[House Report 104-434]
[From the U.S. Government Publishing Office]





                                                 Union Calendar No. 209

        104th Congress, 1st Session -  -  -  -  -  -  -  -  -  - House 
Report 104-434

 
                   CREATING A 21st CENTURY GOVERNMENT

                               __________

                             SECOND REPORT

                                 by the

                        COMMITTEE ON GOVERNMENT
                          REFORM AND OVERSIGHT


                             together with


                            ADDITIONAL VIEWS


                                     


                                     


 December 21, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed
              COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

     WILLIAM F. CLINGER, Jr., 
      Pennsylvania, Chairman
CARDISS COLLINS, Illinois            BENJAMIN A. GILMAN, New York
HENRY A. WAXMAN, California          DAN BURTON, Indiana
TOM LANTOS, California               J. DENNIS HASTERT, Illinois
ROBERT E. WISE, Jr., West Virginia   CONSTANCE A. MORELLA, Maryland
MAJOR R. OWENS, New York             CHRISTOPHER SHAYS, Connecticut
EDOLPHUS TOWNS, New York             STEVEN SCHIFF, New Mexico
JOHN M. SPRATT, Jr., South Carolina  ILEANA ROS-LEHTINEN, Florida
LOUISE McINTOSH SLAUGHTER, New York  WILLIAM H. ZELIFF, Jr., New 
PAUL E. KANJORSKI, Pennsylvania      Hampshire
GARY A. CONDIT, California           JOHN M. McHUGH, New York
COLLIN C. PETERSON, Minnesota        STEPHEN HORN, California
KAREN L. THURMAN, Florida            JOHN L. MICA, Florida
CAROLYN B. MALONEY, New York         PETER BLUTE, Massachusetts
THOMAS M. BARRETT, Wisconsin         THOMAS M. DAVIS, Virginia
GENE TAYLOR, Mississippi             DAVID M. McINTOSH, Indiana
BARBARA-ROSE COLLINS, Michigan       JON D. FOX, Pennsylvania
ELEANOR HOLMES NORTON, District of ColumbiaTATE, Washington
JAMES P. MORAN, Virginia             DICK CHRYSLER, Michigan
GENE GREEN, Texas                    GIL GUTKNECHT, Minnesota
CARRIE P. MEEK, Florida              MARK E. SOUDER, Indiana
CHAKA FATTAH, Pennsylvania           WILLIAM J. MARTINI, New Jersey
BILL BREWSTER, Oklahoma              JOE SCARBOROUGH, Florida
TIM HOLDEN, Pennsylvania             JOHN B. SHADEGG, Arizona
            ------                   MICHAEL PATRICK FLANAGAN, Illinois
BERNARD SANDERS, Vermont (Independent)HARLES F. BASS, New Hampshire
                                     STEVEN C. LaTOURETTE, Ohio
                                     MARSHALL ``MARK'' SANFORD, South 
                                     Carolina
                                     ROBERT L. EHRLICH, Jr., Maryland

  James L. Clarke, Staff Director
    Kevin Sabo, General Counsel
     Judith McCoy, Chief Clerk
  Kristie Simmons, Professional 
               Staff
 Kimberly Cummings, Professional 
               Staff
Bud Myers, Minority Staff Director
     Denise Wilson, Minority 
        Professional Staff

                                  (ii)
                         LETTER OF TRANSMITTAL

                              ----------                              

                                  House of Representatives,
                                 Washington, DC, December 21, 1995.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: By direction of the Committee on 
Government Reform and Oversight, I submit herewith the 
committee's second report to the 104th Congress.

                                   William F. Clinger, Jr.,
                                                          Chairman.

                                 (iii)

                                     

                            C O N T E N T S

                              ----------                              
                                                                   Page
I. Purpose, Background and Objectives............................     1
    A. Purpose of the Hearings...................................     1
    B. Background................................................     2
    C. Committee Objectives......................................     2
II. Findings.....................................................     3
III. Recommendations.............................................     4
IV. Introduction and Review of Testimony.........................     6
    A. Introduction..............................................     6
    B. Review of Testimony.......................................     6
        1. Common Reorganization Principles......................     6
        2. Additional Suggestions and Findings...................    16
V. Conclusion....................................................    20

                                 VIEWS

Additional views of Hon. Cardiss Collins.........................    22
Additional views of Hon. Gene Green..............................    22

                               APPENDIXES

Appendix I--Charts...............................................    25
Appendix II--List of Hearing Locations, Dates and Witnesses......    28

                                  (v)

  
                                                 Union Calendar No. 209
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-434
_______________________________________________________________________

                   CREATING A 21st CENTURY GOVERNMENT

                                _______


 December 21, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                             SECOND REPORT

    On December 14, 1995, the Committee on Government Reform 
and Oversight approved and adopted a report entitled ``Creating 
a 21st Century Government.'' The chairman was directed to 
transmit a copy to the Speaker of the House.

             I. PURPOSE, BACKGROUND AND OBJECTIVES

                       A. Purpose of the Hearings

    The purpose of the Government Reform and Oversight 
Committee field hearings on ``Creating a 21st Century 
Government'' was to learn from the American public, State and 
local government officials and the private sector their 
suggestions and experiences on creating innovative, 
streamlined, and cost effective organizations. The committee 
intends that Congress learn from and adopt some of these 
successful strategies in an effort to restructure the executive 
branch to better meet the needs of Americans today and in the 
21st century.
    In its effort to hear from people outside Washington, D.C., 
the committee invited witnesses from State and local 
government, the private sector, and the American public to 
testify or participate in an open forum in which Members could 
hear their experiences and ideas with regard to organizational 
downsizing. Members of the committee traveled to Parma Heights, 
Ohio; Upper Montclair, New Jersey; Federal Way, Washington; 
Long Beach, California; Albuquerque, New Mexico; and Charlotte, 
North Carolina. Each one of these cities has recently 
challenged inefficient government by revitalizing its main 
functions in order to survive, compete, prosper and provide for 
the needs of its citizens. Identifying what has worked, what 
has hindered their reorganization efforts and how best to 
implement a plan will aid Congressional initiatives to 
revitalize government at the Federal level.

                             B. Background

    As the United States approaches the 21st century, it is 
shedding the vestiges of the Industrial Revolution in favor of 
an economy driven by information and technology. Government 
must keep up with this changing society. At the same time, 
however, the American electorate is demonstrating support for a 
government smaller in size, scope and cost--yet more efficient 
and effective in those activities it must perform. The 
challenge for Congress is to determine the appropriate role of 
the Federal Government in our evolving society and to identify 
the structure and practices that will enable the government to 
fulfill its missions now and in the next century.
    Today, the Federal Government is performing too many 
functions to deliver them all efficiently and cost effectively. 
It is critical to refocus government on those essential 
functions that it must perform and consider whether government 
should be involved in an activity if it cannot do it well. In 
fact, in the effort to do things better, it seems government 
has only gotten bigger. In 1985, there were 1013 Federal 
programs; today, there are 1390 Federal programs administered 
by 53 departments and establishments of the Federal 
Government.\1\ To support these programs and the bureaucracy 
that runs them, Federal income tax receipts today have grown to 
an amount 13 times the amount they were in 1960.\2\ Today a 
person must work 126 days to pay off his or her share of all 
Federal, State and local taxes, compared with 44 days required 
to pay them off in 1930. The Cost of Government Day--that is, 
the day in 1995 on which the American taxpayer finally paid off 
his or her share of the financial burden of government--was on 
July 9th, more than halfway through the year.\3\
    \1\ Office of Management and Budget, Catalog of Federal Domestic 
Assistance. Chart 1, Appendix I.
    \2\ Office of Management and Budget. Chart 2, Appendix I.
    \3\ Tax Foundation. Chart 3, Appendix I.
---------------------------------------------------------------------------
    Despite numerous reports and studies conducted on the 
effectiveness and efficiency of the Federal Government, little 
has been accomplished to make government more streamlined and 
effective. The most recent effort at comprehensive 
``reinvention,'' Vice President Gore's National Performance 
Review (NPR), was initiated in 1993. NPR included an exhaustive 
study and review of the executive branch, yet few concrete 
proposals were implemented as a result. Indeed, only modest 
reorganizations have resulted from the major reorganization 
initiatives of the last fifty years, including the First Hoover 
Commission (1947-49), the Second Hoover Commission (1953-55), 
the Ash Council (1969-71), and the Grace Commission (1982-84).

