[Senate Hearing 112-531]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 112-531

                   RETOOLING GOVERNMENT FOR THE 21ST
                CENTURY: THE PRESIDENT'S REORGANIZATION
                     PLAN AND REDUCING DUPLICATION

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS


                             SECOND SESSION

                               __________

                             MARCH 21, 2012

                               __________

        Available via the World Wide Web: http://www.fdsys.gov/

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs














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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  JERRY MORAN, Kansas

                  Michael L. Alexander, Staff Director
                    Holly A. Idelson, Senior Counsel
                      Jonathan M. Kraden, Counsel
              Jason T. Barnosky, Professional Staff Member
               Nicholas A. Rossi, Minority Staff Director
           J. Kathryn French, Minority Deputy Staff Director
         Christopher R. MacDonald, Minority Research Assistant
                  Trina Driessnack Tyrer, Chief Clerk
                 Patricia R. Hogan, Publications Clerk
                    Laura W. Kilbride, Hearing Clerk










                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Collins..............................................     2
    Senator Coburn...............................................    11
    Senator Carper...............................................    13
    Senator Brown................................................    15
Prepared statements:
    Senator Lieberman............................................    23
    Senator Collins..............................................    25
    Senator Akaka................................................    31
    Senator Carper...............................................    32

                               WITNESSES
                       Wednesday, March 21, 2012

Patricia A. Dalton, Chief Operating Officer, U.S. Government 
  Accountability Office..........................................     4
Hon. Daniel I. Werfel, Controller, Office of Federal Financial 
  Management, Office of Management and Budget....................     6

                     Alphabetical List of Witnesses

Dalton, Patricia A.:
    Testimony....................................................     4
    Prepared statement...........................................    48
Werfel, Hon. Daniel I.:
    Testimony....................................................     6
    Prepared statement...........................................   105

                                APPENDIX

Charts (4) submitted by Senator Collins..........................    27
Charts (3) submitted by Senator Brown............................    34
Letter from Senator McCain to Hon. Leon E. Panetta, dated March 
  19, 2012, with an attachment...................................    37
Hon. John Engler, President, Business Roundtable, prepared 
  statement......................................................   110
Responses to post-hearing questions for the Record from:
    Ms. Dalton...................................................   114
    Mr. Werfel...................................................   120

 
      RETOOLING GOVERNMENT FOR THE 21ST CENTURY: THE PRESIDENT'S 
              REORGANIZATION PLAN AND REDUCING DUPLICATION

                              ----------                              


                       WEDNESDAY, MARCH 21, 2012

                                     U.S. Senate,  
                       Committee on Homeland Security and  
                                      Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:02 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Carper, Pryor, Collins, 
Coburn, and Brown.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good morning and welcome to this 
hearing.
    I do not think there would be any disagreement with the 
statement there is too much duplication and too little unity of 
effort in our Federal Government. And, of course, that leads to 
too much waste at a time when our government and our taxpayers 
can least afford it.
    Today's hearing is going to look at two important efforts 
to identify and offer solutions to reduce waste and to increase 
unity of effort and efficiency in our Nation's government.
    First, the latest report of the Government Accountability 
Office (GAO) on duplication in Federal agencies--which was 
required by legislation first introduced by Senator Coburn. 
This report identifies 32 areas of overlap, duplication, or 
fragmentation that likely are wasting a large number of 
taxpayer dollars.
    GAO's recommendations range from better coordination of 
Homeland Security grants--which is a topic of longstanding 
concern to this Committee--to more centralized coordination of 
the nine Federal agencies charged with protecting our food 
supply from terrorist attacks or natural disasters.
    Solving these problems will require concerted action by 
Congress working, of course, with the Executive Branch. That is 
why today we thought it would be appropriate to examine 
legislation which implements the President's proposal that he 
discussed in his State of the Union address this year, which is 
restore to the presidency the authority to reorganize 
government.
    The Reforming and Consolidating Government Act of 2012, 
which has been introduced by Senator Mark Warner of Virginia 
and me, is based on language requested by the President. We 
think it deserves a hearing. We believe it will help reduce 
duplication and improve the effectiveness and efficiency of the 
Federal Government.
    This proposal reinstates the government reorganization 
authority that past Presidents relied on from 1932 to 1984. Any 
plan a President proposes under this legislation must decrease 
the number of executive agencies and result in cost savings. 
Such presidential reorganization proposals would be put on a 
fast track through Congress, with no amendments or filibusters 
permitted if this legislation as introduced is adopted. The 
authority given to the President under this legislation would 
sunset after 2 years.
    I know that some of my colleagues are concerned about how a 
President might use this authority, but as the current 
President said in his State of the Union speech: ``We live and 
do business in the Information Age, but the last major 
reorganization of the government happened in the age of black-
and-white TV.''
    That is not going to get the job done. The bill we are 
considering today would make an important first step in 
updating and improving our government and would enable whoever 
is elected President this November, if it is adopted and 
enacted, to have 2 years of this extra authority and fast track 
to move to reorganize our Federal Government and make it more 
efficient.
    So I look forward to hearing from the witnesses and 
questioning them as well. Thank you. Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman.
    Our country has an unsustainable Federal debt of more than 
$15 trillion. That amounts to $49,600 for every man, woman, and 
child in this Nation. When difficult decisions must be made 
even dealing with very worthwhile programs, there simply can be 
no tolerance for taxpayers' dollars being wasted. That is why 
the GAO's report identifying duplication, fragmentation, and 
overlap of Federal programs is so important. The GAO estimates 
that the reforms could save tens of billions of dollars 
annually.
    When the GAO released its 300-plus-page report last year, 
we were presented with overwhelming, quantifiable evidence of 
just how serious this problem is.
    This year, GAO is not only reporting on new areas of 
duplication, but also providing a report card on what action--
or lack of action--has been taken to fix the problems 
identified in last year's report. It is surely disappointing 
that, of the 81 areas discussed in the 2011 report, most have 
had only partial or nominal remedial action taken, and, worse, 
18 have not been addressed at all.
    At a time when our Nation is encumbered by a huge debt, 
there simply can be no excuse for this persistent waste, 
duplication, and inefficiency.
    Duplication and overlap serve neither the taxpayers nor the 
intended beneficiaries of the programs in question. To cite 
just one example, a person with a disability may have to wade 
through a perplexing maze of some 50 programs providing 
employment assistance spread across nine agencies.
    What is the cause of such duplication? At times, the 
President, seeking to put his own mark on the budget to 
demonstrate his priorities, creates a new program, despite the 
fact that similar ones already exist.
    In other cases, it is Congress that creates the new 
programs without checking to see if other programs with similar 
goals already are on the books. Overlapping committee 
jurisdictions may further contribute to the problem.
    This is not a case of bad intentions at work. Just the 
opposite. It is the proliferation of good intentions that has 
created the problem, and the problem is compounded by a lack of 
transparency about what programs even exist. Although various 
sources released by the Office of Management and Budget (OMB) 
and the Congressional Budget Office (CBO) produce partial lists 
of various government programs, there is not an exhaustive list 
of Federal programs in one, easy-to-access location.
    That is why I have cosponsored Senator Coburn's bill that 
would require a comprehensive list on a public Web site of 
every Federal program, along with its budget and performance 
information.
    The duplication and overlap in green building initiatives 
are a case study. Right now, there are 11 agencies running 94 
initiatives trying to foster green buildings in the non-Federal 
sectors. Improving the energy efficiency of buildings is surely 
a worthwhile goal, but overlapping and duplicative programs are 
not the best way to achieve that goal. There is no consistent 
oversight, there is no accountability, and there is a virtual 
certainty that millions and millions of dollars are being 
wasted. Think how much overhead we are paying for each box on 
the charts that we have passed out.\1\ These programs could be 
streamlined and achieve the same policy goal in a measurable 
way for less money. And, of course, there are many other 
examples that we will talk about today.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Collins appears in the Appendix 
on page 28.
---------------------------------------------------------------------------
    We often hear reports of duplicative programs, but rarely 
do we see proposals to address the problem. That is why I think 
it is appropriate that the Chairman has joined today's topic of 
the GAO duplication report with an evaluation of the 
reorganization authority the President has requested that 
might--and I underline ``might''--help address some of these 
problems.
    Congress has surely failed more times than not in 
reorganizing government in a major way. I would note, however, 
that two of the most significant such reorganizations in the 
past 10 years--comprehensive intelligence reform and the 
creation of the Department of Homeland Security (DHS)--have 
emerged as a result of this Committee's efforts, not by 
presidential fiat.
    While I understand that Congress is sometimes an obstacle 
to speedy reform, it is important that, in considering ways to 
expedite the process, we do not undermine Congress' ability to 
carefully consider and amend legislation.
    In the current context, I would note that we are being 
asked by the Administration to develop and vote on the fast-
track reorganization authority in the absence of the actual 
reorganization proposal that we are told will be submitted for 
consideration using this new authority. I believe that is a 
mistake.
    Nevertheless, I appreciate the serious work that has gone 
into both the diagnostic efforts at GAO and the efforts by OMB 
to develop some remedies, and I look forward to hearing from 
our panel.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you, Senator Collins.
    I have just been notified there is going to be a vote 
around 11 a.m., so we will go as long as we can. We may have to 
recess for that purpose.
    If it is all right with the witnesses, I think I would like 
to call on Ms. Dalton first because I know you are both going 
to testify on both the GAO report and the President's proposal, 
but I thought perhaps we would ask you first to describe the 
report and then Mr. Werfel can respond to it on behalf of the 
Administration and talk about the President's proposal.
    Thanks for being here. Why don't you go first, Ms. Dalton?

