Government Management: Observations on the President's Proposed  
Freedom to Manage Act (13-NOV-01, GAO-02-241T). 		 
								 
The fundamental issue raised by the proposed Freedom to Manage	 
legislation is not whether government operations can and should  
be improved, but rather, how best to deal with these issues. This
report focuses on several key issues: (1) a comprehensive review,
reassessment, and reprioritization of what government does and	 
how it does business is clearly warranted. This is especially	 
vital in view of changing priorities and the compelling need to  
improve the efficiency and effectiveness of government in light  
of our long-range fiscal challenges; (2) the Freedom to Manage	 
proposal was evidently motivated, in part, by a desire to	 
eliminate wasteful, redundant, and inefficient reporting and	 
other mandates. GAO has previously recommended to the executive  
branch that a comprehensive and government-wide review in this	 
area was appropriate. As a result, the Administration's decision 
to conduct such a review has great merit; and (3) although the	 
thrust of this review is desirable and some expedited		 
congressional consideration may well be appropriate for specific 
issues, the Congress has an important role to play in management 
reform initiatives, especially from an authorization and	 
oversight perspective. The following points are relevant: (a) the
Freedom to Manage Act is very broad in scope and contains several
provisions that would significantly affect the scope and timing  
of related congressional debate and involvement in a range of	 
related legislative proposals, and (b) although in the past the  
Congress has adopted "fast track" approaches for specific areas, 
the design and broad scope of this proposal would alter the	 
relative influence of the Congress in addressing a broad range of
federal management issues. Depending on the nature of the	 
legislative proposals that will be submitted, they could have	 
profound implications for the role the Congress plays in	 
developing legislation and conducting oversight to enhance the	 
performance and ensure the accountability of the executive	 
branch. 							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-241T					        
    ACCNO:   A02459						        
  TITLE:     Government Management: Observations on the President's   
Proposed Freedom to Manage Act					 
     DATE:   11/13/2001 
  SUBJECT:   Federal legislation				 
	     Proposed legislation				 
	     Presidential proposals				 

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GAO-02-241T
     
GAO United States General Accounting Office

a

Test i mony Before the Committee on Rules, House of Representatives

For Release on Delivery 4: 00 p. m. EST Tuesday, November 13, 2001

GOVERNMENT MANAGEMENT

Observations on the President?s Proposed Freedom to Manage Act

Statement of David M. Walker Comptroller General of the United States

GAO- 02- 241T

Page 1 GAO- 02- 241T Mr. Chairman and Members of the Committee: Good
afternoon. I appreciate the opportunity to discuss the Freedom to Manage
legislative proposal transmitted by the President to the Congress.

Both this Congress and the Administration are to be commended for increasing
the focus on how to improve the efficiency and effectiveness of the federal
government as we move into the 21 st century. GAO has sought to

assist the Congress and the executive branch in considering the actions
needed to support the transition to a more high performing, resultsoriented,
and accountable federal government. We believe that it is crucial for both
the Congress and the executive branch to work together in a constructive
manner on ?good government? issues that are designed to help achieve
continuous improvement of the federal government. At the same

time, the Congress has authorization, appropriation, and oversight roles
that must be considered in connection with any related matters.

The fundamental issue raised by this proposed legislation is not whether
government operations can and should be improved, but rather, how best to
deal with these issues. The Administration?s proposal would

fundamentally alter the process by which the Congress and the executive
branch typically interact in connection with a potentially broad range of
management- related legislative proposals. Therefore, the question at hand
is whether and how the Congress wishes to change the nature of its normal
deliberative process. Importantly, the proposal is very open- ended in the
range of proposed changes to the management and organization of the

federal government that could be presented to the Congress for expedited
consideration.

My statement today will focus on several key issues: 1. A comprehensive
review, reassessment, and reprioritization of what government does and how
it does business is clearly warranted. This is especially vital in view of
changing priorities and the compelling need

to improve the efficiency and effectiveness of government in light of our
long- range fiscal challenges. 2. The Freedom to Manage proposal was
evidently motivated, in part, by a

desire to eliminate wasteful, redundant, and inefficient reporting and other
mandates. GAO has previously recommended to the executive branch that a
comprehensive and governmentwide review in this area was appropriate. As a
result, the Administration?s decision to conduct such a review has great
merit.

