The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Thursday, July 6, 1995                 TAG: 9507060008
SECTION: FRONT                    PAGE: A8   EDITION: FINAL 
TYPE: Editorial 
                                             LENGTH: Medium:   58 lines

SHRINKING THE FEDERAL GOVERNMENT FORMULA FOR SUCCESS?

You could easily have missed the trend amid all the talk about the need to cut a bloated the federal government down to size, but in reality the civilian government work force has been shrinking.

The number of federal civil servants has slipped from 3 million at the end of the 1980s to 2.8 million. During the same period, the U.S. economy added 8 million jobs. Federal jobs, excluding the military, now represent the smallest percentage of all U.S. jobs since just before Americans marched off to fight World War II.

Spending on federal programs is another matter. That has not been shrinking. It gets bigger and bigger - and will continue to do so.

But now that the Republican-controlled Congress and President Clinton agree that the federal budget must be balanced within a decade, there's more than an even chance that the growth of federal spending will slow and shrink in comparison with gross domestic product.

The odds that this will happen rise if the Republican Congress eliminates many of the programs it judges as harmful and simply refuses to vote funds for others that Mr. Clinton could be expected to veto.

Defunded programs would still be law, but without money, they would be inoperative. The Wall Street Journal reported recently that the Republican majority on the House Budget Committee hopes to defund 62 programs, including tightened meat and poultry inspection, the ``motor voter'' law that aims to boost voter registration, the Endangered Species Act and the indoor-air-quality standards.

Republican congressional leaders argue that a smaller and less costly federal government will improve Americans' lot by easing the burden of taxation and regulation, freeing individuals and corporations to make better use of their own resources and free-market forces.

Hope that's so, because a sea change in politics portends substantial changes in what Washington does, how it does it and the size of the work force doing it.

Meanwhile, the shifting of responsibilities from Washington to state and local governments challenge the latter to do more with less.

If shrinking government boosts the fortunes of the mass of Americans, who have been losing economic ground for two decades, they will be applauded. But that's far from assured: The globalization of the economy, the vanishing of well-paid industrial jobs and the downward pressure on compensation create turbulence that darkens the near-term outlook for tens of millions of American wage earners.

Americans are testy, as shown by the rejection of George Bush (more than the embrace of Bill Clinton) in the last presidential election and by the wholesale rejection of Democrats nationwide in the last congressional and state elections. Testiness could turn to nastiness if prospects for the many don't brighten. by CNB