 TESTIMONY OF PATRICIA A. DALTON,\1\ CHIEF OPERATING OFFICER, 
             U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Dalton. Thank you, Mr. Chairman, Senator Collins, and 
Members of the Committee. We appreciate the opportunity to 
discuss the need to reexamine the structures and operations of 
the Federal Government. With the Federal Government 
experiencing a period of profound transition and challenges, it 
also faces opportunities to enhance performance, ensure 
accountability, and position the Nation for the future.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Dalton appears in the Appendix on 
page 48.
---------------------------------------------------------------------------
    GAO's reports over the past 2 years have identified 
numerous areas of potential duplication, overlap, and 
fragmentation across the Federal Government. For some of the 
areas, restructuring, including consolidation, may be the 
appropriate solution. In other instances, improved 
coordination, better information on performance and costs, and 
enhanced accountability may be appropriate.
    Government reorganizations often, and I would say most 
likely, are going to be very complex and take time to implement 
properly. The President, as you know, recently requested 
expedited reorganization authority. The bill introduced by you, 
Mr. Chairman, and Senator Warner would renew, with some 
modifications, the authority that Congress provided the 
President from 1932 through 1984.
    Expedited reorganization authority may facilitate 
reorganizations; however, all key players should be engaged in 
the discussion: The President, the Congress, and parties with a 
vested interest in the restructuring, including State and local 
governments and citizens. It is important to ensure consensus 
on identified problems and the solutions that can actually 
remedy the problems identified. Fixing the wrong problems, or 
fixing the right problems poorly, can cause more harm than 
good.
    Prior reorganization initiatives reinforce the importance 
of maintaining the balance between the Executive and 
Legislative roles. Safeguards are needed to ensure 
congressional input and concurrence on the goals as well as the 
overall reorganization proposal.
    Effective implementation is also critical to any 
restructuring. This requires establishing clear mission and 
strategic goals; sustained leadership; and comprehensive 
implementation, planning, and execution. Importantly, S. 2129 
would require an implementation plan to be submitted by the 
President along with his proposal. Effective oversight 
throughout the implementation process would also be critical.
    Let me now turn to GAO's work on overlap, duplication, and 
fragmentation in the government.
    In our 2012 report, we identified 32 areas of potential 
duplication, overlap, or fragmentation, as well as 19 
additional areas where there is potential for cost savings or 
revenue enhancement. I would just like to illustrate by a few 
examples.
    In the area of unmanned aircraft systems, the Department of 
Defense (DOD) expects to spend over $37 billion on these 
systems over the next few years. Military service-driven 
requirements rather than an effective department-wide strategy 
have led to overlapping capabilities. In the area of housing 
assistance, in 2010 the government had obligations of over $170 
billion in housing-related programs, plus numerous tax 
expenditures. We identified 20 different entities administering 
160 programs. Many of these programs may be justified because 
of differences in products or service delivery areas and 
markets. However, we did find examples where the Departments of 
Housing and Urban Development (HUD) and Agriculture (USDA) both 
run programs that offer similar products and now have market 
overlap.
    Science, technology, engineering, and mathematics (STEM) 
programs are programs to encourage education in the science, 
technology, engineering, and mathematics areas. We reported 173 
of 209 STEM education programs administered by 13 agencies 
overlapped to some degree. Though these programs overlap, there 
may be important differences among the programs that need to be 
understood. It is also important to understand the 
effectiveness of the programs, unfortunately, there is very 
little that is known about the effectiveness of these programs.
    In the area of military and veterans health care, DOD and 
the Department of Veterans Affairs (VA) need to improve 
integration of costs, care coordination, and case management. 
There has been improvement, but there is much more that can be 
done. Our wounded warriors are often enrolled in multiple 
programs. They have multiple case workers that are often 
working on the same issue or may even be giving some 
conflicting advice to our warriors. There is more that can be 
done in terms of integrating these services to our warriors and 
our veterans.
    Our 2012 report also identifies a number of areas of 
potential financial benefits, including better management of 
DOD contracts and acquisition, enhanced use of Medicare and 
Medicaid fraud detection systems, and regular evaluation of 
user fees, as well as many others.
    As Senator Collins noted, we also followed up on our 2011 
report. Of the 81 areas identified, we found four areas had 
been fully addressed, 60 had been partially addressed, and the 
remaining had not been addressed at all. Many of these issues 
are difficult to address and will take time and sustained 
leadership on the part of both the Administration and the 
Congress. There are opportunities certainly for efficiency and 
effectiveness, but as I said, they are going to take time and 
sustained leadership and commitment.
    Thank you, Mr. Chairman. That concludes my remarks.
    Chairman Lieberman. Thank you, Ms. Dalton. That was 
excellent. I must say, I find those examples you gave of 
duplication to be mind-boggling--or maybe I should say 
headache-inducing--in the areas that you talked about, the 
unmanned aerial aircraft and the STEM programs, for instance. 
So we will come back to that in the question-and-answer period.
    Next we will hear from Daniel Werfel, who is Controller at 
the Office of Federal Financial Management, OMB. Thanks for 
being here.

