Tom Temin@tteminWFED February 14, 2025 10:27 am
Whether you took the deferred resignation offer from the White House or not, everyone is paying attention to its implementation. In an attempt to provide a softer and easier way to reduce the federal workforce, this is not necessarily a new idea for doing so; it’s just never been attempted on this scale before. To get some more background on it the Federal Drive with Tom Temin spoke to Elaine Kamarck, director of the Center for Effective Public Management at the Brookings Institution.
Interview transcript:
Eric White Everyone’s aware of what the deal is. One of the first actions the Trump White House took was offering all federal employees the chance to receive eight months pay if they agreed to step out of their role, essentially a buyout. But they’re calling it a deferred resignation. Let’s backtrack a little bit here because they’re actually invoking on moves done by a few of their predecessors that have tried to get away from the [reduction in force] idea and make it a little bit more humane in offering these buyouts. What is the history of the use of this idea when it comes to reducing the federal workforce?
Elaine Kamarck Well, okay. It began really in the Bush administration, and it was part of what they called the Cold War dividend, where they offered buyouts to people in the national security and Defense area because, for instance, they didn’t probably need as many Russian speakers as they used to need, that sort of thing. When the Clinton administration came in, I worked with Al Gore to lead the National Performance Review, and we saw that technology was reducing the need for ranks of middle management. And we went to Congress and we asked for bailout authority for the domestic side of the government. And in March of 1994, Congress passed buyout authority up to $25,000 for the domestic side of the government as well. It was a bipartisan bill. It passed passed big on both sides. So when we offered buyouts in the Clinton administration, it was clear that Congress had already authorized this, that there would be money there to pay the buyouts. And it was in one I think it was mostly one lump sum. And so that was the history of it. I don’t think there’s been anything else since then until we have the Trump and Musk proposal for it. And I purposely did not call it buyouts because I think they didn’t want to limit themselves to the $25,000 limit, which is in the current law. So they called it something else. And of course, calling it something else is making everybody wonder if this is going to happen or not, if it’s legal or not.
Eric White Absolutely. Yeah. Let’s get into that legality. So essentially, you all offered $25,000, boom, smack right there. This is a little bit different. As in they’re going to continue paying their salary throughout the year until September, which can get a little tricky because they may not necessarily have the budget authority for that. Is that going to kind of gum up the works? And did I have that correct on your budget, on you all’s buyout ideas where you just give that lump sum right away and everybody walks away?
Elaine Kamarck Yeah, I gave the lump sum. Everybody walked away. There was none of this business about deferred leave. I mean, none of this business about not coming to work but getting paid, which is a little bit weird for any sort of institution to do it. And I’m not quite sure why they did it other than to get around the $25,000 limit. And that was 30 years ago. So since then, the average federal salary is around $100,000. And as you can see, the buyout authority in the law would be would be exceeded in the eight months of pay. So I think the reason so few federal workers took this deal was because they just weren’t clear if it was going to actually end up being legal. And of course, it is at the courts right now.
Eric White We’re speaking with Elaine Kamarck here from the Brookings Institution. And there are so many other questions that were not answers. And we’ve heard from federal employees about the massive amount of emails sending out that have FAQs attached to it. What if I want to get back into the government, just with a different agency, do I have to give this money back? There are so many stipulations. What sort of stipulations did you all look at when coming up with your buyout idea? And were there some that, one, that you were thinking, why didn’t you all cover this, were you kind of taken aback by?
Elaine Kamarck No, basically people couldn’t come back into the government. I can’t remember, frankly, if there was a year limit on that, a time frame after which you could. But you basically you were gone. You got your money, you were out. You could not come back. And that was the end. But it was also only offered to certain people in organizations. And so what you didn’t want to do, for instance, you didn’t want 50% of the air traffic controllers to take a buyout because then you would stop all air traffic in the United States. So you didn’t want that to happen. You had to do this pretty carefully. And one of the things that I think is going to come back and bite them is that they did this across the board without any plan in mind for continuing the agency’s mission, regardless of who came and who went. So this really is something that could end up blowing up in their faces.
Eric White And let’s look at the idea of buyouts in general. There are critics of it who say they shouldn’t even be implemented, even the private sector, because basically they incentivize you to lose your best and brightest. You’re either losing folks who have options and are there and feel that they can go out and test their their worth in the private sector or whatnot, or you’re losing veterans of agencies who are able to kind of show everyone else the ropes and know how things are done. Was it effective for you all? And is that something that was considered this time around, you think?
Elaine Kamarck I don’t think it was considered this time around. I think there’s no doubt there will be a brain drain from the agencies. They will lose young people coming into the agencies who have, for instance, a lot of the technical skills that older people don’t have. I think they will also lose some managerial expertise as older people take the buyouts. So I think it’s difficult. As I say, you should use buyouts in conjunction with a plan. And the plan has to be we’re going to not do these things anymore or we’re going to replace these with technology. We’re going to replace some of these jobs with technology. If you have a plan for the agency — or it applies in business, too — I mean, if you have a plan, they can work well. But in the absence of a plan, you really don’t know what you’re going to get.
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