[Senate Hearing 106-722]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 106-722
 
                  HAS GOVERNMENT BEEN ``REINVENTED''?

=======================================================================


                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
        RESTRUCTURING, AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION


                               __________

                              May 4, 2000

                               __________

      Printed for the use of the Committee on Governmental Affairs



                    U.S. GOVERNMENT PRINTING OFFICE
66-086 cc                   WASHINGTON : 2000
_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
         U.S. Government Printing Office, Washington, DC 20402





                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Darla D. Cassell, Administrive Clerk

                                 ------                                

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND 
                        THE DISTRICT OF COLUMBIA

                  GEORGE V. VOINOVICH, Ohio, Chairman
WILLIAM V. ROTH, Jr., Delaware       RICHARD J. DURBIN, Illinois
JUDD GREGG, New Hampshire            ROBERT G. TORRICELLI, New Jersey
                  Kristine I. Simmons, Staff Director
   Marianne Clifford Upton, Minority Staff Director and Chief Counsel
                     Julie L. Vincent, Chief Clerk





                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Voinovich............................................     1
    Senator Durbin...............................................     3
    Senator Thompson.............................................     4

                               WITNESSES
                         Thursday, May 4, 2000

J. Christopher Mihm, Associate Director, Federal Management and 
  Workforce Issues, General Government Division, U.S. General 
  Accounting Office..............................................     6
Paul C. Light, Vice President and Director of Governmental 
  Studies, The Brookings Institution.............................     8
Donald F. Kettl, Professor of Political Science and Public 
  Affairs, LaFollette Institute of Public Affairs, University of 
  Wisconsin-Madison, The Brookings Institution...................    10
Ronald C. Moe, Project Coordinator, Government and Finance 
  Division, Congressional Research Service, The Library of 
  Congress.......................................................    12
Scott A. Hodge, Director of Tax and Budget Policy, Citizens for a 
  Sound Economy Foundation.......................................    14

                     Alphabetical List of Witnesses

Hodge, Scott A.:
    Testimony....................................................    14
    Prepared statement...........................................    80
Kettl, Donald F.:
    Testimony....................................................    10
    Prepared statement with attachments..........................    59
Light, Paul C.:
    Testimony....................................................     8
    Prepared statement...........................................    51
Mihm, J. Christopher:
    Testimony....................................................     6
    Prepared statement...........................................    33
Moe, Ronald C.:
    Testimony....................................................    12
    Prepared statement...........................................    70


                  HAS GOVERNMENT BEEN ``REINVENTED''?

                              ----------                              


                         THURSDAY, MAY 4, 2000

                                       U.S. Senate,
     Oversight of Government Management, Restructuring,    
                 and the District of Columbia Subcommittee,
                        of the Committee on Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:08 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. George V. 
Voinovich, Chairman of the Subcommittee, presiding.
    Present: Senators Voinovich, Durbin, and Thompson.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. The hearing will come to order.
    Good morning and welcome. Today the Subcommittee on 
Oversight of Government Management will examine the National 
Partnership for Reinventing Government, known more commonly by 
its abbreviatin NPR. Initiated in March 1993, NPR's stated goal 
was to ``create a government that works better, costs less, and 
achieves the results Americans care about.''
    It is now the Federal Government's longest-running 
government reform initiative, and on that I congratulate them. 
I have learned from my own experience that you can't make any 
systemic change without a long-term commitment.
    This morning, though, I would like to look beyond the 
longevity of NPR to learn more about what it has and has not 
accomplished. This fits in with the Subcommittee's larger goal 
of considering where we have been and where we need to go to 
ensure that the Federal Government is prepared to meet the 
challenges of the next century.
    As many of you know, prior to my election, I served on the 
executive side of government for over 26 years as a county 
commissioner, mayor, and governor. I was very much involved in 
management and audits and what can be achieved with them and 
sometimes what cannot be achieved with them.
    In fact, I will never forget that when I ran for 
commissioner, I said we are going to get in the bowels of 
county government, and as mayor, I said the bowels of the city 
government. Senator Thompson, you might be interested to know 
when I came to Washington, they took me literally, and put me 
in the bowels of the Dirksen Building. [Laughter.]
    But my motto for State Government was to work harder and 
smarter and do more with less. We established the Operations 
Improvement Task Force and public-private partnerships on the 
State level, and they were very, very worthwhile.
    So I am very interested in the NPR management initiative. 
What has it accomplished? And where do we have to go? In other 
words, let's build on its successes, identify the weaknesses, 
and see if we can't address them.
    Unfortunately, I cannot ask the Director of NPR, Morley 
Winograd, questions about the program. Although officially 
invited almost a month in advance, Mr. Winograd has declined 
our invitation to be the lead witness or to send a deputy to 
discuss NPR's record.
    NPR has taken on an operational role, acting on its own as 
an agent of change in the government. It would have been 
appropriate for NPR to have been represented here this morning, 
and I am deeply disappointed that they chose not to 
participate. I would like to read a letter that I received from 
Ronna Freiberg, Director of Legislative Affairs, Office of the 
Vice President. I received this letter yesterday, as a matter 
of fact.
    It says, ``Mr. Chairman: Thank you for your letter to 
Morley Winograd inviting him to testify at the Subcommittee's 
hearing on reinventing government. We regret that it will be 
impossible for him to testify. Mr. Winograd is the Director of 
the National Partnership for Reinventing Government, an 
interagency task force. Mr. Winograd is on the staff of the 
Executive Office of the President, and advises both the 
President and Vice President on matters pertaining to the task 
force. He was appointed by the President without Senate 
confirmation.''
    ``Congressional requests to the White House in furtherance 
of congressional oversight of White House policy initiatives 
raise significant issues regarding the confidentiality of 
Presidential decision making. As you will appreciate, given 
comparable concerns voiced during the previous administration, 
it has been the practice to direct oversight requests to 
Executive Branch agencies in order to avoid addressing these 
confidentiality concerns unnecessarily.''
    ``You have identified a number of topics on which 
information is available from the Office of Management and 
Budget and other Executive Branch agencies. We suggest that you 
first direct your request to the Office of Management and 
Budget and other agencies directly involved in the reinvention 
effort. The Senate-confirmed members of the administration at 
these agencies can provide more formal testimony.''
    ``We recognize the importance you place on government 
management issues, and we appreciate very much your continuing 
interest in the National Partnership for Reinventing 
Government.''
    I think this letter speaks for itself.
    The questions the Subcommittee is raising are very 
important for this reason: In 9 months, a new administration is 
going to take office. The next President will face an array of 
very serious problems, particularly in the management of human 
capital, that will demand immediate attention. For example, by 
2004, over 900,000 Federal employees will be eligible to 
retire. An honest assessment of NPR's accomplishment will be 
instructive in this effort and will give the new administration 
a better sense of what has worked, what has not, and, more 
important, what remains undone. I hope our Subcommittee hearing 
today is going to be helpful in providing that assessment.
    Now, let me repeat NPR's mission statement: ``In time for 
21st Century, reinvent government to work better, cost less, 
and get results Americans care about today.'' Today we will 
hear differing opinions as to whether NPR has indeed fulfilled 
this mission, and I look forward to the testimony.
    I now yield to our Ranking Member of the Subcommittee, my 
friend Senator Durbin, for an opening statement.

              OPENING STATEMENT OF SENATOR DURBIN

    Senator Durbin. Thank you, Mr. Chairman. I have just been 
conferring with my staff here to ask whether this is 
unprecedented for a senior adviser in the administration not to 
appear. It seems unusual to me, but I am told that I guess that 
has been a custom--I would like to check into that--that they 
usually refer this to the OMB and they send somebody. And I 
don't know the answer to that----
    Senator Voinovich. Well, the thing that bothers me is I 
received this letter yesterday.
    Senator Durbin. No excuse for that. You should have been 
notified far in advance so you could make plans for your 
hearing. I agree with you completely on that score.
    And I want to thank you for these hearings because I think 
they have been very positive, and I think that the 
administration should be cooperating in this effort to look to 
the future and what we are going to do to reinvent government. 
And I think they have a good record to point to in terms of 
what they have accomplished over the last several years.
    I think it is interesting to note that Vice President Gore 
in this reinvention of government often made reference to this 
book by David Osborne and Ted Gaebler on reinventing 
government. Maybe one of the more inspiring passages in this 
book is from Governor Voinovich of Ohio, who said in his 
inaugural address, ``Gone are the days when public officials 
are measured by how much they spend on a problem. The new 
realities dictate that public officials are now judged by 
whether they can work harder and smarter and do more with 
less.''
    I bet you thought that was going to be a dangerous quote, 
but it is a good one. And it should have been, and I believe 
was, an inspiration to a lot of people who were involved in 
reinventing government. And I think they have some things to 
point to that in the course of the last 7 years really show 
some progress.
    We believe that they have recommended and Congress has 
adopted savings of over $136 billion due to reinventing 
government. They recommended a series of government procurement 
reforms which Congress adopted. Over the last 7 years, those 
changes have saved taxpayers more than $12 billion. More than 
1,200 Hammer Award teams have been honored for reinvention 
efforts that they estimate will save over $37 billion. And, of 
course, the Federal civilian workforce has been reduced by 17 
percent, or 377,000 full-time equivalent employees, as a 
result, the smallest Federal workforce in 39 years.
    I believe, Senator Voinovich--and I don't want to speak for 
him here, but I believe we share some concerns about 
contracting out and privatization and whether or not we are 
getting good service for those decisions, and we can certainly 
look into them as part of this effort.
    One of the things that I find interesting is the dramatic 
turnaround in a short period of time in the public view of the 
Federal Government. This is interesting. After a 30-year 
decline, public trust in the Federal Government is finally 
increasing. In 1964, when the University of Michigan's 
Institute for Social Research asked the question, ``Do you 
trust the Federal Government to do the right things most of the 
time?'' 76 percent of Americans said ``yes'' in 1964. By 1994, 
public response to this question had plummeted to 21 percent, 
so a dramatic decline, 76 percent to 21 percent in a period of 
30 years.
    When measured last in 1998, public trust levels had nearly 
doubled, up to 40 percent, so at least we have a positive trend 
in that direction.
    I will close by saying that it was interesting when we had 
our last hearing and talked about the complaints that Federal 
employees had about the Federal Government, that one of the 
things that they complained about was they don't believe that 
they were being rewarded--in fact, being punished many times--
for creative thinking. And if we are going to make reinvention 
work, we have to start rewarding creative thinking, letting 
people rock the boat a little bit to force us out of a status 
quo mentality. And that is a challenge to each of us, I am 
sure, in our offices as Senators, and it is a challenge to 
every agency to be open and receptive to new ideas that might 
step on a few toes in the process.
    I thank you for this hearing. I am sorry the administration 
didn't get back to you sooner and didn't get back to you with a 
more favorable response.
    Senator Voinovich. Thank you, Senator Durbin.
    We are fortunate today that we have with us the Chairman of 
the Governmental Affairs Committee, Senator Fred Thompson. Mr. 
Chairman, I understand that you would like to make an opening 
statement.