 TESTIMONY OF HON. DANIEL I. WERFEL,\1\ CONTROLLER, OFFICE OF 
 FEDERAL FINANCIAL MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET

    Mr. Werfel. Thank you, Chairman Lieberman, Senator Collins, 
and Members of the Committee, for inviting me to testify on the 
Reforming and Consolidating Government Act of 2012.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Werfel appears in the Appendix on 
page 105.
---------------------------------------------------------------------------
    From the beginning of the Administration, the President has 
focused on making government more efficient and accountable--
eliminating waste, saving money, and making government services 
more responsive. For instance, when the President took office, 
improper payments were on a steady rise. By taking tough new 
steps to fight waste, fraud, and abuse, we have avoided over 
$20 billion in improper payments over the past 2 years and 
recaptured nearly $2 billion in overpayments. Furthermore, on 
the real estate front, the President directed agencies to 
achieve $3 billion in savings by reducing annual operating 
costs, disposing assets, consolidating existing space, and 
other space realignment efforts. Agencies have already achieved 
$1.5 billion in savings and expect to achieve $3.5 billion in 
savings by the end of fiscal year 2012.
    I want to commend the Chairman, Senator Collins, and 
Members of the Committee for their leadership on efforts to 
improve government performance for the American people and 
express my appreciation for the Committee's work with the 
Administration.
    Another area of common ground is the desire to have an 
efficient, effective government that does not require expert 
knowledge to navigate. This is why President Obama is urging 
Congress to reinstate presidential authority to reform, 
consolidate, and modernize the Executive Branch.
    The scale of the Federal Government is vast. For decades, 
we have seen agencies created in response to the crisis of the 
moment. We have seen big departments broken into smaller 
departments, which over time have grown into big departments of 
their own. As the Members of this Committee well know, we have 
rarely seen departments or agencies downsized, much less 
eliminated.
    The GAO recently confirmed this by identifying 32 areas of 
duplication, overlap, or fragmentation among Federal programs. 
If we were starting from scratch today, we would all agree that 
we would wind up with a different mix of agencies and 
departments.
    In these times, government must be as efficient as possible 
in spending scarce dollars. Each program comes with its own 
associated overhead and related expenses, driving total 
spending needlessly upward. But overlap and duplication have 
more than just financial cost. They also make it more difficult 
for the American public, our customers, to access the programs 
and service they need. Over the past year, we spoke to hundreds 
of businesses to find out what is working and what is not 
working when they deal with the Federal Government. They told 
us there were too many agencies doing the same thing, that they 
were getting different answers to the same question, and that 
the export system was set up only for big businesses who could 
afford to hire someone to deal with all the paperwork.
    They identified a series of straightforward issues a 
business owner might have such as: How can I identify 
international buyers? What financing and assistance programs 
are available to me from the government? In each case, the 
business owners confront a host of overlapping agencies, 
bureaus, and programs, all organized to help, but many 
operating autonomously of other programs addressing the same 
set of challenges. These examples exist across government and 
beg for a mechanism to consolidate key areas of overlap and 
duplication, make it easier for Americans to access government 
services, and save money.
    That is why the President submitted the Reforming and 
Consolidating Government Act of 2012, which would reinstate the 
reorganization authority that Presidents have had for the 
better part of 50 years. For most of 1932 through 1984, 
Presidents had the authority to submit proposals to Congress to 
reorganize the Executive Branch via a fast-track procedure. The 
Act would reinstate the 1984 executive reorganization authority 
with a key modification. It would require that any plan either 
reduce the number of agencies or result in lower costs.
    In addition, the Act would provide up to a 60-day window 
for congressional feedback and presidential modification of the 
plan. It would maintain the 1984 procedures with an expedited 
process for an up-or-down vote by Congress on specific 
consolidation proposals. This would ensure that a proposal 
cannot take effect without congressional approval. And the Act 
would sunset the authority after 2 years, allowing Congress to 
reconsider its authorization.
    The proposed legislation enables the government to deliver 
the productivity growth we need, reduce program duplication and 
overlap, rationalize overhead and expenses, and improve 
customer services beyond the level that exist today. The 
President has said that if Congress reinstates reorganization 
authority, the first proposal he would make is to consolidate 
six business-focused agencies into one. This would save 
billions by eliminating duplication and overhead costs, and for 
the first time enable businesses to reach out to just one 
department in order to access the core government services that 
will help them compete, grow, and hire.
    We all want a government that is efficient, effective, and 
offers Americans the services they deserve. Providing the 
President with a means to propose consolidations to save money 
and reduce government waste, subject to an up-or-down vote by 
both Houses of Congress, is an important step to accomplish 
these shared goals.
    Thank you, and I look forward to your questions.
    Chairman Lieberman. Thanks, Mr. Werfel.
    We are going to do 5-minute rounds of questions, so we can 
see if we can get as many of the Members in before the vote.
    Let me ask you, Ms. Dalton, first: In this progress report 
on the problems identified in last year's duplication report, 
GAO found that about 80 percent of the problems identified in 
which GAO recommended possible Executive Branch action, those 
were addressed, about 80 percent of them in some way, not all 
fully. Unfortunately, Congress did not fare as well. GAO found 
that Congress has addressed less than 40 percent of last year's 
recommendations.
    So I wanted to ask you to spend a minute, if you would, 
indicating what you think are some of the more important of the 
unaddressed recommendations that GAO made to Congress last year 
to avoid duplication.
    Ms. Dalton. I think, Mr. Chairman, there are a number of 
them that Congress is considering in various legislation that I 
think could certainly help remove some of the duplication. For 
example, in the area of surface transportation, we have over 
100 surface transportation programs. The surface transportation 
reauthorization bill is currently being considered, and there 
is some consideration of reducing the number of those programs.
    In the area of employment and training, we have over 40 
programs. Again, there are some opportunities, I believe, to 
streamline the number of programs.
    I think anywhere that we identify numerous programs where 
they are legislatively authorized, there is an opportunity upon 
reauthorization to give a hard look at these programs to see 
whether or not we really need them all. Is there a way to 
consolidate some of them? We do need to have good data as to 
what the effectiveness of each of these programs is.
    Chairman Lieberman. Right.
    Ms. Dalton. So, in many cases, it is both that Congress 
needs to take action and that the Administration does too, 
because Congress needs the information to make informed 
decisions on what programs should be continued or not.
    Chairman Lieberman. And the information necessarily will 
come from the Executive Branch.
    Ms. Dalton. Yes.
    Chairman Lieberman. So the point here is that these are 
areas of duplication that the Executive Branch cannot itself 
deal with because they are legislatively mandated or created.
