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Trump imposes hiring freeze for federal workers, worrying Maryland

Economic & Fiscal Policy

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JANUARY 24, 2017 Bookmark and Share

President Donald J. Trump on Monday declared a hiring freeze for nonmilitary federal workers, fulfilling a key campaign promise in what could be the first step toward a broader downsizing of the government workforce.

The moves are being closely watched in Maryland, home to some 300,000 federal workers and several agencies.

Some analysts warned the freeze would have an instant chilling effect on a state already suffering tepid job creation while impairing the ability of government to function.

Others described the freeze as standard fare for an incoming executive looking to take stock, and would not be felt — at least in the short term.

"You're not actually [cutting] the federal workforce, you're just not adding to it," said Christopher B. Summers, president and CEO of the conservative Maryland Public Policy Institute. "I wouldn't expect Maryland to be that affected by this at all.

"Now, maybe down the road, it's hard to say."

The order was no surprise after an election season in which Trump pledged to "drain the swamp." He returned to the theme in his inaugural address, describing a Washington area that has prospered while other parts of the country struggled.

"For too long, a small group in our nation's capital has reaped the rewards of government while the people have borne the cost," he said. "That all changes — starting right here, and right now."

In a memo Monday, the administration said open executive branch civilian positions are to be left empty, no new roles may be created, with limited exceptions, and contracting outside the government to circumvent the freeze would not be permitted.

Department heads may make exceptions for public safety and national security. The Office of Personnel Management may also make exceptions.

The administration said the freeze would be followed within 90 days by a "long-term plan to reduce the size of the federal government's workforce through attrition."

Don Kettl, a professor of public policy at the University of Maryland, said the administration "is very serious about trying to shrink the size of government."

"This is just a first shot of what's certain to be an ongoing battle between government bureaucracies."

The freeze drew instant fire from the unions representing federal workers and members of Maryland's heavily Democratic congressional delegation.

"A hiring freeze will be harmful and counterproductive, increasing backlogs, decreasing service quality and causing more frustration for Americans seeking help from their government," said Tony Reardon, president of the National Treasury Employees Union, which represents workers at 13 agencies, including about 6,700 in Maryland.

Rep. Andy Harris said the move makes sense.

"Given the $20 trillion debt and $500 billion deficit that President Obama left in place, it's not unreasonable for the new Chief Executive to pause federal hiring while he evaluates the policies necessary to get our fiscal house in order," the Baltimore County Republican said in a statement.

But Sen. Ben Cardin, a Democrat, said the measure was "inefficient, costly and counterproductive."

Sen. Chris Van Hollen, also a Democrat called it a "knee-jerk decision" that "involved as much thought as one of the president's many tweets."

Rep. Elijah E. Cummings said Trump "showed just what kind of a boss he intends to be."

"On his first day he targeted middle-class people who work for the American public, making their lives harder and more stressful," the Baltimore Democrat said. "Working families in Maryland beware: This is a signal to bosses everywhere to do the same."

Rep. C.A. Dutch Ruppersberger said he hopes the halt is temporary.

The Baltimore County Democrat said it has the potential to disrupt a major element of the state's economy. Federal employment has helped secure Maryland's place as the home of some of the most prosperous and well-educated professionals in the country.

"Our region will eventually suffer from this," Ruppersberger said.

Economists said Maryland will likely be hurt in the short term, but the long-term impact depends on how long it lasts, whether it is followed by cuts and what Trump's attitude toward contractors will be.

Jobs at military installations in Maryland or agencies such as the Social Security Administration in Woodlawn could be shielded from cuts, analysts said. Departments such as the Environmental Protection Agency might not fare as well.

Because so many Marylanders commute to Washington, University of Baltimore economist Richard Clinch said, the impact will still be felt.

"This is unambiguously bad news for the Maryland economy," he said. "However, the long-term implications have yet to be seen.

"… My gut tells me this is a near-term reaction to a change in administration and a change in priorities."

The size of the federal government has remained relatively stable since the 1960s.

There were 2.5 million civilian federal employees and 2.8 million uniformed military personnel in 1962, according to the Office of Personnel Management.

By 2014, civilian federal employment had grown to 2.7 million. The number of military personnel fell to 1.5 million.

Those numbers do not reflect the extensive use of private contractors to perform work once handled in-house by federal employees.

Some said even a short-term contraction could hurt Maryland.

"We're concerned," said Prince George's County Executive Rushern Baker. "When we had the government shutdown, the most affected region was Prince George's County and probably Montgomery County and Fairfax," Va.

Presidents of both parties — including Democrat Jimmy Carter and Republicans Ronald Reagan and George W. Bush — have enacted freezes as they entered office.

After the Carter and Reagan freezes, the Government Accounting Office concluded in 1982 that they did not actually help control employment levels, and in some cases they increased costs because they led to inefficiencies.

Kettl, the University of Maryland professor, called the move a "clumsy and almost always ill-advised strategy."

"We can certainly cut the size of government, but this is not the way to do it," he said.

But Peter Morici, an economist and business professor at the University of Maryland, said freezing hiring now gives Trump's administration flexibility to shift spending priorities without necessarily impacting the number of people employed by the federal government.

"I know it seems like a big news story, but it's not," he said. "It's appropriate, given there is likely to be a radical change in what they spend on."

Some federal agencies rushed hiring in the final months of President Barack Obama's term. Others have vacant positions.

Witold Skwierczynski of Catonsville has worked for the Social Security Administration since 1973. He heads the American Federation of Government Employees council that oversees Social Security Administration field offices.

Skwierczynski said wait times for Social Security and disability checks have increased. Inside the office, he said, stress levels are high.

"Our employees are on edge," he said. "They're not sure what's going to happen."

Economist Anirban Basu, CEO of the Sage Policy Group, said federal workers will likely limit their spending as they face uncertainty, hurting another major driver of economic growth.

"I suspect that the announcement today will have a chilling effect on both the Baltimore and Washington metropolitan-area economies," he said.

Basu said he sees the freeze as a preview of cuts that could eventually be severe, as Trump looks to make good on a pledge to cut taxes, while increasing spending for the military and on infrastructure.

Trump said Monday the administration was looking into "cutting taxes massively" and "cutting regulation massively."

"We're trying to get [the corporate tax rate] down to anywhere from 15 to 20 percent," he said. Regulations could be cut "by 75 percent," he said, but did not explain how it would work or be measured.

Basu said he expects deeper cuts.

"It seems clear that today's move is the first of many such moves that will result in what is likely to be a shrinking federal workforce," he said.

Baltimore Sun reporter Jeff Barker contributed to this article.

nsherman@baltsun.com

sarah.gantz@baltsun.com