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92–124 PDF 2004

HUMAN CAPITAL PLANNING: EXPLORING THE

NATIONAL COMMISSION ON THE PUBLIC SERVICE’S RECOMMENDATIONS FOR REORGANIZING

THE FEDERAL GOVERNMENT

HEARING

BEFORE THE

SUBCOMMITTEE ON CIVIL SERVICE

AND AGENCY ORGANIZATION

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

SEPTEMBER 17, 2003

Serial No. 108–109

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

JOHN SULLIVAN, Oklahoma

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

WILLIAM J. JANKLOW, South Dakota

MARSHA BLACKBURN, Tennessee

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

CHRIS BELL, Texas

———

BERNARD SANDERS, Vermont

(Independent)

PETER SIRH, Staff Director

MELISSA WOJCIAK, Deputy Staff Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHILIP M. SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY ORGANIZATION

JO ANN DAVIS, Virginia, Chairwoman

TIM MURPHY, Pennsylvania

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

ADAH H. PUTNAM, Florida

NATHAN DEAL, Georgia

MARSHA BLACKBURN, Tennessee

DANNY K. DAVIS, Illinois

MAJOR R. OWENS, New York

CHRIS VAN HOLLEN, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

RON MARTINSON, Staff Director

B. CHAD BUNGARD, Deputy Staff Director and Senior Counsel

CHRIS BARKLEY, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on September 17, 2003 ..................................................................... 1

Statement of:

Johnson, Clay, III, Deputy Director for Management, Office of Management and Budget ........................................................................................... 41

Volcker, Paul A., chairman, National Commission on the Public Service ... 47

Walker, David M., Comptroller General, U.S. General Accounting Office .. 9

Letters, statements, etc., submitted for the record by:

Davis, Hon. Danny K., a Representative in Congress from the State

of Illinois, prepared statement of ................................................................ 8

Davis, Hon. Jo Ann, a Representative in Congress from the State of

Virginia, prepared statement of ................................................................... 4

Johnson, Clay, III, Deputy Director for Management, Office of Management and Budget, prepared statement of ................................................... 43

Volcker, Paul A., chairman, National Commission on the Public Service,

prepared statement of ................................................................................... 49

Walker, David M., Comptroller General, U.S. General Accounting Office,

prepared statement of ................................................................................... 12

(1)

HUMAN CAPITAL PLANNING: EXPLORING THE

NATIONAL COMMISSION ON THE PUBLIC

SERVICE’S RECOMMENDATIONS FOR REORGANIZING THE FEDERAL GOVERNMENT

WEDNESDAY, SEPTEMBER 17, 2003

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY

ORGANIZATION,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2:13 p.m., in room

2154, Rayburn House Office Building, Hon. Jo Ann Davis (chairman of the subcommittee) presiding.

Present: Representatives Davis of Virginia, Tim Murphy, Davis

of Illinois, Van Hollen, and Delegate Norton.

Staff present: Ron Martinson, staff director; B. Chad Bungard,

deputy staff director and senior counsel; Vaughn Murphy, legislative counsel; Chris Barkley, legislative assistant clerk; John

Landers, OPM detailee; Michelle Ash, minority counsel; Tania

Shand, minority professional staff member; and Teresa Coufal, minority assistant clerk.

Mrs. DAVIS OF VIRGINIA. A quorum being present, the Subcommittee on Civil Service and Agency Organization will come to

order. We are going to go ahead and start the hearing even though

our witnesses are not here yet. They are on their way. However,

we are expected to have a series of votes starting here within the

next 15 minutes, so for the sake of time, we are going to go ahead

and begin with opening statements.

I want to thank you for being here for such an important hearing. Many of our hearings this year have touched on items presented in the Volcker Commission report. This one is going to look

at an interesting point the Commission made that is easily overlooked, the connection between government reorganization and employee performance, and enhancing mission coherence and clarifying the roles of Federal agencies throughout the executive branch.

One of the reasons that I came to Congress was to eliminate unnecessary spending, redundant programs, and other problems that

waste the taxpayers’ money. I believe there is a great deal of

money to be saved by improving the performance of our government. I am not anti-government. I do, after all, chair the Civil

Service Subcommittee, and I believe that my record demonstrates

my strong support for Federal employees, for military personnel,

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and for retirees. But that does not mean that I am unable to see

any flaws in our government.

Something is wrong with the way the Federal Government is organized when the Department of Agriculture is charged with inspecting pepperoni pizzas and the Food and Drug Administration

is charged with inspecting cheese pizzas. There are at least 12 different agencies responsible for administering more than 35 food

safety laws. Such nonsensical, fragmented responsibility leads to

gaps, inconsistencies, ineffective Government oversight, and an unacceptable level of protection of the public. When I read the Volcker

report and see many such examples of potentially overlapping and

redundant programs, it makes me seriously question whether our

limited resources are being used most effectively.

Such organizational chaos is the reason that I recently introduced H.R. 2743, the Government Accountability and Streamlining

Act, which will help prevent the creation of redundant or duplicative Federal programs by requiring the General Accounting Office

to review all legislation before a final vote in the House or Senate

to determine if new government programs would be created by the

legislation.

Today, we are going to hear from three outstanding witnesses—

and I am sorry they are not here to hear me say that: Paul Volcker,

chairman, National Commission on the Public Service; Clay Johnson, Deputy Director of the Office of Management and Budget; and

Comptroller General David Walker. Mr. Walker has just concluded

an appearance at the National Press Club in which he outlined

many of the pressures that are bearing down on the Federal Government’s limited resources. I see Mr. Walker’s speech as a call to

arms, a warning that unless we dramatically change the way that

we do business, the Federal Government is going to be in dire

straits very soon.

