[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





      WHY RESHUFFLING GOVERNMENT AGENCIES WON'T SOLVE THE FEDERAL 
                      GOVERNMENT'S OBESITY PROBLEM
=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 15, 2012

                               __________

                           Serial No. 112-138

                               __________

Printed for the use of the Committee on Oversight and Government Reform









         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform
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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director












                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 8, 2012....................................     1

                               WITNESSES

The Honorable Mark A. Warner, United States Senator from the 
  State of Virginia
    Oral statement...............................................     4
    Written statement............................................     8
The Honorable Ron Johnson, United States Senator from the State 
  of Wisconsin
    Oral statement...............................................    11
    Written statement............................................    13
Paul C. Light, Ph.D., Paulette Goddard Professor of Public 
  Service, New York University
    Oral statement...............................................    22
    Written statement............................................    24
The Honorable Dan G. Blair, President and CEO, National Academy 
  of Public Administration
    Oral statement...............................................    34
    Written statement............................................    36
Mr. Robert Shea, Grant Thornton LLP
    Oral statement...............................................    46
    Written statement............................................    48
Mr. Max Stier, President and CEO, Partnership for Public Service
    Oral statement...............................................    55
    Written statement............................................    57

                                APPENDIX

The Washington Post Article: Government continues to shrink, 
  despite `obesity problem' rhetoric.............................    80
The Honorable Elijah E. Cummings, Ranking Member, A Member of 
  Congress from the State of Maryland: Opening Statement.........    82
List of the 108 committees and subcommittees.....................    84

 
      WHY RESHUFFLING GOVERNMENT AGENCIES WON'T SOLVE THE FEDERAL 
                      GOVERNMENT'S OBESITY PROBLEM

                              ----------                              


                      WEDNESDAY, FEBRUARY 15, 2012

                  House of Representatives,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 9:34 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Walberg, Lankford, Labrador, 
DesJarlais, Gowdy, Kelly, Cummings, Towns, Norton, Kucinich, 
Tierney, Connolly, Quigley, and Murphy.
    Staff Present: Michael R. Bebeau, Assistant Clerk; Molly 
Boyl, Parliamentarian; Lawrence J. Brady, Staff Director; Adam 
P. Fromm, Director of Member Services and Committee Operations; 
Linda Good, Chief Clerk; Tyler Grimm, Professional Staff 
Member; Jennifer Hemingway, Senior Professional Staff Member; 
Frederick Hill, Director of Communications and Senior Policy 
Advisor; Ryan Little, Professional Staff Member; Justin 
LoFranco, Deputy Director of Digital Strategy; Mark D. Marin, 
Director of Oversight; Tegan Millspaw, Research Analyst; 
Jeffrey Post, Professional Staff Member; James Robertson, 
Professional Staff Member; Laura L. Rush, Deputy Chief Clerk; 
Rebecca Watkins, Press Secretary; Kevin Carter, Detailee; 
Krista Boyd, Minority Deputy Director of Legislation/Counsel; 
Beverly Britton Fraser, Minority Counsel; Kevin Corbin, 
Minority Deputy Clerk; Carla Hultberg, Minority Chief Clerk; 
and Paul Kincaid, Minority Press Secretary.
    Chairman Issa. Good morning. The committee will come to 
order.
    We on the Oversight Committee exist to secure two 
fundamental principles. First, Americans have a right to know 
that the money Washington takes from them is well spent. And 
second, Americans deserve an efficient effective government 
that works for them. Our duty on the Oversight and Government 
Reform Committee is to protect these rights. Our solemn 
responsibility is to hold government accountable to taxpayers 
because taxpayers have a right to know what they get from their 
government. We have a responsibility to work tirelessly in 
partnership with citizen watchdogs to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy.
    I will now recognize myself for an opening statement. Today 
we are at the core of our responsibility. President Obama 
recently unveiled or announced in the State of the Union a 
reorganization plan. His request for authority comes without 
any specifics, simply the need for reorganization. Although we 
recognize that there may be a specific plan that the President 
can work with us on, I believe this committee has an obligation 
to go far beyond what the President has in mind.
    In fact, under both this President and his predecessor OMB 
has told us that Congress won't, in fact, be necessary, that we 
can do it with limited authority. That is simply not true. The 
history has shown since the Hoover Commission that the only way 
to get genuine change in the Federal bureaucracy is to have 
buy-in in advance from the House, the Senate, the community at 
large and the Executive branch. Reorganizations, like the first 
major reorganization, require multi-term occurrences. 
Congresses change, the House and the Senate changes 
significantly and the White House is likely to change who is in 
it, not because this President may not win reelection but 
because reorganization takes more than 4 or 5 years. A good 
plan is in fact a plan for at least a decade and one that takes 
years to accomplish. Just bringing together disparate databases 
that in fact have grown up over a generation into a single 
cohesive interactive system would easily take two presidencies.
    So as we begin today talking about waste in government 
anew, let's understand that since 2008 spending on Federal 
programs has increased by hundreds of billions of dollars. We 
simply cannot reshuffle the deck chairs on this Titanic. The 
truth is that uncollected debts total over $290 billion, 
improper payments total at least $115 billion in 2011, the 
Federal Government has grown its workforce by 200,000 
employees. Last year the duplicative programs reported by the 
GAO identified numerous areas that overlap, and in fact none 
have changed during the interim.
    It is very clear that the administration is on the right 
track by saying that we need a major reorganization, but this 
committee more than any other committee in the House has an 
obligation to look at the big picture. We have to look at last 
Sunday's announcement of the new budget which will add $1.3 
trillion to the deficit. Clearly we cannot tax our way out of 
it and we cannot cut our way out of it. Reorganization that 
brings efficiency; in other words, win-win situations in which 
you make changes in which all the essential services get 
delivered but they get delivered for less.
    Additionally, every Congress we talk about how much is not 
collected and yet we haven't made the fundamental investments 
into making sure that next year and the year after collections 
are more and more honest because of the kind of transparency 
that real reform and database and in cooperation between 
Cabinet positions can bring. That is why I am excited to have 
not one but two Senators as our lead panel. And before we go to 
them I now recognize the ranking member, Mr. Cummings, for his 
opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman. And I 
would like to welcome all of our distinguished witnesses here 
today. And let me thank you, Mr. Chairman, for agreeing to my 
request to invite Senator Warner who has been a champion of 
government reform efforts for many years, both as Governor of 
Virginia and now as the head of the Senate BudgetCommittee's 
Task Force on Government Performance. I would also like to 
thank the chairman for agreeing to my request to invite our 
witness on the second panel Max Stier, the President and CEO of 
the Partnership for Public Service, which issued a very good 
report on government efficiency issues last year.
    Now on the topic of today's hearing I confess I am a bit 
confused. The hearing title suggests that the Federal 
Government has an obesity problem that somehow caused the 
Nation's budget deficit. But according to economists and 
financial experts, the most significant causes of the Federal 
deficit are, one, the Bush era tax cuts for the wealthy; two, 
the wars in Iraq and Afghanistan; and, three, the fallout from 
the 2008 financial crisis. Unfortunately, we will not be 
addressing any of these issues today.
    Mr. Chairman, I ask unanimous consent to enter into the 
record an excellent Washington Post column published yesterday 
titled Government Continues to Shrink Despite Obesity Problem 
Rhetoric.
    Chairman Issa. Since it is excellent, without objection so 
ordered.
    Mr. Cummings. It so happened to be by Joe Davidson who did 
a great job. The column addresses today's hearing and describes 
how the size of the Federal workforce has decreased and the 
government is doing more with less.
    The hearing title also refers to a recent proposal by the 
President to reorganize and consolidate a number of our 
Nation's trade agencies into a single department that will be 
more effective and save billions of dollars in the process. 
Unfortunately, we will not be addressing the details of this 
proposal today either.
    Instead, today's hearing appears to be a survey of 
proposals to reduce the size of government and cut the pay and 
benefits of Federal employees without focusing on the negative 
impacts of these proposals on core services that the American 
people depend upon.
    I think it is safe to say that every member of the 
committee and this Congress agrees that the Federal Government 
can and should work better. We should always strive to ensure 
that agencies work more effectively and efficiently on behalf 
of the American taxpayers. Our differences come in figuring out 
how we get there. I do not believe that the way to reform 
government is to attack millions of hard working middle class 
workers who are already contributing $60 billion towards 
deficit reduction as a result of the existing 2-year pay 
freeze. Yet the House is scheduled to vote this week on a bill 
approved by this committee that will take an additional $44 
billion out of their pockets by slashing existing pension 
benefits for new, current and retiring Federal workers.
    This is a wrong approach. We should not try to solve our 
budget problems on the backs of middle class Federal workers 
while we refuse to ask the wealthiest Americans, refuse to ask 
them to contribute even one penny more towards these goals. 
Instead, we should reform government by cutting waste. For 
example, there are billions of dollars waiting to be saved 
through contracting reform. The mission on wartime contracting 
identified between $31 billion and $60 billion in waste and the 
United States continues contracting in Iraq and Afghanistan. 
And Congressman Tierney to his credit has introduced a bill to 
enact one of the Commission's recommendations by creating a 
special inspector general for Overseas Contingency Operations.
    Congress should also promote greater competition in Federal 
contracts. Federal agencies awarded about $170 billion in 
noncompetitive contracts in 2009 alone. The administration is 
also taking a number of actions, such as improving agency 
systems to reduce improper payments by the Federal Government 
by $50 billion by the end of the year. One key tool that we 
already have in place is GPRA Modernization Act on the House 
side. This new law came out of this committee and it was signed 
by President Obama on January 4, 2011. It requires the 
administration to develop crosscutting agency priority goals 
and to track progress toward meeting those goals.
    Finally, I know that Senator Warner was one of the biggest 
proponents of this law on the Senate side, and I understand he 
has been pressing the administration to fulfill each and every 
provision of the new law. I look forward to hearing his 
testimony, as well as that of Senator Johnson and all of our 
witnesses today. And again, Mr. Chairman, thank you very much.
    Chairman Issa. Would you yield to the gentleman from 
Virginia for a moment?
    Mr. Cummings. Of course.
    Mr. Connolly. Thank you, Mr. Chairman. And I thank the 
ranking member. I just wanted to of course welcome both of our 
Senators, but I particularly wanted to welcome my home state 
Senator, soon to be the senior senator from the Commonwealth of 
Virginia, Mark Warner. Senator Warner and I worked together 
when he was the Governor and I was Chairman of Fairfax County. 
And now we have the privilege of both serving our constituents 
here in the Congress. And I want to thank him for his 
leadership, his willingness to try to find bipartisan 
solutions, his leadership on trying to find creative solutions 
to our fiscal problems, and of course his championship for the 
Federal workforce where the Commonwealth of Virginia hosts so 
many Federal employees.
    So I just wanted to welcome him to the Oversight and 
Government Reform Committee. And I thank the chair.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Chairman Issa. Thank you. We now go to our distinguished 
panel of witnesses. Whether junior or senior Senator you are 
still distinguished. Senator Mark Warner represents the 
Commonwealth of Virginia, and of course Senator Johnson 
representing the State of Wisconsin. If you were not members of 
our body you would be required to be sworn pursuant to 
committee rules. Since all of us on both sides of the dais at 
this time are sworn officials we would like to hear your 
testimony. Since you are Senators we have to tell you that we 
do have this clock. It runs for 5 minutes. And it means not 
that much but try to summarize as close as you can to 5 
minutes.
    Senator Warner.