Page 2 GAO- 02- 241T 3. While the thrust of this review is desirable and
some expedited congressional consideration may well be appropriate for
specific

issues, the Congress has an important role to play in management reform
initiatives, especially from an authorization and oversight perspective. The
following points are relevant:

 The Freedom to Manage Act is very broad in scope and contains several
provisions that would significantly affect the scope and timing of related
congressional debate and involvement in connection with a range of related
legislative proposals.

 While in the past the Congress has adopted ?fast track? approaches for
specific areas, the design and broad scope of this proposal would alter the
relative influence of the Congress on the administration in addressing a
broad range of federal management issues. Depending on the nature of the
legislative proposals that will be submitted, they could have profound
implications for the relative role the Congress

plays in developing legislation and conducting oversight to enhance the
performance and ensure the accountability of the executive branch.

Presumably, the Congress will want to obtain the input of GAO and/ or other
parties before enacting any substantive proposals. As a result, any
expedited consideration timeframes should allow for a reasonable period of
time for this to occur.

Reassessing Government Operations to Improve Management and Efficiency

The Congress and the Administration face a series of daunting strategic and
operational challenges to improve the performance and accountability of the
federal government. 1 The federal government must continue to

implement, and as appropriate enhance, the already enacted statutory
management framework designed to maximize the performance and assure the
accountability of the federal government. Meeting the challenges of the 21st
century will also require repositioning government to address a range

of key themes outlined in GAO?s strategic plan for supporting the Congress.
Addressing these challenges will require a fundamental review, reassessment,
and reprioritization of the government?s roles and responsibilities. 2 The
federal government will need to enhance interagency

coordination and integration activities, work better with other levels of 1
See High Risk Series: An Update (GAO- 01- 263, Jan. 2001) and Major
Management Challenges and Program Risks: A Governmentwide Perspective (GAO-
01- 241, Jan. 2001)

Page 3 GAO- 02- 241T government, with nongovernmental organizations, and
with the private sector- both domestically and internationally- to achieve
results and

desired outcomes. The statutory framework and other legislation enacted
during the 1990s demonstrate the Congress? capacity to deal with both
specific program and governmentwide management reform proposals. Through the
creation of the existing statutory framework, the Congress sought to improve
the fiscal, program, and management performance of federal agencies,
programs, and activities. For example, the Government Performance and

Results Act (GPRA) is a central component of the existing statutory
management framework, which includes other major elements, such as the Chief
Financial Officers (CFO) Act, and information resources management
improvements, such as the Clinger- Cohen Act. These laws provide information
that is pertinent to a broad range of managementrelated

decisions to help promote a more results- oriented management and decision-
making process.

The Congress has played a central role in management improvement efforts
throughout the executive branch and has acted to address several individual
high- risk areas through both legislative and oversight activities. This
Administration appears to be taking these important areas very seriously in
setting the President?s Management Agenda and working to implement it.
Several areas, such as governmentwide human capital management, correspond
to areas that we have designated as high- risk. In addition, we have been
engaged in ongoing efforts to work with the Office of Management and Budget
(OMB) in a constructive manner on a range of

?good government? issues. The Administration has also signaled its intent to
undertake a comprehensive review of the performance and relevance of the
base of government programs and operations as part of the budget process- a
review that is both important and necessary. Just as the Congress has
legislated tools to help improve management and program delivery, there is
little doubt that some legislative provisions currently exist that may
impede more economical, efficient, and effective government operations.
Presumably, this is the premise behind the

Freedom to Manage Act. However, as we reported in 1997, when OMB attempted
to implement a related legislative managerial accountability and flexibility
pilot project, agencies generally found that many of these

2 GAO?s Strategic Plan, 2000- 2005.

Page 4 GAO- 02- 241T requirements had been self- imposed and, as a result,
they could implement needed changes themselves by revising internal
procedures or eliminating

unnecessary regulations. 3 More importantly, as submitted, the Freedom to
Manage Act would allow the Administration to propose a broad range of both
substantive and nonsubstantive proposals. It would also provide a vehicle to
propose new legislation, as well as repeal or revise existing legislation.