When we talk about reducing or eliminating redundancies, we

must also look at reorganization. The heart of the Volcker report

is its suggestion to realign the executive branch into a limited

number of mission-based departments. Very obviously, this could

result in elimination of redundant or overlapping functions; but

just as importantly, it would serve to reinvigorate the Civil Service.

Federal human capital planning, getting the best employees to

come to work for the Federal Government, keeping them in public

service, and getting the most production out of them begins not

with any small changes to personnel practices, but with a complete

reorganization of the Government into a limited number of mission-based departments. According to the Volcker Commission report, reorganization is the first and most critical step in improving

the performance of Federal civil servants.

The structure of the Federal Government is often the result of

department-level decisionmaking without governmentwide coordination. Consequently, Federal civil servants have difficulty in fully

comprehending an agency’s mission and coordinating with other

agencies. Reorganizing along mission-oriented goals will allow the

Government to get the most productivity out of Federal civil servants and provide employees with a greater sense of purpose.

Allow me to read a few excerpts from the Volcker Commission report, ‘‘the simple reality is that Federal public servants are conVerDate 11-MAY-2000 10:59 Mar 22, 2004 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 D:\DOCS\92124.TXT HGOVREF1 PsN: HGOVREF1
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strained by their organizational environment. Changes in Federal

personnel systems will have limited impact if they are not accompanied by significant change in the operating structure of the executive branch.’’

‘‘The reorganization we recommend here will require significant

improvements in the quality of top executives, in the management

or operating units, and in the ability of agencies to meet their

unique staffing needs. There is extensive evidence now of duplication, overlap, and gaps in many critical functions. This pattern consistently undermines effective government performance.’’

To facilitate reorganization, the Volcker Commission suggested

reestablishing the President’s fast-track authority to recommend

structural reorganization of Federal agencies and departments. Reorganization authority would give the President, as it has for others dating back to 1932, the power to propose organizational

changes to Federal agencies and require Congress to disapprove or

approve the action without lengthy delays. Between 1953 and 1980,

when Presidential reorganization authority was in effect, 65 reorganization plans were submitted to Congress; only 8 were rejected.

We are now in a far different place since 1980. There has been

exponential growth in technology, globalization, and the Federal

Government. The need to reestablish Presidential reorganization

authority is more important now than ever.

As a nation, we simply cannot afford to continue the status quo.

The Volcker Commission made an important finding, ‘‘the current

organization of the Federal Government is not good enough. It is

not good enough for the American people, not good enough to meet

the extraordinary challenges of the century just beginning, and not

good enough for the hundreds of thousands of talented Federal

workers who hate the constraints that keep them from serving

their country with the full measure of their talents and energy. We

must do better, much better, and soon.’’

It is very clear that reorganizing the Government, revitalizing

and improving the performance of the Civil Service, and reducing

duplicative and overlapping programs are three pieces of the same

large puzzle.

Mr. Walker earlier today made a strong case as to why the time

for reorganization and improved operations is now. I look forward

to hearing the views of our distinguished guests when they arrive

today on this very important matter. I want to thank you all for

being here.

And now I would like to recognize the ranking minority member

of the subcommittee, Mr. Danny Davis, for his opening statement.

And, Danny, we are proceeding on even though our witnesses are

not here yet. They are on their way. But we are expected for votes

here very shortly.

[The prepared statement of Hon. Jo Ann Davis follows:]

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Mr. DAVIS OF ILLINOIS. All right. Well, thank you very much,

Madam Chairwoman. And let me first of all thank you for convening this hearing on the reorganization of the executive branch.

This hearing will be very helpful as we continue to examine how

to make the Federal Government more effective and efficient. In

April, the full committee held a hearing on reorganizing the government. At that hearing, the Comptroller General, David Walker,

stressed that above all else ‘‘all segments of the public that must

regularly deal with our government—individuals, private sector organizations, States, and local governments—must be confident that

the changes that are put in place have been thoroughly considered,

and that the decisions made today will make sense tomorrow.’’

Many experts, like those who will testify before us today, support

granting the President’s reorganization authority. But what is

emerging from these hearings on reforming government is that the

‘‘devil is indeed in the details.’’

I believe that everyone would agree that overlapping and duplicative government programs are problematic. But how much authority should the President be given to reorganize the Federal

Government and what role should Congress have in framing the reorganization?

There are numerous models for granting the President’s reorganization authority. In 1932, when Congress first granted the President’s reorganization authority, the President was permitted to

issue an Executive order which went into effect unless Congress

acted within 60 days.

In 1984, the last time Congress passed reorganization authority,

a joint resolution had to be issued in the House and the Senate.

If either body failed to vote on the reorganization plan, it was considered disapproved.

We can learn a lot from the creation of the Department of Homeland Security and the role Congress played in framing that agency.

Hopefully, the witnesses before us today will have an opportunity

to provide us with specifics on how and why reorganization language should be drafted, and I hope that they will do so.

Again, Madam Chairwoman, I thank you for convening this hearing, and I look forward to the testimony of our witnesses.

Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Davis.

[The prepared statement of Hon. Danny K. Davis follows:]

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Mrs. DAVIS OF VIRGINIA. Our witnesses have now arrived. I will

tell you, gentlemen, we started with our opening statements because they have just rung for us to go for a series of votes. So we

will be out of here for probably 40 to 45 minutes, and I do apologize

for that.

I would like to see if Mr. Cooper, if you have an opening statement you would like to make?

Mr. COOPER. I have no opening statement, Madam Chair.

Mrs. DAVIS OF VIRGINIA. Then I am afraid I am going to have

to recess us here for about however long it takes. We have three

votes, possibly one with a 10-minute debate. So we may be gone 40,

45 minutes or so. I do apologize.