                        C. Committee Objectives

    Pursuant to its jurisdiction under Rule X of the Rules of 
the House of Representatives, the committee is empowered to 
lead government-wide reorganization efforts. It identified 
seven steps toward achieving the goal of smaller, more cost 
effective government, which guided the committee in its series 
of field hearings on ``Creating a 21st Century Government'' 
across the country.
    The first step is to consider government reorganization 
from a broad perspective that goes beyond any single department 
or agency. Because any changes in the Federal Government will 
have a ripple effect, the committee believes the most effective 
strategy is to restructure the Federal Government in a 
comprehensive way, rather than through a fragmented approach.
    The second step is to identify principles to drive and 
shape government reorganization, and apply those principles 
across the functions and institutions of the Federal 
Government. Throughout the field hearings, witnesses testified 
on the principles which have guided their reorganization 
efforts, some of which may be applicable on the Federal level.
    The third step is to identify barriers to streamlining and 
reorganization, and create a path to clear those barriers. One 
of the most prevalent barriers to any reorganization effort is 
internal resistance to change. Federal bureaucracies will be 
faced with the difficult task of replacing outdated practices 
with innovative approaches to delivering agency services.
    The fourth step is to engage in a dialogue with the 
American people to ensure their participation in creating their 
21st century government. Input from the American public is a 
vital component of the restructuring process. As the 
beneficiaries and consumers of a vast majority of Federal 
Government programs, the American public knows first-hand how 
programs affect them, what programs have a positive impact and 
what programs are simply ineffective.
    Steps five and six involve consulting with experts in an 
array of disciplines to identify and apply effective and 
successful reorganization strategies to the Federal Government. 
The field hearings served as a forum where these witnesses 
brought their own unique perspectives to each hearing and 
shared their success stories. Calling on these witnesses and 
borrowing the most creative ideas of corporate, State, and 
local government entities will enhance Federal reorganization 
efforts.
    Step seven requires an attention to workforce, information 
technology, management, and performance standards. A largely 
expanded workforce, inefficient management, outdated 
technology, and a lack of clear performance standards have 
contributed to the inefficient bureaucratic structure that 
exists today. Outdated technology has left many Federal 
agencies and departments unable to communicate on sophisticated 
information networks. Updating the technology and management of 
Federal departments and agencies can help create a government 
that is more responsive to the needs of the American people.

                          II. FINDINGS

    State and local government witnesses, business 
representatives, and the public all advocate looking at each 
Federal department and agency to determine which of the 
functions it provides are vital to the service delivery needs 
of Americans and which can be better carried out by State or 
local governments or the private sector. The widely shared view 
was that the Federal Government is not meeting the needs of its 
customers, the American public, and is less effective, less 
efficient and more costly than it should be. It must be fixed.
    Six fundamental points, or practices, were raised at all 
six field hearings, each to promote the efficiency, 
effectiveness, high quality and low cost of service delivery. 
The first three of these common reorganization principles in 
particular affect the culture of an organization, while the 
other three are more practical in application. The committee 
finds--
    1) Clear missions and a solid organization mission 
statement are necessary for establishing priorities and goals 
and maintaining focus on established objectives.
    2) Open and honest communication with employees about each 
step of the reorganization process is vital to maintaining 
employee morale, as is affording employees an opportunity to 
convey their views on downsizing and reorganization.
    3) Innovative management techniques are enabling States, 
localities and businesses to empower employees and to strip 
layers of bureaucratic management in favor of more streamlined 
structures. The result has been more efficient, more responsive 
organizations with high morale and greater productivity.
    4) Privatization is clearly one of the most advocated means 
of taking government out of functions which are not inherently 
governmental and which can be performed more efficiently and 
cost-effectively by the private sector.
    5) Competitive bidding will improve service while saving 
money. The government should be forced to compete with private 
business for effective, efficient service delivery.
    6) The Federal Government must replace old and outdated 
computer systems with advanced technology that allows open 
communication both internally and with the public. Using such 
technology will facilitate ``one-stop shopping'' and other 
innovations in service delivery.

                      III. RECOMMENDATIONS

    The committee makes the following recommendations as a 
result of its oversight findings:

1) Establish a citizens commission on 21st century government.

    Congress should establish a commission to determine the 
appropriate role of the Federal Government in the next century, 
and to recommend a structure, size and scope for the executive 
branch that will best enable the government to fill that role. 
The American public should be afforded an active role in this 
commission to ensure it reflects their priorities and 
expectations.

2) Identify and remove statutory and regulatory barriers to 
        reorganization and innovation.

    Congress and Federal departments and agencies should 
identify statutes or regulations that prevent or frustrate 
department and agency efforts to privatize functions, introduce 
competitive bidding practices, reorganize or eliminate 
functions, and institute other innovations in the way the 
government does business. Congress and Federal departments and 
agencies should remove those barriers where appropriate.

3) Increase privatization and competitive bidding.

    Congress and Federal departments and agencies should 
endeavor to privatize or invite competitive bidding for Federal 
activities and functions which are not inherently governmental 
when such privatization would result in better service and 
greater cost savings to the taxpayer.

4) Enlist the aid of the private sector in reorganization and 
        innovation efforts.

    Congress and Federal departments and agencies should invite 
experienced individuals from the private sector to form a 
partnership with Federal officials in executive branch 
reorganization, innovation and downsizing.

5) Restore responsibilities to the States and local governments without 
        imposing unfunded mandates.

    Congress should work with State and local governments to 
identify those Federal programs or activities that can be 
administered with greater success on the State or local level, 
and should provide greater State and local flexibility in 
administering Federal programs wherever possible. Congress 
should impose no new unfunded mandates on States or localities, 
and should identify existing mandates which can be altered or 
eliminated in order to ease the burden on State and local 
governments.

6) Establish, communicate and adhere to a clear mission for Federal 
        agencies.

    Every Federal department and agency must ensure that its 
mission is clear to all employees and to the public. A solid 
mission statement that is unambiguous and understood will allow 
the department or agency to establish priorities and remain 
focused on its core function or functions.

7) Maintain open lines of communication with agency employees.

    Federal departments and agencies should make employees a 
part of any reorganization process. Sharing information with 
employees and listening to employees will make it easier to 
maintain morale and productivity. Communication also may result 
in new ideas and approaches that will improve service and save 
money.

8) Promote innovation by managers and employees.

    Congress and Federal departments and agencies should 
encourage innovative management techniques in order to increase 
productivity, service quality and employee morale, and should 
explore ways to reward employees for suggesting changes that 
result in cost savings, better service and greater efficiency.

9) Use technology to improve service and increase efficiency.

    Congress and Federal departments and agencies should 
identify barriers to the use of advanced technology. Congress 
and Federal departments and agencies should remove those 
barriers and take full advantage of technology to fulfill the 
missions of Federal Government.

10) Ensure full implementation of the Government Performance and 
        Results Act.

    Federal departments and agencies should work actively with 
the Office of Management and Budget and Congress to fully 
implement the provisions of the Government Performance and 
Results Act (P.L. 103-62). This law requires Federal 
departments and agencies to measure program performance and tie 
their performance goals to annual budget requests.

            IV. INTRODUCTION AND REVIEW OF TESTIMONY

                            A. Introduction

    The primary legislative jurisdiction of the Committee on 
Government Reform and Oversight as reflected in Rule X of the 
Rules of the House of Representatives includes matters relating 
to the overall economy, efficiency and management of government 
operations and activities, the relationship of the Federal 
Government to the States and municipalities, and 
reorganizations in the executive branch of the Government. Rule 
X also affords the committee primary oversight responsibility 
to ``review and study, on a continuing basis, the operation of 
Government activities at all levels with a view to determining 
their economy and efficiency.''
    Pursuant to this authority, the committee held a series of 
field hearings across the country in an attempt to help 
Congress answer important questions about the size, scope and 
functions of Government. The field hearings served two main 
purposes: (1) to identify the strategies and principles used by 
corporate, State and local government organizations in 
restructuring their entities, and to learn which of their most 
successful and creative ideas can be applied to Federal 
reorganization plans; and, (2) to learn from the American 
people their thoughts and ideas for a more responsive, limited 
government designed to meet their needs.

