Washington's $1 Trillion Opportunity by Paul C. Light
I'm posting this full article because several people couldn't read the full article from the link provided to me by WSJ. I was able to read the whole article by going to Google (search: Professor Paul Light)>News (about 4th or 5th article on list)
President Barack Obama's blue-ribbon fiscal commission began its work on a somber note last month. "Anything we eventually do in any way will be met by howls of anguish," said the commission's co-chair, former Republican Sen. Alan Simpson. "The debt is like a cancer that will destroy the country from within," said his co-chair, former Clinton White House Chief of Staff Erskine Bowles.
If the commission wants a more positive note the next time it meets, it should take a look at the $1 trillion opportunity that resides in comprehensive bureaucratic reform. Not only is the rate of return high, the reforms are well within reach and long overdue.
The savings will not be found in hiring freezes and pay cuts-which inevitably lead to backdoor pay increases through promotions and title creep-but in streamlining the government's antiquated systems, duplicative programs, and needlessly dense organization chart. Consider the following rough estimates of the possible 10-year savings:
• Save $1 billion by cutting the number of presidential appointees. Sens. Russ Feingold (D., Wis.) and John McCain (R., Ariz.) have already introduced a proposal to cut the number of appointments to 2,000 from 3,000, but cutting the number by half to 1,500 would make a bigger contribution in both dollars and clarity of command. Add in the savings from improving the government's ability to connect the dots and move appointees into office faster, and the total might reach $100 billion in improved performance.
• Save $100 billion by eliminating needless management layers throughout the bloated federal hierarchy. The flattening of government should not be restricted to the political class at the top. It should also target the middle and lower-level managers who strangle information as it flows upward at agencies such as the Federal Bureau of Investigation, where early clues to the September 11 terrorist attacks were never advanced.
• Save $200 billion by eliminating many of the federal jobs about to be vacated by the baby boomers. It will be tempting to fill the roughly half million jobs with the next federal employee in line but many of the posts were created by automatic promotions as the baby boomers aged. There are only two ways to know whether the jobs are needed. The first is to examine each job as it is exited and make a deliberate decision to fill it. The default should be no.
The second is to leave the job open for six months and see if the work is done faster with fewer hands. Either way, the federal government's mid-level work force will likely become smaller at least until the evaluations are completed. Of course, great care will need to be taken to protect government's essential roles in research, regulation and law enforcement.
• Save $200 billion by cutting the contracting work force. The federal government is not the only employer where padding has occurred. The Obama administration is already planning on capturing nearly $40 billion in contractor waste through tighter contracts on so-called indefinite quantity agreements. A parallel cut in the number of contract employees could capture much more. The Obama administration should also prohibit the use of contractors as de facto civil servants. Too many are hired from outside government because the hiring and disciplinary process within government is broken.
• Save $100 billion by increasing federal productivity. Federal employees have some of the most important jobs in the world, but many do not have the basic materials needed for a high-productivity era. Relatively small investments in integrated information technology that allows agencies to communicate with each other could generate huge productivity savings across government.
So could the elimination of the federal government's antiquated regional office structure, which is a bastion of micromanagement, costly overhead, and needless dead-ends on information and decisions.
• Save $300 billion by merging duplicative programs. Duplication produces more than confusion for lower-level employees and government beneficiaries. It also creates wasteful spending through multiple accounting, oversight and processing systems. The federal government could save enormous overhead by consolidating the "back office" operations in high-volume agencies such as the Social Security Administration, which has an impressively low administrative cost per case.
• Save $200 billion by eliminating programs that either do not produce results or are too trivial to save. Alexander Hamilton wrote that government should only be involved in "extensive and arduous enterprise for the public benefit." Using that metric, one can easily assemble a long list of programs that should be dropped from the statute books, such as agricultural price supports, a sacred cow that does little to create public benefit.
Although the back-of-the-envelope savings add up to more than $1.1 trillion over 10 years, some of the savings would have to be spent on new technologies, buy-out packages, and accelerated training as the federal work force adjusts to its new shape. It costs money to save money. Even if Congress and the president set aside $100 billion for productivity investments, taxpayers would still reap $1 trillion in potential savings.
It is not clear how the Congressional Budget Office or the Office of Management and Budget would score these ideas. Both long ago lost their capacity to monitor administrative costs. Nor is it clear that federal employment would fall. The federal government still needs more workers at the bottom of the hierarchy where its goods and services such as veterans care are delivered and laws are enforced. It is entirely possible that the number of midlevel jobs could fall by 300,000 even as the number of front-line jobs rises by the same number, albeit at a much lower cost per hire.
What is clear is that the federal government is long overdue for comprehensive reform. It's been nearly 60 years since Herbert Hoover led the last streamlining effort. During that time, our federal bureaucracy has steadily thickened with reporting chains to nowhere, micromanagement, ineffective accounting systems, and needless red tape. There are dollars to be found in another government-wide review.
If the fiscal commission wants to delegate this work, George H.W. Bush would be the perfect former president to lead the effort. Mr. Bush made total quality management the centerpiece of his abbreviated management agenda, and he was always interested in good government. Mr. Bush would need full authority to put every bureaucratic process on the table, including the hopelessly sluggish presidential appointments process, the antiquated civil-service system, and the anachronistic federal organization chart.
Yet even if comprehensive reform does not save a dime, the nation deserves a faster, more responsive government. The federal government needs the right employees in the right programs with the right resources to honor the promises being made today. If doing so saves $1 trillion or so, all the better.
