U.S. GOVERNMENT PRINTING OFFICE

66–086 cc WASHINGTON : 2000

S. Hrg. 106–722

HAS GOVERNMENT BEEN ‘‘REINVENTED’’?

HEARING

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT,

RESTRUCTURING, AND THE DISTRICT OF COLUMBIA

SUBCOMMITTEE

OF THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

May 4, 2000

Printed for the use of the Committee on Governmental Affairs

(

For sale by the Superintendent of Documents, Congressional Sales Office

U.S. Government Printing Office, Washington, DC 20402

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COMMITTEE ON GOVERNMENTAL AFFAIRS

FRED THOMPSON, Tennessee, Chairman

WILLIAM V. ROTH, Jr., Delaware

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

ARLEN SPECTER, Pennsylvania

JUDD GREGG, New Hampshire

JOSEPH I. LIEBERMAN, Connecticut

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

JOHN EDWARDS, North Carolina

HANNAH S. SISTARE, Staff Director and Counsel

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel

DARLA D. CASSELL, Administrive Clerk

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT,

RESTRUCTURING, AND THE DISTRICT OF COLUMBIA

GEORGE V. VOINOVICH, Ohio, Chairman

WILLIAM V. ROTH, Jr., Delaware

JUDD GREGG, New Hampshire

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

Kristine I. Simmons, Staff Director

Marianne Clifford Upton, Minority Staff Director and Chief Counsel

Julie L. Vincent, Chief Clerk

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C O N T E N T S

Opening statements: Page

Senator Voinovich ............................................................................................. 1

Senator Durbin ................................................................................................. 3

Senator Thompson ............................................................................................ 4

WITNESSES

THURSDAY, MAY 4, 2000

J. Christopher Mihm, Associate Director, Federal Management and Workforce

Issues, General Government Division, U.S. General Accounting Office ......... 6

Paul C. Light, Vice President and Director of Governmental Studies, The

Brookings Institution ........................................................................................... 8

Donald F. Kettl, Professor of Political Science and Public Affairs, LaFollette

Institute of Public Affairs, University of Wisconsin-Madison, The Brookings

Institution ............................................................................................................. 10

Ronald C. Moe, Project Coordinator, Government and Finance Division, Congressional Research Service, The Library of Congress ..................................... 12

Scott A. Hodge, Director of Tax and Budget Policy, Citizens for a Sound

Economy Foundation ........................................................................................... 14

ALPHABETICAL LIST OF WITNESSES

Hodge, Scott A.:

Testimony .......................................................................................................... 14

Prepared statement .......................................................................................... 80

Kettl, Donald F.:

Testimony .......................................................................................................... 10

Prepared statement with attachments ........................................................... 59

Light, Paul C.:

Testimony .......................................................................................................... 8

Prepared statement .......................................................................................... 51

Mihm, J. Christopher:

Testimony .......................................................................................................... 6

Prepared statement .......................................................................................... 33

Moe, Ronald C.:

Testimony .......................................................................................................... 12

Prepared statement .......................................................................................... 70

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HAS GOVERNMENT BEEN ‘‘REINVENTED’’?

THURSDAY, MAY 4, 2000

U.S. SENATE, OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE, OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS, Washington, DC.

The Subcommittee met, pursuant to notice, at 10:08 a.m., in

room SD–342, Dirksen Senate Office Building, Hon. George V.

Voinovich, Chairman of the Subcommittee, presiding.

Present: Senators Voinovich, Durbin, and Thompson.

OPENING STATEMENT OF SENATOR VOINOVICH

Senator VOINOVICH. The hearing will come to order.

Good morning and welcome. Today the Subcommittee on Oversight of Government Management will examine the National Partnership for Reinventing Government, known more commonly by its

abbreviatin NPR. Initiated in March 1993, NPR’s stated goal was

to ‘‘create a government that works better, costs less, and achieves

the results Americans care about.’’

It is now the Federal Government’s longest-running government

reform initiative, and on that I congratulate them. I have learned

from my own experience that you can’t make any systemic change

without a long-term commitment.

This morning, though, I would like to look beyond the longevity

of NPR to learn more about what it has and has not accomplished.

This fits in with the Subcommittee’s larger goal of considering

where we have been and where we need to go to ensure that the

Federal Government is prepared to meet the challenges of the next

century.

As many of you know, prior to my election, I served on the executive side of government for over 26 years as a county commissioner,

mayor, and governor. I was very much involved in management

and audits and what can be achieved with them and sometimes

what cannot be achieved with them.

In fact, I will never forget that when I ran for commissioner, I

said we are going to get in the bowels of county government, and

as mayor, I said the bowels of the city government. Senator Thompson, you might be interested to know when I came to Washington,

they took me literally, and put me in the bowels of the Dirksen

Building. [Laughter.]

But my motto for State Government was to work harder and

smarter and do more with less. We established the Operations ImVerDate 11-MAY-2000 13:30 Nov 13, 2000 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 66086.TXT SAFFAIRS PsN: SAFFAIRS
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provement Task Force and public-private partnerships on the State

level, and they were very, very worthwhile.

So I am very interested in the NPR management initiative. What

has it accomplished? And where do we have to go? In other words,

let’s build on its successes, identify the weaknesses, and see if we

can’t address them.

Unfortunately, I cannot ask the Director of NPR, Morley

Winograd, questions about the program. Although officially invited

almost a month in advance, Mr. Winograd has declined our invitation to be the lead witness or to send a deputy to discuss NPR’s

record.

NPR has taken on an operational role, acting on its own as an

agent of change in the government. It would have been appropriate

for NPR to have been represented here this morning, and I am

deeply disappointed that they chose not to participate. I would like

to read a letter that I received from Ronna Freiberg, Director of

Legislative Affairs, Office of the Vice President. I received this letter yesterday, as a matter of fact.

It says, ‘‘Mr. Chairman: Thank you for your letter to Morley

Winograd inviting him to testify at the Subcommittee’s hearing on

reinventing government. We regret that it will be impossible for

him to testify. Mr. Winograd is the Director of the National Partnership for Reinventing Government, an interagency task force.

Mr. Winograd is on the staff of the Executive Office of the President, and advises both the President and Vice President on matters

pertaining to the task force. He was appointed by the President

without Senate confirmation.’’

‘‘Congressional requests to the White House in furtherance of

congressional oversight of White House policy initiatives raise significant issues regarding the confidentiality of Presidential decision

making. As you will appreciate, given comparable concerns voiced

during the previous administration, it has been the practice to direct oversight requests to Executive Branch agencies in order to

avoid addressing these confidentiality concerns unnecessarily.’’

‘‘You have identified a number of topics on which information is

available from the Office of Management and Budget and other Executive Branch agencies. We suggest that you first direct your request to the Office of Management and Budget and other agencies

directly involved in the reinvention effort. The Senate-confirmed

members of the administration at these agencies can provide more

formal testimony.’’

‘‘We recognize the importance you place on government management issues, and we appreciate very much your continuing interest

in the National Partnership for Reinventing Government.’’

I think this letter speaks for itself.

The questions the Subcommittee is raising are very important for

this reason: In 9 months, a new administration is going to take office. The next President will face an array of very serious problems,

particularly in the management of human capital, that will demand immediate attention. For example, by 2004, over 900,000

Federal employees will be eligible to retire. An honest assessment

of NPR’s accomplishment will be instructive in this effort and will

give the new administration a better sense of what has worked,

what has not, and, more important, what remains undone. I hope

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our Subcommittee hearing today is going to be helpful in providing

that assessment.

Now, let me repeat NPR’s mission statement: ‘‘In time for 21st

Century, reinvent government to work better, cost less, and get results Americans care about today.’’ Today we will hear differing

opinions as to whether NPR has indeed fulfilled this mission, and

I look forward to the testimony.

I now yield to our Ranking Member of the Subcommittee, my

friend Senator Durbin, for an opening statement.

OPENING STATEMENT OF SENATOR DURBIN

Senator DURBIN. Thank you, Mr. Chairman. I have just been

conferring with my staff here to ask whether this is unprecedented

for a senior adviser in the administration not to appear. It seems

unusual to me, but I am told that I guess that has been a custom—

I would like to check into that—that they usually refer this to the

OMB and they send somebody. And I don’t know the answer to

that——

Senator VOINOVICH. Well, the thing that bothers me is I received

this letter yesterday.

Senator DURBIN. No excuse for that. You should have been notified far in advance so you could make plans for your hearing. I

agree with you completely on that score.

And I want to thank you for these hearings because I think they

have been very positive, and I think that the administration should

be cooperating in this effort to look to the future and what we are

going to do to reinvent government. And I think they have a good

record to point to in terms of what they have accomplished over the

last several years.

I think it is interesting to note that Vice President Gore in this

reinvention of government often made reference to this book by

David Osborne and Ted Gaebler on reinventing government. Maybe

one of the more inspiring passages in this book is from Governor

Voinovich of Ohio, who said in his inaugural address, ‘‘Gone are

the days when public officials are measured by how much they

spend on a problem. The new realities dictate that public officials

are now judged by whether they can work harder and smarter and

do more with less.’’

I bet you thought that was going to be a dangerous quote, but

it is a good one. And it should have been, and I believe was, an

inspiration to a lot of people who were involved in reinventing government. And I think they have some things to point to that in the

course of the last 7 years really show some progress.

We believe that they have recommended and Congress has

adopted savings of over $136 billion due to reinventing government. They recommended a series of government procurement reforms which Congress adopted. Over the last 7 years, those

changes have saved taxpayers more than $12 billion. More than

1,200 Hammer Award teams have been honored for reinvention efforts that they estimate will save over $37 billion. And, of course,

the Federal civilian workforce has been reduced by 17 percent, or

377,000 full-time equivalent employees, as a result, the smallest

Federal workforce in 39 years.