                         B. Review of Testimony

1. Common Reorganization Principles

            a. Every organization must have a clear mission.
    The reliance upon clear mission statements was strongly 
encouraged by witnesses from all types of organizations. 
Defining mission is the first step in any reorganization 
effort. Mission is the organization's guide to identifying 
those functions for which it is responsible, and an 
organization can be evaluated based on how well it fulfills 
that mission.
    Mr. Wendell White, Charlotte City Manager, testified that 
everyone has to identify with the mission of an organization 
before the organization can turn itself around.\4\
    \4\ North Carolina original transcript, p. 40, in full committee 
files.
---------------------------------------------------------------------------
    Mr. Thomas Moore, Chairman and CEO of Cleveland Cliffs, 
Inc., testified that one of the main principles of management 
used at his company is to challenge and sharpen the mission of 
each unit within the organization.\5\ Mr. Moore noted that this 
exercise is applicable to levels of government as well.
    \5\ Ohio original transcript, p. 177, in full committee files.
---------------------------------------------------------------------------
    The Honorable Heather Wilson, Secretary of New Mexico 
Department of Children, Youth and Families, testified that the 
first thing she did upon taking office was refine the 
department's mission statement with the help of her employees. 
She added:

          When I first read the mission statement I read it 
        over and over again and still could not understand 
        exactly what this agency did. And it seems to me if a 
        mission statement is not clear, employees and the 
        people we serve will have no idea what we do. So we 
        clarified that mission statement of common values of 
        what we expect of ourselves and what our employees and 
        the public may expect of us.\6\
    \6\ New Mexico original transcript, p. 34, in full committee files.

    A clear mission is an important component of any 
organizational structure because it sets a defined parameter 
and guideline on what the vital functions of an organization 
are. Many bureaucratic institutions within the Federal 
Government have lost sight of their missions. Congress must 
reevaluate the mission of each Federal department and agency to 
determine whether those missions are still valid. Based on that 
analysis, Congress can better determine what functions the 
Federal Government should administer and what functions would 
be better delivered by States and localities or the private 
sector.
            b. Communicate with employees and the public.
    Open communication is necessary to keep employees as well 
as customers informed of and involved in every step in the 
reorganization process. It has been a vital component of many 
State, local government, and business downsizing strategies. 
Communication has led to sustained employee morale at a time of 
great instability, broader involvement in restructuring the 
organization, and most importantly, a greater openness to 
change.
    Internal resistance to change is normal and expected. 
Keeping employees informed at each step in the process helps 
overcome opposition to change and increases the chance that 
reorganization objectives are met. The following witnesses 
stressed the vital role that communication played in their own 
revitalization efforts.
    Mr. Frank Altimore, Vice President of Business Process 
Design at LTV Steel Company, testified on his company's urgent 
need to downsize in order to survive in a highly competitive 
marketplace, and acknowledged the important role that 
communication played in promoting partnerships. Mr. Altimore 
stated, for example, that when shift changes occurred in the 
plants, workers were to report to work 45 minutes prior to 
their shifts in order to be briefed on what happened during the 
previous shift. This type of communication created openness, 
employee involvement, commitment, and most importantly a team 
spirit among employees.\7\
    \7\ Altimore, prepared written statement, pp. 8-10.
---------------------------------------------------------------------------
    Mr. Roger Sustar, President of the Fredon Corporation in 
Ohio, emphasized a similar success with communication in his 
organization. He advised it is easy to share information and it 
is easy to get better together. All that is necessary is to 
communicate with employees and encourage them to share their 
ideas.\8\
    \8\ Ohio original transcript, p. 193, in full committee files.
---------------------------------------------------------------------------
    Secretary Wilson announced a massive reorganization 
strategy just 18 days after being appointed to office. 
Communication was a key asset in making this reorganization 
successful. She explained:

          Initially the Department employees developed a sense 
        of common values of what we expected from each other 
        and what the public expected from us. This allowed for 
        open communication between employees, management, and 
        the customers. The single most important factors when 
        considering any restructuring initiative are 
        communication with your employees and the public, on 
        where you are going and why, and involvement of line 
        employees to encourage a bottom-up answer to your 
        organization's problems.\9\
    \9\ New Mexico original transcript, pp. 56-60, in full committee 
files.

    Mr. Henry Taboada, Assistant City Manager of the City of 
Long Beach, noted the success that the Long Beach City Police 
Force had when communicating with area residents to determine 
which services were most important to them. He explained that 
the Long Beach Police Department, suffering from low morale, 
initiated an effort to develop a strategic plan to meet the 
needs of their customers through the use of surveys and 
questionnaires. A series of public meetings were held where the 
community voiced its concerns. As a result of communication 
between the police department and the local citizens there was 
a clearer picture of how safe the police department's customers 
felt, which services were important to them, and how they rated 
the police department's performance.\10\
    \10\ California original transcript, p. 13, in full committee 
files.
---------------------------------------------------------------------------
    Mr. Robert Murphy, Senior Vice President for Organization 
and Human Resources at Rockwell International, testified on the 
important communication lessons Rockwell learned through its 
downsizing initiatives. He suggested:

          Be up-front with your employees regarding your 
        organization's downsizing plans. Communicate to them 
        way ahead of time what you are doing and why. We found 
        that if you do this and you're up front with people and 
        give them time, they can handle that kind of news.\11\
    \11\ California original transcript, p. 139, in full committee 
files.

    Federal Government employees, Federal officials, and the 
American public all have a joint investment and responsibility 
in ensuring that government services are of the highest 
possible quality. It is the responsibility of Federal officials 
and employees to suggest new ways to achieve that quality while 
saving money and increasing efficiency. Maintaining an open 
dialogue with the American public is necessary to learn which 
services the people demand and monitor the quality of those 
services.
            c. Apply innovative management techniques.
    Effective management skills are necessary to sustain the 
gains made through downsizing and reorganizing. Employees who 
have competent and trustworthy leadership will be more willing 
to accept the changes that accompany the downsizing of an 
organization. The witnesses who testified before the committee 
have implemented a number of unique management policies, 
including ``no appointment necessary'' meetings with the boss, 
a policy forgoing government cars, and a ``productivity bank'' 
which uses dollars saved to fund additional innovations in the 
way the entity conducts its business. These State, local and 
business leaders have good advice on management styles that get 
the job done while promoting strong internal communication and 
employee involvement.
    The Mayor of Philadelphia, Edward Rendell, testified that 
the city is working on innovative management techniques to put 
incentive back into government. He explained:

          I would love to see a system in my city and in the 
        Federal Government where we give bonuses to individual 
        Federal workers who are extremely productive. Where we 
        give a percentage of cash savings of any cost savings 
        suggestion that an employee comes up with. Here in the 
        City we have successfully implemented a Productivity 
        Bank, which consists of a small amount of money, $25 
        million out of our budget. And we make it available for 
        loans to our own departments to invest in innovation 
        and the only rule is that they have to pay it back in 
        three years with whatever the interest rate was at the 
        time of their loan.\12\
    \12\ Ohio original transcript, p. 55, in full committee files.

    Mr. William Lawrence, Executive Vice President for 
Planning, Technology and Government Affairs at TRW, Inc., 
testified about TRW's effort to eliminate layers of management. 
---------------------------------------------------------------------------
He offered the following example:

          Where we formerly had, both at our space and defense 
        automotive businesses, a staff at the sector level, we 
        have since eliminated those functions and those tasks 
        have either been combined at the company headquarters 
        or in our operating groups, and we reduced our staff 
        from 600 employees to about 450 while doubling our 
        revenues.\13\
    \13\ Ohio original transcript, p. 171, in full committee files.

    Mr. Murphy discussed the importance of an innovative 
management style when his organization was in a renewal 
---------------------------------------------------------------------------
process. He explained:

          In past decades, we had a somewhat centralized 
        command and control management style. But today, our 
        business units make a majority of the decisions. We 
        operate with a much less bureaucratic, more 
        entrepreneurial management style. We abhor bureaucracy 
        because it puts control and turfdom ahead of 
        shareholders' and our customers' best interests.\14\
    \14\ California original transcript, p. 120, in full committee 
files.

