U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

80–220 PDF 2013

S. Hrg. 113–25 

THE COSTS AND IMPACTS OF CRISIS BUDGETING 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

MARCH 13, 2013 

Available via the World Wide Web: http://www.fdsys.gov/ 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

RICHARD J. KESSLER, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

JOHN G. COLLINS, Professional Staff Member 

HOLLY A. IDELSON, Senior Counsel 

SUSAN B. CORBIN, DHS Detailee 

KEITH B. ASHDOWN, Minority Staff Director 

CHRISTOPHER J. BARKLEY, Minority Deputy Staff Director 

CATHARINE A. BAILEY, Minority Director of Governmental Affairs 

TRINA D. SHIFFMAN, Chief Clerk 

LAURA W. KILBRIDE, Hearing Clerk 
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1 

Senator Coburn ................................................................................................. 4 

Senator Begich .................................................................................................. 18 

Prepared statements: 

Senator Carper ................................................................................................. 39 

Senator Coburn ................................................................................................. 41 

WITNESSES 

WEDNESDAY, MARCH 13, 2013 

Philip G. Joyce, Ph.D., Professor of Management, Finance, and Leadership, 

School of Public Policy, University of Maryland ................................................ 6 

Scott D. Pattison, Executive Director, National Association of State Budget 

Officers .................................................................................................................. 8 

Colleen M. Kelley, National President, National Treasury Employees Union ... 10 

Stan Z. Soloway, President and Chief Executive Officer, Professional Services 

Council .................................................................................................................. 12 

ALPHABETICAL LIST OF WITNESSES

Joyce, Philip G., Ph.D.: 

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

Prepared statement .......................................................................................... 43 

Kelley, Colleen M.: 

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

Prepared statement .......................................................................................... 65 

Pattison, Scott D.: 

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

Prepared statement .......................................................................................... 56 

Soloway, Stan Z.: 

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

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

APPENDIX 

Government Accountability Office, statement for the Record .............................. 78 

Response to post-hearing questions for the Record: 

Mr. Joyce ........................................................................................................... 91 

Mr. Pattison ...................................................................................................... 96 

Ms. Kelley ......................................................................................................... 101 

Mr. Soloway ...................................................................................................... 104 

(1) 

THE COSTS AND IMPACTS OF CRISIS 

BUDGETING 

WEDNESDAY, MARCH 13, 2012 

U.S. SENATE, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 2:33 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 

Chairman of the Committee, presiding. 

Present: Senators Carper, Begich, and Coburn. 

OPENING STATEMENT OF CHAIRMAN CARPER 

Chairman CARPER. Good afternoon, everyone. Senator Coburn 

and I are happy to see you all, and we welcome you here before 

us today. 

I have just come from a meeting where we were talking about 

potential Government shutdowns, continuing resolutions (CRs), sequestration, and on and on and on. So I think this topic is certainly 

timely, and hopefully that tale of horribles will soon come to an end 

and we can start running our Government maybe a little bit more 

like we try to run our own families and budgets in our businesses—at least most of us do. But we are happy to welcome all 

of you here today. 

Over the past several years, as we know, our Federal Government has had to operate through a number of debt ceiling crises, 

numerous and sometimes lengthy continuing resolutions—people 

keep asking me, ‘‘What is a CR? ’’—and the threat of Government 

shutdowns, the prospect of going over some fiscal cliff, and now 

across-the-board budget cuts to most Federal programs through sequestration. President Obama addressed this flawed approach to 

governing in a prominent passage in his most recent State of the 

Union address that some of you may recall when he said, ‘‘the 

greatest Nation on Earth cannot keep conducting its business by 

drifting from one manufactured crisis to the next.’’ I think the 

American people know this. It is not the way, that they run their 

family budgets; it is usually not the way they run their businesses. 

This kind of crisis budgeting, as we all know, represents a bicameral and bipartisan failure of leadership. 

We are going to hear from our witnesses today thatour failure in 

this area has made our Government not only less effective but also 

more costly to taxpayers. It has also degraded Federal employee 

morale and the confidence of our citizens in us. It has created 

harmful ripple effects for State and local governments. I heard 
2 

from some of them today. It has hindered efforts to help our Nation’s economy as it recovers from one of the worst economic recessions in our history. 

I hear every day, including today, that our businesses need predictability, they need certainty in the Tax Code, on the spending 

side. They want to know that we can govern, that we can be fiscally responsible. 

Some of our budget battles stem from fundamental disagreements over the role of Government and how much money we ought 

to spend on it. However, today’s hearing is not so much about how 

much we spend, but how we spend it. And it is about the price tag 

attached to our inability to come to timely agreements on spending, 

no matter what the eventual amounts are—I will call it an ‘‘uncertainty tax,’’ if you will. 

I have stated any number of times at hearings and elsewhere in 

recent months that, given the serious deficit and debt problems 

that our country faces, we need to shine a light into every nook and 

cranny of the Federal Government and ask ourselves at least this 

one question: How do we get a better result for less money in almost everything we do? 

Dr. Coburn and I along with our colleagues tried to do that on 

the Federal Financial Management Subcommittee that we have 

taken turns leading. I have made it one of my top goals as Chairman of this Committee, and it is a goal I believe I share with him. 

Today’s hearing takes things a step further, focusing not just on 

a particular program and its inefficiencies, but rather on a way of 

doing business in Washington that makes it impossible for the Federal Government as a whole to give taxpayers the results they demand in an effective and affordable manner. By failing to provide 

timely, predictable budgets, we are generating waste throughout 

our Government and exporting some of that waste to our State and 

local partners and everyone who relies on us. 

Dr. Phil Joyce from the University of Maryland, who is with us 

today, has written a report detailing the costs of this budget uncertainty. Based on his past research of Government practices as well 

as extensive interviews with current and former Government officials, Dr. Joyce found that—in fact—this uncertainty does not just 

deny us opportunities to get better results and save money, but actually gives those we serve and partner with worse results for more 

money. Among the findings that are disturbing: 

For example, the Government Accountability Office (GAO) found 

that because of a series of funding delays, the Bureau of Prisons 

was unable to lock in contracting prices for a new facility in West 

Virginia. This resulted in about $5.4 million in additional costs. 

In another instance, because of a 2011 funding delay, the Navy 

canceled seven ship repair contracts. Deferring this maintenance is 

expected in the long haul to increase costs and decrease operational 

effectiveness down the road. 

In 2006, the Veterans Health Administration (VHA) awarded 60 

percent of its maintenance budget in the last month of the fiscal 

year. Compressing that much spending in that small amount of 

time creates an environment in which error, fraud, and just plain 

bad spending decisions are inevitable. 
3 

And those examples do not include the countless hours of time 

wasted as managers and employees attempt to prepare for multiple 

possible outcomes, perhaps several times within a single fiscal year 

depending on what Congress might have in mind. Colleen Kelley, 

President of the National Treasury Employees Union (NTEU), will 

discuss today some of these kinds of unseen costs. 

Our other witnesses, Scott Pattison of the National Association 

of State Budget Officers and Stan Soloway of the Professional Services Council, will detail some of the ripple effects that States and 

private businesses face as a result of the budget uncertainties we 

create. As a recovering Governor, I know that State budgeting is 

a zero sum game. It is incredibly difficult to plan and budget effectively if you do not know what is, or is not, coming your way from 

Washington. And as someone who has focused recently, as most of 

my colleagues have, on how we can get our economy moving at a 

faster clip, it is clear from this work that the uncertainty our Federal budget situation is creating is not helping businesses create 

jobs. In fact, it may be hurting them. 

As I have said before, and I suspect you will hear me say again— 

I believe the best route we can take is to pass a comprehensive, bipartisan plan that gives Government and business certainty and 

shows the American people that we can lead—not unlike the plan 

that the man to my right here worked on, the Bowles-Simpson Deficit Commission, for many months. Then after we do that, we need 

to translate those plans into timely appropriations bills that will let 

agencies and their partners spend their time trying to get much 

better results for the taxpayer dollar, not hastily putting together 

contingency plans. I hope today’s hearing strongly reinforces the 

President’s statement, puts a couple of exclamation points after it, 

and just helps bring this irresponsible behavior to an end. 

Before I turn it over to Senator Coburn, I will just mention that 

I just came from meeting with a group of Close Up students from 

a high school in central Delaware, just south of Dover, and they 

were asking, ‘‘What is this sequestration all about? And why is it 

harmful from time to time?’’ 

Well, obviously, we need to reduce spending, but I will just give 

you an example, and this is a hypothetical. This high school—I just 

met these kids—is about 10 miles from the Dover Air Force Base. 

The Dover Air Force Base is a big airlift base. We have C–5s; we 

have one of the biggest airplanes in the world, cargo aircraft; we 

have C–17s, the newer, smaller version of the C–5. We can buy 

new C–17s for, I do not know, about $250 million a copy. We can 

overhaul, modernize I think two C–5s for about that same amount 

of money. So for the price of one new C–17, we can buy two C–5s. 

Why would we want to do that? Well, modernized, they will fly for 

another 30, 40 years. They can carry twice as much as a C–17, fly 

twice as far. They can take off out of Dover Air Force Base, a C– 

5, with new engines and all, they can fly out of Dover Air Force 

Base nonstop all the way to Afghanistan, right over the top. And 

save a lot of money in doing that. 

When we enter into a contract with, say, Lockheed or some other 

defense contractor, we actually make a contract to promise them 

we are going to try to modernize six planes, for example, a year 

and we get a decent price. Maybe not a low price, but a pretty good 
4 

price. What happens when we can only do one or we can only do 

two? We end up paying a whole lot more money for the aircraft 

that eventually we will have modernized. It is just a dumb way to 

do business. And that is just one example out of money that come 

to mind for me today. 

We can do better than this, and our goal is, when we finish up 

by the end of this fiscal year, we will have put in place a long-term 

comprehensive deficit reduction plan, a balanced plan that gets us 

on the right track to bringing down our debt as a percentage of the 

gross domestic product (GDP), does it in a responsible way, and 

really follows the model that Senator Coburn, whom I am pleased 

to serve with, has helped to shine a light on. 

Thank you, Tom. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. Well, let me thank you for being here, and I 

would like to submit my statement for the record and give you a 

quote from Will Rogers. Just so you know, this is not a new problem in Congress. In the 1930s, he said, ‘‘I do not make jokes. I just 

watch the Government and report the facts.’’ And so, the fact is we 

have not had a budget in 4 years. The reason we have not had a 

budget does not have anything to do with the needs of the Government or in the best interests of the country. It has to do with the 

needs of politicians. 

So even with the attempts of the 1974 Budget Act and all the 

things we have done, the process still gets manipulated for political 

gain, and our real problem is we are focused on the short term and 

not the long-term best interests of the country. My partner on this 

Committee has demonstrated an attitude that is other than that, 

and that is why we are such good friends, and we are focused on 

the long term. 

I want to welcome you here. My criticisms are of both parties because both have done it. In 16 of the last 20 years, Congress has 

failed to pass and send the President all the appropriation bills on 

time. That kills the agencies. A continuing resolution kills the 

agencies. It does not allow for innovation. It does not allow for 

changes. It does not allow for judgment. And we have been doing 

that for 4 years, which has markedly hurt their ability to do what 

they are asked to do. 

So I am thankful that you are here on a day when a new budget 

is being marked up. This is a good hearing, but I think we all know 

what the consequences are. It is inefficiency, it is increased costs, 

and it lays at the feet of the Members of Congress for not doing 

their job. 

It also lays at the feet of the President. He is 2 months late in 

putting forth his budget—that is the first time that has happened 

in a long time in this town—to see what his priorities are as we 

put out what the Congress’ priorities are. 

So we do not have the benefit of what their ideas are, the very 

people at the Office of Management and Budget (OMB) who actually get to see at a much closer level than we do what works and 

what does not. And so we are at a disadvantage because the President has failed to comply. 
5 

Nevertheless, there is enough blame to go around in Washington 

for every party and every branch, and what we ought to be about 

is the leadership that solves that, which means knowing what you 

are voting on, thinking about what is in the best long-term interest 

of the country, and not what is the best short-term interest of any 

party or politician. I thank you. 

Chairman CARPER. Thank you. 

We have been joined by Senator Begich from Alaska. Welcome, 

Mark. Good to see you. 

Before I introduce Dr. Joyce, I will just mention one other thing, 

if I could. We are going to have some tough choices to make today 

and this week with respect to the kind of continuing resolution or 

mini omnibus appropriations bill we are going to pass. Some really 

hard choices are going to have to be made when the House and the 

Senate create a conference committee and try to hammer out the 

differences between our two different bills. 