The hurricane is also headed right through my district and over

my house, so I am trying to get out of here as fast as I can to go

make sure my horses and my husband and my family are all safe

and sound. So if this goes too long—if it doesn’t go too long, I will

love you guys; if it goes too long, I will turn it over to someone else.

But thank you. We will be back shortly.

[Recess.]

Mrs. DAVIS OF VIRGINIA. I want to thank you all for being patient

and waiting. It seems to happen every time we have a hearing.

I ask unanimous consent that all Members have 5 legislative

days to submit written statements and questions for the hearing

record and that any answers to written questions provided by the

witnesses also be included in the record. Without objection, so ordered.

I ask unanimous consent that all exhibits, documents and other

materials referred to by Members and the witnesses may be included in the hearing record and that all Members be permitted to

revise and extend their remarks. Without objection, it is so ordered.

It is the practice of this committee to administer the oath to all

witnesses. So if you all would please stand, I will administer the

oath.

[Witnesses sworn.]

Mrs. DAVIS OF VIRGINIA. Let the record reflect that the witnesses

have answered in the affirmative and please be seated. Our first

witness on this distinguished panel is David Walker, the U.S.

Comptroller General from the General Accounting Office. Mr.

Walker just arrived from delivering a speech at the National Press

Club dealing with the same issues we are considering here today.

The subcommittee is also very fortunate to have two other very

distinguished guests, Clay Johnson of the Office of Management

and Budget as well as Paul Volcker, chairman of the National

Commission on the Public Service. We are very glad to have such

expert witnesses here today to discuss these issues.

Mr. Walker, you are recognized first for 5 minutes and feel free

to summarize your statement. Your complete statement will be

submitted for the record.

STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL,

U.S. GENERAL ACCOUNTING OFFICE

Mr. WALKER. Thank you, Madam Chair. I will summarize it

since you have got the whole statement. I am pleased to have the

opportunity to be here. As you alluded to, I just came from the NaVerDate 11-MAY-2000 10:59 Mar 22, 2004 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 D:\DOCS\92124.TXT HGOVREF1 PsN: HGOVREF1
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tional Press Club talking about an array of challenges that the

Federal Government faces at the early stage of the 21st century.

I think because of those challenges we have both an opportunity

and an obligation for the government to fundamentally review and

reassess what it’s doing, how it’s organized, how it does business

and in some cases who does its business in the 21st century. I believe part of that has to include the subject of this hearing, which

is how it’s organized and how it goes about doing business, including important human capital strategies.

On the organization front, I think as we reexamine government’s

missions, functions and activities, there’s an opportunity to reduce,

to consolidate, to integrate a number of existing government functions, activities and even departments and agencies in order to improve the flexibility, accountability, economy, efficiency and effectiveness of the Federal Government. My general view is that the

fewer number of entities that you have, the better. The less overhead you are going to have and the more flexibility you’re going to

have, etc.

If I can, I included in my statement a number of examples of

where we have a number of redundancies in the Federal Government right now anywhere from meat and poultry inspection to a

number of grant programs dealing with first responders to job

training programs, etc. I won’t go into that. I think that my written

statement speaks for itself. I think it’s important that as we move

forward we recognize that what we’re trying to do is to create high

performing organizations in government that are focused more on

results, positive outcomes for the citizens and that hopefully are

working together in partnership to achieve those desired outcomes.

Clearly part of this is going to involve a transformation, a cultural

transformation of how agencies do business. The center of that will

be how they treat their people, what type of people they have, how

they end up measuring their performance, how they reward their

performance, etc. I have included a number of examples in my testimony.

What we are trying to do at GAO is to lead by example in both

the organizational alignment area as well as in strategic planning,

human capital and other areas. We, for example, developed a strategic plan in consultation with the Congress. Based on that plan

we reorganized our agency. We reduced the layer of management.

We reduced the number of organizational entities from 35 to 13.

We reduced the number of our field offices from 16 to 11. We redeployed resources both horizontally and focused externally, and enhanced our partnerships within government and outside of government both domestically and internationally with positive outcomes.

Much greater results with the same level of FTEs. And I think it

can be done in other areas of government as well.

I would also point out in my statement that there are several

things that I believe that should be considered as a way to move

the ball forward. I think your proposal for a Government Accountability and Streamlining Act of 2003 has conceptual merit. I think

we need to look at some modifications to target that. I have some

suggestions in my testimony. We need to relook at reinstituting

budget controls given our fiscal challenge. We need to consider additional executive reorganization authority, special commissions, as

11

Chairman Volcker will be talking about, based on the great work

that he has done. In addition, enhanced congressional oversight is

going to be key. Considering selective application of a chief operating officer or chief management official in selected departments

and agencies as well as governmentwide human capital reforms

will be important.

In the final analysis Congress has to be able to integrate whatever it has done here in its oversight, authorization and appropriation activities. If there are not consequences for agencies who are

not performing, who are not demonstrating results for the resources they are given, if there aren’t consequences, then behavior

is not going to change. People who are doing the right thing need

to be rewarded. People who are not doing the right thing need to

be held accountable. With that Madam Chairwoman and Mr. Van

Hollen, thank you for the opportunity to be here. I look forward to

hearing from my colleagues and would be happy to answer any

questions you may have thereafter.

[The prepared statement of Mr. Walker follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Walker. Mr. Johnson,

I will recognize you for 5 minutes. You are welcome to summarize

your statement, and your full statement will be put in the record.