    Secretary Wilson took a unique approach to fixing her 
problem-plagued department by starting with her own office. She 
eliminated some symbolic items from the budget such as the gold 
seal on the letterhead, and she gave up her government car. She 
also moved from her large office into a more moderate one and 
transformed the larger office into work space for four workers. 
She implemented a set of office visits where anyone could 
schedule a meeting with her, on any subject, and have 15 
minutes of her time. Brown bag lunches were also set up in an 
attempt to get employees and management talking and coming up 
with collective solutions.\15\
    \15\ New Mexico original transcript, p. 34-36, in full committee 
files.
---------------------------------------------------------------------------
    Innovative management techniques have made tremendous 
impacts on fiscal health as well as employee morale in all the 
organizations represented at the field hearings. Public 
servants displayed a willingness to give up some of the 
``perks'' of being appointed or elected to office in favor of 
saving resources. Managers who communicate with employees, 
invite their participation, and lead by example can expect to 
sustain reorganization successes.
            d. Public/private partnerships and privatization can save 
                    money and improve service.
    Many witnesses advocated privatization of government 
services as an effective way to save taxpayer dollars, improve 
service, and remove government from those activities it does 
not perform well. Privatization is the act of reducing the role 
of government, or increasing the role of the private sector, in 
an activity or in the ownership of assets.\16\
    \16\ E.S. Savas, Privatization, the Key to Better Government, 
Chatham House Publishers, Inc., New Jersey, 1987, Pg. 3.
---------------------------------------------------------------------------
    States and localities across the country have also been 
successfully implementing partnerships, commissions and 
contracts involving the private and public sector for many 
years. Public-private partnerships and task forces encourage 
collaborative solutions and enable a coordinated use of 
resources to address problems.
    In the State of Ohio, the Mayor of Cleveland, Michael 
White, testified in regard to his city's success in creating 
public/private partnerships. The city of Cleveland created 
``Cleveland Competes,'' which included myriad strategies to 
meet the city's downsizing objectives. Mayor White explained 
one ``Cleveland Competes'' success story:

          Already, we have evidence of how the Cleveland 
        Competes concept has improved the lives of Cleveland 
        families. The McCafferty Metro Health Center was in 
        deplorable condition, physically and medically, and the 
        services were woefully inadequate. In August of 1992, 
        the city of Cleveland struck a landmark partnership 
        with the Metro Health Medical Center and we began to 
        see tremendous improvements in our ability to serve 
        those in need of medical services. Pediatric visits 
        alone increased from 3028 in 1991 to 13,278 in 1994, an 
        overwhelming increase of 249 percent. Additionally, the 
        total number of patient visits increased from 11,170 
        visits in 1991 to 25,092 visits in 1994. Today, three 
        of the city's four health centers have joined in 
        partnership with Metro Health.\17\
    \17\ Ohio original transcript, pp. 40-41, in full committee files.

    Mayor Rendell of Philadelphia explained that upon his 
election he inherited a billion-dollar deficit. He created a 
task force to help him alleviate the city's financial burdens. 
The Mayor explained that the creation of the Mayor's private 
sector task force was an attempt to modernize the city 
government with the innovation, accountability and 
entrepreneurship of the private sector. The task force was 
composed of 41 local CEO's and approximately 300 loaned 
executives from 130 organizations, all chosen for their 
professional knowledge and experience. Through this commitment 
of volunteer resources, the task force thoroughly analyzed city 
operations and made specific recommendations for improving 
service quality, cutting cost, increasing revenues, and 
streamlining operations. From its inception in January of 1992 
to the completion of its work in December 1993, the task force 
completed 17 management reviews of 26 departments and 7 
citywide issues.\18\
    \18\ Rendell, prepared written statement, pp. 4-5, in full 
committee files.
---------------------------------------------------------------------------
    A similar strategy was implemented by the Governor of the 
State of Ohio, George Voinovich. Testifying on the Governor's 
behalf was Mr. James Conrad, the Director of the Ohio 
Department of Administrative Services (DAS). Mr. Conrad 
reported:

          Shortly after taking office, Governor Voinovich 
        established the Operations Improvement Task Force (OIT) 
        to find ways the State could provide more efficient 
        services to Ohio's citizens. The Governor designed the 
        OIT as a public/private partnership, gaining the 
        support of more than 100 companies in the process. 
        These companies donated more than $500,000 and 300 
        individuals to the effort and spent an enormous amount 
        of time reviewing nearly every aspect of State 
        government. The result of these intense efforts was 
        approximately 1600 recommendations on improving 
        efficiency in State government. To date, more than 80% 
        of the recommendations have been completed and the 
        Governor remains committed to seeing this effort 
        continued.\19\
    \19\ Conrad, prepared written statement, pp. 1-2, in full committee 
files.

    Mr. Robert Gardner, Commissioner of Lake County, Ohio, 
utilized both public/private partnerships and privatization of 
public services, such as the prisoner transport program and 
solid waste management, to save Lake County resources. He 
---------------------------------------------------------------------------
explained:

          We have entered into a partnership with GTE Mobilenet 
        and we have shared resources for the past three years, 
        thereby eliminating the need for additional radio 
        towers and for the purchase of land for new towers. By 
        sharing the same towers, the county has saved 
        approximately half a million dollars.\20\
    \20\ Ohio original transcript, pp. 122-123, in full committee 
files.

    The Honorable William Pascrell, Mayor of Paterson, New 
Jersey, testified that one of his first initiatives as mayor 
was to audit all city functions. A number of partnerships were 
formed as a result of these audits. Paterson's Health 
Department forged partnerships with two large hospitals in an 
attempt to provide preventative medical care and reduce 
duplication of services. Paterson's Department of Community 
Development forged ties with State agencies, private lending 
institutions, and private developers to make Paterson 
attractive for new business prospects.\21\
    \21\ New Jersey original transcript, pp. 36-37, in full committee 
files.
---------------------------------------------------------------------------
    Lieutenant Governor of the State of New Mexico, Walter 
Bradley, spoke of Governor Johnson's successful restructuring 
plans for New Mexico which include many privatization 
initiatives. Mr. Bradley explained:

          Governor Johnson intentionally sought out private 
        sector-oriented cabinet secretaries, staying away from 
        the entrenched bureaucrats, and gave them the charge of 
        running their departments like they would run their own 
        business. Through employee input in these agencies an 
        initiative was brought up that would do away with three 
        layers of bureaucracy that made obtaining a lease for 
        the private sector on a State building too burdensome. 
        The entire leasing section was privatized eliminating 
        these layers of bureaucracy.
          In an attempt to involve the business community in 
        public sector decisions the Governor formed a public/
        private group called Small Business Advocacy Group. The 
        group met through a series of hearings and was designed 
        for the citizens and the business representatives of 
        New Mexico to tell us what was in the way and what we 
        in State government could do to make it work for 
        them.\22\
    \22\ New Mexico original transcript, pp. 15-22, in full committee 
files.

    Forgoing public/private partnerships in favor of 
privatization takes government out of service delivery 
altogether and still yields savings for the taxpayers. The 
Governor of the State of New Jersey, Christine Todd Whitman, 
---------------------------------------------------------------------------
testified on some of her State's privatization initiatives:

          New Jersey privatized eleven State-run day care 
        centers over the past two years. We anticipate that 
        will save taxpayers $1.9 million this year. Seventeen 
        day activity centers for the developmentally disabled 
        were privatized with a cost savings of $2.3 million. 
        Privatizing the final 10% of custodial services in the 
        Capitol Complex saved $1 million and we anticipate that 
        the privatizing of 23 motor vehicle departments will 
        save the taxpayers $4.4 million.\23\
    \23\ Whitman, prepared written statement, p. 2, in full committee 
files.

    The Honorable James Treffinger, Essex County Executive, New 
Jersey, spoke of the similar cost savings that his county 
---------------------------------------------------------------------------
experienced when privatizing government services. He testified:

          In our attempt to downsize, we have privatized the 
        County cleaning and janitorial services at a net 
        savings of $1,026,000. We privatized security for the 
        court buildings that resulted in a net savings of 
        $1,080,000. We utilized private contractors for snow 
        plowing and are currently exploring privatization and 
        the sale of a county-run geriatric center.\24\
    \24\ New Jersey original transcript, p. 30, in full committee 
files.

    Gwen Fraser, the owner of Fraser Inc., a small business in 
Washington, represented the small business community and its 
willingness to be involved in the privatization process. She 
---------------------------------------------------------------------------
testified:

          I know that I can speak for thousands of small 
        business owners that generally stand ready to help you 
        help us. We can get it done. So call on us. Tap on our 
        willingness. We can make a difference together.\25\
    \25\ Washington original transcript, p. 140, in full committee 
files.

