[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[House]
[Pages 2019-2022]
[From the U.S. Government Publishing Office, www.gpo.gov]



      NEED FOR GOOD MANAGEMENT IN EXECUTIVE BRANCH IS LONG OVERDUE

  The SPEAKER pro tempore (Mr. Kerns). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from California (Mr. Horn) is 
recognized for 30 minutes.
  Mr. HORN. Mr. Speaker, with a new administration, it is time that we 
face up to the lack of management in the executive branch.
  Mr. Speaker, today I am introducing legislation to create an Office 
of Management within the executive office of the President, H.R. 616.
  The language of the bill is below and will be part of the Record.
  The proposal that complements and extends the efforts of recent 
congresses to focus on one of the greatest challenges facing the 
Federal Government is seen best this way: finding an effective way to 
manage the complex collection of Government cabinet departments, 
independent agencies, and laws and regulations that exist to serve the 
public and provide for our national security.
  Some might argue that this proposal is unnecessary or unimportant. 
Those arguments are profoundly misguided. The challenge of effectively 
managing our Government is, in fact, one of the most vital issues 
before us.
  If we hope to solve the long-term problems that threaten Social 
Security and Medicare, and if we hope to strengthen our social safety 
net for children and other vulnerable members of our society and if we 
want to reduce the tax burden on American families, then we must start 
with a well-managed Federal Government.
  As most Members of Congress know, each year we receive reports from 
the comptroller general of the United States, those excellent reports 
that billions of tax dollars are lost to waste, fraud, and abuse.
  A January 2001 report by the General Accounting Office, which works 
for the comptroller general, stated the following: ``We have identified 
inordinate program management risks in major program and mission areas. 
These range from large benefit payment programs that sustain 
substantial losses to the earned income tax credit that experiences a 
high rate of noncompliance.''
  In addition to these two programs, the General Accounting Office 
stated that poor management policies place vital programs such as 
Medicare, supplemental security income, student financial aid, and the 
Department of Housing and Urban Development's single family mortgage 
insurance and rental housing assistance at the high risk of waste, 
fraud, and misuse of the taxpayers' money.
  The new GAO report lists 21 programs that remain at high risk of

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waste, fraud, abuse and mismanagement, in addition to the emerging 
government-wide problem of managing its strategic human capital.
  Among the most significant problems, the report cited the Department 
of Defense's poor financial management. Despite the GAO's recognition 
of this serious accounting problem, which dates back to 1995, little 
has changed.
  In May of last year, the Subcommittee on Government Management, 
Information, and Technology, which I chaired, found that the Department 
of Defense still cannot produce auditable financial statements. We 
started on that on a bipartisan basis back in 1993 and most of us said 
they will never make it. We were right.
  In fact, the Department's Inspector General reported that, in 1999, 
the Department of Defense had to make bookkeeping adjustments that 
totaled $7.6 trillion, not million, not billion, we are talking about 
trillions, $7.6 trillion in order to reconcile its books with the 
United States Treasury and other sources of financial records.
  The GAO's examination of the comptroller general of those adjustments 
found that at least $2.3 trillion of the adjustments were not supported 
by documentation, reliable information, or audit trails.
  The Department of Defense is not the only agency with such problems. 
It is just the biggest. The subcommittee's examination of the 1999 
financial audit of the Health Care Financing Administration found that 
the Agency had erroneously paid out an estimated $13.5 billion in its 
Medicare fee-for-service program. That is roughly 8 percent of the 
program's $170 billion budget.
  As the General Accounting Office testified at a subcommittee hearing 
on this subject last year, accounting procedures were so inadequate 
that no one could even estimate how much of this money was lost to 
fraud.
  These are just two examples of the enormous cost of the Government's 
poor management, outmoded business practices, and insufficient 
financial controls.

