[House Report 104-435]
[From the U.S. Government Publishing Office]




                                                 Union Calendar No. 210

104th Congress, 1st Session - - - - - - - - - - - - House Report 104-435


 
      MAKING GOVERNMENT WORK: FULFILLING THE MANDATE FOR CHANGE

                               __________

                              THIRD 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             CHARLES F. BASS, New Hampshire
  (Independent)                      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
Bud Myers, Minority Staff Director

   Subcommittee on Government Management, Information, and Technology

STEPHEN HORN, California, Chairman
CAROLYN B. MALONEY, New York         MICHAEL PATRICK FLANAGAN, Illinois
MAJOR R. OWENS, New York             PETER BLUTE, Massachusetts
ROBERT E. WISE, Jr., West Virginia   THOMAS M. DAVIS, Virginia
JOHN M. SPRATT, Jr., South Carolina  JON D. FOX, Pennsylvania
PAUL E. KANJORSKI, Pennsylvania      RANDY TATE, Washington
                                     JOE SCARBOROUGH, Florida
                                     CHARLES F. BASS, New Hampshire
J. Russell George, Staff Director 
            and Counsel
Mark Uncapher, Professional Staff 
        Member and Counsel
 Mark Brasher, Professional Staff 
              Member
 Anna Miller, Professional Staff 
              Member
     Andrew Richardson, Clerk
     Matthew Pinkus, Minority 
        Professional Staff
     David McMillen, Minority 
        Professional Staff


                         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 third report to the 104th Congress. The Committee's 
report is based on hearings conducted by its Subcommittee on 
Government Management, Information, and Technology.

                                   William F. Clinger, Jr.,
                                                          Chairman.


                            C O N T E N T S

                              ----------                              
                                                                   Page
 I. Summary of Oversight Findings and Recommendations.................1
        A. Introduction..........................................     1
        B. Overview of Investigation.............................     3
        C. Findings..............................................     5
        D. Recommendations.......................................     8
II. Report on the Committee's Oversight Review.......................10
        A. Background............................................    10
              1. Need for Rethinking Government..................    10
              2. The National Performance Review.................    11
              3. Additional Factors Prompting This Investigation.    11
        B. Proceedings of the Subcommittee on Government 
          Management, Information, and Technology................    11
              1. May 2, 1995, Hearing............................    11
              2. May 9, 1995, Hearing............................    13
              3. May 16,1995, Hearing............................    14
              4. May 16 and 23, 1995, Hearing....................    15
              5. June 6, 1995, Hearing...........................    16
              6. June 13 and 19, 1995, Hearing...................    17
              7. June 20, 1995, Hearing..........................    19
              8. June 27, 1995, Hearing..........................    20
        C. Determining the Federal Role..........................    21
              1. Missions and Services...........................    22
              2. Departments and Agencies........................    24
              3. Managing the Transformation.....................    26
              4. Federal-State Government Goals-oriented 
                Management.......................................    28
        D. Organizing Government.................................    28
              1. Management Structure............................    28
              2. Reengineering Techniques........................    31
              3. Information Technology..........................    32
              4. Field Organizations.............................    33
              5. Workforce Competency............................    33
        E. Making the Government Accountable.....................    33
              1. Public Accountability...........................    33
              2. Goals and Work Results..........................    36
              3. Outcomes Versus Outputs.........................    37
              4. Reports to the Citizenry........................    37
III.Conclusions......................................................38


                                 VIEWS

Additional views of Hon. Cardiss Collins, Hon. Carolyn B. 
  Maloney, Hon. Henry A. Waxman, Hon. Robert E. Wise, Hon. Major 
  R. Owens, Hon. Edolphus Towns, Hon. John M. Spratt, Jr., Hon. 
  Louise McIntosh Slaughter, Hon. Paul E. Kanjorski, Hon. Gary A. 
  Condit, Hon. Collin C. Peterson, Hon. Thomas M. Barrett, Hon. 
  Barbara-Rose Collins, Hon. Eleanor Holmes Norton, Hon. James P. 
  Moran, Hon. Gene Green, Hon. Carrie P. Meek, Hon. Chaka Fattah, 
  and Hon. Tim Holden............................................    42

                               APPENDIXES

Appendix A. Summary of Findings and Recommendations..............    53
Appendix B. Index of Witnesses...................................    58


                                                 Union Calendar No. 210
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-435
_______________________________________________________________________



       MAKING GOVERNMENT WORK: FULFILLING THE MANDATE FOR CHANGE
                                _______
                                

 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

                              THIRD REPORT

    On December 14, 1995, the Committee on Government Reform 
and Oversight approved and adopted a report entitled ``Making 
Government Work: Fulfilling the Mandate for Change.'' The 
chairman was directed to transmit a copy to the Speaker of the 
House.

          I. SUMMARY OF OVERSIGHT FINDINGS AND RECOMMENDATIONS

                            a. introduction

    The Committee on Government Reform and Oversight (``the 
committee'') has primary legislative and oversight jurisdiction 
with respect to the ``overall economy, efficiency and 
management of Government operations and activities, including 
Federal procurement,'' and to ``[r]eorganizations in the 
executive branch of the Government.'' It also has 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'' 
(Rules of the House of Representatives, 104th Congress, 
X,1(g)(6) and (12) and X,2(b)(2)).
    In addition to its other oversight responsibilities under 
Rule X,4(c)(2):
          [T]he Committee on Government Reform and Oversight 
        may at any time conduct investigations of any matter 
        without regard to the provisions . . . conferring 
        jurisdiction over such matter upon another standing 
        committee. The committee's findings and recommendations 
        in any such investigation shall be made available to 
        the other standing committee or committees having 
        jurisdiction over the matter involved. . . .
    Pursuant to this authority, the Subcommittee on Government 
Management, Information and Technology convened eight oversight 
hearings to solicit advice and recommendations for (a) changing 
what the Federal Government does; (b) improving the overall 
economy, efficiency and management of its operations and 
activities; and (c) effectively planning, measuring and 
reporting the results to the American public.
    The committee's inquiry reflected public expectation for 
reform, as expressed by the 1994 election, and including a 
commitment to balance the Federal budget by 2002 in the 
``Contract With America.'' As the ``Contract'' stated,
          Balancing the budget will not be easy. It will 
        require a fundamental restructuring of government. We 
        believe the American people are ready for government 
        that does . . . [fewer] of the wrong things . . . [and] 
        does the right things well.\1\
---------------------------------------------------------------------------
    \1\ Gillespie, Edward and Schellhas, Bob, eds., Contract with 
America, The Bold Plan by Rep. Newt Gingrich and Rep. Dick Armey and 
the House Republicans to Change the Nation. New York, Random House, 
1994, p. 23.
---------------------------------------------------------------------------
    The committee believes that any exercise in ``Making 
Government Work'' must begin with an examination of the Federal 
Government's mission. Fulfilling the commitment to balance the 
Federal budget in seven years requires a recognition of the 
fiscal constraints on the Federal Government, whose ambitious 
tasks have outstripped available public resources. To redress 
this overextension, a total review of the Federal Government's 
activities is necessary.
    The committee is responding to the prevailing public 
expectations that provided a mandate to the Congress to 
consider with care the various Government functions, and to 
determine whether or not they should continue to be performed 
and, if retained, how they can be made more effective. As 
Barone and Ujifusa have noted:
          The 1994 election . . . marked a return to old 
        traditions . . . [it] did not entirely transform either 
        the political opinion or civil society; it only 
        provided an occasion and a setting in which opinions 
        which had long been held could be expressed and a 
        society that had been for some time reshaping itself 
        could reveal its new form. . . . It is a country in 
        which political forces and governmental mechanisms tend 
        to ratchet the size of government down, not ratchet it 
        up. . . . Just as Americans decided from long 
        experience with the depression of the 1930s and the 
        prosperity of the 1940s and after[ward] that markets 
        don't work very well and government does, so Americans 
        decided from long experience with the stagflation of 
        the 1970s and the growth of the 1980s and after[ward] 
        that government doesn't work very well and markets do. 
        . . . Not all the forces tending to ratchet down 
        government will always succeed. But they are all 
        working in the same direction.\2\
---------------------------------------------------------------------------
    \2\ Barone, Michael, and Grant Ujifusa, ``Introduction: The 
Restoration of the Constitutional Order and the Return to Tocquevillian 
America,'' The Almanac of American Politics 1996, Washington, DC: 
National Journal, Inc., 1995, pp. xxiii ff.
---------------------------------------------------------------------------
    The experience of American industry also influenced the 
committee. In the past decade, corporations and other entities 
have reexamined their roles and redefined their institutional 
objectives and purposes. Many corporate changes have been 
facilitated by technology that speeds information to decision 
makers and thereby reduces the need for traditional 
hierarchies. While such changes have been wrenching at times to 
the people in these institutions, the result has been to make 
American industry far more productive and competitive. The 
Federal Government has yet to implement a similar 
transformation on any appreciable scale. While the committee 
recognizes fundamental differences between the purposes and the 
cultures of business and Federal Government organizations, it 
remains receptive to the suggestion that ``rethinking'' and 
``reengineering'' methods successfully used in the private 
sector can be and should be adapted for use in the Federal-
Government. We note that between 1990 and 1995 non-farm 
productivity in the United States grew at a 2.2 percent annual 
rate.\3\ If there had been a similar productivity growth in the 
public sector, there would have been dramatic improvements in 
the form of additional services and reduced costs.
---------------------------------------------------------------------------
    \3\ Farrell, Christopher, et al., ``Riding High,'' Business Week, 
Oct. 9, 1995, pp. 134-135.
---------------------------------------------------------------------------

                      b. overview of investigation

    The committee notes that the last comprehensive effort to 
reorganize the Cabinet was President Nixon's proposal of 25 
years ago. At that time the President provided this assessment 
of the executive branch, which is equally valid today:
          As we reflect on organizational problems in the 
        Federal Government today, one seems to stand out above 
        all others: the fact that the capacity to do things . . 
        . is exceedingly fragmented and broadly scattered 
        throughout the Federal establishment. . . . [T]he wide 
        variety of offices and bureaus, departments and 
        agencies . . . [o]ften . . . trip over one another as 
        they move to meet a common problem. . . . Frequently, 
        they behave like a series of fragmented fiefdoms--
        unable to focus Federal resources or energies in a way 
        which produces any concentrated impact. Consider these 
        facts:
          Nine different Federal departments and 20 independent 
        agencies are now involved in education matters. Seven 
        departments and eight independent agencies are involved 
        in health. In many major cities, there are at least 20 
        or 30 separate manpower programs, funded by a variety 
        of Federal offices. Three departments help develop our 
        water resources and four agencies in two departments 
        are involved in the management of public lands. Federal 
        recreation areas are administered by six different 
        agencies in three departments of the government. Seven 
        agencies provide assistance for water and sewer 
        systems. Six departments . . . collect similar economic 
        information--often from the same sources--and at least 
        seven departments are concerned with international 
        trade. While we cannot eliminate all of this diffusion 
        we can . . . bring similar functions under common 
        commands.\4\
---------------------------------------------------------------------------
    \4\ Nixon, Richard M., President of the United States, Message to 
the Congress, March 25, 1971, ``President's Departmental Reorganization 
Program.''
---------------------------------------------------------------------------
    One could read the above quotation and believe that 
President Nixon was describing today's Federal Government. In 
fact, the Cabinet of 1995 has three more departments than did 
the Nixon Cabinet, and Federal programs and agencies have 
continued to proliferate virtually unchecked. The executive 
branch of the Federal Government has not undergone a 
comprehensive, systematic review of its missions, services, and 
organization since the Nixon Administration. The similar 
thrusts toward consolidation in President Nixon's 1971 plan and 
The Heritage Foundation's 1995 proposal suggest that many of 
the problems of duplication, proliferation, inefficiency and 
waste within the Federal Government are as critical today (if 
not more so) as they were a quarter century ago.
    The Nixon reorganization plan, President Carter's Personnel 
Management Project which led to the Civil Service Reform Act of 
1978, the Grace Commission under President Reagan, and most 
recently President Clinton's National Performance Review [NPR] 
effort have each influenced the committee's report. The 
committee also reviewed material and heard testimony on 
departmental restructuring from scholars at several research 
and public policy organizations--including The Heritage 
Foundation,\5\ and The Brookings Institution,\6\--and the 
various task forces of the House Republican Freshman. These 
efforts have as their common purpose the alignment and 
consolidation of the existing related functions of the Federal 
Government, and the streamlining of the Cabinet departments. 
However, the Heritage and House Freshman plans place 
considerable emphasis on reducing the scope of Federal 
Government activities. Because of the Administration's 
management responsibilities for the Federal Government, the 
point of reference for all material reviewed was the National 
Performance Review (NPR), Phases I and II.
---------------------------------------------------------------------------
    \5\ Hodge, Scott A., Ed., Rolling Back Government: A Budget Plan to 
Rebuild America, Washington DC, The Heritage Foundation, 1995.
    \6\ Kettl, Donald F., Reinventing Government? Appraising the 
National Performance Review, a report of The Brookings Institution's 
Center for Public Management, August 1994.
---------------------------------------------------------------------------
    The series of eight hearings began on May 2, 1995, with an 
overview of the NPR process. The committee focused next, on May 
9, on the appropriate role of Federal executive leadership in 
strengthening the management of Cabinet level departments. The 
third hearing, on May 16, 1995, turned to consolidating and 
restructuring the executive branch, assessing alternative ideas 
for rearranging or reducing several departments and agencies. 
In its fourth session, on May 16 and 23, 1995, the committee 
examined the consolidation of a large number of Federal 
programs and organizations. Attention turned in June to the 
Federal Government's field establishment. After reviewing 
several types of possible corporate structures for Federal 
programs such as aviation, electric power, and transportation, 
on June 6, the committee heard testimony from several regional 
administrators on June 13, 1995, to understand their roles and 
hear their suggestions, then adjourned to Chicago on June 19 
for a firsthand look at the Federal Government's operations 
from the field perspective. The seventh hearing, on June 20, 
1995, in Washington, emphasized improving governmental results 
through performance measurement, benchmarking and 
reengineering, as many private corporations have done. The 
hear- 
ings ended on June 27, 1995, focused on agencies' preparation 
for compliance with the Government Performance and Results Act 
of 1993, or GPRA.
    This report details the above eight hearings and expresses 
the committee's views on resultant findings.

                              c. findings

    Based on the investigation and oversight hearings conducted 
by the Subcommittee on Government Management, Information and 
Technology, the committee finds as follows:

1. The Management of the Federal Government Needs Improvement.

    (a) The capacity of the President as the chief executive 
officer of the Federal Government and its principal manager has 
been diminished over several Administrations. The Executive 
Office of the President has abrogated its responsibility to 
oversee and improve the Government's management structure.
    (b) The capacity available to the President in the Office 
of Management and Budget [OMB] to reform or improve management 
has steadily declined and now barely exists, despite a 
competent Director of OMB and a Deputy Director for Management, 
whose talents in this area are underutilized. Federal 
management organization, oversight authority, and general 
influence have been consistently overridden by recurring budget 
crises and budget cycle demands, despite conscientious 
intention to give ``Budget'' and ``Management'' equal voice 
within OMB.
    (c) The NPR, in its ad-hoc and episodic approach to 
management issues, reveals the weakened state of management 
capacity of the Executive Office of the President.
    (d) The NPR-inspired announcement of a reduction of over a 
quarter-million Federal jobs may have been warranted; however, 
without first having a solid empirical rationale for doing so 
and not knowing where or how, it reflected a lack of strategic 
vision as to the Federal Government's role, and as such it 
seriously eroded Federal workers' morale, productivity, and 
planning for the future.
    (e) The capacity of the Office of Personnel Management to 
provide leadership to a revitalized career service has been 
seriously impaired.
    (f) Short-term political appointees have layered and 
``thickened'' the Federal Government's upper echelons of 
organization to a point where productivity, management, and 
continuity of operation have become seriously affected.
    (g) Some potential candidates for political appointment 
believe that service in Federal organizations will hinder their 
careers, imposing a protracted and intrusive nomination process 
as well as numerous restrictions on financial and employment 
activities during and following Federal Government assignments. 
As a result, the pool of available talent qualified for 
appointment and willing to serve has been diminished.
    (h) Qualified people considering careers in public 
administration are discouraged from Federal career employment 
by layers of political appointees of uneven quality precluding 
advancement to positions of senior responsibility.
    (i) Career Federal public administrators have a long record 
of faithfully executing clearly established policy and 
rendering effective political leadership. However, political 
appointees as a group have tended to display more loyalty to 
individual political sponsors and special interests than to the 
President, who is elected by and ultimately accountable to the 
people.
    (j) Employee-buyout programs in Federal organizations have 
not worked as well as intended, resulting in the loss of 
employees with the most marketable skills, leaving in the 
workforce many of the poorer performers.
    (k) Programs for Federal-employee professional education, 
training and development are vital to a smaller workforce 
adopting modern management methods and achieving desired 
productivity improvements.
    (l) The Federal Government must follow the best practices 
of private and public organizations for exploiting information 
technology in reforming management, reducing size, and raising 
productivity and market competitiveness. A recent General 
Accounting Office report provides valuable insights on how the 
Federal Government can lower costs, improve productivity, and 
provide better services to its citizens.\7\
---------------------------------------------------------------------------
    \7\ United States General Accounting Office, ``Managing for 
Results: Experiences Abroad Suggest Insights for Federal Management 
Reforms,'' GAO/GGD-95-120, May 1995.
---------------------------------------------------------------------------

2. The Federal Intergovernmental Roles are Poorly Defined.

    (a) The Federal role has evolved in a patchwork manner. The 
Federal Government lacks a clear and comprehensive statement of 
its proper role. The result is similar redundant programs 
throughout disparate departments and agencies.
    (b) Many citizens view the Federal Government as having 
overreached its proper role, by ``meddling'' in affairs such as 
elementary and secondary education (better left to States and 
communities), marketing and distribution of energy resources 
(better left to market forces), and applied research and 
development (better left to private investment and 
competition).
    (c) Many State governments are willing to risk accepting 
large Federal block grants, with fewer dollars, in return for 
greater flexibility and fewer restrictions. There is some 
concern that any residual reporting burdens and controls from 
Washington may interfere with States' roles and as such 
constitute an ``unfunded mandate,'' contrary to a law sponsored 
by this committee.
    (d) In the current environment many agencies and States are 
trying to develop program partnerships. Federal-State program 
partnership agreements reached a high point during the Johnson 
and early Nixon Administrations. State and Federal leaders need 
to be aware that those intergovernmental agreements later 
deteriorated because roles and responsibilities were not 
clearly defined and accepted by all interested parties. Another 
cause was that the Federal Government seized a decision-making 
role disproportionate to the resources it provided.

3. Organization of Federal Functions is Uneven and Duplicative.

    (a) No Cabinet-level department has been eliminated 
outright in our Nation's history, although many have been 
reorganized, renamed, combined, or split.
    (b) Today's Federal Government is even more enmeshed in red 
tape, replicated functions and controls than it was in 1971, 
when President Nixon tried unsuccessfully to organize and 
streamline Cabinet departments.
    (c) The proposed ``Department of Commerce Dismantling Act 
of 1995'' contains a model for dismantling any high-level 
Federal organization a transitional organization within the 
Office of Management and Budget.
    (d) Approximately a million Federal employees work in some 
thirty thousand field offices outside of Washington. Although 
some field-offices only have five or fewer staff, closing them 
has consistently proven a difficult, almost intractable 
political problem. The committee notes progress by the U.S. 
Department of Agriculture in addressing the problem.

