    [Senate Hearing 115-6177]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 115-6177

                       EXAMINING OMB'S MEMORANDUM ON THE
                       FEDERAL WORKFORCE PART II: EXPERT
             VIEWS ON OMB'S ONGOING GOVERNMENT-WIDE REORGANIZATION

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

                                    HEARING

                                   before the

                                SUBCOMMITTEE ON
                   REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                                     of the

                                  COMMITTEE ON
                   HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   ----------

                               SEPTEMBER 13, 2017

                                   ----------

            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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          EXAMINING OMB'S MEMORANDUM ON THE FEDERAL WORKFORCE PART II

              EXPERT VIEWS ON OMB'S GOVERNMENT-WIDE REORGANIZATION

                                                            S. Hrg. 115-177

                       EXAMINING OMB'S MEMORANDUM ON THE
                       FEDERAL WORKFORCE PART II: EXPERT
             VIEWS ON OMB'S ONGOING GOVERNMENT	WIDE REORGANIZATION

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

                                    HEARING

                                   before the

                                SUBCOMMITTEE ON
                   REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                                     of the

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               SEPTEMBER 13, 2017

                                   __________

                       Available via 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

                        RON JOHNSON, Wisconsin, Chairman
    JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
    ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
    RAND PAUL, Kentucky                  JON TESTER, Montana
    JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
    MICHAEL B. ENZI, Wyoming             GARY C. PETERS, Michigan
    JOHN HOEVEN, North Dakota            MAGGIE HASSAN, New Hampshire
    STEVE DAINES, Montana                KAMALA D. HARRIS, California

                      Christopher R. Hixon, Staff Director
                   Margaret E. Daum, Minority Staff Director
                         Laura W. Kilbride, Chief Clerk

           SUBCOMMITTEE ON REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                       JAMES LANKFORD, Oklahoma, Chairman
    JOHN MCCAIN, Arizona                 HEIDI HEITKAMP, North Dakota
    ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
    MICHAEL B. ENZI, Wyoming             MAGGIE HASSAN, New Hampshire
    STEVE DAINES, Montana                KAMALA D. HARRIS, California
                         John Cuaderes, Staff Director
                    Clark Hedrick, Professional Staff Member
                      Eric Bursch, Minority Staff Director
                        Ashley Poling, Minority Counsel
         Katie Delacenserie, Subcommittee Clerk and Committee Archivist

                                C O N T E N T S

                                     ------
    Opening statement:
                                                                       Page
        Senator Lankford.............................................     1
        Senator Heitkamp.............................................     3
    Prepared statement:
        Senator Lankford.............................................    27
        Senator Heitkamp.............................................    29

                                   WITNESSES
                         Wednesday, September 13, 2017

    Robert Shea, Principal, Grant Thornton Public Sector.............     5
    Rachel Greszler, Research Fellow in Economics, Budgets, and
      Entitlements, Heritage Foundation..............................     6
    Chris Edwards, Director, Tax Policy Studies, Cato Institute......     8
    Anthony M. Reardon, National President, National Treasury Union..    10

                         Alphabetical List of Witnesses

    Edwards, Chris:
        Testimony....................................................     8
        Prepared statement...........................................    51
    Greszler, Rachel:
        Testimony....................................................     6
        Prepared statement...........................................    40
    Reardon, Anthony M.:
        Testimony....................................................    10
        Prepared statement...........................................    60
    Shea, Robert:
        Testimony....................................................     5
        Prepared statement...........................................    31

                                    APPENDIX

    Statements for the Record from:
        American Federation of Government Employees..................    69
        National Council of HUD Locals...............................    76
        Heritage Foundation..........................................    84
        Hertiage Foundation Blueprint for Reorganization.............   273
        Partnership for Public Service...............................   374

                       EXAMINING OMB'S MEMORANDUM ON THE

                       FEDERAL WORKFORCE PART II: EXPERT

             VIEWS ON OMB'S ONGOING GOVERNMENT-WIDE REORGANIZATION

                                  ----------

                         WEDNESDAY, SEPTEMBER 13, 2017

                                     U.S. Senate,
                            Subcommittee on Regulatory,
                          Affairs and Federal Management,
                        of the Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 10:02 a.m., in
    room SD-342, Dirksen Senate Office Building, Hon. James
    Lankford, Chairman of the Subcommittee, presiding.
        Present: Senators Lankford, Heitkamp, and Harris.

                OPENING STATEMENT OF SENATOR LANKFORD\1\

        Senator Lankford. Good morning, everyone. Welcome to
    today's hearing entitled ``Examining OMB's Memorandum on the
    Federal Workforce Part II: Expert Views on OMB's Ongoing
    Government-wide Reorganization.'' Thank you all for being here,
    for our witnesses to be here, and for others that are engaged
    in this. This is the Subcommittee's second hearing on the
    Office of Management and Budget (OMB's) ongoing governmentwide
    reorganization effort. Let me give you some quick context.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Lankford appears in the
    Appendix on page 27.
    ---------------------------------------------------------------------------
        Three months ago, we heard from four Executive Branch
    agencies regarding their plans and progress toward achieving
    the targets and deadlines outlined in OMB's memorandum titled
    ``Comprehensive Plan for Reforming the Federal Government and
    Reducing the Civilian Workforce.''
        In our first hearing on the reorganization, the Departments
    of Commerce, Justice (DOJ), Agriculture (USDA), and Homeland
    Security (DHS) praised OMB's leadership and inclusive approach
    in managing the reorganization process to improve the
    effectiveness and efficiency of the Federal Government. These
    four agencies lauded OMB's decision to collect input from
    Federal employees, managers, executives--and most importantly--
    the American people to streamline operations, eliminate
    duplicative programs, and reduce wasteful spending.
        Further, we learned that OMB provided agencies with an
    aggressive yet achievable timeline to complete and submit their
    proposals for consideration. Agencies were to submit three
    items to OMB by June 30, 2017: draft agency reform plans, plans
    to maximize employee performance, and progress reports on
    ``near-term workforce reduction actions.'' All four of those
    agencies we asked when they were here if they were going to
    meet their deadlines. All four agencies said, yes, they would
    meet those deadlines. By the end of September, agencies are
    supposed to incorporate OMB's feedback and submit their refined
    draft reform plans to OMB.
        At this point in the reorganization efforts, this
    Subcommittee has heard positive news from many Federal agencies
    regarding their progress toward achieving the OMB
    reorganization's goals. We are also well aware of the costly
    duplication of programs performed by different agencies across
    government--the reason for this whole study. Let me give you an
    example of that. The Government Accountability Office (GAO)
    keeps a running list of duplicative Federal programs. They have
    already identified 79 new examples this year, and currently GAO
    estimates that 395 such examples have not been fully addressed,
    that is, duplicative Federal programs. For example, the Federal
    Transit Administration (FTA) administers $3.6 billion in grants
    to be awarded toward transit resiliency projects. However, GAO
    reports that it is likely that the Federal Transit
    Administration grants duplicative funding that is also coming
    from other agencies. In addition to the Department of Justice
    Criminal Division, DOJ has four Divisions which operate their
    own separate criminal sections.
        Timely and common sense reorganization is something we
    should work towards in order to make government more responsive
    to the people it serves. Congress needs to be included in this
    process, especially if OMB plans to request executive
    reorganization authority or other legislative changes.
        The reformation of Federal bureaucracy should not be a
    partisan issue. In fact, it is something Presidents from both
    parties have done for more than 20 years. In his State of the
    Union address in 1996, President Clinton famously declared that
    the era of big government is over. He committed--this was his
    quote--``to give the American people a smaller, less
    bureaucratic government in Washington and one that lives within
    its means.'' Similarly, President Obama remarked that ``we live
    in a 21st Century economy, but we have still got a government
    organized for the 20th Century.'' President Obama went on to
    say, ``our economy has fundamentally changed--as has the
    world--but the government has not . . . The needs of our
    citizens have fundamentally changed but their government has
    not. Instead, it has often grown more complex.''
        Presidents Clinton, Bush, and Obama all sought to reform
    the Federal Government to make it leaner and more efficient for
    the American people. All of them took steps to modernize and
    reform government, but the job is clearly not complete. We have
    a duty to put partisanship aside so that we can accomplish
    reform that is still so necessary.
        The Subcommittee intends to continue to work with this
    Administration to ensure this reorganization effort is
    transparent and ultimately successful. We look forward to
    hearing testimony from OMB on this matter in the near future.
        Thankfully, our four expert witnesses today are from a
    diverse array of outside groups, and they will provide the
    needed insight into OMB's approach and central role in
    implementing the reorganization. Today's witnesses possess
    prior Executive Branch experience and management reform
    expertise, which enables them to offer valuable perspectives on
    the reorganization.
        I have the privilege of serving thousands of Federal civil
    servants from Oklahoma, and I will seek to ensure this
    reorganization hears their input, improves their effectiveness
    as they serve the American people. That is what they love to do
    and what they are being impeded to do by our organizational
    structure. I look forward to hearing from our witnesses today
    on how we can work together to deliver a successful
    reorganization to the American people.
        With that, I recognize Ranking Member Heitkamp for her
    opening remarks.

