<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:86196.wais]
REFORMING GOVERNMENT: THE FEDERAL SUNSET ACT OF 2001
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE CIVIL SERVICE,
CENSUS AND AGENCY ORGANIZATION
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
APRIL 23, 2002
__________
Serial No. 107-188
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
86-196 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
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COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California PATSY T. MINK, Hawaii
JOHN L. MICA, Florida CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania THOMAS H. ALLEN, Maine
DAVE WELDON, Florida JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia ------
JOHN J. DUNCAN, Jr., Tennessee BERNARD SANDERS, Vermont
------ ------ (Independent)
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Chief Clerk
Phil Schiliro, Minority Staff Director
Subcommittee on the Civil Service, Census and Agency Organization
DAVE WELDON, Florida, Chairman
DAN MILLER, Florida DANNY K. DAVIS, Illinois
CONSTANCE A. MORELLA, Maryland MAJOR R. OWENS, New York
JOHN L. MICA, Florida ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
C.L. ``BUTCH'' OTTER, Idaho ELIJAH E. CUMMINGS, Maryland
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Garry Ewing, Staff Director
Melissa Krzeswicki, Professional Staff Member
Scott Sadler, Clerk
Tania Shand, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on April 23, 2002................................... 1
Statement of:
Brady, Hon. Kevin, a Representative in Congress from the
State of Texas; and Hon. Jim Turner, a Representative in
Congress from the State of Texas........................... 7
Everson, Mark W., Controller, Office of Federal Financial
Management, Office of Management and Budget................ 23
Schatz, Thomas A., president, Citizens Against Government
Waste; John Berthoud, president of the National Taxpayers
Union; and Chris Edwards, director of fiscal policy, CATO
Institute.................................................. 35
Letters, statements, etc., submitted for the record by:
Berthoud, John, president of the National Taxpayers Union,
prepared statement of...................................... 51
Brady, Hon. Kevin, a Representative in Congress from the
State of Texas, prepared statement of...................... 9
Edwards, Chris, director of fiscal policy, CATO Institute,
prepared statement of...................................... 59
Everson, Mark W., Controller, Office of Federal Financial
Management, Office of Management and Budget, prepared
statement of............................................... 26
Schatz, Thomas A., president, Citizens Against Government
Waste, prepared statement of............................... 38
Turner, Hon. Jim, a Representative in Congress from the State
of Texas, prepared statement of............................ 15
Weldon, Hon. Dave, a Representative in Congress from the
State of Florida, prepared statement of.................... 3
REFORMING GOVERNMENT: THE FEDERAL SUNSET ACT OF 2001
----------
TUESDAY, APRIL 23, 2002
House of Representatives,
Subcommittee on Civil Service, Census and Agency
Organization,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 3 p.m. in room
2247, Rayburn House Office Building, Hon. Dave Weldon (chairman
of the subcommittee) presiding.
Present: Representatives Weldon, Davis of Illinois,
Morella, and Norton.
Staff present: Garry Ewing, staff director; Chip Walker,
deputy staff director; Melissa Krzeswicki, professional staff
member; Jim Lester, counsel; Scott Sadler, clerk; and Tania
Shand, minority professional staff member.
Mr. Weldon. Good afternoon. It is a pleasure to have our
two first witnesses in the first panel. Kevin Brady is the
author of this bipartisan bill. As a member of the Texas State
Legislature, he has had experience with the sunset process in
Texas and we're very pleased to be able to have him.
Additionally, we are quite pleased for him to be joined by
Congressman Jim Turner. He is the ranking member of the
Government Reform Subcommittee on Government Management. He has
worked very closely with Mr. Brady in developing this important
legislation and is one of the key co-sponsors. He, too, has had
experience with the Texas process as a member of the Texas
State Legislature. I want to commend both gentlemen for their
hard work on this bill.
I call this hearing to examine H.R. 2373, the Federal
Sunset Act of 2001. The Sunset Act would establish a bipartisan
Commission to conduct systematic and periodic reviews of all
Federal agencies and programs. Once the Sunset Commission has
reviewed an agency and issued its report to Congress, the
agency would be eliminated unless Congress affirmatively
reauthorizes it within a year or two.
This bill recognizes that bad programs, not bad employees,
cause Government to be inefficient or ineffective, so it
requires reasonable efforts to retain employees who might be
effective if an agency is eliminated or programs reorganized.
The Sunset Act offers a promising approach to a problem
that has been vexing the Federal Government. As long ago as
1947, a distinguished statesman, former Secretary of State and
former Democratic Senator from South Carolina, James F. Byrnes,
said, ``The nearest approach to immortality on earth is a
Government bureau.''
Traditional congressional oversight has not proved
effective in dealing with the problems of agencies that have
outlived their usefulness or unnecessary duplication of
programs. For example, 70 different Federal programs and 57
different departments and offices fight our war on drugs at a
cost of $16 billion a year, and 788 Federal education programs
in 40 agencies cost $100 billion annually. In fact, the Federal
Government often appears to be on autopilot. The Congressional
Budget Office recently reported that in fiscal year 2002
Congress spent some $91 billion on 131 programs with expired
authorizations.
The Sunset Act will take the Government off autopilot. The
Sunset Act will bring universal accountability to the
Government. The Sunset Commission will shine a spotlight on
obsolete agencies and duplicative programs. Both Congress and
the executive branch will be forced to confront these problems
publicly and make decisions in that spotlight.
All of us in the Federal Government recognize that,
especially in this time of uncertainty and war, we have a moral
obligation to end the funding of poorly performing agencies and
programs. A dollar spent on a program that does not help people
is a dollar we cannot spend on programs that do help people.
Every dollar spent on an agency that has outlived its
usefulness is a dollar we cannot use to fight the war on
terrorism or strengthen homeland security.
We can all agree with OMB director Mitch Daniels that it
would be unconscionable to fund a poorly performing program at
a time when the physical safety of Americans requires that the
Federal Government take on many additional expensive tasks.
Working in the Federal Government means working on behalf
of all Americans. It is a privilege for us to do so. With that
privilege comes the responsibility to use hard-earned taxpayer
dollars wisely and effectively.
We may want to revise the bill before us to address various
concerns, including Constitutional questions, but these are not
insurmountable obstacles, and the Sunset Act appears to give us
an important tool to carry out fundamental responsibility to
the American people.
I look forward to benefiting from the views and insights of
our distinguished witnesses.
I would now like to turn to my ranking member, Mr. Davis,
for his opening statement.
[The prepared statement of Hon. Dave Weldon follows:]
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Mr. Davis. Thank you very much, Mr. Chairman. You know,
I've always been told that Texans oftentimes come in pairs, and
so I want to welcome Representative Brady and Representative
Turner and look forward to their testimony.
I also want to thank you, Mr. Chairman, for calling this
hearing. I've looked forward to the opportunity to interact and
work with you as you've been appointed the new chairman, and we
just look forward to some interesting and exciting times.
Mr. Chairman, though often difficult to achieve, the
efficient and cost-effective operation of government programs
and agencies is a reasonable and necessary goal. H.R. 2373, the
Abolishment of Obsolete Agencies and Federal Sunset Act of
2001, seeks to achieve this by establishing a 12-member
Commission composed largely of Members of Congress to review
periodically and systematically the activities and operations
of all Federal Executive departments and agencies, including
advisory committees, with a view to their efficiency and public
need. The Commission would be authorized to recommend the
abolition of Executive departments, agencies, and advisory
committees in whole or in part by means of draft legislation.
The agency would be abolished no later than 1 year after the
date of the Commission's review unless Congress reauthorizes
the agency.
Though I agree with the elimination of duplicative and
ineffective programs, there seem to be divergent opinions
regarding the Constitutionality of this proposal. A legal
opinion issued by the Department of Justice on September 21,
1998, concluded that the creation of a Federal Sunset
Commission, as prescribed in H.R. 2373, was unconstitutional.
Specifically, the Department determined that this legislation
would violate the Separation of Powers Doctrine by allowing the
abolishment of a statutorily created Executive agency not
through legislation passed in conformity with Article I, but at
the discretion of a 12-member Commission.
The House Committee on Government Reform and the Senate
Committee on Governmental Affairs currently have investigative
and oversight authority to review allegations of waste, fraud,
and abuse, and mismanagement across the Federal Government.
Under this legislation, would these committees be abdicating
their role to a Sunset Commission?
These are two critical issues that must be addressed by the
witnesses at today's hearing. I look forward to the testimony
of not only our distinguished colleagues, but the other
witnesses who have come.
Again, Mr. Chairman, I thank you for the hearing. I look
forward to an interesting afternoon.
Mr. Weldon. Thank you, Mr. Davis.
I think you've put your finger right on the issue that we
want to try to get into here today, and I'm looking forward to
hearing from both our witnesses.
We would now ask Mr. Brady to make his opening statement
and ask that you try your best to confine your comments to 5
minutes, and then we'll hear from Mr. Turner.
