Federal Downsizing: Observations on Agencies' Implementation of the Buyout Authority

Pursuant to a congressional request, GAO discussed federal agencies' use of their buyout authority to reduce staff levels. GAO noted that: (1) by fiscal year 1996, nonDefense agencies expect to perform about 37,000 buyouts and Department of Defense agencies expect 69,000 buyouts; (2) 43 nonDefense agencies have reported paying buyouts; (3) almost 40 percent of nonDefense buyouts have gone to employees in overhead positions and about 70 percent have gone to mid- to upper-level employees; (4) males have received about two-thirds of the buyouts and minorities about 25 percent; (5) just over half of the buyouts have gone to employees eligible for optional regular retirement; (6) buyouts have mitigated agencies' need for reductions-in-force; (7) to ensure compliance with the National Performance Review's goals, the President has required agencies to submit their streamlining plans to the Office of Management and Budget for review and approval; (8) four agencies with authorization for staff increases have used their buyout authority to reduce staffing in areas where mission priorities have changed; (9) most of these staff increases are to support congressionally mandated programs or to perform work in-house contracts; (10) while some agencies have successfully coped with staff reductions through work restructuring, increased automation, and staff redeployments, other agencies have experienced adverse effects; and (11) the proposed consolidation of State with other foreign policy agencies will further reduce staff through buyouts.