    Ms. Dalton. Yes, Mr. Chairman.
    Chairman Lieberman. So we have to adopt legislation. Thanks 
for that detail.
    Mr. Werfel, the Administration has argued that the 
President's proposal, which is embraced in the legislation 
before us, the Reforming and Consolidating Government Act, will 
make it easier to eliminate wasteful duplication. So I wanted 
to ask you if you would elaborate on why this authority is so 
important to achieving that goal and why you think it is 
responsive to the GAO reports on duplication, which really 
represent an indictment.
    Mr. Werfel. We absolutely believe it is responsive in 
numerous ways. The bottom line is that in today's budget 
climate and today's economic climate, we need to do more with 
less, and we need the opportunity for bold transformation to 
reshape the Federal Government in meaningful ways that both cut 
costs and serve the American people better. And what the 
President has put forward is a mechanism to help achieve that. 
It establishes a process by which Congress and the American 
people will expect the Administration to tackle some of the key 
issues that are causing duplication and fragmentation, some of 
which are covered in the GAO report, and to put together bold 
transformations and changes that we can advance to Congress and 
have an open dialogue about the potential benefit, savings, and 
opportunities for improving government.
    Without this mechanism, we are concerned that the types of 
transformations that we can achieve together will come up 
short.
    Chairman Lieberman. Let me ask you--I have about a half-
minute left on my time--for a quick answer. Congress always 
resists or is at least skeptical of fast-track authority. Why 
does the President think that is important for reorganization 
proposals?
    Mr. Werfel. Well, first, I would mention that we are basing 
the framework off of the framework that existed in 1984. We do 
not see a need to reinvent the wheel. We want to go back and 
figure out what was happening before.
    I think what we have tried to do is put together a balanced 
approach that enables things to move quickly and not get bogged 
down, but at the same time empowers Congress to prevent 
proposals going forward that Congress believes are unwise in 
serving the American people. So you have a situation where our 
framework would, for example, limit debate and limit amendment 
but provide the President opportunity to change the proposal in 
response to congressional feedback.
    Chairman Lieberman. Right.
    Mr. Werfel. And, obviously, if we are looking to get the 
proposal passed, we know that Congress could stop it in two 
ways--they can either enact a joint resolution to stop it or 
take no action. Under the President's proposal, if no action is 
taken within 90 days, the proposal will not go forward.
    Chairman Lieberman. Then it is dead.
    Mr. Werfel. So it is the balance between helping the 
process move forward quickly without getting bogged down, at 
the same time creating a feedback loop. But at the end of the 
day, the proposal will not go forward without a recognition 
from Congress that it is smart.
    Chairman Lieberman. OK. In that sense, obviously, it is 
different from the Base Realignment and Closure (BRAC) system, 
which requires a negative action.
    My time is up. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Mr. Werfel, we have just heard again today that there is a 
lack of information about what programs are even out there, and 
this is an area where Senator Coburn has done a great deal of 
work. Why doesn't OMB just issue a directive to every Federal 
agency and department requiring them to list all of the 
programs that they have and what the purpose of the program is 
on their Web sites? You do not need legislation. Why don't you 
just take that so that then when we are considering proposals 
for new programs, we could go to the Web site of that agency 
and look?
    Mr. Werfel. Senator Collins, first of all, I agree, it is 
frustrating--and I can imagine everyone's frustration--that the 
Federal Government today cannot quickly and efficiently produce 
a comprehensive inventory of all the Federal programs. That is 
why Congress enacted the Government Performance and Results Act 
(GPRA) Modernization Act, which was passed last year and signed 
by the President, to require the Federal Government to do just 
that. And so OMB has initiated a process to create this 
inventory.
    Unfortunately, it is not something that we can do 
overnight. It is something that we have to work with the 
Federal agencies to evaluate the systems and information flows 
that they have, and the different definitions of programs and 
activities. Our program systems and our budgetary accounting 
systems have grown up over time in a way that is not fully 
rationalized to answer some of these basic questions, and GPRA 
Modernization is intended to fix that, and we are looking at 
ways to do so.
    So we have initiated a pilot to start a comprehensive 
review with nine agencies, and based on what we learn in terms 
of how they fix their systems and do their information capture 
to get this list of programs, we will take that across the rest 
of government and produce that list.
    Senator Collins. I just do not think that it is that 
complicated. A couple of departments have done it, and it seems 
to me that it reflects perhaps an alarming lack of information 
within the department about its own programs. I think OMB needs 
to be much tougher and lead in this area, or else I for one am 
going to continue to support a legislative mandate.
    Ms. Dalton, I want to switch to you to talk about the 
Administration's reorganization proposal. You in your written 
testimony go into this in much greater detail than you had time 
to do in your oral presentation. You caution us that care 
should be taken regarding Congress deciding to limit its own 
powers and roles in government reorganizations. And I must say 
that I find it ironic that some of my colleagues who are most 
upset about the Senate shutting down the free and open 
amendment process are prepared to support this bill, which 
basically cuts Congress out of the process except for an 
initial consultation.
    You also say in your statement that lessons can be learned 
from prior approaches to granting reorganization authority of 
this nature to the President.
    Could you share with us some cautions that we should look 
at and some lessons of where the reorganization authority was 
used in a way that raised questions?
    Ms. Dalton. Well, I think I would like to start off first 
with an example where it worked, and I think the best example 
goes to the middle of the last century and the Hoover 
Commission. In that instance, there was significant 
consultation with the Congress before a proposal was submitted 
and before the reorganization authority was asked to be used. 
Congress elected to set up a commission to work with the 
Administration to fully analyze and vet the proposal, and then 
it was presented to the Congress for a vote.
    So that in using that authority, there was significant 
consultation with the Congress. There was information going 
back and forth so that there could be agreement on the goals 
that were trying to be achieved and that the solutions made 
sense.
    In other cases where there was not that type of 
consultation, the reorganization authority often could not be 
used because Congress did not buy into the proposals and said 
no. And so I think it is important, as I mentioned in my 
statement, to ensure that there is that adequate consultation 
with the Congress, that the views of Congress are incorporated 
in the development of the proposals, and that Congress has 
adequate time to consider what is being proposed.
    Oftentimes in other cases where it has been used 
successfully, it has been--you have to look at the scale of the 
proposal and the reorganization. If it is a fairly small 
reorganization, that might be something that Congress may want 
to consider saying, yes, the expedited authority may be more 
appropriate. Where it is very large scale, creating a new 
department, for example, I think there needs to be much more 
consultation.
    Senator Collins. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Collins. Senator 
Coburn.

