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From 11 epsHost
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Recent episodes
Merit vs. Tenure: Reforming Federal Firing
Jun 17, 2026
45m 45s
"The Strongman Presidency"
Jun 12, 2026
58m 17s
How the National Security Strategy Gets Made
Mar 12, 2026
58m 22s
Ten Thoughts on Government Data
Mar 5, 2026
13m 00s
When FAFSA Broke, They Called This Guy
Feb 26, 2026
1h 15m 08s
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| Date | Episode | Topics | Guests | Brands | Places | Keywords | Sponsor | Length | |
|---|---|---|---|---|---|---|---|---|---|
| 6/17/26 | ![]() Merit vs. Tenure: Reforming Federal Firing | Today we have a special repeat guest, Scott Kupor, Director of the Office of Personnel Management (OPM). The OPM is the people function in the federal government — the department that sets the rules for the various HR departments in other agencies. Director Kupor was on Statecraft six months ago, and is now a little more seasoned in the federal government.We discuss:* How veterans’ preference works in federal hiring* Who gets fired first when an agency conducts a Reduction In Force (RIF)* Proposed changes to prioritize performance during RIFs* Kupor’s progress in recruiting early career and tech talent to governmentThe full transcript for this conversation is at www.statecraft.pub This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 45m 45s | ||||||
| 6/12/26 | ![]() "The Strongman Presidency"✨ | presidential poweradministrative state+4 | William HowellTerry Moe | StanfordHoover Institution+3 | — | strongman presidencyadministrative control+6 | — | 58m 17s | |
| 3/12/26 | ![]() How the National Security Strategy Gets Made✨ | National Security StrategyU.S. foreign policy+3 | Nadia Schadlow | Trump administrationBiden administration+1 | — | National Security StrategyNadia Schadlow+6 | — | 58m 22s | |
| 3/5/26 | ![]() Ten Thoughts on Government Data✨ | government datapolicy debates+3 | — | Department of Homeland SecurityStudent and Exchange Visitor Information System+1 | — | government datapolicy+5 | — | 13m 00s | |
| 2/26/26 | ![]() When FAFSA Broke, They Called This Guy✨ | FAFSAcollege access+4 | Jeremy Singer | College BoardDepartment of Education+2 | U.S. | FAFSAPell Grants+6 | — | 1h 15m 08s | |
| 2/19/26 | ![]() How a Congressional Office Actually Works✨ | Congressgovernment+5 | Baillee Brown | Inclusive Abundance | San Diego | Congressabundance-policy+5 | — | 1h 09m 16s | |
| 2/13/26 | ![]() How to Rewire City Hall✨ | government innovationcity management+3 | James Anderson | Bloomberg Philanthropies | New York City | city hallgovernment innovation+3 | — | 1h 01m 49s | |
| 2/4/26 | ![]() What’s Wrong with Nonprofits?✨ | nonprofitsNGOs+3 | Greg Berman | Center for Justice InnovationHarry Frank Guggenheim Foundation+4 | — | nonprofitsNGOs+5 | — | 1h 26m 12s | |
| 1/27/26 | ![]() One Year of Trump’s Economic Statecraft✨ | economic statecraftUS policy+4 | Daleep SinghPeter Harrell | Biden AdministrationNational Security Council+1 | Venezuela | economic statecraftTrump+7 | — | 1h 32m 18s | |
| 1/9/26 | ![]() What’s Wrong with NIH Grants?✨ | NIH grantsbiomedical research+4 | Mike Lauer | National Institutes of HealthNational Heart, Lung, and Blood Institute | — | NIHgrants+7 | — | 1h 11m 27s | |
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| 12/16/25 | ![]() 99.8% of Federal Employees Get Good Performance Reviews. Why?✨ | federal employeesperformance reviews+3 | Scott Kupor | Office of Personnel Management | United States | federal employeesperformance reviews+3 | — | 1h 02m 18s | |
| 12/12/25 | ![]() Did the CHIPS "Everything Bagel"...Work?✨ | semiconductorsinvestment+3 | Mike SchmidtTodd Fisher+1 | CHIPS Program OfficeDepartment of Commerce+1 | — | CHIPS Actsemiconductors+3 | — | 1h 35m 35s | |
| 12/4/25 | ![]() How to Save Science Funding | If you’re a scientist, and you apply for federal research funding, you’ll ask for a specific dollar amount. Let’s say you’re asking for a million-dollar grant. Your grant covers the direct costs, things like the salaries of the researchers that you’re paying. If you get that grant, your university might get an extra $500,000. That money is called “indirect costs,” but think of it as overhead: that money goes to lab space, to shared equipment, and so on.This is the system we’ve used to fund American research infrastructure for more than 60 years. But earlier this year, the Trump administration proposed capping these payments at just 15% of direct costs, way lower than current indirect cost rates. There are legal questions about whether the admin can do that. But if it does, it would force universities to fundamentally rethink how they do science.The indirect costs system is pretty opaque from the outside. Is the admin right to try and slash these indirect costs? Where does all that money go? And if we want to change how we fund research overhead, what are the alternatives? How do you design a research system to incentivize the research you actually wanna see in the world?I’m joined today by Pierre Azoulay from MIT Sloan and Dan Gross from Duke’s Fuqua School of Business. Together with Bhaven Sampat at Johns Hopkins, they conducted the first comprehensive empirical study of how indirect costs actually work. Earlier this year, I worked with them to write up that study as a more accessible policy brief for IFP. They’ve assembled data on over 350 research institutions, and they found some striking results. While negotiated rates often exceed 50-60%, universities actually receive much less, due to built-in caps and exclusions.Moreover, the institutions that would be hit hardest by proposed cuts are those whose research most often leads to new drugs and commercial breakthroughs.Thanks to Katerina Barton, Harry Fletcher-Wood, and Inder Lohla for their help with this episode, to Matt Esche and Caleb Watney for their work on the graphs, and to Beez for her help translating this topic to a general audience.For a printable PDF of this interview, click here:Let’s say I’m a researcher at a university and I apply for a federal grant. I’m looking at cancer cells in mice. It will cost me $1 million to do that research — to pay grad students, to buy mice and test tubes. I apply for a grant from the National Institutes of Health, or NIH. Where do indirect costs come in?Dan Gross: Research generally incurs two categories of costs, much as business operations do.* Direct or variable costs are typically project-specific; they include salaries and consumable supplies.* Indirect or fixed costs are not as easily assigned to any particular project. [They include] things like lab space, data and computing resources, biosecurity, keeping the lights on and the buildings cooled and heated — even complying with the regulatory requirements the federal government imposes on researchers. They are the overhead costs of doing research.Pierre Azoulay: You will use those grad students, mice, and test tubes, the direct costs. But you’re also using the lab space. You may be using a shared facility where the mice are kept and fed. Pieces of large equipment are shared by many other people to conduct experiments. So those are fixed costs from the standpoint of your research project.Dan: Indirect Cost Recovery (ICR) is how the federal government has been paying for the fixed cost of research for the past 60 years. This has been done by paying universities institution-specific fixed percentages on top of the direct cost of the research. That’s the indirect cost rate. That rate is negotiated by institutions, typically every two to four years, supported by several hundred pages of documentation around its incurred costs over the recent funding cycle.The idea is to compensate federally funded researchers for the investments, infrastructure, and overhead expenses related to the research they perform for the government. Without that funding, universities would have to pay those costs out of pocket and, frankly, many would not be interested or able to do the science the government is funding them to do.Imagine I’m doing my mouse cancer science at MIT, Pierre’s parent institution. Some time in the last four years, MIT had this negotiation with the National Institutes of Health to figure out what the MIT reimbursable rate is. But as a researcher, I don’t have to worry about what indirect costs are reimbursable. I’m all mouse research, all day.Dan: These rates are as much of a mystery to the researchers as it is to the public. When I was junior faculty, I applied for an external grant from the National Science Foundation (NSF) — you can look up awards folks have won in the award search portal. It doesn’t break down indirect and direct cost shares of each grant. You see the total and say, “Wow, this person got $300,000.” Then you go to write your own grant and realize you can only budget about 60% of what you thought, because the rest goes to overhead. It comes as a bit of a shock the first time you apply for grant funding.What goes into the overhead rates? Most researchers and institutions don’t have clear visibility into that. The process is so complicated that it’s hard even for those who are experts to keep track of all the pieces.Pierre: As an individual researcher applying for a project, you think about the direct costs of your research projects. You’re not thinking about the indirect rate. When the research administration of your institution sends the application, it’s going to apply the right rates.So I’ve got this $1 million experiment I want to run on mouse cancer. If I get the grant, the total is $1.5 million. The university takes that .5 million for the indirect costs: the building, the massive microscope we bought last year, and a tiny bit for the janitor. Then I get my $1 million. Is that right?Dan: Duke University has a 61% indirect cost rate. If I propose a grant to the NSF for $100,000 of direct costs — it might be for data, OpenAI API credits, research staff salaries — I would need to budget an extra $61,000 on top for ICR, bringing the total grant to $161,000.My impression is that most federal support for research happens through project-specific grants. It’s not these massive institutional block grants. Is that right?Pierre: By and large, there aren’t infrastructure grants in the science funding system. There are other things, such as center grants that fund groups of investigators. Sometimes those can get pretty large — the NIH grant for a major cancer center like Dana-Farber could be tens of millions of dollars per year.Dan: In the past, US science funding agencies did provide more funding for infrastructure and the instrumentation that you need to perform research through block grants. In the 1960s, the NSF and the Department of Defense were kicking up major programs to establish new data collection efforts — observatories, radio astronomy, or the Deep Sea Drilling project the NSF ran, collecting core samples from the ocean floor around the world. The Defense Advanced Research Projects Agency (DARPA) — back then the Advanced Research Projects Agency (ARPA) — was investing in nuclear test detection to monitor adherence to nuclear test ban treaties. Some of these were satellite observation methods for atmospheric testing. Some were seismic measurement methods for underground testing. ARPA supported the installation of a network of seismic monitors around the world. Those monitors are responsible for validating tectonic plate theory. Over the next decade, their readings mapped the tectonic plates of the earth. That large-scale investment in research infrastructure is not as common in the US research policy enterprise today.That’s fascinating. I learned last year how modern that validation of tectonic plate theory was. Until well into my grandparents’ lifetime, we didn’t know if tectonic plates existed.Dan: Santi, when were you born?1997.Dan: So I’m a good decade older than you — I was born in 1985. When we were learning tectonic plate theory in the 1990s, it seemed like something everybody had always known. It turns out that it had only been known for maybe 25 years.So there’s this idea of federal funding for science as these massive pieces of infrastructure, like the Hubble Telescope. But although projects like that do happen, the median dollar the Feds spend on science today is for an individual grant, not installing seismic monitors all over the globe.Dan: You applied for a grant to fund a specific project, whose contours you’ve outlined in advance, and we provided the funding to execute that project.Pierre: You want to do some observations at the observatory in Chile, and you are going to need to buy a plane ticket — not first class, not business class, very much economy.Let’s move to current events. In February of this year, the NIH announced it was capping indirect cost reimbursement at 15% on all grants.What’s the administration’s argument here?Pierre: The argument is there are cases where foundations only