Chapter Eight Outline

I. The Elusive Goal of Reducing the “Bloated” Bureaucracy: Now & Then

Those aspiring to high office sometimes trumpet the downsizing of the bureaucracy as one of their primary goals. Presidential candidates in particular often run campaigns focused heavily on just such a pledge. Once elected to office, however, they quickly learn that to accomplish their policy goals, the bureaucracy sometimes must grow rather than contract. By the end of their terms in office, they frequently discover that their work as chief executive has contributed more to increasing the size of government than to reducing it. That certainly was the case during Ronald Reagan’s presidency from 1981 through 1989. The “Reagan Revolution,” as it was often termed, aimed to reduce the burden of government. During his years in office, however, Reagan found that he often needed to increase the size of government to accomplish many of his policy objectives. He left office in 1989 with a much larger bureaucracy than the one he had inherited in 1981. Reagan was certainly not the first president to fall prey to this contradiction. Nearly two centuries earlier, Thomas Jefferson talked the talk of cutting the bureaucracy, but similarly failed to walk the walk of containing its growth. In his campaign, Jefferson stressed the need for “frugality” when it came to federal spending. When he left office in 1809, however, the federal bureaucracy was much larger than the one he had inherited in 1801.

II. What Is Bureaucracy?

A. The word “bureaucracy” often implies negatives like overgrown government and red tape. However, it is necessary to any government for enforcing laws/regulations and administering programs.

B. A bureaucracy is an organization set up in a logical manner to accomplish specific functions. Max Weber noted six characteristics of effective bureaucracies:

1. Organization based on specialization, expertise, and division of labor

2. Organization set in a hierarchical manner, with identifiable chain of command

3. Standard operating procedures (SOP), the rules that employers know and follow

4. Good record maintenance

5. Professionalism on the part of employees

6. Merit-based (not “political”) hiring and promotion

C. Most organizations, including businesses and schools, contain bureaucracies to carry out their functions. The federal government is no exception. The federal bureaucracy is arguably the most important feature of our system, as we depend on it for many things, from defense to social services. Traditionally, it falls under the executive branch, but some of it is accountable to the other branches as well.

D. Because citizens are more likely to make contact with the bureaucracy than any other part of government, it comes to symbolize government to them.

E. The federal bureaucracy is a huge set of organizations serving many different functions, including hundreds of departments, agencies, and other entities. They follow the pattern described by Weber, and their size and multiple responsibilities make the federal bureaucracy a complex system to study.

III. What Does the Federal Bureaucracy Do?

Most of the federal bureaucracy lies within the executive branch and reports to the president, who uses it to exercise executive authority.

A. Policy Implementation

1. Policy implementation is the process of carrying out a law. Congressional laws may involve developing new programs/services or modifying old ones. The federal bureaucracy must fulfill those tasks.

2. Social Security is one example of the bureaucracy in action. The Social Security Act was passed in 1935 to help the elderly and other groups. The act created the Social Security Administration, a federal agency that continues to oversee the program, maintain records, and disburse benefits.

3. The first step in implementing legislation is creating regulations, or rules, to guide agency employees. These rules have the force of law, and apply in the Social Security context (benefit eligibility, etc.) as elsewhere. Not only do regulations translate law into action, but being written and specific, they also provide a basis for consistent application.

4. Once implementation regulations are drafted by an agency, they are published in the Federal Register. Comments are accepted, and may cause modifications. If not, objectors can ask Congress or the courts to modify the rule.

B. Bureaucratic Legislation

1. When implementation laws are vague, agencies have administrative discretion (widespread freedom) in implementation. Policy areas with vague laws include environmental and work safety rules, which give those agencies more latitude in rulemaking. This results from the need for technical expertise in implementation as well as the congressional desire to avoid unpopular decisions.

2. When Congress transfers legislative authority like this, it is delegating legislative power, giving the executive agency effective power to make laws (in apparent contradiction of the Constitution). Those sets of rules relating to the authority of administrative agencies are called administrative law.

3. The EPA and OSHA have wide authority to create environmental and workplace safety laws, while the Federal Reserve has been given much authority to manage the economy through the raising and lowering of interest rates as well as other adjustments.