             OPENING STATEMENT OF CHAIRMAN THOMPSON

    Chairman Thompson. Thank you, Mr. Chairman. I appreciate 
your having this hearing on a subject that has been very 
important to all of us on this Committee.
    We have just gotten our first performance reports from the 
agencies under the Results Act, and so little by little perhaps 
we are making some progress in terms of some of these 
management issues, although we have an awful lot to do.
    On this issue concerning Morley Winograd's failure to be 
here--and I read the letter that came from the Vice President's 
office very carefully, and I think it is remarkable, to say the 
least. What they are doing, Mr. Chairman, is the Vice 
President's office is claiming executive privilege with regard 
to the President.
    Now, first of all, it is totally inappropriate. This has 
nothing to do with communications covered by executive 
privilege. Second, I can't count the number of press 
conferences that they have had. They are on the Internet. They 
have never missed an opportunity to talk about this. And yet 
when we have an oversight hearing to ask them some questions 
about some of the claims that they are making, they claim 
executive privilege because the Executive Office of the 
President is involved, someone is under that general umbrella.
    The Executive Office of the President is frequently the 
subject of oversight hearings. The President's own counsel on 
more than one occasion has testified. Bernie Nussbaum and 
Charles Ruff testified before this Subcommittee just last 
month. His successor, Beth Nolan, testified before the House 
Government Reform and Oversight Committee.
    So, clearly, this is a bogus claim, and the real question 
is why in the world would these people do this on something 
that they are proud of and something that they want to tout and 
share.
    I don't think we ought to, just as a matter of course, 
accept these bogus positions, and if you want Mr. Winograd to 
testify--and I noticed they said they would send somebody from 
OMB if they were confirmed. Well, of course, that lets Ms. 
Katzen out. That is a little shot at you, I assume, Mr. 
Chairman, and me because she has not been confirmed. But if you 
want Mr. Winograd and Ms. Katzen up here, we will convene the 
full Committee and take up the issue of subpoenas.
    It is hard for me to understand when we are trying to 
understand something that has been in the press and the media 
and talked about for so long.
    I was generally pleased to see this effort start because 
you don't have to have necessarily revolutionary results in 
order to get something positive done. And any positive thing 
that could be done ought to be welcomed by all of us.
    We still have tremendous problems. You look at the 
duplication in government, for example, 12 different Federal 
agencies administer over 35 different food safety laws; one 
agency regulates pizza with meat toppings while another agency 
regulates non-meat pizzas; 50 different programs administered 
by 8 agencies assist the homeless. The GAO and inspectors 
general came up to our Committee. We have identified $220 
billion of waste, fraud, and abuse, $35 billion in just 1 year. 
And yet we still seem to have the same core performance 
problems facing the government that we have always had. Every 
time the GAO updates its high-risk list of Federal activities 
most vulnerable to waste, fraud, and mismanagement, the number 
of problems increase.
    GAO started with 14 high-risk problems back in 1990. Its 
most recent list issued last year contained 26 high-risk 
problems. Only one high-risk problem has been removed from the 
list since 1995. Ten of the 14 original high-risk problems from 
1990 are still on the list today, a decade later.
    So we have got substantial problems, and I think that this 
effort that we are dealing with today made some modest 
achievements, but they are overshadowed by their wildly 
exaggerated claims. And we will get into that today and see 
what the testimony is.
    But thank you for having this hearing, and perhaps 
eventually we might even get to hear from somebody who is 
running these programs. Thank you.
    Senator Voinovich. Thank you, Mr. Chairman.
    I would now like to introduce today's witnesses, and I have 
asked them to address a variety of issues associated with NPR 
such as the downsizings and savings attributed to NPR actions. 
Today we have with us Christopher Mihm, Associate Director of 
Federal Management and Workforce Issues at the U.S. General 
Accounting Office. We are glad to have you again here before 
us, Mr. Mihm.
    Paul C. Light is the Vice President and Director of the 
Governmental Studies Program at the Brookings Institution. We 
are glad to have you here, Mr. Light. I have read your book.
    Mr. Kettl is with us today. He is a Professor of Political 
Science and Public Affairs at the LaFollette Institute of 
Public Affairs at the University of Wisconsin-Madison. Mr. 
Kettl, thank you for coming.
    Ronald C. Moe is the Project Coordinator in the Government 
and Finance Division of the Congressional Research Service. He 
is also a Professor at the Center for the Study of American 
Government at Johns Hopkins University. We are glad to have you 
here, Mr. Moe.
    And last, but not least, is Scott A. Hodge, the Director of 
Tax and Budget Policy at the Citizens for a Sound Economy.
    We have a good cross-section of witnesses here today. We 
thank you all for coming, and if you will stand, as is the 
custom in this Subcommittee, I would like you to take an oath. 
Do you swear that the testimony you are about to give before 
this Subcommittee is the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mr. Mihm. I do.
    Mr. Light. I do.
    Mr. Kettl. I do.
    Mr. Moe. I do.
    Mr. Hodge. I do.
    Senator Voinovich. Let the record show that all of the 
witnesses answered in the affirmative. We would like to start 
out with you, Mr. Mihm, and I would ask you to limit your 
testimony to no more than 5 minutes. Hopefully through the 
questioning period some of the other issues that you would like 
to get on the table will come out at that time.
    Mr. Mihm.

   TESTIMONY OF J. CHRISTOPHER MIHM,\1\ ASSOCIATE DIRECTOR, 
  FEDERAL MANAGEMENT AND WORKFORCE ISSUES, GENERAL GOVERNMENT 
            DIVISION, U.S. GENERAL ACCOUNTING OFFICE

    Mr. Mihm. Thank you, Mr. Chairman. Mr. Chairman, Senator 
Durbin, Senator Thompson, it is a great honor to appear before 
you this morning to discuss the management reform efforts 
conducted by the National Partnership for Reinventing 
Government and the continuing management improvement agenda 
facing Federal decisionmakers as we move to the next Congress 
and next administration.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Mihm appears in the Appendix on 
page 33.
---------------------------------------------------------------------------
    As you know, NPR has been one of the largest and longest 
sustained and best known Executive Branch management reform 
initiatives in the Nation's history. However, the NPR efforts 
were not undertaken in isolation of other management reforms. 
Indeed, reflecting widespread interest in reforming government, 
Congress, the administration, and Federal agencies themselves 
all have undertaken ambitious and largely consistent management 
reform agendas in the last decade.
    NPR attempted to build on these ongoing efforts. By their 
very nature, therefore, successful management reform efforts 
often entail concerted efforts on the part of agencies, 
leadership and follow-through on the particular of central 
management agencies and the administration, and critical 
support and oversight from Congress.
    My point here is that, given the interaction of these 
elements, any attempt to isolate the specific contributions of 
any one entity separate from those of other entities is 
generally not possible to do. My prepared statement summarizes 
our observations on aspects of the National Performance Review 
where we have done work on a government-wide perspective. This 
work covers NPR's cost savings estimates, downsizing 
initiative, reinvention laboratories, and acquisition and 
regulatory reform efforts.
    As you requested, Mr. Chairman, I will touch on just two of 
these this morning: The savings estimates and downsizing.
    First, in regard to the savings estimates, we reported in 
July 1999 that NPR claimed savings from agency-specific 
recommendations that could not be fully attributed to its 
efforts. NPR claimed that about $137 billion in savings had 
resulted from its efforts to reinvent the Federal Government, 
with about $44.3 billion of these savings claimed from 
recommendations that were targeted at individual agencies.
    We reviewed six recommendations--these recommendations 
represented over two-thirds of that $44.3 billion--and found 
the relationship between the NPR recommendations and the 
reported savings simply was not clear. The savings estimates 
could not be replicated, and there was no way to substantiate 
the savings that had been claimed. NPR relied on OMB to 
estimate the savings from its recommendations, and OMB 
generally did not attempt to distinguish NPR's contributions 
from other initiatives or factors that influenced budget 
decisions.
    In regards to downsizing, as a result of legislation, 
Executive Branch efforts, including those of the National 
Performance Review, and other budget and program pressures, the 
Federal Government is clearly smaller today than it was in the 
early 1990's as measured by the number of employees on board. 
Nevertheless, the manner in which this downsizing was 
implemented has short- and long-term implications that require 
continuing attention.
    For example, it is by no means clear that the current 
Federal workforce is adequately balanced and positioned to 
achieve results and meet agency missions. This is due in part 
to an apparent lack of adequate strategic and workforce 
planning across the Federal Government. Moreover, most major 
agencies' fiscal year 2000--that is, of course, the current 
fiscal year--annual performance plans that were prepared under 
the Government Performance and Results Act did not sufficiently 
address how agencies will use their human capital, that is, 
their people, to achieve results.
    This suggests that one of the critical components of high-
performing organizations--that is, the systematic integration 
of human capital planning and program planning--is not being 
adequately addressed across the Federal Government.
    Overall, the next Congress and the administration will face 
a series of longstanding management problems that will continue 
to demand their attention. My prepared statement highlights 
just a few of these more important management problems facing 
the government, many of which, Mr. Chairman, you touched on in 
your opening statement.
    These pressing management problems include the critical 
need to adopt a results orientation, coordinate cross-cutting 
program, as Senator Thompson mentioned, address the Federal 
high-risk functions and programs, develop and implement modern 
human capital practices, which, Mr. Chairman, as you 
mentioned--and we certainly concur--is among the most pressing 
problems we face, strengthen financial management, and enhance 
computer security.
    The longstanding problems and issues confronting the next 
Congress and administration are stimulating new efforts to 
reform the Federal Government from this Subcommittee, of 
course, from the full Committee, and elsewhere. In previous 
appearances before this Subcommittee, I have identified a 
number of factors that are critical to making fundamental 
improvements in the performance of the Federal Government. 
Demonstrated executive leadership commitment and accountability 
for change and strong and continuing congressional involvement 
are among those critical factors. In this regard, we look 
forward to continuing to work with the Subcommittee and to 
assist it in its efforts to create high-performing Federal 
organizations.
    This concludes my statement, and I would be happy to answer 
any questions the Subcommittee may have.
    Senator Voinovich. Thank you, Mr. Mihm. I think, if it is 
all right with you, Senator Durbin, and Senator Thompson, that 
we ought to let all the witnesses testify and then ask our 
questions.
    Mr. Light.

