on de­fense con­trac­tors than on all of­fi­cial fed­eral bu­reau­crats ($250 bil­lion).

Fi­nally, “em­ploy­ment in the tax­ex­empt or in­de­pen­dent sec­tor more than dou­bled be­tween 1977 and 2012 to more than 11 mil­lion.” Ap­prox­i­mately a third of the rev­enues to non­prof­its (e.g., Planned Par­ent­hood) flow in one way or an­other from gov­ern­ment. “If,” DiIulio cal­cu­lates, “only one-fifth of the 11 mil­lion non­profit sec­tor em­ploy­ees owe their jobs to fed­eral or in­ter­gov­ern­men­tal grant, con­tract or fee fund­ing, that’s 2.2 mil­lion work­ers” — slightly more than the of­fi­cial fed­eral work­force.

To which add the es­ti­mated 7.5 mil­lion for-profit con­trac­tors. Plus the con­ser­va­tive es­ti­mate of 3 mil­lion fed­er­ally funded em­ploy­ees of state and lo­cal gov­ern­ments. To this to­tal of more than 12 mil­lion add the ap­prox­i­mately 2 mil­lion fed­eral em­ploy­ees. This 14 mil­lion is about 10 mil­lion more than the es­ti­mated 4 mil­lion fed­eral em­ploy­ees and con­trac­tors dur­ing the Eisen­hower ad­min­is­tra­tion.

So, to­day’s gov­ern­ment is in­deed big (3.5 times big­ger than 5½ decades ago), but dis­persed to dis­guise its size. This gov­ern­ment is, DiIulio says, “both debt­fi­nanced and proxy-ad­min­is­tered.” It spends more just on Medi­care ben­e­fits than on the of­fi­cial fed­eral civil­ian work­force, and this is just a frac­tion of the de facto fed­eral work­force.

Many Amer­i­cans are rhetor­i­cally con­ser­va­tive but be­hav­iorally lib­eral. So, they are given gov­ern­ment that is not lim­ited but over­lever­aged — debt­fi­nanced, mean­ing par­tially paid for by fu­ture gen­er­a­tions — and ad­min­is­tered by prox­ies. The gov­ern­ment/for-profit con­trac­tor/non­profit com­plex con­sumes about 40 per­cent of gross do­mes­tic product. Just don’t up­set any­one by calling it “big gov­ern­ment.”


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