You may proceed.
STATEMENTS OF HON. KEVIN BRADY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF TEXAS; AND HON. JIM TURNER, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Brady. Thank you, Mr. Chairman.
Chairman Weldon, Ranking Member Davis, I'd like to thank
you and member of the subcommittee staff for holding the
hearing on H.R. 2373, the Federal Sunset Act of 2001.
Congressman Turner and I offered this legislation together,
based on our experience in the Texas Legislature. Texas is one
of more than 23 other States that have employed the sunset
process as a proven tool to cut wasteful spending, to eliminate
duplication, to streamline agencies, and, most importantly,
just increase accountability. This bill, the Federal Sunset
Act, seeks to bring those same sorts of principles of
efficiency and continual regular evaluation to our Federal
Government.
The battle to eliminate obsolete agencies and make better
us of our tax dollars has been fought throughout our Nation's
history. Going back through our third President's letters,
Thomas Jefferson, you will find a letter he wrote to friends
expressing his frustration. He wasn't able to abolish agencies
that had already outlived their usefulness, even at that early
point in our history. Most recently, former President Jimmy
Carter pushed for a vote on the sunset in the late 1970's.
Big Government seems to have a life of its own. Just ask
those in Congress who, a few years ago, struggled to abolish
the 100-year-old Federal Board of Tea Examiners. The timing for
this measure couldn't be better. A Federal sunset law ensures
that programs are held accountable. The successful ones
continue, and, indeed, our experience is they thrive under
sunset, while the ones that fail are eliminated. This would
allow us to invest more in the programs that work, provide more
resources to the people who truly need that help.
Additionally, enacting the bill would help us ensure we
have enough resources to fight our war on terrorism, to ensure
our children get a good education, continue our path of
doubling medical research funds, and preserve and enhance
Social Security and Medicare once and for all.
In order to reach an honest balanced budget, simply slowing
the growth of Federal agencies isn't enough, as we all know.
Enacting the Federal sunset law creates a tool to cut wasteful
spending, and it is a simple concept. Each and every Federal
Government agency must justify its existence, not its value
when it was created 100 years ago, or 40, or even 20 years ago.
They must prove that they deserve our precious limited tax
dollars today.
Here's how it works. Every Federal agency is given an
expiration date--a date certain when they will go out of
existence unless Congress reestablishes them. In this bill we
suggest a 12-year cycle for most agencies, a shorter period for
troubled ones. A bipartisan, 12-member Sunset Commission,
composed of Members of Congress and the public, examines each
agencies need, its value, its cost-effectiveness, and level of
customer service. Importantly, then citizens, taxpayers, and
State and local government leaders are given a chance to speak
their mind. Is the agency still needed? Is it responsive to its
customers? Is it spending our tax dollars wisely?
Then, after a thorough evaluation, the Commission
recommends to Congress that an agency be reauthorized,
streamlined, consolidated, or eliminated. If the agency is
reestablished, it is assigned a future sunset to make sure it
remains accountable.
Accountability saves money. In Texas, where we've both
served as State legislators, sunsetting has eliminated 44 State
agencies and saved the taxpayers $720 million. Based on these
estimates, for every dollar spent on the sunset process, the
State has received about $42 in return. With results like this
at the State level, where government is smaller and I think
usually more efficient, imagine the cost savings when applied
to the Washington government, itself.
There is very little cost associated with this bill. The
sunset process uses existing mechanisms. Members of the
Commission are appointed by the Speaker and the Senate majority
leader. Hearings will be held in conjunction with existing
authorizing committees. Most work will be conducted within the
legislative framework we've already established. Any cost the
Commission incurs will be offset in the budget for each fiscal
year.
For legislators like us, Chairman Weldon and Ranking Member
Davis, there are additional benefits. Agencies become very
responsive to the American taxpayers and to you and I during
the years preceding their sunset date. They're more oriented to
customer service, they write regulations much closer to the
original intent of legislation that we have passed. They have
to, because under sunset there are no more sacred cows, no
existence until infinity. Every agency is treated the same.
None is singled out. All are held equally accountable.
Many of us ask: don't we already have sunsetting or a
mechanism like it in place? The answer is no. Certainly the
Government Performance and Results Act passed in 1993 was a
strong step in the right direction, and the President's
initiatives on results-oriented, performance-based Government
is another step in the right direction, but we need to go a
step further by having an enforcement mechanism for an agency's
own review and facilitator of tangible results.
On average, more than five agencies perform the same or
related function. There are 163 programs with job training or
employment functions, 64 different welfare programs, more than
500 urban aid programs. Certainly, many of these are
meritorious, but, not only could we afford to streamline and
save tax dollars, but it would make it easier for folks to
understand and know where to seek this aid.
Mr. Chairman, I'm pleased, in conclusion, this legislation
has been endorsed by a number of organizations, some of whom
will testify today. I'm also pleased that during this campaign
for President, then Governor Bush expressed his support for
sunset legislation.
Again, thank you, Chairman Weldon. Now I would like to at
this point yield to my cosponsor.
[The prepared statement of Hon. Kevin Brady follows:]
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Mr. Weldon. Mr. Turner, please proceed.
Mr. Turner. Thank you, Chairman Weldon and Ranking Member
Davis. I am pleased to join my colleague, Congressman Brady, on
a piece of legislation that I think really represents what our
Government Reform Committee is all about, because our charge as
a committee has always been to try to make our Government work
more efficiently, more effectively, work in the taxpayers'
interest, and deliver the services that our people need in the
most cost-effective manner.
This legislation, as Kevin has shared with you, is one that
both of us have had experience with as members of the Texas
Legislature, and another one of our cosponsors, Congressman
Lloyd Doggett, was actually the sponsor of the original sunset
legislation in Texas several years ago.
Those States that have had this type of sunset law in
effect and have had personal experience with it I think, by and
large, would share with us that it has been a very effective
tool for the taxpayers, and in these very difficult times where
we are trying to continue to meet the growing demands of the
public for services--we see our entitlement roles growing
simply by the growth of population--it seems apparent, I think
to all of us, that we've got to learn how to deliver these
services in a more cost-effective manner.
The sunset process, by which every agency has established
in law a sunset date, does amazing things to cause agencies to
operate more efficiently, because when agency heads and agency
managers understand that their agency is going to go out of
existence at a date certain, and that their continued existence
depends upon a positive action by the legislative body, it
gives the legislative body a very unique power to enable
change, positive change, to occur within a given agency.
In the Congress we do have, you know, many committees who
have overlapping responsibilities with regard to various
Federal agencies, but we do not do, in my judgment, a very good
job of congressional oversight.
I'm very pleased that the Bush administration has expressed
their support for sunset legislation. When Kevin and I
introduced this in previous Congresses under the Clinton
administration we did not have that kind of support. I think I
understand why that perhaps was the case, because to have a
Federal sunset law which would require a Sunset Commission to
review the activities of an agency, which generally would
precede the sunset date by at least 2 years, over a 2-year
period perhaps you would be looking at an agency with a
magnifying glass, and for that agency to have the possibility
of going out of existence is certainly strengthening the
congressional oversight power vis-a-vis any administration, the
executive branch.
So I was very pleased that the Bush administration has
looked favorably on this, because you have to be convinced of
the purifying effect of this process in order to be supportive
of it from the point of view of the executive branch, because
it does give the Congress an increased role in determining the
future course of our Federal agencies.
The Commission that is envisioned in this legislation is
bipartisan. I'm sure the administration may have some ideas or
suggestions about composition, but it does include individuals
from the private sector, the thought being here that if we can
involve people from the private sector with expertise in
management and organization, as well as give the public an
opportunity to come before this Commission in public hearings
to express their point of view regarding the operation and
effectiveness of an agency in serving the public, that we bring
pressure to bear on the agencies and on the Congress to produce
positive change.
So I am very hopeful that this committee and this Congress
will look favorably upon this proposal. I have no doubt it will
do the same here as it did in our State of Texas, where we had
44 agencies abolished to date and have saved over $700 million
in the process. And beyond the cost savings I think the process
has made government more responsive to the public and ensured
that those limited and hard-earned tax dollars reach the people
who need them, rather than be expended in bureaucracy along the
way.
Mr. Chairman, thank you for the opportunity to testify in
favor of this bill. We hope that you will see fit to favorably
recommend this bill to the full committee.
[The prepared statement of Hon. Jim Turner follows:]
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Mr. Weldon. I thank both of our witnesses. The Chair would
like to now recognize himself for 5 minutes of questioning.
Mr. Turner, you segued very nicely into one of the
questions I had, and I'd really like both of you to respond to
it. At least my understanding is that Texas has had a better
experience with this than many of the other States, and all the
States of the 23 that have it have benefited from it, but I
understand the Texas experience has been particularly good. I
was wondering if you could just shed some light on why that
might be. Why has Texas had such a great track record in
successful use of the Sunset Commission?
