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112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-334
REDUCING THE SIZE OF THE FEDERAL GOVERNMENT THROUGH ATTRITION ACT OF
December 19, 2011.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
Mr. Issa, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
[To accompany H.R. 3029]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 3029) to reduce the size of the
Federal workforce through attrition, and for other purposes,
having considered the same, report favorably thereon with
amendments and recommend that the bill as amended do pass.
Committee Statement And Views.................................... 2
Explanation of Amendments........................................ 5
Committee Consideration.......................................... 5
Roll Call Votes.................................................. 5
Application of Law to the Legislative Branch..................... 6
Statement of Oversight Findings and Recommendations of the
Statement of General Performance Goals and Objectives............ 6
Federal Advisory Committee Act................................... 6
Unfunded Mandate Statement....................................... 6
Earmark Identification........................................... 6
Committee Estimate............................................... 6
Budget Authority and Congressional Budget Office Cost Estimate... 7
Changes in Existing Law Made by the Bill, as Reported............ 9
Minority Views................................................... 10
The amendments are as follows:
After subsection (h) of the bill, insert the following:
(i) Report.--The Office of Management and Budget shall submit
a report to Congress detailing the effect of the requirements
under subsection (b) on programs, activities, and services,
including those provided to the general population. In such a
report, the Office of Management and Budget shall pay special
attention to any reductions that will harm national security or
endanger life, public health, public safety, property, or the
environment. Each report shall be submitted annually, with the
first report provided within 30 days after the date of
enactment of this Act.
Redesignate subsection (i) (relating to regulations) as
Strike subsection (h) of section 2 and insert the following:
(h) Reduction in Procurement of Service Contracts.--The
President, through the Office of Management and Budget and
subject to subsection (e), shall take appropriate measures to
ensure that there is a reduction in the amount expended for the
procurement of service contracts in each fiscal year occurring
after the date of the enactment of this Act equal to the
reduction in the amount expended for the Federal workforce in
each such fiscal year caused by reason of the enactment of this
COMMITTEE STATEMENT AND VIEWS
PURPOSE AND SUMMARY
Our fiscal situation requires tough choices to restrain
government spending. Agencies must focus on their core mission,
reassess priorities, and direct taxpayer dollars to where they
are most needed. Intelligent workforce management is a key
component of this effort.
The purpose of H.R. 3029 is to reduce the size of the
federal civilian workforce by ten percent through attrition,
thereby allowing agencies to target limited resources to core
mission functions. The bill imposes a hiring freeze on the
executive branch if the ten percent reduction is not achieved
by fiscal year 2015. Within this framework, H.R. 3029 provides
agencies flexibility to implement the reform in the manner that
best meets their unique and evolving needs.
BACKGROUND AND NEED FOR LEGISLATION
From January 2008 to April 2011, the Federal Government
grew by 242,000 civilian, non-postal employees, while the
private sector lost 6.7 million jobs, according to the Bureau
of Labor Statistics. Non-postal civilian personnel costs for
the executive branch were nearly $230 billion in 2010. The
annual budget request the President issued this past Spring
requested funding for an additional 15,000 new federal workers
for FY 2012.
The Committee recognizes that the ratio of federal
employees to the overall U.S. population has declined in recent
decades. This should not, however, be understood to mean that
the Federal Government is now understaffed. In testimony before
the Subcommittee on Federal Workforce, U.S. Postal Service and
Labor Policy, Dr. Andrew Biggs stated, ``If productivity in
federal services tracked productivity in the economy at large,
each federal employee would produce almost twice as much as in
1969. That is, if federal productivity tracked the economy at
large, a workforce around 16 percent smaller than today's could
provide services comparable to those of federal employees in
The National Commission on Fiscal Responsibility and Reform
(``Simpson-Bowles'') called for immediate reforms to reduce
federal spending and make the federal government more
efficient. The Commission recommended a ten-percent reduction
via attrition in the size of the federal workforce, to include
defense civilian employees. In recommending this policy, the
Commission stated, ``Washington needs to learn to do more with
less, using fewer resources to accomplish existing goals.''\1\
\1\The National Commission on Fiscal Responsibility and Reform, The
Moment of Truth, December 2010.
The FY 2012 budget resolution adopted by the House, H. Con.