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

    Mr. Light. Thank you. It is terrific to appear before this 
Subcommittee again. It is always wonderful to be the reader of 
something I have written. They are so rare and few in number, 
so I appreciate your attention.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Light appears in the Appendix on 
page 51.
---------------------------------------------------------------------------
    Let me start by saying that, having sat where the staff of 
this fine Committee and Subcommittee, I take umbrage at the 
notion that a White House official would not want to testify 
before the Subcommittee. This Subcommittee has endured, all of 
you have endured enough long hearings--``my eyes glaze over'' 
hearings, as Senator Glenn used to refer to them--that you 
deserve the cooperation of everybody involved in this very 
difficult effort to make government work better. So I am sorry 
that you don't have the benefit of that testimony, and I hope 
that you can find other ways to get that input.
    I thought I would just briefly summarize my likes and 
dislikes about reinventing government, just briefly run through 
those issues. I think there is a lot to admire here. I think 
there is a lot that we can say was good about reinventing 
government, not to put it in the past tense. I think Don Kettl 
here talks about this as being an ongoing effort that really 
has been ongoing for 50 years. You can't separate reinventing 
government, the current version, from many of the efforts that 
have come before, including Nixon's effort to improve 
government dating back to the Hoover Commission's and beyond. 
This is a long effort that we are in. So let me just focus on 
two likes and three dislikes.
    The first like is the rhetoric. I like how reinventing 
government talks about Federal service. I like the general 
approach that we have decent, hard-working people in government 
and that we need to figure out ways to give them the tools to 
do their work. I think that is an important message to send. 
And it has been useful.
    I think it has been an honorable kind of rhetoric over the 
last 8 years, and it actually began some years before that. But 
it is good when our leaders talk about the honorable role of 
public service this country, and I admire that, and I like the 
notion that the underpinning theme here was of good people 
trapped in bad systems. I think that really is the problem, and 
I think that is what you all have been working on. You haven't 
been working on bad people trapped in good systems. You have 
been working on good people trapped in bad systems, and I think 
that is good rhetoric.
    I think there has been a fair amount of action, much of it 
that originated in this Subcommittee. That is one of the issues 
that we need to address, that when you look at the Government 
Performance and Results Act, you look at acquisitions reform, 
these bills were here in this Subcommittee for years before the 
Clinton-Gore administration took office. This Subcommittee has 
been working on these issues under a bipartisan banner for 
many, many years, and you gave the reinventors a number of 
tools to be successful, most notably, I think, acquisition 
reform, which has been before this Subcommittee for the better 
part of 20 years. And I think Stephen Kellman, the Director of 
the Office of Federal Procurement Policy, was a particularly 
important player in this, alongside the Subcommittee.
    So I like the general directions in some areas, the desire 
to free government from needless rules, the effort to spark 
innovation, the acquisitions reform. I think there has been 
some real progress on those fronts. It is not just cosmetic. 
Good stuff going on across the board in terms of encouraging 
people to do the work they came to government to do.
    Let me point to three dislikes about reinventing 
government, and I prepared this list before I arrived here this 
morning. I think there has been an unnecessary politicization 
of government reform here. This is hard work that needs to span 
both parties, and I think this Subcommittee, in particular, has 
long operated under a bipartisan flag, and I admire the 
Subcommittee for it.
    Frankly, I always felt that if you couldn't get bipartisan 
agreement on this Subcommittee, you just weren't going to go 
anywhere because you had so little interest on the floor of the 
Senate, that if you all weren't aligned, you couldn't get very 
far. And I think that is true of reinventing government or 
improving government. I think it is important to seek the 
common ground.
    I believe, too, that that there has been a lack of 
attention to structural reform. I am looking at the Chairman of 
the full Committee on that. I think you should pass S. 2306. I 
think you should attach it to every bill leaving this Committee 
and every bill leaving the Senate. I have referred to the 
Federal organization chart as rather like the mouth of the 
Ulonga-Bora River where the African Queen and Humphrey Bogart 
got bogged down. I think that S. 2306 could be that gentle rain 
that lifts the Federal Government out of the mouth of that 
swamp and gets it back on track. I think it is time for a very 
detailed look at the structure of the Federal Government, and 
that has to be done through legislation. I don't see any way 
you can do it otherwise.
    And, finally, referring to the Chairman of this Committee 
whose rhetoric on government work has been equally positive and 
uplifting, I think we have got to tackle the current condition 
of the public service. I think that is a real miss in 
reinventing government. We just have not done anything to deal 
with the human service crisis in the Federal Government. We are 
dealing with a public service system, a civil service system 
that was designed for a workforce that has not been to work for 
50 years. And I encourage this Committee, this Subcommittee, 
the honorable Senators, to address that crisis as soon as 
possible because it is going to be catching up with us real 
soon.
    Thanks for the opportunity to testify.
    Senator Voinovich. Mr. Kettl.

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

    Mr. Kettl. Mr. Chairman, I appreciate the opportunity to 
appear before you and Senator Durbin and Senator Thompson this 
morning.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Kettl appears in the Appendix on 
page 59.
---------------------------------------------------------------------------
    At the Brookings Institution for the last 7 years, I have 
been leading an effort to try to assess what reinventing 
government, in fact, has accomplished, and what I would like to 
try to do is to sum up a quick scorecard of what the 
administration has, in fact, been able to do.
    If you look at the effort overall, even though it has been 
now 7 years in progress, the effort is still clearly incomplete 
for reasons that I want to suggest at the end. But if you were 
to try to assign a grade to the progress to date, I think 
overall I would give it a B--substantial progress made, still 
some room for improvement in a variety of areas.
    In particular--and this is my second point--there has been 
a substantial downsizing of the Federal workforce. There has 
been a considerable amount of criticism that, in fact, maybe 
the workforce has not been downsized or has been replaced by 
contractors. In fact, the Federal workforce is smaller than at 
any time in roughly the last 30 years, and there is little 
evidence that the workforce that has been downsized has been 
replaced by contractors. The more important problem is whether 
or not we have right-sized the workforce in the process.
    If you look at the projections of the number of Federal 
employees who are eligible to retire, somewhere between a third 
and a half of all the Federal employees now in the workforce 
will not be there at the end of the next President's first 
term. And what that means is we have no alternative but to 
confront the fundamental question of what the Federal workforce 
ought to look like, what kind of skills it ought to have to do 
the job that we know must be done, and my concern is that the 
first 7 years of reinventing government has not really 
addressed that question. The primary goal is to try to reduce 
the workforce, to get people out the door. We haven't asked the 
question of what kind of workforce we are left with and whether 
or not it is right-sized for the job that has to be done. And 
my fear is that, in fact, it is not.
    My third point is that if you look at some improvements, 
there surely have been improvements in customer service and 
procurement reform. Even agencies that have been troubled, like 
the Internal Revenue Service, are now, in fact, at least better 
than they were, and other agencies, like the Federal Emergency 
Management Administration, which has made substantial progress, 
is now the story that nobody writes about in the middle of 
major crises like hurricanes and earthquakes.
    There have been huge improvements in customer service, 
procurement reform, and the reinvention laboratories--my fourth 
point--really demonstrate what can happen on the ground when 
Federal employees are freed from the bad systems in which they 
are often trapped. Huge and significant improvements have been 
made.
    My fifth point is that, despite the substantial 
improvements that have been made, problem areas like the GAO 
high-risk area list and OMB's own priority management objective 
list have not been addressed. And as you pointed out, Mr. 
Chairman, in many ways these problems have gotten worse and not 
better. This is largely a product of the fact that the 
reinventing government effort has not been engaged in attacking 
these issue head-on, and as we have discovered already, these 
problems are not disappearing. And without a fundamental attack 
on basic management systems, like information, like computer, 
like finance, like personnel, we will surely find ourselves 
crippled as the workforce surely turns over.
    My sixth point is that--and it is related to the previous 
one--the applications of reinvention have been wildly uneven 
throughout the Federal Government. Some agencies now are 
nothing remotely like what they were 7 years ago. Others, such 
as the State Department and the Commerce Department, have just 
simply not shown the same level of progress. And one of the 
failures, I think, of reinventing government has been the 
difficulty of getting the effort implemented and energetically 
pursued by the administration's own political appointees 
throughout the administration.
    My last and perhaps the most important point is that, while 
it is easy to total up some wins and some problems and to 
overall credit the administration with substantial improvement, 
the most important point is that this is an effort that cannot, 
simply will not end at the end of this administration. Whoever 
it is who is President in January of 2001 will simply have no 
alternative but to continue this effort. The name, the National 
Partnership for Reinventing Government, may be abolished. The 
office may be closed. But whoever it is who is President will 
have no alternative but to reinvent reinvention. And the reason 
is that the problems, whether it is the IRS, whether it is 
difficulties in the human capital system, the basic financial 
management and performance systems, the contract, the 
procurement systems, those are not going to go away. They will 
continue to remain and, in fact, as the high-risk list grows, 
the stakes will become even greater.
    The real challenge is to find a way to put political will 
behind that effort. That means the next administration will 
have to focus the efforts of its own political appointees on 
the job of managing the government. And it also means that we 
surely have to make managing this large apparatus we call the 
Federal Government, Federal programs, absolutely essential to 
the job of what the President and the Congress have to do.
    Thank you, Mr. Chairman, for the opportunity to testify.
    Senator Voinovich. Thank you, Mr. Kettl.
    Mr. Moe.

