The Hidden History of the Privatization of Everything

[Triana]

7. Clinton....

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President Clinton, the New Democrat, had warmer attitudes towards the role of government but followed the Reagan-Bush direction of smaller government.

In fact, Clinton succeeded where Reagan and Bush failed. Writing in 1997, the Heritage Foundation’s Ron Utt (who had been Reagan’s “privatization czar”) praised Clinton for pursuing “the boldest privatization agenda put forth by any American president to date,” and noted that his proposals were “virtually all drawn from recommendations made in 1988 by President Reagan’s Commission on Privatization.” In 2006 Reason Foundation’s Robert Poole declared that “the Clinton administration’s privatization successes exceeded those of Reagan.”

In the first year of his administration Clinton assigned Vice President Gore to oversee a major initiative to “reinvent” government under the auspices of an intergovernmental task force, the National Performance Review (NPR). Clinton embraced the ideas popularized by David Osborne and Ted Gaebler, in their 1992 bestseller Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector, and later on by a follow-up book by Osborne and Peter Plastrik, Banishing Bureaucracy.

The Gore initiative was about making the federal government more effective, but the idea of privatization was also baked in from the start, as it was in Osborne and Gaebler’s work.

Clinton’s 1992 campaign promises included a plan to cut 100,000 federal jobs. Downsizing was a significant part of the plan and further baked in pressure to contract out public services and functions that still needed to be performed.

In 1995 President Clinton asked Vice President Gore and the task force to identify programs that could be reinvented, terminated, privatized, or sold. Each agency identified potential functions to privatize including the Seafood Inspection Service, the OSHA and MSHA Accreditation Process, the Office of Personnel Management’s background investigations service (which became USIS, the company that performed background checks on contractors including Edward Snowden and was found to be “flushing” background checks to meet monthly quotas ), the DOL Penalty and Debt Collection, and the Federal Helium Program.

Perhaps Clinton’s most significant contribution to privatization was ideological. The NPR reports redefined government services in market terms – “citizens” became “customers” of public services and competition became a guiding management principle. The NPR’s final recommendations (1995) called for “more competition, more privatization,” an idea first articulated by Friedman and Savas, who called in 1971 for “competition to reduce the monopolistic control many governments have over their customers.”