<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:88328.wais]
LINKING PROGRAM FUNDING TO PERFORMANCE RESULTS
=======================================================================
JOINT HEARING
before the
SUBCOMMITTEE ON GOVERNMENT EFFICIENCY,
FINANCIAL MANAGEMENT AND
INTERGOVERNMENTAL RELATIONS
of the
COMMITTEE ON GOVERNMENT REFORM
and the
SUBCOMMITTEE ON LEGISLATIVE AND
BUDGET PROCESS
of the
COMMITTEE ON RULES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 19, 2002
__________
Serial No. 107-228
__________
Printed for the use of the Committees on Government Reform and Rules
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
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____________________________________________________________________________
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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
JOHN SULLIVAN, Oklahoma (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 Government Efficiency, Financial Management and
Intergovernmental Relations
STEPHEN HORN, California, Chairman
RON LEWIS, Kentucky JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California MAJOR R. OWENS, New York
ADAM H. PUTNAM, Florida PAUL E. KANJORSKI, Pennsylvania
JOHN SULLIVAN, Oklahoma CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Bonnie Heald, Staff Director
Dan Daly, Counsel
Chris Barkley, Clerk
David McMillen, Minority Professional Staff Member
COMMITTEE ON RULES
DAVID DREIER, California, Chairman
PORTER J. GOSS, Florida MARTIN FROST, Texas
JOHN LINDER, Georgia LOUISE McINTOSH SLAUGHTER, New
DEBORAH PRYCE, Ohio York
LINCOLN DIAZ-BALART, Florida JAMES P. McGOVERN, Massachusetts
DOC HASTINGS, Washington ALCEE L. HASTINGS, Florida
SUE WILKINS MYRICK, North Carolina
PETE SESSIONS, Texas
THOMAS M. REYNOLDS, New York
Matt Reynolds, Staff Director
Subcommittee on Legislative and Budget Process
DEBORAH PRYCE, Ohio, Chairwoman
PORTER J. GOSS, Florida LOUISE McINTOSH SLAUGHTER, New
DOC HASTINGS, Washington York
SUE WILKINS MYRICK, North Carolina MARTIN FROST, Texas
DAVID DREIER, California
Chin-Chin Ip, Staff Director
C O N T E N T S
----------
Page
Hearing held on September 19, 2002............................... 1
Statement of:
Daniels, Mitchell E., Jr., Director, Office of Management and
Budget..................................................... 39
McGinnis, Patricia, president and CEO, Council for Excellence
in Government; and Mortimer L. Downey, principal
consultant, PB Consult, Inc................................ 52
Walker, David M., Comptroller General of the United States... 11
Letters, statements, etc., submitted for the record by:
Daniels, Mitchell E., Jr., Director, Office of Management and
Budget, prepared statement of.............................. 41
Downey, Mortimer L., principal consultant, PB Consult, Inc.,
prepared statement of...................................... 86
Horn, Hon. Stephen Horn, a Representative in Congress from
the State of California, prepared statement of............. 96
Maloney, Hon. Carolyn B., a Representative in Congress from
the State of New York, prepared statement of............... 98
McGinnis, Patricia, president and CEO, Council for Excellence
in Government, prepared statement of....................... 55
Pryce, Hon. Deborah, a Representative in Congress from the
State of Ohio, prepared statement of....................... 9
Thompson, Hon. Fred, a Senator in Congress from the State of
Tennessee, prepared statement of........................... 3
Walker, David M., Comptroller General of the United States,
prepared statement of...................................... 14
LINKING PROGRAM FUNDING TO PERFORMANCE RESULTS
----------
THURSDAY, SEPTEMBER 19, 2002
House of Representatives, Subcommittee on
Government Efficiency, Financial Management and
Intergovernmental Relations, Committee on
Government Reform, joint with the Subcommittee
on Legislative and Budget Process, Committee on
Rules,
Washington, DC.
The subcommittees met, pursuant to notice, at 2 p.m., in
room 2154, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the Subcommittee on Government Efficiency,
Financial Management and Intergovernmental Relations)
presiding.
Present for the Subcommittee on Government Efficiency,
Financial Management and Intergovernmental Relations:
Representatives Horn, Schakowsky and Maloney.
Present for the Subcommittee on Legislative and Budget
Process: Representative Pryce.