                              {time}  1515

  At another subcommittee hearing on the governmentwide consolidated 
financial statements last year, the Comptroller General of the United 
States, David Walker, testified that serious financial management 
weaknesses also exist at the Internal Revenue Service, the Forest 
Service, and the Federal Aviation Administration. We have excellent 
people there as directors, and they are turning a lot of this around.
  Commissioner Rossotti at the Internal Revenue Service is an 
outstanding executive. He came from the private sector, and he has 
applied some of those theories to one of the largest bureaucracies in 
the United States.
  The same with the forester of the Forest Service; the same with the 
Federal Aviation Administration. They are working very hard to move 
those agencies ahead. These weaknesses, said the Comptroller General, 
place billions of taxpayer dollars at high risk of being lost to waste, 
fraud, and misuse. There is only one way to find these abuses, and that 
is to ferret out each wasted dollar, agency by agency, program by 
program, line by line.
  To accomplish this goal, we must make management a clear and 
unequivocal priority across the entire Federal Government. The General 
Accounting Office report came to the same conclusion, stating that 
``effectively addressing the underlying causes of program management 
weaknesses offers tremendous opportunities to reduce government costs 
and improve services.'' Congress must create a corps of management 
experts who not only have the ability and skill to address wasteful 
administration and program failures but who also have the power and 
mandate to force action and produce results.
  The Office of Management and Budget in the Executive Office of the 
President was created by President Nixon in 1970 for the various 
purposes I have outlined. At that time, I supported the creation of 
that office and adding the ``M'' there and presumably then having a 
management component with the overworked budget side.
  I thought at the time there is a real possibility to use the budget 
process to get the attention of Cabinet officers and strengthen their 
interest in management practices. I was absolutely wrong. Every one of 
my colleagues in the government and the senior service, senior civil 
service, all of them saw nothing happening. And when I got back here 6 
years ago, that is exactly what had happened. For years, management 
experts whom I respect, inside and outside the government, have said 
that the ``M'' in OMB, the Office of Management and Budget, does not 
stand for management. It stands for mirage.
  The unpleasant reality is that tying management to the power of the 
budget process was an excellent theory but one that never worked. The 
pressures and dynamics of the annual budget process have simply 
overwhelmed nearly every initiative aimed at improving management. In 
effect, the fledgling management trees could not survive among the 
tangled and gnarled limbs of the bureaucratic budgetary forest.
  Since serving as chairman of the Subcommittee on Government 
Management, Information and Technology for the last 6 years, it has 
become very clear to me that we can no longer continue on our present 
course of muddling along, then papering over our fundamental management 
deficiencies with more tax dollars. This course has left us vulnerable 
to monetary waste and threatens to disrupt vital government programs 
that serve millions of Americans.
  This very real problem seized my attention in April of 1996, some of 
my colleagues will remember, on the 2000 date change. Unless corrected, 
the year 2000 problem, called Y2K, threatened to disrupt government 
computers when their internal clocks moved from December 31, 1999 to 
January 1, 2000. The bulky computers of the sixties and seventies had 
little memory and to save that memory they said, Let us just call it 
67, not 1967. At that time no one thought these systems would still be 
operating by the turn of the century.
  As time went on, the concern grew that these computers would 
misinterpret the year 2000 as the year 1900; and there were some rather 
humorous but serious matters. In one case, a 104-year-old woman 
received a school district notice telling her to register for 
kindergarten and little things like that. But it was a serious problem.
  It was grappled with not by OMB, it was grappled with when the 
President of the United States picked a person that had retired from 
OMB, brought that person in as assistant to the President. He did a 
very good job, and we can thank him for getting to it. But it took him 
a long time, 4 years, to get into this. They should have done it 
earlier. We would have saved billions of dollars if they had. But they 
did not. They did not take it seriously.
  When I did a survey of the Cabinet back in 1996, there were two that 
had never heard of it, did not know a thing about it. We had some that 
did know something about it. But the one agency that was on top of all 
this was the Social Security Administration. They have long been a very 
well-run organization. In the sixties when I was on the Senate staff, 
we saw that every day. It is the type of thing that we should commend 
and we did.
  The other thing was the Federal Highway Administration. They had a 
first-rate programmer tell them all about it back in 1987, and they 
just laughed. They said, ``Oh, that isn't possible.'' You would think 
that would go up the line to the Secretary of Transportation at the 
time, but the fact was, it did not.
  And the Federal Aviation Administration, therefore, did not really 
have to face up to the problem, and so they had to play catch-up in 
order to overcome what could have been done beginning in the 1980s. The 
President procrastinated until February 1998 even though the 
gentlewoman from New York (Mrs. Maloney), the ranking Democrat on my 
committee, and I had sent him a letter urging him to appoint someone.
  Well, he did, 2 years after the letter. But that also lost us time. 
The President appointed John Koskinen as an

