The President should direct OMB and agency heads to stop setting FTE
ceilings in fiscal year 1995.
For this transition, the agencies’ accounting systems will have to separate
true operating costs from program and other costs. Some agencies already
have such systems in place; others must develop financial management systems
to allow them to calculate these costs. We address this issue in a separate recommendation in chapter 3.
This recommendation fully supports the President’s commitment to
maintain a reduced federal work force. Instead of controlling the size of the
federal workforce by employment ceilings-which cause inefficiencies’ and
distortions in managers’ personnel and resource allocation decisions-this
new system will control the federal workforce by dollars available in operating funds.
Action: Minimize congressional restrictions such as line items, earmarks
and eliminate FTE floors. Congress should also minimize the restrictions
and earmarks that in imposes on agencies. With virtually all federal spending
under scrutiny for future cuts, Congress is increasingly applying earmark
to ensure that funding flows to favored programs and hometown
projects.