4. Delegation is not open-ended, though. Congress monitors agency performance through congressional oversight, commanding accountability along with the president. If unhappy, it can cut the agency’s budget, refuse presidential appointments, conduct investigations, or create a new agency. These checks often make agencies as responsive to Congress as to the president.

5. Congressional oversight includes hearings by specific committees/subcommittees, which may scrutinize agency spending. Two agencies, the Congressional Budget Office and the General Accountability Office, are directly controlled by Congress (not the president) and help assess the performance, cost, and effectiveness of various agencies.

C. Bureaucratic Adjudication

1. Policy implementation may also involve bureaucratic adjudicating— determining the rights and duties of specific parties under the agency’s rules. While most adjudication occurs in the court system, Congress placed judicial power in some agencies as well (EEOC, EPA, NLRB, FCC, etc.).

2. These agencies can try cases involving related matters, applying personnel, procedures, and case law usually seen in the judicial branch. These include “administrative judges,” appellate courts, and administrative hearings similar to trials. While such findings may be appealed to federal courts, they are usually upheld.

IV. The Development of the Federal Bureaucracy

A. Initially, there were only three departments during Washington’s first presidential term—the Departments of State, Treasury, and War. An attorney general and postmaster general were also soon hired, but the total bureaucracy during the first year was run by only fifty people.

B. Geographic expansion and military conflict led to the growth of the bureaucracy in the 1800s, including the creation of the Department of the Interior, the Department of Agriculture, and the Department of Justice. In the 1880s, industrialization led to a Bureau of Labor and a Commerce Agency that were elevated to the status of Cabinet departments in the early 1900s as they grew in importance.

C. The Great Depression led to FDR’s “New Deal,” significantly increasing the federal bureaucracy with Social Security, the Securities and Exchange Commission, the Civilian Conservation Corps, and a number of public works programs. The Brownlow Commission also gave the president more authority over the bureaucracy at this time.

D. In 1940, the operations of the federal government cost 10 percent of the nation’s GDP, at $9.5 billion, and employed about 700,000 people. By 1975, it increased to 22 percent of the GDP, at $332 billion and 2.2 million employees. This expansion was partly due to Cold War military spending and diplomatic programs, and partly due to LBJ’s Great Society domestic programs, facilitated by postwar prosperity.

V. Getting Control of the Growing Bureaucracy

The American economy began to slump in the mid-1970s, making it harder to support the growing bureaucracy. By the 1980s, growing deficits led to President Reagan’s mandate to reduce it. Reagan targeted domestic programs, and since then various administrations have used the following means to shrink the federal bureaucracy:

A. Privatization: Replacing government providers with private-sector actors (private competition may result in lower costs, and private actors may be more flexible)

B. Deregulation: Removing rules and regulations, which eliminated the need for oversight (Examples: the former Civil Aeronautics Board and the Interstate Commerce Commission)

C. Devolution: Shifting power and responsibility partly back to states to shrink the size of national government

D. “Reinventing Government”: Increasing bureaucratic accountability, seen in efforts by President Clinton and Vice President Gore (some feel these efforts to create a more entrepreneurial spirit, with market-driven and business-oriented planning, have improved government effectiveness and efficiency)

E. The collapse of the Soviet Union and the end of the Cold War in 1991 allowed reductions in military spending (from 1990 to 2000, the number of federal employees declined by about 500,000 and the government percentage of GDP dropped from 21.9 percent to 18.2 percent).

F. More recently, however, federal spending has continued to increase annually. The “war on terror” of recent years has required greater spending, as have the operations of the Department of Homeland Security. The election of President Barack Obama and increased majorities of Democrats to Congress in 2008 during an economic recession ushered in a new growth spurt for the federal bureaucracy.

VI. The Organization of the Federal Bureaucracy

The federal bureaucracy is made up of various agencies with different roles. Some report directly to the president, others answer to both the president and Congress. Most are part of the executive branch, some are part of other branches.

The federal bureaucracy includes Cabinet departments, independent agencies, regulatory agencies, government corporations, and the Executive Office of the President.

