    [Budget Supplement]
    [Making Government Work]
    [13. Improving Government Performance]
    [From the U.S. Government Printing Office, www.gpo.gov]

      ----------------------------------------------------------------------

    [[Page 119]]
      We know big Government does not have all the answers. We know there's not a program for every problem. We
    know, and we have worked to give the American people a smaller, less bureaucratic Government in Washington. And
    we have to give the American people one that lives within its means. The era of big Government is over. But we
    cannot go back to the time when our citizens were left to fend for themselves.

                                          President Clinton
                                          January 1996

      ----------------------------------------------------------------------
      As the President told the Nation, he and his team have worked hard
    since 1993 to create a leaner, but not meaner, Federal Government, one
    that works hand-in-hand with States, localities, businesses, and
    community and civic associations to manage resources wisely while
    helping those Americans who cannot help themselves.
      The President has delivered.
      Since 1993, the Administration has cut the Federal workforce
              by over 200,000 employees, creating the smallest Federal
              workforce in 30 years--and, as a share of the total civilian
              workforce, the smallest Federal workforce since 1931.
      The Administration is creating a Government that provides
              better service to the American people by building on the four
              principles of Vice President Gore's National Performance
              Review--putting customers first, empowering employees to get
              results, cutting red tape, and cutting back to basics.
      The Administration is transforming agencies into lean,
              flexible organizations that emphasize performance: measuring
              the results of programs, not just the amount of money spent on
              them; making the Government an effective buyer and manager,
              especially of complicated information systems; and providing
              financial accountability for Government spending.
      The job has not always been easy. After all, the Administration is
    trying to transform a Federal Government with vestiges of early 20th
    Century thinking and organization into one suited for the next century.
    And, as the Government moves toward a balanced budget, it will have to
    do as private organizations have done--that is, more with less.
      The engines of change are the Federal workers themselves. They are why
    we can reduce the size of the workforce and still improve service. They
    are working harder and smarter each and every day.
      The President proposes a three percent pay raise for both civilian
    employees and the military. Once again, the Administration will consult
    with employee organizations and others before recommending how to
    allocate the civilian pay raise between locality pay and a national
    schedule adjustment.

    [[Page  121]]

                      13.  IMPROVING GOVERNMENT PERFORMANCE

      In past years, debates about Government programs were usually
    dominated by discussions over how much the Government should spend,
    rather than on what the spending would accomplish. But for Americans,
    the debates were largely academic. For well over a decade, the public
    has been saying that Government simply is not working.
      Americans expect and deserve common sense Government--a Government
    that performs well, uses their tax dollars wisely, views them as valued
    customers, does not impose excessive burdens, and makes a positive
    impact on their lives when it addresses such problems as crime and
    poverty and the challenges of employment and education.
      To answer the call, the Administration is making Government smaller,
    better managed, and more efficient. It is, in fact, creating a
    Government that ``works better and costs less.''

                         A GOVERNMENT THAT WORKS BETTER

    Putting Customers First

      In 1993, the President issued an Executive Order directing all
    agencies to develop a comprehensive program of customer surveys,
    training, standard setting, and benchmarking to enable the Government to
    deliver service ``equal to the best in business.'' A year later, the
    National Performance Review (NPR) published the Government's first
    comprehensive set of customer service standards.
      The focus on customer service is bearing fruit, as the NPR outlined in
    Putting Customers First. Consider the following successes:

