[Senate Hearing 109-353]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-353
 
            ACCOUNTABILITY AND RESULTS IN FEDERAL BUDGETING

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

                                HEARING

                               before the

                FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
                     INFORMATION, AND INTERNATIONAL
                         SECURITY SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 14, 2005

                               __________



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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia

           Michael D. Bopp, Staff Director and Chief Counsel
   Joyce A. Rechtschaffen, Minority Staff Director and Chief Counsel
                      Trina D. Tyrer, Chief Clerk


FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, AND INTERNATIONAL 
                         SECURITY SUBCOMMITTEE

                     TOM COBURN, Oklahoma, Chairman
TED STEVENS, Alaska                  THOMAS CARPER, Delaware
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
LINCOLN D. CHAFEE, Rhode Island      DANIEL K. AKAKA, Hawaii
ROBERT F. BENNETT, Utah              MARK DAYTON, Minnesota
PETE V. DOMENICI, New Mexico         FRANK LAUTENBERG, New Jersey
JOHN W. WARNER, Virginia             MARK PRYOR, Arkansas

                      Katy French, Staff Director
                   Sean Davis, Legislative Assistant
                 Sheila Murphy, Minority Staff Director
            John Kilvington, Minority Deputy Staff Director
                       Liz Scranton, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Coburn...............................................     1
    Senator Lautenberg...........................................     5
    Senator Carper...............................................    13

                               WITNESSES
                         Tuesday, June 14, 2005

Hon. David M. Walker, Comptroller General of the United States, 
  U.S. Government Accountability Office..........................     3
Hon. Clay Johnson, III, Deputy Director for Management, Office of 
  Management and Budget..........................................     4
Eileen Norcross, M.A., Research Fellow, Government Accountability 
  Project, The Mercatus Center of George Mason University........    22
Beryl A. Radin, Ph.D., Professor of Government and Public 
  Administration, University of Baltimore........................    24

                     Alphabetical List of Witnesses

Johnson, Hon. Clay, III:
    Testimony....................................................     4
    Prepared statement...........................................    56
Norcross, Eileen, M.S.:
    Testimony....................................................    22
    Prepared statement...........................................    60
Radin, Beryl A., Ph.D.:
    Testimony....................................................    24
    Prepared statement...........................................    74
Walker, Hon. David M.:
    Testimony....................................................     3
    Prepared statement...........................................    33

                                APPENDIX

Questions and responses for the Record from:
    Mr. Walker...................................................    78
    Mr. Johnson..................................................    81
    Ms. Radin....................................................    83
``An Analysis of the Office of Management and Budget's Program 
  Assessment Rating Tool (PART),'' June 2005, by Eileen C. 
  Norcross, Mercatus Center, George Mason University.............    87


            ACCOUNTABILITY AND RESULTS IN FEDERAL BUDGETING

                              ----------                              


                         TUESDAY, JUNE 14, 2005

                                     U.S. Senate,  
        Subcommittee on Federal Financial Management,      
    Government Information, and International Security,    
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2 p.m., in 
room 562, Dirksen Senate Office Building, Hon. Tom Coburn, 
Chairman of the Subcommittee, presiding.
    Present: Senators Coburn, Carper, and Lautenberg.

              OPENING STATEMENT OF SENATOR COBURN

    Senator Coburn. The Subcommittee will come to order. This 
hearing today is on Accountability and Results in Federal 
Budgeting. The Federal Government is expected to spend $2.5 
trillion in the next fiscal year, which comes to $22,000 per 
family in the United States, a significant sum. While the first 
hearing of this Subcommittee focused broadly on the President's 
Management Agenda, also known as PMA, today, we will more 
specifically discuss efforts to increase accountability in 
Federal budgeting--accountability as seen through transparency, 
on-time reports, evaluation, and assessment.
    As part of the PMA, OMB released in 2003 the Program 
Assessment Rating Tool, or PART. Used to evaluate the design, 
goals, and performance of Federal programs, PART seeks to find 
ways to ultimately improve overall performance through the 
format of a basic questionnaire and evaluation of that. Thus 
far, PART has been used to evaluate 607 Federal Government 
programs, roughly 60 percent of the Federal budget. Of these 
607 programs, 15 percent have been rated effective, less than 
90; 26 percent moderately effective; 4 percent ineffective; 29 
percent could not demonstrate results, and 26 percent, 
adequate.
    That last number that I gave you, the 29 percent that could 
not demonstrate results, it was almost a third of the Federal 
Government's programs.
    We will also discuss today the latest iteration of OMB's 
scorecard, which is a set of quarterly grades for each Federal 
agency. Ratings of red, yellow, and green are given to each 
agency for each of five initiatives: Human capital, competitive 
sourcing, financial performance, e-government, and budget and 
performance integration. Ratings are given for both current 
status and progress in implementing the PMA, the President's 
Management Agenda.
    When the first scorecard was issued in June 2002, only 4 
agencies received yellow current status ratings for their 
budget performance and integration, while the remaining 22 
agencies all received red ratings. In the latest scorecard, 6 
agencies have red ratings, 12 have yellow ratings, and 8 have 
green current ratings for budget performance and integration. 
While the latest of these scores are encouraging, they also 
demonstrate that the Federal Government has a lot to do when it 
comes to managing the way it spends the taxpayers' money.
    As part of the President's budget proposal for fiscal year 
2006, OMB released a list of roughly 150 discretionary programs 
for which it proposed either reduced funding or complete 
elimination. The termination of many of these programs has been 
proposed before. For example, the OMB proposed the termination 
of the Advanced Technology Program four separate times. The 
termination of earmarks for the Centers for Disease Control and 
Prevention was proposed not only in fiscal year 2006, but in 
2002, 2003, 2004, and 2005, as well. The termination of the 
program for Community Technology Centers has been proposed six 
separate times.
    It is absolutely stunning that we continue to fund programs 
that time after time, year after year, fail to produce positive 
results or measurable results. I hope we will hear substantive 
proposals today to either terminate or measurably reform these 
programs.
    We are pleased to have with us today representatives from 
both government and academia. On our first panel, the Hon. 
David Walker, Comptroller General of the Government 
Accountability Office, and the Hon. Clay Johnson, III, the 
Deputy Director for Management at the Office of Management and 
Budget, will give us their perspective on efforts to increase 
accountability and ultimately improve results in Federal 
budgeting.
    We are also privileged to have on our second panel Eileen 
Norcross, a Research Fellow with George Mason University and 
The Mercatus Center, and Beryl Radin, a professor of Government 
and Public Administration at the University of Baltimore. They 
will both give us a helpful non-governmental perspective on the 
effect of government accountability efforts.
    Our Ranking Member, Senator Carper, will be here in a 
moment. We will ask him for his opening statement at that time. 
At the present time, I would like to introduce our witnesses. 
Our first witness is the Hon. David Walker, Comptroller General 
of the United States. Mr. Walker began his 15-year term as the 
Nation's chief accountability officer and was appointed in 1998 
as the head of the then-General Accounting Office, now referred 
to as the Government Accountability Office. Through his role as 
Comptroller General, Mr. Walker oversees GAO's work to improve 
the performance and accountability of the Federal Government, 
including measures to improve the efficient and effective use 
of taxpayer dollars.
    Our second witness on the first panel today is the Hon. 
Clay Johnson, III, Deputy Director of Management for the Office 
of Management and Budget. In this role, Mr. Johnson provides 
government-wide leadership to the Executive Branch agencies to 
improve the agency and program performance. Prior to this 
position, Mr. Johnson served as Assistant to the President for 
Presidential personnel and as the Executive Director of the 
Bush-Cheney transition team.
    I would like to thank both Mr. Walker and Mr. Johnson for 
being here. They have been here before and will be here again. 
We are very pleased with your work, and I would note that your 
submitted statements will be made a part of the record and you 
will each be recognized for 5 minutes.
    Mr. Walker.

 TESTIMONY OF HON. DAVID M. WALKER,\1\ COMPTROLLER GENERAL OF 
    THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Walker. Thank you, Mr. Chairman. It is a pleasure to be 
back before this Subcommittee. I appreciate your commitment to 
improving government performance and ensuring accountability 
for the American people. I thank you for including my entire 
statement into the record. I will now move to summarize it.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Walker appears in the Appendix on 
page 33.
---------------------------------------------------------------------------
    I am pleased to come here before the Subcommittee today to 
talk about the concept of performance budgeting in general and 
the Office of Management and Budget's Program Assessment Rating 
Tool, or PART, in particular. As you know, Mr. Chairman, our 
Nation is currently on an unsustainable fiscal path. I have two 
graphics that I would like to refamiliarize you and the other 
Members and key staff with.\2\
---------------------------------------------------------------------------
    \2\ The graphics referred to in Mr. Walkers prepared statement 
appear in the Appendix on pages 39 and 40 respectively.
---------------------------------------------------------------------------
    Both are based upon GAO's long-range budget simulations. 
This first one is based on CBO's 10-year baseline projections 
and the requirements that CBO, by law, must comply with. Those 
requirements, among other things, include: (1) no new laws will 
be passed in the next 10 years, (2) all expiring tax cuts will, 
in fact, sunset, and (3) discretionary spending will grow by 
the rate of inflation during the next 10 years, and (4), that 
the alternative minimum tax will not be fixed.
    Mr. Chairman, I have asked individuals in every speech that 
I have given in the last 2 months whether or not they believe 
any of those four assumptions are true, and so far, I have less 
than ten out of several thousand that believe that those 
assumptions are reasonable. Unfortunately, this is the basis 
Congress is using to make decisions.
    The next chart demonstrates what an alternative scenario 
would look like if all expiring tax cuts are made permanent and 
if discretionary spending grows by the rate of the economy 
during the entire period. It is clearly a very dramatic and 
unacceptable outcome.
    As a result, it is critically important that a fundamental 
reexamination of major spending and tax policies and priorities 
be undertaken in order to recapture our fiscal flexibility for 
the future and address key social, economic, and security 
changes and challenges in the 21st Century. Clearly, 
performance budgeting holds promise as part of a fundamental 
reexamination of the basis of the Federal Government. Existing 
performance budgeting efforts, such as the Government 
Performance and Results Act (GPRA), and PART, (or the Program 
Assessment Rating Tool), can provide a foundation for a 
baseline review of existing Federal policies, programs, 
functions, and activities.
    As I testified before this Subcommittee in April, the 
President's Management Agenda and its related initiatives, 
including PART, demonstrate the Administration's commitment to 
improving not only Federal financial management but also 
overall management while enhancing government performance. 
However, it is not clear that PART has had any significant 
impact on Congressional authorization, appropriations, and 
oversight activities to date.
    In our view, there are three key factors that we believe 
are critical to sustaining successful performance budgeting 
over time. One, we have to build a supply of credible 
performance information. Two, we have to encourage demand for 
that information and its use in Congressional processes by 
garnering stakeholder buy-in. And three, we need to take a 
comprehensive and cross-cutting approach to assessing related 
programs and policies which must be not just vertical, but 
horizontal, and must consider not just spending, but also tax 
policies and preferences.
    The Federal Government is in a period of profound 
transition. We face an array of changes, challenges, and 
opportunities to enhance performance and assure accountability. 
Much is at stake in the development of a collaborative 
performance budgeting process. This is an opportune time for 
the Executive Branch and the Congress to consider and discuss 
how agencies and committees can best take advantage of and 
leverage the new information and perspectives coming from the 
reform agenda currently underway. Some program improvements can 
come solely through Executive Branch action, but for PART to 
meet its intended goal, there must be greater buy-in by the 
Congress, which to date has not been forthcoming.
    I would be happy to answer any questions that you and the 
other Members of the Subcommittee may have, Mr. Chairman. Thank 
you.
    Senator Coburn. Thank you, Mr. Walker. Mr. Johnson.

