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A Times Editorial

Problematic privatization

President Bush's push to privatize a major part of the federal government's work force would move many jobs away from public accountability.

© St. Petersburg Times, published December 1, 2002


A month after federal employees lost some of their colleagues to the Sept. 11 terrorist attack on Washington, President Bush talked of a new respect for government workers. "(It's) due partly to the surge of national pride that has swept our country since the terrorist attacks," he told employees, "but it's also because of how you've performed your jobs, particularly during the last month."

A year later, with the mid-term elections behind him, the president is ready to unload as many as 850,000 of them.

What Bush has proposed is a sweeping, historic privatization of federal government. He would take work that is done by almost half the government's civilian workforce and turn it over to private business, and his motives are far from clear. He says he wants to save tax money, but his ambitious contract quota and his freewheeling financial analysis suggest otherwise.

What models of federal contracting does the president seek to emulate? The $2.69 self-locking nut the Defense Department bought from its contractor for $2,185.50? The 30 contractors that were identified by the Project on Government Oversight as having been fined $3.4-billion for federal violations while continuing to keep government contracts worth more than $100-billion? The four corporations that last year raked in $2.7-billion in federal contracts while using Panama and Bermuda as their headquarters to avoid paying U.S. taxes? The 5-cent washer the military bought for $182.13?

Private contracting can indeed save the government money in some circumstances, and should be pursued when it does. But the determination of potential savings is elusive at best. Sometimes the private company simply plans to use fewer and less experienced employees, which inevitably translates into a lower quality service. Often the private employees are not provided with health or pension benefits.

The long-term danger is that the award of a contract eliminates all future competition -- public or private. The private company simply pours campaign contributions into the hands of its government providers and ends up holding a monopoly franchise over which the government has little control.

The stakes are high, which is why honest financial assessments of each private contract are essential and why even some of Bush's privatization allies are feeling uneasy.

U.S. Rep. Tom Davis, R-Va., chairman of the Government Reform Subcommittee on Technology and Procurement Policy, opened a hearing last year by challenging what at that time was a mere 10 percent quota on privatization. "I am alarmed by the (president's) recent directive," he said. "No justification for these percentages has been offered to date. I remain unconvinced that arbitrarily assigning federal agencies target figures is the best means to ensure cost-savings in the government."

What must Davis think now?

The rush to eliminate federal jobs may help President Bush pretend in 2004 he has shrunk the size of government. But, absent true financial savings, all he will have accomplished is to increase the size of what scholar Paul Light calls the "shadow government." Light estimates the federal government employs 1.8-million civilians, yet contracts for roughly 4-million private workers. The main difference is that one group is directly answerable, and the other is not.

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