<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:23206.wais]
TURNING BUREAUCRATS INTO PLUTOCRATS: CAN ENTREPRENEURIALISM WORK IN THE
FEDERAL GOVERNMENT?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE FEDERAL WORKFORCE
AND AGENCY ORGANIZATION
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
JULY 13, 2005
__________
Serial No. 109-62
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
______
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada BRIAN HIGGINS, New York
KENNY MARCHANT, Texas ELEANOR HOLMES NORTON, District of
LYNN A. WESTMORELAND, Georgia Columbia
PATRICK T. McHENRY, North Carolina ------
CHARLES W. DENT, Pennsylvania BERNARD SANDERS, Vermont
VIRGINIA FOXX, North Carolina (Independent)
------ ------
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director/Communications Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on the Federal Workforce and Agency Organization
JON C. PORTER, Nevada, Chairman
JOHN L. MICA, Florida DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia MAJOR R. OWENS, New York
DARRELL E. ISSA, California ELEANOR HOLMES NORTON, District of
KENNY MARCHANT, Texas Columbia
PATRICK T. McHENRY, North Carolina ELIJAH E. CUMMINGS, Maryland
------ ------ CHRIS VAN HOLLEN, Maryland
Ex Officio
HENRY A. WAXMAN, California
Ron Martinson, Staff Director
Chris Barkley, Professional Staff Member
Reid Voss, Clerk
Mark Stephenson, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on July 13, 2005.................................... 1
Statement of:
Gingrich, Newt L., former Speaker of the U.S. House of
Representatives; David M. Walker, Comptroller General of
the United States; and Maurice P. McTigue, vice president,
Mercatus Center at George Mason University................. 10
Gingrich, Newt L......................................... 10
McTigue, Maurice P....................................... 69
Walker, David M.......................................... 38
Letters, statements, etc., submitted for the record by:
Cummings, Hon. Elijah E., a Representative in Congress from
the State of Maryland, prepared statement of............... 112
Davis, Hon. Danny K., a Representative in Congress from the
State of Illinois, prepared statement of................... 8
Gingrich, Newt L., former Speaker of the U.S. House of
Representatives, prepared statement of..................... 14
McTigue, Maurice P., vice president, Mercatus Center at
George Mason University, prepared statement of............. 72
Porter, Hon. Jon C., a Representative in Congress from the
State of Nevada, prepared statement of..................... 5
Walker, David M., Comptroller General of the United States,
prepared statement of...................................... 41
TURNING BUREAUCRATS INTO PLUTOCRATS: CAN ENTREPRENEURIALISM WORK IN THE
FEDERAL GOVERNMENT?
----------
WEDNESDAY, JULY 13, 2005
House of Representatives,
Subcommittee on Federal Workforce and Agency
Organization,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:08 p.m., in
room 2154, Rayburn House Office Building, Hon. Jon C. Porter
(chairman of the subcommittee) presiding.
Present: Porter, Davis of Virginia, Issa, Marchant, Davis
of Illinois, and Norton.
Staff present: Ron Martinson, staff director; Chad Bungard,
assistant staff director/chief counsel; Christopher Barkley,
professional staff member; Patrick Jennings, OPM detailee
serving as senior counsel; Mark Stephenson and Tania Shand,
minority professional staff members; and Teresa Coufal,
minority assistant clerk.
Mr. Porter. I would like to bring the hearing to order.
We meet today for a hearing on ``From Bureaucrats to
Plutocrats: Can Entrepreneurialism Work in the Federal
Government?'' I think that is a very good question, and we have
some experts here today to help address that specific question.
But before we get into our visitors and special guests, I would
like to say a few words from my perspective.
Prior to having the honor of serving in Congress, I had the
opportunity to have my own business for almost 20 years. Also,
I grew up in a family of small business, where my mom and dad
spent the better part of every evening at the dinner table
talking about the challenges of that entrepreneurial spirit of
trying to have their own business, and understanding the
challenges of meeting a payroll, understanding expectations of
customer delivery, and, more importantly, to make sure they
could take care of their customers.
But today I think there are a lot of questions when it
comes to entrepreneurial spirit and what that really means. In
the private sector, when we talk about entrepreneurial spirit,
it is someone that hopefully has innovation; hopefully has the
ability to make tough decisions, but also lives with those
ramifications, both positive and negative; has to do with the
direct return on investment. An entrepreneur in the private
sector is an individual that understands that the harder the
work, the better they perform, the more efficiently they
perform, the better return on their investment, and by making
their customers happy, they too can reap in the benefits of
that success.
There are very few places in the world like the United
States where we have this entrepreneurial spirit, and that is
one of the things that makes this country so great. It is that
American dream to be able to have ownership, whether that be
your own home or your own business, or whatever that is of your
job. You may be an employee of a corporation or the Federal
Government. But the American dream is based upon the
entrepreneurial spirit, and that is what built this country.
But many times when I talk to my friends and colleagues in
the public sector, when we talk about entrepreneurs, there are
lots of emotions, from a resentment in some cases, there are
folks in the public sector that may not particularly care for
those in the private sector and those that are entrepreneurs
because they don't really understand it; they are threatened
because many times those in the public sector don't really
understand what it is like to be an entrepreneur, and don't
necessarily understand what it is like to have ownership. And I
think probably the fact that they can feel threatened or even
some resentment or even a fear I think is really based upon a
true misunderstanding of the entrepreneurial spirit.
Now, books have been written and there are different
experts--and we are fortunate today to have some of those
experts--but there is also a book out there--and I meant to get
the name, but I am sorry--but it is called ``E Myth,'' where
those that believe that the entrepreneurial spirit is only a
piece of a system and in the private sector provides for that
spirit by putting systems in place that show accountability so
employees and management and ownership understand when there is
success and when there is failure.
One of the challenges that we have is that many times,
especially in the Federal Government--and it isn't for a lack
of quality employees; I think we have some of the best and the
brightest in the world working for the Federal Government--but
I think our current system can really stifle some of their
success. I think that our system can encourage success only to
get the job done and check out for the rest of the day at
times. And, again, this isn't all employees, but I think that
our system in the Federal Government sometimes does not foster
ownership for the employees, does not foster the
entrepreneurial spirit, does not foster success.
But I also know that the current system provides a lot of
comfort. And we have spent a lot of time the past 6 months, and
even prior, looking at pay-for-performance from the Department
of Defense; in the Homeland Security Department we are looking
at the balance of the Federal employees being placed in a pay-
for-performance situation. And I hear frequently from employees
that they are just concerned because they don't understand the
direction of this committee and the direction of the committee.
But part of our job is going to be to educate Federal employees
to understand what our goals are and our mission. And that is
where we run into problems throughout the Federal Government.
At times our employees just don't know what their role is.
Now, firsthand, I think my colleagues on both sides would
probably agree that a better part of our job is trying to take
care of our customers, that is, our voters, our communities,
our States. And a lot of times, of those responsibilities, it
has to do with a customer or a constituent that is frustrated
with the Government; they don't know where to turn. They may
have been waiting months for a Social Security check or for a
Medicare situation or a single mom that has challenges. But I
know we receive hundreds of letters, if not thousands, from
constituents that are frustrated with the Federal Government
and with different government.
Now, I am also a realist. Many folks don't know the
difference between a Congressman and a State Senator or a city
councilman. They are just looking for help because they are
frustrated. They are frustrated because they can't get a door
open when they are in need. So I do know that we spend a lot of
time, as Members of Congress, trying to provide customer
service because possibly a Federal agency hasn't really
followed through as it should.
Now, I will reiterate. We have some of the absolute best
and brightest, and we want to make sure we can encourage that.
But I believe that in government, not unlike the private
sector, we can no longer do business as usual. We are in a
global economy, and that means the Federal Government is in a
global economy.
For us to survive, we have to take care of our employees,
who then will take care of our customers. And I also know that
those races run by one horse don't normally run as fast as when
there are multiple horses. So we want to make sure that there
is some competition that is attainable, where the best and the
brightest that we already have will survive and will become far
more encouraged to provide that customer service.
But as we look at this global economy, we are also facing a
lot of changes. And my son and daughter--my son will be 27
tomorrow and my daughter is 24--they are accustomed to an awful
lot of choices. Now, Speaker Gingrich is here, and I know when
we were growing up we had chocolate and vanilla ice cream; we
didn't have 500 flavors. We didn't have 250 radio stations to
choose from, we had one, maybe two AM stations. At least I did
in my small-town in Iowa.
But our future generation is really accustomed to a lot of
choices. And they also expect customer service, as we do, but
as we evolve and we provide entrepreneurial spirit for our
employees, they too can serve this whole new generation that
is, one, demanding higher and better service; demanding success
in a global economy, where we are competing with China, we are
competing with other countries as we look at the global
economy; but also when we look at technology. And I know that
the Speaker is here today and will touch upon some of the
technology in health care delivery, but it is the same in
public service.
So I am excited to have the hearing today. There is a lot
that we can do. And I know that as a chairman of a committee
that looks at the employees and looks at the agencies and how
they take care of their customer service, I want to make sure
that we can provide not only the best training--which I think
we do--but empower public employees, Federal employees, to
share in that success of working hard and receiving the
benefits of that delivery of the best and most courteous
customer service there is.
Now, the hearing today is going to, again, cover a lot of
areas, but I also want to address that tomorrow, along with
Chairman Davis, we are going to be introducing a bill to create
what is called a Results Commission, which will examine Federal
agencies for their effectiveness. And later this month the
subcommittee will hold a hearing to continue its look into how
the Federal Government can free itself from burdensome
bureaucratic processes and maximize the use of information
technology in the important arena of health care.
And to bring the discussion to reality, I want to thank a
couple of folks that have excelled above and beyond. There is a
young woman from the Las Vegas Social Security Office that went
out of her way to help one of my constituents, Linda Ng;
another individual, Kania Boltman, outstanding service in the
Congressional Inquiry Division. We can go on and on and talk
about those folks that have that entrepreneurial spirit and are
delivering services.
There is a Mr. Brad Gear at the Federal Emergency
Management Agency. His task was to oversee the long-term
recovery after the destruction of the World Trade Center in New
York. It was estimated that it was going to cost around $7
billion to clean up around Ground Zero. He was able to
successfully complete the task in 6 months at $1.7 billion.
So there is a lot of creative thinking happening. The
purpose of the hearing today is to try to find a way to
encourage that throughout the Federal Government.
So can entrepreneurial spirit work in the Federal
Government? I believe it can, and it is my privilege today to,
again, have some of those experts that deal with this on a
daily basis. Each one brings a unique perspective, and we look
forward to lively debate and discussion.
First, we are going to hear from the former Speaker of the
House, Mr. Newt Gingrich. Speaker Gingrich has written a
thought-provoking paper on how to reform the Federal Government
by fostering entrepreneurialism amongst the work force. And, of
course, he has had his leadership in many areas, but also will
be touching upon health care.