Mr. Turner. Mr. Chairman, there are probably several
reasons. Some that, from my experience, come to mind is the
fact that when the sunset legislation was originally passed
there was a great deal of commitment to making it work, and
what we've found there over time is that, as a legislator, to
be able to be appointed to the Sunset Commission is considered
to be a plumb assignment, and, as you can imagine, to have the
power over any given agency to determine their future gives the
members of that body a great deal of clout. So it has become
one of those bodies in Texas that members of the legislature
and members of the public consider to be an important and
influential assignment.
Clearly, in most of our legislatures, particularly those
who have biennial sessions, you have the Sunset Commission
working when the Legislature is not in session. Of course, that
would differ here, since we meet pretty much year-round. So it
certainly helps in States like Texas that the Sunset Commission
is out there working to improve efficiency and effectiveness of
government when the Legislature is not around, and they get a
lot of favorable coverage as a result of that.
Mr. Weldon. So are you recommending that, perhaps, for this
to work well, that we only meet every other year here in
Washington, DC? [Laughter.]
Mr. Turner. Mr. Chairman, that would probably be fine with
me, but it seems our tradition----
Mr. Weldon. As long as they don't cut our pay, right?
Mr. Turner. And, of course, in those States that do that
they usually have, of course, the biennial budget process,
which we don't have.
The Sunset Commission--I think all State agencies in Texas
look to that sunset date with a great deal of trepidation, and
they know that there is a very strong possibility that they may
be significantly changed, and they get very nervous about it,
and they get very responsive to legislators, and I think the
same would be true here in the Congress.
Mr. Weldon. Mr. Brady, do you have anything you wanted to
add to Mr. Turner's comments?
Mr. Brady. I think Jim, Mr. Chairman, hit it right on the
mark. One of the keys, not just in Texas but other States that
have really gotten results from this, has been all agencies are
reviewed. They don't pick some and leave the others out. Every
one is treated equally.
Second, there is a regular review. Some States have, sort
of after their initial review, sort of petered out a bit in
whether they're going to come back in 4 years or 6 years, so
there is no pattern of regular review that everyone can count
on.
A third part of that success is that in those States it
really works and people see it as real reform, an opportunity
to look at the mission of an agency, they really focus on what
they are doing. Oftentimes, again, the good agencies thrive
under sunset. The ones that are responsive, don't duplicate,
that have a high priority, they really shine under this
process.
And the fourth part that we've tried to incorporate in the
final part in our bill, Mr. Chairman, is that in Texas the
Commission works very closely with the committees, the
authorizing committees and the appropriators, so that if
authorizing has an area they want to look at, they recommend
sunset. If appropriators have an area that concerns them, they
want a higher focus that they just don't have the time to do at
that point, they forward it and make that. So there is a real
cooperative approach, and that's what we are recommending in
this bill, as well.
Mr. Weldon. Would both of you be willing to work with the
subcommittee to address any issues that may be raised during
this hearing and in future deliberations on the bill in order
to try to perfect the legislation as we go through the process?
Mr. Turner. Certainly, Mr. Chairman, and I think that
there's probably some suggestions that can be made that would
be very beneficial. Transferring an idea like this from the
State Legislature to this Congress may require some
modifications.
Mr. Weldon. What about the impact on State employees in
Texas? Has there been a loss of jobs as a consequence of this
program?
Mr. Brady. Actually, no. Somewhat like the Federal
Government, Texas government is always looking for good
employees. We always have a list of vacancies that are open.
We're always--just like in our own offices up here, we're
always looking for good people. What happens is that the other
agencies tend to grab them pretty quickly in that process,
because you always--like in the Federal Government here, we've
got some 80,000 mid-level managers and senior-level managers
who will retire just in the next 8 years. The number of other
jobs is far greater than that. So they are quickly picked up.
Mr. Weldon. My time has expired.
I'd like to now recognize the ranking member for 5 minutes
of questioning.
Mr. Davis. Thank you very much, Mr. Chairman.
Representative Brady, I understand that 44 agencies have
been abolished since this legislation was passed. Did you share
what kind of agencies those were? I mean, what did some of them
do?
Mr. Brady. I don't have the full list, but, for example,
when Congressman Turner and I were there, one of the more
significant consolidations really were eliminating three or
four different agencies creating one Texas Natural Resources
Conservation Commission, much like our EPA, where we were able
really to put the best parts of three or four separate agencies
together, eliminate the areas that just no longer had
usefulness, and beef up the areas we really wanted to focus on.
That's one example of it.
Mr. Davis. Were any of them agencies that had been fairly
recently constituted, or were they agencies that may have been
100 years old?
Mr. Brady. In looking at all the States that have had
sunset, the process seems to work this way, and it is sort of
common sense, just like the legislation. In the first round of
review, there's normally a high percentage of eliminations,
averaging about 23 percent, because that's where you find the
agencies that really have really outlived their usefulness. In
subsequent reviews, that No. 10ds to go down and the focus
becomes a more accountable streamlining, you know, working and
be more responsive, so each review seems to have a sort of a
different benefit that accrues from it. That's one of the
reasons Jim and I believe so much in sunset--that in this bill
we've sunsetted the Sunset Commission. I mean, if you want to
hold others accountable, you ought to do the same, so we sunset
it after two review cycles so that we all have an opportunity
to find out if it is working for us.
Mr. Davis. Jim, I noticed you use the terminology
``clout,'' and I thought that was an Illinois term. [Laughter.]
I didn't know that it extended to Texas.
Mr. Turner. I knew it was a Chicago term.
Mr. Davis. A Chicago term. But let me ask you, can this--I
always thought that clout was sort of given by the people in
terms of electing someone to do something. Can that clout be
shared by individuals who are appointed and not necessarily
elected?
Mr. Turner. Mr. Davis, I think it can, because I think when
you use that term we're--I was attempting to describe the
degree of influence that one has in a given position. Clearly,
you know, we have many Federal appointments that are very
influential, and I think that an appointment to a Federal
Sunset Commission, whether you are a legislative appointment or
a public appointee by the President, would be deemed to be a
very significant role, so I think that, even though in most of
our legislatures or in many of our legislatures we have a
stronger legislative branch than we do an executive--it's
particularly true in Texas, where we have what most government
professors would call a ``weak executive form of government.''
In the Congress and in Washington and the executive branch
here, the executive branch is very powerful, and I think it is
appropriate that there be some Presidential appointees to this
type of review Commission.
Keep in mind, once the Sunset Commission makes its
recommendations, it is only a recommendation. It would be the
Congress that would have to pass the enabling legislation to
carry out whatever the Sunset Commission recommends. So we're
not bypassing the Congress.
And we've had occasions, I know, in Texas where the Sunset
Commission recommended changes in an agency and they turned out
not to be smooth sailing in the next legislative session and
Legislature got hung up, couldn't pass the bill, and ended up
passing a short-term extension of the agency for 2 more years
so the process of sunsetting could be delayed while the Sunset
Commission took another look or while the members of the
legislature worked to try to see if they could reach some
accord and pass the legislation to reform the agency.
I suspect we would find that kind of process here when you
made changes in agencies that were deemed to be controversial
and difficult to reach an accord on.
But, by and large, if you look at the list of the 44
agencies that were abolished in Texas--and I wish we had
brought it with us--you know, many of those agencies were small
agencies. Many of them you find out that they were created, you
know, 25 years ago. They have some single function that's
really not that significant any more, and it was very easy, if
they had legitimate functions, to place it in some other agency
and eliminate the overhead and bureaucracy and the function
goes on, and a lot of those abolishments were that type of
changes.
Mr. Davis. Thank you very much. Of course, in Illinois it
is against the law to have a weak executive. [Laughter.]
Thank you, Mr. Chairman.
Mr. Weldon. The Chair now would like to recognize the
gentlelady from the State of Maryland, Mrs. Morella.
Mrs. Morella. Thank you, Mr. Chairman.
Thank you, colleagues, for being here with this interesting
proposition. I've always thought sunsetting made a great deal
of sense in many instances. I have a concern about your
proposal in terms of you say there would be an appointed
Commission, prestigious Commission. You have to determine
whether they serve for a period of time; you have to look at
the kind of support network they would need, the kind of
expertise they would need as they scrutinize each one of these
agencies, and they've got to have some knowledge; whether there
would be the adverse effect of a chilling effect on the part of
the employees, make them want to kowtow to these
Commissioners--all of that, if you can answer any of those
concerns that I have.
But let me ask, let me point out another thought.
Paradoxically, in some of the States that have this sunset
provision, instead of reducing the number of agencies they have
actually increased the number of agencies. It has been called
to my attention that Florida is one of those. They've sunsetted
90 agencies since 1978, but they've created 104 new ones. Do
you have any comments about how that would happen, and the
concern of promoting a bureaucracy in order to have the
expertise to look at each one of these agencies, and the
problems of the idea of the chilling effect on the employees?
