[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]




               PERFORMANCE, RESULTS, AND BUDGET DECISIONS

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT EFFICIENCY
                        AND FINANCIAL MANAGEMENT

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 1, 2003

                               __________

                           Serial No. 108-32

                               __________

       Printed for the use of the Committee on Government Reform


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


                                 ______

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                            WASHINGTON : 2003
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma              C.A. ``DUTCH'' RUPPERSBERGER, 
NATHAN DEAL, Georgia                     Maryland
CANDICE S. MILLER, Michigan          ELEANOR HOLMES NORTON, District of 
TIM MURPHY, Pennsylvania                 Columbia
MICHAEL R. TURNER, Ohio              JIM COOPER, Tennessee
JOHN R. CARTER, Texas                CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota                 ------
MARSHA BLACKBURN, Tennessee          BERNARD SANDERS, Vermont 
                                         (Independent)

                       Peter Sirh, Staff Director
                 Melissa Wojciak, Deputy Staff Director
              Randy Kaplan, Senior Counsel/Parliamentarian
                       Teresa Austin, Chief Clerk
              Philip M. Schiliro, Minority Staff Director

     Subcommittee on Government Efficiency and Financial Management

              TODD RUSSELL PLATTS, Pennsylvania, Chairman
MARSHA BLACKBURN, Tennessee          EDOLPHUS TOWNS, New York
STEVEN C. LaTOURETTE, Ohio           PAUL E. KANJORSKI, Pennsylvania
JOHN SULLIVAN, Oklahoma              MAJOR R. OWENS, New York
CANDICE S. MILLER, Michigan          CAROLYN B. MALONEY, New York
MICHAEL R. TURNER, Ohio

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     Mike Hettinger, Staff Director
                 Larry Brady, Professional Staff Member
                          Amy Laudeman, Clerk
          Mark Stephenson, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 1, 2003....................................     1
Statement of:
    McLean, Donna, Assistant Secretary of Transportation for 
      Budget and Programs and Chief Financial Officer, Department 
      of Transportation; Paul Posner, Director, Strategic Issues, 
      U.S. General Accounting Office; and Maurice McTigue, 
      director, government accountability project, Mercatus 
      Center at George Mason University..........................     9
Letters, statements, etc., submitted for the record by:
    McLean, Donna, Assistant Secretary of Transportation for 
      Budget and Programs and Chief Financial Officer, Department 
      of Transportation, prepared statement of...................    12
    McTigue, Maurice, director, government accountability 
      project, Mercatus Center at George Mason University, 
      prepared statement of......................................    47
    Platts, Hon. Todd Russell, a Representative in Congress from 
      the State of Pennsylvania, prepared statement of...........     3
    Posner, Paul, Director, Strategic Issues, U.S. General 
      Accounting Office, prepared statement of...................    21
    Towns, Hon. Edolphus, a Representative in Congress from the 
      State of New York, prepared statement of...................     6

 
               PERFORMANCE, RESULTS, AND BUDGET DECISIONS

                              ----------                              


                         TUESDAY, APRIL 1, 2003

                  House of Representatives,
Subcommittee on Government Efficiency and Financial 
                                        Management,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 2154, Rayburn House Office Building, Hon. Todd Russell 
Platts (chairman of the subcommittee) presiding.
    Present: Representatives Platts, Blackburn, Miller, Towns, 
and Maloney.
    Staff present: Mike Hettinger, staff director; Dan Daly, 
counsel; Larry Brady and Kara Galles, professional staff 
members; Amy Laudeman, clerk; Mark Stephenson, minority 
professional staff member; and Jean Gosa, minority assistant 
clerk.
    Mr. Platts. A quorum being present, this hearing of the 
Subcommittee on Government Efficiency and Financial Management 
will come to order. And we will begin with some opening 
statements and then we will get to the testimony of our 
witnesses.
    Federal Government appropriation decisions have 
traditionally been based on three things: the amount of funding 
that a program received in the previous year, the President's 
request, and the policy preferences of Congress. A more 
appropriate approach, however, is for Congress to focus on 
whether Federal taxpayers are receiving a good return on the 
investment of their hard-earned dollars. Unfortunately, it is a 
longstanding and well-documented fact that many agencies are 
unable to provide substantial tangible evidence of the benefits 
the public receives for the money spent. Today's hearing is the 
second in a series of three hearings on the topic of 
``Governing With Accountability.'' In this hearing we will 
explore the value of the Government Performance and Results Act 
[GPRA], and the Program Assessment Rating Tool [PART], which 
share the goal of attempting to provide the information 
necessary for Congress to make performance-based budgeting 
decisions.
    In 1993, Congress passed GPRA, also known as the Results 
Act. GPRA seeks to tie the funds an agency receives through the 
appropriations process to the agency's annual performance 
results.
    GPRA, however, is only as good as the quality of the goals 
each agency sets for its programs. While some agencies have 
made good use of GPRA, it is unfortunate that some agencies 
still have not set appropriate goals. The performance plans and 
reports required by GPRA have to be more than just a paperwork 
exercise if Congress is going to be able to make informed 
budgeting decisions based on these reports.
    President Bush and his administration should be applauded 
for their strong commitment to tying budget decisions to 
performance. In furtherance of the budget and performance 
integration initiative in the President's Management Agenda, 
OMB has developed the PART. Unlike GPRA, which looks at agency-
wide performance, PART examines the performance of individual 
programs. PART was used for the first time this past year, and 
the PART ratings for 234 Federal programs, representing over 20 
percent of all Federal funding, were published in the fiscal 
year 2004 budget. While PART has the potential to be a very 
valuable tool for appropriators, more than half the programs 
examined receive grades of ``results not demonstrated'' because 
of inadequate performance goals or the lack of data to provide 
evidence of results.
    While GPRA and PART are important tools for measuring 
performance, it is unclear how these tools compliment one 
another. In a recent forum on GPRA and PART, many Federal 
managers expressed frustrations with what they view as two 
overlapping measurement tools. They would much rather see one 
set of measurements with clear guidelines.
    Our witnesses today will certainly provide us with valuable 
input on how Congress can help facilitate improvements in the 
quality of performance information. I am pleased to have with 
us today the Honorable Donna McLean, the Chief Financial 
Officer with the Department of Transportation; Mr. Paul Posner, 
the Director of Strategic Issues at the General Accounting 
Office; and the Honorable Maurice McTigue, who leads the 
Government Accountability Project at the Mercatus Center.
    I look forward to your testimonies regarding the budget and 
performance integration.
    [The prepared statement of Hon. Todd Russell Platts 
follows:]

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[GRAPHIC] [TIFF OMITTED] T8330.002

    Mr. Platts. And I am certainly now pleased to yield to the 
gentleman from New York, our ranking member, Mr. Towns, for the 
purpose of making an opening statement.
    Mr. Towns. Thank you, Chairman Platts, for having this 
hearing today.
    At its most basic level, performance budgeting requires 
linking agency performance information with budgetary 
decisions. When done correctly, performance budgeting would 
allow resources to be allocated according to an agency's stated 
goals and its results in meeting those goals.
    Although the Government has undertaken several different 
management initiatives over the last 50 years, the Government 
Performance and Results Act has the potential to be the first 
to successfully link resources allocation with results. Nearing 
the 10-year anniversary of GPRA, I, along with Chairman Platts, 
have requested the U.S. General Accounting Office to take a 
thorough review of GPRA. I am hopeful the GAO will accept this 
request, and I look forward to reviewing the eventual results.
    As part of the President's Management Agenda, the 
administration has developed its own initiative to integrate 
performance information with budgetary decisions. The Program 
Assessment Rating Tool was used to review about 20 percent of 
all Federal Government's programs for the 2004 budget.
    As I stated in last week's hearing, successful management 
initiatives require a sustained and concerted effort. They must 
survive multiple administrations of different political 
parties. Understanding this, it is critical that performance 
budgeting uses and produces credible, reliable, and objective-
based information. As the GAO stated in its written testimony, 
this type of information can shift budgetary discussions to 
what really matters, ``lives saved, children fed, successful 
transition to self-sufficiently, and individuals lifted out of 
poverty.''
    I am concerned by the potential of some who may try to use 
performance budgeting to further an ideological agenda. For 
example, when evaluating a program that teaches comprehensive 
sexual education to reduce teen pregnancy, the program would be 
negatively evaluated because of its content and not its merits. 
If performance budgeting has any taint of such ideological 
agendas, it will have no credibility whatsoever.
    I look forward to hearing from today's witnesses on the 
progress of both GPRA and the President's budgetary initiative, 
as well as how these two measures can work together.
    On that note, Mr. Chairman, I yield back, and I am anxious 
and eager to hear from the witnesses.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Edolphus Towns follows:]

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    Mr. Platts. Thank you, Mr. Towns, for your opening 
statement.
    Before we bring the witnesses forward, I would just like to 
recognize Ms. Blackburn and Ms. Miller for joining us. I 
appreciate your attendance here today and participation.
    If I could ask our witnesses now to come forward, and we 
will administer the oath. And also any individuals who will be 
assisting, guiding the witnesses as part of their testimony 
here today, if they could also stand to take the oath.
    [Witnesses sworn.]
    Mr. Platts. Thank you.
    And the clerk will note that the witnesses all affirmed the 
oath.
    And I would like to now proceed directly to the testimony, 
so, Ms. McLean, we will begin with you, followed by Mr. Posner 
and Mr. McTigue. The subcommittee certainly appreciates the 
substantive written testimonies that each of you have provided.
    And I think I mentioned, Ms. McLean, I appreciate having 
those ahead of time to be able to do what I call my midnight 
homework, when I do my best work.
    But we have had a chance to review those, and we would just 
ask that you limit your opening testimony to no more than 5 
minutes here today.
    Ms. McLean, if you would like to begin?