4

I believe, Senator Voinovich—and I don’t want to speak for him

here, but I believe we share some concerns about contracting out

and privatization and whether or not we are getting good service

for those decisions, and we can certainly look into them as part of

this effort.

One of the things that I find interesting is the dramatic turnaround in a short period of time in the public view of the Federal

Government. This is interesting. After a 30-year decline, public

trust in the Federal Government is finally increasing. In 1964,

when the University of Michigan’s Institute for Social Research

asked the question, ‘‘Do you trust the Federal Government to do

the right things most of the time?’’ 76 percent of Americans said

‘‘yes’’ in 1964. By 1994, public response to this question had plummeted to 21 percent, so a dramatic decline, 76 percent to 21 percent in a period of 30 years.

When measured last in 1998, public trust levels had nearly doubled, up to 40 percent, so at least we have a positive trend in that

direction.

I will close by saying that it was interesting when we had our

last hearing and talked about the complaints that Federal employees had about the Federal Government, that one of the things that

they complained about was they don’t believe that they were being

rewarded—in fact, being punished many times—for creative thinking. And if we are going to make reinvention work, we have to

start rewarding creative thinking, letting people rock the boat a little bit to force us out of a status quo mentality. And that is a challenge to each of us, I am sure, in our offices as Senators, and it

is a challenge to every agency to be open and receptive to new

ideas that might step on a few toes in the process.

I thank you for this hearing. I am sorry the administration didn’t

get back to you sooner and didn’t get back to you with a more favorable response.

Senator VOINOVICH. Thank you, Senator Durbin.

We are fortunate today that we have with us the Chairman of

the Governmental Affairs Committee, Senator Fred Thompson. Mr.

Chairman, I understand that you would like to make an opening

statement.

OPENING STATEMENT OF CHAIRMAN THOMPSON

Chairman THOMPSON. Thank you, Mr. Chairman. I appreciate

your having this hearing on a subject that has been very important

to all of us on this Committee.

We have just gotten our first performance reports from the agencies under the Results Act, and so little by little perhaps we are

making some progress in terms of some of these management

issues, although we have an awful lot to do.

On this issue concerning Morley Winograd’s failure to be here—

and I read the letter that came from the Vice President’s office very

carefully, and I think it is remarkable, to say the least. What they

are doing, Mr. Chairman, is the Vice President’s office is claiming

executive privilege with regard to the President.

Now, first of all, it is totally inappropriate. This has nothing to

do with communications covered by executive privilege. Second, I

can’t count the number of press conferences that they have had.

5

They are on the Internet. They have never missed an opportunity

to talk about this. And yet when we have an oversight hearing to

ask them some questions about some of the claims that they are

making, they claim executive privilege because the Executive Office

of the President is involved, someone is under that general umbrella.

The Executive Office of the President is frequently the subject of

oversight hearings. The President’s own counsel on more than one

occasion has testified. Bernie Nussbaum and Charles Ruff testified

before this Subcommittee just last month. His successor, Beth

Nolan, testified before the House Government Reform and Oversight Committee.

So, clearly, this is a bogus claim, and the real question is why

in the world would these people do this on something that they are

proud of and something that they want to tout and share.

I don’t think we ought to, just as a matter of course, accept these

bogus positions, and if you want Mr. Winograd to testify—and I noticed they said they would send somebody from OMB if they were

confirmed. Well, of course, that lets Ms. Katzen out. That is a little

shot at you, I assume, Mr. Chairman, and me because she has not

been confirmed. But if you want Mr. Winograd and Ms. Katzen up

here, we will convene the full Committee and take up the issue of

subpoenas.

It is hard for me to understand when we are trying to understand something that has been in the press and the media and

talked about for so long.

I was generally pleased to see this effort start because you don’t

have to have necessarily revolutionary results in order to get something positive done. And any positive thing that could be done

ought to be welcomed by all of us.

We still have tremendous problems. You look at the duplication

in government, for example, 12 different Federal agencies administer over 35 different food safety laws; one agency regulates pizza

with meat toppings while another agency regulates non-meat pizzas; 50 different programs administered by 8 agencies assist the

homeless. The GAO and inspectors general came up to our Committee. We have identified $220 billion of waste, fraud, and abuse,

$35 billion in just 1 year. And yet we still seem to have the same

core performance problems facing the government that we have always had. Every time the GAO updates its high-risk list of Federal

activities most vulnerable to waste, fraud, and mismanagement,

the number of problems increase.

GAO started with 14 high-risk problems back in 1990. Its most

recent list issued last year contained 26 high-risk problems. Only

one high-risk problem has been removed from the list since 1995.

Ten of the 14 original high-risk problems from 1990 are still on the

list today, a decade later.

So we have got substantial problems, and I think that this effort

that we are dealing with today made some modest achievements,

but they are overshadowed by their wildly exaggerated claims. And

we will get into that today and see what the testimony is.

But thank you for having this hearing, and perhaps eventually

we might even get to hear from somebody who is running these

programs. Thank you.

6

1The prepared statement of Mr. Mihm appears in the Appendix on page 33.

Senator VOINOVICH. Thank you, Mr. Chairman.

I would now like to introduce today’s witnesses, and I have asked

them to address a variety of issues associated with NPR such as

the downsizings and savings attributed to NPR actions. Today we

have with us Christopher Mihm, Associate Director of Federal

Management and Workforce Issues at the U.S. General Accounting

Office. We are glad to have you again here before us, Mr. Mihm.

Paul C. Light is the Vice President and Director of the Governmental Studies Program at the Brookings Institution. We are glad

to have you here, Mr. Light. I have read your book.

Mr. Kettl is with us today. He is a Professor of Political Science

and Public Affairs at the LaFollette Institute of Public Affairs at

the University of Wisconsin-Madison. Mr. Kettl, thank you for coming.

Ronald C. Moe is the Project Coordinator in the Government and

Finance Division of the Congressional Research Service. He is also

a Professor at the Center for the Study of American Government

at Johns Hopkins University. We are glad to have you here, Mr.

Moe.

And last, but not least, is Scott A. Hodge, the Director of Tax and

Budget Policy at the Citizens for a Sound Economy.

We have a good cross-section of witnesses here today. We thank

you all for coming, and if you will stand, as is the custom in this

Subcommittee, I would like you to take an oath. Do you swear that

the testimony you are about to give before this Subcommittee is the

truth, the whole truth, and nothing but the truth, so help you,

God?

Mr. MIHM. I do.

Mr. LIGHT. I do.

Mr. KETTL. I do.

Mr. MOE. I do.

Mr. HODGE. I do.

Senator VOINOVICH. Let the record show that all of the witnesses

answered in the affirmative. We would like to start out with you,

Mr. Mihm, and I would ask you to limit your testimony to no more

than 5 minutes. Hopefully through the questioning period some of

the other issues that you would like to get on the table will come

out at that time.

Mr. Mihm.

TESTIMONY OF J. CHRISTOPHER MIHM,1 ASSOCIATE DIRECTOR, FEDERAL MANAGEMENT AND WORKFORCE ISSUES,

GENERAL GOVERNMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE

Mr. MIHM. Thank you, Mr. Chairman. Mr. Chairman, Senator

Durbin, Senator Thompson, it is a great honor to appear before you

this morning to discuss the management reform efforts conducted

by the National Partnership for Reinventing Government and the

continuing management improvement agenda facing Federal decisionmakers as we move to the next Congress and next administration.

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As you know, NPR has been one of the largest and longest sustained and best known Executive Branch management reform initiatives in the Nation’s history. However, the NPR efforts were not

undertaken in isolation of other management reforms. Indeed, reflecting widespread interest in reforming government, Congress,

the administration, and Federal agencies themselves all have undertaken ambitious and largely consistent management reform

agendas in the last decade.

NPR attempted to build on these ongoing efforts. By their very

nature, therefore, successful management reform efforts often entail concerted efforts on the part of agencies, leadership and followthrough on the particular of central management agencies and the

administration, and critical support and oversight from Congress.

My point here is that, given the interaction of these elements,

any attempt to isolate the specific contributions of any one entity

separate from those of other entities is generally not possible to do.

My prepared statement summarizes our observations on aspects of

the National Performance Review where we have done work on a

government-wide perspective. This work covers NPR’s cost savings

estimates, downsizing initiative, reinvention laboratories, and acquisition and regulatory reform efforts.

As you requested, Mr. Chairman, I will touch on just two of these

this morning: The savings estimates and downsizing.

First, in regard to the savings estimates, we reported in July

1999 that NPR claimed savings from agency-specific recommendations that could not be fully attributed to its efforts. NPR claimed

that about $137 billion in savings had resulted from its efforts to

reinvent the Federal Government, with about $44.3 billion of these

savings claimed from recommendations that were targeted at individual agencies.

We reviewed six recommendations—these recommendations

represented over two-thirds of that $44.3 billion—and found the

relationship between the NPR recommendations and the reported

savings simply was not clear. The savings estimates could not be

replicated, and there was no way to substantiate the savings that

had been claimed. NPR relied on OMB to estimate the savings

from its recommendations, and OMB generally did not attempt to

distinguish NPR’s contributions from other initiatives or factors

that influenced budget decisions.

In regards to downsizing, as a result of legislation, Executive

Branch efforts, including those of the National Performance Review, and other budget and program pressures, the Federal Government is clearly smaller today than it was in the early 1990’s as

measured by the number of employees on board. Nevertheless, the

manner in which this downsizing was implemented has short- and

long-term implications that require continuing attention.

