Chapter 12 - The Bureaucracy

Transcription

1 Chapter 12 - The Bureaucracy Faceless bureaucrats - this image provokes a negative reaction from many, if not most, Americans. Polls consistently report that the majority of Americans support "less government." The same polls, however, report that the majority of Americans support almost every specific program that the government undertakes. The conflict between the desire for small government and the desire for the benefits that only a large government can provide has been a constant feature of American politics. For example, the goal of preserving endangered species has widespread support. At the same time, many people believe that restrictions imposed under the Endangered Species Act violate the rights of landowners. Helping the elderly pay their medical bills is a popular objective, but hardly anyone enjoys paying the Medicare tax that supports this effort. In this chapter, we describe the size, organization, and staffing of the federal bureaucracy. We review modern attempts at bureaucratic reform and the process by which Congress exerts ultimate control over the bureaucracy. We also discuss the bureaucracy's role in making rules and setting policy. THE NATURE OF BUREAUCRACY Bureaucracy is the name given to an organization that is structured hierarchically to carry out specific functions. Generally, bureaucracies are characterized by an organizational chart. The units of the organization are divided according to the specialization and expertise of the employees. Public and Private Bureaucracies We should not think of a bureaucracy as unique to government. Any large corporation or university can be considered a bureaucratic organization. The fact is that the handling of complex problems requires a division of labor. Individuals must concentrate their skills on specific, well-defined aspects of a problem and depend on others to solve the rest of it. Public, or government, bureaucracies differ from private organizations in some important ways, however. A private corporation has a single leader - its chief executive officer (CEO). Public bureaucracies do not have a single leader. Although the president is the chief administrator of the federal system, all agencies are subject to the dictates of Congress for their funding, staffing, and, indeed, their continued existence. Public bureaucracies supposedly serve all citizens, while private ones serve private interests. One other important difference between private corporations and government bureaucracies is that government bureaucracies are not organized to make a profit. Rather, they are supposed to perform their functions as efficiently as possible to conserve taxpayers' dollars. Perhaps it is this ideal that makes citizens hostile toward government bureaucracy when they experience inefficiency and red tape.

2 Every modern president, at one time or another, has proclaimed that his administration was going to "fix government." All modern presidents also have put forth plans to end government waste and inefficiency. Their success has been, in a word, underwhelming. Presidents generally have been powerless to significantly affect the structure and operation of the federal bureaucracy. Models of Bureaucracy Several theories have been offered to help us better understand the ways in which bureaucracies function. Each of these theories focuses on specific features of bureaucracies. Weberian Model. The classic model, or Weberian model, of the modern bureaucracy was proposed by the German sociologist Max Weber. He argued that the increasingly complex nature of modern life, coupled with the steadily growing demands placed on governments by their citizens, made the formation of bureaucracies inevitable. According to Weber, most bureaucracies - whether in the public or private sector - are organized hierarchically and governed by formal procedures. The power in a bureaucracy flows from the top downward. Decision-making processes in bureaucracies are shaped by detailed technical rules that promote similar decisions in similar situations. Bureaucrats are specialists who attempt to resolve problems through logical reasoning and data analysis instead of "gut feelings" and guesswork. Individual advancement in bureaucracies is supposed to be based on merit rather than on political connections. Indeed, the modern bureaucracy, according to Weber, should be an apolitical organization. Acquisitive Model. Other theorists do not view bureaucracies in terms as benign as Weber's. Some believe that bureaucracies are acquisitive in nature. Proponents of the acquisitive model argue that top-level bureaucrats will always try to expand, or at least try to avoid any reductions in, the size of their budgets. Although government bureaucracies are not-for-profit enterprises, bureaucrats want to maximize the size of their budgets and staffs, which are the most visible trappings of power in the public sector. These efforts are also prompted by the desire of bureaucrats to "sell" their products - such as national defense, public housing, or agricultural subsidies - to both Congress and the public. Monopolistic Model. Because government bureaucracies seldom have competitors, some theorists have suggested that these bureaucratic organizations may be explained best by a monopolistic model. The analysis is similar to that used by economists to examine the behavior of monopolistic firms. Monopolistic bureaucracies - like monopolistic firms - essentially have no competitors and act accordingly. Because monopolistic bureaucracies usually are not penalized for chronic inefficiency, they have little reason to adopt cost-saving measures or to make more productive use of their resources. Some economists have argued that such problems can be cured only by privatizing certain bureaucratic functions. TABLE - Selected Presidential Plans to End Government Inefficiency President Plan