    The city of Charlotte, North Carolina is at the forefront 
of privatization. Mayor Richard Vinroot spoke of the important 
role that privatization played in the city's streamlining 
---------------------------------------------------------------------------
efforts. He explained:

          We are attempting to bring privatization to every 
        element of city government. I believe we are regarded, 
        by the Reason Foundation, as one of the three most 
        committed cities to privatization in America. We 
        created a privatization task force to look at how we 
        could bring competition into city hall. And as a result 
        we have gone to a performance pay system, and we 
        reduced our structure from 26 departments of city hall 
        to 13 departments.\26\
    \26\ North Carolina original transcript, pp. 15-16, in full 
committee files.

    Mayor Vinroot charged the Charlotte Privatization/
Competition Advisory Committee with studying the ways in which 
Charlotte could benefit from privatization. Mr. Bill James, 
---------------------------------------------------------------------------
chairman of that Committee, testified:

          Since the (Privatization) Committee's formation in 
        March of 1994 they have accomplished the following 
        goals:
          1) They have written and implemented guidelines for 
        determining how privatization and competition should 
        occur;
          2) They selected about $30 million in excess real 
        estate and placed it on the market; and
          3) They privatized 25% of our residential garbage 
        pickup at substantial savings.
          The reason that privatization has been so successful 
        in Charlotte is a commitment on the part of our elected 
        leaders to find a better way to perform government 
        services; a commitment on the part of city management 
        to see to it that privatization and competition of 
        government services is a priority; and lastly, a strong 
        oversight process that asks tough questions.\27\
    \27\ James, prepared written statement, pp. 1-2, in full committee 
files.

    Charlotte's business sector has been strongly behind Mayor 
Vinroot's privatization initiatives. Mr. Christopher Rolfe, 
Vice President of Organization Effectiveness at Duke Power 
---------------------------------------------------------------------------
Company, expressed his support for privatization:

          When you privatize you bring discipline of the market 
        place to bear, which of course drives cost out and 
        services up. We encourage that. It is a rigorous, 
        disciplined process where government has to decide what 
        businesses it needs to be in and which ones not to be 
        involved in.\28\
    \28\ North Carolina original transcript, p. 143, in full committee 
files.

    Based on State and local experience, privatization is a 
successful and viable option for saving the public sector, and 
consequently the taxpayers, millions of dollars without 
sacrificing the quality of services. Privatization not only 
provides better service delivery for lower cost to the 
taxpayer, but in many cases it creates ties between the public 
and private sectors and leads to long lasting partnerships 
between government entities and private businesses. Communities 
that encourage public and private sector collaboration benefit 
from cost savings to the taxpayer and produce local, civic and 
business leaders who are committed and dedicated to the 
citizens and the success of their community.
            e. Competition and competitive bidding improves service 
                    quality and saves money.
    Competitive bidding is the process by which a State or 
locality invites bids for the performance of services normally 
delivered by the public sector. The concept closely parallels 
privatization in that it allows a government entity to provide 
the best possible service to its constituency at the lowest 
possible price. The difference is that competitive bidding 
allows government entities that normally deliver a service to 
compete with the private sector as well as other government 
entities for the contract to deliver that service in the 
future. Many witnesses advocated this practice and praised the 
effect of competition on service delivery.
    Mayor White suggested all government entities must embrace 
the notion of competition. He explained:

          One way to enhance competition is through competitive 
        bidding. It embraces a fundamental philosophy, that we 
        ought to spend our citizens money the way we would 
        spend our own money. Competitive bidding allows us to 
        provide equal or better service at a lower price, 
        increase efficiency, and compare cost and quantity of 
        government services to the private sector. In our city, 
        local unions won the bid for waste collection and saved 
        the taxpayers $600,000.\29\
    \29\ Ohio original transcript, pp. 37-43, in full committee files.

    Commissioner Gardner had similar success with his county's 
competitive bidding process. They used bidding to purchase 
liability and auto insurance and saved the county $33 million 
between 1989 and 1994.\30\
    \30\ Ohio original transcript, p. 120, in full committee files.
---------------------------------------------------------------------------
    Mayor Vinroot testified that competition is healthy. He 
believes the government workforce should compete for the right 
to pave streets, build sewers, and provide services. Often the 
mayor is asked why government should have to compete with the 
private sector; he responds:

          Because we are providing services for our customers 
        who really don't care who does it for them, they want 
        to be sure it gets done at the most effective price 
        possible. You cannot do that if you don't ask yourself 
        (1) are we competitive, and (2) are we providing the 
        best service at the most competitive price? \31\
    \31\ North Carolina original transcript, p. 19, in full committee 
files.

    Mayor Vinroot was asked how he worked with employees to 
---------------------------------------------------------------------------
help them accept the change, and he replied:

          I have had people come to me and say ``Gosh, you are 
        going to take my job and you are going to contract it 
        out.'' And my answer is, no, we are going to put you in 
        competition with somebody outside the city, and why 
        should you lose, you have been delivering the service 
        for years. You know how to do it. If you lose, you are 
        losing because you are not doing it as well as somebody 
        else who has got some disadvantage you do not have.\32\
    \32\ North Carolina original transcript, pp. 28-29, in full 
committee files.
---------------------------------------------------------------------------
            f. Investing in advanced technology will improve 
                    efficiency, quality, and savings.
    Innovative technology played an important role in the 
successful reorganizations implemented by many States, 
communities and businesses. Greater use of computer technology 
was recommended to the Federal Government as a means of 
communication and to aid in the fight against waste, fraud and 
abuse. The most persuasive aspect of using technology is the 
tremendous potential for increased efficiency in government 
functions, which in turn may yield significant cost savings.
    The city of Cleveland enjoyed cost savings when it embraced 
new computer technology and discarded inefficient, outdated 
systems. Mayor White explained:

          Embracing technology in city departments should be 
        the call of the day. In the area of technology, we are 
        one of the largest cities to have outsourced its 
        payroll system, saving the city $2 million in the first 
        year in hardware costs and over $600,000 in employee 
        costs, not to mention the increased efficiency that new 
        technology brings to any organization.\33\
    \33\ Ohio original transcript, p. 37, in full committee files.

    Commissioner Gardner reported similar cost savings when 
---------------------------------------------------------------------------
Lake County renovated its computer systems. He explained:

          Computerization and improved technology have resulted 
        in smaller and more efficient government in Lake 
        County. In 1985, the Lake County Data Center had a 
        single computer and 20 employees. Today the Data Center 
        has four computer installations, a local area network, 
        a digital equipment mini-computer system, but only 10 
        employees. Operation expenses decreased from $657,000 a 
        year to $286,000 in 1994.\34\
    \34\ Ohio original transcript, p. 121, in full committee files.

    Mr. Len Lauer, Vice President of Sales at Bell Atlantic-New 
Jersey, stressed the importance of information technology, and 
the ability to leverage technology and acquire and process 
information to improve customer service and gain market share. 
He named information management as the single skill most 
critical to productivity and adaptability. He then went on to 
---------------------------------------------------------------------------
explain:

          Although the motivations of business and government 
        may be distinctly different, our goals are similar. We 
        both need to manage information and large 
        organizations. We both need to leverage technology to 
        help manage our organization and to deal with the 
        following three fundamental changes in business and 
        government:
          First, the growing impact of information; second, the 
        impact of digitizing information; and third, the 
        convergence of technologies, which will create new 
        distribution channels of information.\35\
    \35\ New Jersey original transcript, p. 156, in full committee 
files.

    Mr. Paul Sommers, Executive Director of the Northwest 
Policy Center at the University of Washington, suggested that 
all levels of government get involved with the sharing of 
services through the use of a web site, which is an Internet 
page that can be accessed by computers with Internet 
communication capabilities. By linking together through a web 
site or other means, organizations can share information and 
access specialized services.\36\
    \36\ Washington original transcript, p. 64, in full committee 
files.
---------------------------------------------------------------------------
    The Honorable Steve Kuykendall, California State 
assemblyman, echoed Mr. Sommers' views when he testified:

          It's time for the government, at all levels, to 
        realize there is nothing wrong with using high 
        technology techniques to transmit information from your 
        constituents, whether it's an E-Mail system or a page 
        on the Internet that people can call up and see what 
        your doing.\37\
    \37\ California original transcript, p. 92, in full committee 
files.

    Mr. D. Sherrill Clements, Executive Marketing Director of 
the Oracle Corporation, testified that technology is a 
judicious investment that can truly advance the ability of the 
government to provide service to the citizen and still look to 
economies of cost and operation. He suggested the use of open 
and scalable architecture, which allows computers to 
communicate with one another, is essential to taking full 
advantage of the technology available.\38\
    \38\ California original transcript, p. 126, in full committee 
files.
---------------------------------------------------------------------------
    Innovative technology has been a distinct asset in the 
reorganization strategies of States, localities and businesses. 
Their experiences have shown an investment in technology can 
yield both immediate and long term improvements in service, 
quality and cost.

