John, one of the biggest problems with federal pay scales is that there is no differentiation in pay between federal departments. A GS 15 with a B.A. in education at the Department of Education will make the same pay as a GS 15 supervisory aerospace engineer at NASA. In the private sector, we realize that people in some fields make more — much more — than those in others. But not so in government. Instead, we underpay government employees in highly technical, sought-after fields and overpay them in others.
But the real problem with the federal workforce is job security. It is nearly impossible to fire someone after his probationary period is over. Most federal managers deal with problem employees by moving them into jobs where they can do little harm — even if it means promoting them. When I was the director of the U.S. Commission on Civil Rights during the Reagan era, I managed to fire one employee (he had been accused of stealing money from the agency, repeatedly). And I had to go through a lengthy formal appeals and arbitration process that took nearly a year. Until federal workers can be fired for poor performance, we will continue to have a bloated federal workforce.