Next, we will be introducing the Comptroller General of the
United States--another entrepreneur in government, which I
think is a real compliment--Mr. David Walker. He brings, of
course, a wealth of experience in the private and the public
sector at the GAO.
And last, we are going to hear from Maurice McTigue,
director of Government Accountability Projects at the Mercatus
Center who first-hand has helped change the thought process and
the culture and experience in reforming the New Zealand
government in his time as a member of parliament there.
So I would like to thank all three of you for being here
today.
[The prepared statement of Hon. Jon C. Porter follows:]
[GRAPHIC] [TIFF OMITTED] T3206.001
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Mr. Porter. I would now like to recognize our ranking
minority member of the subcommittee, Mr. Danny Davis, another
entrepreneur in government.
Mr. Davis of Illinois. Well, thank you very much, Mr.
Chairman, and I want to thank you for calling this very
important hearing today.
Over the last several years, this subcommittee has held
several hearings on Civil Service reform and government
reorganization. At one such hearing, held in April 2003, the
Comptroller General, David Walker, stressed that above all else
``all segments of the public that must regularly deal with our
Government--individuals, private sector organizations, States,
and local governments--must be confident that the changes that
are put in place have been thoroughly considered and that the
decisions made today will make sense tomorrow.'' I agree with
the Comptroller and look forward to listening and learning
about practices and policies that will make sense for the
Federal Government, Federal employees, and taxpayers today and
tomorrow.
I also want to again thank Mr. Walker and our other
witnesses for taking the time to testify at this hearing. Like
you, I am certain that it will be a spirited discussion. And,
hopefully, at the end of the day, we will have garnered some
insight, information, and perhaps even expertise that would
help move America forward.
So again I thank you for calling this hearing and I look
forward to the testmiony of our witnesses.
[The prepared statement of Hon. Danny K. Davis follows:]
[GRAPHIC] [TIFF OMITTED] T3206.003
Mr. Porter. Chairman Davis.
Mr. Davis of Virginia. Thank you very much. I am going to
be brief, but I am really looking forward to the testimony of
our three experts here in the first panel.
Mr. Speaker, you have been very creative in a number of
ways in trying to make government work over the years.
Politicians and the public alike take shots at bureaucrats,
meaning Government employees, who are perceived as paper
shufflers, long on procedures, short on results; many of them
performing the tasks they were employed to perform, but filling
out forms that probably should have never been printed; working
under regulations that shouldn't have been written.
We bear some responsibility in that. And I think today we
will talk about the laws, the procedures, the incentives that
we give them to work under and how we can make them more
productive.
I personally believe Federal employees want to be
productive. I think they want to take pride in what they do.
They want to show results. And sometimes we spend so much time
and effort making sure nobody steals anything that they can't
get much else done at the same time. We need to, I think,
empower employees to make decisions and incentivize them in the
right way, and I am really looking forward to your comments
today.
Government isn't the private sector. We know that. We have
to have a transparency and safeguards there that you will never
get in the private sector. We don't have a profit motive that
brings out inefficiencies because we are not competitive. But
having said that, we realize that people are motivated by
incentive, and we need to find ways to build incentives for
Federal employees to take risks, to reward risks that achieve
the results, not just to not make mistakes, which is so often
what happens under the current system.
General Walker, you have been innovative in human capital
reform at the GAO. You have told us reform is needed. You have
identified areas that we need to focus on at this committee,
and we hope to take further action in some of these as well. I
can't think of too many other organizations in existence today
that use methods that are 125 years old, but our Civil Service
does. And it is time to review those and probably reinvent
government.
And, Mr. McTigue, your reputation as an entrepreneur in
government management and organization as a member of the
parliament in New Zealand is legendary. I am pleased that you
are currently affiliated with George Mason University out in my
district, as well. The dramatic reforms you and your colleagues
accomplished can be a model for us, a checklist, if you will,
that we should look at in terms of moving our Government away
from the bureaucratic to a more entrepreneurial model.
I want to thank everybody for your comments today and for
being with us and being willing to take some questions.
Mr. Porter. Thank you, Mr. Chairman.
Congresswoman Holmes Norton.
Ms. Norton. Thank you, Mr. Chairman. This is an interesting
hearing, and I am very pleased that you have chosen to have a
hearing on this subject. I do want to especially welcome my
good friend, Speaker Newt Gingrich. I will always remember
Speaker Gingrich for his fairness to the District of Columbia,
the energy he put into the Capital of the United States, when
he was speaker at a particularly trying time.
Some may be surprised to see Newt here talking about
management of Government, but that is because you all don't
know Newt Gingrich. I sometimes think that the word visionary
was not coined until Newt Gingrich burst onto the public scene,
because his visionary sense sometimes knows no limits. And I
say that as someone, as Newt knows, who is not always in
agreement with him. But Newt Gingrich is one of these people
who it pays for everybody to listen to, whether you are one of
his devotees or not. When Newt talks, just listen; it will
perhaps help you to improve on your own adversarial approach to
what he is saying or you may even adopt one of his ideas. So I
especially welcome my good friend Newt Gingrich here.
Thank you, Mr. Speaker.
Mr. Porter. Thank you very much.
I would like to ask unanimous consent that all Members have
5 legislative days to submit written statements and questions
for the record, and any answers to written questions provided
by the witnesses also be included in the record. Without
objection, so ordered.
I ask unanimous consent that all exhibits, documents, and
other materials referred to by Members and the witnesses may be
included in the hearing record, and that all Members be
permitted to revise and extend their remarks. Without
objection, so ordered.
As you know, it is the practice of the subcommittee to
administer the oath to all witnesses. If you could please
stand, I would like to administer the oath. Please raise your
right hands.
[Witnesses sworn.]
Mr. Porter. Thank you. Let the record reflect that the
witnesses have answered in the affirmative. Again, welcome.
Witnesses will each have 5 minutes for opening remarks,
after which the members of the committee will have a chance to
ask questions.
Mr. Gingrich, again, thank you very much. It is an honor to
have you here. We appreciate your insights and thoughtfulness.
You will have approximately 5 minutes.
STATEMENTS OF NEWT L. GINGRICH, FORMER SPEAKER OF THE U.S.
HOUSE OF REPRESENTATIVES; DAVID M. WALKER, COMPTROLLER GENERAL
OF THE UNITED STATES; AND MAURICE P. MCTIGUE, VICE PRESIDENT,
MERCATUS CENTER AT GEORGE MASON UNIVERSITY
STATEMENT OF NEWT L. GINGRICH
Mr. Gingrich. Thank you, Mr. Chairman. I want to thank you
and the other members for your kind words, in particular the
rather glowing comments of Ms. Norton. That alone was worth
coming up here for. So thank you.
I have a very direct message, I guess, for the Congress,
and that is that real change is going to require real change.
That we keep trying to monkey around at the margins and somehow
get dramatically better results. But, in fact, what we need is
a very profound change, far more than just privatization. We
also need to learn the lessons of modern productivity and the
lessons of modern quality, and then rethink from the ground up
how Government functions.
Many of the things we as a people try to do together in our
Government are extraordinarily important, life and death: the
very education of our young, the protection of our country, key
elements of transportation. And it is important to recognize
that this is a city which spends almost all of its energy
trying to make the right decisions and almost none of its
energy focusing on how to improve implementing the right
decisions. And, yet, without implementation, the best ideas in
the world simply don't occur.
I am submitting for the record a paper on entrepreneurial
public management. It is a term I use very deliberately. As
Chairman Davis pointed out, we currently have a bureaucratic
public administration model that has some 125 years of
development. It was originally created when male clerks with
quill pens were sitting on high stools, writing on paper from
an ink bottle.
You now live in a modern world, and I think the standard
you should set for the Government is the speed, agility, and
accuracy of UPS and FedEx. Take a look at those two systems,
and then come back and say, all right, if we want education to
work, how do we get it to be that accurate? If we want health
to work, how do we get it to be that effective? If we want
intelligence to protect us from terrorists, how do we ensure
that level of daily competence?
I outline 20 points in this paper on entrepreneurial public
management--which I won't go over, but I will be glad to answer
questions on--because I think it is a system's replacement
problem. This is not marginally improving the system we have
inherited; it is, in fact, replacing it with a profoundly
different system. I think Congress has, in many ways, the major
role to play, because most of the current system is inherently
structured by law, modified by the way we do oversight, and
reflected in our budgeting and appropriations process.
I would encourage you to have a series of hearings on
demming the Toyota protection system and the nature of quality
in the private sector, and to ask people who are actually
practitioners to come in, explain why we are so dramatically
more productive in the private sector, and then ask them what
the basic principles would be for rewriting and redesigning our
entire system of employment, of procurement, and of management.
I would also encouraged you to look at legislation to
dramatically modernize the entire system. I would urge you to
look at how the budget process today is anti-investment and
traps us in failed systems of the past. And I would ask you to
look at how the appropriations process tends to bias us against
the kind of modernity that we need.
Let me just give you three quick examples of the scale of
change I am describing.
The budget committees, and possibly this committee, should
be holding hearings on the process by which the Congressional
Budget Office and the Office of Management and Budget engage in
scoring, because that very scoring shapes much of what we do.
We had the experience in the last week of a 24 percent error
rate in estimating the surplus or deficit for this year, that
is, within the cycle of this year. The CBO and OMB model was
off by 24 percent. Now, if that is what we are relying on to
tell us what we can invest in health care, or what we can
invest in education, or what we can invest in a better
environment, it is so central to our operating that it deserves
to be open, transparent, and accountable.
Second, look at small symbolic changes that would be
dramatic. As Ms. Norton pointed out, I am passionate about our
national capitol truly being our national capitol. We should be
looking at the National Zoo as an example of where a public-
private partnership would radically improve the zoo, which will
never be improved in the current bureaucracy under the current
Smithsonian system.
Yet, over half the cities in the United States today, there
is a public-private partnership: San Diego, arguably the best
zoo in the world; New York City, arguably the best research zoo
in the world; the Atlanta Zoo; the Memphis Zoo; the zoo in
Birmingham, just to give you some examples.
You could combine the area out around Front Royal, that
magnificent area, which could be the equivalent of the San
Diego Wild Animal Park, and you could combine it with the zoo
downtown. You could create a public-private partnership and
within a very short time you would have vastly more money,
vastly more energy, and you would have a better system, with
better care of the animals, with better attendance, and
everybody is a winner. But it is a different model than trying
to funnel enough resources through the Smithsonian bureaucracy.
On a larger scale--I can't say this too strongly--our
intelligence system is broken, and fixing the top of it with
new names and new charts is irrelevant. Porter Goss ought to
have the ability to block-modernize the entire staff of the
Central Intelligence Agency. I will give you one example. This
is something I have been working on for the last 2 weeks.
North Korea is a country we have been studying since 1950.
That is 55 years. We have had 38,000 troops in South Korea for
two generations. Sixty-five percent of our analysts don't read
or speak Korean at all; 25 percent read or speak it partially;
fewer than 10 percent of the analysts currently dealing with
North Korea are fluent in Korean.