charge 15% overhead rate on grants — and universities acquiesce to such low rates — and the federal government is entitled to some sort of “most-favored nation” clause where no one pays less in overhead than they pay. That’s the argument in this half-a-page notice. It’s not much more elaborate than that.The idea is, the Gates Foundation says, “We will give you a grant to do health research and we’re only going to pay 15% indirect costs.” Some universities say, “Thank you. We’ll do that.” So clearly the universities don’t need the extra indirect cost reimbursement?Pierre: I think so.Dan: Whether you can extrapolate from that to federal research funding is a different question, let alone if federal research was funding less research and including even less overhead. Would foundations make up some of the difference, or even continue funding as much research, if the resources provided by the federal government were lower? Those are open questions. Foundations complement federal funding, as opposed to substitute for it, and may be less interested in funding research if it’s less productive.What are some reasons that argument might be misguided?Pierre: First, universities don’t always say, “Yes” [to a researcher wishing to accept a grant]. At MIT, getting a grant means getting special authorization from the provost. That special authorization is not always forthcoming. The provost has a special fund, presumably funded out of the endowment, that under certain conditions they will dip into to make up for the missing overhead.So you’ve got some research that, for whatever reason, the federal government won’t fund, and the Gates Foundation is only willing to fund it at this low rate, and the university has budgeted a little bit extra for those grants that it still wants.Pierre: That’s my understanding. I know that if you’re going to get a grant, you’re going to have to sit in many meetings and cajole any number of administrators, and you don’t always get your way.Second, it’s not an apples-to-apples comparison [between federal and foundation grants] because there are ways to budget an item as a direct cost in a foundation grant that the government would consider an indirect cost. So you might budget some fractional access to a facility…Like the mouse microscope I have to use?Pierre: Yes, or some sort of Cryo-EM machine. You end up getting more overhead through the back door.The more fundamental way in which that approach is misguided is that the government wants its infrastructure — that it has contributed to through [past] indirect costs — to be leveraged by other funders. It’s already there, it’s been paid for, it’s sitting idle, and we can get more bang for our buck if we get those additional funders to piggyback on that investment.Dan: That [other funders] might not be interested in funding otherwise.Why wouldn’t they be interested in funding it otherwise? What shouldn’t the federal government say, “We’re going to pay less. If it’s important research, somebody else will pay for it.”Dan: We’re talking about an economies-of-scale problem. These are fixed costs. The more they’re utilized, the more the costs get spread over individual research projects.For the past several decades, the federal government has funded an order of magnitude more university research than private firms or foundations. If you look at NSF survey data, 55% of university R&D is federally funded; 6% is funded by foundations. That is an order of magnitude difference. The federal government has the scale to support and extract value for whatever its goals are for American science.We haven’t even started to get into the administrative costs of research. That is part of the public and political discomfort with indirect-cost recovery. The idea that this is money that’s going to fund university bloat.I should lay my cards on the table here for readers. There are a ton of problems with the American scientific enterprise as it currently exists. But when you look at studies from a wide range of folks, it’s obvious that R&D in American universities is hugely valuable. Federal R&D dollars more than pay for themselves. I want to leave room for all critiques of the scientific ecosystem, of the universities, of individual research ideas. But at this 30,000-foot level, federal R&D dollars are well spent.Dan: The evidence may suggest that, but that’s not where the political and public dialogue around science policy is. Again, I’m going to bring in a long arc here. In the 1950s and 1960s, it was, “We’re in a race with the Soviet Union. If we want to win this race, we’re going to have to take some risky bets.” And the US did. It was more flexible with its investments in university and industrial science, especially related to defense aims. But over time, with the waning of these political pressures and with new budgetary pressures, the tenor shifted from, “Let’s take chances” to “Let’s make science and other parts of government more accountable.” The undercurrent of Indirect Cost Recovery policy debates has more of this accountability framing.This comes up in this comparison to foundation rates: “Is the government overpaying?” Clearly universities are willing to accept less from foundations. It comes up in this perception that ICR is funding administrative growth that may not be productive or socially efficient. Accountability seems to be a priority in the current day.Where are we right now [August 2025] on that 15% cap on indirect costs?Dan: Recent changes first kicked off on February 7th, when NIH posted its supplemental guidance, that introduced a policy that the direct cost rates that it paid on its grants would be 15% to institutions of higher education. That policy was then adopted by the NSF, the DOD, and the Department of Energy. All of these have gotten held up in court by litigation from universities. Things are stuck in legal limbo. Congress has presented its point of view that, “At least for now, I’d like to keep things as they are.” But this has been an object of controversy long before the current administration even took office in January. I don’t think it’s going away.Pierre: If I had to guess, the proposal as it first took shape is not what is going to end up being adopted. But the idea that overhead rates are an object of controversy — are too high, and need to be reformed — is going to stay relevant.Dan: Partly that’s because it’s a complicated issue. Partly there’s not a real benchmark of what an appropriate Indirect Cost Recovery policy should be. Any way you try to fund the cost of research, you’re going to run into trade-offs. Those are complicated.ICR does draw criticism. People think it’s bloated or lacks transparency. We would agree some of these critiques are well-founded. Yet it’s also important to remember that ICR pays for facilities and administration. It doesn’t just fund administrative costs, which is what people usually associate it with. The share of ICR that goes to administrative costs is legally capped at 26% of direct costs. That cap has been in place since 1991. Many universities have been at that cap for many years — you can see this in public records. So the idea that indirect costs are going up over time, and that that’s because of bloat at US universities, has to be incorrect, because the administrative rate has been capped for three decades.Many of those costs are incurred in service of complying with regulations that govern research, including the cost of administering ICR to begin with. Compiling great proposals every two to four years and a new round of negotiations — all of that takes resources. Those are among the things that indirect cost funding reimburses.Even then, universities appear to under-recover their true indirect costs of federally-sponsored research. We have examples from specific universities which have reported detailed numbers. That under-recovery means less incentive to invest in infrastructure, less capacity for innovation, fewer clinical trials. So there’s a case to be made that indirect cost funding is too low.Pierre: The bottom line is we don’t know if there is under- or over-recovery of indirect costs. There’s an incentive for university administrators to claim there’s under-recovery. So I take that with a huge grain of salt.Dan: It’s ambiguous what a best policy would look like, but this is all to say that, first, public understanding of this complex issue is sometimes a bit murky. Second, a path forward has to embrace the trade-offs that any particular approach to ICR presents.From reading your paper, I got a much better sense that a ton of the administrative bloat of the modern university is responding to federal regulations on research. The average researcher reports spending almost half of their time on paperwork. Some of that is a consequence of the research or grant process; some is regulatory compliance.The other thing, which I want to hear more on, is that research tools seem to be becoming more expensive and complex. So the microscope I’m using today is an order of magnitude more expensive than the microscope I was using in 1950. And you’ve got to recoup those costs somehow.Pierre: Everything costs more than it used to. Research is subject to Baumol’s cost disease. There are areas where there’s been productivity gains — software has had an impact.The stakes are high because, if we get this wrong, we’re telling researchers that they should bias the type of research they’re going to pursue and training that they’re going to undergo, with an eye to what is cheaper. If we reduce the overhead rate, we should expect research that has less fixed cost and more variable costs to gain in favor — and research that is more scale-intensive to lose favor. There’s no reason for a benevolent social planner to find that a good development. The government should be neutral with respect to the cost structure of research activities. We don’t know in advance what’s going to be more productive.Wouldn’t a critic respond, “We’re going to fund a little bit of indirect costs, but we’re not going to subsidize stuff that takes huge amounts of overhead. If universities want to build that fancy new telescope because it’s valuable, they’ll do it.” Why is that wrong when it comes to science funding?Pierre: There’s a grain of truth to it.Dan: With what resources though? Who’s incentivized to invest in this infrastructure? There’s not a paid market for science. Universities can generate some licensing fees from patents that result from science. But those are meager revenue streams, realistically. There are reasons to believe that commercial firms are under-incentivized to invest in basic scientific research. Prior to 1940, the scientific enterprise was dramatically smaller because there wasn’t funding the way that there is today. The exigencies of war drew the federal government into funding research in order to win. Then it was productive enough that folks decided we should keep doing it. History and economic logic tells us that you’re not going to see as much science — especially in these fixed-cost heavy endeavors — when those resources aren’t provided by the public.Pierre: My one possible answer to the question is, “The endowment is going to pay for it.” MIT has an endowment, but many other universities do not. What does that mean for them? The administration also wants to tax the heck out of the endowment.This is a good opportunity to look at the empirical work you guys did in this great paper. As far as I can tell, this was one of the first real looks at what indirect costs rates look like in real life. What did you guys find?Dan: Two decades ago, Pierre and Bhaven began collecting information on universities’ historical indirect cost rates. This is a resource that was quietly sitting on the shelf waiting for its day. That day came this past February. Bhaven and Pierre collected information on negotiated ICR rates for the past 60 years. During this project, we also collected the most recent versions of those agreements from university websites to bring the numbers up to the current day.We pulled together data for around 350 universities and other research institutions. Together, they account for around 85% of all NIH research funding over the last 20 years.We looked at their:* Negotiated indirect cost rates, from institutional indirect cost agreements with the government, and their;* Effective rates [how much they actually get when you look at grant payments], using NIH grant funding data.Negotiated cost rates have gone up. That has led to concerns that the overhead cost of research is going up — these claims that it’s funding administrative bloat. But our most important finding is that there’s a large gap between the sticker rates — the negotiated ICR rates that are visible to the public, and get floated on Twitter as examples of university exorbitance — and the rates that universities are paid in practice, at least on NIH grants; we think it’s likely the case for NSF and other agency grants too.An institution’s effective ICR funding rates are much, much lower than their negotiated rates and they haven’t changed much for 40 years. If you look at NIH’s annual budget, the share of grant funding that goes to indirect costs has been roughly constant at 27-28% for a long time. That implies an effective rate of around 40% over direct costs. Even though many institutions have negotiated rates of 50-70%, they usually receive 30-50%.The difference between those negotiated rates and the effective rates seems to be due to limits and exceptions built into NIH grant rules. Those rules exclude some grants, such as training grants, from full indirect cost funding. They also exclude some direct costs from the figure used to calculate ICR rates. The implication is that institutions receive ICR payments based on a smaller portion of their incurred direct costs than typically assumed. As the negotiated direct cost falls, you see a university being paid a higher indirect cost rate off a smaller — modified — direct cost base, to recover the same amount of overhead.Is it that the federal government is saying for more parts of the grant, “We’re not going to reimburse that as an indirect cost.”