                OPENING STATEMENT OF SENATOR HEITKAMP\1\

        Senator Heitkamp. Thank you, Chairman Lankford. I think in
    the last 2 weeks, we have seen no greater examples of the
    critical need for a trained, experienced, compassionate, and
    empathetic Federal workforce. And my great applause goes out to
    all the men and women of every agency of the military who have
    worked so hard to protect lives, protect property, and offer
    hope to so many people who are now in the process of recovery
    from both Hurricane Harvey and Hurricane Irma.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Heitkamp appears in the
    Appendix on page 29.
    ---------------------------------------------------------------------------
        And so I think it is a wonderful backdrop to have this
    discussion because I think way too often hearings like this
    tend to be perceived to be critical of our great Federal
    workforce, and as Chairman Lankford just said, we represent
    amazing people who do amazing work who could find much more
    lucrative careers in the private sector, but choose instead to
    serve our public. And so my kudos and my great gratification
    for the work that is being done by the Federal workforce.
        I continue to believe that our Subcommittee's oversight of
    agency reorganization is absolutely essential. Federal
    employees are a critical part of the Federal Government. We
    cannot have government, our Nation, and citizens need without a
    strong, focused, and vibrant Federal workforce.
        While I greatly appreciate the time and insight from
    today's witnesses, I am disturbed that the Office of Management
    and Budget has declined our invitation to appear before the
    Subcommittee on this timely subject. There is no one closer to
    the heart of what is going on in this reorganization than OMB,
    and it is vital for our Subcommittee to understand the
    interplay between OMB and the Federal agencies that it is now
    seeking reform recommendations from. It is unacceptable that
    OMB chose to not testify at this hearing, and I am going to do
    everything that I can to try to ensure their presence at our
    next hearing on this topic, and I hope Chairman Lankford will
    join me in that effort.
        I also will be doing all that I can to protect our Federal
    workers, and I look forward to hearing about the impact that
    the reorganization process has on those workers thus far in
    today's hearing.
        Again, I thank the witnesses for their testimony. I greatly
    appreciate all of the time that it takes to participate in a
    hearing like this. I know it is not easy. Preparation of
    testimony is a critical component, and I look forward to your
    thoughtful comments on this reorganization process.
        Thank you, Mr. Chairman.
        Senator Lankford. I am glad to and I would say, Senator
    Heitkamp, absolutely we will engage with OMB. They are a
    critical aspect of this. The Administration and OMB sparked
    this. They have been receiving input from the agencies, and I
    would completely agree we need to be able to hear their input,
    what they are seeing in the direction they will go, especially,
    as I mentioned in my opening statement, if they are pursuing
    executive authority to do reorganization or certainly
    legislative authority to be able to do it. We have to be able
    to partner together.
        I would like to proceed to the testimony from our
    witnesses, and let me introduce all four of them. We will have
    the swearing in of those witnesses, and then we would be glad
    to be able to receive your testimony.
        Robert Shea is a principal at Grant Thornton where he leads
    the public sector strategy practice. Prior to that, he served
    in the Office of Management and Budget as Associate Director
    for Administration and Government Performance. Thanks for being
    here.
        Rachel Greszler is the research fellow in economics,
    budgets, and entitlements in the Institute for Economic Freedom
    and Opportunity at the Heritage Foundation. Before joining
    Heritage in 2013, she served as a senior economist on the
    Congressional Joint Economic Committee. Thanks for being here.
        Chris Edwards is the director of tax policy studies at Cato
    Institute. Before joining Cato, he served as a senior economist
    on the Congressional Joint Economic Committee. Thank you as
    well for your insight again.
        Tony Reardon is a 25-year veteran of the National Treasury
    Employees Union (NTEU), where he has worked in a variety of
    leadership roles. He has served as the national president of
    the union since his election in August 2015. Thanks for
    bringing your insight to us today.
        It is the custom of this Subcommittee to swear in all
    witnesses that appear before us, so if you would please stand
    and raise your right hand. Do you swear that the testimony you
    will give before this Subcommittee will be the truth, the whole
    truth, and nothing but the truth, so help you, God?
        Mr. Shea. I do.
        Ms. Greszler. I do.
        Mr. Edwards. I do.
        Mr. Reardon. I do.
        Senator Lankford. Thank you. You may be seated. Let the
    record reflect all witnesses answered in the affirmative.
        We are very pleased that you are here. You all have given
    tremendous written testimony to us already which will be a part
    of the permanent record, and we are looking forward to your
    oral testimony and then Senator Heitkamp and I peppering you
    with questions on this as we walk through the process together.
    So, Mr. Shea, you are first up.

     TESTIMONY OF ROBERT SHEA,\1\ PRINCIPAL, GRANT THORNTON PUBLIC
                                 SECTOR

        Mr. Shea. Thank you, Chairman Lankford, Ranking Member
    Heitkamp, Members of the Subcommittee, for the privilege of
    testifying before you today.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Shea appears in the Appendix on
    page 31.
    ---------------------------------------------------------------------------
        If implemented properly, the President's Executive Order
    (EO) on reorganization could be the most ambitious
    reorganization of the Federal Government in its history. To be
    successful, a great deal of collaboration with myriad
    stakeholders within and outside the Executive Branch will be
    critical, and that is just on the front end. The real work
    begins when organizations launch the process of integration and
    optimization. But we should not even begin this process unless
    we agree on what outcomes we are trying to accomplish.
        Optimizing business structures to maximize results is
    ongoing in the private sector. The Federal Government lacks
    such agility, so policymakers are constantly working to find
    ways to overcome these bureaucratic barriers to change. Overlap
    and duplication among government programs continues to grow. We
    are lucky that this Committee has helped lay the groundwork for
    substantial reorganization of the Executive Branch. You stole a
    lot of my thunder, Mr. Chairman, which is your prerogative.
    GAO's most recent report included 79 new actions across 29 new
    areas for Congress or Executive Branch agencies to reduce,
    eliminate, or better manage fragmentation, overlap, and
    duplication.
        Now, GAO is quick to point out that not every area in which
    there is overlap or duplication would benefit from a
    reorganization or restructuring. This Committee, among few in
    Congress with broad cross-government jurisdiction, can play an
    important role in pushing agencies just to improve their
    collaboration among overlapping and duplicative programs.
        Though GAO has done a great job highlighting areas of
    overlap and duplication, a robust, consistent inventory of
    government programs would help even more. If OMB is unwilling
    to untangle this important requirement, the Committee should
    consider asking an independent entity to do the work to produce
    the required inventory.
        The most recent, memorable reorganization, of course, was
    the establishment of the Department of Homeland Security. We
    are still working to get the benefits of integration we had
    hoped to gain when DHS was created. The intent was to improve
    coordination among disparate entities responsible for securing
    the homeland, then scattered across the government. If
    connecting the dots to anticipate threats was difficult before,
    it would be easier, presumably, if the entities were together
    under one cohesive organizational roof.
        Many reports highlight the difficulty achieving the vision
    of an effective homeland security enterprise even after
    consolidating these 22 different entities, and we can always do
    better. That is why when President Bush proposed the creation
    of the Department, he also sought permanent reorganization
    authority. We knew what was proposed would not always work most
    effectively, and the ability to reorganize the Department's
    agencies would strengthen the Nation's security.
        Trust is important in reorganizations, and trust is
    developed in government policy formulation by creating a
    transparent structure for communication and sharing of
    information with key stakeholders.
        This Committee knows well that up until the 1980s, as you
    said, Mr. Chairman, Congress granted the President
    reorganization authority, and since then, every President has
    sought it. Congress has not adequately trusted the President to
    grant it. We will need to overcome this level of mistrust to
    get very far on the reorganization path.
        So it is important to document some of the things we have
    learned from past reorganization efforts:
        It is crucial that we agree on the outcomes we are trying
    to achieve before embarking on a reorganization;
        Before announcing a reorganization proposal, engage in
    active collaboration with internal and external stakeholders;
        Do not expect savings early in a reorganization.
    Reorganizations are expensive;
        And enactment of a reorganization is just the beginning. As
    we have seen with DHS, the benefits of reorganization or
    restructuring come long after enactment.
        I would be remiss not to mention the recent recommendations
    of the Commission on Evidence-based Policymaking, of which I
    served as a member. We have been hard at work over the past
    year to develop practical recommendations you can act on to
    strengthen evidence-based practices across government. And
    among some of the recommendations we made, establishing a
    National Secure Data Service by bringing together existing
    statistical expertise now across government, improving privacy
    protections with better technology and greater coordination,
    and aligning capacity for statistics evaluation and policy
    research within and across departments. There is more detail in
    my testimony, but I am happy to answer more questions about
    that important work.
        The President's Executive Order on Government
    Reorganization presents us an enormous opportunity. Whether we
    take the opportunity depends in large part on the collaborative
    approach the Administration takes with its proposals and the
    willingness of this Committee to enact them. The benefits of
    reorganization will not be realized for years. It is my hope we
    will see the leadership and commitment necessary to make these
    long-overdue changes to our Federal Government.
        Thank you.
        Senator Lankford. Thank you. Ms. Greszler.