Now, this is a system of such stunning incompetence at a
practical level that trying to marginally improve it over a 20
year period the week after the bombings in London ought to be a
warning to all of us that we have to go to dramatic block
modernization at the personnel level or we are going to risk
getting killed.
One last example. It is fascinating that Amtrak, which is
very, very important to the northeast corridor, cannot learn
from the British experience, where the British have
systematically modernized their railroads; privatized the
operation away, which ended up being very acceptable to the
British rail unions; and, as a result, the increase in traffic
on the British railroads is larger than the total traffic on
Amtrak.
And there is a model there worth looking at, because I
don't care how much money this Congress spends on Amtrak. In
the current model, with the current rules, under the current
structures, it is going to fail, once again, for the 30th year.
So I just want to suggest to you this is about more than
just privatizing out of the Government. It is also about
bringing the best of the models of modern productivity into the
Government. And I think the invention of entrepreneurial public
management is one of the most important challenges that this
Congress faces. And I thank you for allowing me to come here.
[The prepared statement of Mr. Gingrich follows:]
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Mr. Porter. Thank you very much, Mr. Speaker.
Next we will have Honorable David M. Walker, Comptroller
General of the United States.
Welcome, Mr. Walker.
STATEMENT OF DAVID M. WALKER
Mr. Walker. Thank you, Mr. Chairman. Members, it is a
pleasure to be back before this subcommittee, this time to talk
about how to transform Government to meet the challenges of the
21st century.
As you know, I have spent 20 years in the private sector,
now 13 in the public sector. And, as you know, GAO is trying to
lead by example with regard to transforming what we do and how
we do it for the benefit of the Congress and the American
people.
What I would like to do is to show a few slides that I
think demonstrate a compelling business case for why it is not
only desirable, it is absolutely essential that we transform
what the Government does, how the Government does business, who
does the Government's business, and how we are going to pay for
the Government's business in the 21st century, which means
dramatic and fundamental reform not just in the executive
branch, but also in the legislative branch, which is not well
aligned for success in the 21st century.
This first builds on Speaker Gingrich's comment. This is
based upon looking at CBO's assumptions for the next 10 years,
using GAO's long-range budget simulations. It shows what our
fiscal future looks like based upon two key assumptions: No. 1,
discretionary spending in the first 10 years grows by the rate
of inflation; No. 2, that all tax cuts expire; No. 3--in fact,
there are four key assumptions that no new laws will be passed;
and, No. 4, that the alternative minimum tax will not be fixed.
I would respectfully suggest none of those assumptions are
realistic. As a result, this shows that we have a large and
growing structural deficit due primarily to known demographic
trends, rising health care costs, and lower Federal revenues on
a relative basis than a percentage of the economy.
Next is an alternative scenario. There are only two
changes, but differences between this one and the first one.
No. 1, discretionary spending grows by the rate of the economy,
which includes national defense, homeland security, judicial
system, transportation, education, etc.; and, second, that all
tax cuts are made permanent. This is an Argentina scenario.
With all due respect, New Zealand did a great job in
transforming itself, but only when it was on the verge of
default.
It is absolutely essential that we take action now; that we
begin to recognize reality that we are in an imprudent and
unsustainable fiscal path; that working at the margins is not
acceptable; and that as this document shows--which was
published on February 16th, of which each Member has been given
a copy--a vast majority of the Federal Government is based upon
conditions that existed in the United States in the 1950's and
the 1960's. Whether it is entitlement programs, whether it is
spending policies or tax policies, they are based upon
conditions that existed in the United States and in the world
in the 1950's and 1960's, and we need to fundamentally review,
re-engineer, re-prioritize the base of the Federal Government.
In doing that, we are going to have to ask some fundamental
questions. Why do we have this program? Why do we have this
policy? Why do we have this function or activity? Stated
differently: Why did we create it? What were the conditions
that existed? What were we trying to accomplish? How do we
measure success on an outcome-based basis? Are we successful on
that basis? What is the relative priority for today and
tomorrow?
Believe it or not, a vast majority of Government has never
been asked those fundamental questions. It is time that we ask.
Furthermore, we are also going to have to recognize that
this is nothing less than a cultural transformation. The left-
hand side shows the current state of many Government agencies.
And, by the way, it is not just Government agencies, it is
monopolies and entities in the private sector that do not face
significant competition. That is the real key element.
My father worked for AT&T when it didn't have much
competition. They had the same type of factors as many
Government agencies do: hierarchical, stovepiped, process and
output-oriented, reactive behavior, inwardly focused, avoiding
technology, hoarding knowledge, avoiding risk, protecting turf,
and directing employees as to what to do.
We have to transform how Government does business to make
it a flatter organization, more matrixed and results-oriented,
to be much more proactive, much more focused on the needs of
customers and clients, to leverage technology, to empower
employees, to share knowledge, manage risk, and, very, very
importantly, form partnerships not only in Government, between
governments, with the public-private, not-for-profit sector
both domestically and internationally in order to make
progress.
At GAO, we have focused on four key dimensions with great
success, because we actually have fewer people today than we
did 6 years ago and our results have over-doubled.
No. 1: Results. What are outcome-based results? Return on
investment last year, 95 to 1, No. 1 in the world. No. 2: What
do our clients and customers say about our work? Ninety-seven
to 98 percent positive client feedback. No. 3: What do our
employees say about our agency as a model employer? No. 1 in
the Federal Government and higher than the private sector by
about 6 percentage points. And, last, but not least: What do
our partners that we work with say about how good a partner we
are?
In summary, there is absolutely no question that we need to
review, re-examine, re-engineer the base of the Federal
Government. Working at the margins is not acceptable. Budget
reform is part of that, but it is much more than that. And,
candidly, this has to happen not just in the executive branch,
but in the legislative branch, because if you look at the
authorization, the appropriation, and the oversight process,
many times when things are authorized, Congress does not
provide clear direction of what it is attempting to achieve and
what are the outcome-based results which that program should be
measured against.
Second, in the absence of those outcome-based results, the
assumption is if you throw more money at it, or if you provide
additional tax preferences, it will be good and it will make a
difference. That is simplistic and wrong. More money and more
tax preferences do not necessarily achieve better results. We
need to understand what results we are trying to achieve and to
try to make sure that people are geared toward doing that. In
appropriations, the money has to be allocated in a more
targeted basis and based upon results that are actually
achieved, rather than results that are promised.
And, last, I want to commend this committee and a few
others for engaging in periodic oversight. We need more
oversight. But that oversight is not just to find out what is
not working; it is also to acknowledge what is working, because
there are many things that are going well, and we should share
those successes, celebrate those successes, replicate them
across Government, while figuring out where we need to make
changes and holding people accountable for progress.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Walker follows:]
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Mr. Porter. Thank you very much, Mr. Walker.
Mr. McTigue, welcome. I think you are going to address some
solutions also. We appreciate your being here.
STATEMENT OF MAURICE P. MCTIGUE
Mr. McTigue. Thank you, Mr. Chairman. Yes, indeed. First, I
applaud the concept of government organizations being
innovative, creative in solving societal problems.
I also support the theory and reasoning captured in the
paper by Speaker Newt Gingrich. The constraint and
standardization of the industrial revolution is not the culture
for successful 21st century organizations. However, the culture
of organizations do not change just because we ask them to
change. The incentives in these organizations must change to
produce the desired culture change. This means that talking
must be converted into action on the structural change
necessary to get the desired result.
My written testimony takes the entrepreneurial ideas
espoused by Speaker Gingrich and suggests the changes necessary
to produce private sector organizations with a clear view of
what success looks like, strong accountability for results
achieved, and the flexibility to resolve the societal
challenges that are requested to be addressed.
My recommendations, however, are not based on theoretical
managerial concepts, but are based on the practical experience
of having been personally involved in implementing such change
to the machinery of government in New Zealand, both as an
elected member of parliament and as a member of cabinet.
The work we do at the Mercatus Center at George Mason
University is convincing us more and more that the cost of
creating successful organizations is closely linked to a strong
and well designed system of accountability. If the
accountability regime focuses on accountability for the
completion of tasks and accounting for expenditures, then the
organization becomes process-oriented and tends to be
bureaucratic. If the accountability regime focuses on
successfully making progress on outcomes, then the organization
is much more likely to identify and use best practice to seek
new and better ways of maximizing progress toward the outcome,
and generally develops an entrepreneurial or success-oriented
culture.
However, if management is charged with accountability for
outcomes, but constraints outside management's control are
placed on the operation of the organization, then both morale
and performance will be adversely affected. Therefore,
accountability for outcomes will only produce optimal results
if management is given the freedom to manage and the
opportunity to succeed.
Mr. Chairman, in the points that I make in my written
presentation to you, I am making a suggestion that inside the
organizations of government there should be a division between
the directorship of the organization and the day-to-day
management. The day-to-day management of the organization
should be done by the career professionals who have long
experience in delivering those outputs, but that the role the
appointee should be the guidance or the directorship of the
organization and should stay in the policy field.
That, I know, would be a major change for the way in which
the Government of the United States works, but I believe it is
the right course of action. That the people who run the day-to-
day operations should be there because of their competency to
do the job. They should have a CEO kind of stature and they
should have term contracts that gives them permanence of
authority, that means that the decisions that they make will be
carried out by the organization.
But if this is going to work, then the funding process
itself also needs to be changed. An appropriation really, in
psychological terms, is a grant of money addressed at a
particular outcome, with the expectation that it is going to
produce a result. A much more viable way of doing that is to
purchase from delivery organizations a specific set of outputs
that are designed to produce the outcome that you want.
Under that purchase agreement, there is a clear indication
of exactly what it is that has to be approved and there is a
strong ability for accountability. In that image, you are
looking at something that focuses very much on the outcome
rather than focusing on the output. If I were to challenge
something that you said before, Mr. Chairman, I would say this.
You made the comment that employees often don't know what
their job is or what is expected of them. And I would say that
maybe the instructions from their bosses don't clearly describe
what they expect from them. For example, currently there are
hundreds of billions of dollars in activities funded each year
that have not as yet been reauthorized. That process of
reauthorization could make it very clear exactly what it is
that Congress expects from that outcome.
Let me just take one of the simplest examples. Each year
Congress funds a very significant quantity of money for food
stamps. The purpose of that is to feed hungry people. Yet, food
stamps are never going to eliminate hunger, because all they do
is address the consequence of hunger: the fact that there are
hungry people there.
The reauthorization of that process should very clearly say
that over a period of time the United States intends to
eliminate hunger. That would bring about a very different set
of programs that are based upon what caused the hunger in the
first place. Maybe the person can't read or write; maybe the
person is new to the United States; maybe the person has a
disability. But what could we do to alleviate those problems so
the person could no longer be hungry?