?Dan: This is where we shift a little bit from assessment to speculation. What’s excluded from total direct costs? One thing is researcher salaries above a certain level.What is that level? Can you give me a dollar amount?Dan: It’s a $225,700 annual salary. There aren’t enough people being paid that on these grants for that to explain the difference, especially when you consider that research salaries are being paid to postdocs and grad students.You’re looking around the scientists in your institution and thinking, “That’s not where the money is”?Dan: It’s not, even if you consider Principal Investigators. If you consider postdocs and grad students, it certainly isn’t.Dan: My best hunch is that research projects have become more capital-intensive, and only a certain level of expenditure on equipment can be included in the modified total direct cost base. I don’t have smoking gun evidence, it’s my intuition.In the paper, there’s this fascinating chart where you show the institutions that would get hit hardest by a 15% cap tend to be those that do the most valuable medical research. Explain that on this framework. Is it that doing high-quality medical research is capital-intensive?Pierre: We look at all the private-sector patents that build on NIH research. The more a university stands to lose under the administration policy, the more it has contributed over the past 25 years — in research the private sector found relevant in terms of pharmaceutical patents.This is counterintuitive if your whole model of funding for science is, “Let’s cut subsidies for the stuff the private sector doesn’t care about — all this big equipment.” When you cut those subsidies, what suffers most is the stuff that the private sector likes.Pierre: To me it makes perfect sense. This is the stuff that the private sector would not be willing to invest in on its own. But that research, having come into being, is now a very valuable input into activities that profit-minded investors find interesting and worth taking a risk on.This is the argument for the government to fund basic research?Pierre: That argument has been made at the macro-level forever, but the bibliometric revolution of the past 15 years allows you to look at this at the nano-level. Recently I’ve been able to look at the history of Ozempic. The main patent cites zero publicly-funded research, but it cites a bunch of patents, including patents taken up by academics. Those cite the foundational research performed by Joel Habener and his team at Massachusetts General Hospital in the early 1980s that elucidated the role of GLP-1 as a potential target. This grant was first awarded to Habener in 1979, was renewed every four or five years, and finally died in 2008, when he moved on to other things. Those chains are complex, but we can now validate the macro picture at this more granular level.Dan: I do want to add one qualification which also suggests some directions for the future. There are things we still can’t see — despite Pierre’s zeal. Our projections of the consequence of a 15% rate cap are still pretty coarse. We don’t know what research might not take place. We don’t know what indirect cost categories are exposed, or how universities would reallocate. All those things are going to be difficult to project without a proper experiment.One thing that I would’ve loved to have more visibility into is, “What is the structure of indirect costs at universities across the country? What share of paid indirect costs are going to administrative expenses? What direct cost categories are being excluded?” We would need a more transparency into the system to know the answers.Does that information have to be proprietary? It’s part of negotiations with the federal government about how much the taxpayer will pay for overhead on these grants. Which piece is so special that it can’t be shared?Pierre: You are talking to the wrong people here because we’re meta-scientists, so our answer is none of it should be private.Dan: But now you have to ask the university lawyers.What would the case from the universities be? “We can’t tell the public what we spend subsidy on”?Pierre: My sense is that there are institutions of academia that strike most lay people as completely bizarre.Hard to explain without context?Pierre: People haven’t thought about it. They will find it so bizarre that they will typically jump from the odd aspect to, “That must be corruption.” University administrators are hugely attuned to that. So the natural defensive approach is to shroud it in secrecy. This way we don’t see how the sausage is made.Dan: Transparency can be a blessing and a curse. More information supports more considered decision-making. It also opens the door to misrepresentation by critics who have their own agendas. Pierre’s right: there are some practices that to the public might look unusual — or might be familiar, but one might say, “How is that useful expense?” Even a simple thing like having an administrator who manages a faculty’s calendar might seem excessive. Many people manage their own calendars. At the same time, when you think about how someone’s time is best used, given their expertise, and heavy investment in specialized human capital, are emails, calendaring, and note-taking the right things for scientists [to be doing]? Scientists spend a large chunk of their time now administering grants. Does it make sense to outsource that and preserve the scientist’s time for more science?When you put forward data that shows some share of federal research funding is going to fund administrative costs, at first glance it might look wasteful, yet it might still be productive. But I would be able to make a more considered judgment on a path forward if I had access to more facts, including what indirect costs look like under the hood.One last question: in a world where you guys have the ear of the Senate, political leadership at the NIH, and maybe the universities, what would you be pushing for on indirect costs?Pierre: I’ve come to think that this indirect cost rate is a second-best institution: terrible and yet superior to many of the alternatives. My favorite alternative would be one where there would be a flat rate applied to direct costs. That would be the average effective rate currently observed — on the order of 40%.You’re swapping out this complicated system to — in the end — reimburse universities the same 40%.Pierre: We know there are fixed costs. Those fixed costs need to be paid. We could have an elaborate bureaucratic apparatus to try to get it exactly right, but it’s mission impossible. So why don’t we give up on that and set a rate that’s unlikely to lead to large errors in under- or over-recovery. I’m not particularly attached to 40%. But the 15% that was contemplated seems absurdly low.Dan: In the work we’ve done, we do lay out different approaches. The 15% rate wouldn’t fully cut out the negotiation process: to receive that, you have to document your overhead costs and demonstrate that they reached that level. In any case, it’s simplifying. It forces more cost-sharing and maybe more judicious investments by universities. But it’s also so low that it’s likely to make a significant amount of high-value, life-improving research economically unattractive.The current system is complicated and burdensome. It might encourage investment in less productive things, particularly because universities can get it paid back through future ICR. At the same time, it provides pretty good incentives to take on expensive, high-value research on behalf of the public.I would land on one of two alternatives. One of those is close to what Pierre said, with fixed rates, but varied by institution types: one for universities, one for medical schools, one for independent research institutions — because we do see some variation in their cost structures. We might set those rates around their historical average effective rates, since those haven’t changed for quite a long time. If you set different rates for different categories of institution, the more finely you slice the pie, the closer you end up to the current system. So that’s why I said maybe, at a very high level, four categories.The other I could imagine is to shift more of these costs “above the line” — to adapt the system to enable more of these indirect costs to be budgeted as direct costs in grants. This isn’t always easy, but presumably some things we currently call indirect costs could be accounted for in a direct cost manner. Foundations do it a bit more than the federal government does, so that could be another path forward.There’s no silver bullet. Our goal was to try to bring some understanding to this long-running policy debate over how to fund the indirect cost of research and what appropriate rates should be. It’s been a recurring question for several decades and now is in the hot seat again. Hopefully through this work, we’ve been able to help push that dialogue along. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 00m 50s | ||||||
| 11/25/25 | ![]() Should the Feds Bail Out Chicago? | The full transcript for this conversation and many others can be found at www.statecraft.pub.Today we’re joined by David Schleicher. David is Professor of Property and Urban Law at Yale Law School, and an expert in local government law, land use, finance, and urban development.I found David’s book, In a Bad State: Responding to State and Local Budget Crises, a fascinating and readable primer on municipal debt: what it is, how it grows, and how cities can face up to it.Municipal pension funding may not sound like the most fascinating topic. I hope this conversation illustrates two things. First, how our pension systems work matters to all of us — whether or not we are enrolled in a municipal pension. Second, these questions go to the heart of how our cities are run, why they fail, and how they can be improved.We discuss:* Why are so many municipal pension funds in debt?* Why New York City went bankrupt and Chicago didn’t* Moral hazard in municipal credit* The practice of "universal log rolls"* How the federal government should respond to local bankruptcies This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 05m 47s | ||||||
| 11/12/25 | ![]() How Diplomacy Works in Africa | Today we’re joined by Judd Devermont, one of the most experienced Africa policy hands in Washington. He spent 16 years as an intelligence analyst, serving in both the Obama and Biden administrations. Most recently, he was Senior Director for African Affairs at the National Security Council. He authored the Biden administration’s Strategy Toward Sub-Saharan Africa. Since leaving government in early 2024, he writes a newsletter called Post Strategy, reflecting on what works and what doesn’t in US policy toward Africa.We discuss* What “care and feeding” means in diplomacy* What went wrong with the relationships with Niger* The problem with envoys* Whether the NSC has been neutered under Trump* Why most intelligence analysis doesn’t cut it anymoreThe full transcript for this conversation is at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 35m 40s | ||||||