  TESTIMONY OF HON. CLAY JOHNSON, III,\1\ DEPUTY DIRECTOR FOR 
          MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET

    Mr. Johnson. Mr. Chairman, Senator Lautenberg, thank you. I 
contend that agencies are better managed today, and they are 
more focused on results than ever before. But we are not as 
focused on results as we can and need to be.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Johnson appears in the Appendix 
on page 56.
---------------------------------------------------------------------------
    Agencies are assessing program performance with the PART 
instrument and using this information to inform management and 
budget actions. The Administration is proposing Sunset and 
Results Commissions legislation to involve Congress more 
directly in holding agencies accountable for results.
    Some say the PART assessments have not had any impact on 
authorizations, appropriations, or oversight. To that, I say it 
has had some impact, but clearly, we can do a better job 
convincing Congress of the usefulness of performance 
information. I point out that this effort was designed to span 
5 years. Only this past year did we assess programs accounting 
for more than 50 percent of the budget. We are only in the 
fourth year of a 5-year effort, and there is more attention 
being paid this year than last.
    Some would also say that PART assumes that each program has 
one goal and that all programs are alike. To that, I say all 
programs are alike in that they should be able to account for 
what taxpayers are getting for their money. Most importantly, I 
point out, though, that the PART asks unique questions for 
different kinds of programs. They ask unique questions for 
competitive grant programs, block grant programs, regulatory-
based programs, capital asset programs, credit programs, and 
research and development programs.
    Some say that good performance data is hard to come by. I 
agree, but shame on us if we are not always looking for the 
best way, no matter how imperfect, to measure what our programs 
do, and what outcomes they achieve.
    And some say that the Results and Sunset Commissions that 
we are about to propose are ways to get rid of programs we do 
not like. To that, I say we want programs to work. The history 
of Sunset Commissions and similar programs is that they are 
much more apt to drive program improvement than they are to 
result in program elimination.
    We all want to get more for the money we spend. The biggest 
opportunity is to get programs to work better. Yes, we debate 
in the preparation of our budgets and in appropriations 
legislation on whether to eliminate $5 or $10 billion of 
programs or how else to spend it, but this pales in comparison 
to the $20-plus billion associated with every 1 percent 
improvement in performance. The most significant opportunity we 
have is to drive better program performance.
    We believe that the PART now, and the soon to be proposed 
Sunset and Results Commissions, help us achieve these savings 
for the taxpayers. They help us focus on results. Thank you.
    Senator Coburn. Thank you, Mr. Johnson.
    Senator Lautenberg, would you like to make an opening 
statement.

