The Trump Administration has Planted a Landmine in Federal Agencies

The outgoing administration has set a ticking time bomb for the incoming one, and planted it into every federal agency the president-elect is about to take over. Through executive action, President Donald Trump has gutted civil service protections, a four-year process that was undertaken to allow him to sweep out federal workers in his second term. Now that such a term isn’t in the cards for Trump, his lieutenants are busy making big changes in federal agencies, potentially upending the work lives of hundreds of thousands of federal employees, and sowing chaos in Joe Biden’s first 100 days. 

A race is on between those Trump die-hards and the incoming administration, as the Trump team looks to execute on powers they’ve aggregated before the Biden administration can act to stop them. 

Beginning in 2017, the Trump administration began to discuss creating a new federal worker classification, called Schedule F. It was finally implemented it by executive order on October 21. The new classification would allow Trump’s deputies to effectively hire and fire at will. At the end of every administration, some appointees attempt to “burrow in” – government-speak for converting their appointed roles into a career category, allowing them to stay despite the new regime. The changes under Schedule F could make that process much easier, by removing requirements that individuals applying for federal government jobs be qualified. And once those officials have successfully burrowed in, they’d have new powers at their disposal. The changes that the Trump administration has already sought under Schedule F would, for instance, remove protections for 88 percent of the employees in the critical Office of Management and Budget, and potentially many more agencies. The OMB, which crafts policy and budgeting across the federal government, is critical to Biden being able to implement much of his executive agenda.

The question, then, is how much damage the Trump appointees can do quickly, and how much of that can be undone. If Biden doesn’t make reversing the order an immediate priority, it’s easy to envision it getting lost amidst the chaotic first few months, and then forgotten, as Trump’s burrowed employees slash through the ranks of federal employees, replacing them with cronies. 

The order was crafted by James Sherk, a longtime former employee at the Heritage Foundation, who currently works for Trump’s Domestic Policy Council. It’s being implemented by Michael Rigas, a top official at the Office of Management and Budget and another Heritage alumni. An Intercept review of news stories shows that Heritage is one of the only organizations going on the record supporting Schedule F. 

The Trump administration has partnered closely with the conservative Heritage Foundation in the moves, which could benefit government contractors associated with Heritage. 

Per Trump’s order, Schedule F is a new schedule in the civil service that does not have protection from civil service rules that mandate cause in terminations and ensure due process for federal employees. The executive order authorizing Schedule F underscores the role that think tanks, with their contributor lists shielded from the public, play in crafting policy in Washington, where a single think tank with expertise in a particular area can dominate an administration’s approach to the issue, even if it cuts against 130-year-old laws guaranteeing a civil service independent of graft, bribery, patronage, or corporate influence. 

The Heritage Foundation, founded in 1973 with funds from the Coors family, has long been an integral part of the right in Washington, distinguishing it from the rival American Enterprise Institute by closely adhering to the GOP line on social issues. Civil service rules are a domain of expertise for Heritage Foundation President Kay Cole James, who led George W. Bush’s Office of Personnel Management, which oversees the administration of the civil service, from 2001 to 2004. James helped to lead the Trump transition for both the Office of Management and Budget and the Office of Personnel Management, agencies that are now implementing Schedule F. Heritage has published reports going back 20 years urging dramatic reforms to the civil service, effectively making federal employees at-will at the discretion of the president. 

In their public statements, Heritage officials have stated that they do not believe that the civil service should be a bulwark against executive overreach. “Imagine if you have a CEO of a company and they’re told, look you cannot do anything to discipline or dismiss managers who refuse to carry out your directives, or who actively try to thwart your initiatives,” Rachel Greszler, a research fellow at Heritage, told the Federal News Network in October.  “And that’s often the case right now within the federal government.”

The change in administrations is unlikely to change the influence think tanks have, with former Center for American Progress head Neera Tanden set to lead the Office of Management and Budget. (Although, in contrast to Heritage, CAP does release the identity of some of its donors.) The Obama administration oversaw an unprecedented weakening of civil service rules at the Department of Veterans Affairs.

The executive order could be a beachhead for a longer-term undermining of the civil service, whereby presidents will be able to exert much more authority over the 2.8 million-strong federal workforce, effectively reviving the patronage system banned by the Pendleton Act in 1883. For most of the first century of American government, federal jobs were considered spoils to dole out to the powerful backers of the victorious administration.

Schedule F is a “huge, broad new exception,” said John Hatton, the legislative director of the National Association of Active and Retired Federal Employees, a professional organization that has over 300,000 members. “It creates a whole new class of employees. The language of it is such that it could be interpreted very broadly, possibly as many as hundreds of thousands of federal employees. It goes against the idea of federal civil service, which is a career workforce with merit-based hiring and some due process.”

The impetus for the executive order came from a 19-page memo authored by Sherk in 2017, soon after he had joined the Trump administration from Heritage as a “Labor Policy Adviser.” The memo urged wide restrictions on the rights of unions, both within the federal government and without. 

“His memorandum was a blueprint for an absolute destruction of any kinds of protections any American workers could have from their union or from the government. It was extremely insidious,” said Jacqueline Simon, the public policy director at the American Federation of Government Employees, a labor union with 300,000 members. 

Of particular concern to some experts is the way that the proposed executive order could lead to the politicization of the government contracting process, by making it easier both to hire underqualified employees and remove government employees charged with procuring government services or in crafting procurement policy. Nearly all government contracting must be done by career civil servants, and some of the contracting requires significant subjective determination by those civil servants. “If you’re hired and have to prove your loyalty, then you don’t have fiduciary responsibility to the taxpayers you’re sworn only to adhere or show loyalty to whoever hired you,” said Simon.

Without civil service protections, a company that was looking for federal money could exert its influence to fire an employee who was unwilling to give the firm the contract, and replace them with a crony eager to let out the business. Civil service protections are designed to block that sort of arrangement.

Those types of companies are precisely the kind who fund the Heritage Foundation. Nick Schwellenbach, a senior investigator at the Project on Government Oversight, connected Heritage’s work on Schedule F to its connections to defense contractors. In 2015, The Intercept reported on emails that showed Heritage officials working closely with Lockheed Martin executives to save a weapons program facing cuts, and the think tank has frequently advocated not only for higher spending at the Pentagon, but specifically higher spending on individual weapons programs, including on Lockheed’s F-35 jet program, which has seen its projected costs balloon from $200 billion in 2001 to $1.5 trillion in 2017. (By contrast, the annual cost of the Temporary Assistance to Needy Families welfare program is $17 billion annually.)

“We wrote a report a decade ago called ‘Bad Business’ and we found that when we fully loaded out the cost of contracting out positions they often far exceeded the cost of a government employee. James Sherk specifically attacked our report and defended outsourcing,” said Schwellenbach. 

“When contracting officers raise questions, asking, ‘Should we even outsource this function, are we getting value for this contract?’ they could really piss off their superiors. Civil service protections are there to protect those employees.” 

While the Trump administration has not moved, as of now, to reclassify under Schedule F any employees of the Department of Defense, the Sherk memo urged exempting the entire Department of Defense from collective bargaining. But OMB, which includes the Office of Federal Procurement Policy, sets rules for the federal government’s purchasing operation. James has experience with the contracting process as well; she briefly worked for Mitchell Wade in 2005, who was later convicted and sent to prison for bribing then-Congressman Duke Cunningham, R-Calif., for his help acquiring federal contracts. 

“Lockheed Martin would prefer it if the procurement officers it dealt with were chastened and felt fear of asking the hard questions,” said Schwellenbach.