| 10/31/25 | ![]() How to Run New York City | You can find the full transcript of this conversation at www.statecraft.pub.The likely next mayor of New York City is Zohran Mamdani, if polling is anywhere close to being correct. Much of the conversation has revolved around the day-to-day administration of City Hall. If Mamdani wins, does he have what it takes to run the city’s government?Today’s guest is still active in NYC political life, and it was clear I would not get an answer to that particular question. Instead, I took this opportunity to investigate how City Hall actually runs, and how the past three mayors have structured their administrations. But if you read between the lines, you can treat this conversation as a guide about what has worked in New York’s governance over the last 20 years, and the likely stumbling blocks for an ambitious new administration.Maria Torres-Springer moved to New York City a week before 9/11, and spent most of the following 20 years in city government — first as a top appointee in the Bloomberg administration, then in several high-powered roles under Bill de Blasio, and eventually as second-in-command for Eric Adams. Her most recent role was as first deputy mayor: functionally the Chief Operating Officer of New York City. Torres-Springer resigned in February 2025 (she was not implicated in the overlapping Eric Adams corruption scandals).To put it lightly, Torres-Springer has fans. In November 2024, City & State New York wrote a cover story titled, “The Vibe at City Hall is Thank God for Maria Torres-Springer.” It quotes political figures from the far left, center left, and right, calling Torres-Springer “a phenomenal leader,” “a very classy, charismatic, knowledgeable individual,” and, “a serial overachiever in a good way.” When Adams appointed her as first deputy mayor, he said, “She has the ability of landing the plane.”Torres-Springer is widely described as one of the most effective political operators in New York City, and she’s been linked in media stories as a potential official in the next mayoral administration (although she recently took a role as President of the Revson Foundation, a NYC-based philanthropic organization). She’s maybe the best possible guest to talk about steering City Hall.Given constraints on what Torres-Springer could discuss, I wanted to get into two big topics. One is process. What does it take to run City Hall? How have different mayors done it differently? The other is outcomes. Torres-Springer was one of the champions of City of Yes, the Adams-backed initiative to build 500,000 new housing units in the city over the next 10 years. I wanted to better understand City of Yes, what she’s most excited about, what didn’t make the cut, and how it all came together politically.We discuss:* What it takes to succeed working for three very different mayors* How Bloomberg, de Blasio, and Adams governed differently* How to work effectively under constant pressure* The political coalitions that made City of Yes possible* Why it takes over a year to turn over a NYCHA apartment* How to fix the plumbing of government* What the next mayor should prioritize to keep New York thrivingThanks to Harry Fletcher-Wood, Eamonn Ives, and Katerina Barton for their judicious audio and transcript edits for length and clarity. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 18m 07s | ||||||
| 10/23/25 | ![]() A Statecraft Fall Roundup | This episode was originally recorded on October 18th at the Progress Conference in Berkeley. Because of the federal shutdown, Director Kratsios called in virtually.Michael Kratsios is Director of the White House Office of Science and Technology Policy, and the president’s top science and technology advisor. In the first Trump administration, Kratsios was US Chief Technology Officer, and later acting Under Secretary of Defense for Research and Engineering, where he championed emerging tech like AI, quantum, and autonomous systems in defense.Given constraints in the topics Kratsios could speak on, my questions focused on understanding the administration’s AI and science policy. We talked about the recent AI Action Plan: what AI can do for America and the world, and how the administration plans to ensure US leadership. We discuss the administration’s vision for gold standard science, and whether the structures we use to fund science need to change. We also touched on how the second Trump administration differs from the first, and Kratsios’s take on AI safety.Thanks to Harry Fletcher-Wood and Katerina Barton for their light edits for length and clarity in the transcript and audio, respectively, and for a tight turnaround. The White House has not yet cleared the full video for publication, but we’ll share it here if it is cleared.The full transcript for this conversation and many others is available at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 36m 48s | ||||||
| 10/16/25 | ![]() Is the Senate Fixing Housing Policy? | Today we’re talking about housing. The ROAD to Housing Act passed the Senate Banking, Housing, and Urban Affairs Committee 24-0 in late July. Last week — despite the shutdown — it cleared the Senate. It’s a package of 27 pieces of legislation to boost housing supply, improve affordability, reduce regulatory roadblocks, and reduce homelessness.When you zoom out a bit, what’s happened here is pretty surprising. The chair of the committee, Republican Tim Scott, and the Ranking Member, Elizabeth Warren, a Democrat, co-sponsored the bill. The bill is the committee’s first bipartisan housing markup in over a decade. Passing through committee unanimously doesn’t happen often for serious bills of this sort. I wanted to understand how this bill happened, and came to have a serious shot at passing. And I also wanted to get a better sense of what’s actually in the bill, and why it matters for housing. If you’re like me, most of the debates you hear about housing policy focus on zoning, which is a local issue — very little federal say. So what are all these pieces of legislation? Do they matter?Joining me is an unorthodox trio:* Will Poff-Webster was legislative counsel for Senator Brian Schatz, a Democrat from Hawaii. He’s our inside guy today: he worked on the bill within the Senate. And today, he covers housing policy here at IFP.* Alex Armlovich is Senior Housing Policy Analyst at the Niskanen Center. He has been working on housing issues for a long time, and his fingerprints are on parts of this bill package. He’s my advocate from the outside.* Brian Potter is Senior Infrastructure Fellow at IFP and author of Construction Physics, which I very much enjoy editing. If I can make one newsletter recommendation to you besides Statecraft, it’s Construction Physics. He has a background in private-sector home building. And has written about several of the proposals in this package.Table of contents:* What’s the federal role in housing policy?* What’s in the bill?* Regulatory reform* Technical assistance plus incentives* Funding and financing reform* A brief sidebar on manufactured home chassis* Will the bill matter?* How did the bill happen, politically speaking?* The policy wonk success storyThank you to Harry Fletcher-Wood and Katerina Barton for their judicious transcript and audio edits.For the full transcript of this conversation, go to www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 08m 48s | ||||||
| 10/8/25 | ![]() Why We Don't Build Apartments for Families | Today, we’re joined by Bobby Fijan. He’s a co-founder of the American Housing Corporation, a startup building housing for families in cities. A burning question motivates his work: How do you make cities places where families can live and thrive? He has a new report out with the Institute of Family Studies looking at what families really want from their apartments.This is a pretty self-indulgent episode for me. I live in Brooklyn with my wife and two-year-old, and we’re expecting our second kid. We want to stay in the city — it’s where our life and community are, and where we’ve put down roots. But the classic route for people like us is to move out to the suburbs once the family grows. I hoped talking to Bobby would help me avoid that fate.Bobby argues that the best ideas for family-friendly housing aren’t new. Pre-war apartments in American cities look a lot like what he’s advocating for. We’ve done this before, and we could do it again.We discuss:* How the financial crisis fuelled a boom in studio apartments* Why did apartments get so much smaller after 2008?* Why are most two-bedroom apartments designed for roommates?* What do families actually want in a floor plan, and why don’t developers build it?* Whether upzoning can helpThanks to Harry Fletcher-Wood and Katerina Barton for their judicious transcript and audio edits.The full transcript to this conversation and many others is available at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 57m 34s | ||||||
| 10/2/25 | ![]() How to Bring Down Healthcare Costs | Today, I’m joined by Anup Malani. He’s a professor of law at the University of Chicago, currently on leave, serving as the first Chief Economist at the Centers for Medicare & Medicaid Services. This means he oversees economic analysis for the agency managing $2 trillion in annual healthcare spending — 23% of the entire federal budget. CMS runs Medicare for 70 million elderly Americans, Medicaid for low-income families, and the health insurance exchanges where millions buy coverage.Malani answers a lot of questions I have about American healthcare policy:* The US spends 20% of GDP on healthcare. Why is our life expectancy so bad?* How do you crack down on Medicare fraud without hurting patients who need care?* What incentives do private insurers like UnitedHealth have to make patients look sicker than they are?* What do academic economists get wrong about policy?The full transcript for this conversation is at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 22m 18s | ||||||
| 9/17/25 | ![]() What Is America’s Infrastructure Cost Problem? | This episode was originally recorded on September 4th at the Abundance Conference in DC."Zach Liscow, my guest today, is a professor of law at Yale Law School. In 2022-2023, he was the Chief Economist at the Office of Management and Budget. He's also now my colleague at IFP, as a non-resident senior fellow.I have a bit of a problem today, which is that while Zach may not be a national household name, he might as well be in this audience. As most of you are aware, Zach has worked on many interesting economic topics, but especially on infrastructure costs: why it costs so much to build in the US, what the inputs are, and cross-cutting comparisons.The challenge for me today as an interviewer is that, in part because of Zach’s work, everyone here now knows that infrastructure in the US costs a huge amount to build. I recently reviewed some submissions for a project on transit at IFP, and every other submission referenced the fact that the cost per mile to build a subway in New York is something like eight times more than the equivalent project in Paris.These stylized facts are now embedded in our discourse. And my problem is that this makes it a little hard to figure out how to have a conversation that isn't just all of us nodding in agreement. I'm going to try to tackle that problem, but I just want to lay my cards on the table. This is my fear, and we’ll try to avoid it."The full transcript for this conversation and many others is at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 33m 35s | ||||||
| 9/10/25 | ![]() How to Write the AI Action Plan | The full transcript for this conversation is at www.statecraft.pub. When I started this podcast a couple years ago, the idea was more constrained than it is today. We wanted to do exit interviews with civil servants, who were newly free to speak about their experiences and their learnings. The project has expanded: we talk to political scientists, economists, DC wonks, elected officials and people currently in government. But the core value of this project is in that original idea of getting a hold of people as they're leaving the government, pinning them to the wall, and making them reveal their secrets.Today's guest is in that mold. His name is Dean Ball. If you follow AI policy, you already know who he is. Until a couple of weeks ago, Dean was a senior policy advisor for artificial intelligence and emerging technology at the White House Office of Science and Technology Policy (OSTP).Dean and I go back a little while. Most notably, we’ve serve together on one of the most dominant trivia teams DC has seen. But that's not why Dean's important. Dean's had a whirlwind tour over the past few months in the federal government. During that time, he was the organizing author of the Administration's AI Action Plan, a comprehensive roadmap from the White House on federal AI policy.Today, we caught up to talk about that Action Plan, what it takes to write a strategy document for the federal government, and the challenges of implementing that strategy in the face of political, personal, and bureaucratic opposition.I've said in the past that Dean thinks more clearly about the near-term future than most people. I still think that's true, though I don't agree with him on everything here. He's an incredibly sharp thinker and I benefit from talking to him.We discuss:* How to gain influence in the White House* Navigating the interagency process efficiently* Whether the deep state is real* The AI Action Plan* How to implement change across the federal government* The complexities of export controls on AI Chips* Why Dean left the White House after six monthsThanks to Harry Fletcher-Wood for his transcript edits, and to Katerina Barton for her audio edits. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 25m 05s | ||||||