Is this new? The answer, in my view, is no. Back about
1960, John F. Kennedy said, after the launch of Sputnik, ``We
are going to be the first on the moon.'' Didn't have any idea
how you were going to get there, nor did anybody else in the
Government have any idea how you were going to get there. But
there was a very clear vision of what the challenge was,
getting to the moon. But not only what the challenge was, but
the priority: it wasn't going to be good enough to be there
second, it was only good enough if you got there first. And, of
course, the Government was entrepreneurial enough to be able to
succeed in that challenge.
What we are lacking at the moment is a clear vision given
to your organizations that says this is the role. We expect
from Homeland Security that you will improve the safety of
Americans at home by 10, 15, or 20 percent per annum. We are
not offering that challenge. And it is possible to measure
whether or not that is happening. We should be saying that the
challenges to each year commission, this number of new
enterprises among our economically disadvantaged and minority
groups in society, but all we do is devote money to it and hope
that we are going to get that result.
One of my colleagues has a great description for that, Mr.
Chairman. He says that if you allocate money to something that
you want to see achieved, and don't have a clear view of how
that is going to be done, that is what you call a faith-based
initiative. And, unfortunately, a great deal of the budget is
faith-based initiatives. Thank you, Mr. Chairman.
[The prepared statement of Mr. McTigue follows:]
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Mr. Porter. Thank you very much, Mr. McTigue. We appreciate
it.
Very compelling testimony by all three. I appreciate your
insights and your thoughts. But I must tell you I am
disappointed, because I think there is one key element that was
not addressed, and that is, of course, the political side of
the reality of putting in place some of these required, if not
imminent and necessary, changes.
And I know that our system of government has its share of
challenges, but still the best in the world, but it creates an
adversarial environment here in Washington, and it appears--and
I know, Mr. Speaker, you were in office for a long time, far
longer than I; Mr. Walker and Mr. McTigue--but I think that a
serious challenge to us in competing in this global world with
no boundaries is our own political process of the spirit of
attack and spirit of taking down the other party.
There are many ideas that are floated here in Washington
that become political fodder. May I suggest even a personal
account as a discussion item has been used--and I use this as
an example because it is alive and well today, and, again,
waiting to see specifics on personal investment accounts. It
has turned into a campaign on who is going to be the next
President, not about what is best for seniors.
So I guess as I have three of the best and the brightest
here today, I want to take a moment, as we look at your ideas
and suggestions, I think many of which could take us into this
next century. But as we weave through the political process,
what steps do you see that we can bring both political parties
together and do what is actually best for the country, not what
is best for a political party?
Mr. Speaker.
Mr. Gingrich. I think that is a very realistic starting
point for this discussion, if we can assume that we have
crossed the threshold of agreeing that we need very real
change. I will give you just a couple of specific insights from
my own career.
The first thing I would recommend to the House Republican
majority is to find 5 or 10 bills the Democrats have introduced
that move us in the direction you are describing and pass them.
You will change the whole tone of the building. And I remember
when Dick Armey, who was not on the Armed Services Committee,
had the idea for a base closing commission, went out and
advocated it as a minority member. Republicans were in the
minority, and had been, at that point, for about 34 years.
And Armey talked to enough people long enough that Les
Aspen decided that he had better move it as a Democratic idea
because it was too popular to stop. And so Dick Armey, never
having served on the Armed Services Committee, passed one of
the most important pieces of reform legislation for the
national defense system.
I remember when Jack Kemp and Bill Roth went around talking
about tax cuts, made it popular enough in the country that a
Democratic Congress passed it in 1981.
So I start with the idea there are a lot of people in the
Democratic caucus who have a very passionate interest in
government working. They come out of a philosophy that believes
in government; they represent, often, constituencies that
desperately need government. And I would look around and find
the 5 or 10 best small ideas and pass them as freestanding
bills so that, all of a sudden, people say, gee, we are really
working together.
Second, what you hold hearings on really matters. And if
you bring in people who think positively--I will give you a
specific example. Mayor Giuliani had a remarkable system for
fighting crime and made New York City dramatically safer and
dramatically more prosperous. That system relied very heavily
on a matrix-based organization; it has been studied widely.
I would invite Mayor Giuliani and the people who have
implemented that system and the people who have studied that
system to come down and hold three or four hearings in a row on
what would the Federal Government be like if we brought that
model and we applied it around the Federal Government, and what
would we have to change to do it? I think it is something which
many New Yorkers of both parties would agree made the city a
dramatically better city. So I would try to be positive about
the big ideas.
Third, there are things that don't have much political
resistance. We define the inspector generals' job so that half
of their time should be highlighting successes and half of
their time should be finding fault, and you would, overnight,
change the psychology of the inspector generals. Because the
goals shouldn't be ``gotcha.'' The goal shouldn't be to look
for petty excuses to blame somebody. The goal should be, I am
inspecting this department to get it to be the most productive,
most effective deliverer of services possible. That change I
suspect you could do on a bipartisan basis.
Last, let me just say, in answer to this question, define
what success is for each department and then hold hearings on
those aspects that are successful. What are the five best
achievements at HUD this year? What are the three best
achievements at the Department of Labor? There is no reward in
the American Government today for serving the country, taking a
risk, being entrepreneurial.
And, frankly, you might consider allowing inside the Civil
Service some limited number of promotions for achievement
outside everything else. Yes, you are going to run a risk of
favoritism and all that stuff, but if it could be defined as
actually relating to an achievement so we began to reward risk-
taking among Civil Servants, it might pay us a huge dividend in
the long run.
Those are just specifics that I think are all doable, would
all be positive, and would all have bipartisan support if they
were designed right.
Mr. Porter. Mr. Walker, just address that, please.
Mr. Walker. Well, first, I share a number of those
thoughts. One, for example, is the fact that when you are
talking about trying to look at government, it is not just what
is wrong with government, it is what is right with government.
There are a lot of things that government does that it does
well, and they do not get highlighted enough.
So I think it is important to be able to look not only at
the roles of the inspectors general, but also to be able to
look at oversight and to recognize that you can conduct
oversight hearings where you cannot just talk about the
negative; you can talk about the positive. Who is doing it
well? Who is doing it right? How can you share that? In
addition to who has a problem? What is the problem? How are we
going to solve the problem? And how can we make progress?
Let me turn just for a second to the executive branch,
because the Speaker spoke primarily about the legislative
branch, although I totally agree that changes are necessary in
the legislative branch.
The United States does not have a strategic plan. The
largest, the most important, the most complex entity on the
face of the Earth does not have a strategic plan. It does not
have well defined goals and outcomes. We spend $2\1/2\ trillion
a year, hundreds of billions of dollars in tax preferences,
issue thousands of pages of regulations, and we have no plan.
You are going nowhere fast without a plan.
Second, the United States does not have key safety,
security, social, environmental, etc. indicators to assess the
Nation's position and progress over time and in relation to
other nations. These are outcome-based indicators. The United
States does not have clearly defined goals and objectives about
what we are trying to achieve on an outcome basis and an
integrated basis based upon current and expected resource
levels.
As a result, in the absence of having those basic things,
it is no wonder that people think, well, if we want to solve a
problem, let us throw more money at it; let us put more people
on it; let us give another tax preference. Those are simplistic
and flawed analyses.
We need to be able to have a plan; figure out what we are
trying to accomplish; come up with key outcome-based
indicators; take a more strategic and innovated approach; align
the executive branch and the legislative branch based upon
today and tomorrow; be able to focus on allocating resources to
achieve the most positive results within available resource
levels. And we need to make sure that there are adequate
incentives for people to do the right thing, transparency to
provide reasonable assurance they will do the right thing
because somebody is looking, and appropriate accountability if
they do the wrong thing, as well as praise if they do the right
thing. These are basic. These are basic to any organization,
whether you are in the public sector, private sector, not-for-
profit sector. And we don't have it.
The last thing I would say is I come back to the
legislative branch. The authorization process, the
appropriations process, the oversight process. When are
authorizing or reauthorizing, what are you trying to
accomplish? How do you measure success? It has to be integrally
in that. In the appropriations process, we can no longer assume
that the base of government is OK. We can no longer spend
tremendous amount of time and energies that we are going to
plus this up a little bit or cut this back a little bit. We
have to look at the base--what is working; what is not working;
what makes sense for the 21st century--because the base is
unsustainable and is not results-oriented.
And, in the oversight process, as I said, we have to
recognize that there has to be much more oversight. But it
doesn't all have to be negative. In fact, it is important that
it be balanced. Because, after all, there are some things that
government does that the private sector either cannot, will
not, or should not do. So it is critically important we make
sure we do it right and we celebrate successes when we do.
Mr. Porter. Thank you, Mr. Walker.
Mr. McTigue, we will come back to you in a second.
Mr. Davis, do you have any questions?
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
And again I thank the witnesses.
Mr. Speaker, several of your principles for entrepreneurial
public management are centered around information technology,
the use of sophisticated equipment and wireless communication
devices and all. If I remember, in 1995, you led the effort to
eliminate the Office of Technology Assessment. What has
occurred between then and now in terms of that would shift,
perhaps, your thinking from where it may have been at that
point to where it is today?
Mr. Gingrich. Well, in 1995 I also testified at the Ways
and Means Committee that we should consider giving every second
grader a laptop, because I wanted to end disparities in access
to information technology. So I don't know that my views have
changed much. I wrote a book on the importance of scientific
and technology change in 1984 called Window of Opportunity, and
I have long been a believer that technology is a significant
part of our future and that science--in fact, I helped double
the NIH budget and, in retrospect, wish I had tripled the
National Science Foundation budget because I think science is
such a key part of our future.
Those of us who were very pro-science who opposed the
Office of Technology Assessment frankly thought it was an
obsolete office that did an inadequate job. It is a little bit
like the rise of Google. It is amazing how much information you
have at your fingertips now if you simply go online and pull up
Google and type in a query.
By the way, I also helped, when I became speaker, the day
after I was sworn in, we launched the Thomas System online so
that the entire world can access the U.S. Congress for free.
And a few weeks after that I did the first effort to raise
money for the National Library of the American People, which is
the first digital library on a large scale that exists, and it
now has over 5 million documents online, including Scott
Joplin's writings and much of Martin Luther King, Jr.'s work,
so that people all over the world and school children all over
the world can access it.
So I do believe in technology, and always have. That was a
very specific question about a very specific office that I
frankly thought did not do a very good job.
Mr. Davis of Illinois. Do you think that there is any
possibility that we might move what I will call overuse of
technology? When I think of technology and I think of the
implications, and when I think of globalization, I also think
of unemployment and I think of the lack of opportunities in
some instances for people to keep up and be able to be
employed. Is it possible that we might reach a point where we
can do so much, where many of the people really won't be needed
to accomplish what has to get done?
Mr. Gingrich. If that came to me, my initial answer would
be no, but I would describe it slightly differently. You know,
people have thought, starting with the Greek mythology of
Prometheus being punished for having discovered fire, there is
a long tradition of let us not do the next technological cycle.
The wheel was good enough for me and the ox cart is good enough
for me. Why are you bringing in this newfangled thing?