4. Public Accountability is Weak.

    (a) The National Performance Review [NPR] contributed to 
identifying the need to improve the Federal Government and 
lower its operating costs.
    (b) By not establishing first what activities the Federal 
Government should be performing, the NPR was flawed from the 
outset and did not achieve enough progress.
    (c) NPR neglected to place sufficient emphasis on fiscal 
accountability by failing to address the Federal Government's 
responsibility for stewardship of public resources.
    (d) The ad-hoc, even disjointed, nature of NPR is a telling 
sign of the disconnect between policy and management, evidence 
atrophy of the tools of management, and an admission that the 
President has no organized capacity to manage the executive 
branch.
    (e) The NPR recommended a doubling of the existing 1-to-7 
supervisory span of control to a 1-to-14 or 1-to-15 supervisor 
to subordinate ratio. This recommendation was without 
appropriate foundation and ignored the Government's widely 
varying missions, and threatens public accountability.
    (f) With more Federal work being done under contract with 
private vendors, effective contract administration is 
critically important in ensuring efficiency, effectiveness, and 
accountability.
    (g) The growth of ``contract government'' is a direct by-
product of the emphasis on personnel reduction. As successive 
administrations have sought to limit or reduce the number of 
Federal employees, more and more activities have been 
contracted out.
    (h) The experiences of other foreign and federal, State and 
local governments in carrying out significant management and 
accountability reforms are valuable to Federal agency managers 
as they implement the Government Performance and Results Act of 
1993 [GPRA].
    (i) Government corporations and other Government-sponsored 
enterprises have assumed roles and responsibilities very 
different from those for which the Government Corporation 
Control Act of 1945 was intended. Today, a conceptual framework 
is needed for setting up these kinds of enterprises and 
centralized oversight of their management operations.
    (j) Executive branch accountability is made more difficult 
by the complex congressional budget process and by additional 
legislative branch restrictions and controls placed on 
Government agencies, such as prohibitions on closing outdated 
Federal field offices.

                           d. recommendations

    Based on the foregoing findings, the committee recommends 
as follows:

1. Strengthen the President's Role as Chief Executive Officer of the 
        Executive Branch.

    (a) Management of the Federal Government should be a 
Presidential priority. Among the President's many roles is the 
responsibility to serve as chief executive officer or general 
manager of the Federal Government. Many broad initiatives 
intended to make the Federal Government work better depend on 
the commitment by the President and his staff in the Executive 
Office of the President. By approaching the Federal Government 
almost exclusively from a budget or a policy perspective, 
Presidents limit their capacity to reform management in the 
Federal Government.
    (b) The President, acting Jointly with Congress through a 
Federal management office, should establish intergovernmental 
partnerships, with clearly defined Federal and State roles and 
responsibilities, and allow local Federal managers the 
authority and flexibility needed to assist State and local 
officials in managing devolved programs, functions, and 
resources.
    (c) To make the President's executive office more 
accountable to the public, Congress should establish an Office 
of Inspector General in the Executive Office of the President.

2. Establish an Office of Management.

    (a) To enhance the President's management capability 
throughout the executive branch, Congress should establish in 
the Executive Office of the President a top-level management 
and organization oversight office headed by an administrator 
who has direct access to the President. Sustained attention to 
management issues beyond recurring budget crises is vital to 
ensure effectiveness. The new Federal management office would 
combine the management functions of the OMB, the residual 
policy and oversight functions of the Office of Personnel 
Management, and the policy functions from the General Services 
Administration into an entity separate from but equal in 
stature to the remaining Office of the Budget.
    (b) The executive branch is in serious need of an office 
with responsibility for departmental reorganizations such as 
the proposed dismantling of the Department of Commerce. The 
current legislative initiative in that regard will be a model 
for managing large-scale reductions in the Federal Government's 
organizational structure and scope of work.
    (c) An Office of Management could encourage the 
implementation of the strategic information management and 
technology practices increasingly common in quality private and 
public organizations. It could stress the need to focus a 
concentration of energy on technology improvements that attain 
goals; and assert senior management control over technology 
investment decisions.
    (d) Executive agencies should exploit, publicize, and 
replicate successful private sector ventures in making Federal 
Government organizations work more effectively, drawing upon 
past successes.

3. Convene a Commission on Federal Reorganization.

    (a) Congress should establish a blue-ribbon inquiry 
commission of experts from the business, academic, and 
nonprofit sectors and Federal, State and local government to 
recommend to the President and Congress in early 1997: (i) ways 
to organize more efficiently the functions the Federal 
Government performs, and (ii) changes in law that would reduce, 
transfer, or eliminate Federal functions. If resources permit, 
such a commission should produce a reorganization plan.
    (b) Such a commission should apply the guideline criteria 
for agency elevation to Cabinet department status which were 
developed in 1988 by the National Academy of Public 
Administration [NAPA].\8\ Such a review ought to result in a 
new alignment and grouping of the tasks and functions of the 
Federal role by major purpose.
---------------------------------------------------------------------------
    \8\ National Academy of Public Administration, ``Evaluation of 
Proposals to Establish a Department of Veterans Affairs: A Report,'' 
Washington, D.C., 1988.
---------------------------------------------------------------------------
    (c) Congress should concurrently provide the President 
broad authority, including optional fast-track authority, to 
restructure executive branch departments and agencies, similar 
to past (and now expired) Reorganization Acts.
    (d) Congress should be fully involved in the consolidation 
of the many Federal programs it enacts and funds; the proposed 
commission should look for additional opportunities to 
consolidate or combine Federal programs, and make 
recommendations accordingly.
    (e) Once changes have been made in the structure of the 
executive branch, Congress should conform its own internal 
committee organization and jurisdictions to parallel the 
executive branch changes.

4. Reshape the Federal Civil Service.

    (a) Congress should proceed with legislation that would 
reduce the allowable number of political appointees to an 
initial level of 2,000-aimed principally at Schedule C (not 
subject to Senate confirmation) positions--and set lower 
targets for future years as additional executive branch 
organizations are consolidated or abolished.
    (b) Congress should appropriate the professional education, 
training and development funds for executive agencies, not as 
separate line items, but as an integral part of total personnel 
costs. That would afford managers the flexibility to choose 
between training and hiring to upgrade collective 
organizational skills.
    (c) Any future Federal employee ``buyout'' legislation 
should be limited to serving the needs of the downsized Federal 
Government by focusing agency buyouts on those with less-needed 
skills, functions, and capabilities.

5. Strengthen Public Accountability.

    (a) Both the President and Congress should complete the 
work to implement the Government Performance and Results Act, 
in order to make the executive branch both performance-driven 
and accountable. The Act's performance measurement provisions 
ought to be used in all steps of the budget and management 
process.
    (b) To make public accountability in the executive branch 
less cumbersome and counterproductive, Congress should simplify 
the present complex structure of 13 separate appropriations 
bills by combining them into a lesser number, possibly 
comparable to the internal budget review structure in the 
Office of Management and Budget. Congress should adjust its own 
internal authorizing and appropriating committee structure 
correspondingly.
    (c) Congress should amend the Government Corporation 
Control Act of 1945 to raise the efficiency and effectiveness 
of the Federal Government's business-type operations and 
organizations and to set standards consistent with today's 
marketplace conditions.
    (d) In its quest to attain the objective of balancing the 
Federal budget by fiscal year 2002, Congress must recognize 
three critical needs: (i) to preserve the Federal Government's 
accountability to the governed throughout the transformation 
process; (ii) to foster that objective by making investments in 
human and technological development during that process; and 
(iii) to accept the hard lessons learned by industry that 
workforce strength is to be cut only after--not before or 
while--the Federal roles have been determined and 
organizational structures have been reduced or eliminated.

             II. REPORT ON THE COMMITTEE'S OVERSIGHT REVIEW

                             a. background

1. The Need for Rethinking Government.

    In preparing for its investigation the Subcommittee on 
Government Management, Information and Technology noted the 
following recommendations from author and management expert 
Peter Drucker:
          Of the 384 recommendations of ways to reinvent 
        government identified by the Vice President in 1993, 
        about half are being proposed in the budget for fiscal 
        year 1995. If all these recommendations are accepted by 
        Congress, they should result in savings of about $12.5 
        billion over two years . . . [but] an annual saving of 
        $6 billion . . . be a cut of no more than two tenths of 
        one percent of the budget. . . .
    Government has outgrown the structure, the policies and the 
rules designed for it and still in use. . . . The first 
reaction in a situation of disarray is to do what Vice 
President Gore and his associates are now doing--patching. It 
always fails. The next step is to rush into downsizing. 
Management picks up a meat-ax and lays about itself 
indiscriminately. . . . In many . . . cases, downsizing has 
turned out to be . . . ``amputation before diagnosis.'' The re- 
sult is always a casualty. . . . The way to get control of 
costs is not to start by reducing expenditures but to identify 
the activities that are productive that should be strengthened, 
promoted and expanded. . . . This has been done often enough in 
all kinds of organizations--businesses, hospitals, churches, 
and even local govern- ments--that we know it works. . . . 
Continuing with activities that we would not now choose to 
begin is wasteful. They should be abandoned.\9\
---------------------------------------------------------------------------
    \9\ Drucker, Peter F., ``Really Reinventing Government,'' Atlantic 
Monthly, vol. 273, no. 2 (Feb. 1995), pp. 49-61, citing Gore, Albert 
P., Jr., Vice President of the United States, Creating a Government 
That Works Better and Costs Less--The Report of the National 
Performance Review. New York, Penguin Books USA, 1993, p. 292.
---------------------------------------------------------------------------

2. The National Performance Review.

    On March 3, 1993, President Bill Clinton, in announcing the 
NPR, told the Nation:
          Our goal is to make the entire Federal Government 
        both less expensive and more efficient, and to change 
        the culture of our national bureaucracy away from 
        complacency and entitlement toward initiative and 
        empowerment. We intend to redesign, to reinvent, to 
        reinvigorate the entire national government.\10\
---------------------------------------------------------------------------
    \10\ Gore, op. cit., p. xxix.
---------------------------------------------------------------------------
    The committee supports the notion of cultural change toward 
initiative and empowerment. Accepting the business ethic of 
pleasing one's customers--the taxpayer--is a worthy pursuit in 
a democracy. However, no initiative should be pursued at the 
expense of fiscal accountability. Without determining 
government's proper role, efforts to redesign, reinvent, and 
reinvigorate any part of the Federal Government are likely to 
fail. Those concerns underscore the findings, recommendations, 
discussion and conclusions of this report.

3. Additional Factors Prompting This Investigation.

    The majority of the committee views the 1994 electoral 
mandate as a reflection of the electorate's changed 
expectations as to the appropriate role of the Federal 
Government. We note that the committee jurisdiction contains 
several areas of the ``Contract With America,'' including the 
need to eliminate unfunded mandates on State and local 
governments and to rationalize Federal Government regulations.
    The international trend toward devolution and performance-
driven government focused the committee's attention on the 
recent accomplishments of other, smaller nations whose 
economies and governments had fallen into even more serious 
disarray than our own. The successes of the Government of New 
Zealand in reestablishing creditworthiness through a fiscally 
disciplined program of transferring nationalized functions to 
government corporations and private industry were particularly 
promising. The fact that these accomplishments of large-scale 
management reforms were possible in the public sector is 
pertinent to current U.S. Government reform efforts.

     b. proceedings of the subcommittee on government management, 
                       information and technology

1. May 2, 1995, Hearing on the NPR.

    At that hearing, testimony was received from 
representatives of the Office of Management and Budget [OMB], 
the General Accounting Office [GAO], the governments of New 
Zealand and Oregon, and four leading public policy research 
group analysts. The National Performance Review [NPR] had two 
phases, the first to make government work better and cost less, 
and the second to have Cabinet departments fundamentally 
reevaluate missions, goals and objectives. Witnesses testified 
on the NPR's role and mission and on whether the NPR had 
suitable benchmarks for evaluating its progress, had met 
expectations as implemented so far, and could likely attain its 
stated objectives.
    Alice M. Rivlin, Director, and John Koskinen, Deputy 
Director for Management, OMB, offered testimony for the Clinton 
administration, focusing on assessing the results achieved to 
date from the NPR and supporting its effectiveness in improving 
executive branch departments and agencies. It was noted that 
Vice President Gore had encouraged agencies to adopt the 
review's 1,200 recommendations from its first phase. Dr. Rivlin 
urged congressional funding to continue NPR's work through its 
second phase.
    Charles A. Bowsher, Comptroller General of the United 
States, GAO, applauded the concepts and aims of the NPR. 
However, he cited shortcomings such as the failure of the 
National Performance Review to deal with three-fourths of what 
the GAO considered to be the most important management problems 
in Federal agencies, including acquisition systems at the 
Federal Aviation Administration and defense weapons system 
acquisition and inventory management. He also advocated clearer 
statements of goals, better use of information, and a tighter 
focus on outcome-based management.
    Tony Dale, Budget Manager of the New Zealand Treasury (in 
his capacity as Harkness Fellow, 1994-95, the Commonwealth 
Fund), discussed his government's management reforms, which 
included privatization of some public sector functions and the 
consequent development of responsive government corporations. 
This effort led to reduced government outlays, low inflation, a 
growing economy, and a ten-year turnaround from a nine percent 
deficit to a seven percent surplus in the budget of New 
Zealand.
    Duncan Wyse, Executive Director, Oregon Benchmarking 
Project, recalled his State's recent reforms and advocated 
similar reforms in both the legislative and executive branches 
of the Federal Government, noting that improvements at all 
levels must acknowledge that the Federal agenda is largely 
implemented by State and local governments.
    Dwight Ink, President Emeritus, Institute of Public 
Administration, expressed frustration with what he called NPR's 
feeble implementation progress to date, noting severe weakening 
of the leadership and oversight capacities of OMB and the 
Office of Personnel Management [OPM], widely divergent quality 
of agency reviews, an initial focus on processes long before 
deciding missions and roles, and failure to give attention to 
managerial professionalism and to protection from political 
manipulation and abuse of the new flexibility which he strongly 
supported.
    R. Scott Fosler, President, National Academy of Public 
Administration, conveyed cautious agreement with the NPR's 
scope and purpose, noting that to be successful NPR would need 
to address key areas such as agencies' capacity, a coherent 
framework, and the Government's accountability to the public.
    Donald F. Kettl, Senior Nonresident Fellow, The Brookings 
Institution, and professor at the University of Wisconsin, 
Madison, countered that the NPR had already achieved 
substantial progress and savings so far, but warned that its 
progress could not be con- sidered self-sustaining and that 
many unresolved questions re- mained.
    Herbert N. Jasper, Senior Associate, McManis Associates, 
praised many accomplishments of the NPR but expressed mis- 
givings about its lack of analysis, inconsistencies between 
statutory mandates and available resources, characteristic 
``government- bashing'' tone in most supplemental reports, and 
a pervasive top- down, autocratic approach in its 
recommendations.

2. May 9, 1995, Hearing on Strengthening Departmental Management.

    At that hearing, testimony was received from the GAO, two 
Clinton administration Cabinet officials, two former Cabinet 
officials, and a public policy research group analyst.
    Thomas P. Glynn, Deputy Secretary of Labor, explained 
Federal management and ``reinvention'' initiatives in his 
agency, including a newly proposed chief information officer 
position. The committee questioned the diffusion of management 
accountability throughout the department among its deputy 
secretary, the Secretary's chief of staff, inspector general, 
assistant secretary for management, and chief financial officer 
positions, each of which had some part of the overall 
management role.
    George Munoz, Assistant Secretary for Management and Chief 
Financial Officer of the Treasury testified on the current 
Federal management and ``reinvention'' initiatives within and 
outside his agency, including the need to emphasize the three 
principles of customer service, strategic planning, and 
streamlining that had guided the department's management 
improvements.
    Assistant Comptroller General Johnny C. Finch, General 
Government Division, and Gene L. Dodaro, Accounting and 
Information Management Division, GAO, reviewed the critical 
steps needed to strengthen Federal agency management, among 
them clearly defining missions, strengthening financial 
management, improving operational effectiveness through 
technology-based reengineering, and building capacity to manage 
the Federal workforce. Dodaro believed that government reform 
efforts abroad have succeeded in large part because they have 
addressed and solved problems of fixing accountability for 
results--a measure missing or omitted from the NPR report.
    Alan L. Dean, former Assistant Secretary of Transportation 
for Management and coordinator of President Nixon's plan for 
departmental reorganization, and William D. Hansen, former 
Assistant Secretary of Education for Management and Chief 
Financial Officer, discussed proposals for how the management 
of today's Federal departments could be strengthened. Dean 
noted increasing numbers of noncareer officials throughout the 
Federal workforce and a loss of Government corporation 
management expertise occasioned by OMB's most recent 
restructuring, and proposed the creation of a separate Office 
of Federal Management, outside OMB. Hansen outlined the effects 
of block-granting educational programs on the internal 
organization and structure of the Department of Education in 
the early 1980s.
    Roger L. Sperry, Director of Management Studies, National 
Academy of Public Administration, summarized the Academy's 
recent reports and other relevant work on the strengthening of 
Federal departmental management. He identified six essentials 
of Federal Government reform: strengthening Federal leadership, 
harnessing information technology, combining and integrating 
like functions, making performance the driving factor, 
streamlining Federal field structures, and improving 
legislative-executive branch relations.

3. May 16, 1995, Hearing on Consolidating and Restructuring the 
        Executive Branch.

    At that hearing, testimony was received from four Members 
of Congress, one former Cabinet official, and three public 
policy research group analysts.
    Representative Robert S. Walker of Pennsylvania, Chairman 
of the Committee on Science, advocated a Department of Science. 
The proposed department would combine science elements of the 
existing Departments of Commerce and Energy as those two 
agencies are phased out. The department would also include the 
National Science Foundation, National Aeronautics and Space 
Administration, Environmental Protection Agency, and the United 
States Geological Survey. Chairman Walker noted that an 
independent department would emphasize the role of science in 
government decision making.
    Representative Sam Brownback of Kansas explained the 
overarching framework under which the Freshman Task Forces on 
Departmental Restructuring were considering agency reductions. 
His group endeavors to make the Federal Government smaller, 
more efficient, and more focused, based on four principles: 
localize, privatize, consolidate, and eliminate.
    Representative Dick Chrysler of Michigan presented his plan 
for dismantling the Department of Commerce, H.R. 1756. He 
described the Department of Commerce as a loose collection of 
more than 100 programs serving only 1,000 customers. He noted 
that only a small percentage of the department's budget had 
been used to support trade.
    Representative Todd Tiahrt of Kansas argued for eliminating 
the Department of Energy. After recounting its history since 
being created in 1977, he noted that the department's rationale 
for existence seemed to have evolved over time and questioned 
whether the department's current missions justified a Cabinet 
level agency.
    Robert A. Mosbacher, former Secretary of Commerce, endorsed 
the elimination of his former department. He noted that 60 
percent of the agency budget and more than 35,000 members of 
the work force were devoted to activities other than promoting 
trade.
    Scott A. Hodge, Grover M. Hermann Fellow in Federal 
Budgetary Affairs, The Heritage Foundation, summarized the 
recommendations of the Foundation's book, Rolling Back 
Government. The Heritage proposal would shrink the number of 
Cabinet agencies from 14 to 5, eliminating the Departments of 
Agriculture, Commerce, Education, Energy, Housing and Urban 
Development, Interior, Labor, Transportation, and Veterans 
Affairs, and retaining the Departments of State, Defense, 
Treasury, Justice and Health and Human Services.
    Jerry Taylor, Director, Natural Resources Studies, Cato 
Institute, focused his testimony on eliminating the Department 
of Energy. He argued that energy production and distribution 
was better directed by market forces than by government 
regulation. Taylor proposed shifting Energy's weapons 
responsibilities to a new sub-cabinet National Nuclear Weapons 
Administration, and either terminating or privatizing the 
department's remaining functions.
    Herbert N. Jasper, Senior Associate, McManis Associates, 
provided a range of viewpoints concerning the consolidation and 
restructuring of the executive branch, and proposed the 
creation of a Commission on Executive Reorganization. The body 
would have six months in which to propose a Cabinet 
reorganization plan. The commission would review program 
restructurings in order to devise an appropriate organizational 
structure.