| 8/28/25 | ![]() Leninist Technocracy with Grand Opera Characteristics | Today I'm talking to Dan Wang. He has a great new book, Breakneck: China's Quest to Engineer the Future. Dan spent the better part of the last decade in China and published a yearly letter summarizing his thoughts, explorations, and eating.Breakneck is like those letters: it goes all over the place, as does our conversation. Topics include:* America's overabundance of lawyers* Whether our ruling class should be all economists* Stylish propaganda* The book collections of Yale professors* iPhone manufacturing* Forced sterilization* Planting cassavaOne of the things I like most about Dan's work is that he's comfortable looking at China through multiple, very different lenses. Parts of Breakneck explicitly use China as a lens to think about the US and its political culture and institutions. Other parts of the book try very hard to take China on its own terms, without reading our own culture into it. It’s that mix that made the book so enjoyable for me, and I hope you enjoy it too.Thank you to Harry Fletcher-Wood for his judicious transcript edits, and to Katerina Barton for her audio edits. You can find the full, annotated transcript to this conversation at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 20m 48s | ||||||
| 8/21/25 | ![]() Four Ways to Fix Government HR | Today I'm talking to economic historian Judge Glock, Director of Research at the Manhattan Institute. Judge works on a lot of topics: if you enjoy this episode, I'd encourage you to read some of his work on housing markets and the Environmental Protection Agency. But I cornered him today to talk about civil service reform.Since the 1990s, over 20 red and blue states have made radical changes to how they hire and fire government employees — changes that would be completely outside the Overton window at the federal level. A paper by Judge and Renu Mukherjee lists four reforms made by states like Texas, Florida, and Georgia: * At-will employment for state workers* The elimination of collective bargaining agreements* Giving managers much more discretion to hire* Giving managers much more discretion in how they pay employeesJudge finds decent evidence that the reforms have improved the effectiveness of state governments, and little evidence of the politicization that federal reformers fear. Meanwhile, in Washington, managers can’t see applicants’ resumes, keyword searches determine who gets hired, and firing a bad performer can take years. But almost none of these ideas are on the table in Washington.Thanks to Harry Fletcher-Wood for his judicious transcript edits and fact-checking, and to Katerina Barton for audio edits.For a printable transcript of this interview, click here:Judge, you have a paper out about lessons for civil service reform from the states. Since the ‘90s, red and blue states have made big changes to how they hire and fire people. Walk through those changes for me.I was born and grew up in Washington DC, heard a lot about civil service throughout my childhood, and began to research it as an adult. But I knew almost nothing about the state civil service systems. When I began working in the states — mainly across the Sunbelt, including in Texas, Kansas, Arizona — I was surprised to learn that their civil service systems were reformed to an absolutely radical extent relative to anything proposed at the federal level, let alone implemented.Starting in the 1990s, several states went to complete at-will employment. That means there were no official civil service protections for any state employees. Some managers were authorized to hire people off the street, just like you could in the private sector. A manager meets someone in a coffee shop, they say, "I'm looking for exactly your role. Why don't you come on board?" At the federal level, with its stultified hiring process, it seemed absurd to even suggest something like that.You had states that got rid of any collective bargaining agreements with their public employee unions. You also had states that did a lot more broadbanding [creating wider pay bands] for employee pay: a lot more discretion for managers to reward or penalize their employees depending on their performance.These major reforms in these states were, from the perspective of DC, incredibly radical. Literally nobody at the federal level proposes anything approximating what has been in place for decades in the states. That should be more commonly known, and should infiltrate the debate on civil service reform in DC.Even though the evidence is not absolutely airtight, on the whole these reforms have been positive. A lot of the evidence is surveys asking managers and operators in these states how they think it works. They've generally been positive. We know these states operate pretty well: Places like Texas, Florida, and Arizona rank well on state capacity metrics in terms of cost of government, time for permitting, and other issues.Finally, to me the most surprising thing is the dog that didn't bark. The argument in the federal government against civil service reform is, “If you do this, we will open up the gates of hell and return to the 19th-century patronage system, where spoilsmen come and go depending on elected officials, and the government is overrun with political appointees who don't care about the civil service.” That has simply not happened. We have very few reports of any concrete examples of politicization at the state level. In surveys, state employees and managers can almost never remember any example of political preferences influencing hiring or firing.One of the surveys you cited asked, “Can you think of a time someone said that they thought that the political preferences were a factor in civil service hiring?” and it was something like 5%.It was in that 5-10% range. I don't think you'd find a dissimilar number of people who would say that even in an official civil service system. Politics is not completely excluded even from a formal civil service system.A few weeks ago, you and I talked to our mutual friend, Don Moynihan, who's a scholar of public administration. He's more skeptical about the evidence that civil service reform would be positive at the federal level.One of your points is, “We don't have strong negative evidence from the states. Productivity didn’t crater in states that moved to an at-will employment system.” We do have strong evidence that collective bargaining in the public sector is bad for productivity.What I think you and Don would agree on is that we could use more evidence on the hiring and firing side than the surveys that we have. Is that a fair assessment?Yes, I think that's correct. As you mentioned, the evidence on collective bargaining is pretty close to universal: it raises costs, reduces the efficiency of government, and has few to no positive upsides.On hiring and firing, I mentioned a few studies. There's a 2013 study that looks at HR managers in six states and finds very little evidence of politicization, and managers generally prefer the new system. There was a dissertation that surveyed several employees and managers in civil service reform and non-reform states. Across the board, the at-will employment states said they had better hiring retention, productivity, and so forth. And there's a 2002 study that looked specifically at Texas, Florida, and Georgia after their reforms, and found almost universal approbation inside the civil service itself for these reforms.These are not randomized control trials. But I think that generally positive evidence should point us directionally where we should go on civil service reform. If we loosen restrictions on discipline and firing, decentralize hiring and so forth — we probably get some productivity benefits from it. We can also know, with some amount of confidence, that the sky is not going to fall, which I think is a very important baseline assumption. The civil service system will continue on and probably be fairly close to what it is today, in terms of its political influence, if you have decentralized hiring and at-will employment.As you point out, a lot of these reforms that have happened in 20-odd states since the ‘90s would be totally outside the Overton window at the federal level. Why is it so easy for Georgia to make a bipartisan move in the ‘90s to at-will employment, when you couldn't raise the topic at the federal level?It's a good question. I think in the 1990s, a lot of people thought a combination of the 1978 Civil Service Reform Act — which was the Carter-era act that somewhat attempted to do what these states hoped to do in the 1990s — and the Clinton-era Reinventing Government Initiative, would accomplish the same ends. That didn't happen.That was an era when civil service reform was much more bipartisan. In Georgia, it was a Democratic governor, Zell Miller, who pushed it. In a lot of these other states, they got buy-in from both sides. The recent era of state reform took place after the 2010 Republican wave in the states. Since that wave, the reform impetus for civil service has been much more Republican. That has meant it's been a lot harder to get buy-in from both sides at the federal level, which will be necessary to overcome a filibuster.I think people know it has to be very bipartisan. We're just past the point, at least at the moment, where it can be bipartisan at the federal level. But there are areas where there's a fair amount of overlap between the two sides on what needs to happen, at least in the upper reaches of the civil service.It was interesting to me just how bipartisan civil service reform has been at various times. You talked about the Civil Service Reform Act, which passed Congress in 1978. President Carter tells Congress that the civil service system:“Has become a bureaucratic maze which neglects merit, tolerates poor performance, permits abuse of legitimate employee rights, and mires every personnel action in red tape, delay, and confusion.”That's a Democratic president saying that. It’s striking to me that the civil service was not the polarized topic that it is today.Absolutely. Carter was a big civil service reformer in Georgia before those even larger 1990s reforms. He campaigned on civil service reform and thought it was essential to the success of his presidency. But I think you are seeing little sprouts of potential bipartisanship today, like the Chance to Compete Act at the end of 2024, and some of the reforms Obama did to the hiring process. There's options for bipartisanship at the federal level, even if it can’t approach what the states have done.I want to walk through the federal hiring process. Let's say you're looking to hire in some federal agency — you pick the agency — and I graduated college recently, and I want to go into the civil service. Tell me about trying to hire somebody like me. What's your first step?It's interesting you bring up the college graduate, because that is one recent reform: President Trump put out an executive order trying to counsel agencies to remove the college degree requirement for job postings. This happened in a lot of states first, like Maryland, and that's also been bipartisan. This requirement for a college degree — which was used as a very unfortunate proxy for ability at a lot of these jobs — is now being removed. It's not across the whole federal government. There's still job postings that require higher education degrees, but that's something that's changed.To your question, let’s say the Department of Transportation. That's one of the more bipartisan ones, when you look at surveys of federal civil servants. Department of Defense, Veterans Affairs, they tend to be a little more Republican. Health and Human Services and some other agencies tend to be pretty Democrat. Transportation is somewhere in the middle.As a manager, you try to craft a job description and posting to go up on the USA Jobs website, which is where all federal job postings go. When they created it back in 1996, that was supposedly a massive reform to federal hiring: this website where people could submit their resumes. Then, people submit their resumes and answer questions about their qualifications for the job.One of the slightly different aspects from the private sector is that those applications usually go to an HR specialist first. The specialist reviews everything and starts to rank people into different categories, based on a lot of weird things. It's supposed to be “knowledge, skills, and abilities” — your KSAs, or competencies. To some extent, this is a big step up from historical practice. You had, frankly, an absurd civil service exam, where people had to fill out questions about, say, General Grant or about US Code Title 42, or whatever