But I would put it a little differently, and here is an
example where I think government could rethink itself. I would
tie unemployment compensation to re-education. Because what
technological change does mean is that we are not in an
industrial age cycle where you get laid off for 4 months, go
back to the very same job. The average person is going to be in
a different job, in a different industry, doing a different
thing.
So I would make unemployment compensation directly a
component of also being able to go out and to get better
educated so that if you are unemployed and you do have some
free time. And I would look at places like the University of
Phoenix, which is the largest online education system in the
world. And I would try to integrate so that every citizen in
the United States has a continuing opportunity to improve their
marketability, their capability, and their productivity, which,
I think, is frankly going to be a key to our being able to
compete effectively with China and India.
So I am very much for reinvesting in the human capital of
the American people in order that they can keep up with and be
employed in the technological changes that we are going to live
through.
Mr. Davis of Illinois. You mentioned Phoenix. I happened to
do the commencement address for Kaplan on this past Saturday,
which was a great commencement and a great graduation.
Mr. Walker, could I ask you, you mentioned in your comment
that in addition to looking at what might be wrong with
government, let us also take a look at what is right with
government. What are some of those ``right with government''
things that we could look at?
Mr. Walker. Well, I think the fact of the matter is there
are certain functions that are performed by government that you
don't want to privatize, you know, that need to be done by
government. Therefore, we have to do it well. I think the other
thing we have to recognize is that there are certain agencies
that are very much trying to do what all of us are talking
about: try to be more results-oriented, try to be more citizen-
centered, try to empower their employees more, and try to form
better partnerships.
I think more needs to be done to highlight those that are
making progress in areas where we want them to make progress.
There are many agencies that have done positive things. FEMA
has done positive things there. The IRS even, believe it or
not, has done a number of positive things with regard to trying
to transform themselves. We might be another example.
So part of it is just the fact that let us not just look
for what is wrong; let us look for some of the things that are
going well and figure out how we can highlight that and spread
it across the Government.
Mr. Davis of Illinois. I will yield back. My time is up.
Mr. Porter. Chairman Davis.
Mr. Davis of Virginia. You know, we have a hard time here.
Ideas are a very, very important part, but we have a hard time
getting the Government to change anything. For example,
Telework. A lot of the companies out in my district, their
employees aren't hanging around the office all day; they are
out visiting customers, some of them are working at home, as
long as they have their laptops and whatever else they need to
be in communication. These are not just quality of life issues,
they are efficiency issues in some cases. But we have a hard
time getting agencies to respond to that.
Competitive sourcing. It seems to me you can't have
government re-innovation without competitive sourcing. Yet, the
House struck down our ability to do that in an amendment a
couple weeks ago. The Buy America Act is a huge impediment in
terms of efficiencies and being able to get the best goods and
services for our dollar. Yet, members go crazy over those kind
of things.
But I think the testimony here is excellent. You need to
reward risk. You need to reward innovation. Right now we reward
people for not taking chances. It is the opposite of what it
ought to be.
Let me ask each of you. I will start with Speaker Gingrich.
If you could give two or three of the most single practical
things that Congress could undertake to pass legislatively,
could you give a priority? Putting a comprehensive package
together in this environment just becomes so difficult.
Mr. Gingrich. Well, let me say, first of all, I don't want
to disappoint my good friend, but this process has always been
a mess. Always. I mean, it was a mess for George Washington.
And it was designed to be a mess. The founding fathers wanted
to guarantee we wouldn't become a dictatorship, so they
designed a machine so inefficient that no dictator could force
it to work. And they succeeded so well that we can barely get
it to work voluntarily. It was by design. So I start with that.
There are three things you can do over and over again that
make a difference. And I say this having served 16 years in the
minority and tried to get things done when I belonged to the
minority party, and for a brief period had served twice with a
Democratic President and a Democratic Congress. The first thing
you do is you talk about it, you hold hearings on it, you do
special orders on it. You get the language so people get used
to it.
Mr. Davis of Virginia. You stay on message, in other words.
Mr. Gingrich. It is really important, because eventually
people change how they measure themselves. We change what we
tolerate. We have seen it happen over and over for several
hundred years now.
So I think to say that--and notice I didn't come here today
to be anti-government. I came here today to say we have a
vested interest as a people in government that works, in a
government that is effective. We can argue over which things it
should do. But once we make the decision to do it, it should do
it to the best possible ability and it should match
institutions like FedEx and UPS in their capability.
By the way, there is a page 1 story in the paper today that
our inability to use information technology in health care in
the area of hospital-induced illnesses alone is killing an
estimated 100 Americans a day. Now, that should be an area
where we should be able to come together to say that, on a
bipartisan basis, liberal and conservative, saving 100 lives a
day would be a good thing.
And certainly if you look at something like airline
crashes--when I used to serve as ranking member, and before
that as minority member on the Aviation Subcommittee--there
wasn't a Democratic airline safety proposal and a Republican
airline safety proposal; it was an idea that we both flew in
airplanes and we would like to get there safely. So we somehow
came together. I think you start with language.
The second thing you do--I want to go back to what I said
earlier because I think it is so important. And this, again,
may surprise some of my friends because I have been a fairly
aggressive partisan much of my life. It is really important to
scan every bill introduced by Democrats and find 5 or 6 or 10
bills that move us a step in the right direction, and bring
them up in a bipartisan way and begin to create a notion that
even if they are baby steps, if they are steps in the right
direction, they can make an impact.
And then last, to go back to your key point, I don't think
you can pass an omnibus bill. I think it is too complicated.
But you can target specific things. And I will give you two
relatively narrow examples I mentioned here today.
The first is to really work on a bill to redefine the job
of the inspector general so that the inspector general is not
just a negative, fault-finding, law enforcement function; it is
a productivity, quality, effectiveness, improving function. It
would dramatically change the culture of many of the
departments.
And the second one is to look at something very small that
is of importance to several members of this panel, and that is
the National Zoo. Here is a great symbolic institution. And
with the right public-private partnership, which ought to be
doable on a bipartisan basis, I believe you could have a truly
national quality institution with two great parks, one modeled
on San Diego. And it would be a symbol of the willingness to
start doing new things in a new way, designed to achieve
positive results.
Those are small steps, but I think they are important.
Mr. Davis of Virginia. Mr. Walker.
Mr. Walker. Three things. I think the Federal Government
has to have a strategic plan and I think OMB should be tasked
to do it.
No. 2, I think we need to develop a public-private
partnership to develop a set of key national outcome-based
indicators--safety, security, social, economic, environmental,
etc.--in order to guide our way on strategic planning, enhance
performance accountability reporting, facilitate the review of
the base of the Federal Government, and to help make
authorization, appropriation, and oversight decisions and
engage in related activities. Other countries have it. There is
no reason we can't and we shouldn't have it.
No. 3, I do agree that you need to look at the
accountability community and make it a performance and
accountability community. What you are trying to do is to
maximize performance and assure accountability at the same
point in time. But we can't forget about the first; we want to
maximize performance.
And the last thing I would say for the legislative branch
is think about how these concepts apply to the authorization,
the appropriation, and the oversight process, especially
oversight--I think you can start there first--and then also
reauthorizations and new authorizations, and lead by example.
Make sure that you are trying to take a balanced approach. Make
sure that you are trying to focus on what outcomes are we
trying to achieve and how can we provide guidance to these
agencies to help them understand this is what we expect to
achieve on an outcome basis, this is how we are going to
measure success, this is what we expect you to gear your
energies and efforts to, and we are going to hold you
accountable. But, by the way, we are going to provide you
reasonable flexibility to get your job done, and as long as you
can deliver results and not abuse authority, you are fine.
Mr. Davis of Virginia. Mr. McTigue.
Mr. McTigue. Congressman Davis, I would do it with one
measure. That one measure would require that every
appropriation have linked to it a specific progress toward an
outcome. So with the SEC you would seek an improvement in the
behavior in the market by 10 percent per annum; on hunger you
would expect a decrease in hunger by 10 percent per annum; on
homelessness by 10 percent per annum; and so on.
If you linked every appropriation to the progress you
expected to make on an outcome, all of the other things would
fall in place because they would have to. It is in the best
interest of the elected Members of Congress and it is in the
best interest of the organizations that deliver those goods and
services. It would force you to buy goods and services from the
best provider, whether that provider was a private sector
provider, whether it was a voluntary sector provider, or
whether it was a public sector provider. But if that was there,
then there is a clear target to shot for every year.
The third thing is, if you did that, I think that the
reputation of Congress itself among the general public would
improve immediately.
Thank you.
Mr. Davis of Virginia. Thank you.
Mr. Porter. Congresswoman, do you have any questions?
Mr. Gingrich. Can I just add one quick thing to what
Chairman Davis asked? I think if you were to encourage every
Member of Congress to create an entrepreneurial public
management working group back home and bring together four
groups of people: people in the private sector who are actually
doing it, that is, who have productivity, who have quality, who
are using technology; people in local government who you have
pride in and who are respected.
I think, for example, of the mayor of Chicago and Mayor
Giuliani. Mayor Daley and Mayor Giuliani were stunningly
effective local officials, and to have them come in and say
here are the nine things you could do to make the Federal
Government better would, I think, be powerful.
The third is the same thing with State officials, and the
fourth is with Federal officials. We don't honor the person who
spends 30 years of their life serving the American people by
asking their opinion. And yet, I will bet you--this is basic
demming, this is a basic approach to quality.
If you went out, as you know, in your district and you
wandered across the district and just sat around and said to
local government employees, so what are three things we could
do that would allow you to serve the country more effectively,
at the end of a couple months of that kind of looking at home--
and if you just encouraged this to be a standing long-term
relationship, that every member build an entrepreneurial public
management working group at home--you would begin to get ideas
flooding back into the Congress. You would have a whole new
tone of telling people things. And that then makes it easier to
pass things here, because now you have noise back home saying
it is a good thing to do.
Mr. Porter. Thank you.
Congresswoman.
Ms. Norton. I am going to, I guess, start with Speaker
Gingrich, since he conceptualizes much of what the three of you
say, and then go across the board.
I want to say, Mr. Walker, you know, I understand
limitations of a graph, but the expiration of the tax cuts, the
tax cuts which are footnoted here and the spending here, this
is the kind of thing that gets people's hackles up, because
obviously it is noted here. It is noted here, but since the tax
cuts are in a footnote, what one really sees across here is a
spending that is the hardest to deal with, that does not have
speak to the stuff Congress has kind of piled on new, the stuff
that was already there cumulatively.
And it is much harder to deal with it when that is what you
put in people's face, because then you just get the House
divided with people saying, well, you know, if you hadn't done
the tax cuts in the first place, and others saying if you spend
less. And, frankly, that is where we are now, stuck on stupid.
I want to start where Mr. Gingrich starts. His model starts
very rationally, then when we get to his ideas they are
eclectic. Some of them are short-term; some of them are
revolutionary and long-term. But he starts, it seems to me,
with a corporate model, with, for that matter, the model of any
large enterprise, what he calls the vision of success, the so-
called what in the hell are you trying to do question.