Staff present for the Subcommittee on Government
Efficiency, Financial Management and Intergovernmental
Relations: Bonnie Heald, staff director; Henry Wray, senior
counsel; Dan Daly, counsel; Chris Barkley, clerk; David
McMillen, minority professional staff member; and Jean Gosa,
minority clerk.
Staff present for the Subcommittee on Legislative and
Budget Process: Chin-Chin Ip, staff director.
Mr. Horn. A quorum being present, the subcommittees will
come to order. Today the Subcommittee on Government Efficiency,
Financial Management and Intergovernmental Relations is holding
a joint hearing with the Subcommittee on Legislative and Budget
Process of the House Rules Committee. I welcome my fine
colleague, Ms. Pryce, who chairs that subcommittee, and the
distinguished members of both subcommittees.
Today's hearing is on the important subject of linking
program funding to performance results. Washington
policymakers, both in the executive branch and Congress, devote
an enormous amount of time each year deciding how to spend the
taxpayers' money. However, too little time is devoted to
determining what that spending accomplishes.
We tend to measure success by how many job training
programs we enact, how much money we appropriate for them, and
how many training grants we award. We rarely look at what those
programs actually achieve, such as how many trainees actually
obtain and retain jobs.
In recent years, the focus has begun to shift from process
to results. The Government Performance and Results Act of 1993,
appropriately called the ``Results Act,'' provided the impetus
for this change. However, the transition toward results-
oriented, performance-based decisionmaking involves many
challenges, and the pace has been slow.
Federal agencies are using their Results Act plans and
reports to try to define and measure the results of their
performance. Many agencies have made significant progress.
However, an important link has been missing. Policymakers have
failed to establish a connection between performance results
and their funding decisions. Until that link is fully in place,
the Results Act will remain largely a paperwork exercise, and
the effectiveness of funding decisions will remain largely
untested.
Fortunately, the current administration is intent on
establishing this link. President Bush designated budget and
performance integration as one of the five governmentwide
initiatives in the President's management Agenda.
In furtherance of this initiative, the Office of Management
and Budget has developed a Program Assessment Rating Tool known
as PART--PART being Program Assessment and Rating Tool. We will
hear much about this assessment tool today, and we are
delighted to hear it. During the fiscal year 2004 budget cycle,
the PART process will be used to evaluate the performance of
Federal programs that account for more than 20 percent of all
Federal spending. In future budget cycles, these evaluations
will be extended to all other Federal programs.
The PART process and the broader Presidential initiative to
integrate budgets and performance represent an important effort
to launch the Federal Government on the road toward results-
oriented, performance-based decisionmaking.
All of our outstanding witnesses today are important
leaders in this quest. I welcome you and look forward to your
testimony.
I am also pleased that another outstanding leader in this
effort, Senator Fred Thompson, has submitted a written
statement for the hearing; and, without objection, his
statement, which is very excellent, will be put in the hearing
at this particular point. Senator Thompson wanted to join us
today, but he is unable to attend due the press of Senate
business, and we would sure like them to get that business and
get it back to the House. Without objection, his statement will
be included in the record.
[The prepared statement of Senator Thompson follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Horn. I now yield to my cochair of today's--she's
coming soon--and that will be Mrs. Pryce.
So we will then start with the Comptroller General of the
United States. Mr. Walker has done an outstanding job in his
role as the Comptroller General in his 15-year term, and we are
delighted to have him here. He has been in many of our
hearings, and we thank not only him but his very fine staff
throughout the Nation. In our recent program of terrorism,
about 15, 20 hearings, there has always been help from the GAO,
so thank you.
Ms. Pryce, come right here. We were just about to interview
the Comptroller General, but you have an opening statement, so
please join us.
Ms. Pryce. Well, Mr. Chairman, I appreciate your waiting or
your proceeding, and I'll just put this in the record--I don't
need to read it. Thank you--in the interest of time.
Mr. Horn. OK. You mean, there aren't pearls we should be
looking at right now.
Ms. Pryce. Go right ahead.
Mr. Horn. OK.
[The prepared statement of Hon. Deborah Pryce follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Horn. Mr. Walker knows the routine of this committee,
so----
[Witness sworn.]
Mr. Horn. It is a great pleasure to have you here.