    TESTIMONY OF RACHEL GRESZLER,\1\ RESEARCH FELLOW IN ECONOMICS,
             BUDGETS, AND ENTITLEMENTS, HERITAGE FOUNDATION

        Ms. Greszler. Thank you for the opportunity to be here
    today. I would like to spend my time this morning focusing on
    three different things.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Greszler appears in the Appendix
    on page 40.
    ---------------------------------------------------------------------------
        So first is to provide a summary of some of the
    recommendations that we have made at the Heritage Foundation in
    our reorganization blueprints.
        Second is to look at some of the past reorganization
    efforts and their obstacles.
        And then third is to recommend what I see as the best
    pathway forward toward meaningful reform.
        So, first, in response to the President's Executive Order
    to reorganize the Federal Government, the Heritage Foundation
    researched and compiled two blueprint for reorganization
    documents.\2\ In doing so, we sought the advice and expertise
    of people with ``in the trenches'' Federal Government
    experience, and they provided invaluable insight to these
    documents here.
    ---------------------------------------------------------------------------
        \1\ The documents referenced by Ms. Greszler appears in the
    Appendix on page 273.
    ---------------------------------------------------------------------------
        Our first analysis of Federal departments and agencies
    contains about 110 specific recommendations. Some of those
    include: eliminating the Federal Housing Administration and the
    Consumer Financial Protection Bureau (CFPB); transferring non-
    Federal functions such as police and fire protection and low-
    income housing assistance to State and local governments. We
    also recommend streamlining certain offices, such as many of
    the Department of Veterans Affairs (VA's) 42 different veterans
    services programs, consolidating them into one integrated
    service system to better serve those veterans.
        We also recommend moving the Food and Nutrition Services--a
    welfare program--from the Department of Agriculture to the
    Department of Health and Human Services (HHS) and also
    transferring the student aid programs from Education to the
    Treasury Department.
        And, finally, we recommend eliminating programs that
    unjustly subsidize certain industries over others, such as the
    Corporation for Public Broadcasting, the Export-Import Bank of
    the United States (Ex-Im) bank, and the energy loan programs.
        Without going into detail, our second report, ``Pathways to
    Reform and Cross-Cutting Issues,'' includes proposals for
    budget process reform, regulatory reform, restructuring
    financial regulators, reducing the Federal Government's
    footprint, and, most importantly, in my opinion, is
    transforming the Federal Government's personnel policies.
        Next, I would like to look at some of the past efforts in
    the obstacles to reorganization. Despite the fact that
    government reorganization has bipartisan support, it has always
    faced significant obstacles. Probably the most significant is
    the iron triangle made up of Federal agency administrators,
    interest groups served by those agencies, and then the
    Congressional committees that oversee them.
        For each of these groups, changes to or elimination of
    specific agencies or departments could result in the loss of
    government-protected jobs, special taxpayer-funded benefits and
    services, as well as power.
        For example, even when Congress created the new Department
    of Homeland Security, something that is a lot easier to do than
    eliminating a department, the outcome was an irrational
    structure. Although the Coast Guard and the Customs and Border
    Protection (CBP) agencies became part of the DHS, their
    jurisdiction remains within that of their previous committees
    that did not want to give up their oversight.
        So in recent history, both Presidents Clinton and Obama
    have embarked on well-intended reorganization efforts. The
    Clinton Administration's National Performance Review (NPR) was
    one of the most persistent reorganization efforts. It generated
    1,200 proposals to improve government, and with the help of
    Congress, many of the NPR's recommendations were enacted,
    including the elimination of over 250 programs and agencies.
    Now, while the NPR was successful on many fronts, Clinton's
    deference to opposition from public sector unions prevented
    necessary and meaningful personnel reforms.
        President Obama also wanted to reorganize parts of the
    Federal Government, and he asked Congress for the executive
    authority to do so. He even stipulated that his plan would
    reduce the number of agencies and save taxpayers' dollars, and
    he proposed things that Republicans supported, like eliminating
    the Department of Commerce. Nevertheless, Republicans refused
    to grant him reorganization authority.
        Congress has also attempted reorganization. When
    Republicans took over Congress in 1995, they attempted to
    eliminate multiple agencies. The House spent months passing
    legislation through 11 committees to eliminate the Department
    of Commerce. But when it got to the Senate, a single Republican
    Senator blocked its passage.
        So I would like to wrap up by proposing what I see is the
    best pathway toward meaningful reform. I recommend a
    congressionally created and bipartisan reorganization
    commission consisting of independent experts with fast-track
    authority. This type of commission would avoid most of the
    pitfalls that have hampered previous efforts, and it would
    provide an insightful and necessarily independent review and
    set of recommendations.
        After receiving the commission's recommendations, both
    Congress and the President could have an opportunity to submit
    their suggested changes, and the commission would be able to
    accept or deny those.
        Although the obstacles to successful governmentwide
    reorganization are significant, both the consequences of
    failing to act and the benefits of establishing a more
    efficient, accountable, and right-sized Federal Government are
    too great to do nothing.
        Thank you.
        Senator Lankford. Thank you. Mr. Edwards.

     TESTIMONY OF CHRIS EDWARDS,\1\ DIRECTOR, TAX POLICY STUDIES,
                             CATO INSTITUTE

        Mr. Edwards. Mr. Chairman and Members of the Committee,
    thank you for inviting me to testify today on the OMB-led
    effort to improve Federal management and cut spending. As
    members know, Federal spending and deficits are soaring in
    coming years, and it is threatening a financial crisis down the
    road unless we make reforms. The OMB effort can help avert the
    risk of a Federal financial crisis in the future.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Edwards appears in the Appendix
    on page 51.
    ---------------------------------------------------------------------------
        OMB-led reforms can also tackle another problem, which is
    the bloated scope of Federal activities. The Federal Government
    today funds 2,300 different aid and benefit programs. That is
    twice as many as just as recently as the 1980s. All 2,300
    Federal programs are susceptible to management and performance
    problems.
        The April OMB memo said that there is a ``growing citizen
    dissatisfaction with the cost and performance of the Federal
    Government.'' That is certainly true when you look at polling
    data.
        Here is the irony: As the size of the Federal Government
    has grown in recent decades and in theory is providing more
    services to citizens, trust in Federal competence has plunged,
    according to the polling data. So why is that happening? I
    think the Federal Government has grown far too large, frankly,
    to adequately manage and oversee all this vast array of
    programs that it runs.
        Consider this: The Federal budget of $4 trillion a year is
    100 times larger than the average State budget in the United
    States of about $40 billion. So you folks oversee an empire
    essentially that is 100 times greater than the typical State
    legislator. So the OMB-led effort makes sense. The government
    would perform better with fewer failures if it were smaller.
        So work in Congress and agencies finds savings. The OMB
    memo discusses workforce reforms, and I think there are lots of
    reforms there we can make to save money. I think Federal
    pension benefits, for example, are excessive. I also think that
    there is a problem in disciplining poorly performing Federal
    workers. One statistic that has really struck me is that the
    firing rate for poorly performing Federal workers is only one-
    sixth as high as the firing rate in the United States private
    sector. So I think there is a real problem there.
        Another issue is the excess layers of Federal management.
    Academic research has found that American corporations have
    much flatter managements today than in the past, but research
    by Paul Light of Brookings has found that the number of
    management layers in a typical Federal agency today is twice as
    large as the 1960s. We are adding layers of middle management
    in the Federal Government. Light thinks that is a cause of
    increasing Federal failure. So we should focus on reducing
    Federal management layers.
        All that said, Federal spending on compensation and
    procurement is really only one-quarter of the entire Federal
    budget. Three-quarters of Federal spending is cash at the door
    and benefit programs for individuals and businesses and State
    governments. So how do we reform that spending? Two areas are
    of particular interest to me.
        One is reviving federalism. Rachel touched on this. The OMB
    memo suggests focusing Federal activities more where there is a
    ``unique Federal role'' and consider devolving other activities
    to State and local governments. The Federal Government funds
    more than 1,100 State aid programs. There are many problems
    with State aid programs, as I have written about extensively. I
    think they reduce State policy freedom, I think they breed
    bureaucracy, and I think they distract Federal policymakers,
    frankly, from focusing on truly national issues.
        The OMB memo says that agencies should do ``fundamental
    scoping'' of their activities, and I certainly agree, and I
    think we ought to look at State aid programs that the Federal
    Government ought to devolve to State and local governments.
        So a last point is that the OMB memo touched on the idea of
    comparing the costs of Federal programs to the benefits. Are
    the costs of particular programs justified by the benefits they
    produce to society? Well, cost-benefit analysis is a standard
    tool of economics that tries to judge the overall net value of
    programs. Since 1981, Federal agencies have been required to
    perform cost-benefit analysis for major regulatory actions. So
    we often see news stories about whether the Environmental
    Protection Agency (EPA) cost-benefit analysis and, the results
    of those analyses show for regulations. There is no general
    requirement, however, to perform cost-benefit analysis on
    Federal spending programs. The Congressional Budget Office
    (CBO) and the GAO do not generally do cost-benefit analysis.
        So supposing the Congress is considering spending $10
    billion on an energy program. Does the program make any
    economic sense? Right now, we are flying blind. There is no
    overall analysis that would show. A cost-benefit analysis would
    look at whether the program's expected benefits were higher
    than the costs of the $10 billion in tax funding plus the
    additional damage caused, called ``deadweight losses'' of
    taxation. I think policymakers should require agencies to
    evaluate more programs with full cost-benefit analysis.
        There is disagreement about the results of such studies.
    They can be very complicated. But I think the whole cost-
    benefit analysis process is useful because it would require the
    government to at least try to quantify the merits of its policy
    actions.
        That is all I have, and thanks for holding these important
    hearings.
        Senator Lankford. Thank you very much, Mr. Edwards. Mr.
    Reardon.