Res. 34, also calls for a ten-percent reduction in the federal
workforce, to be achieved through attrition at a one-for-three
replacement rate. This policy is assumed as part of the overall
reduction in discretionary spending to below 2008 levels, and
the five-year discretionary spending freeze accomplished by the
Thus, H.R. 3029 builds on the recommendations of both
President Obama's fiscal commission and the most recent House-
passed budget resolution in requiring a ten percent reduction
in the size of the federal civilian workforce through
attrition. The bill achieves the necessary reduction through
natural attrition, allowing agencies to hire one federal
employee for every three who retire or leave their job.
Over the last ten years, federal civilian employees
separated from the federal workforce at an average rate of
92,000 per year. According to the Office of Personnel
Management, approximately 300,000 federal civilian employees
are eligible for retirement, and close to 500,000 will be
eligible to retire by the start of fiscal year 2015. On
December 12, 2011, the Federal Times reported that more than
100,000 employees were likely to apply for retirement before
the end of the calendar year, a 24 percent increase over
\2\Losey, Stephen, Federal Times, ``Retirement surge 24% over last
year,'' December 12, 2011, available at: http://www.federaltimes.com/
article/20111212/PERSONNEL02/112120301/1001 (last accessed December 13,
H.R. 3029 further requires that the level of savings
achieved by the attrition policy be accompanied by an equal
savings in service contract expenditures. The bill provides the
President, acting through the Office of Management and Budget
and in consultation with the Office of Personnel Management,
broad flexibility to achieve the necessary reductions in
staffing and service contracts, and to prioritize staffing
needs across the Federal Government.
The Committee recognizes that it is essential for agencies
to maintain sufficient expertise and technical capability.
Accordingly, the bill gives the executive branch the
opportunity to make choices to: (1) protect programs that are
of the highest priority or that achieve the best results; (2)
guard against skills imbalances; and (3) allow agencies to make
decisions that best meet their unique needs. The executive
branch could prioritize, for instance, hiring for federal law
enforcement functions over other functions and activities.
Agencies have three years to achieve the required workforce
size, providing the opportunity to plan a more nimble and
effective government, rather than simply backfill vacancies as
Beginning in fiscal year 2015, the bill makes the Federal
Government subject to a hiring freeze if the size of the
workforce exceeds ninety percent of its size as of September
30, 2011. The President may waive the hiring freeze in the
interest of national security or other extraordinary
circumstances. The term ``national security concern'' is
intended to reflect the essential functions performed by, among
others, federal law enforcement personnel. The President may
also waive the hiring freeze with respect to a particular
position or category of positions critical to an individual
The Federal Workforce Restructuring Act of 1994\3\
established a requirement that the administration reduce the
federal workforce by 272,900 positions by 1999. The Act placed
annual ceilings on executive branch full-time equivalent
positions from fiscal years 1994 through 1999.
\3\Public Law 103-226.
Section 1. Short title
Establishes the short title of the bill as the ``Reducing
the Size of the Federal Government Through Attrition Act of
Section 2. Reduction in Federal workforce
The President must reduce the size of the federal civilian
workforce by ten percent by fiscal year 2015. The Office of
Management and Budget (OMB), in consultation with the Office of
Personnel Management, is responsible for achieving the
reduction on behalf of the President. The reduction will be
accomplished through attrition, using a one-for-three
replacement rate. In other words, the Federal Government may
hire no more than one employee for every three who separate
from federal service between the date of enactment and the
beginning of fiscal year 2015.
OMB notifies Congress each quarter of each fiscal year in
which the number of federal employees is greater than ninety
percent of the number of federal employees as of September 30,
Beginning in fiscal year 2015, the Federal Government is
subject to a hiring freeze for any increase in federal civilian
employees greater than ninety percent of the number of federal
employees as of September 30, 2011. The President may waive the
hiring freeze in the interest of national security or other
extraordinary circumstances. The President may also waive the
hiring freeze with respect to a particular position or category
of positions critical to an individual agency.
The President, through OMB, must reduce the amount spent on
service contracts by an amount equal to the savings achieved
from reductions in the size of the federal civilian workforce.