      STATEMENTS OF DONNA MCLEAN, ASSISTANT SECRETARY OF 
  TRANSPORTATION FOR BUDGET AND PROGRAMS AND CHIEF FINANCIAL 
 OFFICER, DEPARTMENT OF TRANSPORTATION; PAUL POSNER, DIRECTOR, 
 STRATEGIC ISSUES, U.S. GENERAL ACCOUNTING OFFICE; AND MAURICE 
MCTIGUE, DIRECTOR, GOVERNMENT ACCOUNTABILITY PROJECT, MERCATUS 
               CENTER AT GEORGE MASON UNIVERSITY

    Ms. McLean. Great. Thank you very much.
    Thank you for the opportunity to speak before you today. My 
testimony will address the Budget and Performance Integration 
Initiative and will provide an update on the administration's 
overall efforts to integrate budget and performance. The Budget 
and Performance Integration Initiative is one of five 
governmentwide initiatives instituted by the President. I will 
explain how this Initiative, along with the Program Assessment 
Rating Tool [PART], as you have already discussed, is helping 
us improve our review of the Federal budget.
    The Budget and Performance Integration Initiative is 
intended to build the results-oriented Government envisioned by 
the President by ensuring that Federal resources are directed 
to programs that work and that programs that do not perform are 
either reformed or ended. Through the Budget and Performance 
Integration initiative, we are changing the dialog about 
funding to focus on what can be achieved with the total funding 
a program receives. The administration has developed a traffic 
light grading system to track how well the Federal departments 
and agencies are executing the President's Management Agenda. 
While no ``green'' scores have been achieved in this 
initiative, nine agencies, including the Department of 
Transportation, have earned a ``yellow'' status score.
    To make the relationship between funding and performance 
more transparent and understandable, several agencies have 
begun modifying their preparation and presentation of their 
budgets to clarify how proposed funding relates to performance 
goals and outcomes. At the Department of Transportation, we 
redesigned both the budget preparation process and presentation 
of the budget submissions so that the information on 
performance goals and targets for each program could be 
connected directly into the traditional budget account formats. 
By changing our review process this way, we identified ways to 
enhance the effectiveness of existing programs without 
necessarily requesting additional resources.
    Although we have made significant strides in integrating 
budget and performance data, we also acknowledge that program 
performance results for some Federal programs are still 
uncleared or not measured. The administration has developed the 
PART to improve the quality of performance information overall, 
to inform decisionmaking and, most importantly, to improve 
program performance.
    The PART essentially is a questionnaire that assesses the 
program's purpose, its design, its strategic planning, its 
management, and its results and accountability. It is designed 
so that the burden is on the program to demonstrate 
performance. If there is no solid positive supporting evidence, 
the PART result is deemed not favorable and the program 
receives a lower PART rating. The requirement for evidence 
supports the principle that Federal managers must be 
accountable for effectively designing and managing their 
programs.
    For the 2004 budget, the PART was used to rate the 
performance of 234 Federal programs, covering approximately 20 
percent of the total Federal budget. This first effort 
confirmed a longstanding suspicion: half of the programs 
assessed were unable to demonstrate results. Despite the fact 
that agencies have been reporting on performance under the 
Government Performance and Results Act [GPRA], since 1999, many 
still do not have performance measures that clearly relate 
program goals to outcomes in a way that facilitates 
accountability. The administration's application of the PART 
will improve performance reporting, making it more focused, 
more credible, and more useful.
    It is also important to note that the PART is intended to 
enrich budget analysis, not supplant it. Numerous factors are 
considered when developing a budget: policy goals, economic 
conditions, external factors, and other variables. And they 
will continue to be considered along with performance. So while 
one of the goals of the budget and performance integration 
initiative is to have performance-derived budget decisions, 
there may be cases where a high performing program could not 
achieve improved results with additional funding, and, thus, 
there is no justifiable reason to increase funding.
    In addition to supporting funding decisions, the use of the 
PART also supports management actions and legislative proposals 
included in the President's budget. For example, the PART 
review for the Federal Aviation Administration's Airport 
Improvement Program supported restructuring that we believe 
will strengthen the program's ability to focus Federal 
resources where they have the greatest impact. There are 
similar examples relating to other agencies throughout the 
budget.
    The PART has its shortcomings, but based on a first year's 
experience, the administration believes this process is 
beginning to work and over time will boost the quality of 
Federal programs and provide taxpayers with more and better 
results for their tax dollars. Despite its already significant 
contributions toward integrating budget and performance, the 
PART is still a work in progress.
    Thank you, Mr. Chairman, for inviting me to discuss the 
administration's effort to improve budget and performance 
integration and how the PART process is helping us make 
improvements in the review of Federal programs. Thank you. I 
would be happy to answer any questions.
    [The prepared statement of Ms. McLean follows:]

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    Mr. Platts. Thank you, Ms. McLean, and we will come back to 
the whole panel for questions.
    And I would just note, before we get to Mr. Posner, that in 
our hearing last week on the President's Management Agenda and 
the traffic light approach, that while the Department of 
Transportation is still ``yellow'' or ``red'' in where you are, 
that you are ``green'' in all five governmentwide initiatives 
as far as making progress, and that is great to see.
    Ms. McLean. That is correct. Thank you.
    Mr. Platts. Mr. Posner.
    Mr. Posner. Thank you, Mr. Chairman.
    I want to first talk about the performance of GPRA itself. 
Based on the 60-year checkered history we have with management 
reform initiatives, GPRA's survivability and sustainability is 
truly remarkable; survived two different administrations, a 
strong interest by some in the Congress; and that is a tribute 
to everybody here in the Congress and certainly in the 
executive branch.
    The challenge we face at the 10-year anniversary here is 
that in some ways we are at a crossroad. We built the bridge, 
and we need now to have people walk across it. And so the 
challenge for us is how do we use the wealth of information and 
data, which we still have a long way to go, in decisionmaking 
and in management. That is where GPRA required a link to the 
resources. It is not enough just to do plans and measures; you 
have to figure out a way to link it to the things that really 
matter to people.
    It is always difficult to define strategic goals and 
strategic plans in a broad-based program or agency, even more 
difficult to specify outcomes, but particularly difficult as 
the stakes get large when you apply it to the resources, where 
there are real winners and real losers that are determined 
based on how you define your measures.
    I want to devote my testimony to talk about what is 
performance budgeting and what isn't, and how would we know it 
if we saw it, and how do you sustain this initiative. And the 
very first thing I want to talk about is that frequently the 
management reforms we care most about flounder on the grounds 
of disillusionment because they are premised on the wrong 
expectations.
    One important thing about performance budgeting is it is 
not an automatic process. We can't put the budget on automatic 
pilot and say if a program does well, it gets more money; if it 
does poorly, it gets less money. It doesn't take the judgment 
out of budgeting; in fact, it makes it harder, because the 
stakes get larger when you are talking about outcomes and 
people's lives. That is most important.
    So rather than thinking about performance budgeting as a 
mechanical link, what you have to think about, to me, is what 
you get out of performance budgeting is raising new questions. 
You want to raise performance questions for decisionmakers to 
answer, but there are lots of other things affecting budgeting: 
priorities, needs, equity considerations, and the like. But you 
want to have performance be a factor, and an important factor. 
And when you look at the PART, the administration itself has 
defined this in important ways. And a lot of the results of the 
first year PARTs were not just budgeting, they were management 
reforms in key areas, and that is important to think about so 
that we don't set the bar unrealistically high.
    The second point to sustain this initiative is as you apply 
performance frames to the budget, you have to go in armed with 
credible information, with goals where there is a consensus 
among the stakeholders about what you are trying to do; 
otherwise, the temptation to distort measures is too great as 
you apply it to budgeting. Developing reliable data on 
outcomes, developing good evaluation studies is a long-term 
proposition. We are still, in many agencies, not there yet in 
evaluation. Evaluation is still a field that, compared to other 
management disciplines, is not as strong, and we need a lot of 
work to improve resources, improve the focus that agencies 
place on evaluation of their programs.
    The third key element is sustaining demand. Once we build 
the credible measures, you have to have some use for it, as we 
have said, and this is where PART comes into play; it really 
represents a shift from what someone had called a passive 
strategy of developing plans and hope people use them, to an 
active strategy of force-feeding them into the budget. And that 
is an important issue. We are starting a review for you and 
others on this, and we hope to have some results as we meet 
with OMB and the other agencies.
    The fourth issue is a little less glamorous or less easy to 
summarize, but it is really how we develop an infrastructure of 
performance budgeting to sustain this in the agencies and in 
the budget process itself, and we can talk about this some 
more. But basically I have given you a handout each of you has 
that shows that really there are stovepipe management 
disciplines in each agency that the budget has one set of 
orientations and accounting structures, performance planning 
has a second, and the financial statements have a third. And in 
most agencies these are not connected, these are not 
harmonized, and what we have been doing with GPRA is to figure 
out a way to have these different disciplines talk to each 
other and be cross-walked. And that is a major challenge we 
face in the agencies; it is one where financial managers, 
budgeteers, and planners have to learn to talk to each other so 
that the information across all those disciplines can be shared 
and inform the different enterprises we are talking about.
    The next page illustrates the HUD performance plan and 
budget--the budget accounts are on the left, the performance 
plan goals are on the right. It shows that HUD has better in 
actually showing how many dollars are associated with each of 
their strategic goals. This was not an easy process, but it is 
the kind of thing that has to start taking place for 
performance goals to infuse themselves into the way we make 
budget decisions; and that is really the goal that we are 
seeking here.
    The final point simply is that performance has to 
ultimately, hopefully, inform the way we make budget tradeoffs. 
Once we focus more on outcomes, the goal would be to focus our 
budget toward how we consider related programs and tools, not 
just an individual program, but across many stovepipes and many 
agencies; and, more importantly, how we take programs to their 
base and re-ex-
amine what they are doing, not just the increments, but the 
base itself. Those are two important values that performance 
can lend to making our budget process a more fulsome 
enterprise.
    Thank you.
    [The prepared statement of Mr. Posner follows:]