STATEMENT OF CLAY JOHNSON III, DEPUTY DIRECTOR FOR

MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET

Mr. JOHNSON. Thank you very much. I agree with Comptroller

General Walker and I am sure I will agree with Chairman

Volcker’s position that we must and can significantly improve the

performance of government for the American people. However,

mine is a cautionary note here today. I suggest to members of this

committee that no matter how the Federal Government is organized, its performance will not be enhanced, it will not be enhanced

unless our valuable human resources and employees are managed

strategically. It won’t be enhanced unless we make investments

wisely and professionally in technologies to help us accomplish our

goals. It won’t be enhanced unless we focus on cost and efficiency

and have timely and financial information available to us to do

that, and it won’t be enhanced unless we’re asking ourselves

whether individual government programs are working and if they

aren’t working what we need to do about them to get them to work.

These are areas where there is opportunity today for historic improvements in the management and performance of the Federal

Government. Agencies and departments with a little help from

OMB are aggressively pursuing these opportunities as we speak.

This is happening today. We must continue to support and reward

these efforts and never think that reorganization per se is the big

cure for unsatisfactory performance. Reorganization per se will not

accomplish what we want to accomplish.

With my verbal comments today I want to briefly touch on the

human capital opportunities. I want to be brief so more time can

be devoted to Chairman Volcker because I know we are interested

in hearing his remarks.

Our employees are the greatest resource we have to improve the

performance of the Federal Government. Each year we spend more

than $100 billion on our almost 2 million civilian employees. Agencies are beginning to manage this annual investment and their employees more strategically, focusing more on results and evaluating

employee performance based on the achievement of measurable

goals. Inventories of the skills we need to perform our mission are

being prepared. Skills gaps are being addressed and succession

plans are being put in place, which is particularly important given

the large percentage of Federal employees who are eligible for retirement in the next few years.

Hopefully, if Congress adopts the administration’s proposed

human capital performance fund and we move away from a complete reliance on automatic across-the-board pay raises, Federal

employees can receive pay based on their performance and not just

their longevity. As an example of what agencies are doing today,

not a year from now but what they are doing today, to more strategically place the human capital, HHS has developed and implemented SES performance based employment contracts that link to

program outputs and outcomes. EPA has implemented an SES mobility program which fosters the development of cross-agency skills

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and succession planning. Interior has completed a comprehensive

work force plan for all its bureaus to guide a department-wide recruiting strategy as well as performance-based contracts for members of the Senior Executive Service. The Department of Transportation has implemented a department-wide leadership succession

planning strategy and piloted a mentoring program for emerging

leaders. And GSA has implemented an agency-wide leadership institute to ensure that current and future leaders are effective.

That is all happening today. It’s not all that needs to be done,

but it is very significant because none of that was happening 2, 3

years ago. Agencies and departments are working on these significant management opportunities and others like them that are realistically possible today. It is important and necessary that we make

these changes no matter how the Federal Government is organized.

Any reorganization without these changes will have minimum impact on government performance.

Currently, the administration is not studying any possible reorganization of the executive branch as such a move would not be

practical without the benefits of the Reorganization Act, which allowed such a proposal to be considered by Congress in an expedited

fashion. If and when the Reorganization Act is reauthorized, the

administration looks forward to working with Congress, this committee in particular, and GAO to explore the opportunities to reorganize agencies and departments to better serve the American people. Thank you.

[The prepared statement of Mr. Johnson follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Johnson. Mr. Volcker,

I want to thank you for agreeing to come back before this subcommittee. I really enjoyed hearing your testimony in front of our

full committee, and I recognize you for 5 minutes.

STATEMENT OF PAUL A. VOLCKER, CHAIRMAN, NATIONAL

COMMISSION ON THE PUBLIC SERVICE

Mr. VOLCKER. Thank you for inviting me back. I appreciate it

and I will try to be brief. I have the feeling I don’t need any statement. I just have to read your introductory comments here. We are

certainly singing out of the same hymn book and you emphasized

very clearly some of the organizational problems we have.

Interestingly enough, listening to Mr. Johnson, he says organization can’t accomplish everything, which I certainly agree with. We

arrived at some emphasis at organizational change because we felt

it’s very difficult in getting personnel and other changes of the kind

we’re talking about without some pretty basic reorganization and

an emphasis on the importance of bringing related activities together, avoiding too many conflicts in activities, strong political direction of related departments, but when it gets to the ministerial

agencies, providing the kind of flexibility and personnel and other

practices and review that Mr. Johnson and the Comptroller General have emphasized. So we kind of are approaching this in different directions, but I don’t want to lose sight of the importance

of the reorganizational changes.

Having said that, the question is how to get there. Reorganization is always very controversial and difficult. It’s not a thing that

grabs the attention of the Congress or the administration very

often. It’s not a glamorous political subject. And we have concluded

that you’re not going to get any action unless you provide some

general reorganization authority. It’s a lot easier to say than to do,

but I think we are at an exceptional period now where there is

more recognition of the need for reform, not just an organization

but elsewhere, particularly in personnel practices in government,

and I’ve seen it for a long time. So the opportunity is there.

And you personified the interest in Congress, which I presume

is not unanimous, but it’s been very difficult to get people in Congress interested in this. And I’m encouraged by the interest in this

committee and I think there is some interest in the Senate, too. So

I think we have an opportunity to make some progress, and we

strongly recommend something that’s not unique but a reorganization authority. That is about the only way the progress has been

made consistently in the past beginning back with President Truman and moving ahead with the reorganization proposed by the

Hoover commission.

Reorganizational authority or authority subject to congressional

approval has been used in other controversial areas, as you well

know, and that is our proposal, that you go ahead and provide

some reorganization authority subject to the approval of the Congress, a positive approval of the Congress, by both Houses of the

Congress.

We are not talking about a blank check. I think the check in this

legislation is to provide a framework that will permit the President

to make proposals within a framework that the Congress has alVerDate 11-MAY-2000 10:59 Mar 22, 2004 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 D:\DOCS\92124.TXT HGOVREF1 PsN: HGOVREF1
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ready set out as reasonable, because otherwise you are going to

have too much controversy on every particular proposal. So the

check as I see it, the good political challenge is to provide the reorganization authority with enough of a framework for the President

to work within in presenting a particular proposal.

