Jeb Bush: Federal Employees Are Paid Far Better Than Their Private Sector Counterparts

By on July 20, 2015 in Pay & Benefits with 79 Comments

In a speech today in Tallahassee to promote his presidential campaign, Republican presidential candidate Jeb Bush called for making substantial cuts to the size of the federal government, namely by targeting the federal workforce.

Bush said the civil service system “runs on automatic” which he says has led to federal employees being “hired, promoted, and given pay increases often without regard to performance.” He added that some select reforms would go a long way towards changing the federal workforce for the better.

First, Bush said he would freeze federal hiring to cut the size of the overall federal workforce via attrition. “We will go by a simple three-out, one-in rule across the federal workforce, with exceptions for critical positions related to our security and safety. Only one new hire for every three who leave,” said Bush.

He added that he expected this reform alone to cut the size of the federal workforce by 10% within five years in an effort to cut costs. “Combined with other reforms, reducing the size of the bureaucracy by 10 percent within 4 years is a realistic goal, saving tens of billions of dollars, and without adding to unemployment,” added Bush.

Image of Jeb Bush

Republican presidential candidate Jeb Bush

He also decried the lack of pay for performance in government which he said leads to non-performing employees being retained and promoted along with the amount of time and effort it takes to remove federal workers for cause.

“Obviously, federal employees should retain civil rights and whistleblower protections. But beyond that, the time it takes to remove an unproductive employee should be measured in weeks rather than years. Job security is one thing, job entitlement is another, and every time a federal employee needs to be moved along it shouldn’t be a federal case,” said Bush.

Regarding federal workers’ pay, Bush had this to say: “The [current pay] system they left us rewards longevity, instead of performance. Many federal employees are paid far more than their private-sector counterparts. Compared to private sector employees, federal employees earn more than $1,500 more per year in wages and nearly $16,000 more in benefits.”

Bush didn’t cite a source for his numbers, however, a recent study by the Congressional Budget Office lends at least some credence to Bush’s numbers on the federal pay/private sector pay discrepancies, but the study noted that the pay differences varied depending on federal workers’ levels of education and also did not look at specific dollar amounts. For details on this study, see: CBO: Federal Compensation 16% Higher Than Private Sector. As is often the case on the federal pay debate, it depends on who you ask.

Regarding these issues, Bush said he would propose merit pay along with giving financial incentives to federal employees whose actions help reduce federal spending. “When federal employees are found squandering public money, we should call them out on it – and when they find ways to save public money, we should reward them for it,” said Bush.

If this latter idea sounds familiar, it’s because something similar was recently put forth by Senators Rand Paul (R-KY) and Mark Warner (D-VA). They introduced legislation that would empower an agency’s inspector general to pay a bonus of up to $10,000 to a federal employee who identifies wasteful or fraudulent spending. To date, it has not advanced in the Senate. See Want a $10,000 Bonus? A New Bill Would Reward Feds Who Report Wasteful Spending.

Bush’s ideas regarding the federal workforce are nothing new. The idea of cutting the size of the overall federal workforce via attrition dates back at least as far as the days of the Simpson-Bowles Deficit Commission which produced some ideas for reducing federal spending that ultimately went nowhere. For details on these proposals, see Commission Proposes “High-Three” to “High-Five” for Retirement, Pay Freeze and Changes to FEHB for Federal Employees.

Will Bush’s ideas gain any traction? At this point, that will largely depend on how well he fares in the presidential race.

A full of copy of Jeb Bush’s speech in Tallahassee is included below.

Monday, July 20, 2015 Tallahassee, Florida

Thank you very much. It’s good to be back in Tallahassee, and great to be back with so many old friends.

We’re in the early days of a long campaign.  I’m making my case to voters all across the country, and I’m happy to tell you the signs are good.

People are ready to choose a new president.  Among Republicans, they’ve got plenty of choices.  They want to know, not just what we believe, but what we have accomplished – and for me that story begins right here in Tallahassee.

In my eight years in office we didn’t just mark time, we filled those years with hard work and real reform.

It wasn’t always a smooth path.  In fact, we used to call this city “Mount Tallahassee” because it was so remote from the people, so caught up in the settled ways of a comfortable establishment.  I was a governor who refused to go along with that establishment.  I wasn’t a member of the club, and that made all the difference.

Should I win this election, you will not find me deferring to the settled ways of “Mount Washington,” either.  The overspending, the overreaching, the arrogance, and the sheer incompetence in that city – these problems have been with us so long that they are sometimes accepted as facts of life.  But a president should never accept them, and I will not.  We need a president willing to challenge the whole culture in our nation’s capital – and I mean to do it!