STATEMENT OF DAVID M. WALKER, COMPTROLLER GENERAL OF THE UNITED
STATES
Mr. Walker. Thank you, Chairman Horn, Chairwoman Pryce,
other members of the subcommittee. It is a pleasure to be here
today to discuss efforts to link resources with results, what
some people have referred to as performance budgeting.
The current administration has made linking resources to
results one of its top five priorities and a key item on the
President's management agenda. In this regard, the Office of
Management and Budget's latest initiative, the Program
Assessment Rating Tool, also referred to as PART, has been
designed to use performance information more explicitly in the
Federal budget formulation process by summarizing performance
and evaluation information.
In my testimony today, I outline a lot of information. At
this time, Mr. Chairman, with the concurrence of you and the
other subcommittee members, I would like to have my full
statement included into the record so I can just summarize key
elements. Is that all right, Mr. Chairman? Thank you. Then I
will move on to summarizing key elements.
Three key points at the out set. First, our Nation faces a
very serious long-range fiscal challenge, which should serve to
frame our discussion. The first board that I have illustrates
that, and it is also in my testimony.
If you look at how the composition of the Federal budget
has changed in the last 40 years, it's been very dramatic. In
1962, when John F. Kennedy was President, 68 percent of the
budget was discretionary. Congress could decide each and every
year how to spend those funds. In 2002, it's down to 37
percent; and trends show that it's going to continue to
decline, which means that you, Members of Congress, will have
less and less discretion unless something is done in deciding
how to meet current and emerging national needs.
Given our longer-range fiscal imbalance, which I'm going to
show now, there is also a need to broaden the measures and
focus of the Federal budget process to accommodate these goals.
What this board represents is GAO's 50-year-long range
simulation of what the future of the Federal budget looks like
if you assume current law for tax policy as a percentage of the
economy and if you assume that discretionary spending grows by
the rate of the economy, which some would argue is a
conservative assumption, and that the Social Security and
Medicare trustees are correct in what they expect for the
spending on those programs to be based on their best estimate
assumptions. If you assume they're correct, if you assume the
discretionary spending grows by the rate of the economy, this
is our future.
The bottom line is this. Due to known demographic trends
and rising health care costs, starting in a little over 10
years, we will start experiencing a period of rapidly
escalating deficits as far as the eye can see.
Now, what does this mean? This means at least a couple of
things. We need to somehow figure out how we can have different
metrics and mechanisms to consider the longer-term implications
of current legislative of proposals because we might be able to
afford some things today that we won't be able to sustain
tomorrow. Second, it means we need to start looking at the
base--the base of Federal spending, the base of tax policy, the
base of everything that causes this gap to arise in the future
years because the numbers don't add up.
The status quo is unsustainable. Something is going to have
to give. And it's more than just looking at entitlement
programs. It's also looking at discretionary spending
programs--which ones are working, which ones aren't working,
which ones are generating a higher return, which ones may have
made sense in the past but may not make sense today or for the
future.
So in order to address these emerging challenges it's
necessary to address not only the entitlement programs but also
the base of the budget. And it's important not just to look at
spending, traditional spending, which the PART is intended to
do. It's also important to look at tax preferences which all
too frequently are off the radar screen, and I will show you an
example of that if we can.
If you look at the health care area as an example, you can
see that 72 percent of the, ``expenditures'' that relate to
health care at the Federal level are mandatory outlays. There
is a discretionary component. But tax expenditures represent 20
percent of the Federal commitment to the health area. Health
care represents the No. 1 tax preference in the Internal
Revenue Code, and yet it's largely off the radar screen. Are
those tax preferences achieving what they're intended to or
not? I think that has to be part of the equation.
We are mindful that this kind of review will also in the
end require a proper national debate, because the American
people do not understand the nature, extent and significance of
this gap and, from a practical standpoint, elected officials
will have to make sure that they are educated so that you don't
get too far ahead of the public.
But back now to performance budgeting. Credible outcome-
based performance information is absolutely critical to foster
the type of intelligent debate in understanding what's working,
what's not working and how do we go about re-examining the
base. Performance information can help us in this regard, but
it will not provide mechanistic answers for budget decisions
nor can performance data eliminate the need for considered
judgment and political choice. If budget decisions are to be
based in part on performance data, the integrity, credibility
and quality of this data and the related analyses become even
more important.