      Social Security Administration's (SSA) Customer Service Line: Business
    Week reported in mid-1995 that an independent survey of some of the
    Nation's best 1-800 customer service lines ranked SSA's service on top,
    ahead of companies like L.L. Bean, Federal Express, and Disney. SSA's
    reputation for solving problems quickly and courteously earned it the
    highest overall score.
      Customs Service--Streamlining Inspections: In Miami, the airlines and
    Federal agencies formed partnerships to overhaul Customs procedures for
    international travelers, eliminating three-hour delays and missed
    connecting flights. Officials from the Customs Service, the Immigration
    and Naturalization Service (INS), and the Agriculture Department worked
    with airline officials to reduce clearance times to 45 minutes, on
    average.
      Veterans Affairs Department (VA)--Responding to Customers: Responding
    to complaints about long waits to see benefits counselors, the VA
    promised veterans it would cut waiting times to 30 minutes or less.
    Having met that promise, the VA in the past year has aimed higher; it
    now promises veterans no more than a 20-minute wait and is meeting that
    goal 90 percent of the time.
      The Administration has used advances in information technology (IT) to
    serve customers faster, more accurately, and more reliably. IT is not an
    end in itself, but a means for agencies to work smarter, faster, and
    better. By making data more easily accessible, the electronic
    dissemination of information not only better serves current users but
    expands the potential audience.
      Previously, for information about benefits or services, citizens
    typically had to visit a Federal office during business hours. Now, the
    Government is increasingly using 1-800 numbers and on-line connections
    to deliver such information 24 hours a day.
      The information that only the Government collects is vital for many
    reasons. Businesses and markets depend on census data and other economic
    statistics to make sound and timely decisions, and access to the results
    of federally-funded scientific and technical research helps increase the
    competitiveness of U.S. businesses. Federal geographic and
    climatological information helps farmers to
    [[Page 122]]
    plan efficiently, local
    governments to formulate environmental policy, and public safety
    officials to prepare for natural disasters.
      To expand access to the information, the Government is increasingly
    using the Internet. For instance, those who rely on economic and social
    data will soon find it in the Economic and Social Statistics Briefing
    Room on the White House home page (http://www.whitehouse.gov/WH/html/
    briefroom.html). Other examples include:
      U.S. Business Advisor Web Site (http://www.business.gov). In
              February 1996, the Vice President dedicated the opening of
              this new form of virtual Government agency, which gives
              businesses one-stop access to all Federal agencies that assist
              or regulate business.
      Expand Deployment of Technology in Schools (http://www.ed.gov/
    prog--info/ERIC/index. html). This Education Department on-line
              information service gives teachers, parents, and students a
              personal touch through trained specialists available to help
              them search for information.
      Modernize Tax Systems (http://www.irs.ustreas. gov). This
              Internal Revenue Service web site offers electronic versions
              of the 500 most frequently used tax forms and instruction
              booklets. In the first half of April 1995, Americans
              downloaded over 200,000 tax forms and booklets; the day that
              taxes were due, they downloaded nearly 20,000 forms.
      Also to improve customer service, the Administration is encouraging a
    wider use of electronic payments between citizens and government.
      The Federal Government is making more and more payments
    electronically. In 1996, taxpayers will be able to receive their tax
    refunds electronically. And as part of the Federal-State Electronic
    Benefit Transfer (EBT), more beneficiaries of Social Security, Food
    Stamps, and other programs soon will be able to receive electronic
    payments.
      The Government makes payments to over 90 percent of Federal employees
    and retirees through direct deposit, and pays vendors through the
    Government-wide small purchase card and Government travel card. The
    Administration and Congress are developing legislation to mandate that,
    by 1999, the Government make all Federal payments electronically. Chart
    13-1 shows the trend for paper checks and electronic payments and,
    assuming enactment of the bill, projections to 2002.

      These efforts to improve customer service and Government performance
    are beginning to pay off. In 1995, six Federal organizations each
    received one of the 15 prestigious Innovations in American Government
    Award, sponsored by the Ford Foundation and Harvard University's John F.
    Kennedy School of Government. Winners received $100,000 grants to foster
    innovation.
      The winners included:
      The Interior Department's Bureau of Reclamation, which
              transformed itself from a ``dam-building agency'' into a
              leading water resource management bureau.
      The Defense Logistics Agency's Defense Personnel Support
              Center in Philadelphia, which connects consumers with
              suppliers of food, clothing, and medicine. The center replaced
              a cumbersome stockpile system with electronic ordering
              technology.
      INS' Operations Jobs Project in the Midwest, which formed
              partnerships with businesses to help detect illegal alien
              workers and replace them with unemployed citizens.