Name any excess or abuse in the federal government, and these past six years it has gotten worse.

The rush to take over healthcare, when they couldn’t even get the lousy website working, and cannot even keep basic commitments like caring for veterans at the VA. Veterans died while waiting for care at a VA hospital last year.  But only two people were fired for lying about wait times. Two people! We trusted veterans to fight for us.  We should trust them to be able to choose their own doctor.

The partisan abuses at the IRS, and the cover-up that followed, all of which to this day have gone unpunished.

The wholesale loss of personnel records and security information to cyber hackers in China, because the political hacks in charge of OPM ignored official warnings.

Today, we know that more than 22 million were affected and that the information taken includes the intrusive questionnaires used to vet people for security clearances.

What does it say when, with all its resources, the federal government could not even protect vital data from a hostile actor?  Rarely has incompetence carried such a price in government.

Ineptitude on this order is enough to sound the alarm bells all by itself.  But when it becomes the norm, when there’s no accountability and few even expect it anymore, that’s when we really need to worry.

It has come to that point with the current administration, and with the entire Washington establishment that it so perfectly represents.

Don’t get me wrong: During my time in Florida, government wasn’t perfect. But part of being a strong leader is accepting responsibility when things go wrong.

After the 2000 presidential election recount, we moved decisively to improve our election laws and made our voting systems the envy of the nation. When Rilya Wilson’s tragic case exposed shortcomings in our child welfare system, we stepped up our commitment to community-based care and made the system more responsive to children in need. And when senior people in my administration violated the public’s trust, they were removed from their jobs.

When these problems occurred, I took responsibility. That’s what Floridians deserved. And this is the kind of leadership we need to bring to Washington!

For anyone who wants to see a federal government even bigger, and even farther removed from those it is supposed to serve, the other party will be offering that option.  As for me, I’m offering a different agenda altogether.  It will not be my intention to preside over the establishment, but in every way I know to disrupt that establishment and make it accountable to the people.

The ultimate disruption of Washington is to reject, as I do, the whole idea of a government forever growing more, borrowing more, and spending more – beyond anyone’s ability to control or even comprehend.

And I have no illusions about what reform really takes.  The next president has got to confront the spending culture of Washington – and I will do it!

I think we’ve learned by now that you can have a fast-expanding economy, or you can have a fast-expanding government, but you cannot have both.  You have to choose, as I did when I was governor of the fourth-largest state.

In my time in office, Florida’s economy expanded by an average of 4.4 percent per year – more than 50% faster than the national average. At the same time, government spending as a percentage of our State’s economy went down.

We balanced our budget every year I was in office and increased our state’s reserves by eight billion dollars. We were upgraded to a AAA bond rating, rather than the sorry downgrade our federal government received during the Obama years.

I vetoed more than 2,500 spending items, producing $2 billion in savings, and I’m glad somebody was keeping count.  Legislators started calling me Veto Corleone – and, as you might guess, I told them it was only business.

I also was the first governor to put an entire state budget online in a fully interactive and searchable format, to keep government out in the open, where it belongs.

I cut the state bureaucracy by more than ten percent, trying to live up to my promise in the 2nd inaugural to make buildings around Tallahassee “silent monuments to the time when government played a larger role than it deserved or could adequately fill.”

From the very outset as president, I would signal a new direction by supporting fundamental reforms that go to the heart of the problem.

First, we have to confront and end the habitual practice of deficit spending. As long as deficits are an option, deficits will be the reality.  The remedy that I will support as president is a balanced budget amendment. To be clear, a properly-designed amendment must be a tool to limit government – not raise taxes.

Americans in every party are right to be worried about the fiscal integrity and solvency of our government. It needs to be fixed.

I will urge Congress to submit a balanced budget amendment to the states and let the people decide.

Second, it’s time to revive Veto Corleone. The president should be able to eliminate wasteful spending through a constitutionally sound line-item veto – such as the version that Congressman Paul Ryan has proposed.

Overspending is one of those problems where a president has to assert the national interest, even if no one else will.  The power to veto irresponsible spending is part of that duty, and I know how to use it!

A third spending reform is in government procurement.
Federal agencies spend billions of dollars every month on equipment and services, following complicated procedures that no company would use in a competitive environment.  The process is slow, and too often it holds no one accountable for being over budget or behind schedule.

Military procurement is just one of many areas where our systems and processes are failing. The defense department is still operating by the procurement methods of the Cold War.  In some cases, by the time new equipment reaches our troops, it’s almost obsolete.