The required reduction in service contract spending is subject
to the same waiver authority as that pertaining to federal
OMB reports to Congress on the impact of the federal
workforce reductions on federal government programs and
The President or his designee may issue implementing
EXPLANATION OF AMENDMENTS
Rep. Cummings offered an amendment requiring agencies to
report to Congress on the impact of the required federal
workforce reductions on Federal Government programs and
activities, including those provided to the general population.
Rep. Issa offered a second-degree amendment requiring only the
Office of Management and Budget to submit a report. The
Cummings amendment, as modified by the Issa second-degree
amendment, was agreed to by voice vote.
Rep. Cooper offered an amendment allowing agencies to hire
two workers for every three who leave federal service, instead
of the one for three replacement rate in H.R. 3029. The
amendment was withdrawn.
Rep. Lynch offered an amendment in the nature of a
substitute. The amendment was defeated by voice vote.
Rep. Lynch offered an amendment requiring a reduction in
service contract expenditures equal to the savings achieved
from the reduction in the size of the federal civilian
workforce. Rep. Issa offered a second-degree amendment making
the reduction in service contracts subject to the waiver
authority in H.R. 3029. The Lynch amendment, as modified by the
Issa second-degree amendment, was agreed to by voice vote.
Rep. Meehan offered an amendment exempting federal law
enforcement officers from the definition of federal employees
used in H.R. 3029. The amendment was withdrawn.
Rep. Yarmuth offered an amendment exempting agencies that
provide services to veterans from H.R. 3029. The amendment was
defeated by a recorded vote of 9 ayes to 12 nays.
On November 3, 2011, the Committee met in open session and
ordered reported favorably the bill, H.R. 3029 as amended, by
roll call vote of 23-14, a quorum being present.
ROLL CALL VOTES
1. Mr. Yarmuth offered an amendment which exempted agencies
that provide services to veterans. The amendment was defeated
by a recorded vote of 9 Ayes to 12 Nays.
Voting Aye: Cummings, Towns, Norton, Tierney, Lynch,
Connolly, Davis, Yarmuth, and Speier.
Voting Nay: Issa, Platts, Jordan, Chaffetz, Lankford,
Buerkle, Gosar, Meehan, DesJarlais, Guinta, Farenthold, and
2. The bill, H.R. 3029, as amended, was ordered favorably
reported to the House, a quorum being present, by a recorded
vote of 23 Ayes to 14 Nays.
Voting Aye: Issa, Burton, Mica, Platts, McHenry, Jordan,
Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar,
Labrador, Meehan, DesJarlais, Walsh, Gowdy, Ross, Guinta,
Farenthold, Kelly and Cooper.
Voting Nay: Cummings, Towns, Maloney, Norton, Kucinich,
Tierney, Clay, Lynch, Connolly, Quigley, Davis, Braley, Yarmuth
APPLICATION OF LAW TO THE LEGISLATIVE BRANCH
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill reduces the size of the federal civilian workforce by
ten percent through attrition. Legislative branch employees and
their families, to the extent that they are otherwise eligible
for the benefits provided by this legislation, have equal
access to its benefits.
STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.
FEDERAL ADVISORY COMMITTEE ACT
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
UNFUNDED MANDATE STATEMENT
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandate Reform Act, P.L. 104-4) requires a statement as to
whether the provisions of the reported include unfunded
mandates. In compliance with this requirement the Committee has
received a letter from the Congressional Budget Office included
H.R. 3029 does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 3029. However, clause 3(d)(3)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act.
BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 3029 from the Director of
Congressional Budget Office:
Congressional Budget Office,
Washington, DC, December 15, 2011.
Hon. Darrell Issa
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3029, the Reducing
the Size of the Federal Government Through Attrition Act of
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Santiago
Robert A. Sunshine
(For Douglas W. Elmendorf, Director).
H.R. 3029--Reducing the Size of the Federal Government Through
Attrition Act of 2011
Summary: H.R. 3029 would require the Office of Management
and Budget (OMB) to take action to ensure that:
Federal agencies do not appoint more than
one employee for every three employees retiring or
separating from government service (unless the
President has issued a waiver) through September 30,
The number of people in the federal
workforce, beginning in fiscal year 2015, does not
exceed 90 percent of the total number of employees as
of September 30, 2011 (although use of the waivers
could exempt parts of the workforce); and
The amount expended for service contractors
is reduced by the same amount as the savings generated
from federal workforce reductions each fiscal year.