We are going to have some tough choices on the budget resolution that will be before us next week in the Senate and finally in 

a conference with the House. We are going to have some really 

tough choices that will enable us to avert or get into another debt 

crisis later this summer. 

And one of the things I want from this hearing is just the ammunition to enable us to remind our colleagues when we are trying to 

make those tough decisions, struggling with making those tough 

decisions, that there are real consequences for our failure to make 

those tough decisions, and there are consequences that can be 

measured in some cases in dollars and cents, in other cases not. 

But we welcome you here today and appreciate your testimony and 

your presence and the work you do. 

Our first witness is Dr. Phil Joyce, Professor of Management, Finance, and Leadership at the University of Maryland’s School of 

Public Policy. Dr. Joyce recently authored a widely cited report for 

the IBM Center for the Business of Government examining the 

costs and impacts of Federal budget uncertainty. And before his 

academic career, Dr. Joyce worked in both the Illinois State Budget 

Office and with the United States Congressional Budget Office 

(CBO), where he received the Director’s Award for Distinguished 

Service. That is quite an accomplishment. 

Our next witness is Mr. Scott Pattison, Executive Director of the 

National Association of State Budget Officers (NASBO), which represents budget officers from all of 50 States. Prior to his service in 

the association, Mr. Pattison served as Virginia’s State Budget Director, and before that head of the Regulatory and Economic Analysis Section of the Virginia Department of Planning and Budget. Is 

that in Richmond? 

Mr. PATTISON. Yes. 

Chairman CARPER. That is where young Ben Carper lives today, 

our youngest son. 

Our next witness is Ms. Colleen Kelley—Colleen, very nice to see 

you—the National President of the National Treasury Employees 

Union, which is the largest independent Federal sector union in the 

country. A Pittsburgh native and a certified public accountant 

(CPA), Ms. Kelley has served in her current position since 1999 

and has been here more than a few times. We welcome you back. 
6 

1The prepared statement of Mr. Joyce appears in the Appendix on page 43. 

The final witness is Stan Soloway, the President and Chief Executive Officer of the Professional Services Council, which represents 

over 360 member companies. And prior to his current position, Mr. 

Soloway served as Deputy Under Secretary of Defense for Acquisition Reform and director of former Secretary of Defense Bill 

Cohen’s Defense Reform Initiative. That is good. 

I thank all of you for joining us today, and your entire testimony 

will be made part of the record. We welcome you and look forward 

to your comments and to a good conversation after that. Dr. Joyce. 

TESTIMONY OF PHILIP G. JOYCE,1 PH.D., PROFESSOR OF MANAGEMENT, FINANCE, AND LEADERSHIP, SCHOOL OF PUBLIC 

POLICY, UNIVERSITY OF MARYLAND 

Mr. JOYCE. Thank you, Chairman Carper, Senator Coburn, and 

Senator Begich. It is good to be here. 

Thank you for asking me to testify today on this important topic. 

I want to congratulate the Committee for deciding to highlight the 

subject of the insidious effects of budget uncertainty. You have 

done a good job of outlining the long-term nature of this problem, 

the fact that we have recently limped along from one crisis to another. 

It would be a bit reassuring to think that this recent experience 

was exceptional and we could now return to normal. But normal 

is not too good either. We have not passed a budget resolution actually in 7 of the last 15 years, and we have not passed all appropriation bills on time in 16 years, and only 4 times in the 37 years 

since the Congressional Budget and Impoundment Control Act became law. 

So this is not a problem that has come to us recently, and it is 

also, as you suggest, not a partisan problem. It is a bipartisan 

problem. 

Any organization—whether it is the Federal Government, a State 

or local government, or a business—needs to plan for the funds 

that it is going to have available in order to effectively budget and 

manage. And my message to you is that late appropriations not 

only create negative consequences for Federal agencies, but also for 

people who get money from the Federal Government. And my colleagues on the panel are, I am sure, going to be talking about the 

effects on recipients and know more about it than I do, so I want 

to focus on some of the main negative consequences for Federal 

management and for the costs of providing services. 

First, budget uncertainty disrupts service delivery and lowers 

employee morale and productivity. Agencies engage in hiring 

freezes. The problem with hiring freezes is it leads you to not having staff in the places where you need them because you do not 

have turnover that happens equally across the agency. And people 

leave Government because of this lowered morale, and the people 

who leave are precisely the ones who have options, who are precisely the ones who you do not want to leave. 

Second, CRs tend to freeze priorities in place. Agencies have difficulty responding to new threats and problems, and they are required to keep funding outdated or ineffective programs. 
7 

Third, CRs require governments to engage in hurried or shortterm contracting. Agencies have to squeeze 12 months of contracting work into perhaps less than half a year. They also enter 

into multiple contracts, month to month, or even week to week in 

some cases, because of the length of CRs. This leads to more work 

and higher costs. Contractors dealing with the Federal Government 

may even charge a higher rate, a risk premium, if you will, in 

order to be compensated for this uncertainty. 

Fourth, agencies, OMB, and congressional staff waste a great 

deal of time preparing for potential Government shutdowns and 

CRs and then figuring out how to comply with them after the fact. 

Finally, agencies defer investments in people or in physical assets, which compromises their effectiveness and leads to higher future costs. 

Ultimately, I think it may be the apparent invisibility of these 

negative effects that creates the greatest impediment to fixing the 

problem. Frankly, we hear a lot in this town about waste in Government, which undoubtedly exists, but at least part of the waste 

in Government is caused by these very practices. That is, many of 

the same people who decry waste in Government are ones who are 

contributing to it. 

No State or local government would be able to get away with 

this. You know this, Senator Carper, from having been a Governor. 

If you had chronic funding delays at the State level, it would result 

in lowered bond ratings and increased borrowing costs and political 

fallout. 

Given all of this, of course, the best thing that could be done 

would be to just enact appropriations on time. And, of course, that 

would be the best possible outcome. I find that to not be a completely helpful suggestion, so I am going to move on to some things 

that, if we are stuck with late appropriations, might tend to at 

least lower the costs of them. 

First, I think the Congress should give agencies more flexibility 

in spending. For example, you could increase the percentage of 

money that is available on a multi-year or no-year basis and also 

avoid the temptation to micromanage the budget execution process. 

My point on this latter is that sometimes we have appropriations 

that are 4 months or 6 months late, but agencies are still required 

to get approval of spending plans before they can begin spending. 

Frankly, that is a luxury we cannot afford if we are going to have 

late appropriations. 

Second, I would make it harder to pass continuing resolutions 

than regular appropriations bills. If we could not pass CRs, the options would be either a full-year appropriation or a Government 

shutdown. That would raise the apparent cost, and I think perhaps 

more urgency in enacting appropriations would increase the odds 

of their being enacted on time. 

Third, I think CRs should be limited to only one or two per year 

that do not extend past the end of the calendar year. Frankly, if 

we are going to have CRs, they are not all created equal. It matters 

how many there are, and it matters how long agencies have to operate under them. Problems created by multiple CRs—and there 

have been as many as 21 in a single year—or CRs lasting 6 months 

or more are well documented. 
8 

1The prepared statement of Mr. Pattison appears in the Appendix on page 56. 

It seems particularly important to focus on these improvements 

now because the problem is becoming worse and the threat of sequestration compounds it. Even without sequestration, we are 

going to need to reduce Federal spending, and that is going to result in less than a zero sum game for Federal agencies. Having sufficient time to plan for these budget reductions I think is more important than ever. 

So my bottom line is that funding delays have costs, and there 

are both financial costs and costs felt through compromised Government effectiveness. Either way, these are completely self-inflicted wounds, and the Congress and the President should do what 

is necessary to mitigate them. 

I thank you, and I look forward to any questions you might have. 

Chairman CARPER. Thank you, Dr. Joyce. Mr. Pattison. 

TESTIMONY OF SCOTT D. PATTISON,1 EXECUTIVE DIRECTOR, 

NATIONAL ASSOCIATION OF STATE BUDGET OFFICERS 

Mr. PATTISON. Thank you, Mr. Chairman. 

Chairman Carper, Ranking Member Coburn, and, of course, all 

of the Members of the Committee, I want to thank you for inviting 

me here today on behalf of the National Association of State Budget Officers, and I want to tell you that the State finance and budget 

commissioners across the country are very appreciative of your 

doing this hearing because they feel that any increase in certainty 

and less crisis budgeting would be a huge benefit. 

What we have found and what I must report to you today is that 

the uncertainty at the Federal level presents numerous challenges 

to sound financial management and long-term strategic planning at 

both the State and local government levels, as you know. 

One thing that I really want to point out is the Federal Government provides one-third of all of the resources that States spend, 

and, therefore, by having this persistent uncertainty through the 

CRs and fiscal crises like the fiscal cliff, it has led to a short-term 

focus. And so what really is a shame is State and local governments do not have the opportunity to achieve the results that we 

all want them to under the programs, either in part or fully funded 

by the Federal Government. 

Our current board chair, the South Dakota Chief Financial Officer (CFO) Jason Dilges, has a good quote. He told our group recently, ‘‘The uncertainty causes many more problems than do specificity and certainty, even when that certainty is not good news.’’ 

Now, before I discuss the impacts of the—— 

Chairman CARPER. Would you say that again? Give us that quote 

from South Dakota again. 

Mr. PATTISON. Oh, sure. He said, ‘‘The uncertainty causes many 

more problems than do specificity and certainty, even when that 

certainty is not good news.’’ 

Chairman CARPER. Thank you. 

Mr. PATTISON. Now, before I discuss the impacts of the crisis 

budgeting—and I will just list some of these—let me mention that 

with the economy improving, you still have a situation where the 

State money is very tight. We had an average of 6 percent year- 
9 

over-year growth in State budgets for many years before the recession. Now it is down to about 2 to 3 percent. 

What is important about that, whether one thinks it is good or 

bad that the levels have declined, is that it means that money is 

very tight at the State and local government levels. This uncertainty and crisis budgeting that we are talking about today has important impacts on States and localities and their ability to plan 

budgets, as we know, but also to effectively deliver Government 

services. And, of course, as we have talked about, it costs money. 

There are also other impacts such as impacts on cash-flow and, 

as has been talked about and I know will be talked about further, 

definitely on contracts. I want to highlight some of the impacts that 

we have found when we deal with the budget officers across the 

country. 

Uncertainty about Federal funding prevents strategic planning 

and disrupts program management. And I have heard the word 

‘‘disruption’’ from the CFOs across the country many times. It 

forces many State programs to focus on the next few weeks and not 

the next few months. So rather than focus on long-term results, 

they are just focusing on the short term. 

I will give you some examples that I have just heard in the last 

few days. For example, we are hearing from States like California 

that they have difficulties in planning for the next school year. 

School districts have to determine exactly how many teachers they 

want. 

I have also heard several Midwestern States talk about how they 

need a huge lead time to determine how to plan for certain pests 

so that crops are not devastated. This is something that is harder 

to plan for with only a few weeks or months. 

State CFOs also report that Federal funding volatility can lead 

to program instability, increased staff turnover, and decreased productivity. Ramping up and down of the staffing is a huge problem, 

and an Arizona finance official told me he calls it ‘‘roller-coaster 

costs.’’ And I think that is a great name for it. He says, ‘‘It is just 

up and down. We ramp up and down. It costs us money, and it 

does not allow us to focus on the long-term results that we want 

to focus on.’’ And as far as contracts, uncertain funding levels prevent State and local governments from signing long-term agreements that, of course, can save money. 

Lack of funding certainty from Congress can lead to forgone investments and, of course, costlier ones. I will give you an example. 

Delays in road construction because of short-term funding can actually be a huge problem, particularly for Northern States, with 

shorter seasons to build roads, et cetera. 

Just in March of last year, when we had another temporary extension of the surface transportation programs, for example, North 

Carolina delayed projects that affected 41,000 employees. Michigan 

cited that 3,500 jobs were at risk as a result of those transportation 

funding delays. 

Now, if the uncertainty continues, what we are concerned about 

at the State and local governmental levels is that we are going to 

look at problems that are a problem now but will get worse. One 

of them is we really feel the continued uncertainty will have an impact on our bond ratings even more than they do now. And this, 
10 

1The prepared statement of Ms. Kelley appears in the Appendix on page 65. 

of course, will affect the ability of States and localities to borrow 

money for roads, bridges, buildings, transit. 

Also, when State budget officials lack confidence in the Federal 

Government’s ability to provide good certainty as to spending, they 

may not engage in partnering with the Federal Government in the 

future. And, of course, I mentioned there are huge cash-flow problems that we believe will get worse and delay payments in the future. 