For example, it is by no means clear that the current Federal

workforce is adequately balanced and positioned to achieve results

and meet agency missions. This is due in part to an apparent lack

of adequate strategic and workforce planning across the Federal

Government. Moreover, most major agencies’ fiscal year 2000—that

is, of course, the current fiscal year—annual performance plans

that were prepared under the Government Performance and ReVerDate 11-MAY-2000 13:30 Nov 13, 2000 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 66086.TXT SAFFAIRS PsN: SAFFAIRS
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1The prepared statement of Mr. Light appears in the Appendix on page 51.

sults Act did not sufficiently address how agencies will use their

human capital, that is, their people, to achieve results.

This suggests that one of the critical components of high-performing organizations—that is, the systematic integration of

human capital planning and program planning—is not being adequately addressed across the Federal Government.

Overall, the next Congress and the administration will face a series of longstanding management problems that will continue to demand their attention. My prepared statement highlights just a few

of these more important management problems facing the government, many of which, Mr. Chairman, you touched on in your opening statement.

These pressing management problems include the critical need to

adopt a results orientation, coordinate cross-cutting program, as

Senator Thompson mentioned, address the Federal high-risk functions and programs, develop and implement modern human capital

practices, which, Mr. Chairman, as you mentioned—and we certainly concur—is among the most pressing problems we face,

strengthen financial management, and enhance computer security.

The longstanding problems and issues confronting the next Congress and administration are stimulating new efforts to reform the

Federal Government from this Subcommittee, of course, from the

full Committee, and elsewhere. In previous appearances before this

Subcommittee, I have identified a number of factors that are critical to making fundamental improvements in the performance of

the Federal Government. Demonstrated executive leadership commitment and accountability for change and strong and continuing

congressional involvement are among those critical factors. In this

regard, we look forward to continuing to work with the Subcommittee and to assist it in its efforts to create high-performing

Federal organizations.

This concludes my statement, and I would be happy to answer

any questions the Subcommittee may have.

Senator VOINOVICH. Thank you, Mr. Mihm. I think, if it is all

right with you, Senator Durbin, and Senator Thompson, that we

ought to let all the witnesses testify and then ask our questions.

Mr. Light.

TESTIMONY OF PAUL C. LIGHT,1 VICE PRESIDENT AND DIRECTOR OF GOVERNMENTAL STUDIES, THE BROOKINGS INSTITUTION

Mr. LIGHT. Thank you. It is terrific to appear before this Subcommittee again. It is always wonderful to be the reader of something I have written. They are so rare and few in number, so I appreciate your attention.

Let me start by saying that, having sat where the staff of this

fine Committee and Subcommittee, I take umbrage at the notion

that a White House official would not want to testify before the

Subcommittee. This Subcommittee has endured, all of you have endured enough long hearings—‘‘my eyes glaze over’’ hearings, as

Senator Glenn used to refer to them—that you deserve the cooperation of everybody involved in this very difficult effort to make govVerDate 11-MAY-2000 13:30 Nov 13, 2000 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 66086.TXT SAFFAIRS PsN: SAFFAIRS
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ernment work better. So I am sorry that you don’t have the benefit

of that testimony, and I hope that you can find other ways to get

that input.

I thought I would just briefly summarize my likes and dislikes

about reinventing government, just briefly run through those

issues. I think there is a lot to admire here. I think there is a lot

that we can say was good about reinventing government, not to put

it in the past tense. I think Don Kettl here talks about this as

being an ongoing effort that really has been ongoing for 50 years.

You can’t separate reinventing government, the current version,

from many of the efforts that have come before, including Nixon’s

effort to improve government dating back to the Hoover Commission’s and beyond. This is a long effort that we are in. So let me

just focus on two likes and three dislikes.

The first like is the rhetoric. I like how reinventing government

talks about Federal service. I like the general approach that we

have decent, hard-working people in government and that we need

to figure out ways to give them the tools to do their work. I think

that is an important message to send. And it has been useful.

I think it has been an honorable kind of rhetoric over the last

8 years, and it actually began some years before that. But it is good

when our leaders talk about the honorable role of public service

this country, and I admire that, and I like the notion that the underpinning theme here was of good people trapped in bad systems.

I think that really is the problem, and I think that is what you all

have been working on. You haven’t been working on bad people

trapped in good systems. You have been working on good people

trapped in bad systems, and I think that is good rhetoric.

I think there has been a fair amount of action, much of it that

originated in this Subcommittee. That is one of the issues that we

need to address, that when you look at the Government Performance and Results Act, you look at acquisitions reform, these bills

were here in this Subcommittee for years before the Clinton-Gore

administration took office. This Subcommittee has been working on

these issues under a bipartisan banner for many, many years, and

you gave the reinventors a number of tools to be successful, most

notably, I think, acquisition reform, which has been before this

Subcommittee for the better part of 20 years. And I think Stephen

Kellman, the Director of the Office of Federal Procurement Policy,

was a particularly important player in this, alongside the Subcommittee.

So I like the general directions in some areas, the desire to free

government from needless rules, the effort to spark innovation, the

acquisitions reform. I think there has been some real progress on

those fronts. It is not just cosmetic. Good stuff going on across the

board in terms of encouraging people to do the work they came to

government to do.

Let me point to three dislikes about reinventing government, and

I prepared this list before I arrived here this morning. I think there

has been an unnecessary politicization of government reform here.

This is hard work that needs to span both parties, and I think this

Subcommittee, in particular, has long operated under a bipartisan

flag, and I admire the Subcommittee for it.

10

1The prepared statement of Mr. Kettl appears in the Appendix on page 59.

Frankly, I always felt that if you couldn’t get bipartisan agreement on this Subcommittee, you just weren’t going to go anywhere

because you had so little interest on the floor of the Senate, that

if you all weren’t aligned, you couldn’t get very far. And I think

that is true of reinventing government or improving government.

I think it is important to seek the common ground.

I believe, too, that that there has been a lack of attention to

structural reform. I am looking at the Chairman of the full Committee on that. I think you should pass S. 2306. I think you should

attach it to every bill leaving this Committee and every bill leaving

the Senate. I have referred to the Federal organization chart as

rather like the mouth of the Ulonga-Bora River where the African

Queen and Humphrey Bogart got bogged down. I think that S.

2306 could be that gentle rain that lifts the Federal Government

out of the mouth of that swamp and gets it back on track. I think

it is time for a very detailed look at the structure of the Federal

Government, and that has to be done through legislation. I don’t

see any way you can do it otherwise.

And, finally, referring to the Chairman of this Committee whose

rhetoric on government work has been equally positive and uplifting, I think we have got to tackle the current condition of the public service. I think that is a real miss in reinventing government.

We just have not done anything to deal with the human service crisis in the Federal Government. We are dealing with a public service system, a civil service system that was designed for a workforce

that has not been to work for 50 years. And I encourage this Committee, this Subcommittee, the honorable Senators, to address that

crisis as soon as possible because it is going to be catching up with

us real soon.

Thanks for the opportunity to testify.

Senator VOINOVICH. Mr. Kettl.

STATEMENT OF DONALD F. KETTL,1 PROFESSOR OF POLITICAL SCIENCE AND PUBLIC AFFAIRS, LAFOLLETTE INSTITUTE OF PUBLIC AFFAIRS, UNIVERSITY OF WISCONSINMADISON, THE BROOKINGS INSTITUTION

Mr. KETTL. Mr. Chairman, I appreciate the opportunity to appear before you and Senator Durbin and Senator Thompson this

morning.

At the Brookings Institution for the last 7 years, I have been

leading an effort to try to assess what reinventing government, in

fact, has accomplished, and what I would like to try to do is to sum

up a quick scorecard of what the administration has, in fact, been

able to do.

If you look at the effort overall, even though it has been now 7

years in progress, the effort is still clearly incomplete for reasons

that I want to suggest at the end. But if you were to try to assign

a grade to the progress to date, I think overall I would give it a

B—substantial progress made, still some room for improvement in

a variety of areas.

In particular—and this is my second point—there has been a

substantial downsizing of the Federal workforce. There has been a

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considerable amount of criticism that, in fact, maybe the workforce

has not been downsized or has been replaced by contractors. In

fact, the Federal workforce is smaller than at any time in roughly

the last 30 years, and there is little evidence that the workforce

that has been downsized has been replaced by contractors. The

more important problem is whether or not we have right-sized the

workforce in the process.

If you look at the projections of the number of Federal employees

who are eligible to retire, somewhere between a third and a half

of all the Federal employees now in the workforce will not be there

at the end of the next President’s first term. And what that means

is we have no alternative but to confront the fundamental question

of what the Federal workforce ought to look like, what kind of

skills it ought to have to do the job that we know must be done,

and my concern is that the first 7 years of reinventing government

has not really addressed that question. The primary goal is to try

to reduce the workforce, to get people out the door. We haven’t

asked the question of what kind of workforce we are left with and

whether or not it is right-sized for the job that has to be done. And

my fear is that, in fact, it is not.

My third point is that if you look at some improvements, there

surely have been improvements in customer service and procurement reform. Even agencies that have been troubled, like the Internal Revenue Service, are now, in fact, at least better than they

were, and other agencies, like the Federal Emergency Management

Administration, which has made substantial progress, is now the

story that nobody writes about in the middle of major crises like

hurricanes and earthquakes.

There have been huge improvements in customer service, procurement reform, and the reinvention laboratories—my fourth

point—really demonstrate what can happen on the ground when

Federal employees are freed from the bad systems in which they

are often trapped. Huge and significant improvements have been

made.

