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BUILDING AN EXECUTIVE–LEGISLATIVE 

PARTNERSHIP FOR PERFORMANCE BUDGETING 

HEARING 

BEFORE THE

COMMITTEE ON THE BUDGET 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, NOVEMBER 17, 2009 

Serial No. 111–17 

Printed for the use of the Committee on the Budget 

( 

Available on the Internet: 

http://www.gpoaccess.gov/congress/house/budget/index.html 
(II) 

COMMITTEE ON THE BUDGET 

JOHN M. SPRATT, JR., South Carolina, Chairman 

ALLYSON Y. SCHWARTZ, Pennsylvania 

MARCY KAPTUR, Ohio 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

EARL BLUMENAUER, Oregon 

MARION BERRY, Arkansas 

ALLEN BOYD, Florida 

JAMES P. MCGOVERN, Massachusetts 

NIKI TSONGAS, Massachusetts 

BOB ETHERIDGE, North Carolina 

BETTY MCCOLLUM, Minnesota 

CHARLIE MELANCON, Louisiana 

JOHN A. YARMUTH, Kentucky 

ROBERT E. ANDREWS, New Jersey 

ROSA L. DELAURO, Connecticut, 

CHET EDWARDS, Texas 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

JAMES R. LANGEVIN, Rhode Island 

RICK LARSEN, Washington 

TIMOTHY H. BISHOP, New York 

GWEN MOORE, Wisconsin 

GERALD E. CONNOLLY, Virginia 

KURT SCHRADER, Oregon 

PAUL RYAN, Wisconsin, 

Ranking Minority Member 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

MARIO DIAZ–BALART, Florida 

MICHAEL K. SIMPSON, Idaho 

PATRICK T. MCHENRY, North Carolina 

CONNIE MACK, Florida 

JOHN CAMPBELL, California 

JIM JORDAN, Ohio 

CYNTHIA M. LUMMIS, Wyoming 

STEVE AUSTRIA, Ohio 

ROBERT B. ADERHOLT, Alabama 

DEVIN NUNES, California 

GREGG HARPER, Mississippi 

ROBERT E. LATTA, Ohio 

PROFESSIONAL STAFF

THOMAS S. KAHN, Staff Director and Chief Counsel 

AUSTIN SMYTHE, Minority Staff Director 
(III) 

C O N T E N T S 

Page 

Hearing held in Washington, DC, November 17, 2009 ......................................... 1 

Statement of: 

Hon. John M. Spratt, Jr., Chairman, Committee on the Budget ................. 1 

Prepared statement of ............................................................................... 2 

Hon. Paul Ryan, ranking minority member, Committee on the Budget ..... 3 

Questions for the record ........................................................................... 28 

Hon. Robert B. Aderholt, a Representative in Congress from the State 

of Alabama, questions for the record ........................................................... 29 

Jeffrey D. Zients, Chief Performance Officer and Deputy Director for 

Management, Office of Management and Budget ...................................... 4 

Prepared statement of ............................................................................... 7 

Responses to questions for the record ..................................................... 29 

(1) 

BUILDING AN EXECUTIVE–LEGISLATIVE 

PARTNERSHIP FOR PERFORMANCE 

BUDGETING 

TUESDAY, NOVEMBER 17, 2009 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE BUDGET, 

Washington, DC. 

The committee met, pursuant to call, at 10:03 a.m., in room 210, 

Cannon House Office Building, Hon. John Spratt [chairman of the 

committee] presiding. 

Present: Representatives Spratt, Schwartz, Becerra, Doggett, 

Berry, Yarmuth, Scott, Bishop, Connolly, Schrader, Ryan, Lummis, 

Austria, and Latta. 

Chairman SPRATT. Let me call the hearing to order and welcome 

our witness as well as the guest here today and the members on 

the committee. 

We continue today our discussion on performance budgeting and 

management improvements in the executive branch and, in particular, on ways we can make our government more cost effective. 

To ensure that tax dollars are spent wisely and well, among other 

things, we need to fix goals, we need to evaluate effectiveness, we 

need to purchase goods and services for a fair price. 

We are honored to have as our witness today Jeffrey Zients, 

OMB’s Deputy Director for Management and chief performance officer. He is the guy who holds the job that I just described. It is 

a big job. 

I am sure your time is very precious, and we appreciate your 

finding the time to come and testify to us. 

I would also like to thank my colleagues on the Republican side 

for working out with our side on setting this hearing up. This is 

an ongoing dialogue between our committee and the administration 

on performance budgeting and management improvements in general. 

Above all, I want to thank and recognize Congressman Kurt 

Schrader of Oregon, whose commitment to this subject and experience in this field have been essential to us in developing this hearing. Before he came here, Congressman Schrader, as a member of 

the State legislature, played a major role in designing Oregon’s initiatives in this realm. His State encourages State agencies to focus 

their efforts to achieve a better return on the State’s investment. 

Congressman Schrader continues to work with Oregon Solutions, 

a public-private partnership which engages communities in solving 

public problems. Before turning to Mr. Ryan for his opening state-
2 

ment, I would like to yield the balance of my time to Congressman 

Schrader to say just a few words. 

[The prepared statement of Mr. Spratt follows:] 

PREPARED STATEMENT OF HON. JOHN M. SPRATT, JR., CHAIRMAN, 

COMMITTEE ON THE BUDGET

Good Morning. I’d like to welcome all of you to our discussion of performance 

budgeting and ways Congress and the Administration can work together to make 

our government more effective and more cost-effective. The American public deserves to know that we are spending their tax dollars wisely, and that means setting clear goals, evaluating programs for effectiveness, and purchasing goods and 

services for a fair price. I thank my colleagues on the other side of the aisle for 

working with us, and I hope this bipartisan hearing will be the beginning of a constructive, ongoing dialogue between our Committee and the Administration about 

fiscal responsibility. 

I would also like to recognize Congressman Kurt Schrader of Oregon, whose persistence and thoughtfulness on this issue is a primary reason we’re holding this 

hearing. Before he came to Washington, Congressman Schrader played a key role 

in helping Oregon’s state agencies re-focus their efforts to meet clear, simple goals 

and deliver a better return on the state’s investment, and he continues to work 

closely with Oregon Solutions, a public-private partnership which engages communities in solving public problems. We are grateful for his leadership on this important issue. Congressman Schrader, would you like to say a few words? 

Mr. SCHRADER. Thank you, Mr. Chairman. I appreciate your help 

in organizing the hearing and allowing me the opportunity to speak 

here today. 

Mr. Zients, thank you for agreeing to testify before the House 

Budget Committee. I was very pleased when President Obama set 

up the position earlier this year, and I am really glad to see you 

settling into your position at this time. 

Performance management has been a big issue for me for a long 

time. I spent most of my time in the Oregon legislature developing 

a culture of measurement and achieving outcomes. In most legislative bodies, there is a complete disconnect between the lofty goals 

of educating a workforce, ending hunger, stopping drugs, helping 

the homeless, and the actual budget process itself. There is an obvious need to link the budget outlays to intermediate outcomes that 

move us measurably towards achieving our goals. 

While much has been written on outcome- and performancebased budgeting, implementation has often foundered in the public 

arena where buy-in by either the executive or legislative body is incomplete. Oregon has spent the last decade with its governor and 

legislature committed to developing culture performance outcomes, 

steering committees to develop the procedures involve both the executive and legislative branch. The agency would propose outcomes, 

but it would be modified by the legislature in the course of their 

deliberations. 

What has resulted has been an appreciation, I think, by the executive agencies and the legislature of how their actions do or do not 

achieve their desired goals and the ability to allocate resources 

more effectively and strategically. 

Oregon is not alone. States with diverse political environments 

have made performance measurement an important part of their 

budgeting process. Texas, the home of my colleagues Mr. Doggett, 

Mr. Edwards, and Mr. Hensarling on this committee, began instituting performance measurements nearly two decades ago. 
3 

Here in Congress, there have been various efforts to improve 

Federal budgeting throughout this century. Most recently, these efforts were pursued by successive Congresses and two Presidents 

with different politics. President Clinton established a National 

Performance Review, and the 103rd Congress passed the Government Performance and Results Act of 1993. Codifying performance 

plans and congressional involvement, they developed a development of these strategic plans. 

President George W. Bush continued these efforts with a Program Assessment Rating Tool, and in this Congress we have already passed the Weapons Systems Acquisition Reform Act of 2009 

to improve how our defense dollars are spent. 

Government performance is a bipartisan and interbranch issue 

supported by Democrats and Republicans, multiple Congresses, 

and Presidents. Those of us here today have the opportunity to 

work together on this issue again at a time when it is more important than ever for us to spend taxpayer money wisely. 

And I yield back. 

Chairman SPRATT. Mr. Ryan. 

Mr. RYAN. Thank you, Mr. Chairman. I also want to welcome our 

witness, OMB’s Deputy Director for Management and the administration’s chief performance officer, Jeffrey Zients. 

Welcome, Mr. Zients. Nice to have you here today. 

I think everyone here can agree: Ideally, government programs 

should function efficiently. And that means providing the maximum level of services for the lowest possible costs. But the common and entirely justifiable view is that the phrase ‘‘government 

efficiency’’ is often a contradiction in terms. 

That view is not entirely fair. Over the years, Congresses and administrations have tried by various measures to systemically evaluate programs, weed out waste and duplication, and make the government work better. Of course, without any particular striking exception, the government always seems to come up well short of that 

goal. So progress is clearly in need. 

Medicare is a classic example. Medicare has a critically important mission to provide health care for the elderly, but it has a $38 

trillion unfunded liability. That means, with all its good intentions, 

the Federal Government has overpromised benefits for future beneficiaries by $38 trillion more than the program can actually pay. 

And we just learned that Medicare last year had a whopping improper payment rate of 12.4 percent. That is $47 billion lost to 

fraud in a single year, in a single government program; and this 

comes after years of efforts to prevent fraud. The great goal of 

Medicare is to get the fraud rate down to 10 percent, and even that 

seems a bit lofty for this massive Federal entitlement spending program. 