To conclude, more certainty about Federal funding levels and 

greater flexibility can enhance States’ ability to make informed decisions, address tough fiscal challenges, improve program performance, and plan for the long term. Any actions that provide increased certainty of Federal appropriations amounts to us will be 

exceptionally positive and will decrease some of the harms I have 

talked about today. This will lead to saving money and focusing on 

programs results. 

So, in our view, we would like to see us all work together to 

make budget preparation, financial management, and strategic 

planning more efficient, more certain, and less costly. 

Thank you very much. 

Chairman CARPER. Thank you very much, Mr. Pattison. Ms. 

Kelley, please proceed. 

TESTIMONY OF COLLEEN M. KELLEY,1 NATIONAL PRESIDENT, 

NATIONAL TREASURY EMPLOYEES UNION 

Ms. KELLEY. Thank you very much. Chairman Carper, Ranking 

Member Coburn, thank you very much for the opportunity to participate in today’s hearing. I think it is particularly important for 

the Committee to hear about the implications of crisis budgeting on 

those who are most directly affected by it in the Federal Government, and that, of course, is the Federal workforce. 

During fiscal year 2011, Federal employees faced the possibility 

of Government shutdowns and unpaid furloughs due to appropriations lapses no less than eight times, including three times in December 2010 and once in April 2011, when detailed plans were disseminated listing who was excepted and non-excepted from the furlough and how they were to shut down their work stations. In 

many of these cases, employees had only hours of notice as to 

whether they should go to work the next day or not. 

Fiscal year 2012 saw five continuing resolutions before an Omnibus Appropriations bill was enacted on December 23, 2011. While 

there has been a CR in place since September 2012, employees are 

yet again bracing for the possibility of a Government shutdown 

when it expires on March 27. 

In addition to Government shutdowns due to lapses in appropriations, Federal employees have also recently faced the prospect of 

loss of pay or job loss due to hitting the debt ceiling. This threat 

was only resolved at the last minute in August 2011 with the enactment of the Budget Control Act. And Federal employees know 

that they will face a similar debt ceiling threat again this summer. 

The current and most debilitating budgeting crisis impacting the 

Federal workforce is sequestration. On March 1, the sequestration 
11 

order was issued requiring most Federal agencies to implement 

across-the-board cuts of 5 percent of their annual budget or 9 percent of their remaining fiscal year 2013 budget. Federal employees 

have since been notified of unpaid furloughs they will have to serve 

of up to 22 days that could reduce their pay by 20 percent for the 

rest of the year. 

Professor Joyce’s report, ‘‘The Costs of Budget Uncertainty,’’ 

noted that: 

Employees may respond to furlough notices by spending otherwise productive time seeking other employment. . . . An actual 

shutdown, or even a credible threat of one, can push people out the 

door. It can also be one factor that discourages people from wanting 

to work for the Federal Government. 

We are seeing that employees are leaving, and we are beginning 

to see a different twist on Professor Joyce’s observation. There has 

recently been a very large increase in the number of workers leaving the Federal workforce, primarily to retire. In February 2013, 

20,374 Federal employees retired. That is more than three times 

the number who retired in February 2012. And so far in 2013, over 

42,000 employees have retired; that is 40 percent of what retired 

in the entire year of 2012. A large increase in retirements is especially alarming since approximately 53 percent of the Federal 

workforce will be eligible to retire by next year, and a significant 

loss of these experienced employees could leave agencies, already 

stretched very thin, in dire circumstances. 

With the implementation of sequestration, Customs and Border 

Protection (CBP) employees, who are represented by NTEU, have 

received notice that they will need to serve up to 14 days of unpaid 

furlough beginning in April. That will be a 10-percent pay cut in 

every 2-week paycheck for the rest of the fiscal year. The cuts to 

Customs and Border Protection will also increase already long wait 

times at airports and at land border crossings to as much as 4 or 

5 hours. Wait times at the border cost the U.S. economy in jobs, 

output, wages, and tax revenue. 

NTEU-represented employees at the Environmental Protection 

Agency (EPA) have been told to expect to take 13 unpaid furlough 

days by the end of the fiscal year. That will result in an estimated 

1,000 fewer inspections by EPA. 

The Internal Revenue Service (IRS) employees represented by 

NTEU have been told they will face 5 to 7 furlough days under sequestration. The IRS has announced that it will delay implementing these unpaid furloughs until after the tax filing season 

ends on April 15. Due to funding cuts and planning for sequestration, the IRS has nearly 5,000 fewer employees today than it did 

just 2 years ago. Despite delaying furloughs, wait times for taxpayers trying to get help on the telephone and at walk-in centers 

have increased dramatically. 

Due to the late enactment of the American Taxpayer Relief Act 

in January, which included a retroactive Alternative Minimum Tax 

patch as well as other tax extender provisions, the IRS was forced 

to delay the start of the current filing season until January 30 for 

most taxpayers. According to the National Taxpayer Advocate, the 

extensive work the IRS must perform to accommodate late-year 

changes has an opportunity cost. It requires the IRS to pull em-
12 

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

ployees from other priority work, reducing service to taxpayers and 

potentially reducing revenue from voluntary compliance as well as 

collection efforts. 

Professor Joyce’s report cites a number of actions that agencies 

rely on in times of budget uncertainty that reduce efficiency, and 

these include hiring freezes, furloughs, training, and travel delays. 

All of these inefficient practices are being utilized by agencies right 

now due to the uncertainty of the congressional budgeting process. 

The Federal employees I represent have been under a pay freeze 

for more than 2 years. They are facing significant pay cuts due to 

sequestration. As they see the waste that comes from the lack of 

timely congressional action, it is not surprising that they think that 

the wrong people are getting their pay cut. 

Thank you again for this opportunity to testify today, and I am 

very happy to answer any questions you have. 

Chairman CARPER. Ms. Kelley, thank you for sharing that valuable perspective with us today. Mr. Soloway, please proceed. Thank 

you. 

TESTIMONY OF STAN Z. SOLOWAY,1 PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, PROFESSIONAL SERVICES COUNCIL 

Mr. SOLOWAY. Mr. Chairman, Senator Coburn, thank you again 

for the opportunity to testify here today. I am pleased to join my 

colleagues and join the voices providing you with ammunition for 

the discussions ahead. 

Let me be clear from the outset that, as an organization representing more than 360 companies doing business with the Government, we take no position on the specific solutions to the current fiscal debate. We recognize and respect that funding decisions 

are within the purview of Congress and the Administration. We 

have a very strong point of view with regard to the question you 

have posed in today’s hearing. 

When our member company Chief Executive Officers (CEOs), 

gathered just over a month ago to identify our top policy priorities 

for 2013, achieving budget stability emerged by far as their No. 1 

objective. The consensus among our leaders can be summarized in 

four simple words: ‘‘Rip off the Band-Aid.’’ 

We recognize that no stakeholders will be unscathed, but we also 

believe that it is in the best interest of the Nation and the Government to finally come to grips with the fiscal challenges we face. 

Indeed, on virtually every level, restoring a reasonable degree of 

predictability and stability to Federal budgeting—the return to regular order, if you will—is essential to the right functioning of Federal agencies, successful program execution, and the ability of our 

industry to bring to the table the best and most innovative and effective solutions. 

Let me briefly set forth the four key areas in which today’s lack 

of stability and certainty in budgeting are impacting our industry. 

First, and most obviously, the lack of stability and predictability 

significantly increases the risks faced by companies serving the 

Government. This is a most basic economic fact. And with in-
13 

creased risk comes unnecessarily increased conservatism with regard to investments in people, capabilities, and technology. 

When I speak of risk, I do not mean simply the risks associated 

with whether one wins a contract or not. I am speaking more 

broadly of the risks associated with whether the contract on which 

one is bidding will be significantly delayed or even ever awarded. 

There is broad agreement that procurement lead times today are 

stretching longer than anyone has seen in recent history, in some 

cases as much as 3 or more years from the submittal of bids to 

award decisions. 

I am also speaking of whether margins, which in the Government market have always been somewhat lower than the commercial environment, will be pressured lower and lower as agencies 

seek any and every tool at their disposal to save money, even when 

doing so is contrary to smart practice. We are not talking here 

about margins begin driven down from the unreasonably high to 

the reasonable. We are talking about margins being driven from 

the reasonable to the unreasonable. 

In fact, an authoritative annual report recently released by 

Grant Thornton documents this trend very clearly. One year ago, 

35 percent of the more than 100 Government contractors surveyed 

reported margins below 5 percent. This year that number has 

jumped to 60 percent, despite the fact that a substantial percentage 

of those firms provide very high end, often complex solutions to the 

Government. Needless to say, the absence of reasonable margins 

directly impacts a company’s ability to invest in future capability, 

in people, or in excellence generally. 

I am also speaking of a range of impacts playing out in acquisition strategy and practice. For example, across our more than 360 

member companies of all sizes, there is a consensus that the Government is defaulting to procuring virtually everything from the 

simple to the most complex on a ‘‘lowest-price technically acceptable’’ (LPTA) basis. There are many reasons for this, but clearly 

uncertainty is one of them. Under the rules, when what is known 

as an ‘‘LPTA contract’’ is awarded, the Government must award to 

the lowest bidder meeting the minimum technical requirements. 

For a wide range of commodities, that makes eminent sense. But 

for the many far more complex professional and technology requirements the Government has, it is both counterintuitive and counterproductive. Unfortunately, it is also dominating today’s marketplace. 

We are facing a potential race to the bottom where companies 

have to do whatever they can to survive. But the depth of that race 

is ultimately controlled by the Government customer and the behaviors and attributes it rewards and incentivizes—rewards and 

incentives that are impossible in the face of uncertainty. 

We can also see these impacts very clearly with regard to the 

workforce. On the public sector side, our partners have been living 

with a long-term pay freeze, often increased workloads, and the difficult challenges of managing in an unstable environment. This is 

not to mention the potential for furloughs as a result of the sequester. 

All of this comes at a time when the Government workforce faces 

daunting demographic and skills gap challenges and when the Gov-
14 

ernment itself is struggling to be competitive for critical skills, particularly in the technology sphere. 

In the private sector, the impacts have also been acute. Over the 

last couple of years, thousands of jobs have been eliminated across 

the industry as a direct result of the budget uncertainty and related program instability. Many of the individuals who have exited 

those jobs have also exited the Government sector altogether and 

are unlikely to return. Still thousands more positions have not 

been filled by companies who simply cannot justify the investments 

required, given the uncertainty in their marketplace. 

There is also increasing pressure on the Government market to 

arbitrarily cap contractor employee salaries, even when such caps 

bear little relationship to what the broader human capital marketplace has deemed certain skills to be worth. Most of the attention 

is being focused on how contractor salaries compare to Government 

salaries rather than on the far more pertinent question of whether 

those salaries enable contractors to compete for the best talent 

with the rest of the commercial world. 

Finally, and perhaps most importantly, is the impact on mission. 

Here the message is also quite simple. The combination of uncertainty and potential funding reductions force agencies to forgo or 

delay new initiatives to improve performance or delay planned 

technology refresh and scheduled maintenance and upkeep, all of 

which causes long-term costs inevitably to rise and mission effectiveness to suffer. They require agencies to fund their initiatives incrementally, which is often, by definition, inefficient and costly. 

Budgetary pressures lead to reduced investments in people and 

technology in both industry and Government and are further exacerbated by the trends I discussed earlier: Awards on the basis of 

lowest rather than best price, unprecedented pressures on margins, 

and the reduced ability of both companies and the Government to 

hire needed skills, all of which poses great threat to the effective 

and optimal execution of the Government’s mission. 

Mr. Chairman, I have much more detail in my written statement, but would be happy to answer any questions that you may 

have, and thank you again for the opportunity. 

Chairman CARPER. Good. Thank you, Mr. Soloway. Leading off 

the questions is Dr. Coburn. 

Senator COBURN. Mr. Soloway, I am somewhat perplexed. Most 

of the businesses that are in your group, one of their mantras is 

to do more with less every year. Most of them believe in markets, 

that markets allocate scarce resources. 

In listening to your testimony, I get the other impression. If, in 

fact, we get too cheap on our prices, you will quit supplying it. If 

you cannot supply it, if the business is not good for your business, 

you are not going to be there. And, therefore, as people drop out, 

the market price goes up. So markets will take care of a lot of the 

things that you outlined in your testimony. 

Do you disagree with that? 

Mr. SOLOWAY. I do not disagree with it in terms of markets in 

general, but in the Government market there are a lot of unique 

aspects which lead me to question the presumption a little bit. I 

think clearly our member companies believe in markets and market forces. I think that what we have in the Government market 
15 

are often unnatural market forces that do not bear any relationship 

to what you would see in a commercial environment, where the 

Government actually can manage things like profit, can manage 

salary caps and so forth, in ways in which you cannot do in the 

commercial space. 