it was, and then submit it. Someone rated the civil service exam, and then the top three test-takers were eligible for the job.We have this newer, better system, where we rank on knowledge, skills, and abilities, and HR puts put people into different categories. One of the awkward ways they do this is by merely scanning the resumes and applications for keywords. If it's a computer job, make sure you say the word “computer” somewhere in your resume. Make sure you say “manager” if it's a managerial job.Just to be clear, this is entirely literal. There's a keyword search, and folks who don’t pass that search are dinged.Yes. I've always wondered, how common is this? It's sometimes hard to know what happens in the black box in these federal HR departments. I saw an HR official recently say, "If I'm not allowed to do keyword searches, I'm going to take 15 years to overlook all the applications, so I’ve got to do keyword searches." If they don't have the keywords, into the circular file it goes, as they used to say: into the garbage can.Then they start ranking people on their abilities into, often, three different categories. That is also very literal. If you put in the little word bubble, "I am an exceptional manager," you get pushed on into the next level of the competition. If you say, "I'm pretty good, but I'm not the best," into the circular file you go.I’ve gotten jaded about this, but it really is shocking. We ask candidates for a self-assessment, and if they just rank themselves 10/10 on everything, no matter how ludicrous, that improves their odds of being hired.That's going to immensely improve your odds. Similar to the keyword search, there's been pushback on this in recent years, and I'm definitely not going to say it's universal anymore. It's rarer than it used to be. But it’s still a very common process.The historical civil service system used to operate on a rule of three. In places like New York, it still operates like that. The top three candidates on the evaluation system get presented to the manager, and the manager has to approve one of them for the position.Thanks partially to reforms by the Obama administration in 2010, they have this category rating system where the best qualified or the very qualified get put into a big bucket together [instead of only including the top three]. Those are the people that the person doing the hiring gets to see, evaluate, and decide who he wants to hire.There are some restrictions on that. If a veteran outranks everybody else, you’ve got to pick the veteran [typically known as Veterans’ Preference]. That was an issue in some of the state civil service reforms, too. The states said, “We're just going to encourage a veterans’ preference. We don't need a formalized system to say they get X number of points and have to be in Y category. We're just going to say, ‘Try to hire veterans.’” That’s possible without the formal system, despite what some opponents of reform may claim.One of the particular problems here is just the nature of the people doing the hiring. Sometimes you just need good managers to encourage HR departments to look at a broader set of qualifications. But one of the bigger problems is that they keep the HR evaluation system divorced from the manager who is doing the hiring. David Shulkin, who was the head of the Department of Veterans Affairs (VA), wrote a great book, It Shouldn’t Be This Hard to Serve Your Country. He was a healthcare exec, and the VA is mainly a healthcare agency. He would tell people, "You should work for me," they would send their applications into the HR void, and he'd never see them again. They would get blocked at some point in this HR evaluation process, and he'd be sent people with no healthcare experience, because for whatever reason they did well in the ranking.One of the very base-level reforms should be, “How can we more clearly integrate the hiring manager with the evaluation process?” To some extent, the bipartisan Chance to Compete Act tries to do this. They said, “You should have subject matter experts who are part of crafting the description of the job, are part of evaluating, and so forth.” But there’s still a long road to go.Does that firewall — where the person who wants to hire doesn't get to look at the process until the end — exist originally because of concerns about cronyism?One of the interesting things about the civil service is its raison d’être — its reason for being — was supposedly a single, clear purpose: to prevent politicized hiring and patronage. That goes back to the Pendleton Civil Service Act of 1883. But it's always been a little strange that you have all of these very complex rules about every step of the process — from hiring to firing to promotion, and everything in between — to prevent political influence. We could just focus on preventing political influence, and not regulate every step of the process on the off-chance that without a clear regulation, political influence could creep in. This division [between hiring manager and applicants] is part of that general concern. There are areas where I've heard HR specialists say, "We declare that a manager is a subject matter expert, and we bring them into the process early on, we can do that." But still the division is pretty stark, and it's based on this excessive concern about patronage.One point you flag is that the Office of Personnel Management (OPM), which is the body that thinks about personnel in the federal government, has a 300-page regulatory document for agencies on how you have to hire. There’s a remarkable amount of process.Yes, but even that is a big change from the Federal Personnel Manual, which was the 10,000-page document that we shredded in the 1990s. In the ‘90s, OPM gave the agencies what's called “delegated examining authorities.” This says, “You, agency, have power to decide who to hire, we're not going to do the central supervision anymore. But, but, but: here's the 300-page document that dictates exactly how you have to carry out that hiring.”So we have some decentralization, allowing managers more authority to control their own departments. But this two-level oversight — a local HR department that's ultimately being overseen by the OPM — also leads to a lot of slip ‘twixt cup and lip, in terms of how something gets implemented. If you're in the agency and you're concerned about the OPM overseeing your process, you're likely to be much more careful than you would like to be. “Yes, it's delegated to me, but ultimately, I know I have to answer to OPM about this process. I'm just going to color within the lines.”I often cite Texas, which has no central HR office. Each agency decides how it wants to hire. In a lot of these reform states, if there is a central personnel office, it's an information clearinghouse or reservoir of models. “You can use us, the central HR office, as a resource if you want us to help you post the job, evaluate it, or help manage your processes, but you don't have to.” That's the goal we should be striving for in a lot of the federal reforms. Just make OPM a resource for the managers in the individual departments to do their thing or go independent.Let's say I somehow get through the hiring process. You offer me a job at the Department of Transportation. What are you paying me?This is one of the more stultified aspects of the federal civil service system. OPM has another multi-hundred-page handbook called the Handbook of Occupational Groups and Families. Inside that, you’ve got 49 different “groups and families,” like “Clerical occupations.” Inside those 49 groups are a series of jobs, sometimes dozens, like “Computer Operator.” Inside those, they have independent documents — often themselves dozens of pages long — detailing classes of positions. Then you as a manager have to evaluate these nine factors, which can each give points to each position, which decides how you get slotted into this weird Government Schedule (GS) system [the federal payscale].Again, this is actually an improvement. Before, you used to have the Civil Service Commission, which went around staring very closely at someone over their typewriter and saying, "No, I think you should be a GS-12, not a GS-11, because someone over in the Department of Defense who does your same job is a GS-12." Now this is delegated to agencies, but again, the agencies have to listen to the OPM on how to classify and set their jobs into this 15-stage GS-classification system, each stage of which has 10 steps which determine your pay, and those steps are determined mainly by your seniority. It's a formalized step-by-step system, overwhelmingly based on just how long you've sat at your desk.Let's be optimistic about my performance as a civil servant. Say that over my first three years, I'm just hitting it out of the park. Can you give me a raise? What can you do to keep me in my role?Not too much. For most people, the within-step increases — those 10 steps inside each GS-level — is just set by seniority. Now there are all these quality step increases you can get, but they're very rare and they have to be documented. So you could hypothetically pay someone more, but it's going to be tough. In general, the managers just prefer to stick to seniority, because not sticking to it garners a lot of complaints. Like so much else, the goal is, "We don't want someone rewarding an official because they happen to share their political preferences." The result of that concern is basically nobody can get rewarded at all, which is very unfortunate.We do have examples in state and federal government of what's known as broadbanding, where you have very broad pay scales, and the manager can decide where to slot someone. Say you're a computer operator, which can mean someone who knows what an Excel spreadsheet is, or someone who's programming the most advanced AI systems. As a manager in South Carolina or Florida, you have a lot of discretion to say, "I can set you 50% above the market rate of what this job technically would go for, if I think you're doing a great job."That's very rare at the federal level. They've done broadbanding at the Government Accountability Office, the National Institute of Standards and Technology. The China Lake Experiment out in California gave managers a lot more discretion to reward scientists. But that's definitely the exception. In general, it's a step-wise, seniority-based system.What if you want to bring me into the Senior Executive Service (SES)? Theoretically, that sits at the top of the General Service scale. Can't you bump me up in there and pay me what you owe me?I could hypothetically bring you in as a senior executive servant. The SES was created in the 1978 Civil Service Reform Act. The idea was, “We're going to have this elite cadre of about 8,000 individuals at the top of the federal government, whose employment will be higher-risk and higher-reward. They might be fired, and we're going to give them higher pay to compensate for that.”Almost immediately, that did not work out. Congress was outraged at the higher pay given to the top officials and capped it. Ever since, how much the SES can get paid has been tightly controlled. As in most of the rest of the federal government, where they establish these performance pay incentives or bonuses — which do exist — they spread them like peanut butter over the whole service. To forestall complaints, everyone gets a little bit every two or three years.That's basically what happened to the SES. Their annual pay is capped at the vice president’s salary, which is a cap for a lot of people in the federal government. For most of your GS and other executive scales, the cap is Congress's salary. [NB: This is no longer exactly true, since Congress froze its own salaries in 2009. The cap for GS (currently about $195k) is now above congressional salaries ($174k).]One of the big problems with pay in the federal government is pay compression. Across civil service systems, the highest-skilled people tend to be paid much less than the private sector, and the lowest-skilled people tend to get paid much more. The political science reason for that is pretty simple: the median voter in America still decides what seems reasonable. To the median voter, the average salary of a janitor looks low, and the average salary of a scientist looks way too high. Hence this tendency to pay compression. Your average federal employee is probably overpaid relative to the private sector, because the lowest-skilled employees are paid up to 40% higher than the private sector equivalent. The highest-paid employees, the post-graduate skilled professionals, are paid less. That makes it hard to recruit the top performers, but it also swells the wage budget in a way that makes it difficult to talk about reform.There's a lot of interest in this administration in making it easier to recruit talent and get rid of under-performers. There have been aggressive pushes to limit collective bargaining in the public