Of course, to make matters worse, in the meantime Congress is 

about to add a $1 trillion new health care entitlement that is similar in design to Medicare, and we are significantly expanding Medicaid, which is already bankrupting the States. This is far from the 

first administration to propose such a program performance initiative, and frankly, this isn’t the first such fiscally responsible sounding measure this administration has hailed even as it continues to 
4 

pursue enormous expansions in size, scope, and cost to the Federal 

Government. 

Now, I do believe performance measures, such as those we will 

be discussing today, can help highlight which programs are failing 

or are in need of reform, but it cannot make the difficult political 

decisions to actually eliminate failing programs or, more important, 

restructure currently unsustainable entitlements. 

So my concern is that, despite Mr. Zients’s best intentions and 

the genuine merits of performance-based budgeting, this initiative 

could be diminished to marginal tinkering to programs with major 

structural flaws, or it might simply cover Congress’s failure to take 

real steps necessary to get control of the dangerous explosion of 

Federal spending, deficits, and debt. I truly hope that is not the 

case. 

Mr. Zients, I look forward to learning more about the administration’s proposals at today’s hearing. 

Chairman SPRATT. Thank you, Mr. Ryan. 

By way of introduction I should tell everyone on the panel that 

the Deputy Director comes here well qualified. He graduated from 

Duke summa cum laude. The only problems with his education is 

that he did not have an opportunity to study under David Price 

while he was there. They overlapped, I believe. 

He has served as the CEO of a major business firm and as a 

management consultant. He brings huge talents and experience to 

this job, and he needs them for the task that is set out before him. 

We are glad you are here. We look forward to your testimony. We 

will, as practice, make your testimony in its entirety part of the 

record, but you can summarize it as you see fit. You are our only 

witness today, so you are welcome to take your time in explaining 

your position. We are eager to hear what OMB has in store in the 

way of management efficiencies and oversight systems. 

Thank you again for coming. The floor is yours. 

STATEMENT OF JEFFREY D. ZIENTS, CHIEF PERFORMANCE 

OFFICER AND DEPUTY DIRECTOR FOR MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET 

Mr. ZIENTS. Members of the committee, I appreciate the opportunity to come before you today to discuss the Obama administration’s efforts to improve the performance of the Federal Government. 

The President believes that it is more important than ever to 

maximize the effectiveness of every tax dollar we spend. When programs work, we should support them; when programs do not work, 

we need to fix them or end them. To accomplish this, we need to 

measure the performance of programs and continually search for 

more effective and efficient ways to operate. 

During my 20 years in the private sector as a CEO and adviser 

to CEO, I found that leadership, measurement, and a motivated 

workforce creates the foundation for good performance. I am confident that the same is true in government. 

Congress and previous administrations laid some of the groundwork for government-wide performance management, including the 

Clinton administration’s GPRA and the Bush administration’s 
5 

PART. The result is that today we have thousands of metrics and 

plans. 

I believe the test of a performance management system is whether it is used. Despite the extent and breadth of these historic efforts, the current system fails this test. Congress doesn’t use it, 

agencies don’t use it, and it doesn’t produce meaningful information 

for the public. There is too much focus on process and not enough 

on outcomes. We do not track progress and goals which cut across 

agencies. Overall, too much emphasis has been placed on producing 

performance information to comply with a checklist of requirements. 

This must change. Federal managers and employees at all levels 

must use performance goals and measures to set priorities, monitor 

progress, and diagnose problems. 

The fundamental problem with the past performance improvements has been the lack of involvement of Congress. We would like 

to work with you to develop mechanisms to better use performance 

information to inform budget decisions. This committee has the 

ability to see the big picture, and I believe there are opportunities 

to leverage your unique perspective to look across programs that 

are trying to achieve similar goals and better understand which are 

working and which are not. 

Also, we plan to work with Congress to build on promising performance management developments in State and local governments and other countries. Several States, including Oregon, Virginia, Texas, and Ohio, show how government can clearly communicate State performance priorities, track progress against goals, 

and make results transparent to the public. 

Local governments, including New York City and Baltimore, 

have effectively used performance management practices to improve outcomes and drive down costs. Other countries, including 

the United Kingdom, offer instructive lessons. 

We are committed to taking the best of what works in other governments, in the private sector, and in recent Federal efforts to create a new performance management system. This system will be 

the foundation for our efforts to improve the efficiency and effectiveness of the Federal Government. 

As we develop this management system, there are five key principles we will follow. 

First, senior leader ownership: It is critical that senior agency 

leaders own the overall performance management process and their 

agency goals and measurements. Secretaries and deputy secretaries will be charged with setting of agency goals and will be held 

responsible for performance against those goals. 

Second, cascading goals: A clear line must link agency strategic 

goals and measurements to programs and to individual employees. 

Third, outcome-oriented cross-agency targets: Outcome-oriented 

goals and measures connect government agencies to their missions. 

Similarly, achieving broad government outcomes often requires 

contributions from multiple actors across different agencies. 

Fourth, relentless review: Measurement has no value if it is not 

used. Clear communication of goals, progress against targets, and 

frequent reviews of performance against plans are essential. These 

reviews must be performed at all levels of government. 
6 

Fifth, transparency: Achieving important government goals requires the active engagement of Congress, the public, and the overall government workforce. Transparency plays a critical role in creating accountability and stimulating idea flow. 

Using these five principles, the administration is committed to 

driving performance gains across the Federal Government. 

We have already begun to move forward on several fronts. In this 

year’s spring budget guidance, OMB asked every major agency to 

identify a small number of outcome-oriented, high-priority performance goals which they intend to achieve in the next 12 to 24 

months. Senior leaders are actively involved in this effort, including secretaries and deputy secretaries. This level of involvement, I 

believe, is a significant break from the past. Agency leaders will review their progress against their goals on an ongoing basis. Agencies have also identified goals, such as climate change and homelessness, that are high priority for multiple agencies and require 

close collaboration. 

In June, we launched the IT Dashboard, which displays cost and 

schedule variance for every major Federal Government IT project. 

The IT Dashboard is already having an impact. The VA has put on 

hold 45 over-budget or behind-schedule projects until it decides 

which to continue and which to terminate. We plan to roll out similar dashboards for other government functions. 

In September, the United States Citizenship and Immigration 

Services set up a system that allows applicants to see their status 

via the Web or e-mail updates and the processing time of their case 

compared to other similar cases. This makes what has been a notoriously opaque process much more transparent. We are encouraging agencies to identify other service areas which can benefit 

from similar customer facing systems. 

For certain types of programs, ongoing measurement is not sufficient. These programs require periodic in-depth evaluations to determine their effectiveness. On October 7, OMB encouraged Federal agencies to request fiscal year 2011 funding to conduct significant pilot evaluations in strength and agency evaluation capacity. 

Among the Obama administration’s Cabinet and sub-Cabinet appointments are several former governors and State officials who 

have experience using performance goals and measures to drive 

government performance. We are enlisting them and other leaders 

across Federal agencies to work together as a vanguard for Federal 

performance management with particular emphasis on adopting 

best practices from State and city performance management systems. 

As we move forward, we will also identify current measurement 

efforts that are not used and are burdensome. We will either eliminate them or streamline them. This will include making the performance and accountability reports more useful by scaling back 

their hundreds of pages per agency per year. 

OMB is using performance information to inform budget decisions. The President’s fiscal year 2010 budget proposed reduced 

funding or the termination of 121 programs. Agency goals and relevant performance information are also informing our internal fiscal year 2011 budget discussions. Overall, across the last several 
7 

months, we have made progress in setting up our new performance 

management system and have begun to pilot key parts of it. 

That said, we have a lot of work to do to put in place a system 

that is truly used by key decision-makers across government. As 

we undertake these efforts, we would like to work with the Budget 

Committee to make sure the information you receive from agencies 

serves you well. We look forward to partnering with you as we 

learn more about the committee’s performance improvement priorities. 

We have already had productive conversations with members of 

this committee, including Representatives Schrader and Cuellar, 

and I want to thank the committee for holding this hearing and for 

your belief in improving Federal performance. I look forward to 

working with you to achieve this objective. 

Mr. Chairman and members of this committee, I would be 

pleased to answer any questions. 

[The prepared statement of Jeffrey Zients follows:] 

PREPARED STATEMENT OF JEFFREY D. ZIENTS, CHIEF PERFORMANCE OFFICER AND

DEPUTY DIRECTOR FOR MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET

Chairman Spratt, Ranking Member Ryan, and Members of the Committee: I appreciate the opportunity to come before you today to discuss the Obama Administration’s efforts to improve the performance of the Federal government. 

The President believes that it more important than ever to maximize the effectiveness of every tax dollar we spend. We must be aggressive in identifying which programs work, and which do not. When programs work, we should support them and 

continue to push for improved performance. When they do not, we need to reform 

or terminate them. To accomplish this, we need to measure the performance of programs and continually search for more effective and efficient ways to operate. 

During my 20 years in the private sector as a CEO and advisor to CEOs, I found 

that leadership, measurement, and a motivated workforce create the foundation for 

good performance. I am confident that the same is true in government. 

Congress and previous Administrations laid some of the groundwork for government-wide performance management, starting with the Clinton Administration’s implementation of the Government Performance and Results Act (GPRA). The Program Assessment Rating Tool (PART) developed by the Bush Administration tried 

to create metrics at the program level. The result is that today we have thousands 

of metrics and plans in a number of overlapping systems. 

The test of a performance management system is whether it is used. Despite the 

extent and breadth of these historic efforts, the current approach fails this test. Congress doesn’t use it. Agencies don’t use it. And it doesn’t produce meaningful information for the public. 

Most metrics are process-oriented and not outcomes-based. We do not track 

progress on goals that cut across agencies. Overall, too much emphasis has been 

placed on producing performance information to comply with a checklist of requirements instead of using it to drive change. 

This must change. Federal managers and employees at all levels must use performance goals and measures to set priorities, monitor progress, and diagnose problems. They must learn from practices that work and those that do not. They need 

to learn how to use goals and measures to motivate the best from our workforce 

and our service delivery partners to achieve greater results and to allocate scarce 

resources wisely. 