My fifth point is that, despite the substantial improvements that

have been made, problem areas like the GAO high-risk area list

and OMB’s own priority management objective list have not been

addressed. And as you pointed out, Mr. Chairman, in many ways

these problems have gotten worse and not better. This is largely a

product of the fact that the reinventing government effort has not

been engaged in attacking these issue head-on, and as we have discovered already, these problems are not disappearing. And without

a fundamental attack on basic management systems, like information, like computer, like finance, like personnel, we will surely find

ourselves crippled as the workforce surely turns over.

My sixth point is that—and it is related to the previous one—the

applications of reinvention have been wildly uneven throughout the

Federal Government. Some agencies now are nothing remotely like

what they were 7 years ago. Others, such as the State Department

and the Commerce Department, have just simply not shown the

same level of progress. And one of the failures, I think, of reinventing government has been the difficulty of getting the effort implemented and energetically pursued by the administration’s own

political appointees throughout the administration.

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1The prepared statement of Mr. Moe appears in the Appendix on page 70.

My last and perhaps the most important point is that, while it

is easy to total up some wins and some problems and to overall

credit the administration with substantial improvement, the most

important point is that this is an effort that cannot, simply will not

end at the end of this administration. Whoever it is who is President in January of 2001 will simply have no alternative but to continue this effort. The name, the National Partnership for Reinventing Government, may be abolished. The office may be closed.

But whoever it is who is President will have no alternative but to

reinvent reinvention. And the reason is that the problems, whether

it is the IRS, whether it is difficulties in the human capital system,

the basic financial management and performance systems, the contract, the procurement systems, those are not going to go away.

They will continue to remain and, in fact, as the high-risk list

grows, the stakes will become even greater.

The real challenge is to find a way to put political will behind

that effort. That means the next administration will have to focus

the efforts of its own political appointees on the job of managing

the government. And it also means that we surely have to make

managing this large apparatus we call the Federal Government,

Federal programs, absolutely essential to the job of what the President and the Congress have to do.

Thank you, Mr. Chairman, for the opportunity to testify.

Senator VOINOVICH. Thank you, Mr. Kettl.

Mr. Moe.

STATEMENT OF RONALD C. MOE,1 PROJECT COORDINATOR,

GOVERNMENT AND FINANCE DIVISION, CONGRESSIONAL

RESEARCH SERVICE, THE LIBRARY OF CONGRESS

Mr. MOE. Mr. Chairman, thank you for inviting me to testify this

morning.

The reinvention exercise is not simply a number of new practices

adopted by the several agencies that together make for better management; rather, it is an exercise to fundamentally alter the character of the Executive Branch and congressional oversight role. The

goal of the reinventors has been to make the Executive Branch entrepreneurial in character, structured and operated like they believe a large private corporation is managed.

The critical issue facing Congress, and especially this Committee,

is whether the entrepreneurial model with its private corporate

bias is appropriate for the Executive Branch and whether the Congress as co-manager of the Executive Branch is enhanced or diminished by the entrepreneurial management model.

The basic question to be asked is: Are the governmental and private sectors alike or unalike in their essential characteristics? The

underlying premise of much of the reinventing government exercise

is that the governmental and private sectors are essentially alike

in the characteristics and best managed according to some business

sector principles.

What are these generic business principles? Well, the NPR tells

us that they are: Cast aside red tape, meaning laws, regulations,

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and so forth; satisfy customers, not citizens; decentralize authority

and work better and cost less.

The public law or constitutional theory of government management, which we have had since the founding of the Republic, in

contrast to the contemporary entrepreneurial theory, is based on

the premise that the government and private sector are fundamentally distinct. They are not alike in the essentials, and the applicability of business school aphorisms to government management is

much less than supposed.

The foundation of government management, according to the constitutionalists, is to be found in public law, not in the behavioral

practices and principles of business. In point of fact, the purpose

of the governmental sector is to implement the laws passed by Congress, not to please customers.

Indeed, the government interacts with citizens and, in so doing,

must follow certain constitutional principles. Even the use of the

term ‘‘customer’’ is misleading, as it is a term generally associated

with a commercial transaction between voluntary participants governed by private law.

The distinguishing characteristic of governmental management

contrasted to private management is that the actions of governmental officials must have their basis in public law, not in the

financial interests of private entrepreneurs and owners or in the fiduciary concerns of government and corporate managers.

The highest value promoted by public law management theory is

political accountability. The debate over the future of government

management, therefore, is not so much over whether the specifics

of the reinvention exercised resulted in better, or worse, short-term

results or whether or not actual savings were achieved or whether

or not we really have fewer employees, but is over which of two

fundamental value systems will prevail. Will it be the entrepreneurial management model with its priority of performance, however defined and measured, or the public law management model

with its priority of political accountability?

Lest this discussion sound a bit abstract, it needs to be recognized that the recent financial collapse of the privatized U.S. Enrichment Corporation and the rising debate over the status and

practices of Fannie Mae and other government-sponsored enterprises are a direct consequences of the problems associated with

mixing the governmental and private sectors in an entrepreneurial

model.

The role of Congress under these two managerial systems is very

different. The entrepreneurial management doctrine is managercentric, with Congress being viewed as largely an outside player

and nuisance, as illustrated by the gratuitous decision of the NPR

folks to not appear in front of this Subcommittee. In point of fact,

this Committee and the Congress of the United States manages the

Executive Branch, in large measure, through these general management laws, of which there are about 80. And it is a fact that

the Congress maintains its co-managerial role through these general management acts. Agencies seeking exceptions have to meet

the burden of proof. Law is the fundamental tool for managing the

Government of the United States, not Harvard Business School

aphorisms.

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1The prepared statement of Mr. Hodge appears in the Appendix on page 80.

Finally, I will say that the NPR is as important for what they

didn’t touch as for what they did address. In my written statement,

I go into some detail on this, but the four major issues, none of

which they discussed or addressed properly, include the issues associated with the heavy reliance in our system on short-term political appointees as managers; second, the intentional erosion in the

capacity of central management agencies, particularly the elimination of the management side of OMB in 1994, and the special

need for Office of Federal Management; three, the consequences of

growing reliance on contractors; and, fourth, the growth in the

quasi-government which threatens to eliminate many of the core

functions of government.

As to the question that prompted this hearing—Has government

been reinvented?—the answer appears mixed. At the operational

level, there has been significant change, much of it for the better.

At the level of conceptual and legal management, however, the results have not been as salutary. A case can be made that the core

competencies of government have eroded under NPR and are likely

to continue to erode.

We are probably the only major government in the world today

that does not have a separate central management agency. For

many, the answer to the question who is minding the store is: No

one.

Finally, the reinventing government exercise has essentially been

an exercise in altering certain incentives in the management practices and operations of government. Although many of the processes have been strengthened, it is debatable whether the central

core competencies of government have been strengthened or eroded

by the 7-year NPR exercise. Congress is wise to take a look at NPR

to determine just what philosophical direction they wish to take in

the future to protect their constitutional role as co-manager of the

Executive Branch.

Thank you, Mr. Chairman.

Senator VOINOVICH. Thank you, Mr. Moe. Mr. Hodge.

STATEMENT OF SCOTT A. HODGE,1 DIRECTOR OF TAX AND

BUDGET POLICY, CITIZENS FOR A SOUND ECONOMY FOUNDATION

Mr. HODGE. Thank you, Mr. Chairman, Senator Durbin, and

Senator Thompson.

As you mentioned earlier, Mr. Chairman, when Vice President Al

Gore did unveil what was then called the National Performance

Review 7 years ago, he promised that reinventing government

would make the government work better and cost less. And as I see

it today, after 7 years of what I like to think of as perfecting the

art of recycling paper clips, there is simply too much evidence to

deny that the Federal Government now works worse and costs

more. Government spending has escalated to record levels. Half of

all government agencies cannot produce auditable books. Serious

mismanagement, as GAO has pointed out, continues to plague most

Federal agencies. Redundancy and duplication abound, and many

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government programs have simply become immortalized in the

Federal budget.

The bottom line is that reinventing government has failed to cure

the widespread cancer of waste, fraud, abuse, and mismanagement

that is crippling the Federal Government. These problems are continuing because the administration has tinkered with the process

of government rather than go in and analyze and determine the

substance of what government should and should not do. As a result, we get process-oriented pseudo-reforms that may make the

bureaucracy oftentimes work better for the bureaucrats, but not

work better and cost less for the citizens.

I think a classic example of this is the Plain English Award that

the Vice President gave to a Department of Agriculture employee

about 2 years ago for rewriting the USDA instructions for cooking

a Thanksgiving turkey. Now, remarkably, no one in the administration, no one in the bureaucracy asked why are we spending taxpayer money to write recipes for cooking Thanksgiving turkeys

when we have successfully done that for about 300 years since the

first Thanksgiving.

But a more serious issue is that reinventing government has

failed to get Federal agencies to do its most basic function: Account

for how they spend the taxpayers’ money. GAO has pointed out in

its analysis in the most recent financial statements of the government that the government’s books are so bad that, ‘‘The government’s financial statements may not provide a reliable source of information for decisionmaking by the government or the public.’’

In other words, the Federal Government, which this year will

spend more than the combined economies of China, Canada, and

Mexico, has no idea where it is spending the taxpayers’ money, it

has no idea where it is being spent, or if it is doing any good.

And recent reports and analysis by the House Budget Committee have found similar things—the $19 billion in improper payments

paid by the government in 1998. The Defense Department had to

make $1.7 trillion in manual adjustments to its financial statements just to get them to pass.

As we heard earlier, 15 programs have been added to the GAO’s

high-risk list in the last 7 years. Redundancy abounds. Even the

Department of Commerce itself is redundant to 71 other agencies

in government, and, of course, we know there are now 788 Federal

education departments and programs.

Well, the question I think that we ought to ask the administration: Has any Cabinet official been held accountable for these management failures? Which, if they were to happen in the private sector, would be actionable under law. If they have not been held accountable, why not?