I think the difference here is that in the Government market a 

large percentage of companies do a significant amount of work with 

the Government. The Government is their customer. So it is not 

easy just to exit the Government and go into the commercial marketplace. 

Senator COBURN. But, again, in a market-based system, it is the 

classic Walmart syndrome. If you become too big of a supplier to 

Walmart, you will not exist. 

Again, I want to get back to the markets. To me, your testimony 

does not ring true because if you want to be in this business, and 

there is no real market, the market is what the Government is 

going to say, it will have a negative effect. And so either you will 

go out of business and somebody else will come in to do that, and 

ultimately if enough go out of business, the market will—the price 

will rise because the Government will want to buy it. 

Mr. SOLOWAY. Let me try to address that. I apologize if I am not 

being clear, because I do not disagree with you in general terms, 

but let me paint a slightly different picture. 

If you go back a little bit to the 1990s when we went through— 

this Committee was very key in passing some very major reforms 

to acquisition policy. The whole goal was to expand the Government’s access to a much wider range of capabilities. 

What we have seen in recent years, absent the pressure of the 

budgets, is a bit of a regression from some of those efforts, and so 

that creates a problem. 

The Government market is different than the commercial market 

in a number of ways; companies in the Government market recognize that their margins are going to be lower than they might get 

if they were commercial companies. But in return, it is a relatively 

stable, predictable customer; it provides a reasonable degree of 

clarity to the space. But when that clarity and that predictability 

disappear, the tradeoff no longer becomes as viable. 

Senator COBURN. Oh, I agree. 

Mr. SOLOWAY. The problem is it is not as easy to take a company 

that is doing engineering support for military systems and say, ‘‘I 

am going to do engineering in a commercial world.’’ That shift is 

not that easy. We have lots of companies in the Government space 

that are highly commercial and Government is a small customer. 

They are, in fact, going to be decreasing some of their investments 

in the Government space. I have many member companies that are 

beginning to look at other markets because of the uncertainty and 

unpredictability of the Government space. 

So, yes, you could argue that the markets will take care of themselves and these issues of margins. But for the people in the market today who are investing in supporting the mission of the U.S. 

Government, that answer is not actually a very helpful one because 

they are faced with the challenge of either finding an entirely new 

market or very significantly declining margins and, therefore, de-
16 

clining competitiveness and ability to drive value in the market 

that they have grown up in. So it is not an even switch. 

Senator COBURN. Again, but it is a choice to be in that market. 

Mr. SOLOWAY. Absolutely, and they choose to be in the market 

to serve the Government. 

Senator COBURN. That is right. And what is in front of us as a 

country—with the unsustainability of where we are, that is not 

going to get better. 

Now, the timing of it, what we are talking about today, disrupting that and making people make poor economic decisions because of Congress’ irresponsibility. I agree with you. We do not 

want that to come on the suppliers that are coming to the country. 

But what is a significant point is once you become reliant on the 

Government, it is very difficult for you. But if you were balanced 

in terms of where you sold and what you sold, it is less. 

So I understand the problems. To me, it is obvious. Your testimonies are obvious to me. Right? And they are to the rest of the 

people in the country. They know this is expensive, what we are 

doing. They know it interrupts planning. They know it is a poor 

way to run the Government. Everybody agrees with that. The question is: Will the grownups, like Tom and I, get together and solve 

the bigger problem so you do not have those problems? 

Mr. SOLOWAY. Senator, could I just clarify one point? Because I 

want to be clear, if I was not in my testimony. There is nothing, 

no position we would take or statement we would make to suggest 

that we think we ought to be protected from the austerity we face. 

We recognize that piece. 

I think from a Government perspective, putting on my former 

Government official’s hat, what I want as a marketplace supporting 

my missions is an innovative, agile, technologically current marketplace. The more the Government as a customer creates an unnatural marketplace, minimizes the abilities to drive value and reasonable margins, the less agile, less innovative, and weaker the market that is serving me becomes. So it is in the Government’s interest to have that kind of marketplace. 

For a company other than large commercial companies, it is actually exceedingly difficult to be in both markets at once, because it 

is very expensive to do business in the Federal Government market. Accounting systems are entirely different. There are a lot of 

tremendous differences. But I just want to be clear. We are not expecting any protection. That is my point about ‘‘ripping the BandAid off.’’ We will plan to whatever scenario is out there. As Mr. 

Pattison said in the quote from one of the State budget directors, 

it was absolutely—— 

Senator COBURN. I agree with you. I was not trying to give 

you—— 

Mr. SOLOWAY. No, I understand that. I just want to be clear. 

Senator COBURN. I actually have done Government contracts before when I was in the manufacturing business, and I decided I did 

not want to have anything to do with it, and I quit. In other words, 

I chose to not go as a Government supplier rather than to go as 

a Government supplier. Mr. Pattison, I have one other question for 

you, and then I am going to submit, if I may, Mr. Chairman, all 

my questions to the record. 
17 

Looking at your testimony, outlining it, for example, education— 

Ms. Kelley talked about education, and you talked about education. 

Less than 10 percent of a State’s budget is Federal education dollars. It seem to me the smarter the State is, given our dysfunction 

over the past 18 years, is to become less and less reliant on the 

Federal Government, because as you outline, the States know how 

to do this. They do it themselves. Senator Carper did it himself 

when he was Governor of Delaware. But when you have a question—and it is really a problem for my home State because a vastly 

greater percentage of our budget comes from the Federal Government than is in our local budget. And so there are ramifications. 

And there is this big movement in Oklahoma for us to start becoming independent of the Federal Government in terms of our needs. 

And so you are seeing this move, to not take advantage of things 

that are promised because the very high likelihood is, given our 

budget difficulties, there is going to be less in the future, not more, 

in terms of real dollars. I am talking absolute dollars. 

Do you have any thoughts on that? 

Mr. PATTISON. Well, I think one thing is, depending on how the 

future goes, I have heard a lot of comments from State CFOs that 

they will probably—especially if new programs are proposed or 

money is moved—I would not be surprised if they do look at those 

more carefully than always automatically taking the Federal 

money. 

I will say, though, politically it is really hard in a lot of States 

not to accept the Federal funds. 

Senator COBURN. Yes. 

Mr. PATTISON. In addition to that, they often feel—— 

Senator COBURN. It is called an ‘‘elixir.’’ 

Mr. PATTISON. Yes, and they often feel they have to make up for 

it or there is an enormous amount of pressure, particularly if there 

are programs, for example, for special education and disabled children. So there are a lot of pressures on that—— 

Senator COBURN. They are mandates. 

Mr. PATTISON. Yes. 

Senator COBURN. That we have never met our obligation on yet. 

Mr. PATTISON. And that is one thing I do have to tell you that 

States are extremely worried about right now, is they expect that 

cuts will come. We are willing to take the Band-Aid off, as Mr. 

Soloway has said, but we are worried about the requirements not 

changing and less money to do the same—— 

Senator COBURN. Yes, I agree. And that is a legitimate criticism. 

I want to thank all of you for your testimony. I am sorry I cannot 

stay for the rest of the interchange between my two colleagues and 

you. But I will submit my questions for the record, and I would appreciate it if you would get back to me with answers. Thank you. 

Thanks, Tom. 

Chairman CARPER. Dr. Coburn, I just want to thank you for adjusting your schedule to be here for this portion of our hearing. 

Thank you. 

Dr. Coburn mentioned that I spent some time as a Governor. Another guy who was a chief executive officer not of a State but of 

a big city is right here, and he served for a number of years as the 

Mayor of Anchorage, Alaska. I will not say that it has more people 
18 

than Delaware, but it has a lot of people. And he brings that expertise with him, and a lot of others, and I am happy to recognize him 

for questions. Thank you. Thanks for being here, Mark. 

OPENING STATEMENT OF SENATOR BEGICH 

Senator BEGICH. Thank you very much, Mr. Chairman. We 

would describe it in Alaska, not that we would be ripping off a 

Band-Aid, but we would be tearing off the duct tape. And we use 

duct tape quite a bit, and actually I describe that in somewhat of 

a serious way, that whatever we do on this budget will be painful. 

And I think people are not yet adjusting to it, and clearly the political environment has not adjusted. I had to do this when I was 

Mayor, and the former Governor, now Chairman of the Committee 

here, had to do it. We make tough calls. You have to deal with it. 

Mr. Soloway, I think what you were trying to describe, I am 

going to give you a couple examples. In the road construction business, you can take the low bid and potentially pay for that between 

two elements: Cost overruns, adjustments they would require during the project, or a product that later down the road—down the 

road literally—that you have to repair because it was poorly done. 

We switched to an effort called ‘‘best value,’’ which was we will 

pay a little bit more, but we will get a better product. But it is 

more competitive, because then everyone starts playing and you increase the pool. Because if you are just low-balling it, no one wants 

to do that, and they hope, they pray, and play off of change orders. 

Is that one of the examples that you are trying to describe, that 

that is another way to do the business, if you had a long-term plan, 

in service delivery and product delivery, that best value is another 

way to manage things to get the best value and also create a larger 

competitive pool, which gets more competition but gets better value 

for what you are paying? 

Mr. SOLOWAY. I think it is precisely the point I was trying to 

make, and you have given an excellent example. I think the bottom 

line is there are certainly a lot of commodities we buy, from pencils 

to laptops these days, to other things that maybe even a few years 

ago had not been a commodity. 

Senator BEGICH. Right. 

Mr. SOLOWAY. Low price makes eminent sense. But when you are 

dealing with anything complex, you get what you pay for, and we 

are finding more and more that the Government, partially because 

of these pressures and this uncertainty, is more about driving price 

down at the expense of long-term quality than it is about re-evaluating what we are doing. We are not critically relooking at the requirements saying, ‘‘What can we do better? How do we do more 

with less? Or how do we do less with less? ’’ 

Senator BEGICH. Also, I think on the service end—again, I am 

asking this so I make sure I am thinking the same thing here. 

When we bid out services, we looked for first quality of the delivery 

of the service, for example, engineering services for the city to construct, versus price. Because if you are looking for quality, then you 

get a better product. Then when you put those bid packages out, 

you do not have people coming back for multiple change orders. 

But the issue in the service industry is—I will use engineering 

as an example. It takes an expertise to have a civil engineer, me-
19 

chanical engineer, or any of those types of engineers that work on 

Government projects versus a private sector project. There is a difference. There are a lot of similarities. But there are sometimes different requirements of the paperwork that goes over here, the mill 

that we create, but to keep that kind of staff available, you cannot 

just go out to the marketplace tomorrow, put an ad in, and get a 

whole bunch of engineers, because one thing we do not have a lot 

of in this country because we do not do good STEM education—we 

are trying—is to have actually a lot of qualified, ready-to-go engineers. 

Is that a fair statement? One of the challenges with a service 

company is making sure you have a cadre that you can tap into, 

not just have them reassess what they are going to do from a company standpoint, they are not just going to keep them on line waiting for the Government. 

Mr. SOLOWAY. They cannot afford to keep them on line. 

Senator BEGICH. Right. 

Mr. SOLOWAY. I think your example is exactly right. The point 

is that we have a shortage of high-tech skills, of engineering skills 

in the country. Our member companies are competing primarily 

with the purely commercial marketplace for that talent. The Government is competing as well for that talent and struggling to get 

it because of the way the Government pay and other personnel 

policies are structured. So I think, yes, the dichotomy you reference 

is very accurate. 

Senator BEGICH. Let me ask Dr. Joyce, if I can, I think the way 

we do the business here—I mean, I come from the small business 

world. I would be bankrupt the way we do the business around 

here. As Mayor, I would have been kicked out of office without— 

because in local government, just kind of like State government, 

you cannot—in my case now—be thousands of miles away from 

your constituents. They will find you as a Mayor, and as a Governor I am sure they would, especially in Delaware. They would 

find you. 

Chairman CARPER. In Delaware, our State is about 6 miles wide. 

In one part it is actually 35 miles wide. But there are not many 

places to hide, so you are right. 

Senator BEGICH. Yes, that’s right. 

So I think your general testimony here from all of you—and I am 

going to focus, if I could, Dr. Joyce, and others that want to give 

some thoughts here. The system of how we do CRs, these halfbaked kind of appropriation bills, budget resolutions that the President never even has to sign at the end of the day, which makes 

no sense to me, because there is no responsibility then. The system 

is convoluted and broken. Is that a fair statement based on the testimony? I heard systematically maybe at different levels, but is not 

that how we do these? There is no penalty. In other words, we keep 

doing CRs. So what? The penalty is taxpayers lose a ton of money. 

