Right now government employees have an incentive to spend, and often waste, as many taxpayer dollars as they can. For example, a middle manager has the incentive to convince his superiors he needs more personnel on his team, so that he can increase his position in the department and improve his chance of promotion later. There is also the problem of budgets not rolling over so a department would be better off blowing its budget entirely rather than saving the citizens money by spending their allotment wisely. I suggest we create a budgetary bonus program that takes the savings left over at the end of the fiscal year from each department/agency/bureau and splits it between first the treasury (sending money back to reduce borrowing needs and effectively lower the deficit) AND all the staff of the particular department. So, for example, lets say that, thanks to new productivity software, or finding better value from vendors, an agency finds that it can deliver on its directed goals but still have, say $100 million dollars of their multi-billion dollar budget left over. $50 million of that left over would go directly to deficit reduction and the other $50 million would be split evenly between all of the staff of the department as an end of year bonus paid out in December (fiscal year ends September 30th, giving time for accountants to crunch the relevant numbers and giving those employees the money around the holidays which will increase its likelihood of being spent and thus recirculating in the actual economy). This would incentivize all government employees to actually find ways to spend government money efficiently, find cost savings and headcount reductions, because they will directly benefit from doing so. This could be combined with a guarantee that budgets automatically grow in line with population growth, or some formula of population and inflation, to ensure that agencies don’t begin to fear their budgets getting scrapped in the long term from becoming “too efficient”. I believe that in the short term this would not save the government a whole lot, due to the institutional inertia of the staff doing things the way “they’ve always been done,” but, by changing the way government employees view spending money and needlessly hiring additional paper pushers, in the long term it could both save America billions (heck, TRILLIONS eventually) AND it could also gradually create an incentive for top talent to work for the government as loyal civil servants and not merely as a stepping stone to a lucrative private sector role. This would be the kind of policy that would need to stick around at least a few years to see benefit. Skeptical bureaucrats might be reluctant to find savings initially and only return a pittance in the first year or two. But once they get word that one department or another got massive bonuses due to their spending restraint, the genie will be let out of the bottle and the whole federal government will be looking for ways to work more efficiently, cut waste and bloat, and save the taxpayers money.
2 Likes
Great idea! I even see this on the local level. This would be a great policy!
1 Like
Great idea, would definitely help. Especially long term!