Mr. Brady. If I may, Mr. Chairman, let me address that
issue first. In Texas, at least--I don't know if it is this way
in other States--it has actually had the opposite effect.
Employees know that they have people's ears when sunset comes
around. They are listened to very carefully. They actually have
a process for input in the sunset area.
What we've discovered is that, for example, in research
areas, where there has never seemed to be enough money to do
the needed research that can't be done anywhere else, those
dollars are often diverted into programs that aren't as
effective or aren't as needed, and government employees have
been some of our best routes to root out the areas that don't
have the priority today that they once did, in fact, and so
they've actually been a big part of that role in the sunset
act.
Mrs. Morella. Would they know when they would be up for
this process?
Mr. Brady. My experience is yes.
Mrs. Morella. They would know in advance that this is going
to happen next year, we are going to be given the evaluation?
Mr. Brady. And actually, the way the process works would be
that the Sunset Commission would publish the dates through the
whole 12-year cycle of who was being sunsetted what period.
This raises one of the issues on Constitutionality on the bill,
if I could address it real quickly----
Mrs. Morella. Yes.
Mr. Brady [continuing]. Because it sort of goes to what you
asked.
In looking at the bill, the only area that raised concern
was the thought that the Legislature needs to set the
expiration date where an agency is reviewed, and perhaps
eliminated or consolidated or streamlined, rather than the
Commission. We actually think that's helpful and can be
addressed several different ways. The committee probably has
its own ideas, but you could in the original legislation set
the agency dates at that time.
Second, part of this bill requires our agencies to work
together to do a full program inventory of all of our programs
by function. We could direct the Sunset Commission, as its
first act, to bring back, to study those programs, put them in
order where they can study them where they make sense, bring
that back to the Congress to be----
Mrs. Morella. Seems like a monumental responsibility.
Mr. Brady. Well, actually, when you're looking at trying to
save money that is being wasted and shift it to the agencies we
really need that help and programs for, it's not.
Mrs. Morella. Mr. Turner.
Mr. Turner. Thank you, Mrs. Morella. You ask very good
questions.
I think, from my perspective, if there is created in the
management of an agency some uncertainty, you do have to offer
some expertise. It seems to me that what we're trying to do
through this legislation is to exercise in a greater degree the
responsibility that we all know this Congress has in terms of
legislative oversight, and to effectively exercise that may
occasionally cause agencies and managers in those agencies to
be a little bit apprehensive.
Now, the process, as it has worked in Texas, you do have
together on the Commission staff some expertise. In our case, I
could envision much of that coming from places like the General
Accounting Office. The way we oftentimes exercise of oversight
responsibility today is we ask the General Accounting Office to
do a report, and occasionally they get read. What we do in the
Sunset Commission is ask people who understand that agency,
understand the body of law administered by that agency, to take
a good, hard look at it, and the GAO I think has those types of
people on board, and those are the types that could work on the
staff of the Sunset Commission.
After they've made a recommendation--i.e., done their
report--you would know, in this process, that something is
likely to happen, rather than the report collecting dust on a
shelf.
You know, it could be that on occasion agencies would be
created. We're about, I assume, to do one with the INS by the
proposal pending in Judiciary. We could very well find the
Commission recommends splitting up an agency into different
parts for some reason. But history is that there ends up being
less bureaucracy as a result of this process.
But I think that it is also important to understand that
this process does not preclude the Congress from doing what we
are contemplating doing with the INS. There's nothing about the
sunset process that says that Congress can't, by its own
initiative, look at an agency and change it. What we're doing
in the sunset process is making sure that every agency, over a
period of time, usually about every 12 years, gets this review,
and we're not waiting for crises to determine whether an agency
ought to be examined. It is institutionalized.
I think that it is a healthy process that can save taxpayer
dollars. And, in addition to emphasizing the savings, I think
it can cause government to be more responsive to the public. It
can cause services of an agency to be rendered in a more
consumer-friendly and effective way, which is equally as
important as the tax dollars we might save in the process of
eliminating the so-called ``bureaucracy.''
Mrs. Morella. Thank you.
Mr. Weldon. The gentlelady's time has expired.
Well, I want to thank both of our witnesses in the first
panel. Your presentations have been most informative.
I would like to now ask the second panel to come forward.
It's actually one person. I'd like to welcome the Honorable
Mark Everson, the controller of the Office of Federal Financial
Management for OMB. Mr. Everson chairs the President's
Management Council and leads the development of the traffic
light score card that has been included in the President's
budget.
Last week, President Bush announced his intent to nominate
Mr. Everson to the deputy director for management at OMB. This
is a critically important position, and I would like to
congratulate Mr. Everson on the pending nomination.
It is the practice of the Government Reform Committee to
swear in witnesses at all of our hearings, so, therefore, Mr.
Everson, I would like you to now rise and raise your right
hand.
[Witness sworn.]
Mr. Weldon. Would the court reporter please note the
witness has answered in the affirmative.
Mr. Everson, you are recognized for a 5-minute opening
statement.
STATEMENT OF MARK W. EVERSON, CONTROLLER, OFFICE OF FEDERAL
FINANCIAL MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET
Mr. Everson. Thank you. I think you have my full statement,
Mr. Chairman, so I'll just cover parts of it.
Mr. Chairman, members of the committee, I am pleased to be
here and to represent the administration in support of this
legislation. The President has called for and the
administration strongly supports establishment of a Sunset
Review Board at the Federal level with the specific charge to
review every agency and every program at least once every
decade.
The administration supports a regular and rigorous
examination of the efficiency and effectiveness of all Federal
Government programs and agencies. We do have concerns about the
structure and operation of the Commission, but we strongly
support its fundamental purpose.
There is much common ground between the President's
proposal for a Sunset Review Board and the Sunset Commission in
the legislation, and we will be getting to the committee later
today, I believe, in fact, a detailed letter on the
Constitutional issues from the Department of Justice, so that I
think is on its way.
We would note that the President has no role under the
legislation, as currently drafted, in determining the
composition of the Commission. We would hope to see that
remedied.
We would also urge you to consider some safeguards against
the risk of delay in congressional action in the case that
there would be normally a reauthorization but just hasn't yet
been achieved by the Congress.
Finally, I think one of the points that the Justice
Department will be making is the retention of bicameralism and
the presentation process to make sure that there is the same
Presidential role and full role of the Congress in abolishment
of agencies as normally exists in the legislative process.
As I mentioned, during the campaign President Bush gave
strong support for a Federal Commission or board such as that
proposed in the legislation, and he did have experience, as was
indicated, in Texas. As part of the President's management
agenda, which you mentioned, the administration has included as
one of five Government-wide initiatives budget and performance
integration. This initiative has a simple purpose--to improve
programs by focusing on performance and results.
The administration has launched, with the 2003 budget, a
process that is consistent with the broad objectives of the
sunset legislation by proposing to reinforce provably strong
programs and to redirect funds in many cases from programs that
demonstrably fail or cannot offer evidence of success.
I don't know if you've all seen the budget in detail, but
if you go into any one of the chapters we've evaluated, we've
taken a first cut at evaluating program effectiveness by
indicating whether programs are effective, ineffective,
moderately effective, or, in the case where there is enough
data on outcomes, of unknown effectiveness.
So we see the need for rigorous methodology for assessing
program results and effectiveness as entirely consistent with
this effort here, and we are actually reaching out at this time
to the academic community and others to try and refine our
methodologies to improve the program evaluations that we're
undertaking as a part of the President's management agenda.
I believe both Congressmen Brady and Turner are correct in
trying to launch this sort of initiative. There is broad
support for getting more examination of government results,
I've indicated in the prepared testimony. I'd just like to
quote the Comptroller General from some recent testimony. He
indicated that, ``A fundamental review of existing programs and
operations can create much-needed fiscal flexibility to address
emerging needs by weeding out programs that have proven to be
outdated, poorly targeted, or inefficient in their design and
management. It is always easier to subject proposals for new
activities or programs to greater scrutiny than that given to
existing ones.''
We also believe that, at a minimum, it is time to
reinstitute permanent reorganization authority for the
President to permit expedited legislative approval of plans to
reorganize the executive branch. That's something I would also
draw to your attention.
I'd just like to say in closing, again, we strongly support
this concept. I was very pleased to hear the remarks of your
two opening witnesses.
I would be happy to take any questions from the committee.
[The prepared statement of Mr. Everson follows:]
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Mr. Weldon. Thank you, Mr. Everson.
The Chair now recognizes himself for 5 minutes for
questioning.
Could you be a little bit more specific on the Presidential
involvement? Are you talking about perhaps the President having
the right to appoint some members of the Commission?
Mr. Everson. I think that certainly would be our preferred
position, and that, as in so many other instances, the
President makes an appointment and then the Senate reviews the
appointment and consents to the appointment.
Mr. Weldon. The entire Commission?