Mr. Light is a professor at New York University's Robert F. Wagner School of Public Service and the author of "A Government Ill Executed: The Decline of the Federal Service and How to Reverse It" (Harvard University Press, 2009).
President Barack Obama's blue-ribbon fiscal commission began its work on a somber note last month. "Anything we eventually do in any way will be met by howls of anguish," said the commission's co-chair, former Republican Sen. Alan Simpson. "The debt is like a cancer that will destroy the country from within," said his co-chair, former Clinton White House Chief of Staff Erskine Bowles.
If the commission wants a more positive note the next time it meets, it should take a look at the $1 trillion opportunity that resides in comprehensive bureaucratic reform. Not only is the rate of return high, the reforms are well within reach and long overdue.
The savings will not be found in hiring freezes and pay cuts-which inevitably lead to backdoor pay increases through promotions and title creep-but in streamlining the government's antiquated systems, duplicative programs, and needlessly dense organization chart. Consider the following rough estimates of the possible 10-year savings:
• Save $1 billion by cutting the number of presidential appointees. Sens. Russ Feingold (D., Wis.) and John McCain (R., Ariz.) have already introduced a proposal to cut the number of appointments to 2,000 from 3,000, but cutting the number by half to 1,500 would make a bigger contribution in both dollars and clarity of command. Add in the savings from improving the government's ability to connect the dots and move appointees into office faster, and the total might reach $100 billion in improved performance.
• Save $100 billion by eliminating needless management layers throughout the bloated federal hierarchy. The flattening of government should not be restricted to the political class at the top. It should also target the middle and lower-level managers who strangle information as it flows upward at agencies such as the Federal Bureau of Investigation, where early clues to the September 11 terrorist attacks were never advanced.
• Save $200 billion by eliminating many of the federal jobs about to be vacated by the baby boomers. It will be tempting to fill the roughly half million jobs with the next federal employee in line but many of the posts were created by automatic promotions as the baby boomers aged. There are only two ways to know whether the jobs are needed. The first is to examine each job as it is exited and make a deliberate decision to fill it. The default should be no.
The second is to leave the job open for six months and see if the work is done faster with fewer hands. Either way, the federal government's mid-level work force will likely become smaller at least until the evaluations are completed. Of course, great care will need to be taken to protect government's essential roles in research, regulation and law enforcement.
• Save $200 billion by cutting the contracting work force. The federal government is not the only employer where padding has occurred. The Obama administration is already planning on capturing nearly $40 billion in contractor waste through tighter contracts on so-called indefinite quantity agreements. A parallel cut in the number of contract employees could capture much more. The Obama administration should also prohibit the use of contractors as de facto civil servants. Too many are hired from outside government because the hiring and disciplinary process within government is broken.
• Save $100 billion by increasing federal productivity. Federal employees have some of the most important jobs in the world, but many do not have the basic materials needed for a high-productivity era. Relatively small investments in integrated information technology that allows agencies to communicate with each other could generate huge productivity savings across government.
So could the elimination of the federal government's antiquated regional office structure, which is a bastion of micromanagement, costly overhead, and needless dead-ends on information and decisions.
• Save $300 billion by merging duplicative programs. Duplication produces more than confusion for lower-level employees and government beneficiaries. It also creates wasteful spending through multiple accounting, oversight and processing systems. The federal government could save enormous overhead by consolidating the "back office" operations in high-volume agencies such as the Social Security Administration, which has an impressively low administrative cost per case.
• Save $200 billion by eliminating programs that either do not produce results or are too trivial to save. Alexander Hamilton wrote that government should only be involved in "extensive and arduous enterprise for the public benefit." Using that metric, one can easily assemble a long list of programs that should be dropped from the statute books, such as agricultural price supports, a sacred cow that does little to create public benefit.
Although the back-of-the-envelope savings add up to more than $1.1 trillion over 10 years, some of the savings would have to be spent on new technologies, buy-out packages, and accelerated training as the federal work force adjusts to its new shape. It costs money to save money. Even if Congress and the president set aside $100 billion for productivity investments, taxpayers would still reap $1 trillion in potential savings.
It is not clear how the Congressional Budget Office or the Office of Management and Budget would score these ideas. Both long ago lost their capacity to monitor administrative costs. Nor is it clear that federal employment would fall. The federal government still needs more workers at the bottom of the hierarchy where its goods and services such as veterans care are delivered and laws are enforced. It is entirely possible that the number of midlevel jobs could fall by 300,000 even as the number of front-line jobs rises by the same number, albeit at a much lower cost per hire.
What is clear is that the federal government is long overdue for comprehensive reform. It's been nearly 60 years since Herbert Hoover led the last streamlining effort. During that time, our federal bureaucracy has steadily thickened with reporting chains to nowhere, micromanagement, ineffective accounting systems, and needless red tape. There are dollars to be found in another government-wide review.
If the fiscal commission wants to delegate this work, George H.W. Bush would be the perfect former president to lead the effort. Mr. Bush made total quality management the centerpiece of his abbreviated management agenda, and he was always interested in good government. Mr. Bush would need full authority to put every bureaucratic process on the table, including the hopelessly sluggish presidential appointments process, the antiquated civil-service system, and the anachronistic federal organization chart.
Yet even if comprehensive reform does not save a dime, the nation deserves a faster, more responsive government. The federal government needs the right employees in the right programs with the right resources to honor the promises being made today. If doing so saves $1 trillion or so, all the better.
Mr. Light is a professor at New York University's Robert F. Wagner School of Public Service and the author of "A Government Ill Executed: The Decline of the Federal Service and How to Reverse It" (Harvard University Press, 2009).