        TESTIMONY OF ANTHONY M. REARDON,\1\ NATIONAL PRESIDENT,
                   NATIONAL TREASURY EMPLOYEES UNION

        Mr. Reardon. Chairman Lankford, Ranking Member Heitkamp,
    and Members of the Subcommittee, thank you for allowing NTEU to
    share its thoughts on the Administration's plans to reorganize
    the Federal Government.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Reardon appears in the Appendix
    on page 60.
    ---------------------------------------------------------------------------
        NTEU is in favor of improving the efficiency and
    effectiveness of Federal agencies to ensure that they are
    providing the services that Americans rely upon and that
    taxpayer dollars are spent wisely. However, we are deeply
    concerned with the agencies being directed to make reductions
    in the workforce based only on proposed budgets that do not yet
    have congressional approval, which will drastically impact the
    ability of agencies to meet their missions. Additionally, it is
    our fear that staffing reductions are being proposed with the
    aim of outsourcing functions and services that, based on past
    experience, will only cost taxpayers more money and will
    provide the public with less transparency and accountability.
        It is important, however, that such reform efforts not take
    place in a vacuum. Rather, we believe that only by having
    senior officials working closely with front-line employees and
    their representatives will real positive reform take place.
    Federal employees are an essential source of ideas and
    information about the realities of delivering government
    services to the American people.
        Experience has shown that involving employees and their
    representatives in pre-decisional discussions concerning
    workplace matters results in better, higher-quality
    decisionmaking, more support for those decisions, and more
    timely implementation.
        It is in this vein that I reached out to and met with then-
    OMB Senior Advisor Linda Springer to discuss our desire to be
    part of the reorganization planning. I also asked our chapters
    to provide ideas that I could share with agency heads. I am
    pleased to say that the response from our members was
    overwhelming. After collecting these ideas, I wrote letters to
    agencies and offered to meet to discuss these suggestions. The
    recommendations provided were generally as follows:
        To increase telework and/or hoteling to reduce real estate
    costs and increase employee productivity;
        To consolidate management layers, because we continue to
    see top-heavy management organizations with higher-than-need-be
    supervisor-to-employee ratios;
        To hire more support staff so that employees with more
    complex work could spend less time performing administrative
    functions;
        To empower front-line decisionmaking in order for agencies
    to breed individual and group confidence, enabling people to
    work both more efficiently and more effectively;
        And, finally, to fill existing vacancies so that agencies
    can meet their missions.
        One of the major concerns NTEU has with the reorganization
    effort is its call for increased outsourcing of government
    functions. NTEU has long maintained that Federal employees,
    given the appropriate tools and resources, do the work of the
    Federal Government better and more efficiently than any private
    entity. When agencies become so reliant on Federal contractors,
    the in-house capacity of agencies to perform many critical
    functions is eroded, jeopardizing their ability to accomplish
    their missions.
        NTEU has witnessed prior efforts to improve government
    services fail. We have seen overly ambitious efforts to reform
    the civil service that eroded employee rights and morale, as
    well as haphazard efforts to reduce the number of Federal
    workers by cutting an arbitrary number of personnel,
    implementing a hiring freeze, or failing to replace departing
    employees.
        In fact, one of the biggest failures of the Clinton-Gore
    Administration's so-called Reinventing Government initiative
    was the hollowing out of agencies, leaving them unable to
    conduct proper workforce planning, and without a skilled
    workforce in place.
        Finally, it should be noted that the Federal Government's
    current inability to carry out its basic functions without
    threats of a default or shutdown undermines any confidence that
    massive reform efforts can be successfully achieved.
        Thank you again for the opportunity to share my views with
    you today, and I am happy to answer any questions.
        Senator Lankford. Thank you all for your testimony.
        This conversation will be a conversation. I am going to
    make a couple of questions here, pass it to Ranking Member
    Heitkamp, to do some questions, and then we will just have an
    open dialogue, and we will go back and forth. So I would like
    for this to be a dialogue not only among the four of you, but
    with us, and then we will be able to keep that moving, because
    this is exceptionally important that we get some context areas.
        So from my perspective, the things that I want to be able
    to gain from today is not only a set of ideas that you have
    already presented, the things to be able to notice and to be
    able to watch for in a reorganization, but obviously, we are
    going to work with the legislative issues, not only executive
    authority and releasing that to the Executive Branch of what
    authorities they have to be able to accomplish that, but
    actually putting into legislative action whatever has to be put
    into structure. All of these agencies were created by Congress.
    All of the structures were created by Congress. Congress should
    still be involved in the engagement of how the oversight is
    done.
        So there are often executive agencies where the Executive
    Branch is given the responsibility to run it, they were created
    by Congress. The parameters that were done for them were
    created by Congress, that is, the American people were speaking
    into it. So there is still a responsibility to be able to
    engage in that issue. So ideas and insight that you may have in
    structure and format are exceptionally helpful to us in that.
        Mr. Reardon, I want to be able to make a couple comments to
    you, and I appreciate your comments and your list on it. It is
    very interesting to me, because very often I will visit with
    our front-line employees, as you mentioned as well. And I have
    the habit of when I go into agencies in Oklahoma to not just
    meet with the people that I am assigned to meet with, but to
    get past that and to get to cubicle world and get a chance to
    visit with many of our great employees that are in cubicles.
        This is a comment I heard from the last place that I
    visited, and I will leave the places and people out on it
    because I have not asked them specifically to mention it
    publicly. I remember walking into a place, and when I am
    walking through just meeting people on it, I had a Federal
    employee that came and caught me, introduced themselves, and
    said, ``We have a lot of work to be able to do. There are a lot
    of things we are doing we should not do. There are a lot of
    things that we are doing that are wasteful, that I know I am
    filling out papers that no one is reading. I want to do
    purposeful work. That is why I came.'' And there were just a
    million things that she had on her mind.
        I put that in context with a previous place that I had gone
    to, when I am walking around through the cubicles, and I walked
    up to a lady that was in one of the spots, and I said, ``Tell
    me what you do.'' She looked up from her desk and smiled at me,
    and she said, ``I do what we should not do. I love my job. I
    love the people I work with. But the tasks that I do the
    Federal Government should not do at all. But I do it every
    day.''
        I want to make sure their opinions are being heard, because
    they have ideas. They know the loss that is happening and where
    they are spinning their wheels and not accomplishing things.
    How can we pull those opinions out and get them to a larger
    voice? And is it your perception at this point that OMB is
    hearing from those individuals who have those practical ideas?
        Mr. Reardon. Mr. Chairman, I very much appreciate your
    question, and I, too, agree that front-line employees need to
    be heard from. And I do not believe that at the present time
    that is occurring effectively.
        I believe that, without question, agency management and
    front-line employees must engage, work together, and figure out
    some of those things that you are talking about. Where
    paperwork is unnecessary or duplicative, or they are doing work
    that, as the young lady mentioned, they should not be doing, I
    totally agree. That all has to be worked out, and those changes
    must be made.
        But one of the things that I am concerned about is that
    front-line employees are not really being heard. I can tell you
    that I have those same conversations. In fact, I recently had a
    conversation with some Internal Revenue Service (IRS) employees
    from Oklahoma, and----
        Senator Lankford. Great folks, by the way.
        Mr. Reardon. They are great folks, along with--we have many
    CBP employees, Office of Field Operations employees in Oklahoma
    as well.
        Senator Lankford. Which, by the way, while you are
    mentioning that, some of them are in an office complex that
    they should not be in, and we are in the process of trying to
    get them out of that space because their space is the problem.
        Mr. Reardon. The IRS folks?
        Senator Lankford. Yes.
        Mr. Reardon. I am in 100 percent agreement. That, in fact,
    is why I was speaking to them yesterday in Tulsa. Thank you.
        Senator Lankford. Yes.
        Mr. Reardon. So I believe that many of our Federal
    employees, certainly those in the 31 agencies where we
    represent folks, they do not feel that they are being listened
    to. They do not feel as though they have a voice. And I think
    one of the important elements that we bring is that, as I said,
    we represent employees in 31 agencies, so we have a very
    interesting perspective. We know what is going on in all those
    agencies. And so where our front-line employees in a particular
    agency would be involved in some reforms, we would be able to
    deliver some best practices that are occurring in different
    agencies and bring them to the debate. But I do not believe
    that is happening.
        Senator Lankford. Well, OMB has promised us that they are