Mr. Everson. I think that would be the easiest way to
resolve some of the appointment clause issues. And let me
stress I don't want to get outside my area of expertise here on
Constitutionality, and I think the letter will address all of
this, but some of the functions that are--some of the technical
powers given to the Commission under the legislation, as drawn,
do get into questions of, I gather, the appointments clause and
certain duties and ability to execute certain actions, so I
think we'll have some rather technical comments on that would
get to the substance of it all.
Mr. Weldon. I was very interested in your comments about
safeguards against the risk of delay in congressional
consideration. Could you describe how any authorities in the
legislation could be crafted in such a way to avoid the
Constitutional issues that have been raised?
Mr. Everson. I think we would be happy to work with you on
that element of it, but recognizing that there are some
functions in the government that are obviously much more
important to have an ability to retained in others defense, to
cite one that was already talked about briefly earlier on. But
I think we are simply suggesting that this automatic mechanism,
where things really, simply because of the passage of time,
would expire without full legislative action or the involvement
of the President, that does constitute a problem. Perhaps with
a bridge period before you would get to such definitive action,
you could retain much of what is sought here.
Mr. Weldon. Well, my concern in that is that any language--
you know, typically the way the Congress keeps agencies alive
that have never been reauthorized in years and years and years
is by inserting reauthorization language----
Mr. Everson. Right.
Mr. Weldon [continuing]. Into the Appropriation Act, and
any provisions that could be inserted into this legislation to
try to force a reauthorization could be construed, I think, as
violating the separation of powers and getting into
Constitutional questions, so certainly any language that might
help us come closer to that I would be very happy to look
favorably on, assuming that it met Constitutional concerns.
Mr. Everson. We would be happy to provide that for you,
sir.
Mr. Weldon. I have been very pleased with the initiatives
coming from the administration in terms of rating agencies on
their effectiveness. In your statement you alluded a little bit
to how this legislation could complement what the president is
doing in that. Could you expand on that a little bit more for
me?
Mr. Everson. Sure.
Mr. Weldon. You kind of brushed over it in your statement.
Mr. Everson. Yes. What we did in this first round, if you
will, really did not attempt to cover the full range of
government programs. We took some programs. We're in the
process now of internally developing our guidance for the 2004
budget process, and we are going to establish a methodology, if
you will. We're actually convening a workshop--the National
Science Foundation is doing this very soon--to cover the
methodologies on how we would do some of these evaluations, and
we will have a period of time where we will get, over a period
of several years, full evaluations of all programs and
agencies.
What this does--and I agree with both Congressmen Brady and
Turner--having this set timeline, a set time table where you
get to every program over a specified schedule, that
strengthens this very concept, because you are holding people
accountable, you know that your turn at bat is coming, and so
often I would say my reflection on coming back into Government
is that you push out the issue. You push out the day of
reckoning. When you have a clear schedule, that's helpful. I
think this methodology is consistent with what we are
developing right now internally in the administration to look
at everything.
Mr. Weldon. Do you believe the law should formally
incorporate some of the provisions the President is pursuing,
such as requiring a review for an agency that has been rated by
the administration as being ineffective?
Mr. Everson. A review by this Commission or a review----
Mr. Weldon. This Commission.
Mr. Everson [continuing]. By OMB?
Mr. Weldon. This Commission.
Mr. Everson. My initial--I'd like to reflect on it, but my
initial instinct is probably yes, because the more scrutiny we
can bring to the things that aren't working--and this assumes
that we've gotten to a point where we have an agreement on the
methodology. Here, again, we want to be very clear that we have
value neutral, very sustainable criteria for forming these
evaluations so that you don't get, as you mentioned, one
program that's doing something in education being judged
differently than another program in another agency that's also
doing things in education. You level the playing field, and
then you find certain programs are less effective than others.
Yes, anything that brings focus on those that are behind is
helpful.
Mr. Weldon. I see my time has expired. I'd like to now
recognize the gentleman from Illinois for 5 minutes.
Mr. Davis. Thank you very much, Mr. Chairman.
Mr. Everson, as I mentioned in my opening statement, the
Department of Justice issued a legal opinion on this
legislation in 1998. Have you sought or obtained any further
legal opinion from Justice on this type of legislation?
Mr. Everson. As I indicated, sir, there will be a letter
coming either today or tomorrow that addresses the issues that
we see in the legislation, I think summarizing one being the
appointments area, another being principally being this
retention of the Presidential role and the full congressional
role in terms of the abolition of the agencies, but we will
have a detailed letter to you shortly.
Mr. Davis. In 1998, Mr. Deceive, who was then acting deputy
director for management, opposed this legislation because,
among other things, the administration believed that it
established procedures that would supersede the authority of
the President and Congress----
Mr. Everson. Right.
Mr. Davis [continuing]. In reality. Do you have any
opinions in relationship to the----
Mr. Everson. I think the comments from Justice will
indicate that we do feel you need to retain the role--once the
Commission is taken, it has made its recommendations, the role
of the full Congress and the President in ratifying, or not the
ultimate decision of the Commission, so that would be one
point.
But as to the internal role of OMB, I said to Congressman
Brady and Congressman Turner a few minutes ago, this was a very
short discussion that we had--Mitch and some of the others had,
and myself--because we believe the more focus you bring on
program effectiveness and whether people are--the citizenry is
getting its money's worth, that's better. That's positive. So
we're not turf conscious here in saying that there shouldn't be
others who are looking at the effectiveness of progress. We're
not saying we should have the only role by far in making
proposals of what should be abolished or not.
Mr. Davis. If I recall, Representative Turner expressed
appreciation for the fact that the President was supportive.
Now, is the President supportive of the concept of a
Commission, or is the President supportive of this legislation?
Mr. Everson. The administration--the President is
supportive of the concept of the Commission as incorporating
some modifications, some of which I've mentioned, and others
that we would be happy to work with the committee on. I mean,
obviously we have strongly held positions on these
Constitutional and appointment issues. So we would want to go
forward with you and very much address those.
Mr. Davis. Thank you very much.
Mr. Chairman, I have no further questions.
Mr. Weldon. I thank the ranking member, and I now yield to
the gentlelady from Maryland for 5 minutes.
Mrs. Morella. Thank you. Thanks, Mr. Chairman. I find this
very interesting.
I'm curious. You know, I've pointed out that there have
been some instances where States have actually added the
agencies, and Mr. Turner's response was, ``Well, they still add
up to a savings.'' A possibility. But, you know, there are 12
States I understand that did have this sunset provision that
dropped it, and I'm curious about why they have dropped it.
Mr. Everson. I'm sorry, Congresswoman, I don't have
detailed knowledge of the experience of the individual States.
I'm approaching this really from the point of view of trying to
get the intellectual support and the extra scrutiny on
effectiveness, so we would take a view, if the result was--I
can tell you this: if the result was that we should have
another agency, we would support that. This is, from our point
of view, about evaluating effectiveness and what works or
doesn't work for the taxpayers, so it is, for us, a value
neutral proposition. Obviously, we think over time we're going
to get savings, but if in one instance there was growth in the
drug area--you mentioned drugs before. If that's the right
answer, because of a good evaluation of program effectiveness,
then that's an answer we would want to support, from a
management point of view.
Mrs. Morella. Incidentally, congratulations on your
appointment.
Mr. Everson. Thank you.
Mrs. Morella. You know, we passed GPRA--Government
Performance and Results Act.
Mr. Everson. Right.
Mrs. Morella. We looked to that and we say, ``Hey, this is
the way to really discern whether we're getting the results
that we really want.'' So I just wonder if this is going to be
overlapping, or does it mean that GPRA is not working or we're
not assessing enough?
And then I pick up on what was mentioned with the first
panel, and our chairman mentioned that, and that is the delay
strategy. I sit here thinking about the fact that almost every
year we have the continuing resolution and almost every year we
have items that are in the appropriations bills that were not
authorized--I mean, even appropriated and not even authorized
in the appropriations bill sometimes.
So I just think that maybe it works in some States, but do
you realize how vast this is going to be to try to make it
applicable to the Federal Government? Do we need to do that?
Maybe there is another way of doing it. I am concerned about
also the bureaucracy that this may be creating.
Mr. Everson. Let me say to you, Congresswoman, probably no
one better than I realizes how vast the Government is, given
the job that I'm trying to now do. Particularly in this
management area, whenever you get into evaluation and
assessment, the first answer you get to or the first reason not
to proceed is the one you just cited--that it's too
complicated, it's too far-flung, there are too many differences
in the programs.
I think that our approach would be that you've got to start
and you've got to instill that discipline that has been
articulated by the Congressmen, the first panelists, so well.
Let me come back to GPRA. I would think that one of the
things that this Commission would do is strengthen the GPRA
process, because it would do what the administration and the
Congress, frankly, have not done as well as they could, which
is to take a look at the strategic objectives of these
departments and agencies and then to see whether the outcomes
of the programs correlate to the objectives that were set under
the GPRA process. I think these are glossed over far too
frequently and everything is looked, as the Comptroller General
indicated, on a basis of incremental change. It doesn't--you're
not going back and looking at the broad strokes of are you
educating the children better or are the streets safer.