4. May 16 and 23, 1995, Hearing on Combining Federal Programs and 
        Organizations.

    At that hearing, testimony was received from 
representatives of the GAO; the Departments of Energy, 
Education, and the Treasury; three former Secretaries and two 
former Under Secretaries of Energy; and two public policy 
research group analysts.
    Secretary of Energy Hazel R. O'Leary, contended that 
matters such as national security protection, nuclear danger 
reduction, weapons site cleanup, environmental management, 
science and technology management, and energy enhancement were 
Federal concerns justifying retention of the department, albeit 
somewhat smaller. O'Leary rejected as unwieldy and ill-advised 
a conceptual proposal for a Department of Science.
    Donald P. Hodel, former Secretary of Energy under President 
Reagan, characterized the department as meddlesome and unsuited 
to the market-economy functions of producing and generating 
energy.
    Admiral James D. Watkins, U.S.N. (ret.) former Secretary of 
Energy under President Bush, voiced concern for effective 
stewardship of the Nation's nuclear energy program, without 
siding for or against a Department of Energy. Watkins 
recommended convening a team of experts to recommend 
disposition of the department's functions.
    John S. Herrington, former Secretary of Energy in the 
Reagan Administration, proposed to dismantle the department by 
placing nuclear weapons responsibilities under a new Under 
Secretary of Defense, privatizing the Naval petroleum reserves 
and five electrical power marketing administrations, and 
terminating energy conservation and research and development 
programs.
    Shelby T. Brewer, former Under Secretary of Energy during 
the Reagan Administration, stated that the departments original 
mission of energy development, conservation, and demonstration 
had degenerated to ten percent of its present array of programs 
and functions, which, he said, now included environmental 
management, basic science, and biological medical research.
    Donna R. Fitzpatrick, former Under Secretary of Energy 
during the Bush Administration, urged eliminating the 
department and assigning nuclear weapons responsibility to a 
sub-Cabinet agency independent of the Department of Defense.
    Marshall S. Smith, Under Secretary of Education, supported 
retention of the Department. He claimed that Education had the 
smallest proportion of administrative costs and the lowest 
ratio of employees to total budget among Cabinet departments. 
But basically, he saw Federal involvement in education as a 
matter of fulfilling a national interest because it supports 
democracy and the economy.
    Donald Wurtz, Chief Financial Officer of the Department of 
Education, provided testimony and answered questions concerning 
the department's need to improve the collection of student loan 
debts.
    Chester E. Finn, Jr., John Olin Fellow, the Hudson 
Institute and former Assistant Secretary of Education during 
the Reagan Administration, objected to Federal meddling in 
American education and advocated either block-granting Federal 
education programs to the States or transferring the Department 
of Education's missions and functions elsewhere within the 
Federal Government.
    William D. Hansen, Executive Director of the non-profit 
Education Finance Council and Assistant Secretary of Education 
for Management in the Bush Administration, cited the near 
doubling of categorical Federal education programs in 14 years 
as a prime example of the need to consolidate overlapping and 
duplicative Government programs, reduce Federal intrusion upon 
local education, and cut back departmental staff.
    George Munoz, Assistant Secretary for Management and Chief 
Financial Officer of the Treasury, described management reforms 
and recent improvements in financial management practices that 
had been implemented in the Department of Education.
    Paul Posner, Director, Budget Issues, Accounting and 
Information Management Division, GAO, suggested that the 
opportunity was ripe for raising governmental operating 
efficiency and improving performance, by consolidating programs 
with similar objectives and identifying and eliminating 
duplicative and conflicting program requirements.

5. June 6, 1995, Hearing on Corporate Structures for Government 
        Functions.

    At that hearing, testimony was received from the 
Administrator of the General Services Administration [GSA], the 
Deputy Administrator of the Bonneville Power Administration, a 
former Defense Secretary, and four proponents of Government 
corporations.
    Donald H. Rumsfeld, former Secretary of Defense under 
President Ford and chief executive officer of General 
Instruments Corporation, offered testimony concerning the 
general concept of using corporate structures for Federal 
Government functions, stressing the critical importance of 
first questioning an agency's mission and then restructuring 
based on that review. Involved in several successful corporate 
restructurings, Rumsfeld emphasized that restructuring an 
agency without first reviewing its mission would be nothing 
more than wasted effort.
    Roger W. Johnson, Administrator of General Services, 
explained the ongoing reorganization of his agency, stating 
that there were a number of line management Federal jobs whose 
incumbents' performance could be rated according to profit or 
loss results. He stressed that ``governing by process'' rather 
than by results, encourages risk aversion among Federal 
managers.
    Jack Robertson, Deputy Administrator, and Paul Majkut, 
General Counsel, Bonneville Power Administration, suggested 
Government corporation status for their agency, citing 
competition from local power producers and increased compliance 
costs of preserving endangered species as prime factors for the 
change.
    Daniel V. Flanagan, Jr., President, Flanagan Consulting 
Group, proposed legislation to form a Defense-related 
Government corporation, to be known as the Forrestal 
Corporation, which would also funnel private sector investments 
into Federal energy improvement required by the 1990 Energy 
Act.
    Harold Seidman, Senior Fellow, National Academy of Public 
Administration and drafter of the Government Corporation 
Control Act of 1945, presented an update of the act to improve 
oversight of Government corporations through the strengthening 
of Government expertise in keeping with the times.
    Jack Johnson, President of the Professional Airways Systems 
Specialists, and Barry Krasner, President of the National Air 
Traffic Controllers Association, two unions, endorsed formation 
of a Government, rather than a privatized, air traffic control 
corporation, as more favorable to employee interests.

6. June 13 and 19, 1995, Hearing on Streamlining Federal Field 
        Structures.

    At that hearing, testimony was received from 
representatives of the Departments of Agriculture and 
Transportation; the newly independent Social Security 
Administration [SSA]; three retired public administrators; an 
employee advocacy group president; as well as eight regional 
directors from the General Services Administration and the 
Departments of Defense, Housing and Urban Development, State, 
Transportation, and the Treasury.
    Dwight Ink, President Emeritus of the Institute of Public 
Administration, offered several recommendations for 
streamlining Federal field structures: (1) that field structure 
reforms be the result of comprehensive analysis of agency 
missions and activities, addressing the three interdependent 
dimensions of structures, systems, and people; and considering 
the total Government-wide impact of all agencies on communities 
and the public; (2) that agency personnel be appropriately 
trained for their changed responsibilities; and (3) that a 
number of the higher level career positions be redesigned and 
shifted from headquarters to the field.
    Alan L. Dean, Senior Fellow, at the National Academy of 
Public Administration, advocated decentralizing agencies' 
management to their lowest practicable levels for greatest 
responsiveness and best use of resources, adding that no single 
model for field structure could suffice for all departments and 
agencies but that field offices at every level should reflect 
an agency's mission and impact on the public.
    Charles F. Bingman, visiting Professor of Public 
Administration, at The George Washington University, decried 
the entrenched resistance to change which greatly impaired 
Federal flexibility and initiative to reorganize operating 
structures. He noted that field structures needed to be able to 
adjust to reflect the changing characteristics of the programs 
being administered.
    Wardell C. Townsend, Jr., Assistant Secretary of 
Agriculture for Administration, reported on the President's 
Management Council Federal Field Office Study and on his 
departments progress in restructuring its field offices, 
proposing four general guidelines for restructuring: (1) 
maintain government presence at points of service delivery only 
where face-to-face contact is necessary; (2) upgrade service by 
exploiting technology; (3) centralize back-room recordkeeping 
and processing operations for greatest efficiency; and, (4) 
eliminate unnecessary layers of control.
    Shirley Sears Chater, Commissioner of the Social Security 
Administration, explained her agency's reappraisal of its own 
field structure and announced plans to abolish or merge five of 
ten regional offices and by 1999 to increase the number of 
employees each supervisor was responsible from a 7:1 to 15:1 
ratio. The latter was possible as a result of a 5-year $1.1 
billion investment in information technology.
    Mary Barrett Chatel, President, National Council of Social 
Security Management Associations, wanted to go beyond the 
Social Security Administration's plan, by redistributing to the 
field offices at least 30 percent of jobs located at the 
agency's headquarters and regional offices.
    D. Lynn Gordon, Miami district director, U.S. Customs 
Service, Department of the Treasury, and George Rodriguez, 
Houston area coordinator, Department of Housing and Urban 
Development, reported successes in improving customer 
satisfaction under the National Performance Review. Each agency 
had succeeded in an initiative to improve ``customer service'' 
through enhanced administrative flexibility and adept use of 
communication skills with individual clients and institutions.
    William Burke, Great Lakes regional administrator of the 
General Services Administration, and chair of the Chicago 
Federal Executive Board (which coordinates certain activities 
of Federal agencies in the region), outlined the agency's 
initiative for controlling administrative costs through 
telecommuting (work at home) programs and by pooling of 
different agencies' overhead resources, a concept called the 
Cooperative Administrative Support Unit [CASU] program. He also 
briefed the committee on the extent of the regional Federal 
presence located in the Chicago area.
    Gretchen Schuster, Chicago Regional Director, Passport 
Agency, Department of State, and also a Federal Executive Board 
member, detailed the board's activities in coordinating the 
actions of 154 member agencies in the Chicago area.
    Joseph A. Morris, former General Counsel for Office of 
Personnel Management urged further decentralization of Federal 
Government work away from Washington, more thorough regional 
coordination by Federal Executive Boards of agency field office 
programs and activities, and greater reliance by Washington 
headquarters offices on the advice of those Federal managers in 
the field.
    Michael P. Huerta, Associate Deputy Secretary of 
Transportation and Director, Office of Intermodalism, 
Department of Transportation, presented his agency's plan to 
combine management of surface transportation and civilian 
maritime functions in an Intermodal Transportation 
Administration. He indicated, though, that the agency intended 
to defer decisions on field offices until after the general 
intermodal plan had been approved.
    Kenneth A. Perret, Garrome Franklin, and Donald Gismondi, 
Federal regional administrators in Chicago for highways (FHA), 
aviation (FAA), and transit (FTA), described regional 
transportation and infrastructure issues and the need for 
increased cooperation to effectively administer grants under 
the 1991 Intermodal Surface Transportation Efficiency Act.
    Colonel Richard Craig, North Central Division Engineer, 
U.S. Army Corps of Engineers, explained the Corps headquarters' 
responsibility for budget and broad policy issues the division 
(regional) offices' intergovernmental contacts and quality 
management emphasis, and the district (field) elements' direct 
operational responsibility for civil works facilities such as 
dams and for environmental regulatory compliance.

7. June 20, 1995, Hearing on Performance Measurement, Benchmarking and 
        Reengineering.

    At that hearing, testimony was received from 
representatives of the General Accounting Office [GAO], three 
research groups, two State governments, and two consulting 
firms.
    Donald F. Kettl, Center for Public Management, The 
Brookings Institution, and professor at the University of 
Wisconsin, Madison, endorsed the potential of performance 
measurement to measure success in terms of results achieved. He 
also elaborated on the utility of performance measurement in 
revealing to citizens how tax dollars are delivering services 
and to Congress how programs are producing results. Kettl added 
that performance measurement is about communication and 
management rather than number crunching, requires a long term 
view, and addresses both outputs, which are comparatively easy 
to measure, and outcomes, which are more difficult.
    Harry P. Hatry, Director of State and local government 
research programs at the Urban Institute, recommended that the 
committee seek and use information on program quality and 
outcomes; that it coordinate with authorizing and 
appropriations committees in reviewing specific agencies' 
performance; and that it encourage State and local governments 
to measure performance in terms of quality and service to the 
public.
    Herbert N. Jasper, Senior Associate, McManis Associates, 
discussed potential weak spots in performance measurement, such 
as gaming by selecting safely attainable targets, selecting 
measurement data on the basis of availability rather than 
relevance, and ignoring the labor-intensive aspect of the 
process. Calling ``reengineering'' the systematic application 
of common sense, Jasper acknowledged that the very political 
nature of the budget process could frustrate the aim of 
performance budgeting which seeks more analytical and objective 
budget decisions.
    Johnny C. Finch, Assistant Comptroller General, General 
Government Programs, GAO, described the four critical actions 
needed for measuring performance in the Federal Government: (1) 
focus on mission and desired results; (2) involve key 
stakeholders; (3) develop systems that measure performance 
relevant to the decisions managers must make; and (4) use the 
measurement information to modify processes in ways that 
further enhance performance.
    Linda Kohl, Minnesota Director of Planning, outlined her 
State's three-phase benchmarking project: (1) involving having 
the citizens decide on a long-term vision for their State; (2) 
developing a set of clear, outcome-based, measurable indicators 
for which data were available; and (3) soliciting users' 
feedback on the indicators, which she said could serve as tools 
of accountability for Federal block grant funds.
    Sheron K. Morgan, Planning Officer for North Carolina, 
described the State's performance measurement system as one 
which linked policy and budgeting and had shifted 
accountability from ingoing efforts to outcoming results. She 
stressed that success meant the involvement of senior 
management and the acceptance by agencies of proposed 
measurement indicators.
    Joseph G. Kehoe, Managing Partner for Government Services 
of Coopers and Lybrand, advocated activity-based costing--or 
ABC--as a way of determining the true cost of a service or 
activity, and of analyzing and measuring the value of each 
service or activity's component processes to determine the 
contribution of each to the overall quality of results.
    Laura Longmire, National Director of Benchmarking, KPMG 
Peat Marwick, outlined the utility of benchmarking, performance 
measurement, and business process reengineering in enhancing 
accountability. She asserted that all processes can be measured 
in terms of quality and response time through use of these 
techniques, and that to be improved, processes must first be 
measurable. Longmire identified common themes for successful 
projects: long-term scope, management commitment, investment in 
technology and tools, continual communication, and a cultural 
focus on results rather than compliance.

8. June 27, 1995, Hearing on Compliance with the Government Performance 
        and Results Act of 1993 [GPRA]

    At that hearing, testimony was received from officials of 
the Office of Management and Budget [OMB], the General 
Accounting Office [GAO], as well as from two public policy 
research group analyst, and the coordinators of four GPRA pilot 
projects.
    OMB Deputy Director for Management John A. Koskinen held 
that the more than 70 first stage GPRA ``pilot projects'' were 
valuable experiments but reported no immediate plans for second 
stage projects. Koskinen announced OMB plans to integrate the 
GPRA findings into the budget process. Fiscal year 1998 would 
be treated as a ``dry run'' to comply with the Act's 
requirements, which take effect the following year.
    Johnny C. Finch, the Assistant Comptroller General for 
General Government Programs at GAO, saw five challenges for the 
agencies implementing GPRA: (1) developing and sustaining top 
management commitment; (2) building the internal capacity of an 
agency to use performance information; (3) creating cultural 
incentives to change the focus of management and accountability 
from compliance to results; (4) integrating GPRA into daily 
operations; and (5) working together with Congress to build a 
more effective oversight approach.
    Paul C. Light, Director of Public Policy Programs, the Pew 
Charitable Trusts, explained the difficulties inherent in 
converting from the Federal Government's present compliance-
based accountability system to one based on performance, as 
GPRA requires. Light focused on a compliance-oriented 
management culture that had been reinforced by the many layers 
of top-level political appointee positions, which he called the 
``thickening'' of the Federal Government.
    President R. Scott Fosler of the National Academy of Public 
Administration, questioned the Federal Government's capacity to 
implement GPRA and suggested it might lag behind schedule, 
unless executive leadership and congressional support could be 
mobilized to further the proper understanding and effective 
implementation of the Act's provisions.
    Anthony A. Williams, Chief Financial Officer, Department of 
Agriculture, described the Forest Service GPRA pilot project. 
The project, one of eight in the department, covers all program 
activities of the Forest Service. The Forest Service has 
developed an integrated financial and accomplishment reporting 
system and a set of corporate performance measures.
    Vice Admiral A.E. Henn, Vice Commandant, U.S. Coast Guard, 
Department of Transportation, explained the Coast Guard's 
project, one of four in the department. The project covers 
Marine Safety, Security and Environmental Protection programs 
and has focused on accountability for results coupled with 
greater flexibility for managers.
    Joseph Thompson, New York Regional Director of the 
Department of Veterans Affairs, praised the GPRA as a tool for 
organizational improvement, citing his organization's change in 
structure from a top-heavy hierarchy to self-managed teams. One 
of the results has been a reduction of customer service 
delivery from 30 to 20 steps.
    Colonel F. Edward Ward, Jr., Director of Field Offices, 
Department of Defense Finance and Accounting Service, provided 
testimony on the implementation of an Air Force GPRA pilot 
project at his last previous duty station with the Air Combat 
Command in Langley, Virginia. The command successfully 
developed a cost accounting methodology to track costs per unit 
of output and capture costs associated with performance 
measures.

                    c. determining the federal role

    As indicated at the beginning, the committee believes that 
any exercise in making government work must begin with a close 
look at the Federal Government's mission. The commitment to 
balance the Federal budget in seven years requires recognizing 
the fiscal constraints on the Federal Government, whose 
ambitious tasks have outstripped available public resources. To 
redress this overextension, a total review of the Federal 
Government's activities is necessary.