A fundamental problem with past performance improvement efforts has been the 

lack of involvement with Congress. We would like to work with you to develop 

mechanisms to better use performance information to inform budget decisions. This 

Committee has the ability to see the big picture, and I believe there are opportunities to leverage your unique perspective to look across programs trying to achieve 

similar goals and better understand which are working and which are not. 

Also, we plan to work with Congress to build on promising performance management developments in State and local governments and other countries. Several 

State websites including in Oregon, Virginia, and Ohio, for example, show how government can clearly communicate state performance priorities, progress, problems, 

and strategies to the public. Washington’s Government Management Accountability 
8 

and Performance program and Maryland’s StateStat illustrate the value of goal-focused, data-rich discussions to find the root causes of problems and to devise smarter strategies to tackle them. Local governments, including New York City; Baltimore, Maryland; and King County, Washington have effectively used performance 

management practices to improve outcomes, reducing crime and increasing housing 

starts for example, and drive down costs. Other countries, including the United 

Kingdom and New Zealand, offer instructive lessons. 

As the Administration develops this performance management system, we are 

committed to taking the best of what works—in other governments, the private sector and recent Federal efforts—to create a new performance management system. 

This system will at the foundation of our efforts to improve the efficiency and effectiveness of the Federal government. In developing this performance management 

system, there are five key principles we will follow: 

1. Senior leader ownership of performance management process. It is critical that 

senior agency leaders ‘‘own’’ the overall performance management process and their 

agency goals and measurements. Secretaries and Deputies will be charged with the 

setting of agency goals, will be held responsible for performance against those goals 

and their related measurements and will be expected to be actively engaged in all 

aspects of the performance management process. 

2. Cascading goals and measurements. A clear line must link agency strategic 

goals and measurements to programs and employees. Unfortunately, few agencies 

have historically had agency goals cascade down to unit or program targets or understood how performance against specific program and unit goals resulted in success—or failure—against agency-wide objectives. Both linkages are critical to the 

functioning of a successful performance management system. 

3. Outcome-oriented, cross-agency goals and measurements. Outcome-oriented 

goals and measures connect government agencies to their missions. Too often in the 

past targets have been internal and process oriented. Similarly, achieving broad 

government outcomes often requires contributions from multiple actors across different agencies and often inside and outside of government. Goals and measurements must support coordination across these organizational boundaries. These 

must also reflect clear delineation of lines of responsibility, explicitly identifying 

who a ‘‘goal owner’’ is and what other organizations are expected to contribute toward a common objective. Similarly, a given unit’s measurements must reflect their 

differing contributions toward common goals. 

4. Relentless review and accountability. As has been noted above, measurement 

has no value if it is not used by decision makers. Clear communication of progress 

against targets and frequent reviews of performance against plans are essential. 

These reviews must be performed at all levels of government, including program, 

unit and agency level reviews, as well as reviews by OMB and other components 

of the White House of overall agency performance. These reviews must be done on 

a regular basis, probably at least quarterly. Only this kind of relentless review process will result in performance management becoming ingrained into the culture of 

government. 

5. Transparent process. Achieving important government goals requires the active 

engagement of the public, Congress, and the overall government workforce. Transparency plays a critical role in this engagement, promoting understanding of what 

we in the government are doing, stimulating idea flow and involvement of broader 

groups, communicating results and creating accountability for agency managers. 

Such transparency is therefore critical to the success of any Federal performance 

management system. 

Using these five principles, we are committed to driving performance gains across 

the Federal government. This is an ambitious undertaking. However, we have already begun to move forward on several fronts. 

PRIORITY PERFORMANCE GOALS FOR EVERY AGENCY

In this year’s spring budget guidance to agencies, OMB asked every major agency 

to identify a small number—three to eight—of ambitious, outcome-oriented high priority goals which they intend to achieve in the next 12 to 24 months. Senior leaders 

are actively involved in this effort, including Secretaries and Deputy Secretaries. 

This level of involvement is a significant break from the past. We expect agency 

leaders to review their progress against their goals on an ongoing basis and OMB 

will monitor progress here also. At the same time, agencies are identifying goals, 

such as climate change and homelessness, which are a high priority for multiple 

agencies and require close collaboration. 
9 

MANAGEMENT DASHBOARDS

Management dashboards have proven an effective means for succinctly conveying 

real time performance data in both the private and public sectors. In June, we 

launched the IT Dashboard, which covers all major IT projects across government. 

The IT Dashboard makes it possible to review cost and schedule variance for every 

major Federal government IT project. The dashboard also shows how each agency’s 

Chief Information Officer has assessed performance. The IT Dashboard is already 

having an impact. As a result of this effort the VA, for example, put 45 over-budget 

or over-schedule projects on hold until it decides which to continue and which to 

terminate. We plan similar dashboards for other common government functions, including procurement, financial management, and personnel management. 

CUSTOMER-FACING PERFORMANCE INFORMATION

We have begun using dashboards not just to improve our administrative functions, but to serve agency customers. In June, the President charged Secretary 

Napolitano and the team at the United States Citizenship and Immigration Services 

(USCIS) to set up, within 90 days, a system that allows applicants to see their application status via web or email updates, how long each step in the process normally takes, and the speed of the applicant’s case compared to other similar cases. 

The site went live on September 24, exactly 90 days after President’s announcement 

and makes what had been a notoriously opaque process much more transparent. We 

are encouraging agencies to identify other service areas which can benefit from similar customer-facing systems. 

RIGOROUS EVALUATIONS

For certain types of programs, regular measurement is not sufficient. These programs require periodic in-depth evaluations to determine their effectiveness. On October 7th, OMB Director Orszag encouraged Federal agencies to request FY2011 

funding to conduct significant evaluations in social, educational, and economic programs as well as begin to strengthen agency evaluation capacity. He also established an inter-agency evaluation working group and instructed all Federal agencies 

to make evaluations of program impacts readily available online. 

PERFORMANCE LEADERSHIP

Dr. Shelley Metzenbaum, who joined our OMB team a month ago, is leading our 

performance measurement and management effort. Among the Obama Administration’s Cabinet and sub-cabinet appointments are several former Governors, state officials, and local officials, who have experience using performance goals and measures to drive government change. We are enlisting them and other interested officials across Federal agencies to work together as a vanguard for Federal performance management. They are developing real-time systems for measuring their performance and managing their agencies. 

As we move forward, we are also identifying current performance management requirements and systems that do not meet these principles, and will either eliminate 

or streamline them. This will include making the Performance and Accountability 

Reports more useful by scaling back their hundreds of pages per agency per year. 

OMB is also using performance measures, evaluations, and other relevant data 

about need and program context to inform budget decisions. The President’s FY 

2010 Budget proposed reduced funding or the termination of 121 programs that that 

had not accomplished the goals set for them, that operated inefficiently, or that 

were unnecessary because the program objectives were being better addressed by 

another program. Agency goals and relevant performance information will also inform our FY2011 budget decisions. 

As we undertake these efforts, we would like to work with the Budget Committee 

to make sure the information you receive from agencies serves you well. We look 

forward to partnering with you as we learn more about the Committee’s performance improvement priorities. We have already had productive conversations with 

members of this Committee, including Representatives Schrader and Cuellar. 

I thank the Committee for holding this hearing and for your belief in improving 

Federal performance. I look forward to working with you, with Federal employees 

across the nation, and with our service delivery partners to accomplish this objective. Mr. Chairman and Members of the Committee, I would be pleased to answer 

any questions you may have. 

Chairman SPRATT. Thank you very much. 
10 

I am going to yield my time now, my first 5 minutes, to Mr. 

Schrader, and I will come in and be the clean-up hitter at the end 

of everyone else’s questions. 

Mr. Schrader. 

Mr. SCHRADER. Thank you again, Mr. Chairman. I appreciate 

that. 

Mr. Zients, given the work that has been done before under the 

Clinton and Bush administrations with PART and the Government 

Performance and Results Act, how do you see this management initiative for this administration, relating to them, replacing them? 

How is that all going to work together? 

Mr. ZIENTS. Good question. Thank you. 

Well, first of all, I think we need to make sure that we don’t sort 

of throw the baby out with the bath water. There are good aspects 

to GPRA, there are good aspects to PART. I think there is too 

much—there are too many metrics. We tend to measure in silos, 

which is how we are organized as a government—by agency, by 

program—when many of our issues—homelessness, climate change, 

employment programs—tend to go across. So we need to have the 

ability to go across in identifying the issue or the opportunity rather than the silo. 

We need to be focused on outcomes-oriented measures. Too often, 

measures are input- or process-oriented. So outcomes-based measures. We need to make sure that we don’t have too many; I think 

the focus on too many things is ultimately the focus on nothing. So 

we need to prioritize. 

And then—do all of this and be transparent, and then make sure 

that people are using the system—you are using it, senior leaders 

across government are using it—and that that use, that attention, 

then trickles down or cascades through the organization, all the 

way to the individual employee. 

So I think there is a decent foundation here, but we need to take 

the pieces that fit with what I just described and also eliminate 

what doesn’t, to remove the clutter, if you will. 

Mr. SCHRADER. Very good points. I totally agree. And if we can 

get that alone done, we will have gone a long way towards improving government efficiency and getting great bang for our buck with 

our taxpayer dollars. 

But to that end, how do you envision getting Congress involved? 

As I alluded to in my opening remarks, a lot of times that is the 

nub. I mean, the State to the north of me, Governor Locke had put 

a great program into potential effect, and it was largely somewhat, 

if you will, at least ignored by the legislative branch. 

How do you envision getting Congress involved in either the 

early stages of helping develop the management system; and then, 

more importantly perhaps, once the system is up and running, involve us in working with you on the outcomes that are desired? 

Mr. ZIENTS. I think when you do do the retrospective on the prior 

efforts, there has not been enough involvement with Congress at 

the beginning in helping to create the system; and therefore, it is 

probably not surprising that there hasn’t been a lot of use. So we 

are reaching out to you and your colleagues in the House and the 

Senate, and we want input as to what will serve you well, because 
11 

you are an important part of making sure that this system is used 

and paid attention to. 

