The case for bigger government

For about four decades, conventional wisdom has been telling us that government is too big. How much of our federal taxes go to paying civil servants inside the Beltway? Or outside it? And what do these federal employees do? I recently read that there are approximately 2.1 million federal employees. The general schedule of pay shows a top salary of $134,776 – not extravagant by private-sector standard, but still coming to a large chunk of taxes.

But here’s the thing: The article I was reading (in the July-August issue of the Washington Monthly) claims that there also were 2.1 million civil servants in 1966 when the population was 196 million. Today the population is 323 million, and the GDP and federal spending have quadrupled. The country has grown, but the number of people doing the work of running it has not.

So is it really a good idea to cut the federal workforce further? It would seem not, and in fact, the work of government can’t continue with only 2.1 million civil servants. The solution Congress and the White House have come up with is to hire private contractors. These contractors come from for-profit businesses and are employed across the spectrum of jobs from office staff to security checking and military supply. And they are very costly. While employees hired from these companies don’t receive benefits and the generous retirement of federal employees and may only be paid $50 an hour, the consulting company may be billing the government $350 an hour to cover its overhead and profit margin.

This not only makes no financial sense: It’s dishonest. Congress points to keeping the federal workforce low and even promises to make it smaller all the while hiring far more expensive contractors at a shocking rate. Paul Light, a public service professor at NYU puts the “true size of government” at about 3.7 million in 2015. That means that 1.6 million employees are hidden from the American public.

Another piece of the big government narrative is that regulation – the regulating agencies – adds to the deficit through salaries paid to agency employees and at the same time stifles the ability of business to grow because of rules and laws. Regulation can also be seen as a restraint on personal freedom and the creativity necessary for business creation and expansion. Such thinking is an essential part of the American ethos. We hear constantly that the federal government is growing and usurping more and more market freedom.

However, if we look at our economic history we see that there has been always been a good deal of regulation and it has actually stimulated rather than repressed business. The Sherman Antitrust Act of 1890 was the first in a series designed to break up monopolies thereby promoting competition. The Clayton Act of 1914 banned anti-competitive practices like discriminatory pricing.

Regulatory agencies also protect us consumers. The Food and Drug Administration protects the purity of food and against quack or harmful medicines. Aviation was a chancy way to travel until the Air Commerce Act of 1926 set standards of safety. More recently there is FEMA and, of course, Social Security, Medicare and Medicaid. One of the greatest insecurities in our northern part of the country is the lack of utility regulation of heating oil and propane. Unlike electric and natural gas utilities, oil and propane companies are not required to make deliveries to customers who can’t pay. Citizen’s Energy with free contribution of oil from Venezuela has helped many Granite Staters, but with Venezuela’s acute economic troubles that source of oil is no longer available. Federal government regulation here would be a lifeline to many.

In my reading I also learned that regulation rather than killing jobs has actually stimulated growth. For instance, the Clean Air Act to regulate greenhouse gas emissions was the challenge to many industries to develop ways of complying, simultaneously reducing greenhouse emissions and creating new jobs. Washington Monthly cites NBD Nano, a company that started with 12 employees and developed oil-and waterproof industrial coatings to reduce fuel consumption in power plants.

There are many other examples of business opportunities created because of federal regulations. So these agencies should not be seen as foes of a competitive marketplace, but the cause of healthy competition.

So, what do we have? A government that is much bigger than we are allowed to see but one that is staffed by independent and frequently insufficiently trained employees. (Edward Snowden, for instance, was given clearance by USIS, a contracting company specializing in security information.) Federal agencies that are designed to protect us and that also promote business opportunities through their very rules and regulations. Think about it. Yes, it’s expensive, but do we want to – could we really afford to – do without it? The federal workforce and government regulatory agencies are actually what keep us safe and stimulate our economy. One thing we can change: the expensive and often insufficiently – make that, dangerously – trained contractors that are sucking our country dry. To do that we need to honestly expand the federal government’s workforce.

Katharine Gregg is a longtime guest columnist for The Telegraph.