1. Establishing Clearer Federal Missions and Effective Services.

    The executive branch of the Federal Government has not 
undergone a comprehensive, systematic review of its missions, 
services, and organization since the Nixon administration. The 
similar thrusts toward consolidation in President Nixon's 1971 
plan and the Heritage Foundation's 1995 proposal suggest that 
many of the problems of duplication, proliferation, 
inefficiency and waste within the Federal Government are as 
critical today (if not more so) as they were a quarter century 
ago. Since that time, as the National Academy of Public 
Administration and others have shown, the accretion of small 
programs in domestic departments, such as Commerce and Housing 
and Urban Development, have reduced these organizations to mere 
``holding companies'' of disparate functions. During the Reagan 
Administration the President's Private Sector Survey on Cost 
Control (also known as the ``Grace Commission'' after its 
chairman Peter Grace) recommended ways for reducing waste and 
controlling costs in the executive branch. Most of its 
recommendations were not implemented by Congress. The National 
Performance Review [NPR] headed by Vice President Gore 
reexamined them in 1993 and found many worth pursuing as 
potentially cost-effective. However, in the committee's view, 
both the Grace Commission and Phase I of the NPR neglected the 
fundamental questions about what functions executive 
departments and agencies ought to perform.
    Some have argued that the Grace Commission's private-sector 
experts never fully appreciated the accountability and 
substantial cultural differences between profit-motivated 
businesses and tax supported Government agencies, diluting 
their recommendations by relying on cost-cutting solutions 
better suited to business than to Government.\11\ Conversely, 
some NPR critics suggest that its total reliance on career 
Federal employees, rather than private sector managers, has 
yielded a myopic view of Government's ills and how to cure 
them. NPR can point to relatively few savings which it has 
initiated and is directly responsible for implementing. The 
review claims the across-the-board reduction of more than a 
quarter-million Federal jobs as credit for most of its savings. 
The appropriateness of crediting NPR with the savings from 
eliminating these positions is open to debate. In addition, the 
NPR reports have appropriated as their own many preexisting or 
localized savings initiatives.
---------------------------------------------------------------------------
    \11\ ``See, e.g., Downs, George W. and Patrick D. Larkey, The 
Search for Government Efficiency: From Hubris to Helplessness, New 
York: Random House, 1986, pp. 220-221: ``. . . [T]he Commission appears 
to have embraced the . . . arrogant notion that problems exist because 
no one in government has noticed them and that they will go away if the 
collective genius of the private sector points them out. Yet, if this 
is so, what does it tell us about . . . the efforts of outstanding 
managers . . . who have arrived in Washington following extremely 
successful careers in business? . . . More probable is . . . that the 
public sector's problem's are very difficult and very different from 
those that private-sector management faces and that it will take more 
than hackneyed solutions and business maxims to solve them.''
---------------------------------------------------------------------------
    Given a more appropriate mix among its task force members, 
NPR might have been able to balance the unique characteristics 
of the Government management environment against lessons 
learned from the private sector's experience. The best kind of 
group to rethink Government may therefore be ``neither Grace 
nor Gore'' but a mix of the best minds from business, 
government, universities, and foundations.
    The committee applauds the present NPR efforts for 
realizing the imperatives to rethink and transform the 
Government for the next century. As such, NPR represents a 
crucial and important first step. However, the committee 
supports the additional measures discussed above for raising 
current efforts by several orders of magnitude. The results 
claimed by the most recent NPR recommendations have not been 
independently verified, and the committee is unaware of any 
Administration plan or process for verification. The NPR made 
some contribution toward improving the Federal Government and 
lowering its cost; however, it appears to be largely based on 
anecdotal and ad-hoc information, rather than the result of a 
deliberate and cohesive plan. In the committee's view, NPR 
began by asking the wrong questions, did not go far enough, and 
did not put sufficient emphasis on fiscal accountability.
    In its just-released third report, for instance, NPR 
decries ``taking an axe to the federal government'' as 
problematic in ``that it won't fix what remains.'' Yet, a few 
pages farther is the statement that ``In 1993, the 
Administration announced a goal to . . . cut 252,000 government 
jobs . . . in five years,'' and, in the summary of savings to 
date, that, ``As a result [of 160,000 job reductions], savings 
for FY 1995 are projected to be $4.4 billion. Total five-year 
savings are estimated at $40.4 billion by the end of FY 
1999''--that amounting to 70 percent of the report's estimated 
total ``savings based on actions to date'' of $57.7 billion. It 
appears from the Third Report that over two-thirds of the 
projected five-year savings from actions already taken are 
going to come from the very up-front job cuts the report 
criticizes as taking an axe to the Government.\12\
---------------------------------------------------------------------------
    \12\ Gore, Third Report of the National Performance Review, 
Washington, DC, 1995, pp. 2, 6.
---------------------------------------------------------------------------
    In the committee's view, the downsizing, and the estimates 
of downsizing, should be one of the last actions, after there 
is consensus on what functions the Federal Government should be 
performing, and on what is the most cost-efficient, effective, 
customer-friendly, and publicly accountable way of performing 
those functions. By contrast, the NPR has put it first and has 
thereby, by the committee's reckoning, started at the end of 
its task. The NPR, now in the immediate Office of the Vice 
President, is unlikely to enjoy the sustained institutional 
commitment necessary for effective management. The NPR's 
objectives would be better attained by a permanent Office of 
Management, within the Executive Office of the President. In 
that connection, the committee supports current and proposed 
initiatives for convening a commission of experts from 
business, universities, the nonprofit sector, and all levels of 
government, including the legislative branch, to undertake a 
reassessment of Government missions, processes and 
accountability.
    In the committee's view, the core group of Federal 
missions, services and programs should be defined by broad, 
overarching considerations of national priority. There are 
basically five areas: economic policy; foreign affairs and 
trade; national defense; natural resources and the environment; 
and domestic safety, peace and justice. Many functions the 
Federal Government performs now may more effectively and 
economically be done elsewhere:
     The education of America's children is essentially 
local in nature. Under Secretary of Education Marshall Smith 
told the committee that nationwide between six and seven 
percent of the total cost of public education from kindergarten 
through twelfth grade is underwritten by the Federal 
Government, with the remainder supplied by State and local 
sources; yet, according to William Hansen, Federal paperwork, 
accounting and reporting requirements disproportionately burden 
teachers and administrators and deter them from actually 
educating our Nation's youth.\13\ The committee recognizes that 
education is a priority for the Nation. However, the States and 
localities are fully capable of educating the citizenry. 
``Federalizing'' the response to problems has not made the 
response more effective.
---------------------------------------------------------------------------
    \13\ Testimony of Marshall S. Smith and William D. Hansen at the 
May 23, 1995, hearing. An example given in testimony was a 1991 survey 
of Ohio school districts, which determined that each school district in 
the State was required to complete 330 reports and forum, of which 157 
were submissions to the State and 173 were Federally required, 
suggesting that the Federal Government was responsible for 55 percent 
of the paperwork burden while Federal funds accounted for about six 
percent of the resources available to each school district.
---------------------------------------------------------------------------
     The sale, distribution, and consumption of our 
Nation's energy resources are quintessentially affairs of the 
commercial marketplace and should therefore be subject to 
market conditions of supply and demand, not insulated from 
them, according to testimony received from several witnesses. A 
number of witnesses questioned whether a Cabinet-level 
department was necessary or appropriate for the energy 
function. Of particular concern was today's Federal competition 
with private industry in the marketing of electric power, e.g., 
the Bonneville Power Administration and the Tennessee Valley 
Authority.
     Certain functions such as the printing and minting 
of the Nation's money and the constitutional function of the 
conduct of foreign policy and providing for the common defense 
are unarguably Federal responsibilities. However, most 
commercial-type activities supporting those functions could and 
should be performed by private sector sources under contract to 
the Federal Government. The committee noted the distinction 
between ``contracting-out,'' where the Government retains 
accountability for mission or program outcomes despite many of 
the goods and services being delivered under contract by non-
governmental entities, versus divestiture and devolution, where 
accountability for outcomes, and the functions themselves, are 
transferred out of the Federal Government.

2. Establishing More Effective Departments and Agencies.

    The committee supports a 1988 proposal by the National 
Academy of Public Administration [NAPA] for organizing the 
Federal Government by major purpose--as originally recommended 
in 1949 
by the First Hoover Commission \14\ and later by President 
Nixon. \15\ The National Academy's criteria for departmental 
status were repackaged by Mr. Jasper as the following:
---------------------------------------------------------------------------
    \14\ Hoover, Herbert Clark. Commission on Organization of the 
Executive Branch of the Government, Concluding Report, May 1949, pp. 
41-42: ``Many closely related functions . . . are so scattered that . . 
. no one is charged with considering the problem as a whole [; and] . . 
. many agencies contain functions which are totally unrelated to each 
other . . . creating a lack of central purpose and greatly increasing 
the problems of internal coordination. . . . [A]reas presenting the 
greatest problems of duplication and coordination are those in which 
services of a similar nature are located in different agencies in the 
executive branch. This dispersion of related functions has led to 
interagency rivalries and conflicts which have been extremely wasteful 
and costly. . . . [I]t has been our constant objective to achieve the 
greatest possible degree of unity in the departmental structure [so 
that] . . . a maximum unity of purpose in each department is . . . 
achieved.''
    \15\ See note 4.
---------------------------------------------------------------------------
    Would a proposed Cabinet entity:
          a. Have under its tutelage all the Federal programs 
        contributing to the broad national goal or goals 
        assigned the entity?
          b. Be able, with its combination of related programs, 
        to improve service delivery and save money for both the 
        intended clientele (recipients) and the taxpayers?
          c. Be free from domination by a single constituency 
        group or professional discipline?
          d. Fill an acknowledged need for improved leadership, 
        visibility and public support for its programs?
          e. Best serve the national interest as an independent 
        Federal entity (in or out of the Cabinet), as opposed 
        to being devolved or privatized?
          f. Make the Cabinet stronger or weaker, or have no 
        effect on it? \16\
---------------------------------------------------------------------------
    \16\ Testimony of Herbert N. Jasper at the May 16, 1995, hearing.
---------------------------------------------------------------------------
While generally supporting these criteria, the committee 
believes that there is a basic criterion which should determine 
Cabinet status: The departments in the Cabinet should be 
entities with programs high in policy content and in divisive 
issues requiring top-level attention. Those entities with 
stable administrative programs that tend to ``run by 
themselves'' would not be strong candidates for the Cabinet. A 
Cabinet should contain those entities of the Federal Government 
which require coordination by the chief executive officer and 
his staff. Under the Constitution, the President is the Chief 
Executive.\17\ As Article II, Section 1 clearly, begins: ``The 
Executive Power shall be vested in a President of the United 
States of America.'' \18\
---------------------------------------------------------------------------
    \17\ The American Cabinet is quite different than the British 
Cabinet. In the United Kingdom the Cabinet is made up of party leaders 
from the Parliament. The members bear collective responsibility for the 
administration of the government under a Prime Minister. In the United 
States, the idea of a Cabinet is based on Article II, Section 2 of the 
Constitution: the President ``may require the Opinion, in writing, of 
the principal Officer in each of the executive Departments, upon any 
Subject relating to the Duties of their respective Offices. . . .'' 
President Washington met regularly with the Secretaries of State, 
Treasury, and War, and the Attorney General. Congress may establish a 
major department and provide for a Secretary to head it. Ultimately, 
the President may add to the Cabinet those whose advice he wishes, such 
as the U.S. Representative to the United Nations and the U.S. Trade 
Representative, among others. For many Presidents, the Cabinet has been 
``window dressing.'' Lincoln put his political opponents in the Cabinet 
so he could keep his eye on them. Eisenhower was the first to have more 
formal Cabinet meetings and a Cabinet Secretary. There were briefing 
papers in advance, organized discussion, a decision memorandum and 
follow-up by the Cabinet Secretary and other staff.
    \18\ United States Constitution.
---------------------------------------------------------------------------
    Aligning and consolidating the programs of Federal agencies 
by major purpose would lead to increased efficiency and 
improvements in performance that significantly benefit 
taxpayers, administrators, service providers, and beneficiaries 
alike, according to Mr. Poser. Juxtaposing similarly-aimed 
programs helps managers pinpoint those that are duplicative, 
outdated, and no longer cost-effective and would help Congress 
to make explicit tradeoffs among similar programs. 
Administration and service delivery of the programs to be 
retained or consolidated would be improved by discerning and 
removing conflicting requirements and overlapping provisions. 
Finally, consolidation of programs makes possible significant 
cuts in Federal spending, by requiring less effort and fewer 
employees to administer them effectively.\19\
---------------------------------------------------------------------------
    \19\ Testimony of Paul L. Poser at the May 23, 1995, hearing.
---------------------------------------------------------------------------
    Some possible illustrative departmental examples of 
grouping by similar mission should be considered and include 
those that follow. They are based on suggestions made to the 
committee:
     Forming a Department of Human Resources from the 
Departments of Education, Labor, and portions of Health and 
Human Services;
     Forming a Department of Natural Resources from 
elements of the Departments of Agriculture, Commerce, Energy, 
and the Interior.
     Pooling the statistics-gathering functions of 
several departments and agencies, the Bureau of the Census 
which is now in Commerce, and the Bureau of Labor Statistics 
which is now in Labor, into a single, independent statistical 
entity.
     Consolidating Federal disbursing and related 
financial services into a single entity.
    The committee supports legislation to define for government 
enterprises a set of realistic, contemporary standards of 
accountability for public funds, while affording management the 
autonomy to organize for best results. The proposal would 
update the Government Corporation Control Act of 1945, and:
     Redefine powers, duties and responsibilities of 
Government corporations and future Government-sponsored 
enterprises [GSE]; 20
---------------------------------------------------------------------------
    \20\ Existing government sponsored enterprises are subject to 
various statutory reporting and control standards.
---------------------------------------------------------------------------
     Require annual reports on the corporations' and 
the future GSE's effect on the public debt;
     Set creditworthiness rating standards for future 
GSEs; and
     Require annual audits of government enterprises.

3. Managing the Transformation of the Executive Branch.

    The fundamental rethinking of the Federal Government's core 
functions will require both broad and high-level coordination 
and unity of purpose in its undertaking. The ad-hoc nature of 
the National Performance Review [NPR] organization dramatically 
demonstrates a critical void in the President's capacity to 
manage the executive branch of the Federal Government.
    Witnesses offered a wide range of options for restoring 
effective government-wide management oversight capacity and 
organization to the executive branch. Witnesses agreed that 
consideration of budget issues and budget officials had 
regularly overridden management interests, with predictable and 
tragic results such as the Department of Housing and Urban 
Development scandal of the 1980s.\21\ To preclude yet another 
occurrence, the President and Congress needs to act together to 
preserve the preeminent authority and influence of a 
government-wide management planning and oversight office.
---------------------------------------------------------------------------
    \21\ Moe, Ronald C., ``The HUD Scandal and the Case for an Office 
of Federal Management,'' Public Administration Review, Vol. 51, No. 4 
(July/August 1991), pp. 298-307. A 1983 NAPA panel report, 
``Revitalizing Federal Management,'' urged the establishment of an 
Office of Federal Management. The report drew input from a 17-member 
Federal Advisory Council and contained views of nine top managers from 
an in-depth study.
---------------------------------------------------------------------------
    Options included establishing a new statutory Office of 
Management within OMB or establishing an Office of Management 
outside OMB but within the Executive Office of the President. 
If the latter route were chosen the Director of an Office of 
Management would have the same relationship to the President as 
the Director of OMB. Both would be nominated by the President 
and confirmed by the Senate. Both would report directly to the 
President. An Office of Management would combine the policy and 
oversight functions of the General Services Administration and 
the Office of Personnel Management [OPM] with management 
functions of the Office of Management and Budget. Several 
witnesses supported dismantling OPM and assigning to the new 
office policymaking responsibility for Federal workforce 
training and development.
    In March 1994, then OMB-Director Leon R. Panetta and Deputy 
Director Alice M. Rivlin announced a reorganization called 
``OMB 2000,'' which essentially sought to integrate management 
oversight functions into budget review. In the announcement, 
they noted:
          Critics of these recommendations may say that efforts 
        to integrate management and budget will end up in 
        merely bigger budget divisions, whose management 
        responsibilities will be driven out by daily 
        firefighting issues. We believe this criticism is based 
        on a false premise that ``management'' and ``budget'' 
        issues can be thought about separately. In fact, the 
        changes are intended to improve OMB's ability to 
        oversee agency programs and policies to ensure their 
        efficiency and effectiveness.\22\
---------------------------------------------------------------------------
    \22\ Office of Management and Budget Office Memorandum No. 94-16, 
March 1, 1994.
---------------------------------------------------------------------------
The committee notes also that as a Member of this body Mr. 
Panetta, in 1991, introduced legislation which would have 
established an independent Office of Federal Management in the 
Executive Office of the President, apart from OMB.\23\ 
Accordingly, the committee favors the earlier Panetta proposal 
as more likely to afford the President a directly subordinate 
capacity for carrying out his policy objectives, free of daily 
budget disputes.
---------------------------------------------------------------------------
    \23\ ``Office of Federal Management Act of 1991,'' introduced by 
Mr. Panetta on June 25, 1991, as H.R. 2750.
---------------------------------------------------------------------------
    As the Congress fundamentally begins to restructure the 
Federal Government, the need for effective management 
leadership in the Executive Office of the President is crucial. 
The committee adopted a model for a proposed ``Program 
Resolution Office'' within OMB as a mechanism for overseeing 
the phaseout of existing executive departments and agencies and 
ensuring the orderly redistribution and consolidation of 
retained Federal Government functions. The dismantling of large 
executive branch organizations is an example of an activity for 
which an office with a mission for Presidential level 
management planning and oversight would have responsibil- 
ity. A salient reference work in that connection is the 
National Academy of Public Administration's 1992 report, Beyond 
Distrust, which addresses productive ways of sharing power 
between the legislative and executive branches as a means 
toward ``effective governance under modern circumstances''.\24\ 
The recommendations to be forthcoming from the proposed 
Presidential commission must be focused on longer-term 
improvement and on measured, investment-oriented considerations 
of effective and stable government-wide oversight.
---------------------------------------------------------------------------
    \24\ National Academy of Public Administration, Beyond Distrust, 
Washington, DC, 1992, p. 9.
---------------------------------------------------------------------------

4. Federal-State Government Goals-Oriented Management.

    The GAO has studied experiences of six selected State 
governments which have undertaken results-oriented management 
reforms similar to those required under the Government 
Performance and Results Act of 1993, P.L. 103-62 [GPRA].\25\ 
The GAO believes that those experiences could help Federal 
agencies to focus more on program impact, which may lead to 
improved program effectiveness. The committee heard from 
officials of Oregon, Minnesota and North Carolina regarding 
their successes and their assessment of the effect that block-
granting of Federal programs was likely to have on those 
successes. While it is important to strengthen working 
relationships between the Federal Government and the States, 
the devolution of Federal Government workload must focus most 
intently on sorting out roles and responsibilities and assuring 
effective implementation.
---------------------------------------------------------------------------
    \25\ ``Managing for Results: State Experiences Provide Insights for 
Federal Management Reforms,'' GAO Report B-258332 of December 21, 1994.
---------------------------------------------------------------------------
    The committee believes that with devolution of Federal 
activities to the States through programmatic block grants, 
Congress will provide the management flexibility for State 
executives to administer these programs, reduce the extensive 
and crippling paperwork that now exists, and still have the 
fiscal accountability the taxpayers have a right to expect. 
Some flexibility in Federal audit controls over how the States 
do that work (with Federal resources) might be less costly and 
more beneficial overall than keeping present controls in place. 
The goal of the Federal Managers' Financial Integrity Act of 
1982, P.L. 97-255 [FMFIA] is that controls should not cost more 
than the benefits they produce. The committee supports proposed 
amendments to the Single Audit Act [SAA], P.L. 98-104 to raise 
the organization-wide audit threshold from $100,000 to 
$300,000. In this connection the committee advocates forming 
strong Federal-State-local partnerships and consolidating 
related activities in ``one-stop shopping'' centers.