I think that this committee could play a particularly valuable 

role in that, looking across the silos and helping with some issues 

that do go across programs and helping us to think that way and 

organize that way. And the more that we can tie performance management to the budget, the more successful it will be in actually 

having the system be used and actually have it drive results. 

Mr. SCHRADER. If you could discuss just for a moment how you 

might shift resources using performance-based budgeting in light of 

a particular crisis or a policy objective that Congress is attempting 

to achieve in any given session, how would that impact the use of 

your outcome-based budgeting system? 

Mr. ZIENTS. I think that if you were to take one of these issues 

that does cut across, and you would say, Okay, there are a dozen 

or two dozen programs that are attempting to accomplish the mission of that cross-cutting issue or opportunity—let’s say, homelessness—and understand: 

What do we know about each one of those programs? 

What do we know in terms of how they are performing versus 

their outcomes-based measurements? 

Are they performing at the target, below the target, or above? 

Have there been any evaluations done of those programs as to 

how those programs perform on their own, and then in comparison 

to other programs? 

We can then say, Okay, that issue is important; now let’s make 

sure we fund the programs that are working well and not fund or 

fix the programs that aren’t working. 

Mr. SCHRADER. Excellent. That is great. 

You talked about already directing OMB to talk with the agencies about priorities in the next 12 to 24 months. Oftentimes it has 

been my experience that to achieve certain outcomes it takes several legislative or congressional sessions to get there. It can take 

years more than just a couple years. 

How do you envision the outcomes? There are intermediate outcomes, there are long-term outcomes; how do you see the relationship of what you are doing related to the long-term budgetary implications that this Congress would be involved in? 

Mr. ZIENTS. I think that if targets are too far out in the future, 

people tend to discount them and they don’t really drive performance. So in this effort where each agency has identified three, four, 

five—maybe as many as six, seven, eight, depending on the size of 

the agency—high-priority performance goals, we are looking for 

metrics across a year-to-2 period of time. 

It doesn’t mean in 24 months we are complete, but we want to 

see how agencies are tracking against those milestones. And if they 

are performing well, you know, we will obviously encourage continued strong performance. If people are missing targets, we will call 

that out and look for mid-course corrections and ultimately want 

to ensure that those targets are met. 

So I would think that that type of information, how are agencies 

doing against their targets, what does the trajectory look like, 

would inform future budget decisions. 
12 

Mr. SCHRADER. I found that if you don’t have intermediate outcomes, you lose focus entirely. But you have to have your eye on 

the big prize, and those intermediate outcomes hopefully get you on 

that trajectory. 

Mr. ZIENTS. Exactly. 

Mr. SCHRADER. One more question if I may, Mr. Chair. 

You also referenced some rigorous in-depth evaluations periodically. Are you envisioning that like a zero-based budgeting exercise 

or something similar? 

Mr. ZIENTS. It could play into a zero-based budgeting exercise, 

but it is actually a slightly different take, which is to say, there are 

programs where we have measured them and we are seeing how 

they are performing against their targets and goals as I just described. 

But at the same time, you need to step back and say, How is this 

program doing versus other programs serving the same goal? How 

is this program doing versus a control? And, therefore, you need a 

rigorous evaluation of those programs periodically to understand 

what kind of return the taxpayer is getting on the dollar. 

I don’t think as a generalization we do enough evaluation across 

government. So the guidance encourages agencies to build their 

evaluation capabilities; to start to work in cross-agency groups to 

share best practices; to make all evaluations, historic and future, 

transparent because sometimes evaluations end up on a shelf 

somewhere; and also, to encourage agencies to put forward proposals for additional evaluations to be funded in the fiscal year 

2011 budget. 

So I think evaluation dollars can have a very high return for all 

of us. 

Mr. SCHRADER. I appreciate that. If we can actually get Congress 

and the administration on the same page with performance measurement, we will have done yeoman’s work and probably be one of 

the better achievements in this Congress, in my humble opinion. 

I yield back, Mr. Chairman. 

Chairman SPRATT. Ms. Lummis. 

Ms. LUMMIS. Thank you, Mr. Chairman. And I applaud Mr. 

Schrader’s attention to this project. I think it could be very worthwhile. 

Thank you for being here, Mr. Zients. 

Five months ago, Peter Orszag directed Federal agencies to identify high-priority goals. And you mentioned a couple of them, homelessness and climate change. Has there been a publication of those 

goals so we can see what your goals are and compare them to our 

goals? Or when do you expect that to become available? 

Mr. ZIENTS. We are in the midst of the budget process at OMB, 

and I can tell you that those high-priority performance goals—I am 

impressed by the first round that were submitted. 

There is some variation across the agencies. Some of them still 

need some work. But we are starting each budget discussion with 

those high-priority performance goals and ensuring that they are 

the right goals, and then the budget discussion follows those goals. 

When the President releases the budget in February, we plan to release those high-priority performance goals with the budget. 
13 

Ms. LUMMIS. And are those performance goals tied to specific 

budget items? In other words, can we expect to see a deficit reduction component associated with those goals or real savings associated with that? 

The reason I asked, and I think that Representative Schrader 

has hit on it, I have seen polls that show that the average Democrat believes that almost half of Federal dollars are wasted, and 

the average Independent and Republican believes that more than 

half of Federal dollars are wasted. So clearly, the American people 

are and have a right to be a bit cynical about how Federal dollars 

are spent. And it is incumbent upon all of us to set up manners 

in which a transparent system can be used by the public to evaluate whether their dollars are being used well. 

Is that going to be available to the public? 

Mr. ZIENTS. Well, the high-priority performance goals are very 

much focused on management, so not on policy. And so it goes right 

to the issue you are talking about, which is how well do our government services perform? 

And I think there are two aspects to that. One is, how efficient 

are they? And the second is, how high is the quality of the service? 

How good is the citizen interaction with the service? 

And, yes, many of the high-priority performance goals address 

citizen facing services, both their efficiency and their effectiveness, 

meaning their service quality. And, yes, we do plan on making 

those goals, the broad goals and the supporting metrics and the 

milestones and the plans, available to the public. 

Ms. LUMMIS. And are there savings that will be tied to budget 

reductions associated with those goals? 

Mr. ZIENTS. As I said, the goals themselves have to do with becoming more effective and more efficient. So, yes, there ultimately 

will be savings, a separate exercise as part of the OMB budgeting 

process, to identify taking all available evaluation and metrics and 

other knowledge we have, recommending programs that should either be terminated or funding should be reduced. So in fiscal year 

2010, I think there were 121 of those programs presented as part 

of the budget, and we will do a similar exercise in fiscal year 2011. 

Ms. LUMMIS. Let me give you an example of an agency that, as 

the bill passed the House this year, received an over-35-percent increase in their budget, which is a stunning number to me. I can’t 

imagine a Federal agency being able to expend that big of a budget 

increase. And that was the EPA. 

How will you monitor one agency’s massive expansion of dollars 

under these types of performance bills? 

Mr. ZIENTS. Understanding the right outcomes-based measures 

and ensuring that the agencies are performing against those measures—and if they are not, that corrective actions are taken—and 

making those metrics available to the public and for all of you to 

monitor progress against. 

Ms. LUMMIS. Thank you, Mr. Zients. 

Thank you, Mr. Chairman. 

Chairman SPRATT. Thank you, Ms. Lummis. 

Mr. Doggett. 

Mr. DOGGETT. Thank you very much. 

And thank you, Mr. Schrader, for your interest in this. 
14 

I was involved in some of these performance evaluations back in 

my days in the Texas State legislature, and I think this is really 

important. And I appreciate your service at OMB, but as you know, 

my concern is about the half of the budget that OMB is doing nothing on, and that is the tax expenditure side. In fact, it probably is 

more than half of the budget according to the determinations that 

the Government Accountability Office has made. 

By ‘‘tax expenditures,’’ I am referring to the special tax breaks, 

known as tax expenditures, that are designed to reward particular 

activities or to advantage specific groups of taxpayers that are 

often described as spending programs hidden within the Tax Code. 

As best I can determine, OMB has done nothing about the tax expenditure portion of the budget with the notable exception of taking the appendix A on performance measures and economic effects 

of tax expenditures that the Bush administration OMB put into its 

budget year after year, and copying it—I think verbatim; you may 

have changed a word or two—and putting it into the budget that 

the President submitted in February. 

Is there anything else that OMB has done, other than copying 

those words from the Bush budget and giving us appendix A in the 

same form we have seen it year after year? 

Mr. SCHRADER. I agree with you that there we are talking mostly, or this morning has been focused on spending programs, and 

there is a whole other side of this which is the tax side. And the 

President is committed to maximizing that the impact of every dollar we collect and every dollar, I suppose, that we don’t collect. And 

it is—those types of programs oftentimes are part of the collection 

of programs to serve different purposes like homelessness or other 

cross-cutting issues. It has not been the first area that we have focused on in the first few months. 

Mr. DOGGETT. Have you done anything on it? 

Mr. ZIENTS. It has not been an area of focus for us. It will be 

going forward. 

Mr. DOGGETT. Is it correct that to this point all you have done 

is to reprint appendix A out of the Bush administration budget and 

put it in your budget? 

Mr. ZIENTS. I don’t have specific knowledge on that. 

Mr. DOGGETT. Well, if you compare them side by side, there may 

be a word or two change, but it looks to me like it is a reprint. 

Just to give you an example. And I was encouraged by the comments in the President’s budget that programs will not be measured in isolation, but assessed in the context of other programs 

that are serving the same population and meeting the same goals. 

Instead of picking on somebody else’s tax expenditure, I will talk 

about one that I authored, which is the higher education tax credit 

that is part of the stimulus program. 

I don’t see how you can evaluate—as Mr. Schrader has suggested 

we need to do, and I agree with him—Pell grants, Perkins loans, 

work-study without evaluating and comparing them with a rather 

substantial tax reduction—$14 billion was the score, approximately, on the higher education tax credit that I authored—and 

comparing all three. 
15 

But I don’t see OMB doing anything on that, and I am concerned 

that when we get the budget next February, it will have the same 

appendix reprinted. 