              OPENING STATEMENT OF SENATOR COBURN

    Senator Coburn. Well, first of all, thank you all for being 
here. My first question is just a statement of thanks to GAO 
for all the hard work they have done. I know this has been a 
struggle.
    Just for history for the record, when we first asked for 
this, GAO told us it was impossible. The Congressional Research 
Service (CRS) told us it was impossible. And what we found is 
we are actually starting to know something about two-thirds of 
the government.
    My question for Mr. Werfel is: How is it that the 
Department of Education can give us a list every year of their 
programs and the rest of the departments cannot?
    Mr. Werfel. Senator, I am glad you asked because I want to 
go back to my earlier answer. Right now, we produce the 
President's budget and a variety of different mechanisms that 
provide long lists of programs and tables that show you what 
the dollars are. The issue is validating that the list is fully 
comprehensive, accurate, clear, and does not cause confusion. 
And what happens is that we have a combination of factors, 
including definitional issues in terms of whether these 
activities amount to a single program, do they amount to 
multiple programs, and what we want to do is make sure that we 
provide the correct list, and that is what is going to take a 
little bit of time, is the validation of----
    Senator Coburn. Well, quite frankly, we do not have time to 
wait. You know, your first answer, if any American was 
listening to that, they did not believe a word of it. And if 
that is the fact, we are in a whole lot more trouble than any 
American thinks we are in, because what you are saying is we 
cannot tell you what we are doing today. That is what you are 
saying. And the fact is that is just an absence of leadership 
both in the Bush Administration and in this one.
    The fact is it has not been a priority. If the Department 
of Education can put out a book this thick every year with all 
their programs, every other agency can do that. The question is 
that nobody has demanded it. There has not been an Executive 
Order issued that said you will by this time report to us every 
program. And if there is a problem with a definition, footnote 
it and say this may or may not be a separate program. But the 
excuse of not having it is ridiculous for the taxpayers in this 
country.
    You know, Mr. Chairman, the GAO has given us 403 specific 
recommendations to eliminate duplication. There has not been 
one bill or one amendment that has passed that addresses any of 
that in terms of their specific recommendations. So it is not 
just OMB, and it is not just Congress. It is both. And what we 
are hearing today is we have an excuse why we cannot get there. 
And what every business person and every college graduate knows 
and everybody that manages people is if you cannot measure what 
you are doing, you cannot manage it. And you come from the 
Office of Management and Budget.
    I think we need a better answer. I am fully supporting the 
President's idea to reorganize. I am going to help on this 
bill. It has to be cleaned up some, but I am going to help. We 
have to do that. And I fully intend to be engaged to make sure 
that gets through here if it is possible. But we have to do the 
other steps as well, and we cannot wait.
    Mr. Werfel. Can I just respond? One of the historical 
lessons here that I think you will know and be familiar with is 
when you passed the Federal Funding Accountability and 
Transparency Act, which launched USAspending.gov, which you 
cosponsored with then-Senator Obama. You set out a time frame, 
and at that time I think you felt it was ridiculous that we 
cannot tell the American people where Federal dollars are going 
and who receives them, what grantee, what contractor, and you 
were right. And it took time for us to build up the necessary 
systems. You gave us deadlines, and we have worked hard to meet 
those deadlines. And we are not meeting all of them, but we are 
meeting a lot of them, and there is much more information out 
there today that is really enabling a change in the way 
government is happening. People are calling up inspector 
general (IG) hotlines and saying, ``I just saw on 
USAspending.gov''--or Recovery.gov or other of these Web sites 
are that are doing this--``that this entity down the street 
from me is receiving funds, and this does not look like an 
entity that should be receiving Federal dollars.'' And that 
helps us do our fraud and oversight work.
    With this program list--and, admittedly, it intuitively is 
a potentially easier proposition than what you asked us to do 
under USAspending.gov--the same thing occurred. Debate and 
dialogue occurred between the Administration and Congress, and 
the GPRA Modernization bill, which sets a line in the sand and 
asks us to list every program, establishes a statutory 
deadline, which we intend to meet. And I agree with your 
frustration. It is a tough answer to give. I would be 
frustrated if I was sitting at home. And we are working on it, 
and we are taking it seriously. And so the line has been drawn 
in the sand, and we will get it done.
    Senator Coburn. All right. Thank you. I am out of time.
    Chairman Lieberman. Thanks, Senator Coburn. Thanks for your 
leadership on this, really your passionate and understandably 
impatient leadership. We owe it to you to try to do better than 
we have at responding to it.
    I am also really grateful for your statement that you want 
to work together on a reorganization proposal. I think when the 
President introducted it in the State of the Union, maybe most 
people just thought it was another State of the Union proposal 
and it was going to go nowhere. But I think it would be a great 
thing for us at this moment in our government's history, with 
so much waste, so much debt, so much public exasperation, that 
if we could work together to get this done and then enact it, 
whoever is elected President then will have extraordinary 
authority for 2 years to challenge Congress to make the Federal 
Government work better and eliminate the duplication.
    Senator Coburn. If the Chairman would just yield for a 
minute, the frustration I have is we had an amendment that said 
before we pass a new bill, the CRS would tell us whether or not 
we are duplicating. Our colleagues voted that down. The 
American people are probably nauseous about that if they knew 
it, that we do not want to know whether we are creating a new 
duplicative program. That is what 50 Senators said: ``We do not 
want to know.'' And that tells you how sick Washington is, that 
we will not even put forth the tools to discipline ourselves to 
make good decisions. And several Members of this Committee 
voted against that.
    Chairman Lieberman. You know, for the record, when Senator 
Coburn uses terms like ``nauseous'' and ``sick,'' he is a 
doctor. [Laughter.]
    So it has special weight. Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. There is probably an opportunity for me to 
explore fee-for-service as opposed to treating the patient and 
using prevention and wellness here.
    Senator Coburn. We are treating the symptoms, not the 
disease.
    Senator Carper. Yes. Let us just pursue that just for a 
little bit, if we could.
    First of all, thank you both for being here and for your 
efforts. You have heard me talk about trying to change the 
culture of the Federal Government. It is something that Dr. 
Coburn and I, along with others on this Committee, have worked 
on to try to move away from a culture of spendthrift, more 
toward a culture of thrift. Would you just help explain for us 
how what the Administration is proposing fits into that 
cultural change that we have called for for some time?
    Mr. Werfel. Absolutely, Senator Carper. Thank you for the 
question. We think we need different solutions to reshape 
government in a way that has it not only streamlined, not only 
saving money, not only addressing a lot of the issues that GAO 
raises in its duplication report, but to meet 21st Century 
realities, 21st Century demands, and we want to be bold and 
transformative.
    I mentioned in my opening remarks that we spent a lot of 
time talking to hundreds of businesses, over 100 small and 
medium-sized businesses, asking them their reflections on 
government services that they rely on to build their 
businesses, to compete in international markets. And there was 
a common theme that emerged from those discussions, and that 
common theme was that government programs in this critically 
important area of enabling business growth, enabling these 
businesses to thrive and compete and hire, are too fragmented 
and too complex. They were not getting a straight answer, they 
wanted a one-stop shop. They wanted the opportunity to work and 
interface with one Web site, one program, rather than having to 
hire a lot of additional subject matter experts to figure out 
how to navigate all this and build these road maps.
    And so really there is a choice that is presented there, we 
think. One is that we can use administrative tools and smaller 
bite-sized steps to try to map these things out and help 
businesses figure out where all these points are and build 
tools that way, and we will do that. As long as we are around 
and we do not have the ability or the authority to reorganize 
government, we are going to do everything we can to help 
businesses. That is more of a bite-sized approach.
    The more transformative approach is to actually change the 
way the Federal Government is structured so that rather than 
needing a complex road map of where all these services and the 
answers to all these questions are, the road map is much more 
simple because the organizations are together. And by bringing 
the organizations together in many ways, depending if you do it 
right--and we want to work with Congress to make sure we get it 
right--multiple benefits emerge, not just from the customer 
perspective but from sharing infrastructure, sharing financial 
and human resource systems, because you are under the same roof 
and in a shared organization. You are leveraging each other's 
resources. They enforce; we enforce. They have lawyers; we have 
lawyers. Now you are working together and building that 
capacity.
    And so it is really a choice, and what the Administration 
is saying is that we need the reorganization authority to 
enable broader, more transformative change, and we think that 
fits right in to what Congress is trying to do, which is to 
streamline, eliminate duplication, address the issues in the 
GAO report, and build a government for the 21st Century.
    Senator Carper. My colleagues have heard me talk about a 
Finance Committee hearing that took place last fall, and it was 
a hearing that had about five or six people before us, and the 
people were pretty smart, and they had some ideas on how to 
reduce our budget deficits. One of the people who testified was 
a fellow named Alan Blinder. He used to be a Vice Chairman of 
the Federal Reserve when Alan Greenspan was the Chair. And in 
his testimony, he said that the 800-pound gorilla in the room 
on deficit reduction was health care costs, and he mentioned 
that the Japanese spend half as much as we do for health care, 
they get better results, and they cover everybody. He said, 
``They cannot be that smart; we cannot be that dumb.''
    He finished his testimony, and the others finished their 
testimony, and it came back to the rest of us to ask questions. 
And I said to him, ``You said that health care costs are the 
800-pound gorilla in the room. If we do not do something about 
reining those in, we are doomed, on Medicare and Medicaid and 
so forth.'' I said, ``What would be your advice for us?'' And 
he thought for a moment, and he said, ``I am not an expert, I 
am not a health care economist, and I am none of those things. 
Here is what I would suggest.'' He said, ``Find out what works. 
Do more of that.''
    That is all he said. ``Find out what works, and do more of 
that.''
    Sometimes I think a guiding principle like that, even with 
a big government like this--and those of us who are running 
this government, those of us who serve on this side, the idea 
should be for us to think every day about what works and do 
more of that. And I said to him in response, ``You mean like 
find out what does not work and do less of that?'' And he said, 
``Yes.''
    I would just ask that you keep that thought in mind as we 
go forth, and we want to be supportive of what you are 
proposing, but I would like for you to keep that in mind.
    Thank you very much.
    Senator Collins [presiding]. Senator Brown.