            OPENING STATEMENT OF SENATOR LAUTENBERG

    Senator Lautenberg. Thank you very much, Mr. Chairman. 
Forgive my tardiness. I am sorry that I missed the Subcommittee 
meeting that you had, but it was impossible to be back here 
from distant travel.
    I do thank you for convening this hearing, and thanks also 
for giving us an opportunity to discuss the issue. Mr. 
Chairman, I think everyone knows I came out of the business 
community, and before I arrived in the Senate, when I left that 
company 23 years ago, we had 16,000 employees and the cardinal 
principle was to make sure everybody carried their share and we 
held them accountable. As a result of that kind of supervision, 
we had a really successful career as a company and it continued 
on way past my chairmanship, so apparently I got them off on a 
good start.
    So I applaud the President's desire to hold the government 
programs and employees accountable for their performance. The 
first step in accountability is an ability to measure 
performance, and that is what the PART program is about. 
Measuring performance is like any other tool in business or 
government. It can be effective, but only if it is used 
properly, and that, Mr. Chairman, is my concern about the PART 
program.
    We have to ask the right questions, measure the right 
things. If we don't, we will never get good results. So we have 
to make sure that the questions are directed in such a way that 
there is an objective review. Programs should be judged based 
on how well they achieve the goals set for them and whether or 
not they have any political pressure to present the results of 
their review.
    Since this hearing is about a performance-based budget, 
there is one thing that I would like to mention in passing, and 
that is in business, there is a measure of success that we 
don't have available to us here and that is the financial 
result, financial bottom-line. But government just doesn't and 
can't really do it the same way. Our definition of success is 
much more complicated. When a program doesn't perform, we have 
to ask why not.
    For instance, the Manufacturing Extension Partnership 
Program lost points on its PART evaluation because in spite of 
its successes in leveraging financial support, it serves only a 
small percentage of small manufacturers each year, and that 
evaluation was used to cut the funding for the program. It 
doesn't make sense. If the program is working, it doesn't have 
enough resources to make a big enough impact, we should decide 
on whether or not we are going to increase it or get rid of the 
program.
    In short, Mr. Chairman, we should demand accountability for 
the Federal Government to make sure they accomplish the goals 
that we set for them, but we have to examine the outcomes of 
these programs honestly, fearlessly, and without any bias in 
the way we see the programs other than in their efficiency and 
their results.
    So I thank you, Mr. Chairman, for doing this.
    Senator Coburn. Thank you. I would clarify for the record, 
in both Mr. Walker's testimony and Mr. Johnson's testimony, I 
believe there is reference to the fact that when programs fall 
low on the PART assessment, that sometimes it is because not 
enough money has been given. So I think they recognize that 
weakness and they have testified that way.
    I want to go back to your chart, because whether we have a 
Results or a Sunset Commission or whether we have a PART 
evaluation, right now, we are sitting at about 19.6 percent of 
our GDP, the government consuming it, according to what you 
have right there, and estimated to grow to approximately 40 
percent by the year 2040.
    We have a tool now that we are using--that we are 
attempting to use. We are not effectively using it in a lot of 
ways because a lot of the agencies aren't responding with the 
management expertise based on the measurement tool that is 
going to be used there. What is the plan to move those numbers 
down through PART, through results, through Sunset Commission, 
so even though we have this long run of mandatory spending, how 
in the world are we going to achieve that area that we can 
achieve and how are we going to be able to implement this?
    We are in the third year, fourth year of this. What do we 
see? Are we seeing improvements? The criticisms of the PART 
system, are they legitimate? Is it resistance to just being 
measured, or are there some legitimate criticisms to the PART 
system, either one of you that might want to respond to that.
    Mr. Walker. I will start, Mr. Chairman, by refamiliarizing 
you, and I know you have read this at least once, the booklet 
that we put out----
    Senator Coburn. Twice.
    Mr. Walker. Thank you very much, Mr. Chairman. 
Specifically, I am referring to the booklet that we put out on 
February 16 which lays out the business case pretty strongly 
that we are on an imprudent and unsustainable fiscal path. As a 
result we are going to have to look at the basis of the Federal 
Government, both as it relates to spending and as it relates to 
tax policy.
    With regard to the subject of this hearing today, in 
addition to trying to answer the 202-plus questions in the 
booklet that illustrate the need to reexamine the base of the 
government, I do believe there is strong conceptual merit to 
having some type of periodic assessment of programs, policies, 
functions, and activities. My personal view is that the 
agencies should be on the front line. This should be a normal 
and recurring part of their job.
    I think in order for these assessments to work, several 
things have to happen. It is important what the process is. It 
is important what the principles and the criteria are. It is 
also important who the players are that are involved in 
generating the results that will be considered by the Congress, 
as well as by the President, to the extent of the Executive 
Branch, in trying to make decisions.
    In that regard, I think there is a need for and an 
opportunity to institutionalize a periodic assessment process 
that builds upon the principles that are laid out in this 
booklet, including the generic questions, as well as the 
principles and generic questions that are outlined in the PART. 
By doing so we can try to come up with something that has a 
chance of being sustained over time and can generate more 
meaningful results, both financially and non-financially, 
irrespective of what administration might currently be in 
power.
    Mr. Johnson. I think we have great opportunity to use the 
PART. Whatever it is called 5 years or 10 years from now there 
should be an instrument that we use consistently across all 
programs to assess performance, and today is it called the PART 
and there are 25 questions, plus or minus. It should be a part 
of our job. It should be part of what agencies do on a day-in 
and day-out basis. That is the assumption in the PART now.
    Part of the PART program is you evaluate different aspects 
of the program and then you are supposed to develop recommended 
next steps, things that you, the program manager, are going to 
do this next year to improve performance, reduce cost, or both, 
and we are set up to monitor that and to hold agencies 
accountable for the follow-through--we, OMB, are set up to 
follow through, hold agencies accountable and then follow 
through on those recommendations.
    And some of these programs' recommended next steps are 
really significant. They are going to invest more money in IP. 
They are going to reorganize this. They are going to change the 
rules, get a bill changed, new legislation, or whatever. Others 
are less aggressive.
    They all should be held accountable for having a commitment 
to improve performance every year. That is built into the 
system. We are now at the point where we have some programs 
that are now in the second year and the third year since its 
asessment, so we are now able to start holding agencies 
accountable for that follow-up on what they said they could do 
to improve performance.
    The other thing we need to do and are preparing to do is to 
make this information more public so there is more discussion 
about PART and about what the desired outcomes are, what the 
performance measures are, and so forth. All this information is 
available now on the website. You have to really want to find 
it and you have to be able to speak that form of English that 
only OMB and a few Congressional staffers are adept at 
speaking.
    What we want to do is to take this information, just put it 
in English, put it in lay terms for all the world to see. Here 
is what we are spending your money on. Here is how we evaluate 
these programs. Here is how we measure success, and here is 
what the recommended next steps are. This more public 
information, we believe, is going to drive more dialogue 
between the public and Members of Congress.
    There will be more dialogue between think tanks and good 
government groups and Members of Congress and the Executive 
Branch about how much better this performance measure is than 
that performance measure, how much stronger and more aggressive 
this recommended next set of actions is than that one, and 
there will be more pressure, more dialogue, more discussion 
about how to drive performance even better. Make it more 
public, make it more transparent, and get more impetus behind 
using the information to drive performance. Both of those 
things--the first one exists and the second one is in the 
process of being developed.
    Senator Coburn. It seems to me we have three problems. One 
is creating a culture where you use management tools of 
assessment and outcomes to drive policy, refinements, and 
efficiency within programs.
    The second is just the management expertise of demanding 
more with less, which is nowhere in any of this that I have 
found anywhere. We still have yearly budgets that come in at 
baseline rather than zero-based budgeting. So that is the 
second part.
    And the third part is to engage Congress. The Congress is 
going to get surprised in about 4 years and we are going to be 
making major cuts to major programs to handle our financial 
difficulties. It seems to me whatever we can do to awaken 
Congress to what is about to happen to us in terms of 
international financial markets, the force that is going to be 
placed on the Congress.
    My follow-up question is, what about the second and the 
third part? What about the more for less that is every 
business. Senator Lautenberg asked that of his business every 
year. Give me more for less. That is called efficiency. That is 
called productivity. He asked that and got it. What about that 
component of it?
    And the second question I would ask you about is how do you 
engage Congress? How do you engage Congress to address what 
those charts show, and how do we make the changes that are 
necessary, create an awareness in Congress to do the reform? 
There are a lot of programs out there that are great. This 
isn't going to be just about programs that are great ideas. It 
is going to end up being what about the programs that we cannot 
afford? Which is the best of those? That is the other reason 
why we should have such a good assessment tool. We cannot 
afford everything that we are promising today.
    So please answer those two subparts of that question, if 
you would, and then I will defer to Senator Lautenberg.
    Mr. Walker. Mr. Chairman, I would respectfully suggest that 
we need to integrate and institutionalize those two concepts 
into the current processes that we already have. For example, 
we have the Government Performance and Results Act, which 
requires strategic and annual performance planning, and annual 
performance and accountability reporting. A key component of 
that should be the concept of getting more done with whatever 
resources and authorities you have, and it could be with less, 
or it could be the same amount.
    Second, I think we also have to look at the budget process 
and the materials that are provided to the Congress. We need to 
move beyond baselines. The baselines are not sustainable. The 
baselines, to a great extent, represent an amalgamation and 
combination of programs, policies, functions, and activities 
that made sense when they were put into place but haven't been 
subject to fundamental review and reexamination. Performance 
information needs to be included as part of that process.
    I think we need to make the agencies responsible for doing 
this. I think there needs to be a role for OMB on behalf of the 
Executive Branch and the President, whoever the President might 
be. I also think there needs to be a role for GAO, because the 
fact of the matter is that every administration has a President 
who is associated with a political party. They change from time 
to time, but by definition, the Congress has to feel 
comfortable with the process, the principles, and the players. 
As a result it is important not just to get an Executive Branch 
assessment but also the GAO's assessment since we are an 