What do I mean by a framework? I certainly think there ought

to be a requirement for consultation within the effective departments with the Congress. We suggest in the report that might be

useful to have an outside group or groups of experts involved so

that kind of weight can be attached to the proposals. I think you

need some guidelines to make sure that merit principles are preserved, traditional insulation at the administrative side from political interference. You need some indication of employee protections,

many of which have become quite traditional in the Civil Service.

If you’re going to have pay for performance and wide pay bands

and all the rest, which we strongly support, you need some standards for how performance is judged in a neutral and nonpartisan

way. I think you’ll need some provision for oversight by OPM and

by the Office of Management and Budget so that we can have some

assurance that flexibility is used and not abused. But I think all

those things are possible. And the commission that I headed and

its staff is in the process still of sponsoring some conferences and

some work along the lines of spelling out what might be practical

and feasible in terms of developing some of these guidelines.

So I think that’s all I would want to urge today that concentration be placed upon the importance of enabling legislation and the

kind of framework that should be established in that enabling legislation.

[The prepared statement of Mr. Volcker follows:]

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Mrs. DAVIS OF VIRGINIA. Thank you, Mr. Volcker, and I would

like to say thank you for taking the time and being so patient waiting while we voted. I appreciate the expertise that comes from each

one of you. I am going to begin with the question and answer session. And I would like to thank Mr. Van Hollen and Mr. Murphy

and Ms. Holmes Norton for coming to the hearing today, and we

are going to start out here with a few questions. I will take my 5

minutes and then go to Mr. Van Hollen.

Mr. Walker, in 1949 the Hoover commission sent Congress 277

specific recommendations for structural changes to the Federal

Government. It’s estimated that about 100 of the recommendations

were adopted, which was considered to be quite impressive. In the

2 years following the commission’s report Truman submitted 35 reorganizational plans to Congress, of which 26 were approved. Do

you believe it will be a worthwhile exercise for Congress to assemble a high level bipartisan commission similar to that of the Hoover

commission for reorganization of the government?

Mr. WALKER. There were two Hoover Commissions. One was

more successful than the other. I think we can learn some valuable

lessons from the Hoover commission that was more successful. And

part of that was the players that were involved, you had a combination of people from the executive branch, the legislative branch

as well as certain other experts. Furthermore, if you look at the

scope of what they were asked to do, it was a much clearer defined

scope, if you will, and, you know, dealing more with management

and operational issues, if you will, rather than policy and programmatic choices. And so I do think that considering some type

of a commission that is properly comprised with the appropriate

scope is one that could help to move this forward.

Mrs. DAVIS OF VIRGINIA. Would you gentlemen like to comment

on that question?

Mr. VOLCKER. I must confess, I had not thought of that approach

at this point. I think the kind of consultation and expertise that

was involved in the Hoover commission would be useful. I don’t

know whether it’s useful to do that kind of across the board or do

it in a particular area that a President or the Congress may decide

is a priority area as a kind of complement to the kind of legislation

I’m talking about, which would simply have enabling authority for

reorganization. And the substance of that reorganization is obviously a big and complicated subject. Is that the point at which you

want—if the President chose an independent commission. I don’t

know whether it would require legislation. You could go back obviously and have a full scale Hoover type commission. That’s not

what I have been thinking about and my guess is that we slow

down the process at this point rather than enhance it.

Mr. JOHNSON. My personal preference is that the Reorganization

Act be passed and then the executive branch be challenged to come

forward with proposals.

Mr. WALKER. If I can, Madam Chair, I think it is important to

have enabling legislation, no question about that. And that’s fundamental. I think any commission that you would have could be a

supplement to, not a substitute for, but you need that enabling legislation.

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Mrs. DAVIS OF VIRGINIA. Mr. Volcker, you made a comment that

Congress hasn’t politically been real interested in the reorganization and I would imagine one of the reasons is that, A, it’s not

glamorous and, B, it’s probably very controversial and something

that quite frankly scares the socks off the Federal workers, and

that’s not what this hearing is intended to do and it’s not what we

want to do. We want to make it a better place for our Federal

workers. I think that is one of the reasons you don’t see much activity within the Congress on our reorganizing or doing anything

to change our Civil Service workers.

Mr. WALKER. We have reorganized GAO to where we eliminated

a layer of management, which was an unneeded layer. We didn’t

lay off anybody. Nobody lost their jobs.

Mrs. DAVIS OF VIRGINIA. Was there job loss?

Mr. WALKER. In that particular case, no. We did close 5 of 16

field offices and there were some job losses, but every person but

one who wanted our assistance to find a job found a job. And so

they either retired or they—or we helped them find a job. So there

are ways to do this in ways that get the job done, but in a considered, compassionate, you know, effective manner.

Mrs. DAVIS OF VIRGINIA. Mr. Walker, your concerns about government spending should strike a real chord with all the taxpayers

and future taxpayers, and I have heard your comments and I saw

your speech that you made today. And our children and grandchildren must not be burdened by our inability to control spending.

Could you give us any ideas about the best path we should take

to achieve governmental reorganization to eliminate functional

redundancies? I assume you read my opening statement about the

cheese pizzas and the pepperoni pizzas.

Mr. WALKER. It’s hard to believe that one department has responsibility for cheese pizza and the other department pepperoni

pizza, and the only difference is the pepperonis I guess. We were

trying to debate earlier who had the pineapple pizzas but we

couldn’t decide that. That is a small part of our challenge, let’s face

it. But it is illustrative of what could end up happening through

an accumulation of agencies, programs, functions, policies and activities on a piecemeal basis over decades. And one of the things

that has to happen that I pointed out in my speech at the Press

Club today is that we need to have a very disciplined process where

we start looking at what exists in government today, both mandatory discretionary spending as well as the tax side. We have to look

at it and ask ourselves does it make sense in the 21st century. You

know, what kind of resources and authorities are being allocated?