3 Lyndon Johnson ( ) Programming, planning, and budgeting systems Richard Nixon ( ) Management by Objectives Jimmy Carter ( ) Zero-based Budgeting Ronald Reagan ( ) President's Private Sector Survey on Cost Control (the Grace Commission) George H. W. Bush ( ) Right-Sizing Government Bill Clinton ( ) Reinventing Government George W. Bush ( ) Performance-Based Budgeting Barack Obama (2009-present) Appointment of a chief performance officer THE SIZE OF BUREAUCRACY In 1789, the new government's bureaucracy was tiny. There were three departments - State (with nine, War (with two, and Treasury (with thirty-nine - and the Office of the Attorney General (which later became the Department of Justice. The bureaucracy was still small in At that time, the secretary of state had seven clerks and spent a total of $500 (about $9,800 in 2013 dollars) on stationary and printing. In that same year, an appropriations act allocated $1.4 million (or $27.5 million in 2013 dollars) to the War Department. Government Employment Today Times have changed. Excluding military service members but including employees of the legislative and judicial branches and the U.S. Postal Service, the federal bureaucracy includes approximately 2.9 million employees. That number has remained relatively stable for the past several decades. It is somewhat deceiving, however, because many other individuals work directly or indirectly for the federal government as subcontractors or consultants. Conventionally, attempts to measure the size of the federal bureaucracy also leave out the men and women of the Army, Navy, Air Force, and Marines. In 2012, these personnel numbered 1,410,000. Despite their service ethos, it cannot be denied that the armed forces are gigantic bureaucracies with all the characteristics of bureaucracies everywhere. The figures for federal government employment are only part of the story. From 1982 to 2008, growth in government employment was mainly at the state and local levels. If all government employees are included, more than 16 percent of all civilian employment is accounted for by government. Costs are commensurately high. Spending by all levels of government was equivalent to only about 11 percent of the nation's gross domestic product in For fiscal year 2013, it is approximately 39 percent. The Great Recession and its aftermath had a major impact on government spending due to high rates of unemployment - together with President Barack Obama's stimulus programs - resulted in sharp increases in federal spending. At the same time, the rest of the economy was collapsing. Government spending therefore became a larger part of a smaller economy. Spending peaked at more than 42 percent of the economy in 2009, the largest since World War II.

4 In 2009, the number of state and local government workers began to fall, because these governments could not collect enough revenue to fund their previous levels of activity. From August 2008 to the end of 2011, state and local government employment fell by about 660,000. Federal Spending While the U.S. Postal Service accounts for 574,000 employees of the bureaucracy, the postal service has been entirely self-supporting and has drawn no funds from the government at all. (Recent financial troubles have raised the question of whether the USPS can remain self-supporting in the future, however.) In contrast, the employees of the Social Security Administration make up only 3 percent of the federal workforce, but they are responsible for 20 percent of what the federal government spends. Studies repeatedly show that most Americans have a very inaccurate idea of how the federal budget is spent. Almost one-third of all federal spending goes to two programs that benefit older Americans - Social Security and Medicare. Additional social programs, many aimed at low-income individuals and families, push the total amount of social spending past the 50 percent mark. In short, the federal government spends much more on the poor than many people realize. Medicaid, a joint federal-state program that provides health-care services, is the largest of these programs. (CHIP is the Children's Health Insurance Program, and SNAP is the Supplementary Nutrition Assistance Program, better known as food stamps.) In contrast, traditional cash welfare - Temporary Assistance for Needy Families (TANF) - accounts for only 0.4 percent of the budget ($18 billion) and is buried in the "Miscellaneous low-income and disability support" slice. Military defense and veterans' benefits are an additional quarter of the whole. Interest payments on national debt are 5 percent. Education and training, transportation, and "everything else" amounts to only 16 percent of the budget. Foreign aid, which is included in the "Everything else" slice, is 1.4 percent, or $56 billion. This is a substantial sum, but it is much smaller than many people imagine. Frequently, politicians will claim that they can balance the federal budget by making large cuts to this 16 percent slice of federal spending. These claims are not based on reality. THE ORGANIZATION OF THE FEDERAL BUREAUCRACY Within the federal bureaucracy are a number of different types of government agencies and organizations. The executive branch, which employs most of the government's staff, has four major types of structures. They are (1) cabinet departments, (2) independent executive agencies, (3) independent regulatory agencies, and (4) government corporations. Each has a distinctive relationship to the president, and some have unusual internal structures, overall goals, and grants of power. Cabinet Departments The fifteen cabinet departments are the major service organizations of the federal government. They can also be described in management terms as line organizations. This means that they are