So here we are with a Pentagon that’s had to cut military equipment, pay, and health care – all the while losing billions in backward, wasteful procurement methods.  The Pentagon’s acquisition system is so swamped with regulations, only a handful of giant defense companies can compete for big contracts.

That’s why I support initiatives by the respective Chairmen of the Senate and House Armed Services Committees, John McCain and Mac Thornberry, to reform the defense procurement process to make it more transparent, flexible and competitive.

Competition reduces costs and ensures our troops have quality equipment that keeps them safe.  It’s not asking too much for the people who defend our country that we eliminate waste so we can invest in them.

These problems are not unique to military procurement.  The processes and procedures used to purchase information technology are fraught with cost overruns, delays and outright failures.

Over the past five years, the U.S. Government Accountability Office has made more than 700 recommendations for reforming the system, yet only 23 percent have been fully implemented.  We can apply the same principles we will use to fix defense acquisition to address procurement failures like those that resulted in Healthcare.gov.

And, my fourth spending reform, if we’re going to make good budget decisions, we need to deal with real numbers.  The trick in Washington now is called baseline budgeting.  It means that the current-year level of spending is the starting point for future spending, which of course is always assumed to be higher.  We can no longer afford to make this assumption and I will work with Congress to change it.

You know you’ve got a problem when standard accounting seems like a subversive idea.  And that’s how it is with federal budgeting.  It’s a rigged system, designed to increase spending no matter what.

Meanwhile, all the taxpayers who underwrite this spending have to live in the real world, where you start with zero, define priorities, and observe boundaries.
It’s not as fun as working with make-believe numbers, but it can keep you out of trouble.  Real-world budgeting would mark a big step toward national solvency, and in my administration it will be the rule.

When a given agency asks for more budget authority, they’ll be required to support them with detailed justifications, and also to propose offsetting cuts.
In the short of it, we’re going to turn off the automatic switch on discretionary spending increases, and weigh budgets only on the merits.

Too much in the federal government runs on automatic – which usually means that things are happening with no one stopping to ask why.
We see this in the way the civil service operates.  People are hired, promoted, and given pay increases often without regard to performance.

More than ever, it’s a system stuck in old ways, ruled by inertia, and unaccountable to the people.  And with over two million employees on the federal payroll, these problems carry a heavy cost, and a few serious reforms will go a long way.

My first reform will be placing a freeze on federal hiring. We can expect more than 10 percent of the current federal workforce to retire over the next 5 years. It’s a fairly safe bet that not everyone who leaves has to be replaced.

We will go by a simple three-out, one-in rule across the federal workforce, with exceptions for critical positions related to our security and safety. Only one new hire for every three who leave.

This policy can, on its own, reduce the size of the federal bureaucracy by 10 percent within 5 years.
Combined with other reforms, reducing the size of the bureaucracy by 10 percent within 4 years is a realistic goal, saving tens of billions of dollars, and without adding to unemployment.

We made those tough cuts in Florida. Under our reforms, we also made top-level management more accountable by defining them as at-will employees.  We ensured that employees at every level could be let go if they were not doing the job.  The effect was to up everyone’s game, attract new talent, and above all to remind public employees that they are there to serve.

Whether it’s a company’s employees we’re talking about or a government workforce, the whole idea of management is to reward good performance and make the best the standard.  And that’s not the system we have in Washington.

Much of what we have is a relic from the 1970’s and the Carter administration.  And let’s just say they didn’t have the taxpayers’ interest foremost in mind.

The system they left us rewards longevity, instead of performance. Many federal employees are paid far more than their private-sector counterparts.
Compared to private sector employees, federal employees earn more than $1500 more per year in wages and nearly $16,000 more in benefits.

There are a lot of exemplary employees in the federal government, but they’re treated no better than the bad ones.  And the bad ones are almost impossible to effectively discipline or remove.

Job security is one thing, job entitlement is another, and every time a federal employee needs to be moved along it shouldn’t be a federal case.

The system is so broken that in 2013 the number of federal employees terminated for cause actually fell to 0.18%.  So I will set in motion some long-overdue reforms.
Obviously, federal employees should retain civil rights and whistleblower protections.  But beyond that, the time it takes to remove an unproductive employee should be measured in weeks rather than years.

And just like in the real world, compensation should depend on the type of job and the quality of the work.  If the aim is to bring out the best in public servants, and to improve morale across the federal workforce, then we have to get the incentives right.  No more doling out raises across the board.  If we respect and recognize skill and dedication when we see them, then I promise you: We’ll see a lot more excellence in the ranks of the civil service – and we’ll attract new talent as well.