independent, nonpartisan, nonideological agent and a subsidiary 
of the Congress.
    Mr. Johnson. When they first started using the PART 40 some 
odd percent of the programs could not demonstrate a result. So 
it was impossible to hold the head of programs accountable for 
the accomplishment of a goal. They couldn't define what the 
goal was. They didn't know what they were trying to accomplish 
or they knew what they were trying to accomplish, but they 
couldn't measure it, or whatever, some combination of the 
above.
    With performance information for programs, you now have 
information that you can use to hold program managers 
responsible for the accomplishment of desired outcomes at 
desired costs, and it is at that point, and we are just now 
getting to that point, where you can start setting annual goals 
with program managers that we want to get more for less, or we 
want to get the same for less, or we want to get more for the 
same. And that needs to be part of holding managers 
accountable, holding employees accountable.
    That is one of the basic concepts for why there ought to 
be, we propose and will recommend here shortly, civil service 
modernization government-wide. It helps create an environment 
where people, managers in particular, are held more accountable 
for how their programs perform, and also how to better engage 
Congress.
    When we started this, the whole PMA was designed to focus 
on opportunities to better manage the Federal Government that 
involved Congress initially as little as possible. Nothing 
against Congress, but we wanted to work as much as we could 
within the Executive Branch to drive performance. Now there is 
more information available. There is information on 60 percent 
of the budget. We have information now that can be used to 
inform budget decisions, programs, continuation of programs, 
and elimination kind of decisions. So now there is enough 
information to more significantly involve Congress.
    So this is why we are having these kinds of hearings. This 
is why you are interested in this. We can get more buy-in about 
what the stated purpose is. We can get more buy-in to the 
validity of these performance measures. We can get more buy-in 
to the validity of these efficiency measures.
    And I think one of the key things that is going to lead to 
the credibility and validity of these numbers is if we are able 
to show Congress how this information is being used within the 
Executive Branch, not to eliminate, add, or subtract programs, 
but to drive performance. We can show that this makes sense. 
Program managers are using these new definitions of desired 
outcomes, and we are making these kinds of changes in the way 
programs are being managed and achieving different kinds of 
results, more desirable results, than we were several years ago 
before we had this information.
    I believe that is going to make a big difference in terms 
of how credible this information is with Congress, and then 
these kinds of trends also make it much more necessary for 
Members of Congress and the Executive Branch to pay attention 
to what is working and what is not, and what we are getting for 
the money.
    Senator Coburn. Senator Lautenberg.
    Senator Lautenberg. Thanks, Mr. Chairman.
    These two witnesses are very knowledgeable people. We see 
them with some degree of regularity.
    Mr. Johnson. We have the same agent. [Laughter.]
    Mr. Walker. We get the same fee.
    Mr. Johnson. The same fee, Senator, zero. [Laughter.]
    Senator Lautenberg. Well, we can discuss that at another 
time, but what I----
    Mr. Walker. More for less. [Laughter.]
    Senator Lautenberg. I got a little concerned when Mr. 
Johnson made some reference, and I thought that there was a 
suggestion in there that maybe the Congress ought to be rated 
the same way, using PART. If that is the case, I will recuse 
myself from that hearing. [Laughter.]
    But in any event, thank heaven that we are not measured by 
the same yardstick. It is fair to say that there might even be 
some political influence around here.
    How sure are you, Mr. Walker, can we be, that there is no 
political urging, to use the politest term I can, because this 
is all that I share with the Chairman here. We have gotten to 
know each other some and we know that in terms of how we 
operate, there is consistency of view.
    As I listened to what each of you had to say, I thought 
about the differences in departments. How do you measure the 
museum performance and how do you measure a transportation 
program or the manufacturing program, which I think is a very 
good idea? You are left in kind of a discovery area. Who do you 
talk to--who gets spoken to when these decisions are being 
reviewed or questions are being asked? Who in the line of 
command typically gets talked with? Do the employees get to 
respond? Do the staff within these units get to respond, or is 
this strictly a management review?
    Mr. Johnson. I don't know how far down it gets. It is both 
agency and OMB, but I don't know how far down, if it gets down 
to the Forest Service person in whatever Western State.
    There are four basic areas of questioning in the PART that 
really are good questions that would apply to your form of 
business, my form of business, any kind of Federal program. Is 
there a clear, defensible purpose? There are several questions 
related to that. Are there valid short-term and long-term 
goals? Is the management sound or the management practices 
good? And what are the results of the program relative to the 
goals? Now, those are generic questions that apply to any kind 
of program.
    There is work done by OMB and people working on individual 
programs within the agencies. They get agreement or 
disagreement on what the ratings are. We are this year 
establishing an appeals board in case there is an impasse at 
what the evaluation ought to be, and it goes to a selection of 
deputy secretaries to review that and make some determination 
on what the ruling ought to be on that.
    But I feel comfortable that there are good assessment from 
both objective and pride of authorship. The people involved in 
the program standpoint, and the questions that are asked are 
generic in nature, but very focused on whether the programs are 
working or not.
    Senator Lautenberg. Mr. Walker.
    Mr. Walker. Senator Lautenberg, you having been in the 
private sector for many years and I having been in the private 
sector for 21 years, these are management 101 concepts that 
apply to government as well as the private sector and the not-
for-profit sector. They are not inherently partisan in nature. 
And yet the fact of the matter is, the government hasn't done 
much in this area for many decades, irrespective of which party 
was in power.
    I would respectfully suggest that the agencies have to be 
primarily responsible and accountable for doing what needs to 
be done here. I would also agree that OMB has a role to play. 
At the same point in time, I don't believe that it can stop at 
OMB. Given the fact that OMB is part of the Executive Branch, 
and works directly for the President--whoever the President 
might be and whichever party that President might be associated 
with--I think you need to have a check and balance. I think 
part of that check and balance possibly is to have a role for 
GAO. Ultimately, it is not only going to require action by the 
Executive Branch, it is also going to require action by the 
Legislative Branch in order to achieve meaningful and lasting 
results.
    Rightly or wrongly, I know there is concern in the Congress 
with regard to just relying upon the PART. There is also 
interest in having some checks and balances in the process. 
That is how our Constitution is based.
    Senator Lautenberg. In the business world, again, each of 
our witnesses here has talked about the experiences in the 
private world. I think that the most reliable measure is to see 
how the customers like it. I don't know whether we include that 
as part of our review. Again, I note that the museum is here, 
and I wonder, have we done any assessment or do we do any about 
visitors, whoever the customers may be. Unfortunately, it takes 
time to catch up with that opinion. The cart and horse thing 
that is so often used as a reference here is whether the 
resources are adequate to give the facility or the program 
enough time and enough direction to work effectively.
    Mr. Walker. Senator Lautenberg, I would respectfully 
suggest, as Clay Johnson touched on the criteria need to be 
customized to the particular entity involved. Let us take GAO 
as an example, which I know firsthand. We are a professional 
services organization. We have four primary measures. Measure 
one, results, financial and non-financial results. Two, what do 
our clients, meaning the Congress, think about our work? Three, 
what do our employees think about our agency? And then four, 
what do our partners, both within government and outside of 
government domestically and internationally, think about us?
    Those four measures work very well, and there are a lot of 
details behind those measures, but the framework has a lot of 
conceptual merit. However, the details obviously have to be 
tailored to the particular enterprise and their workforce.
    Senator Lautenberg. And each of you is satisfied that there 
is--that these results are free of any skewing for political or 
ideological decisions?
    Mr. Johnson. I am totally satisfied that they are free of 
those biases.
    Mr. Walker. We haven't evaluated that. I believe that to 
the extent that you have a process that provides for checks and 
balances, then it can provide additional assurance, not just 
for today, but 5 years from now, and 50 years from now.
    Mr. Johnson. I want to talk about customer service in a 
second, but one thing, there is less bias in our assessment of 
the ratings than will be there in Congress' assessment of 
whether programs work or not, to your point that you made 
earlier.
    On customer service, we had talked about that. I can tell 
you that every program that has a large customer service 
component, which is almost all of them, does a lot of customer 
service measuring. All of our lending operations, all of our 
grant-making operations, all of our e-Government initiatives 
are measuring customer satisfaction, and like many government 
issues, they are comparing our ability to take a reservation 
for a campsite with orbit.com's satisfaction with their ability 
to take an airline reservation. So we are looking for private 
sector benchmarks and trying to build that into program 
managers' goals.
    The thing we have to realize, our ability to assess 
programs are in a pretty infant stage. We are now in a 3-plus 
year process of measuring program performance. We haven't even 
evaluated all the programs yet. The program metrics and 
measurements we use will be way better 5 years from now than 
they are now and better still 10 years from now. We will get 
better at measuring. We will get better at correlating this 
with results and so forth.
    We talked about how we don't have customer satisfaction 
measures in all of our customer service programs. It is in 
some, but not all. That needs to be corrected. That will be 
corrected. But we are going from a situation 2 years ago where 
50 percent of the programs could not demonstrate any result, 
forget the right result, any result. We are now coming to the 
point where we have measures, a lot of them are very 
rudimentary and basic, and now we are going to build from there 
and make them much better and use that information to hold the 
program managers more accountable for the delivery of more for 
less.
    Senator Coburn. Senator Carper, welcome.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thanks, Mr. Chairman. I apologize for 
running a little late. Our caucus luncheon ran until about 
2:15. We had a heated discussion on energy policy, and as I was 
making my way over here, my cell phone went off and it was our 
Lieutenant Governor from Dover, Delaware calling, from 
Legislative Hall, to give me the results of the elections in 
Boys' State and he was standing next to the newly-elected Boys' 
State Lieutenant Governor, our oldest son, Christopher Carper, 
who we are just very proud of.
    Senator Coburn. All right.
    [Applause.]
    Senator Carper. Nobody has asked for a recount. [Laughter.]
    So, I think we are in a moment of real pride. He had lunch 
at the Governor's house today, where we used to live. Tuesday 
in Delaware, we have a legislative leadership luncheon where 
Democrat and Republican leaders in the legislature and the 
Governor and the Lieutenant Governor all have lunch, and 
sitting right there at the table was--literally in a room where 
he grew up for 8 years, was our boy, real special.
    I have a statement I would like to give, not now but maybe 
during our break between our panels, if you don't mind. I want 
