MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. And a Happy New Year to all. The tense fiscal cliff negotiations went down to the wire last night. And while automatic across-the-board federal cuts were avoided for now, the last-minute deal once again simply kicked the can down the road, and federal agencies and workers are rightly nervous about the future.

MR. KOJO NNAMDIWhen economic times are tough, federal workers are used to being in the political crosshairs, but in our area, the effects of any cuts could go well beyond federal agencies, hitting thousands of employees in the private sector as well. Joining us to discuss how all of this might play out is Max Stier. He is the president and CEO of the Partnership for Public Service. Max Stier, good to see you. Happy New Year.

MR. MAX STIERHappy New Year and good to see you.

NNAMDIThank you. Joining us by phone from Annapolis is Don Kettl. Don Kettl is the dean of the School of Public Policy at the University of Maryland and a nonresident senior fellow at the Brookings Institution. Don Kettl, thank you for joining us. Happy New Year to you.

MR. DONALD KETTLHappy New Year, Kojo, to you and to Max.

NNAMDIYou, too, can join the conversation by calling us at 800-433-8850. Are you a federal worker or government contractor? Are you concerned about what's ahead for you? Call us, 800-433-8850, or send us email to kojo@wamu.org. You can send us a tweet, @kojoshow, or you can simply go to our website, kojoshow.org, ask a question or make a comment there. Max, I'll start with you. Democrats and Republicans barely averted the fiscal cliff. What does the current deal, short term as it is, mean for federal workers?

STIERMore of the same. And you had it exactly right. It really does kick the can. You know, there's not the emergency fire drill of having to deal with a sequestration, but that's only been put off by two months.

STIERAnd you're going to have the confluence both of having to deal with sequestration as well as, in the near term, the debt limit and also quite important the continuing resolution, which, you know -- and Don may know better than me. But this is the -- I think there's only four times in the last 38 years that Congress has actually gotten its full budgets done. And this is yet another year in which federal agencies are having to operate without really knowing what their budget is.

NNAMDIDon, based on the current temporary deal and the next set of negotiations, what seems likely to you at this point?

KETTLWell, there are a couple of things that seem lined up and maybe inescapable. The first is that the odds of a cost-of-living increase, which the president was putting on the table, now seems to be coming back off, so that public employees can probably count on getting a raise if they can get it within step increase or get a promotion. But the kind of across-the-board increase that they were counting on probably is not going to happen, but more important is what's lying ahead.

KETTLThere's enormous amounts of uncertainty. We not only don't know how this is going to come out, but we don't know when it's going to come out. And so we're looking at a long, long stretch of uncertainty and the possibility of having this kicked down the road not once but maybe multiple more times as well.

NNAMDIWell, sequestration isn't quite off the table yet. Some imagine the worst-case scenario involving immediate layoffs and cuts to federal agencies. Do we know what it would actually mean for paychecks and for jobs, Max?

STIERWell, I mean there have been various scenarios that have been run, and they, you know, show a lot of dire things. But truthfully, I don't think people really know what this will look like in part because there are a lot of choices that will have to be made by -- both by the White House and by individual agencies, none of it being really the best way to manage any organization. So it's -- we are unfortunately making a bad situation much worse in the method by which we're approaching this.

STIERAnd as Don suggests, I think, you know, there's, from the personal in terms of the, you know, potential for pay-raise issues but more generally for federal workers they're already in a climate of great uncertainty. You mentioned economic hard times, putting federal workers in the crossfire. It also puts federal workers at the frontline because, you know, many federal workers are actually helping people who are facing enormous economic challenges.

STIERSo if you look at the Social Security Administration or the VA or any number of other federal agencies, the workforce is not only being hammered both in the court of public opinion but also financially and in the work that's being demanded of them. So it's a very, very bad brew, and you see that in the, you know, the employee engagement numbers that are best places to work rankings, the OPM's employment viewpoint survey, terrible, terrible numbers and terrible even compared to the private sector.

NNAMDIIs it important, however, to point out that even if sequestration does eventually happen and there are layoffs, they're not likely to be immediate layoffs?

STIERThey're not likely to be immediate. However, again, I think there's not been a lot of good communication about what exactly this will look like, and therefore, as we all know, sometimes uncertainty can be worse than the actual truth. And it's certainly the case that it inhibits good management of resources.

STIERBut it also takes a toll on individuals when they don't know what's likely to happen to them, and people often assume the worst. So, unfortunately, I think, you know, we're seeing very, very poor management of our workforce, of our government's resources, and it's not what we need to be doing today.

NNAMDIAnd, Don Kettl, the deal that was struck yesterday, this alternative to the fiscal cliff, is not necessarily going to be good news for federal workers either, is it?