A. Cabinet Departments

1. At the top of the bureaucracy are the fifteen Cabinet departments. At the head of each department is a secretary (aside from the attorney general) who reports directly to the president. These secretaries comprise most of the president’s Cabinet, are nominated by the president, and are confirmed by the Senate.

2. The “inner Cabinet” includes the heads of the most important departments (State, Defense, Treasury, and Justice).

3. Cabinet (executive) departments have broad authority over general policy areas. Most are collections of agencies, each with a more specific focus. This structure facilitates specialization, division of labor, and chain of command. For example, the Department of Labor includes the Occupational Safety and Health Administration (OSHA), the Bureau of Labor Statistics (BLS), and the Office for Labor-Management Standards (OLMS). The Department of Defense includes the Army, Navy, Air Force, and National Guard.

4. Congress can define the scope, authority, and existence of Cabinet departments, giving it an important check on the president. Departments have been created to deal with special situations, such as Defense (1947), Energy (1977), Veterans Affairs (1988), and Homeland Security (2002).

5. The Cabinet members also play symbolic political roles. Interest group, community, and business leaders provide input to department heads, and recent presidents have used secretary appointments to highlight diversity. For example, President Clinton made history by appointing women for the first time to Justice Department and State Department positions. President George W. Bush appointed a woman, an African American, and a Hispanic American to the inner Cabinet. President Obama’s cabinet is also diverse, featuring in prominent positions four women and two African Americans.

B. The Department of Homeland Security

The Department of Homeland Security (DHS) was created in response to September 11th, a reorganization of twenty-two existing agencies into one department to improve coordination, communication, and operation. Primary units of DHS include Border and Transportation Security, Emergency Preparedness and Response, Science and Technology, Information Analysis and Infrastructure Protection, the Secret Service, and the U.S. Coast Guard.

C. Independent Agencies

Independent agencies lack the high status of Cabinet departments. These smaller agencies have a more narrow focus, such as National Aeronautics and Space Administration (NASA) and the Small Business Administration (SBA). Their leaders are appointed by and report directly to the president.

D. Regulatory Agencies

1. Regulatory agencies are responsible for implementing economic rules/regulations. They are supposedly staffed on a non-partisan, non-political basis to ensure fairness and avoid corruption. Therefore, they are not controlled by the president, but are created by Congress and run by independent boards/commissions.

2. The first one was the Interstate Commerce Commission (ICC) (1887), created to stop corruption in the railroad industry, though it covered all transport. This agency was abolished by Congress in 1995 as overregulating and impeding business growth.

3. Other major regulatory agencies include the Federal Trade Commission (FTC), Federal Communications Commission (FCC), Securities and Exchange Commission (SEC), Equal Employment Opportunity Commission (EEOC), Environmental Protection Agency (EPA), and Consumer Product Safety Commission (CPSC).

E. Government Corporations

Government corporations are set up to run like private companies even though they serve a public purpose. There is a market for the service that customers are willing to pay for individually, and such units are therefore primarily funded by these fees. However, because they serve a public service, government will subsidize shortfalls. Examples are the U.S. Postal Service (USPS), the Tennessee Valley Authority (TVA), and AMTRAK.

F. The Executive Office of the President

The president has an office staff (the Executive Office of the President) that reports directly to the president, provides advice and counsel, and helps manage the federal bureaucracy. The EOP is managed by the White House Chief of Staff and includes a Communications Office, a press secretary, a Council of Economic Advisors, a National Security Council (for foreign/military advice), an Office of Management and Budget (for national budget advice), a White House Counsel (for legal advice), an Office of Science and Technology, an Office of the U.S. Trade Representative, and an Office of National Drug Control Policy, among others.

VII. The Federal Workforce

The federal bureaucracy currently employs 2.7 million civilian personnel, not counting 1 million postal workers and 1.5 million military personnel.

A. Political Appointees and Career Professionals

1. About 8,000 members of the workforce are presidential appointees, selected to reflect the president’s views, usually as a political reward. Some high-ranking officials (ambassadors, agency/department heads, etc.) must be confirmed by the Senate.