to say to our witnesses that I don't think I have ever seen the 
two of you before, but it is great to see you. [Laughter.]
    People are going to start talking, but we are glad you are 
both here. Thank you for your testimony and your response to 
our questions.
    Let me just start off, if I could, with a question for you, 
Mr. Johnson, and I am going to ask Mr. Walker to respond to it, 
as well. I will give you the first shot at it, if I can.
    I have read criticisms, and you have probably heard them, 
too, of the Program Assessment Rating Tool which argue that 
OMB's ratings sometimes ignore the will of Congress with 
respect to our intent in creating certain programs. I just 
wonder, is it possible for a program to get a poor rating 
simply because it does what is required by statute and not 
necessarily what OMB might like for that program to do?
    Mr. Johnson. Yes.
    Senator Carper. All right. What should we do about that?
    Mr. Johnson. What we challenge our agencies to do is----
    Senator Carper. I want the record to show, that is the 
shortest answer I have ever gotten from any witness in the 4-
plus years I have been here. Could you be more direct? 
[Laughter.]
    Mr. Johnson. We charge agencies to have outcome goals for 
each program, and if the enabling legislation doesn't provide 
that or leaves that vague or there are contradictory outcomes 
called for, we make it the responsibility of the agencies to go 
back to the appropriate body here and fix that.
    They say, well, but I can't control that. Then we say, 
well, we are not saying who is at fault here. We are saying we 
have a program that does not have a defined outcome, or it has 
a defined outcome and perhaps in some cases the measures are 
undefined--or the goals are so broad or so vague that you could 
never hold anybody accountable for their accomplishment. That 
needs to be fixed. And if it involves working with Congress to 
fix it, then it is their responsibility to work with Congress 
to fix it.
    Again, the assessment is not of Congress--it is of the 
program, but the program manager is responsible for doing what 
they can to get the most result for the amount of money spent 
for that program, and if it involves corrective legislation, 
that is what they need to go try to get.
    Senator Carper. Mr. Walker, any thoughts, please?
    Mr. Walker. First, I think one of the things that Congress 
needs to do when it is enacting legislation, whether it be a 
new program, or whether it be a new tax policy, is it needs to 
think about why is it doing it, what is it trying to achieve, 
and how should success be measured. Therefore, at the very 
creation of a program or policy, these are issues that should 
be focused on by the Congress, since it is the body that causes 
it to be created and appropriates money on a recurring basis. 
That is generally not being done at the present time.
    Second, it is important that we not just look at the 
programs with regard to the different departments and agencies, 
but we need to have additional emphasis on horizontal 
activities, because many times there are many programs that are 
being operated and trying to accomplish a similar goal within 
many different departments and agencies, and we need to focus 
on employing more of a horizontal and integrated approach.
    Last, I think we can't forget about tax policy. We spend as 
much in this country, or fore go as much in revenue in this 
country in some years as a result of tax expenditures and tax 
preferences as we do in total discretionary spending. 
Discretionary spending includes national defense, homeland 
security, judicial system, education, the environment, GAO, 
OMB, etc. It is important that we not let tax preferences/
expenditures off the radar screen. They have to be on the radar 
screen, too.
    Senator Carper. I have to ask this question. It is not 
really germane to our hearing today, but you mentioned tax 
expenditures and revenue flow gone. Is there any significant 
revenue flow gone simply because taxes that are owed and are 
not being collected?
    Mr. Walker. Over $300 billion is the estimated tax gap, of 
which there are sub-elements to that, some because people 
aren't claiming the income, some because they have understated 
their gains, some because they have overstated their losses, 
some because they have delinquencies that we haven't collected. 
And we had a hearing on that before the Senate Finance 
Committee and that is an issue that needs more attention, as 
well.
    Senator Carper. So $300 billion, is that like a one-time 
number or is that a recurring number?
    Mr. Walker. Every year.
    Senator Coburn. The Chairman and I have talked about that 
and I think that might be the subject of some subsequent 
inquiries not today, but that is an issue for another day.
    We had another hearing in our full Committee, Mr. Chairman, 
this morning, and out of the mouths of a couple of our 
witnesses came the words ``Government Performance and Results 
Act,'' and I don't remember anybody ever mentioning that in a 
hearing before, at least not that I can recall. Anyway, it was 
mentioned a time or two in our earlier hearing.
    What I would like to do is ask, if I could, just start with 
Mr. Johnson to ask a little bit about how we coordinate the 
rating tool with the Government Performance and Results Act, 
which I think might have been adopted about a dozen or so years 
ago but I think it goes back to the early or mid-1990s. How 
does OMB take into account programs' successes in fulfilling 
obligations, placed on them in their agency's long-range or 
annual performance plan? Does the rating tool ignore the 
Government Performance and Results Act? How do we just 
coordinate the two and use them both effectively, or is that 
impossible?
    Mr. Johnson. No, it is not impossible at all. In fact, they 
should be used together. The Government Performance and Results 
Act was adopted 12 years ago and----
    Senator Carper. Could you just take a second and give us a 
little short primer on the Government Performance and Results 
Act, if you are able to? And if you are not, you are OK.
    Mr. Johnson. I am known to be a pretty good delegator, and 
so I am going to call on my good friend, Mr. Walker.
    Mr. Walker. That is called delegating up, Senator, but that 
is OK. [Laughter.]
    Mr. Johnson. Whatever you want to call it, just do it for 
me.
    Mr. Walker. He is very adept at delegating.
    Senator Carper. Well, we have all done it.
    Mr. Walker. I would say, Senator, one of the things that I 
mentioned before was I think it is very important that we 
recognize that we do have a number of statutory provisions in 
place, one of which is the Government Performance and Results 
Act, GPRA. My personal view is that we need to take a lot of 
these concepts, and integrate them into the current framework. 
We also need to institutionalize them such that they will exist 
irrespective of what administration is in power and 
irrespective of which party controls the Senate and the House 
of Representatives.
    I do not think they are mutually exclusive. They should 
both be done. One should be a subset of the other.
    Senator Carper. How did he do?
    Mr. Johnson. It wasn't much of a summary, but---- 
[Laughter.]
    Mr. Walker. Oh, you want me to summarize GPRA? I apologize.
    Senator Carper. Just a primer, if you would, on----
    Mr. Walker. Yes. The Government Performance and Results 
Act, which I believe was created in----
    Mr. Johnson. I would give him a----
    Senator Carper. An incomplete?
    Mr. Johnson. No----
    Senator Carper. You are taking my time.
    Mr. Walker. The answer is that the Government Performance 
and Results Act, which I believe was created in 1993, provides 
for a number of things. One, it provides that agencies do a 
strategic plan periodically. Second, it provides that agencies 
prepare an annual performance plan. Third, it requires that 
agencies publish an annual performance and accountability 
report.
    I might note for the record that, as frequently is the 
case, many times, these pieces of legislation are passed and 
only apply to the Executive Branch. In this particular case, as 
in many others, we have voluntarily adopted it at GAO, not just 
to comply, but to try to lead by example.
    It was a very valuable concept and we have made a lot of 
progress in the last 12 years with regard to this. But we still 
have a ways to go. I believe that some of the concepts we are 
talking about today represent a prime example of how we need to 
integrate these concepts into our existing mechanism. However, 
we need greater involvement by the Legislative Branch, 
including the Congressional committees, because to a great 
extent, whether it is budget, whether it is appropriations, 
whether it is authorizations or reauthorizations or whether it 
is oversight, this type of information is not used to the 
extent that it should be.
    Mr. Johnson. David and I were on a panel a couple of years 
ago with Pat McGinnis with the Council on Excellence in 
Government and Congressman Armey talking about the Government 
Performance and Results Act, and I think that it was the 
feeling of everybody on that panel that the Government 
Performance and Results Act had not lived up to its potential.
    I think one of the reasons is that the unit of evaluation, 
I suggest, should not be an agency. It is difficult to say that 
an agency has succeeded, an agency is the sum of its programs. 
There are some agencies like Commerce that have the most 
unbelievably wide diversity of programs--they all do, but some 
of them are incredible. And to say that Commerce is doing this 
or doing that overall, it is not really relevant.
    So I think now having program information gives us 
information about relevant units of measure, relevant component 
parts of agencies that can now be incorporated into our overall 
discussion about if Commerce, if Interior, if the State 
Department is meeting its mission? Is it accomplishing its 
strategic goals?
    Three years ago, we only had program information for 20 
percent of the programs, then 40, now 60. We are in 80. This 
next year is for us the time when all of us should figure out 
how to really bring these two things together, because I think 
it gives us an opportunity to realize even more completely the 
full potential of the Government Performance and Results Act of 
12 years ago.
    Senator Carper. Yes, sir.
    Mr. Walker. One last thing, Senator Carper, we still need a 
government-wide plan. We don't have a government-wide strategic 
plan. We don't have a government-wide performance plan. We do 
have, I would argue, a performance and accountability report, 
but we still need the government-wide plan.
    The budget is, by definition, not a strategic plan because 
it doesn't look out far enough.
    Senator Carper. Who should be responsible for developing 
that?
    Mr. Walker. The President, and presumably the President 
would use his very valuable agent, OMB.
    Senator Carper. Thank you. Gentlemen, thanks very much.
    Senator Coburn. I want to go back for just a moment. Mr. 
Johnson, in your testimony, you stated that the Administration 
is proposing two new commissions, the Sunset and the Results 
Commissions. Can you talk in some detail about what those 
commissions would do, how would they be created, and how they 
would be structured, and what their purposes would be?
    Mr. Johnson. Yes, and I know I am going to miss a few of 
these facts. The Sunset Commission is a concept, I think it is 
employed by about half the States. Texas is one. What we are 
proposing is that there be a seven-member commission, four in 
the majority party--or in the Administration, three not. Four 
members appointed by the President with consultation from the 
majority and minority leaders in both Houses.
    There would be a list put together with Congress, a 
schedule of when programs or agencies would come up for review 
over a 10-year period of time. So it would set a 10-year review 
cycle. If Congress and the President agreed that the department 
of X ought to be reviewed in total, it will be on that list. If 
they agree that it only ought to be programs or it ought to be 
these programs but not those programs, or it shouldn't be 
defense programs, or it should be--that will be worked out, but 
there will be a 10-year review cycle.
    Then every year, those programs, and so we are talking 
about 1,200 programs--let us say it is only program specific--
it would be 1,200 programs. About 120 programs a year would 
come up for consideration. If they are not affirmatively agreed 
to to be continued, they would sunset.
    My understanding is that the experience in the States is 
that the programs tend not to then go away. They tend to know 
that their judgment day is coming up, so there is 
accountability--Congress is on the line, calling for 
performance. The Executive Branch is on the line, calling for 
performance. Program managers really feel held accountable for 