And we are a service company. That is what the Federal Government is. We deliver services. And if we cannot deliver them with 

some certainty, then it has a ripple effect, and the system is broken. 

So I guess I am interested in—we did a 2-year budgeting in the 

city. When I first got here, the Department of Veterans Affairs 
20 

(VA) budget we worked on, we got them a 2-year budget, which 

makes a lot of sense. I know it would be problematic here because 

all the politicians want to have every pound of hide they can get 

out of every department for every inch and every month. But does 

it not make sense for us actually as a Federal Government to make 

a 2-year budget as well as finally do what State budgets do, local 

budgets do, and the private sector, operating budget, capital budget? Does that not make more sense? 

Mr. JOYCE. Well, two responses to that. 

On biennial budgeting, which has been proposed for a long 

time—I mean, when I worked at the Congressional Budget Office 

in the early 1990s, there were active proposals for biennial budgeting. There was even one that came from President Clinton. On 

biennial budgeting, I think the first thing to say is that we do not 

actually do annual budgeting very well. 

Senator BEGICH. We do not monthly budget. 

Mr. JOYCE. I mean, the benefits of biennial budgeting were typically sort of stated as a counter to annual budgeting. But I would 

say we do not even do annual budgeting very well. 

Senator BEGICH. Well, that gives us a good basis to start from. 

Mr. JOYCE. Right. And I think the thing that one would have to 

keep in mind on biennial budgeting is that in the first place it 

would create more certainty, but it would only create more certainty if it worked as advertised. The way it is advertised is that 

you would budget in, say, the odd-numbered year and then you 

would do oversight in the even-numbered year. 

Senator BEGICH. Right. 

Mr. JOYCE. You would have to make sure that people did not 

come in and do wholesale changes to the budget in the second year, 

because at that point you just have a biennial process on paper. 

Senator BEGICH. Good point. Yes. 

Mr. JOYCE. And I think on capital budgeting, I think that the 

concern that I have heard expressed is only that it would be sort 

of difficult to enforce what was called capital and what was called 

operating in the Federal Government context. 

Senator BEGICH. I would totally disagree with any Federal agency that says that. State governments do it, local governments do it. 

We can tell the difference. People can tell the difference between 

capital—so I have heard that same thing, and every time an agency brings that up, I say, ‘‘Are you kidding me?’’ The private sector 

does it. I mean, in my household, I know what a capital budget— 

I mean, a roof is a capital budget. 

Mr. JOYCE. Right. 

Senator BEGICH. Putting a string of lights at Christmastime is 

not. 

Mr. JOYCE. Right. 

Senator BEGICH. And I think as long as the parameters are 

there, right, the base, then they could actually do a capital budget 

because when you think of our budget and the debt that we accumulated, part of that is for capital. We are building all these roads 

and ports. This is capital investment. It is like when we buy a 

home. But people view it as, oh, we are just borrowing money to 

operate the Government. Yes, but we are also investing, and that 

capital investment is no different than the private sector would do 
21 

borrowing from the markets, as well as an individual would do 

when they want to buy a house. 

Now, some are lucky and fortunate enough to pay cash for a 

house, but a majority of Americans do not. They borrow. But to pay 

the utility bills, they use operating dollars. It seems so simple to 

me. 

Mr. JOYCE. Well, and I agree with you absolutely that there 

needs to be more attention paid not to just spending as spending, 

but asking the question, What is it we are buying for that spending? A dollar of spending for consumption is not the same thing as 

a dollar of spending for investment. And that is where having some 

distinction between at least what is investment spending and what 

is consumption spending is a useful thing to do. 

Senator BEGICH. Can I ask one last question, Mr. Chairman? 

This is maybe a set-up question to any of you that want to answer 

this, because I will editorialize in the question. 

I do not think Congress does enough oversight in this area. We 

are always just running and moving from place to place. And I appreciate the Chairman’s focus here not only today but on multiple 

levels. I have seen multiple hearings being set up, and it is about 

oversight. I do not think Congress does a really good job. We do 

oversight on the crisis, but we never do oversight on the operations. 

We are good with a crisis. I mean, if something happened tomorrow, we would be all here sitting around, yelling screaming, and 

then the next week, new day, new story. 

Do any of you want to comment? And you can criticize us. I am 

OK with that. I have alligator skin. Once you have survived being 

Mayor, once you have survived being Governor, huh, this is an easy 

job compared to that. Give me your thoughts. I just do not think 

we do enough of this kind of review and say, this program should 

not exist anymore because it is inefficient. Give me your thoughts 

on that. And I will stop there, Mr. Chairman. I apologize. 

Mr. JOYCE. Well, I have a couple things I could say, but I do not 

want to monopolize. But I think you are exactly right. I think the 

reason for that is because there is no incentive to do oversight, it 

is not sexy. The kind of oversight—— 

Senator BEGICH. We think it is. Right? 

Mr. JOYCE. Well, I know. This is a great Committee for that. But 

many other committees do not view it as sexy. 

Senator BEGICH. Right. 

Mr. JOYCE. And they view oversight as defined as sort of rooting 

out the big-headline kind of problem. And the real work of oversight is hard work. It is getting sort of into the weeds. 

Now, I think that some of the things that have happened in the 

past several years—for example, the Government Performance and 

Results Act (GPRA) and then the Government Performance and 

Results Modernization Act—are trying to get at that kind of issue, 

trying to sort of emphasize how well it is the programs are working. But, still, I do not think there is nearly enough attention paid 

in forums such as this on questions of what programs are working 

and what programs are not working. 

Senator BEGICH. Does anyone else want to comment? 

Mr. SOLOWAY. I would like to just second what Dr. Joyce said 

about the definition of ‘‘oversight’’ and the hard work involved. As 
22 

1The information provided by Mr. Pattison appears in the Appendix on page 99. 

he said, a lot of oversight is about rooting out bad actors, which 

is important. It is certainly one of the responsibilities of the Committee. But a lot of it is also delving into understanding not only 

what programs work and do not work but why they work and why 

they do not work and, therefore, what changes are needed in personnel policies, organizational structures, or whatever it might be, 

to learn those lessons and apply them later on. And too often it is 

a quick hit and move on. With discussions like this where you really get into the impacts of the budget process on management of the 

agencies, you begin to see where a lot of those problems are and 

things that need to be done to address it, as opposed to just pointing to bad actors and moving on from that. 

Mr. PATTISON. I will just add, Senator, that there are a lot of 

States and localities, including Delaware and Alaska, where we 

have seen some really exceptional examples, and, frankly, strong 

incentives, where they provide really good oversight. And it is certainly not perfect, but I think there are some examples that I 

would love to see Federal agencies and departments and, of course, 

you in the Congress look at as models for looking at when programs are effective and what changes should take place to really 

put the money toward results and effectiveness and not just appropriate on a short-term basis for a program. 

Senator BEGICH. Will you share those with the Committee at 

whatever time? 

Mr. PATTISON. Certainly. 

Senator BEGICH. Great. 

Mr. PATTISON. I would be happy to.1

Senator BEGICH. Mr. Chairman, thank you for letting me go on 

a little longer there. I appreciate it. 

Chairman CARPER. You can go on longer almost any time, including this time. Thank you really for the valuable perspectives you 

bring here, and a lot of common sense. 

I am Presbyterian, but I have a news break here. In terms of uncertainty, there is less uncertainty in the Vatican, and apparently 

our Catholic brothers and sisters are going to have a new Pope. He 

is from Argentina, and his name is—he is not Irish. When I say 

this name, you will say, ‘‘This guy is not Irish.’’ His name is Jorge 

Bergoglio, and he is going to go by ‘‘Pope Francis.’’ I do not know 

if that is in honor of St. Francis of Assisi, who has a great prayer. 

I will not say his prayer today, but it is one that we could probably 

take to heart here in our work in the U.S. Senate. So I just wanted 

to wish him well, and now we will go back to our questions. 

Senator BEGICH. They made a decision in a timely manner. 

Chairman CARPER. Yes, they did. Something we can learn. 

[Laughter.] 

There you go. No sequestration there, no fiscal cliffs. They just 

did it. 

I have a number of questions that my staff has been good enough 

to help prepare, and I am going to go to those in a minute. But 

I want to followup on a little bit of what Dr. Coburn and Senator 

Begich were saying. 
23 

I am not one who likes just to focus on symptoms of problems. 

I like to go to the underlying cause. One of my favorite things I 

like to do, as my staff knows, is ask people who have been married 

a long time, ‘‘What is the secret for being married 50, 60, or 70 

years? ’’ And I get funny answers, hilarious answers. I almost use 

them in a comedy monologue sometimes at home. I am not going 

to go there today. 

But I get some great serious responses, too. One of my favorites 

from over the years is the two C’s. The first time I heard that, I 

said, ‘‘What do you mean, the two C’s?’’ And the answer was, ‘‘Communicate and compromise.’’ And I really think part of—if you go 

back not really to just symptoms but the underlying causes, we do 

not do a real good job here of communicating. And some of us are 

better than others at trying to find the middle and reaching a compromise. 

I am happy that the President has been reaching out to Republicans and Democrats on Capitol Hill. I think he is doing that again 

today. He took some of our colleagues out to dinner last week. I 

talked to several of them. They thought that was good. They had 

a good conversation, and I hope we hear and see a good deal more 

of that, and that is going to be helpful. 

At the end of the day, we have to figure out how to compromise 

on some of these issues. And one of the things I have asked my 

staff to do is to literally go through your testimony and pull from 

that just some of the most telling, undeniable truths that you are 

saying today so that when we find we are struggling to get to a 

compromise on a continuing resolution, when we are struggling to 

get to a budget resolution, I will be able to say to my colleagues, 

‘‘All right. I know this is not easy, this is hard, but just keep in 

mind these four or five points. And that is why it is important for 

us to not give up.’’ 

In terms of solutions, let us talk a minute about solutions, and 

then I will go to a list of more prepared questions. But Senator 

Begich has raised an idea that we both heard Senator Enzi of Wyoming bring forth for a number of years, the idea of a capital budget, maybe a biennial budget. And we have had some discussions of 

that. I just want us to drill down on that a little bit more. He is 

one of the most thoughtful people we have here, and I think he is 

either a CPA or accountant by training, and a Mayor of Gillette, 

Wyoming, in his past. So he comes at it from a number of different 

directions. But just help us drill down. I will give you an example. 

We have a whole lot of surplus property, like tens of thousands 

of pieces of Federal property, that we do not use or we underuse. 

We pay utilities for them, have security for them. We spend a lot 

of money, maybe a couple billion bucks a year. But we do not really 

need these pieces of property. Some of them are buildings, some of 

them are not. Some of them are in great shape, some are not. 

But one of the reasons we spent a whole lot of money for space 

for the Federal Government is because we are on a cash basis of 

accounting. And you say to an agency, you can go out and lease a 

place for a year or two, and that is going to be—that is fine. Or 

you can go out and buy a place for forever. But if you go out and 

buy a place—and let us say it costs, I don’t know, $1 million—or 

you can lease a place for $100,000 a year. Within about 10, 11, 12 
24 

years you have more than paid for the place by what you are paying for it. But the way we run our accounting system here, a cash 

basis of accounting, we discourage agencies from making a smarter 

decision. That is just one example where we waste money in terms 

of space allocation and acquisition of buildings. 

But go ahead, just help us drill down on some solutions. One of 

them could be what Senator Begich has mentioned here. What are 

some others? In other words, if we could wave a magic wand and 

get everybody around here to communicate and compromise, that 

would certainly help. I think the President could play a big role in 

that, and I am encouraged with the role he is playing. But just 

help us with some common sense solutions here. Go ahead, please, 

anybody. 

Mr. SOLOWAY. Senator, one of the points that we raised in our 

testimony—and I think it is related to the question you are posing—is in the face of uncertainty, what can we do to be smarter 

about how we manage? And one thing, which seems simple but is 

unfortunately not terribly prevalent in the Government environment today, to build on your communication theme, is to really— 

and this Committee play a significant role here—lead and even direct agencies to get with their stakeholders. There are companies, 

non-governmental organizations (NGOs), universities, others who 

work with Federal employees every day of the week together to figure out how to drive sustainable savings as opposed to cuts. It is 

one thing to cut the cost of something. But if you are not really 

looking at it strategically, the cut may be temporary, it may drive 

costs up later on, or it may be unwise. But if we could create an 

environment in which all of the stakeholders are actually collaborating, to look at program X, everything we are requiring in it, and 

I as a company give up some revenue because, that does not really 

add value to what you are doing, and the Government says, well, 

I do not really need to do this, you actually have a much better 

chance of getting at some sustainable savings and actually some 

paradigm shifts in how we do business. Right now it is so siloed, 

so distant, and exacerbated by uncertainty, but in the near future, 

something like that to help build a different environment I think 

would be very helpful to agencies. 