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assistant to the President and he did pull it together, but it was 
running right to the last wire to be passed and the last hurdle. Mr. 
Koskinen served the President as deputy director of OMB for management. 
You would think something would have happened there. He was there from 
1993 until he retired. He is a very good man, but in the OMB nest, it 
was not the way to run the program. And he knew that. And when you are 
an assistant to the President, you can get things done. The Cabinet 
officers start listening to you. Yet Mr. Koskinen's able leadership at 
OMB frankly did not do anything to solve the problem until he took 
retirement, the President called him back in, and then he went to work 
and focused on it.
  The year 2000 crisis provides powerful evidence of the need for an 
Office of Management. The executive branch of our government must have 
one office that is focused solely on finding, deciphering and solving 
this type of problem before it occurs, not afterwards. We need one 
group of management-oriented professionals who are available to monitor 
and help find solutions to management problems before they become 
costly burdens to the taxpayers.
  Looking back, Franklin Roosevelt had a small group of professionals 
who were capable of sorting out problems and their long-range 
implications. They had the ear of the President in that era of the 
budget. President Harry Truman had such a group, as did President 
Dwight D. Eisenhower. It went downhill on management after President 
Eisenhower left office, and more and more it was politicized. Instead 
of professional civil servants that knew what they were doing, neither 
Democrats nor Republicans knew what they were doing, and that is not 
good enough. What we need are professionals that work for the 
President, and that is the way that agency used to work. Had the year 
2000 problem been taken seriously a decade ago, its solution might 
easily have been integrated into the routine maintenance and 
modernization of Federal computer systems. Unfortunately, that did not 
happen; and we lost probably a few billion. But they do not seem to 
care about that down there.
  In recent years, five major Federal agencies have launched computer 
modernization efforts that sunk from lofty goals to abject failures. 
These efforts by the Internal Revenue Service, the Federal Aviation 
Administration, the Department of Defense, the National Weather 
Service, the Medicare program can be summed up as an ongoing series of 
repetitive disasters that at the highest possible cost failed to 
produce useful computer systems needed to serve the public. The 
Internal Revenue Service finally realized that its project had failed 
at the $4 billion mark. The FAA, Federal Aviation Administration, had a 
similar disaster that cost more than $3 billion before they canceled it 
and realized they were not going in the right direction. Both were 
costly examples of abysmal management. Another word for it is 
stupidity.
  The American taxpayer deserves a lot more from the executive branch 
than it has received. The new Bush administration can solve a lot of 
those management problems which have been very well swept under the 
rug. We need to get it out from under the rug and deal with it. Three 
years ago, the General Accounting Office reported that ``these efforts 
are having serious trouble meeting cost, schedule and/or performance 
goals. Such problems are all too common in Federal automation 
projects.''
  In short, good management could have saved taxpayers billions of 
dollars and given the government and its citizens modern, efficient, 
productive and effective technology. Yes, we need to strengthen the 
President's staff in the area of information technology, but we have an 
even greater need to have an integrated approach to management 
improvement.
  The desperate need to improve the government's financial management 
systems which I have already referred to can be pursued meaningfully 
only in concert with information technology. In addition, however, many 
of the failures in upgrading these computer systems can be traced to 
inadequacies in the procurement process. At present, these three 
specialized areas of management reside in three independent offices 
within the Office of Management and Budget. We must remove all of them 
from the shackles of the budget process and insist that they work 
together to eliminate further loss of billions of dollars in wasteful 
and unsuccessful systems development.
  Many other management challenges lie ahead. We need an organized and 
comprehensive governmentwide plan to protect government computers from 
cyber attacks such as the Melissa and I-Love-You viruses. Over the next 
few years, the Federal workforce will suffer massive attrition as a 
large number of workers become eligible to retire. We need an executive 
branch agencywide strategy to train new workers and retain veteran 
employees. An Office of Management would produce enormous dividends in 
these areas simply by early identification of problems such as these 
and pointing the way toward the most effective solutions.
  Mr. Speaker, there are other vital areas that need the same kind of 
scrutiny and guidance that I believe would flow from an Office of 
Management. Beginning with the Debt Collection Improvement Act which 
became law in 1996, Congress has attempted to provide Federal 
departments and agencies with the tools they need to collect the 
billions of dollars in debts that these agencies are owed. Yet so far 
their collection efforts have been sluggish and ineffective. Good 
financial management practices and systems should be in place 
throughout the Federal Government. However, recent subcommittee 
hearings have again shown that too many agencies have neither.
  We will have quite a number of hearings this year taking the 
Comptroller General's little reports on each of these agencies. We 
would obviously like the appropriations subcommittee to do the same 
thing and the authorizing committee, but we as the oversight will make 
sure what the Comptroller General has brought up should be read by 
every Member of this Chamber, and then we can face up to these problems 
and do something about it. But Congress cannot do it day to day. That 
is where the executive branch and the Executive Office of the President 
is important to have this type of an entity added to it, which is 
simply moving it around but getting a focus in it, and that is the 
Office of Management.
  Regardless of party, most White House staffers are interested in 
policy development, not managing policy implementation. Policy involves 
hope, excitement and media coverage. Management, on the other hand, 
appears dull and dreary, whether it is program management or financial 
management. Yet good policies that are not translated by management 
into action have very little value. Removing the management problems 
from the current Office of Management and Budget would provide the 
President with a rational division of labor that would place a new and 
necessary emphasis on managing what is now unmanageable.