 STATEMENT OF THE HON. MARK R. WARNER, A UNITED STATES SENATOR 
                   FROM THE STATE OF VIRGINIA

    Senator Warner. Thank you, Chairman Issa and Ranking Member 
Cummings, for inviting me today, and members of the committee. 
I am proud to be here with my good friend Ron Johnson. I want 
to make sure the record shows that both Senator Johnson and I 
were here at the committee on time. And as the chairman 
mentioned a little bit earlier, since we are both fairly junior 
in the Senate we will soon get over this affliction and start 
treating you House Members as House Members as opposed to just 
new Senators. But we really look forward to the opportunity to 
be here and discuss the way government works.
    I also want to thank the chairman for the collaboration we 
have had on the data bill, something I think that is very 
important in terms of bringing across the board financial 
transparency to government operations, and I look forward to 
seeing if we can get that passed into law.
    I want to echo what the ranking member said. I looked at 
the title for the hearing today and I had to think it was a 
colorful title. I am not sure that our government is obese, but 
I am sure it could use a bit of housekeeping.
    Chairman Issa. Senator, it is kind of like when you have a 
really good article but the headline is different. Different 
groups write them.
    Senator Warner. I get it, I get it. I think we would all 
agree though that for too long we have added programs, 
regulations and policies layer after layer without ever taking 
time to step back and review the structure of government to see 
if these existing programs and policies really make sense. And 
this is something that Senator Johnson and I have worked on on 
the Budget Committee together and I know it is the function of 
this committee. I have got a lot of ideas, and recognizing the 
time constraints I want to try to hit these very quickly and 
would love to have the opportunity to come back and share in 
more detail any of the subjects that I am going to briefly 
discuss. And I do think that, as Ranking Member Cummings said, 
that in a number of these areas President Obama has made 
progress.
    Let's start with the overlap and duplication of Federal 
programs. I recall as a Governor how frustrating it was for me 
when we looked at things like workforce training, when we 
looked at teacher quality programs. Trying to rationalize them 
at the State level was virtually impossible because we had so 
many different Federal programs with different streams of 
funding. We should not have 82 teacher quality programs across 
10 different agencies. We shouldn't have 56 financial literacy 
programs across 20 different agencies.
    I do believe that reorganization and consolidation of 
similar and duplicative programs can provide more effective 
services and at the same time save taxpayer money. There is a 
couple of different ways we can go about this. Ranking Member 
Cummings mentioned the Woodlace bill that probably most folks 
have never heard of other than members of this committee, the 
GPRA bill, the Government Performance and Results Modernization 
Act of 2010, which I was proud to co-sponsor. One of the 
requirements of that bill was to try to limit the number of 
goals an actual agency has. Because anybody who has been in 
business knows that if you have 10, 20, 30 goals you really 
have no major goal. Unless we can limit this to a more limited 
number and start looking across the function of government, not 
just by program and by agency, we are not going to be 
effective.
    On Monday, when the President outlined his budget, he 
outlined 14 cross-agency priority goals in the 2013 budget. As 
I mentioned previously, there was no requirement. This was one 
of the requirements of GPRA. The 14 goals I think that the 
President outlined were clear. One, for example, was the goal 
to double exports by the end of 2014. That is clearly in the 
Nation's interest and cuts across a series of agencies.
    So I think we are seeing some of the results of GPRA 
already. I would argue as well one area that the administration 
I think needs to do better on, we asked in GPRA for agencies 
not only to identify their top programs, but to do something 
that has never been done before, which is identify the least 
performing programs. We too often in government want to 
highlight our successes, we are not as willing to expose those 
areas that need improvement. And we need to continue to focus 
the administration on performance of least performing programs.
    But obviously we continue to do more. The President has 
also requested that we restore executive reorganization 
authority with expedited congressional review. And again, there 
would be a process for Congress to review any proposed 
reorganization. I urge the committee to consider this proposal 
favorably.
    As the chair and the ranking member knows, I spent most of 
my career in business and every CEO has the authority to 
reorganize and structure their company to improve results. As 
Governor I had the authority to reorganize the State agencies, 
and I was also held accountable for results. In fact, every 
President from 1932 to 1984 had the authority to submit 
proposals to reorganize the Executive branch. I believe we 
should give the President as our Chief Executive the authority 
to do this job and modernize the way the government works to 
deliver better results, and again hold the President 
accountable.
    I think one of the things that we can include in this type 
of proposal is to make sure that any reorganization would 
actually save money and eliminate overhead. And I would also 
point out again that what the President is proposing would 
still give Congress the ability to vote on an up or down basis 
on any specific reorganization.
    I intend to be a sponsor of the President's Reforming and 
Consolidating Government Act in 2012 in the Senate, and I can 
assure you that there will be broad bipartisan support in the 
Senate, and I hope again that same kind of support can be 
garnered here in the House. And I would argue since this bill 
is coming so late in the President's term this would obviously 
be a tool whoever becomes the next President serving in January 
of 2013.
    Another area I believe we need to do more housekeeping on 
is regulations, and I know the committee again has worked on 
this as well. I believe regulations are like programs. We have 
added layers and layers over the years. But we rarely go back 
and review what works. We need regulatory reform to put in 
place basic metrics and incentives to provide some regulatory 
housekeeping.
    I am working on a proposal that will require all agencies, 
executive and independent, to conduct economic impact analysis 
for all those proposed regulations costing over $100 million. I 
have also got a proposal that will build on this that will try 
to change some of the incentives inside the agencies. Right now 
an agency is basically rewarded with more personnel and more 
funding if you add more regulations. We have got to try to 
change that framework. So my regulatory reform proposal will 
also include a PAYGO type mechanism that will require agencies 
to identify offsets that will force them to modify or eliminate 
rules from their existing stock of regulations whenever they 
seek to put new regulations in place. This kind of balancing 
out aspect will actually, I believe, change the incentives 
inside the agency so as they move forward on proposed 
appropriate new regulations you have to find that offset. It 
makes I think good commonsense. And before you say this would 
be impossible to do, the U.K. Has actually implemented a 
similar system called the one-in/one-out proposal. It has been 
up and operating for a couple of years right now. And again, we 
are modeling after some of the very effective things that have 
taken place in regulatory reform in the U.K.
    In addition, as we have looked at regulatory reform I have 
seen that one of the things we don't do a very good job of is 
ever looking back and seeing did the regulation that was put in 
place actually achieve its goal. It is remarkable, we have 
never done this in any meaningful way. And what we have instead 
is we have sometimes agencies saying here are all these 
benefits, businesses saying here are all these costs. We don't 
have some level of independent analysis on this. I believe we 
need a legislative agency, like the CBO, to review the economic 
impact analysis every 5 years or so to determine if the 
regulations that we have put in place, that the agencies have 
put in place, are working and report this information to 
Congress. This independent analysis will provide helpful data 
for Congress and the agencies to modify and eliminate both 
outdated laws and regulations.
    In closing, let me just say this. We do have a lot of work 
to do. I did see recently the President identified 9,000 
reports that agencies submit to Congress. If there was one, 
again, low hanging fruit that we could relieve some burden on 
the agencies, but also start to streamline some of this 
duplicative reporting, systems also need to be reviewed. I do 
think it is the responsibility for Congress to think boldly in 
this area. We have also got a proposal. We are working on a 
civilian BRAC process in terms of real property, something that 
as we are looking at our enormous deficits we ought to put in 
the hopper as well.
    So I would like to come back at some point, recognizing I 
have well exceeded my five minutes here, as any good Senator 
would. But I look forward to working with this committee. I 
appreciate the opportunity to appear before it. And I would 
want to again say, Senator Johnson, while he is a new Senator, 
has taken up this mantle as well and he is a good colleague and 
someone I know will be a firm ally of this committee in terms 
of making government more efficient for our people, our 
taxpayers and at the end of the day savings in dollars.
    Thank you, Mr. Chairman.
    [Prepared statement of Senator Warner follows:]





    
    Chairman Issa. Thank you, Senator. And Senator Johnson, 
even though he has got you by a year and a half more or less 
you can have the same time. Please, you are recognized.

STATEMENT OF THE HON. RON JOHNSON, A UNITED STATES SENATOR FROM 
                     THE STATE OF WISCONSIN

    Senator Johnson. Thank you, Mr. Chairman. Good morning 
Chairman Issa, Ranking Member Cummings, members of the 
committee. Thank you for the opportunity to participate in 
today's hearing. We are entering the fourth year of an 
administration that promised to cut the deficit in half by the 
end of its first term. The U.S. incurred a deficit of $459 
billion in 2008, the year before President Obama entered 
office, yet the deficit grew to $1.4 trillion in fiscal year 
2009, followed by $1.3 trillion in 2010, $1.3 trillion in 2011, 
and OMB has just projected another deficit of $1.3 trillion in 
2012.
    And as a quick aside, contrary to popular belief, the total 
cost of the 2001-2003 tax cuts plus the wars in Iraq and 
Afghanistan, approximately $300 billion, when our annual 
deficit is $1.3 trillion, or $1,300 billion, so that is not the 
main driver of our deficit.
    Any proposal to consolidate operations that would actually 
reduce spending would be welcome and should be enacted. And 
here is where I would like to commend Senator Warner as being a 
real leader in the Senate. And it is a real area I think where 
we can work on a bipartisan basis to obtain reform and enact 
reform in government. So I certainly look forward to working 
with you on that.
    But when placed in proper perspective to the magnitude of 
our budget and regulatory crisis, President Obama's requested 
fast track reorganization authority looks more like an election 
year talking point than a serious cost cutting proposal. Why 
should the American people take this proposal seriously when 
President Obama's fiscal 2013 budget adds $10.6 trillion to our 
current debt level and proposes spending another $47 trillion 
over the next 10 years? By the way, this compares to his budget 
from last year that proposed spending $46 trillion over 10 
years. Where are the spending cuts? The Federal Government is 
obese. For 50 years, from 1960 to 2008, Federal spending 
averaged 20.2 percent of GDP. Last year it exceeded 24 percent. 
And without reform it will consume 35 percent of our economy by 
the year 2035.
    As Federal Reserve Board Chairman Bernanke stated in 
testimony before the Senate Budget Committee last week, this 
dynamic is clearly unsustainable. Federal spending is the 
visible portion of government fat. Federal regulations are the 
less visible plaque clogging the arteries of our economy.
    According to a study commissioned by the Small Business 
Administration, it cost $1.75 trillion to comply with Federal 
regulations in 2008. That amount is larger than all but eight 
economies in the world, and is a burden imposed by Washington 
on job creators each and every year. Reshuffling agencies, akin 
to rearranging deck chairs on the Titanic, will do little to 
slow the out-of-control growth of the Federal Government.
    Instead of saving costs, consolidation efforts could take 
on a life of their own. For example, while the mission of the 
Department of Homeland Security is a worthy one, no one knows 
if the cost of consolidating 22 agencies has been worth the 
price tag. A 2011 study by Ohio State University estimates the 
total cost to the economy of homeland security measures tops $1 
trillion. With more than 230,000 employees, DHS is now the 
third largest Cabinet department. Yet an unqualified audit of 
its operations remains elusive and unfulfilled.
    And let's face it, the Federal Government is replete with 
unfulfilled promises. Our $16 trillion war on poverty is 
impoverishing America. In 1965, .3 percent of the population, 
561,000 individuals, received food stamps. Today that number 
has increased to 46 million, or 14.8 percent of all Americans. 
During the same period the percentage of families living below 
the poverty line has only slightly declined from 13.9 percent 
to 11.1 percent, but the absolute number of individuals in 
poverty has almost doubled from 24 million to over 46 million. 
Partly as a result of government programs making out of wedlock 
births financially possible, those birth rates have skyrocketed 
from 7.7 percent in 1965 to 40.6 percent last year with obvious 
negative economic implications for those families and Federal, 
State and local budgets. These are not metrics of success, they 
are profoundly disappointing metrics of abject failure.
    As someone new to this process, it is apparent that 
Washington's bias is geared for addition and rarely 
subtraction. Last year proved the current critical political 
makeup of Washington does not possess the courage or will to 
adequately limit the growth of government. Enforceable spending 
controls, like the CAP Act, and a constitutional amendment to 
limit the size of government must first be passed to force 
everyone to negotiate spending priorities and entitlement 
reform. Everyone should be at the table and everything should 
be put back on budget subject to annual appropriations and 75-
year solvency standards.
    To address the growing regulatory burden on job creators, a 
regulation moratorium should be put in place until measures 
like the United Kingdom's one-in/one-out rule and the REINS Act 
can be enacted to achieve regulatory balance.
    And finally, a bicameral sunset committee should be 
established with the sole mandate of identifying Federal rules, 
regulations and laws that do more harm than good and then 
recommending their elimination. In a government where most 
activities are additive a permanent sunset committee would 
provide a formalized process for subtraction. That would be a 
welcome change.
    Thank you for the opportunity to testify.
    [Prepared statement of Senator Johnson follows:]