I would like to commend the Administration for introducing a companion bill,
the Managerial Flexibility Act. By way of contrast to the Freedom to Manage
Act, this bill would make statutory changes to promote a specific

set of management reforms in the areas of human capital, budgetary
accounting, and property management. Greater flexibility would be provided
to executive branch managers to address discrete management functions with
defined and discrete goals and purposes. For example, the proposed early
retirement and buy- out authorities both make appropriate recognition of the
need to consider employee skills and knowledge, in

addition to longevity, when making such decisions. Although we may have some
suggestions for changing specific provisions and for other possibilities
that should be covered, on the whole this bill constitutes an important step
in addressing some of the long- standing challenges within the federal
government.

Provisions That Constrain Congressional Involvement

The Freedom to Manage Act contains several provisions that would
significantly limit traditional congressional debate and involvement. As
noted above, this bill has a very broad scope and would establish an
expedited legislative process to consider a broad range of proposals,

including eliminating or reducing barriers to efficient government
operations posed by existing laws as well as new and potentially substantive
and controversial reform proposals. For example, the

Administration?s proposals could apply to organizational structures, program
consolidations, program or regulatory requirements, reporting provisions,
and delivery mechanisms. The act could affect both agencyspecific and
governmentwide policies, and could be used to eliminate or modify existing
laws, whether in authorization or appropriation acts, as well as to provide
new authorities. 3 GPRA: Managerial Accountability and Flexibility Pilot Did
Not Work as Intended (GAO/ GGD- 97- 36, April 10, 1997).

Page 5 GAO- 02- 241T Traditionally, congressional and executive branch
considerations of policy trade- offs are needed to reach a reasonable degree
of consensus on the

appropriate federal response to any substantive national need. The
provisions of this legislation mandate that any proposal submitted by the
President under this act must be introduced into the Congress within a short
time frame, and reported out of Committee within a specified time period.
Floor consideration would follow soon thereafter- apparently regardless of
other matters pending before the Congress. The amount of

time for debate is severely restricted, and amendments are not in order.
These very tight time frames may- depending on the nature and scope of the
proposals- prevent the Congress from fully considering the proposals? key
implications or obtaining necessary analysis and perspective from GAO and
others. Congressional deliberative processes serve the vital function of
both gaining input from a variety of clientele and stakeholders affected by
any changes and providing a check and counterbalance to the executive
branch. This normal legislative process is not a model of efficiency but it
does help ensure that any related actions have broad support. Restrictions
on Committee consideration and/ or amendments can change

the legislative process with its normal give and take into an expedited
referendum on the President?s proposals. Under the Administration?s bill the
authorizing committees would be cut out of the process. Essentially,

this would limit the Congress? ability to garner valuable input through
conducting hearings and other means. This is especially true in connection
with proposals for new authorities versus those proposals designed to revise
or repeal outdated, redundant, or inefficient reporting requirements.
Moreover, it could undermine support for some proposals by forcing ?all or
nothing? choices on legislative packages.

By requiring an expedited congressional vote on presidential proposals
without amendment, the Freedom to Manage bill would alter the traditional
role of the Congress in the legislative process. The President would gain
substantial leverage to define the issues and the Congress? ability to
consider carefully any proposal or to build consensus as to the right
approach to a problem would suffer.

The bill appears to be based on two assumptions: (1) that many management
problems stem from accumulation of incremental legislative provisions over
time and (2) that the regular legislative process for deliberating
presidential proposals is unduly slow and cumbersome. However, it is worth
remembering that the Congress has often achieved major changes in highly
charged and complex areas through the normal

Page 6 GAO- 02- 241T deliberative processes- welfare and telecommunications
reform are two examples. Moreover, special procedures were not needed to
prompt the

Congress to pass the existing statutory management framework mentioned
earlier. In fact, the passage of these keystone legislative initiatives and
the subsequent persistent oversight provided by congressional committees has
propelled the Congress into a major leadership role in governmentwide
management reform efforts.