STATEMENT OF RONALD C. MOE,\1\ PROJECT COORDINATOR, GOVERNMENT 
   AND FINANCE DIVISION, CONGRESSIONAL RESEARCH SERVICE, THE 
                      LIBRARY OF CONGRESS

    Mr. Moe. Mr. Chairman, thank you for inviting me to testify 
this morning.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Moe appears in the Appendix on 
page 70.
---------------------------------------------------------------------------
    The reinvention exercise is not simply a number of new 
practices adopted by the several agencies that together make 
for better management; rather, it is an exercise to 
fundamentally alter the character of the Executive Branch and 
congressional oversight role. The goal of the reinventors has 
been to make the Executive Branch entrepreneurial in character, 
structured and operated like they believe a large private 
corporation is managed.
    The critical issue facing Congress, and especially this 
Committee, is whether the entrepreneurial model with its 
private corporate bias is appropriate for the Executive Branch 
and whether the Congress as co-manager of the Executive Branch 
is enhanced or diminished by the entrepreneurial management 
model.
    The basic question to be asked is: Are the governmental and 
private sectors alike or unalike in their essential 
characteristics? The underlying premise of much of the 
reinventing government exercise is that the governmental and 
private sectors are essentially alike in the characteristics 
and best managed according to some business sector principles.
    What are these generic business principles? Well, the NPR 
tells us that they are: Cast aside red tape, meaning laws, 
regulations, and so forth; satisfy customers, not citizens; 
decentralize authority and work better and cost less.
    The public law or constitutional theory of government 
management, which we have had since the founding of the 
Republic, in contrast to the contemporary entrepreneurial 
theory, is based on the premise that the government and private 
sector are fundamentally distinct. They are not alike in the 
essentials, and the applicability of business school aphorisms 
to government management is much less than supposed.
    The foundation of government management, according to the 
constitutionalists, is to be found in public law, not in the 
behavioral practices and principles of business. In point of 
fact, the purpose of the governmental sector is to implement 
the laws passed by Congress, not to please customers.
    Indeed, the government interacts with citizens and, in so 
doing, must follow certain constitutional principles. Even the 
use of the term ``customer'' is misleading, as it is a term 
generally associated with a commercial transaction between 
voluntary participants governed by private law.
    The distinguishing characteristic of governmental 
management contrasted to private management is that the actions 
of governmental officials must have their basis in public law, 
not in the financial interests of private entrepreneurs and 
owners or in the fiduciary concerns of government and corporate 
managers.
    The highest value promoted by public law management theory 
is political accountability. The debate over the future of 
government management, therefore, is not so much over whether 
the specifics of the reinvention exercised resulted in better, 
or worse, short-term results or whether or not actual savings 
were achieved or whether or not we really have fewer employees, 
but is over which of two fundamental value systems will 
prevail. Will it be the entrepreneurial management model with 
its priority of performance, however defined and measured, or 
the public law management model with its priority of political 
accountability?
    Lest this discussion sound a bit abstract, it needs to be 
recognized that the recent financial collapse of the privatized 
U.S. Enrichment Corporation and the rising debate over the 
status and practices of Fannie Mae and other government-
sponsored enterprises are a direct consequences of the problems 
associated with mixing the governmental and private sectors in 
an entrepreneurial model.
    The role of Congress under these two managerial systems is 
very different. The entrepreneurial management doctrine is 
manager-centric, with Congress being viewed as largely an 
outside player and nuisance, as illustrated by the gratuitous 
decision of the NPR folks to not appear in front of this 
Subcommittee. In point of fact, this Committee and the Congress 
of the United States manages the Executive Branch, in large 
measure, through these general management laws, of which there 
are about 80. And it is a fact that the Congress maintains its 
co-managerial role through these general management acts. 
Agencies seeking exceptions have to meet the burden of proof. 
Law is the fundamental tool for managing the Government of the 
United States, not Harvard Business School aphorisms.
    Finally, I will say that the NPR is as important for what 
they didn't touch as for what they did address. In my written 
statement, I go into some detail on this, but the four major 
issues, none of which they discussed or addressed properly, 
include the issues associated with the heavy reliance in our 
system on short-term political appointees as managers; second, 
the intentional erosion in the capacity of central management 
agencies, particularly the elimination of the management side 
of OMB in 1994, and the special need for Office of Federal 
Management; three, the consequences of growing reliance on 
contractors; and, fourth, the growth in the quasi-government 
which threatens to eliminate many of the core functions of 
government.
    As to the question that prompted this hearing--Has 
government been reinvented?--the answer appears mixed. At the 
operational level, there has been significant change, much of 
it for the better. At the level of conceptual and legal 
management, however, the results have not been as salutary. A 
case can be made that the core competencies of government have 
eroded under NPR and are likely to continue to erode.
    We are probably the only major government in the world 
today that does not have a separate central management agency. 
For many, the answer to the question who is minding the store 
is: No one.
    Finally, the reinventing government exercise has 
essentially been an exercise in altering certain incentives in 
the management practices and operations of government. Although 
many of the processes have been strengthened, it is debatable 
whether the central core competencies of government have been 
strengthened or eroded by the 7-year NPR exercise. Congress is 
wise to take a look at NPR to determine just what philosophical 
direction they wish to take in the future to protect their 
constitutional role as co-manager of the Executive Branch.
    Thank you, Mr. Chairman.
    Senator Voinovich. Thank you, Mr. Moe. Mr. Hodge.