5 directly accountable to the president and are responsible for performing government functions, such as printing money and training troops. These departments were created by Congress when the need for each department arose. The first department to be created was State, and the most recent one was Homeland Security, established in A president might ask that a new department be created or an old one abolished, but the president has no power to do so without legislative approval from Congress. Each department is headed by a secretary (except for the Justice Department, which is headed by the attorney general). Each department also has several levels of under-secretaries, assistant secretaries, and other personnel. Presidents theoretically have considerable control over the cabinet departments, because presidents are able to appoint or fire all of the top officials. Even cabinet departments do not always respond to the president's wishes, though. One reason why presidents are frequently unhappy with their departments is that the entire bureaucratic structure below the top political levels is staffed by permanent employees. Many of these employees are committed to established programs or procedures and resist change. TABLE - Executive Departments Department and Year Established State (1789) (12,588 Treasury (1789) (105,612 Interior (1849) (69,866 Justice (1870) (115,746 Agriculture (1889) (92,217 Commerce (1913) (45,737 Labor (1913) (16,366 Principal Functions Negotiates treaties, develops foreign policy, protects citizens abroad. Pays all federal bills; borrows funds; collects federal taxes; mints coins and prints paper currency; supervises national banks. Supervises federally owned lands and parks; supervises Native American affairs. Furnishes legal advice to the president; enforces federal criminal laws; supervises federal prisons. Provides assistance to farmers and ranchers; conducts agricultural research; works to protect forests. Grants patents and trademarks; conducts a national census; monitors the weather; protects the interest of businesses. Administers federal labor laws; promotes the interest of workers Selected Subagencies Passport Services Office; Bureau of Diplomatic Security; Foreign Service; Bureau of Human Rights and Humanitarian Affairs; Bureau of Consular Affairs Internal Revenue Service; U.S. Mint U.S. Fish and Wildlife Service; National Park Service; Bureau of Indian Affairs; Bureau of Land Management Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Prisons SOil Conservation Service; Agricultural Research Service; Food Safety and Inspection Service; Federal Crop Insurance Corporation; Commodity Credit Corporation; Forest Service Bureau of the Census; Bureau of Economic Analysis; Patent and Trademark Office; National Oceanic and Atmospheric Administration Occupational Safety and Health Administration; Bureau of Labor Statistics; Employment Standards Administration; Employment and

6 Defense (1947) (657,347 Housing and Urban Development (1965) (9,459 Transportation (1967) (57,324 Energy (1977) (16,140 Health and Human Services (1979) (85,257 Education (1979) (4,642 Veterans Affairs (1988) (317,620 Homeland Security (2003) (198,658 Independent Executive Agencies Manages the armed forces (army, navy, air force, and marines); operates military bases; is responsible for civil defense Deals with the nation's housing needs; develops and rehabilitates urban communities; oversees resale of mortgages Finances improvements in mass transit; develops and administers programs for highways, railroads, and aviation Promotes the conservation of energy and resources; analyzes energy data; conducts research and development Promotes public health; administers Medicare and Medicaid; enforces pure food and drug laws; conducts and sponsors health-related research Coordinates federal programs and policies for education; administers aid to education; promotes educational research Promotes the welfare of veterans of the U.S. armed forces Attempts to prevent terrorist attacks within the United States, control America's borders, and minimize the damage from natural disasters. Training Administration National Security Agency; Joint Chiefs of Staff; Departments of the Air Force, Navy, Army; Defense Advanced Research Projects Agency; Defense Intelligence Agency; the service academies. Government National Mortgage Association; Office of Community Planning and Development; Office of Fair Housing and Equal Opportunity Federal Aviation Administration; Federal Highway Administration; National Highway Traffic Safety Administration; Federal Transit Administration Federal Energy Regulatory Commission; National Nuclear Security Administration Food and Drug Administration; Public Health Service; Centers for Disease Control and Prevention; National Institutes of Health; Centers for Medicare and Medicaid Services Office of Special Education and Rehabilitation Service; Office of Elementary and Secondary Education; Office of Postsecondary Education; Office of Vocational and Adult Education; Office of Federal Student Aid Veterans Health Administration; Veterans Benefits Administration; National Cemetary Systems U.S. Customs and Border Protection; U.S. Coast Guard; Secret Service; Federal Emergency Management Agency; U.S. Citizenship and Immigration Services; U.S. Immigration Customs Enforcement Independent executive agencies are bureaucratic organizations that are not located within a department but report directly to the president, who appoints their chief officials. When a new federal agency is created - the Environmental Protection Agency, for example - Congress decides where it will be located in the bureaucracy. In recent decades, presidents have often asked that a new organization be kept separate or independent rather than added to an existing department, particularly if a department may be hostile to the agency's creation. Independent Regulatory Agencies Typically, an independent regulatory agency is responsible for a specific type of public policy. Its function is to make and implement rules and regulations in a particular sphere of action to protect the public interest. The earliest such agency was the Interstate Commerce Commission (ICC), which