And everybody starts that way, he says, and I think you all
would agree, except government, which just says here are some
things to do, let us get to doing them. I profoundly accept
that because my own experience reinforces it so much.
My experience in government was as chair of the Equal
Employment Opportunity Commission, which gave me an opportunity
that few people have in government. The agency was on its
knees, it was about a dozen years after it was set up in the
first place, overcome with backlog, and the President said get
in there and deal with it.
So it was possible for me to step back and say what do I
want to do and I am going to do it. It was so bad that people
had to let me do it so that we got the backlog down from
something that would take a case 4 years to where it took 4
months, and did something that was tough, where people
initially said uh-oh, that is to say, went to a model of
settling cases, rather than the litigation model that came out
of the civil rights movement that had been so successful, you
know, sue it. It has bothered you, it is bad, so go at it with
a lawsuit.
And we were able to show that you got far more for people
who brought cases by settling them early while the evidence was
young and fresh, than by going for years when the evidence and,
for that matter, the witnesses had vanished.
We organized not only the structure--that is about what we
are about doing now in the Homeland Security Committee with
homeland security--but reorganized work so that investigators,
instead of going after pieces of paper, focused on bringing the
parties together to seeing if there was kind of agreement
between the parties that could be reached.
The civil rights groups were the most doubtful. But because
I came out of the movement, they gave me some slack. And, in
the long run, when they saw that people got more than
previously, the system was accepted.
Most government managers don't find themselves in a
situation where the thing is falling apart, so somebody has to
say get in there and do it. But I endorse this notion, and I
think we could do that even for agencies that are at this
moment. What is the vision of success, for example, as the
Speaker says. I want to hold you--as Mr. McTigue says--hold you
accountable because you have to lay out at the beginning what
it is you are trying to achieve, or the President indicates
what he is trying to achieve.
By the way, the EEOC, the people who were taking it, who
were being slammed, were the front line people who processed
the cases. Obviously, the management of the agency was
responsible. The very same people who were slammed because the
cases took 4 years were the people who got them done in 4
months because they had a new system. So it seems to me that on
down the line, including the unions, including the workers, are
going to be much more receptive if they see that management is
being held accountable in the same way the CEOs are held
accountable, and they, in fact, make people want to do the work
by the systems they put in place.
I looked closely at some of the things you want people to
be able to do in the Government, Speaker Gingrich, because I
agree with you. People who believe in government as I do really
ought to be up front reforming government. Many of my
Republican colleagues come straight out and say government just
shouldn't be doing most of what they do. I don't think we have
any right, therefore, to criticize them when they go at
government. It seems to me we ought to be going much more
strongly at problems in government if we believe that people
benefit from government.
Once you get down into the Civil Service system is where
you get people dividing out. We have a Civil Service system for
a reason. We are not dumb. It is because it is the Government.
So that if you were to be fired from one of the three Fortune
500 companies, on whose board I served before I came to
Congress, you did not have due process, fifth amendment,
fourteenth amendment. That happens to be part of government
employment. It is very different from employment in the private
sector. And you have to be smart enough to think through that
as well as think through how to make it more efficient.
Some of the things you have in your paper, Speaker
Gingrich, it seems to me may sound strange, but I think could
be done, and some of them may be done now. For example, you say
allowing people to move in and out of government service. Well,
we are crying and screaming about scientists who obviously can
make far more money. Increasingly, we are not going to be able
to attract the best and the brightest to the government service
as we could before, because there are so many options out
there.
I wonder about moving in and out of government as a way to
deal with some of that. Doctors, many, many people now who, it
seems to me, will be able to do better in the private sector.
Moving from department to department. Some of that obviously
still goes on here.
The reason I break this up this way, Speaker Gingrich, is
in spite of your revolutionary approach to government, you and
I know that these folks are more likely to take bits and pieces
of it and move it, than they are to throw the whole thing up
and begin again. You say here, for example, to buildup
seniority as you move in and out without continuous service, as
long as experience and knowledge has risen. That is
interesting.
I am sure that people would first stop and think about
people who spent all their time in government. But I just think
these are examples of ideas, and I want to ask you, building
upon this, if I could just pose my question around an existing
system.
Mr. Porter. And we are going to have another round, also.
Ms. Norton. But this was the question I was leading up to,
if I could just get this. And then I will forgo the round.
Mr. Porter. OK.
Ms. Norton. It is the so-called A-76 process, as an example
of government trying to move forward in a different way. Very
controversial, but it is a process by which civil servants
compete with the private sector before the work is outsourced.
Now, I am told that----
Mr. Porter. Maybe what we could do is have them answer that
question in the second round. Would that be OK, Congresswoman?
Ms. Norton. But I haven't asked it yet.
Mr. Porter. Oh.
Ms. Norton. I am told that 80 to 90 percent of the time
Federal workers win, that sometimes what happens is they have
to downsize in order to compete with the private sector because
the private sector often doesn't have health care. So they do
this by attrition. It is very controversial.
But they have been willing to do this to keep the work in-
house, with all of the limitations involved, which is they
compete with people who don't have the same benefits and
therefore are forced to make themselves look like the private
sector, or else they would end up, too, without health care for
some workers and the like.
Some of you may know something. I think Mr. Walker and Mr.
Gingrich may know something about the A-76 process.
Mr. Davis of Virginia. Would the gentlelady yield on that?
I don't think any government organizations had to reduce health
care benefits. They are all under FEHBP. And my understanding
is that there are companies with retired military officers and
the like that elect not to reward their people with health care
benefits because most of their employees have it and they put
them in other areas. That is why these regulations are
ridiculous. But I am not aware of any government organization
that has had to pare down their health care benefits to compete
on competitive sourcing.
Ms. Norton. Mr. Chairman, if I could indicate I didn't say
that is what in fact happens as a result of the competition.
You are perfectly right on that. But that in order to make sure
that the benefits are in place, what happens is, although they
win the competition most of the time, they downsize in order to
make sure that they are competitive with the private sector.
Now, I am not against the A-76 process. It is often seen by
some people as unfair because that is what you have to do, you
have to match yourself up with a system that has fewer
benefits. It is one of the compromises, frankly, that I would
like to ask you about, because it comes out of trying to take
something from the private sector, make employees compete. They
do well. It has some real controversy attached to it. I wonder
if it is the kind of model that you think could be built upon.
Mr. Porter. Thank you. And what we will do is we will come
back to answer that question, if you don't mind. We will have
another opportunity and we will come back to that in just a
moment.
Congressman Issa.
Mr. Issa. Thank you, Mr. Chairman.
Thank you all for being here today. Actually, what I will
do is I will piggyback the gentlelady's question so that,
realistically, you can answer both in one capsule, I believe.
Briefly, I had the honor, before I came to Congress, of
chairing the IT outsourcing for the county of San Diego. And as
I think the Speaker knows, the county of San Diego went through
a whole process of top-to-bottom evaluating and, in most cases,
bidding out any number of services.
I will say that our history was not 80 percent, but we did
have times in which, in the case of information technology, was
outsourced. It was actually outsourced because, after
evaluating it, the in-house people said we cannot equal what we
need to equal at any price, even in a county as large as San
Diego. And those personnel were transferred to the private
sector as part of the guaranty, and all of their benefits were
equaled in the private sector as part of the contract. The only
thing we didn't guaranty them is a job for life. They obviously
had to continue performing after a lock-in period.
However, as someone who observed in San Diego, we
dramatically reduced, for example, the cost of operating the
county's motor pool, a very large fleet of vehicles, and with
no reduction in service or in pay. So I am a fan of trying to
bring entrepreneurial process.
But, very briefly, the two questions that I have is, one,
is or how does Congress empower its agencies to have the power
to be entrepreneurial, which by definition means freedom to
fail? Because in the private sector we fail, and we fail
miserably. And sometimes heads roll and sometimes they don't,
but we get up the next day and the company gets up to the base.
We don't have the bureaucratic mentality that we generally have
in government that all programs are 100 percent success and no
programs get canceled, and so on.
But the second one, which is the predictability of money.
We have a followup hearing, Hollis Eden, a company from my
district, who is grappling with the problem. We went out on the
biosheild and we essentially said be entrepreneurs, develop
fixes for radiation and for other biological warfare. Develop
these and we will buy them. Well, they have been developed.
This particular one for radiation poisoning is nearly approved
by the FDA. And we are simply refusing to fund purchasing.
So if you are going to ask the private sector to take risk
at their own expense, develop a solution, how do you, how do
we, since the you is we, provide some level of predictability
that, when the entrepreneur takes the risk, they are not taking
two risks, one that they may not win a contract, but how about
the one where we say there is going to be a contract and then
ultimately there isn't or it is delayed by so many years as to
make it fruitless?
Those are sort of with the gentlelady's first, but then
those two series of questions.
Mr. Gingrich. Let me yield first to David Walker, because
he actually chaired a project on A-76. I think that would be a
useful place to start.
Mr. Walker. Ms. Norton, I chaired something called the
Commercial Activities Panel--I think it was about 3 years ago
now--at the request of Congress. It was a statutory mandate. I
would comment to you and be happy to provide to your staff, if
you would like, a copy of that report. That report includes the
heads of the two major unions in the Federal Government, as
well as officials in the Government and the private sector. We
agreed unanimously on 10 principles that should govern any type
of competition process. We had super-majority agreement on a
set of recommendations, but not total agreement on those set of
recommendations.
I think one of the key elements that came out of that
effort was A-76 is only focused on certain functions and
activities. One of the things that we are talking about here is
how can you create high-performing organizations throughout the
Federal Government, whether or not they will ever be subject to
an A-76 competition.
In many cases what ends up happening is there are certain
core functions and activities that should stay in Government.
A-76 theoretically only deals with those functions and
activities where they are not core to the Federal Government;
they could be done by the Government or the private sector,
they are not inherent governmental needs, if you will.
My point is what are we doing to try to make sure that for
all of government--not just ones that might be subject to A-
76--that we are leveraging technology, we are streamlining our
processes, we are minimizing our management layers, we are
empowering our employees and getting the ideas of employees in
order to do things more economically, efficiently, and
effectively. I think a lot more has to be done there. And I
think that is what this hearing is all about, I would suggest.
Mr. Gingrich. Let me give you a couple of examples. Let me
say, first of all, that if you decide to hold more hearings in
this direction, one of the people I would invite in, if I were
you, is Steve Goldsmith, the former mayor of Indianapolis, who
is a very innovative person. I think if you said to him, give
me 15 specific examples, he would come in armed and really able
to give you very good specific examples of doable things and
real success stories.
Two, part of what has to happen, Mr. Issa, is to develop
lock-in provisions in these bills. If you notice, when we start
to build an aircraft carrier, which is a multi-year project, we
manage to somehow write the legislation so that the shipyard in
Norfolk knows it will actually finish it; and there is a very
substantial penalty clause if we don't. So part of that is a
contracting problem. The Congress has to be honest and up-front
about how it would approach these things. And I think that is a
challenge. Again, I think at least half the problems we are
describing are in the legislative branch and can't be fixed in
the executive branch alone.
