The 19th Century Europeans who designed the modern welfare state viewed its principle instrument to be the rational, enduring and professional bureaucracy. Especially, they thought bureaucracy would be stable. As late as 1900, American government was ninety percent local, self-motivated and practical, with only foreign policy and interstate commerce run by national cabinet heads and their elite staff. With the rise of the welfare state in 20th Century America under Woodrow Wilson and Franklin Roosevelt, things changed dramatically and, presumably, permanently in the favor of the expert civil service.

Professor Woodrow Wilson concluded that the old U.S. separation of powers was "a serious imperfection," where the "federal government lacks strength because its powers are divided," solved only by centralizing responsibility and power in the hands of the Presidency. Under President Roosevelt the civil service was professionalized so that it could determine the proper, neutral, scientific answer for every social problem. In the U.S., as in Europe, this has been the dominant administrative model--at least in theory--until this very day. Yet, its form has changed radically over that period of time.

Even as early as President Jimmy Carter, the neutral-expert model had come under significant stress. In his Civil Service Reform Act of 1978, he proposed a return to the historic cabinet model, relying upon a modern performance-management personnel system led by political appointees, both of which he passed through Congress to become law. His theory emphasized providing presidential leadership to committed top political officials and then holding them and their subordinates personally accountable for achievement of the election-endorsed and value-defined program, rooted deeply in the separation of powers of the original Constitution that Wilson had challenged. Instead, the bureaucracy was perceived as labyrinth resistant to change that cabinet and sub-cabinet officials were to move through their political and leadership skills.

As early as the 1960s, President John F. Kennedy had issued an Executive Order even to allow limited union bargaining in the civil service. As a result of pressure from his union allies, President Carter was forced to add union bargaining into his Act alongside the one based upon executive performance. That dual and conflicting system still exists in a somewhat modified form, with the unions in a critical position to affect government administration. President Bill Clinton even enhanced the union role by giving them unprecedented involvement in decision-making through labor-management councils that had control even over such normal executive functions as the assignment of work to employees.

It was left to President Ronald Reagan actually to end both the traditional civil service model and the union-dominance one. He implemented the CSRA and its performance and political leadership elements as his top management priority his first year, against great union opposition. As a result, America saw its most aggressive era of public sector union activity, with numerous job actions and work stoppages across government. As a result, the air controller union, especially, had negotiated concessions on pay and work rules opposed by Reagan's civil service chief that went well beyond the traditional scope of union rights. But, in a rash move, the union struck against the government. President Reagan considered this act an egregious affront to the Constitution and a reckless breaking of a sacred vow not to strike against the peoples' government. So, he summarily fired them all. The rest was history as neither public nor private unions in the U.S. have recovered since, with no governmental strikes and few if any subsequent job actions, and a weakening of union power in the bureaucracy, including the later repeal of the union-management councils.

As with all new organizational models, Reagan's began to atrophy, indeed sooner than most. By the first President George H.W. Bush, performance had been downgraded and much of the legal superstructure dismantled. But 9/11 spurred actions to increase government efficiency in the new George W. Bush administration. Donald Rumsfeld at the Department of Defense, Tom Ridge at the Department of Homeland Security, and Andrew Card at the White House all revived the Reagan-Carter political/performance model. A strong management rights proposal for DHS was blocked in Congress by the Democrats to mollify their union allies and, surprisingly, this administrative matter actually became a major campaign issue. With the Republican's success in raising this as an issue and their victory in the 2002 election, the DHS bill subsequently passed easily, followed soon thereafter by an even more pro-performance and pro-management bill at DOD.

The DOD rules apply to almost half of the national civilian civil service workforce. It would exempt work schedules, equipment utilized, training, length of temporary re-assignments (including those out of the geographical work area), promotion rules and overtime among other functions from being bargained by a union or appealed as a prohibited civil service practice. Management would only have to consult with the unions and, after 60 days, could implement rules over their opposition. Appeals were removed from the union-friendly Federal Labor Relations Authority and reassigned to a Defense authority, most of whose members would be selected by the DOD secretary.

The America civil service today has developed into a very strange amalgam of administrative models planned by no one. For one half of the bureaucracy, a dual CSRA system of both civil service and union bargaining rules holds sway, with all of the resulting inefficiency. Some performance enhancement has followed the Carter-Reagan performance reforms even there but seniority and work-to-the-rule still predominate except at the highest executive levels. For the other half of government at DOD and DHS, performance will either become the guide if the Bush Administration reforms are fully implemented or they could disappear if the Democrats win. But two new phenomena will not change regardless of the election.

First, most of government work will not be performed by the civil service. Today, after multiple administrations controlled by both political parties, there are 12.1 million private contractors performing national government work and only 750,000 civil servants--and DOD is scheduled to privatize 300,000 more. In tight budget times, contracting appeals to both political parties because privatization saves money, in fact 30 percent or more in most studies based upon the contracting out that has occurred already. And, by most evaluations, the work is performed more efficiently and more expeditiously. The private sector performs even government work more cheaply and efficiently than a professional civil service.

Second, other than in the entitlement areas, government is only growing relatively at the state and local levels. The report this week by the Trustees of Medicare and Social Security demonstrates that the day of reckoning for entitlements has now been brought forward by seven additional years, to the year 2019. The total excess of spending over income of these two programs is an incredible $50 trillion (not billion), larger than the total national wealth generated by the U.S. in a typical year. Last year's prescription drug benefit added $8 trillion to the liability, suggesting Congress will not act soon to avoid national bankruptcy. The result will be that, in a dozen years, the whole income of the national government will be absorbed by these two programs plus defense. Everything else will have to be sent back to state and local government or the private sector if they are to receive sufficient funds to survive as more than symbolic programs.

The paradoxical end result of adoption of the welfare state and its centralized bureaucracy will be to send most governmental administration back to the local level, pretty much the way Alexis de Tocqueville found it in the 1800's. This will not surprise those who learned from the great theorist of the bureaucracy, Ludwig von Mises, that centralized public management has no means to respond to demand comparable to the private sector's universal profit and loss bottom line. Centralized government bureaucracy must ultimately bog down for lack of meaningful communication between its multiple layers of professional staff without any standardized medium of exchange. The age of big national bureaucracies managing all of society is now all but passé and, judging from recent history, no one will miss it very much when it is completely spent.

By Editor