Moreover, in seeking to link resources to results, it is
necessary to improve government's capacity to account for and
measure the total cost of Federal programs and activities. It's
not just what results are achieved but at what cost; what is
the return on investment, what is the cost/benefit relationship
and what are the alternatives if the Federal Government is not
part of the equation?
The Government Performance and Results Act, also known as
GPRA or the Results Act, expanded the supply of performance
information generated by Federal agencies. It provided the
foundation. But progress has been relatively slow.
We now need to take it to the next level. We need to make
sure that there are outcome-based measures, that they're linked
with cost and that we have a rigorous process by which the
administration can end up making recommendations to Congress
and Congress can make decisions through the appropriations
process, and can take actions through the oversight process,
authorization process, etc.
OMB's PART proposes to build on GPRA by improving the
demand for results-oriented information in the budget. It has
the potential to promote a more explicit discussion and debate
between OMB, the agencies and the Congress about the
performance of selected programs. Improving budgetary debates
is always a good idea, but caution is in order at this stage
about expectations from this process. The accuracy and quality
of the evaluation information necessary to make informed
judgments is highly uneven throughout the Federal Government.
In the long run, sustaining a credible performance-based focus
in budgeting will require significant improvements in
evaluation capacities and information quality across Federal
agencies as well as with third parties who implement many
Federal programs.
Finally, and most critically, the Congress must play an
active role with regard to the performance-based budgeting
concept. Congress has to buy into this concept. It has to
devote sustained attention to this issue. And Congress needs to
take this performance information that is coming out of GPRA
and use it in making its own decisions with regard to the
annual appropriations process. Congress also needs to take this
type of information and use it for purposes of oversight.
Congress needs to consider this type of information in
conjunction with the authorization process.
In my testimony I lay out some suggestions that Congress
may want to consider about how it might be able to go about
playing an active role, because only through the sustained
attention by the Congress as well as the executive branch over
a period of years can this concept become a realty. We have
seen predecessors like ZBB, zero based budgeting, and other
types of concepts come and go; and it's only through sustained
commitment by both the executive and the legislative branch
that this approach can bear fruit.
The graphics that I showed you serve as demonstrable
evidence that we really have no choice. We must begin to look
at the base. We must begin to separate the wheat from the
chaff.
Thank you.
Mr. Horn. Thank you, General.
[The prepared statement of Mr. Walker follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Horn. I will now yield to Mrs. Schakowsky. She has also
participation in another committee, I believe; and then we
will----
Ms. Schakowsky. Thank you, Mr. Chairman; and I thank the
witnesses for their participation today.
As one of our witnesses points out, the primary result of
the Results Act has been deforestation. Agencies produce glossy
reports full of performance goals and little changes. These
goals are often so general that they're meaningless. One agency
had as a performance goal to complete its plans for work to be
done in the following year. For another project, the goal was
to achieve a customer satisfaction rating of 80 percent.
I share the concerns that these performance measures are
not achieving the intentions of the legislation. However, I am
not sure that linking vague measures to the budget process will
achieve better government, and I have strong concerns about the
objective of that process.
It is all well and good to hold hearings to talk about
accountability in the budget process. It is particularly
important at a time when the country is faced with a crisis in
corporate responsibility. However, we have to make sure that
this is not an effort to single out programs that are political
targets like welfare and public support programs.
It was interesting to me in the charts that you presented
that Social Security, Medicare, Medicaid, health care were
mentioned. It must not be an effort to go after the low-hanging
fruit and not go after the really bad actors that waste
billions. If we don't clean up the financial management at the
Department of Defense, which this subcommittee has had numerous
hearings about, then all of the rest of this is a wasted
effort.
The newspapers continue to be full of stories of the
accounting failures at Enron, WorldCom and Tyco. There are
still stories about document shredding at Arthur Andersen. For
years we have asked the Government to behave more like
business, and I'm afraid the Department of Defense chose the
wrong models.
Last year, the Inspector General reported that the Defense
Department had $1.2 trillion in expenditures that could not
properly be accounted for in the annual audit. The GAO has
repeatedly testified that the failure of the Defense Department
to be able to audit its books is what is keeping the entire
Government from being able to have a clean audit.