  STATEMENT OF SCOTT A. HODGE,\1\ DIRECTOR OF TAX AND BUDGET 
        POLICY, CITIZENS FOR A SOUND ECONOMY FOUNDATION

    Mr. Hodge. Thank you, Mr. Chairman, Senator Durbin, and 
Senator Thompson.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hodge appears in the Appendix on 
page 80.
---------------------------------------------------------------------------
    As you mentioned earlier, Mr. Chairman, when Vice President 
Al Gore did unveil what was then called the National 
Performance Review 7 years ago, he promised that reinventing 
government would make the government work better and cost less. 
And as I see it today, after 7 years of what I like to think of 
as perfecting the art of recycling paper clips, there is simply 
too much evidence to deny that the Federal Government now works 
worse and costs more. Government spending has escalated to 
record levels. Half of all government agencies cannot produce 
auditable books. Serious mismanagement, as GAO has pointed out, 
continues to plague most Federal agencies. Redundancy and 
duplication abound, and many government programs have simply 
become immortalized in the Federal budget.
    The bottom line is that reinventing government has failed 
to cure the widespread cancer of waste, fraud, abuse, and 
mismanagement that is crippling the Federal Government. These 
problems are continuing because the administration has tinkered 
with the process of government rather than go in and analyze 
and determine the substance of what government should and 
should not do. As a result, we get process-oriented pseudo-
reforms that may make the bureaucracy oftentimes work better 
for the bureaucrats, but not work better and cost less for the 
citizens.
    I think a classic example of this is the Plain English 
Award that the Vice President gave to a Department of 
Agriculture employee about 2 years ago for rewriting the USDA 
instructions for cooking a Thanksgiving turkey. Now, 
remarkably, no one in the administration, no one in the 
bureaucracy asked why are we spending taxpayer money to write 
recipes for cooking Thanksgiving turkeys when we have 
successfully done that for about 300 years since the first 
Thanksgiving.
    But a more serious issue is that reinventing government has 
failed to get Federal agencies to do its most basic function: 
Account for how they spend the taxpayers' money. GAO has 
pointed out in its analysis in the most recent financial 
statements of the government that the government's books are so 
bad that, ``The government's financial statements may not 
provide a reliable source of information for decisionmaking by 
the government or the public.''
    In other words, the Federal Government, which this year 
will spend more than the combined economies of China, Canada, 
and Mexico, has no idea where it is spending the taxpayers' 
money, it has no idea where it is being spent, or if it is 
doing any good.
    And recent reports and analysis by the House Budget 
Committee have found similar things--the $19 billion in 
improper payments paid by the government in 1998. The Defense 
Department had to make $1.7 trillion in manual adjustments to 
its financial statements just to get them to pass.
    As we heard earlier, 15 programs have been added to the 
GAO's high-risk list in the last 7 years. Redundancy abounds. 
Even the Department of Commerce itself is redundant to 71 other 
agencies in government, and, of course, we know there are now 
788 Federal education departments and programs.
    Well, the question I think that we ought to ask the 
administration: Has any Cabinet official been held accountable 
for these management failures? Which, if they were to happen in 
the private sector, would be actionable under law. If they have 
not been held accountable, why not?
    Well, we have heard a lot of boasts about reducing the size 
of the government by 300,000 over the last 7 years, but I think 
this is somewhat of a smokescreen, because I think it is 
mistaken to equate the size of government with the number of 
employees. After all, over the last 7 years, government 
spending has increased by 28 percent, or $390 billion.
    So I guess in a perverse sense, maybe government is more 
efficient. We are now simply spending more money with fewer 
employees. But this is not what the American people want. They 
don't want government to waste their money more efficiently. 
They want real value for their money, and that can only be done 
by asking tough questions of government and the substance of 
government.
    The kinds of tough questions that we see private sector 
CEOs ask on a continual daily basis of their corporations: What 
is our core business? What activities should we quit doing 
because they are either outmoded or obsolete or they are simply 
inefficient? Where have we gotten fat and redundant? Do we have 
to perform these functions in-house, or can we contract them 
out? The old make or buy decision government does too much in-
house.
    And if we ask these questions of the Federal Government, we 
will force Washington to focus on improving its core missions 
while we overhaul and streamline the way it does everything 
else?
    Well, to wrap it up, 7 years ago the President said the 
Federal Government needed reinventing because it is not just 
broke, it is broken. Well, today, by any reasonable measure, it 
is still broken, much like a corporation facing Chapter 11 
bankruptcy.
    Reinvention can no longer be a substitute for 
accountability. The only true way to make government work 
better and cost less is to first challenge the substance of 
what government should and should not do, and then demand the 
same standard of accountability from Federal officials as we 
demand from their private sector counterparts. The American 
people deserve no less.
    Thank you very much.
    Senator Voinovich. Thank you, Mr. Hodge.
    There are a lot of questions to ask, and I will start them 
off. And if it is all right with the Members of the 
Subcommittee, we will each have 10 minutes for questioning. 
That will give us a little more time to get at some of these 
things.
    Mr. Mihm, what methodology does GAO use to estimate savings 
from its own recommendations? And how does this compare with 
OMB's methodology? The reason I raise this is because I have 
been through many management audits, and when they are 
completed, it is difficult to ascertain savings. I know I 
always tried to be very conservative because when you are not, 
somebody comes along and says, wait a second, and then they 
start pointing things out. When you measure savings, how does 
that differ from what was used by OMB in determining the 
savings of NPR?
    Mr. Mihm. Yes, sir, we try to be conservative as well, not 
just because we are naturally so inclined as an audit 
organization. Let me start off with how OMB does it and then 
counterpose it to the way we did it.
    OMB estimated savings using its normal budget processes, 
which are not designed to be estimating savings from any sorts 
of initiatives. They are designed to provide point-in-time 
estimates that are relevant for the particular moment in which 
those estimates are made, a particular budget season. OMB took 
all of the changes, that is, the reductions in an actual 
appropriation that an agency received, compared to what had at 
an earlier point been the expected appropriation, and claimed 
the differance as savings for the National Performance Review.
    Let me give you an example of this. The Department of 
Energy budget for the nuclear weapons complex was reduced about 
$7 billion over what had been its expected budget--this is over 
a period of years--for a variety of reasons, most prominently 
because of the end of the Cold War, the Nuclear Test Ban 
Treaty, and all the rest. We simply did not need the nuclear 
capacity that we had previously needed.
    The OMB processes, however, booked all of those reductions 
as savings attributable to the National Performance Review 
because NPR had made a recommendation that urged that the 
downsizing of the nuclear weapons complex continue. This is one 
of those examples that I mentioned in my initial statement 
about how these savings were all booked to the National 
Performance Review, even though there were plenty of other 
factors that contributed to budget reductions--and certainly 
factors far more influential going on than the mere fact that 
the NPR had made a recommendation.
    Now, in terms of the way we do it at the General Accounting 
Office, we use, as I mentioned, a fairly conservative approach. 
We request information from the agency as to any accrued 
savings. We have an independent fact checking that goes on, two 
separate fact checkings that go on internally within GAO: An 
independent fact checking from the team that actually did the 
recommendation so we are not checking up on ourselves. We then 
have a separate group, at a higher level within GAO, that looks 
at all of these savings to make sure that they can withstand 
the scrutiny of an outside examination.
    And then I guess the final point that I would make is that 
we also save our documentation. One of the problems that we had 
when we were doing our review of the cost savings from the NPR 
is that since they were budget estimates developed at a point 
in time, in many cases, the documentation was not retained, and 
so we couldn't go in and find out how OMB did its estimates. 
OMB could not replicate it. For our savings estimates, you can 
have several years back. If you come in, you can see exactly 
how we did it, what the justification was, how the fact 
checking went, if there was any discussion in regard to that 
fact checking, and what the higher level review was. And so we 
are fairly rigorous in the approach that we use.
    Senator Voinovich. I would suggest that it be made very 
clear the basis upon which savings are going to be determined, 
some objective way of looking at it so that all of the agencies 
that are involved in the process understand that this is the 
way they are going to be judged, so they understand that right 
from the beginning. Do you think that ought to be looked at?
    Mr. Mihm. I think that is clearly so, yes, sir. I also 
think, though--and this gets back to the premise of your 
initial question when you were relating your experience--is 
that it seems to be largely a mistake to try and claim large 
financial savings from management improvement initiatives. 
Management improvement initiatives improve efficiency and 
effectiveness, but to try and claim tens of billions of dollars 
in savings is often very difficult. And if you look at the 
history of management reform efforts, many of them have crashed 
on the rocks when they have gone ahead and tried to overclaim 
direct financial savings from their management improvements.
    Senator Voinovich. Another issue that has come up today--
and maybe you can all comment on it--is the issue of workforce 
strategic planning during the last 7 years.
    The testimony was that there was an effort to reduce the 
number of employees, and there are some that have alleged that 
those employees were replaced by a ``shadow government.'' 
Someone might want to comment on that. But the other issue is, 
when you are reducing the number of people, you ought to look 
at the role of the agency and make sure that you maintain the 
competencies that you need to get the job done.
    I would ask any of you to comment on that, if you would 
like. Mr. Light?
    Mr. Light. Well, let me weigh in on the issue of what 
downsizing did or didn't occur. I mean, it is true that the 
overall size of government today in terms of total employment, 
which would include estimates of the number of people under 
contract to the Federal Government, as well as under grants to 
the Federal Government, is down from what it was in 1984. It is 
definitely not down from what it was in 1960. It couldn't be. 
The only number that is down from 1960 is full-time equivalent 
civil service.
    It cannot be true, given the run-up in what we do since 
1960, that the total true size of government could be down. It 
is just ridiculous to make that claim.
    It is true that the defense downsizing, the reduction in 
procurement, the reduction in contracting over the last 15 to 
16 years, largely driven by the end of the Cold War, has 
reduced total full-time equivalent civil service, total 
contract purchase of labor, total grant purchase of labor. 
There is no question that the last 16 years bounded have seen a 
reduction in the overall size of government.
    I would add one other factoid to this: That the only 
category of contract employment that has gone up has been in 
the purchase of services. OK? So you have to disaggregate these 
numbers. It is only by the most narrow definition of workforce 
that a President could say the era of big government is over. 
It is only by counting full-time equivalent civil service. When 
you add everything together, you can make the case that, one, 
we never had an era of big government in this Western 
democracy, and, two, that it is still pretty large. It is 
smaller than it was in 1984, but we have got a lot of people to 
deliver a very large mission here. And the American public 
needs to debate really the central question: Is this the 
mission we want government to deliver? Because this is about 
the number of people we need, whether they are under contract 
or grant or under Uncle Sam's employment system. We need about 
12 million full-time equivalent bodies to deliver the mission 
we have got to deliver.
    How you sort them out? I don't know. You want to reduce 
that number, you got to change the mission.
    Senator Voinovich. I will never forget when I became county 
auditor--everything was farmed out to the private sector. I had 