KETTLWell, it's not likely to for a couple of reasons. The first is that most of this was really focused on taxes, and so the great uncertainties that are hanging out there on the spending side, that is, decisions about what we're going to do are still hanging out there. And then on top of that, there is this question about what's going to happen with the cost-of-living increases that now seem to be off the table one way or another.

KETTLBut Max made in many ways the most important point about this. We talk all the time about trying to improve the performance of the federal government. People sometimes say we have to run government more like the private sector, but no smart thinking private sector organization would ever run itself this way with such uncertainty about what is it going to do, when -- how much it's going to pay its workers, how it's going to try to motivate workers to do the right thing.

KETTLThis is just not something that any well-managed private sector organization would ever do. And then we turn around and sometimes wonder why the government struggles as it does, and it's in many ways the result of this. Now, to be sure, this is the product of very fundamental questions about what we want our government to do, but we do have to ask ourselves about what implications this has for the way the government performs.

NNAMDI800-433-8850 is our number. We're discussing the federal workforce in the current economic climate and the future of the federal workforce in general, inviting your calls at 800-433-8850. How has the uncertainty of the past year affected your workplace and your career choices? You can also send us email to kojo@wamu.org and send us -- or send us a tweet, @kojoshow. Before I move off to the private sector a little bit, Don, do we have a sense of what might be on the table in terms of defense spending?

KETTLWe really don't. One of the biggest pieces of uncertainty here is that we know how bad it would have been had we tumbled over the cliff because that was going to be something that was set in a formula. We went over the cliff, but we pulled ourselves back from the budget cuts at the last second. The biggest uncertainty right now is really a collection of two things: When we're going to come up to the next finish line or the next set of battles, but then how big a cut at the deficit that we're actually going to make.

KETTLAnd we could decide that we're going to just take a small cut of federal spending and then deals it again and again and again, or the long promise grand deal that so many people have been talking about for so long could finally come into play. And so so much of this has to do with the big question about how large of a cut and how big of a deal we're going to make and how much of that is focused on entitlements, both now and in the future, and how much of it has to do with basic government operations.

KETTLSo we're asking ourselves how many employees that we're going to have working for VA hospitals and how much are we going to be spending 15 years down the line in Medicare. And we just don't know either what the answer to that question is or when we're going to be making the decision on that.

NNAMDIMax, in all of these discussions whether defense or other agencies, there are substantial private sector implications as well. What kind of ripple effects might there be throughout our region's economy here?

STIERWell, look, the federal government buys goods and services north of, you know, $500 billion on annual basis, and, as you said, this is the, you know, primary industry for this area. So there are significant implications, you know, both for direct federal employees as well as the larger contractor community that supports our government.

STIERAnd once more, it's the uncertainty that is, you know, in some ways the most devastating. You can plan if you know what you have to plan for, but if you don't -- and Don did a nice job of outlining a number of the uncertainties that exist out there -- really, really difficult to manage effectively. And the end result is people understandably manage conservatively.

STIERAnd, therefore, you'll see companies that might be able to optimize their impact much better if they actually knew what they had to the deal with, but they have to prepare for the worst even if the worst is not coming. And that means that they slow down. They don't hire people. They fire people. Federal agencies make short-term contracts. They don't, you know, invest for the longer term, all kinds of bad things that cost American taxpayers money and quality of government.

NNAMDIDon, there is not an explicit deadline, but we expect all of these issues to come up when Congress is forced to deal with the national debt. What do you see down the line there, especially given the fact that it will be a new Congress that will be tackling these issues? How do you see that affecting these discussions?

KETTLIt's a new Congress. It's a new day, and it's going to have to be a new deal. And what Congress has done now is to put off the sequestration that is this automatic set of cuts for two months. Within that period, we're going to have to deal with an extension of the national debt. It's important to note that we don't have to keep doing this to ourselves that we make these temporary debt increase ceilings, and then we have to come back and revisit it over and over again. And most countries don't do that.

KETTLWe don't have to do that to ourselves, but we do it because it gives both sides in Congress leverage over these decisions. And what I really expect to happen as we get further down the road on that is that we're going to begin the process of trying to answer the two big questions here. The first is, how large of a bite of this deficit apple are we going to take?

KETTLWe've been talking over and over again for years that we really have to get our budget situation under control, and will we try to do this in a large way or just one more bit of piecemeal? The second is, what's the balance that we're going to set between taxing and spending on the one side? Is this really a chance for fundamental tax reform, or are we going to just hack our way through it in bits and pieces? And how much on the spending side are we going to do by trying to fix entitlements as opposed to short-term decisions?

KETTLThe obvious answer to this is that the more fundamentally we deal with the questions and the more we deal with the longer-range implications for this, the better off we're going to be because it -- we'll remove the uncertainty and provide a better fix. But, of course, the politics make that very, very, very hard to do. And so we could easily find ourselves in a very sad situation, having to refight all of these battles, but this time, I suspect, with the Republicans having a stronger hand than they had the last time.

