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Tags: A 70 Year Old Lesson Applicable Today

A 70-Year-Old Lesson Applicable Today for Feds

By    |   Tuesday, 28 January 2025 10:17 AM EST

As President Donald Trump, Republican majorities in the House and Senate, and DOGE chair Elon Musk seek to address a $36 trillion national debt, a $1.8 trillion annual deficit, and a smaller, more efficient, and less costly federal government, they would be well served to renew a policy that the "government will not start or carry on any commercial activity to provide a service or product for its own use if such product or service can be procured from private enterprise through ordinary business channels," first promulgated 70 years ago by the Bureau of the Budget in the Eisenhower administration.

The Bureau of the Budget has since been replaced by the Office of Management Budget, its bulletins are now circulars, and 55-4 is now A-76. OMB Circular A-76, while still on the books today, is not enforced in the federal government.

Congress has effectively halted efficient utilization of private sector contractors for services that are commercial in nature through an appropriations bill rider moratorium. As a result, 1.1 million federal employees — more than half of the non-uniformed military and postal service federal workforce — are in positions deemed commercial in nature.

In performance of these activities, federal agencies duplicate private-sector businesses, engage in unfair government competition with private enterprise, including small business, and operate monopolies that have never been market tested.

Applying the Jan. 15, 1955, policy could save over $30 billion each year, increase efficiency, stimulate innovation, and rebalance the federal workforce into performance of inherently governmental functions.

The 1955 policy was supported by each president, Republican and Democrat, from Dwight D. Eisenhower through George W. Bush, until a 2009 government employee union inspired appropriations rider enacted while Democrat controlled the House, Senate, and White House under President Barack Obama prevented implementation of this good government tool.

The policy enables the federal government to employ the "yellow pages test," a simple and effective process that says if you can find firms in the yellow pages of the phone book providing products or services that the government is also providing, then the government service should be subject to market competition to break up the government monopoly and provide a better value to the taxpayer.

That is a test that has also been successfully applied by mayors and governors, Democrat and Republican, across the nation.

Federal agencies, as well as state and local government using federal funds, are engaged in activities ranging from architecture to zoology and include scores of other activities including audits, bus transportation, building codes, construction, debt and bill collections, campgrounds and concessions, engineering, equipment repair and maintenance depots, film studios and theater management, food service and security, graphics, healthcare services, hearing aids, information technology and data centers, insights and market research, insurance, laboratories and laboratory accreditation, landscaping, laundry and dry cleaning, office products, pest management and wildlife control, manufacturing, meeting planning, motor coaches, printing and chart production, public storage, recycling and waste management, road signage, roofing, security technologies and products, simulation technology and services, surveying, mapping and geospatial, tax preparation, transportation, travel planning, and utilities, and other tasks that have little to do with governing.

The government is the nation's largest banker, insurer, homeowner, landlord, utility provider, and bus, transit, and passenger train operator.

The 1955 budget bulletin was implemented when legislation mandating an end to government agency duplication and competition of private enterprise passed the House of Representatives and was headed for approval in the Senate when the White House argued that government or private sector performance decisions should be executive branch management determinations rather than a legislative mandate.

The past 70 years have demonstrated such an approach fell short. It is time to make the policy permanent.

John Palatiello chairs the Business Coalition for Fair Competition.

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Politics
As President Donald Trump seeks to address a $36 trillion national debt, a $1.8 trillion annual deficit, and less costly federal government, he would be well served to renew a policy that first promulgated 70 years ago by the Bureau of the Budget in the Eisenhower administration.
A 70 Year Old Lesson Applicable Today
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2025-17-28
Tuesday, 28 January 2025 10:17 AM
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