Daily Labor Report®

Trump May Reference Civil Service Overhaul in State of Union

Jan. 29, 2018, 6:08 PM

President Donald Trump may mention plans to reform the federal workforce in his State of the Union address Jan. 30.

“It’s rumored that the president is likely to reference civil service reform in the State of the Union,” Robert Shea, a former official at the White House Office of Management and Budget, told Bloomberg Law Jan. 29.

A second source, a former high-level government official who spoke on the condition of anonymity, also said Trump may use the speech to call for an overhaul of the federal civil service system. That source said the overhaul could include a proposal to make it easier to fire government workers.

A mention of plans to change how federal employees are hired, paid, fired, or managed in the president’s State of the Union would most likely be followed Feb. 12 by a more substantial description of what the administration has in mind, Shea and the second source said. That’s when the administration plans to unveil its fiscal year 2019 budget request.

“You can expect to see a lot of meat on the bones for whatever is hinted at in the address,” Shea, now a principal at Grant Thornton in Alexandria, Va., said of the budget proposal.

Shea was at the OMB from 2002 to 2008. He led the OMB’s Office of Performance and Personnel Management for much of that time.

“A pretty substantial reorganization” of the Office of Personnel Management also may be ahead, Shea said.

The other source also said changes may be coming for the OPM, which is the government’s central HR agency.

“OPM may be ready for a big shakeup,” that source said.

The OPM press office referred questions to the White House and the OMB. Neither supplied comments in response to multiple requests.

Leaders Lacking, Former OPM Chief Says

The administration doesn’t appear to be in a good place to begin overhauling how federal employees are paid and managed, Donald Devine, the OPM director for four years under President Ronald Reagan, told Bloomberg Law.

“You don’t have anybody at OPM. The main person at OMB for federal workforce issues isn’t confirmed,” Devine said when asked about the possibility of a shakeup at the personnel agency.

The OPM has an appointed chief because of delays in the Senate on acting on the nomination of Jeff Pon, who is Trump’s choice to lead the agency.

Margaret Weichert, Trump’s pick to be OMB deputy director for management, also is awaiting Senate action.

The fact that these appointees aren’t in place “doesn’t mean there isn’t going to be an agenda” from the administration on civil service issues, Devine said.

Overhaul Ahead?

Signs that the administration will call for an overhaul of the existing system for hiring, firing, promoting, and paying federal employees have been building for some time.

“My guess is that the upcoming convergence—the State of the Union and the budget—will have much deeper and more far-reaching implications than many people expect,” Don Kettl, a public policy professor at the University of Maryland, told Bloomberg Law.

“There’s a very widespread debate over OPM and its future,” Kettl said. “The OMB team is very alert to the fact that it’s hard to get leverage over government’s results without making changes in the human capital system.”

The heads of the Labor Department, OMB, and OPM called for “performance-sensitive compensation systems” to create a “more citizen-centered, results-oriented, and market-based” government in a “memorandum to the president” released Dec. 22.

“We need to empower Federal agencies to better manage, develop, and reward employees,” Labor Secretary Alexander Acosta, OMB Director Mick Mulvaney, and Acting OPM Director Kathleen McGettigan said in an analysis of the government’s pay system.

Agencies’ Plans to Help Form Budget Request

Federal agencies were asked in April to submit plans for “reforming the federal government and reducing the federal civilian workforce.”

These plans will be used to form the administration’s FY 2019 budget request, Mulvaney wrote in a memorandum to agency heads.

The OMB has been very effective in preventing leaks regarding its deliberations over the agency’s reorganization plans, Kettl said. The plans themselves also have been kept secret, which Kettl called remarkable.

—With assistance from Chris Opfer.

To contact the reporter on this story: Louis C. LaBrecque in Washington at llabrecque@bloomberglaw.com

To contact the editor responsible for this story: Peggy Aulino at maulino@bloomberglaw.com

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