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    Mr. Platts. Thank you, Mr. Posner. Some excellent points, 
and we do appreciate GAO and your efforts in working with this 
committee as we look to how to take GPRA and PART and kind of 
go forward in a positive way.
    Mr. McTigue.
    Mr. McTigue. Thank you, Mr. Chairman. And thank you for the 
invitation to be here. It is an honor for me, as a visitor to 
your Country, to be able to come and give testimony in front of 
your Congress.
    First, I want to congratulate Congress on the vision that 
it had in 1993 in actually passing into law a statute that 
requires agencies to become accountable for what benefit they 
produce for the public rather than just how they spend money.
    The Congress of the United States exists to bring benefit 
to the American people. That doesn't really need to be said. 
But until recently you pursued that agenda by allocating money 
to certain activities designed to produce a given benefit. 
Accountability for agencies was based on confirming to you that 
the money was indeed spent on the activities you directed. The 
presumption was that the benefit automatically flowed because 
the activities were funded and they occurred.
    The Government Performance and Results Act changed all 
that. Now agencies are required to inform you and the American 
people not only that they spent taxpayers' money as directed, 
but also how much public benefit flowed from the expenditure of 
that money. That is what I would call the first wave of change, 
the establishment by agencies of strategic plans that detailed 
exactly what it was that they were setting out to do and then 
accounting in real terms for the public benefit that they were 
meant to have achieved.
    But the second wave of change is what do you do with that 
information, and the second wave of change, in my view, is just 
starting to occur now; and that came with the introduction of 
the President's Management Agenda, which through its 
initiatives really looks at how do you create successful high-
performance organizations. But there is one particular element 
of that initiative that actually looks at how you prepare 
budgets and requires that they be prepared on a performance 
basis, and that goes to the heart of your inquiry.
    A performance budget requires that the Government know what 
public benefit it wants to produce, and in what quantity. It 
must then purchase the appropriate quantity of activities that 
will produce these benefits. To do this, the Government needs 
to know how successful each program is at achieving its goals, 
and at what cost per unit of success.
    In carrying out this work, OMB has created a new tool, the 
Program Assessment Rating Tool [PART], to assist it in 
establishing the success or lack thereof of each program. It is 
important to remember that PART is only a tool; it is not an 
end in its own right. It will and should change and adapt as 
circumstances demand. Its usefulness should be measured in 
terms of the following factors: does it establish the efficacy 
of the programs; does it identify the cost per unit of success; 
does it compare the utility of programs addressing the same 
goal; and does it identify the consequences of transferring 
funds from ineffective programs to effective programs.
    At its best, a tool like PART will create the effect of a 
number of programs seeking resources from a common pool, with 
the best getting funding and the worst losing their funding. A 
truly effective tool will produce all of the relevant 
information that will allow elected representatives to make 
decisions on the allocation of resources in full knowledge of 
the consequences of their decisions.
    Mr. Chairman, if you wanted to make PART really effective, 
the initiative now lies with Congress, because for it to have 
real effect across the whole of Government organization, 
Congress needs to de-fund programs that are shown to have no 
beneficial effect. And until such time as Congress does de-fund 
programs that are shown to have no beneficial effect, then 
agencies will not pay great attention to anything else that 
happens.
    What recommendations would I make? First, how the programs 
are selected for review is important. Currently, it appears 
that OMB is taking a broad selection of programs across many 
agencies and outcomes. In my view, it would be much better to 
select specific programs and review all of the programs that 
address that particular outcome. For example, all of the 
programs that address literacy should be looked at at the same 
time. All the programs that address poverty should be looked at 
at the same time. All of the programs that address homeland 
security should be looked at at the same time. And then you can 
make a judgment about which of these would produce for you the 
greatest possible benefit for the public at the least possible 
cost. When you are doing that, then I think that you will get 
the greatest impact from both GPRA and from PART and the 
President's Management Initiative.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. McTigue follows:]