Well, we have heard a lot of boasts about reducing the size of the

government by 300,000 over the last 7 years, but I think this is

somewhat of a smokescreen, because I think it is mistaken to

equate the size of government with the number of employees. After

all, over the last 7 years, government spending has increased by 28

percent, or $390 billion.

So I guess in a perverse sense, maybe government is more efficient. We are now simply spending more money with fewer employees. But this is not what the American people want. They don’t

16

want government to waste their money more efficiently. They want

real value for their money, and that can only be done by asking

tough questions of government and the substance of government.

The kinds of tough questions that we see private sector CEOs

ask on a continual daily basis of their corporations: What is our

core business? What activities should we quit doing because they

are either outmoded or obsolete or they are simply inefficient?

Where have we gotten fat and redundant? Do we have to perform

these functions in-house, or can we contract them out? The old

make or buy decision government does too much in-house.

And if we ask these questions of the Federal Government, we

will force Washington to focus on improving its core missions while

we overhaul and streamline the way it does everything else?

Well, to wrap it up, 7 years ago the President said the Federal

Government needed reinventing because it is not just broke, it is

broken. Well, today, by any reasonable measure, it is still broken,

much like a corporation facing Chapter 11 bankruptcy.

Reinvention can no longer be a substitute for accountability. The

only true way to make government work better and cost less is to

first challenge the substance of what government should and

should not do, and then demand the same standard of accountability from Federal officials as we demand from their private sector counterparts. The American people deserve no less.

Thank you very much.

Senator VOINOVICH. Thank you, Mr. Hodge.

There are a lot of questions to ask, and I will start them off. And

if it is all right with the Members of the Subcommittee, we will

each have 10 minutes for questioning. That will give us a little

more time to get at some of these things.

Mr. Mihm, what methodology does GAO use to estimate savings

from its own recommendations? And how does this compare with

OMB’s methodology? The reason I raise this is because I have been

through many management audits, and when they are completed,

it is difficult to ascertain savings. I know I always tried to be very

conservative because when you are not, somebody comes along and

says, wait a second, and then they start pointing things out. When

you measure savings, how does that differ from what was used by

OMB in determining the savings of NPR?

Mr. MIHM. Yes, sir, we try to be conservative as well, not just

because we are naturally so inclined as an audit organization. Let

me start off with how OMB does it and then counterpose it to the

way we did it.

OMB estimated savings using its normal budget processes, which

are not designed to be estimating savings from any sorts of initiatives. They are designed to provide point-in-time estimates that are

relevant for the particular moment in which those estimates are

made, a particular budget season. OMB took all of the changes,

that is, the reductions in an actual appropriation that an agency

received, compared to what had at an earlier point been the expected appropriation, and claimed the differance as savings for the

National Performance Review.

Let me give you an example of this. The Department of Energy

budget for the nuclear weapons complex was reduced about $7 billion over what had been its expected budget—this is over a period

17

of years—for a variety of reasons, most prominently because of the

end of the Cold War, the Nuclear Test Ban Treaty, and all the rest.

We simply did not need the nuclear capacity that we had previously needed.

The OMB processes, however, booked all of those reductions as

savings attributable to the National Performance Review because

NPR had made a recommendation that urged that the downsizing

of the nuclear weapons complex continue. This is one of those examples that I mentioned in my initial statement about how these

savings were all booked to the National Performance Review, even

though there were plenty of other factors that contributed to budget reductions—and certainly factors far more influential going on

than the mere fact that the NPR had made a recommendation.

Now, in terms of the way we do it at the General Accounting Office, we use, as I mentioned, a fairly conservative approach. We request information from the agency as to any accrued savings. We

have an independent fact checking that goes on, two separate fact

checkings that go on internally within GAO: An independent fact

checking from the team that actually did the recommendation so

we are not checking up on ourselves. We then have a separate

group, at a higher level within GAO, that looks at all of these savings to make sure that they can withstand the scrutiny of an outside examination.

And then I guess the final point that I would make is that we

also save our documentation. One of the problems that we had

when we were doing our review of the cost savings from the NPR

is that since they were budget estimates developed at a point in

time, in many cases, the documentation was not retained, and so

we couldn’t go in and find out how OMB did its estimates. OMB

could not replicate it. For our savings estimates, you can have several years back. If you come in, you can see exactly how we did it,

what the justification was, how the fact checking went, if there was

any discussion in regard to that fact checking, and what the higher

level review was. And so we are fairly rigorous in the approach

that we use.

Senator VOINOVICH. I would suggest that it be made very clear

the basis upon which savings are going to be determined, some objective way of looking at it so that all of the agencies that are involved in the process understand that this is the way they are

going to be judged, so they understand that right from the beginning. Do you think that ought to be looked at?

Mr. MIHM. I think that is clearly so, yes, sir. I also think,

though—and this gets back to the premise of your initial question

when you were relating your experience—is that it seems to be

largely a mistake to try and claim large financial savings from

management improvement initiatives. Management improvement

initiatives improve efficiency and effectiveness, but to try and claim

tens of billions of dollars in savings is often very difficult. And if

you look at the history of management reform efforts, many of

them have crashed on the rocks when they have gone ahead and

tried to overclaim direct financial savings from their management

improvements.

18

Senator VOINOVICH. Another issue that has come up today—and

maybe you can all comment on it—is the issue of workforce strategic planning during the last 7 years.

The testimony was that there was an effort to reduce the number

of employees, and there are some that have alleged that those employees were replaced by a ‘‘shadow government.’’ Someone might

want to comment on that. But the other issue is, when you are reducing the number of people, you ought to look at the role of the

agency and make sure that you maintain the competencies that

you need to get the job done.

I would ask any of you to comment on that, if you would like.

Mr. Light?

Mr. LIGHT. Well, let me weigh in on the issue of what downsizing

did or didn’t occur. I mean, it is true that the overall size of government today in terms of total employment, which would include estimates of the number of people under contract to the Federal Government, as well as under grants to the Federal Government, is

down from what it was in 1984. It is definitely not down from what

it was in 1960. It couldn’t be. The only number that is down from

1960 is full-time equivalent civil service.

It cannot be true, given the run-up in what we do since 1960,

that the total true size of government could be down. It is just ridiculous to make that claim.

It is true that the defense downsizing, the reduction in procurement, the reduction in contracting over the last 15 to 16 years,

largely driven by the end of the Cold War, has reduced total fulltime equivalent civil service, total contract purchase of labor, total

grant purchase of labor. There is no question that the last 16 years

bounded have seen a reduction in the overall size of government.

I would add one other factoid to this: That the only category of

contract employment that has gone up has been in the purchase of

services. OK? So you have to disaggregate these numbers. It is only

by the most narrow definition of workforce that a President could

say the era of big government is over. It is only by counting fulltime equivalent civil service. When you add everything together,

you can make the case that, one, we never had an era of big government in this Western democracy, and, two, that it is still pretty

large. It is smaller than it was in 1984, but we have got a lot of

people to deliver a very large mission here. And the American public needs to debate really the central question: Is this the mission

we want government to deliver? Because this is about the number

of people we need, whether they are under contract or grant or

under Uncle Sam’s employment system. We need about 12 million

full-time equivalent bodies to deliver the mission we have got to deliver.

How you sort them out? I don’t know. You want to reduce that

number, you got to change the mission.

Senator VOINOVICH. I will never forget when I became county

auditor—everything was farmed out to the private sector. I had no

expertise in-house to find out whether or not the private sector was

doing the job that it was supposed to do. So immediately I took

some money that we used for annual reappraisal and hired some

people that had the academic background and the experience to

make sure that the private sector was doing what it was supposed

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to be doing. And I just wonder: Have we retained in government

the people that are necessary to make sure that the ‘‘shadow government’’ or the independent contractor is really, in fact, getting

the job done?

Mr. LIGHT. Well, let me—I mean, other people on the panel, Ron

Moe and I talked about this. Look, the downsizing was done

through an entirely random process. We have reduced the total size

of government through attrition and through voluntary buyouts.

We were not deliberate in any means in terms of reduction except

in several very specific cases, like the Army Materiel Command.

Otherwise, it has been haphazard, random, and there is no question that in some agencies we have hollowed out institutional memory, and we are on the cusp of a significant human capital crisis.

How we would inventory that I think goes to the issue of legislation like S. 2306. We don’t know what is going on. It is the most

frequent question I get in terms of can you prove that there is

something wrong out there, and the answer is we don’t know. And

that speaks to the basic problem. It is an issue of sloppiness. It is

an issue of inattention. And we see it in how we did this workforce

downsizing. And now others here I think have better points of

view.

Senator VOINOVICH. Mr. Kettl.

Mr. KETTL. Mr. Chairman, I think that Dr. Light is exactly right.

We have, in a sense, been focusing on the wrong target. The number of Federal employees first doesn’t begin to get at the question

of who it is who is actually doing Federal work because more and

more Federal work is being done out in the for-profit and not-forprofit sector and in State and local governments, and focusing only

on the number of Federal employees as somehow a target on the

size of government misses anything that is real about what the

true size of the Federal Government is.

The second point that I think is important to make is that, as

Dr. Light pointed out, the target for a workforce reduction in the

neighborhood of 300,000 Federal employees was completely arbitrary. There wasn’t any pre-planning that suggested that that was

the appropriate target or whether it should have been more or

should have been less.

A third point is that, as it was implemented throughout the Federal Government, it was done in a way where the goal essentially

was to get people out the door, and it relied on voluntary separations through a buyout. And that gets to a fourth problem, which

is: Is what we are left with the kind of government that we need?

And the problem is that we have increasingly created a gulf between the people who are in the government and the skills needed

to run that government effectively.

