Planet Money: The Last Time We Shrank the Federal Workforce – Episode Summary

Release Date: March 12, 2025
Host: Sarah Gonzalez and Amanda Aronczyk
Guest: Elaine Kmark, Federal Workforce Expert at the Brookings Institution

1. Introduction

In the latest episode of Planet Money, hosts Sarah Gonzalez and Amanda Aronczyk delve into the complexities of shrinking the federal workforce. Drawing parallels between the current Trump administration's efforts and the significant workforce reductions of the 1990s under President Bill Clinton and Vice President Al Gore, the episode provides a comprehensive analysis of government efficiency measures and their long-term impacts.

2. Federal Workforce Overview

The episode opens with a brief overview of the federal workforce's size, highlighting that "the actual size of the federal government, like the number of federal employees, hasn't changed much in 50 years. 50 years ago, there were 2.1 million federal employees. Today, there are 2.3 million." (05:20) This stagnation is contextualized against a 68% growth in the U.S. population, emphasizing challenges in maintaining proportional workforce numbers.

3. Historical Context: The 1990s Workforce Reduction

Elaine Kmark, a renowned expert on federal workforce dynamics, provides an insightful retrospective on the 1990s efforts to reduce government bloat. During this period, under Clinton and Gore's administration, the federal workforce peaked at over 3 million employees. Elaine was pivotal in steering the National Performance Review (NPR), also known as "Reinventing Government" (REGO), aimed at making the federal government more efficient and cost-effective.

4. Strategies for Reducing Workforce

a. Modernization and Efficiency

One of REGO's primary objectives was modernization. "Back in 1993, no federal agency had a website. And we started telling agencies to build websites," Elaine explains (08:03). This digital transformation was intended to streamline operations and improve accessibility.

b. Cutting Waste Through Regulation Reform

A significant portion of the effort focused on identifying and eliminating unnecessary regulations. Elaine recounts the infamous tale of the "$400 federal hammer," a symbol of bureaucratic inefficiency. "They added cost to everything from hammers and staplers to airplanes," she notes (09:20). The team meticulously identified and dismantled obsolete statutes and convoluted procurement processes that burdened agencies with excessive red tape.

c. Targeted Job Cuts and Buyouts

After extensive analysis, Elaine and her team determined that job cuts alone would not yield substantial savings. Instead, they focused on eliminating redundant roles and offering buyouts. "A lot of these were buyouts. We had buyout authority from Congress," Elaine clarifies (17:24). Over eight years, approximately 426,000 federal employees were let go, achieving the smallest federal workforce since the mid-20th century and saving taxpayers around $136 billion (17:39).

5. Notable Achievements and Cultural Shifts

REGO's efforts were not just about numbers but also about transforming the bureaucratic culture. "Al Gore was giving out these awards to people and agencies that found the government the most savings," Amanda highlights (12:08). The Hammer Awards became a symbol of efficiency, despite their "tacky" appearance (12:35).

6. Current Efforts Under the Trump Administration

Fast forward to the present, the Trump administration, through a unit referred to as "Doge," is attempting to replicate and even accelerate the federal workforce reduction. Unlike the methodical approach of the 1990s, current efforts are marked by "chaotic" and "mixed messages," including "blanket" firings and abrupt policy changes (02:42, 03:40).

7. Challenges and Pushback

Elaine Kmark expresses skepticism about the current administration's approach:

• "This is the thing about DOGE that's so weird, is that they're ignoring Congress so much," she states (18:14).
• A federal judge ruled against the administration's broad firing powers, emphasizing the necessity of "following established channels" (23:29).

The episode underscores the complexities of workforce reductions, highlighting that:

• "Federal contractors outnumber civil servants," adding another layer of difficulty (21:55).
• Regulatory and procedural hurdles make mass firings impractical and legally challenging.

8. The Role of Federal Contractors

Federal contractors play a significant role in the government's operational capacity. Elaine provides insights into their functions:

• Goods Contractors: Responsible for tangible items like "trucks for the army" or "yellow legal pads for the Justice Department" (22:15).
• Services Contractors: Handle specialized tasks such as cybersecurity, scientific expertise, and janitorial services (22:59).

The administration's discontinuation of some contracts has already led to job losses among these contractors, further complicating workforce reduction efforts.

9. Future Implications and Legislative Interventions

Elaine anticipates a "messy" process moving forward due to the current administration's disregard for legislative protocols. She predicts Congress will intervene to reinstate critical positions, especially in essential agencies like NOAA. This intervention is likely driven by concerns over national safety and effectiveness:

• "If NOAA misses or predicts a hurricane late... What is Congress going to do? It's going to say, holy moly, put those people back," Elaine notes (24:51).

10. Lessons from the Past and Optimism for the Future

Despite the turmoil surrounding current efforts, Elaine maintains a level of optimism based on historical precedents:

• "We passed about 100 laws over the seven years," she remarks about REGO's success (16:07).
• Elaine believes that a structured, bipartisan approach, akin to the 1990s, is essential for meaningful and sustainable workforce reductions.

11. Conclusion

The episode concludes by juxtaposing the ambitious yet orderly approach of the 1990s with the tumultuous current administration's tactics. Elaine Kmark’s experiences serve as both a cautionary tale and a beacon of hope, illustrating that while reducing government size is feasible, it requires meticulous planning, legislative cooperation, and a clear focus on eliminating inefficiencies without undermining essential services.

Notable Quotes:

• Elaine Kmark on Regulation Costs: "They added cost to everything from hammers and staplers to airplanes." (09:20)
• Elaine on Coronavirus Workforce Changes: "But today, they offered buyouts to every single government employee, but not enough people took the buyouts." (02:42)
• Elaine on Congressional Involvement: "You go to Congress... they gotta reverse them." (16:05)
• Elaine on Federal Contractors: "We have more contractors than we have civil servants." (21:52)

Production Credits:

This episode was produced and reported by Willa Rubin, edited by Jess Jiang, and engineered by Jimmy Keeley. Fact-checking was assisted by Sierra Juarez, with Alex Goldmark serving as executive producer. Special thanks to Ben Zipper at the Economic Policy Institute for insights on the federal workforce.

For those interested in understanding the intricate dynamics of federal workforce management and government efficiency measures, this episode offers a wealth of information, historical context, and expert analysis.