7 was established in 1887 when Americans began to seek some form of government control over the rapidly growing business and industrial sector. This new form of organization, the independent regulatory agency, was supposed to make technical, nonpolitical decisions about rates, profits, and rules that would be for the benefit of all and that did not require congressional legislation. In the years that followed the creation of the ICC, other agencies were formed to regulate such areas as communication (the Federal Communications Commission) and nuclear power (the Nuclear Regulatory Commission). (The ICC was abolished in 1995.) The Purpose and Nature of Regulatory Agencies. In practice, regulatory agencies are administered independently of all three branches of government. They were set up because Congress felt it was unable to handle the complexities and technicalities required to carry out specific laws in the public interest. Regulatory agencies and commissions actually combine some functions of all three branches of government - legislative, executive, and judicial. They are legislative in that they make rules that have the force of law. They are executive in that they provide for the enforcement of those rules. They are judicial in that they decide disputes involving the rules they have made. Heads of regulatory agencies and members of agency boards or commissions are appointed by the president with the consent of the Senate, although they do not report to the president. When an agency is headed by a board, rather than an individual, the members of the board cannot, by law, all be from the same political party. Presidents can influence regulatory agency behavior by appointing people of their own parties or individuals who share their political views when vacancies occur, in particular when the chair is vacant. Members may be removed by the president only for causes specified in the law creating the agency. Agency Capture. Over the last several decades, some observers have concluded that regulatory agencies, although nominally independent, may in fact not always be so. They contend that many agencies have been captured by the very industries and firms that they were supposed to regulate, and therefore make decisions based on the interests of the industry, not the general public. The results have been less competition rather than more competition, higher prices rather than lower prices, and less choice rather than more choice for consumers. Deregulation and Reregulation. During the presidency of Jimmy Carter ( ), significant deregulation (the removal of regulatory restraints - the opposite of regulation) was initiated. For example, Carter appointed a chairperson of the Civil Aeronautics Board (CAB) who gradually eliminated regulation of airline fares and routes. Deregulation continued under President Ronald Reagan ( ), who eliminated the CAB in January During the administration of George H. W. Bush ( ), calls for reregulation of many businesses increased. Indeed, during that administration, the Americans with Disabilities Act of 1990, the Civil Rights Act of 1991, and the Clean Air Act Amendments of 1991, all of which

8 increased or changed the regulation of many businesses, were passed. Additionally, the Cable Reregulation Act of 1992 was passed. Under President Bill Clinton ( ), the Interstate Commerce Commission was eliminated, and the banking and telecommunications industries, along with many other sectors of the economy, were deregulated. At the same time, there was extreme regulation to protect the environment, a trend somewhat attenuated by the George W. Bush administration. Regulation Today. After the financial crisis of September 2008, many people saw inadequate regulation of the financial industry as a major cause of the nation's economic difficulties. During President Obama's administration, therefore, reregulation of that industry became a major objective. After intense debate, Congress passed a comprehensive financial industry regulation plan in Americans have had conflicting views about the amount of regulation that is appropriate for various industries ever since the government began to undertake serious regulatory activities. Many people find regulation to be contrary to the spirit of free enterprise and the American tradition of individualism. Yet in cases such as BP's Deepwater Horizon oil spill disaster in the Gulf of Mexico in April 2010, citizens of all political stripes were outraged to learn that the relevant regulatory agency, the Minerals Management Service, had failed to do its job. Even so, real limits exist as to the ability of the federal government to protect the public. Government Corporations Another form of bureaucratic organization in the United States is the government corporation. Although the concept is borrowed from the world of business, there are important differences between public and private corporations. A private corporation has shareholders (stockholders) who elect a board of directors, who in turn choose the corporate officers, such as the CEO. When a private corporation makes a profit, it must pay taxes (unless it avoids them through various legal loopholes). It distributes the after-tax profits to shareholders as dividends or plows the profits back into the corporation to make new investments, or both. A government corporation has a board of directors and managers, but it does not usually have any stockholders. The public cannot buy shares of stock in a typical government corporation, and if the entity makes a profit, it does not distribute the profit as dividends. Nor does it have to pay taxes on profits - the profits remain in the corporation. Bankruptcy. The federal government can also take effective control of a private corporation in a number of different circumstances. One is bankruptcy. When a company files for bankruptcy, it asks a federal judge for relief from its creditors. The judge, operating under bankruptcy laws established by Congress (as specified in the Constitution), is ultimately responsible for the fate of the enterprise. When a bank fails, the government has a special interest in protecting customers who have deposited funds with the bank. For that reason, the failing institution is taken over by the