how their programs perform, and it tends to drive more 
significant performance, more focus on results, and more focus 
on efficiency.
    And so what happens is programs get better. Improvements 
get better. Occasionally, the Sunset Commission will come out 
with a recommendation to modify a program or change the 
measures or less of this and more of that as opposed to this 
thing should go away altogether. If something needs to be done 
away with, my guess is, and I think the experience in States 
is, it will generally be done away with long before it ever 
comes up before sunset review. So it is a mechanism for driving 
a formal focus on results. Congress would be involved and the 
Executive Branch involved, both calling for results.
    The Results Commission is to deal with the programs like 
job training or community and economic development or programs 
dealing with disadvantaged youth or world water quality, where 
there are issues that many agencies and many programs are 
involved with which makes it very difficult for the Executive 
Branch and for the Congress to deal with these matters, because 
you get into jurisdictional issues, you get into so many 
different budgets, you get into issues about, well, is it 
Commerce's fault, is it Interior's fault, is it whatever.
    If Congress agreed to the concept, then what would happen 
is the President would propose that we ought to create a 
specific Results Commission on the subject of job training. 
Congress would agree that was not too controversial a topic or 
it was a good enough amount of money or a substantive issue 
that we should create a Results Commission to deal with that. 
They would agree to do that. The President would form a seven-
person commission, four in consultation with the majority and 
minority leaders in both Houses. But it would be seven people 
who have expertise of various sorts on the subject of job 
training in this case. It would be a commission put together to 
deal with the specific issue at hand.
    They would then have 9 months to receive a proposal on how 
to organize these multi-agency, multi-program efforts 
differently, do away with some, add some things, combine them 
over here, combine them into--whatever the recommendation is, 
take that, have hearings, decide what they believe--how the 
President's recommendation ought to be amended, if at all, come 
back to the President with that. There is some dialogue back 
and forth. Anyway, but then that goes to the Congress for 
expedited consideration, like a BRAC-kind of a process.
    So one deals with single agency kinds of performance 
issues. The other one deals with single program performance. 
The other one deals with multiple departments, multiple 
agencies, multiple programs dealing with the same issue.
    I have left a lot of the details out, but----
    Senator Coburn. Talk with me for a minute about the fact 
that we are going to approve $170 billion worth of spending 
this year for programs that aren't authorized. How does the 
Results or the Sunset Commission deal with that? In other 
words, we are going to spend $170 billion. We are going to 
appropriate it this year for programs that are totally 
unauthorized. In other words, the Congress hasn't done this 
job, either won't reauthorize them, don't have the votes to 
reauthorize and appropriate them anyway. How do you address 
that problem? Thirty percent of our discretionary budget is 
appropriated without any authorization.
    Mr. Johnson. I am not familiar with the particulars, but 
when the Congress and the Executive Branch are developing that 
list of programs, that schedule to review all programs, it 
would decide whether they are reviewing just authorized 
programs, or unauthorized programs. They might decide to put 
all those unauthorized programs in the first couple years of 
sunset review.
    So Congress is integrally involved with the Executive 
Branch to decide what is involved and in what order these 
different programs are involved. So this would be a mechanism 
for doing that.
    Senator Coburn. We really could do that if we had effective 
oversight, without either of those commissions, couldn't we?
    Mr. Johnson. Yes, sir.
    Mr. Walker. Mr. Chairman, I would respectfully suggest the 
commission wouldn't deal with that issue. The fact of the 
matter is that you already have a number of programs that have 
not been reauthorized yet, even though they are supposed to be 
reauthorized, and yet the Congress has decided to continue to 
appropriate.
    There is absolutely no question that we need additional 
emphasis on whether or not programs, policies, functions, and 
activities are achieving real results. There is absolutely no 
question that we need additional emphasis on mechanisms to 
determine whether and to what extent programs should be 
continued.
    However, we should integrate those mechanisms into other 
ongoing processes and institutionalize them. I haven't seen the 
proposed legislation and I would reserve any comment on the 
proposed legislation until I see it. However, historically, we 
have done a lot of work at GAO with regard to commissions that 
work and commissions that don't work. The commissions that 
typically have worked the best are the ones that had a finite 
term and a specific mission to be accomplished. What I am 
hearing is something that could go on indefinitely.
    The real key is, how can we end up making sure that the 
Congress is engaged to a greater extent? How can we make sure 
that more of this type of information is automatically 
considered? How can we increase the transparency of this 
information, not only for the benefit of the Congress, but also 
for the benefit of the public so there are incentives to start 
dealing with some of the tough issues that have accumulated 
over time and that we are going to be forced to deal with 
because of the fiscal picture that I outlined earlier?
    Senator Coburn. Senator Carper.
    Senator Carper. Just a couple more questions, if I could. 
Let me just ask, and again, I sort of direct this to you, if I 
could, Mr. Johnson, and then to ask Mr. Walker to respond, as 
well, but what factors do the views of stakeholders or the 
individuals or groups that benefit from a given program, what 
factors would their views play with respect to OMB's ratings of 
a particular program and how, if at all, does OMB actually 
solicit their views?
    Mr. Johnson. I know that we pay attention to if programs 
are working or not, and if they are supposed to serve a given 
community, the most important stakeholder group is the 
community of citizens that are supposed to be served, and so 
there are different measurements of whether they are being 
served or not.
    But the exact method of doing that and the degree to which 
it happens across the board, I don't know, but I can get back 
to you with that information.
    Senator Carper. General, do you want to take a shot at that 
one, as well?
    Mr. Walker. He would be in a better position to say on 
PART. I do believe that it is a factor that should be 
considered. At the same point in time, just because you have a 
lot of people that are happy that the program exists doesn't 
mean that the program or policy, if it is on the tax side, is 
achieving the desired results.
    All too frequently, in the absence of having performance 
and outcome-based information, the assumption is if we spend 
more money, we will get more results, or if we give more tax 
preferences, we will get more results. That is not necessarily 
true, and that is part of the whole purpose here. We need to 
find out what works and what doesn't work because we are not 
going to be able to afford and sustain all that we have right 
now. We also need to make room for other things that the 
Congress will want to do because of emerging needs and 
challenges facing the country in the future.
    Senator Carper. OK. And one last question, if I could. 
Based on the analysis of the rating tool scores, grant 
programs, as I understand it, are less likely to receive 
effective scores and much more likely to be deemed ineffective 
or to receive a score of results not demonstrated. I just 
wonder, why do you think this is, and how do rating tool 
questionnaires differentiate between different types of 
programs?
    Mr. Johnson. There are questions that are asked of grant 
programs that are specific to grant programs. I was giving a 
talk to the SESes at EPA about a month ago and a couple fellows 
came up to me at the end and said PMA is great and getting more 
results and better defined goals and so forth. We need to get 
States and local communities to, once we grant them the money, 
get focused on getting more for the money.
    And I said, what is fabulous is that you are asking me 
about this. I bet you 5 years ago, you never would have been 
inclined to think about how we can now focus on what our grant 
recipients do with the money, because that is what we are 
holding agencies accountable for. The goal is not to give 
monies to States and municipalities in an efficient, effective 
fashion. The goal is to get good things happening with the 
money that States and municipalities are spending in a 
prescribed nature.
    So that means not only we have to define what the goals 
are, but we have to hold States and municipalities, to the 
extent to which we can, accountable for spending the money as 
designed and in an effective fashion. Right now, we are not 
particularly equipped to do that, and I think that disconnect 
between us giving them the money and them spending the money 
wisely or them spending the money as intended or them producing 
or measuring the results of that is not what it needs to be. 
But now our agencies know that they are being held accountable 
for how their grant recipients spend the money and so they are 
going to turn around and work with States or municipalities and 
maybe make the money they get next year dependent on how well 
they spend the money this year.
    We can get better at this. We just generally have not been. 
That has not been our goal, is to seek the performance against 
desired outcomes at the bottom level.
    Senator Carper. All right. Mr. Walker.
    Mr. Walker. Several thoughts, Senator. One, there are 
different forms of grants, including block grants, and I think 
one of the things that we need to keep in mind is that we need 
more performance-related information, we need more transparency 
so that we can have more accountability both at the Federal 
level as well as the State and local level, depending upon the 
facts and circumstances.
    Second, we have a finite amount of resources, which are 
going to get tighter as time goes forward based upon known 
demographic trends, rising health care costs, and other 
factors. As a result, we need to be more value and risk 
oriented. We also need to be more targeted with regard to 
expenditures as well as tax preferences.
    The last thing is, and it is a concern that I have, there 
are other practices that exist that can complicate this. For 
example, the practice of Congressional earmarking. When you are 
in a situation where you have a finite amount of resources and 
it is going to get tighter and you are trying to get people to 
focus on results, to the extent that there is going to be more 
earmarking, then there is going to be less flexibility to be 
able to target, to achieve desired outcomes, to mitigate risk, 
which could establish a vicious cycle that should be of concern 
to all parties.
    Senator Carper. Good enough. Thank you both very much.
    Senator Coburn. Thank you. I am going to submit some 
questions in writing so we don't carry this out too long.
    The other point I would make, the number one stakeholder in 
all these programs is the next two generations. It is not the 
stakeholders that are meant to serve, because if we don't solve 
the financial problem, there is not going to be any service and 
the stakeholders, the next two generations, are going to be 
paying the bill for things that we have already spent the money 
long ago.
    So it is important for us to--the ultimate stakeholder is 
the American taxpayer for all these programs, because since we 
are running on a deficit to the tune of about $22,000 per man, 
woman, and child per year in this country, and the people 
sitting in this room, the vast majority, aren't going to be 
paying that money back, it is going to be our children or 
grandchildren, it is important to keep perspective of who the 
real stakeholder is.
    I want to thank you for your testimony. I am sure we will 
invite you back. We appreciate so much you being with us, and 
with that, we will dismiss the first panel.
    Senator Carper, while our second panel is coming up, I will 
ask you to----
    Senator Carper. I think I would just ask unanimous consent 
that my statement appear in the record and we will go right to 
the second panel.
    Senator Coburn. Without objection.
    Senator Carper. Thanks.
    [The prepared statement of Senator Carper follows:]