NNAMDIMax Stier, what say you?

STIERYou know, again, the crystal ball is not very clear. I think that, you know, like Don, I think that the likelihood, frankly, is that, you know, we get more of the same. It is politically a very challenging situation. We saw it play out in this last go around, and we've seen consistently, you know, the choices that have been made have always been sort of the least large resolution of issues possible.

STIERAnd that is, I think, unfortunately what we're likely to see going forward. We do have divided government. We have a system that permits, you know, the vision to basically stop things, really hard to get stuff done, a lot easier to prevent them from happening. And so I think, in all likelihood, we'll see a continual war of attrition between the two sides trying to, you know, get the upper hand.

STIERAnd once more, that means, you know, uncertainty for everybody, and it is not a good thing. It is certainly not optimizing, you know, our ability to address our problems. And you look at what, you know, Europe faces now and look at us, and you say, you know, the shoe is on the other foot right now, and we're not looking, you know, very statesmanlike.

NNAMDIGot to take a short break. When we come back, we'll continue this conversation on the federal workforce and the economic crisis and the future of the federal workforce. We'd like to hear from you at 800-433-8850. Do you think federal workers are unfairly targeted when it comes to government belt tightening? You can also go to our website, kojoshow.org, and join the conversation there or send email to kojo@wamu.org. I'm Kojo Nnamdi.

NNAMDIWelcome back to our conversation on the future of the federal workforce. We're talking with Don Kettl. He is the dean of the School of Public Policy at the University of Maryland and a nonresident senior fellow at the Brookings Institution. He joins us by phone from Annapolis. Joining us in studio is Max Stier, president and CEO of the Partnership for Public Service. And if you'd like to join us by phone, the number is 800-433-8850.

NNAMDIWe got an email from Jeffrey in Germantown, Md., who writes, "I'm a federal employee, and my pay has been frozen for two years. Taking inflation into account, I've taken about a 5.3 percent pay cut over these past two years." Well, Don Kettl, one of the first acts of 2013 was a move in the House to extend the federal pay freeze. What do you make of that?

KETTLWell, you know, the problem here at the core is that members of Congress, given all of this battle, don't want to have themselves in a position taking a pay increase. And whenever members of Congress deny themselves a pay increase, they often couple along federal employees as well because their argument is, well, if they're not going to get an increase, then neither is anybody else.

KETTLBut what that does, of course, is to create this ongoing problem of making federal employees in the position where they're suffering because of political battles that are happening elsewhere. It undermines the ability to be able to really motivate people. It, frankly, makes people discouraged. It creates an ongoing problem of trying to recruit people to the federal workforce as well. And it's one of these making a bad situation a worse situation that is one that we unfortunately keep going down.

KETTLIt's been worse for employees of many state and local governments. State employees in Maryland, for example, have not only had no pay increases, but until Jan. 1 that -- memory serves me right -- four years of furloughs as well, as well as freezes. So it's been worse in some ways at the state level. But the fallout from the political battles in Congress have tended to bring their employees directly into that in ways that only make it harder to motivate people. And that's an unfortunate side effect of all of this as well.

NNAMDIThe rest of Jeffrey's email, Max Stier, says, "President Obama's proposed pay increase will have meant an increase in take-home pay of about $5 a month for a person making $50,000. I would rather not get any increase than this fig leaf. At least that way, it would be clear to the public that federal employees have received zero pay increase for three years." What do you think federal workers can expect, Max Stier? Our emailer Jeffrey says $5 a month? I don't want that fig leaf. That's not a pay increase at all.

STIERLook, I think we're more fundamentally having the wrong conversation, and there's been a political battle over whether federal employees are paid more or less than the private sector companies.

NNAMDIAnd you say that's not the right question to ask.

STIERIt isn't. What we do have is a compensation system, a pay system of the government that was designed in 1949. And there have been changes since, but not really to the fundamentals of it. And the world has changed in very dramatic ways. And I think what we really need to re-examine -- and this is true beyond just in the compensation arena. But we really need to examine the way we're doing government and improving the way we do government.

STIERAnd that includes the way we pay our federal employees. I think we need to tie it much more closely to individual contributions and what we need to do to be able to recruit and retain the very best talent that we really should want in our federal government. That requires some pretty dramatic changes to what exists right now.

STIERAnd at the end of the day, I concur with the basic notion, which is, you know, 0.5 percent isn't what this should be about. We really should be thinking about, how do we make sure we have the government that we want? And part of that is going to require us to change dramatically the way we compensate our federal employees.

NNAMDIRyan in Bethesda, Md. has a question or a suggestion about that. Ryan, you're on the air. Go ahead, please.

