Five Ways to Downsize Government

Published August 4, 1995

As Congress grapples with the challenge of downsizing or eliminating bureaucracies that haven’t been critically reexamined for many decades, its Members would do well to consider some of the lessons learned by the businessmen and -women who made their companies more competitive in the 1990s. I have a somewhat unusual perspective on this issue, having spent roughly twenty years in the federal government and another twenty in the corporate world. Here, based on my own experience, are five guidelines for members of Congress:

Define the “Core” Business

We must ask whether a problem is truly a federal responsibility, or can it be handled better by voluntary organizations, local governments, or state governments. For the federal government, the four basic departments–State, Defense, Justice, and Treasury–have a solid basis for existence. The others were either more narrowly based, an afterthought, or both. These latter departments should be scrutinized for elimination, downsizing, reorganization, movement to state and local governments, or privatization.

Cut Sharply and Rapidly

Cut sharply and rapidly. Don’t wait. Whatever it is you do, the odds are overwhelming that you should have done more–rather than less–and that you should have done it sooner, rather than later. There are so many pressures in Washington, D.C. to preserve the status quo that the most frequent mistake is to make too few changes or to cut too little. Do it once. Do it well. And then let people get back to work. Don’t try to cut the dog’s tail off one inch at a time, hoping it won’t hurt as much.

Eliminate Bureaucracy

Congress should move swiftly to cut management and get personnel costs under control. It is guaranteed that there are more managers and more staff in the federal government than are needed. In less than seven months, Scott Paper Company eliminated 11,200 people, one-third of its workforce. The company cut 71 percent of the headquarters staff, 50 percent of management, and 20 percent of the hourly employees. If the national government is as overstaffed as was Scott Paper, some 140,000 government managers could be cut immediately, saving taxpayers billions of dollars.

Reorder the Organizational Chart

Probably one-half to two-thirds of the non-central departments are no longer needed in their current form. For example, the Republican proposal to close the 93-year-old Department of Commerce seems reasonable to me. That department lacks a clear sense of mission, and it duplicates the work of dozens of other departments and agencies: a sign that taxpayers could do without it in its present form. The same likely could be said for other departments, such as Energy, Housing and Urban Development, Education, Transportation, and Veterans Affairs.

Sell Unessential Assets

Why is the federal government borrowing over $200 billion a year to cover its deficit when it is sitting on billions of dollars of assets that could and should be sold to the private sector? Some twenty years ago, I chaired the Property Review Board in the Nixon Administration, which supervised the evaluation of hundreds of federal real properties for movement to their highest and best use outside of government. The resistance in both the Executive and Legislative branches was enormous. That opportunity is still there and, given the current budget situation, must be seized.

As Congress goes about the business of putting meat on the bones of the balanced budget plan passed earlier this year, it will have to make tough decisions. I recognize the difficulty of that task, having once served in the House. But I’ve learned that decisions made every day in the corporate world are sometimes even more difficult because the very survival of a company can be at stake.

The choices to be made affect real people with careers, mortgages to pay, and families to raise. But Congress oversees an enterprise facing bankruptcy, and the consequences of not acting now, swiftly and firmly, will be devastating for a far greater number of people. The right decisions made now, however tough, will help restore the long-term health of the government, our economy, and our country.

Donald H. Rumsfeld has served as a member of Congress, U.S. Ambassador to NATO, chief of staff to President Ford, and, from 1975 to 1977, Secretary of Defense. Between 1977 and 1985 he was CEO of G.D. Searle, and from 1990 to 1993 he was Chairman and CEO of General Instrument Corporation.