Chairman CARPER. Thank you. Others, please? 

Mr. JOYCE. The other thing—and I mentioned this briefly in my 

testimony, but Senator Begich’s question really, sort of suggested 

this to me again—is that when you are talking about making more 

certainty available on a longer-term basis, you are talking about 

something like biennial budgeting. Biennial budgeting in its kind 

of classic sense is saying you are only making budget decisions 

every other year as opposed to every year. But there is also the 

issue of how long you allow agencies to have funding available; 

that is, if we made more funding available on a multi-year as opposed to an annual basis, or even on a no-year basis, that would 

mean that there would be less serious consequences for agencies 

when they came up to the sort of end of the fiscal year because not 

as much of their money would be at risk. 

And when I was doing this IBM report, when I went out to talk 

to people in agencies, the agencies that had more money that was 

available to them to obligate over a longer period of time were 
25 

agencies that had a much less difficult time dealing with this problem, and they had much more flexibility when the time came when 

a CR was about to run out, because a lower percentage of their 

funding was at risk at that point. 

Chairman CARPER. Thank you. My father used to say, to followup on what you said—I remember all these adages that my 

mom and my dad raised us with. You probably can, too, from your 

own childhood. But my dad used to say, ‘‘Work expands to fill the 

amount of time we allocate to a job.’’ And I would like to think that 

if we had a biennial budget, 1 year to legislate, 1 year to do oversight, I would like to think we would get it done—the first year we 

would do what we are supposed to get done in terms of budgets 

and appropriations. That may not work that way. We may think, 

well, we actually have 2 years here, and we will just, like, let it 

bleed into the second year. 

All right. Please? 

Mr. PATTISON. Well, one thing that we find with the uncertainty—and I am not sure exactly the best solution, but I think it 

is helpful to point it out. From a State and local government perspective, in addition to the uncertainty or the very short-term CRs 

and that type of thing, there are the communication issues. And it 

is totally understandable. I am not being critical of the Federal 

Government or Federal agencies, but they are afraid to say or communicate anything until something is actually passed. And so it 

compounds the problem we have at the State and local level because not only is there uncertainty because we do not know 

amounts, we have to wait for a CR or the fiscal cliff to be dealt 

with. 

In addition to that, once that occurs, then we begin getting communications of how to technically implement and make the actually 

changes, or we get the exact amounts and that type of thing. 

So I think a lot of problems we have, especially in that regard, 

and allow us to do more long-term planning, which could be beneficial in many ways and decreases costs, would be to end the 

compounding of the uncertainty by somehow improving the communication over time, too. 

Chairman CARPER. Ms. Kelley. 

Ms. KELLEY. Chairman Carper, I have been trying to think of 

suggestions for you since I learned about the hearing last week, 

and I do not like telling you that I have a blank piece of paper 

right now. But I am still thinking, so I will send them as I think 

of them. 

But for me, it is trying to figure out how to not put Federal employees in the middle of the uncertainty. States, governments, and 

the American public are who are getting caught in the middle of 

all this right now. I just think it is so disheartening for the workforce and it will be for the country, once it hits. Because sequestration is different than a shutdown, of course, the severe impact and 

the immediate impact of it has not been seen yet. But it will be, 

and then I think the American public is going to be saying, ‘‘What 

the heck is going on down there?’’ 

When I thought about the multi-year budgeting, I do not really 

have a position on it one way or the other because, as we have all 

noted, we have not been able to get it right for an annual budget 
26 

yet. So I worry a little bit about trying to set the goal for a 2-year 

until we can do it for the 1-year. But we will keep working on it 

at NTEU, and I will send any ideas that we have. 

Chairman CARPER. OK. That would be great. Thanks. 

All right. A couple other questions I would like to ask while you 

are still here with us. One of the those is that the types of budget 

issues that we are discussing today can be difficult for a lot of folks 

to understand. And for those people at home and those that are 

here with us today, could you just give us a couple—maybe a real 

sort of basic definition of what a continuing resolution is and how 

it works? 

Mr. JOYCE. Well, a continuing resolution, a classic continuing 

resolution, is just a short-term appropriation that permits spending 

to continue until a full-year appropriation is enacted. And so in a 

sense, it is just allowing you to continue doing what you are already doing. And one of the problems with that, of course, is that 

it freezes past priorities in place, and also it does not permit for 

increases, inflationary increases, for example, that you know are 

going to occur; or in the case of agencies where they are going to 

experience, let us say, an increase in the demand for their services, 

it does not enable them to sort of adjust for that. But in a classic 

sense, it is just a short-term appropriation that just allows you to 

limp along at the prior year’s spending level. 

Chairman CARPER. That was nice. I would call it Continuing Resolution 101. Every now and then you hear a great truth, and I ask 

one of you to repeat something you said today, that was especially 

good. But when I hear from witnesses a great truth—today, several 

of them, actually. But one of the great truths we had from a witness about a year or two ago, Dr. Alan Blinder, former Vice Chairman of the Federal Reserve, now back to teaching economics at 

Princeton, when I asked him about deficit reduction, he had been 

saying that the 800-pound gorilla in the room on deficit reduction 

is health care. If we do not get our arms around health care costs, 

we are doomed. And I just asked him as a followup question what 

we ought to do about that. And he said, ‘‘I am not a health economist. I am not a health expert. Here is my advice to you. Find out 

what works, do more of that.’’ That is all he said. ‘‘Find out what 

works, do more of that.’’ I said, ‘‘You mean find out what does not 

work and do less of that?’’ He said, ‘‘Yes.’’ 

But the problem with a CR, if we continue these CRs for long 

enough, we are continuing to do stuff that does not work, even 

though we know it does not work. And maybe when we have a better idea we cannot fund that better idea. That is not very smart. 

A question, if I could, for Ms. Kelley and Dr. Joyce. I think there 

was a story in the Washington Post a month or two ago, in late 

January, but it talked about the time that agencies spent planning 

for various budget scenarios. And the story I think quotes one manager, I think at the Department of Homeland Security, who said 

these words: 

‘‘First we are told not to develop plans for sequestration. Then 

we spent 7 days a week coming up with them, and the cuts got 

postponed. Now we are doing it all over again with new targets. It 

is taking away from what we need to be getting done.’’ 

That is a pretty good quote, is it not? 
27 

That I think kind of says it all. It sums it up pretty well. And 

I would just ask you to talk a little bit, both of you, about how 

much time gets eaten up by preparation for CRs, fiscal cliffs, sequestrations, and so on, and the toll it takes on the real missions, 

the real work that we are supposed to be doing. Please, Ms. Kelley, 

Dr. Joyce. 

Ms. KELLEY. I think we will probably never know the real number of hours or months that go into all this, but without exception, 

I believe every agency has been doing these what-if scenarios since 

last summer when they saw January 1, coming as the first sequestration deadline, and then when it got moved forward, and then for 

each CR. It would be pretty irresponsible of them not to do that. 

I mean, they really have to. But to do all that work and then have 

to do it all over again is a huge waste of time. And it is a distraction, of course, for the agencies from what their real mission is and 

what they are supposed to be doing. 

For the front-line employees, it is a huge distraction. They keep 

hearing the noise about a Government shutdown, now about furloughs. And that is a huge distraction and, again, that time will 

just never, ever be measured. But it takes away from the energy 

and the focus and the creativity, of what it is they come to work 

every day to do on behalf of our country. 

Chairman CARPER. Dr. Joyce. 

Mr. JOYCE. I was told recently that I had been overusing the 

word ‘‘stupid,’’ so—— 

Chairman CARPER. I am sorry. Say that again. Did you call me 

‘‘stupid’’? 

Mr. JOYCE. No, I did not. [Laughter.] 

I was told recently I had been overusing the word ‘‘stupid’’ in describing what we are doing in the budget process, so I will just use 

words like ‘‘counterproductive’’ and ‘‘dysfunctional.’’ But I think, 

the issue that you are putting your finger on is one of the best examples of where the budget process is counterproductive, because 

we are either spending a lot of time planning for something that 

does not happen, in which case it is a complete waste of time, or 

we are spending a lot of time planning for something that does 

happen, in which case it happened and it was a bad thing, given 

a Government shutdown. 

In either case, it is not a good thing, and we just put agencies 

through this in the spring of 2011 when they had to develop furlough plans and plans for dealing with a Government shutdown. 

And now, 2 years later, they are doing it again. 

I suppose the good news is that, given that we had late budgets 

in many prior years as well, OMB did not make them do that every 

year. But as Ms. Kelley suggests, any rational agency, even if they 

were not told by OMB to do this, should have been thinking, once 

they saw all the uncertainty out there, ‘‘What are we going to do?’’ 

And there was a point at which OMB was saying—and it was in 

a sense quite reasonable—‘‘Do not plan for this because we do not 

know what is going to happen,’’ because they knew as soon as they 

pulled the switch, it was going to lead to all this wasted time. But 

I do not think that means that agencies were not doing it, because 

I think there are a lot of agencies out there that were quite con-
28 

cerned about what would happen when the time came when they 

did not have any funding. 

Then OMB pulled the switch, and at that point everybody kind 

of went into high gear, as you suggested from your quote, trying 

to develop these plans. And there is nothing about developing these 

plans that contributes to the mission success of any of these agencies. And it is all, as I suggested, a completely self-inflicted wound. 

Chairman CARPER. A followup, if I could, for Ms. Kelley and Dr. 

Joyce, and then I will probably ask others to just chime in if you 

want to. But kind of focusing on morale, in your testimony, Ms. 

Kelley, you note the noticeable decrease in Federal employee morale and job satisfaction over the past several years. I would like 

to quote the results of an international study reported on National 

Public Radio (NPR) a year or so ago. When they asked people what 

they liked about their job, thousands of people around the world, 

some people liked getting paid; some people liked the benefits, vacation, health care, whatever, pensions; some people liked the folks 

they work with; some people liked the environment in which they 

work. But do you know what most people said? What they liked 

most about the job was they liked the idea that they were working 

on something important and they were making progress. 

Think about that. They liked the notion that they were working 

on something important and they were making progress, and I 

think part of the impact on morale for Federal employees, I think 

everybody—I do not care whether you are in agriculture, transportation, health care, housing, defense, or whatever. The work that 

those folks are doing, they are servants. I am a servant, they are 

servants. The work they are doing is important, and I think we are 

impeding their progress and impeding their ability to make 

progress for our country in their particular line of work. 

But go ahead. I am going to ask Ms. Kelley, if you would, from 

your perspective, how has the morale decreases affected employee 

productivity? And I do not know if there is any way to put a cost 

on it, but I would like to ask if you think there might be. And we 

will ask our other witnesses for any comments they have. Thank 

you. 

Ms. KELLEY. I think there is definitely a decrease in morale, and 

it has been documented over the last couple of years. I think that 

is for a number of reasons, including Federal employees being 

under a pay freeze for the last 2 years and seeing nonstop efforts 

to continue that pay freeze well into the future by some. 

They also see that they do not have the resources in their agencies to do the important work that they are trying to do every day. 

Most agencies have seen the numbers of employees that they have 

decrease, and so the workloads increase, and their ability to do the 

quality work they are trying to do, they are not able to do that. 

As to the costs of the productivity, I believe that Federal employees, most of them rise above that. I think kind of in spite of the 

bad morale, they continue to do the work they do, and they do it 

as best they can with the resources that they have. Most Federal 

employees come to work for the Federal Government because they 

want to serve the public, and they believe in the mission of their 

agency. They believe in it. No matter how bad morale is, they believe in the mission of the agency. And what they are looking for 
29 

is the support daily from the leadership in the agency as well as 

from Congress and everyone who needs to support—— 

Chairman CARPER. And even the President. 

Ms. KELLEY. And even the President, yes. That is what they are 

looking for. 

So I actually believe that productivity in the Federal Government 

has not gone down in spite of the morale, and I think that is to 

the credit of the employees. 

Chairman CARPER. All right. Does anybody else want to respond 

to that? Again, because we are trying to figure out how—about has 

there been a morale decrease among Federal employees and is 

there any way to put a cost on that. Anybody? 

Mr. JOYCE. Well, I would just say I do not think you can place 

any kind of precise cost on it, but I think that the people that I 

talk to certainly suggest that, there are a lot of people spending a 

lot of time talking about this uncertainty. And I am not suggesting 

that as a criticism of Federal employees. I would think that in any 

workplace where you were facing the kind of uncertainty, the prospects of furloughs, and everything else that Federal employees are 

facing, it would be reasonable for a certain percentage of each day 

to be spent sort of talking about what is going to happen. And I 

think that is a decrease in productivity, and certainly it is the case 

that it does not have a positive effect on morale. And as I suggested in my testimony, the people that tend to leave Federal service for these reasons are the people who have options to do other 

things, and some of those people are the very people that you 

would least want to see leave. 