Instead, you're looking at, ``Do we have more teachers or do we
have more police officers?'' I think this Commission, this
concept would advance that GPRA concept that you mentioned.
Mrs. Morella. Yes. Does the legislation affect or address
the releasing of sensitive information that might well come out
in the review process?
Mr. Everson. I'm not sure. I'm not sure that it does get to
that. Could you clarify maybe what you would mean by that
information?
Mrs. Morella. Well, there might be some information that
should not be public, publicly declared, and I would hope that
there would be some way of preserving some intelligence
information.
Mr. Everson. Right. Sure. Of course. That should be
adequately addressed. I agree with you there 100 percent.
Mrs. Morella. Yes.
Mr. Chairman, I think I'll yield back. But I think the
concept has some merit, but I think it needs a lot more work on
some of the various details of it.
Thank you.
Mr. Weldon. I thank the gentlelady.
I would just point out on page 13 of the act line nine, it
includes a paragraph, ``The extent to which the agency, as part
of their evaluation, has complied with the provisions contained
in the Government Performance and Results Act of 1993.''
I'd like to now recognize the gentlelady from the District
of Columbia, Ms. Norton.
Ms. Norton. Thank you very much, Mr. Chairman.
Mr. Everson, I don't envy the position you have been put in
to come and testify about a bill with a pending Constitutional
memo due you, and to somehow appear before our committee.
The issues, as you must realize, raised by this proposal
fairly pulsate with Constitutional questions.
Mr. Everson. Yes.
Ms. Norton. Each State has its own Constitution, and I
understand the State of Texas is where it has inspired this
bill. I've not looked at the Texas Constitution, but I have
looked closely at our Constitution.
Mr. Everson. Yes.
Ms. Norton. I continue to--I taught full time at Georgetown
before coming to Congress, and continue to teach a course
called, ``Lawmaking and statutory construction.'' The main
theory of the course is the separation of powers has left us a
cumbersome system, perhaps too cumbersome for the 21st century,
when we are competing against parliamentary democracies that
can--with unified governments that can make a decision, and
that's it.
And so I challenge my students, ``Help us to come to the
point where there are sufficient shortcuts in our system----''
Mr. Everson. Right.
Ms. Norton [continuing]. ``So that the brilliant separation
of powers system created in the 18th century is not obsolete
today.''
I am not unsympathetic with the motivation behind this
bill, although my interest is not so much the mundane notion
of, ``Shall there be one committee or another committee,'' but
I think the earth-shattering notion of whether or not, with
separation of powers government, one can compete with
parliamentary governments that can make a decision about
Microsoft and that's it, not 10 years of litigation. I think
this is a serious question. It is a marvelous intellectual
challenge.
I can only say to you that I am reminded of how the Supreme
Court has struck down our shortcuts time and time again, the
one-house veto. I mean, I could go on and on.
Mr. Everson. Yes.
Ms. Norton. They have been fairly clear about the
presentment clause, about needing both Houses of Congress, and
I admire the fact that Congress was seeking ways around this
cumbersome system. I think it is a brilliant system and I think
we've got to put our best minds to thinking how to preserve it
and make it efficient in a global market economy.
Now, the first thing--you talk about what the President
wants to do. I think you would get bipartisan support for
budget and performance integration to improve programs that are
focusing on results. I mean, you know, here's the problem.
Here's the evidence. It would be pretty hard to say, unless you
just have some political reason for wanting an agency to exist.
Many Members will instantly believe that their own
jurisdiction is being usurped by a few Members, so, you know,
first you're going to get people in your face with that.
Your notion about a Presidential Commission I don't think
improves this bill because we have had Presidential Commissions
since the beginning of time. They can recommend. They then have
a Member put in a bill. But I don't think you get the instant
result that this bill would try to get.
Until we find the shortcut that is Constitutional and does
not raise more questions than it solves, I would advise that
the President's own Sunset Review Board--you could think more
deeply about it and whether some of the problems raised by this
bill could be solved administratively rather than spend the
next seven or 8 years in court trying to find out whether or
not this suggestion is Constitutional.
Mr. Everson. Yes. If I might respond, first, I very much
appreciate what I consider very eloquent questioning or
presentation of our system and its broadest elements in the
European model. I've lived overseas, most recently in France,
and, although I guess with their elections you can't actually
cite the French as maybe getting the best results.
Ms. Norton. OK. Cite the British.
Mr. Everson. The British. Yes. Please. Thank you.
I think it really does--the issue you pose of the
government being led by the leader of the legislative branch,
it is a different system. As you point out equally correctly,
we do have the checks that ensure very real democratic
processes.
I think that what we'll come up with in the commentary that
we'll provide from the Justice Department will get back to a
correct weighing of things like the Chada decision and others
that you're getting to, so that perhaps some will be
disappointed with the solution as not breathtaking enough or
not leaving a strong enough shortcut role for the Commission,
if you will, but again we would still think it is worth doing
because of the focus it will bring on a regularly scheduled
basis to the activities of these agencies, many of which have
expanded or outlived their usefulness or now are duplicated by
other entities of the government.
Ms. Norton. Thank you.
Thank you, Mr. Chairman.
Mr. Weldon. Well, I thank the gentlelady for her very
erudite comments. I thank our witness, Mr. Everson, for his
testimony. It has been most helpful.
I'd like to now call the third panel to come before the
committee.
I would like to extend a welcome to the members of the
third panel. Each of these gentleman represents a watchdog
organization dedicated to safeguarding the interests of the
American people, the American taxpayers.
Mr. Thomas Schatz is president of Citizens Against
Government Waste [CAGW]. Citizens Against Government Waste's
mission is to eliminate waste, fraud, and abuse, and
mismanagement in the Federal Government.
I'd also like to welcome Mr. Chris Edwards, who is the
director of fiscal policy studies at the Cato Institute. Mr.
Edwards has close to a decade of experience in tax and budget
policy, including working as a senior economist on the Joint
Economic Committee.
I'd also like to welcome Mr. John Berthoud. He is president
of the National Taxpayers Union, a well-known, nationwide,
grassroots lobbying organization of taxpayers.
Gentlemen, it is the practice of the Government Reform
Committee to swear in witnesses at all of our hearings. I'd ask
that you now rise and raise your right hands and I will
administer the oath.
[Witnesses sworn.]
Mr. Weldon. Let the court reporter please note the
witnesses have answered in the affirmative.
We'll proceed from my left to right, your right to left.
We'll begin with you, Mr. Schatz. I'd ask that each of the
witnesses please try your best to summarize your comments to 5
minutes.
STATEMENTS OF THOMAS A. SCHATZ, PRESIDENT, CITIZENS AGAINST
GOVERNMENT WASTE; JOHN BERTHOUD, PRESIDENT OF THE NATIONAL
TAXPAYERS UNION; AND CHRIS EDWARDS, DIRECTOR OF FISCAL POLICY,
CATO INSTITUTE
Mr. Schatz. Thank you very much, Mr. Chairman. I appreciate
being here today on behalf of the more than 1 million members
and supporters of Citizens Against Government Waste, and
appreciate also the opportunity to provide testimony on H.R.
2373, the Abolishment of Obsolete Agencies and Federal Sunset
Act of 2001.
We have quoted President Reagan that the nearest thing to
eternal life we'll ever see on life is a government program.
You obviously found an earlier quote. But it is still,
nonetheless, a perennial problem in Washington. The big issue
today is apparently what to do and how to do it in a way that
meets everybody's satisfaction in terms of Constitutionality
and achieving the goals.
A number of items that are already in place have been
mentioned--Government Performance and Results Act, the listing
of items in the President's budget for the first time with the
score card. Ultimately, whether we have a Sunset Commission--
and hopefully we will when that passes the Constitutional
questions--it is really, in the end, up to the Members of
Congress to make decisions about what to do about the
information that is before them regarding these agencies.
It seems that a Sunset Commission would add to the
intelligence about what is working and what is not in
Washington, and certainly it puts pressure on the agencies,
themselves, to continue to justify their existence.
As we've seen time and again, programs and agencies are
included in appropriations bills without being reauthorized.
The authorizing committees, themselves, are, on numerous
occasions, distraught by the activity of the Appropriations
Committee, because they are unable to get to the work that they
need to do. I think the Sunset Commission would be a welcome
addition to the question of what to do in terms of true review
of how the programs are working.
We are facing, obviously, very troubled times, obviously,
the war on terrorism being of the prominent consideration in
the budget for this year and in the foreseeable future, and we
also have a different type of revenue flow to the Federal
Government than we had just a year or two ago. Both of those
problems will continue to put pressure on determining whether
or not we are putting our resources in the appropriate places.