               OPENING STATEMENT OF SENATOR BROWN

    Senator Brown. Thank you, Madam Chairman.
    Mr. Werfel, I just want to note something that the Ranking 
Member said. I do not understand how these various departments 
do not know what programs they are controlling and how it is 
not easy to actually put these on a Web site. It makes no sense 
to me. And I concur with what you were saying about being a 
little bit more forceful to get that information out. That is 
just a comment.
    And while we are talking about duplication and waste, let 
us talk about, if we could, the dollar bill and dollar coins. 
As you know, President Obama made the very wise decision to 
curtail the wasteful production of dollar coins, which, 
frankly, has been a flop since it was first introduced about 40 
years ago. I wrote legislation to fix the dollar coin which 
Senator John Kerry helped me introduce. I was very pleased to 
see that the President, in fact, adopted a similar position 
shortly thereafter. If you will bear with me, there is a lot of 
spin and misinformation out there, and I really want to set the 
record straight.
    If you look at the first chart,\1\ you can see the dollar 
bill is incredibly popular. I have never heard a complaint 
about it, and look at the approval ratings. It is actually 97 
percent of people who say that it is more convenient; 83 
percent oppose the elimination; and 81 percent want Congress to 
do more important work. I agree with that one wholeheartedly. 
And you cannot get much greener than the dollar bill, 
obviously, because it is made from recycled cotton, which is 
extremely light and, thus, greener to transport than the heavy 
coins. And no wonder they have never had to run ads asking 
people to use the dollar bill.
---------------------------------------------------------------------------
    \1\ The first chart referenced by Senator Brown appears in the 
Appendix on page 34.
---------------------------------------------------------------------------
    On the other hand, if we could go to the next chart,\2\ 
there is the dollar coin. Now, that is a real loser in the 
marketplace. It is always more expensive to make it than the 
dollar bill. There are no savings associated with it.
---------------------------------------------------------------------------
    \2\ The second chart referenced by Senator Brown appears in the 
Appendix on page 35.
---------------------------------------------------------------------------
    Let me repeat: According to GAO, the dollar coin is not 
less expensive over its 30-year life span than printing a 
succession of dollar bills.\3\ And there is an attempt to say 
that the coin is cheaper, and that is just fiction. One of the 
companies, as a matter of fact, that makes the coin metal has 
received loans from a foreign government that basically amount 
to foreign subsidies, and I still cannot get a straight answer 
from the U.S. Mint on how a foreign-owned company is getting 
picked to help produce American currency.
---------------------------------------------------------------------------
    \3\ The third chart referenced by Senator Brown appears in the 
Appendix on page 36.
---------------------------------------------------------------------------
    National Public Radio has done some great work on this 
issue, and they found that there are about $1.3 billion coins 
in storage at the Federal Reserve banks. The Fed says these 
coins are actually more commonly redeposited to banks than 
actually used in commerce. Americans get them at the bank or at 
the store, and they really cannot wait to get rid of them. And 
small businesses are often burdened with getting these coins 
back to the banks.
    If you can see it, here is actually a vault with all these 
dollar coins just sitting there. We are paying money not only 
to store them, but obviously to produce them.
    And I want to acknowledge President Obama's leadership on 
this issue, but I would also like to know whether OMB supports 
a permanent legislative fix to the broken dollar coin program. 
Do you support a more permanent legislative fix to that 
situation?
    Mr. Werfel. Senator Brown, I think it would be premature 
for me to answer that question for a variety of different 
reasons. One, I think there is a better set of experts at the 
Treasury Department on all issues currency that can speak 
better to this issue and the right things to do. And, second, 
on any particular legislative amendment or direction that we 
take on currency, I think there is a lot of analysis that we 
want to go over with you and your team to figure out exactly 
what the right answer is.
    I will say that what we found with the commemorative dollar 
coins that were being produced by Treasury is that there was 
not a demand for them. And they were starting to stack up in 
our vaults without citizens asking for them. And it started to 
be a very clear disconnect, and we were about to spend tens of 
millions of dollars to produce these coins where there was not 
a clear demand for them.
    Senator Brown. Not only the coins, but the vaults--we were 
actually building new vaults to store them. A complete waste of 
money, and I already know the answer because the information is 
already out there, but I wanted to obviously just reiterate 
this fact of another duplicative and wasteful government 
program, and we need to do it better.
    I would like to shift gears, if I could, to the National 
Oceanic and Atmospheric Administration (NOAA) and merging NOAA 
with the Fish and Wildlife Service. In the last two State of 
the Union addresses, the President has asked for authority to 
reorganize, as we have talked about, and I found that the 
American fishing industry is bizarrely overregulated with a 
scheme that is just out of whack with other regulated 
industries. Fishermen can encounter Coast Guard inspectors, 
NOAA inspectors, Fish and Wildlife inspectors all in one day, 
and it is easier to smuggle something across the border than to 
catch an extra fish in this country, it seems. And the abuses 
NOAA committed towards our fishermen, the shredding of files by 
the top cop, the $300,000 luxury yacht which we all know about 
that is being used for party cruises and booze cruises, the 
millions of mismanaged fishermen's fines and the other 
scandals, there has been no accountability that I can see.
    Can you make a commitment today that your transfer of NOAA 
to the Department of the Interior will take into account the 
many improvements that need to be made in our fisheries and how 
they are regulated?
    Mr. Werfel. Absolutely we can make a commitment that the 
goal in the President's framework that he outlined on business 
and trade and on the transfer of NOAA to the Department of the 
Interior is all about improved effectiveness and improved 
performance.
    I would say that because of our goal to create an 
organization or a department that was laser focused on business 
and trade and competitiveness, it made sense to find a place 
where NOAA could work in concert with another entity that has 
stewardship responsibilities for natural resources, earth 
science, etc. And so the Department of the Interior was the 
logical home. But that does not mean that just moving them 
together is the answer. There has to be planning, there has to 
be an understanding of exactly what the opportunities for 
improved performance are, and we should set an expectation with 
both you and the public that any element of a reorganization is 
going to enhance productivity, accountability, and integrity of 
Federal programs.
    Senator Brown. And, also, more importantly, re-establishing 
the trust between the fishermen and the Federal Government and 
NOAA. Thank you.
    Senator Collins. Senator Pryor, you are welcome to proceed 
if you wish. I am going to leave to go vote.
    We will take a 10-minute recess. I think that Senator 
Lieberman is on his way back, but the rest of us have to go 
vote. Thank you.
    [Recess.]
    Chairman Lieberman [presiding]. The hearing will reconvene. 
I hope and believe that some of my colleagues will return. If 
not, I am going to proceed for a bit with some questions. I 
thank the witnesses and everyone here for their understanding. 
My staff was just having a discussion about how inefficient it 
is to force us to walk back and forth and interrupt the 
hearing, and that at some point--it is probably not near--we 
are going to reach the stage where electronically we will be 
able to prove our identity, as we do every day in other forms 
of electronic communication, and cast our vote from afar. But 