What kind of results are being achieved? It’s a very important approach.

I lay out several ideas with regard to redundancies that need to

be considered in my testimony. But this is a fundamental process.

It’s an important process. It’s going to take years but we need to

get started.

Mrs. DAVIS OF VIRGINIA. Anyone else have a comment? My 5

minutes are up, and I want to go to Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Madam Chairman, and I want to

thank all three of you gentlemen for your testimony. And Mr.

Walker, I haven’t had a chance to look at it all but I have a copy

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of the speech you gave before the National Press Club and I heard

a little bit about it on NPR radio this morning. So thank you for

your observations there with respect to future budget situations as

well as the management issues.

And Mr. Volcker, thank you very much for your sticking to it on

this issue over many years and your service. You’re right, it is not

one of those issues that grabs the attention of a lot of people but

it is very important to the success of our country that we be able

to continue—that we attract good people to government in the future. So all three of you, thank you very much for being here. Obviously one of the concerns Congress has is giving up a blank check

over any administration, Republican or Democrat. So if we were to

provide the kind of authority, as I understand it, you are supporting a provision where the administration would come forward with

the reorganization proposal and there would be vote up or down.

Let me take you back though to the whole question of the Homeland Security Department, because there the administration came

forward with the proposal and I think maybe I’m wrong but my

sense was that the administration as well as Members of Congress

thought the final product would be strengthened and improved in

many ways as a result of going through the process. After all there

had been number of bills that Members of Congress introduced

that actually initiated the process. And if we had just an up or

down vote, you wouldn’t have—without the opportunity for amendment, you wouldn’t really have that ability to do it or the administration would be in such a position they could say well, OK, we

agree to that and will have to come back with another draft. And

I guess why should Congress give up that flexibility? My understanding—I could be wrong—with respect to reorganization of government that we have not—and I could be wrong—we haven’t seen

any major proposals coming forward in recent years other than

Homeland Security, that we have—and anything that has come up

we as a Congress have acted on. So I would be interested in your

response.

Mr. VOLCKER. I guess my brief answer would be history is

against you. When you do it one by one and with full range of debate about every aspect of the reorganization proposal, nothing gets

done. In fact it probably won’t be proposed. Now Homeland Security was a rare instance, obviously following September 11, obviously revealed a lot of lack of cooperation, lack of information, of

course related agencies at that time, a sense of emergency, and finally got done with a lot of effort in a very difficult situation, but

a pressing situation. Whether you can expect that to be successful

right across the board I think is doubtful. With the kind of question

that you have, I would anticipate by saying you can’t write a complete blank check you want to give some instruction in effect in this

legislation about basic principles or guidelines that have to be respected in terms of any Presidential proposal and you could require

certain consultation, too, including certain consultation with this

committee. But it gives you some kind of framework within which

the proposal is made and if you still don’t like it you vote it down

and obviously you would have to come back. But you don’t have to

fight every principle over again. You settle what’s really a core continuing requirement in the enabling legislation in general terms.

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Mr. VAN HOLLEN. Do you believe that the prior reorganization

acts offer any guidance in that area or is there some kind of model?

Mr. VOLCKER. I think some of those weren’t quite so sweeping.

They were more individual proposals, but I think the conclusion

consistently has been to get consistent action here, you need some

kind of enabling legislation. And I am just urging what’s been done

in the past to get some action here.

Mr. VAN HOLLEN. Is there a model that you’ve seen that sort of

spells out the limitations?

Mr. VOLCKER. There are models in other areas. Base closings.

Mr. VAN HOLLEN. In terms of this procedure, I understand. But

I’m talking about with respect to the kind of limitations that you

thought would be appropriate to write into this kind of authorization.

Mr. VOLCKER. I’m not going to be very precise now because I am

unable to sitting here. It is an area that we’ve been working a bit

with the committee staff on—the full committee staff. And it’s an

area in which we are engaging and plan to engage in consultations

with some experts in this area and we would be delighted to work

with the committee if and when—I hope you will—develop some

legislation.

Mr. VAN HOLLEN. Thank you.

Mr. JOHNSON. My comment about the Homeland Security to be

careful, it’s not just the Homeland Security organization. It’s the

largest reorganization in 50 years. What was proposed by the

President, I think it was 27 pages long, would have led to a very,

very effective Department of Homeland Security. What was agreed

to by the Congress and the President will also lead to a very effective—it’s what was agreed to was better—we could debate that all

day long—it will be made to work and our country will be much

more secure and safer as a result of that. But I don’t think it’s

proper to say that thank goodness there was not an up or down

vote on the original proposal because that proposal was flawed.

Mr. WALKER. If I can quickly, first, there were unusual external

events that resulted in the creation of the Department of Homeland

Security, which hopefully are not going to occur frequently. And so

I think—we can’t count on those types of events. We don’t want

those types of events to try to force the type of reorganization that

needs to occur in other areas of government that may not involve

safety and security but are important opportunities for economy, efficiency, effectiveness, etc.

Second, you’re right, no blank checks. Nobody should give a

blank check. I have had the opportunity to testify before the House

Rules Committee as well as the full Government Reform Committee on this issue and will be happy to provide that to your office

because I think there are some principles and guidelines that could

be employed to try to allow more flexibility in circumstances where

it’s really only management operational issues versus policy and

programmatic issues and, you know, different safeguards to make

sure the Congress is not giving up too much of its Constitutional

responsibilities.