The Sunset Act does not make a determination of which
agencies should be reformed, reorganized, or eliminated. It
simply creates this 12-member Commission to assign an
expiration date to every agency. Twelve years would be the
normal length, and it could be shorter if Congress thought that
was appropriate.
It draws on the resources of the Comptroller General, the
Congressional Budget Office, and the Congressional Research
Service, who prepare an inventory of Federal programs within
each agency to assist and advise the Commission and Congress in
implementing the requirements of the act. It also instructs the
Commission to consider the need and purpose of each agency if
each operates efficiently, if the agency's programs are
duplicative, and whether the agency is in compliance with the
Government Performance and Results Act.
One of the tougher issues when it comes to establishing the
mission and determining the performance of Federal agencies is
not necessarily whether it is meeting its own goals, but
whether it duplicates the activities of another agency.
Agencies tend to look inside themselves and even committees of
Congress tend to look only at the jurisdiction that they have
and not outside the parameters of what they are considering in
terms of what might be duplicative elsewhere in the Federal
Government. With a Sunset Commission, it would be, I think,
easier for Congress to look at what is really out there and
what is being duplicated before a committee or the Congress,
itself, votes on creating a new program.
The Commission will evaluate the agency and submit
recommendations as to whether they should be abolished,
streamlined, or reorganized, also provide suggestions for
administrative and legislative action. If Congress does
reauthorize the agency, it will assign a sunset date.
This has worked well in Texas and in a number of the other
States that have sunset laws, and when one looks at all of the
lists of programs that are considered wasteful, inefficient,
duplicative, there are many, many out there, but there are not
many objective ways that they can be evaluated so that the
public can get a better idea of what is working and what is
not. The President's budget certainly takes a first step in
that direction. We welcome that.
Mr. Chairman, I appreciate the opportunity to appear before
you today. We feel that it doesn't matter if an agency was
created a year ago or 100 years ago. Our tax dollars are
stretched to the limit, and we believe this will be a welcome
step in determining where our priorities should lie.
Thank you.
Mr. Weldon. Thank you, Mr. Schatz.
[The prepared statement of Mr. Schatz follows:]
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Mr. Weldon. Mr. Berthoud.
Mr. Berthoud. Chairman Weldon and distinguished members of
the committee, thank you very much for inviting us here today.
I am John Berthoud, president of the National Taxpayers Union.
We have 335,000 members nationwide, and we have been a long-
time supporter of budget process reforms, and so we are pleased
to speak and support this legislation.
Delegate Norton asked some very important questions, I
think, about delegation. It seems to be a--there's some
agreement among all members of the committee that there are
issues of duplication, excess, and I think we all, no matter
what political philosophy we come from, would rather see
dollars spent in more efficacious ways than in what we might
identify as waste and abuse, and the issue is how, within the
constructs that the founding fathers gave us 225 years ago, can
we best create a process to eliminate that which is no longer
useful, that which is no longer necessary. I think, which there
is some agreement among all of us here today, that there is at
least some problem to that degree in the Federal Government.
Delegating--the issues of Congress delegating powers,
Congress binding itself to future--in future Congresses has
been an issue perennially, both in a programmatic sense such as
entitlements, where one Congress binds future Congresses, and
in process reforms. We can go back to the Gramm-Rudman-Hollings
legislation of 1995--excuse me, 1985, which was struck down in
the Bowsher v. Cynar case and then resurrected in 1987, we can
also look at something we support. And we supported the Gramm-
Rudman very strongly. We also supported the BRAC process,
creating an independent Commission to cut spending in an area
where most would agree that excess had crept up in.
And so what we look at your efforts, Mr. Chairman and
members of the committee, with this legislation is to craft
legislation that passes Constitutional muster, that will not
perfect the process--we don't see any magic golden bullets in
the legislative process--but that will improve the process
within Constitutional bounds. For us it is an issue of
government by inertia versus greater review and the possibility
of dislocation. I think Congresswoman Morella in her questions
was asking about the possibility for upset and dislocation in
agencies. I don't think necessarily that's a bad thing. If
agencies have to hustle and have to, you know, either
reorganize themselves or occasionally go out of business
because their functions are not the best use of Federal
dollars, that is a good thing for taxpayers and for, indeed,
all Americans.
Let me say a couple words about a somewhat analogous
process, the budget. The Base Closing and Realignment
Commission, which was first sponsored in the late 1980's by a
still relatively obscure Texan again--seems to be something
about Texas today--named Dick Armey who worked with Members on
both sides of the aisle to create an independent Commission
that would select sites for closing.
Besides getting a list of recommendations from an impending
Commission, the BRAC process had another very unique aspect,
which was that all recommendations had to either be accepted by
Congress as a whole or rejected. No log-rolling was allowed. So
legislators whose Districts were adversely impacted could not
trade votes with other legislators, although it did certainly
cause some legislative discomfort.
The Congress we believe wisely passed the BRAC process.
We've had four rounds of base closings in ensuing years, and
the Defense Department estimates that taxpayers are currently
saving $6 billion per year because of those BRAC rounds. I
think that's the kind of savings--and what happens to those
dollars, now we might have a debate. I might say those dollars
should go back to taxpayers. Others might see those dollars as
being going to other programs. That, to me, seems to be a very
healthy and very positive debate. But a politics of inertia
where those dollars just stay in obsolete bases or, in the case
of today, obsolete programs seems to be a lose/lose for all
concerned.
So for us the message from the BRAC process is clear:
independent Commissions can provide very effective assistance
to the job of ferreting out waste, and so we also particularly
applaud the mechanism in H.R. 2373 that requires an affirmative
act of Congress, congressional reauthorization for an agency.
The legislation specifies that otherwise agency would
terminate. Such a process would ensure that programs continue
to exist not simply because of inertia, but rather because
America has a continuing need for them.
So, Mr. Chairman, we applaud this legislation. We thank
Congressman Brady and Congressman Turner for their good
efforts.
On behalf of our 335,000 members, we would encourage you
and the members of the committee to work through the
Constitutional issues, hopefully with advice from the
Department of Justice, and get legislation that will help us
re-prioritize and better spend Federal dollars.
Thank you very much.
Mr. Weldon. Thank you very much.
[The prepared statement of Mr. Berthoud follows:]
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Mr. Weldon. Mr. Edwards, you may proceed. You are
recognized.
Mr. Edwards. Thank you very much, Mr. Chairman and members
of the committee, for allowing me to testify today regarding
the Abolishment of Obsolete Agencies and Federal Sunset Act.
Establishing a systematic procedure to review all agencies and
abolish unneeded ones is a great idea. It is an idea that would
be a sound management practice in any large organization,
especially one as big as the $2 trillion Federal Government.
Sunset legislation has been debated before, as you know, at
the Federal level. In the late 1970's there was a strong
bipartisan movement to pass Federal sunset legislation
introduced by Senator Ed Muskie. It would have sunset most
Federal programs every 10 years. Supporters of the sunset
legislation at the time ranged all the way from Jesse Helms and
William Roth to Ed Kennedy and John Glenn.
Twenty-five years later, the need to reform, review, and
abolish Federal agencies and programs is much greater. Today
the explosive budget costs of the baby boomers loom on the
horizon. The country has more than two decades of experiences
with Federal agency and program failures, and a privatization
revolution has swept the world, but not yet this country.
Let me illustrate the need for Federal sunset legislation
by contrasting private industry with the Government industry.
In the private sector, companies are sunset routinely when
their products are no longer needed. For example, retailer
Montgomery Ward was recently sunset by the market, and it looks
like K-Mart may be next. That's good news for the overall
economy, because it means that more efficient methods of
satisfying the public have arrived. Wal-Mart and Target come to
mind. By contrast, there is no structured method to sunset
Federal agencies when they no longer serve a useful or cost-
effective purpose.
In the private sector, companies also get sunsetted if they
follow shoddy financial practices. Enron, of course, is a
recent example. By contrast, Government agencies are often
dreadful financial performers year in and year out but face no
effective sanction to enforce better results.
The administration's 2003 budget notes that Amtrak has
utterly failed to wean itself off subsidies and is a futile
system. Clearly, Amtrak should have been up for sunset review
many years ago.
Overall--and these are staggering statistics--10 percent of
all businesses in the United States go out of business every
year, and 10 percent of all private sector jobs disappear
either through business contractions or failures. Now look at
Government. While Members of Congress are threatened with
sunsetting every 2 years, the executive branch has no mechanism
to create the constant renewal that every organization needs in
our fast-changing society, so in the private sector poor
performers are routinely weeded out and Federal sunset law can
help bring that private sector dynamism to the Federal
Government.
There have, of course, been numerous attempts to bring
private sector management practices into the executive branch
of Government. The Bush administration has launched an effort
to grade programs as effective and ineffective, as has been
discussed today, but that initiative needs and enforcement
mechanism, and I think the Federal sunset law would be a way to
enforce the administration's management initiatives.