    Chairman Issa. Thank you. I will now recognize myself if 
you will take some questions. Senator Warner, that 
distinguished document, the very good document that was entered 
in the record by the ranking member, talks about the size of 
the Federal workforce, and it takes full advantage of a million 
men and women who were taken out of the military during the era 
of shrinking that they mention.
    Do you think that the size of the Federal workforce and 
number of employees is the appropriate measure or do you 
believe that when we are looking at the size of government we 
should use Senator Johnson's metrics, which is the portion of 
the GDP that is consumed by government?
    Senator Warner. I would first of all point out that I have 
used those same numbers on the----
    Chairman Issa. Well, I knew you would go with this.
    Senator Warner. --amount of consumption of Federal 
Government at 24, 25 percent. Of course I also point out the 
fact that revenues now are at 15 percent of a 75-year low. And 
any time we have had, as somebody who has been more than 
slightly obsessed about the $15 trillion debt and deficit, if 
you look back over those 75 years any time we have had relative 
balance it has been when spending and revenues have been 
between that 19-1/2 and 21 percent. So I want to get in the 
point that if we are going to get a deficit solution it is 
going to require both a shrinking and an increase on revenue 
size.
    I think in terms of the size of the Federal workforce what 
is the exact right number for the workforce I think is what is 
the least number possible to provide efficient service. As we 
were talking in the anteroom, you know, the size of the Federal 
workforce right now is a bit of a mystery because are we 
counting full-time employers, are we counting contractors? And 
those numbers, the fact that we don't have frankly as good a 
data on the size, the fact that we don't know, for example, the 
exact number of contractors that DOD has at this point, this is 
one area where I would completely agree with Senator Johnson, 
we ought to have at least full and complete data so then we can 
have this kind of discussion.
    Chairman Issa. Well, and I think that is the leading 
question I asked. You know, Senator Johnson, we often debate 
how much we pay a Federal worker, whether we out-source or in-
source. To a great extent those questions are to be a question 
of cost versus benefit. I think we would all agree to that. You 
said quite candidly that, well look, we have got this 24 
percent that could and will likely grow to 35 percent if 
unchecked. We have a historic 19 percent. Senator Warner points 
out that we in fact have 15 percent coming out of revenue. Do 
you agree that we need to get--our goal should be to get to 19-
19, so to speak, that we can't expect to get to 19 percent of 
GDP in spending and still have 15 percent in revenue and then 
say we have a balanced budget; would you agree to that?
    Senator Johnson. First of all, I think you have to 
recognize reality, and over the last 50 years prior to 2008 the 
total amount the Federal Government was able to extract from 
the economy and revenue was about 18.1 percent. And that is 
regardless of whether the top personal tax rate during my 
lifetime has been 90, 70, 50, 28, 31, 35, 39.6 percent. So to a 
certain extent you have to recognize reality. And I realize 
that when we had surpluses for 4 years at the end of the '90s 
or early 2000s revenue did bump up against above 20 percent one 
year, otherwise still below 20. But spending was only at 19.1 
percent one of those years, otherwise it was in the 18 percent 
range.
    So from my standpoint I think the size of government in 
relationship to GDP is a key metric. And when you currently add 
in State and local spending we are at about 40 percent 
nationally. So 40 cents of every dollar filters through some 
level of government. And to put that in perspective, Norway 
spends 40 percent on government of its GDP, Greece, anybody 
hear of Greece recently it is about 47 percent, Italy is 49.
    Chairman Issa. A little different than how much they get 
from oil, between Greece where they have olive oil and Norway 
where they have export oil that is much more profitable.
    Senator Johnson. Precisely. But right now in the United 
States we are at the lower level of European style government. 
And we are seeing that economic model collapse. And it is just 
not a metric for success. And again, I think we should really 
be looking at metrics. Certainly everything the government does 
needs to be judged based on what it actually accomplishes and 
the metrics of success are not really there.
    Chairman Issa. Well, let me quickly, because my time is 
expiring, and I know you have very short time here, the 
President has talked about reorganization authority. And you 
may differ on this, but let me ask sort of the rhetorical 
question.
    In the best case, because you both alluded to this, 
wouldn't we plan a reorg authority in the House and the Senate 
that envisions, if you will, continuous reform, envisions the 
idea that reform is not an up or down vote one time on a change 
that the President thinks works for one or more agencies, but 
in fact change the whole system to be more corporate? And I 
will preface this by saying, Senator Warner, you and I, we 
agree on almost everything. But I have been a CEO and I have 
been a board member. CEOs do not have straight reorg authority. 
What they ordinarily do is they bring their ideas to the board 
and they get sort of a pre-approval. Then they go out and they 
refine it. And then they come back for a final approval. And 
during this time they periodically come for major chunks of 
money. And, oh, by the way, the CFO tries to figure out how to 
explain it to Wall Street. So when we look at the process of 
government one of the challenges is, and this is where I want 
you both to comment as much as you feel you can, don't we 
inherently have a problem considering reorg authority up or 
down one time and shouldn't we fashion our bill so that there 
is ongoing commission, both House and Senate, but also 
independent thinkers working in concert with whoever is in the 
White House to try to get continuous improvement?
    Senator Warner. Well, I would agree, Mr. Chairman, that we 
need to have a process that has continuous improvement, number 
one.
    Number two, I think on any reorg authority that a 
requirement that said you have to show that the reorganization 
would save costs and save overhead would be important.
    Number three, what the President is requesting would be 
then subject to an up or down vote. And I would concur with you 
that most CEOs would have to then go to their board and get 
approval. The one difference that I would point out, and I 
didn't fully appreciate this until I got here, was that in the 
case of a business operation generally speaking the board of a 
company has the best interest almost always of the company at 
heart. One of the things that has been interesting as we come 
up here, and I could never understand why we didn't have a 
rational, for example, transportation policy at the Federal 
level, now having been here for 3 years I understand that it is 
because of congressional jurisdiction turf battles that mean 
that I am not sure, and I say this in an ecumenical fashion, 
that too often rationalization of the Federal Government is 
held up by the congressional oversight and congressional 
jurisdiction functions that has no equivalent in the private 
sector.
    So giving this President, giving any President the reorg 
ability with a straight up or down with a requirement that you 
have got to show cost effectiveness and overhead savings I 
think is just a rational way to move forward on an entity as 
large as the Federal Government.
    Chairman Issa. Before we go to Senator Johnson I would ask 
unanimous consent that a small but meaningful list of the 108 
committees and subcommittees that the Department of Homeland 
Security alone reports to in our turf battles be entered in the 
record as germane. Without objection, so ordered. Senator 
Johnson.
    Senator Johnson. Thank you, Mr. Chairman. I think we need 
to recognize that what motivates business and what motivates 
bureaucracies are two totally different things. Business 
actually has the discipline of making a profit so they have 
every incentive to keep their expenses and costs in line. 
Bureaucracies, on the other hand, their primary goal in many 
respects is growth, they continue to grow. And so if we are 
going to think about reorganizing bureaucracies any successful 
business of course does have a culture of continuous 
improvement. And the way they are able to maintain that culture 
of continuous improvement is they actually benchmark goals and 
they measure what goals they have established. And that is part 
of the problem of government, is we just simply never really go 
back and take a look what were the good intentions and measure 
what actually was achieved versus what the intention was. And 
that is what I was trying to point out in my testimony. That is 
where it starts. We have to establish the goals and the metrics 
for accountability.
    Senator Warner. Mr. Chairman, if I can add one comment. And 
I am not sure we are all that far apart, you know, your concept 
of continuing----
    Chairman Issa. This is what we like about having the two of 
you, is that for this committee I think there is no two 
Senators closer to the view where we need to be.
    Senator Warner. But I do think we have put in place some 
tools. I do think GPRA, which requires a consolidation of a few 
identifiable goals for each program or agency, is a critical 
first step. I think the notion of crosscutting agency goals so 
that as you have these 47 different financial literacy programs 
and 92 teacher training programs, not only do you need 
consolidation but you need amongst those what are the top 
couple of goals around teacher quality and improvement.
    I do think the notion of regulatory reform, a one-in/one-
out regulatory PAYGO makes sense in terms of a housekeeping 
approach so that there is an incentive inside the agency to 
look at cleaning out. I also think the notion, particularly on 
the regulatory front, of creating someplace, and CBO may or may 
not be the best spot, an independent entity that can assess the 
claim oftentimes made by the agency that X thousands of lives 
are saved or the cost by the business that X hundreds of 
billions of dollars are charged, we have no independent 
analysis there. And we have no analysis that says 3 years, 5 
years after the fact did the regulation that was put in place 
actually achieve the goal that was said to put in place. These 
kind of areas I think would help bring about some of the 
objective metrics I think all of us would like to see if we are 
going to hold government more accountable. And recognizing as 
we have to take on this $15 trillion debt, clearly we have got 
to spend smarter than we are spending now.
    Chairman Issa. Thank you. With that we go to the gentleman 
from Virginia who was here at the start for his questions.
    Mr. Connolly. I thank the chair. And again welcome both of 
our colleagues from the United States Senate. Just a few 
questions to my friend and colleague Senator Warner. Senator 
Warner, if I understood what you were saying in terms of 
metrics, surely looking at spending, Federal spending as a 
percentage of GDP is absolutely a valid metric. But if I heard 
you correctly so too is revenue as a percentage of GDP. And 
right now that revenue figure is far below what it was last 
time we actually balanced the Federal budget without a 
constitutional amendment 4 years in a row, is that correct?
    Senator Warner. Yes, I think again I have, as my friend the 
congressman is aware of, been very active in the effort to try 
to bring about this balance cutting spending, reforming 
entitlement programs, a tax reform program that generates 
additional revenue, because I frankly believe that debt and 
deficit is our single greatest threat to this country and in 
effect has become a proxy for whether Congress is up to solving 
any problem. And it is going to require I think looking at both 
sides of the balance sheet.
    Mr. Connolly. And Senator, when you were the Governor of 
the Commonwealth of Virginia you had to balance the budget 4 
years of your term. Did you only look at cutting spending to 
balance that budget?
    Senator Warner. Thank you, Congressman, for that very nice 
easy softball you have just thrown me. You may recall Virginia 
was dealing with a $6 billion budget shortfall. We were put for 
the first time ever on credit watch. We substantially cut 
programs, shrank our State workforce. But we also put together 
a tax reform plan with a 2 to 1 Republican legislature that 
passed with significant numbers. And Virginia was reaffirmed 
not only its triple-A bond rating ranking for the best managed 
State in the country, and I would add ranked as the best State 
for business.
    Mr. Connolly. So balance worked out pretty well for the 
Commonwealth of Virginia?
    Senator Warner. Balance worked out pretty well. I would 
also add one of the challenges we have, and I think this again 
needs to be reflected as we look at what is the appropriate 
percent of Federal spending in the GDP, is that, and again it 
would be an area where actually I think Senator Johnson and I 
would agree, we might disagree about the specifics of the 
reform, but we do need to reform our entitlement programs. One 
of the challenges we have is we have 3 million people a year 
hit retirement age. Whatever that retirement age ends up being, 
there are going to be costs in those programs that are in 
effect unprecedented always keeping upward pressure on the 
amount to spend the Federal Government will have. So this is 
just demographics taking place and how we grapple with that is 
terribly important.
    Mr. Connolly. And Senator Warner, again, looking at 
metrics, certainly I remember, both in the Commonwealth of 
Virginia and in local government, one metric we used was the 
ratio of our staffing to population. We used that to see were 
we in fact efficiently using technology to create economies for 
our taxpayers. And I am just looking at data over the last 50 
years. In 1962, when President Kennedy was President, the ratio 
was 13.3; that is to say 13.3 employees per thousand 
population. And it went up under Nixon from that to 14.4, which 
was the high watermark. And it is now the lowest it has been in 
50 years, 8.4. And if you look at actual numbers, including 
Postal Service workers, actual numbers of Federal employees, it 
is 350,000 below its high watermark 20 years ago when President 
H.W. Bush was President. So in absolute terms and in ratio it 
looks like in the last 50 years we have actually cut out a lot 
of that fat we are so concerned about in the title of this 
hearing.
    Do you think it is a fair metric to suggest that that kind 
of ratio might mean we are running a leaner and more efficient 
operation, not to suggest there couldn't be additional savings, 
but clearly we have achieved something here?
    Senator Warner. You know, I have to say that----
    Chairman Issa. Feel free to disagree with him.
    Senator Warner. No, no. I am just going to say that, you 
know, in the Senate when we make these quick testimonies we 
speak and then get out of Dodge before the questions come. You 
know, it is interesting sitting on this side of the ledger 
following a thoughtful provocative but very leading question, 
but I think those are good metrics you have put forward.
    Mr. Connolly. Thank you. And I yield back. Thank you very 
much.
    Chairman Issa. Senator Johnson, I think you had something 
left to say.
    Senator Johnson. I would like to provide some balance to 
the question.
    Senator Warner. May I? I apologize to the chair. I didn't 
know that.
    Chairman Issa. And I apologize. We are going to let you go. 
I felt that----
    Senator Warner. No, absolutely.
    Chairman Issa. --that you are both sort of Fox, not MSNBC, 
but Senator Johnson felt left out here and he is junior and I 
don't want him to leave here feeling bad.
    Senator Johnson. I just want to provide a little balance in 
answering the question. First of all, I think there is a great 
deal of agreement, certainly what I found, I would say 
consensus in Washington that we actually need to reform our Tax 
Code. And I think Republicans also want more revenue, but we 
want to grow revenue the old-fashioned way by increasing our 
economy. And so the question I would ask when you take a look 
at the metric of 24 percent of GDP in terms of government 
spending is why hasn't this President in his budget actually 
proposed pro growth tax reform? And also we all recognize that 
the real long-term looming crisis in terms of our budget is 
entitlements, Medicare and Social Security. And again, the 
President in his fourth budget, I mean he has basically had 
four cracks at the apple here, he still has yet to step up to 
the plate and propose any type of reform that would actually 
save Social Security and Medicare long-term.
    So again, I am all for increasing revenue, but let's do it 
the old-fashioned way by actually getting economic growth. The 
reason we are at only 15 percent revenue this year and for the 
last couple of years is because our economy is in terrible 
shape. And that is also to a certain extent driven by the 
progressivity of our Tax Code. When you have a highly 
progressive Tax Code that is going to be revenue in terms of 
the government is going to be far more affected by shocks to 
the economy.
    So again, I would look at pro growth tax reform. The 
broadness of the base eliminates the loopholes in special 
deductions. I think there is a great deal of consensus. And 
that is what we really need to be doing here. Let's look at 
what we agree on. We agree on reforming government, we agree on 
pro growth tax reform, so let's actually start doing it this 
year.
    Chairman Issa. I want to thank both of you. Please tell 
your friends on the other side of the dome it is a great place 
to come, a great audience, another opportunity for a C-SPAN 
moment. So we will take a short recess just to reset. And thank 
you again, Senators.
    [Recess.]
    Chairman Issa. The committee will come to order. Our second 
panel of witnesses includes Mr. Paul Light is a Professor of 
Public Service at the Robert Wagner School of Public Service 
New York University. The Honorable Dan Blair serves as 
President and CEO of the National Academy of Public 
Administration. Mr. Robert Shea is a Principal at Grant 
Thornton, LLP. And Mr. Max Stier is President and CEO of a 
Partnership for Public Service.
    You are not Senators. Pursuant to the rules of the 
committee all witnesses will be sworn. Please rise to take the 
oath and raise your right hands.
    Do you solemnly swear that the testimony you are about to 
give will be the truth, the whole truth and nothing but the 
truth?
    Let the record indicate that all witnesses answered in the 
affirmative.
    Since there is a few more of you we would ask that you try 
to stay close to your 5 minutes. As previously noted your 
entire statement will be placed in the record along with 
supplemental data you may choose to add after the hearing. So 
let's begin with Dr. Light.