2. Additional Findings and Suggestions

    In traveling across the country, it became clear that most 
State and local government leaders, business leaders, and 
private citizens support an effort to reevaluate the size, 
scope and functions of the Federal Government. The committee 
learned valuable reorganization strategies from distinguished 
private and public sector witnesses. They shared many 
innovative ideas and success stories in addition to the common 
reorganization principles discussed in the previous section. 
Their suggestions will assist the Federal Government in 
revitalizing Federal departments and agencies.
            a. Parma Heights, Ohio Hearing
    Mr. Lawrence, representing TRW, Inc., suggested the United 
States needs to determine those activities that should or 
should not be administered on a national level. Second, the 
country should compare the capabilities and competencies of 
government and the private sector regarding the ability to 
provide high priority needs. Finally, the Federal Government 
must set realistic limits on the financial burden people are 
expected to bear to fund national priorities.\39\
    \39\ Lawrence, prepared written statement, p. 6, in full committee 
files.
---------------------------------------------------------------------------
    Dr. William Marshall, a Professor of Law at Case Western 
Reserve University, offered similar suggestions for drawing the 
distinction between Federal, State and local authority. He 
advised that the following criteria should be used in making 
this distinction: (1) whether a phenomenon is intrastate or 
whether it exists between States; (2) whether there is a need 
for uniformity; (3) whether decentralizing power increases the 
cost; (4) where State governments may not act appropriately; 
and (5) where economies of scale demand the kind of resources 
only the Federal Government can provide.\40\
    \40\ Ohio original transcript, pp. 223-225, in full committee 
files.
---------------------------------------------------------------------------
            b. Upper Montclair, New Jersey Hearing
    Mr. Dwayne Warehime, a private citizen, participated in the 
committee's open mic session and made several suggestions, 
including:
          1) Redefine the limits of government responsibility;
          2) Impose a moratorium on new legislation;
          3) Don't tinker, make real cuts; and
          4) Create a strike force against waste, with 
        authority to investigate, expose, terminate, and arrest 
        individuals who intentionally waste public funds.\41\
    \41\ New Jersey original transcript, pp. 102-103, in full committee 
files.
---------------------------------------------------------------------------
    Mayor Pascrell proposed that every government examine its 
functions to identify opportunities for improved efficiency, 
candidates for privatization, and functions which should not be 
performed by government.\42\
    \42\ New Jersey original transcript, p. 39, in full committee 
files.
---------------------------------------------------------------------------
            c. Federal Way, Washington Hearing
    Mr. Lawrence Riggs, President of the Services Group of 
America, testified that his organization strongly supports 
Congressional efforts to reduce the size of the Federal 
Government:

          Our experience proves that you can reduce the size 
        while increasing efficiency and productivity. The key 
        to success here is focus. You need to decide where 
        government can provide real value and focus on those 
        areas. Where government fails to produce results that 
        justify their cost, it should end the activity.\43\
    \43\ Washington original transcript, p. 141, in full committee 
files.

    Witnesses from State and local governments shared a view 
that States and localities should be trusted to govern their 
own affairs without excessive Federal involvement. The 
Honorable Mary Ann Mitchell, a Washington State Representative, 
---------------------------------------------------------------------------
urged Congress to support block grants:

          We are delighted with the block grant idea. We have 
        no problem with that. We have long wanted to make those 
        decisions locally. We feel that we know what is needed 
        in our community, better than the Federal Government 
        does. So to have that opportunity to make those 
        decisions locally is very important to us.\44\
    \44\ Washington original transcript, pp. 52-53, in full committee 
files.

    The Honorable Chris Vance, a member of the Metropolitan 
King County Council, echoed Representative Mitchell's request 
---------------------------------------------------------------------------
for greater State and local authority. He suggested:

          Trust us to be competent in our local decision 
        making. We know best what the people back home think 
        and we have large expensive staffs as you do and we can 
        make the decisions at the local level.\45\
    \45\ Washington original transcript, p. 30, in full committee 
files.

    Mr. Thomas Vander Ark, Superintendent of the Federal Way 
School District, expressed concern over the state of the 
American educational system today and offered suggestions to 
---------------------------------------------------------------------------
improve it. He said:

          We need to dramatically streamline educational 
        funding. Our funding comes from local tax collections 
        and the money that we send to Washington comes back to 
        us in the form of myriad programs with very specific 
        program requirements that makes it very, very difficult 
        for us to operate. I believe strongly in local control; 
        that the teachers and parents of this school are very 
        capable of making sound educational decisions for the 
        students at this school.\46\
    \46\ Washington original transcript, p. 59, in full committee 
files.

    Mr. Paul TeGantvoort, owner of Seattle Automotive 
Distributing, agrees that the educational system needs repair. 
---------------------------------------------------------------------------
He said:

          I think our educational system really needs a major 
        overhaul. I do not think there is any reason for the 
        Federal Government to be involved in education. I think 
        the money must come back to the local school districts 
        and be administered here and allow schools to do the 
        job that they have been hired to do by the public, and 
        not to have to operate under Federal mandates all the 
        time.\47\
    \47\ Washington original transcript, p. 148, in full committee 
files.

    Mr. Mitchell Melars participated in the open mic segment at 
which members of the audience were invited to share their 
---------------------------------------------------------------------------
views. He suggested:

          With all the brilliant organizational minds we have 
        in the private sector, I favor recruiting a small army 
        of a-dollar-a-year men and women to take over the 
        reorganization of the Federal Government without 
        political interference.\48\
    \48\ Washington original transcript, p. 114, in full committee 
files.
---------------------------------------------------------------------------
            d. Long Beach, California Hearing
    The Honorable Michael Stoker, Chairman of the California 
Agriculture Labor Relations Board, offered general 
recommendations to the committee as it explores executive 
branch reorganization. He suggested:
          1) Provide any given service through one level of 
        government;
          2) Eliminate duplication of programs and between 
        levels of government;
          3) Utilize groups like the National Association of 
        Counties and the League of Cities, who would welcome 
        the opportunity to work with Congress; and
          4) Provide local governments greater flexibility in 
        implementing Federal mandates.\49\
    \49\ California original transcript, p. 53, in full committee 
files.
---------------------------------------------------------------------------
            e. Albuquerque, New Mexico Hearing
    Secretary Wilson offered the committee a list of things for 
Congress to consider when refocusing a government agency:
          1) The job is not to row the boat, the job is to 
        steer it.
          2) Hire creative, nonconformists.
          3) Bold moves are easier than minor corrections.
          4) Clarify the vision of the organization.
          5) Words and symbols do matter.
          6) Enlist the help of line employees.
          7) Encourage disagreement until the point of 
        discussion.
          8) Never tell people how to do things. Tell them what 
        to do and let them use their ingenuity.
          9) What gets measured gets done.
          10) Expect excellence.\50\
    \50\ New Mexico original transcript, p. 38, in full committee 
files.
---------------------------------------------------------------------------
    The Honorable Barbara Seward, a Bernalillo County 
Commissioner, testified in favor of returning programs back to 
the localities. She testified:

          The local government can most assuredly administer. 
        The local government is very hands-on. We know our 
        constituents personally and they certainly know how to 
        get us on the telephone and tell us what they approve 
        of and what they disapprove of.\51\
    \51\ New Mexico original transcript, p. 96, in full committee 
files.
---------------------------------------------------------------------------
            f. Charlotte, North Carolina Hearing
    Mr. White, Charlotte City Manager, suggested that the 
Federal Government take inventory of those activities in which 
it is involved, identify the priorities, and discontinue those 
activities that are not vital. Turn responsibility for these 
non-vital activities over to State and local governments, he 
recommended, so the States and communities can prioritize them 
based upon the local needs.\52\
    \52\ North Carolina original transcript, p. 21, in full committee 
files.
---------------------------------------------------------------------------
    Mr. Bill James, Chairman of the Charlotte Privatization/
Competition Advisory Committee, offered his thoughts on how 
best to approach privatizing Federal activities:
          1) Write rules that define the ultimate goal of 
        privatization.
          2) Avoid mixing goals.
          3) Establish a Federal oversight committee with one 
        person responsible to look into all areas of 
        government.
          4) Give this Federal oversight committee authority to 
        bring back legislation to a house committee.
          5) Require all areas of the Federal Government to be 
        subject to this committee.
          6) Inventory all government assets and allow this 
        committee to bring back plans for disposing of those 
        assets deemed excess.\53\
    \53\ James, prepared written statement, pp. 1-4, in full committee 
files.
---------------------------------------------------------------------------
    Finally, Mr. Barney Lawson, owner of Modern Management 
Inc., suggested that effective leadership by a chief executive 
can motivate bureaucrats, unions, and citizens to join together 
for the common good.\54\
    \54\ Lawson, prepared written statement, p. 4, in full committee 
files.
---------------------------------------------------------------------------