A few weeks ago, Representative Shays and I held a hearing
where it was revealed that the Department of Defense was
selling surplus chemical production suits on the Internet for
$3. At the same time, it was purchasing those same suits from
the manufacturer for $200.
Mr. Horn and I have held hearing after hearing documenting
the waste, fraud and abuse of Government credit cards
throughout the Department of Defense. In one of our first
hearings on credit cards, the GAO testified that the Navy
policy was to not inventory items that are easily stolen. Quite
frankly, I found that hard to believe.
At our July hearing, I asked Dee Lee to explain the policy.
She said, ``the policy was always that sensitive property
should be recorded and tracked.'' The Navy, however, continues
to argue that Palm Pilots and digital cameras don't have to go
on an inventory list. I guess the Navy performance goal is buy,
buy, buy.
If the performance measure was balancing the books, the
Department of Defense would fail. If the performance measure
was accounting for property, the Department of Defense would
fail. If the performance measure was responsible management of
procurement through Government credit cards, the Department of
Defense would fail.
At the same time, DOD is instituting an entirely new
procurement system that eliminates goals entirely in the guise
of reform. DOD will no longer lay out requirements that weapons
systems have to meet, let alone time lines by which they have
to meet them. Indeed, the Department of Defense will allow
weapons programs to build whatever they can. Then every 2 years
or so DOD will check in to see whether the technology has
matured enough to deploy something. That is what the Pentagon
is doing with missile defense, and it has resulted in a giant
slush fund with absolutely no accountability. This is the model
DOD wants to copy for all of the programs.
I am pleased that missile defense is one of the programs on
the list today. However, I am surprised.
In July, Thomas Christie, Director of Test and Evaluation
for the missile defense program, testified before one of our
subcommittees that there are no objective measures against
which the missile defense program will be judged. This is a $8
billion a year program with no objective performance measures.
This morning, the Defense News reported that Secretary
Rumsfeld was developing a plan to streamline the legislative
requirements on the Defense Department to make the Department
more efficient. Notably absent from this plan were any
specifics on improving accountability at the Department.
I remain skeptical about linking vague measures of
performance to the budget process. However, if Congress is to
be convinced that this administration is serious about
management accountability, it can be done by cleaning up the
mess at DOD.
Some criticize as unpatriotic those who are questioning
blanket budget increases for the DOD during a time of war. I
believe just the opposite is true. Those who refuse to hold the
Defense Department accountable are endangering the safety of
the men and women who risk their lives to protect us and
endangering the very safety of each and every one of us and our
constituents in this country.
Thank you, Mr. Chairman.
Mr. Horn. I thank the gentlelady from Illinois.
We will now have the testimony of Mr. Daniels, and I think,
as you know, this is an investigating committee, so we do ask
you to affirm the oath.
[Witness sworn.]
Mr. Horn. We are delighted to have you here, and please
proceed in any way you'd like.
STATEMENT OF MITCHELL E. DANIELS, JR., DIRECTOR, OFFICE OF
MANAGEMENT AND BUDGET
Mr. Daniels. The way I would like, I would guess, is the
way the committee would like, that's that I will be very brief.
I've submitted written testimony. Let me just summarize it
quickly for you, Mr. Chairman.
I do want to start by sincerely thanking this committee for
paying attention to a subject that's been paid too little
attention, I would say, by the Congress in the aggregate over
time and for holding this particular hearing. Sometimes these
occasions are burdens, and then sometimes they're really very
welcome, and this is in the latter category, and I cannot
salute you enough for, as I say, devoting your time to a
subject that many would prefer to ignore.
I think I can sum up in plain English the subject that
brings us together and the approach that the administration has
embarked on to address it. For far too long, the only questions
that we seemed to address as spending is enacted year on year
is how much, and never how well, is the money being spent.
Several brave Members of Congress and innovative Members of
Congress, some years back, bothered by this, passed a statute
and some related measures that did attempt to inaugurate an era
of accountability, to demand proof of performance as a
condition for continued spending, let alone increased spending.
But, after 10 years, we find that the ambitions of that
legislation had not been realized or really even, I would say,
approached.
We've taken it very seriously. We promised the Congress at
the time this administration came to office that we would, and
the specific subject on which you summoned us here today is the
manifestation, or the latest, of our seriousness of purpose.
Very simply, we believe that it's time to put the burden of
proof for Government spending where it should be, on the
proponent of each dollar that should be spent.