To be more specific, I know that GAO called on OMB long before 

this administration, and you were there, asking them to implement 

some specific recommendations. As best I can determine, not a single recommendation GAO made back in 2005 has been implemented by OMB, and I don’t even see any plans to implement it. 

In the fiscal 2002 budget, OMB announced that IRS had a 10- 

year panel sample that would facilitate the evaluation of tax expenditures; and as recently as 2006, OMB described this data set 

as permitting, quote, ‘‘more extensive and better analysis of many 

tax provisions than can be performed using only annual data.’’ 

2008, just before you came on board, marked the tenth year of 

that 10-year study. What are OMB’s plan for that data system, 

data set, and what specific plans does OMB have, as you said, 

going forward, for gathering the data needed to perform the evaluation of tax expenditure programs? And how will the future be any 

different from the past years of neglect on this issue? 

Mr. SCHRADER. First of all, I totally agree with the horizontal approach, and that the tax expenditure side should be part of that, 

along with the programs that we are talking about. So 100 percent 

agreement there. 

I think a lot of these programs are actually more conducive to 

the evaluation than they are the measurement. So I think part of 

the evaluation push will coincide with looking at these types of programs. 

And there is a lot going on. As I said, there are a lot of current 

programs that we are evaluating in terms of measurement, what 

we should keep and what we should not keep. And I will lean in 

to the area you are talking about. It is not an area that I have 

spent much time on to date, but it is certainly a priority going forward. 

Mr. DOGGETT. Well, just in conclusion, Mr. Chairman, we are 

about to take up in coming weeks what are called the extenders tax 

provisions. This is an annual ritual where lobbyists come and talk 

to staff of the Ways and Means Committee and the Senate Finance 

Committee, and the extenders get extended with little or no evaluation or consideration of whether they serve any worthy purpose 

whatsoever. 

The last 14 budgets, well before your time, that have come out 

of the executive branch have bemoaned the fact that evaluating tax 

expenditures was a significant challenge. To date, no one has accepted that challenge. These are a huge part of the budget. At a 

minimum, the GAO’s recommendation of 2005 to place the tax expenditure for higher education next to the direct expenditure for 

higher education would help the public and the Congress in evaluating what resources we are allocating for good purpose or ill. 

But I would just urge you, as I will be urging in the strongest 

terms when we consider the President’s budget this next year, that 

this needs attention and needs attention yesterday. 

And I appreciate your service and your attention to this matter. 

Mr. ZIENTS. Thank you. 

Chairman SPRATT. Thank you. 
16 

Mr. Austria. 

Mr. AUSTRIA. Thank you, Mr. Chairman. 

And, Mr. Zients, thank you for your testimony today. I appreciate 

it very much, as this committee, I am sure, does. And I think the 

question again comes down to how we here in Congress and the administration can ensure that citizens, the taxpayers, get the most 

out of the tax dollars that they send to Washington, D.C.; and I 

want to bring up some of the things that you talked about as far 

as efficiency and effective. 

I think, unfortunately, all too often what is forgotten about government programs is that no matter how important or well intentioned they might be, they impose a cost on the economy. Every 

dollar spent by the government is a dollar taken away from someone else who might spend or invest it on growth-producing activities. So when we decide what we want government to engage in, 

whether it be a large or small activity, we should consider the cost 

of collecting the taxes, increasing the debt compared to the value 

of the government’s programs. 

Do you incorporate in your analysis the government’s performance at all? That would be my first question. 

Mr. ZIENTS. The performance? 

Mr. AUSTRIA. The performance as to how much money it is costing to collect the taxes, to run the plan efficiently, because again, 

every tax dollar that we are spending here in government is being 

taken out of the private sector. 

Mr. ZIENTS. I think that is really at the heart of what I view my 

team’s mission, which is to make sure that where we are spending 

dollars, we are spending them wisely; that programs that don’t 

work we identify and we either fix or terminate, and programs that 

do work we continue to drive their performance and make them 

better. 

So, yes, I think the performance of government is front and center for what we do. I think it is important, as I said earlier, to understand how we best serve you and your needs as to which programs, which metrics, which cross-agency goals are most important, and make sure that we design a system that you find useful 

as you go about your important work. 

Mr. AUSTRIA. Mr. Zients, let me also just kind of follow up and 

again kind of throw in a little bit of my opinion. 

I think one of the fundamental problems with government programs is that they lack any natural incentive to promote efficiency. 

And that is why I think what you do is so important. 

So for a number of years now, we have been paying agencies 

more through cap adjustments—and I want to talk about that—you 

know, to do what they should be doing in my opinion, anyway, and 

that is attacking waste, fraud, and abuse. With that in mind, I 

have got two questions. 

If we really want to promote greater efficiency in government 

agencies, don’t we at some point have to simply just restrict their 

budgets and force them to get by with tighter limits and work more 

efficiently and more effectively with the dollars that they have? 

Mr. ZIENTS. I think it is hard to generalize. But certainly, I think 

looking at how efficient they are and insisting we become more effi-
17 

cient, as has the private sector across time, is a very good discipline. 

I think—one of the observations I have from 20 years in the private sector is, a lot of the efficiency gains and service quality gains 

have been driven by information technology. And there are pockets 

of information technology sophistication and leading-edge use in 

the government. But for the most part, we are way behind. And I 

think that we need to understand how we leverage information 

technology and other breakthroughs in management and operations to drive better efficiency, which happens also to be correlated with better service. 

So I think a discipline of ‘‘you should be getting better and better 

each year’’ is a good discipline, whether that is through lower dollars or lower budgets or higher output; it can be a combination depending on the situation. 

Mr. AUSTRIA. Mr. Chairman, one follow-up to that. 

I think, in any case, the testimony you have given today—the 

analysis, the metrics, I think, are useful; but I think, as a committee member, you know, when can we expect to see some results? 

And I want to follow up on what the Congresswoman from Wyoming, Ms. Lummis, was talking about as far as being able to see 

from a transparency standpoint that efficiency, that effectiveness, 

starting to see savings results from these efforts. 

Mr. ZIENTS. I think it is extremely important that we get results 

fast. 

I think—Congressman Schrader and I were talking beforehand. 

And this is not an overnight effort; this is a complex system that 

we are going to put in place that is going to drive performance, 

hopefully for many, many years to come. 

That said, I think it is important that we have some fast results. 

I think I highlighted a few of those with the IT Dashboard as an 

example in the testimony. But there are also areas like contracting 

where we spend $530 billion a year. We have put a stake in the 

ground, the President put a stake in the ground on March 4 that 

we are going to save $40 billion by fiscal year 2011. So we are right 

now reviewing plans from each agency as to how they are going to 

bring forward their $40 billion. 

So while we are building a system that is going to be built to last 

and serve, hopefully, many Congresses, I want to make it clear 

that we are very interested in having immediate results that save 

taxpayer dollars and improve the services that we provide. 

Mr. AUSTRIA. Thank you, Mr. Chairman. 

Chairman SPRATT. Mr. Scott. 

Mr. SCOTT. Thank you, Mr. Zients, for being with us today. One 

of the things that concerns me is the fact that CBO doesn’t score 

prevention. In the health care bill there are some prevention activities that just aren’t scored. I serve as Chair of the Crime Subcommittee, and prevention strategies are not scored; and, in fact, 

wasteful strategies aren’t scored either. 

Pew Research Forum calculated that any incarceration rate over 

500 per 100,000 was actually counterproductive. We are already at 

700 per 100,000. Some communities lock up minorities at the rate 

4,000 per 100,000, and still we are passing mandatory minimums 

and other things that just will make the situation worse. 
18 

How would performance budgeting help us get out of this mess? 

Mr. ZIENTS. I think that as to the health care piece of it is not 

a place where I have spent a lot of personal time. It is something 

that the President and Director Orszag are obviously deep in on. 

Other metrics that are performance based, like the ones you described should be part of what we measure—agency performance 

and how we measure it. So it is not a terrain that I have personally 

spent a lot of time on, but what you are describing are the types 

of outcome-based metrics that should be part of what we are doing. 

Mr. SCOTT. You mentioned saving money in contracting. Everybody knows that you can save money in contracting by bundling 

contracts and skipping the bid process and just going—letting people pick and choose and not going through the expense of a formal 

bid. You would give up, however, the opportunities of small businesses to participate in fairness, because if people can pick their 

friends, if you are not a friend, you don’t get covered. 

How would you balance efficiency and cost effectiveness with 

making the contracting process fair and open to all, including small 

businesses? 

Mr. ZIENTS. Right. I absolutely agree with the importance of 

small and minority-owned businesses in the contracting process. 

What you just described didn’t strike me as efficient. 

Actually, I think there is not enough competition in contracting. 

Too often there is only one bid or there is no bid, and it goes to 

one contractor. So I think increasing competition is a good thing to 

contribute to increasing efficiency. Too often we rely on what are 

called high-risk contracting vehicles, so cost-reimbursement contracts or time-and-material contracts, or as I said, contracts that 

aren’t competed, are all high-risk vehicles. 

We have asked every agency to reduce the percent by 10 percent. 

So I think the sort of loose network that you described—returning of favors, if you will—I am not sure how much of that exists; 

but to the extent that exists, I would argue, that is inefficient. And 

that is the kind of—there is the kind of practice we want to change 

through increasing competition and moving more towards fixedprice contracts while at the same time absolutely understanding 

the importance of the small business minority communities. 

Mr. SCOTT. In my former work in the State senate in Virginia, 

we worked with trying to coordinate agencies with similar or overlapping missions and tried to coordinate those activities from a 

mission perspective. 

In the education area, you kick the kid out of school with no 

services that would save them money in the education service; but 

if someone from the criminal justice system is around the table, 

they might suggest that is not a good policy. 

How does the performance budgeting—how does the performance 

budgeting work across agencies in making sure they are properly 

coordinated? 

Mr. ZIENTS. I think you are exactly right, and we can learn from 

States like Virginia. And I think today we don’t do a good job. 

Today, it is really done in these silos at the level of over 1,000 different programs. So I think through the high-priority performance 

goal exercise that I described, we have already identified several 

situations where agencies are coming to the table for the first time 
19 

to coordinate on their share of high-priority performance goals. 