                         V. CONCLUSION

    As a new century approaches, the Federal Government must 
keep pace with the changing needs of its citizens. Federal 
institutions that do not evolve with the rest of society will 
become ineffective and irrelevant. The Government Reform and 
Oversight Committee field hearings revealed that the American 
public believes there is a role for government, but that this 
role must be limited. Further, people want the Federal 
Government to be responsive, cost effective and less 
bureaucratic. The testimony offered at the committee's field 
hearings provided several principles that should be part of the 
downsizing, streamlining, and reorganization process. By 
learning which approaches have worked in the State, local and 
private sectors, Congress and the executive branch can 
revitalize Government without ``reinventing the wheel.''
    Mr. Eisenhower, a private citizen who testified during the 
open mic segment in Long Beach, California, expressed his 
support for a more limited Federal Government. He said:

          I think it's an immoral presumption to say, from on 
        high, whatever the level is, that we know best what to 
        do and you (the local level) are not able to govern 
        yourselves. We ultimately are the ones that have to 
        live with the decision, and if we aren't going to be 
        responsible enough to participate, then I guess we 
        deserve what we end up with.\55\
    \55\ California original transcript, p. 101, in full committee 
files.

    Mr. Leroy Pittman, a participant in our Charlotte open mic 
segment, offered his support for ``Creating a 21st Century 
---------------------------------------------------------------------------
Government'' when he said:

          I congratulate you for what you have done so far. We 
        are standing shoulder to shoulder in our belief that 
        the least government is the best government, and the 
        closer to the people the better.\56\
    \56\ North Carolina original transcript, p. 122-123, in full 
committee files.

    Former Secretary of the U.S. Department of Labor, Lynn 
Martin, also encouraged a revitalization of government for the 
---------------------------------------------------------------------------
next century when she said:

          Creating a 21st century government, in my view, is a 
        subject that is long overdue. For too many years we 
        have blindly maintained many outdated and ineffective 
        programs and policies. We cannot close our eyes to the 
        fact that a large part of today's government was 
        designed for an America and a world that has long 
        passed into history.\57\
    \57\ Ohio original transcript, p. 17, in full committee files.

    Ms. Sandra Reckseit, the Executive Director of United We 
Stand America in Ohio, toured the country with her 
organization. She said in the open mic segment that, based on 
her tour experiences, she believes people are ready for reform. 
They know it is going to take sacrifice and that it has to be 
fair, both inside and outside the beltway. Many of today's 
programs are from the 1930's and do not work anymore. The 
nation needs programs that are dynamic to meet the needs of 
today, and to start tomorrow with some flexibility. They are 
ready to reform, they will stand behind (Congress) if it's 
fair.\58\
    \58\ Ohio original transcript, p. 162, in full committee files.
---------------------------------------------------------------------------
    Ms. Fraser commended Congress for its intent to pursue 
executive branch reorganization. She said:

          In complying with your efforts to hear about success 
        stories from the private sector, let me state that the 
        greatest success story that I can point to is the fact 
        that the new Congress of the United States of America 
        is seeking the input from business and private 
        individuals as they reshape the government of this 
        great land.\59\
    \59\ Fraser, prepared written statement, p.1, in full committee 
files.

    Finally, Mr. Tom Rogers, a private citizen, encouraged the 
---------------------------------------------------------------------------
committee's efforts and said:

          I am here to commend you, to encourage you, to hope 
        that you become a success story, because to the extent 
        that you downsize there is a greater than even chance 
        that we will get toward eliminating the deficit.\60\
    \60\ North Carolina original transcript, p. 115, in full committee 
files.

    The public believes in a limited, responsive government 
that is designed with their needs in mind. Downsizing and 
reorganization, when approached correctly, has resulted in more 
efficient, effective entities in State and local government and 
the private sector. The Government Reform and Oversight 
Committee finds that the same success can be realized on the 
Federal level. The committee field hearings were the first step 
in creating the ``21st century government'' the American people 
expect and deserve.
                ADDITIONAL VIEWS OF HON. CARDISS COLLINS

    The Report's Background comments on the need to restructure 
the Executive branch unfairly criticizes the National 
Performance Review (NPR). Instead of properly acknowledging 
recent efforts to make government more streamlined and 
effective, the Committee has incorrectly and unfortunately 
chosen to slight and ignore the important contributions the NPR 
has made in the 20th Century. Let me now set the record 
straight.
    In February of 1992, President Clinton and Vice-President 
Gore initiated the National Performance Review--Creating a 
Government that Works Better and Costs Less. The NPR was 
initiated to radically change the way government operates. The 
first step of the ``review'' was to look at what the government 
does and how it does it. The next step was to fix those things 
that do not work. Next, the ``review'' went to the American 
public to determine what works and what does not. Thousands of 
citizens were contacted directly at town hall meetings, 
national conferences and local neighborhoods. More than 30,000 
letters and phone calls from citizens across the country were 
received. (Almost an identical process undertaken by this 
Committee.)
    In the past two and a half years, the NPR has been 
responsible for a number of changes in how government addresses 
its basic functions. Since President Clinton took office there 
are nearly 200,000 fewer federal employees. Today, the federal 
government is smaller and more streamlined than it has been in 
30 years. President Clinton has committed to cutting 16,000 
pages from federal regulations. We have passed and implemented 
the Government Performance and Results Act and instituted 
procurement reform. As a final irony, House Speaker Newt 
Gingrich, speaking about the NPR on ABC News earlier this year, 
characterized its results: ``The Vice President's effort is a 
total success.''
                                                   Cardiss Collins.
                                ------                                


                  ADDITIONAL VIEWS OF HON. GENE GREEN

    Member of the Minority of the Government Reform and 
Oversight Committee
    The reports approved by this Committee traditionally have 
been issue driven and non-partisan. However, the charts placed 
in the Appendix of the report offer a slanted and incomplete 
version of the costs of government. For example, Appendix I, 
Chart 2, entitled ``Taxes Have Multiplied'' states that federal 
receipts from individual income taxes are more than 13 times 
the size they were in 1960. The chart does state whether 
inflation was taken into account for these calculations. We do 
not dispute that income taxes have increased significantly over 
the past 35 years, however, the absence of clarifying 
information in this chart is apt to confuse the reader and 
discount the usefulness of the chart.
    Appendix I, Chart 3 suffers similar problems. Entitled 
``Cost of Government Day'' the chart is supposed to tell the 
reader how long it takes Americans to work to pay off the 
yearly costs of government. The chart, provided by the 
Americans For Tax Reform Foundation, states that ``regulatory 
costs'' are taken into account in determining overall 
governmental costs. However, the chart does not define how 
regulatory costs were calculated. Would the costs of a $500/
hour lawyer who has to stand in line to renew his driver's 
license be counted for this chart? Attempts to quantify 
regulatory costs, which could be defined quite broadly, should 
be accompanied by a brief statement of assumptions. Otherwise, 
the chart ends up raising more questions than it answers.
                                                        Gene Green.


  APPENDIX II--LIST OF HEARING LOCATIONS, DATES AND WITNESSES

                   Parma Heights, Ohio--July 14, 1995

WITNESSES:

    Lynn Martin, Former Secretary, U.S. Department of Labor.
    Elizabeth Baron, Graduate Student, Northwestern University.
    Michael White, Mayor of Cleveland, Ohio.
    Edward Rendell, Mayor of Philadelphia, Pennsylvania.
    J. Kenneth Blackwell, Treasurer, State of Ohio.
    James Conrad, Director, Department of Administrative 
Services, Ohio.
    Keith Rasey, Director of Federal Government Relations, 
Greater Cleveland Growth Association.
    Claire Freeman, Executive Director, Cuyahoga Metropolitan 
Housing Authority.
    Daniel Whitmire, Austinburg Township Trustee, Ohio.
    Robert A. Gardner, Commissioner, Lake County, Ohio.
    William B. Lawrence, Executive Vice President for Planning, 
Technology and Government Affairs, TRW, Inc.
    M. Thomas Moore, Chairman and CEO, Cleveland Cliffs, Inc.
    Frank Altimore, Vice President for Business Process Design, 
LTV Steel Company, Inc.
    Karen R. Kleinhenz, Regional President, Society National 
Bank, Akron, Ohio.
    Roger Sustar, President and Owner, Fredon Corporation.
    Michael Horowitz, Senior Fellow, the Hudson Institute.
    William Marshall, Professor, Case Western Reserve 
University School of Law.