As we are relying more on grants to State and local governments,

on partnerships to State and local governments in the regulatory

arena, in contracts with the private sector and the not-for-profit

sector, we have more and more need for strategic planning in the

government, needs to get information systems to find out what is

going on out there, and to find ways of managing those systems

correctly. And those are the very areas of government where often

it is most difficult to recruit and where, quite frankly, we have not

done a very good job of figuring out what kind of workforce for the

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future we need. And those chips will begin to fall with a vengeance

in the next 3 or 4 years as this human capital problems becomes

more serious.

So we have some arbitrary measures of arbitrary targets that

don’t begin to get us at the real problems that we have to solve,

and where, if we don’t, we will surely pay a very high price in the

very near future.

Senator VOINOVICH. The most important thing would be to have

agencies assess where they are right now, what competencies they

lack, what competencies they may lack in the next several years,

and then develop a strategy to meet those human capital needs.

Mr. KETTL. There is that issue, Mr. Chairman, and in addition,

it seems to be it has to be the job for the Office of Personnel Management to make sure that happens and to do the job for the Federal Government overall so that we have some place where we are

tracking the basic figures and the statistics and the trends and the

skills and we are making some effort to align the Federal Government’s personnel systems with the job the Federal Government has

to perform. And the problem that we have had, especially in about

the last 15 years, is that the gap between those two has become

yawning to the point where genuine crisis threatens.

Mr. HODGE. Mr. Chairman, if I could comment just a second—

I am sorry.

Senator VOINOVICH. I am out of time, and I will call on Senator

Durbin.

Senator DURBIN. Thank you, Mr. Chairman.

Mr. Light, I think you made a very important point here about

the change in rhetoric on Capitol Hill, and I do salute the Chairman here in particular for his positive view toward taking a close

look at management at the Federal level. It hasn’t been that long

ago, only a few years ago, when we were going through this period

of self-loathing up here, which culminated—I think its nadir was

the shutdown of the Federal Government when great political philosophers like Rush Limbaugh were announcing that the American

people would never miss this Federal Government if it just shut

down and went away. And, of course, time proved him wrong and

the American people proved him wrong. There are important functions of this government that are being served by people who are

working hard to do a good job, and I think that whole ultra-conservative ilk, has been repudiated by that single experience, and

we have finally turned that corner and now tend to look at things

in a more positive way.

But having said that, there still is built into this discussion a

tension which may not be present in a business setting or some

other type of organization, because if I become the new CEO of a

company that is not doing well and decide that I am going to make

a dramatic change in management, it is on my shoulders. I ultimately have to answer to the shareholders when it is all said and

done. But in this case, it is a shared responsibility. The executive

by itself can go so far in reinventing and making strategic changes.

And there is still going to be a congressional voice in that chorus

that will decide how much money, how far you can go. Each of us

brings to this debate our own particular attitudes and our own particular interests. And from time to time, those interests trump straVerDate 11-MAY-2000 13:30 Nov 13, 2000 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 66086.TXT SAFFAIRS PsN: SAFFAIRS
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tegic thinking. We tend to be fairly parochial at times. I confess

that sin on my own part.

Don’t you think that this has to be taken into account, too, that

this is a unique management situation with this division in power

between the purse strings and those who are drawing up the pie

charts and the organizational structures?

Mr. LIGHT. Absolutely. I think the solution is in a conversation

that occurs between the Executive Branch and Congress. Personally, I never saw it on this Subcommittee. It must be over in the

House in another body.

Senator DURBIN. That is why I left it. [Laughter.]

Mr. LIGHT. The tension is that your colleagues in appropriations

and authorization, of course, yourselves because you sit on authorizing and appropriating committees, your membership does here on

the Subcommittee, you have to struggle with how to make the

kinds of reforms that you are pushing over here like Government

Performance and Results Action tractionable to your colleagues as

they are making the key decisions and spending money.

One of the arguments that I make about Government Performance and Results Act is that it really doesn’t matter right now to

things that matter to Federal agencies, that if it doesn’t involve

head count or money, why should an agency pay attention to that?

And, of course, that involves a dialogue between this Subcommittee, which is leading the performance charge, and the Appropriations committees.

Senator DURBIN. And if I might interrupt you for a second, a

clear illustration is something that the Chairman has brought out

in previous hearings. We do not fund the incentives and rewards

for employees and agencies so that they feel good about what they

are doing and so that they can attract the very best into the Federal Government. It is something that we tend to trim away. And

we wonder then why we don’t have better statistics when it comes

to retention of good employees, why we can’t recruit good employees. So that is an illustration, from my point of view, of how this

is different than a business situation where someone can decide we

are going to set aside a portion of this budget and we are going to

make this a team concept in management.

We tend to make a budget decision, which really attacks the

team concept and says you can have a team but you can’t reward

them, and I think that is what came through in some previous

hearings that we had. It may go to your point, Mr. Mihm, about

the strategic decisions that are being made in these agencies. I

think this political breakdown that I have tried to elucidate here

is in that direction.

Mr. Moe, if I might ask you this question, you raised something

that is very interesting, too, this entrepreneurial model versus—

you called it public law management?

Mr. MOE. Yes, public law or constitutional.

Senator DURBIN. And it is interesting, too, because the entrepreneurial model as I see it, it is easy for Mr. Hodge and his organization, which is well known on Capitol Hill, to be critical of an effort

by the Department of Agriculture for food safety. And I guess that

is an easy target for anybody to go after. But the bottom line is we

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22

tant and how much we want to spend on it and whether you can

justify it.

And the same thing comes through when we are talking about

childhood immunizations. Is it worth it? Is it worth putting a little

extra money in immunizing kids? Can you really prove it out?

It gets down to the thinking which we have in this Subcommittee

all the time about the so-called cost/benefit analyses. Can you put

a price tag on it? Can you identify the dollar value of it? And time

and time again, I have split with the Subcommittee because I think

there are many things you can’t put a price tag on.

For example, when it comes to the whole question of the Food

and Drug Administration and its role in tobacco, what is it worth,

I think it is worth a lot. Can I quantify it? Well, if I quantify it

and Americans live longer, those longer-living Americans are more

expensive to the government as they draw more Social Security. So

in a cost/benefit ratio, should we be educating people about the

danger of tobacco if it raises the cost of the Social Security system?

Well, I think the obvious answer from a public policy viewpoint is,

of course, we should. But a cost/benefit ratio, the entrepreneurial

thinking, the green eyeshade thinking, leads us off into some

never-never-land where you really have to quantify everything.

I don’t want to put words in your mouth, but are you thinking

along these same lines about this entrepreneurial model versus the

other?

Mr. MOE. Yes, the entrepreneurial model is based on private law

and the maximization of equity return to private owners. That is

why they can act the way that they do. And one of the logical conclusions from that is you have considerable leeway in the amount

of money you pay and the rewards are monetary, and you rely on

performance measurements, the bottom line.

The performance measurements and those types of things are not

applicable in the public sector, in the governmental sector, which

are run by public law. The measurement of whether you are doing

a good job is whether you are implementing what Congress intended you to do, irrespective of the performance connected with it.

Now, the classic case would be the IRS. The IRS was the ultimate performance organization. I mean, they strictly followed

GPRA—they had quotas down to the local tax collector. And all of

a sudden, it blew up. It blew up because, in point of fact, officers

of the United States have a higher requirement to meet than simple maximum performance in collecting taxes, and that is adherence to due process of law.

Once you recognize that, then you start to design programs and

you evaluate them in terms of the actual requirements of public

law rather than trying to impose, which NPR does, the private sector model, which is inappropriate to much of what it is that government does.

There are things that, no matter how well you measure them

and no matter how well you want them to work, are unadministrable because they are conceptually unsound. That is, management cannot make a conceptually unsound program work well. Do

not ask management to do it. Most of these high-risk areas are situations in which the standard measurement procedure for management isn’t appropriate.

23

Senator DURBIN. So if you just, for example, said to IRS employees you will be rewarded and promoted if you bring actions against

individuals and bring money back to the Federal treasury, you are

defying the basic idea of due process which says the right decision

by the employee may be no action against that citizen.

Mr. MOE. Absolutely. In day-to-day life, however, the contrast between the high performance and public law requirements are not

usually that stark. But if there is a direct conflict, the highest

value in the governmental sector is adherence to the law and adherence to the constitutional due process, not the maximization of

performance.

Now, the second thing to note is that the Federal Government

does not deliver many services. There are only three major agencies

that deliver services directly to the public, as opposed to State and

local government which deliver many services, is the Social Security Administration, the Veterans Department, and IRS. And so

most of what the Federal Government does not involve a customer

relationship. It is a relationship between the sovereign and the citizen. Therefore, the relationship is not a voluntary one. Even

though it may be friendly, it isn’t necessarily a voluntary relationship because an officer of the United States has the right to prevent you from having something; therefore, it is a suable action. It

isn’t a voluntary action.

So much of this entrepreneurial rhetoric therefore is inappropriate for the government relationship to the citizenry. It is not appropriate to use phrases like ‘‘chief executive officer’’ or ‘‘customer.’’

Those are inappropriate terms. They really muddle up proper

thinking.

We are a government that operates without a central management agency. It is unbelievable. We are probably the only major

government that operates without a central management agency.

OMB concentrates on the budget. The things we are complaining

about here are constitutional in nature. We are trying to run the

world’s most complex social system with amateur short-term officers. Starting next January, we are likely to be bringing in 4,000

new people to manage government. Paul Light will do his very best

at the Brookings Institution to educate them, but they will still remain short-term amaterus.

There is zero continuity at the top. People come here from all

over the world and say, ‘‘How do you run a government with no

continuity?’’ And we say, ‘‘Barely.’’