I will also propose, along with merit pay, enhanced financial incentives for managers whose skill and careful planning actually reduce spending.

When federal employees are found squandering public money, we should call them out on it – and when they find ways to save public money, we should reward them for it.

In Florida, we partnered with the private sector to reward worker productivity, and we reformed our system to allow state employees to financially benefit when they found ways to save taxpayer money. These incentives led to more innovation and less bureaucracy here in Tallahassee.

Of course, the surest way to protect the taxpayers’ money is not to take so much of it in the first place.  The best way to keep government accountable is to limit its power to regulate our economy and our lives.

And in the coming months, I will be setting forth my plans for tax and regulatory reform on a scale we haven’t seen since the Reagan years, and I will be outlining my ideas to reform the major entitlement programs and provide a replacement for Obamacare.

Not to keep you in suspense, the objective in both cases is to bring government back within the consent of the governed … so that it truly serves the national interest, instead of catering so often to the special interests.

After all, it’s the relentless expansion of government that made lobbying Washington’s premier growth industry.  Spending on lobbying has risen by more than 45 percent over the past decade, translating to $12.5 million per member of Congress at last count.

Restrain federal spending and bureaucratic meddling, and we’ll disrupt the culture that thrives on big government.
I know how that kind of culture works – I saw it here in Tallahassee.  Over time, lobbyists and legislators grew a little too comfortable in each other’s company, cutting deals that didn’t have much to do with the public interest.
So along with all the other changes we made, I signed into law some of the strictest lobbying reforms in the country.

Even before I took office, I signaled a new way of doing business by forbidding lobbying by any member of my transition team.

As governor, we ended the practice of lawmakers accepting gifts from lobbyists. The reforms I signed into law also required lobbyists to disclose information about their clients and their compensation – so the public would know who they were working for.

In that spirit, we need to reform disclosure rules in Washington. Here is what I propose.  Every time a lobbyist meets with any member of Congress, that should be reported online – every week, and on the member’s official website.

That should include the ambiguous class of consultants who lobby but call it something else. The definition of the term “lobbyist” should be expanded to address the cadre of “government relations” and “government affairs” specialists now populating the Capitol.

Then there’s the pattern of so many outgoing members of Congress who quickly become lobbyists themselves, as if merely moving on to the business end of the same enterprise.

We need to help politicians to rediscover life outside of Washington, which – who knows? – might even be a pleasant surprise for them.  The great majority are talented people and can help make a big contribution to their communities in their post public service life.

If I am elected president, I will use all of my influence to enact into law an immediate, unequivocal six-year ban on lobbying – a full Senate term – for ex-members of the House and Senate.

We will take similar measures at the White House. I will strengthen existing prohibitions that prevent departing executive branch employees from lobbying members of my Administration.

In all of these reforms, it matters what example is set by those in elective office.  It’s easy for elected officials to lay out standards of performance for others.  But what are high standards worth if we don’t apply them to ourselves?

Consider a pattern in Congress of members who sometimes seem to regard attendance and voting as optional – something to do as time permits.
The reality is that Congress is in session for three days in a typical week anyway, so it’s not asking too much that every member be there and work on those days.
And if it’s an incentive they need, how about the one that pretty much every worker in America has in their job: you don’t show up, you don’t get paid for that time.

A bill to dock the pay of absentee members might not pass the House or Senate, but at least it would get them all there for a vote.  If we can’t always get them on the job, let’s at least get them on the record.

If I learned anything as governor of Florida, it was never to take time for granted.

I even kept on my desk, where I would always see it, a digital clock counting down the time left in my term to the last hour.  I might just bring that clock along, should I have the honor of serving the 1,461 days of the next presidential term.

Our leaders in Washington can be so immersed in coming campaigns and far-off legacies as to lose sight of present challenges, and work that needs doing right now.  Things delayed in Washington have a way of never getting done at all.

But this era of excuses is drawing to an end.  There’s some lost time to make up, and we can do it.  Real economic growth is achievable, and I have set a goal of four percent a year.  Balanced budgets, and debt that is finally under control, are also within our power to accomplish.  And the driving force must be a presidential-level challenge to the culture of spending.  This is essential and achievable in a single term – and don’t let anyone tell you otherwise.

All of that is part of the case I intend to make across our state and our country.  I’m giving this race my all, speaking to every voter of every background, and being true to what I believe.

Here’s what I believe, and here’s what I know: For all of us, these coming years can be the best time ever to be alive in America.  I’m ready for the challenge, and I’m asking for your vote.  Thank you.

© 2016 Ian Smith. All rights reserved. This article may not be reproduced without express written consent from Ian Smith.

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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