sector. That should theoretically make it easier to recruit, but it also increases the precariousness of civil service roles. We've seen huge firings in the civil service over the last six months.Classically, the explicit trade-off of working in the federal government was, “Your pay is going to be capped, but you have this job for life. It's impossible to get rid of you.” You trade some lifetime earnings for stability. In a world where the stability is gone, but pay is still capped, isn't the net effect to drive talent away from the civil service?I think it's a concern now. On one level it should be ameliorated, because those who are most concerned with stability of employment do tend to be lower performers. If you have people who are leaving the federal service because all they want is stability, and they're not getting that anymore, that may not be a net loss. As someone who came out of academia and knows the wonder of effective lifetime annuities, there can be very high performers who like that stability who therefore take a lower salary. Without the ability to bump that pay up more, it's going to be an issue.I do know that, internally, the Trump administration has made some signs they're open to reforms in the top tiers of the SES and other parts of the federal government. They would be willing to have people get paid more at that level to compensate for the increased risks since the Trump administration came in. But when you look at the reductions in force (RIFs) that have happened under Trump, they are overwhelmingly among probationary employees, the lower-level employees.With some exceptions. If you've been promoted recently, you can get reclassified as probationary, so some high-performers got lumped in.Absolutely. The issue has been exacerbated precisely because the RIF regulations that are in place have made the firings particularly damaging. If you had a more streamlined RIF system — which they do have in many states, where seniority is not the main determinant of who gets laid off — these RIFs could be removing the lower-performing civil servants and keeping the higher-performing ones, and giving them some amount of confidence in their tenure.Unfortunately, the combination of large-scale removals with the existing RIF regs, which are very stringent, has demoralized some of the upper levels of the federal government. I share that concern. But I might add, it is interesting, if you look at the federal government's own figures on the total civil service workforce, they have gone down significantly since Trump came in office, but I think less than 100,000 still, in the most recent numbers that I've seen. I'm not sure how much to trust those, versus some of these other numbers where people have said 150,000, 200,000.Whether the Trump administration or a future administration can remove large numbers of people from the civil service should be somewhat divorced from the general conversation on civil service reform. The main debate about whether or not Trump can do this centers around how much power the appropriators in Congress have to determine the total amount of spending in particular agencies on their workforce. It does not depend necessarily on, "If we're going to remove people — whether for general layoffs, or reductions in force, or because of particular performance issues — how can we go about doing that?" My last-ditch hope to maintain a bipartisan possibility of civil service reform is to bracket, “How much power does the president have to remove or limit the workforce in general?” from “How can he go about hiring and firing, et cetera?”I think making it easier for the president to identify and remove poor performers is a tool that any future administration would like to have.We had this conversation sparked again with the firing of the Bureau of Labor Statistics commissioner. But that was a position Congress set up to be appointed by the President, confirmed by the Senate, and removable by the President. It’s a separate issue from civil service at large. Everyone said, “We want the president to be able to hire and fire the commissioner.” Maybe firing the commissioner was a bad decision, but that's the situation today.Attentive listeners to Statecraft know I’m pretty critical, like you are, of the regulations that say you have to go in order of seniority. In mass layoffs, you’re required to fire a lot of the young, talented people.But let's talk about individual firings. I've been a terrible civil servant, a nightmarish employee from day one. You want to discipline, remove, suspend, or fire me. What are your options?Anybody who has worked in the civil service knows it's hard to fire bad performers. Whatever their political valence, whatever they feel about the civil service system, they have horror stories about a person who just couldn't be removed.In the early 2010s, a spate of stories came out about air traffic controllers sleeping on the job. Then-transportation secretary, Ray LaHood, made a big public announcement: "I'm going to fire these three guys." After these big announcements, it turned out he was only able to remove one of them. One retired, and another had their firing reduced to a suspension.You had another horrific story where a man was joking on the phone with friends when a plane crashed into a helicopter and killed nine people over the Hudson River. National outcry. They said, "We're going to fire this guy." In the end, after going through the process, he only got a suspension. Everyone agrees it's too hard.The basic story is, you have two ways to fire someone. Chapter 75, the old way, is often considered the realm of misconduct: You've stolen something from the office, punched your colleague in the face during a dispute about the coffee, something illegal or just straight-out wrong. We get you under Chapter 75.The 1978 Civil Service Reform Act added Chapter 43, which is supposed to be the performance-based system to remove someone. As with so much of that Civil Service Reform Act, the people who passed it thought this might be the beginning of an entirely different system.In the end, lots of federal managers say there's not a huge difference between the two. Some use 75, some use 43. If you use 43, you have to document very clearly what the person did wrong. You have to put them on a performance improvement plan. If they failed a performance improvement plan after a certain amount of time, they can respond to any claims about what they did wrong. Then, they can take that process up to the Merit Systems Protection Board (MSPB) and claim that they were incorrectly fired, or that the processes weren't carried out appropriately. Then, if they want to, they can say, “Nah, I don’t like the order I got,” and take it up to federal courts and complain there. Right now, the MSPB doesn't have a full quorum, which is complicating some of the recent removal disputes.You have this incredibly difficult process, unlike the private sector, where your boss looks at you and says, "I don't like how you're giving me the stink-eye today. Out you go." One could say that's good or bad, but, on the whole, I think the model should be closer to the private sector. We should trust managers to do their job without excessive oversight and process. That's clearly about as far from the realm of possibility as the current system, under which the estimate is 6-12 months to fire a very bad performer. The number of people who win at the Merit Systems Protection Board is still 20-30%.This goes into another issue, which is unionization. If you're part of a collective bargaining agreement — most of the regular federal civil service is — first, you have to go with this independent, union-based arbitration and grievance procedure. You're about 50/50 to win on those if your boss tries to remove you.So if I’m in the union, we go through that arbitration grievance system. If you win and I’m fired, I can take it to the Merit Systems Protection Board. If you win again, I can still take it to the federal courts.You can file different sorts of claims at each part. On Chapter 43, the MSPB is supposed to be about the process, not the evidence, and you just have to show it was followed. On 75, the manager has to show by preponderance of the evidence that the employee is harming the agency. Then there are different standards for what you take to the courts, and different standards according to each collective bargaining agreement for the grievance procedure when someone is disciplined. It’s a very complicated, abstruse, and procedure-heavy process that makes it very difficult to remove people, which is why the involuntary separation rate at the federal government and most state governments is many multiples lower than the private sector.So, you would love to get me off your team because I'm abysmal. But you have no stomach for going through this whole process and I'm going to fight it. I'm ornery and contrarian and will drag this fight out. In practice, what do managers in the federal government do with their poor performers?I always heard about this growing up. There's the windowless office in the basement without a phone, or now an internet connection. You place someone down there, hope they get the message, and sooner or later they leave. But for plenty of people in America, that's the dream job. You just get to sit and nobody bothers you for eight hours. You punch in at 9 and punch out at 5, and that's your day. "Great. I'll collect that salary for another 10 years." But generally you just try to make life unpleasant for that person.Public sector collective bargaining in the US is new. I tend to think of it as just how the civil service works. But until about 50 years ago, there was no collective bargaining in the public sector.At the state level, it started with Wisconsin at the end of the 1950s. There were famous local government reforms beginning with the Little Wagner Act [signed in 1958] in New York City. Senator Robert Wagner had created the National Labor Relations Board. His son Robert F. Wagner Jr., mayor of New York, created the first US collective bargaining system at the local level in the ‘60s. In ‘62, John F. Kennedy issued an executive order which said, "We're going to deal officially with public sector unions,” but it was all informal and non-statutory.It wasn't until Title VII of the 1978 Civil Service Reform Act that unions had a formal, statutory role in our federal service system. This is shockingly new. To some extent, that was the great loss to many civil service reformers in ‘78. They wanted to get through a lot of these other big reforms about hiring and firing, but they gave up on the unions to try to get those. Some people think that exception swallowed the rest of the rules. The union power that was garnered in ‘78 overcame the other reforms people hoped to accomplish. Soon, you had the majority of the federal workforce subject to collective bargaining.But that's changing now too. Part of that Civil Service Reform Act said, “If your position is in a national security-related position, the president can determine it's not subject to collective bargaining.” Trump and the OPM have basically said, “Most positions in the federal government are national security-related, and therefore we're going to declare them off-limits to collective bargaining.” Some people say that sounds absurd. But 60% of the civilian civil service workforce is the Department of Defense, Veterans Affairs, and the Department of Homeland Security. I am not someone who tries to go too easy on this crowd. I think there's a heck of a lot that needs to be reformed. But it's also worth remembering that the majority of the civil service workforce are in these three agencies that Republicans tend to like a lot.Now, whether people like Veterans Affairs is more of an open question. We have some particular laws there about opening up processes after the scandals in the 2010s about waiting lists and hospitals. You had veterans hospitals saying, "We're meeting these standards for getting veterans in the door for these waiting lists." But they were straight-up lying about those standards. Many people who were on these lists waiting for months to see a doctor died in the interim, some from causes that could have been treated had they seen a VA doctor. That led to Congress doing big reforms in the VA in 2014 and 2017, precisely because everyone realized this is a problem.So, Trump has put out these executive orders stopping collective bargaining in all of these agencies that touch national security. Some of those, like the Environmental Protection Agency (EPA), seem like a tough sell. I guess that, if you want to dig a mine and the Chinese are trying to dig their own mine and we want the mine to go quickly without the EPA pettifogging it, maybe. But the core ones are pretty solid. So far the courts have upheld the executive order to go in place. So collective bargaining there could be reformed.But in the rest of the government, there