9 Federal Deposit Insurance Corporation (FDIC), which ensures continuity of service to bank customers. Government Ownership of Private Enterprises. The federal government can also obtain partial or complete ownership of a private corporation by purchasing its stock. Before 2008, such takeovers were rare, although they occasionally happened. When Continental Illinois, then the nation's seventh-largest bank, failed in 1984, the FDIC wound up in control of the institution for ten years before it could find a buyer. Significantly, the FDIC took over Continental Illinois by purchasing preferred stock newly issued by the bank. Preferred stock is a special type of investment that typically pays interest but does not let the holders vote for the corporation's board of directors. By purchasing the stock, the FDIC pumped $4.5 billion of new capital - provided by the taxpayers - into the bank, ensuring its solvency. The Bank Bailout. The Continental Illinois rescue provided a blueprint for the massive bank bailout initiated by Henry Paulson, President George W. Bush's Treasury secretary, in October The Troubled Asset Relief Program (TARP) gave the Treasury the authority to spend up to $700 billion. Of this sum, about $400 billion was actually disbursed by Paulson and by Timothy Geithner, Obama's Treasury secretary. The government bought preferred stock and similar investment devices from more than eight hundred businesses, including banks, automobile companies, and the giant insurance company AIG. The bailout program was tremendously unpopular, but by 2011 most banks had paid back the government's investments. The auto companies and AIG had announced plans to do likewise. In 2012, the Congressional Budget Office estimated that TARP's final cost to the taxpayers would be about $32 billion. Government-Sponsored Enterprises. An additional type of corporation is the governmentsponsored enterprise, a business created by the federal government itself, which then sells part or all of the corporation's stock to private investors. Until 2008, the leading examples of this kind of company were the Federal Home Loan Mortgage Corporation, known as Freddie Mac, and the Federal National Mortgage Association, commonly known as Fannie Mae. Both of these firms buy mortgages from banks and bundle them into securities that can be sold to investors. When the housing market collapsed during the Great Recession, so - eventually - did Freddie Mac and Fannie Mae. Investors had always assumed that the federal government backed up the obligations of the two enterprises, even though the government had never issued an explicit guarantee. In September 2008, the implicit guarantee became real when Treasury secretary Paulson placed the two mortgage giants under a federal "conservatorship" and pumped billions in fresh capital - also provided by the taxpayers - into them through purchases of preferred and common stock. In contrast to the TARP investments, the sums invested in Freddie Mac and Fannie Mae appear to be lost forever. In 2011,

10 the Federal Housing Finance Agency estimated that the bailouts of the two companies would ultimately cost taxpayers $124 billion. STAFFING THE BUREAUCRACY There are two categories of bureaucrats: political appointees and civil servants. As noted earlier, the president can make political appointments to most of the top jobs in the federal bureaucracy. The president also can appoint ambassadors to foreign posts. All of the jobs that are considered "political plums" and that usually go to the politically well connected are listed in Policy and Supporting Positions, a book published by the Government Printing Office after each presidential election. Informally (and appropriately), this has been called the "Plum Book." The rest of the national government's employees belong to the civil service and obtain their jobs through a much more formal process. Political Appointees To fill the positions listed in the "Plum Book," the president and the president's advisers solicit suggestions from politicians, businesspersons, and other prominent individuals. Appointments to these positions offer the president a way to pay off outstanding political debts. Presidents often use ambassadorships to reward individuals for their campaign contributions. But the president must also take into consideration such things as the candidate's work experience, intelligence, political affiliations, and personal characteristics. Presidents have differed in the importance they attach to appointing women and minorities to plum positions. The Aristocracy of the Federal Government. Political appointees are in some sense the aristocracy of the federal government. But their powers, although they appear formidable on paper, are often exaggerated. Like the president, a political appointee will occupy her or his position for a comparatively brief time. Political appointees often leave office before the president's term actually ends. In fact, the average term of service for political appointees is less than two years. As a result, most appointees have little background for their positions and may be mere figureheads. Often, they only respond to the paperwork that flows up from below. Additionally, the professional civil servants who make up the permanent civil service may not feel compelled to carry out their current chief's directives quickly, because they know that he or she will not be around for very long. The Difficulty in Firing Civil Servants. This inertia is compounded by the fact that it is very difficult to discharge civil servants. In recent years, fewer than 0.1 percent of federal employees have been fired for incompetence. Because discharged employees may appeal their dismissals, many months or even years can pass before the issue is resolved conclusively. This occupational rigidity helps to ensure that most political appointees, no matter how competent or driven, will not be able to exert much meaningful influence over their subordinates, let alone implement dramatic changes in the bureaucracy itself. History of the Federal Civil Service

11 When the federal government was formed in 1789, it had no career public servants but rather consisted of amateurs who were almost all Federalists. When Thomas Jefferson took over as president, few federal administrative jobs were held by members of his party, so he fired more than one hundred officials and replaced them with his own supporters. Then, for the next twenty-five years, a growing body of federal administrators gained experience and expertise, becoming in the process professional public servants. These administrators stayed in office regardless of who was elected president. The bureaucracy had become a self-maintaining, long-term element within government. To the Victor Belong the Spoils. When Andrew Jackson took over the White House in 1828, he could not believe how many appointed officials (appointed before he became president, that is) were overtly hostile toward him and his Democratic Party. Because the bureaucracy was reluctant to carry out his programs, Jackson did the obvious: he fired federal officials - more than had been fired by all his predecessors combined. The spoils system - an application of the principle that to the victor belong the spoils - became the standard method of filling federal positions. Whenever a new president was elected from a party different from the party of the previous president, there would be an almost complete turnover in the staffing of the federal government. The Civil Service Reform Act of Jackson's spoils system survived for a number of years, but it became increasingly corrupt. In addition, the size of the bureaucracy increased by 300 percent between 1851 and As the bureaucracy grew larger, the cry for civil service reform became louder. Reformers began to look to the example of several European countries - in particular, Germany. That country had established a professional civil service that operated under a merit system in which job appointments were based on competitive examinations. In 1883, the Pendleton Act - or Civil Service Reform Act - was passed, placing the first limits on the spoils system. The act established the principle of employment on the basis of open, competitive examinations and created the Civil Service Commission to administer the personnel service. Only 10 percent of federal employees were covered by the merit system initially. Later laws, amendments, and executive orders, however, increased the coverage to more than 90 percent of federal employees. The effects of these reforms were felt at all levels of government. The Supreme Court strengthened the civil service system in Elrod v. Burns in 1976 and Branti v. Finkel in In those two cases, the Court used the First Amendment to forbid government officials from discharging or threatening to discharge public employees solely for not being supporters of the political party in power unless party affiliation is an appropriate requirement for the position. Additional enhancements to the civil service system were added in Rutan v. Republican Party of Illinois in The Court's ruling effectively prevented the use of partisan political considerations as the basis for hiring, promoting, or transferring most public employees. An exception was permitted, however, for senior policymaking positions, which usually go to officials who will support the programs of the elected leaders.