    in the process of that. The four agencies that we visited with,
    one of the questions that Senator Heitkamp and I had for them
    specifically when they came is: How are the Federal employees
    that work in these agencies, how are they contributing to the
    ideas? They talked through how they are doing it, through
    online, through emails, how they are reporting that back up,
    how they are receiving it, the thousands of comments they are
    receiving. So it is our hope that not only are they being
    heard, but that OMB will actually apply some of those things,
    because there are some very practical, specific reforms that
    can be done if those individuals are heard.
        Mr. Reardon. Can I offer one other thing?
        Senator Lankford. Sure.
        Mr. Reardon. One of the models that I think is really
    outstanding is, for example, in the Federal Deposit Insurance
    Corporation (FDIC). They have these workforce excellence
    committees that bring together front-line employees as well as
    management groups. And I will tell you, I have seen it
    firsthand and Chairman Marty Gruenberg and I see this
    firsthand: that these front-line employees and these managers
    get in these committees, and they operate not as labor and
    management. They operate as FDIC employees, and they tackle
    really important issues within the FDIC, bringing about
    efficiencies, doing work that says how should we do things to
    make it better for our operation, for the banks, so on and so
    forth. That for me is a real model and something that we should
    be looking across government to emulate.
        Senator Lankford. Senator Heitkamp.
        Senator Heitkamp. I think there are two steps to this
    process, and the first step is the low-hanging fruit, where we
    could all sit down, across the ideological spectrum, and say,
    ``This is crazy. Why are we doing it this way? Why can we not
    be more efficient in what we do? Why do we have to have three
    agencies that do exactly the same function that are just in the
    business of turf protecting when we have so much other
    important work to do?'' And so, there is enough work to do in
    this country. We do not need to make work. And I think we can
    all agree that that is the baseline.
        Another really interesting kind of parallel here is this
    agreement that we are management heavy, that we have too many
    layers of management. It probably creates little fiefdoms. It
    probably creates more competition for protection of that
    function than what it should.
        And so I want to explore the management structure and what
    you perceive, I think, Mr. Reardon, because you are probably
    closest to what is happening with reorganization right now. Is
    this an issue that is being tackled by any of these agencies
    that are now looking at government efficiency?
        Mr. Reardon. Thank you, Ranking Member Heitkamp. I am close
    to this, and from what I have seen in my experience, agencies
    are not tackling it effectively enough.
        If, for example, you look at CBP, right now in CBP there is
    something on the order of one supervisor for every 5.7
    employees. In 2003, I believe it was, that number was one
    supervisor for every 12 employees.
        Now, I ask you to couple that with the fact that across
    CBP, we are short something on the order of 4,000 CBP officers
    and 631 agriculture specialists. And it is important to
    recognize what these folks do. Not only do they help protect
    our country through the ports of entry (POE), but they also
    protect us, insofar as the agriculture specialist, making sure
    that pests do not come in and ruin our crops and so forth. And
    so there is also an economic element to this because they help
    move people, tourists, as well as freight into and out of our
    country.
        So it is important to make certain that we have the
    staffing that we need for these agencies such as CBP.
        Senator Heitkamp. I just want to kind of add to my
    frustration about what happens to Border Patrol and agents who
    are front line. When we had the surge at the border of
    unaccompanied minors, they carry a gun, but they were changing
    diapers. That makes no sense.
        Mr. Reardon. Right.
        Senator Heitkamp. That is not the function that they signed
    up for, and it creates morale problems, and it creates real
    challenges for those Border Patrol agents. So getting them back
    on patrol should be our top priority.
        But if you take a look at reorganization coming from
    Congress, probably the worst example, in my opinion, is the
    Department of Homeland Security. Why is that? Because as Ms.
    Greszler said, there was no oversight. There is no consistent
    oversight from Congress. We shoved all these agencies together,
    said, ``Good luck.'' We bring them in and we beat them because,
    your morale is poor, you are not functioning the way you want
    to function. But we take no responsibility on this side of the
    dais for the challenges that we have created with no commitment
    to overall oversight. And I think you see that repeatedly.
        And what I would like to just reiterate, this Subcommittee,
    is incredibly committed to actually creating an oversight
    system of the work that is being done right now, whether it is
    in the planning or whether it is in the implementation of this
    oversight. We cannot just have this oversight, this new
    reorganization, been there, done that, now we all can take a
    bow when we go out to talk to the cameras, and then behind it
    is chaos. We need to take responsibility here for what we are
    not getting done, and I think the Department of Homeland
    Security is a critical component.
        Mr. Edwards, you raised this question of the tiered
    management system. How pervasive, when you do the judgment--you
    just heard Mr. Reardon say, 1:6, 1:12. When you think about
    benchmarks for management to front-line workers, what do you
    think that ratio--let us assume you agree that these are all
    functions we should be performing in the Federal Government.
    What do you think that ratio should be?
        Mr. Edwards. I do not know what it should be precisely. I
    mean, there is a whole academic literature on span of control
    and the like.
        Senator Heitkamp. Right.
        Mr. Edwards. But there is academic research that I have
    looked at major U.S. corporations. They are flattered that
    their spans of control have increased.
        Senator Heitkamp. Can you give the numbers you gave in your
    testimony again? You said the United States Government----
        Mr. Edwards. So Paul Light of Brookings has found that the
    number of layers in the typical Federal agency has doubled
    since the 1960s, and he has done this interesting analysis
    looking at titles of Federal employees, and there are far more
    employees today than in the past that have long, fancy titles
    like Assistant Deputy, da, da, da, rather than front-line
    folks.
        One of the points he makes is that--and we saw this after
    Hurricane Katrina, which I read quite a bit about and looked at
    the official reports on. There is no doubt in my mind that one
    of the chief screw-ups, Federal screw-ups after Hurricane
    Katrina was that the Department of Homeland Security was new,
    there were so many different layers, that the communication
    became very difficult. And there was this huge complexity of
    decisionmaking. No one knew who was responsible for what.
        So I think communication flows more quickly when you have
    fewer layers of management. I think rules and regulations are
    easier because everyone knows who is responsible.
        Senator Heitkamp. I just want to tell kind of a personal
    story before we hear from Mr. Shea. I once was a Federal
    attorney, and every time I wrote a letter, I had a routing
    slip, and it had to be signed off by four levels. And, of
    course, you have to justify your existence, so you send it back
    with changes. And by the time the top guy changes what you just
    did, the bottom guy does not like it. And so you can imagine
    the lack of number one efficiency, but accountability, at the
    end who was really accountable for that letter? There was no
    one accountable for that letter.
        And when I went to State government as an attorney, I went
    into my supervisor, and I said, ``Can I have the routing
    slip?'' And he said, ``The what?'' I said, ``The routing slip
    where I have to get approval to send this letter out.'' And, I
    am 25 years old or 26 years old, and he looked at me and goes,
    ``Well, did you research that letter?'' I said, ``Yes.'' ``You
    think you said the right thing in that letter?'' I said,
    ``Well, yes, I worked pretty hard on it.'' He goes, ``Then sign
    it and send it.''
        And you know what? The message to me was, look, you are
    accountable. And when you add those layers of supervision, you
    eliminate accountability for the work that is being done, and I
    think it creates an attitude that maybe I do not have to take
    responsibility for this because it is going to be the guy at
    the top.
        Mr. Shea, you wanted to comment before I turn it back over
    to Senator Lankford.
        Mr. Shea. You just reminded me of my first days at OMB when
    every memo or circular had to be signed off on in physical hard
    copy, and you had some documents literally as high as the dais
    that some bloke had to carry around from office to office to
    get signed. Luckily, we have gone electronic. I am sure they
    are giving it the same diligent review they did then.
        I think it is important to note--and Rachel said this in
    her testimony--that if we do not tackle fundamental personnel
    reform in conjunction with reorganizations, you will not get
    the benefits that you hope. Agencies cannot recruit and retain
    the workforce they need to accomplish their missions. It is the
    chief challenge we find when we survey chief human capital
    officers (CHCO), chief financial officers (CFO), chief
    information officers (CIO).
        So unless agencies have the flexibility to mold the
    workforces they need to accomplish the mission you hope they
    will accomplish when you reorganize them, you will not get
    there.
        Senator Heitkamp. But I do want to make this point, that we
    have created an atmosphere where a mistake could be
    catastrophic. So people are afraid of making mistakes, and that
    creates paralysis. We have to have a level of tolerance for
    things not always being perfect. And I think when you look at
    management structures, if you want a zero mistake tolerance
    standard, you will get nothing done. I had a Governor who had a
    sign on the wall that said, ``If you made no mistakes today,
