Free Markets

Here’s One Way To Reduce The Federal Workforce: Increase Buyout Payments

Job security is a well-known benefit of government employment. Over the past half-century, it has become increasingly harde to actually fire a government employee, particularly a federal government employee.

In fact, the federal workforce has ballooned into the current leviathan that employs more than 2.8 million people. While total employment has remained flat since the early 1990s, total compensation has nearly doubled to an average of $123,160 per employee. With compensation at $267 billion, that’s an obvious target for cost savings.

Republicans have long wanted to tackle this monstrosity, but entrenched special interests have repeatedly succeeded in stalling those efforts. However, the GOP recently succeeded in starting a pilot program to increase buyout payments. Buyout payments allow the government to offer cash settlements to employees to encourage voluntary separation. This has proven to be the quickest and most efficient way to reduce the federal workforce.

House Republican leadership successfully included a buyout payment increase within the 2017 National Defense Authorization Act, and which applied to civilian defense employees. Before it was set to expire, the Office of Management and Budget included an expanded version in the 2018 NDAA to help meet the government reform priorities of the Trump administration.

The second iteration will increase buyout payments by sixty percent, include increases for inflation, and remain in existence through 2021.

The Voluntary Separation Incentive Payment program will allow certain agencies to offer up to $40,000 to incentivize the early retirement of government employees. The program will be a major part of the Trump administration’s planned reductions in the federal workforce. That amount is a major cost savings from the annual salaries of many of these employees. Indeed, compared to the average total compensation for a federal employee, there is still a net savings of more than $80,000.

The Environmental Protection Agency, Interior Department and State Department are among the agencies taking part in the program.

(Department of Defense photo by Master Sgt. Ken Hammond, U.S. Air Force)

Wilson most recently served as the Director of Social Media on the presidential campaign of Gary Johnson and Bill Weld.
He started in politics by founding the political advocacy organization A Libertarian Future after the 2012 presidential election. Its Facebook page now reaches tens of millions of people a month, and the website received more than 10 million pageviews in three years.
Wilson has also launched a successful digital marketing firm with a range of domestic and international clients. After living in Europe intermittently throughout college, he currently resides in California – strictly for the climate.

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