then we would miss the schmoozing in the well of the Senate. 
[Laughter.]
    Let me proceed. When this Committee was considering the 
creation of the Department of Homeland Security, the primary 
motivation was to build a governmental agency capable of taking 
on the new security challenges. Obviously, part of this was in 
part to avoid the duplication, but also the lack of 
coordination. The metaphor we were fond of using was that 
nobody was putting the dots on the same board so that they 
could have seen the plot that became 9/11 unfolding.
    But I think there  was also another aspect to that response 
to 9/11, which was that we were undertaking a new mission and a 
new security environment, and that probably would require more 
resources in addition to the elimination of duplication and 
forcing of coordination.
    Now I will move to the President's proposed reorganization 
of our trade and commercial agencies, and I know from his 
statement that his purpose is to spur job creation and foster 
economic growth, which are obviously very important goals in 
their own right. But cost savings can sometimes be difficult to 
achieve in reorganization, especially when consolidating or 
moving around large agencies or a lot of programs.
    So I wanted to ask you, Mr. Werfel, when we are considering 
a reorganization proposal, what weight would you say should be 
given to improving our updating the agency mission as distinct 
from cost savings that may be achieved in the future?
    Mr. Werfel. That is a very good question. What is happening 
in my head right now is that you are mixing two key issues of a 
bottom line. Because my main purpose at OMB surrounds financial 
management and our financial statements and government 
efficiency, I am often asked what is the government's bottom 
line, and I think the government's bottom line is to meet its 
mission cost-effectively. And so I do not think you can 
compromise one for the other. It is a failure of government if 
we cannot be cost-effective. It is a failure of government if 
we cannot achieve our mission. And so I think both have to be 
looked at in concert.
    Right now, I think there is a clear pressing need with the 
budget climate we are in to find efficiencies, and you said it 
is difficult, and I agree. To be successful, you have to be 
extremely relentless in your planning for how you are going to 
integrate these agencies in a way that they are not going to 
just be on status quo in terms of their systems and 
infrastructure. There are obvious decisions that need to be 
made in order to streamline the infrastructure that underlies 
these organizations, things that I think with DHS, as an 
example, took longer. In that case, only now are we starting to 
see some of those integrations of systems and infrastructure 
start to result in some savings. I think looking forward we 
want to make sure that we hit the ground running with an 
expectation and a design that those infrastructure leveraging 
and economies of scale are achieved right away.
    But if you are not comfortable that the connectivity that 
you are creating in the new organization is going to further 
advance mission, then I think the proposal is not smart.
    Chairman Lieberman. Well, that is a good answer, because we 
really aspire to both. And I take it in the specific example of 
the President's proposal regarding trade and commercial 
activities in agencies that you are confident that would, if 
enacted, achieve both cost savings and greater mission 
accomplishment.
    Mr. Werfel. We are confident based on an enormous amount of 
outreach that was done to businesses, former government 
officials, current government officials, committees, and 
Members of Congress. It is a framework, and there is more work 
to be done to finalize the details and a lot more consultation 
that will be done.
    Senator Collins is not here, but earlier she and Ms. Dalton 
talked about the importance of the congressional role. And 
there is a clear intent with the President's proposal and the 
program going forward to consult with Congress at every step of 
the way, from the inception of a reorganization proposal to the 
planning and across through the implementation.
    And so right now where we are in this life cycle with the 
trade and business proposal is that we have done an enormous 
amount of outreach that has led us to the conclusion that we 
can dually achieve better mission and achieve savings, and that 
is the framework that we are operating under.
    As we roll up sleeves with you and others to define the 
proposal more specifically, if we were to get the 
reorganization authority, I think there will be an opportunity 
to delve even deeper into those questions. But there is a good 
starting point here based on the analysis and the research that 
we have done that this proposal will enable both mission and 
cost savings improvements.
    Chairman Lieberman. Yes, I can tell you that--perhaps this 
is saying the obvious--if the reorganization authority had been 
enacted already and the fast-track process was law, any 
presidential proposal--let us take this one--would be taken 
with a greater degree of seriousness. It is true in the 
proposal that now Senator Warner and I have put in, if Congress 
does not act within 90 days, it is gone. But the very fact that 
there is that clock running will lead stakeholders, media, 
etc., to put a different kind of pressure on Congress when such 
a proposal is made, than, in fact, exists now with regard to 
this specific proposal that the President has made.
    Let me ask about the idea of results and cost savings; that 
is, the bill requires any reorganization plan submitted by the 
President must either decrease the number of agencies or result 
in cost savings. Who is the arbiter of results and cost savings 
in the contemplation of the President's proposal?
    Mr. Werfel. That is an interesting question. I think OMB 
has the responsibility to produce the information. The 
transmittal of any proposal will include cost savings, an 
explanation of the efficiencies that are achieved in the moving 
pieces that we are proposing, as well as other relevant 
information like the plan of action, how we are going to 
implement the plan, and how it is going to be accountable going 
forward. So we produce the information.
    I think the arbiter is ultimately Congress in terms of the 
authority that is granted to either approve or disapprove the 
proposal. Obviously the President will sign the law, so it is 
the dual relationship of how laws are enacted, but I would not 
articulate OMB as the arbiter. I would articulate OMB as the 
entity that is required to provide policymakers such as the 
President and Congress the raw materials they need to determine 
what is in the best interest of America for these proposals.
    Chairman Lieberman. Ms. Dalton, would you like to comment 
on that?
    Ms. Dalton. Yes, thank you, Mr. Chairman. A couple things.
    First of all, I would like to comment on the cost savings. 
One of the things to be aware of is that it may take time 
before the cost savings would be achieved, and an understanding 
of that timing is critical. When the Congress created the 
Department of Homeland Security, it was recognized that there 
were going to be some up-front investments before you could 
really achieve the results we were looking for. So that is 
important.
    The implementation plans need to be detailed to show what 
the timing is and where those potential cost savings would be 
and what would be expected to be achieved. And then there is a 
basis to look at--are we getting what we expected?
    Chairman Lieberman. Right. Thank you. That is helpful.
    Senator Collins mentioned something--I believe it was in 
her opening statement--and it is interesting, and I would 
invite both of you to respond--I hope we are not thinking 
narrowly here because they came out of our Committee. But the 
creation of the Department of Homeland Security and then the 
implementation legislatively of the 9/11 Commission's 
recommendations together represented the most significant 
reorganization of our national security agencies since the end 
of the Second World War, necessarily because I think we were 
facing such a unique challenge. But those resulted from a 
legislative initiative, and in the case of the 9/11 Commission 
from a commission created by the legislature.
    In fact, I will tell you--which I know you know, both of 
you--that it was pretty clear to me that within the Executive 
Branch there was resistance to the reorganization because it 