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    Mr. Platts. Thank you, Mr. McTigue, for your testimony and 
also the experiences that you bring as a former public official 
yourself to this discussion.
    I want to thank each of you for your testimonies, and we 
will now proceed to questions. And for the most part we will 
kind of stick by the 5-minute rule, with each Member having 5 
minutes for questions, and then once we have completed one 
round, for those who would like, we will gladly continue with 
additional questions.
    I will begin, I guess.
    Ms. McLean, first, you well highlight some of the important 
things that can come from performance-based budgeting and 
reviews, such as examples of where some of the focus has 
allowed us to reorganize a program where we can still perform 
that mission effectively without needing more money, and so 
maybe we didn't save money, but we didn't need to spend more; 
and the focus is on the program, that you have to justify your 
existence, as opposed to just automatically. And, again, I 
think those are important aspects of this review.
    In closing, though, you touched on while there is some 
great progress going forward, you said there are some 
shortcomings to PART, and I was wondering if you would be 
willing to expand on what you think are the most significant 
shortcomings that we can look at for improvement with PART 
itself.
    Ms. McLean. Sure. I think from the Department of 
Transportation's standpoint, one of the biggest problems with 
the PART evaluation was the timing. This year, the first year 
it occurred, it happened right in the last sort of throws of 
our budget review. From a Department, we are already looking at 
what we are going to fund for 2005, and we submit our budget 
request to OMB in September this year for our 2005 request. So 
for the PART process to be effective at the department level, 
it really has to be completed in the summer; and OMB is pushing 
that to be the process, so that we are doing the PART summaries 
earlier so that, again, our decisions on our budget funding and 
our budget restructuring, and if we need to, in this case, the 
Department of Transportation has two large reauthorizations 
pending in 2004. Had we had the PART assessment earlier in the 
summer, we could have used that information better in our 
reauthorization for the Federal Aviation Administration and for 
the surface reauthorization programs.
    That is more of a timing issue than more on a substantive 
issue. I think that it is clear, the more time you understand 
what the requirements of the PART, the more as a department you 
can prepare and be better situated for a favorable PART 
evaluation.
    Obviously, the more we know about the PART, the more we can 
prepare not only for 2005, but 2006. So if the PART changes 
significantly from a department standpoint, I am not able to 
predict what I need to do to be able to have a favorable rating 
in the PART assessment. So while I am looking for improvements 
in some areas, I want to say from a department standpoint 
predictability is very helpful as well.
    Mr. Platts. In using the information and going through the 
PART process with, I want to say Penn. DOT, my State House 
days, with DOT, and you make the reviews, you are going to find 
some good and some bad. What if it is a high priority program 
of the administration with a terrible score, how are you going 
to mesh that, because you say in your testimony it is not an 
automatic?
    Ms. McLean. That is right.
    Mr. Platts. Low score means de-funding.
    Ms. McLean. That is right.
    Mr. Platts. But how do you balance that if the processes 
have credibility that something gets a very low score but 
doesn't see a reduction in funding?
    Ms. McLean. In funding, right. Well, you probably know, but 
the PART has four categories in its grading: program purpose 
and design, strategic planning, program management, and program 
results. And the program results piece is weighted as 50 
percent. So if a program had a poor score, it is probably 
because your actual results are either not measurable or we 
didn't choose reasonable goals, or that the data isn't 
available in a timely fashion or available at all.
    One of our largest programs was reviewed last year, the 
Highway's Federal aid program. We did receive a reasonable 
score, but one of the concerns we had, and I could see other 
programs could have similar problems, which would not be timely 
information.
    In Highways, one of our biggest goals is, of course, 
reducing fatality rates. The information that the Department of 
Transportation gets on fatality rates comes from the States, 
and if the States don't provide us data in a timely fashion, 
then we are downgraded for our PART score because of that data.
    So I would say if we received a very low score on a core 
program, it is probably because of the collection of data or 
the timeliness of that type of results data. So I think I would 
go back and immediately start planning and changing the way we 
collect data. And in this case, in Highways, we may have to 
either encourage the States to provide us data on a more timely 
basis or, in fact, change the way we collect data altogether 
and make it more of a Federal responsibility. That is not what 
I am proposing, I am just saying that could be the thought 
process that happens as a result of a low PART score.
    Mr. Platts. In the initial round of reviews, as agencies 
are going through PART for the first time, that data collection 
may be a problem, but in subsequent years, once it is more in 
place, that should not continue to be a problem.
    Ms. McLean. That is right. You would hope that departments 
would be able to predict. The Department of Transportation is 
working with our OMB counterparts on transportation, saying, 
OK, this is what we are going to review in 2005, and the 
remaining pieces are what we are probably going to review in 
2006. So we should, we, the Department, should be strategically 
looking at that and making sure that our data sources are up to 
date, and if they are not, making those changes now.
    Mr. Platts. Thank you.
    I will now yield to Mr. Towns for the purpose of 
questioning.
    Mr. Towns. Thank you very much, Mr. Chairman.
    Let me start with you, Mr. Posner. You testified that we 
shouldn't expect good scores always to generate more funding 
and low scores to cause less, and, indeed, a review of this 
year's results shows that just over a quarter of the programs 
rated ``ineffective'' receive increased funding over last year, 
while over 10 percent of those rated ``effective'' were cut. 
Why? It seems to me to be an attitude out there that if we 
perform poorly, we will get more money next time around.
    Mr. Posner. Well, this is what I was talking about, about 
our expectations, that it is not a mechanical process. It is 
quite possible and often likely that priorities enter into 
this, as well as performance, so that even though, and the 
administration acknowledges this, programs that got a poor 
rating will still get sustained funding partly because the 
priorities are strong for that particular area.
    That doesn't mean that you simply do nothing. If a program 
gets a poor rating on this, it means you have to take actions 
to improve it. In some cases, as the administration notes in 
the PART, they actually have to put investments to bring 
programs up to snuff, to make them less vulnerable to risk and 
abuse, and things like that; in other cases it is management 
reforms.
    But I think we make a mistake if we just look for funding 
changes as the only measure of how PART does. In fact, if I am 
an advocate for a program, this could actually strengthen my 
program, if I can take those management reforms and make a 
stronger case for next year.
    Mr. Towns. How could PART be strengthened? How could we 
strengthen it?
    Mr. Posner. Well, again, we are just beginning our review, 
but in some other forums several people have talked about one 
important question here, which is how are we selecting the 
programs to be reviewed in the first place.
    Mr. Towns. That was my next question.
    Mr. Posner. And that is an important question to examine. 
For example, there are opportunities to think about going 
forward, selecting programs that relate to one another, as was 
said earlier--say the programs dealing with first responders or 
the programs dealing with highways, to ensure that we select 
suites of programs and tools, including, I would add, tax 
expenditures; not just spending programs, but all the different 
tools we use. For example, the most important way we influence 
low income housing these days is through the tax credit, as 
well as through HUD's programs.
    And so the opportunity would be to select the whole suite 
of programs and tools we have, concentrating on that area.
    Another potential option is to select programs in concert 
with the Congress and with the reauthorization schedule of the 
Congress, so that for the next cycle we gain some better 
integration across Congress and the President in terms of 
agreement on what are the oversight priorities we want to focus 
on for the coming year.
    So those are some of the things.
    I want to commend OMB, I would add. It is very unusual in a 
budget document to have the agency indicate the areas of 
weakness it wants to look into, and OMB in fact has done that, 
and that is commendable.
    Mr. Towns. Thank you very much.
    Let me ask, I guess, OMB. How can we assure the credibility 
of PART initiative for Congress, the agencies and the public; 
and what steps are OMB taking to promote transparency about the 
review process and the budgetary results?
    Ms. McLean. Well, the PART process was developed in a very 
open manner, in my opinion. The PART tool was issued in, I 
believe it was, March of last year for review both for the 
executive branch as well as for interest public groups. The OMB 
developed a performance measurement advisory council, which was 
chaired by Mort Downey, who is a former Government official, 
the Deputy of the Department of Transportation under the last 
administration, and OMB was very open to criticisms, 
corrections, changes at that time.
    Working at the Department of Transportation, we offered 
many comments, and most of them were accepted and integrated 
into the PART process. I suspect they will go through that 
process again; it is on the OMB Web site.
    As far as when we specifically chose programs to review the 
PART process, it was transparent from the standpoint of the 
Department of Transportation and OMB worked very well together 
on choosing what would be the best programs. And as Mr. Posner 
suggested, we did choose two programs, the highway program and 
the aviation grant programs, that were going to be reauthorized 
this year, so we did take those kind of concerns into 
consideration when we were choosing our programs. And then OMB, 
this year, added a new book to their large stack of documents 
that they publish at the release of the President's budget, and 
it is an entire book on exactly what was considered for these 
PART reviews.
    So I think it is very open, and OMB has encouraged us to go 
out and talk to our interest groups. I think the Department of 
Agriculture is working with some of the wildlife conservation 
groups to, in fact, identify what are reasonable performance 
measures. So it is not just the Federal Government saying this 
is our goal, but as an industry or as a group we are deciding 
this is what we want and, in the case of agriculture, what they 
are working on.
    Mr. Towns. I have just a little piece on the back of that, 
Mr. Chairman.
    I guess what I really want to get to, how do you report 
legislative constraints in terms of the kinds of things that 