                          A GOVERNMENT THAT COSTS LESS

    Streamlining the Government

      Americans want a smaller Government, and the Administration is
    creating one. Starting with the NPR's report of September 1993, From Red
    Tape to Results, and continuing a year later in the Federal Workforce
    Restructuring Act, the President and Congress agreed to cut 272,900
    full-time equivalent (FTE) personnel by the end of this decade--that is,
    12 percent in six years. (An FTE is not necessarily synonymous with an
    employee. Put simply, one full-time employee counts as one FTE, or two
    employees who each work half-time count as one FTE.)
    [[Page 123]]
      The Administration is ahead of schedule. It has cut the Federal
    civilian workforce by 9.8 percent, or by over 200,000 employees, out of
    2.2 million in January 1993.\1\ We now have the smallest Federal
    workforce in 30 years (see Chart 13-2) and, as a share of the Nation's
    total workforce, the smallest since 1931.
      \1\The figure of over 200,000 refers to the latest count of actual
    employees. It corresponds to a reduction of 185,000 FTEs, or 8.6
    percent, from January 1993 to September 30, 1995.
    ---------------------------------------------------------------------------

      Just as important, virtually all departments and major agencies are
    streamlining their workforces (see Chart 13-3). Agencies with the
    largest FTE cuts from 1993 to 1995, as a share of their workforce, are
    the Office of Personnel Management (OPM), at 32 percent; the General
    Services Administration (GSA), at 18 percent; and the National
    Aeronautics and Space Administration (NASA), at 13 percent.

    Restructuring Agencies

      A smaller Government is not an end in itself. The Government must
    change the way it operates.
      In place of the highly centralized, inflexible organizations of
    yesterday that focused on process, the Administration is creating
    decentralized management structures within agencies to focus on results.
    In the past three years, agencies themselves have cut the number of
    their supervisory personnel by over 45,000, or 23 percent of the overall
    cut in employees. The President's Management Council has led efforts to
    restructure and eliminate unnecessary agency field offices. In many
    instances, agencies are consolidating their operations, allowing them to
    close small, inefficient field offices in some places while
    strengthening the services they provide to customers.
      NASA and OPM are two of the agencies that are restructuring.
    [[Page 124]]
      NASA: Nearly 40 years ago, Congress created NASA and gave it nearly
    unlimited resources to win the ``space race.'' Today, NASA has launched
    a major restructuring to do more with less. Without canceling major
    programs, NASA is cutting its budget needs from 1995 through the year
    2000 by 36 percent, and is boosting its productivity by 40 percent over
    the same period. NASA also is cutting the cost of its spacecraft and
    increasing the number of launches a year.
      How? First, NASA is cutting its headquarters staff in half,
    consolidating redundant field functions, and focusing the missions of
    the respective field centers. From 1993-1995, NASA cut its workforce by
    over 3,000 FTEs. By 2000, the agency will have 8,000 fewer civil
    servants and 50,000 fewer contract employees.
      Second, NASA has changed the nature of its relationship with private
    industry. The agency and its contractors are engaged in a new
    partnership, with contractors operating and commercializing more routine
    space ventures while the Government focuses on high-reward, multi-decade
    research and development. NASA is using performance-based contracting to
    tell contractors what it needs from them, but is giving contractors more
    freedom on how they meet these needs. (For more details on performance-
    based contracting, see the discussion later in this chapter.)

      OPM: OPM, the Government's central personnel management agency, also
    is doing more with less. After cutting its workforce by 32 percent from
    1993 to 1995; scrapping four layers of management and overhead in its
    field structure; and refocusing its mission on ensuring the integrity of
    the merit system, OPM redesigned its management structure and functions.
      Despite furloughs and a 67 percent cut in appropriated funds in the
    Employment
    [[Page 125]]
    Service Program in 1996, OPM worked to provide first-rate
    service to its customer agencies. Among other things, it used technology
    to work smarter and cheaper in human resources activities. OPM also
    reversed a 10-year trend of higher deficits in its revolving fund by
    imposing tough management decisions, tighter financial controls, and
    increased accountability. And the agency successfully privatized its
    training program and will complete privatization of its investigations
    function in early 1996.