In addition, H.R. 3029 would require OMB to submit a report
detailing how federal programs, activities, and services would
be affected by the reduction in the workforce.
Assuming appropriations are reduced in accordance with the
reduction in the workforce and the use of contractors, CBO
estimates that implementing H.R. 3029 would reduce
discretionary spending by about $35 billion over the 2012-2016
period. The bill would have no effect on direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
H.R. 3029 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 3029 is shown in the following table.
The costs of this legislation fall in most budget functions.
By fiscal year, in millions of dollars--
2012 2013 2014 2015 2016 2012-2016
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Reduction in the Federal Workforce:
Estimated Authorization Level................. -700 -2,400 -4,300 -5,000 -5,100 -17,500
Estimated Outlays............................. -700 -2,300 -4,200 -5,000 -5,100 -17,300
Reduction in the Procurement of Service Contracts:
Estimated Authorization Level................. -700 -2,400 -4,300 -5,000 -5,100 -17,500
Estimated Outlays............................. -700 -2,300 -4,200 -5,000 -5,100 -17,300
Estimated Authorization Level................. 1 1 1 1 1 5
Estimated Outlays............................. 1 1 1 1 1 5
Estimated Authorization Level............. -1,399 -4,799 -8,599 -9,999 -10,199 -34,995
Estimated Outlays......................... -1,399 -4,599 -8,399 -9,999 -10,199 -34,595
Basis of estimate: For this estimate, CBO assumes that H.R.
3029 will be enacted early in 2012 and that future
appropriations would, on net, be reduced as a result of lower
expenses for wages, salaries, and service contracts.
CBO estimates that implementing H.R. 3029 would reduce
salaries and expenses for federal employees by $700 million in
2012 and by about $17 billion over the 2012-2016 period. The
bill would authorize the President to exempt parts of the
government workforce from the attrition policy under certain
conditions--for example, if there is a national security
concern or an extraordinary emergency, or if the performance of
a critical agency mission requires it. CBO believes that those
waivers are broad enough that a significant portion of the
federal workforce would be exempt from the attrition directive.
Based on the governmentwide shutdown in 1995--when about 1.2
million employees out of a workforce of roughly 2 million
civilian employees were exempt from the furlough--as well as
information from the Office of Management and Budget, experts
on the federal workforce, and the General Services
Administration, CBO estimates that only about one-third of the
current workforce would be affected by the provisions of this
bill. CBO calculates that the portion of the federal workforce
that would be affected would decline from about 710,000
employees at the end of September 2011 to about 640,000 at the
end of September 2014 (at which point, the 10 percent reduction
in the number of affected federal employees would be achieved).
The amount of savings that would be generated from reducing
funding for service contracts is very uncertain. The bill
specifies that the amount expended for service contracts should
be reduced by the same amount as the savings generated from the
federal workforce, as shown in the above table. However, if
payments were shifted from service contracts to another means
of acquiring such services (such as by bundling them together
with other types of purchases), the savings would be less.
Under the bill, OMB would have to submit an annual report
detailing the effect of the reduction in the workforce on
federal programs, activities, and services; CBO estimates that
reporting requirement would cost $5 million between 2012 and
This bill--or any legislation that would reduce the funds
available for a particular discretionary program or that would
achieve savings by undertaking a particular activity--would
only reduce projected total appropriations if the caps on
discretionary spending were also lowered. Without a reduction
in the caps, CBO assumes funding for other discretionary
programs would fill the gap created by the specific reduction
Pay-As-You-Go Considerations: None.
Intergovernmental and private-sector impact: H.R. 3029
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
Estimate prepared by: Federal costs: Santiago Vallinas;
Impact on state, local, and tribal governments: Elizabeth Cove
Delisle; Impact on the private sector: Paige Piper/Bach.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
CHANGES IN EXISTING LAW MADE BY THE BILL AS REPORTED
There were no changes made to existing law in H.R. 3029.