This is a start, but the system that we are envisioning, the system 

that we will develop, will absolutely not start at the level of how 

we are organized, but instead start at the level of serving, in your 

example, an individual student. 

Mr. SCOTT. You mentioned Virginia. Virginia has frequently been 

designated the best-managed State in the country. What is Virginia 

doing that we should learn from? 

Mr. ZIENTS. Virginia has a handful of important goals, outcomesbased goals at the State level, that they make public. They benchmark their performance versus other States. They have performance agreements with the folks who are running those agencies, 

who are responsible for meeting those goals, regular reviews of performance against. And then those goals in turn cascade through 

the agencies down to individuals. 

So it is—I think it is Virginia is a leading State. The results have 

followed. As you said, they have been recognized by Pew and others 

over and over again as a well-managed State. So I think there is 

a lot we can learn from the States. And we want to build on the 

best of the States’ efforts, Oregon, Texas, Virginia come to mind; 

cities, Baltimore, New York, and other cities; and then pockets of 

good performance through the Federal Government and take sort 

of a best-practice approach. 

We don’t need to reinvent the wheel. But I think there is a lot 

to learn from Virginia and other States. 

Chairman SPRATT. Mr. Yarmuth. 

Mr. YARMUTH. Thank you, Mr. Chairman. I do have a question 

that I want to get to in a minute, but I have to comment on a couple things that have been said here. 

The first—and I am sorry he has left—was Mr. Austria saying 

that every dollar that comes into the Federal Treasury is a dollar 

that we deprive the private sector of. And I would just like to remind Mr. Austria and those others who continually try to demonize 

government that last year, at the request of the Bush administration, we allocated $700 billion to bail out the private sector. And 

in fact, $300 billion or so of that is still out there in the private 

sector helping to alleviate their problems. 

We have about $290 billion from the American Recovery Act that 

went back into American citizens’ pockets, which presumably is out 

there in the private sector being spent and/or saved. And there are 

examples of that. There is example after example of Federal tax 

dollars actually going not only to support the private sector but to 

go into the private sector. 

The second comment I want to make is one you made, Mr. 

Zients, when you talked about the efficiency of the private sector. 

And certainly there are things that are done in the private sector 

that probably should be replicated in the Federal Government. But 

there are a lot of things, having spent most of my life in the private 

sector, that they are not always the most efficient way of operating. 

And all we have to look at is the number of eight-digit salaries that 

have gone to people who have run companies into the ground. 

Anyway, that being said, I do have a question. 

One of the inevitable things that we do here when we pass legislation is to create unintended consequences; and in fact, probably 
20 

everything we do creates unintended consequences. Is there a way 

that the performance measures that you are setting up will catch 

unintended consequences of programs and agencies, or is that 

something that we need to leave in the oversight function of Congress? 

Mr. ZIENTS. I think the rigorous review of how programs will do, 

are doing, versus what they set out to do, will inevitably uncover 

some of those. But I don’t think it is the—it is not the intention, 

it is not the primary objective of the programs. But I think that 

those reviews of how programs are doing versus their targets and 

goals, my experience so far in the Federal Government and in the 

private sector is oftentimes you will find those unintended consequences. 

I do want to comment in that having spent my whole career in 

the other Washington, if you will, in the local business community, 

I do think there are things we can learn from the private sector. 

But I do want to tell you that I bring a lot of humility to how different this sector is, how big it is, and how a lot of what happens 

here is unique to this sector, and how there are a lot of good things 

happening in the Federal Government. So I don’t want you to misinterpret the private sector. 

Hopefully, there is some transference possible, but I don’t think 

that is the lead by any stretch. 

Mr. YARMUTH. I take it and I agree with you absolutely. 

Kind of extending that question a little bit about unintended consequences, how is your system and your program going to relate to 

Inspectors General and the GAO in terms of how—what is the relationship going to be? 

Mr. ZIENTS. Yes. One of my roles is to chair the inspector general 

counsels, I do spend a lot of time with IGs and I think they play 

a very important function. I think that we want them to continue 

to play the role they play so effectively. At the same time, I think 

they do have ideas about how we can prevent waste, fraud, and 

abuse. So I am encouraging that community to continue, obviously, 

the role it plays and to keep it very independent and strong. 

At the same time, start to bring forward, as I think the Recovery 

Act has shown, the ability to preempt rather than simply look 

backwards in a rearview mirror. 

So I think IGs are very important in their watchdog capacity and 

also the capacity of helping us identify how we can be better. I 

have worked with GAO now on several issues and have a lot of respect for the rigor of their analytics, and we are working together 

on several GAO high-risk-list issues, including security clearance, 

where I was here a few weeks ago to testify. And I found it very 

helpful to work closely with GAO to understand not only what is 

the problem, but how do we actually solve the problem. So I think 

both GAO and IGs have a very critical role in this moving-forward 

agenda. 

Mr. YARMUTH. One last comment. Having spent 25 years or so 

in the media before I came to this job, it is going to be interesting 

to see whether the good stories, the success stories that you have 

to tell are covered as well as the negative stories you have to tell. 

I am all for transparency, but I hope we get balanced coverage. 
21 

Mr. ZIENTS. I couldn’t agree more. And I do think there are pockets of good performance, and hopefully we will create many more 

together. 

I think it is important to recognize those and to celebrate those, 

while at the same time where there are problems we are transparent and we uncover them and we do things to fix those problems. 

But I think recognition and reward and positive publicity is part 

of the package here. 

Mr. YARMUTH. Thank you very much. 

Chairman SPRATT. Thank you. Mr. Becerra. 

Mr. BECERRA. Mr. Chairman, can I pass? 

Chairman SPRATT. Sure. Ms. Schwartz. 

Ms. SCHWARTZ. Thank you. I appreciate weighing in on this hearing and hearing some of your comments. 

I wanted to follow up on a couple of things that you said in response to some of the questions. First, I did want to say I appreciate some of the goals that have already been set, and they are 

pretty demanding goals, I think, in terms of the way you do Federal contracting and making sure that those are Federal contracts 

to the private sector and making sure that, I think you have said— 

my notes say $40 billion in savings is the goal, and 7 percent savings by 2011 in baseline spending and reducing dollars obligated 

under high risks that are no-bid contracts by 10 percent. Those are 

all pretty ambitious goals and look forward to your meeting them. 

What I wanted to ask about is I think what is actually maybe 

more complicated because those goals can be met. The subcontracting to the private sector is very important, making sure we 

evaluate how those dollars are being spent. But the issue of program evaluation and how you actually do plan in a time-sensitive 

way to do the kind of evaluation of what is working and what isn’t; 

not only each program by itself, but in the context of what our priorities and goals are for that department, for the Nation. You 

know, it is a program to be working, but if it is doing something 

nice over there but really doesn’t meet our basic priorities in the 

kind of economy, the kind of revenue-sensitive situation we have 

for the budget for the government, it seems to me that you are 

looking at not only does the program work or not, but does it actually meet our overall goals that we have set for that department. 

So even if the program is functioning well but does not meet our 

overall goals, what kind of action are you going to take on that, is 

really my first question. 

And I did want to follow up on your question about health IT. 

You acknowledge that—not health IT, but information technology 

that you are using to monitor programs, again, I assume, in a timesensitive way, and to create more efficiency within government. 

If you could also speak to—you acknowledge that it is a problem, 

but—two questions about that. One is it takes an investment to put 

in the kind of information technology—I am well aware of this because of the health information technology that I have worked on. 

But that takes some cost to us, spending money to get systems 

computerized, really make sure we have the right software, make 

sure it is interoperable, make sure that that information is shared 

publicly and used by managers to make decisions. 
22 

Could you speak to not just acknowledging the importance of 

using technology, information technology, but then how are you 

going to, one, move it up to scale and then use it in a way to do 

the kind of timely evaluation of our programs that I talked about 

in the first part of my question? 

Mr. ZIENTS. I think in the first part what matters, I think, we 

are uncovering through that high-priority performance goal exercise; so, which programs really fit with those handful of priorities. 

And that is the beginning of a prioritization exercise, so that things 

that matter less either are not funded at all or funding is reduced 

to those areas and funneled to those areas that matter more. 

The evaluation memo that went out from Director Orszag is, I 

think, has laid out the vector of what you are describing, which is, 

let’s take everything that we have done historically on evaluation 

and make it transparent so nothing is on the back shelf anymore; 

let’s build agency capabilities to do more evaluations; let’s have 

agencies work together to evaluate programs or issues that run 

across agency. And then if we are going to make it part of the funding of the fiscal year 2011 budget, is to fund more evaluations. 

I think we need more rigorous evaluation of what we are doing. 

And some of those evaluations do take time but others take less 

time. And I think when we spend those dollars on evaluation, we 

need to prioritize and do it in those areas that we believe are 

most—have the highest spend and where we believe that the evaluation will have insights to really drive future decisions. On IT—— 

Ms. SCHWARTZ. Just to finish up on that. So is the evaluation 

being done by the government agency, of are you building that into 

money that is being spent for a program to say they have to report 

back on their effectiveness and cost? 

Mr. ZIENTS. Agencies will do rigorous third-party evaluations of 

how they are performing versus their own targets but also against 

alternatives and control samples, so it will be very rigorous and 

independent. 

The IT piece, it is a little bit—and again I am generalizing here 

because there are pockets of success—but it is a little bit lose/lose 

in that I do believe in many areas we are behind where we should 

be on IT, yet we spend a lot of money. We spend $76 billion a year 

on information technology and we have too many projects that are 

behind schedule or over budget or never are implemented or don’t 

achieve their intended results. 

Now, this is not unique to our sector. It is hard in the private 

sector also to do large-scale IT. But we need to really think through 

how we have the project management capabilities to get this done. 

We move pretty slowly on IT, and as we all know, technology 

moves fast; so sometimes it takes several years just to begin a program, a project. And by the time we start it, sometimes the technology is a few generations behind. 

We also need to have technology driven and owned by senior 

leaders. When IT is done in a silo, it is inevitably unsuccessful. So 

we need to, I believe, improve IT project management from spec development through completion. 