Third, I would like to build on something that Mr. McTigue
said. I think if the Appropriations Committee, in its annual
process, required each department and agency, as a starting
point, to list the 10 percent least effective or least useful
projects in the agency--just for review purposes--that would
change the dialog of management dramatically. And if they would
also list the 10 percent most effective, you begin to get a
whole different sense of hearings and people would have a
different sense coming in.
One last thing. And I don't quite know how to say this as
quickly as we should, but I will dive in. Imagine your own
personal life with no automatic teller machine, no cell phone,
no e-ticketing. Just go down the list of whatever is now
normal. That is government. So a specific example that you
could begin to look at for the Federal Government tomorrow
morning: Travelocity and Expedia and other systems allow you to
buy airline tickets in a highly competitive environment. I used
to represent the Atlanta Airport. Per passenger mile in
constant dollars, tickets have dropped from 23 cents a
passenger mile in 1978 to 12 cents today on average.
Your city, Mr. Porter, has been one of the great recipients
of inexpensive airfare, since it now has, I think, 40 million
visitors a year, or something like that. So in that setting, in
the Federal Government, I know of one department, as a matter
of fact, in which you are not allowed to buy business class.
Now, it turns out that there are a number of places where you
could actually buy business class cheaper than you can buy a
regular first class ticket if you are looking for a special
deal.
There are also a number of places where I could buy the
government priced ticket, which in the model of 20 years ago
was often the least expensive ticket because of bulk
purchasing, or I could buy this afternoon's immediately
available least expensive ticket and save 60 percent of the
cost.
There are no places I know of in the Federal Government
where we incentivize people to save the taxpayer money. But if
we were to say, as an example, you can benchmark online the
standard price the Government is going to pay this morning. If
you can get a better ticket for the same or lower amount, you
are allowed to do so. And if you can get it for a substantially
lower amount, you can even consider sharing. If somebody says I
will fly the night before, I will take the redeye, and, by the
way, the taxpayer and I will share the money, it is a totally
different way of thinking about the whole process.
And I do want to say, just in closing, I agree totally with
one of the points that was made by Mrs. Norton, which is you
have a much higher fiduciary obligation to avoid corruption and
to avoid theft and to avoid all the kinds of things that we
know, prior to the Civil Service laws, were real.
So you are not a private company. This is in fact the
public's money and the public trust, and I do think you have to
have some extra special provisions of transparency and
accountability from that standpoint. But I do think you could
respond to the emerging modern world and save a substantial
amount of money and actually be more effective.
Mr. Issa. Mr. Chairman, if I could just make one quick
followup.
Speaker Gingrich, I must disagree with you, respectfully.
There is an exception in Government, and that is that when you
became speaker and you switched us over to having a fixed
budget that was fungible, that could be spent anywhere, it does
incentivize my office and all the members' offices to look for
government, non-government cheaper tickets so that we can do
our jobs, and those funds now are movable to other uses. So
with rare exception you would be right, but there was notable
exception that you might remember fondly.
Mr. Davis of Virginia [presiding]. Mr. Walker.
Mr. Walker. Two things, if I can, real quick. No. 1, Steve
Goldsmith was a member of the Commercial Activities Panel. He
is a former mayor of Indianapolis, now at Harvard. Second, as
you probably recall, at our request, as well as the Department
of Defense, meaning GAO as well as the Department of Defense,
the Congress passed, several years ago, a bill that gives Civil
Service employees or Federal employees the right to keep
frequent flier miles. There are some agencies that have now set
up gain-sharing programs for the purpose to try to have a win-
win situation, where if people use their frequent flier miles,
if it saves the taxpayers money, then that is shared between
the taxpayers and the individuals.
So there are ways to do it. We need to look for more.
Mr. McTigue. Mr. Chairman, can I just make a couple of
comments as well?
Mr. Davis of Virginia. Sure.
Mr. McTigue. The comment was made by you, Mr. Chairman,
right at the very beginning, about it is easy to measure
progress in the private sector because there is a well known
bottom line; it is what is the return on capital or it is what
is the profit or it is what is the dividend. But there is a
bottom line in the government sector as well, and we often
ignore that, and the bottom line is the public benefit. So what
is the public benefit that accrued from spending resources on
this particular activity? And until recently we have been bad
at measuring that.
So, for example, in the case of Delegate Norton at the
EEOC, the public benefit at the end of the year is by how much
has discrimination been diminished, and looking for ways in
which you can continually diminish discrimination.
Delegate Norton, there was something else that you
mentioned that I want to pick up, but it is from my experience
in New Zealand, not from my experience in the United States. As
we made it possible for people in Civil Service to move readily
from Civil Service to the private sector and back again, I had
people working for me from time to time who were into their
third iteration of doing that. It was hugely beneficial to both
because people were going into the private sector, getting best
practice, and coming back into the public sector and bringing
that best practice with them.
But at the same time we also found, after a short period of
time, that the private sector realized how good some of the
people were that we had and we had aggressive headhunting of
people in the public sector. And that was good as well, because
it started to give them a sense of their own self worth.
The third thing that I wanted to say was this, and that is
that unless you have a clear focus on what the public benefit
is that you are trying to achieve, then you are not going to
get the efficiencies that you want. One of the decisions that
the Government of New Zealand made was that it was the
responsibility of every executive working in government
departments to buy goods and services from the best provider;
that they needed to define best.
Best does not necessarily mean cheapest. And what we saw
frequently was that would change from public sector to
voluntary sector to public sector to private sector. But as
long as the competition was open and fair, then the beneficiary
was the public benefit; we were getting more goods and
services.
And the last comment, Mr. Chairman, was this, that where
government agencies were able to get efficiencies from what
they were doing, we allowed the money to stay inside that
agency to allow them to do more of their public good; it didn't
have to be returned to the treasury. What we found then was
that many agencies, at the end of the year, finished up with
surpluses instead of deficits, and there was no spending
splurge at the end of the year on things of little value.
Mr. Davis of Virginia. Thank you very much.
We have about 15 minutes left. What I want to try to do is
just do 5 minutes apiece, if we can try to hold that strictly.
I will start, and then Mr. Davis and then Ms. Norton. Then at 4
p.m., I am going to gavel it shut so that our speakers can
leave.
A couple of comments. One is my experience in running the
government out in Fairfax was I went to my managers, and some
of the best ideas came from people that have been there for
years but nobody ever listened to them. They know how to save
money if you will just empower them sometime. The guy that is
at the window everyday talking to people, they know what is
right and what is wrong. And we got some wonderful suggestions.
When I went to my senior managers and asked them to save
money, they came up with a little bit of savings. But when I
went to them and said, you know, I am going to give you a
percent back and you are going to have wide discretion as to
how to spend your savings, they came up with huge savings. You
empower them, you give them the right incentives, and it is
funny what they can come up with.
In talking about outsourcing, I represent 54,000 Federal
employees. I think they are the greatest asset the Government
has. And I think it is not their fault in many cases; we misuse
them. We don't incentivize them the right way. We don't empower
them the right way. We don't always pay them the right way.
These are investments. On the other hand, if they find out that
they can't compete with the private sector and the private
sector can do it for less, we exist for the taxpayers, at the
end of the day, to get the best deal for them.
But one of the problems we have is we have a Civil Service
that basically is a one-size fits all standard. We are getting
a lot of stuff being outsourced today because we don't have a
cadre of high technology software people in Government because
we won't pay them appropriately because the current schedules
don't even speak to these qualifications. And you try to change
it and some of the existing Government employee groups are the
first ones to resist it. And then they complain when you have
to outsource to get this stuff done.
So I just wonder. I personally favor more bonuses and those
kind of incentives, because I think they work. If a procurement
officer can bring a large contract in below cost and on time,
we lose tens of billions of dollars with contract overruns
every year with improper oversight. Training has to be
something that we need to spend more money on. Yet, that is the
first thing that is cut with the budgets. Just some minor
changes in those ways I think could help.
Before I ask for a comment, I would just say Government's
tendency when they have to lose weight is they chop off fingers
and toes. You remember we would go agonizing votes to save a
little bit of money on something symbolic, where, in truth, fat
is layered throughout Government in the way we do business. And
if we just take a look at the way we are doing business and
change some of those models, I think there is a lot more
savings.
And I will just open up and see if there is any comment on
that.
Mr. Gingrich. Well, you said a lot of different things, and
I agree with almost all of them. You are exactly right, and
that is part of what I meant about having an entrepreneurial
public management working group back home. I think if the
average member went home and went around and talked to the
actual deliverer of goods and services in the Federal
Government in their district, they would be startled how many
people know better.
I think, second, you kind of have also a challenge to
define what are we trying to accomplish. And here I think Mr.
McTigue put his finger on something very, very important. One
of the projects we are working on is to review education
bureaucracy from the standpoint that if I could find, out of
our current $60 billion Federal education budget, a way to get
40 percent more salary for teachers, but also have as part of
that contract a merit relationship so that teachers really were
delivering for that 40 percent pay raise, I think you would
have a lot better education system than all the layers.
So I think it is partly a question of what system are we
asking to do this and partly a question of who actually knows
it and how do you incentivize them to come in.
Last, I would be very curious if you tried to offer that
opportunity in a variety of places. Obviously, again, this is
why I would recommend, on change, it is fundamental that you
start with a bipartisan effort.
Two last things. Take any of these handful of agencies and
try to figure out how can we take your Fairfax model and say to
a cabinet secretary or the head of some agency, if you can
really find X amount of savings, you get to keep 10 percent of
it as a discretionary fund, a portable, accountable, publicly
spent fund, you would begin to get real control. I think you
would find staggering levels of savings.
And the last thing, which goes back to something Mrs.
Norton said, I am very worried about how we are approaching the
National Institutes of Health. I am very worried that a
grotesque overreaction to a handful of people is going to make
mediocre an institution like that. And I think designing a
brand new science technology pay scale and setting up
appropriate ethics relationships that ought to largely be a
function of transparency, not of limitation.
But if you look at the cycle we went through recently,
where people in Congress were proposing that secretaries at NIH
wouldn't be able to hold--I think the NIH bureaucracy proposed
rules which would have meant that a secretary couldn't have
invested their pension fund in a health company. This is a
secretary who is not doing anything except clerical work; has
no plausible public impact. It verges on being crazy.
So I think there is a zone here where, if we want the best
and the brightest, you might bring in both from the private
sector, from the academic world a number of people who fit that
category and say to them, what are the right rules? How do we
get to the right rules? What is the right compensation?
And in some cases I do believe you are going to find that
it is some kind of contracting relationship, because there are
some areas where, in order to get the very best, they have to
work all the time at the cutting edge, and no Government job by
itself will keep them there. So you have to have some ability
to come in and out of the system, bringing with you that level
of experience.