Committee Democrats respectfully oppose H.R. 3029, the
Reducing the Size of the Federal Government Through Attrition
Act of 2011, as ordered reported by the Committee on November
3, 2011. The bill would require an arbitrary, government-wide
10% reduction in the federal workforce by 2015. This measure
would be implemented by restricting agencies to hiring only one
new worker to replace every three workers who leave federal
Americans depend on the work that our dedicated federal
employees do each day to provide for our national security,
ensure the safety of our food and water, care for our veterans,
and test new medicines for safety and efficacy. Despite the
invaluable service that these public servants provide, this
bill unfairly targets the federal workforce. Although federal
employees were not the cause of the financial crisis or our
nation's budget deficit, they are being asked to shoulder a
disproportionate share of the burden of solving our fiscal
problems. Federal employees are already struggling through a
two-year pay freeze that will deprive them of $60 billion over
the next ten years. They are also are facing early retirement,
buyouts, furloughs, and layoffs as a result of deep budget cuts
established by the Budget Control Act of 2011.
Although we agree that we must take significant steps to
curb Federal spending, we do not agree that across-the-board
personnel cuts are a meaningful solution to our nation's budget
deficit. Arbitrary workforce reductions sound quick and easy to
implement, but they do not account for the unique mission,
workload, or critical functions of each federal agency or the
distinctive education, skills, and training of each agency's
workforce. The Majority's approach will result in severe
staffing shortages at many of our critical Federal agencies,
such as the Department of Defense, the Department of Veterans'
Affairs, the Internal Revenue Service, the Department of
Justice, the Securities and Exchange Commission, the Department
of Health and Human Services, and the Department of Homeland
History has shown that broad-based workforce reductions
actually may result in increased government spending in the
form of increased backlogs, reduction or termination of agency
services, or increased contracting costs. Such rigid cuts will
also lead to a decrease in the quality of services provided to
taxpayers. Some agencies and Federal occupations are still
feeling the negative effects today of workforce reductions
implemented in the 1990s.
The personnel cuts supported by the Majority can also
result in skills imbalances and the loss of institutional
knowledge when employees with skills in high demand or with
significant experience separate from federal service. According
to the Office of Personnel Management, 40% of all Federal
workers will be eligible to retire in ten years. Non-strategic
personnel reductions would only hamper agencies in their
workforce and succession planning.
In contrast to the Majority's proposal, Committee Democrats
support a more strategic approach that will provide agency
leaders with flexibility to determine how their specific
organizations can achieve necessary cuts and how those cuts
will impact mission and results. The Budget Control Act, which
reduced spending caps for the federal government for fiscal
year 2012 through 2021, has already set this process in motion.
A budget-based management approach gives agencies the
discretion to determine the best way for them to meet the
reduced budget caps.
During the Committee's consideration of H.R. 3029,
Representative Lynch offered an amendment that would have
provided agencies with flexibility to implement the goal of
reducing the total number of Federal employees. Unfortunately,
this common-sense amendment was rejected.
Representative Lynch also offered an amendment, which was
adopted, that would require the amount expended for federal
government service contractors to be reduced by an amount equal
to the savings generated from federal workforce reductions.
Although we strongly oppose the arbitrary limits on the federal
workforce included in this bill, this amendment will prevent
work from simply being shifted to contractors if the federal
workforce is reduced.
Finally, the Committee also approved an amendment offered
by Ranking Member Cummings with a minor change offered by
Chairman Issa. Ranking Member Cummings amendment required
agencies to report on the programs, activities, and services
which would be reduced or terminated as a result of personnel
reductions required by the bill. The amendment required
agencies to pay particular attention to reductions that would
harm national security or endanger life, public health, public
safety, property, or the environment. Chairman Issa's change to
the amendment required the Office of Management and Budget to
report to Congress, instead of agencies.
Giving our agencies the power to reshape their
organizations while taking into account mission, priorities,
workload, and staffing is especially important now that
substantial automatic budget cuts have been triggered by the
Budget Control Act. Studies and experience have shown
conclusively that better results are achieved when agencies
make cuts strategically rather than arbitrarily. The non-
strategic, indiscriminate cuts to the Federal workforce
proposed in H.R. 3029 will make the country less secure, lead
to major backlogs in programs and services, decrease agencies'
productivity, and impair public access to the services the
American people deserve and expect from their government.
Elijah E. Cummings.
Stephen F. Lynch.