12 The Civil Service Reform Act of In 1978, the Civil Service Reform Act abolished the Civil Service Commission and created two new federal agencies to perform its duties. To administer the civil service laws, rules, and regulations, the act created the Office of Personnel Management (OPM). The OPM is empowered to recruit, interview, and test potential government workers and determine who shoudl be hired. The OPM makes recommendations to the individual agencies as to which persons meet the standards (typically, the top three applicants for a position), and the agencies then decide whom to hire. To oversee promotions, employees' rights, and other employment matters, the act created the Merit Systems Protection Board (MSPB). The MSPB evaluates charges of wrongdoing, hears employee appeals of agency decisions, and can order corrective action against agencies and employees. Federal Employees and Political Campaigns. In 1933, when President Franklin D. Roosevelt set up his New Deal, an army of civil servants was hired to staff the many new agencies that were created. Because the individuals who worked in these agencies owed their jobs to the Democratic Party, it seemed natural for them to campaign for Democratic candidates. The Democrats who controlled Congress in the mid-1930s did not object. But in 1938, a coalition of conservative Democrats and Republicans took control of Congress and forced through the Hatch Act - or Political Activities Act - of The act prohibited federal employees from actively participating in the political management of campaigns. It also forbade the use of federal authority to influence nominations and elections, and it outlawed the use of bureaucratic rank to pressure federal employees to make political contributions. The Hatch Act created a controversy that lasted for decades. Many contended that the act deprived federal employees of their First Amendment freedoms of speech and association. In 1972, a federal district court declared the act unconstitutional. The United States Supreme Court, however, reaffirmed the challenged portion fo the act in 1973, stating that the government's interest in preserving a nonpartisan civil service was so great that the prohibitions should remain. Twenty years later, Congress addressed the criticisms of the Hatch Act by passing the Federal Employees Political Activities Act of This act, which amended the Hatch Act, lessened the harshness of the 1939 act in several ways. Among other things, the 1993 act allowed federal employees to run for office in nonpartisan elections, participate in voter registration drives, make campaign contributions to political organizations, and campaign for candidates in partisan elections. MODERN ATTEMPTS AT BUREAUCRATIC REFORM As long as the federal bureaucracy exists, attempts to make it more open, efficient, and responsive to the needs of U.S. citizens will continue. The most important actual and proposed reforms in the last several decades include sunshine and sunset laws, privatization, incentives for efficiency and productivity, and more protection for so-called whistleblowers. Sunshine Laws Before and After 9/11

13 In 1976, Congress enacted the Government in the Sunshine Act. It required for the first time that all multiheaded federal agencies - agencies headed by a committee instead of an individual - hold their meetings regularly in public session. The bill defined meetings as almost any gathering, formal or informal, of agency members, including a conference telephone call. The only exceptions to this rule of openness are discussions of matters such as court proceedings or personnel problems, and these exceptions are specifically listed in the bill. Sunshine laws now exist at all levels of government. Information Disclosure. In 1966, the federal government passed the Freedom of Information Act (FOIA), which required federal government agencies, with certain exceptions, to disclose to individuals information contained in government files. FOIA requests are helpful not just to individuals. Indeed, the major beneficiaries of the act have been news organizations, which have used it to uncover government waste, scandals, and incompetence. For example, reporters learned that much of the $5 billion allocated to help small businesses recover from the effects of the 9/11 terrorist attacks went to companies that did not need such relief, including a South Dakota country radio station, a dog boutique in Utah, an Oregon winery, and a variety of Dunkin' Donuts and Subway franchises. Curbs on Information Disclosure. Since the terrorist attacks of September 11, 2001, the trend toward open government has been reversed at both the federal and the state levels. Within weeks after September 11, 2001, federal agencies removed hundreds, if not thousands, of documents from Internet sites, public libraries, and the reading rooms found in various federal government departments. Information contained in some of the documents included diagrams of power plants and pipelines, structural details on dams, and safety plans for chemical plants. The military also immediately began restricting information about its current and planned activities, as did the Federal Bureau of Investigation. These agencies were concerned that terrorists could make use of this information to plan attacks. It is possible, however, that wherever the public starts to believe that the threat has lessened, some groups will take state and local governments to court in an effort to increase public access to state and local records by reimposing the sunshine laws that were in effect before 9/11. Sunset Laws The size and scope of the federal bureaucracy can potentially be controlled through sunset legislation, which places government programs on a definite schedule for congressional consideration. Unless Congress specifically reauthorizes a particular federally operated program at the end of a designated period, the program will be terminated automatically - that is, its sun will set. The idea of sunset legislation was initially suggested by Franklin Roosevelt when he created the host of New Deal agencies in the 1930s. His adviser (and later Supreme Court justice), William O. Douglas, recommended that each agency's charter shoudl include a provision allowing for its termination in ten years. Only an act of Congress could revitalize it. The proposal was never