RYANWell, my question, Kojo, is -- was you just touched on momentarily ago was, basically, that in the private sector, because of the compensation, because of the level of benefits and health care pension, as well as their 403 (b) or whatever the section is in the private sector and most of those three-legged stool for their retirement, for things such as that don't really exist anymore.

RYANAs far as receiving health care or employer-sponsored health care, nobody pays for all of their benefits anymore. So -- and, in fact, on NPR, they had listed it as, I believe, about 12 percent was what the average federal employee makes over with somebody in the private sector would make.

NNAMDIWell, there -- I'm glad you brought that issue up, Ryan, because as Max Stier has already said, he doesn't think that is the right question to ask. I don't know if you want to respond to Ryan before I go to Don Kettl, Max.

STIERIf I could, I would love to. I mean, I think the challenge here is that, again, we're asking the wrong questions. We're making the wrong comparison. We shouldn't be looking at the overall rate of pay in the private sector and the overall rate of pay in the federal government. We shouldn't be making those large generalizations.

STIERWe should instead be looking at the specific talent that we actually need. And again, the thing that works for me is if you think of, you know, Bill Gates walking into a bar with 12 other people. All of a sudden, everybody in there, if you average all their net worth, becomes a billionaire. Well, you got one Bill Gates, and you got a bunch of other people that are nowhere close. You got to look at the same thing in the federal government. We shouldn't be comparing the entire private sector against the entire federal workforce.

STIERWe should be looking at engineers that we need to be doing specific tasks in specific geographies and thinking about, what do we need to compensate them to get the very best people? And if we went through that exercise, the deck would be shuffled. It would mean we would get -- we'd have a much better opportunity to get the right talent for the American people without having -- without wasting the resources. That's not what we do today.

NNAMDIAnd, Don Kettl, you raise a bigger question about the future and whether we have the right workforce to get the job done.

KETTLWell, that's exactly right. Max makes just a terrific point about making sure that as we're battling this through that we really focus on the right questions. And it's one thing to say that we have these public-private comparisons. But the private sector doesn't employ large numbers of air traffic controllers or airport screeners, and the comparisons for the reasons Max points out often are just not the right ones.

KETTLBut the more important question is, are we producing a workforce that has the skills to get the job done that the government and that the people need? And if you look at the long list of 30 different programs that the government accountability offices identified as areas especially prone to risk and to waste and the mismanagement, every single one of them has at it's core a problem of human capital, getting the right people in the right places with the right skills to manage the programs well.

KETTLAnd if we are really serious about trying to reduce the cost of the federal government and improve its performance, to reduce waste and to make government more satisfying for citizens, we have to start with the core problem which is making sure we have the right people in the right places with the right skills.

KETTLAnd I think any careful look at what we are doing right now would say that we just are not doing a very good job in that at all. And we're paying for that over and over and over again. And every time we jump back into short-term calculus and so much uncertainty, it only makes a bad problem worse.

NNAMDIWe got an email from Rita, who said, "With all due respect, private corporations cut jobs, cut pay and adjust jobs, copes all the time often without notice. Why shouldn't the federal government operate with the same efficiencies private business has to? I was on the job one day, and 70 pink slips were handed out in one day alone unannounced.

NNAMDI"We're all suffering under this economy. And to me, this is a new normal for the future with the loss of so many well-paying jobs in the country." Max, federal workers are seen by many, and maybe including our emailer, Rita, as risk averse. Is this accurate, or does it depend on where you work?

STIERWell, A, first, I would have given a big amen to everything that Don said already. So I think he's 100 percent right. It is all about the talents, all about the people. And this comes back to your question about risk aversion. There is too much risk aversion in the federal workforce, and there are a lot of good reasons for it. And you look at any number of recent scandals, and you can understand why federal employees are terrified to step out. It's a bad thing all around.

STIERAnd, you know, again, the scandal around the GSA conference is a great example of it. If you look at the cost that we've incurred in our response to that GSA scandal, it dwarfs the money that was wasted beforehand. And it's a major, major problem for the way we run government because we will not get the kind of innovation, the kind of willingness to try new things. If we destroy anybody who, you know, steps out and makes a mistake, there's a lot of conversation and is backed on the key point of risk aversion about how much the government does to chain the hands of business.

STIERI think the problem is at least as bad inside government. Federal employees have more requirements placed on them that get layered one on top of the other without anyone going back and thinking about are we really, you know, all together accomplishing what we really want to get done than any other, you know, segment of our society. And we don't benefit from that. It's in a major, major cost.

NNAMDIWant to get back to the issue of innovation. But first, here is Steve in Fairfax, Va. Steve, you're on the air. Go ahead, please.

STEVEGood morning, Kojo. How are you?

NNAMDII'm well.