Mr. VAN HOLLEN. Thank you, Madam Chairman.

Mrs. DAVIS OF VIRGINIA. Mr. Murphy.

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Mr. MURPHY. Thank you, Madam Chair. First of all, I compliment you on putting together this hearing. And these issues are

incredibly important when we read some of these reports about the

number of agencies and programs involved. It’s absurd and we can

certainly save the taxpayers a lot of money and do a better job. In

the interest of time and also the delays our panels had and recognizing the impending weather here, I would like to submit some

questions for the record and ask them to respond that way.

Mrs. DAVIS OF VIRGINIA. Without objection. Ms. Holmes Norton.

Ms. NORTON. Thank you very much, Madam Chairwoman. I’d

simply like to get some clarification as to what exactly is desired

here. First, I want to make it clear that far from having any objection to reorganizations of government when I served as Chair of

the Equal Employment Opportunity Commission during the Carter

administration, I asked the President and he indeed put forward

a major civil rights reorganization of the Federal Government precisely because the duplication and overlapping of agencies was so

costly and so inefficient. So I—if I have any bias, it’s toward consolidation and toward reorganization. I believe the government

agencies grow like topsy. When anybody has an idea, they create

some department or subdepartment.

But after having served on the Homeland Security Committee, I

sat on this committee as we dealt with DOD, I want to know what

it is about. I mean after that experience where the Congress was

so responsive, I’m absolutely puzzled that the administration would

come forward and ask to have the authority to reorganize the government with no amendments from the Congress as if, you know,

there were some kind of perfection anywhere in the universe.

So I just want to know why you don’t feel that perhaps with

some kind of abbreviated process, I can even understand that, you

wouldn’t be better off talking to Members of the House and Senate,

many of whom have far longer experience than I have, know the

government better than any of you with the possible exception of

Mr. Volcker. Why in the world don’t you think—I thought I heard

Mr. Johnson say a better piece of legislation than Homeland Security because of the way people cooperated, what is to be gained?

What is it that you are after given the responsiveness of Congress

to you on two occasions, giant reorganizations, Homeland Security

and DOD? What is it that you are after that requires such haste

that you don’t even want the kind of give and take legislative process that we have had for 200 years in this Congress? What is it

that requires—because the word ‘‘requires’’ is the word I think

should be used. Congress should give up such authority only if it’s

required. Why is it required? What is the urgent necessity requiring it?

Mr. JOHNSON. I am not suggesting a specific reorganization.

What I’m suggesting is that some form of expedited consideration

by Congress be passed. I don’t know how that ought to be structured. That would be debated as such an act was being created.

But what exists now would almost ensure that whatever started off

as a race horse would end up as a camel medical. And there has

to be instead of that some kind of expedited way to consider government reorganization. Whether it allows up, down votes I don’t

60

know any of that. But a faster, more direct way of consideration

by Congress has to be developed is what I’m suggesting.

Mr. WALKER. Ms. Holmes Norton, I believe what the issue is that

there are a number of Presidents of both political parties who, for

a number of years, had certain reorganization authority. That authority has expired. And so the question is whether and to what

extent Congress might seek to give this and future administrations

some basic reorganization authority. Clearly no blank checks. And

as I mentioned, I testified before House Rules as well as full committee about some ideas as to how you separate the wheat from the

chaff. I share a lot of your concerns about DOD’s transformation

bills, especially in the human capital area. I don’t think that’s necessarily what they are talking about expedited treatment for. We’re

really talking about organizational units rather than fundamental

changes in the Civil Service system.

Ms. NORTON. You know, whole units involving employee rights

could be abolished with a blank check.

Mr. WALKER. And blank checks would clearly be inappropriate.

And that’s one of the things we have tried to do at GAO is to talk

about some principles and some safeguards in order to make sure

that Congress doesn’t give up too much authority and to make sure

that situation doesn’t occur because that wouldn’t be anybody’s

benefit for that to occur.

Ms. NORTON. I don’t oppose an expedited way to reorganize the

government. My own experience tells me you want to get it done,

you don’t want to get it done fast and wrong but you want to get

it done fast. Mr. Johnson’s testimony was that President and Congress need to work together and we work on things far more serious, far more urgent if, I may so and is. Why would the reorganization—how would you ensure that the President works with the

Congress given what you have proposed here this afternoon?

Mr. JOHNSON. I’m sorry——

Ms. NORTON. If in fact the President could put forward an up or

down motion, an up or down bill and you would have to vote

against the whole thing, and we know what the purpose of that is,

we’re not fools, how would you assure that we worked with the

President since he knows just like we have an omnibus bill that nobody is going to go after the omnibus bill because there are too

many things in there to get the whole body to vote against them?

How would you assure that we work together to keep that from

happening, an omnibus type bill from occurring in this context?

Mr. JOHNSON. Well, maybe—briefly and you are much more informed.

Mr. VOLCKER. You are on the seat here and I’m not.

Mr. JOHNSON. In my mind, it would be to do it with Congress

and not to Congress, because if we’re doing it to Congress nothing

would get approved. Once an idea is developed you would seek

input from Congress, who know their States and districts, and you

would work with agencies who know their programs and so forth

and you would work with constituent groups that know what needs

to be done and what the opportunities were. And then you develop

your ideas and there’s compromise and debate and discussion, but

eventually somebody has to put together something and come forVerDate 11-MAY-2000 10:59 Mar 22, 2004 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6633 D:\DOCS\92124.TXT HGOVREF1 PsN: HGOVREF1
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ward. And you would come forward with full explanation and full

selling points why on balance this is the best thing to do.

Ms. NORTON. And if you don’t like it vote against the whole

thing. That is really an ‘‘in your face’’ approach.