14 adopted. It was not until 1976 that a state legislature - Colorado's - adopted sunset legislation for state regulatory commissions, giving them a life of six years before their "suns set." Today, most states have some type of sunset law. Privatization Another approach to bureaucratic reform is privatization, which occurs when government services are replaced by services from the private sector. For example, the government has contracted with private firms to operate prisons. Supporters of privatization argue that some services can be provided more efficiently by the private sector. A similar scheme involves furnishing vouchers to government "clients" in lieu of services. For example, instead of supplying housing, the government could offer vouchers that recipients could use to "pay" for housing in privately owned buildings. The privatization, or contracting-out, strategy has been most successful on the local level. Some municipalities have contracted with private companies for such services as trash collection. This approach is not a cure-all, however, because many functions, particularly on the national level, cannot be contracted out in any meaningful way. For example, the federal government could not contract out many of the Defense Department's functions to private firms. The increase in the amount of government work being contracted out to the private sector has led to significant controversy in recent years. Some have criticized the lack of competitive bidding for many contracts that the government has awarded. Another concern is the perceived lack of government oversight of the work done by private contractors. Incentives for Efficiency and Productivity An increasing number of state governments are beginning to experiment with schemes to run their operations more efficiently and capably. These plans focus on maximizing the efficiency and productivity of government workers by providing incentives for improved performance. Some of the most promising measures have included such tactics as permitting agencies that do not spend their entire budgets to keep some of the difference and rewarding employees with performance-based bonuses. Government Performance and Results Act. At the federal level, the Government Performance and Results Act of 1997 was designed to improve efficiency in the federal workforce. The act requires all government agencies (except the Central Intelligence Agency) to describe their goals and establish methods for determining whether those goals are being met. Goals may be broadly crafted (for example, reducing the time it takes to test a new drug before allowing it to be marketed) or narrowly crafted (for example, reducing the number of times a telephone rings before it is answered). Saving Costs Through E-Government. Many contend that the communications revolution brought about by the Internet has not only improved the efficiency with which government agencies deliver services to the public but also helped to reduce the cost of government. Agencies can now

15 communicate with members of the public, as well as other agencies, via . Additionally, every federal agency now has a Web site to which citizens can go to find information about agency services instead of calling or appearing in person at a regional agency office. Since 2003, federal agencies have also been required by the Government Paperwork Elimination Act of 1998 to use electronic commerce whenever it is practical to do so and will save on costs. Although data-rich high-tech systems have provided new, efficient ways of accomplishing the government's work, privacy concerns have become an issue when the government collects data on individuals. As one example, the American public has never accepted the concept of a national ID card, even though many other nations require their citizens to obtain such ID. Even in the United States, it is difficult to live a normal life without a Social Security number and a state-issued ID such as a driver's license. Lack of adequate ID can also be a tremendous burden to the world's poorest people. Helping Out the Whistleblowers A whistleblower is someone who blows the whistle on (brings to public attention) a gross governmental inefficiency or an illegal action. Whistleblowers may be clerical workers, managers, or even specialists, such as scientists. Laws Protecting Whistleblowers. The 1978 Civil Service Reform Act prohibits reprisals against whistleblowers by their superiors, and it set up the Merit Systems Protection Board as part of this protection. Many federal agencies also have toll-free hotlines that employees can use anonymously to report bureaucratic waste and inappropriate behavior. About 35 percent of all calls result in agency action or follow-up. Further protection for whistleblowers was provided in 1989, when Congress passed the Whistleblower Protection Act. That act established an independent agency, the Office of Special Counsel (OSC), to investigate complaints brought by government employees who have been demoted, fired, or otherwise sanctioned for reporting government fraud or waste. Some state and federal laws encourage employees to blow the whistle on their employers' wrongful actions by providing monetary incentives to the whistleblowers. At the federal level, the False Claims Act of 1986 allows a whistleblower who has disclosed information about a fraud against the U.S. government to receive a monetary award. If the government chooses to prosecute the case and wins, the whistleblower receives between 15 and 25 percent of the proceeds. If the government declines to intervene, the whistleblower can bring a suit on behalf of the government and, if the suit is successful, will receive between 25 and 30 percent of the proceeds. The Problem Continues. Despite these efforts to help whistleblowers, there is little evidence that they truly receive much protection. More than 41 percent of the employees who turned to the OSC for assistance in a recent three-year period stated that they were no longer employees of the government agencies on which they had blown the whistle.