                              {time}  1530

  Those who are engaged in budget analysis have different skills and 
fulfill different roles than those who work in financial and program 
management.
  Since 1993, on a bipartisan basis, this Congress has authorized chief 
financial officers and chief information officers for each cabinet 
department and each independent agency. Both management and budget 
staffs could and should participate in annual budget reviews of the 
executive branch departments and agencies. Of course they should do 
that. But they also have to focus to be very effective, and you cannot 
be diverted, just going to meetings.
  We do not need to create a new bureaucracy or require a major 
reorganization of the executive office of the President. We do, 
however, need to create a separate office of management, whose director 
has clear and direct access to the President or the President's Chief 
of Staff, similar to the President's relationship with the separate 
Director of Budget, who sits in his cabinet.
  If we are to create government-wide accountability, then an office of 
management is essential. It is long-overdue

[[Page 2022]]

reform that taxpayers deserve and good government demands. An office of 
management could work with departments and agencies in measuring the 
value of program effectiveness.
  Mr. Speaker, the Subcommittee on Government Efficiency, Financial 
Management and Intergovernmental Relations, which is the subcommittee I 
now chair, will have a large agenda this year. We will follow up on all 
of the reports of the General Accounting Office and the Comptroller 
General of the United States.
  We have had hearings on what the States are doing. We have had 
hearings on what other countries are doing. If Oregon can do it, why 
cannot the executive branch of the United States do it? If New Zealand 
can do it, why cannot the executive branch of the United States do it? 
If Australia can do it, why cannot the executive branch of the United 
States do it? It just gets down to a question of doing it.
  My most famous and fun commencement address that I learned as a 
university president was when Winston Churchill, the great leader of 
the free world, was sitting there puffing on his cigar watching the 
graduates and what they were doing. He got up to the podium and he 
said, ``Do it,'' and sat down. If commencement speeches were that long, 
two words, we would have better inspiration for most of the young 
people of America.
  In August of 1910, Theodore Roosevelt spoke to this very issue. He 
said no matter how honest and decent we are in our private lives, if we 
do not have the right kind of law and the right kind of administration 
of the law, we cannot go forward as a Nation.
  Mr. Speaker, it is time to go forward. If we are to create 
government-wide accountability, an office of management is essential. 
It is a long-overdue reform that taxpayers deserve and good government 
demands. The office of management could work with departments and 
agencies in measuring the value of program effectiveness.
  Mr. Speaker, the Subcommittee on Government Efficiency, Financial 
Management and Intergovernmental Relations, which I chair, will have a 
large agenda this year. We will follow it up on just these various 
points: What Oregon, Australia and New Zealand are doing, why are we 
not doing? So let us try it.

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