    Reforming Procurement

      Until recently, the Federal procurement process had been controlled by
    a maze of rigid laws and regulations that caused delay, consumed
    resources, hindered innovation, and made it hard for the Government to
    choose suppliers committed to delivering good quality at competitive
    prices.
      Federal procurement, which accounts for about $200 billion in spending
    a year, has been a top focus of Administration activity. The NPR called
    for a redesigned procurement system that would rely less on bureaucracy
    and more on streamlined, customer-oriented practices to deliver better
    value to the taxpayer.
      The Federal Acquisition Streamlining Act of 1994 (FASA), which the
    Administration and Congress developed cooperatively, includes many
    Administration proposals relating to purchases of commercial items and
    purchases considered ``smaller-dollar''--that is, under $100,000. FASA
    allows agencies to use simplified procedures for a larger class of
    smaller-dollar purchases, promotes the acquisition of standard
    commercial items, eliminates many record-keeping and reporting
    requirements, focuses on past performance in choosing contractors, and
    reinforces the President's
    [[Page 126]]
    directive that instructs agencies to use
    electronic commerce to streamline procurement.
      More recently, and at the Administration's urging, Congress reformed
    the way Government makes larger-dollar purchases and acquires
    information technology (IT) as part of the Federal Acquisition Reform
    Act (FARA) and Information Technology Management Reform Act, which the
    President signed into law earlier this year.
      These laws:
      allow the Government to reduce the number of suppliers with
              whom it has negotiations after it receives initial proposals;
      permit the Government to develop simplified procedures for
              buying commercial items up to $5 million, up from $100,000
              under previous law;
      repeal the ``Brooks Act,'' which forced agencies that were
              buying IT to adhere to special rules and obtain GSA approval;
      establish criteria for agencies to evaluate IT investment
              programs, modeled on the best practices of successful
              companies; and
      require agencies first to make the way they work as efficient
              as possible, then to automate that efficient process, and,
              finally, to measure the improvement.

      Streamlined Negotiation Process: The Administration is working to
    enable agencies to issue solicitations more easily and to reduce their
    reliance on the detailed written proposals they receive from suppliers.
    For example, agencies might ask potential suppliers to present their
    proposals orally. The Treasury Department's Bureau of Engraving and
    Printing (BEP) awarded a service contract this way for an international
    public education campaign relating to the new version of the $100 bill.
    BEP estimates that oral presentations saved from eight to 12 months in
    negotiating time. Firms bidding on the BEP project reported significant
    cuts in their proposal preparation costs.
      Using a different streamlining practice, the Government renegotiated
    the price of its long-distance telephone contract in 1995 by putting two
    suppliers in direct competition with one another. The Government chose
    two long-distance providers up-front and will periodically put them in
    head-to-head competition in the future to ensure that the Government
    continues to get the best value for its dollar. Due to the most recent
    renegotiation, the Government will save $200 million a year for the next
    three years, and will enjoy the lowest long-distance rates anywhere--
    averaging 3.5 cents a minute.

      Commercial Purchases: FASA and FARA also will simplify the procurement
    process for commercial products and encourage agencies to adopt more
    commercial practices. These laws are enabling the Government to enjoy
    the same access to good prices and current technology that other
    commercial market customers enjoy.
      The Defense Department (DOD), Government's largest buyer, is
    increasingly using commercial products and capabilities in place of
    custom-designed products that were manufactured solely for the
    Government market.
      The Air Force, looking to meet DOD's airlift needs, was able
              to consider a derivative of a commercial airliner as an
              alternative to the C-17. The competitive pressure enabled the
              Air Force to save an estimated $4 billion on C-17 purchases.
      The Navy used commercial electronics in its new sonar systems,
              instead of a military specifications system, thus reducing the
              life-cycle costs for 13 systems by $100 million over 15 years.
              In addition, commercial electronics have reduced maintenance
              requirements, training, and downtime by 75 percent.