               STATEMENT OF PAUL C. LIGHT, PH.D.

    Mr. Light. It is a pleasure to be here with you today. And 
thank you for your work and the committee's work to improve 
government performance.
    I would like to start by just telling you a quick story 
about Senator John Glenn for whom I had the pleasure of serving 
back in the 100th Congress on government reform and 
presidential appointments.
    I remember asking him once what he was thinking when he was 
sitting on top of the rocket that would send him into orbit, 
now almost 50 years ago. Were you thinking about whether the 
rocket was fueled and whether everybody was ready, whether 
there might be an accident?
    And he said back to me, of course not, I was thinking about 
the lawn, my house, Annie, you know, the whole thing. And I 
said why? He said because I had faith that the Federal 
employees and the contractors working side by side with them 
were doing their job.
    And I wonder sometimes whether he would have that same 
level of confidence given the ongoing problems actually 
delivering services now 50 years later. I still think he would 
have great confidence, but I think we have got to ask ourselves 
the question about whether government is currently working as 
well as it should.
    Chairman Issa. And this was even though every other launch, 
every second launch prior to that had blown up?
    Mr. Light. He was very----
    Chairman Issa. He was an optimist, wasn't he?
    Mr. Light. And he still is. He still is. We should all be 
in his shape, you know?
    I just want to answer a couple of questions that came up 
earlier. You have my statement.
    On the overhaul issue, you are quite right. There were two 
Hoover Commissions. One ran from 1947 to 1949, the other from 
1953 to 1955. They produced 50 reorganization plans. It was not 
a single up or down. Now, they did have the reorganization 
authority, and, of course, the President is asking for 
consolidation authority. And we can talk a little bit about 
that. I don't think it is a bad idea, but I am not sure where 
the reorganization plans would come from, given the shrinking 
of OMB's ability to deliver reorganization plans. So, you know, 
it is worth asking about.
    On the size of government, head-count issue, I think you 
have to include all the Federal Government's employees, 
including contractors. And, by my estimates, we have about 7.5 
million contract employees, another 3 million grant employees, 
and then we have the 2.2 million Federal employees, plus 
postal, plus military. It is a big workforce to deliver the 
mission we have, you know. So I think the issue of head count 
is deceiving, to some extent. I think we could have the same 
head count but different distribution of workers and get the 
job done well.
    On the agenda, I think GPRA modernization is very 
important. I would like to see a budget table that shows the 
amount of money that we spend on the priorities that are 
generated through the Modernization Act and see whether they 
add up to the total budget or what percentage of the budget 
cannot be classified as related to the small handful of 
priorities identified through this important process.
    On the thickening of government, really, what does a 
government agency look like? I think that you are on point here 
regarding the need for a more efficient government. I think we 
have too many layers of government, too many Presidential 
appointees. We could cut the number of Presidential appointees 
in half and do better. I think the baby-boom retirements, while 
troublesome to many of us, also offer an opportunity to take a 
good, hard look at the senior levels of government, where I 
think we could have some downsizing and redistribution of 
workers down to the bottom.
    You have a bill before you that has been passed by the 
Senate on some modest streamlining, a small first step really, 
by my view. And Max Stier here will argue that it is an 
important first step. I think we can move forward with it, but 
I still think we have too many appointees and we ought to do 
something about it.
    Let me conclude by saying that my father was an auto-parts 
man. And in his business was a machine shop, and he ground down 
pistons and engines and overhauled day-in and day-out. So when 
the President says we need an overhaul, I think of pulling the 
engine out, grinding it down and really working it over, not 
just changing the spark plugs. And I think, to date, we have 
had relatively timid proposals for an overhaul, and it is time 
to get big. I don't necessarily know exactly how to do it. I 
have some ideas and I have a list of proposals. But I think 
this committee, with its proud history, should be the place to 
begin this effort.
    So good luck, and keep up the good work.
    Chairman Issa. Thank you, Doctor.
    [Prepared statement of Mr. Light follows:]





    Chairman Issa. Mr. Blair?

               STATEMENT OF THE HON. DAN G. BLAIR

    Mr. Blair. Thank you, Mr. Chairman, members of the 
committee. I appreciate the invitation----
    Chairman Issa. Could you pull the microphone just a little 
closer, please?
    Mr. Blair. Certainly.
    Chairman Issa. Thank you.
    Mr. Blair. Mr. Chairman and members of the committee, thank 
you for the invitation for me to testify today.
    I am Dan Blair, president and CEO of the National Academy 
of Public Administration. The Academy is a congressionally 
chartered nonprofit organization comprised of more than 700 
fellows who are selected by the membership.
    I am honored to appear on this panel today with three of my 
distinguished Academy fellows: Dr. Light, Mr. Shea, and Mr. 
Stier. And I would also note that Mr. Shea is the vice chairman 
of the board. So I will be on good behavior today.
    Mr. Light. But are we all paying our dues?
    Mr. Blair. Well, that is a better question, and we will 
talk about that after the hearing, Dr. Light.
    As noted in my written testimony, the Academy's 
congressional charter precludes from taking an official 
position on legislation, and the views I am presenting today 
have not been formally endorsed by the Academy.
    We now use a 20th-century government organization to 
respond to 21st-century problems. The President's proposal to 
merge the Commerce Department with other trade-related agencies 
might be a step in the right direction if done right. However, 
moving the boxes around without taking a hard look at how the 
actual work is being done is unlikely to lead to significant 
improvements. Organizational changes must be bolstered by 
additional approaches to improve public management.
    First, consider using the principles of ``Smart Lean 
Government'' to examine the delivery of government programs and 
services through a holistic or a cross-government approach. An 
SLG examination of government programs would take an enterprise 
architecture approach of examining the interrelationships of 
information, people, technology, and processes. For example, 
the trade promotion activities would not focus solely on the 
International Trade Administration, but would examine trade 
promotion activities and expenditures across the spectrum of 
agencies supporting foreign trade. This approach can identify 
areas where coordination can be improved and government 
activities may be consolidated, and improve how programs are 
operated, measured, and managed.
    Other approaches include improving productivity and 
expanding the use of technology and data. A term called 
``disruptive innovation,'' which is the introduction of new 
technology which replaces an earlier technology or product, can 
be utilized for the benefit of government and the taxpayer.
    Across the government, Congress and the Executive should 
foster environments that encourage innovation and creativity. 
For example, Congress could require that agencies report on 
their use of data accumulated from industry, other agencies, 
and the public in order to make it accessible and useful to its 
stakeholders. In the private sector, where disruptive 
innovation has become commonplace, consumers are used to steady 
price reductions and performance improvements over time. The 
challenge is creating management structures and environments 
which foster and encourage this type of behavior in government.
    Further, what gets measured is what gets done. So one step 
forward may be for the Bureau of Labor Statistics to begin 
again to measure Federal productivity. The Federal Government 
last measured its productivity almost 20 years ago, and it may 
be time to revisit that concept to determine what the 
appropriate productivity metrics would be to measure.
    Other tools include enhanced human capital flexibilities, 
increased interagency and intergovernmental collaboration and 
coordination, and linking budgets with program performance 
across agency and department lines. The GPRA Modernization Act 
gives OMB this type of authority to change the way budgets are 
developed and implemented.
    Further, Congress could consider engaging in a rigorous 
review of agency missions, functions, and programs in an effort 
at a strategic realignment. This approach would examine what 
agencies do as required by statute, regulation, or practice, 
and evaluate whether underperforming activities or programs 
should be shed in order to protect budgets for core mission and 
high-performing activities and programs.
    Mr. Chairman, by changing the way that government work gets 
done, we can dramatically improve the effectiveness and 
efficiency of government services and programs.
    This concludes my oral testimony, and I am happy to answer 
any of your questions.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Blair follows:]





    Chairman Issa. Mr. Shea?