no expertise in-house to find out whether or not the private 
sector was doing the job that it was supposed to do. So 
immediately I took some money that we used for annual 
reappraisal and hired some people that had the academic 
background and the experience to make sure that the private 
sector was doing what it was supposed to be doing. And I just 
wonder: Have we retained in government the people that are 
necessary to make sure that the ``shadow government'' or the 
independent contractor is really, in fact, getting the job 
done?
    Mr. Light. Well, let me--I mean, other people on the panel, 
Ron Moe and I talked about this. Look, the downsizing was done 
through an entirely random process. We have reduced the total 
size of government through attrition and through voluntary 
buyouts. We were not deliberate in any means in terms of 
reduction except in several very specific cases, like the Army 
Materiel Command. Otherwise, it has been haphazard, random, and 
there is no question that in some agencies we have hollowed out 
institutional memory, and we are on the cusp of a significant 
human capital crisis.
    How we would inventory that I think goes to the issue of 
legislation like S. 2306. We don't know what is going on. It is 
the most frequent question I get in terms of can you prove that 
there is something wrong out there, and the answer is we don't 
know. And that speaks to the basic problem. It is an issue of 
sloppiness. It is an issue of inattention. And we see it in how 
we did this workforce downsizing. And now others here I think 
have better points of view.
    Senator Voinovich. Mr. Kettl.
    Mr. Kettl. Mr. Chairman, I think that Dr. Light is exactly 
right. We have, in a sense, been focusing on the wrong target. 
The number of Federal employees first doesn't begin to get at 
the question of who it is who is actually doing Federal work 
because more and more Federal work is being done out in the 
for-profit and not-for-profit sector and in State and local 
governments, and focusing only on the number of Federal 
employees as somehow a target on the size of government misses 
anything that is real about what the true size of the Federal 
Government is.
    The second point that I think is important to make is that, 
as Dr. Light pointed out, the target for a workforce reduction 
in the neighborhood of 300,000 Federal employees was completely 
arbitrary. There wasn't any pre-planning that suggested that 
that was the appropriate target or whether it should have been 
more or should have been less.
    A third point is that, as it was implemented throughout the 
Federal Government, it was done in a way where the goal 
essentially was to get people out the door, and it relied on 
voluntary separations through a buyout. And that gets to a 
fourth problem, which is: Is what we are left with the kind of 
government that we need? And the problem is that we have 
increasingly created a gulf between the people who are in the 
government and the skills needed to run that government 
effectively.
    As we are relying more on grants to State and local 
governments, on partnerships to State and local governments in 
the regulatory arena, in contracts with the private sector and 
the not-for-profit sector, we have more and more need for 
strategic planning in the government, needs to get information 
systems to find out what is going on out there, and to find 
ways of managing those systems correctly. And those are the 
very areas of government where often it is most difficult to 
recruit and where, quite frankly, we have not done a very good 
job of figuring out what kind of workforce for the future we 
need. And those chips will begin to fall with a vengeance in 
the next 3 or 4 years as this human capital problems becomes 
more serious.
    So we have some arbitrary measures of arbitrary targets 
that don't begin to get us at the real problems that we have to 
solve, and where, if we don't, we will surely pay a very high 
price in the very near future.
    Senator Voinovich. The most important thing would be to 
have agencies assess where they are right now, what 
competencies they lack, what competencies they may lack in the 
next several years, and then develop a strategy to meet those 
human capital needs.
    Mr. Kettl. There is that issue, Mr. Chairman, and in 
addition, it seems to be it has to be the job for the Office of 
Personnel Management to make sure that happens and to do the 
job for the Federal Government overall so that we have some 
place where we are tracking the basic figures and the 
statistics and the trends and the skills and we are making some 
effort to align the Federal Government's personnel systems with 
the job the Federal Government has to perform. And the problem 
that we have had, especially in about the last 15 years, is 
that the gap between those two has become yawning to the point 
where genuine crisis threatens.
    Mr. Hodge. Mr. Chairman, if I could comment just a second--
I am sorry.
    Senator Voinovich. I am out of time, and I will call on 
Senator Durbin.
    Senator Durbin. Thank you, Mr. Chairman.
    Mr. Light, I think you made a very important point here 
about the change in rhetoric on Capitol Hill, and I do salute 
the Chairman here in particular for his positive view toward 
taking a close look at management at the Federal level. It 
hasn't been that long ago, only a few years ago, when we were 
going through this period of self-loathing up here, which 
culminated--I think its nadir was the shutdown of the Federal 
Government when great political philosophers like Rush Limbaugh 
were announcing that the American people would never miss this 
Federal Government if it just shut down and went away. And, of 
course, time proved him wrong and the American people proved 
him wrong. There are important functions of this government 
that are being served by people who are working hard to do a 
good job, and I think that whole ultra-conservative ilk, has 
been repudiated by that single experience, and we have finally 
turned that corner and now tend to look at things in a more 
positive way.
    But having said that, there still is built into this 
discussion a tension which may not be present in a business 
setting or some other type of organization, because if I become 
the new CEO of a company that is not doing well and decide that 
I am going to make a dramatic change in management, it is on my 
shoulders. I ultimately have to answer to the shareholders when 
it is all said and done. But in this case, it is a shared 
responsibility. The executive by itself can go so far in 
reinventing and making strategic changes. And there is still 
going to be a congressional voice in that chorus that will 
decide how much money, how far you can go. Each of us brings to 
this debate our own particular attitudes and our own particular 
interests. And from time to time, those interests trump 
strategic thinking. We tend to be fairly parochial at times. I 
confess that sin on my own part.
    Don't you think that this has to be taken into account, 
too, that this is a unique management situation with this 
division in power between the purse strings and those who are 
drawing up the pie charts and the organizational structures?
    Mr. Light. Absolutely. I think the solution is in a 
conversation that occurs between the Executive Branch and 
Congress. Personally, I never saw it on this Subcommittee. It 
must be over in the House in another body.
    Senator Durbin. That is why I left it. [Laughter.]
    Mr. Light. The tension is that your colleagues in 
appropriations and authorization, of course, yourselves because 
you sit on authorizing and appropriating committees, your 
membership does here on the Subcommittee, you have to struggle 
with how to make the kinds of reforms that you are pushing over 
here like Government Performance and Results Action 
tractionable to your colleagues as they are making the key 
decisions and spending money.
    One of the arguments that I make about Government 
Performance and Results Act is that it really doesn't matter 
right now to things that matter to Federal agencies, that if it 
doesn't involve head count or money, why should an agency pay 
attention to that? And, of course, that involves a dialogue 
between this Subcommittee, which is leading the performance 
charge, and the Appropriations committees.
    Senator Durbin. And if I might interrupt you for a second, 
a clear illustration is something that the Chairman has brought 
out in previous hearings. We do not fund the incentives and 
rewards for employees and agencies so that they feel good about 
what they are doing and so that they can attract the very best 
into the Federal Government. It is something that we tend to 
trim away. And we wonder then why we don't have better 
statistics when it comes to retention of good employees, why we 
can't recruit good employees. So that is an illustration, from 
my point of view, of how this is different than a business 
situation where someone can decide we are going to set aside a 
portion of this budget and we are going to make this a team 
concept in management.
    We tend to make a budget decision, which really attacks the 
team concept and says you can have a team but you can't reward 
them, and I think that is what came through in some previous 
hearings that we had. It may go to your point, Mr. Mihm, about 
the strategic decisions that are being made in these agencies. 
I think this political breakdown that I have tried to elucidate 
here is in that direction.
    Mr. Moe, if I might ask you this question, you raised 
something that is very interesting, too, this entrepreneurial 
model versus--you called it public law management?
    Mr. Moe. Yes, public law or constitutional.
    Senator Durbin. And it is interesting, too, because the 
entrepreneurial model as I see it, it is easy for Mr. Hodge and 
his organization, which is well known on Capitol Hill, to be 
critical of an effort by the Department of Agriculture for food 
safety. And I guess that is an easy target for anybody to go 
after. But the bottom line is we have to make a decision as to 
whether or not food safety is important and how much we want to 
spend on it and whether you can justify it.
    And the same thing comes through when we are talking about 
childhood immunizations. Is it worth it? Is it worth putting a 
little extra money in immunizing kids? Can you really prove it 
out?
    It gets down to the thinking which we have in this 
Subcommittee all the time about the so-called cost/benefit 
analyses. Can you put a price tag on it? Can you identify the 
dollar value of it? And time and time again, I have split with 
the Subcommittee because I think there are many things you 
can't put a price tag on.
    For example, when it comes to the whole question of the 
Food and Drug Administration and its role in tobacco, what is 
it worth, I think it is worth a lot. Can I quantify it? Well, 
if I quantify it and Americans live longer, those longer-living 
Americans are more expensive to the government as they draw 
more Social Security. So in a cost/benefit ratio, should we be 
educating people about the danger of tobacco if it raises the 
cost of the Social Security system? Well, I think the obvious 
answer from a public policy viewpoint is, of course, we should. 
But a cost/benefit ratio, the entrepreneurial thinking, the 
green eyeshade thinking, leads us off into some never-never-
land where you really have to quantify everything.
    I don't want to put words in your mouth, but are you 
thinking along these same lines about this entrepreneurial 
model versus the other?
    Mr. Moe. Yes, the entrepreneurial model is based on private 
law and the maximization of equity return to private owners. 
That is why they can act the way that they do. And one of the 
logical conclusions from that is you have considerable leeway 
in the amount of money you pay and the rewards are monetary, 
and you rely on performance measurements, the bottom line.
    The performance measurements and those types of things are 
not applicable in the public sector, in the governmental 
sector, which are run by public law. The measurement of whether 
you are doing a good job is whether you are implementing what 
Congress intended you to do, irrespective of the performance 
connected with it.
    Now, the classic case would be the IRS. The IRS was the 
ultimate performance organization. I mean, they strictly 
followed GPRA--they had quotas down to the local tax collector. 
And all of a sudden, it blew up. It blew up because, in point 
of fact, officers of the United States have a higher 
requirement to meet than simple maximum performance in 
collecting taxes, and that is adherence to due process of law.
    Once you recognize that, then you start to design programs 
and you evaluate them in terms of the actual requirements of 
public law rather than trying to impose, which NPR does, the 
private sector model, which is inappropriate to much of what it 
is that government does.
    There are things that, no matter how well you measure them 
and no matter how well you want them to work, are 
unadministrable because they are conceptually unsound. That is, 
management cannot make a conceptually unsound program work 
well. Do not ask management to do it. Most of these high-risk 
areas are situations in which the standard measurement 
procedure for management isn't appropriate.
    Senator Durbin. So if you just, for example, said to IRS 
employees you will be rewarded and promoted if you bring 
actions against individuals and bring money back to the Federal 
treasury, you are defying the basic idea of due process which 
says the right decision by the employee may be no action 
against that citizen.