Chairman CARPER. Good point. 

Anything else before I go to my next question, Mr. Pattison? 

Mr. PATTISON. I just want to add really quickly from a State and 

local perspective that it is more along the lines of where resources 

are being devoted, and what we see at the State and local level, 

particularly when there is the uncertainty from the Federal level— 

and obviously the programs that are all or in part funded from 

Federal funds—is really time being spent more on short-term activities or dealing with how they are going to deal with the sequester and so forth that really prevents you from devoting the time 

where you want, which is effective programs, getting the results, 

and he goals you want. 

Chairman CARPER. OK. Good point. All right. 

This will be a question for our entire panel. Looking at examples 

of waste that result related to uncertainty, one of the goals for this 

Committee—and I think it is certainly one shared by Dr. Coburn— 

is, as I said earlier, getting better results for less money or at least 

better results for the same amount of money for everything we are 

doing, from A to Z, in this Government. 

From what I have heard today, it seems like we are often doing 

the opposite, and we are setting up agencies to deliver worse services, and sometimes at a higher cost for taxpayers because we are 

making it almost impossible in some instances for them to plan. 

And this is coming at the same time that we are talking about cutting services in programs that a lot of Americans actually do rely 

on. 
30 

So let me just ask each of you from your own perspective, from 

you own experience, what has been the clearest, maybe the most 

startling example that you can think of, of this kind of waste and 

inefficiency that we are talking about today? Think about that. If 

you want to give that one some thought and come back to me on 

the record, that would certainly be fine. But if you have anything 

that you want to offer right now, you can. 

But I find when we are struggling to get to a compromise on a 

continuing resolution/mini omnibus appropriations bill for the rest 

of the year, when we are struggling to get to yes on a continuing 

resolution with the House, when we are struggling to figure out 

how to avoid another debt ceiling crisis, I just want to have a 

whole, if you will, quiver full of arrows, each of which provides a 

startling example that will just make my colleagues think, ‘‘No, 

that is crazy. We cannot continue to do that. We have to find a way 

to get to yes.’’ So that is what I am looking for here. And I will 

be happy to take those for the record, but put some thought into 

it, and give me a bunch of good examples, really good examples, 

please. 

I have sort of a followup question. I think this would be for all 

of our witnesses, maybe especially for Mr. Pattison and Dr. Joyce. 

Not many people like uncertainty. Some do, though, but not many 

people like uncertainty, and that certainly includes planners. 

But listening to the testimony, I get a sense that not all uncertainty is created equal, and that the budget uncertainty of the past 

few years is actually worse than usual. Somebody mentioned how 

many years we have gone with only four or five times when we 

have passed all the appropriations bills. I remember when Jim 

Wright became Speaker of the House, succeeding Tip O’Neill a 

number of years ago, I was a House Member, and one of the things 

he said when we elected him Speaker of the House was that we 

are going to pass every single appropriations bill this Congress and 

put it on the President’s desk. And you know what? We did. 

So I have felt from that time ever since, if a leader says that this 

is what we are going to get done and there is no stopping us, we 

are not going to give up, says that early, not at the last minute, 

every day drives that home, you can get that done. And it does not 

have to be the Speaker. It can actually be the President or a Majority Leader or not. 

But, anyway, going back to the question, it sounds as though in 

past agendas and past agencies and their State and local partners 

did not know exactly when they were going to get their funds, but 

they usually knew about how much they would eventually get. Now 

it is almost anybody’s guess what eventual funding will be as well 

as when is it going to show up. And I just want to know, am I 

hearing that right? If you want to discuss this shift, please do, and 

how it makes the uncertainty harder to work with. So it is not just 

a question of when we are going to get it but how much will we 

get and when are we going to get it. Please. 

Mr. PATTISON. Well, what I see from a State and local perspective that I think illustrates the problem is the reason it is getting 

worse is because our money is tighter. Obviously, the recession was 

a big cause. But we certainly forecast and foresee that our growth 

rates of revenue and budgets at the State level are probably going 
31 

to average about half what they did for the period after World War 

II to the beginning of the Great Recession. 

As a result, when money is that tight, the uncertainty makes it 

much worse. When you have a little more money, you have a cushion, as you know having been Governor, Mr. Chairman, and they 

really have no cushion, and they do not expect to for years. And 

there is really no ability to move money, so those cash-flow issues, 

the lost money from not being able to save money on certain contracts, the roller coaster, up-and-down staffing, and all these other 

issues, causes an enormous amount of problems and, frankly, costly 

problems that could be covered over a bit when you had a bit of 

a cushion. And since the cushion no longer exists, the uncertainty 

is really going to make problems even worse for State and local 

government. 

Chairman CARPER. OK. 

Mr. JOYCE. I would say, three things to sort of document the fact 

that it has gotten worse. The first is to just reinforce the last point 

that you made—which is that the issue now is one of both timing 

and amount—it used to be that agencies were pretty sure how 

much money they were going to end up with. They just were not 

exactly sure when they were going to get it. So they could limp 

along under a continuing resolution, but they knew what the fullyear appropriation looked like. 

Now, especially with sequestration, they do not know what the 

full-year appropriation looks like, and I would think that trickles 

down to State and local governments and contractors as well. 

The second is that it used to be that some appropriation bills became law prior to the beginning of the fiscal year, and others might 

be bundled up in a continuing resolution. Recently we have a situation where no appropriation bills become law before the beginning 

of the fiscal year, and, therefore, it is the entire appropriations 

process that is late. 

And the third is that we tend to be operating under CRs for a 

longer period of time, that is, further into the fiscal year. I had lots 

of people in agencies tell me that they have sort of adjusted to CRs 

as long as they did not last past the beginning of the calendar year. 

But once it started getting into February or March, it started to 

create much bigger problems. And now we have a lot more CRs 

that go into February, March, or April. 

Chairman CARPER. OK. Mr. Soloway. 

Mr. SOLOWAY. Mr. Chairman, if I could just add to that—and I 

agree with both comments—I think there is another piece to this 

puzzle which is more than just the question of timing or amount 

of money. And I think it has to do with the times we are in. Unlike 

15, 20, 25 years ago, technology is moving at what they call ‘‘clock 

speed’’ now. Needs are changing dramatically very quickly, but we 

do not have a system that can respond very quickly to those changing needs. In fact, we have a system that tends to get bottlenecked 

and not move forward. We have a confluence of a whole bunch of 

pressures from the demography of the Federal workforce, mission 

requirements of Federal agencies, all of these things coming together at a time when the system supporting it seems to not be— 

well, I will not say ‘‘seems’’—in fact, is not moving efficiently forward. So that you have a bunch of factors coming together. 
32 

I think from a private sector perspective, there are two things 

that when I think about this or we talk about it, it should not surprise anybody—I know it does not surprise you or the other Members of the Committee—there is a lack of confidence, whether it is 

on the Federal workforce part or on the part of industry relative 

to the Government. It is analogous to the economy, writ large. People ask, ‘‘Why is it a jobless recovery? ’’ or ‘‘why has the jobless rate 

not come down faster? ’’ And the answer, the economists say, is because industry is not yet confident that this is a recovery that is 

going to hold. 

Well, play that back down at the Government level. We are doing 

it to ourselves in the sense of not being able to provide any level 

of certainty or predictability to drive confidence, whether it is of 

the workforce or of the outside players who support the Government. 

The final thing I will say is we recognize in our industry and I 

think everybody recognizes that the debate that is taking place is 

a fairly seminal one. There are some very fundamental differences 

of opinion in Congress and the Administration over how and where 

the money ought to be spent. And I think as outsiders we sit back 

and say, ‘‘We understand that, but at some point you have to make 

a decision.’’ And it is that lack of decision, that inability to come 

to that closure, that is causing everybody to step back and say this 

is a broken system. 

Chairman CARPER. OK. A couple more and we are done. 

I am going to come back to you, if I could, Mr. Soloway, and this 

deals really with the impact on contractors. In your testimony, you 

highlight the effects that this crisis budgeting has on the economy 

at large. You, in fact, touched on this again. For my entire career, 

I think I have been focused like a laser on how do we create a nurturing environment for job creation and job preservation. As a recovering Governor, I care a whole lot about job creation and job 

preservation. I think the best thing you can do for anybody is to 

make sure they have a job. 

Guys and gals like me, Governors, Mayor, Presidents, Senators, 

we do not create jobs. What we do is help create a nurturing environment for jobs: a well-equipped workforce, the kind of broad infrastructure that we need, access to capital, common sense regulations, reasonable tax levels—all those things that are part of that 

nurturing environment. 

A few would argue that the Federal Government plays an integral role in our national economy in decisions that we make or do 

not make and are felt far outside of Washington. 

I would just like to hear a little bit about what your member 

companies are telling you regarding holding back on hiring or investment because of the budget uncertainty, and specifically the 

role that these continuing resolutions and potential fiscal cliffs and 

shutdowns play in their decisionmaking, if you would just a little 

bit. 

Mr. SOLOWAY. Sure, and I think there is some of that in my written testimony. There has been a palpable effect on hiring. There 

have been both layoffs, some of them very public in the larger public companies, many of them not public as there are smaller compa-
33 

nies involved, and tens of thousands of positions cut over the last 

couple of years. 

I have talked to 15 or 20 of our companies just in the week or 

so since we got the call about this hearing to find out what they 

were doing, and I think I may have mentioned in the written statement that small businesses are telling us they have 6, 8, or 10 positions that they are simply not filling. These are positions that 

would be considered ‘‘overhead,’’ and that are not revenue generating. They consider them critical to being able to build their infrastructure, to build the company and so forth, but they are simply 

not able to justify the investment. They are not confident enough 

in what is going on that they can cover those costs. So it is a combination of jobs being lost and hiring not taking place. 

And then the third piece, it is always a challenge—I think Senator Begich mentioned this when he was here. It is always a challenge in the services industry, which is what we represent, to keep 

a bench of people who are not revenue generating. There is only 

a certain amount of time that you can keep somebody on board who 

is not actually generating revenue. What our companies are telling 

us is that period of time, which has always been limited, is more 

limited than ever, because the pressures to drive costs down to the 

bone, some of which are perfectly appropriate, they are competitive, 

others of which might be unhealthy, are affecting their ability to 

keep people on board. And as we have these long procurement lead 

times—we had one case I mentioned, the U.S. Agency for International Development (USAID), notified some contractors just a 

few months ago that bids that they submitted in June 2010 would 

not be decided on until at least June 2013. That is 3 years from 

the time they submitted the bid. They are supposed to have key 

personnel by name and resume, not just by capability. They are 

supposed to be able to turn on a dime as soon as the award is made 

and say, ‘‘I am ready to go to work.’’ It becomes an impossibility 

because you cannot hold onto those people. They go to other positions. You need to redeploy them. 

So there is a whole range of employment impacts that are driven 

by these delays that are negatively impacting the space. 

Chairman CARPER. Good. Thank you for that. 

A question for Mr. Pattison, and then I have one for the whole 

panel, and I think we are just about done. Again, as a recovering 

Governor, I know there is little wiggle room when it comes to putting together and implementing a State budget. States cannot engage, for the most part, in deficit spending, although some figure 

out how to do it. It is a zero sum game. 

With that in mind, what are you hearing from States regarding 

specific programs that are at greatest risk of their missions being 

compromised under budget uncertainty? And how are the States 

addressing those risks? You spoke to this already to some extent, 

but just come back to it, if you would. 

Mr. PATTISON. Well, there are quite a few examples, although 

one thing I want to preface this with is one thing that we are finding is that it is kind of how the shell game is working. And what 

I mean by that is some of those things that could involve the worst 

harm, they are able to move monies and try to prevent that. But 

what you are not seeing necessarily is maybe the State park has 
34 

closed hours or money that goes to libraries, to the localities, that 

is not going there because they are moving money to cover, say, the 

Ryan White Program funds that the Federal Government uncertainty is causing problems with, or the Individuals with Disabilities 

Education Act (IDEA) or whatever the case may be. 

What the uncertainty is really causing is the disruption and the 

problems, especially since they do feel the obligation in certain programs that really affect individuals, as the ones I have mentioned, 

like the Ryan White Program. And so they feel that they would 

have to funnel those funds to those things. But, again, you are 

short-changing something. And those other things are really what 

is the painful result of uncertainty. And, of course, I mentioned K– 

12 and some of the other things. 