                    STATEMENT OF ROBERT SHEA

    Mr. Shea. Thank you, Mr. Chairman, members of the 
committee. I am proud to be with you today to talk about 
reorganization, especially at the committee that gave me my 
first job in Washington. I am also proud to be with such good 
friends. You will get, like on the last panel, a lot of violent 
agreement among us.
    My name is Robert Shea. I am a fellow of the National 
Academy of Public Administration and a principal of Grant 
Thornton.
    Reorganization and consolidation offer many opportunities 
to improve government's performance, but they take time. Faster 
results, in my view, will come from greater collaboration among 
government programs and a more focused assessment of their 
relative cost-effectiveness.
    And the Federal Government, as has been discussed, has been 
grappling with reorganization almost since its inception. But I 
wonder what past Presidents would say about the volume of 
overlap and duplication that plagues our government today. 
There are hundreds of government programs, many aimed at the 
same problem, often from different organizations throughout the 
executive branch.
    If Congress or the executive branch were to undertake a 
substantial reorganization, where would they start? How would 
we know which programs to keep, consolidate, or terminate? Past 
efforts have made a dent but really haven't provided you the 
information you need to make good decisions. After a decade of 
the Government Performance and Results Act implementation, many 
agencies began to make great strides understanding the 
performance of their programs. Unfortunately, that effort did 
not result in the kind of information you need to make 
decisions, like good cross-cutting goals or collaboration among 
cross-cutting programs.
    In 2001, OMB developed the Program Assessment Rating Tool 
to inventory the government's programs and assess their 
relative performance. After 5 years of implementation, OMB and 
agencies assessed nearly 1,000 programs, nearly 100 percent of 
the Federal Government's budget. They assigned each program a 
rating of ``effective,'' ``moderately effective,'' 
``adequate,'' ``ineffective,'' or ``results not demonstrated.''
    A number of efforts to improve the performance of 
duplicative programs flowed from this effort. For instance, the 
administration used assessment results as one factor in its 
decision to propose consolidation of 17 community and economic 
development programs. We also used the PART process to arrive 
at a common set of outcome measures with which to measure the 
government's job training programs.
    For a variety of reasons, the Obama administration is no 
longer using this tool to assess and improve programs. So what 
tools exist to do this today?
    A lot has been said about the Government Performance and 
Results Act Modernization Act, a promising framework for 
improving the coordination among like programs. If Congress 
takes an active role holding the executive branch accountable 
for its implementation, the law's requirements can be powerful 
incentives to improve coordination among duplicative programs.
    The budget released Monday does include 14 cross-cutting 
goals, as Senator Warner mentioned. And you can find those 
goals at www.goals.performance.gov. I think they are a mixed 
bag, but I think they could use your attention. Your feedback 
on those goals would be readily accepted by the administration.
    Getting programs in different agencies to agree on common 
goals and a coordinated approach for achieving them is hard. 
Agencies or programs with common goals often have completely 
different congressional authorizing and appropriations 
committees, a situation that enables stovepipes. They also have 
separate constituencies who will fight to preserve the status 
quo.
    While there are many barriers to interagency collaboration, 
technology provides enormous opportunity to overcome those 
barriers, especially social media and collaborative technology. 
The Federal Government is really only just beginning to 
capitalize on these tools to enhance collaboration.
    A number of other initiatives show promise: program 
evaluation. The Obama administration is building on the Bush 
administration's effort to more rigorously evaluate programs 
across government, a very necessary step in order to discern 
what works in government.
    The Administrative Flexibility Initiative is also an 
important effort. Overlapping and duplicative programs tend to 
have exponentially more cumbersome and wasteful administrative 
requirements imposed on State and local governments. The 
administration has tasked agencies and OMB with inventorying 
those requirements and reducing them, which may seem like a 
minor effort but could, when you combine them, really free up 
money that State and local governments can use to focus on 
outcomes.
    Improved coordination is easier said than done. Agency and 
program leadership are busy enough working within their own 
domain without having to be concerned with another's 
activities. Active congressional and Presidential leadership 
and oversight can produce results sooner than what an 
organization may never produce.
    Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Shea follows:]





    Chairman Issa. Mr. Stier?

                     STATEMENT OF MAX STIER

    Mr. Stier. Thank you very much, Mr. Chairman, members of 
the committee. It is a pleasure to be here and, as my 
colleagues said, a pleasure to be testifying with them. I think 
we are all trying to do the same thing, and I would also say 
all friends. So it is really an honor to be here.
    Chairman Issa. By the way, since you all in the same 
academy, do you have a quorum here? Because, you know, each of 
you says you don't have this authority individually. Together 
do we?
    Mr. Shea. We could vote on the President's salary right 
now. We could make some savings right here.
    Mr. Stier. Exactly. And I think that Dan appropriately 
speaks for the whole Academy.
    But be that as it may, you know, we do have violent 
agreement here. And I think a real question to ask is, since 
there is so much agreement, why isn't more happening? And I 
think that the execution imperative is fundamental here, and we 
have to focus, you know, our primary attention on those 
execution questions.
    One way to do that is look at what happened the last time 
that there was a major contraction in the government's budget, 
during the 1990s. We have a process in government of repeating 
the past mistakes because we don't pay attention to what has 
happened before. So we actually did a report with Booz Allen 
called ``Smart Cuts,'' where we examined what occurred during 
the 1990s and drew a set of lessons that I believe have great 
application for today. And I am just going to mention five of 
them. Obviously, we go in greater depth in the testimony.
    The first one is--and this is a conversation that, 
likewise, has been held with the prior witnesses, as well--and 
that is talent needs to be viewed as an asset, not a cost, in 
government. The bottom line is that good government begins with 
good people. It is real easy to cut costs in cutting, you know, 
money out of the workforce. But at the end of the day, we need 
to make sure that we are not really impacting mission in a way 
that we don't want.
    IBM did a great study of companies during the last 
downturn, and what they saw is that the companies under 
pressure were actually investing more in their people because 
they needed more out of them. And I think we need to take that 
attitude when we examine the Federal workforce. It doesn't mean 
that there are not costs available, but we have to be real 
smart about how we do it.
    Secondly, we need to make sure that we are making better 
choices about what we are doing and not simply looking at 
across-the-board cuts, which, again, is the norm and what we 
saw during the 1990s. That penalizes the efficient and 
effective organizations, when, in point of fact, if you want to 
save resources, you just have to do fewer things and do them 
well. But, again, the tendency and the easy thing to do is just 
say, we are going to cut across the board. And that doesn't end 
up actually giving us what we ultimately need.
    Third, we need to--and this is building off the comments 
that you made, Mr. Chairman--we really need to look over the 
long term. This is a long-haul process. My belief is one of the 
root causes of dysfunction in government is that we have a set 
of political leaders in the executive branch that are around, 
on average, for 18 months to 2 years. That means that they are 
incented to focus on policy development, crisis management, but 
not on the health of the organizations that they run, because, 
frankly, they are not going to be around long enough either to 
have that impact or to actually pay the piper for problems that 
they create or don't solve. And so I think it is fundamental 
for to us have that long-term view.
    There are some great good examples. Patent and Trademark 
Office is one of the ones that I love, where they went out--
they had to change their physical site. They chose a building 
with a much smaller footprint. They decided, we are going to 
change the culture, we are going to move to a telework 
environment. They wound up saving money on the physical plant 
that they had, they wound up producing, you know, better 
results in terms of their productivity, and they reduced their 
costs. We need to look for opportunities like that. Ask the 
question whenever an agency is actually moving buildings, why 
don't see that as a transformation opportunity? But, again, 
looking at the long term.
    Fourth, we have to measure the impact of our choices that 
we are making today. And, again, you know, Robert, the work 
that he did on PART I think is a fabulous example of things 
that we need to see more of. I would present to the committee 
also the work that we have done at the partnership around the 
Best Places to Work rankings. Again, a challenge in the public 
sector is you don't have financial metrics for performance, 
frequently. And in the private sector, where you do, smart 
companies look at employee attitudes because there is a strong 
correlation between those attitudes and ultimate performance. 
We should be using those numbers to tell us what is going on 
inside the Federal Government today, and Best Places allow us 
do that.
    Fifth, coming to the question of reorganization, it is a 
reasonable strategy to use, but, frankly, we ought to start 
with the talent issues. The 9/11 Commission said it best; the 
quality of the people is more important than the quality of the 
wiring diagram. Important to see how those boxes play together, 
but if you don't solve the internal issues, frankly, moving the 
boxes, as we have heard from a number of other folks, won't 
make any difference.
    In our written testimony, we offer 25 questions that we 
think are a good starting point in thinking about 
reorganization. And, Mr. Chairman, I salute you for also the 
chart you put in. You know, this is, again, a 9/11 Commission 
report recommendation. If we don't see this as a board of 
directors for the government, if we don't see the 
interrelationship, frankly, the executive branch won't work 
right.
    So, pleasure to be here, and look forward to any questions 
that you might have. Thank you so much.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Stier follows:]