    you really did not get anything done.''
        Mr. Shea. You are talking about the culture of an
    organization.
        Senator Heitkamp. Right.
        Mr. Shea. And leadership can overcome structural barriers
    to creating that culture in organizations with sustained
    leadership. We get to manage in an environment where senior
    leadership turns over sometimes as frequently as every 18
    months. So you can play an important role in making sure there
    is a sustained attention to whatever culture it is you want to
    see in an organization, including one that is risk tolerant.
        Senator Lankford. So how much common ground do we have on
    personnel policies? Let me just talk hiring for a moment. If I
    remember the number correctly, because we have done a lot of
    studies on this, off the top of my head I think it is 120
    different hiring authorities that are out there. No one can
    keep track of 120 different hiring authorities, and it has
    reached a point that those 120 different hiring authorities,
    every agency contacts us and says, ``We want direct hire
    authority.'' In other words, ``We want to do none of the
    above.'' How do we fix that? Let us just start with that,
    because going back to your Customs and Border Patrol Statement,
    we had some of the folks here after the President made the
    announcement we need to hire--you said 4,000, he said 5,000
    additional people that need to be there. Our response was,
    ``Good luck.'' Right now, Customs and Border Patrol, it takes
    450 days to hire one person. It is one of the worst areas we
    have in government for hiring people and the length of time it
    takes to hire somebody. How do we solve that?
        Mr. Shea. So we do not have a lot of common ground. I broke
    my pick on trying to get a lot of personnel flexibilities in
    place across government. You could rewrite personnel rules in
    such a way that made it much easier to hire people, to retain
    people. But if you ask--and veterans' preference is a major
    barrier, both to hiring people and to hiring veterans. So it is
    a major stumbling block in improvement to the Federal hiring--
    --
        Senator Lankford. By the way, privately, agencies will tell
    us that.
        Mr. Shea. But if you ask Gene Dodaro and if you find
    agencies that have been able to figure this out, leadership
    commitment can overcome a lot of existing barriers. So if
    people make it a priority--frankly, not a sexy agenda item for
    many political appointees, but if you make it a priority, you
    can really improve things.
        Senator Lankford. OK. Any other comment on that from
    anyone? Because I want to be able to move on. We have a million
    topics to be able to go through as well.
        All right. So let me ask a process question. Ms. Greszler,
    one of the things that you focused in on in your report--and
    thank you for pulling all those things together--are the
    practical aspects and the process things. Today is more
    process-oriented for us because we are trying to work through
    the specifics. Obviously, the Administration is going to make
    their proposal on the specific things in it.
        About 6 years ago, I am a young Congressman, and I saw a
    major issue in the Department of Transportation (DOT) where
    they were overreaching and really doing something that States
    should do, not the Federal Government at all. So I had this
    great idea and put a bill together and got cosponsors and
    dropped the bill. We started building momentum on it to be able
    to put it onto a highway bill. And I have an appointment show
    up on my calendar from someone from the U.S. Department of
    Transportation, and they wanted to come in and visit with me on
    the importance of this program. And I described where I was on
    it, and they said where they were on it. We were going back and
    forth, and it was very polite. And I said, ``I do not
    understand, because the States all do this already. Why do we
    have to have this additional layer on the Federal level when
    every State already does this? Is there any State that is not
    doing it well?'' And he said, ``No. Every State is doing it
    well.'' I said, ``Then why do we have to do this?'' And his
    exact response to me was, ``I have people that do that every
    day.'' And I thought that is not the answer I was looking for.
    I was looking for safety, soundness, some essential thing. He
    was, like, ``No, I have people for that, so we need to do
    that.''
        I fought my way through that bill and lost, because many in
    my party and others all said, ``No, we need to keep doing that
    because we have people for that.''
        One of the things that you tried to identify in your report
    was the challenge of process trying to move things. You
    proposed this commission to do it, and Congress has a love-hate
    relationship with creating commissions to be able to do things.
    But I would be very interested in process things. When there is
    an idea that enough of us can look at and say, ``Yes, that is
    an idea we need to seriously take on,'' what would you suggest
    based on studying this has been an effective mode for actually
    moving the idea into reality?
        Ms. Greszler. I think so many times when there is an idea,
    even if there is a lot of support for that idea, it ends up
    getting tied up in that committee process, because ultimately
    you are going to have somebody that comes in, somebody is going
    to lose a job. Even if it is a function that everybody agrees
    does not need to be performed, there is somebody doing it. And
    that is a loss for them, and they are going to argue a lot
    harder than the rest of Americans or the other committees.
        And so I just see it as so difficult to get little things
    through Congress. Even last week the House voted some of the
    proposals we include in here, just eliminating or reducing some
    of the funding for things like essential air services that
    provide up to $200 subsidies for these flights in the middle of
    nowhere or Amtrak funding, and, overwhelmingly, that amendment
    was voted down. And so things that make sense and that the
    Federal Government should not be doing are so difficult to get
    through Congress. And that is why ultimately I think, going
    forward, if we want to see a big governmentwide reorganization,
    you kind of have to step back. I mean, one thing to do would be
    to put it in the hands of committees like your own that have
    broad jurisdiction, government oversight as opposed to the more
    particular ones that would be more inclined to protect their
    turf. But even that I think you would face some significant
    obstacles, and so that is why I think if you have an
    independent commission, it is bipartisan, both sides can elect
    people from previous Administrations to look at the idea, I
    think there is a broad set of ideas available that everybody
    largely agrees on. But you put them in one package, and then it
    is about reform. It is not about 5 jobs or 10 jobs there. It is
    about making the government as a whole work better for the
    people, and I think that is when you can have some people
    swallow a little bit of a loss in one area or another.
        Senator Heitkamp. I would resist a little bit what you are
    saying, Rachel, because I am a huge proponent of the Ex-Im
    Bank. You mentioned the Ex-Im Bank in your testimony. I do not
    think that is a waste of manpower. I think it is a critical
    piece of our trade infrastructure. I am frustrated because we
    reauthorized the Ex-Im Bank by almost a 60-percent majority
    here, making a statement, hearing all of the arguments, and it
    was a tough fight, and we still do not have a fully functioning
    bank, because on the outside we have challenges coming from a
    number of the groups that are represented here. I get it.
        And so, there comes a time when you have to say, look, we
    lost that fight. Let us focus on the things that we can agree
    on. Let us focus on duplicative programs. Let us focus on not
    the ideological programs. Maybe those come later. But we do not
    have a big discussion in this country very often about where
    are the boundaries.
        I will give you a for instance. We had a Banking Committee
    where we talked about bitcoins, and everybody was talking about
    how they are going to regulate bitcoins. They got to me, and I
    said, ``Stop it. It is buyer beware.'' You want to deal in
    bitcoins and you lose your life savings, that is not on me. But
    the minute the government touches it, it says it is OK, we are
    regulating it, therefore, you can now have some sense of
    security around using this currency.
        So I think we do not have those foundational arguments, and
    those foundational arguments, when we get into it, distract
    from where the soft spot is, where we can all agree across
    ideological barriers.
        And so I would say that instead of fighting the fights
    about whether we are going to have a Consumer Financial
    Protection Bureau or an Ex-Im Bank, let us talk about how we
    can reduce the frustration of front-line employees in
    performing these functions, how we can identify what Senator
    Lankford just talked about, places where we do not need these
    folks to be doing what they are doing. We have a lot of other
    things they could be doing. And why does anyone want to spend
    their life doing something that does not add value to the
    American public? They do not. These employees do not.
        And so, I think that one of the things that we could do is
    lower the ideological barriers and really get to that
    efficiency measurement that we could all agree on. And when you
    are talking about cost-benefit analysis, I mean, there is a lot
    of discussion here. I am all for that. You know who should be
    performing cost-benefit analysis on existing Federal
    expenditures? The Appropriations Committee, the oversight
    committees that authorize these programs. And we should have a
    greater sense of skepticism about the program. We should be a
    much more critical reviewer of these programs regardless of our
    ideology.
        And so I would say that we could really do some great work
    here if we just agreed that the hard-line, hard-fought
    ideological battles about various agencies got set aside and we
    could work on the low-hanging fruit, build trust, build
    relationships, and then continue the discussion.
        Ms. Greszler. I do think you could structure a commission.
    You could give it a narrow window: These are things that you
    are going to address, and these are things that are off limits.
    But I would worry a little because there are so many of the
    issues that are ideological. I see Federal personnel and