maybe are roles of third parties? I mean, do you look at all of 
this? Because a lot of times we mess up. And are you prepared 
to point the finger at us if we do mess up? I think that is my 
real question.
    Ms. McLean. Well, I think some of the decisions that were 
made in the President's budget are because perhaps some 
programs that were funded are not being effective. I mean, I 
will give an example of Department of Education's vocational 
education State grant program, where the States are giving 
grants for vocational education programs. Basically, OMB found 
through the PART process, with the Department of Education, 
that there was no proof of an increase of academic performance 
under these programs, job skills were not improved, post-
secondary degrees weren't achieved as a result of this funding. 
In fact, less than 40 percent of the students involved in these 
programs received any additional certification or degrees as a 
result of being part of these grant programs.
    So OMB and the Department of Education did say this is 
ineffective and it received that rating. Now, it received 
slightly less funding, not significantly less; it went from 
about $1.18 billion to a request of $1 billion for 2004 from 
the President's budget. But we are sort of pointing the finger, 
I guess, all around, saying that this program isn't working and 
it needs to be restructured. So the President's budget is 
suggesting that these grant programs be given to the States. 
The States are then given the flexibility to develop the kind 
of vocational training that is effective, and the States are 
required to provide performance data, and if it is not an 
effective program, then it will not receive additional funding.
    So I think that is where we are headed. If we are not 100 
percent there this year, I think in the next couple years you 
will see more and more examples like that.
    Mr. Platts. Thank you, Mr. Towns.
    Now I would like to recognize the subcommittee's vice 
chairperson, Ms. Blackburn, who has led the charge in Tennessee 
at the State level regarding accountability.
    Ms. Blackburn.
    Ms. Blackburn. Thank you, Mr. Chairman.
    Mr. McTigue, I agree with you that we need to begin to de-
fund programs that are not producing any beneficial effect. I 
agree completely, and I congratulate you on having the courage 
to sit in this room and make that statement. I do hope that we, 
as Members of Congress, have the courage to take the pencil out 
and start drawing through line items as we look at the 
budgeting process.
    One question I have quickly for you is you are studying 
GPRA and PART, are you looking at both the actual hard cost of 
a program and the opportunity cost that may or may not be there 
in providing that Government service?
    Mr. McTigue. The answer to your question is yes. We have 
done a number of studies where we have looked at an outcome, 
say, for example, vocational training, and look at all of the 
programs that are called vocational training in one form or 
another. You actually have 45 of them, and for that you 
actually get about 2.8 billion people into work each year. But 
if you looked at those programs and you said which are the most 
successful at getting people into work, and what would happen 
if we actually put the money into the three most successful 
programs, the 2.8 billion people into work becomes something 
like 14 million, by just funding the most successful programs.
    The complaint that I have about PART at this moment, and I 
don't want to be too harsh on it because it is only year one 
and, understandably, OMB has been cautious in the decisions 
that it has drawn from its examination this year, and I think 
that is appropriate, but the thing that I have that I am 
concerned about is that it is not comparing program with 
program; it is actually looking at each program on a standalone 
basis.
    Now, what we really need to know at the end of the day is 
that out of these 75 programs that we fund in this area, there 
are 5 of them that are highly successful, there are 25 of them 
that are moderately successful, and the others have very 
limited success. What would happen if we put the money into the 
five programs that are highly successful? Those are the kind of 
questions that I would want to have answers to if I was a 
politician, because then I could make very rational decisions 
based not upon spending money, but based upon what is going to 
maximize the public benefit; what will help most people learn 
to read, what will help most people get into work, what will 
help most people deal with the problems of hunger. And then if 
I were sitting in your chairs, I would be able to say this mix 
of programs will give us the greatest possible benefit.
    Incidentally, having been a politician, if you have that 
evidence in front of you, it does become possible to cut 
programs that don't work. Without that evidence, it is very 
difficult indeed. But if you can show that public benefit would 
be maximized by taking resources from programs that are 
unsuccessful and putting it into successful programs, then you 
have a politically sustainable debate and you can make 
progress.
    Ms. Blackburn. Thank you, sir. I liked your idea, also your 
comments about grouping all like programs as you go through 
that review.
    And that leads me, Mr. Posner, to a question for you, 
looking at tradeoffs on national goals and reviewing programs 
and reviewing goals. How do you see approaching that and how 
would you go about organizing?
    Mr. Posner. That is a good question. That is related to 
what Mr. McTigue just said, that we fund many groups of related 
initiatives, and oftentimes it is revealing to just simply 
inventory what they are; and to realize it is not just 
discretionary programs, it is mandatory programs, it is loans 
at loan guarantees, it is tax expenditures, increasingly. We 
just did a report on student assistance, where we looked at 
higher education loans, loan guarantees, grants, Hope tax 
credits, learning tax credits. There is this proliferation of 
tools and we never look at them together, and that cuts across 
committees here, that is a challenge for the Congress, and it 
is a challenge for the Government.
    Now, what GPRA provided us is a possible vehicle, it is 
called the Government-wide Performance Plan. We have not 
successfully used that. The past several years we have not even 
published one, and several years before we published a report 
of sorts, where we grouped the 18 missions of Government, they 
are called budget functions. We grouped related programs under 
that, including regulations, tax expenditures; and we at least 
there had an opportunity for the most important related 
programs to talk about what they were achieving, how much it is 
costing, and bump them up against one another. And that is the 
vehicle at the very least that OMB could be pulling together 
once again, and ultimately having to come to the Congress to 
engage you up here in that debate.
    And that is why getting the Congress ultimately involved is 
important, because I think as Mr. Towns acknowledged earlier, 
Congress is fundamentally the author of most of these programs. 
You create them, you design them, and agencies administer them, 
but you are the key players, and somehow getting you into the 
process of identifying where the problems are and helping to 
resolve them is the thing we have to start working toward.
    Ms. Blackburn. Well, and my hope would be is we have enough 
evaluated data coming through this process that we would be 
able to look at that and develop a way to lower the cost of 
administering those collectively.
    Just one quick comment. On page 2 of your report, in your 
historical perspective, I note that you mention failed methods 
of budgeting, and zero-based budgeting as being one of those. I 
am one of those individuals that happens to like that zero-
based budgeting concept. If you will just very quickly comment 
how you would see a performance-based concept working in 
concert with the zero-based concept.
    Mr. Posner. All right. I think, in concept, zero-based 
budgeting is important to do periodically. I think where we 
failed in the mid-1970's is we did it all at once, and we 
imposed a tremendous burden on the process. In fact, that is 
one of the caution lights for PART. One of the things about 
PART that is commendable in this regard is that it targets 20 
percent of those programs. Thinking about how we can target 
zero-based reviews is important, but we have to do this kind of 
base examination; it is a matter of how we target it so we 
don't burden the budget process unnecessarily and doom the 
effort.
    Ms. Blackburn. So what you are saying is that you would use 
as your blanket, your overall performance-based, and then come 
in and, with your troublesome areas, target a zero-based.
    Mr. Posner. A variety of criteria could be used to define 
how you do that. PART applies it to those 230 programs. You 
could group those programs and target it more based on areas 
like job training, homeland security, areas for 
reauthorization, a variety of other ways to think about that.
    Ms. Blackburn. OK, thank you.
    Do I have time for one more question, Mr. Chairman? Thank 
you.
    Ms. McLean, you mention in your testimony that PART has 
impacted your budget decisions, but then you get over in the 
back over here, in your conclusion, and you don't have a lot to 
say about budgeting and lowering cost. Now, two questions for 
you. One, as you look at this being results-oriented, are you 
all looking at penalties that would have an impact in that 
regard? Do you feel like PART may bolster unpopular programs 
that are performing well and do away with unpopular ones that 
are not performing well? And in light of that, looking at 
results and penalties, and your comment was your lack of 
success was a issue of timing. Have you all taken steps to look 
at both a long-range and a short-term program of work and 
subsequent goals that you would expect to meet over, say, an 
18-month or 2-year, 36-month period of time?
    Ms. McLean. At the Department of Transportation we did not 
see significant reductions in our budget as a result of the 
PART process. My understanding is elsewhere in the budget 
process that did happen. The vocational training example I had 
provided before did result in a reduction and a restructuring 
in that budget.
    I think Mr. Posner has said it well, that, there is no 
formula on whether or not, if you get a good grade, do you get 
more money or less money; if you get a bad grade, do you get 
more money or less money. It is a mixture, as well as the 
program ends up being restructured, if possible.
    In the Department of Transportation we did restructure our 
airport improvement program to focus a little more on small and 
medium size airports. That was our proposal and our 
reauthorization for FAA. I think that OMB has been very clear 
about making sure that the PART process is not, while we are 
not calling it penalties because you want to be as positive as 
possible; however, if you are not performing and you do have 
the information that you are not performing in this program, 
then, I don't think OMB has shied away from reducing or asking 
for less money for those programs.
    In preparation, when you are talking about how do we 
prepare for the future in looking at these PART reviews, we are 
looking at our programs that are going to come up here this 
summer and then the following summer, and asking, in our case, 
the Federal Transit Administration, the FAA, etc., if you don't 
have solid data on these programs, we need to go now and start 
getting solid data, collecting it and making sure, verifying 
that our performance measures are accurate.