    Chairman Issa. I will now recognize myself for a first 
round.
    First question for all of you: In a reorganization, is a 
reorganization of the executive branch--we are talking about a 
significant change, not just one, if you will, Cabinet 
position--is there any way that that can be effective without 
Congress buying into it in a way in which, one, we support the 
change not just by a vote but by post-vote, particularly, 
reorganizing to match the executive branch? I think Senator 
Warner said it pretty well, and, as you have mentioned, Mr. 
Stier, the chart says it all.
    If we vote for a reorganization, don't we have to, in the 
House and the Senate, realign so that our committees match the 
new government reality?
    Mr. Blair. I will take a stab at that question, Mr. Chair.
    Chairman Issa. You don't have to say ``yes'' or ``no,'' but 
``yes'' would be good.
    Mr. Blair. I think if you don't look at the organization of 
Congress in light of the changes that take place in executive 
branch organization, you risk running into the same problems of 
overlap and duplication which you are actually trying to 
address within the executive branch organization itself.
    Can Congress, as a body, effectively conduct its oversight 
and authorizing and appropriating duties without changing? The 
answer is yes, but I think it is going to take a lot more 
effort. So I think that the Congress is going to have to take a 
look at itself in terms of trying to align itself better with 
the reorganized executive branch.
    Chairman Issa. So does that, by definition, beg the whole 
question of a reorg the way the President is talking about, 
``Give me authority and I will loosely tell you what I am going 
to do,'' or Hoover Commission, where you came up with 273 
recommendations, most of which were accepted but accepted over 
a long period of time with multiple interim steps?
    Mr. Blair. Well, you can do a one-off here or a one-off 
there in terms of executive branch organization, but you really 
need----
    Chairman Issa. Yeah, but Dr. Light said that is not an 
overhaul.
    Mr. Blair. --to do it in terms of an overarching strategy 
and within an architecture that makes sense as to what your 
ultimate goal would be.
    Chairman Issa. Let me ask, sort of, the broadest question 
here. Senator Warner is a cosponsor, or he, actually, has a 
companion bill for the DATA Act. We are trying to make 
interoperative fundamentally how we communicate, so that data 
in one place and the other, it doesn't take a team of people to 
try to match up on a one-off basis, but rather you can look at 
it transparently back and forth if you have the rights. Nice 
thought, nice idea. Clearly, I am very dedicated to it.
    But let me ask a more fundamental question. OMB, which has, 
I am told, six Senate-confirmed positions, is repeatedly 
clearly ignored when they want to make fundamental changes in 
how Cabinet positions spend their money and do their work.
    Do we have a fundamental problem that, even though there 
are 23 Cabinet-level positions, including the OMB Director is 
considered a Cabinet level, do we have a fundamental problem in 
that back-office functions--sort of, OPM, OMB, all the data 
questions, all the questions of how money is spent not on what 
the Cabinet position does but on the things that facilitate 
that--those, in fact, are hierarchies that belong to Cabinet 
positions, and unless there is consensus, they can ignore, if 
you will, the Office of the President by simply delaying?
    Is that a long but fundamental truth that every OMB 
Director faces?
    Mr. Shea. I, as having led a lot of interagency 
collaborations from OMB, I can tell you without question, you 
know, there are going to be some who are really invested in the 
success of the enterprise and you have their buy-in, but there 
will be a pocket, almost invariably, who oppose what you are 
trying to accomplish and want to protect their turf. And when 
it has been successful is when OMB and a lead agency and 
Congress are all joined at the hip and invested in the success 
of the enterprise.
    Examples include security clearance reform and the Federal 
Funding Accountability and Transparency Act implementation. In 
both cases, Congress had virtually a seat at the table 
throughout the nitty-gritty of the implementation of both those 
initiatives. And they have proven more or less successful.
    Chairman Issa. I am going to ask just one exit question, if 
you will.
    Mr. Stier, you used the PTO. The PTO currently has a 
backlog greater than it did before reorg. They have hired a lot 
more people. They now consume their entire budget even without 
fee diversion.
    If this were a private enterprise and basically because 
they charge the revenues that run them, wouldn't you give them 
less than an ``A''?
    Mr. Stier. I think that the PTO, again--and on the backlog 
side, first of all, I mean, clearly there is a 3-year backlog, 
I believe it is over 700,000 applications, on the patent side. 
That is a massive problem. I think what David Kappos is doing 
is actually the right movement. I think he has gotten the 
backlog--my understanding is he has gotten the backlog down. 
And he is, I think, aligning his resources in a very smart way 
against their needs. And a good example of that is even around 
understanding how to use performance incentives to increase 
productivity.
    So they don't, clearly--and I think Dave Kappos would be 
the first person to say that--deserve an ``A'' in terms of what 
they are producing today. But to your point about the time it 
takes to turn something around, my sense is--and you may have 
greater expertise in this than I do, but from what I can see, 
he is on the right track but he has a long distance to go.
    Chairman Issa. And I am a big fan of his. That is the only 
reason that, besides having my own patents and serving on 
Judiciary, that--and I wanted to make sure we understood, he 
has a big job and a long way to go----
    Mr. Stier. Yes.
    Chairman Issa. --and his is a predominantly Federal 
workforce that he is trying to get to be more productive, 
including the telecommuting and including, by the way--they are 
siting a West Coast facility so they can recruit and retain 
people that right now just do not want to come to that little-
bitty building----
    Mr. Stier. Right.
    Chairman Issa. --because it is in an area they don't want 
to live.
    Mr. Stier. Right. No, absolutely. And that is critical. And 
I think the longer he stays in that job, the better the agency 
is going to be.
    Chairman Issa. You heard it here.
    With that, we go to the gentleman from Virginia, Mr. 
Connolly, for 5 minutes.
    Mr. Connolly. Thank you, Mr. Chairman.
    And welcome to our panel.
    Mr. Stier, I gave a town hall meeting at the PTO 
headquarters you referred to, and I can confirm what you said. 
I saw a lot of energy and synergy. I mean, I think that it 
created something in terms of a dynamic that improved 
productivity and morale. And those are things definitely I 
would hope at some point we care about with respect to the 
Federal workforce, not only at PTO but throughout the Federal 
Government.
    The President has proposed consolidating a number of 
international economic entities to try to achieve similar 
synergy and productivity. And I note a GAO report from last 
year that said, ``These practices,'' meaning desirable 
practices, ``include leveraging physical and administrative 
resources, establishing compatible policies and procedures, 
monitoring collaboration, and reinforcing agency accountability 
for collaborative efforts through strategic or annual 
performance plans.''
    From your point of view, does the President's proposal make 
sense in terms of similar synergy and productivity potential 
gains?
    Mr. Stier. Look, I think there is no question but that we 
have a government that needs to be changed in many dramatic 
ways. I think the challenge here is that the idea, almost, is 
less important than the execution issues. And so that is why in 
my testimony I identify 25 questions that I think we really 
want to look for answers for before we start down this road.
    And, again, thinking about historical example, if you look 
at the Department of Homeland Security, if you look at any 
major reorganization in the modern era, it is after many, many 
years at best still a work in progress.
    So I think the answer to your question is that I think it 
is important for the President to be putting his marker down to 
say that we need to examine the form and shape of government, 
but what I would ask for and what I would suggest would make 
for a more successful ultimate resolution is that we look at a 
more comprehensive set of issues that include primarily some of 
the talent and culture issues that I think are fundamental, 
ultimately, to success in getting better productivity out of 
the government.
    I think you have to look at that holistically, and you have 
to build a time frame into it. So, again, I think that, 
whatever reorganization is imagined, we need to make sure there 
is continuity of attention and a leadership group that is 
around long enough to see that execution through.
    Mr. Connolly. Mr. Blair, one of the concerns I always have 
when I look at any government structure is the stovepipe 
structure and mentality. And, again, sort of keying off the 
suggestions or the recommendations made by the President, when 
you go to some of our embassies overseas, there are lots of 
stovepipes, seemingly uncoordinated, and yet sharing a common 
mission in terms of trying to promote U.S. economic interests, 
investment, trade, and exports.
    And I just wonder if you might comment on that. How do we--
if not this proposal, what, to try to overcome the stovepipe 
mentality to achieve efficiencies and productivity gains that 
we desperately need?
    Mr. Blair. Thank you, Congressman. I appreciate the 
question.
    There are different approaches you could take to attack 
that stovepiping that you identified. And one of them that is 
outlined in my testimony is an approach called Smart Lean 
Government. This approach was brought to the Academy by some of 
its fellows, and we have been working with an outside group at 
refining this. But, fundamentally, what it does is takes a 
holistic approach, looking at government across the spectrum, 
not at a department or an agency, but by looking at the actual 
program that is being delivered.
    And so, one of the things that I talked about was--take, 
for instance, international trade. It is just not one agency; 
we have a series of agencies. And look at the ultimate service 
or product or program that is being delivered, and how is the 
most effective way of getting that to the customer? Is there 
overlap and duplication? Are multiple departments involved? If 
so, why?
    GAO came out with a report last year that highlighted 
potential overlap and duplication in a whole host of programs. 
Sometimes that duplication is necessary and intentional. 
Sometimes you want those belts and suspenders in order to 
prevent a program failure. But this approach would take a look 
at it across the government spectrum and say, what is the most 
effective way of delivery to the customer? Usually the customer 
doesn't care who delivers it so much as it is done well and 
that it meets his or her or their industry's needs.
    So that is one approach that could be taken.
    Mr. Connolly. And, Mr. Shea, if I had a little more time, I 
might ask you to elaborate a little bit. You made a very 
interesting point in terms of expanding evaluations as a tool. 
I wonder if you might just elaborate on that, as my last 
question.
    Mr. Shea. Yes, sir. Thank you very much.
    In order to find out whether our programs are working, it 
is necessary to conduct a scientific experiment, basically, 
isolating what we are doing from other factors so you can say 
without a shadow of a doubt what we are doing is working. 
Simple performance measurement is a very good indicator, but it 
often disguises other factors that are impacting the 
performance outside of what we are doing.
    The Department of Education has a large investment, through 
the Institute of Education Sciences, to really figure out what 
is impacting student outcomes throughout the country. And they 
are building a body of evidence that helps them invest in 
better and more effective practices.
    This is being expanded throughout government on a 
relatively small scale, but a kernel of information about an 
effective practice is gold if you can really use it to scale up 
and impact outcomes that, frankly, we have been working on for 
centuries and haven't made a dent.
    Mr. Connolly. Thank you.
    Thank you, Mr. Chairman.
    Mr. DesJarlais. [Presiding.] The gentleman's time has 
expired.
    The chair now recognizes the gentleman from Michigan, Mr. 
Walberg, for 5 minutes.
    Mr. Walberg. Thank you, Mr. Chairman.
    And thanks to the panel for being here.
    Listening to the Senators earlier, I was interested to hear 
a lot of violent agreement, as you have mentioned, from two 
Senators in a body that has extremely violent disagreements on 
actually doing something.
    And I am reminded that we are coming up on the third 
anniversary of the stimulus that expanded government, that 
really did not produce an economy that would grow. I look at a 
little card here that I have that lists a number of things to 
deal with regulatory barriers that come from government and a 
significant number of bills that we have passed, including the 
REINS Act and other regulatory accountability reforms, that 
still sit in the Senate, not acted upon.
    So while I am not asking you as a panel of Senators on how 
we should accomplish this, I have appreciated some of the 
statements that you have made in your opening remarks.
    Dr. Light, I was raised in the home of a machinist who was 
also an extreme conservative and always thought that he could 
build his cars and engines much better and more efficiently 
than taking it to a mechanic. And so, in the grease pit that he 
built in our family garage, I watched him do that and then 
became a gearhead myself and have had engines--both light tune-
ups as well as rebuilds, taking the whole engine out of the 
car, as well, when I had to. I know also that in the process of 
grinding valves, that is a fine process taken carefully, as 
opposed to wrenching out the bottom end of an engine and taking 
out the crankshaft and replacing it.
    I was interested in your background on that as you 
discussed what needs to be done with the bureaucracy. And so I 
would like to ask you if you would discuss a bit further and in 
detail your proposals to overhaul the bureaucracy, including 
removing engine parts as necessary.
    Mr. Light. Well, I know how to tune and set the timing on a 
'57 Chevy, but that is not how we do it now, is it?
    Mr. Walberg. That is right. We don't have the points 
anymore.
    Mr. Light. You know, I think, to continue this metaphor, 
the first thing you do is drain the oil and clean out the 
sludge. And that is something we got to do.
    I agree with my colleagues that it is difficult. And there 
is a lot of conversation about rearranging the chairs on the 
deck of the Titanic, but we have a real opportunity here. We 
have about 50 percent of the Federal workforce moving toward 
retirement. And that can be seen as a problem or that can be 
seen as an opportunity. We have a lot of opportunity here to 
take a look at what we have, and instead of downsizing through 
attrition at the bottom or reductions in force, we can take a 
look at jobs and not fill them as they have been exited.
    We can take a look at the structure of government and 
reorganize, but we are going to have to go big. We are going to 
have to take a look at the whole structure. And this 
opportunity is going to slip through our fingers, and 10 years 
from now we are going to have the same government that we have 
right now. I am all in favor of patience, but when an 
opportunity like this comes along, you take advantage of it.
    Now, how do we do that? I am not wild about another Hoover 
Commission. I am not sure we could do it with the current 
structure of Congress, and I am not sure that the President 
could relay the reorganization plans. I do like the idea of 
creating some sort of government reform trust, modeled on the 
Resolution Trust Corporation, to which we would give 
responsibility for collecting the delinquent taxes, collecting 
the bad loans, collecting and dealing--liquidating the useless 
property that we have, and collecting the money from doing so. 
I mean, we have some cherry-picking that we can do that can 
yield big dollar returns if we just invest in it and give 
somebody the authority to do it.
    And then we have to actually delayer the government. We 
have to take some things off and streamline the block, if you 
will.
    Mr. Walberg. Well, let me follow up on that and ask maybe 
across the panel, if you would care to comment. Does the 
Constitution and, as one witness in a hearing last week said, 