Ms. SCHWARTZ. But again, it is not just getting the information 

and posting it. Transparency is important but it is then the use of 

that information to help informed decisions. 
23 

Mr. ZIENTS. I absolutely agree. The information is only as good 

as how much it is used to drive the decisions. 

Ms. SCHWARTZ. I think my time is up. Good luck. 

Mr. ZIENTS. Thank you. 

Chairman SPRATT. Mr. Becerra. 

Mr. BECERRA. Mr. Chairman, thank you very much. Mr. Zients, 

thank you very much for your testimony. 

Let me—I believe other members may have asked this, and I 

apologize that I wasn’t here for those questions. Any number of 

agencies can produce any number of dollars in savings depending 

on how efficient we can make them be in terms of their management. Some agencies are bigger than others. You can go after 

FEMA which is a small agency overall, with a very, very important 

mission when it is called upon to do it, versus, say, the Department 

of—or the Social Security Administration, which is a huge agency, 

or the Department of Defense, the largest of all our government departments. So you can get a different level of bang for the efficiency 

in the buck. 

I would like to focus on a couple of things. IRS. IRS probably is 

the largest producer of savings available out there for us in terms 

of its mission, what it does. It collects taxes. And if the studies are 

correct, some quarter of a trillion dollars in taxes go uncollected on 

an annual basis. Part of that is because we likely aren’t focusing 

the personnel that we have at IRS in the best areas to gain the 

most efficiency, because there are some people who probably owe 

the government $1,000 in unpaid taxes and there are probably a 

lot of entities out there that owe the government millions in unpaid 

taxes. And unless they focus correctly, we may collect $1,000 from 

that one individual American and let lots of companies get away 

without paying the millions that they owe the government in taxes. 

And so when it comes to expenditure programs, would your agency be involved in trying to help the IRS determine how to best 

focus its attention so that a nonprofit agency that is collecting 

money—there are tax deductions that go with that, and therefore 

are foregoing tax revenues—that we are making sure that that 

agency is actually using its money for the intended nonprofit purpose instead of paying their executives high salaries. Or do we 

want to make sure that if we have a program like the first-time 

home buyer tax credit, that we are not sending money off to a 4- 

year old who applies for a first-time home buyer tax credit, so that 

we are not being defrauded out of those $8,000 in tax credits that 

we are giving to Americans. 

Mr. ZIENTS. Let me start at the beginning of your question, 

which is prioritization. There are efforts, and we have talked about 

a few of them today, the performance management system that is 

the main focus of the hearing today, contracting, information technology, where they really are horizontal across agencies. The work 

we do hopefully applies to FEMA in your example and the IRS. So 

we want to create those institutional capabilities across the government in performance management, contracting, information technology and some other areas. 

That said, there are certainly areas where we believe they are at 

the intersection of large and inefficient, and that is where we want 

to focus more of our energy. 
24 

So to bring that same philosophy to the IRS, there is a tax gap 

of I think $300 billion. And closing that tax gap is, I am sure, important for the IRS and for all of us. And within the IRS, the commissioner should be prioritizing to say where is that intersection of 

it is big and I can get it done. 

So that philosophy of systemic horizontal improvement but at the 

same time focusing in on some areas that need special attention in 

getting early results and returning, in this situation, dollars to the 

taxpayers or dollars to the government is exactly the philosophy 

that we are embarked on. 

Mr. BECERRA. I think many of us would have a great deal of interest in supporting and observing what you do if we had a clear 

sense that in terms of trying to extract efficiency in the management of government we really went after the big apples. 

IRS, I suspect you will find, is strapped. It doesn’t have enough 

personnel to go out there and do all the work it needs to do. And 

that is because too often it gets a bad rap; that it is just out there 

like the bad cop trying to get Granny to pay her taxes when, in 

fact, there are many, many very wealthy individuals or corporations that are not doing what Granny has done, and that is paid 

her taxes. 

I would hope that what we are able to find in the work that you 

do is you will focus in on the big guys, the Department of Defense 

which does all these no-bid contracts or cost-plus contracts, which 

cost the taxpayers tremendous amounts of dollars, IRS and other 

agencies, and figure out what they need to do. In some cases we 

shouldn’t just blame them, because they don’t have enough personnel to do the work; in some cases we should try to help them 

be more efficient. 

But when you let $250 billion to $300 billion go on an annual 

basis because it is uncollected taxes, that is probably the biggest— 

the biggest inefficiency we can have in government. 

Mr. ZIENTS. I agree with your philosophy. Contracting, saving 

$40 billion across 2 years, of the $530 billion two-thirds of that is 

DOD. So clearly if we are going to move the dial and achieve our 

$40 billion goal, which we are committed to doing, hopefully exceeding, DOD has to be front and center in that effort. And they 

are, and they are making good progress. 

Mr. BECERRA. Thank you. Thank you, Mr. Chairman. 

Chairman SPRATT. Let me pick up on that point because as you 

go through the portfolio business at DOD, you will sooner or later 

run into the SAR, the Selected Acquisition Report. Have you or 

your office done any work in this area with DOD to improve upon 

or at least to see how well working the Selected Acquisition Report 

is? 

Mr. ZIENTS. As part of my responsibilities I oversee the Office of 

Federal Procurement Policy, which interacts with DOD and the civilian agencies on procurement and is the lead policy group. I am 

not familiar with the details of SARs but I do know that DOD, as 

I said before, is far and away the largest contractor. They are making good progress on increasing competition; reducing the use of 

cost reimbursement contracts; moving to fixed price; and also looking at have we in some situations contracted out or outsourced in-
25 

herently governmental functions or areas that we need to make 

sure we have the capacity to perform our critical function. 

So I think DOD is—I am impressed by their focus. They obviously have a lot to do when you are contracting for over $300 billion in the context of, you know, two wars and all the rest. But I 

think they are making good progress and they will contribute to 

their share, or hopefully even more of the $40 billion target. 

Chairman SPRATT. I am glad you mentioned the outsourcing because that is a big issue of concern in the Department of Defense, 

how much we are spending on outsourcing. And it has a repercussion, too, within the Department in the sense you aren’t training 

and bringing on board people who would otherwise be developing 

the management talents that you need internally are instead being 

displaced by outside contractors who charge substantially more 

than you would be paying for the talent inside. 

I worked years ago as a young officer in the Army with the development of the SAR. I didn’t have much to do with it, but it was 

in the office I was working. The guy sitting across from me was 

Hank Paulson. One of the other guys in the room was Walt 

Minnick, who is now in the Congress. When I came back here in 

1983 I went to see—I got on the Armed Services Committee and 

I went to check out the SAR, the Selected Acquisition Report. 

When I pulled it—that is about 13 years after I had been in the 

service—I saw it was essentially the same document it was in 1971 

when I left here. It had not evolved, it had not improved, it was 

about the same document. It was a variance analysis document for 

measuring cost, schedule and technical performance. And I guess 

over the years looking and dealing with the SAR, the one conclusion I have drawn is if it is used and it works, it will become more 

useful; and if it is not used and it is sort of done as something perfunctory that has to be done, then it doesn’t evolve, it doesn’t become more useful. 

The SAR should be much much more sophisticated than it is 

presently, but it hasn’t been used on the Congress well enough. 

When we have tried to dictate and put it in legislative language 

it always fails—the translation of it into real action on the bureaucratic side failed us. 

I would urge you to take a close look at that because it is way 

overdue on overhaul and improvement. And in particular, you 

mostly talk about judging performance, which is backward, looking 

how results have been produced. The SAR needs to be adapted so 

that it is forward-looking. And there are certain things that are 

picked out in advance to be watched from a variance analysis 

standpoint, so that if something is going awry, you will know that 

soon enough to take some preventive action so you don’t have to 

lose a lot of money and learn the hard way that the system is not 

going to be up to specs. 

Mr. ZIENTS. I completely agree. We need to have forward—this 

conversation we were having earlier with Congressman Schrader— 

we need to have forward metrics that we are tracking our progress 

against, and if we are not meeting or exceeding those, alarm bells 

should go off and we need to fix it. 

You know, with SAR and others, I think there is too much of a 

compliance mentality rather than let’s use this to drive results. 
26 

And where that is happening, we should either revamp and create 

something that passes the standard of we are going to use it to 

manage performance or we should get rid of it, because it is just 

clutter and taking up time. I think on acquisition, one of the rootcause problems is the workforce itself on acquisitions as we doubled contracting across the last 5 years. 

Chairman SPRATT. I will give you two examples. Some years 

ago—because I sponsored some legislation to change the SAR. 

When I was hiring a legislative assistant to do military and defense work for me, I put in the RFP, so to speak, that I would like 

to have somebody that had that ability to work with Selected Acquisition Reports, forbearance analysis, because I would like to be 

doing some work in that area. And I got two or three applications 

from the Beltway consultants of people who were doing SARS, and 

I was curious as to how it was they were doing SARS. 

What I found out is that the program management officers in 

many cases themselves outsource the SAR, get an outside management consulting firm to do the work that they should be doing. And 

if they are not capable of doing it, they shouldn’t be in the management position with respect to that program. 

Mr. ZIENTS. As part of the contracting work, we have asked each 

agency to identify an organization where they believe they might 

be overly relying on contractors. A significant portion of the 23 or 

24 agencies that are doing the pilot selected their acquisition organization because they have contractors doing acquisition. So that is 

an area it is not unusual to have contractors in the acquisition 

area. It doesn’t mean that that is always incorrect. But I think that 

it is data that so many of the agencies pick that area of acquisition 

as an area we are potentially over-relying on contractors. 

Chairman SPRATT. Which brings me to the next point. And that 

is, we shouldn’t get so lost in devising management reporting systems that we forget that the real payoff comes from getting good 

managers. 

Mr. ZIENTS. I 100 percent agree. 

Chairman SPRATT. They are useful and helpful, but they are no 

substitute for getting good people. 

Mr. ZIENTS. If you want great management you need great people. 

Chairman SPRATT. How do we do that? That is the sleeper issue, 

it seems to me, within the efficiency and effectiveness of the Federal Government. How do we attract—— 

Mr. ZIENTS. Well, we have to have a hiring process that actually 

attracts the best and brightest. If it takes 6 months, on average, 

to hire someone—my experience in the private sector is the best 

talent doesn’t loiter for 6 months, it finds another home. So we 

need to be able to hire the best talent and to hire the best talent 

you have to streamline the process. 