    Mr. Moe. Absolutely. In day-to-day life, however, the 
contrast between the high performance and public law 
requirements are not usually that stark. But if there is a 
direct conflict, the highest value in the governmental sector 
is adherence to the law and adherence to the constitutional due 
process, not the maximization of performance.
    Now, the second thing to note is that the Federal 
Government does not deliver many services. There are only three 
major agencies that deliver services directly to the public, as 
opposed to State and local government which deliver many 
services, is the Social Security Administration, the Veterans 
Department, and IRS. And so most of what the Federal Government 
does not involve a customer relationship. It is a relationship 
between the sovereign and the citizen. Therefore, the 
relationship is not a voluntary one. Even though it may be 
friendly, it isn't necessarily a voluntary relationship because 
an officer of the United States has the right to prevent you 
from having something; therefore, it is a suable action. It 
isn't a voluntary action.
    So much of this entrepreneurial rhetoric therefore is 
inappropriate for the government relationship to the citizenry. 
It is not appropriate to use phrases like ``chief executive 
officer'' or ``customer.'' Those are inappropriate terms. They 
really muddle up proper thinking.
    We are a government that operates without a central 
management agency. It is unbelievable. We are probably the only 
major government that operates without a central management 
agency. OMB concentrates on the budget. The things we are 
complaining about here are constitutional in nature. We are 
trying to run the world's most complex social system with 
amateur short-term officers. Starting next January, we are 
likely to be bringing in 4,000 new people to manage government. 
Paul Light will do his very best at the Brookings Institution 
to educate them, but they will still remain short-term 
amaterus.
    There is zero continuity at the top. People come here from 
all over the world and say, ``How do you run a government with 
no continuity?'' And we say, ``Barely.''
    So those are the issues that need to be addressed, I 
believe, as well as performance in any given agency and whether 
it is saving money or not.
    Senator Durbin. Thank you. The last point I will make is 
that, in addition to the cost/benefit ratio and the bean-
counting approach to this, which I have had some difficulty 
with in the past, I also have difficulty with the concept that 
we are going to go to biennial budgeting and appropriations 
because I believe that that takes away the oversight 
responsibility that Congress has to watch these agencies and to 
comment on them. There are others who disagree, including the 
Chairman.
    Senator Voinovich. Absolutely. [Laughter.]
    Senator Durbin. But having said that, I think that if we 
are going to play the appropriate role under the Constitution, 
the appropriations process and the authorizing committees have 
a responsibility to watch this management on a regular basis.
    Thanks, Mr. Chairman.
    Senator Voinovich. Senator Thompson.
    Chairman Thompson. Well, thank you, Mr. Chairman. A 
fascinating discussion. You bring up so many things that we 
have been dealing with here. In listening to you, it looks to 
me like the real fundamental question is: How much should we 
try to and how much capability do we have to measure what 
government is doing and whether it is really doing its jobs? 
That is what the Results Act is supposed to try to do, and the 
experts in the area say that one of the things you have to do 
is determine the cost of what you are doing. And it is not an 
easy picture.
    Senator Durbin has a problem with cost/benefit analysis, 
and, of course this revives an old discussion we have had for a 
long time. The fact of the matter is that the suggestions put 
forth have to do with non-quantifiable as well as quantifiable 
measures. And if you have something that saves lives which is 
non-quantifiable, you shouldn't have much difficulty in 
carrying the day politically on that issue.
    So that to the side, the problem is if you don't have some 
kind of objective measure, then you are going to run into what 
we have seen, billions of dollars of waste, no one really 
accountable, and all the other things we have seen.
    The problem, on the other hand, if you have too much, if 
you want to call it measurement, you run into things like this 
NPR, because what they clearly did was choose some things, as 
we do on Capitol Hill lots of times, choose some things that 
are clearly measurable and understandable to the American 
people--the number of employees cut. You can't make a political 
speech about the improved quality because you can't explain the 
way you came to that conclusion. But you can sure have some 
objective criteria by cutting employees.
    That is a balance that we have to make, and I think the 
problem is oftentimes that we don't--in our cost/benefit 
analysis, we don't look at the picture broadly enough, and the 
cost/benefit analysis is not only what you are doing well, how 
much money you are saving, how much it costs, but also the 
quality considerations and all that. We have got to figure out 
a way to do that.
    But what you have to have, in looking at the history of all 
this and the extremely exciting and interesting books that Mr. 
Light writes on government reform and so forth, and he traces 
the history of all these reform movements and all these 
commissions--the Hoover Commission and the Grace Commission and 
all that. He tells us how it really all depends on who is in 
office and whether the Republicans control one branch and the 
Democrats another and whether you have a Democrat or Republican 
President. And it is almost a case to be made for determinism. 
You can almost tell the counterreform efforts that are coming 
based on who controls what. And here we are again. And I 
appreciate your endorsement of Senator Lieberman and my latest 
commission effort. Maybe we will do better.
    But what runs through all of that, to me, is the point that 
you have to have real management in the Executive Branch, and 
you have to have real support from Congress. Now, Congress has 
passed a slew of laws recently--Clinger-Cohen, Paperwork 
Reduction, GPRA, all these various things that are coming to 
fruition now. So I think you can make a case that over the last 
several years the leadership of this Subcommittee in the past 
has contributed a lot to that.
    But I see very little to be encouraged about from a 
management standpoint. This business of these reductions, 
everybody sees through that. Everybody knows about the 
downsizing and where it has come from, 60 percent from Defense 
and Energy civilian workers. But OMB not only did not get in 
there and say, now, look, you need to consider the quality of 
the workforce, OPM, we are responsible for that, they aided and 
abetted this kind of sham approach. And if you look at these 
performance reports that are coming in now from the Results 
Act, one of the worst ones in terms of setting identifiable 
goals is OMB. It is totally process-oriented. I mean, they of 
all people are supposed to be looking over these other 
agencies. Just like Mr. Moe said, there is no management over 
there. I mean, they are downsizing in every way. That is where 
they are really downsizing, is in the management part of OMB. 
Nobody is looking out for the management side.
    So they are going along with whatever wind is blowing at 
the moment, and that is why we wind up with a hollowed-out 
workforce in some of these areas, no consideration as to the 
fact that we haven't asked any less of these government 
employees and these agencies. We keep piling more 
responsibilities on them as we are cutting in many cases the 
most experienced people--it is haphazard cutting without 
strategic planning.
    So we have got to figure out what do you do about all this, 
and I think Senator Durbin is right. It is essentially a 
political question in the broadest sense of the word. You have 
to have commitment from the Executive Branch. You have to have 
commitment from what is the OMB or some successor to it. That 
is something else we need to take a look at. And you have to 
have cooperation and commitment up here.
    We shouldn't be criticizing. Every time somebody makes an 
effort to do something positive, we shouldn't be critical of it 
because it doesn't reform all of government. We ought to be 
supportive. The problem with this effort is that when you look 
at their downsizing claims or their savings claims, and some of 
these I think GAO has been rather generous in some of its 
assessment. You say that the claimed agency savings cannot all 
be attributed to NPR. If you look at it, virtually no savings 
can be attributed to NPR. So I think you are giving them a 
break on that.
    So you look at all of that, and then you look at their 
involvement in this citizenship U.S.A. business where documents 
obtained from the Office of the Vice President and NPR under 
subpoena of the House Committee on Government Reform which we 
have indicated that political appointees and outside interest 
groups persuaded the administration that hundreds of thousands 
of immigrants should be rushed through the naturalization 
process in the hopes that they would vote for the Democrats in 
the 1996 election. Justice is looking into it. What is known so 
far, apparently INS naturalized hundreds if not thousands of 
felons in contravention of the law. And you see that as a part 
of it. That is the problem that we have with this. It is not 
that we want to be critical of every effort and even a little 
overblown rhetoric about accomplishments and so forth. But we 
have got to--we don't want to discourage people from doing it 
in the future.
    But these are the reasons, and then to cap it all off, I am 
beginning to understand now why they don't want to show up and 
testify here today and answer some of these questions. But it 
doesn't contribute to the solution that we are looking for.
    I will just finish this with a broader question, and, that 
is, from a broader standpoint, Mr. Light, in looking over 
history and the reform efforts--and as you point out, it has 
been ongoing and will continue. We now have a few tools we 
didn't have. Is it a money problem? Is it a funding problem? Is 
it an executive problem? Is it a Legislative Branch problem 
inherently? Are there difficulties there because we have to 
have these political measuring sticks that the people publicly 
understand? Is it the nature of the matters that we are dealing 
with? What is your broad overview? And I will play devil's 
advocate with my own bill. Why do you think there might be a 
chance that with this new commission proposal that we have that 
that would do any good?
    Mr. Light. May I just hope that when you said ``an exciting 
read'' that you meant it. [Laughter.]
    It will be on remainder tables.
    Chairman Thompson. It is interesting.
    Mr. Light. Look, I think that there is substantial 
agreement between the parties and between the branches that 
there needs to be a breather here where we take a look at all 
of the structure and laws that we have added on that government 
has accreted over the years and take a whack at them.
    You need that every once in a while. It has been 50 years 
since we took a systematic look at the Federal organization 
chart. I don't pretend that that is the answer, but I think 
every once in a while you need to sit down and sweep clean and 
take to task the things that have risen over the years.
    I am encouraging you on your commission to add an action-
forcing device. I think just as we went through the painful 
process of closing military bases that we all knew were 
obsolete and needed to be closed but we could not summon the 
will at either end of Pennsylvania Avenue to do so, every once 
in a while you have to take a look at this.
    If you look at the first reinventing government report, 
there is a strong section on eliminating what we don't need. 
And you look back at that 7 years later and say we didn't do 
much of that. We couldn't do much of that. Every once in a 
while you need to step back, take a look at what you have 
accumulated, and take a whack at it. And I think that you have 
to do it in a context where both ends of the avenue are given 
an opportunity to do the right thing, but not given a whole lot 
of opportunity to summon up the old arguments for continuing 
program X or program Y because it meets a jurisdictional demand 
or it has been there for a good long time.
    I just think that you need that breather every once in a 
while, and I can't imagine a better time to do it than right 
now. We are at the change of administrations. We have non-
incumbents running. It is a good time to take a look at it, do 
it quickly, present to this branch an up or down vote on a 
package of structural reforms. I think that is an essential 
part of it, and throw civil service in there while you are 
working on it.
    Chairman Thompson. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Voinovich. I would like to make one comment, Mr. 
Moe, about what you said. First of all as part of my management 
philosophy, I told my directors and secretaries that if you 
can't measure it, don't do it. I like customers, Mr. Moe, 
internal customers within our agencies that are customers unto 
themselves, and external customers that we have to take care 
of. That is a concept that I believe in strongly. We found in 
State Government that many of our agencies didn't even know who 
their customers were. I will never forget our Environmental 
Protection Agency--everyone was screaming about it. They didn't 