      Performance-Based Service Contracting: The Government spends $110
    billion a year for contracted services. To improve what the Government
    gets for its dollar, the Administration is introducing performance-based
    contracting; the Government will make contractors responsible for
    meeting performance standards while giving them the freedom to decide
    how.
      This method can cut contract costs by an average of 15 percent,
    according to results of a Government-wide pilot project. The Navy's
    conversion to performance-based contracting for aircraft maintenance
    saved an immediate $25 million, and the selection process took 30 fewer
    days than the previous, non-performance-based
    [[Page 127]]
    competition. With this in
    mind, OMB Director Alice Rivlin asked agencies to develop a structured
    approach to performance-based contracting in order to boost savings and
    productivity.

      Past Performance in Picking Contractors: In an early initiative, the
    Administration encouraged agencies to use the commercial practice of
    comparing the past performance of competing contractors. Knowing their
    ability to get work depends on how well they have performed, contractors
    now have a strong incentive to strive for excellence.
      The change was immediately apparent to GSA's Federal Supply Service
    (FSS). After identifying 213 suppliers in its Stock and Special Order
    Program with poor work histories, FSS stopped working with 163 of them.
    According to FSS, the remaining 50 have significantly improved their
    performance.

               MEETING BOTH GOALS:       WORKS BETTER AND COSTS LESS

    Changing the Way Government Manages Its Work

      The Administration is committed to empowering Federal workers, and
    encouraging and recognizing their enterprising efforts. Managers and
    workers are transforming Government from its preoccupation with
    procedures, process, and penalties to a focus on customers,
    partnerships, and delivering information and services rapidly. That is,
    managers and workers are changing the way Government operates.

      ``Reinvention Labs'': In the past three years, the Administration has
    created over 200 Reinvention Labs, in which groups of employees work
    outside normal bureaucratic processes to achieve results.
      Some Reinvention Labs focus on the work of entire agencies or bureaus.
    Others concentrate on improving or redesigning specific processes.
      Labs within the Agriculture, Commerce, Energy, Interior,
              Justice, and Housing and Urban Development (HUD) Departments
              are developing collaborative partnerships with State and
              municipal governments and private entities to reach and serve
              customers better, and to respond more effectively to local
              priorities.
      Labs within the Department of Health and Human Services (HHS),
              GSA, and OPM are streamlining internal systems, such as
              travel, to save money and free up employees for other work.
      Several DOD labs are employing new technologies to enhance
              their battlefield support to fighting forces.
      Vice President Gore has recognized the successes of reinvention with
    over 280 ``Hammer Awards'' for teams of Federal, State, and local
    employees, businesses, and citizens--praising their efforts to build a
    Government that works better and costs less.
      Over a dozen such awards have gone to multiagency teams, recognizing
    interagency and intergovernmental cooperation. Atlanta's Government-
    Owned Real Estate Team, comprising officials from GSA and nine other
    agencies, received its Hammer Award for simplifying the sale of
    government-owned real estate.

      The President's Management Council (PMC): In his first year, the
    President asked all executive departments and agencies to name a Chief
    Operating Officer who would report directly to the agency head and be
    responsible for the agency's overall management. At the same time, to
    help him and the Vice President foster management reforms, the President
    created the PMC, comprising the Chief Operating Officers of the Cabinet
    departments and several other major agencies.
      The PMC is a catalyst and implementer of management reforms. It has
    contributed to the Administration's efforts to reform procurement and
    personnel systems, improve customer service, rationalize field office
    structures, and streamline the Federal workforce. It has worked closely
    with employee representatives and associations of Government managers to
    make labor-management partnerships a reality. PMC members also worked
    closely with Members of Congress to craft buyout legislation to make the
    necessary Government downsizing more humane.
    [[Page 128]]
    Improving Financial Management

      An efficient, effective Government needs sound financial management,
    including management and reporting systems that produce reliable
    information. To develop these systems, the Administration is
    establishing Government-wide accounting standards, producing audited
    financial statements, streamlining management controls and reporting,
    and modernizing debt collection.