We need to make sure that we are providing enough training and 

continuing education. We need to make sure we have an appraisal 

system that rewards those that are performing well and enables us 

to give out feedback and potential out-counseling for those who are 

underperforming. 

So I think there is a lot that we need to do on the human resources side, working closely with Director Barry at OPM, and it 
27 

is an area of a lot of focus; because I 100 percent agree with you, 

if you want good management get great people. 

Chairman SPRATT. You need to be doing some face-to-face interviewing too, if I can tell you how to run your shop. I know this is 

free advice and worth what it cost. But so much of your civil service applications today are generated by the Internet. 

Mr. ZIENTS. To support your point I am so struck by—again, not 

to keep coming back to the private sector because it doesn’t have 

all the answers—but how important part of a senior manager or 

any manager’s time recruiting and coaching is and how central it 

is to their performance review in the private sector—again, with 

exceptions because there are good pockets of performance here too, 

but for the most part it is not as front and center for managers to 

be doing the recruiting and doing the coaching, and we need to 

change that. 

Chairman SPRATT. Two areas where I really think you need help, 

big-time, top-flight help—IT, health IT, on which we are spending 

billions, literally billions. I think it was $18 billion on the Recovery 

Act by itself, more money to come with the health care reform bill 

that is before us right now. It is clearly something where we have 

got to spend, where lots of money can be wasted if it is not closely 

supervised by people who are capable of doing it. 

And secondly, maybe even more importantly, with higher stakes, 

is financial regulation, the financial institution regulation. We have 

got to get people at the FDIC, the examiners, the people on the 

ground who are out there making day-to-day assessments of the 

quality of loans that banks are generating and many other things: 

investment quality, risk management, things of this nature. We 

have got to get better people than we have had. Not to disparage 

anybody, it is just that the problem has outgrown, I think, the capacity of many of our regulators. 

Do you have a plan for that? I know this is a little bit outside 

the scope of management performance, but in truth it is one of the 

keys to management performance and assessment. 

Mr. ZIENTS. They aren’t two areas that I am deep in personally, 

but I agree with you they are a high priority. 

Chairman SPRATT. Are there other members? Mr. Schrader, do 

you wish to ask further questions. 

Mr. SCHRADER. Just, if I may, kind of a closing comment. I am 

excited about the prospects of your office and working with Congress and getting better results, the tendency for our bodies to 

micromanage all these agencies. I don’t know about everybody else 

here, but I am a veterinarian, and so my ability to micromanage 

the Defense Department is probably miniscule. Some of the members have been here a long time and have greater expertise, but 

I can manage results. 

I don’t have to be an expert in weapons procurement if we set 

targets and look to see whether or not the procurement process is 

getting us where we need to go. I think that is pretty clear. And 

I would hope that as you work through the process, that the outcomes that are worked up in concert with Congress are posted on 

a Web site so that—and actually I would hope they become part 

of every appropriation bill at the end of the Congress; that we can 

look back and see what the benchmarks were, what our targets 
28 

were, how close we got, why we didn’t get there, and use that to 

inform the discussion. Because sometimes I think we got to avoid 

the ‘‘gotcha’’ mentality. 

I also believe strongly that while I agree that certain agencies 

should probably be doing some of these things anyway, the real 

world in my little corner of the universe, in a small business, is 

that I reward employees for extra effort and behavior. And that 

gets me results, that gets me great results. I do better economically. I think my clients do better economically. And I think that 

same thing would hold true here in the government; that our taxpayers would do better if these resources are strategically invested. 

And working across the silos is so critical, Mr. Zients. I agree 

with you 100 percent. There are numerous States that have ways 

of addressing that, making the management more efficient, cutting 

through the middle management bureaucracy—whether it is a private industry or certainly in the public sector—is absolutely critical. And I would urge you to look at those examples that are out 

there, going forward. 

This Congress, myself in particular, is very interested in working 

with you in the short term and in the long term to make sure that 

outcomes-based budgeting becomes part of the Federal psyche. 

Thank you. I yield back. 

Chairman SPRATT. Mrs. Lummis, any questions? 

Mrs. LUMMIS. No thank you, Mr. Chairman. I do very much appreciate your presence here today and the attention to the subject. 

It is a worthwhile expenditure of time. 

Chairman SPRATT. Ms. Schwartz. 

Ms. SCHWARTZ. No questions. 

Chairman SPRATT. Mr. Director, your talents, experience, and 

ability and your presentation today speak well of the administration’s commitment to the goals that you set out. And count on us 

to work with you in any way we can to bring these to fruition. 

Thank you very much for what you are doing and thank you for 

taking time to come and lay it out for us this morning. We very 

much appreciate your being here. 

Mr. ZIENTS. Thank you. 

Chairman SPRATT. At this point, I would like to ask unanimous 

consent that members who did not have the opportunity to ask 

questions be given 7 days to submit questions for the record. Any 

member who would like to submit an opening statement may do so 

as well. Without objection so ordered. Thank you again. 

[Questions for the record and their responses follow:] 

QUESTIONS FOR THE RECORD SUBMITTED BY MESSRS. RYAN AND ADERHOLT AND THE

RESPONSES BY MR. ZIENTS

QUESTIONS FROM RANKING MEMBER PAUL RYAN

1. Mr. Zients, you mentioned in your testimony that you want to create a partnership with the Budget Committee because it is in a unique position to look at government-wide program performance and help ensure that OMB’s measurements are used 

by Congress. After 16 years of GPRA, 7 years of PART, and almost a year into the 

new Administration, your agency must have a running list of programs that are duplicative, ineffective, have outlived their usefulness, or are in need of cross-agency coordination. Will you please provide us with a list of these programs so that we can 

get started? 

The Administration has identified 121 terminations, reductions, and other areas 

of savings that will save approximately $17 billion. The Terminations, Reductions 
29 

and Savings volume of the Budget the Administration proposed in May 2009 identifies programs that do not accomplish their intended objectives, are not efficient, or 

that replicate efforts being completed by another initiative—and recommends these 

programs for either termination or reduction. These changes range from eliminating 

entitlements to banks and lenders making student loans that will cost taxpayers 

$41 billion over the next decade to ending a $7 million education program that was 

used by only 15 school districts and with no evidence that it was improving student 

achievements. No matter their size, these cuts and reductions are all important to 

setting the right priorities with spending. As part of the FY 2011 budget that will 

be released in February will identify additional programs for termination and look 

forward to working with you on those proposals. 

2. Mr. Zients, are there any legislative changes that can be made that would help 

the Administration’s performance budgeting effort? 

I believe the Government Performance and Results Act (GPRA), relevant Executive Orders, and requirements for outcomes measurement in several laws provide 

a powerful legal foundation on which to build and do not see the need for changes 

at this time. My views on that may change, though, as we gain experience so I 

would like to hold open the possibility of answering that question until after we get 

a chance to see how well our performance management approach is working and 

what barriers we encounter. 

3. Mr. Zients, you stated at the hearing that performance evaluations will be rigorous and conducted by a third party. Who will be the third party evaluators? 

The Administration is committed to rigorous, independent program evaluations 

and has devoted time and resources to improving the evaluation of programs 

throughout the Federal government. The Director’s October 7th ‘‘Increased Emphasis on Program Evaluations’’ memo is that latest sign of that commitment. The 

third-party contractors who have the expertise to conduct rigorous evaluations will 

vary from agency to agency and from program to program. A competitive process 

is typically used to select the contractors who perform these evaluations. 

QUESTIONS FROM REP. ROBERT B. ADERHOLT

1. You state in your testimony that ‘‘Secretaries and Deputies will be charged with 

the setting of agency goals.’’ What do you view Congress’s role to be in the setting 

of these goals? 

OMB has asked agencies to determine the priority goals they will work to achieve 

given existing legislative and budget authority. The goals reflect near-term priorities 

for agency senior leadership, and are a subset of the efforts agencies will undertake 

to implement the laws passed by Congress. OMB has asked agencies to include the 

goals in their annual performance plans and Congressional Budget Justification, 

and to engage Congress as appropriate to discuss these priorities. 

We welcome efforts by Congress to help agencies achieve these important performance improvements, including monitoring agency progress and helping to overcome 

any barriers which arise. We will work to facilitate this by ensuring you have accurate and timely reporting available on progress. 

2. You state in your testimony that ‘‘A clear line must link agency strategic goals 

and measurements to programs and employees.’’ If done properly, this is a good way 

to identify underperforming employees. When your performancebased budgeting initiatives identify such employees, what is done? At what point are underperforming 

employees to be terminated? 

It is critical for Federal employees to understand how their efforts contribute to 

achieving the broader agency mission, and for managers to be able to consider the 

achievement of ultimate outcomes when evaluating the performance of individual 

employees. Guidelines for employee performance measurement are currently set by 

each Federal agency under regulations issued by the Office of Personnel Management. We will work to ensure the government-wide framework we establish enables 

agencies to link the measures they use to evaluate individual employees in the 

broader context of the strategic planning and performance reporting framework for 

the agency. 

3. It is my understanding that the Administration has abandoned the Program Assessment Rating Tool (PART) which received the 2005 Innovation Award from Harvard University’s John F. Kennedy School of Government. Is this true? If so, can you 

cite cases in which PART failed to successfully assess certain programs? Could the 

Administration not make improvements to PART instead of abandoning it? 
30 

Some components of the PART were successful while others were problematic. We 

are reviewing the PART now to determine which elements should be continued as 

part of our performance management framework, and which should be discontinued. 

4. This past year, the Social Security Administration (SSA) came under scrutiny 

for hosting a lavish retreat for many of its employees. Were there any goals set under 

your performancebased budgeting initiative for this retreat? If so, were any of the 

goals met and what did you do with the results? 

OMB leads performance management efforts on a government-wide basis, and coordinates performance measurement activities at the agency and program level. We 

are not involved in setting performance measures for individual events. 

[Whereupon, at 11:28 a.m., the committee was adjourned.] 

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