    compensation reform as crucial to this. No matter how many
    agencies you eliminate or reorganizations or duplications you
    get rid of, if you do not change the personnel structure, the
    way that we hire and fire employees, the way that we compensate
    them, I mean the government cannot attract and retain the best
    and brightest employees that they want to right now, and it
    cannot get rid of the ones that it needs to. And that is
    something that, even if you have the perfect structure and you
    are only performing the functions you should, you still need
    the appropriate personnel organization and way to go about
    that. And so I think that, yes, you can limit the functions of
    a commission or whatever reorganization plan it is, but there
    are always going to be some partisan issues in there.
        Senator Heitkamp. Mr. Reardon.
        Mr. Reardon. I think it is important to recognize that a
    lot of these workload and personnel issues really come down to
    a need of process improvements, not really an overhaul of laws.
    We can hire people, we can pay them, but the fact is that it
    has to be funded. And, when I talk to my members, what I hear
    from them are things like, they do not have the resources that
    they need to do their jobs. I think I have mentioned this
    before, and it still is stunning to me, that, for example, in
    the IRS there are people, many people--all over the country--
    that do not have office supplies to do their jobs. So, funding
    to have the tools and the resources to do the job is important.
        I would also mention to you training dollars. Not only
    training dollars for front-line employees so that they have the
    knowledge to do the work--times are changing, and people need
    to be trained to move along with those times, but also training
    for managers. Managers have a lot of the tools at their
    disposal right now to deal with problem employees. But the fact
    of the matter is they are not sufficiently trained to do that
    work.
        And, ultimately a lot of this, candidly, comes down to
    staffing. I mentioned CBP. IRS, for example, since 2010 has
    lost on the order of 20,000 employees, 20 percent of its
    workforce. And that is obviously the organization that brings
    in 93 percent of our country's revenue. Something is wrong
    there.
        Senator Heitkamp. I think Mr. Shea had a comment.
        Senator Lankford. Mr. Shea, were you going to comment on
    that? And then I want to add a question if you----
        Mr. Shea. Sure. I just want to endorse Rachel's idea. A
    similar bill we proposed during the Bush Administration to
    create a commission that would produce recommendations and go
    to Congress for an up-or-down vote, and you could narrow the
    scope of that commission in such a way, and that is based on
    the success of the Base Realignment and Closure (BRAC)
    Commissions, which were specifically designed to overcome
    potential road blocks that they would face in the Congress.
        On the cost-benefit analysis, I mentioned in my testimony
    the Commission on Evidence-based Policymaking. The government
    is investing more and more to rigorously evaluate its programs.
    They generally are found not to be effective, but it is really
    hard, expensive, and takes a long time to do these evaluations.
    It is our hope that if the recommendations of the Commission
    are implemented, it will be easier to get that data so that you
    can find the few diamonds in the rough that are actually having
    an impact and at what cost so that you can compare the cost-
    effectiveness of programs across government.
        Senator Lankford. OK. So, interestingly enough on that, I
    posted on my Facebook page, which I do at times, the topic of
    this hearing and just ask folks that are on it any of their
    ideas and thoughts on it. Lucy Perez of Oklahoma City posted
    this question: ``Why do we not consolidate agencies and Federal
    departments that perform similar duties?'' And I think it was
    an honest question. Why do we not do that?
        When I talk to anyone who has ever been with OMB, they see
    the issues and say this function is done loosely by four
    different entities. Now, all of them will have a little slight
    variation on it, but four different entities basically do the
    same thing on it. The American people, definitely the people in
    Oklahoma see it; people all over the country see it. We have a
    bill called ``The Taxpayers Right-to-Know'' that passed
    unanimously in the House and over here is being held up by, I
    think, five of my colleagues that do not want to do it. But it
    basically forces a list of all of the things the Federal
    Government does just so we can set them side by side and
    Congress can evaluate just for transparency's sake what are all
    the things that we do, where are they. We cannot even get that
    list at this point.
        So the question is: Help me and help her hear this answer.
    What is the issue of why, as it is called, cross-cutting, where
    you are looking at different agencies, an agency's silo can
    evaluate it, but dealing with duplication in multiple agencies
    becomes harder? And how do we get through that?
        Mr. Shea. It is kind of a philosophical question. I think,
    once a government institution is created, its ecosystem
    develops around it. It has offices in OMB that are responsible
    for overseeing its management and budgeting. It has oversight
    committees in Congress. It has contractors--not like Grant
    Thornton, of course, but other contractors who have an interest
    in doing business with that organization, so those tentacles
    make it really difficult to reform those organizations.
    Everybody, I think, has good intent. They want the mission to
    succeed. But they become too aligned to the status quo to want
    to move to something different. There is an enormous fear about
    what will result afterwards. Who will lose? Someone will have
    to lose. I do not think that necessarily has to be the case,
    but that is the fear.
        Mr. Edwards. Can I make a quick comment?
        Senator Lankford. Mr. Edwards.
        Mr. Edwards. Sort of maybe obvious points, but, if you have
    two $1 billion programs in different agencies that essentially
    do the same thing, the GAO would say that they are overlapping,
    etc. Maybe they are under the auspices of different
    congressional committees. The folks who protect both programs,
    of course, in Congress would want to defend them both. And if
    you combine them to eliminate duplication, people would argue,
    well, we should spend $2 billion on the total because they were
    each $1 billion programs. So there is an issue saving money.
        On the bigger sort of philosophical questions, Robert
    said--I have a stat in my testimony that in the private sector,
    there is just this automatic renewal that happens. As we all
    know, bankruptcy in the private sector in America is absolutely
    enormous. There is a pretty standard statistic that 10 percent
    of all U.S. businesses go out of business every year, either
    through bankruptcy or something else. If the demand for a
    product falls, if the costs go too high, it just disappears in
    the private sector. And the government, unfortunately, it is
    very difficult to shift resources. They get sort of stuck where
    they get originally put.
        Senator Heitkamp. I think if you go back and take a look,
    let us talk about supervision. I have a bill that has been
    supported by a lot of folks on supervision. We are going to
    reintroduce it this Congress, because I agree with you, I
    think--people used to tell me in State government, when I ran
    agencies, that you could not fire people in State government. I
    said, ``That is news to me because I fired a lot of people who
    were not functioning.'' I mean, there is a process. And I think
    that we sometimes hide behind that process to avoid that
    confrontation. And I think front-line workers who tend to get
    promoted, if they are good at what they do, may not be the best
    supervisors. And we need to move that along.
        But when you look at duplication, we are going through this
    whole exercise. We do not need all of this review to know that
    there is duplication. We have had GAO come in here incredibly
    frustrated because they say the same things over and over
    again, the same report over and over again, and nothing
    happens. And why is that? Because we do not do appropriate
    oversight here. There are no cameras that are going to come in
    here--if we were having a Committee hearing on Equifax, we
    would have tons of people waiting outside that door. It is the
    issue du jour, it is the topic du jour that sucks the oxygen
    out of the room in Congress when we should be doing the
    yeoman's like work on this side of the dais to improve the
    quality and competence of the Federal Government building,
    again, the commitment that the American public has and the
    sense that they have that we are doing the right thing. It is
    not a sexy thing. I think what we are doing here is not sexy.
    But we are committed to doing it the right way and making sure
    that we have some results that we can build on when we build on
    the trust.
        And so, Mr. Reardon, you wanted to comment?
        Mr. Reardon. Yes, one of the other things that I would add
    that I think that we all kind of run into is this notion that
    the Federal Government is somehow bad, that Federal employees
    are somehow bad, they are swamp creatures, they are in the
    swamp.
        Senator Lankford. They are right now because of hurricane
    relief.
        Mr. Reardon. Well, that is exactly true. You are exactly
    right about that. They are some of our greatest first
    responders, without question. So I think the political
    rhetoric--and it has been around for decades, but it has really
    taken hold to the point where I have a lot of meetings with our
    members, and I routinely have people say to me, ``Why does
    Congress feel this way about us?'' And they just cannot get
    their minds around why so many in Congress, based on some of
    the public statements that are made in the media or maybe by
    some in OMB, why people feel so negative about them. And so our
    Federal employees, in large measure, do not feel valued.
        There has been a lot of talk here about trust. Federal
    employees do not really feel as though they trust management
    either. So there are some things that I think we really need to
    pay attention to in our current system, and the trust between
    the front lines and management I think is certainly one of
    those things.
        And I would add that, when we talk about first responders
