Buy-in

Agencies no longer have to seek congressional approval before offering buyouts of up to $25,000 to employees in exchange for leaving the federal workforce. The switch to permanent buyout authority was included in legislation creating a Homeland Security department last year and gives agencies more leeway to better craft their workforce than did previous buyout regulations.

"It is a very strategic tool and should be used to achieve the results that the agencies are looking to achieve," an Office of Personnel Management official said Monday. "Agencies need to have a plan for how and why and what it would do for them in terms of restructuring their organizations."

Buyouts were used extensively during the 1990s after President Bill Clinton pledged to shrink the federal workforce and issued an executive order telling agencies to cut 100,000 federal jobs over three years. Vice President Al Gore's reinvention initiative expanded on that goal, directing agencies to eliminate 252,000 positions over five years, which included the 100,000 jobs Clinton had targeted in his executive order. While packing its bags in 2001, the Clinton administration boasted of reducing the federal workforce by 377,000 employees, claiming it cut the federal workforce to its smallest size since the days of President Eisenhower.

In 1994, Congress hopped on the downsizing bandwagon and enacted the Federal Workforce Restructuring Act. The legislation gave agencies buyout authority, limited personnel levels for fiscal 1994 through 1999, and increased the federal downsizing target to 272,900 jobs. Under the old regulations, agencies had to get permission from Congress, then argue their case to both OPM and the Office of Management and Budget before they could offer buyouts to their employees. When approval was given, buyout authority was always limited to a specific period. Moreover, agencies were not allowed to go back and add positions if they created critical gaps in skills as a result of the buyouts. But critics say the 1990s-era downsizing was done with little planning and led to a loss of people with key skills, propelling workforce management onto the General Accounting Office's biennial list of the biggest issues facing the federal government.

A supporter of the new permanent buyout authority thinks it may help ease some of those human capital woes.

"Besides having a preapproved plan in effect, you could also target those positions that are no longer needed because of innovations or changes in the mission," said John Palguta, vice president for policy and research at the Partnership for Public Service, a "good government" group. "You could use it to fill new positions that are better matches to your needs."

Under the new regulation, agencies must still make their case to OPM, but rather than lose vacated positions, they can now fill them with employees who better fit the agency's mission and strategic goals.

"This is not the same as simply turning agencies loose," Palguta said. "They have to go to OPM to get approved and make a business case, produce a proposed organizational chart and justify how the business will operate without the positions."

According to Palguta, who retired from the federal government last year after spending 22 years at the Merit Systems Protection Board, "This is really a good deal and I think in most cases it's going to be used as intended. I see no downside."