By BEN FREEMAN
Senator John McCain (R-AZ) and five other Senate Republicans introduced the "Down Payment to Protect National Security Act of 2012" today, which is nearly identical to a House bill championed by House Armed Services Committee Chairman Buck McKeon (R-CA), an ardent supporter of defense contractors whose wife, coincidentally, received tens of thousands of dollars from defense contractors and their lobbyists in her bid for election to the California Assembly.
According to McCain’s office, the bill will replace “draconian defense cuts scheduled to take effect in 2013 with more responsible reductions in federal spending.” Specifically, their draconian solution to this draconian problem is to replace the “across-the-board” federal spending cuts mandated by “sequestration” in the Budget Control Act of 2011, nearly half of which would come from the Pentagon, with a federal employee pay freeze and employee attrition.
The justification for this, according McCain’s office, is a Congressional Budget Office (CBO) report, which claims that “federal employees are compensated 16 percent higher than their private sector counterparts, and enjoy a 48 percent advantage in benefits.”
As POGO’s Scott Amey wrote earlier this week, the CBO report compares individuals with similar education not occupations, which “wrongly leads to the assumption that the private sector is cheaper and therefore government services should be outsourced. POGO busted that myth last year, finding that contractors for comparable occupations cost, on average, 83 percent more than federal employees.
This leads to the fundamental flaw in these sequestration solutions—when the Pentagon, or any government agency, can’t hire federal employees, they hire service contractors, which are usually more expensive than the federal employees they are replacing. Eliminating government workers doesn’t eliminate their work; when there’s a federal employee hiring freeze or reductions through attrition agencies are forced to look to contractors, whose hiring is never capped, and who can bill taxpayers up to $693,951 for defense contractor employee compensation—and even more for scientific and engineering jobs—which is more than three times the salary of Cabinet-level secretaries.
This outsourcing has led to a dramatic rise in personnel costs at the Pentagon over the past ten years. In fact, in fiscal year 2010, the Department of Defense (DoD) paid service contractors nearly $250 billion, which is more than they paid all DoD civilian and uniformed personnel combined. Yet, based on the best estimates of contractor numbers, which are notoriously hard to count, there are far fewer contractors than DoD civilian and uniformed personnel.
Under this plan, taxpayers will ultimately pay more to have fewer people working for them. Unless this plan is accompanied by a reduction in government spending on service contractors, as we at POGO have suggested, this is not a down payment to protect national security; this is a down payment to overpaid contractors, and taxpayers will keep making the payments for years to come.
Ben Freeman is POGO's National Security Fellow.
Photo of McCain via United States Marine Corps Official Page.