              OPENING PREPARED STATEMENT OF SENATOR CARPER

    Thank you, Mr. Chairman, for holding this very timely hearing.
    As you and all of our witnesses are well aware, our country is 
facing record budget deficits. We're just embarking on another 
appropriations season here in Congress where we'll be called on to make 
some very difficult decisions about what to do with scarce Federal 
dollars.
    At the same time, as GAO and General Walker have pointed out 
countless times before this Subcommittee and elsewhere, we're at a kind 
of turning point right now where we need to decide what we want our 
government to do in the 21st Century. Nearly 4 years after the attacks 
on September 11, we still have a whole new set of needs and priorities 
that must be balanced against older needs and priorities and scores of 
popular programs.
    And with the challenge of the retiring Baby Boom generation on the 
horizon, we just can't afford to do all of the things we might want to 
do--at least not well. That's why proposals like OMB's Program 
Assessment Rating Tool are so interesting.
    We should never be afraid of taking a hard look at Federal programs 
to determine whether or not they're accomplishing what we intended for 
them to accomplish when we first created them. In this day and age, we 
simply can't afford to allow poorly-managed programs to continue 
without reform or, frankly, for a program that has run its course and 
achieved its goals to continue draining resources from other 
priorities. That said, we need to be certain that the Program 
Assessment Rating Tool or whatever mechanism we use to make these 
evaluations is itself effective.
    To be effective, a program like the Program Assessment Rating Tool 
must be totally separated from politics and ideology. It must also be 
closely coordinated with existing mechanisms agencies and Congress use 
to align budgets with program goals and outcomes, such as the 
Government Performance and Results Act. And perhaps most importantly, 
we also need to make sure that a program's intended beneficiaries 
outside of Washington have a say before an evaluation is completed. 
While I'm keeping an open mind on this issue, I've some evidence that 
the Rating Tool might fail all three of these tests.
    I'd just say in closing, Mr. Chairman, that we're not going to 
close the budget deficit by reducing spending on a program here or 
eliminating a program there. President Bush called for the curtailment 
or elimination of 154 programs in his Fiscal Year 2006 budget proposal. 
Even if Congress were to eliminate every single one of those programs, 
I think the savings would only cover a fraction of our budget deficit.
    Non-defense discretionary spending, the target of many of the 
spending reductions and program eliminations in the President's budget 
proposal, makes up only about 16 percent of the Federal budget. I'm 
sure we can find ways to improve the management of some of the funding 
in that 16 percent, or even to find and eliminate waste or inefficient 
use of resources. If we truly want to tackle the fiscal problems facing 
us right now, however, we--meaning Congress--need to take a look at the 
entire budgetary picture, on both the spending and revenue side, and 
make some tough decisions.

    Senator Coburn. Our second panel, we are privileged to have 
with us today two scholars from the academic community to give 
us their perspectives on Federal Government accountability 
efforts.
    Our first witness on the second panel is Eileen Norcross 
from the Mercatus Center in George Mason University. Much of 
Ms. Norcross's academic research effort has focused on the 
analysis of budget and performance integration and agency 
performance reports. We look forward to hearing from her today.
    Our second witness on the panel is Dr. Beryl Radin, 
Professor of Government and Public Administration with the 
University of Baltimore. She has written extensively on the 
role of the Federal management as an instrument of policy 
implementation, and we look forward to hearing her thoughts on 
the current initiative to make government more accountable and 
outcome-oriented.
    Ms. Norcross, if you would.

 TESTIMONY OF EILEEN NORCROSS,\1\ RESEARCH FELLOW, GOVERNMENT 
ACCOUNTABILITY PROJECT, THE MERCATUS CENTER OF THE GEORGE MASON 
                           UNIVERSITY

    Ms. Norcross. Thank you, Chairman Coburn and Senator Carper 
and Members of the Committee on Homeland Security and 
Governmental Affairs, for inviting me to testify on the state 
of accountability and results in Federal budgeting.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Norcross appears in the Appendix 
on page 60.
---------------------------------------------------------------------------
    Much of my research at the Mercatus Center is on the 
progress agencies have made towards developing outcome 
measures, the Program Assessment Rating Tool, and the extent to 
which Congress and the Executive Branch use performance 
information in the budget. I would like to submit for the 
record my paper analyzing the results of the fiscal year 2006 
PART. Additionally, I would like to submit a copy of our 2004 
annual scorecard for your reference.
    Why should we bother to evaluate the performance of 
agencies or program results? What is the purpose of linking 
performance information with cost information? Policy makers 
can and do debate values and priorities, but such a debate is 
about ends, not means. Policy makers often articulate many 
worthwhile ends--reducing homelessness, eradicating disease, or 
ensuring we are secure from terrorism. If we are to accomplish 
these ends, we must know if results are being achieved. This 
means holding programs to a fact-based, not values-based, 
standard.
    If our goal is to reduce homelessness, does the program 
actually do this? If so, to what extent does it succeed? Do 
other approaches reduce homelessness more effectively? How many 
fewer homeless people would we have if we moved resources from 
a less-effective to a more-effective program?
    Answering such questions requires reliable performance and 
financial information. Linkage of results information and cost 
information tells us which means are most likely to accomplish 
the ends policy makers decide are worthwhile. Measuring results 
enables us to know what public benefits arose from a given 
activity.
    Agencies are statutorily required to report on their annual 
performance by articulating their goals, designing performance 
measures, and assessing results achieved. This then requires 
that agencies link their goals, objectives, and performance 
measures with their budgets.
    According to our annual scorecard, which evaluates how well 
agencies are meeting their reporting requirements, we find many 
agencies lag in linking performance information and financial 
information. Not until our third annual scorecard in 2002 did 
an agency, SBA, receive the highest score in this category. 
They achieved this because each of their performance indicators 
included a cost estimate, and some included a cost per output 
measure. This practice continued in 2003.
    This measure is important because where there are programs 
of equal efficacy, then the best means of comparing them is the 
cost per unit of success. This allows us to know how resources 
might be used to increase the public benefit.
    Some agencies have made improvements in recent years. In 
our first scorecard in 1999, 14 agencies showed no linkage of 
cost to goals. This year, 7 agencies allocated their costs 
among goals and objectives, falling short of the highest score 
only because they failed to link these costs to individual 
performance measures.
    With the fiscal year 2004 budget, the Bush Administration 
attempted to forward the use of performance budgeting with 
PART. By formally linking budget requests to program 
performance, PART provides a view into how the Executive Branch 
is making some of its budgetary decisions.
    This approach has several merits. It is program-focused. 
Budget decisions are often made at the program level. Where 
multiple programs attempt to accomplish similar outcomes, PART 
assessments can facilitate comparisons. OMB has made the 
assessments publicly available, ensuring the process is 
transparent and open to the public.
    There are some shortcomings. We may agree or disagree on 
individual PART assessments. The yes/no format may oversimplify 
agency answers. There are difficulties in relating individual 
program assessments to GPRA's assessment of performance goals.
    PART must remain open to constructive criticism in terms of 
its methodology and mechanics, but it would be a setback to the 
use of performance information if the concept of trying to 
objectively assess program results were abandoned altogether.
    In the fiscal year 2006 budget, the President recommended 
155 programs for termination or program cuts. Fifty-four of 
these programs have been PARTed. Of the 99 recommended for 
termination, 32 have been PARTed. Of the 55 recommended for 
cuts, 23 have been PARTed. These 55 programs represent about 
$10 million in savings, or 0.4 percent of the proposed $2.57 
trillion budget. Within the 55 programs, it appears PART was 
used in conjunction with other information to make funding 
decisions. Twenty-five of the 175 programs rated results not 
demonstrated, and half of the 22 programs rated ineffective to 
date were recommended for elimination or cuts. There is not a 
perfect correlation between a PART score and funding decisions.
    PART is not the only means to better integrate performance 
information into the budget. Important criticisms remain about 
its methodology, question format, and ratings classifications. 
But PART remains a consistent, systematic, and transparent 
attempt to evaluate government programs. By focusing on 
individual programs where budgetary decisions are often made, 
PART is a valuable approach that can only improve the effort to 
advance performance budgeting.
    Thank you, Mr. Chairman, Senator Carper, and Members of the 
Committee for taking on this important subject. The integration 
of performance information into the budget is a vital means of 
guaranteeing that the stewardship of public funds will achieve 
the most effective results and show the greatest public 
benefits. I hope this testimony will be helpful as the 
Subcommittee considers the role of performance information in 
the Federal budgetary process.
    Senator Coburn. Dr. Radin.