STEVEI am a long-term federal employee. I've been with the Department of Defense for over 34 years. I'm relatively senior and was at the top of my step when the pay freezes were put into effect three years ago. So I've been going along for three years without any raises although my net pay is going down due to increases in health care costs and those kinds of things. But the thing I find to be most frustrating is we as federal employees have not been able to step up and do the things that we can do because of the uncertainties with the budget and not knowing what is coming down the road.

STEVEWe can't plan over the next horizon. It's gotten so frustrating for me that I've actually chosen to retire. Tomorrow is my last day as a federal employee. And it's kind of bittersweet because I've had 34 good years working for the government. And, unfortunately, I just can't continue on this -- in the atmosphere that we have today.

NNAMDISteve, thank you for those 34 years. And, Max, you were just saying that federal workers, presumably people like Steve, are doing or want to do innovative work in these tough times, and you talked about places where that's happening like the Patent and Trademark Office. Can you tell us a little bit about that?

STIERCertainly, and let me echo your thanks to Steve for his service. And, you know, again, I think we are seeing retirement rates come up, and there are a lot of very good people who want to make a difference, who, you know, no longer feel like they can continue that fight, and that's a loss for our country. There are corners of government in which lots of very innovative great things are happening, and you point out one of my favorites, Patent and Trademark Office.

STIERReally, really important if you think about what it does, which is to essentially manage the intellectual property of our country, one of the places where we do excel as a country. And what's remarkable of their story -- and I'm going to get these numbers a little bit wrong. But in our best places to work, rankings in 2007, they were, you know, pretty, you know, scraping bottom, about 177 out of 240-so components of government. Fast forwarding to today, they are number five out of 297 components in government, and every year since that 2007 mark, they marched up the ladder.

STIERWhat's really attractive to me is that at the same time, they were improving performance. So what you saw is a drop in their backlog of patent applications about 20 percent, even though the number of applications was going up 5 percent. So you saw what you should see, which is more engaged employees equals better performance. And, you know, we talk about the pay parity question.

STIERI would like to see an engagement parity goal for federal workers versus the private sector. Today, federal workers are not as committed and satisfied largely because of their views of their leadership. That's a major, major problem. We should be -- that's how we should be measuring ourselves if we're succeeding in government. Do we have a federal workforce that is at least as engaged and preferably more engaged than the norm in the private sector?

NNAMDIDon Kettl, what agencies do you see are stepping up, so to speak, being more proactive, more innovative?

KETTLYou know, I think there are some tremendous stories out there. And one of the sad things about all the headlines that have been circling around is that some of the stories get pushed to the side. Let me tell you just a really brief tale that gives some hope. The Bureau of Indian Affairs, which, by almost any measure, has long been one of the very most troubled in the entire federal government, set a target last year of trying to reduce the rate of violent crime on three Indian reservations by 5 percent.

KETTLAnd by some strong leadership and careful work with other agencies and with state and local governments, they actually managed, instead of hitting the 5 percent target, to make it 35 percent. And they did it simply through good management, not through a massive infusion of cash but by good management and doing smart work connecting programs across boundaries. And it goes to show that happens if we have stronger leadership focused on performance, measure and reward what people do and try to create the right incentives for the right kind of activity.

KETTLThere are a lot of really good people out there doing a lot of very good stuff. And the last thing that we need is people who know how to do that, like Steve concluding at the end of their careers that they just can't take it anymore. We know what we want to do, and we see how to do it well, and we need to make sure we've build the government from the bottom up to make sure that what we want is what we get and what we need is what it is that we produce.

NNAMDIHere is Sandy in Gaithersburg, Md. Sandy, you're on the air. Go ahead, please.

SANDYHi.

NNAMDIHi.

SANDYI worked for the Park System in Montgomery County for 30 years approximately, and we went, at one point, for six years without COLAs. But it would seem like if the congressman are worried about getting a COLA, they're the only ones that I know of that are going to get 100 percent of their pay when they retire. I mean, that's a major difference in issues in salary and stuff like that.

NNAMDIYou make a good point, Sandy. Doesn't she not -- does she not, Max Stier?

STIERHard to argue with that.

NNAMDIIn terms of what federal employees get when they retire.

STIERAgain, I think the key point here is we need a system that enables us to get the right people to make government work well, and that needs to be our starting point and that we don't have that system today. And it certainly doesn't help when you, again, you have the pay freezes and other efforts to, you know, simply take the money out without really looking at what the consequences are to our overall system.

NNAMDIThank you for your call, Sandy. On to Matt in Washington, D.C. Matt, you're on the air. Go ahead, please.

MATTYes. Good afternoon, Kojo. Yeah. I have an acquaintance that works for a federal agency, Department of Homeland Security, and I'm not exactly sure what division. But he has described that his group and the group that he works for in that they don't take any federal funding, meaning that the fees that they charge for the services they provide cover the cost of the personnel and whatever other, you know, capital equipment they require.