So those are the issues that need to be addressed, I believe, as

well as performance in any given agency and whether it is saving

money or not.

Senator DURBIN. Thank you. The last point I will make is that,

in addition to the cost/benefit ratio and the bean-counting approach

to this, which I have had some difficulty with in the past, I also

have difficulty with the concept that we are going to go to biennial

budgeting and appropriations because I believe that that takes

away the oversight responsibility that Congress has to watch these

agencies and to comment on them. There are others who disagree,

including the Chairman.

Senator VOINOVICH. Absolutely. [Laughter.]

24

Senator DURBIN. But having said that, I think that if we are

going to play the appropriate role under the Constitution, the appropriations process and the authorizing committees have a responsibility to watch this management on a regular basis.

Thanks, Mr. Chairman.

Senator VOINOVICH. Senator Thompson.

Chairman THOMPSON. Well, thank you, Mr. Chairman. A fascinating discussion. You bring up so many things that we have

been dealing with here. In listening to you, it looks to me like the

real fundamental question is: How much should we try to and how

much capability do we have to measure what government is doing

and whether it is really doing its jobs? That is what the Results

Act is supposed to try to do, and the experts in the area say that

one of the things you have to do is determine the cost of what you

are doing. And it is not an easy picture.

Senator Durbin has a problem with cost/benefit analysis, and, of

course this revives an old discussion we have had for a long time.

The fact of the matter is that the suggestions put forth have to do

with non-quantifiable as well as quantifiable measures. And if you

have something that saves lives which is non-quantifiable, you

shouldn’t have much difficulty in carrying the day politically on

that issue.

So that to the side, the problem is if you don’t have some kind

of objective measure, then you are going to run into what we have

seen, billions of dollars of waste, no one really accountable, and all

the other things we have seen.

The problem, on the other hand, if you have too much, if you

want to call it measurement, you run into things like this NPR, because what they clearly did was choose some things, as we do on

Capitol Hill lots of times, choose some things that are clearly measurable and understandable to the American people—the number of

employees cut. You can’t make a political speech about the improved quality because you can’t explain the way you came to that

conclusion. But you can sure have some objective criteria by cutting

employees.

That is a balance that we have to make, and I think the problem

is oftentimes that we don’t—in our cost/benefit analysis, we don’t

look at the picture broadly enough, and the cost/benefit analysis is

not only what you are doing well, how much money you are saving,

how much it costs, but also the quality considerations and all that.

We have got to figure out a way to do that.

But what you have to have, in looking at the history of all this

and the extremely exciting and interesting books that Mr. Light

writes on government reform and so forth, and he traces the history of all these reform movements and all these commissions—the

Hoover Commission and the Grace Commission and all that. He

tells us how it really all depends on who is in office and whether

the Republicans control one branch and the Democrats another and

whether you have a Democrat or Republican President. And it is

almost a case to be made for determinism. You can almost tell the

counterreform efforts that are coming based on who controls what.

And here we are again. And I appreciate your endorsement of Senator Lieberman and my latest commission effort. Maybe we will do

better.

25

But what runs through all of that, to me, is the point that you

have to have real management in the Executive Branch, and you

have to have real support from Congress. Now, Congress has

passed a slew of laws recently—Clinger-Cohen, Paperwork Reduction, GPRA, all these various things that are coming to fruition

now. So I think you can make a case that over the last several

years the leadership of this Subcommittee in the past has contributed a lot to that.

But I see very little to be encouraged about from a management

standpoint. This business of these reductions, everybody sees

through that. Everybody knows about the downsizing and where it

has come from, 60 percent from Defense and Energy civilian workers. But OMB not only did not get in there and say, now, look, you

need to consider the quality of the workforce, OPM, we are responsible for that, they aided and abetted this kind of sham approach.

And if you look at these performance reports that are coming in

now from the Results Act, one of the worst ones in terms of setting

identifiable goals is OMB. It is totally process-oriented. I mean,

they of all people are supposed to be looking over these other agencies. Just like Mr. Moe said, there is no management over there.

I mean, they are downsizing in every way. That is where they are

really downsizing, is in the management part of OMB. Nobody is

looking out for the management side.

So they are going along with whatever wind is blowing at the

moment, and that is why we wind up with a hollowed-out workforce in some of these areas, no consideration as to the fact that

we haven’t asked any less of these government employees and

these agencies. We keep piling more responsibilities on them as we

are cutting in many cases the most experienced people—it is haphazard cutting without strategic planning.

So we have got to figure out what do you do about all this, and

I think Senator Durbin is right. It is essentially a political question

in the broadest sense of the word. You have to have commitment

from the Executive Branch. You have to have commitment from

what is the OMB or some successor to it. That is something else

we need to take a look at. And you have to have cooperation and

commitment up here.

We shouldn’t be criticizing. Every time somebody makes an effort

to do something positive, we shouldn’t be critical of it because it

doesn’t reform all of government. We ought to be supportive. The

problem with this effort is that when you look at their downsizing

claims or their savings claims, and some of these I think GAO has

been rather generous in some of its assessment. You say that the

claimed agency savings cannot all be attributed to NPR. If you look

at it, virtually no savings can be attributed to NPR. So I think you

are giving them a break on that.

So you look at all of that, and then you look at their involvement

in this citizenship U.S.A. business where documents obtained from

the Office of the Vice President and NPR under subpoena of the

House Committee on Government Reform which we have indicated

that political appointees and outside interest groups persuaded the

administration that hundreds of thousands of immigrants should

be rushed through the naturalization process in the hopes that

they would vote for the Democrats in the 1996 election. Justice is

26

looking into it. What is known so far, apparently INS naturalized

hundreds if not thousands of felons in contravention of the law.

And you see that as a part of it. That is the problem that we have

with this. It is not that we want to be critical of every effort and

even a little overblown rhetoric about accomplishments and so

forth. But we have got to—we don’t want to discourage people from

doing it in the future.

But these are the reasons, and then to cap it all off, I am beginning to understand now why they don’t want to show up and testify here today and answer some of these questions. But it doesn’t

contribute to the solution that we are looking for.

I will just finish this with a broader question, and, that is, from

a broader standpoint, Mr. Light, in looking over history and the reform efforts—and as you point out, it has been ongoing and will

continue. We now have a few tools we didn’t have. Is it a money

problem? Is it a funding problem? Is it an executive problem? Is it

a Legislative Branch problem inherently? Are there difficulties

there because we have to have these political measuring sticks that

the people publicly understand? Is it the nature of the matters that

we are dealing with? What is your broad overview? And I will play

devil’s advocate with my own bill. Why do you think there might

be a chance that with this new commission proposal that we have

that that would do any good?

Mr. LIGHT. May I just hope that when you said ‘‘an exciting

read’’ that you meant it. [Laughter.]

It will be on remainder tables.

Chairman THOMPSON. It is interesting.

Mr. LIGHT. Look, I think that there is substantial agreement between the parties and between the branches that there needs to be

a breather here where we take a look at all of the structure and

laws that we have added on that government has accreted over the

years and take a whack at them.

You need that every once in a while. It has been 50 years since

we took a systematic look at the Federal organization chart. I don’t

pretend that that is the answer, but I think every once in a while

you need to sit down and sweep clean and take to task the things

that have risen over the years.

I am encouraging you on your commission to add an action-forcing device. I think just as we went through the painful process of

closing military bases that we all knew were obsolete and needed

to be closed but we could not summon the will at either end of

Pennsylvania Avenue to do so, every once in a while you have to

take a look at this.

If you look at the first reinventing government report, there is

a strong section on eliminating what we don’t need. And you look

back at that 7 years later and say we didn’t do much of that. We

couldn’t do much of that. Every once in a while you need to step

back, take a look at what you have accumulated, and take a whack

at it. And I think that you have to do it in a context where both

ends of the avenue are given an opportunity to do the right thing,

but not given a whole lot of opportunity to summon up the old arguments for continuing program X or program Y because it meets

a jurisdictional demand or it has been there for a good long time.

27

I just think that you need that breather every once in a while,

and I can’t imagine a better time to do it than right now. We are

at the change of administrations. We have non-incumbents running. It is a good time to take a look at it, do it quickly, present

to this branch an up or down vote on a package of structural reforms. I think that is an essential part of it, and throw civil service

in there while you are working on it.

Chairman THOMPSON. Thank you very much.

Thank you, Mr. Chairman.

Senator VOINOVICH. I would like to make one comment, Mr. Moe,

about what you said. First of all as part of my management philosophy, I told my directors and secretaries that if you can’t measure

it, don’t do it. I like customers, Mr. Moe, internal customers within

our agencies that are customers unto themselves, and external customers that we have to take care of. That is a concept that I believe

in strongly. We found in State Government that many of our agencies didn’t even know who their customers were. I will never forget

our Environmental Protection Agency—everyone was screaming

about it. They didn’t know who their customers were, and after

they identified their customers, they started talking to them and

found out they were unhappy. And in a 2-year period, the customers became a lot happier because there was recognition. Most

government employees are good people and want to get the job

done, but they have to understand who their customers are.

NPR, we can say what we want to about it, and maybe has exaggerated, as Senator Thompson said. I am one of those people who

thinks the past is the past. The issue is we are here today and

where are we going tomorrow. That is my real concern. We do have

a human capital crisis.

It seems to me that OMB no longer has an M in it. There is no

management. And the issue is: How do you go about putting in

place a vehicle or a mechanism to move forward and take on these

challenging problems that we have in the Federal Government

today?

One of our witnesses this week, on Tuesday, Senator Durbin, you

will recall, was Inspector General Gross of NASA. She said, ‘‘As a

result of reductions and reinventions of the Federal personnel community mandated by NPR, many personnel offices are understaffed

and ill-equipped to compete with their private sector counterparts.’’

