Who better to know where the federal government can save taxpayer dollars than federal employees?

That's the premise behind a bipartisan bill introduced by Sens. Rand Paul and Mark Warner. The legislation would allow federal agencies to give employees bonuses of up to $10,000 for identifying ways to save money.


Paul, a Kentucky Republican who is running for president, said the Bonuses for Cost-Cutters Act of 2015 is intended to "empower those on the front lines of federal spending to find efficiencies and improve productivity to return value to the taxpayer" and reduce the federal budget deficit.

Private companies, local governments and the military have long solicited employee suggestions for creative cost-cutting. Paul described the act as an effective tool to fight "bloat" in the federal government.

"Under the current law, federal employees have a perverse incentive to spend all of their agency's annual budget before the end of the year," Paul said in a statement. "Bonuses will reverse the incentive to the benefit of the employee and the taxpayer."

But the National Federation of Federal Employees, which represents 110,000 federal workers, said the proposal, which follows the sequester, furloughs and the October 2013 government shutdown, was insulting. The union warned it would create a "dog-eat-dog mentality."

"The largest problem with the legislation," said William R. Dougan, president of the National Federation of Federal Employees, "is that the authors make the assumption that pools of unused money are being hidden by federal agencies, and that by providing a financial incentive to uncover these treasure coves of unused funds, the federal government can save untold amounts of money.

"That premise is not only false, but it is insulting to the agency employees and congressional appropriators that meticulously construct an intricate multibillion-dollar agency budget.

"In reality, the opposite is true: Sequestration is strangling agency budgets and forcing federal employees to work with significantly fewer resources while Congress expects the same results."

The legislation would allow inspectors general at federal agencies to pay bonuses worth 10 percent of savings identified by employees, up to $10,000.

Warner, a Virginia Democrat, said the program would target "unneeded or surplus" end-of-year spending.

During the last week of the fiscal year, Warner said, spending by federal agencies is 4.9 times higher than the weekly average the rest of the year. Research has shown that the "quality" of that spending is lower than during the rest of the year, he said.

"When we empower federal employees to identify surplus funds instead of encouraging the 'use it or lose it' mentality, we are better stewards of taxpayers' dollars," Warner said in a statement.

Sen. Mike Enzi, a Wyoming Republican who is co-sponsoring the legislation, said, "It's the people holding the shovel who really know how to solve problems."

Paul sponsored a similar bill in 2013.

Aides to Paul point to the experience of the Securities and Exchange Commission, which solicited suggestions for saving money from employees in 2011.


The agency received 48 employee suggestions, according to Paul's office and adopted three proposals that added up to $50,000 a year in anticipated yearly savings.

The city of Phoenix saved at least $3.3 million through a similar suggestion program four years ago. Toyota has had a "Creative Idea Suggestion System" since 1951.

The Air Force in recent years has sought ideas from its personnel to improve efficiencies through an Airmen Powered by Innovation program and an Every Dollar Counts campaign.

Rep. C.A. Dutch Ruppersberger established a "gainsharing" program when he became Baltimore County executive in 1995. The program rewarded employees for making improvements that increased revenues or reduced costs.

Employees in the county's dietary division and the Parks and Recreation Department received bonuses that ranged from $200 to $500 for helping save about $200,000 in the first year.

"We support gainsharing as a general principle," said Jaime Lennon, a spokeswoman for Ruppersberger. "We saw that it improved employee morale as well as cut costs at the county level."

But Lennon said the congressman "would have to take a closer look at the specifics" of the Senate legislation before taking a position on it."

Dougan, the union president, said the legislation was too simple an idea to work on the federal level.

"This budgeting process is not easily understood, and incorporates countless fund swaps throughout the year to ensure funding stabilities," he said. "Providing a substantial financial incentive to employees not familiar with the complex budgeting and accounting practices used in developing and implementing massive agency budgets is a recipe for headache, confusion and unnecessary administrative work.

"Rather than creating a dog-eat-dog mentality among federal employees, senators should work on restoring agency budgets so federal employees are properly funded to carry out the work of the American people."