                        d. organizing government

1. Management Structure.

    The National Performance Review's span-of-control standard 
of 15 subordinates under a single supervisor appeared 
unrealistic to the committee, in light of testimony received:
          The NPR report is certainly in the mainstream of 
        management thinking but it's clearly off base in 
        several respects such as relying too much on irrelevant 
        State and local experience. The NPR curiously 
        recommended--and you heard [OMB Deputy Director] John 
        Koskinen talk about it--that the seven-to-one ratio of 
        employees to managers should be changed to the alleged 
        private-sector ratio of 15 employees to each manager, 
        but Labor Department statistics report a ratio of only 
        6.3 to one, and some of the case studies that the NPR 
        used were the Ritz Carlton Hotel and I wonder what 
        supervision of chambermaids has to do with supervision 
        of toxic waste cleanups.\26\
The ``flatness'' (large span of control, few management layers) 
or ``steepness'' (small span of control, many management 
layers) of an agency's or department's organization will vary 
with the mission or program and, in the committee's view, 
should remain a management prerogative, based on the complexity 
of the work involved and not some arbitrary standard.
    Changes in span of control require careful assembly of the 
appropriate support activities that, in effect, partially 
substitute some of the activities traditionally performed by 
immediate supervisors. For example, information technology can 
enhance communication passed among multiple organizational 
levels. Training and development can supplement the 
instructional function performed by supervisors. Finally, the 
Inspector General offices and other auditing activities can 
backstop the oversight activities of supervisors.
    The top ranks of the Federal Government are ``thick'' with 
political appointees, whose positions remain vacant during a 
protracted nomination and approval process, who may be ill-
prepared for their work, who are often loyal to others besides 
the President, and who rarely stay in their jobs more than two 
years. Legislation to roll back the 3,000 ceiling on political 
appointees to 2,000 is being considered. While a one-third 
rollback is a good start, the committee supports further 
reductions, especially among Schedule C appointment positions, 
if the Federal Government is to reach industry's demonstrated 
level of delayering its top echelons. Professor Paul Light 
noted that throughout the Federal Government in 1983 there was 
one employee at the middle for every 1.6 on the front-line, and 
that by 1992 the ratio was moving down toward one-to-one.\27\ 
To Federal career employees the political appointee layer 
appears to be a ``glass ceiling,'' frustrating aspirations for 
advancement to the top ranks, sapping morale, and discouraging 
initiative. Reductions in the top levels will unclog the lines 
of management communication, remove unnecessary layers of 
review and supervision, and improve the clearance and policy 
formulation process.
----------
    \26\ Testimony of Herbert N. Jasper at the May 2, 1995, hearing.
    \27\ Light, Paul C., Thickening Government, Washington, DC: The 
Brookings Institution, 1995. The following extract from tabular data on 
p. 12 makes the point:

  Number of Occupants in Average Department Hierarchy, Selected Years,  
                                1960-1992                               
------------------------------------------------------------------------
              Primary Title                1960    1972    1980    1992 
------------------------------------------------------------------------
Secretary...............................       1       1       1       1
Under Secretary.........................       2       2       2       2
Assistant Secretary.....................       9      10      12      15
Deputy Assistant Secretary..............       8      14      28      36
Associate Deputy Assistant Secretary....       2       5       7      18
Administrator...........................       9      10       9       9
Deputy Administrator....................       5       9      11      14
Assistant Administrator.................       6       9      11      14
------------------------------------------------------------------------

    The committee supports advisory (staff) rather than 
directive (line) authority for Assistant Secretaries as a means 
of preserving a direct line of communication between department 
Secretaries and the principal operating officers of their 
subordinate agencies. The employees at the subordinate 
agencies--whether labeled an ``Administration,'' ``Bureau,'' 
``Center,'' or ``Institute,''--are in the most direct contact 
with the public being served.
    The committee has weighed a suggestion for forming an 
administrative ``super-agency,'' a kind of holding company for 
a miscellany of smaller, loosely related agencies, no one of 
which had a mission justifying Cabinet rank. In concept, the 
organization would function similarly to today's Department of 
the Commerce, seen by some as a front office for several 
largely self-contained, independent bureaus. Critical to 
success in surfacing any of the component agencies' major 
issues or problems would be direct and continual contact 
between the administrator and the heads of the component 
agencies.
    Even more critical will be to improve the professional 
quality of the appointees and career senior executives 
remaining in the Federal Government. The ability to sustain the 
type of operational flexibility introduced by th6 NPR depends 
on a future career workforce that is professional and 
nonpolitical.
    In its 1989 report the National Commission on the Public 
Service (Volcker Commission) reported that among its sample of 
1988 honor society graduates, public service was not perceived 
as a place where talented people could get ahead, and that 
public service was often seen as a career of last resort, with 
negligible probability of ending up in a top government 
job.\28\
---------------------------------------------------------------------------
    \28\ Report and Recommendations of the National Commission on the 
Public Service, (Volcker Commission Report) National Commission on the 
Public Service, Washington, DC: 1989, p. 26. The Commission was named 
after Paul Volcker, former Chairman of the Federal Reserve Board, who 
chaired the Commission.
---------------------------------------------------------------------------
    Federal political appointees for their part have tended to 
view public service assignments as private-career pauses, 
during and following which their permissible work and financial 
activities are circumscribed by conflict-of-interest rules.\29\ 
Younger candidates for appointment in the Federal Government 
have had less time to build lucrative private careers, are less 
affected by the losses in total income typically resulting from 
Federal service, and therefore are more likely to accept 
appointments than their more senior, better qualified, and more 
prosperous counterparts. Under such circumstances it seems 
likely that the caliber of willing candidates for political 
appointment will continue to be lower than many expect and 
those who accept are generally likely to have less experience 
and maturity in managing or in helping to manage complex 
organizations.
---------------------------------------------------------------------------
    \29\ The Volcker Commission Report (ibid., p. 15) noted, ``Men and 
women are reluctant to interrupt promising careers and uproot families 
to move to one of the most expensive areas in the country . . . 
Nominees are exposed to an array of complex and overlapping disclosure 
forms, most of which become public . . . [and] are asked to make 
immediate divestiture, whatever the cost and tax burden, of any 
financial holdings that might constitute a conflict of interest. And 
they are often given little or no orientation about their new 
responsibilities, in large measure because those doing the recruiting 
may know little about the substantive demands of the jobs.''
---------------------------------------------------------------------------
    To focus much-needed Presidential-level attention on the 
dearth of management capacity available to the Federal 
Government, the committee supports charging the proposed new 
Office of Management with accountability for the Federal 
workforce's level of professional competency. Thinning the 
ranks and improving the caliber of both political appointees 
and career senior executives, are necessary but not sufficient 
steps. The President (and Congress) should act to fill 
vacancies more expeditiously. The individuals consequently 
appointed should carry into their positions strong intention to 
serve the full Presidential term. Political appointees ought to 
be loyal to the President's policy objectives and possess a 
solid understanding of the statutes which underlie the agency's 
mission and program.

2. Reengineering Techniques.

    The committee supports a Government-wide adoption of the 
continuous process improvement advocated by Peter Drucker.\30\ 
A continuous series of steps characterizes the process by which 
most Federal Government services reach citizens. At the June 
20, 1995 hearing, Ms. Kohl, Dr. Morgan, Mr. Kehoe and Ms. 
Longmire explained that the elemental steps in a long process 
can be isolated and examined to identify the opportunities for 
improvement. Although processes may appear impossibly complex 
at first, agencies have succeeded in dissecting and simplifying 
them.
---------------------------------------------------------------------------
    \30\ See footnote 9.
---------------------------------------------------------------------------
    Department of Labor officials recounted their success in 
reducing the number of separate steps to recruit and hire new 
employees from 120 to 41, an improvement of almost two-thirds. 
Social Security Administration management and an employee group 
presented views as to how their agency could be advantageously 
reengineered using information technology, decentralizing 
authority and accountability, and establishing one-stop 
customer service points. Naval shipyards, in their attempts to 
streamline and improve support functions, discovered through 
value analysis that errors, rework, and unneeded work on ship 
repairs could be eliminated.
    Various witnesses indicated that once goals are 
established, fully understood, and assimilated into the 
organizational culture, then the workforce's attitude toward 
process improvement generally shifts. Process improvement must 
be continuous. Members of an organization need to understand 
that even processes only recently reengineered can always be 
improved.
    Tools widely used in process improvement include 
performance measurement and benchmarking. Ms. Longmire 
explained that performance measurement is a different way to 
evaluate what an organization is doing. It focuses on how well 
goals are being attained, and at what cost. By systematically 
evaluating the effectiveness and efficiency of required 
resources, it is possible to quantify results, establish clear 
accountability, and--ultimately--help government do more with 
less. Longmire likened performance measurement to a compass, 
showing current position and orientation, and benchmarking to a 
map, indicating direction and distance from an objective: 
``Benchmarking is a tool that shows how to drastically achieve 
performance improvement by comparing your organization with the 
best practices of others. . . . By comparing yourself to 
private or public sector leaders, you can leapfrog improvements 
in the way that you work.'' \31\
---------------------------------------------------------------------------
    \31\ Testimony of Laura G. Longmire at the June 20, 1995, hearing. 
A benchmarking model used by Xerox Corporation since 1980 consists of 
these phases: (1) Process owners flow-chart or map their processes, 
measure them, and determine who should be their benchmarking partners. 
(2) Process owners compare key performance indicators to industry 
leaders, identifying performance gaps. (3) Communicating the ``best 
practice'' findings, leaders seek to gain acceptance by the people who 
will have to adopt changed methods, and establish stretch [harder to 
reach] goals for improvement. (4) Comparative performance data are 
translated into action plans and implementation for the ``best of 
best'' practices or new improvements.
---------------------------------------------------------------------------
    However, just as processes leading to goals must be 
continually reviewed and improved, so also must the goals 
themselves be periodically reviewed and assessed, to be sure 
they still fit the organization's or agency's external setting 
and environment. Goals orientation and their review, and 
process orientation and its review are continual and 
complementary.
    The committee recommends that as part of agencies' 
implementation of the Government Performance and Results Act, 
each organization explain its policies and procedures in a 
brief, succinct manual for new employees and management 
officials. The manuals would summarize regulations and 
directives.

3. Information Technology.

    The committee notes a report by the General Accounting 
Office, ``Executive Guide: Improving Mission Performance 
Through Strategic Information Management and Technology-
Learning from Leading Organizations'', which describes a 
strategic, integrated set of fundamental management practices 
that were instrumental in the success of several Federal, 
State, and private sector organizations.\32\ The organizations' 
leaders managed through three fundamental areas of practice: 
quantitatively assessing performance against best-known private 
and public organization performance benchmarks; directing 
scarce technology resources toward high-value uses by 
reengineering some critical governmental functions; and 
reducing costs and improving service through the application of 
modern managerial methods.\33\ The report chronicles the 
repeated failures of the Federal Government to utilize 
effectively the opportunities offered by information 
technologies. Based on the GAO findings, the committee 
concludes that some agencies have tended to look to 
``hardware'' or ``software'' solutions to problems which would 
have been better addressed through more effective management of 
the basic processes.
---------------------------------------------------------------------------
    \32\ United States General Accounting Office, ``Executive Guide 
Improving Mission Performance Through Strategic Information Management 
and Technology-Learning from Leading Organizations,'' GAO Report AIMD-
94-115, May 1994.
    \33\ An Office of Management and Budget statement of those best 
practices is available as Circular A-130, ``Management of Federal 
Information Resources''.
---------------------------------------------------------------------------
    Many of the functions of the Federal Government have 
involved the review of paperwork at successive points of 
coordination. Integrating information technology into the 
``work process'' can reduce the layers of review and decision 
making time, while maintaining accountability. However, merely 
adding information technology to existing poorly thought 
through work patterns usually yields limited benefits.

4. Field Organizations.

    Nearly a million Federal employees are stationed in 30,000 
field offices, 12,000 of which have five or fewer workers in 
each. Changes in information and communication technology have 
made many of these offices unnecessary. The grouping of many 
disparate categorical programs into a consolidated block grant 
will have an even greater impact on the field offices. The 
committee supports the use of these guidelines for streamlining 
field offices:
     Locate executive department and agency field 
offices and regional offices so that they are readily available 
to (1) serve the individual citizen, and (2) relate to State 
and local officials in implementing or overseeing a program.
     In structuring field establishments, avoid 
``steepness'' of organization (many echelons, narrow spans of 
control, close supervision and review) in favor of 
organizational ``flatness'' (few layers of review and 
supervision, wide spans of control, local decision making 
authority).
     Push day-to-day operating decisions as far down 
the chain as possible, for resolution by officials closest to 
the situation; and keep headquarters offices in Washington 
focused on policy making questions and broad management issues 
at the department or agency level.
     Include information and communication technology 
considerations in every aspect of planning for the streamlining 
of Federal field organizational structures, in order to take 
maximum advantage of technology's potential for enhancing 
productivity, cutting paper-based processes, shortening 
delivery time, and assuring customer satisfaction.
     Recognize that no single, universally applicable 
model will suffice for streamlining all field offices, and that 
the number of field offices and the degree of deployment and 
decentralization from headquarters will vary by Federal program 
and the need for face-to-face ``government-customer contact in 
order to carry out effectively the program involved.

5. Workforce Competency.

    The concept of a unified budget for agency field managers, 
similar to that given laboratory heads under the fiscal year 
1996 Energy and Water Development Appropriations Act may serve 
as a target for enlarging Federal managers' flexibility, 
authority and autonomy Government-wide. The committee 
anticipates that over the transition period of several years 
envisioned by the GPRA, a great number of control functions, 
regulations, reports, and the Federal jobs associated with them 
will be eliminated, resulting in much of the cost saving 
currently driving the effort to balance the Federal budget.

                  e. making the government accountable

1. Public Accountability.

    The Federal Government should be accountable to the 
taxpayers-customers for the stewardship of the resources 
entrusted to it. That important point was omitted from the 
recommendations in the NPR report. The committee strongly 
affirms that a major thrust of making government work is to 
instill in every employee, management official, and contractor 
of the Federal Government a commitment to serving the Nation 
and its citizens. Congress is ideally positioned to simplify 
the executive branch's task of becoming more accountable to the 
public, by removing some of the legislative obstacles which 
make that accountability unnecessarily difficult and 
complex.\34\ The result would be to empower Federal agency and 
field managers in ways similar to the NPR's recommendations. 
The committee would support examples such as those which 
follow, which were not present among any of the NPR's financial 
management recommendations but were offered in testimony at the 
hearings:
---------------------------------------------------------------------------
    \34\ Testimony of former Under Secretary of Energy Shelby Brewer at 
the May 23, 1995 hearing: ``Part of the problem . . . is the clutter of 
the multiplicity of congressional committees that oversee. And each 
committee has a set of interests, different from others. And then the 
appropriations structure is very confusing. If you look at the budget, 
a layman cannot understand it.''
---------------------------------------------------------------------------
    Simplify executive branch accountability by consolidating 
several of the thirteen separate Congressional appropriations 
bills. If the legislative review process of the President's 
executive budget was comparable to the internal review now made 
by the Office of Management and Budget, there would be only 
five appropriations subcommittee. A sixth separate subcommittee 
could review the legislative and judicial branches as well as 
the Executive Office of the President. These actions would 
bring some order to the annual appropriations review with 
several favorable results: (1) a more coordinated process for 
appropriating funds, (2) downsized House and Senate committee 
structures, and (3) smaller and more productive agency 
headquarters and field offices to track this process. If the 
executive branch were reorganized by major purpose, Congress 
might take similar steps in that direction.
    Control agencies' human resources only through dollars, not 
by dollars and staffing caps, by appropriating a gross 
personnel and training budget to each agency. Managers would 
decide the numbers, salaries, and training investment of their 
workforces within their budget. An example of this is the 
combining of several appropriation accounts which was 
encouraged by both House and Senate Appropriations Committees 
in the proposed Energy and Water Development Appropriations Act 
for fiscal year 1996.\35\ Those provisions have provided field 
laboratory managers unprecedented freedom and flexibility in 
shifting their resources.
---------------------------------------------------------------------------
    \35\ House Report Number 104-149, pp. 70-71; Senate Report Number 
104-120, p. 88; H.R. 1905, 104th Congress.
---------------------------------------------------------------------------
    Allow interagency funding once again; take out the 
restriction on ``passing the hat'' to fund interagency efforts 
that Congress has inserted in every Treasury, Postal Service, 
and General Government Appropriations Act since 1971. The 
prohibition grew from Congress's suspicion that by pooling 
funds from different agency appropriation accounts, the 
executive branch would create new agencies without first 
consulting lawmakers or getting statutory approval. The 
proposed change would permit agencies to experiment with 
interagency and intergovernmental service initiatives. The time 
for mistrust is past; the time for inter-branch partnership, 
cooperation, and trust is now. The executive branch has enough 
flexibility, and Congress enough control, in permanent law.\36\
---------------------------------------------------------------------------
    \38\ 31 U.S.C. 1346 & 1347.
---------------------------------------------------------------------------
    The committee encourages the appropriations committees to 
make, and enforce, rules against appropriation-bill riders 
which outlaw the closure of named field offices or locations. 
To do otherwise would deny executive agency managers the 
flexibility and the empowerment which NPR recognized they need 
in order to execute their programs with the best possible 
results. If there are serious legislative concerns over the 
failure of a proposed field office reorganization to serve 
clientele effectively, then the agency could be asked to review 
the matter for one year.
    The committee noted that Federally contracted-out work is 
still Federally accountable and as such is subject to the same 
stewardship standards as work performed by Federal employees. 
In that respect, Federal contract administration has become a 
critical function in terms of the Federal Managers' Financial 
Integrity Act, in that it relies increasingly on the technical 
and professional qualifications of those who enforce the work 
statements of Federal contracts. Well-written work statements, 
clear award and sanction provisions, and airtight quality 
control methods must be complemented by competent enforcement 
to ensure adequate results. For these reasons, there needs to 
be much more effective training of Federal contract 
administrators. Those involved in acquisition and procurement, 
contract administration, and continuous inspection of 
production should be encouraged by monetary and non-monetary 
incentives to be one of the elite groups within a revitalized 
federal service. The $213 billion annually that are spent on 
all types of contractor work demands talented people.
    At the request of this and other committees of the House 
and Senate, the General Accounting Office conducted an 
assessment of approaches used by several national governments 
in carrying out management reforms that Federal agencies could 
use in implementing the Government Performance and Results 
Act.\37\ There are growing efforts in implementing results-
oriented management reforms in Australia, Canada, New Zealand 
and the United Kingdom. These approaches and experiences are 
relevant to the Federal implementation of the Government 
Performance and Results Act. New Zealand Budget Manager Tony 
Dale explained his government's structural reforms, which have 
separated policy advice functions from service delivery 
functions.\38\ A key feature of the New Zealand reforms was 
that a career professional departmental chief executive began 
to be appointed on a limited (typically five year) term 
performance-based, contract. Department chief executives sign 
an annual agreement with their superior political ministers. 
That agreement specifies the performance goals to be achieved 
by the agency in the year ahead. At year's end the level of 
achieve- 
ment is used to determine the departmental chief executive's 
salary . . . Dale noted: ``We have defined performance on the 
basis of outputs in goods and services, not on the basis of 
outcomes.'' \39\ In addition, political appointees are limited 
to a small number that concentrate on policy.
---------------------------------------------------------------------------
    \37\ United States General Accounting Office, ``Managing for 
Results: Experiences Abroad Suggest Insights for Federal Management 
Reforms,'' GAO Report B-260057 May 2, 1995.
    \38\ Testimony of Tony Dale, Budget Manager, New Zealand Treasury, 
(in his capacity as Harkness Fellow, 1994-95, the Commonwealth Fund), 
at the May 2, 1995, hearing. As an example, from the testimony, 
responsibility for advice to government on environmental policy and 
regulatory issues was assumed by a new environmental ministry; and a 
service delivery agency, the Department of Conservation, was 
established to run national parks and manage endangered species. The 
purpose was to provide clearer focus for the operating agencies about 
what their line of business was and where they should specialize their 
expertise.
    \39\ Testimony of Tony Dale, Budget Manager, New Zealand Treasury, 
(in his capacity as Harkness Fellow, 1994-95, the Commonwealth Fund), 
at the May 2, 1995, hearing.
---------------------------------------------------------------------------
    The United Kingdom's Citizen's Charter, begun in 1991, had 
by 1994 published 38 documents covering major public services 
and setting out the specific service standards that citizens 
could expect and at citizens could do if the standards were not 
met, according to the GAO report. As an example of citizens' 
recourse, the Post Office was to compensate customers for late 
arrival of a special delivery item by refunding twice the fee 
paid or a book of first-class stamps, whichever was greater in 
value. This approach to accountability would seem to work best 
where enforceable penalties can be devised to fit specific 
mission circumstances.