Frankly, here in Washington, and only here, the burden is
almost always on the person who would challenge the embedded
base of spending, to which the Comptroller General referred. In
all my years in business, I was always on the hot seat in
proposing to my colleagues and to a board of directors spending
for a given fiscal year, first to prove that the dollars my
unit had spent in the past had realized the appropriate
results, the required rate of return; and only having proven
that did I have standing to ask for that money again, let alone
an increase. That's the way the world works and the way one day
we hope it will work here.
The principles on which we are operating again are very,
very simple. They are transparency and visibility and
accountability.
In terms of transparency, we hope to elevate and to publish
in the budget, in all future budgets, measures of results, done
as credibly and openly as we can. The instrument that we have
used, we assigned some of the best people in OMB to work on
this. We've called on outside academic and past practitioners
from administrations of both parties to help us. We feel an
obligation that the measures being employed be nonideological,
be neutral, be objective, be based on the best evidence
available, which everyone knows is still in most cases far too
imperfect.
But we're only after one answer, and that is, does a given
program or activity work or not? To what extent does it deliver
on the purposes Congress determined were in the public
interest?
There's a separate argument that quite properly goes on
about whether a given activity should be undertaken at all, but
we want to separate that argument and leave it for its proper
place in the political arena and focus on the question, if
Congress has decided that a given activity should occur, is it
being done well or not? It has always seemed to me that this
ought to be a quest that people of all ideologies could
embrace. Those who believe that Government ought to be more
limited than it is, I guess not surprisingly, would want to put
programs under close scrutiny. But those who sincerely believe
in a more activist role for Government, I would think, would be
the most offended of all to find money being spent poorly to
achieve a given purpose, when there were better options
available.
So we hope this is something we can unite around, and we
thank this committee for its past work and its current
attention to a subject that--about which we feel great
excitement and to which we feel great commitment.
[The prepared statement of Mr. Daniels follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Horn. We're going to have a couple of votes pretty
soon, so let me get a couple of paragraphs in and maybe see how
we respond to it.
In both Senator Thompson's statement and my own over the
various years are the following: that every good, well-managed
corporation, and the same for a university, that they take
their executives and their boards out to a retreat to start
saying, look, what are we doing here and how do we deal with
it. Management problems come up, and that's certainly helpful.
I would hope that we would have Presidential appointees
such as the Director of OMB and the, say, Deputy Secretary of a
particular agency or a Cabinet officer, him or her, and we need
to have the Presidential appointees connected with the
authorization committees, the appropriations committees, where
they can sit around and then see what ought to be done. Some of
it can be done in open things, and some they ought to just get
off in the woods and say let's really deal with this problem.
And I would hope that the President's appointees would be
matched by the elected officials to Congress in the Senate and
the House, and they can discuss and talk about deadbeat
programs that they all know they have in some of these various
committees.
I would hope that there would be that connection and not
just say, oh, well, here, let the staff do it, and--either OMB
or up here. No. Let's get the person that has the authority,
either of the President of the United States or the people of
the United States. So--and the Comptroller General has--at the
beginning of every single Congress, a sort of red light book, I
call it, even though they're nice and blue and white. But the
fact is that they are right on the mark in terms of certain
problems we ought to face up to here at this end of
Pennsylvania Avenue and there at that stage.
I was delighted when you put in that management booklet.
And even if the Xeroxes didn't quite say which was yellow and
green and what not, it showed you were very frugal in terms of
your Xerox machines because the Armed Forces around here are in
rainbow's colors and all the rest. So we sort of laugh about
that a little. But it does make a point. And so the Rules
Committee is the ones that they can help do it.
Now, my biggest supporter here in the Congress was the
majority leader, Mr. Armey, and he was very supportive of all
the bits and pieces of hearings; and we don't know who the next
majority or minority will be. But whoever they are, they ought
to deal with this; and if you've got better ideas, I'm all for
them. I would like to leave them to the Rules Committee.
Mrs. Pryce is the chairman of the Rules Subcommittee on
Legislative and Budget Process, and I would think that--and if
you want to comment on this, Deborah, that we just--we need to
have some of the system, shall we say, of both ends of the town
and both ends of the Capitol. So I don't know if you want to
say something on this.