Mr. Walker. Quickly, Mr. Chairman. First, I think it is
important to keep in mind that the principles and concepts that
we are talking about here are not corporate concepts; they are
modern management principles and concepts that apply to the
public sector, the private sector, and the not-for-profit
sector.
For any system to work, whether it is a human capital or
Civil Service system or a health care system--you name it--
corporate government system, you have to have incentives for
people to do the right thing, transparency to provide
reasonable assurance they will do the right thing because
somebody is working, and accountability if they don't do the
right thing. That is particularly important in government.
As you properly pointed out, employees have a lot of great
ideas. We need to make sure that one of the key things that
every agency does is to regularly tap the ideas of their
employees as to how we can continuously improve. That is not
the norm in government. It should be the norm. It is one of the
four elements I talked about before.
Last thing, very importantly. There are many, many needs
and opportunities in the Federal Government to try to modernize
itself to improve its economy, efficiency, effectiveness, that
have nothing to do with politics and that have nothing to do
with political parties.
And one of the things that we may need to do--and I believe
we desperately need to do it right now in the Department of
Defense, and maybe in the Department of Homeland Security, but
definitely the Department of Defense--we need a chief operating
officer, a chief management official who is a level two
official focused on these basic business issues, who is a pro
with a term appointment and a performance contract, could come
from the Civil Service, could come from the private sector,
because it doesn't get focused on.
If we look at other countries, whether it is New Zealand,
whether it is the U.K., whether it is the Netherlands, they
have these positions. They are ahead of us with regard to
transforming government. And this is one of the key elements
that has helped them to get to where they need to be.
Thank you.
Mr. Davis of Virginia. Thank you.
Mr. McTigue. Mr. Chairman, let me endorse everything that
David Walker has just said, and also what Speaker Gingrich's
aid as well. But let me take one part of it a little bit
further. In my written testimony to you I have a section in
there where I talk about the Office of Personnel Management.
In my view, that is a redundant organization unless it has
its function changed dramatically. And its new function should
be to identify whether or not each organization in the
Government has the capability to do its job. And that means
looking at its human capital and seeing whether or not it has
those resources in place.
For example, if you read the 9/11 Commission Report, you
can see that one of the causes of the failure in intelligence
was the fact that something as simple as translation didn't
happen in a reasonable period of time. If somebody had been
auditing those organizations for their human capital
capabilities, immediately that would have been red-flagged. Not
only would it have been red-flagged, it would have told you
that there was the likelihood of a critical failure of this
organization unless something as simple as translation was
addressed.
Many organizations suffer from just exactly these things,
as you identified, Mr. Chairman, because they don't have the
right skills in place, and nobody is focused on identifying
that.
Mr. Davis of Virginia. Thank you.
Mr. Davis.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
In addition to the creation, perhaps, of the CEO type
individual, if we are to develop these results-based high-
performance organizations, what else must change if that is to
happen within the Federal Government?
Mr. Walker. Well, first, to clarify, I think we need a
chief operating officer or a chief management official. For
example, let us take the Department of Defense. You would have
the secretary of defense, who is the CEO; you would have a
deputy secretary of defense for policy, who is a political
appointee and obviously the party of the current president; and
you would have a deputy secretary or principal under secretary
for management. That is the position I am talking about.
I think one of the things that has to change is we need to
get back to basics and we need to focus on what are we trying
to accomplish in these different agencies. What type of results
and outcomes are we trying to achieve, and how can we align our
agencies and our performance measurement reward systems to get
that done. I do think we are going to need Civil Service
reform. I do think we are going to need Civil Service reform to
be more market-oriented and performance-based.
But I do, however, believe it is going to be critically
important, in achieving those reforms, that there be adequate
safeguards in place to make sure that people do it right and in
a nondiscriminatory fashion. And I believe that those systems
and safeguards should be in place before agencies are allowed
to use those additional flexibilities. I think because if they
don't demonstrate to an independent party that they have those
systems and safeguards in place, it could be a disaster. But I
do think we are going to need to modern our Civil Service
system as part of an essential element of trying to accomplish
the objectives we have talked about today.
Mr. Gingrich. Let me pick up on what Mr. Walker just said
but approach it from a slightly different angle. I want to say
two quick recent stories. One is a Washington Times story,
Arabic Words Go Free In Jails, which I will submit, where it
turns out the U.S. Department of Prisons has no Arab-speaking
translators, despite having currently 119 persons with specific
ties to international Islamist terrorist groups.
And, in fact, the person who reported this cannot get
transferred from the prison in which he is likely to be killed
because he has now been identified and the Arab-speaking people
in that prison regard him as a traitor to the cause, and the
Bureau of Prisons refuses to transfer him.
The second was an article or a story which came out just a
few days ago on CBC, which points out that U.S. border guards
allowed a man to enter the United States when he arrived at the
Canadian border carrying a homemade sword, a hatchet, a knife,
brass knuckles, and a chainsaw stained with what appeared to be
blood. He was allowed into the United States. Two decapitated
bodies were found the next day in his New Brunswick town.
He was finally arrested during a routine check that
discovered outstanding warrants for his arrest. And Bill
Anthony, a spokesman for the U.S. Customs and Border
Protection, said that Sprays could not be detained because he
is a naturalized U.S. citizen and that ``being bizarre is not a
reason to keep somebody out of this country or lock them up.''
Now, I just want to suggest, after the London bombings,
that we are not a serious country yet. If the U.S. Bureau of
Prisons hasn't figured out we need an Arab translator, and we
haven't fired the head of the U.S. Bureau of Prisons for not
figuring it out, and we are not protecting the man who blew the
whistle, we are not a serious country.
And I want to come back. These are the steps that need to
happen in response to your question, Mr. Davis. First of all,
there are three assessments: what are your goals, what are your
metrics for achieving the goals, and is it working or not.
There are six solutions: is the strategy right; are the people
right; are they right but they need to be trained; do they have
enough resources; are the regulations wrong, in which case the
President should issue new ones; is the legislation wrong, in
which case the President should send up proposed changes in
legislation.
There are four specific requirements to change the speed
and tempo of government: more rapid firing for incompetence;
more rapid promotion for achievement; more rapid hiring for new
people; and more rapid reassignment for people who are
currently in the wrong position.
And unless Porter Goss gets that kind of authority, we are
going to remain vulnerable to losing an American city to
terrorists. It is that simple and that real.
Mr. Davis of Virginia. Thank you.
Ms. Norton.
Ms. Norton. Very quickly, Mr. Chairman. I focus on
hypotheticals, looking for win-wins, because I don't see how we
can proceed in this kind of Congress, or ever in Congress
without something approaching it. That is why I look to the A-
76. Actually, it was carrot and stick. The stick was exactly
what workers didn't want, outsourcing; and the carrot was,
look, you restructure it by the way they do the restructuring,
as I understand it. Yes, there will be some downsizing--I
understand most of that was by attrition--and yet it continues
to be controversial.
Mr. McTigue mentioned people being able to keep money in
the budget that they saved. Let me just ask a question
pertaining to that. When I ran an agency, we did feverishly try
to spend at the end of the year, rather than give it back to
the Treasury. I hope we weren't being wasteful. But I can tell
you every agency does try to make sure it spends its money. I
believe we do that in the Congress. Of course, you have to be
careful here, because it comes out of your own pocket, out of
the members' pocket if you overspend.
I remember in this committee we passed a bill which allowed
an agency to set up child care out of its own budget if there
was money left over, and there were agencies that did that. I
think some agencies would be afraid that if they could keep the
money themselves, rather than go back to the Treasury, when the
time came for them to go before the authorizing committees and
the appropriation committees, they would simply lose it in the
budget process. How do you get around that?
Mr. McTigue. Can I answer that? I used to be Minister of
Employment at one time, and was responsible for most of the
programs that helped get people back into work. Now, if I used
up all of the money that I had for long-term unemployed, I had
to stop spending on long-term unemployed. But if I managed to
get all of the people that I was required to into work with
disabilities and had some money left over, that gave me the
opportunity of being able to transfer through to putting more
of it into the field of long-term unemployed.
Because the Government was actually focusing more on how
much public benefit are we buying, they might have decided that
they wanted to take another 100,000 people out of being
unemployed and, therefore, you didn't necessarily lose money
because you proved that you were more efficient or able to get
more people the benefit that you sought.
So that worked OK. And what we found was that more and more
people were focusing on the result and getting the cost down so
that they could multiply the benefit, because their performance
payments were attached to how successful were they at moving
people back into employment, not whether or not they did it at
exactly that quantity of money.
Mr. Walker. It may be, Ms. Norton, that you make sure that
they get the money for 1 year. The gain-sharing could be a 1-
year gain-sharing. There is no guarantees that you are going to
continue to benefit from that year after year after year; you
have to have new savings in order to get new gain-sharing.
I will tell you what some agencies do on your example of
child care, including GAO. We have an award-winning child care
facility at GAO. We donate space. That is our contribution. And
we try to make sure that it has adequate capacity and things of
that nature. But that is a soft dollar cost. You know, there is
a cost, but it is not a hard dollar cost; we don't have to come
out of pocket in order to meet that need.
Mr. Gingrich. I am going to sound naively idealistic for a
second. I really think the legislative branch, under our
Constitution, has to be at least as mature as the executive
branch. And I think that really means you have to think about,
when we talk about retraining the executive branch and we talk
about education for executive branch managers, we really have a
job to do on our own members and on the staffs, because these
are learned patterns. You can train an appropriations committee
to say I am always going to be supportive of X amount of
flexibility, and that becomes a trained behavior.
I will just give you one example we worked on for a long
time that I think had some positive effect. The news media
loves to beat up congressional junkets and then loves to beat
up Congressmen for not knowing anything about foreign policy.
We worked very hard to get--and President Clinton and I worked
hard to get every leader since then--at the Executive Level to
encourage Congressmen to travel, to talk positively about
Congressmen traveling, because I knew if you could get people
in the habit of going back home and reporting on their travel,
it in fact is rewarded.
People back home want you to be a leader who understands
that we are in the world. I don't think any member gets
attacked back home for having gone to Afghanistan or gone to
Iraq or gone to China and tried to understand what is going on
if you are serious about it, and if you go back home and say
this is what I did.
I say the same thing here. The Congress is going to have to
be an integral part, under our Constitution, of getting to an
entrepreneurial public management; it can't be done by the
executive branch without the Congress being supportive.
Mr. Davis of Virginia. Thank you very much. We appreciate
everyone's testimony today. I think this is just the beginning,
not the end. As we move forward, I appreciate very, very much
your insights and looking forward to continuing working
together.
Mr. McTigue, if we could chat for a moment after the
meeting, I have a couple of questions I would like to ask.
But due to the time, I would like to ask that if any
Members have additional questions for our witnesses today, they
can submit them for the record.
I would again like to thank you all for being here.
The meeting is now adjourned. Thank you all.
[Whereupon, at 4:04 p.m., the subcommittee was adjourned.]
[The prepared statement of Hon. Elijah E. Cummings
follows:]
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