Aside from reforming programs, of course, a Federal Sunset
Commission would ask the more fundamental question of whether
an agency or program ought to exist at all. For example, the
public cannot rely on the Agriculture Committees in the House
and Senate, for example, to eliminate unneeded farming
programs, as this year's farm debate makes clear. Congress
needs an independent voice within Congress to push for needed
reforms.
This committee should consider how a Sunset Commission
could build on the administration's new management rating
system to cut wasteful spending. As I think has been mentioned,
I think a good idea would be, say, 5 years in a row of
ineffective grades from the OMB for a Federal agency should
trigger perhaps an automatic Sunset Commission review.
Let me suggest an additional idea that the committee may
want to consider with this sort of legislation. Aside from
proposing agency reforms and termination of wasteful spending,
the Federal Sunset Commission ought to have a broad capability
to proactively study how agencies could be transferred to the
private sector. Privatization is an idea that has transformed
economies around the world, but the Federal Government has so
far been oddly resistant to the idea, even for obvious
candidates such as Amtrak. The Federal Sunset Commission could
examine privatization models that have worked elsewhere, such
as Canada's privatization of air traffic control or Britain's
privatization of some military facilities, or Germany's
privatization of its post office, and figure out how to
implement ideas here.
So, at minimum, a Federal Sunset Commission could help
uncover serious management lapses at agencies before they
explode into crises. The current overhaul of the horribly run
Immigration and Naturalization Service would have been
completed probably years ago if the Federal Sunset Commission
had been in place. But, beyond averting management disasters, a
Sunset Commission could determine which agencies and programs
are needed at all.
With the coming budget pressures of entitlement programs
set to explode with the retirement of baby boomers, we need to
start terminating and privatizing as many government programs
as we possibly can so that the next generation is not crushed
with taxes.
Thank you for holding these important hearings. I look
forward to working with the committee on these issues.
Mr. Weldon. Thank you, Mr. Edwards.
[The prepared statement of Mr. Edwards follows:]
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Mr. Weldon. The Chair now recognizes himself for 5 minutes.
I'd ask all the members of the committee maybe to respond
to this. There are some people who would say that the sunset
process is not necessary because Congress already has
sufficient authority to oversee the Federal Government and
eliminate agencies and programs that do not work. How do we
respond to that type of criticism against this legislation?
Mr. Schatz. Yes, Mr. Chairman, the Congress does have that
authority. Unfortunately, it's not exercised very often. As I
mentioned in my remarks, the committees, themselves, get caught
up in the programs and agencies that are under their
jurisdiction and often are unable or, in some cases, unwilling
to see the duplication that lies elsewhere in the Federal
Government.
One very important role that a Sunset Commission would play
would be to determine whether a program or an agency is
duplicative and whether or not it is performing the way it is
supposed to; therefore, giving a more objective list and
evaluation to the committee. It would also help educate the
public about whether or not these particular programs and
agencies are doing what they're supposed to do and taxpayers
can go to really one place to find out what's going on. Right
now there's so much that is involved in terms of getting
information from Congress, in terms of finding what you're
looking for, that I think the Sunset Commission would help
address that particular issue.
Mr. Berthoud. Mr. Chairman, I think that's a good question.
If you look at the small case study that I suggested, which is
base closings, both the first Bush administration and the
Clinton administration, their Department of Defense every year
would publish statistics about the decline, huge decline post
end of the cold war in military spending, in military
personnel, in procurement dollars, and the area of spending in
Defense that was least scathed or most unscathed was military
bases. Congress certainly had the power and the ability, but
the institutional logic was not there and military independent
base closing process helped facilitate a need that
institutional politics of Congress was not able to adequately
do by itself.
So I think absolutely you are correct that Congress has the
ability to do it, but Congress has not done as good a job as it
can, and I think this process would help it do better.
Mr. Edwards. I would agree with those comments, and I would
say that often the problem is, of course, that the authorizing
committees get captured by the industry they're supposed to be
overseeing. I mean, the Agriculture Committees in the House and
Senate I think are a good example. They seem to be very
resistant to farm reforms that, you know, there's wide
agreement in the private sector, everyone from the ``Washington
Post'' to the Cato Institute agrees that farm programs need
reform, and yet it didn't happen this year.
Also, you know, the Federal Government is so vast that
often, you know, problems are below the surface for many years,
and, you know, obviously Members can only focus on narrow
issues, and, you know, problems at the INS were sort of under
the surface for many years, but until a crisis occurs it often
doesn't get on the congressional agenda, so I think the sunset
process would be a way to get problem agencies onto the agenda
for Congress to take a look at.
Mr. Weldon. Do you any of you have any insight into this
issue of how you appoint the Commission? The legislation, as it
has been crafted by Mr. Brady and Mr. Turner--and I think Mr.
Doggett was also involved in drafting this legislation--calls
for, I think, all the members to be appointed by the
legislative branch. It was recommended possibly they could all
be appointed by the President and confirmed by the Senate. I
think that's another extreme. Do you have any thoughts on this
issue? It was raised by the administration witness that there's
some concerns about the makeup of the Commission.
Mr. Edwards. I think the way the bill is structured now is
actually pretty good. I think that the members of the
Commission should be appointed by Congress. I think this Sunset
Commission should be an agency of Congress so that--I mean,
ultimately the recommendations are going to be forwarded to
Congress, and I think that there can be greater prestige and
clout--a word that was used earlier--if these are Members of
Congress appointed by the Speaker and the majority leader. I
think the recommendations will get more thorough analysis by
Members of Congress.
Mr. Weldon. Would each of you agree with that, or would you
offer an olive branch to the White House?
Mr. Schatz. Well, clearly the Justice Department's letter
will have some impact on what happens at the subcommittee and
committee levels, so I would really defer judgment until we see
what they have to say and then do a separate analysis, because
it wasn't necessarily what we were looking at specifically when
we came before you this afternoon.
Mr. Weldon. I see my time has expired.
Mr. Davis, did you have any questions for this panel?
Mr. Davis. Yes, Mr. Chairman. Thank you very much.
Perhaps each one of the panelists could just respond. I
mean, Texas is a big State, but it is small in comparison to
the United States of America, and getting around to each one of
the agencies obviously is quite time consuming and labor
intense. Given the Texas experience, do you think that the
amount of--or that we would get to the agencies in such a
manner that we could effectively carry out the intent of the
Commission?
Mr. Berthoud. Congressman, I think that's a good question.
I think Congresswoman Morella was asking questions similar to
that, and I think part of the answer--Texas is not the United
States. The United States is not Texas. Washington also has
tools such as the General Accounting Office, such as the
Congressional Budget Office that I think will be of great
assistance to this Commission.
Bill Eggers I would recommend to the committee has done
terrific work on the Texas Commission, and the committee might
want to--and I would be happy to provide information on how to
get a hold of Mr. Eggers. I've seen him give a presentation on
what was done in Texas. It's terrific. I just wanted to amend
that to my comments and for the sake of the committee.
Mr. Schatz. I would agree with my friend from NCU here
because there are resources that do exist. We put together a
list each year called ``Prime Cuts,'' which is more than 550
recommendations that are gathered from CBO and OMB and years of
congressional proposals. That is a laundry list of what could
be done. There will be obvious disagreements about whether
those things are appropriate or agreeable to the Congress, but
the information does exist.
I think what the Sunset Commission would be able to do is
to consolidate a lot of what is out there in a way that would
be more understandable to the taxpayers and perhaps more
acceptable and maybe more objective in terms of what is being
presented to Congress. It would be outside of the committee
process, perhaps be less partisan, and hopefully result in
something that could be used.
The Grace Commission, for example, made over 2,400
recommendations, $424 billion in savings over 3 years. That was
about--was 160 senior business people and about 2,000
volunteers over a year-and-a-half. So there are experiences
over the years--the Hoover Commission, other Commissions have
done this type of work in the past.
Obviously, if you appoint a Sunset Commission and you're
not getting your money's worth, it is time to reexamine whether
it's working well.
Mr. Edwards. I think, you know, the one role of the Sunset
Commission would be to do something that the GAO and the
departmental IGs and others don't currently do. There's
currently a lot of focus, and the GAO does a tremendous job in
looking at management reform and management issues and
financial issues with the agencies, but they don't look at
agency and program possible terminations and they don't look at
how to move Federal activities into the private sector, and I
think that would be an area where a Sunset Commission would
have to get staff specialization to look at experiences of
other countries and to look at how a lot of these agencies and
programs could be moved to the private sector.
Mr. Davis. Mr. Chairman, I don't have any further
questions. I certainly just want to thank the witnesses for
their testimony. I appreciate their response.
Mr. Weldon. Well, I thank the ranking member for his input
and all the Members who attended the hearing, and I certainly
thank this panel for their very useful input. Again, I thank
all of the witnesses.
The record will be left open for a couple of weeks to allow
Members to submit questions in writing and for additional
comments and extension of remarks.
With that, this hearing is now adjourned.
[Whereupon, at 4:15 p.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]