the ``constitutional niceties''--I disagree with that; I think 
there is still authority in the Constitution--does that come 
into play in dealing with the size of government, in your 
minds?
    Mr. Light. Well, I will just quickly say that the 
Constitution is quite clear that the executive is to faithfully 
execute the laws. And Hamilton, a particular proponent of a 
well-functioning government, argued that the jarrings of 
parties that we see on Capitol Hill, the intense conflict, is 
important for protecting the public from tyranny, but once the 
laws are passed, the President is to execute--period, end of 
story.
    And the President has authorities, properly checked by this 
institution. And we can figure out ways to get this done and 
get it done in a timely fashion without wasting this 
opportunity that we have. We can figure this out. You are 
capable of doing it, and you have done it already. So, I mean, 
I think it is possible.
    Mr. DesJarlais. The gentleman's time has expired.
    Mr. Blair. One comment I would have on that is that we 
don't--it would be interesting to see what our Founders would 
think about our Federal Government today. And to that end, and 
maybe in some shameless self-promotion----
    Mr. Walberg. As long as we had an EMT close to them.
    Mr. Blair. What I was going to mention is that--and this 
may be shameless self-promotion on the part of the Academy, but 
we are going to be looking at hosting a seminar on this in a 
couple months. And we are looking at what The Federalist Papers 
and others said at the time of the Founders and looking and 
comparing and contrasting that today. So I think that will be a 
good debate, and I think that I will be able to more fully 
answer your question after hearing from our panelists on that.
    But we have a very fundamental problem today, that we can't 
deliver--or we have a hard time delivering on the products and 
services that government is supposed to be delivering on. And 
we are not doing it as efficiently and effectively as we have 
to. We have a pending sequestration that is hanging over 
everyone's heads, and something needs to be done.
    And it is going to take leadership. It is going to take 
executive leadership, congressional leadership, working 
together and working across the aisle. But if it is done by one 
side or the other side, or it is done to the other side, you 
are not going to build together that critical mass that is 
necessary to shepherd those reforms through.
    We can look back through history, like, over the last 10 to 
15 years and seeing reforms, if it has not been in personnel, 
in health care, et cetera, that didn't have that strong 
bipartisan, bicameral support. And if you don't have that, when 
the sides switch, where are the promoters and where are the 
people who are the stakeholders in that?
    And so, what I would urge this committee--this committee is 
poised and primed to serve that function, to come up with a 
plan to--maybe not the plan itself, but to direct an 
organization or to come up with the parameters for what a 
reorganized Federal Government should look like. Your 
counterpart in the Senate is equipped to do the same thing, and 
you are at a point in history when this can be done.
    And the American people are depending on you. They are 
depending on the Congress; they are depending on the executive 
branch. They want to see everyone join together at least to do 
what is good and in the best interests of the American people. 
And so, to that effect, I think that this committee has a rare 
opportunity to make that happen.
    Mr. Walberg. Thank you.
    And thank you, Mr. Chairman.
    Mr. DesJarlais. I thank the gentleman.
    The chair now recognizes the gentlelady from the District 
of Columbia, Ms. Norton, for 5 minutes.
    Ms. Norton. Thank you very much, Mr. Chairman.
    I would like to take a stab at building on the violent 
agreement among you to see if we can model it for this 
committee. Often, there is needless division in this committee, 
and I wonder if this might not be the time, when I listen to 
your testimony, to draw out something of what the committee has 
done with what the President proposes to do.
    And, by the way, watch out for your looking at the Framers. 
The Framers were so wise. The Framers knew what they didn't 
know and what they did know. And one thing the Framers could 
not have envisioned is a global economy, the Industrial 
Revolution, and the technical revolution that we are trying to 
go through. So the last thing they did was to try to reorganize 
the government. That is up to us.
    The committee has voted to reduce the size of government--I 
am not sure where this has gone in the House floor--by 2015 by 
10 percent, some across-the-board figure. Now the President now 
wants to reorganize the government.
    My only experience with this kind of massive reorganization 
comes from having served on the board of three Fortune 500 
companies. And I must tell you that it is only out of that 
experience that I can counter my inherent hostility to fast-
track. Because I can tell you that no CEO in a Fortune 500 
company would have done anything but put the plan before the 
board of directors and that is it. And what the President 
faces, it is 400 CEOs, or 400 and some CEOs, that want to get 
into the act of reorganizing the government. So I guess that 
drives him to fast-track, and we always hate it.
    But let me tell you what has already happened. For decades 
now, we have had a base closure commission. And look, I have 
lost--I have lost a base. They have another one coming up. We 
hate it. They survive. This very committee has just approved a 
BRAC-type bill to allow for the consolidation and disposal of 
property. A bill from another committee, a similar bill, went 
to the floor last week, BRAC-type, civilian BRAC-type bill for 
agencies so you can dispose of or consolidate some of this 
excess property held by a number of agencies, passed in the 
House. Okay.
    So what we have before us now is--the committee uses the 
word ``obesity,'' meaning some are concerned with the number of 
employees, despite figures showing a quite remarkable and 
steady decline in the number of employees. When you listen to 
Senator Warner's testimony, it suggests that our problem has 
not been so much people as duplication of programs. Indeed, 
Senator Warner himself, in listing his examples, didn't point 
to agencies, he pointed to programs: This one does, you know, 
this for the poor children, and so does that one, and there are 
10 agencies that do it.
    So my question is, with Members of Congress wanting to 
reduce the Federal workforce further right now and with the 
President wanting to reorganize the workforce, isn't this a 
time to bring the two together, rationally, so that, for 
example, instead of a 10 percent cut across the board, you may 
with reorganization eliminate whole programs altogether and 
therefore accomplish what you want perhaps with the same amount 
of funding in a more rational way?
    I think you, Dr. Light, talked about streamlining and 
delayering. Well, you don't do either with a 10 percent across-
the-board cut. You do what happened when I was at the Equal 
Employment Opportunity Commission, when I was chair. You know, 
we did the attrition and so forth, but if there were too few 
lawyers, we would have to fill those positions anyway because 
they were vital to what the agency did.
    So I would like to know whether you--I would like to hear 
from all four of you--whether you think the President's desire 
to reorganize and the committee's desire to cut employees in 
fact could come together if the President were given this 
authority, which I hate? I am trying to fight against my own 
bias to find what is the right way to go.
    Mr. Light. First of all, it is a delight to be back 
testifying before you. It is nice to see you again.
    But let me say that I am violently opposed to the 
attrition-based downsizing. I don't think it is going to work. 
And, in fact, oftentimes you hear people who advocate the 
downsizing--which hits the bottom layer of government with a 
tsunami force while insulating the higher levels of government 
from much turnover at all. So we hear people saying, ``We ought 
to cut the workforce,'' but, incidentally, PTO has that 
backlog. And SSA has a backlog. And the Veterans Administration 
has a backlog. And the backloads grow and grow and grow because 
these downsizings--and the Clinton administration did this, 
too--these downsizings whack off the bottom of government 
because the quit rates, the separation rates are much higher. 
And Max Stier has documented the separation rates in the first 
5 years of service.
    Now, if we start looking at the jobs that the baby boomers 
are vacating at the middle and higher levels, we can get some 
reductions in force there. But we should take the dollars, I 
believe, that we save from those reductions in force and hire 
more people on the front line. You might end up with----
    Ms. Norton. Well, can you do that without reorganization?
    Mr. Light. You can do it without reorganization, but it is 
a multiplier effect on reorganization. You might end up with 
the same number of Federal employees, but they would be at a 
different level and there would be a different cost. You would 
have more inspectors, you would have more disability review, 
you would have more people looking at those patent and 
trademark applications. You would have a better-working 
government. And you wouldn't have do it through an attrition-
based downsizing that would reduce the number of people who are 
actually delivering the goods and services.
    I understand the point of the effort, but I don't think it 
works the way people think it will.
    Mr. DesJarlais. The gentlelady's time has expired.
    The chair will now recognize himself for 5 minutes.
    Mr. Light, you proposed a $1 trillion cut in Federal 
spending last July, and there are a lot of areas that you cut 
from. Can you focus for a minute on why the Federal management 
has 18 layers of, I guess, management and you would like to 
reduce that number to 6? Why does the government currently have 
so many management layers? And how does that impact its 
efficiency?
    Mr. Light. The management layers exist for a simple reason: 
The Federal Government pays exactly no price for creating new 
layers. Every business in America pays a price--in lost 
productivity, lost clarity of communication--when it creates a 
new layer of management. So does Congress, which has created 
more and more layers, and the Office of Management and Budget 
and so forth, and universities. You want to see a paragon of 
layering? You ought to take a look at university hierarchies.
    It is when you pay a price for creating a layer that you 
reduce the creation of layers. That is it. And we have allowed 
them to be established, and we allowed them to spread. I 
counted 64 layers between the top of the departments, on 
average, and the bottom of just the administrator compartment. 
I mean, it is because we don't pay a price for it.
    And we have used it during pay freezes, and we have used it 
during hiring freezes; we have used the creation of layers to 
get our people moved up. It is often by accident, and we just 
don't do much about it.
    Mr. DesJarlais. Do you know what the total number of 
Federal employees are--the private contractors, Federal 
employees like ourselves, postal, veterans? Do you know what 
the total number is?
    Mr. Light. The estimated number I would use is 14 million.
    Mr. DesJarlais. Fourteen million?
    Mr. Light. And that includes some number--I mean, that 
includes the contractors, the military, the Postal Service, the 
quasi-government--you know, the full-time-equivalent Feds, the 
full-time-equivalent contractors.
    Mr. DesJarlais. I think Chairman Issa asked Senator Warner, 
what would be the ideal workforce, and he gave an answer that, 
you know, seems acceptable: Whatever is appropriate to do a 
good job. And I think he went on to say we don't really even 
know how many people work for us. And that is a problem.
    I ran a medical practice for 20 years, and I have had from 
four to five employees, and I can say down to probably 15 
minutes a day I know what each one of those employees does. And 
the Federal Government, when we don't even know what these 
people are doing, that seems like a big problem.
    And a good example, this year on our MRA accounts for all 
of the Members, we were tasked with reducing that number by 5 
percent in 2011, and in 2012 we are tasked with reducing that 
by 6 percent. So we have seen a 10 percent cut in 2 years. And 
the reason we are successful at getting that done is because I 
was told when I came to Congress that I had this budget to 
manage my staff and if I went over budget that money came out 
of my pocket. So guess what? We are meeting those levels.
    How can we transform that into a bigger approach with 
government and get better accountability?
    Mr. Light. Well, I mean, we know everything possible about 
Federal employees once they are on the payroll, almost to their 
shoe size. We know nothing about the number of contract 
employees.
    Every time I roll out these estimates, which are pretty 
solid, but, you know, they are estimates, the service 
contractor association says, you know, these are terrible 
estimates, they are just estimates, they are overblown. And I 
will always say back to them--I get phone calls from my 
colleague over there, and I will always say back, you know, 
Stan, that is a good point, but what is your number? And he 
will say, we don't have one, and we don't want to get one, and 
we don't have to get one; we don't have to tell you how many 
people we employ.
    So we do not extract from the contract community or the 
grant community any data on what gets paid. The Project on 
Government Oversight just released a report comparing contract 
costs by job classification code in the contractor community, 
the private sector, and the Federal community. And Feds are 
overpaid somewhat in many categories to private employees and--
--
    Mr. DesJarlais. Is it like 70,000 to 50,000, on average? Is 
that the gap between Federal and private----
    Mr. Light. But when you go to the contractor community, the 
contractors are vastly overpaid compared to the Federal 
employees.
    Mr. DesJarlais. Okay.
    One other point. I think I have heard from Ed and 
Workforce--we had a hearing, and 98.5 percent of government 
employees are retained once they join the government workforce. 
Have you ever heard of that type of retention rate of employees 
in any other private-sector industry?
    Mr. Light. You know, the turnover rate has to be somewhere 
between 0 and 5 percent to get that fresh blood. I mean, I 
would rely on Max here, my colleague Max, to give you something 
on that.
    Mr. DesJarlais. Okay. Actually, I did want to get to some 
of your thoughts on the unpaid tax liability that the IRS has 
identified, about $300 billion per year, but my time has 
expired.
    And so I will yield to the ranking member, the gentleman 
from Maryland, Mr. Cummings, for 5 minutes.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Dr. Light, you just said something that was very 
interesting. You said the contractors are paid more than the 
Federal employees. Is that right?
    Mr. Light. Absolutely correct, according to the Project on 
Government Oversight. In 33 of the 34 job classifications they 
studied--I think it was 34--contractors were overpaid--not 
overpaid--were paid more. You know, I shouldn't have let that 
word slip.
    Mr. Cummings. And the Federal Government is spending over 
$500 billion on Federal contracts. We keep hearing about 
proposals to cut Federal employees. However, you recommended in 
your testimony that the acquisition workforce should be 
increased to strengthen oversight.
    Now, why is it so important to increase the number of 
employees focused on acquisition oversight?
    Mr. Light. We need to know what is happening out there in 
that 40 percent of contracts that are sole-sourced, 
noncompeted. We have a vast increase in the number of bundled 
contracts, which are nests of contractors, sub and sub and sub. 
We don't know what is going on in there. And the acquisition 
workforce has remained pretty steady, a little bit lower now, 
at sort of low-60,000s since 1990.
    We just got to take a look inside those nests, those sole-
source contracts. That is what the Shays Commission has done on 
Iraq wartime contracting. I mean, you start looking inside 
these nests and you see these conflicts of interest and 
problems monitoring what is going on.
    We have to have more people with the skills--and this goes 
to Max Stier's point. We have to have a stronger acquisitions 
workforce. And we cannot rely on contractors to write our RFPs, 
which happens in many agencies.
    Mr. Cummings. Well, you know, we had an experience with 
that with the Coast Guard. The Coast Guard in the Deepwater 
project, they had the private contractors pretty much write the 
contract.
    Mr. Light. Right.