16 Additionally, in 2006 the United States Supreme Court placed restrictions on lawsuits brought by public workers. The case, Garcetti v. Ceballos, involved an assistant district attorney, Richard Ceballos, who wrote a memo asking if a county sheriff's deputy had lied in a search warrant affidavit. Ceballos claimed that he was subsequently demoted and denied a promotion. The outcome of the case turned on whether an employee has a First Amendment right to criticize and employment-related action. The Court deemed that when he wrote his memo, Ceballos was speaking as an employee, not a citizen, and was thus subject to his employer's disciplinary actions. The ruling will affect millions of governmental employees. Protecting whistleblowers was an Obama campaign promise. Many observers believe, however, that in practice the Obama administration's record on whistleblowers is one of the worst ever. BUREAUCRATS AS POLITICIANS AND POLICYMAKERS Because Congress is unable to oversee the day-to-day administration of its programs, it must delegate certain powers to administrative agencies. Congress delegates power to agencies through enabling legislation. For example, the Federal Trade Commission was created by the Federal Trade Commission Act of 1914, the Equal Opportunity Commission was created by the Civil Rights Act of 1964, and the Occupational Safety and Health Administration was created by the Occupational Safety and Health Act of The enabling legislation generally specifies the name, purpose, composition, functions, and powers of the agency. In theory, the agencies shoudl put into effect laws passed by Congress. Laws are often drafted in such vague and general terms, however, that they provide limited guidance to agency administrators as to how they should be implemented. This means that the agencies themselves must decide how best to carry out the wishes of Congress. The discretion given to administrative agencies is not accidental. Congress has long realized that it lacks the technical expertise and the resources to monitor the implementation of its laws. Hence, administrative agencies are created to fill the gaps. This gap-filling role requires an agency to formulate administrative rules (regulations) to put flesh on the bones of the law. But it also forces the agency itself to become an unelected policymaker. The Rulemaking Environment Rulemaking does not occur in a vacuum. Suppose that Congress passes a new air-pollution law. The Environmental Protection Agency (EPA) might decide to implement the new law through a technical regulation on factory emissions. This proposed regulation would be published in the Federal Register, a daily government publication, so that interested parties would have an opportunity to comment on it. Individuals and companies that opposed parts or all of the rule might then try to convince the EPA to revise or redraft the regulation. Some parties might try to persuade the agency to withdraw the proposed regulation altogether. In any event, the EPA would consider these comments in drafting the final version of the regulation.

17 Waiting Periods and Court Challenges. Once the final regulation has been published in the Federal Register, there is a sixty-day waiting period before the rule can be enforced. During that period, businesses, individuals, and state and local governments can ask Congress to overturn the regulation. After the sixty-day period has lapsed, the regulation can still be challenged in court by a party having a direct interest in the rule, such as a company that expects to incur significant costs in complying with it. The company could argue that the rule misinterprets the applicable law or goes beyodn the agency's statutory purview. An allegation by the company that the EPA made a mistake in judgment probably would not be enough to convince the court to throw out the rule. The company instead would have to demonstrate that the rule itself was "arbitrary and capricious." Controversies. How agencies implement, administer, and enforce legislation has resulted in controversy. For example, decisions made by agencies charged with administering the Endangered Species Act have led to protests from farmers, ranchers, and others whose economic interests have been harmed. At times, a controversy may arise when an agency refuses to issue regulations to implement a particular law. When the EPA refused to issue regulations designed to curb the emission of carbon dioxide and other greenhouse gases, state and local governments, as well as a number of environmental groups, sued the agency. Those bringing the suit claimed that the EPA was not fulfilling its obligation to implement the provisions of the Clean Air Act. Ultimately, the Supreme Court held that the EPA had the authority to - and should - regulate such gases. Negotiated Rulemaking Since the end of World War II in 1945, companies, environmentalists, and other special interest groups have challenged government regulations in court. In the 1980s, however, the sheer wastefulness of attempting to regulate through litigation became increasingly apparent. Today, a growing number of federal agencies encourage businesses and public interest groups to become directly involved in drafting regulations. Agencies hope that such participation may help to prevent later courtroom battles over the regulations. Congress formally approved such a process, which is called negotiated rulemaking, in the Negotiated Rulemaking Act of The act authorizes agencies to allow those who will be affected by a new rule to participate in the rule-drafting process. If an agency chooses to engage in negotiated rulemaking, it must publish in the Federal Register the subject and scope of the rule to be developed, the names of the parties that will be affected significantly by the rule, and other information. Representatives of the affected groups and other interested parties then may apply to be members of the negotiating committee. The agency is represented on the committee, but a neutral third party (not the agency) presides over the proceedings. Once the committee members have reached agreement on the terms of the proposed rule, a notice is published in the Federal Register, followed by a period for comments by any person or organization interested in the