Now, I just wonder, does this run across the Federal Government? And if it does, we are in big trouble. I would be interested

in recommendations as to how we go about addressing this problem

in the short term, because we have to jump start it and then look

for a mechanism to put in place to guarantee that we deal with

this problem over the long term and that we have some oversight

in the Federal Government.

One of my problems is that so many of the issues, Senator Durbin, that come before this Subcommittee ought to be taken care of

on the management side of government. So much of what we are

talking about, really, if you had management that was dedicated

to this, we wouldn’t have these hearings.

For example, GAO has identified at-risk agencies, and there are

more of them today than there were a decade ago. How do you

focus on the main responsibilities of government, and that is delivVerDate 11-MAY-2000 13:30 Nov 13, 2000 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 66086.TXT SAFFAIRS PsN: SAFFAIRS
28

ering services to people in a sensitive, efficient way? I am concerned that if we don’t get at this quickly, it is going to clog up our

economy because so many entities in the private sector are dealing

with Federal agencies. They are moving ahead in terms of human

capital and technology, and if we don’t keep pace with them, we are

going to have a gigantic traffic jam where the Federal Government,

instead of getting out of the way or greasing the skids, is going to

become a real problem to this country’s productivity.

So I am interested, if you were in the shoes of the folks at OMB

now, what would you do?

Mr. MIHM. Mr. Chairman, if I may, I think there are a couple

of things that can be done. First, Congress has already passed a

legislative vehicle that can help you on this, and that is the Government Performance and Results Act. I mentioned in my comments earlier that the 24 largest agencies, did not systematically

talk about and think about their human capital strategies in the

context of programmatic goals, and that is the connection that

needs to be made. That is something that we are looking at, and

certainly additional oversight efforts from this body, so that we can

begin to start showing the programmatic consequences to this staffing crisis that you are talking about.

All too often, the debate, as we have been discussing on the panel

here, has just been on have we cut people or have we not cut people and where have we been cutting them. We don’t understand

what the consequences of those skill gaps are. We don’t understand

the consequences of where cuts may have been inappropriately

made. We don’t understand the consequences of where more people

may be needed.

Two of the areas in particular on our high-risk list deal with exactly the lack of this human capital, both in contract management

over at NASA and contract management in the Department of Energy. Both of those, among the root causes there is the lack of people, as Dr. Kettl was suggesting, that know how to manage contracts, these large, complex, difficult contracts. So I think one

thing, one clear legislative device that you already have, is the

Government Performance and Results Act.

Second, we recently issued a self-assessment guide for agencies

to use that they can go through and begin to think and develop

baselines on what their human capital profile looks like, the extent

to which they have skills gaps, and then develop an action plan in

order to improve performance.

And then, third, as you know, Mr. Chairman, we have also just

recently issued a report looking at best practices in the private sector in human capital planning and execution. And we are working

with OPM and others to try and get the message and the news of

that spread throughout the Executive Branch.

There are a number of things that can be done. Let me just add

one final one, and this is work that we are doing for you in this

regard, and that is, come next January, February, and March when

political appointees are coming in front of this Subcommittee and

the authorizing committees, to the extent that questions can be

asked of them about the public management and about their responsibilities and their knowledge of that, that will both give you

information on what they know and their commitment, but also unVerDate 11-MAY-2000 13:30 Nov 13, 2000 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 66086.TXT SAFFAIRS PsN: SAFFAIRS
29

derscore to these nominees the importance that Congress places on

the effective management of programs.

So I guess those four devices are what we would suggest.

Senator VOINOVICH. I appreciate the cooperation that we are getting from GAO in putting that questionnaire together, and hopefully it is going to be of such quality that this Subcommittee and

other committees in Congress will be able to use it. First of all, it

will help us find out whether the new people that are coming in

know anything——

Mr. MIHM. Absolutely.

Senator VOINOVICH [continuing]. In terms of what they are being

charged with doing, and, second of all, I say with tongue in cheek

that maybe some of them, after reading the questionnaire, may decide they don’t want to take the job because of the challenges that

are connected with it. [Laughter.]

So if I am listening carefully, you have put together that self-assessment.

Mr. MIHM. Yes, sir.

Senator VOINOVICH. If you were in the management side of government, probably the best thing you could do at this stage of the

game would be to move with that assessment, ask everybody to fill

it out, figure out where they are, and that would be the beginning

of addressing this human capital crisis that we are confronted

with.

Mr. MIHM. I think so, yes, sir. We are moving very hard in this

regard. The Comptroller General has met with the President’s

Management Council to try at the very senior levels of the administration to engage them. At staff levels, we are working with our

counterparts over in OPM and in OMB, and certainly in the individual agencies as well on this.

Senator VOINOVICH. Well, that would be a good gift to the next

administration, whether it is Vice President Gore or George Bush,

that somebody was doing a lot of work so that when they came in,

they would have a current assessment, that addressed some of the

really critical areas where we need people so that we can keep this

government operating during the transition period. Because I know

from transitions that I have been through that you are so busy trying to get everything organized, so often something that is really

critical, if it is not brought to your attention immediately, just gets

neglected. And we are running out of time in some of these agencies in terms of the skills that are needed to keep them going.

Mr. MIHM. I think one of the virtues of both the self-assessment

guide that we have done, but just more generally thinking about

human capital, is, again, to tie it back into the programmatic consequences. Certainly new political appointees and even new members perhaps that come up with an agenda that is policy- or program-oriented, they can quickly lose interest in just hearing openended discussions of ‘‘we have a human capital crisis’’ unless it is

made clear to them the scope of this crisis and the consequences

for what they want to achieve in a programmatic and policy sense.

That is, what we are trying to do in our work in both the high-risk

list and in other areas, is show that this is not just a few goodgovernment ‘‘geeks’’ talking about management ‘‘stuff.’’ This really

matters in terms of the quality and the effectiveness of the services

30

that are developed and delivered to the American people—not to

characterize my colleagues as ‘‘geeks.’’ [Laughter.]

Senator VOINOVICH. I would call them ‘‘the A Team.’’

Mr. MIHM. Thank you, sir. That is why you are there and I am

here.

Senator VOINOVICH. I have watched the Federal Government for

18 years. I have lobbied this place as mayor and as governor, and

you get new administrations in and we have new secretaries, assistant secretaries, deputies, and so forth. My observation has been

that they have wonderful ideas, and before they know it, they are

traveling around the country and making speeches and visiting

places, and the people that are necessary to get the job done are

neglected. They are as important or more important than some of

the speeches that they are making.

Mr. KETTL. Mr. Chairman, you make a very important point

there, because we often engage in a folly that we can in a sense

think of and create the management side of government as if somehow there were a piece of it we could push aside and let it take

care of it. We are increasingly in the position where government,

no matter how bold its ideas and policies may be, doesn’t work unless management is wired deeply into the policy and the politics

and the programmatic side of it.

Senator VOINOVICH. Absolutely.

Mr. KETTL. And that is in many ways, I think, Mr. Mihm’s fundamental point and the point that you just made. And that creates

a real dilemma because on the political side there is little political

payoff for the government simply doing well what citizens expect

it to do. Mail delivered yet again today is not a popular headline

in the paper. Mismanagement, on the other hand, is guaranteed to

make it on the evening news. And so there is serious punishment

for management failures. The incentive is to stay as far away from

them as possible, to try on the other hand just to leave the management to everybody else because there is very little political payoff. But we are increasingly at the point where that is not a luxury

we can afford any longer because in case after case after case, as

we have seen in the last 3 or 4 years, and we can chart the possible

headlines that could pop up in the next 5 years just by simply looking down the list of GAO’s high-risk areas, we can see the possibilities of things that could go wrong. And the most important thing

that this Subcommittee can do is to ensure that we don’t engage

in the kind of folly that suggests there is a management side of

government that can be separated out from the policy and the politics, because policy and politics increasingly depend on government’s ability to actually deliver results.

Senator VOINOVICH. All right. Senator Durbin.

Senator DURBIN. Well, I would just close on a point that I had

raised earlier, because I think that when we look at management

models, this is a unique situation. It is unique in that Congress

and the Executive Branch have to work together in this regard,

and there is a built-in institutional friction and tension that was

anticipated by the Constitution. There are obvious political differences that might arise between an executive of one party and

congressional leaders of another. And there are personal tensions

where I have seen chairmen of committees basically have their own

31

personal agenda when it comes to an agency, and they can drive

it home in terms of the authorization and appropriations language.

So whoever the next President may be, their ability to reform,

truly reform government and bring new management to it will depend to a great extent on what happens on Capitol Hill, whether

it is a cooperative atmosphere and approach to it. I think that the

effort by this administration was a good-faith effort. I think it came

at a time when the political divisions between Congress and the

Executive Branch were obviously very different with the onset of

the Gingrich leadership in the House and the like. And the tension

was there to a great extent. It has been manifest today in some of

the observations that have been made in this panel.

So I guess I am hoping that we can rise above politics and even

find a level of cooperation when it comes to these two institutions;

otherwise, I am not sure how far an Executive Branch on its own

can go to reform this situation.

Senator VOINOVICH. Well, I think a lot of what this Subcommittee does will impact what is going to take place.

Thank you very much for coming today. We really appreciate it.

There are other questions, by the way, that I have that I would like

answered, and I would appreciate your response to them. Of

course, your written testimony will be part of the record.

I want to assure you that we are going to build on what we have

heard and see if we can’t deal with some of the problems that we

discussed today.

Thank you very much.

[Whereupon, at 11:43 a.m., the Subcommittee was adjourned.]

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