MATTAnd I believe it's a part of immigration or passport that does this. And I was wondering if the panel had any other examples of agencies that do this. And maybe this is a transition that some other agencies should progress into where a federal-run agency is a funded by the fees by the people that you service.

NNAMDIMax Stier.

STIERYeah, there are a lot of examples. We talked about the Patent and Trademark Office. They generate more revenue for the treasury than they actually cost. There's a great article, I think, in today's New York Times, about the asset forfeiture office at the southern district of New York U.S. Attorney's Office, and I think they brought in $3 billion this year. The FDA, they're -- actually, the drug companies have affirmatively said, let us pay.

STIERWe want -- we actually want good government, and that's going to require, you know, more resources at FDA, and we'll pay fees to make that happen. I do think it's a model that can work in some instances. It is interesting to note -- and Don may know this better than I -- but in most, if not all of those instances, even though the money is generated by fees, it goes to the Treasury, and the Congress still needs to appropriate the dollars for those agencies. So a lot of those agencies are still caught up in the crazy budgeting appropriations dysfunctionality that exists in Congress right now.

STIERSo even though they're generating this money, they don't have the same kind of field of view that they ought to have about what their budgets ought to be. But in general, look, I think that works for some places. It's not going to work for everything. You think about national defense, which is, you know, by far, in a way, the largest -- or intelligence community. You know, these are massive parts of the federal budget.

STIERNo easy way to see how you -- you know, how they -- sort of customer base paying that for fees. But it is -- it would be -- it would really help. I mean, so much of the problem is really fundamentally the way Congress manages the budget process. It would help enormously if Congress got its own act together.

NNAMDIDon Kettl?

KETTLJust no doubt about that. Matt, his last point is the central one. A huge point of this is that Congress spends so much of its time with very, very short-term calculations and focusing, not surprisingly, on the political tactics that the long-term often gets lost. And so many of the things that we end up complaining about with government and about what it is the government does is the product of this, and you can see that just right in the front lines today.

KETTLWhat -- the big battle that we're having is the day-two story, which is, wait a minute, you forgot to appropriate the money to help people in the Northeast recover from Hurricane Sandy.

NNAMDITrue.

KETTLAnd that really gets down to the basic question of, yes, we want to try to do all we can to raise revenues to try to help some programs support themselves. But at some point as a country, we have to decide what kinds of things we want to do, with all of us contributing for making some things happen like perhaps hurricane relief. And that's something that we're just not very good at having a very good conversation about.

NNAMDIMatt, thank you very much for your call. We're going to take a short break. If you have called, stay on the line. We will get to your call. If you'd like to call, the number is 800-433-8850. How you -- how has the uncertainty of the past year affected your workplace and your career choices if you're a federal employee? 800-433-8850. You can send email to kojo@wamu.org. I'm Kojo Nnamdi.

NNAMDIWelcome back to our conversation on the future of the federal workforce in the current, I guess I should say, political climate. We're talking with Max Stier, president and CEO of the Partnership for Public Service, and Don Kettl, dean of the School of Public Policy at the University of Maryland and a nonresident senior fellow at The Brookings Institution. Here now is Sam in Silver Spring, Md. Sam, your turn.

SAMHi. Thanks. I have 30-plus years in computer science and business field, about 27 of it in the private sector, just a few years in the federal government. I'm senior in one of those big federal agencies. And the dysfunctional issues I see are both duplicated within the private sector and the public sector. For example, (unintelligible) two or 300 bucks an hour, just printing paper, not much added value. Some of the consulting firms, I had to literally quit these private sectors 'cause I see these contractors take advantage of federal employers.

SAMOn the flip side, now that I'm a federal employee, I see people with high school degrees who make $120,000 a year. I'm a computer scientist, so imagine me engaging with those people and the years that I have. It's very challenging. So one of the things that I propose -- and I've told my management -- and it's because of regulations within the OPM -- is that I, Sam, cannot go out and hire the best. This (word?) for this position is open for internal only -- internal to my agency, internal to federal government. There's a lot, a lot of those.

SAMI literally went through 1,000 -- when I got hired, I went through 1,000 resumes. Then they picked 12 people to interview. I went through five interviews. And it was not -- and this is my tenth time doing it because I've been in the (word?) for about 20 years. And one of the things I hear a lot is that my resume previously was exceedingly -- they scored high, and they had somebody else in mind.

SAMAnd a lot of them, they had just told me this within the federal government. So they would cancel the position in the hope that I won't get the position open again. So if anything, any proposal is make it more competitive to hire the best. Stop the only can hire people inside, Sam. And hire people that are technically good in that area not because they've spent 20 years there, and now they deserve a promotion. And that is amazing. It is really awful, in addition to some other issues.