are these very extreme, long collective bargaining agreements between agencies and their unions. I've hit on the Transportation Security Administration (TSA) as one that's had pretty extensive bargaining with its union. When we created the TSA to supervise airport security, a lot of people said, "We need a crème de la crème to supervise airports after 9/11. We want to keep this out of union hands, because we know unions are going to make it difficult to move people around." The Obama administration said, "Nope, we're going to negotiate with the union." Now you have these huge negotiations with the unions about parking spots, hours of employment, uniforms, and everything under the sun. That makes it hard for managers in the TSA to decide when people should go where or what they should do.One thing we've talked about on Statecraft in past episodes — for instance, with John Kamensky, who was a pivotal figure in the Clinton-Gore reforms — was this relationship between government employees and “Beltway Bandits”: the contractors who do jobs you might think of as civil service jobs. One critique of that ‘90s Clinton-Gore push, “Reinventing Government,” was that although they shrank the size of the civil service on paper, the number of contractors employed by the federal government ballooned to fill that void. They did not meaningfully reduce the total number of people being paid by the federal government. Talk to me about the relationship between the civil service reform that you'd like to see and this army of folks who are not formally employees.Every government service is a combination of public employees and inputs, and private employees and inputs. There's never a single thing the government does — federal, state, or local — that doesn't involve inputs from the private sector. That could be as simple as the uniforms for the janitors. Even if you have a publicly employed janitor, who buys the mop? You're not manufacturing the mops.I understand the critique that the excessive focus on full-time employees in the 1990s led to contracting out some positions that could be done directly by the government. But I think that misses how much of the government can and should be contracted out. The basic Office of Management and Budget (OMB) statute [OMB Circular No. A-76] defining what is an essential government duty should still be the dividing line. What does the government have to do, because that is the public overseeing a process? Versus, what can the private sector just do itself?I always cite Stephen Goldsmith, the old mayor of Indianapolis. He proposed what he called the Yellow Pages test. If you open the Yellow Pages [phone directory] and three businesses do that business, the government should not be in that business. There's three garbage haulers out there. Instead of having a formal government garbage-hauling department, just contract out the garbage.With the internet, you should have a lot more opportunities to contract stuff out. I think that is generally good, and we should not have the federal government going about a lot of the day-to-day procedural things that don't require public input. What a lot of people didn't recognize is how much pressure that's going to put on government contracting officers at the federal level. Last time I checked there were 40,000 contracting officers. They have a lot of power. In the most recent year for which we have data, there were $750 billion in federal contracts. This is a substantial part of our economy. If you total state and local, we're talking almost 10% of our whole economy goes through government contracts. This is mind-boggling. In the public policy world, we should all be spending about 10% of our time thinking about contracting.One of the things I think everyone recognized is that contractors should have more authority. Some of the reform that happened with people like [Steven] Kelman — who was the Office of Federal Procurement Policy head in the ‘90s under Clinton — was, "We need to give these people more authority to just take a credit card and go buy a sheaf of paper if that's what they need. And we need more authority to get contract bids out appropriately.”The same message that animates civil service reform should animate these contracting discussions. The goal should be setting clear goals that you want — for either a civil servant or a contractor — and then giving that person the discretion to meet them. If you make the civil service more stultified, or make pay compression more extreme, you're going to have to contract more stuff out.People talk about the General Schedule [pay scale], but we haven't talked about the Federal Wage Schedule system at all, which is the blue-collar system that encompasses about 200,000 federal employees. Pay compression means those guys get paid really well. That means some managers rightfully think, "I'd like to have full-time supervision over some role, but I would rather contract it out, because I can get it a heck of a lot cheaper."There's a continuous relationship: If we make the civil service more stultified, we're going to push contracting out into more areas where maybe it wouldn't be appropriate. But a lot of things are always going to be appropriate to contract out. That means we need to give contracting officers and the people overseeing contracts a lot of discretion to carry out their missions, and not a lot of oversight from the Government Accountability Office or the courts about their bids, just like we shouldn't give OPM excess input into the civil service hiring process.This is a theme I keep harping on, on Statecraft. It’s counterintuitive from a reformer's perspective, but it’s true: if you want these processes to function better, you're going to have to stop nitpicking. You're going to have to ease up on the throttle and let people make their own decisions, even when sometimes you're not going to agree with them.This is a tension that's obviously happening in this administration. You've seen some clear interest in decentralization, and you've seen some centralization. In both the contract and the civil service sphere, the goal for the central agencies should be giving as many options as possible to the local managers, making sure they don't go extremely off the rails, but then giving those local managers and contracting officials the ability to make their own choices. The General Services Administration (GSA) under this administration is doing a lot of government-wide acquisition contracts. “We establish a contract for the whole government in the GSA. Usually you, the local manager, are not required to use that contract if you want computer services or whatever, but it's an option for you.”OPM should take a similar role. "Here's the system we have set up. You can take that and use it as you want. It's here for you, but it doesn't have to be used, because you might have some very particular hiring decisions to make.” Just like there shouldn't be one contracting decision that decides how we buy both a sheaf of computer paper and an aircraft carrier, there shouldn't be one hiring and firing process for a janitor and a nuclear physicist. That can't be a centralized process, because the very nature of human life is that there's an infinitude of possibilities that you need to allow for, and that means some amount of decentralization.I had an argument online recently about New York City’s “buy local” requirement for certain procurement contracts. When they want to build these big public toilets in New York City, they have to source all the toilet parts from within the state, even if they’re $200,000 cheaper in Portland, Oregon.I think it's crazy to ask procurement and contracting to solve all your policy problems. Procurement can’t be about keeping a healthy local toilet parts industry. You just need to procure the toilet.This is another area where you see similar overlap in some of the civil service and contracting issues. A lot of cities have residency requirements for many of their positions. If you work for the city, you have to live inside the city. In New York, that means you've got a lot of police officers living on Staten Island, or right on the line of the north side of the Bronx, where they're inches away from Westchester. That drives up costs, and limits your population of potential employees.One of the most amazing things to me about the Biden Bipartisan Infrastructure Law was that it encouraged contracting officers to use residency requirements: “You should try to localize your hiring and contracting into certain areas.” On a national level, that cancels out. If both Wyoming and Wisconsin use residency requirements, the net effect is not more people hired from one of those states! So often, people expect the civil service and contracting to solve all of our ills and to point the way forward for the rest of the economy on discrimination, hiring, pay, et cetera. That just leads to, by definition, government being a lot more expensive than the private sector.Over the next three and a half years, what would you like to see the administration do on civil service reform that they haven't already taken up?I think some of the broad-scale layoffs, which seem to be slowing down, were counterproductive. I do think that their ability to achieve their ends was limited by the nature of the reduction-in-force regulations, which made them more counterproductive than they had to be. That's the situation they inherited. But that didn't mean you had to lay off a lot of people without considering the particular jobs they were doing now.And hiring quite a few of them back.Yeah. There are also debates obviously, within the administration, between DOGE and Russ Vought [director of the OMB] and some others on this. Some things, like the Schedule Policy/Career — which is the revival of Schedule F in the first Trump administration — are largely a step in the right direction. Counter to some of the critics, it says, “You can remove someone if they're in a policymaking position, just like if they were completely at-will. But you still have to hire from the typical civil service system.” So, for those concerned about politicization, that doesn't undermine that, because they can't just pick someone from the party system to put in there. I think that's good.They recently had a suitability requirement rule that I think moved in the right direction. That says, “If someone's not suitable for the workforce, there are other ways to remove them besides the typical procedures.” The ideal system is going to require some congressional input: it’s to have a decentralization of hiring authority to individual managers. Which means the OPM — now under Scott Kupor, who has finally been confirmed — saying, "The OPM is here to assist you, federal managers. Make sure you stay within the broad lanes of what the administration's trying to accomplish. But once we give you your general goals, we're going to trust you to do that, including hiring.”I've mentioned it a few times, but part of the Chance to Compete Act — which was mentioned in one of Trump's Day One executive orders, people forget about this — was saying, “Implement the Chance to Compete Act to the maximum extent of the law.” Bring more subject-matter expertise into the hiring process, allow more discretion for managers and input into the hiring process. I think carrying that bipartisan reform out is going to be a big step, but it's going to take a lot more work. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 03m 02s | ||||||
| 8/7/25 | ![]() How to Be a Good Intelligence Analyst | Today we're joined by Dr. Rob Johnston. He's an anthropologist, an intelligence community veteran, and author of the cult classic Analytic Culture in the US Intelligence Community, a book so influential that it's required reading at DARPA. But first and foremost, Johnston is an ethnographer. His focus in that book is on how analysts actually produce intelligence analysis.Johnston answers a lot of questions I've had for a while about intelligence and spying, such as:* Why do we seem to get big predictions wrong so consistently?* Why can't the CIA find analysts who speak the language of the country they're analyzing?* Why do we prioritize expensive satellites over human intelligence?We also discuss a meta-question I always come back to on Statecraft: is being good at this stuff an art or a science? By “this stuff,” I’m referring to intelligence analysis, but I think that the question generalizes across policymaking. Would more formalizing and systematizing make our spies, diplomats, and EPA bureaucrats better? Or would it lead to more bureaucracy, more paper, and worse outcomes? How do you build processes in the government that actually make you better at your job?You can find the full transcript for this conversation at www.statecraft.pub. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.statecraft.pub | 1h 01m 26s | ||||||
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