      Government-wide Accounting Standards: To make the Government's
    financial information more consistent, the Administration set an
    ambitious goal for the Federal Accounting Standards Advisory Board to
    recommend a comprehensive set of Government-wide financial accounting
    and cost accounting standards by spring. Once the Administration and the
    General Accounting Office adopt the standards, agencies will use them as
    they prepare financial reports and cost information that, in turn, make
    the agencies more accountable to taxpayers.
      Audited Financial Statements: The Administration has worked to
    increase the number of agencies with audited financial statements that
    earned ``unqualified opinions'' (that is, a clean bill of health). Under
    the 1990 Chief Financial Officers (CFOs) Act, several agencies and other
    Government entities must prepare financial statements and have them
    audited. In 1991, only 35 percent of these entities earned unqualified
    opinions. By 1994, almost 60 percent did.
      The 1994 Government Management Reform Act extended the requirement for
    audited financial statements to all activities of agencies covered by
    the CFOs Act, beginning in 1996. Many of the agencies, such as SSA, GSA,
    NASA, and the Nuclear Regulatory Commission (NRC), already have complied
    and issued department-wide audited financial statements with unqualified
    opinions.

      Management Controls and Reporting: The Administration has worked to
    cut agency administrative burdens by streamlining management controls
    and reporting. In June 1995, OMB gave agencies a framework for
    integrating management control assessments that are now done by agency
    managers, auditors, and evaluators.
      SSA and GSA have produced reports that represent a first step toward
    such integration. These pilot Accountability Reports, a proposal of the
    Chief Financial Officers Council, will help these agencies track their
    progress in meeting performance goals. Four other agencies--the Treasury
    and Veterans Affairs Departments, NASA, and the NRC--will issue similar
    Accountability Reports as they complete their 1995 audited financial
    statements. The pilot effort will continue in 1996. These initiatives
    also eliminate the need to separately identify and track ``high risk
    areas''--the Government's serious management challenges. Of the 57 high
    risk areas discussed in last year's budget, agencies have adequately
    addressed 12 and are tracking the rest.

      Debt Collection: The Administration and Congress have been developing
    legislation to modernize debt collection, creating new incentives for
    the Treasury Department and other agencies to support electronic payment
    and the collection of debts owed to the Federal Government. Coordinated,
    Government-wide debt-collection systems can have a substantial payoff.
      Treasury's Tax Refund Offset Program, which intercepts tax
              refund payments to individuals who owe money to the
              Government, collected over $1.2 billion in 1995, including the
              Education Department's recovery of over $1 billion for
              defaulted student loans.
      The Justice Department's Central Intake Facility, which gives
              agencies a central administrative point to which they can
              refer debt claims for litigation and enforcement, collected
              over $1.2 billion in 1995.
      HUD's Credit Alert system has helped agencies avoid making
              over $8.1 billion in potentially bad loans since 1987 by
              determining whether loan applicants have been late in paying
              debts owed to the Government.

