Wednesday, August 3, 2011

Use the FAA model to chop the size of the federal government

Since July 23 much of the FAA has been shutdown. Some 4,000 employees, as well as thousands of contractors who work on FAA funded projects, have been furloughed as the Senate tries to reach a deal on precisely how much money to give the FAA. This, like other budgetary debates in the USG, has been an ongoing issue for months. Using short term extensions of previous budgets and other band aid approaches the Congress has kept the FAA afloat while the political details are worked out. But ten days ago, not even another temporary extension could be agreed upon.

To hear Republicans tell it, the problem is Democrats will not budge on providing air service to rural communities, a benefit heavily subsidized by the federal government. To listen to Democrats, the dispute is about unions and a GOP attempt to remove protections for union via contracting rules in the FAA's budget.

Ultimately though, it is about money and posturing. The Republicans and Democrats are both catering to industries- airlines for the GOP and unions for the Democrats. If their motivation is misplaced though, their inaction is laudable.

After ten days few Americans are able to tell the FAA has been partially shutdown. The essential services part of the FAA, the folks who guide the planes through the sky and do all the stuff one would expect from such an agency, are still functioning. It is the ever growing and mostly unnecessary bureaucracy which has been shutdown.

(Do not be persuaded by the FAA's "we're losing $200 million in tax dollars because of this mess" argument, by the way. Government bureaucracies always try to defend their entire organization when even a small part is threatened. This is why the first thing bureaucrats recommend cutting is usually among the most painful for the general public. The FAA insiders and Congress know they cannot have planes from fall from the sky, by laying off the people who facilitate tax collection- that makes for good headlines).

Every federal agency has "essential" and non-essential staff. For some, like the Department of Defense and Homeland Security, the reasoning behind these plans is that in the event of invasion or some calamitous event certain employees will be sent home while others will remain on duty 24/7. For others, like the Department of Transportation or the First Lady's "Let's Move" staffers, the idea is that a certain skeleton crew should be identified to keep working should Congress not approve a budget (think back a few months). If you live in DC you know these terms well because the rules tell you who has to go to work when it snows more than two inches.

So there is the plan then to cut the size of government: order everyone home except those emergency crews. Then give each agency head permission to hire back 10% of those sent home. The federal government would immediately contract and the savings would be profound.

Many analysts opine that the FAA debate is metaphor for the larger debate about the federal budget. The most often screamed opinion is that Washington is dysfunctional. Pundits who believe the purpose of government is endless action are shocked when they hear that some people want Congress to simply stop acting.

But in this case it has and the result has been less than disastrous. Aside from lost revenue (which is a consequence of selective pain) the impact has been minimal. Unfortunately some contractors and federal employees have lost income. But the reality is if we are ever going to cut the size of the federal government to a sustainable size this is precisely the sort of action that needs to be taken.

Budgets must be shrunk, projects must be stopped, and, yes, jobs must be lost because ultimately it is more critical to save the private sector. The country is more important than the government.

But be mindful, the bureaucracies and their administrators in power will do all that they can to preserve their malignant growth, and to thwart frugality by making whatever cuts come as painful as possible. Suggest emergency staffing levels to such folks and the response will be that jobs will be lost, taxes will be missed, and pain will be felt by many. This despite the certainty that our current national trajectory has us on path for a pain which will be universal.

Pain is coming, we can only manage how much it hurts and what damage it inflicts.