2. Goals and Work Results.

    The Government Performance and Results Act [GPRA] is the 
cornerstone of an effort to shift government away from a focus 
primarily on resource inputs--such as budget level and number 
of employees--toward specific and identifiable outcomes. GPRA 
improves decision making by having agencies establish 
performance goals and a credible evaluation system to determine 
the degree to which the goals have been achieved over a 
specific time period. The term ``performance goal,'' as used in 
the Act, has recently been defined by the Chief Financial 
Officers Council GPRA Implementation Committee.\40\
---------------------------------------------------------------------------
    \40\ ``Implementation of the Government Performance and Results Act 
[GPRA],'' a work by the Chief Financial Officers Council, GPRA 
Implementation Committee, defines a performance goal as, ``A target 
level of performance expressed as a tangible, measurable objective, 
against which actual achievements can be compared. . . . these are the 
targets set by the program for specific reporting periods. A 
performance goal is a statement composed of two components, an 
indicator and a target. For example: ``to increase the immunization 
rates for two-year-olds by 40% by 1999'' includes the indicator--
immunization rates--and the target--to increase rates by 40% by 1999. 
GPRA requires annual goals for each indicator, but goals can be set for 
shorter periods (e.g., quarterly) for internal management purposes.''
---------------------------------------------------------------------------
    The GPRA requires agencies to develop five-year strategic 
plans by September 1997, and to link program performance 
measures to the strategic goals thus developed. A strategic 
plan includes a comprehensive mission statement and general 
goals and objectives encompassing the major functions and 
operations of the agency. A system to keep track of the 
performance measures is crucial if the organization is to 
assess how much improvement is taking place in each period. The 
GPRA system is intended to make possible an objective 
evaluation of work results.
    Part of the challenge of GPRA will be for agencies to 
specify goals and to measure results in quantitative terms. The 
responsible committees of Congress should oversee agency goals 
and measures.
    To comply with the Act, agencies will have to work with the 
congressional authorization and.appropriations committees to 
develop acceptable statements of goals. As an example of how 
the process works, for Fiscal Year 1995 the House 
Appropriations Committee's Subcommittee on Treasury, Postal 
Service and General Government utilized a performance goal-
oriented approach in its appropriation bill hearings. This 
committee views such action as an early and welcome step toward 
the incorporation of GPRA performance indicators into the 
congressional oversight function.

3. Outputs Versus Outcomes.

    The committee notes the distinction to be drawn between 
agency outputs--which are the quantity and quality of services 
delivered or products made--and outcomes, which are the 
quantity and quality of the results achieved by the outputs in 
satisfying the taxpayer-customer. Agencies have control over 
outputs but usually have more limited control over their 
programs' outcomes. Although outputs are generally 
quantifiable, outcomes, which are often qualitative and 
subjective, tend to be much more difficult to measure.
    Witnesses at the hearings agreed that the programs' 
outcomes often depend on factors other than the operation of 
the programs themselves, and are, therefore, not totally within 
the control of agency managers. Nonetheless, information about 
outcomes is important in making resource allocation decisions. 
The challenge for the legislative and executive branches will 
be defining agencies' responsibility for the results they can 
accomplish, with the recognition of the limits that agencies 
may have in accomplishing desired outcomes. Program output, 
e.g. funding supplied, is easier to measure, and witnesses 
agreed that government managers can be held responsible for 
their outputs. Accountability for outcomes can be considered at 
the program, agency and departmental level.
    The committee supports the continuation, development, 
expansion, and extension of the pilot projects begun under the 
Government Performance and Results Act. It supports OMB's 
recent emphasis on training agency staff and developing 
procedures to encourage performance management. The committee 
encourages the OMB to identify projects that meet the GPRA's 
subsequent managerial flexibility and accountability stage of 
preparation to comply with the GPRA.
    More effort is needed to define desired outcomes involving 
intergovernmental and interagency cooperation. All affected 
organizations should participate, with authority and 
responsibility assigned in ways that clearly fix accountability 
and stimulate innovation without fear of taking risks. In that 
connection, agency executives and the Congress may come to rely 
increasingly on agency Inspectors General for verification of 
the appropriateness of performance measures chosen, and of the 
accuracy of the resulting agency indicators.

4. Reports to the Citizenry.

    The committee encourages the work now being done by the 
Chief Financial Officers' Council toward reducing and combining 
the requirements of ten statutory reports into (1) an 
``Accountability Report,'' on the disposition or the public 
resources entrusted to Federal agencies, and (2) a ``Planning 
and Budget Report,'' on the levels of dollar and personnel 
(full-time-equivalent, or FTE) resources 
which are needed for the next year and projected to be 
necessary for the next five years.\41\
---------------------------------------------------------------------------
    \41\ These are the ten reports on which the CFO Council is working 
on:

------------------------------------------------------------------------
             Requiring Statute                 Government-Wide Report   
------------------------------------------------------------------------
Chief Financial Officers (CFO) Act of 1990  CFO Act Annual Report       
 (P.L. 101-576).                             Including audited financial
                                             statements); Agency CFO    
                                             Financial Management Status
                                             Report and five year plan; 
                                             OMB CFO Financial          
                                             Management Status Report   
                                             and five year plan         
Federal Managers' Financial Integrity Act   FMFIA Report (annual)       
 (FMFIA) of 1982 (P.L. 97-255).                                         
Inspector General Act of 1978, amended      Management Report of Final  
 (P.L. 95-452).                              Action (Audit Follow-Up    
                                             report)                    
Government Performance and Results Act of   Strategic Plan; Annual      
 1993 (P.L. 103-62).                         Performance Plan; Annual   
                                             Performance Report         
Prompt Payment Act of 1982 (P.L. 97-177)..  Prompt Payment Report       
Federal Civil Monetary Penalties Inflation  Civil Monetary Penalties    
 Adjustment of 1990 (P.L. 101-410).          Report                     
------------------------------------------------------------------------

    Resource levels must be established in light of program 
goals. More information will become available to the public 
when the Accountability and the Planning and Budget reports are 
perfected. As a result, citizens will find that more 
quantitative and meaningful information is available, which 
will be arranged in much the same way that a publicly traded 
company issues its prospectus and annual report. More research 
and investigation are necessary to define the kinds of non-
quantitative and future-oriented projection information needed 
for the reports. In that regard, one of the first tasks of the 
Office of Management should be to coordinate the examination of 
what information is needed by citizens, the President, and 
Congress.

                            III. CONCLUSIONS

    Making the Federal Government work must substantially begin 
with managing the Federal Government more effectively. As a 
result of its investigation, the committee concludes that 
management functions have been de-emphasized at the most senior 
levels of the Federal Government.
    To correct these deficiencies, however, will require 
innovation and creativity to be displayed and implemented on a 
scale never before attempted. Toward this end, the Federal 
Government must:
     Organize and manage its functions efficiently and 
effectively;
     Define its role and its relationships with other 
entities; and
     Become fully accountable to the public.
    Imperative in this effort are: an invigorated Federal 
management office to provide guidance to the executive 
agencies, a landmark commission to define and recommend the 
Federal role, and a code of simplified planning and reporting 
rules to make the Government more accountable to the citizenry.

            organization and management of federal functions

    The President's capacity to manage the executive branch has 
atrophied, as demonstrated by the ad-hoc and transitory 
National Performance Review group within the Office of the Vice 
President instead of a vibrant, forceful management cadre in 
the Executive Office of the President. After considering many 
different views on the best organization of a central executive 
branch management planning and oversight office, the committee 
concludes there should be such an office in the Executive 
Office of the President outside the jurisdiction of the present 
Office of Management and Budget.\42\
---------------------------------------------------------------------------
    \42\ Obviously, the establishment of the Office of Management would 
change the Office of Management and Budget to the Office of the Budget.
---------------------------------------------------------------------------
    Leading private and public enterprises have successfully 
harnessed the potential of information technology to become 
more efficient and more responsive organizations. The 
successful and visionary executives of these organizations 
practice disciplined self-assessment of their organizations in 
the marketplace, concentrate the energies of their enterprises 
on technological improvements to attain goals, and directly 
consider technology investment decisions. Some information 
technology success stories have taken place within the various 
agencies of the Federal Government. The rest of the agencies 
should heed these examples.
    The problem of management continuity at Federal agencies is 
exacerbated by the rapid turnover (usually 18 months to two 
years) of political appointees. ``People problems'' associated 
with organizational change have become so serious as to require 
urgent attention. Compounding these problems are the employee-
buyout programs, which have led to the separation of many of 
the most talented employees whose ``institutional memories'' 
are now lost.
    This rotating leadership at the top has resulted in 
revolving-door and empty-desk government non-management. Career 
employees are asked to act in vacant political-appointment 
positions which they will seldom be allowed to hold, and then 
to spend months preparing newly-arrived appointees who must be 
educated and oriented at length on their organizations' 
missions and histories--until they move on.
    Downsizing without apparent vision, goals, or strategy has 
placed in a defensive stance those very individuals most 
capable of bringing off the transformation to a leaner, more 
effective Federal Government. A particularly harmful result is 
that able people interested in public service careers are 
increasingly avoiding the Federal Government as a career 
choice. The result of the reduction of a quarter million 
Federal jobs, because of downsizing without having first 
rethought, restructured, and reorganized the executive branch 
according to a well-ordered plan is likely to be a government 
that, as Donald Kettl said, ``costs more and works worse.'' 
\43\
---------------------------------------------------------------------------
    \43\ See footnote 6.
---------------------------------------------------------------------------

         the federal role and relationships with other entities

    The current conglomeration of interwoven, overlapping, and 
conflicting Federal programs and responsibilities demands 
order, alignment, and reconciliation. Redundant, inefficient 
Federal programs and missions must be resolved and realigned, 
with duplication purged. A number of recommendations from the 
1930's Brownlow Committee, the late 1940's and early 1950's 
Hoover Commissions, and the 1970's Nixon plan are worth further 
review for present application.\44\ If the Federal Government 
is to be streamlined and made more responsive, all parties must 
be willing to glean the most attractive offerings from all past 
efforts, including the Grace Commission and the National 
Performance Review, as well as counsel from industry, 
universities, the nonprofit sector, and all levels of American 
government.
---------------------------------------------------------------------------
    \44\ U.S. President's Committee on Administrative Management, 
Report with Special Studies (Washington: U.S. Government Printing 
Office, 1937).
    U.S. Commission on Organization of the Executive Branch of the 
Government, Hoover Commission Report (New York: MacMillan, 1949) U.S. 
Congress, House Committee on Government Operations, Summary of the 
Objectives, Operations, and Results of Commission on Organization of 
the Executive Branch of the Government (First and Second Hoover 
Commission), Committee Print 88th Congress, 1st Session, (Washington: 
U.S. Government Printing Office, 1963).
    U.S. Executive Office of the President, Office of Management and 
Budget, Papers Relating to the President's Departmental Reorganization 
Program (Washington: U.S. Government Printing Office, 1971).
---------------------------------------------------------------------------
    The dictates of reality and previous lessons from industry, 
State governments, and a few foreign governments have clearly 
shown that cosmetic changes and poorly considered unfocused 
cuts of the workforce are not the answer to a moribund or 
lethargic organizational culture. Rather, the success stories 
have come from enterprises and governments that methodically 
and responsibly considered and reconfigured their mission and 
goals to achieve the most useful, favorable, productive, or 
profitable outcomes for their clientele.
    State and local government officials, in particular, will 
feel a need for participation in deliberations over devolution 
of Federal missions, functions, and activities. States and 
communities will need a voice on a Presidential commission to 
participate in forming effective intergovernmental processes 
and relationships. A reduced Federal role and an accompanying 
new management structure are essential to the achievement of a 
balanced Federal budget.

                         public accountability

    While the committee shares many of the general goals for 
the National Performance Review [NPR], it believes that they 
can be attained only through much more comprehensive and far-
reaching measures than those documented or achieved to date. 
The NPR's belated examination of what functions the Federal 
Government should perform--following its initial review of how 
Government did its work--while welcome, is viewed as only the 
first step toward attaining the needed efficiency and economy 
to balance the Federal budget. Similarly, in its choice of an 
institutional vehicle, the Administration has created an entity 
poorly suited for the tasks with which it has been charged.
    The committee believes that more robust steps are needed to 
reach the goals of the NPR. Some examples of these are:
     streamlining the core missions and processes
     eliminating unproductive programs and activities
     cutting the proliferation of political appointees
     thinning out excessive layers of Federal 
management
     removing needless layers of review
     focusing more emphasis on training and developing 
those remaining in a smaller workforce
     giving agencies professional help to adapt to 
change, and
     distinguishing and more clearly defining roles 
between Federal and State agencies
    As a result of these steps personnel and expenditures could 
be reduced accordingly. To guide and coordinate all actions 
leading to attainment of NPR goals, an ``engine of change'' is 
needed. An Office of Management in the Executive Office or the 
President would provide that energy and coordination on behalf 
of the President.
    Government agencies and Congress itself should update their 
organizational structure, technology investment, and public 
accountability. For instance, the Government Corporation 
Control Act of 1945 may have been more appropriate for 1945 
than for 1995; only belatedly, under the Speaker's influence, 
has the House of Representatives begun to exploit personal 
communication technology; and, as sweeping changes are wrought 
within the executive branch, some corresponding realignment of 
congressional committees may be appropriate. The broad aims of 
the Government Performances and Results Act [GPRA] are as 
equally incumbent upon Government corporations and Congress as 
they are on the executive branch. Congress should incorporate 
the fruits of the Act in its authorization and appropriation 
processes.
    The public accountability expected of executive branch 
agencies could be abetted by a simpler and less cumbersome 
arrangement of appropriation accounts. The Office of Management 
and Budget manages the thirteen Federal appropriations through 
five organizational elements, which merit some review for 
possibly a similar alignment in the House.\45\ A less complex 
array of accounts would simplify budget planning and execution 
and fiduciary reporting by executive agencies, enable them to 
adjust more quickly to the requirements of the GPRA and lead to 
earlier and more comprehensive public accountability that 
Congress sought in passing the Act.
---------------------------------------------------------------------------
    \45\ The Resource Management Offices in OMB are General Government; 
Health and Personnel; Human Resources; Natural Resources, Energy and 
Science; and National Security and International Affairs. (The United 
States Government Manual 1995/96, Washington, D.C. GPO 1995.)
---------------------------------------------------------------------------
    Government is too big. For a government to serve its 
taxpayers, who pay the bills to have certain services rendered, 
efficient and effective management structures, processes, and 
goals are needed. An unwieldy government will not be able to 
meet the demands of the Twenty-First Century. That major 
challenge needs the best ideas and energies of the President, 
Congress and our fellow citizens.
ADDITIONAL VIEWS OF HON. CARDISS COLLINS, HON. CAROLYN B. MALONEY, HON. 
    HENRY A. WAXMAN, HON. ROBERT E. WISE, HON. MAJOR R. OWENS, HON. 
    EDOLPHUS TOWNS, HON. JOHN M. SPRATT, JR., HON. LOUISE MCINTOSH 
SLAUGHTER, HON. PAUL E. KANJORSKI, HON. GARY A. CONDIT, HON. COLLIN C. 
    PETERSON, HON. CAROLYN B. MALONEY, HON. THOMAS M. BARRETT, HON. 
BARBARA-ROSE COLLINS, HON. ELEANOR HOLMES NORTON, HON. JAMES P. MORAN, 
 HON. GENE GREEN. HON. CARRIE P. MEEK, HON. CHAKA FATTAH, AND HON. TIM 
                                 HOLDEN