OPEN MIC PARTICIPANTS:

    Keith Simmons, Private Citizen.
    Kathleen Nadall, Private Citizen.
    David Vandall, Private Citizen.
    Joseph Facolt, Private Citizen.
    Doris Deniger, Private Citizen.
    Bernard Kromer, Vice President of Manufacturing, Hybco 
Products, Lake County, Ohio.
    Donald Luziak, Private Citizen.
    Lowell Lefebvre, Private Citizen.
    Sandra Reckseit, Executive Director, United We Stand 
America, Ohio.
    Eileen Fitzgerald, Private Citizen.
    Patricia Coksey, Private Citizen.

             Upper Montclair, New Jersey--September 9, 1995

WITNESSES:

    Christine Todd Whitman, Governor, State of New Jersey.
    Bret Schundler, Mayor, City of Jersey City, New Jersey.
    James Treffinger, County Executive, Essex County, New 
Jersey.
    William Pascrell, Jr., Mayor, Paterson, New Jersey.
    Michael Berkin, Senior Vice President of Performance and 
Service Quality, Dun & Bradstreet.
    Frank Sweeney, Vice President and Controller, ITT Avionics.
    Irvin D. Reid, President, Montclair State University.
    Len Lauer, Vice President, Sales, Bell Atlantic-New Jersey.
    John E. Anderson, Director of Procurement, Public Service 
Electric & Gas Company.

OPEN MIC PARTICIPANTS:

    Stuart Ginsberg, Member, Concord Coalition.
    Mr. Jankowski, Private Citizen.
    Sherwin Raymond, Private Citizen.
    Michelle Shapiro, Private Citizen.
    Bob Hogan, Private Citizen.
    Dwayne Warehime, Former Chairman, United We Stand America, 
New Jersey.
    Rosary Morelli, Private Citizen.
    Kelly Conklin, Private Citizen.

                Federal Way, Washington--October 6, 1995

WITNESSES:

    Chris Vance, Member, Metropolitan King County Council, 
Washington.
    Mary Ann Mitchell, Washington State Representative.
    Thomas J. Vander Ark, Superintendent, Federal Way School 
District, Washington.
    Paul Sommers, Executive Director, Northwest Policy Center, 
University of Washington.
    Richard Zimmerman, President, Washington Performance 
Partnership.
    John Carlson, Chairman, Washington Institute for Policy 
Studies.
    Jack Larsen, Vice President of Energy and Environment, 
Weyerhaeuser Company.
    Gwen Fraser, CEO and Owner, Fraser, Inc.
    Lawrence Riggs, President, Services Group of America.
    Paul TeGantvoort, Owner, Seattle Automotive Distributing.

OPEN MIC PARTICIPANTS:

    Terrell Alan Minarsen, Private Citizen.
    Don Casper, Private Citizen.
    Ann Barney, Private Citizen.
    Randy Robbins, Private Citizen.
    Mitchell Melars, Private Citizen.
    Ed Pina, Vice President of High Line School, Washington.
    Randy Moon, Private Citizen.
    Deborah Carson, Private Citizen.
    Tom Campbell, Washington State Representative.
    Miriam Halgolin, Private Citizen.
    Treasure Shoemaker, Private Citizen.
    Bud Fleisch, Chairman, East King County United We Stand.
    Lana Miller, Private Citizen.
    Curt Anderson, Associated Builders and Contractors.
    Jody Deon, Member, United We Stand, Sixth Congressional 
District, Washington.
    Richard Kennedy, Mayor, Des Moines, Washington.

                Long Beach, California--October 7, 1995

WITNESSES:

    Douglas Drummond, Vice Mayor, Long Beach, California.
    Henry Taboada, Assistant City Manager, Long Beach, 
California.
    Michael Stoker, Chairman, California Agricultural Labor 
Relations Board.
    Richard Terzian, Chairman, Commission for California State 
Government Organization and Economy.
    Fred Silva, Executive Secretary, California Constitution 
Revision Committee.
    Robert H. Murphy, Senior Vice President for Organization 
and Human Resources, Rockwell International.
    D. Sherrill Clements, Sr., Executive Marketing Director, 
Oracle Corporation.

OPEN MIC PARTICIPANTS:

    Thomas Clark, Member, Long Beach City Council, 4th 
District.
    Steve Kuykendall, California State Assemblyman.
    Susan Brooks, Councilwoman, Rancho Palos Verdes.
    Steve Eisenhower, Private Citizen.
    Roger Rosie, Libertarian Party.
    Roger Hughes, Private Citizen.
    John Valentine, Private Citizen.
    Rodney Guarneri, GOPAC Member.
    Ronald Branson, Judicial Misconduct Review.
    Jim Kopp, Retired Executive, General Electric Company.
    Ruby Pyers, Chairwoman of the Board, Southeast Los Angeles 
County Private Industry Council.
    Herb Peters, Private Citizen.
    Patrick Von Mout, Chairman of the Board, National Health 
Federation.
    Kent Gale, Private Citizen.
    Bob Weber, Chairman, Libertarian Party of L.A. County.
    Ernie Castano, Member, Californians for Disability Rates.
    Rod Briggs, Private Citizen.

                Albuquerque, New Mexico--October 9, 1995

WITNESSES:

    Walter Bradley, Lieutenant Governor, New Mexico.
    Stephanie Gonzales, Secretary of State, New Mexico.
    Heather Wilson, Secretary, New Mexico Department of 
Children Youth and Families.
    Lawrence Rael, Chief Administrative Officer, Albuquerque, 
New Mexico.
    Barbara Seward, Member, Bernalillo County Commission, New 
Mexico.
    George W. Rhodes, Vice President and Technical Director, 
Quatro Corporation.
    Mary Molina Mescall, Hispanic Roundtable.
    Steve Strunk, Chief Administrative Officer, Boatmen's 
Sunwest, Inc.

OPEN MIC PARTICIPANTS:

    Richard Peck, President, University of New Mexico.
    James Red, Union Steward, American Federation of Government 
Employees, Local 4041.
    Joe Bowdich, Sheriff, Bernalillo County, New Mexico.
    General Mel Montano, New Mexico Adjutant General.
    Roberta Cooper Ramo, President, American Bar Association.
    Mark Henderson, President, New Mexico Branch of Associated 
General Contractors.
    Ted Hobbs, State Representative, Bernalillo County, New 
Mexico.
    Jay Sorenson, Sierra Club.
    Joe Rose, Concord Coalition.
    Tony Olmi, President, New Mexico Christian Coalition.
    Frank Clinard, Libertarian Party of New Mexico.

              Charlotte, North Carolina--October 20, 1995

WITNESSES:

    Richard Vinroot, Mayor, Charlotte, North Carolina.
    Wendell White, City Manager, Charlotte, North Carolina.
    Bill James, Chairman, Charlotte Privatization/Competition 
Advisory Committee.
    Pat Garrett, President, Charlotte/Mecklenburg Housing 
Partnership.
    Barney Lawson, Owner, Modern Management, Inc., North 
Carolina.
    Christopher Rolfe, Vice President of Organization 
Effectiveness, Duke Power Company.

OPEN MIC PARTICIPANTS:

    Gerald Fox, Mecklenburg County Manager.
    Conrad Pogorzelski, Private Citizen.
    Mark Seiler, Private Citizen.
    Tom Rogers, Concord Coalition Citizen Council, North 
Carolina.
    Leroy Pittman, Small Business Owner, Union County, North 
Carolina.
    Chris Spruyt, Private Citizen.
    Frank Gilreath, Private Citizen.
    Pat McCrory, Mayor Pro Tempore, Charlotte, North Carolina.
    Tom Bailey, Private Citizen.
    Cheryl Cottingham, Private Citizen.
    Earnest Johnson, Private Citizen.
    Elizabeth Bohl, Private Citizen.
    Joe Miller, Private Citizen.

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