    The other requirement of PART is that you have independent 
reviews. So if GAO has done a review on your program, or your 
IG has done a review on your program, that is helpful because 
it helps identify whether or not the program is successful. 
Many programs in the Department haven't had any of those kind 
of reviews. So we need to either divert money that we have 
right now to independent reviews of those programs or, explore 
with GAO or the IG if they are going to go through that 
process, because our scores will be downgraded if we don't have 
independent reviews. So that is the type of thing we are doing 
in preparation for the next 2 years in the PART.
    Ms. Blackburn. Would one of your goals be to lower the cost 
of delivering those services?
    Ms. McLean. Absolutely.
    Ms. Blackburn. Thank you.
    Mr. Platts. Thank you, Ms. Blackburn.
    We will begin a new round with those of us here.
    And I am going to come back, a followup, Mr. Posner, a 
question already asked where you touched on was about the 
Government-wide performance plans that were submitted in 
previous years but not in the current budget. And although we 
do have more information, as you acknowledged OMB and kind of 
identifying things they need to work on, I want to make sure I 
understood that you contend or believe that it would be helpful 
having that Government-wide performance plan in place and 
specifically grouping within that plan those like programs so 
we can get to the type of cross-agency comparison?
    Mr. Posner. Oh, absolutely. I think when you are talking 
about outcomes, outcomes are shared by many programs; and to 
have each program defining their piece of it, without looking 
at the whole, is sub-optimal, to say the least, and I think you 
could get a lot of advantage and perspective by doing a plan 
that was actually used. That is one of the things, we have to 
not only prepare the plan, but have it inform the way we make 
decisions, and that is a key issue.
    Mr. Platts. Did GAO have any conversations with OMB about 
how that would continue to have that Government-wide plan? 
Would it be helpful to you and through you for Congress?
    Mr. Posner. Well, we have had in the past, not recently. 
But we have certainly raised it every chance we get in forums 
like this, yes.
    Mr. Platts. Thank you.
    Mr. McTigue, you touched on the importance of this making a 
difference, that it be kind of a longstanding commitment and 
that everybody involved in the process knows it is not just 
going to be this or next year and this administration. Given 
that we have an administration that serves for 4 years and, as 
a strong supporter of President Bush, I hope that means 8 
years, do you think that we should look to legislate PART or 
something similar to PART into GPRA to make it statutory so 
everyone knows this is not going to change with a new 
administration, whenever that may be, but is something that, as 
with GPRA, is going to be permanent in nature, that every 
program is going to have to start to be accountable and bear 
that burden of proof?
    Mr. McTigue. No, Mr. Chairman, I wouldn't recommend 
legislating something like PART. PART is a tool, and a tool, to 
be useful, has to be changed as circumstances change from time 
to time.
    The concept behind PART, though, I think is important, and 
that is actually looking at each activity and requiring that it 
identify exactly what public benefit that it produces. So being 
able to measure activities against outcomes I think is very 
important. And there is a risk that as the mechanisms start to 
become more sophisticated, people get married to the mechanism 
and forget that what you were really trying to do was find out 
are we making progress on eliminating discrimination, are we 
making progress on eliminating hunger, are we making progress 
on making America a safer place to live.
    So being able to ensure that you are getting scrutiny of 
Government based on outcomes, then that is something that is 
worth looking at. How you write that into law is not something 
that I have been able to discover yet, but writing a tool into 
law I think makes it too cumbersome and not flexible enough to 
be able to adapt to circumstances from time to time.
    Mr. Platts. Isn't there the substantial risk, though, that 
when you have that change in administration, that tool is not 
carried forward and all the legwork that has occurred leading 
up to that change is lost?
    Mr. McTigue. I think that, interestingly, if you look at 
the two administrations in the United States that have been 
involved with GPRA, both have adopted very much the same 
policy. If you look at administrations around the world, nobody 
who started on accountability based upon outcomes has gone 
backward, even though a number of governments would be into 
their third or fourth government, with changes of parties, and 
nobody has actually gone backward.
    The reason for that, in my view, is that the public, once 
they have started to get information that tells you how 
successful or how little success there is in different fields 
of endeavor, will not settle for anything less. In this day and 
age, it is not possible to say we are going to govern more in 
secret than we did before; it has to be the current level of 
transparency or more. So I don't think there is a great risk of 
it going backward.
    The last point I would make is that it seems to have been a 
very bipartisan issue in the U.S. Congress. There hasn't been 
divisions along party lines; there has been divisions about 
which programs are working, which programs aren't working. But 
the process itself has not been something that has come under 
particular criticism from either party; it has been a matter of 
have we got better ideas to take this forward, rather than we 
want to go backward.
    Mr. Platts. The premise being kind of that you don't have 
to make it law; changing the mentality of all involved will 
remain whether the administration changes if we change the 
whole thought process and how we are reviewing.
    Mr. Posner. Mr. Platts, if I could just followup on that. 
GPRA is based on law, but it doesn't address PART, and I think 
it is the flexibility that it gave different administrations to 
tailor it for their use that was important.
    I would note as a matter of history, President Reagan 
initiated the regulatory review process within OMB, and that 
was not based in statute, that particular part of it, and yet 
it was carried on by succeeding administrations. So some of 
these things become institutionalized because they add value to 
a variety of presidents for a variety of different reasons. 
This could very well be one of them.
    I do think it is important, though, your point at the 
beginning that sustainability is important to carry this 
forward. The last thing we want is to have people view this as 
a one-time flash in the pan, because the kind of evaluation 
investment you have to make to get a good score is a sustained 
long-term effort, and if agencies perceive they are not going 
to be held repeatedly to this kind of scrutiny, then there is a 
chance that you are not going to have that kind of investment.
    Mr. Platts. Well, recognizing that ideology is part of 
Members of Congress and the President administration, as we go 
forward in the sense of changing the mental thought process, 
but also ensure the credibility of it so that we are all 
embracing and really buying into this approach, how do we guard 
against the concern that it is not used, as Mr. Towns kind of 
referenced in his opening statement, simply for a means of 
doing away with programs that maybe are effective but aren't in 
line with the current administration, or whatever 
administration, or Congress, their priorities, and that it 
remains credible that we are really going to use the 
information for merit-based decisions, not politically 
motivated decisions?
    Any suggestions from any of the three witnesses on how to 
guard against that occurring?
    Ms. McLean. Well, I think the fact that it has been a very 
open process and a questionnaire is available, and that there 
have been open comments received and taken, I think helps the 
process a lot. The fact that it is as open as possible I think 
keeps it clean, let us say, from those kind of influences.
    Mr. Platts. Even though it is an open process, as I think 
Mr. Posner said in his statement, there is a subjective that it 
is not going to be arbitrary; this score means X dollars less 
or whatever, or X dollars more. With the administration doing 
the reviews, even in an open way, what the scores are is still 
subjective. Do you think the transparency of it itself is what 
is going to guarantee more merit-based?
    Ms. McLean. You are right, there is some subjectivity to 
it, and I think it is going to be very hard to get it out. But 
on the other hand, the PART process does collect reviews that 
have already occurred by GAO, by the IGs, by other independent 
sources. That is part of the process, is what have other people 
said about this program. So as long as that is part of the PART 
tool, then I think it will keep it, again, as objective as 
possible.
    Mr. Platts. Mr. McTigue.
    Mr. McTigue. Can I just echo what Ms. McLean said? And that 
is that as long as there is a high level of transparency, it is 
very difficult to cancel something that is successful. PART is 
one of the processes of review, but we have to remember also 
that each agency writes an annual report based upon the year's 
performance as well, where it looks somewhat differently at 
each of its activities. So somebody who wanted to cancel a 
program that was highly successful and brought high benefit to 
the public has to fight two wars: the war inside Congress, 
where people will want to defend a successful program, but also 
the war with the constituency that is going to lose a major 
public benefit that is now open and apparent.
    So I think that those are good defense mechanisms and 
probably better defense mechanisms than successful activities 
you have had in the past.
    Mr. Posner. If I could just add, that congressional 
oversight is important here, and that the study we are doing 
for you, these hearings are important. The more I think that 
Congress can get in the process of selecting and reviewing what 
programs are doing, as well as the various groups that have an 
interest, I think the better off we are going to be.
    Mr. Platts. Thank you.
    Ms. Blackburn.
    Ms. Blackburn. Thank you, Mr. Chairman.
    Actually, Mr. Posner just answered the question that I 
wanted to ask regarding congressional oversight and 
participation, so I will just say I appreciate very much the 
fact that you all have taken your time to go through this with 
us, it is fascinating and I thank you.
    Mr. Platts. Thank you, Ms. Blackburn.
    A few more questions I will try to squeeze in here before 
we have some votes on the floor.
    The GPRA requires, Ms. McLean, that the consultation 
between administration and the House and Senate committees, 
appropriations committees for the appropriate jurisdiction, and 
I was wondering if you could share with us with the Department 
of Transportation what interactions have occurred in the House 
side, the Subcommittee on Transportation, Treasury, and 
Independent Agencies regarding GPRA and specifically the PART 
review that has been done on the four programs in the 
Transportation Department thus far.
    Ms. McLean. Well, the budget and performance integration 
that was required by the President as one of his five 
President's Management Agendas, as I said in my testimony, 
encouraged DOT to sort of restructure our budget request, so 
the appropriation committees this year saw a completely 
different approach to justifying our budget, and that came 
