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Federal hiring proves to be recession-proof

The federal headcount has been recession proof, growing while many private-sector firms are shrinking. A government tally shows a 14.8 percent increase in the number of executive branch employees from Sept. 2007 to June of this year
Image: Aerial photo Of the Pentagon
The Pentagon in Arlington, Va. Since 2007, the number of civilian Defense Department employees has grown by more than 100,000.  U.s. Air Force / Getty Images file

While Democrats and Republicans in Congress fight over President Barack Obama's new jobs bill, it's worth remembering that there already is one bipartisan job creation program the two parties have agreed on since the recession began: expanding the federal workforce.

While overall payroll employment in the United States has fallen by nearly five percent since the official start of the recession in December 2007, there are 12 percent more federal workers today than there were when the downturn started, according to the Bureau of Labor Statistics.

New jobs data will be released by the Bureau of Labor Statistics Friday morning. The consensus expectation among economists is that a total of 95,000 jobs will have been added to payrolls in October. That would still put the total non-farm payroll tally at about 6.5 million fewer jobs than when the recession began in December 2007.

But the federal headcount has been recession proof, growing while many private sector firms are shedding employees or just holding job levels steady.

Nearly 15 percent increase in executive branch
A separate tally by the Office of Personnel Management, which counts most executive branch employees but excludes the Central Intelligence Agency and a few other agencies, shows a 14.8 percent increase in the number of executive branch employees from September 2007, right before the recession began, to June of this year, the most recent month for which the OPM data are available.

About 275,000 more executive branch workers have been added since September 2007, according to the OPM data.

A small part of this growth in federal employment may have been due to the $825 billion stimulus bill that President Obama signed into law in 2009, but the bulk of that money was simply forwarded to state and local governments to sustain their Medicaid programs and to allow them to hire and retain teachers and other public school employees.

Taking the longer view, going back to the Bush presidency, a report from the Congressional Research Service found last April that that “the federal workforce grew by more than 350,000 employees between 2000 (the low point during the last 12 years) and 2010, with the growth concentrated in homeland security-related agencies, DOD (Department of Defense), DVA (Department of Veterans Affairs), and the Department of Health and Human Services.”

The top four states for federal jobs, according to the CRS report, are California, Virginia, Texas, and Maryland. All but California have unemployment rates below the national average. In the Washington D.C.-northern Virginia metro area, where many federal employees live, the unemployment rate in September was 6.1 percent, three percentage points below the national average.

Romney pledges cut in federal hires
Republican presidential candidate Mitt Romney has made the growing federal workforce an issue in his campaign, pledging in the most recent GOP debate that he would “cut federal employment by at least 10 percent through attrition.” His economic plan proposes to hire only one new employee for every two who retire or quit.

Romney has also said that the Defense Department’s “bureaucracy is bloated to the point of dysfunction and is ripe for being pared. In the years since 2000, the Pentagon’s civilian staff grew by 20 percent while our active duty fighting force grew by only 3.4 percent.”

Another GOP presidential contender, Rep. Ron Paul of Texas, has proposed eliminating five cabinet departments: Energy, Housing and Urban Development, Commerce, Interior, and Education. That would eliminate more than 156,000 jobs.

Meanwhile on Thursday the House Oversight and Government Reform Committee will debate a bill offered by freshman member Rep. Mick Mulvaney, R- S.C., that would require the government to hire no more than one employee for every three who retire or otherwise leave government service.

Mulvaney's goal: reduce the number of federal employees by 10 percent by Oct. 1, 2014. He argues that his bill "will boost private sector employment by slowing the explosive growth of the public sector."

Defense is job magnet
A look at the OPM data shows the federal agencies that have grown the most in headcount since the recession began are the ones dealing with defense:

If all the military agencies are considered together — Air Force, Army, Navy and other Defense Department employees — then Defense has seen the biggest increase in civilian employment with 109,000 hired since the recession started.

The Department of Veterans Affairs, with more than 60,000 new employees since September of 2007, ranks second, followed by the Department of Homeland Security, with 31,000 more employees.

Department of Veterans Affairs spokesman Joshua Taylor said, “Under the President’s budgets, the VA has seen one of the largest increases in the past 30 years, which has allowed VA to hire more staff, treat more patients, and provide benefits to more Veterans. VA recognizes that few organizations have received this kind of resourcing support, but every bit of it is needed to address longstanding issues and to provide Veterans and their families with the care and benefits they have earned.”

And the overall impact of federal largess is felt far beyond official payrolls.  Even with a growing federal work force, the government continues to rely heavily on outside contractors.

Heavy reliance on outside contractors
Political scientist Paul Light, professor of public service at New York University, estimates of the number of federal contractors at between 7 million and 7.5 million. That means there are more than three times as many contractors as federal civilian employees.

Light includes in his estimate the workers at manufacturing firms such as AM General in Mishawaka, Ind. who make Humvees and workers at other manufacturing firms that make hardware for the federal government.

But he also includes non-manufacturing jobs. He said, “Perhaps 85 percent of all information technology work (for the federal government) is now done by contractors, many of who sit side-by-side with federal employees at desks that were once occupied by full Uncle Sam paid workers.”

“Headcount has become the defining statistic on whether or not government is too big. If head count is the defining statistic, what do you do? You hide it” by using contractors, he said.

Contractors, he explained, “are still very attractive for the federal government because those employees are fast to the job and are easy to get rid of when the job is over.”

He noted that at the Defense Department, especially, “We’ve become extremely dependent on contractors and it’s not clear how much we can reduce in terms of contractor employment even though we know we’re probably losing money on some of these contractors because contract employees are paid more — especially at the middle and top of organizations.”

The mandatory budget-cutting law enacted by Congress in last August may begin to crimp both hiring and contracting. If the special deficit reduction committee doesn’t devise a plan to cut outlays and increase revenues, then the law requires an opening round of $54 billion in cuts in spending, starting in 2013.