Implications for Congressional Oversight Given the breadth of this
legislation, the key question is not whether

statutory changes in organizations, program or regulatory requirements, or
delivery mechanisms are warranted but rather whether the Congress wishes to
change the nature of its deliberative process to address the broad,
undefined array of issues that might conceivably fall under the rubric of
government efficiency. Every administration has defined an agenda for
management improvement in its own way. Therefore, the key issue at hand is
how to make changes and reforms and what the respective roles of the
Congress and the executive branch should be in this process.

I do not want to suggest that expedited consideration of proposals is never
warranted. Making difficult decisions to reform specific areas is never easy
given the many stakeholders, agencies, and congressional committees
involved. It is important to recognize that in the past the Congress has
designed procedures to bind itself when it deemed it necessary and
appropriate. However, the broad scope and generality of the Freedom to
Manage Act is not linked to the same type of discrete initiatives that
supported earlier modifications of legislative procedures. For example, the

Base Realignment and Closure Commission was established because the
Congress, the applicable administration, and the Department of Defense all
agreed that military operations would be more efficient if existing excess
capacity were eliminated and savings generated from this action were
channeled to other uses and that the traditional legislative process would

not work in this case. Once agreement was reached on the nature of the
problem and its solution, the Congress established the Commission to select
the bases for closure and agreed to an up- or- down vote on the Commission?s
report in toto. The Congress and the President agreed on the policy
objective and the general scope and nature of the likely proposals in
advance. As a result, the Congress agreed on the need to modify its

procedures to achieve the agreed upon objectives. In specific cases,
developing expedited procedures can hold some promise if the approaches are
linked to a set of discrete initiatives and the Congress and other

Page 7 GAO- 02- 241T stakeholders agree on the general objectives served by
proposals in advance. Going forward, the Congress may well find that
expedited procedures may

be warranted if the approaches are linked to a set of discrete problems and
initiatives. For instance, we have pointed to the need to rationalize
federally owned infrastructure to address excess and outdated facilities in
areas ranging from military bases, to regional offices, to veterans
hospitals

to post offices. Addressing these issues may very well call for a process
similar to the national base closure commissions to expedite consideration
of consolidation and streamlining proposals. Similarly, to address
longstanding strategic human capital management problems in the federal
workforce, the Congress may find it advisable to turn to a commission to
help scope out the more fundamental challenges and develop a

comprehensive reform proposal for legislative consideration. In summary, the
Freedom to Manage Act has a very broad scope. It also asks for streamlined
and very expeditious consideration by the Congress, irrespective of the
substantive nature of the proposal and upon other matters pending before the
Congress. As the tragic events of September 11 have made us increasingly
aware, congressional priorities and the agendas

of the two houses of the Congress can change quickly. Given the need to
position our government to address new challenges and heightened public
expectations, both the Congress and the Administration need to find ways to
reach consensus on specific overarching national goals. As a result,

proposals for sweeping changes to create new authorities or reform existing
authorities must be examined in terms of their effect on the balance of
power between the Congress and the President. The proposed bill, by design,
would provide significant new power to the President to not only initiate
changes, but also to affect the ultimate debate and outcome.

Only the Congress can decide whether it wishes to limit its powers and role
in this way. As part of the legislative branch, I obviously have some
concerns about any serious diminution of your authority. In addition, I
obviously want GAO to have a reasonable amount of time to help the Congress
assess any related legislative proposals before you are required to act.
This can only be determined through a considered analysis of specific

revision, repeal, or authorization proposals. Finally, while we believe that
the comprehensive review being orchestrated by the Administration is
appropriate, it is important that the concept of ?freedom to manage? not be
used as a means to try and achieve ?freedom from oversight.?

Page 8 GAO- 02- 241T Mr. Chairman, this concludes my prepared statement. I
would be pleased to respond to any questions that you or other Members of
the Committee may have.

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