NNAMDIDon Kettl, I'd like to hear you comment on that.

KETTLYou know, what's fascinating, and what Sam has really put his finger on, is the central importance of getting the hiring process right. And John Berry, who's the director of the Office of Personnel Management, is making great strides in this. But it's clear we have a very long way to go, and it's really a couple of steps.

KETTLWe've got to decide, first, what kind of people we need to hire, and the second is trying to make sure that we can do our very best job of finding them, getting them into the government, minimizing the hassle and making sure that the people that we need just don't give up and go elsewhere because entering the federal government is such a hassle.

KETTLIt's -- we have a very bizarre process that if you're, for example, applying as an accountant to a particular governmental search and you don't get the job -- you might have been, for example, number two or three or four -- you have to start all over again in another position and another search and another agency. And we just lose that talent pool over and over and over again.

KETTLSo just being able to streamline the hiring process and coupling it much more closely with the need to try to identify the people that we want to hire, need to hire at the federal government while, at the same time, we deal with the other social priorities we have -- for example, making sure that returning veterans have a good shot at good-paying federal jobs.

KETTLWe just need to do a much, much, much better job of dealing with the hiring process. And we just -- we've made some progress, but we still are stuck, in many ways, in a post-World War II process that has not really been changed to take account of the 21st century realities.

NNAMDIWell, Max Stier, to his credit, Sam began by saying that he saw dysfunction both in the private sector and in the public sector. But I'd like to turn that on its head and take it from dysfunction to improved function because you note that private sector ideas can be useful in rethinking what's possible in the public sector, and some agencies are thinking that way.

STIERCertainly, and I think, again, the starting point is making sure that we have a government workforce that has experience in all the sectors -- for-profit, not-for-profit -- and we need to see more flow of talent between the sectors. This is something that I know Don has done some really good work on, particularly thinking about, you know, the nature of problems we have to address really require multi-sector solutions.

STIERBut we have a very insular workforce today. We do not have enough mobility. Senior Executive Service, the top 7,000 folks, only 8 percent of them move agencies once they become an SES member. Ninety-two percent come from within government.

NNAMDIWhat's an SES member?

STIERSo as a -- yes, as an SES member.

NNAMDIWhat's...

STIERI'm sorry, Service Executive Service.

NNAMDIThank you.

STIERSo they're the top 7,000 people in the federal government, and they're the ones that are, you know, by design, supposed to be this elite management force that is supposed to draw the whole organization together. And yet they're coming from -- largely from within government. They come from within the agencies that they are made Senior Executive Service members, and they don't move after that.

STIERThe hiring issues that were identified are dramatic. Again, looking at the most basic piece, you know, student internships, most good organizations understand that for their entry-level talent, you get student interns. You've had an opportunity to actually work with someone. You get 10 weeks working with them. You know whether they're right for your organization. It's the best assessment tool possible.

STIERFederal government essentially converts only about 6 percent of its interns into full-time employees, whereas a reasonable benchmark is close to 50 percent. There are all kinds of places we can improve. The real critical element that's missing is we need top leadership to care, and that doesn't happen very often.

NNAMDIDon Kettl.

KETTLYeah, I think that's exactly right. And I'm the business of trying to train students for government service. And almost for that exception, we have students who come to us every year. Right now, in fact, our admissions group is going through a stack of 1,000 applications for 125 places in our school for next year. Almost all of these students want to go into government service.

KETTLAnd one of our on-going challenges, even though we're located so close to Washington and to federal agencies, is to try to make sure that students don't get discourage and give up on federal employment because the road from all their aspirations to the ability to be able to get that great job is so rough and so bumpy.

KETTLOne of the biggest tragedies we have is we have people who want to devote their lives and their careers to serving citizens. And we make it very hard, too hard for them to do so. And the federal government and the process, as Max points out, often misses the chance to identify the people who really can contribute most and best to the mission that they're pursuing as well. And it's just a sign of how difficult the problem has become.

KETTLWe have some very good new strategies that have been put in place by the Office of the Personnel Management through the new federal Pathways Program. That's had some progress so far. But we really need to try to do a much better job of making sure that our best and brightest don't really decide to take their best and brightest talents somewhere else at the time when the federal government needs all the help it can get.

NNAMDISam, thank you very much for your call. We move on to Peggy in Olney, Md. Peggy, your turn.

PEGGYHi, Kojo. It sounds to me more like we need a federal firing policy. And along those lines, we in the private sector have endured this stubborn unemployment largely because we are told that technology has taken over for many of the human jobs. Where is this in the federal government? And how many jobs have been lost, and how much money has been saved?

NNAMDIMax Stier.