    Changing the Face of Federal Regulation

      Regulations have the potential to be good or bad. Good regulations
    bring us safer cars and workplaces, cleaner air and water, and fairer
    business practices. But bad regulations--those that are too costly, too
    intrusive,
    [[Page 129]]
    and too inflexible--can impede businesses and other
    institutions from doing their jobs.
      This Administration has sought to develop a more sensible regulatory
    program, one that reduces the burdens of current and new regulations
    while improving their effectiveness--in short, a regulatory system that
    ``works better and costs less.'' The President laid out his regulatory
    principles in Executive Order 12866. They include:
      collecting accurate data and using objective analysis to make
              decisions;
      considering the costs and benefits of alternative ways to
              reach the goals; and
      opening the decision-making process, with meaningful input
              from affected entities.
      In applying these principles to Government's day-to-day work, agencies
    have made impressive progress toward reforming, and restoring confidence
    in, the regulatory system. The following examples show how agencies have
    applied these principles to new regulations.
      Properly identify problems and risks to be addressed, and
              tailor the regulatory approach narrowly to address them. After
              reports of illness from people eating seafood, the Food and
              Drug Administration (FDA) worked closely with the seafood
              industry to adopt an approach that had proven effective in
              improving seafood safety. The resulting regulation requires
              seafood processors to continually monitor areas where health
              hazards will most likely develop, employing sound science and
              a sense of responsibility.
      Develop Alternative Approaches to Traditional ``Command-and-
              Control'' Regulation. Too frequently, the Government has told
              regulated entities precisely what to do, when to do it, and
              how to do it. Experience shows that, in many areas, there are
              better ways to reach the same goal. As a result, the
              Administration has decided to:
        1. Tell people the goals to meet, not how to meet them. The
          Transportation Department (DOT) had long required specific designs
          for packages used to transport hazardous materials. Many of these
          designs, however, became outdated--some were never tested to see
          whether they actually protected the materials being moved and the
          people moving them. In the past several years, however, DOT has
          developed new rules that give shippers greater flexibility to
          design packages, so long as they meet safety thresholds. DOT's
          action has cut costs, in time as well as money.

        2. Rely on Market Incentives. In such areas as fisheries, air
          transportation, and the environment, the Government is creating
          ``tradeable permit'' systems. For example, in regions where
          fishermen receive permits to catch a certain amount of fish,
          tradeable permits let them catch more fish by buying the unused
          portion of other fishermen's quotas. Similarly, airlines can buy
          and sell landing rights at congested airports, and businesses can
          buy and sell permits to discharge limited amounts of specific
          pollutants.
      Develop rules that, according to sound analysis, are cost-
              effective and provide maximum benefits. When such analysis
              suggested how to save more lives for less money, DOT
              reassessed a proposal to increase protection for side impacts
              in light trucks and, instead, chose a more cost-effective
              proposal to increase protection for head impacts in passenger
              cars and trucks.
      Streamline, simplify, and reduce the burden of Federal
              regulation. To reduce the burdens on small business, the Small
              Business Administration (SBA) recently developed an easy, one-
              page application for loans up to $100,000.
      Consult with those affected by the regulation, especially
              State, local, and Tribal governments. The law requires the
              Environmental Protection Agency (EPA) to set emissions limits
              for certain toxic materials from new and existing municipal
              waste combusters. After consulting with local officials who
              operate these facilities, EPA revised its regulation,
              maintaining adequate protection without unduly burdening local
              governments.
    [[Page 130]]
      Regulatory Reform: Improving new regulations is only half the
    challenge; revising existing ones is equally important. In 1995, the
    President directed agencies to review, page-by-page, their existing
    regulations and eliminate those that were unduly burdensome, outdated,
    or in need of revision. The Government is now eliminating 16,000 pages
    of regulations and improving another 31,000. By the end of 1995,
    agencies already had eliminated over a third of the 16,000 pages, and
    improved nearly 5,000 others.
      In 1995, the President announced specific regulatory reforms by major
    agencies, including the EPA; FDA; the Departments of Agriculture, Labor,
    and Treasury; the Pension Benefit Guaranty Corporation; and SBA. For
    example, FDA will reform the process for developing drugs and medical
    devices to bring safe and effective products to market quicker.
    Recently, FDA also pledged to simplify and speed the development of
    drugs created through biotechnology--an important growth industry. And
    FDA has joined with the Agriculture Department to make major reforms in
    the rules that govern food safety.

      Waivers: The Administration has used waivers to cut Federal red tape
    and give more flexibility to States and localities. HHS has given
    welfare reform waivers to 37 States and Medicaid waivers to 12, allowing
    them to experiment with new ways to provide services. The Administration
    also has provided over 700 waivers to the Food Stamp Act.
      The Education Department has used waivers extensively, approving 84
    under the Elementary and Secondary Education Act and Goals 2000 to give
    States, school districts, and schools more flexibility to improve
    academic achievement. It also has designated Kansas, Massachusetts,
    Ohio, Oregon, and Texas as Ed-Flex States, allowing them to provide
    waiver authority to their local districts without further approval.