changed the status quo. And so I just wanted to ask you to 
comment on that--not to speak against the legislation because I 
think it is a good idea to give a President this authority, but 
recent history shows that the Executive Branch has been more 
hesitant to embrace significant reorganization, again, because 
there were people arguing within the Executive Branch against 
changing the status quo in which they had become comfortable.
    Mr. Werfel. A few reactions. First, I think the important 
distinguishing factor about the Department of Homeland Security 
reorganization is that was in response to a crisis and a clear 
emerging need that was on the national consciousness to realign 
our ability to protect the homeland. That is a critically 
important dynamic that I assume will continue going forward, 
and nothing in the President's proposal prevents us from 
responding to crises in order to deal with those types of 
situations.
    The issue becomes what about when we do not have an 
immediate crisis of that nature but we are sitting on top of 
opportunities to improve government. And how do you move past 
the general inertia that sometimes exists to get enough energy 
around changes to government that have pain points involved for 
a variety of different constituents and stakeholders? And we do 
not want any individual pain point or any individual concern to 
prevent us from achieving what might be more of a global 
opportunity.
    And so the issue for us is: Is there a mechanism in place 
right now that best positions us to reshape government in a 
transformative way? The answer is no. And the fact that the DHS 
reorganization came together in response to a crisis from our 
standpoint is not sufficient evidence that the Executive Branch 
and the Congress are ready to be transformative in government 
reorganization. We think this mechanism, as you mentioned 
earlier, creates an environment of expectation and it creates a 
special focus for the types of proposals that we have put 
forward that we do not believe would take place in the absence 
of this framework.
    Chairman Lieberman. That is well said. Ms. Dalton.
    Ms. Dalton. A couple comments. In the formation of the 
Department of Homeland Security, there were agencies scattered 
throughout the government. I think there were 22 agencies that 
were brought together. That clearly showed the need for a 
strategic approach to how do we want to conduct our homeland 
security functions. The reorganization authority and the 
requirement for the President to provide that proposal, I 
think, provides that framework to look more strategically and 
say how do we want to focus our efforts, what are those 
functions. And I think that provides that focal point for the 
discussions between the Legislative and the Executive Branch, 
which when you have that scattering of activities, as you said, 
there is an inertia, a status quo; it is difficult to bring 
that strategic thinking to bear. And by focusing on specific 
proposals from the President, that would provide that strategic 
thinking.
    Chairman Lieberman. Good. Let me go back to the 
implementation plan, the legislation Senator Warner and I have 
introduced, which is S. 2129. It would renew the requirement 
that the President submit an implementation plan along with any 
reorganization proposal, and I think that is a good idea. But 
let me just ask both of you how much detail you think should be 
included in an implementation plan.
    Ms. Dalton. Mr. Chairman, I think there needs to be a 
considerable amount of detail, and as I mentioned earlier, like 
the need to understand the timing of when things would happen, 
what the costs are, and what the investments are. 
Implementation, depending on the size of the reorganization, is 
going to take time. It often takes years. So you need to lay 
that out, lay out who needs to be involved in this process, and 
get their input as part of that implementation plan.
    I would not want to see it at a very high level. I think 
you need to bring a level of granularity to an implementation 
plan.
    Chairman Lieberman. Mr. Werfel.
    Mr. Werfel. I agree with that. I think you want to hit the 
right balance. You want to read the implementation plan and get 
a sense that the combination of the cost savings and the 
mission improvement are justified and appear rational based on 
what the Executive Branch is planning to do. So you want to 
understand things like commitments on combining 
infrastructures. You want to understand who the accountable 
officials will be that will be involved, what are the critical 
path elements where we can establish whether things are on 
progress or not, how accountability will be there, and 
measuring progress along the way. So I think a very high-level 
implementation plan is not what we have in mind.
    At the same time, I also do not know that you need volumes 
and volumes of every last detail----
    Chairman Lieberman. Yes, exactly.
    Mr. Werfel [continuing]. Because I think some of that will 
change as we move forward with a particular implementation. So 
there is a sweet spot here, and I think when we move into a 
phase of a more specific proposal and we move out of the 
framework phase for the business and trade as an example, we 
will work together with the right stakeholders to define that 
analytical structure. That structure may look different each 
time depending on the complexity and the nature of the proposal 
if we get the reorganization authority and we move forward with 
a variety of different proposals.
    Chairman Lieberman. Thanks. I mentioned we cannot vote by 
electronic means, but Senator Pryor has written me by 
electronic means on my BlackBerry to say he is not able to 
return, so I do not myself have any more questions.
    I will give each of you the opportunity to sum up if you 
want in any way, if you would like.
    [No response.]
    I thank you very much. This has been a very helpful hearing 
in both regards. Our gratitude goes to GAO for the continuing 
light that you are shining on the duplication. I said before it 
is headache-inducing when you think about it. All these 
programs have been created with really good intentions, and, 
look, in all those areas--unmanned aerial aircraft, unmanned 
aircraft, STEM programs--they are general subject areas that I, 
as one Member of the Senate, have supported. But it is 
intolerable to have created so many programs that the 
assumption is that they are not coordinating with one another. 
I mean, maybe the burden of proof would be on them to prove to 
us that they are. So I thank you for that.
    I thank you, Mr. Werfel, for your testimony and also to say 
that it was encouraging to see that at least the Executive 
Branch has responded in some way to 80 percent of the proposals 
from the last year's report, and also to thank you for this 
proposal.
    I tell you, I am encouraged by Senator Coburn's commitment 
to work on the reorganization proposal, and I know it is 
difficult. We are already in March of a difficult election year 
session. One of the Capitol Hill newspapers said that when the 
Stop Trading on Congressional Knowledge (STOCK) Act passes this 
week--which I am proud to say the anti-insider trading 
legislation came out of this Committee also--it would be the 
last bipartisan achievement of the year. Maybe we have a few 
more left, and so I am hereby adding the presidential 
reorganization proposal to what I normally describe as my 
bucket list for this year, that is, what I would like to be 
part of achieving before I kick not the bucket, generally, but 
the Senate bucket, and conclude my career next January.
    So maybe with Senator Coburn's support we can build 
bipartisan support to get this done. As I have now said twice, 
but I really think it is significant, whoever is elected in 
November to be our next President will go into office with a 
public demanding changes in government, elimination of waste, 
and movement back to a balanced Federal budget. And this 
authority would give our next President a real opportunity to 
meet those public expectations. So I thank you both. My staff 
is now cringing thinking about what they are going to have to 
do to get that done--I did not give them a detailed 
implementation plan for following through. [Laughter.]
    But, anyway, the record of the hearing will stay open for 
15 days for additional statements and questions. I thank you 
very much for your testimony.
    The hearing is adjourned.
    [Whereupon, at 11:23 a.m., the Committee was adjourned.]



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