directly from our performance goals set out in our GPRA 
performance report.
    I think that if you look at our budget request from last 
year versus this year on any of the Department's modes, you 
will see a significant difference. We are asking for this 
amount of money for safety, this amount of money for system 
efficiency, this amount of money for security. It is much 
clearer in our request this year than it has been in the past. 
Is it perfect? Absolutely not. I am sure we are going to get a 
lot of back and forth in comments from the appropriations 
committees on ways we can improve.
    Regarding the PART, we had some questions from the 
appropriations committees right as soon as the budget was 
submitted, but since most of our scores in the Department were 
relatively positive, I think that we probably didn't get as 
much questions from both our authorizing committees or our 
appropriations committees. I think that the PART scores that 
have been more criticizing the programs that Congress has been 
supporting, I think that is probably initiative maybe a little 
more animated dialog than here at the Department.
    Mr. Platts. And, Mr. McTigue, a question for you that I 
think I know the answer to, but most of what we are focusing on 
now is evaluating existing programs through GPRA and PART 
specifically to the program. I assume that you would agree that 
having something in place for any new proposal that comes from 
the Congress or from administration should go through something 
very similar, although you don't have outcomes to assess yet, 
but to as best possible determine what the projected outcomes 
are, kind of that cost benefit analysis that the private sector 
does every time they are going to make an expenditure that 
maybe is not as commonly done here as this sounds good, so let 
us run with it.
    I would be interested in your comments.
    Mr. McTigue. Mr. Chairman, I used to chair the cabinet 
expenditure control committee in the government in New Zealand, 
so all new proposals had to come before that committee, and 
this is a process that we used to great effect. Any new 
proposal would have to be able to answer these questions, and 
the first one was what proof is there that the problem actually 
exists and that nobody is currently addressing that problem; 
the second question was what proof have you that your suggested 
remedy will actually solve this problem; and the third one was 
what evidence is there to show that the value produced by 
funding this particular activity would be greater than if those 
resources were used on other high priorities for the 
government; and the last one, but the one that, in my view, was 
most important of the lot was what firm commitment can you give 
us on when this problem will be solved and we won't need to 
fund it any longer.
    And I say that is important, Mr. Chairman, because there is 
a very strong tendency in government to fund the consequences 
of problems without ever looking at the cause. So if you look 
at how do I feed hungry people without looking at how the 
hunger was caused in the first instance, you are going to feed 
hungry people forever. What you should really be looking at was 
what is causing the hunger, and deal with that while you are 
feeding the hungry people so that 1 day you don't have to feed 
them anymore. So asking that question about when is it going to 
be solved is very important.
    Now, when you have done those things, you really do a good 
analysis of the benefit that you are going to get, and the cost 
will be known.
    Mr. Platts. I don't remember seeing those questions as part 
of your written testimony, but they well encapsulate the 
approach we do need to take. And if they weren't in the written 
testimony, which I don't remember seeing, if you could share a 
copy of those with us.
    Mr. McTigue. No, they are not in my written testimony, Mr. 
Chairman, but I have them here, and I will give them to your 
committee.
    Mr. Platts. And your concluding one certainly I think the 
analogy to how to feed the hungry, just giving them food or 
teaching them good agricultural skills or other tools to feed 
themselves, is a great analogy. But your first question really 
goes to that cross-agency comparison, yes, this is a need, but 
is there a program already out there that should be addressing 
this rather than reinventing the wheel.
    Mr. McTigue. Well, sometimes, Mr. Chairman, it is not just 
inside government; there may well be people in the voluntary 
sector of society or in the private sector that are already 
dealing with that problem, and you don't want to duplicate it 
if it is already being dealt with effectively.
    Mr. Platts. Thank you.
    I have a couple more, but I want to make sure, Ms. 
Blackburn, you didn't have any other questions.
    Ms. Blackburn. No.
    Mr. Platts. OK, great.
    Mr. Posner, you recommended that Congress should consider 
adopting an annual congressional performance resolution similar 
to our budget resolution. I was wondering if you could expand 
somewhat.
    Mr. Posner. This is a way for Congress to become more 
focused on a performance from a Government-wide standpoint. 
Basically, what we see is Congress has various committees and 
subcommittees. The administration defines a performance agenda, 
essentially, as they have done through PART, as they do through 
the performance plans of the agencies. What we would like to 
see ultimately is for Congress to have a vehicle to come 
together and prioritize what programs are really needing 
oversight in a given year, and to work in concert with the 
administration, as I suggested earlier, for example, in 
selecting PART programs at the outset that satisfy the needs of 
both sides; and ultimately directing congressional oversight 
and possibly GAO studies, among other things, to those areas 
that are of the most concern from a performance perspective.
    We have seen something like this happening in Arizona, for 
example, as part of a new biannual budget process that they 
have introduced, where every year or every other year the 
legislature gets together and focused on some priority areas 
for attention.
    And so the idea is to have Congress be able to address kind 
of broader, cross-cutting performance issues. The budget 
resolution is the one annual time the Congress considers 
everything together, and so the idea was whether there was a 
possibility of integrating that. It needs some more thinking 
and discussion, but it is that notion.
    Mr. Platts. Are you suggesting maybe, though, not a kind of 
shotgun approach, but more of a targeted approach, that we look 
at similar to what has been done in the step kind of the 
phased-in PART process, that each year I know GAO does the at-
risk agencies, and within those each year select a certain 
number to have as part of a performance-driven resolution?
    Mr. Posner. To really drill down and recognize that 
addressing, say, Medicare or other issues requires the work of 
many committees up here; and that is the notion that addressing 
these things or addressing some of the cross-cutting programs, 
say in job training, and making sure when you do that you are 
grouping those programs together that address the same target 
populations, such as the job training for the hard-core and the 
job training for veterans. The key is making sure that you 
think about this in a more comprehensive way than we are 
normally accustomed to doing, and including all of the tools, 
we talked about tax expenditures, loans, that are typically 
authorized by different committees, and thinking about a way to 
cut across that.
    Mr. Platts. Kind of a followup to that, in going to the 
credibility of the PART process, do you envision or think that 
GAO or perhaps the inspector generals of the various agencies 
should play some sort of auditing role in the PART? I mean, 
because the PART is going to give us a lot of that information 
on the programs, but it is being given by the executive branch 
that is making decisions of what they want to propose in the 
budget. So should the inspector generals themselves, or GAO on 
behalf of Congress, play a kind of an auditing role to maintain 
that credibility?
    Mr. Posner. Yes, I think possibly in two respects. And I 
think of audit in the broader, not the narrower, sense. First 
of all, kind of validating the performance information and the 
judgments that were made in that tool and, second, providing 
you with information on the other performance issues and 
problems that are out there that may not have been captured by 
a given PART exercise.
    Mr. Platts. I would be interested, actually, Mr. McTigue, 
and it may be difficult for Ms. McLean, on that question about 
the auditing of PART by GAO or the inspector generals officers, 
if either one of you have thoughts you want to share.
    Ms. McLean. If I could add. I think one of the good things 
about the PART process is we are trying to look at all 
programs, be it good or bad. We are not targeting problem 
projects, we are basically going to be targeting all projects 
just through a phased-in process. I think that maybe this is an 
incorrect view of GAO and the IG, but they typically get asked 
to do audits on problems, areas where we have concerns, and so 
they don't necessarily do the audits on programs that are being 
successful.
    And if you want to do what Mr. McTigue was saying, which 
was basically, let us look at the programs that are successful, 
and if we have overlapping programs, let us put the money in 
those successful programs. Having GAO and the IG as part of the 
PART process, informally or formally, I think would encourage, 
perhaps, some of these more positive programs to also have 
audits.
    I know that is a generalization of what GAO and the IGs do, 
but I would say if we probably stack the reports positive 
versus negative, we might have a little bit less of an equal 
balance.
    Mr. Platts. Mr. McTigue.
    Mr. McTigue. Thank you. I agree with Ms. McLean, that we do 
something rather strange in government, and that is that we 
spend nearly all of our time looking at the things that went 
wrong; whereas, if you were in private industry, what you would 
look at were the things that were successful and see how you 
could expand that success. So you spend sort of three-quarters 
of the time looking at 5 percent of the activity; whereas, if 
you spent some of that time looking at the 75 to 80 percent 
that performs well, you may be able to significantly expand 
that performance.
    About PART and the auditing of PART, I think that this is 
highly commendable, the fact that it is so transparent. If 
there was any loss of that transparency, I would start to 
become concerned. The fact that OMB is prepared to put all the 
information out at the moment is something that makes it 
defendable.
    What I think, though, is that the utility of PART is only 
just beginning. I think that it is probably a crude tool at the 
moment, and it can be significantly more sophisticated and more 
appropriate. But if you are going to start to use it to look at 
outcomes, I think you would design it differently, because you 
wouldn't be looking at each program on its own merits, you 
would be looking at a particular outcome and seeking which of 
those programs, even though they were dissimilar in nature, 
were having the greatest impact on diminishing or eliminating 
hunger, whatever the outcome was. And so the tool might look 
different if you were going to do it that way.
    I think we are in the experimental stage at the moment, and 
cementing anything in during the experimental stage I think 
would be dangerous, except there are some principles at stake 
that I think that are very important to pursue. One of those 
principles is the openness and transparency that we currently 