Chairman CARPER. Yes, you did. I keep talking about core values. You have core values, too, but you do not get to talk about it 

as much as I do. But I know you have core values, and for me they 

are just sort of like a compass. If I get off course, they help me get 

back on course. But I am sure that your core values do the same 

thing for you. But one of them is: If it is not perfect, make it better. 

Everything I do I know I can do better. I think that is true for all 

of us. It is true for all Federal, State, and local programs as well. 

Everything we do we can do better. 

No one is going to argue that this lurching from one crisis to the 

next is anything close to perfect. We know it is not. But I imagine 

that there are some agencies, some employees, and some companies 

that are finding ways to make it better even in the midst of this 

difficult environment. 

Some of you discussed it, at least in your written testimony, but 

I would like to hear more, if I could, from each of you about some 

of the best practices and strategies you have seen to mitigate the 

effects of budget uncertainty. If some of you have some ideas on 

that—I know you do—if you could just maybe cite an example or 

two of some of the best practices and strategies that you have seen 

to mitigate these uncertainties, please. Anybody. Mr. Soloway. 

Mr. SOLOWAY. Sure. I will go back to what I said earlier, and it 

is in my written testimony, because I think it is one thing that is 

simple in concept but needs some real leadership, direction, and 

guidance, and that is collaboration. Any program the Government 

executes has numerous stakeholders involved in the execution of 

that program. What we need to be doing is building bridges of collaboration to enable these folks to work together to identify what 

I referred to earlier as ‘‘sustainable savings and performance improvements.’’ 

Too often what happens is that salami slice cuts to the budget 

come down and they are directed cuts, so we try to do the same 

amount with less money; but we do not change requirements, and 

do not really look at the efficacy of the program as a whole, how 

it is structured. So I think if we proactively had agencies, contractors, universities, and whoever else is involved in the given operation, working much more closely together and collaboratively than 

they are encouraged to do by and large today, you could drive some 

real sustainable savings and help mitigate some of the effects on 

the near term. This would require agencies to really be proactively 

and be pushed and encouraged to communicate and collaborate 
35 

with other stakeholders and for them to be supported and praised 

for it as opposed to occasionally being criticized for appearing to be 

too cozy or what have you. 

It sounds simplistic. It may sound a little Pollyanna. It happens 

to be a basic tenet and a core value of some of the most successful 

businesses, particularly in the professional services world. They see 

the degree to which you collaborate with your customer as a mark 

of success and excellence. It is not a mark of misbehavior. 

Chairman CARPER. Good. Thank you. Ms. Kelley. 

Ms. KELLEY. One of the things that NTEU is doing every day 

and has since this latest crisis came at Federal employees has been 

one of your C’s, Chairman Carper, which is communicate. 

One of the things that I have found is that agencies have not 

done a good job of communicating with employees as to what is 

going on, what is happening, what the risks are, or what the real 

risks are versus the rumors. The rumor mill runs wild everywhere 

in any organization. And NTEU has worked very hard to provide 

information to employees as best that we could and to make sure 

that we put some of the rumors to rest, because the rumors were 

only increasing the anxiety that employees were feeling. 

So that communication is important, even with this uncertainty, 

as we try to figure out what the appropriations and the budgets 

will be, which will take compromise and will take a balanced approach, of course, which NTEU supports. But the communication, 

like I said, has really just been terrible coming from the Government, from the agencies to the employees, and has left them really 

out there making uncertainty a lot more frightening than it has to 

be. 

And so we have worked hard and I think have set up a pretty 

good best practice of that communication, but I would urge agencies from the top all the way down through all the departments to 

do a better job of that and to be allowed to do a better job of that, 

because in many cases I think their hands were tied. 

Chairman CARPER. Thank you. Well said. Mr. Pattison. 

Mr. PATTISON. One thing that would really make a positive difference toward dealing with certainty and allow State officials and 

State finance officials to create more certainty would actually be to 

the extent we can get Federal agencies and departments to get 

away from checklists of requirements and really allow more flexibility for the implementation of programs that focuses on results, 

whether it is decreasing infant mortality or whatever it might be, 

that would really make a big difference. If we are going to continue 

to have uncertainty, it would help us deal with it very well. 

Chairman CARPER. That reminds me of something I heard. It 

was another one of those conversations I will always remember. It 

was, I do not know, 7, 8, 9 years ago. We had a bunch of utility 

CEOs in to meet with me to talk about clean air policy, and one 

of the utility CEOs from a Southern utility was kind of a 

curmudgeonly old guy. He said to me, ‘‘Senator, here is what you 

need to do’’—this is us, the Senate, with respect to clean air. ‘‘Tell 

us what the rules are going to be. Give us some flexibility, a reasonable amount of time, and get out of the way.’’ I will always remember that. I thought it was pretty good advice. Dr. Joyce. 
36 

Mr. JOYCE. The only thing I would add—and in this longer report 

I did for IBM, there is more detail on this. But in every agency 

where I talked to employees that were involved in sort of managing 

the budget—and this is going to sound like it is a negative, but it 

is sort of a positive in the way they responded to the uncertainty— 

is that they pretty much just assumed that they were not going to 

get an appropriation until after the beginning of the calendar year, 

and they adjusted their budget execution process accordingly. 

So, for example, they did not plan to send people to training in 

the first quarter of the year because they were afraid they would 

have to schedule it and then cancel it. They moved the renewal 

date for contracts when they could so that they did not renew during the first quarter of the year so they did not run into this situation where they were trying to renew a contract but they did not 

have the funding in order to do it. 

Now, that is something they have done to respond positively to 

a negative. But I do think it represents, a perfectly rational response and probably a good stewardship of resources on their part 

of their dealing with that uncertainty. And as I suggested earlier, 

the problem really comes because even having adjusted to that uncertainty, the appropriations are being received later and later, and 

there is a certain point at which you just cannot solve that problem 

by delaying anymore, because it is too late into the fiscal year. 

Chairman CARPER. OK. Good. 

I have one last question. I am going to tell you what it is and 

let you think about it for a minute. And while you are thinking, 

I will make just a short closing statement. 

But I am going to ask you just to take a minute to think about 

that you are not sitting in front of that table there, but you are up 

here, and sitting in front of you were 100 Senators, and, if this 

room were big enough, maybe 435 Representatives. And given this 

upheaval and this turmoil, this churn that we have been living 

through mostly for the last couple years—even before that, but it 

just continues to worsen. But if you had opportunities to say to all 

of my colleagues in the House and the Senate maybe one or two 

things that we ought to do, what would be your advice your individual or collective advice? Think about that, if you would. 

And while you are thinking about that, I want to say this: One 

of the things that annoys me in my job—and it used to annoy me 

when I was in State government to some extent, but not as much— 

in fact, I will go even further back. I spent some time as a naval 

flight officer in the Vietnam War, and one of the things that annoyed me then, too, was every now and then I would hear somebody do a job, not do it very well, and say, ‘‘That is good enough 

for Government work.’’ I do not know if you have ever heard that 

before. Few things make me less happy than to hear that I think 

that the work that we do is not sacred work, but it is the people’s 

work. And we are at the service of the taxpayers, and we need to 

do our best. That is one of the things that I find that annoys me 

and always has. I never countenanced that kind of stuff. 

The other thing that annoys me very much is when I hear my 

colleagues in hearings or in speeches or in press interviews talk 

about nameless, faceless bureaucrats making decisions because we 

are not making them. And there are some times they say, well, 
37 

why should we let a nameless, faceless bureaucrat make this particular decision, how dare them? And I think that demeans the 

work and the stature of the people who serve us in all kinds of 

ways—defense of our country, defense of our homeland, trying to 

make sure that our economy works, our transportation systems 

work, our food systems work. That just demeans the work that 

they do. 

So I would just say here today to those nameless, faceless bureaucrats across the country that are struggling and trying to deal 

with this turmoil that we have visited on them, particularly for the 

people that are rolling with the punches, still getting up every 

morning, going to work, doing the best work that they can do, try 

not to let it get you down. I just want to say thank you. 

And with that, having said that and gotten that off my chest, let 

me just come to each of you for the advice. Again, you are sitting 

up here. The Senate and House are arrayed before you. One or two 

takeaways that you would have for all of us, please. We will start 

with Mr. Soloway. 

Mr. SOLOWAY. I was actually hoping you would start at the other 

end of the table. 

Chairman CARPER. I could do that. [Laughter.] 

Mr. SOLOWAY. I do not know that I could come up with any cogent, great advice. I think there is one message that I would take 

away from this, that everybody at this table representing different 

communities shares the passion you have for good management 

and good stewardship of the public dollar, high-quality service 

across the board. And what you heard today was essentially unanimity in perspective on what is happening to our ability to achieve 

those goals, and that should really matter to the people charged 

with legislating, overseeing, authorizing the work, and appropriating the work of Government. 

I do not mean this in a flippant way, but Colleen Kelley and I 

have known each other for well over a decade. We have testified 

together before, but rarely have we testified in an environment 

where we are sitting here joined at the hip. Often we are at odds 

over certain issues. But I think that it means something when we 

have the private sector, we have the public sector, we have the 

States, we have academia all coming together and saying this is a 

serious problem, and if you care about the management of Government, the stewardship of the public dollar, it is time to fix it. 

Chairman CARPER. Thank you. I thought you two were sitting 

kind of close together here. [Laughter.] 

All right. Ms. Kelley, you can go next. 

Ms. KELLEY. I would say that one of the responsibilities of your 

job is to pass appropriations bills so that the Government can function effectively. I would ask you to do that in a timely way, in a 

responsible way, so that the agencies and the dedicated Federal 

employees who are trying to provide these services to our country, 

that our country needs and wants, can do their jobs effectively. So 

I would ask you to do that, to do it the right way, to do it in a balanced way, and then to get out of the way so Federal employees 

can deliver the high quality of service that our country needs from 

them. 

Chairman CARPER. Thank you. 
38 

Mr. PATTISON. I have more or less a corollary to that, and that 

is, figure out incentives that are strong enough, and obviously constitutional, that will cause the appropriations bills, the budget, and 

so forth to be passed on time and for the entire year process. Obviously, the sequester was not sufficient to create that incentive, but 

I think incentives can be developed. 

It certainly occurs at the State level. States almost never pass a 

budget late, and they pass 1- or 2-year budgets at a time. And if 

they can do it—and, of course, many local governments do too. I 

really believe the right incentives can be put in place for the Feds 

to do it also. 

Chairman CARPER. OK. Thank you. Dr. Joyce. 

Mr. JOYCE. I would say that there is no question that there is 

a big fiscal problem facing the country, and that solving that problem is going to invariably involve inflicting pain on a whole bunch 

of people. 

What matters is not just the decisions you make about who is 

going to contribute in what way, but the certainty that any organization responding to that has after the fact. And so I think the 

most important thing to do is to make a decision, make it as quickly as possible, set out a path for multiple years so that people can 

plan for what is coming, and then allow them to implement those 

changes and not limp along from one crisis to another. 

Chairman CARPER. All right. Well, I again want to finish up 

where we started off, by thanking you for joining us today with 

your diverse, valuable perspectives. And one of the things I look for 

in a hearing like this is for actually repetition. I look not for different game plans or road maps, but I try to look for people coming 

together, and I look for consensus. And I think we heard a fair 

amount of that here today. 

The information that you have given me is good. In a day and 

age when we are thinking a lot about gun control, this is good 

ammo. And we are thinking a lot about the number of rounds in 

a magazine, but I do not know if you gave me 30 rounds or 20, but 

you have given us quite a few. 

A lot of the folks that serve on this Committee appropriately also 

serve on the Budget Committee, and the Budget Committee is in 

high gear today, and probably tomorrow as well, in order to get us 

ready for the budget resolution. So a lot of those folks who otherwise would be here are otherwise occupied in the Budget Committee. But on behalf of all of them and all of us, Dr. Coburn and 

myself and Senator Begich, thanks so much for joining us today. 

I told you that I was going to ask you for the record to give me 

one, two, or three just really strong, dramatic, undeniable examples 

of why this churning, stop-and-go, CR, debt ceiling, sequestration— 

why this is just senseless and we have to get away from it so that 

when we are in darkest hour in the next couple of days or weeks 

or months trying to get to a point where we are actually going to 

not just communicate but compromise and get to where we need to 

be, I will be able to pull out one of those clips and use it. 

The hearing record will remain open for 15 days for the submission of additional statements and questions for the record. And 

with that, again our thanks, and this hearing is adjourned. 

[Whereupon, at 4:27 p.m., the Committee was adjourned.] 
(39) 

A P P E N D I X 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 

Æ