ADMINISTRATION

Executive Brief

Sat. May 3, 2008


No Bulls or Bears at the TSP

The Thrift Savings Plan, which runs federal employees' retirement investment funds, has a message for its members: The TSP is not a trading floor. It's not E*Trade. It's a group of funds that move with the financial markets. And the frequent trades that some TSP participants are using to try to stay ahead of the market must stop.

"By misappropriating language used in the capital markets (buys, sells, trades), some TSP participants give the impression that their frequent interfund transfers are trades in and out of the market which affect only their own funds. This is incorrect," Gregory Long, executive director of the TSP's board, wrote when he issued a regulation limiting TSP members to two transfers between funds a month.

Long and fellow board members say that frequently transferring money between funds runs up huge costs (as much as $16 million for a single fund in a single year) that could be more profitably invested. Frequent traders, many of whom received initial warnings in January, say they should be able to do whatever they want with their money.

If the stock market continues to fluctuate, investors in the TSP's index funds may step up pressure to keep matters in their own hands.--Alyssa Rosenberg/Government Executive

Technology Limits for the Next Administration

Key federal information-technology efforts will miss deadlines this year, spending will remain flat, and funding not sucked up for the Iraq and Afghanistan conflicts will go primarily for improving disaster recovery, consolidating infrastructure, and replacing or upgrading servers and software, according to technology consultants at Forrester Research in Cambridge, Mass.

They predicted that federal agencies will mount few new tech projects in 2008 or 2009 and that only in 2010 will funding shake loose for the priorities of a new presidential administration. On April 25, Forrester published "Government IT Spending in 2008: More Work to Do With Smaller Funding Increases." Federal IT consultants at INPUT in Reston, Va., are more pessimistic, contending that the next administration won't recast the budget until fiscal 2011.

Forrester surveyed 151 government and 1,082 nongovernment IT decision makers. Forty percent hope to hire contractors for major software implementations this year; 28 percent said that cutting IT spending is a top priority. And in a display of contrariness, survey participants said they are increasingly interested in taking back outsourced services and in outsourcing more services.--Anne Laurent/Government Executive

More Operation Jump Start, Please

Frustrated by Washington's failure to deliver immigration reform, the governors of Arizona, California, and New Mexico say that the feds should keep footing the bill for the 6,000 National Guard troops who have been stationed on the southern border since 2006. But the Bush administration's budget still plans to end Operation Jump Start this summer as scheduled.

President Bush ordered the Guard to help border patrol agents while the Homeland Security Department hired 6,000 more agents and beefed up physical and high-tech barriers. But the department hasn't hired all 6,000, and it just announced that it will scrap its costly and troubled "virtual fence" pilot project. So the governors are urging Congress to "extend and fully fund" Operation Jump Start in next year's budget. In an April 22 letter to House and Senate leaders, Govs. Janet Napolitano, Arnold Schwarzenegger, and Bill Richardson say, "It is irresponsible to phase out the current [federal] support of the National Guard without the infrastructure and full-time personnel to fill the gap."

A DHS spokeswoman called Operation Jump Start "a resounding success" but added that it's "an immediate, short-term" measure that has been fully funded and is scheduled to end this summer. Last July, as planned, the Guard began cutting back from 6,000 to 3,000 troops. In an e-mail, the spokeswoman said that DHS "is currently on track in the hiring of the 6,000 agents," but she could not say how many have been hired so far. Since Bush took office in 2001, the number of border patrol agents has gone from 9,000 to more than 16,000, with more than 14,000 on the southern border, she said.--Lisa Caruso/National Journal