    Any member of this Committee who has paid attention to the 
hearings held over the previous decade would agree that 
significant improvements in the management of the Federal 
government are required if it is to meet its citizens' needs 
and its taxpayers' expectations. No administration can make the 
necessary changes overnight. The Clinton Administration needs 
to do more, just as the previous administrations did not do 
enough.
    Yet, the Majority fails to recognize that the current 
Administration inherited a Federal government which from a 
management standpoint had been neglected and abused for the 
previous two decades. A 1989 report by the General Accounting 
Office examined the Office of Management Budget and concluded 
that OMB had been unable to coordinate its management and 
budget functions effectively and had not established a stable 
management capacity.\1\ GAO found that ``inconsistent 
leadership, limited resources, implementation strategies that 
failed to recognize unique agency environments, and 
insufficient efforts to gain congressional support were fall 
factors'' in these previous failures.\2\ GAO made four 
recommendations in that report, three of which were ignored by 
the previous Administration (the fourth was enacted through 
legislation):
---------------------------------------------------------------------------
    \1\ Managing the Government: Revised Approach Could Improve OMB's 
Effectiveness (GAO/GGD-89-65) May 4, 1989.
    \2\1d, page 3.
---------------------------------------------------------------------------
          1) That OMB establish a systematic process within the 
        budget cycle for monitoring key management issues;
          2) That OMB give budget divisions the responsibility 
        for overseeing agency implementation of management 
        improvements; and,
          3) That OMB improve coordination between management 
        and budget staff.
    The Clinton Administration, through a reorganization called 
OMB 2000--an initiative of the National Performance Review--has 
achieved each of these goals. In a draft report by the GAO 
which has been provided to Committee, GAO has found that OMB 
2000 has succeeded in bringing more attention to management 
problems. GAO found positive changes in the emphasis on 
management in OMB's management priorities, issues related to 
its statutory offices, and other program-related management 
issues.\3\
---------------------------------------------------------------------------
    \3\ Office of Management and Budget, Changes Resulting From the OMB 
2000 Reorganization (GAO/GGD/AIMD-95-to be determined).
---------------------------------------------------------------------------
    Yet, the Majority fails to give any credit to the Clinton 
Administration for its efforts to improve the management of the 
Federal government, including OMB 2000, the National 
Performance Review, procurement reform, the passage and 
implementation of the Government Performance and Results Act, 
and the wholesale reorganization of the General Services 
Administration. While Members can argue whether these efforts 
are being implemented as well as they could be, their 
significance cannot be ignored.
    In addition, the Majority has embraced a report that is 
filled with inconsistencies and findings not supported by the 
body of the report itself. As an additional irony, the 
Majority's primary recommendations would create additional 
levels of bureaucracy in order to reduce bureaucracy, a 
position that runs counter not only to common sense, but to the 
goals of much of its legislative agenda as well.
Some of the report's findings are not supported
    Not a single witness is quoted from eight days of hearings 
that puts forth the viewpoint of the Majority's number one 
finding, that ``The Executive Office of the President has 
abrogated its responsibility to oversee the Government's 
management structure.'' \4\ Not only is there no discussion of 
such a finding anywhere in the report, it flies in the face of 
the Administration's creation of the National Performance 
Review. NPR, which works under the auspices of the Vice 
President, is directed from the Executive Office of the 
President, and includes representatives of dozens of Federal 
agencies and programs. Rather than abrogating its 
responsibility, this Administration has elevated it to the list 
of its top priorities.
---------------------------------------------------------------------------
    \4\ Page 5 of this report. All citations will be to this version of 
the report.
---------------------------------------------------------------------------
    Another finding, (3)(b),\5\ asserts that there is more red 
tape in the Federal government today than there was in 1971. 
There is not a single bit of evidence anywhere in this report 
to support this ``factoid.''
---------------------------------------------------------------------------
    \5\ Page 7.
---------------------------------------------------------------------------
    One of the Majority's recommendation, (1)(c),\6\ advocates 
the creation of an Office of Inspector General in the Executive 
Office of the President. Not only is there no discussion of 
this recommendation anywhere to be found in the report, not a 
single witness even discussed this issue in the eight days of 
hearings on which the report is based.
---------------------------------------------------------------------------
    \6\ Page 8.
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    As for other inconsistent statements, the Majority 
apparently has failed to read its own report. As part of its 
broad discussion, the report states that ``NPR can point to 
relatively few savings which it has initiated and is 
responsible for implementing.'' \7\ This statement is 
demonstrably false, as the report itself makes clear when it 
quotes from author Peter Drucker:
---------------------------------------------------------------------------
    \7\ Page 22.
---------------------------------------------------------------------------
          If all (of the NPW's) recommendations are accepted by 
        Congress, they should result in savings of about $12.5 
        billion over two years. . . .\8\
---------------------------------------------------------------------------
    \8\ Page 10.
---------------------------------------------------------------------------
    Finally, the majority makes this erroneous statement:
          The Federal Government should be accountable to the 
        taxpayers-customers for the stewardship of the 
        resources entrusted to it. That important point was 
        omitted from the recommendations in the NPR report.\9\
---------------------------------------------------------------------------
    \9\ Page 33.
---------------------------------------------------------------------------
    Yet, one of NPR's top priorities was passage and 
implementation of the Government Performance and Results Act, 
landmark legislation which takes as its very premise the 
Federal government's accountability to those it serves as well 
as to the taxpayers. Perhaps the Majority has forgotten that 
this legislation was opposed by the previous Administration. It 
was not until President Clinton's National Performance Review 
embraced it and worked closely with Democrats and Republicans 
and in an entirely nonpartisan manner that the legislation 
became law.
The problems of government fraud, waste, and abuse facing the Clinton 
        Administration were monumental.
    The problems of government fraud, waste, and abuse facing 
the Clinton Administration when it took office were monumental. 
Studies of agency-by-agency assessments from 1980 through 1992 
documented more than $300 billion of wasted dollars, with 
perhaps billions more that could not be quantified.\10\ The 
biggest single cause of waste, fraud, abuse, and mismanagement 
was the lack of leadership from both the Executive and 
Legislative Branches of government.
---------------------------------------------------------------------------
    \10\ See, for example, Managing The Federal Government: A Decade of 
Decline, Committee Print House Committee on Government Operations, 1992 
(hereafter cited as Managing the Federal Government).
---------------------------------------------------------------------------
    While the agencies had been provided with many of the tools 
to better manage the Federal government, ``Fed bashing,'' such 
as President Bush's proposal to reduce the salaries of top-
level managers by 5 percent, only served to further undermine 
Federal managers and their workers.\11\ Rather than fostering 
the strong leadership that is the linchpin of effective 
management, the Office of Management and Budget often led the 
drive to deprive agencies of the tools they needed to manage, 
cutting audit and enforcement resources, failing to plan for 
the long term, and ignoring huge ripoffs in government health 
care, defense, loan, and other programs.
---------------------------------------------------------------------------
    \11\ Managing the Federal Government, page 3.
---------------------------------------------------------------------------
    The scandal at the Department of Housing and Urban 
Development in the late 1980s is a case in point. Hearings 
revealed that developers and other favored friends of the 
Reagan Administration were overpaid by hundreds of millions of 
dollars for public housing rehabilitation, while influence 
peddling, greed, fraud, and embezzlement of other HUD programs 
cost the taxpayers more than $2 billion.\12\ The HUD Inspector 
General had been reporting on these programs for years without 
any response from OMB or the Department. It was only after 
Congressional hearings than an embarrassed OMB announced it 
would take action.
---------------------------------------------------------------------------
    \12\ Committee on Government Operations Report, ``Abuse and 
Mismanagement at HUD'' (H.Rept 101-977) (Nov. 1, 1990), p. 2.
---------------------------------------------------------------------------
    OMB appeared to take a positive first step by publishing, 
in 1990, a ``high risk'' list of troubled government programs 
that might cost the taxpayers hundreds of billions of dollars 
in the future, and it vowed to get on top of the problems. 
Unfortunately, the Bush Administration devoted only the 
equivalent of three full-time employees to monitor these 99 
high risk problems. With that lack of commitment, it is no 
surprise that the OMB high risk initiative made little 
progress. Meanwhile, OMB saw its staff reduced from 622 to 574 
employees between 1981 and 1991.\13\
---------------------------------------------------------------------------
    \13\ Based on a review of Federal budgets for fiscal years 1981 
through 1992. See, Managing the Federal Government, page 4.
---------------------------------------------------------------------------
    Congress, too, deserved some of the blame for the 
leadership void. Congress was a partner to budget cuts to 
agency programs that have resulted in less audit coverage and 
evaluation of those very programs.
    The Federal government is the world's largest purchaser of 
equipment and supplies. Yet, ineptitude, poor planning, and bad 
auditing--not to mention outright corruption--cost taxpayers 
billions of dollars in faulty procurements. Procurement 
officials repeatedly failed to identify the government's needs 
and objectives, and as a result spent billions of dollars on 
projects that could not accomplish what was required. For 
example, the Department of the Treasury awarded a contract for 
off-the-shelf, commercially available equipment and services to 
a vendor whose proposed price was half-a-billion dollars more 
than the runner-up's bid.\14\
---------------------------------------------------------------------------
    \14\ Managing the Federal Government, p. 5.
---------------------------------------------------------------------------
    Meanwhile, the Administration and Congress were cutting 
back on contract auditors responsible for policing the 
procurement system. While defense contractors were overpricing 
their government contracts by $3 billion between 1987 and 1990, 
the Defense Contract Audit Agency faced a proposed cut from the 
Bush Administration of 86 auditors.\15\ While the Department of 
Health and Human Services' spending increased by more than 150 
percent from 1981 through 1992, the Department's Inspector 
General staff grew at only one-fifth that rate.\16\ The result 
was a significant decrease of oversight of fraud related to 
medical equipment and Medicare programs.
---------------------------------------------------------------------------
    \15\ General Accounting Office Report, ``Contract Pricing: Issues 
Related to the Defense Contract Audit Agency'' (GAO/NSIAD-92-188) (May 
1992) at p. 3.
    \16\ Department of Health and Human Services, Office of Inspector 
General, Fact Sheet on Fiscal Year 1993 Resources (September 1992).
---------------------------------------------------------------------------
    The Federal government was plagued by massive problems in 
information resources management (IRM), the computer systems 
that allow agencies to process the information needed to manage 
operations and make intelligent decisions about programs. Yet 
IRM has consistently been one of the weakest links in the 
government, resulting in cost overruns in the hundreds of 
millions of dollars and years of delays. For example, the 
Internal Revenue Service was attempting to serve a 1990s 
population using 1960s technology.\17\
---------------------------------------------------------------------------
    \17\ House Committee on Government Operations Report, ``Tax systems 
Modernization: Some Early Observations On Its Progress'' (H.Rept. 102-
388) (November 26, 1991) p. 2.
---------------------------------------------------------------------------
    Nearly every Federal agency had a financial management 
structure that was ineffective and inconsistent, leading 
directly to repeated fraud. For example, accounting systems at 
HUD were unable to detect the diversion of $5 million by an 
employee dubbed ``Robin-HUD.''\18\ At the Defense Department, 
inventory records were so bad that the Department purchased $30 
billion in unnecessary inventories.\19\ HHS erroneously paid 
millions each year for health care that private insurance 
companies and self-insured businesses were liable for.\20\
---------------------------------------------------------------------------
    \18\ House Committee on Government Operations Activities Report, 
(H.Rept. 101-1006) (Jan. 2, 1991) p. 121.
    \19\ Managing the Federal Government, page 53.
    \20\Maximus, Inc., ``Medicaid Third Party Liability, Final 
Report,'' report prepared for the Department of Health and Human 
Services, Health Care Financing Administration, Third Party Liability 
Branch (September 30, 1990), pp. ES4-5.
---------------------------------------------------------------------------
    One experiment of the 1980s was an effort led by President 
Reagan to turn over major areas of the Federal government to 
the private sector. Privatization can be a cost-effective 
method of delivering some Federal services. However, without 
appropriate safeguards, private contractors can cost taxpayers 
millions of dollars. For example, at NASA, millions of dollars 
were lost every year because private sector service contractors 
misrepresented their hours, slept on the job, fell far behind 
schedule, and had little if any supervision.\21\ At the 
Department of Energy, 16,000 employees were responsible for 
monitoring the performance of over 100,000 contract employees, 
who in turn were responsible for the waste production and 
management plants that behind schedule, tripling in costs, and 
unable to meet program objectives.\22\
---------------------------------------------------------------------------
    \21\ Inspector General Management Problems, National Aeronautics 
and Space Administration (1992), p. 20.
    \22\ See testimony of John C. Layton, Inspector General, Department 
of Energy, ``Contractor Accountability At Department of Energy Nuclear 
Facilities,'' hearing before the House Committee on Government 
Operations, Subcommittee on Environment, Energy, & Natural Resources, 
(Oct. 24, 1989), p. 11.
---------------------------------------------------------------------------
The Clinton Administration's Accomplishments: What Are the Facts?
    Speaker Newt Gingrich, speaking about the National 
Performance Review on ABC News earlier this year, characterized 
its results:
          ``The Vice President's effort is a total success.'' 
        \23\
---------------------------------------------------------------------------
    \23\ February 2, 1995, ABC World News This Morning.
---------------------------------------------------------------------------
    Today, there are nearly 200,000 fewer federal employees in 
middle management and staff jobs than there were when President 
Clinton took office. Today, the Federal government is smaller 
than it has been in 30 years.
    President Clinton has committed to cutting 16,000 pages 
from 86,000 pages of federal regulations. The Administration 
has developed partnerships with businesses being regulated by 
OSHA and EPA. Regulators reward results, not red tape. They 
negotiate, not dictate. As Philip Howard, author of ``The Death 
of Common Sense,'' notes, the federal government has made ``a 
complete U-turn away from the reigning philosophy of government 
regulation.''
    The Clinton Administration has increased accountability of 
government. It supported the Government Performance and Results 
Act, and requires performance agreements with top agency 
officials to ensure their commitment to these goals. It is 
preparing the first annual financial accountability statement 
to the taxpayers. It has directed all agencies to develop 
customer service standards so agencies will be accountable to 
their customers, not to some bureaucrat in Washington. To date, 
over 200 agencies have publicly committed to over 3,000 service 
standards.
    The report says the ``last comprehensive reorganization 
study'' in the government occurred under President Nixon.\24\ 
Yet, it conveniently ignores the fact that this effort failed. 
The report also talks about the need to first focus on mission 
and roles, then on structure and process. It ignores the fact 
that Congress and the President have been arguing about these 
issues since 1981 with no resolution. Vice President Gore 
rightly determined that ``how the government works'' can be 
fixed independently of ``what the government should do.''
---------------------------------------------------------------------------
    \24\ Page 3.
---------------------------------------------------------------------------
What did the National Performance Review set out to do?
    The fundamental principle of the National Performance 
Review is that improved government, and improved service to the 
public, does not come through reinventing the bureaucracy--or 
by creating a new office--but by changing the culture of how 
the work gets done. This is done not from the top down, but 
from the bottom up. Neither the Office of Management and 
Budget, nor even the President, can simply say, ``do it this 
way,'' and expect things to change. Rather, the culture of 
government must be changed by changing the way people think 
about their job. This is done through giving line employees 
more control over their job, consulting those employees on what 
they see that needs fixing, and through one employee seeing 
another change the way he or she approaches the job.
    As a result of this philosophy, the National Performance 
Review did not set out a set of rules and procedures by which 
work should be done. Rather, it looked for opportunities for 
change--places in the government where employees were eager to 
change the way things were done, places where the red tape 
within government had so tied up the workers that they could 
not perform their job. These demonstration projects would be 
the seeds of change sowed within the system. From them new 
projects would grow, and new ways of doing things would be 
rewarded.
    Shortly after entering office, President Clinton and Vice-
President Gore initiated the National Performance Review to 
``radically change the way government operates--to shift from 
top-down bureaucracy to entrepreneurial government that 
empowers citizens and communities to change our country from 
the bottom up.''\25\
---------------------------------------------------------------------------
    \25\ Bill Clinton and Al Gore, Putting People First, New York, 
Times Books, 1992, 23-24.
---------------------------------------------------------------------------
    The National Performance Review established a system of 
rewards for managers and employees who established new ways of 
doing things that emphasized improving service to the public 
and doing it with fewer resources. Through examples and 
rewards, the National Performance Review plans to reform the 
way government works--not by changing the bureaucracy, but by 
changing the bureaucrats.
    The first step of this review was to look at what the 
government does and how it does it.\26\ Teams of experienced 
federal employees were brought together to identify what works, 
and what does not. 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 meetings, national conferences, and local neighborhoods. 
More than 30,000 letters and phone calls from citizens across 
the country were received.
---------------------------------------------------------------------------
    \26\ Al Gore, Creating a Government that Works Better and Costs 
Less, Washington, D.C., U.S. Government Printing Office, 1993, p. 1.
---------------------------------------------------------------------------
    After careful study, it was estimated that the improved 
efficiencies developed under the National Performance Review 
would result in a reduction of the Federal workforce of over 
250,000 positions. This was not a goal, but the result of 
evaluations of how government functions could better be 
accomplished. The only attempt to make it a goal was by 
Congressional Republicans who attached it to several bills 
moving through Congress.
    The National Performance Review identified four major areas 
for improving government services: cutting red tape, putting 
customers first, empowering employees to get results, and 
cutting back to basics.
    Cutting red tape focused on changes in the budget process, 
personnel, and procurement. This initiative was designed to 
incorporate state and local governments into developing 
procedures that accomplished a reduction in the number of 
categorical grants, increase state and local flexibility in the 
use of the remaining categorical grants, and severely limit the 
number of unfunded mandates on state and local governments to 
provide administrative savings at all levels.
    The initiative to put customers first focused on giving 
customers a voice in the government, and a choice in how 
services were delivered. The use of market dynamics to 
influence employee behavior and market mechanisms to solve 
problems were central tenets of this effort.
    Empowering employees attacked the centralized and 
hierarchical structure of government. By decentralizing 
authority, those who work on the front line become responsible 
for their own decisions. This initiative also addresses the 
number of layers in government. Following the best practices of 
private and public organizations,\27\ the National Performance 
Review sought to reduce the bureaucratic distance between 
employees and supervisors, much as private business has reduced 
the number of middle managers.
---------------------------------------------------------------------------
    \27\ Thomas Peters and Robert Waterman, Jr., In Search of 
Excellence, New York, Warner Books, 1982. See also, Peter Drucker, The 
Age of Discontinuity, New York, Harper Torchbooks, 1978.
---------------------------------------------------------------------------
    The initiative to cut back to basics emphasized eliminating 
what we do not need, and investing in greater productivity. 
These are not piecemeal efforts as in the past, but fundamental 
changes in the systems which organize the federal bureaucracy. 
One of the first legislative changes of the National 
Performance Review was the passage of the government 
Performance and Results Act in 1993. The leadership of Congress 
in passing this Act is acknowledged in the first National 
Performance Review report.\28\ This bill had languished before 
previous Congresses and had been actively 
opposed by the Bush Administration. It took the leadership of 
the National Performance Review and Congress to make it law.
---------------------------------------------------------------------------
    \28\ Al Gore, Creating a Government that Works Better and Costs 
Less, Washington, D.C., U.S. Government Printing Office, 1993, p. 7.
---------------------------------------------------------------------------
What has the National Performance Review accomplished?
    In the past two-and-a-half years, the National Performance 
Review has been responsible for a number of changes in how 
government addresses its basic functions. The initiative to put 
the customer first has resulted in a number of improvements in 
government service. The May 29, 1995, issue of Business Week 
reported that a survey of telephone customer service by Dalbar, 
Inc., put Social Security at the top of the list--ahead of 
Nordstrom, and L.L. Bean, and Federal Express. Immigration and 
Naturalization Service has changed the procedures used to 
process incoming passengers through customs. In fact, the 
improvements were so dramatic, that passengers were getting 
through customs before their bags had been processed by the 
airlines. The Veterans Administration has streamlined its 
hospital intake procedures from 93 questions to three.
    The National Performance Review is working. In March 1995, 
Newsweek reported on a Miami company that used to file 700,000 
Customs forms every year. Now it files one a month.\29\ Robert 
Pear, in The New York Times, called it a quiet revolution.\30\ 
The Houston Sun reported on the opening of a ``general store'' 
for small business, where businessmen and women can go to get 
information on what the government requires, and what it can do 
to help--not just for one agency, but for nearly all government 
agencies.\31\ Financial World praised President Clinton for 
``working behind the scenes to improve government financial 
controls, contract oversight, performance measurement, 
strategic planning, training, procurement and a host of other 
seemingly mundane administrative procedures that ultimately 
determine the success or failure of any federal program.''\32\
---------------------------------------------------------------------------
    \29\ Joe Klien, ``The Birth of Common Sense,'' Newsweek, March 27, 
1995, p. 31.
    \30\ Robert Pear, ``A Welfare Revolution Hits Home, but Quietly,'' 
The New York Times, August 13, 1995, p. 4-1.
    \31\ Sheshe Giddens, ``General Business Store Opens in Palm 
Center,'' Houston Sun, July 17, 1995.
    \32\ Financial World, October 24, 1994.
---------------------------------------------------------------------------
Recommendations for Reform
    These problems, large as they are, are not unsolvable. The 
solutions require leadership and a commitment to sound 
management practices.
            Performance Measurement.
     Measuring performance is essential to good 
government and employee morale. The Administration needs to 
develop a set of performance measures based on results which 
tell managers and employees alike when they are succeeding.
     Performance measures must be based on what the 
customers value, not what is important to the agency.
     Rewards, both monetary and symbolic, must be based 
on performance measures. The Administration should implement a 
system to assure that all financial rewards are based on a 
thorough review of result-based performance measures.
            Competition.
     The Administration should develop better ways to 
expose government work to competition for those functions that 
are not inherently government in nature.
            Agencies and Field Structure.
     The Administration should continue to strengthen 
its programs to determine which agencies are performing 
necessary governmental functions, and which could be eliminated 
or merged with other agencies.
     The Administration should pursue more vigorously 
the consolidation and elimination of field offices. While the 
work at the Department of Agriculture is exemplary, and the 
Houston experiment laudable, there remain in most cities too 
many Federal offices in too many different locations.
            Management.
     The Administration should continue to reduce the 
number of middle managers in pursuit of an manager-to-employee 
ratio more in line with the private sector.
     The Administration should pursue a simplification 
of job classifications within the Federal government in 
conjunction with the development of a results and performance 
based promotion and rewards system.
     The Administration should vigorously pursue a 
management system that clearly delineates policy from service 
delivery. Top management (policy) should be separated from 
operations (service delivery). This allows policy to be 
developed with a clear vision towards balancing competing 
resources, and operations to focus on getting the job done.
            Congressional Organization and Control.
     The joint House leadership, the Rules Committee 
and committee chairs should ensure that unnecessary legislative 
riders are off appropriations bills. Use of such mechanisms 
have often disrupted management of executive agencies, for 
example, by outlawing the closure of specific field offices or 
by setting excessive personnel ceilings in agencies. The 
leadership should also ensure that issues involving government 
management generally are properly referred to this committee 
and others with authority under the rules of the House.
     Chairmen of authorizing committees should also 
consider utilizing their authority under clause 2(b)(2) of Rule 
XXVIII to resist 
legislative provisions in instances where the Senate may 
attempt to impose through the appropriations process.
                                                   Cardiss Collins.
                                                Carolyn B. Maloney.
                                                   Henry A. Waxman.
                                                    Robert E. Wise.
                                                    Major R. Owens.
                                                    Edolphus Towns.
                                                John M. Spratt, Jr.
                                         Louise McIntosh Slaughter.
                                                 Paul E. Kanjorski.
                                                    Gary A. Condit.
                                                Collin C. Peterson.
                                                 Thomas M. Barrett.
                                              Barbara-Rose Collins.
                                             Eleanor Holmes Norton.
                                                    James P. Moran.
                                                        Gene Green.
                                                    Carrie P. Meek.
                                                      Chaka Fattah.
                                                        Tim Holden.
          APPPENDIX A--SUMMARY OF FINDINGS AND RECOMMENDATIONS