STIERLook, I mean, I think that there is a misconception that federal employees are never fired. And I'm going to get this number a little bit wrong, but there are literally thousands of federal employees that are fired every year. I think the more dramatic problem is that we don't do a very good job of communicating what expectations of performance, good performance are for federal employees.

STIERAnd that, I think, is where it starts. We need to have leadership that understands that its job is to make sure that they'd communicated in an effective way to their employees what's expected of them in order to do well in their work environment. And that does not happen in the way that it needs to.

STIERSo, again, I think there is a way general public perception that the federal employees are not accountable, that they can't be fired, that they don't work hard. And there are certainly examples of -- in many places of just those things, but that is not the norm. The norm is a hardworking workforce that is trying to do their best in very trying circumstances.

NNAMDIAnd, Don, Peggy's perception, shared by a lot of people, is that technology is getting a lot of people in the private sector fired. But you claim that technology is also playing a role in making government smarter and more responsive. And you're pointing to FEMA and say that it was evident after Superstorm Sandy and even before.

KETTLIf you'll look at the some of the recent performance by FEMA, this is not the post-Katrina FEMA anymore. One of the things that happened in last year's big storms in the upper part of New York and Vermont was that FEMA went through a very smart exercise that got very little publicity. They went out and looked at Home Depot and some of the other large superstores, and they said, quietly, which of your stores are going to be back in operation fastest because we want to put our emergency operation centers where you are not?

KETTLI mean, why open a FEMA emergency center in the parking lot of open Home Depot store? Instead, they took the needed the federal support and aid to the places where people could not get it from the private sector. And the kind of technology they used to map and to chart the supply chain management of that really produced us no headlines of federal mismanagement. And they came back and did much of the same kind of thing this time around with Hurricane Sandy.

KETTLIf you look, case after case, there are lot of feds being very smart at finding ways of figuring out very innovative solutions to some of the tough problems. And the thing is that they don't get very much headlines because nobody is going to really put a big story in the paper saying, guess what, FEMA didn't screw up on this one.

KETTLBut the fact is that FEMA and lots of other federal agencies have been doing much, much, much better because of their innovative approaches to using technology to try to improve productivity. They may not have a lot fewer federal employees, but the federal employees who are there were doing their work much differently and in many cases much better because they're relying on these important technological improvements to improve the way in which they perform their mission.

NNAMDIWe're not interested in making headlines out of things that work the way they're supposed to, only things that don't. But...

KETTLAll right. Where was the last time -- where was the last time you saw a headline saying mail delivery yet again today? People just don't put big headlines on people doing the job the way they're supposed to. But it makes it so easy for us to overlook the genuine innovations that, in fact, are working hard to make the federal government work better.

NNAMDIPeggy, thank you very much for your call. We got an email from Tom who says that our female caller Sandy, who identified herself as working for Montgomery County, said that members of Congress retire at 100 percent of their salary. "That," says Tom, "is a false statement. Members of Congress are in the same retirement system as federal civilian employees. No member of Congress or any federal civilian worker retires at 100 percent of salary." Is that correct, Max Stier?

STIERHmm. I will have to look into that because my understanding was that they were in a different retirement system. I do know that judges, as an example, so -- do have a separate retirement process that enables them to earn, you know, more money. And obviously, you know, the system itself changed in the mid-'80s so that employees beforehand had a -- more of a defined benefits plan. But I will look into that and look forward to finding what the truth is.

NNAMDIDon, we're running out of time, but I do have to ask this because the Postal Service is often portrayed as a negative stereotype of a federal government agency, not helped by the fact that the USPS has been in the red for quite a while. What's the situation with the Postal Service now?

KETTLThey're struggling, and they're struggling in part because they have a large number of relatively non-remunerative catalogs to try to deliver. Many of us are trying to engage in their communications on Facebook and Twitter. Fewer people are sending Christmas cards and other kinds of first-class mail, and lots more work is being done online.

KETTLThey've got a real problem of trying to pursue their age old mission of delivering the mail for the same price wherever it is that it needs to go, wherever it is we want to send it at a time when technology is challenging them so fundamentally. So they've got a fundamental business model problem that, as best we can tell, is not really the product of mismanagement but the product of the fact that we simply are communicating with each other a lot more differently than we ever used to.

NNAMDII guess that gets back to our earlier caller of how the technology world is causing not just people to lose their job but causing business models to be reconsidered entirely. I'm afraid that's all the time we have. Don Kettl is the dean of the School of Public Policy at the University of Maryland and a nonresident senior fellow at The Brookings Institution. Don, thank you for joining us.

KETTLSo good to be with you, Kojo.

NNAMDIMax Stier is the president and CEO of the Partnership for Public Service. Max, thank you for joining us.

STIERHappy New Year. And Happy New Year to you, Don.

NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.