    and we talk about CBP officers from San Francisco and around
    the country going to help in Hurricane Harvey or Hurricane
    Irma, I would also like to point out that the Federal Emergency
    Management Agency (FEMA) brings people in to answer phones, and
    one of the groups that they brought in were a number of
    employees from the IRS. And the IRS did really a great job of
    providing people so that they could help.
        So there are all kinds of Federal employees who are not
    only pulling people out of floods but that do a lot of
    different kinds of important work. And so I hope the day comes
    where we value the whole Federal workforce.
        Senator Lankford. I think trust builds trust, and when so
    many Federal employees also share with their family and
    relatives how frustrated they are--because they are and they
    are stuck in a bureaucracy. They see things that need to
    change. They see someone sitting next to them that they cannot
    figure out why that person is not working hard and I am working
    really hard, that just continues to build this conversation
    that happens, that people know some of those issues and want to
    be able to work through the process.
        So Members of Congress beating up people they have never
    met is not appropriate. But the real issues that we need to
    address is the effectiveness of what we are doing, the
    bureaucracy of what is happening, when we are slowing down our
    economy waiting on multiple layers. All those things need to be
    addressed.
        My question to this group is--and we need to wrap up, and I
    want to honor your time as well. OMB is in a process right now,
    and part of the reason that we want to be able to have this
    conversation and that we look forward to having the
    conversation with OMB sitting at that same table to talk
    through how they are handling it and what they are doing is
    counsel OMB to make sure you do not miss this, and to Congress
    for this to have lasting change, you have to do this. So what I
    would be interested in is very specific counsel beyond what you
    have in your written statements, because your written documents
    are all in, or if you want to reinforce something you have
    written, counsel to OMB that now that they are looking at the
    things that are coming in from all the agencies, they have to
    help determine those cross-cutting, because at the end of the
    day we have asked OMB to be the one that has the big picture
    and the White House to have the big picture to say bring us a
    set of recommendations where you see recommendations. I will
    keep working on Taxpayers Right-to-Know where we can force
    those same things out so every entity, every think tank, every
    American, all Members of Congress can also see all of the
    duplication, and we can have a national conversation on it. But
    until that time we get all that, OMB has it, counsel you would
    have for OMB as they are handling this and then counsel you
    would have for Congress as we try to walk through and codify
    the issues that are needed. And I would be interested from any
    of you or all of you on that.
        Mr. Shea, you have uniquely got the ball, being in that
    chair before.
        Mr. Shea. So make sure they know what outcome they are
    trying to accomplish and whether what they are proposing is
    going to accomplish it better than we are doing it today.
    Implement the recommendations of the Commission on Evidence-
    based Policymaking so you can actually evaluate whether or not
    what we are doing is accomplishing the intended goal. And for
    Congress and this Committee in particular, you have to commit
    to sustained oversight of the reorganization to ensure that we
    adjust in real time to make sure we actually get to where we
    are trying to go.
        Senator Lankford. Can I ask a quick question on that? Then
    I want to move on. For OMB, is it important that they say what
    they are going to do before they ask for executive authority to
    do it? Because that has been some of the challenge as well. As
    you mentioned before, many times Congress will not give the
    executive authority because there is an uncertainty of what is
    going to happen.
        Mr. Shea. So it is really difficult for me to imagine
    Congress granting the President reorganization authority at
    this time in our history. But perhaps they could enact it for a
    future Administration.
        Senator Lankford. If this Administration were to take it
    on, obviously they are pulling the things together on it. What
    do they need to list out specifically to say here is what we
    want to do, give us authority to do this?
        Mr. Shea. You mean broadly speaking or with each
    individual----
        Senator Lankford. Broadly speaking.
        Mr. Shea. I think, as Rachel suggested and we proposed
    during the Bush Administration, an independent commission to
    make recommendations that get an up-or-down vote in the
    Congress. It can be very narrowly tailored to reducing overlap
    and duplication among programs or agencies.
        Senator Lankford. OK. All right. Thank you. Ms. Greszler.
        Ms. Greszler. And I will just pick up on that. I think that
    if they were required to submit detailed--like a list by list,
    this is exactly what we want to do, there is not much chance of
    Congress granting executive authority.
        To OMB, I would say two things. First, just the process in
    which they are taking in, they have received over 100,000
    recommendations, and so I do not know what they have in place
    over there, but something that would categorize them and, where
    do we have 1,000 people that are saying do the same thing and
    kind of to break it out and here are our broad goals, here are
    some more specific things. Where do we have a lot of agreement?
    And then also considering making some of those available to
    Congress and to the public and just say these were submitted by
    public institutions, here is what they are saying.
        To Congress, I think it is a big thing on the process, and
    so if Congress is going to have to take on some of this,
    whether it comes from the President and hear his proposals--
    there is going to be something in there that needs
    congressional action. I would say the best way to go about that
    is through oversight in the Governmental Affairs Committees
    because you have the broader jurisdiction; otherwise, I think
    everything is just going to get so tied up in the process that
    you will not see much come out of it.
        Senator Lankford. OK. Thank you. Mr. Edwards.
        Mr. Edwards. Robert mentioned the Commission report last
    week, the Murray-Ryan Commission on Evidence-based
    Policymaking, which I went through, and it is very good,
    although it mainly focuses on generating more data. I do not
    think that is what we need. I think we need more evaluations,
    and as I said in my testimony, I think it is a cost-benefit
    analysis which is a standard tool of economics. Some Federal
    agencies, like DOT, the Army Corps, already do detailed cost-
    benefit analysis. We know how to do this. I think that is where
    we ought to put resources.
        Looking around on the Internet in the last few days, the
    State of Washington has this fantastic website. You go to it;
    it has all--I do not know whether it is all, but many of their
    major agencies and programs. They have the full cost-benefit
    analysis results right there. This program costs the average
    taxpayer $100; the benefits are $150; it makes sense. That is,
    I think, what we need, and to inform the public about these
    programs.
        Senator Heitkamp and Rachel had strongly held views about
    the Ex-Im Bank, both, I am sure, very knowledgeable viewpoints.
    But, we needed hard data in that debate. We needed the CBO or
    someone to do the evaluation with a bottom-line number, and
    then we can debate over what the numbers are. So I think we
    need to quantify the benefits of these programs.
        Senator Lankford. OK. Thank you. Mr. Reardon.
        Mr. Reardon. OK. Thank you. The first thing that I would
    suggest is that OMB instruct agencies to work with us on the
    recommendations that we provided those agencies, and they were
    contained in my testimony, so I will not go through all of
    those again.
        To Congress, I would suggest that Congress fund agencies
    appropriately, first thing.
        The second thing is to enact Senator Heitkamp's forthcoming
    supervisor training bill that you had put forward last year.
        Finally, I would say it is important to involve front-line
    employees and their representatives in whatever work is being
    done so that, without question, front-line employee
    perspectives are included and taken very seriously.
        Senator Lankford. OK.
        Senator Heitkamp. We received some great comments from the
    Partnership for Public Service, and so I want to ask unanimous
    consent to enter that testimony into the record.\1\
    ---------------------------------------------------------------------------
        \1\ The statement from the Partnership for Public Service appears
    in the Appendix on page 374.
    ---------------------------------------------------------------------------
        Senator Lankford. Without objection.
        Senator Heitkamp. Thank you.
        I have no further questions.
        Senator Lankford. OK. Thank you for the work leading up to
    this. You did tremendous work in your written testimonies, and
    I appreciate that very much. I appreciate the ongoing dialogue
    as you have specific recommendations or ideas. Please continue
    to be able to bring those. This Committee is very committed not
    only just to the philosophical argument but to actually the
    practical implementation of what those things will really mean.
    Many of the things that you brought up demand really an hour-
    long conversation on each of those issues alone. We are
    actually just skimming the surface today. But I appreciate the
    ongoing dialogue both with our staff and with us as members as
    well.
        Before we adjourn, I do want to announce that next month
    the Subcommittee will hold a hearing to examine how various
    State legislatures review administrative rules and how they
    interact with State regulators.
        That concludes today's hearing. Again, I want to thank our
    witnesses for this. The hearing record will remain open for 15
    days until the close of business on September 28th, my wife's
    birthday, for the submission of statements and questions for
    the record.
        This hearing is adjourned.
        [Whereupon, at 11:19 a.m., the Subcommittee was adjourned.]

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