Mr. JOHNSON. As an expedited fashion as opposed to piecemeal

as current legislation would call for. I don’t know whether it has

to be up or down. That’s the way the old bill was and Congress and

the President and the executive branch have to figure out what expedited fashion means. But we would do this so we would be doing

it with Congress because the way our government is set up you

don’t do anything to Congress.

Ms. NORTON. Unless you have an up or down vote when you

get——

Mr. JOHNSON. I don’t hear anybody saying it was a disastrous

approach.

Mr. VOLCKER. I agree with what Mr. Johnson is saying. You

want to work with the Congress and with others to get something

this broadly acceptable. But I think history suggests that at the

end of the day you have to get together and got to get a vote. And

because there are so many controversial areas involved, it’s very

hard to get Congress to act unless they are faced with an up or

down vote. And it’s likely to be a down vote unless there’s the type

of concentration to talk about. And you are going to have a certain

framework that Congress has put in there to make sure what Congress thinks are important are appropriately recognized in the proposal. And employee protections is one of those areas where you

know you fight it now in Homeland Security. You fight it over

again in the Defense Department reorganization. And you’ll fight

it in every reorganization and get a different answer maybe in each

one. You want some kind of a template here that will facilitate consideration of something that experience shows is very difficult to

get action on even when there’s recognition that something ought

to be done, as you have expressed that.

Ms. NORTON. I want to assure you that we have up and down

votes on very complicated bills here every week, bills of enormous

complication. So the whole notion that you are proposing something

that is more complicated than what we do on a regular basis is an

amazing notion to me. And I invite you to look at the bills that

have been passed during this session of Congress alone. Mr.

Volcker, again your notion about beginning with some guidelines

and the rest, that gives you a start, but the last thing we should

do is to approach the reorganization of the government of the

United States with a blueprint. The kind of principles we start out

with would be so general that I don’t think they would be of much

help. That’s why what we usually start out with is some kind of

bill. Then people get to look at it—and frankly we pass these

things—you know some of us vote against it. You can’t hold it up.

You got a majority, at least the present majority has a majority.

So some vote against us. Some of us vote for it. So it passes out

the committee. Yes, there is some division, but it passes. It goes

to the floor and it passes. Nobody can hold it up. So it seems to

me, yes, you begin with principles. Your next task as far as I’m

concerned is to come forward with a specific expedited process and

ask the Congress to vote on that process. I would be perfectly preVerDate 11-MAY-2000 10:59 Mar 22, 2004 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 D:\DOCS\92124.TXT HGOVREF1 PsN: HGOVREF1
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pared to vote on an expedited process, not on something called a

concept of an expedited process. And I am in your corner. I am one

of the few Members of Congress who has run an agency. And I

would be prepared to advocate the shorthand way of reorganizing

the government. I saw just a tiny part of government, what it took

to reorganize. And by the way we did it in a very short period of

time.

So I think it can be done, but I don’t think you will get very far

talking to Members of Congress who have to deal with complicated

tax legislation, complicated welfare legislation, that this is so complicated that we need an up and down vote with all of the stuff

kind of buried like sausage in between and you folks couldn’t get

it done if you had to deal with the sausage. We get our hands dirty

with this sausage every day. We pass bills out of here every day

and I think we could do this as well.

Mr. WALKER. If I could mention real quickly. Clay Johnson’s two

predecessors ago, Sean O’Keefe, who was Deputy Director of OMB

for Management, and I had an opportunity to testify before the

House Rules Committee—and I will make sure that GAO provides

you a copy of that testimony and some of the follow-up of that because it’s very much along the lines of what you’re talking about.

What happened is the administration came forth with the Freedom

to Manage Act and it didn’t have enough specificity, controls and

safeguards in place. And what we said was what needs to happen

is we need to put forth something that does have more specificity,

more controls and safeguards in place, which is what I hear you

saying. And I think it’s a reasonable request that there’s got to be

something in writing that people can debate and discuss.

Mrs. DAVIS OF VIRGINIA. Thank you, Ms. Holmes Norton. Without seeing any specifics in concept I agree with you that it should

be not concept but specifics when it comes forward. I am going to

ask one more question and I will certainly leave it open to you, Mr.

Murphy and Ms. Holmes Norton, if you have another question. And

this is to you, Mr. Walker. When considering reorganization it’s of

utmost importance in my mind to do it right the first time, which

means we have to have all of our information in front of us.

Could GAO provide to the subcommittee the identity of all Federal programs under each Federal agency determine the role and

function of each program and determine if an existing program performs a function that is performed or carried out by an existing

program or programs even though it is cutting across Federal agency boundaries?

Mr. WALKER. Madam Chair, I would like to work with you to see

if we could narrow the scope and clarify that because that would

be a huge undertaking that would take a tremendous amount of resources over a considerable period of time. But if we could end up

talking about narrowing it to certain activities and start there and

do it on an installment basis, that might make more sense.

Mrs. DAVIS OF VIRGINIA. That may be the way we do reorganization as well because we can’t vote on reorganization if we don’t

know what we are voting on.

Mr. Murphy. Ms. Holmes Norton.

I want to thank all three of you gentlemen. We may have some

more questions that we would like to submit to you in writing. If

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you, Mr. Johnson, Mr. Walker and Mr. Volcker would be willing to

respond to us so that we can make it available to the committee

members, I would certainly appreciate it. And Mr. Volcker, I appreciate you coming all the way down here and I appreciate your time

for coming down here and thank you for all your valuable work

that you have done with your commission on a bipartisan basis.

Mr. VOLCKER. I appreciate even more the opportunity to come

down and try to help keep this process going.

Mrs. DAVIS OF VIRGINIA. Thank you so much, and with that, the

committee stands adjourned.

[Whereupon, at 4:10 p.m., the subcommittee was adjourned.]

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