                                findings

The Management of the Federal Government Needs Improvement.
     The capacity of the President as the chief 
executive officer of the Federal Government and its principal 
manager has been diminished over several Administrations. The 
Executive Office of the President has abrogated its 
responsibility to oversee and improve the Government's 
management structure.
     The capacity available to the President in the 
Office of Management and Budget [OMB] to reform or improve 
management has steadily declined and now barely exists, despite 
a competent Director of OMB and a Deputy Director for 
Management, whose talents in this area are underutilized. 
Federal management organization, oversight authority, and 
general influence have been consistently overridden by 
recurring budget crises and budget cycle demands, despite 
conscientious intention to give ``Budget'' and ``Management'' 
equal voice within OMB.
     The NPR, in its ad-hoc and episodic approach to 
management issues, reveals the weakened state of management 
capacity of the Executive Office of the President.
     The NPR-inspired announcement of a reduction of 
over a quarter-million Federal jobs may have been warranted; 
however, without first having a solid empirical rationale for 
doing so and not knowing where or how, it reflected a lack of 
strategic vision as to the Federal Government's role, and as 
such it seriously eroded Federal workers' morale, productivity, 
and planning for the future.
     The capacity of the Office of Personnel Management 
to provide leadership to a revitalized career service has been 
seriously impaired.
     Short-term political appointees have layered and 
``thickened'' the Federal Government's upper echelons of 
organization to a point where productivity, management, and 
continuity of operation have become seriously affected.
     Some potential candidates for political 
appointment believe that service in Federal organizations will 
hinder their careers, imposing a protracted and intrusive 
nomination process as well as numerous restrictions on 
financial and employment activities during and following 
Federal Government assignments. As a result, the pool of 
available talent qualified for appointment and willing to serve 
has been diminished.
     Qualified people considering careers in public 
administration are discouraged from Federal career employment 
by layers of political appointees of uneven quality precluding 
advancement to positions of senior responsibility.
     Career Federal public administrators have a long 
record of faithfully executing clearly established policy and 
rendering effective political leadership. However, political 
appointees as a group have tended to display more loyalty to 
individual political sponsors and special interests than to the 
President, who is elected by and ultimately accountable to the 
people.
     Employee-buyout programs in Federal organizations 
have not worked as well as intended, resulting in the loss of 
employees with the most marketable skills, leaving in the 
workforce many of the poorer performers.
     Programs for Federal-employee professional 
education, training and development are vital to a smaller 
workforce adopting modern management methods and achieving 
desired productivity improvements.
     The Federal Government must follow the best 
practices of private and public organizations for exploiting 
information technology in reforming management, reducing size, 
and raising productivity and market competitiveness. A recent 
General Accounting Office report provides valuable insights on 
how the Federal Government can lower costs, improve 
productivity, and provide better services to its citizens.
The Federal Intergovernmental Roles are Poorly Defined.
     Federal role has evolved in a patchwork manner. 
The Federal Government lacks a clear and comprehensive 
statement of its proper role. The result is similar redundant 
programs throughout disparate departments and agencies.
     Many citizens view the Federal Government as 
having overreached its proper role, by ``meddling'' in affairs 
such as elementary and secondary education (better left to 
States and communities), marketing and distribution of energy 
resources (better left to market forces), and applied research 
and development (better left to private investment and 
competition).
     Many State governments are willing to risk 
accepting large Federal block grants, with fewer dollars, in 
return for greater flexibility and fewer restrictions. There is 
some concern that any residual reporting burdens and controls 
from Washington may interfere with States' roles and as such 
constitute an ``unfunded mandate,'' contrary to a law sponsored 
by this committee.
     In the current environment many agencies and 
States are trying to develop program partnerships. Federal-
State program partnership agreements reached a high point 
during the Johnson and early Nixon Administrations. State and 
Federal leaders need to be aware that those intergovernmental 
agreements later deteriorated because roles and 
responsibilities were not clearly defined and accepted by all 
interested parties. Another cause was that the Federal 
Government seized a decision-making role disproportionate to 
the resources it provided.
Organization of Federal Functions is Uneven and Duplicative.
     No Cabinet-level department has been eliminated 
outright in our Nation's history, although many have been 
reorganized, renamed, combined, or split.
     Today's Federal Government is even more enmeshed 
in red tape, replicated functions and controls than it was in 
1971, when President Nixon tried unsuccessfully to organize and 
streamline Cabinet departments.
     The proposed ``Department of Commerce Dismantling 
Act of 1995'' contains a model for dismantling any high-level 
Federal organization using a transitional organization within 
the Office of Management and Budget.
     Approximately a million Federal employees work in 
some thirty thousand field offices outside of Washington. 
Although some field offices only have five or fewer staff, 
closing them has consistently proven a difficult, almost 
intractable political problem. The committee notes progress by 
the U.S. Department of Agriculture in addressing the problem.
Public Accountability is Weak.
     The National Performance Review [NPR] contributed 
to identifying the need to improve the Federal Government and 
lower its operating costs.
     By not establishing first what activities the 
Federal Government should be performing, the NPR was flawed 
from the outset and did not achieve enough progress.
     NPR neglected to place sufficient emphasis on 
fiscal accountability by failing to address the Federal 
Government's responsibility for stewardship of public 
resources.
     The ad-hoc, even disjointed, nature of NPR is a 
telling sign of the disconnect between policy and management, 
evidence of atrophy of the tools of management, and an 
admission that the President has no organized capacity to 
manage the executive branch.
     The NPR recommended a doubling of the existing 1-
to-7 supervisory span of control to a 1-to-14 or 1-to-15 
supervisor to subordinate ratio. This recommendation was 
without appropriate foundation and ignored the Government's 
widely varying missions, and threatens public accountability.
     With more Federal work being done under contract 
with private vendors, effective contract administration is 
critically important in ensuring efficiency, effectiveness, and 
accountability.
     The growth of ``contract government'' is a direct 
by-product of the emphasis on personnel reduction. As 
successive administrations have sought to limit or reduce the 
number of Federal employees, more and more activities have been 
contracted out.
     The experiences of other foreign and federal, 
State and local governments in carrying out significant 
management and accountability reforms are valuable to Federal 
agency managers as they implement the Government Performance 
and Results Act of 1993 [GPRA].
     Government corporations and other Government-
sponsored enterprises have assumed roles and responsibilities 
very different from those for which the Government Corporation 
Control Act of 1945 was intended. Today, a conceptual framework 
is needed for setting up these kinds of enterprises and 
centralized oversight of their management operations.
     Executive branch accountability is made more 
difficult by the complex congressional budget process and by 
additional legislative 
branch restrictions and controls placed on Government agencies, 
such as prohibitions on closing outdated Federal field offices.

                            recommendations

Strengthen the President's Role as Chief Executive Officer of the 
        Executive Branch.
     Management of the Federal Government should be a 
Presidential priority. Among the President's many roles is the 
responsibility to serve as chief executive officer or general 
manager of the Federal Government. Many broad initiatives 
intended to make the Federal Government work better depend on 
the commitment by the President and his staff in the Executive 
Office of the President. By approaching the Federal Government 
almost exclusively from a budget or a policy perspective, 
Presidents limit their capacity to reform management in the 
Federal Government.
     The President, acting jointly with Congress 
through a Federal management office, should establish 
intergovernmental partnerships, with clearly defined Federal 
and State roles and responsibilities, and allow local Federal 
managers the authority and flexibility needed to assist State 
and local officials in managing devolved programs, functions, 
and resources.
     To make the President's executive office more 
accountable to the public, Congress should establish an Office 
of Inspector General in the Executive Office of the President.
Establish an Office of Management.
     To enhance the President's management capability 
throughout the executive branch, Congress should establish in 
the Executive Office of the President a top-level management 
and organization oversight office headed by an administrator 
who has direct access to the President. Sustained attention to 
management issues beyond recurring budget crises is vital to 
ensure effectiveness. The new Federal management office would 
combine the management functions of the OMB, the residual 
policy and oversight functions of the Office of Personnel 
Management, and the policy functions from the General Services 
Administration into an entity separate from but equal in 
stature to the remaining Office of the Budget.
     The executive branch is in serious need of an 
office with responsibility for departmental reorganizations 
such as the proposed dismantling of the Department of Commerce. 
The current legislative initiative in that regard will be a 
model for managing large-scale reductions in the Federal 
Government's organizational structure and scope of work.
     An Office of Management could encourage the 
implementation of the strategic information management and 
technology practices increasingly common in quality private and 
public organizations. It could stress the need to focus a 
concentration of energy on technology improvements that attain 
goals; and assert senior management control over technology 
investment decisions.
     Executive agencies should exploit, publicize, and 
replicate successful private sector ventures in making Federal 
Government organizations work more effectively, drawing upon 
past successes.
Convene a Commission on Federal Reorganization.
     Congress should establish a blue-ribbon inquiry 
commission of experts from the business, academic, and 
nonprofit sectors and Federal, State and local government to 
recommend to the President and Congress in early 1997: (i) ways 
to organize more efficiently the functions the Federal 
Government performs, and (ii) changes in law that would reduce, 
transfer, or eliminate Federal functions. If resources permit, 
such a commission should produce a reorganization plan.
     Such a commission should apply the guideline 
criteria for agency elevation to Cabinet department status 
which were developed in 1988 by the National Academy of Public 
Administration [NAPA]. Such a review ought to result in a new 
alignment and grouping of the tasks and functions of the 
Federal role by major purpose.
     Congress should concurrently provide the President 
broad authority, including optional fast-track authority, to 
restructure executive branch departments and agencies, similar 
to past (and now expired) Reorganization Acts.
     Congress should be fully involved in the 
consolidation of the many Federal programs it enacts and funds; 
the proposed commission should look for additional 
opportunities to consolidate or combine Federal programs, and 
make recommendations accordingly.
     Once changes have been made in the structure of 
the executive branch, Congress should conform its own internal 
committee organization and jurisdictions to parallel the 
executive branch changes.
Reshape the Federal Civil Service.
     Congress should proceed with legislation that 
would reduce the allowable number of political appointees to an 
initial level of 2,000--aimed principally at Schedule C (not 
subject to Senate confirmation) positions--and set lower 
targets for future years as additional executive branch 
organizations are consolidated or abolished.
     Congress should appropriate the professional 
education, training and development funds for executive 
agencies, not as separate line items, but as an integral part 
of total personnel costs. That would afford managers the 
flexibility to choose between training and hiring to upgrade 
collective organizational skills.
     Any future Federal employee ``buyout'' legislation 
should be limited to serving the needs of the downsized Federal 
Government by focusing agency buyouts on those with less-needed 
skills, functions, and capabilities.
Strengthen Public Accountability.
     Both the President and Congress should complete 
the work to implement the Government Performance and Results 
Act, in order to make the executive branch both performance-
driven and accountable. The Act's performance measurement 
provisions ought to be used in all steps of the budget and 
management process.
     To make public accountability in the executive 
branch less cumbersome and counterproductive, Congress should 
simplify the present complex structure of 13 separate 
appropriations bills by combining them into a lesser number, 
possibly comparable to the internal budget review structure in 
the Office of Management and Budget. Congress should adjust its 
own internal authorizing and appropriating committee structure 
correspondingly.
     Congress should amend the Government Corporation 
Control Act of 1945 to raise the efficiency and effectiveness 
of the Federal Government's business-type operations and 
organizations and to set standards consistent with today's 
marketplace conditions.
     In its quest to attain the objective of balancing 
the Federal budget by fiscal year 2002, Congress must recognize 
three critical needs: (i) to preserve the Federal Government's 
accountability to the governed throughout the transformation 
process; (ii) to foster that objective by making investments in 
human and technological development during that process; and 
(iii) to accept the hard lessons learned by industry that 
workforce strength is to be cut only after--not before or 
while--the Federal roles have been determined and 
organizational structures have been reduced or eliminated.
                                ------                                


                     APPENDIX B--INDEX OF WITNESSES

    BINGMAN, Charles F. Visiting Professor of Public 
Administration, The George Washington University, JUNE 13/19.
    BOWSHER, Charles A. Comptroller General of the United 
States, General Accounting Office, MAY 2.
    BREWER, Shelby T., Under Secretary of Energy, (Reagan) MAY 
23.
    BROWNBACK, Representative Sam, (Kansas), MAY 16.
    BURKE, William, Great Lakes Regional Administrator, General 
Services Administration and Chair, Chicago Federal Executive 
Board, JUNE 13/19.
    CHATEL, Mary Barrett, President, National Council of Social 
Security Management Associations, JUNE 13/19.
    CHATER, Shirley Sears. Acting Commissioner, Social Security 
Administration, JUNE 13/19.
    CHRYSLER, Representative Dick, (Michigan), MAY 16.
    CRAIG, Colonel Richard. North Central Division Engineer, 
U.S. Army Corps of Engineers, Department of Defense, JUNE 13/
19.
    DALE, Tony. Harkness Fellow, The Commonwealth Fund of New 
York and Budget Manager of the New Zealand Treasury, MAY 2.
    DEAN, Alan L. Senior Fellow, National Academy of Public 
Administration, Assistant Secretary of Transportation (former), 
and coordinator of President Nixon's plan for departmental 
reorganization, MAY 9, JUNE 13/19.
    DODARO, Gene L. Assistant Comptroller General, Accounting 
and Information Management Division, General Accounting Office, 
MAY 9.
    FINCH, Johnny C. Assistant Comptroller General, General 
Government Programs, General Accounting Office, MAY 9, JUNE 20, 
JUNE 27.
    FINN, Chester E., Jr. (Reagan) Assistant Secretary of 
Education, John Olin Fellow, The Hudson Institute, MAY 23.
    FITZPATRICK, Donna R. Under Secretary of Energy (Bush), MAY 
23.
    FLANAGAN, Daniel V., Jr. President, Flanagan Consulting 
Group, JUNE 6.
    FOSLER, R. Scott. President, National Academy of Public 
Administration, MAY 2, JUNE 27.
    FRANKLIN, Garrome. Regional Administrator, Federal Aviation 
Administration, JUNE 13/19.
    GISMONDI, Donald. Regional Administrator, Federal Transit 
Administration, JUNE 13/19.
    GLYNN, Hon. Thomas P. Deputy Secretary of Labor, MAY 9.
    GORDON, D. Lynn. Miami District Director, U.S. Customs 
Service, Department of the Treasury, JUNE 13/19.
    HANSEN, William D. Assistant Secretary of Education for 
Management and Chief Financial Officer (Bush), and Executive 
Director, Education Finance Council, MAY 9, MAY 23.
    HATRY, Harry P. Director, State and Local Government 
Research Programs, Urban Institute, JUNE 20.
    HENN, Vice Admiral A.E. (Gene). Vice Commandant, U.S. Coast 
Guard, Department of Transportation, JUNE 27.
    HERRINGTON, John S. Secretary of Energy (Reagan), MAY 23.
    HODEL, Donald P. Secretary of Energy (Reagan), MAY 23.
    HODGE, Scott A. Grover M. Hermann Fellow in Federal 
Budgetary Affairs, The Heritage Foundation, MAY 16.
    HUERTA, Michael P. Associate Deputy Secretary of 
Transportation and Director, Office of Intermodalism, 
Department of Transportation, JUNE 13/19.
    INK, Dwight A. President Emeritus, Institute of Public 
Administration, and former Assistant Director for Management, 
Bureau of the Budget and Office of Management and Budget, MAY 
2, JUNE 13/19.
    JASPER, Herbert N. Senior Associate, McManis Associates, 
MAY 2, MAY 16, JUNE 20.
    JOHNSON, Jack. President, Professional Airways Systems 
Specialists, JUNE 6.
    JOHNSON, Roger W. Administrator of General Services, JUNE 
6.
    KEHOE, Joseph G. Managing Partner, Government Services, 
Coopers and Lybrand LLP, JUNE 20.
    KETTL, Donald F. Nonresident Senior Fellow, Center for 
Public Management, The Brookings Institution, and professor at 
the University of Wisconsin, Madison, MAY 2, JUNE 20.
    KOHL, Linda. Director of Minnesota Planning, JUNE 20.
    KOSKINEN, John A. Deputy Director for Management, Office of 
Management and Budget, MAY 2, JUNE 27.
    KRASNER, Barry. President, National Air Traffic Controllers 
Association, JUNE 6.
    LIGHT, Paul C. Director, Public Policy Programs, The Pew 
Charitable Trusts, JUNE 27.
    LONGMIRE, Laura. National Director, Benchmarking, KPMG Peat 
Marwick LLP, JUNE 20.
    MAJKUT, Paul. General Counsel, Bonneville Power 
Administration, JUNE 6.
    MORGAN, Sheron K. North Carolina Office of State Planning, 
JUNE 20.
    MORRIS, Joseph A. General Counsel, Office of Personnel 
Management (former), JUNE 13/19.
    MOSBACHER, Robert A. Secretary of Commerce (Bush), MAY 16.
    MUNOZ, George. Assistant Secretary of the Treasury for 
Management and Chief Financial Officer, Department of the 
Treasury, MAY 9, MAY 23.
    O'LEARY, Hazel R. Secretary of Energy, MAY 16/23.
    PERRET, Kenneth A. Regional Administrator, Federal Highway 
Administration, JUNE 13/19.
    POSNER, Paul. Director, Budget Issues, Accounting and 
Information Management Division, General Accounting Office, MAY 
23.
    RIVLIN, Alice M. Director, Office of Management and Budget, 
MAY 2.
    ROBERTSON, Jack. Deputy Administrator, Bonneville Power 
Administration, JUNE 6.
    RODRIGUEZ, George. Houston Area Coordinator, Department of 
Housing and Urban Development, JUNE 13/19.
    RUMSFELD, Donald H. Secretary of Defense (Ford) and chief 
executive officer of General Instruments Corporation, JUNE 6.
    SCHUSTER, Gretchen. Chicago Regional Director, Passport 
Agency, Department of State, and a Federal Executive Board 
member, JUNE 13/19.
    SEIDMAN, Harold. (former) Assistant Director of the Budget, 
Senior Fellow, National Academy of Public Administration, JUNE 
6.
    SMITH, Marshall S. Under Secretary of Education, MAY 23.
    SPERRY, Roger L. Director of Management Studies, National 
Academy of Public Administration, MAY 9.
    TAYLOR, Jerry. Director, Natural Resources Studies, Cato 
Institute, MAY 16.
    THOMPSON, Joseph. New York Regional Director, Department of 
Veterans Affairs, JUNE 27.
    TIAHRT, Representative Todd. (Kansas), MAY 16.
    TOWNSEND, Wardell C., Jr. Assistant Secretary of 
Agriculture for Administration, JUNE 13/19.
    WALKER, Representative Robert S. (Pennsylvania), Chairman 
of the Committee on Science, MAY 16.
    WARD, Col. F. Edward, Jr. Director of Field Offices, 
Defense Finance and Accounting Service, Department of Defense, 
JUNE 27.
    WATKINS, Admiral James D. Secretary of Energy (Bush), MAY 
23.
    WILLIAMS, Anthony A. Chief Financial Officer, Department of 
Agriculture, JUNE 27.
    WURTZ, Donald. Chief Financial Officer, Department of 
Education, MAY 23.
    WYSE, Duncan. Executive Director, Oregon Benchmarking 
Project, MAY 2.

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