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Reason Foundation

Automatic Spending Cuts and Outsourcing

Adrian Moore
January 17, 2012, 7:09pm

With the federal government facing automatic spending cuts, and the need to make a lot more cuts beyond that. John Palatiello points out in a new column that it does not make sense to prevent agencies from using outsourcing to help make some of those cuts.

Fifty-seven years ago this month, January 15, 1955, President Dwight Eisenhower promulgated a federal policy that is as relevant today as it was the day it was issued, if not more so. In 1955 Bureau of the Budget Bulletin 55-4 stated, "The Federal 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

But Congress, in its infinite wisdom, recently banned federal agencies from doing anything that might replace a federal worker with a contractor, or heaven forbid, just stop doing some things.

As a result,

More than 850,000 federal employees are engaged in commercial activities that duplicate, and in some cases compete with, private enterprise, including small business. . . .A government that does virtually everything that can be found in the old Yellow Pages is a government that is simply too big to succeed.

Read the whole column here.


Adrian Moore is Vice President, Policy


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