  TESTIMONY OF BERYL A. RADIN,\1\ PROFESSOR OF GOVERNMENT AND 
         PUBLIC ADMINISTRATION, UNIVERSITY OF BALTIMORE

    Ms. Radin. Chairman Coburn, Ranking Member Carper, my name 
is Beryl A. Radin and I am a Professor of Government and Public 
Administration at the University of Baltimore and an elected 
Fellow of the National Academy of Public Administration, and I 
will be joining the faculty at American University's School of 
Public Affairs this coming fall.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Radin appears in the Appendix on 
page 74.
---------------------------------------------------------------------------
    For more than a decade, I have been studying the efforts 
within the Federal Government to improve the effectiveness and 
accountability of Federal programs and have published a number 
of articles on this subject. Like many others, I believe it is 
important to find ways to assure that limited Federal dollars 
are used effectively to carry out the goals and objectives of 
programs that have been created by both the Congress and the 
Executive Branch. But while the focus on performance is 
extremely important, I have serious questions about the current 
procedures that have been put in place to carry it out.
    The effort that has been undertaken in OMB through PART may 
have been motivated by a legitimate and appealing concern, but 
I do not think that this model is an appropriate way, or is a 
limited way to measure program performance.
    The six issues that I will discuss today explain why there 
appears to be a disconnect between many of the PART evaluations 
overseen by OMB and the budget proposals that were found in the 
President's current budget. They illustrate how difficult it is 
to impose a single model in an extremely complex Federal system 
with a diverse array of programs. We should heed what H.L. 
Mencken once said, ``Explanations exist. They have existed for 
all times, for there is always an easy solution to every human 
program, neat, plausible, and wrong.''
    Let me summarize my six points. First, many Federal 
programs have multiple and conflicting goals. The PART process 
does not really reflect that reality, and most of the 
evaluations that have been done assume there is a single goal 
for programs.
    Second, not all Federal programs are alike. There are major 
differences, and we heard some of that earlier, between 
competitive grant programs, block grant programs, research 
efforts, regulatory programs, and other program forms. Yet the 
PART approach largely treats them alike, even though OMB 
acknowledges the differences and GAO has actually written about 
that extensively. Perhaps most importantly, the PART process 
does not recognize the decisions by Congress to enact programs 
in different form. Instead, OMB actually second-guesses 
Congress in terms of assessment of program purpose and design.
    My third point, OMB budget examiners and OMB itself have a 
limited perspective on programs. It does not make sense to rely 
on only one perspective to determine whether programs should 
live or die. Congress itself has recognized that as it has 
separated the authorizing and appropriating functions. A yearly 
budget is not the only way to look at what are often very 
detailed and complex programs.
    Fourth, there are many different types of information that 
are useful to those who are charged with running or assessing 
programs. The information that is used in the PART process is 
not value-neutral. Rather, it reflects markedly different 
reasons for concern about performance. Significantly, the 
information that is emphasized by OMB often is not useful to 
program managers, policy planners, or evaluators, or judging 
from the quite tepid reaction on Capitol Hill, to those charged 
with appropriations recommendations.
    Fifth, OMB calls for new data sources but does not 
acknowledge that agencies are not able to collect that data. A 
number of agencies would like to collect data on the 
achievement of program outcomes. However, they are constrained 
both by the mandates of the Paperwork Reduction Act as well as 
by their inability to receive appropriations that would give 
them the sources to develop these data systems.
    And sixth, PART focuses on an Executive Branch perspective 
and is not easily transferred to the Congressional branch. The 
one-size-fits-all approach that is found in the PART process is 
not compatible with a Legislative Branch with multiple 
committees and subcommittees as well as separating between 
authorizing and appropriations perspectives. The multiple 
venues within the Congress for discussing issues are one of the 
strongest attributes of our democracy, even though the 
complexity it creates is sometimes frustrating.
    In conclusion, I suggest that this Subcommittee and the 
Congress avoid attempting to adopt the PART process and 
instead, by focusing on accountability and results, emphasize 
the existing resources that are unique to the Legislative 
Branch. Instead of searching for a one-size-fits-all approach, 
the Congress has rich resources within the appropriations and 
authorizing committees structure that could be used to craft 
definitions of results within the framework of specific 
programs. Performance can best be handled within the confines 
of specific program development and traditional Congressional 
oversight.
    The Congress has oversight capacity that can be used to 
provide more robust information than that from the PART 
process. The oversight process gives the Congress access to a 
range of information from GAO, from CBO, CRS, and the 
Inspectors General, as well as from non-governmental sources. 
Each of these sources has a somewhat different perspective, but 
collectively, they offer a rich view of program performance. 
Congress has the ability to develop a regularly-scheduled 
assessment of programs within its oversight role.
    Thank you for inviting me to testify, and I am available to 
work with the Subcommittee and its staff to continue this 
conversation. Thank you.
    Senator Coburn. Thank you both for your testimony.
    I know that the oversight is there. The Congress, less than 
7 percent of their hearings are oversight. Ms. Radin, my 
question is, how are you going to change that? How are you 
going to get Congress to do the oversight that is necessary and 
how are we going to measure performance if Congress won't do 
the oversight?
    Ms. Radin. Has there been an attempt to try to prop up the 
process?
    Senator Coburn. That is one of the things that Senator 
Carper and I are doing with this very Subcommittee, but it is a 
new attempt. We are going to average about two Subcommittee 
hearings a week. That is about 60 or 70, maybe even 80 hearings 
on oversight.
    But the fact is, if you look at all the hearings in 
Congress, the vast majority of them are not oversight hearings. 
The vast number are on the basis of new legislation or 
appropriations. So my question to you is, if we are not going 
to use the PART performance tool, which everybody recognizes it 
has weaknesses, what tool are we going to use?
    Let us also assume all the programs out there are good. Let 
us just make that assumption from it. They are all good, but we 
are going to come up with this budget hurdle we are going to 
face. So the thing we have to know is how do we prioritize 
them? Which is the best, because some are going to go away. I 
promise you, in the next 10 years, a large portion of the 
Federal Government is going to go away because we will not be 
able to afford it. So how do we measure what do we give best to 
the Federal Government?
    Ms. Radin. The Subcommittee certainly can't do everything 
on its own. But can't there be some effort in the organization 
of the Senate and in the House to really focus on the 
authorizing committees, because they are the ones that really 
know the programs. It seems to me that there has not been a 
priority given to oversight in those committees, and that seems 
to me something that the organizers of the Congress can push.
    It is not going to happen all at once. We know that there 
have been attempts to try to rationalize the budget process and 
it is maybe a little bit less irrational than it was in the 
past, but the system is so complex that thinking that we can 
deal with it in one fell swoop is just not realistic.
    Senator Coburn. With all due respect, I don't think we are 
thinking we can do it in one fell swoop. We have seen a 
transition process. And the PART may not be the answer, but 
some measure of performance and some level of accountability so 
that people understand what the end goal is that is associated 
with a relook at how you are performing on that end goal has to 
be a component of every Federal Government program that we 
have. We have to start asking the hard questions because we are 
going to get the hard questions asked about the end, the tough 
ones in the next 5 to 10 years.
    Ms. Radin. I am not arguing that you shouldn't ask those 
questions. I am suggesting that Congress has to grapple with 
that in its own terms and that turning it over to OMB really is 
violating what the Constitution has created. The ball is in 
your court.
    Senator Coburn. That is exactly why we are having the 
hearing. We haven't turned it over to OMB. But a measurement of 
performance, no matter who does it, still gives some 
information with which the Congress can act on. And the 
question may not be whether Senator Carper and I agree on a 
program. The question may be which of the following ten 
programs, two out of them are going to have to go if we are 
going to live within the constraints for our grandchildren. 
Which two, and how do we measure that?
    To have a ratings program or an assessment program within 
the agencies within the program in terms of creating the 
expectation for performance is not a bad idea. I don't think 
that there is anybody up here that is suggesting Congress is 
about to give that over. They are not, because the only way you 
change it is through Congress.
    The other point that I would just ask is you recognize that 
over 25 percent of our discretionary budget is unauthorized 
right now. There is no expertise on it because there is no 
authorizing language and hasn't been for 10 or 15 years. So 
Congress has its own problems in terms of authorizing the 
spending that we have.
    First of all, unanimous consent to put the Mercatus Center 
evaluation into the record, and without objection, that is so 
ordered.\1\
---------------------------------------------------------------------------
    \1\ ``An Analysis of the Office of Management and Budget's Program 
Assessment Rating Tool (PART),'' June 2005, by Eileen C. Norcross, 
Mercatus Center, George Mason University, appears in the Appendix on 
page 87.
---------------------------------------------------------------------------
    Senator Coburn. Ms. Norcross, compare the Mercatus Center 
to the evaluation by OMB and their process. If you line those 
two up, what did you see?
    Ms. Norcross. The annual scorecard?
    Senator Coburn. Yes.
    Ms. Norcross. Our annual scorecard evaluates performance, 
the annual performance reports that agencies must submit. And 
what we found this year was that about 11 percent of the budget 
is represented by good reporting, and what we mean by that is 
that these agencies receive a satisfactory score according to 
our criteria, which assess reports on whether they produce 
public benefits, how transparent they are, and on leadership.
    The PART tool assesses government programs. So the annual 
scorecard we produce really evaluates a GPRA requirement. The 
PART tool evaluates on the program level.
    Senator Coburn. OK. Thank you. Senator Carper.
    Senator Carper. Let me just start off by welcoming you and 
thank you very much for being here and for the thought you have 
given to these issues and your counsel to us today and to the 
Congress.
    Let me start off by asking, where do you think the two of 
you agree in terms of your advice to us and where do you 
disagree?
    Ms. Radin. Well, I think we both agree that assessing 
performance is important, that the question is how do you do it 
and whether you acknowledge that there is incredible diversity 
of programs in the Federal portfolio.
    I am concerned about the PART evaluations that I think have 
really ignored the will of Congress. David Walker talked about 
the importance of Congress defining goals. Now, some of the 
goals and programs are outcome goals, but some of them are also 
process goals and those are legitimate. And yet the approach 
that we have used in both GPRA and in PART have suggested that 
process goals aren't important.
    So, for example, Congress may develop a goal that says we 
want to involve particular groups in the decisionmaking process 
who have not been involved before. That goal is not new. The 
Cooperative Extension Service back in the 1930s really created 
process goals, and I think that is a very legitimate role for 
Congress.
    We have also seen efforts in research, for example, that 
are really process goals and not outcome goals. We focus on 
process because we don't know what is going to occur as a 
result of a research effort.
    In other cases, Congress has actually determined the means 
for developing particular programs. In both the Clean Water 
Revolving Fund and the Consumer Product Safety Commission, 
Congress told the agency not to use cost-benefit analysis in 
making their decisions about programs, yet those agencies got 
very low ratings because they didn't have a cost-benefit 
analysis.
    Now, you asked earlier whether OMB, there were times in 
which OMB, in a sense, preempted the voice of Congress, and it 
has happened. In another example, the Appalachian Regional 
Commission got a low rating because it was playing a 
coordination role and wasn't outcome-oriented. But the very 
fact of that Appalachian Regional Commission is to focus on 
coordination. That is its goal. But it is not an outcome goal, 
it is a process goal.
    So I think this makes things a lot more difficult for the 
agency to fit into the PART process.
    Senator Carper. Let me go back to my original question, and 
I will direct it this time to Ms. Norcross. Where do you see 
you and Dr. Radin agreeing in your testimony? Where do you see 
you disagreeing?
    Ms. Norcross. I would say we both agree on the importance 
of using performance information. We might have disagreements 
on the PART itself and the extent to which it should be used by 
Congress. I don't know that I advocate PART being used by 
Congress wholesale. I think the Executive Branch took the 
initiative to develop a tool that would evaluate the government 
on a program level and I would like to see Congress also 
incorporating that kind of performance information, whether it 
is the PART or not, once Congress demands performance 
information, agencies have to produce it. They have to know how 
their programs are doing and they have to produce better data, 
and it just gives us more objective data to make better 
decisions.
    Senator Carper. Early this morning, on the way down on the 
train, I had a telephone conference call with my State director 
and with the person who is in charge of our largest county for 
me. We were talking about the results of a faith-based housing 
initiative, a home ownership initiative that we have going in 
each of our three counties, and we were talking about how the 
program was going with respect to being successful or not.
    And the question I asked, and I ask this question a lot of 
my staff, is how do we measure success? And the response that 
came back was that we measure success with respect to how many 
people are involved in home ownership counseling programs. And 
I said, is that really the way we want to measure success, or 
do we want to measure success with respect to the number of 
people who become homeowners because of their participation in 
this process.
    I am sort of reminded of that conversation here today, Mr. 
Chairman, because how we measure success is really important as 
to how we evaluate these programs.
    First of all, we have to answer that question. How do we 
measure success, whether it is a home ownership program or 
whether it is a program to get people off of welfare or any 
variety of programs to make us safer, but to be able to 
determine how we measure success is just critical and I don't 
know that we spell that out all that often in legislation that 
we pass. Since we don't spell it out, I think it makes it all 
the more difficult for OMB or anybody else to come in and say 
programs are a success or are doing what they are supposed to 
or not because we have not ourselves said, in order for this 
program to be successful, this has to happen.
    Ms. Radin. I would say that what you are describing is a 
reliance on output measures rather than outcomes. One of the 
reasons why we tend to fall back on output measures is because 
so many of the outcomes are not measurable today but in the 
future. Yet we are talking about annual budget processes. You 
have to give a program, let us say, 5 years or 10 years to 
really show any outcomes. So we use the outputs as an 
indicator, and this is a classic problem for the whole 
evaluation field. People have really tried to figure out how 
you can focus on outcomes when you have a time delay in the 
process.
    Senator Carper. All right. Thank you.
    Senator Coburn. Well, the important thing is that we have 
some process ongoing to measure, and it is not just that we are 
going to measure it, it is that we are going to create the 
expectation that it is going to be measured, which is just as 
important as the measurement itself.
    Just a couple of things. First of all, I thank each of you 
for coming. I have not gotten through the Center's evaluation. 
I am going to do that. I would like to leave the record open so 
that we can send you additional questions.
    I guess one additional question for you, Dr. Radin. Can you 
not measure process? In other words, if the Appalachian 
Regional Commission is a coordinator of effort, can you not 
measure that coordination?
    Ms. Radin. You can, but the way that we have approached 
these kinds of processes----
    Senator Coburn. Now you are talking about OMB's approach.
    Ms. Radin. Yes.
    Senator Coburn. OK.
    Ms. Radin. I think you can measure processes as long as you 
acknowledge that the process is what Congress is trying to 
accomplish with the program. That will be different from 
outcomes.
    Senator Coburn. I think that is true, and I would assure 
you with the diversity in the Senate that what OMB brings to 
us, we are going to look at that evaluation and then we are 
going to make an independent judgment on what is or what isn't 
going to be funded--and unfortunately, from my viewpoint, a lot 
of things are going to get funded that shouldn't and a lot of 
things may not get funded that should, and just the opposite 
viewpoint on somebody sitting on a different political 
spectrum.
    But the most important thing is to reach above that and 
say, no matter whether we agree or not, let us say we agree on 
all of them needing to be funded. How are we going to measure 
which ones have to have priority, because that is really what 
is coming. What is the priority for the Federal Government in 
how we spend, what we spend, and where do we spend it?
    We are not going to see the polarization on issues, I 
think, in the future because the problems economically are 
going to be so difficult. It is going to be which ones have the 
highest priority and which ones do we as a group think needs to 
be funded first, second, third, fourth, and fifth. So 
measurement of whether it is outcome or output or trend lines 
on outcome or output are going to become very valuable for us.
    Ms. Radin. One of the things that I have been concerned 
about is that I think most of the effort in the performance 
area (not just PART), has really focused on efficiency values. 
But there also are effectiveness values and there are also 
equity values and we shouldn't forget them because many 
programs have all of those elements.
    Senator Coburn. And I think the other thing that we heard 
before you came is that there are some programs that aren't 
performing because they are underfunded. In other words, they 
are not going to achieve the critical mass to achieve the goal 
that Congress wanted them to because the resources haven't been 
put there. So we need to look at all of that.
    Any other comments either of you might want to make?
    Senator Carper. Mr. Chairman, I do have one last question, 
if I could. This discussion really reminds me of conversations 
I have had with my colleagues before about programs that are 
not being authorized, not being reauthorized, not being 
revisited, and yet the funding continues. In some cases, it 
makes sense. In other cases, frankly, it does not. In some 
cases, it reflects not an inappropriate thing to go forward and 
to fund a program that has not been reauthorized. In other 
cases, I think it really reflects a failure on our part in the 
Legislative Branch.
    I would like to ask Dr. Radin, one last question, if you 
don't mind. I think you argue, I believe in your testimony, 
that at least some of the ratings given by OMB reflect some of 
the views that critics have held about programs for some time. 
Are there weaknesses within the Program Assessment Rating Tool 
or in the way it has been implemented that allow or maybe even 
encourage bias?
    And as a follow-up, do you think it is possible for OMB, 
regardless of whether it is staffed by Democrats or by 
Republicans, is it possible for OMB to do the kind of work and 
make the kind of determinations that the rating tool calls for 
without introducing some level of bias, whether it be political 
or ideological?
    Ms. Radin. I think one of the points that GAO made in its 
report a year ago January was that there is incredible 
variability in OMB in the way the budget examiners have been 
dealing with PART. And so you have some cases in which a budget 
examiner for the last 20 years has been trying to kill a 
program, makes a recommendation for zero budgeting and Congress 
puts the money back. And then there are other cases in which 
the budget examiner loves the program and so it does extremely 
well.
    And so I think that this process really gives an incredible 
amount of authority to the individual budget examiner. Much of 
that is not really transparent so that we don't know why a 
rating occurs. The child welfare community-based Child Abuse 
Prevention Program was rated in a number of elements that, 
``this element is not applicable.'' Yet the overall rating was 
``results not demonstrated'' and nobody really quite 
understands how you got from that, the ``not applicable'' to 
the ``results not demonstrated.''
    So the fact that this isn't transparent, I think is a big 
issue, and that is why this process is too important to really 
have it centralized in the hands, really, of a small number of 
people in OMB.
    Senator Carper. All right. Thanks to both of you very much.
    Senator Coburn. Thank you. The meeting is adjourned.
    [Whereupon, at 3:40 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

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