    Mr. Cummings. And we now have sitting in Baltimore eight 
ships that they bought, pretty much, that don't float, because 
they did not have a decent acquisitions department. So they 
left it up to the private contractors. And they were buying 
radar systems that were supposed to cover 360 degrees that 
covered 180 degrees. That is what the private--and we lost 
millions upon millions of dollars in that Deepwater project.
    Mr. Light. Well, we have primes on some of these bundled 
contractors that are subs to other primes on other contracts, 
who are subs on their contracts. You see what I mean?
    Mr. Cummings. Yeah.
    Mr. Light. I mean, we have, like, this nest of potential 
conflict of interest across the contract community, but we 
can't see it. It is not transparent at all.
    Mr. Cummings. So it is so big that we are--it is like a 
monster that we can't control. But yet and still, we are 
letting go a lot of Federal employees.
    And it seems like a lot of people why this impression that 
these Federal employees are making a whole, whole lot of money. 
And a lot of them work right here on the Hill, and they are not 
making but so much money. But yet and still, we are chopping 
and freezing their pay. It is very interesting.
    Mr. Light. Well, I don't want to help you set your 
oversight agenda, but we ought to take a look at the 
implementation of the Service Contractor Act of 1965 in terms 
of what the bottom level of the contractor industry is paying 
its workers. They are supposed to be paying a small premium for 
health insurance and other benefits if they are not providing 
those directly. And there is absolutely no evidence that that 
goes on.
    I mean, we just need to understand more about what we are 
spending. Could we use fewer contract employees? We can't 
answer the question until we know how many there are.
    Mr. Cummings. So let me make sure I understand what you 
just alluded to. And I know you didn't come to a conclusion; 
you sort of put it out there as a question. But are you 
thinking that one of the questions that needs to be asked is, 
when these contracts are then awarded to the private 
contractors, work that would have normally been done by Federal 
workers, and they are supposedly for a lower amount, I guess, 
but in the end a lot of times the benefits that would flow to 
the employees of those contractors are not at all comparable to 
what they would get as a Federal employee. Is that----
    Mr. Light. Right. Right. What happens is that we save money 
on the frontline delivery in the short term, but we have an 
intergenerational cost transfer 30, 40 years down the line. If 
you take in a worker at 22 and do not provide a compensation 
package, you do not provide any kind of pension support, 40, 50 
years later they are going to come back to us for Supplemental 
Security Income. The cost of not providing compensation at the 
bottom of the contract workforce eventually catches up to us. 
And, of course, the spread between the top and the bottom is 
also something worth looking at.
    We increased the--this committee led the effort to increase 
the President's salary to $400,000 starting in 2001. And we 
thought that might lift the top of the Federal salary structure 
to eliminate compensation for the SES. It did a little. But we 
still have work to do on that to see what the spreads are 
across the sectors.
    Mr. Cummings. I see my time is up. Thank you.
    Chairman Issa. Thank you.
    I am just going to do a very quick follow-up. And, Dr. 
Light, I am not sure I understand the whole idea that if you 
pay less now, you are automatically going to have this tail. 
That would beg the idea that Greece had the right idea lock, 
stock, and barrel, that, you know, a job for life and 
guaranteed retirement at 50 and so on is the right answer.
    Mr. Light. That is a good point.
    Chairman Issa. But I won't go there.
    I will go to one area, because this committee--Mr. Cummings 
is on both--but this committee looked deeply into Deepwater, 
and what we found was that the Navy had all the assets 
necessary to deliver those eight ships properly. And a classic 
example--and I would like your comment on it--was the Coast 
Guard didn't know how to build major ships at sea, the Navy 
does it for a living, the Coast Guard decided to do it itself 
without the resources.
    So my question to you is, rather than say you have to 
develop the Coast Guard to have the ability to build what is 
essentially identical ships to what the Navy builds every day, 
how do we change government so that, quite frankly, the Coast 
Guard gets told, ``Sorry, you are just not the best to buy your 
own ship in this case; we will give you a seat at the table, 
but the Navy is going to procure it''? How do we make that 
change to where that same dumb contract doesn't happen again 
that gives us ships that break in half in less than 20 years?
    Mr. Stier, you look like you are anxious to answer.
    Mr. Stier. Yeah, I think that it is a great question, and I 
am quite interested in what Dr. Light is going to respond.
    I will throw in one thought, and that is that my view is 
that if we increase mobility amongst the leadership in 
government, that would actually help address--not fully 
address, but it would help address--the issue you are 
describing.
    Chairman Issa. Goldwater-Nichols for the nondefense area.
    Mr. Stier. Absolutely. And, frankly, with DOD, there is a 
lot of expertise in DOD. Goldwater-Nichols has worked quite 
substantially to increase integration across the services, but 
you don't see a lot of integrations with DOD and the civilian 
agencies. And, frankly----
    Chairman Issa. Or even DOD civilians.
    Mr. Stier. That is correct, absolutely. And, you know, it 
is 92 percent of the SES come from within government, four out 
of five from within the same agency. Once they are actually in 
the SES, only 8 percent move agencies. We are putting out a 
report on this at the end of the month.
    I think if you move people around, you create 
relationships, you have people understand that there is 
knowledge in other places and they know who to call. And that 
is the kind of thing that I think would have dramatic impact.
    Chairman Issa. So I see general consensus on that.
    Let me follow up with one more thing. This committee is 
very partisan sometimes on the Federal workforce. I came out of 
San Diego, California, where we had a formal commission process 
for outsourcing versus in-sourcing. We had a system in which 
you could in-source if you could prove you could do it cheaper. 
You could keep a contract if you could prove that you were 
nearly competitive to an outsource, et cetera, et cetera.
    Do we need to have a refinement in that type of analysis so 
that, in fact, the Federal workforce broadly would essentially 
get the right to--if they could beat the full-time equivalent 
of a contractor and provide the same flexibility, they could, 
in a sense, bid for it, so that we wouldn't have this big 
question of, are we paying for an outsource greater--and I 
appreciate, Dr. Light, your concept on the paying less, but in 
some cases we pay more. The best example that I see every day 
is what we are paying--or know of every day--right now in Iraq, 
the people who replaced our men and women in uniform are 
costing us three and four times as much as the uniformed people 
they replaced. And I mean not just--I mean, you know, it is a 
quarter of a million dollars per security person. And no matter 
how you load our active-duty military, you don't get to that 
number.
    Is there a responsibility and a possibility that we could 
create the kind of flexibility so the question of what we used 
to call ``bill or buy'' in the private sector, but ``bill or 
buy'' in the sense of refining the Federal workforce? And if we 
do so, do we need to have a level of flexibility of the Federal 
workforce that goes with that?
    And I would go right down the line.
    Mr. Light. San Diego was also a pioneer in public nonprofit 
and private competition on the welfare front. You know, very 
celebrated experiment out there.
    What we really have to do, I think, is take a good, hard 
look at Budget Circular A-76, which defines the basic terms for 
contracting out. It was revised--when?
    Mr. Shea. In 2003 it was revised.
    Mr. Light. I think we really need to take a good, hard look 
at how it has been implemented and how we define this term 
and----
    Chairman Issa. So after we determined that it failed, 
because we saw outsourcing for greater cost under President 
Bush at times, clearly----
    Mr. Light. Right.
    Chairman Issa. --and now we see in-sourcing in which they 
tap the contractor employee on the shoulder and say, we are 
going to be in-sourcing, would you like a pay raise?
    I mean, we have clearly had an ignoring of these kinds of 
considerations under both--at least the two Presidents I have 
served under.
    Mr. Light. Correct.
    Chairman Issa. Mr. Blair? 
    Mr. Blair. What I was going to interject----
    Chairman Issa. So much for briefly, by the way, but, 
please. That was my last question.
    Mr. Blair. It is really the question of what is inherently 
governmental. And if the job is inherently governmental, it 
should not be contracted out. And if the job is not inherently 
governmental, then there is a fair question of why would you 
have a Federal employee performing that function when it is not 
inherently governmental. So maybe the more fundamental issue--
--
    Chairman Issa. Isn't the answer the lowest-cost delivery of 
what the government has determined shall be delivered on behalf 
of the government? And I say that because the question of 
``inherently governmental''--I can come up with reasons, for 
example, that a patent examiner is inherently governmental. On 
the other hand, I look and say, well, look, if the quality of 
the patent is properly reviewed and the final decision is a 
government decision, well, then the government made its 
inherently governmental decision, which was only the very last 
step, which was the awarding.
    So I can go through and have that argument time and time 
again, but ``inherently governmental'' is hard to decide, and 
we can each have our own. Once you decide the government shall 
deliver--and San Diego is, Dr. Light, one of my favorite 
examples. We made a decision that maybe the YMCA was better, 
maybe Beth Israel was better. We went through whole processes 
of secular and religious groups. And it was always a question 
of we, the government, are paying for it, we take 
responsibility, and we want the highest quality delivered at 
the best value, if you will, not just price. And that concept 
allowed us to flow in and out and, by the way, take away 
contracts even from the most sympathetic groups if they weren't 
delivering the best value.
    How do we get to defining that, not with a circular, but 
with something that we can then check and recheck and recheck? 
Because otherwise, how do we reduce the total cost of delivery 
and, in fact, guarantee that quality, fully-paid-for service is 
delivered?
    Mr. Shea?
    And I thank the ranking member. I know this has gone longer 
than I planned.
    Mr. Shea. Yes, sir. During the Bush administration, we had 
a program called competitive sourcing, with which you are 
familiar.
    Chairman Issa. Right.
    Mr. Shea. It was governed by A-76. A-76 sets as a target 
the completion of a competition within 2 to 4 years. So in a 
bureaucracy, that is a goal. You want to shoot for that 4 
years. So they were all more complicated and time-consuming 
than you wanted them to be.
    But the vast majority of these competitions resulted in a 
victory by the in-house employees. But a majority of cases, you 
perform the same function more professionally and with a 
smaller workforce. Now----
    Chairman Issa. Right. In other words, it caused the Federal 
workforce to reconcile their own shortcomings and get better.
    Mr. Shea. Absolutely. I will never forget the looks on the 
faces of employees when we concluded a competition at OMB. We 
were going to get more professional staff while this function 
we were studying was going to get more professional but 
smaller. And folks who generally opposed this were delighted at 
the outcome.
    That suggests that we could have done a much better job 
communicating it on the front end, because it does impact 
morale when you are going into this. We learned a lot from that 
process that I think would benefit future similar efforts.
    Chairman Issa. Mr. Stier, you have the last word.
    Mr. Stier. I was just going to say thank you.
    Chairman Issa. You are most welcome.
    The ranking member is recognized.
    Mr. Cummings. Just to follow up on the chairman's 
questions, Mr. Shea, when you were talking about the 
comparisons between the government and private contractors, 
where does the piece that I was talking to Dr. Light about--
let's say, for example, we have a private contractor that is 
offering X benefits and those benefits don't, say, even compare 
to what the government is offering, how does that play into 
that? Do you follow me?
    Mr. Shea. Yes----
    Mr. Cummings. It is certainly going to be cheaper. I mean, 
you would figure it would be cheaper if--because I get 
complaints from people in my district who say that they are 
sitting next to people who may be under a contract doing 
basically the same work but in some instances not getting the 
benefits that they are getting.
    Do you follow me?
    Mr. Shea. Let me just say that I am very proud of the 
benefits we offer our employees at Grant Thornton.
    And I think--I am not sure----
    Mr. Cummings. I mean, in other words, how do you----
    Mr. Shea. How do you do an apples-to-apples comparison?
    Mr. Cummings. That is right. That is exactly right.
    Mr. Shea. And I am not sure exactly the parameters of A-76 
in that regard. But I think, within some limitations, what you 
are saying is, the full cost of the government and the bill the 
government pays a contractor. And I think there are some 
requirements that Dr. Light mentioned about minimum benefits 
you pay, but I think generally that is taken into account when 
you are looking at the bottom-line cost that the government is 
paying the contractor versus the fully loaded cost that you are 
paying an employee.
    And that is what takes the time, frankly, in the 
competitions. You are trying to make sure that the cost 
estimates of each, the in-house team and the contractor, are 
fairly compared.
    Mr. Cummings. Uh-huh.
    Mr. Stier, did you have a comment on that?
    Mr. Stier. I would just add that it is also, I think, 
important to look at the cost also of the acquisition process. 
And one of the--and I say this with some hesitation only 
because I haven't been able to verify the data. But I was told 
just yesterday by somebody in the IT world that the average 
cost of the acquisition in the government was somewhere in the 
neighborhood of 50 percent of the total cost of the package, 
including implementation, in the government space, in the 
public-sector space; whereas a reasonable average in the 
private sector was around 12 percent or 12 1/2 percent.
    And I think that, again, if we are looking at cost savings, 
it is not simply--we have to look at the process itself and the 
direct costs that are associated there. But, frankly, we also 
do a very poor job of engaging the contractor community in 
helping identify the right design according to clear 
requirements.
    So there is a complex set of issues that, if you are trying 
to really take this on, I think are worth examining, in which I 
do believe that there are enormous efficiencies that are 
available to us.
    And the last piece I would say, we are missing inside 
government not just the acquisition workforce folks that we 
need, but--Mr. Chairman, to your point, at the end of the day, 
what we look for in our government is the ultimate oversight to 
say that the public good is being looked after in the 
appropriate fashion. We don't have the right talent today 
internally to make those decisions, and that is a real problem.
    Mr. Cummings. And how do you suggest we have it?
    Mr. Stier. And I am cognizant of the fact that I am using 
up your time.
    I think the starting point really is understanding what our 
priorities are, because, again, I think there isn't clarity 
associated with that, and then examining what critical skills 
that we actually need to achieve those priorities. And this is 
something that I think needs to take place not just within 
agencies but holistically as well. But it is a real challenge.
    Mr. Cummings. Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    And I want to thank all of our witnesses. And as I said in 
the beginning, as your thoughts go on for the next several 
days, we will hold the record open for 5 days so that you can, 
as we like to say, revise and extend.
    Chairman Issa. And, with that, we stand adjourned.
    [Whereupon, at 11:45 a.m., the committee was adjourned.]





                                 
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