have; the second is that move toward looking at the results or 
the outcomes, instead of looking at the activity. And what we 
are trying to do is identify the most successful activities and 
seeing that they are not minimized by lack of resources when 
there is something else chewing up resources that is really 
currently ineffectual.
    Mr. Platts. I am going to maybe do two more questions, 
because I think we are going to have votes here in about 10 
minutes.
    And I appreciate your time as well, being very valuable.
    As we go forward and try to fine-tune, and I think your 
comment, Mr. McTigue, that we are kind of in that experimental, 
developmental stage, and so we are somewhat cautious, I want to 
make sure as we move forward to this coming fiscal year, and 
one of the things you talked about, Ms. McLean, was having more 
time to have it really mean something for your Department as we 
try to address those shortcomings, as we do the next 20 percent 
for the next fiscal year, the 20 percent that were done this 
year, how are those going to continue to be evaluated? Are we 
going to build on the initial 20 percent and as we go to 100, 
that we have everybody kind of on a regular process annually? 
Is that initial 20 percent now every year going to have the 
same amount of scrutiny, or less until we get through 
everybody?
    Ms. McLean. Yes and no. I think OMB, again, is still trying 
to set that up, and as we understand it, what is going to 
happen is if there has been any changes in your last year's 
PART scores, you can present suggested adjustments to your 
score. So, in other words, if part of your problem was you 
didn't have data or acceptable goals, you have this year to 
improve that and come back and basically sort of appeal your 
grading and try to improve the program. But if you have nothing 
to say, no improvements, or it was moderately effective or 
effective and you choose not to adjust it, then the PART score 
stands, unless there was some independent review that would 
significantly adjust that score.
    So I think it is a little bit of both. We are not ignoring 
last year's scores, but I think we are given an opportunity, if 
we want to, to improve them.
    Mr. Platts. And the challenge for many of those having been 
the lack of information for the original 20 percent, is it fair 
that every program out there should be on notice that if they 
don't have the information to make their case, that they better 
be working on it?
    Ms. McLean. That is right. The results ``not demonstrated'' 
grade is not one I would strive for. So I think it is pretty 
clear this year that if you have programs out there that you 
are not collecting data on, and you were successful in not 
having them part of last year's review, either get the data or 
try to push it to next year, because you need time to collect 
that information and get it on record.
    The Department had sort of an interesting experience last 
year. Unfortunately, after the events of September 11th, the 
Department was responsible for establishing the Transportation 
Security Administration [TSA], and so we were facing what Mr. 
McTigue was talking about regarding how do you evaluate a 
program that is new that we have no goals for. And what we 
chose to do was to first put out our output goals and then deal 
with our outcome goals later. So, in other words, TSA, the 
Congress required that we have all Federal agencies in place a 
year after for screening of passengers at airports, have them 
all in place in 1 year. So that was more of an output goal, and 
that is what we said that is what we are going to measure 
ourselves with. And then as we collect data we would then have 
more specific outcome measures. But obviously that has now been 
transferred to the Department of Homeland Security, so I am 
sure they will be coming to you with outcome goals shortly.
    Mr. Platts. The decision of what the next 20 percent are, 
and kind of everyone being on notice, you don't want to have 
that, hey, we don't know, what is the timeframe? We heard you 
say it should be earlier, but my understanding is it has not 
yet been identified what 20 percent.
    Ms. McLean. Right.
    Mr. Platts. Is that going to be the case kind of each year 
purposeful, so that agencies don't think, hey, I am in the 
fifth round, so I don't have to worry about it for another 
several years, or I need to get on board now?
    Ms. McLean. Well, I think the goal is to have all of your 
programs reviewed, if not in the 2005 budget, in the 2006 
budget. So by the 2006 budget you should have all your programs 
reviewed. That is at least our message from OMB on the 
Department of Transportation. So next year we are working with 
OMB, and we almost have settled internally what we are going to 
be reviewing for 2005, but I am not sure what OMB's plans are 
as far as announcing what those are. I am sure there are other 
departments that are having a much harder time than we are with 
their OMB counterparts and identifying those programs, so I am 
not sure what schedule other departments are on.
    Mr. Platts. And hopefully it goes kind of back to that 
change in thought process that we are all looking ahead, 
whether this year, next year, that we are all starting to be 
prepared to be more definitive in what our mission is and how 
we are achieving it.
    Ms. McLean. That is right. I know for our Secretary, for 
Secretary Mineta, having an even ``moderately effective'' is 
something he doesn't want to see in his budget, to have 
something ineffective or have ``results not demonstrated.'' 
These are things, really, the President mentions to the 
Secretaries, and so it is something that the Secretaries are 
focused on because, when you get a grade, C is not acceptable; 
you want to have As. So the departments are really focused on 
it.
    Mr. Posner. Mr. Chairman, if I could just add to that. I 
think that is a good illustration of what our theories of 
change need to take into account, that frequently we think if 
you don't get rewarded or you do get rewarded with budget 
changes, that is the main hammer, when in fact I think we often 
overlook the power of, for want of a better word, shame to 
motivate change.
    The CFO Act was passed in 1990. We now have 21 agencies 
with a clean opinion, albeit they have a long way to go with 
their financial systems; and you will hear more about that, as 
I understand, later. But I think the point is there hasn't been 
a budget hammer that has been hanging over agencies' head. What 
has been hanging over them is a fear of embarrassment, and I 
think public transparency is an important way we achieve change 
on these issues.
    Ms. McLean. And just the ``red,'' ``yellow,'' ``green.'' 
The fact that you complimented the Department of Transportation 
at the beginning of this hearing, the President said the same 
thing to Secretary Mineta in one of the cabinet meetings. So, 
if you are not getting that sort of positive feedback from your 
boss, it makes a difference.
    Mr. Platts. You are not going to want to go to those 
cabinet meetings anymore.
    Ms. McLean. That is right.
    Mr. Platts. And I think that is something we heard last 
week from our testifiers in the broad sense of the President's 
Management Agenda, is having an administration that is willing 
to kind of grab the bull by the horns, saying, listen, we have 
GPRA, we have an ox, put it in use and make it happen. And we 
certainly have an administration that is seeking to do that, 
and that took a comment that the President is taking note of 
who has green lights and advancing, and who is not, goes to a 
little bit of that shame in the sense of you are the 
President's appointee; you don't want to be showing up with red 
lights all the time.
    Ms. McLean. That is right.
    Mr. Platts. Mr. McTigue.
    Mr. McTigue. Mr. Chairman, I think it is important, if you 
are going to go through sort of 20 percent of programmatic 
activity each year, that those programs that have been through 
the review process this year should not be allowed to slip back 
in subsequent years. And part of that process should set 
standards for those programs of accounting and tasks that have 
to be completed, and they must be kept up to those standards, 
otherwise you are just going to have a 5-year cycle when people 
are going to have to perform one year and then drop back.
    So I think a strategy that sees that everybody is 
maintaining the standards that they have been brought up to so 
that it is a continual improvement, rather than 1 year of 
accountability and then 4 years of forgiveness, it is possible.
    Mr. Platts. And it sounds like OMB is trying to figure out 
the manpower of doing the next 20 percent, but without losing 
ground on the ones you have already done.
    Ms. McLean. That is right, how to incorporate that.
    Mr. Platts. Because otherwise what you did up front has 
less benefit long-term.
    Mr. McTigue. Exactly.
    Mr. Platts. Before I make a brief closing statement and 
comments, would any of you like to summarize anything that we 
specifically, Members of Congress and this committee, should 
look at, whether it be from an oversight role or specific 
legislative changes to GPRA or anything else that you would 
encourage us to take on?
    Ms. McLean. No, sir.
    Mr. Platts. All right, I want to thank each of you for the 
time you have invested in preparing for today's hearing and the 
comments you have shared. I know the staff back here are taking 
notes and will probably followup with you as we continue to 
move through the process of trying to focus more on 
accountability as the oversight responsibility of this 
subcommittee, and wish you well with your efforts really within 
the agencies, Transportation, GAO, working with us to help us 
make more informed decisions.
    And certainly, Mr. McTigue, your efforts at the Center, and 
providing an outside perspective on what we are doing right or 
doing wrong, especially given your own personal experience and 
what that brings to the table.
    I would also like to recognize our staff, both on the 
majority and minority side, for their efforts. We have Mike 
Hettinger, our staff director; Dan Daly, counsel; our 
professional staff, Larry Brady and Kara Galles, and Amy 
Laudeman, the majority clerk; and on the minority side our 
professional staff member, Mark Stephenson; chief clerk Earley 
Green; deputy clerk Jean Gosa; and also our court reporters for 
their efforts.
    Although there is much work to be done and we acknowledge 
and I appreciate the frankness in our testimony, including, Ms. 
McLean, your support for PART but acknowledging there are some 
shortcomings that we need to fine-tune, as you said, for your 
own timeframe, and then also as we talked about the 
continuation, the annual process that we will now go through, 
we certainly are heading in the right direction, and that is 
largely due to, I think, GPRA kind of coming into its own now. 
And Mr. McTigue and I have talked about how it is 10 years, but 
really 4 or 5 years into the substance of what it is requiring. 
But now with the President's Management Agenda, those working 
together are going to allow us to make good progress. Certainly 
this committee continues to look forward to working with all 
parties in making that accountability happen for the good of 
our taxpayers and for the good of the recipients of those 
services being provided by each of the programs we fund.
    We will hold the record open for 2 weeks from this date for 
those who may want to forward submissions for possible 
inclusion, and this meeting stands adjourned.
    [Whereupon, at 3:28 p.m., the subcommittee was adjourned, 
to reconvene at the call of the Chair.]

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