know who their customers were, and after they identified their 
customers, they started talking to them and found out they were 
unhappy. And in a 2-year period, the customers became a lot 
happier because there was recognition. Most government 
employees are good people and want to get the job done, but 
they have to understand who their customers are.
    NPR, we can say what we want to about it, and maybe has 
exaggerated, as Senator Thompson said. I am one of those people 
who thinks the past is the past. The issue is we are here today 
and where are we going tomorrow. That is my real concern. We do 
have a human capital crisis.
    It seems to me that OMB no longer has an M in it. There is 
no management. And the issue is: How do you go about putting in 
place a vehicle or a mechanism to move forward and take on 
these challenging problems that we have in the Federal 
Government today?
    One of our witnesses this week, on Tuesday, Senator Durbin, 
you will recall, was Inspector General Gross of NASA. She said, 
``As a result of reductions and reinventions of the Federal 
personnel community mandated by NPR, many personnel offices are 
understaffed and ill-equipped to compete with their private 
sector counterparts.''
    Now, I just wonder, does this run across the Federal 
Government? And if it does, we are in big trouble. I would be 
interested in recommendations as to how we go about addressing 
this problem in the short term, because we have to jump start 
it and then look for a mechanism to put in place to guarantee 
that we deal with this problem over the long term and that we 
have some oversight in the Federal Government.
    One of my problems is that so many of the issues, Senator 
Durbin, that come before this Subcommittee ought to be taken 
care of on the management side of government. So much of what 
we are talking about, really, if you had management that was 
dedicated to this, we wouldn't have these hearings.
    For example, GAO has identified at-risk agencies, and there 
are more of them today than there were a decade ago. How do you 
focus on the main responsibilities of government, and that is 
delivering services to people in a sensitive, efficient way? I 
am concerned that if we don't get at this quickly, it is going 
to clog up our economy because so many entities in the private 
sector are dealing with Federal agencies. They are moving ahead 
in terms of human capital and technology, and if we don't keep 
pace with them, we are going to have a gigantic traffic jam 
where the Federal Government, instead of getting out of the way 
or greasing the skids, is going to become a real problem to 
this country's productivity.
    So I am interested, if you were in the shoes of the folks 
at OMB now, what would you do?
    Mr. Mihm. Mr. Chairman, if I may, I think there are a 
couple of things that can be done. First, Congress has already 
passed a legislative vehicle that can help you on this, and 
that is the Government Performance and Results Act. I mentioned 
in my comments earlier that the 24 largest agencies, did not 
systematically talk about and think about their human capital 
strategies in the context of programmatic goals, and that is 
the connection that needs to be made. That is something that we 
are looking at, and certainly additional oversight efforts from 
this body, so that we can begin to start showing the 
programmatic consequences to this staffing crisis that you are 
talking about.
    All too often, the debate, as we have been discussing on 
the panel here, has just been on have we cut people or have we 
not cut people and where have we been cutting them. We don't 
understand what the consequences of those skill gaps are. We 
don't understand the consequences of where cuts may have been 
inappropriately made. We don't understand the consequences of 
where more people may be needed.
    Two of the areas in particular on our high-risk list deal 
with exactly the lack of this human capital, both in contract 
management over at NASA and contract management in the 
Department of Energy. Both of those, among the root causes 
there is the lack of people, as Dr. Kettl was suggesting, that 
know how to manage contracts, these large, complex, difficult 
contracts. So I think one thing, one clear legislative device 
that you already have, is the Government Performance and 
Results Act.
    Second, we recently issued a self-assessment guide for 
agencies to use that they can go through and begin to think and 
develop baselines on what their human capital profile looks 
like, the extent to which they have skills gaps, and then 
develop an action plan in order to improve performance.
    And then, third, as you know, Mr. Chairman, we have also 
just recently issued a report looking at best practices in the 
private sector in human capital planning and execution. And we 
are working with OPM and others to try and get the message and 
the news of that spread throughout the Executive Branch.
    There are a number of things that can be done. Let me just 
add one final one, and this is work that we are doing for you 
in this regard, and that is, come next January, February, and 
March when political appointees are coming in front of this 
Subcommittee and the authorizing committees, to the extent that 
questions can be asked of them about the public management and 
about their responsibilities and their knowledge of that, that 
will both give you information on what they know and their 
commitment, but also underscore to these nominees the 
importance that Congress places on the effective management of 
programs.
    So I guess those four devices are what we would suggest.
    Senator Voinovich. I appreciate the cooperation that we are 
getting from GAO in putting that questionnaire together, and 
hopefully it is going to be of such quality that this 
Subcommittee and other committees in Congress will be able to 
use it. First of all, it will help us find out whether the new 
people that are coming in know anything----
    Mr. Mihm. Absolutely.
    Senator Voinovich [continuing]. In terms of what they are 
being charged with doing, and, second of all, I say with tongue 
in cheek that maybe some of them, after reading the 
questionnaire, may decide they don't want to take the job 
because of the challenges that are connected with it. 
[Laughter.]
    So if I am listening carefully, you have put together that 
self-assessment.
    Mr. Mihm. Yes, sir.
    Senator Voinovich. If you were in the management side of 
government, probably the best thing you could do at this stage 
of the game would be to move with that assessment, ask 
everybody to fill it out, figure out where they are, and that 
would be the beginning of addressing this human capital crisis 
that we are confronted with.
    Mr. Mihm. I think so, yes, sir. We are moving very hard in 
this regard. The Comptroller General has met with the 
President's Management Council to try at the very senior levels 
of the administration to engage them. At staff levels, we are 
working with our counterparts over in OPM and in OMB, and 
certainly in the individual agencies as well on this.
    Senator Voinovich. Well, that would be a good gift to the 
next administration, whether it is Vice President Gore or 
George Bush, that somebody was doing a lot of work so that when 
they came in, they would have a current assessment, that 
addressed some of the really critical areas where we need 
people so that we can keep this government operating during the 
transition period. Because I know from transitions that I have 
been through that you are so busy trying to get everything 
organized, so often something that is really critical, if it is 
not brought to your attention immediately, just gets neglected. 
And we are running out of time in some of these agencies in 
terms of the skills that are needed to keep them going.
    Mr. Mihm. I think one of the virtues of both the self-
assessment guide that we have done, but just more generally 
thinking about human capital, is, again, to tie it back into 
the programmatic consequences. Certainly new political 
appointees and even new members perhaps that come up with an 
agenda that is policy- or program-oriented, they can quickly 
lose interest in just hearing open-ended discussions of ``we 
have a human capital crisis'' unless it is made clear to them 
the scope of this crisis and the consequences for what they 
want to achieve in a programmatic and policy sense. That is, 
what we are trying to do in our work in both the high-risk list 
and in other areas, is show that this is not just a few good-
government ``geeks'' talking about management ``stuff.'' This 
really matters in terms of the quality and the effectiveness of 
the services that are developed and delivered to the American 
people--not to characterize my colleagues as ``geeks.'' 
[Laughter.]
    Senator Voinovich. I would call them ``the A Team.''
    Mr. Mihm. Thank you, sir. That is why you are there and I 
am here.
    Senator Voinovich. I have watched the Federal Government 
for 18 years. I have lobbied this place as mayor and as 
governor, and you get new administrations in and we have new 
secretaries, assistant secretaries, deputies, and so forth. My 
observation has been that they have wonderful ideas, and before 
they know it, they are traveling around the country and making 
speeches and visiting places, and the people that are necessary 
to get the job done are neglected. They are as important or 
more important than some of the speeches that they are making.
    Mr. Kettl. Mr. Chairman, you make a very important point 
there, because we often engage in a folly that we can in a 
sense think of and create the management side of government as 
if somehow there were a piece of it we could push aside and let 
it take care of it. We are increasingly in the position where 
government, no matter how bold its ideas and policies may be, 
doesn't work unless management is wired deeply into the policy 
and the politics and the programmatic side of it.
    Senator Voinovich. Absolutely.
    Mr. Kettl. And that is in many ways, I think, Mr. Mihm's 
fundamental point and the point that you just made. And that 
creates a real dilemma because on the political side there is 
little political payoff for the government simply doing well 
what citizens expect it to do. Mail delivered yet again today 
is not a popular headline in the paper. Mismanagement, on the 
other hand, is guaranteed to make it on the evening news. And 
so there is serious punishment for management failures. The 
incentive is to stay as far away from them as possible, to try 
on the other hand just to leave the management to everybody 
else because there is very little political payoff. But we are 
increasingly at the point where that is not a luxury we can 
afford any longer because in case after case after case, as we 
have seen in the last 3 or 4 years, and we can chart the 
possible headlines that could pop up in the next 5 years just 
by simply looking down the list of GAO's high-risk areas, we 
can see the possibilities of things that could go wrong. And 
the most important thing that this Subcommittee can do is to 
ensure that we don't engage in the kind of folly that suggests 
there is a management side of government that can be separated 
out from the policy and the politics, because policy and 
politics increasingly depend on government's ability to 
actually deliver results.
    Senator Voinovich. All right. Senator Durbin.
    Senator Durbin. Well, I would just close on a point that I 
had raised earlier, because I think that when we look at 
management models, this is a unique situation. It is unique in 
that Congress and the Executive Branch have to work together in 
this regard, and there is a built-in institutional friction and 
tension that was anticipated by the Constitution. There are 
obvious political differences that might arise between an 
executive of one party and congressional leaders of another. 
And there are personal tensions where I have seen chairmen of 
committees basically have their own personal agenda when it 
comes to an agency, and they can drive it home in terms of the 
authorization and appropriations language.
    So whoever the next President may be, their ability to 
reform, truly reform government and bring new management to it 
will depend to a great extent on what happens on Capitol Hill, 
whether it is a cooperative atmosphere and approach to it. I 
think that the effort by this administration was a good-faith 
effort. I think it came at a time when the political divisions 
between Congress and the Executive Branch were obviously very 
different with the onset of the Gingrich leadership in the 
House and the like. And the tension was there to a great 
extent. It has been manifest today in some of the observations 
that have been made in this panel.
    So I guess I am hoping that we can rise above politics and 
even find a level of cooperation when it comes to these two 
institutions; otherwise, I am not sure how far an Executive 
Branch on its own can go to reform this situation.
    Senator Voinovich. Well, I think a lot of what this 
Subcommittee does will impact what is going to take place.
    Thank you very much for coming today. We really appreciate 
it. There are other questions, by the way, that I have that I 
would like answered, and I would appreciate your response to 
them. Of course, your written testimony will be part of the 
record.
    I want to assure you that we are going to build on what we 
have heard and see if we can't deal with some of the problems 
that we discussed today.
    Thank you very much.
    [Whereupon, at 11:43 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X

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