Ms. Pryce. Well, thank you, Mr. Chairman. I'm basically
here to learn about this and to see where we can take it as a
part of our Rules Committee package, if anywhere, and it's
something that I think this committee has looked at more
thoroughly than we have in Rules. So I appreciate the testimony
of the gentlemen and wonder if you might share for me how you--
either one of you--how you believe we could--what troubles you
would see us having if we try to implement this: where we would
start? Where it would go? How much resistance there would be?
And the pitfalls that we would face along the way, if you have
given that any consideration.
Mr. Daniels. Ultimately, of course, the effectiveness of
this endeavor rests on the seriousness with which Congress in
its spending functions views the findings that are produced.
That starts with having well-grounded findings, as I said, a
neutral way of measuring and the best information, demanding
better--ever better information from the departments.
Again, I think there is a burden of proof issue here. The
departments have to understand that the absence of information
is their problem. If they can't prove their case, then they
ought--their future--our future budget proposals and hopefully
Congress's reaction to them will be a skeptical one. So the
first burden I think is on the administration to hold itself to
high standards, to improve the quality of data that is produced
and measured and to present it in a neutral and credible way to
the Congress.
That still leaves the largest question, will anybody care?
Will proponents of a program, those with pride of authorship or
an emotional attachment, care at all that their pride and joy
isn't delivering what they hoped it would or what they
intended? And our only answer to that will be ever greater
visibility. Visibility matters, we find, Ms. Pryce.
In a related accountability step to which the chairman made
reference, we are grading our departments on their management,
everyday management of their problem areas. In fact, some of
these problem areas are drawn from the general watch list that
you referred to and we found has a remarkably tonic effect in
terms of the attention of management and the seriousness with
which they view these problems, that somebody's keeping score
and somebody's watching in the world. Someone out there might
notice that they're doing a poor job.
Ms. Schakowsky is now gone, but I agree completely with her
view about the importance of management at the Defense
Department. They got a very red report card because the
problems she's talking about are very real and we see them the
same way. So in just that way, I'm hoping that as we
systematically begin to analyze and report on the performance
of specific programs and activities that those responsible for
those programs will work harder to improve their performance
and the data that proves their performance and, finally, that
Members of Congress will find it inconvenient or uncomfortable
or awkward to vote year after year for more money, more money,
more money for a program that's demonstrably failing.
Mr. Horn. General.
Mr. Walker. Thank you, Mr. Chairman.
First, I think both the Congress and the administration
have a responsibility to be focused on linking resources with
results. I think we have provided some fairly compelling
graphics as to why the status quo is unsustainable. We need to
start looking at the base. That means in the appropriations
process, that means in the authorization process, and the
oversight process as well.
In our testimony we lay out the idea that the Congress may
want to consider having a performance resolution. It may want
to have a set of principles and decide that there are certain
types of areas or functions or activities that it would like to
single out to focus on.
The administration is using the PART process as a tool to
try to be able to help further progress in the area of linking
resources to results; and I think it's appropriate that the
executive branch, you know, take the lead to do this in a
comprehensive manner. That's part of what management is all
about. That's part of the reason why you have OMB to link the
management with resource allocation decisions.
I think it is also going to be important if the executive
branch is going to be making recommendations to the Congress,
the Congress will need to have a reasonable degree of assurance
as to the credibility of the data, the methods, the analysis,
and the basis for the recommendations. The Congress at some
point in time may want GAO to be involved in doing related
reviews; and, obviously, if you do, we're happy to work in that
direction.
I also think that, as Mitch alluded to, one of the things
that I have said quite frequently is you've got to have three
things to make any system, program or policy work effectively.
First, incentives for people to do the right thing.
Incentives are inherent in linking resources to results. If it
has consequences on resources, I mean, that is an incentive. In
other words, we want you to accomplish certain objectives; and
if you don't accomplish certain objectives then you know it is
going to have a negative consequence. It's not just linking
resources to results. It's also tying agency and individual
performance measurement rewards systems to those desired
results, too. So it's the budget process, but it's also the
individual performance appraisal process as well. It goes down
to that level of people and Government has not done that in the
past.
The second thing is transparency, to show that somebody's
watching and to provide an incentive for people to do the right
thing, which Mitch talked about.
And the third thing you have to have, and the Congress has
a critically important role to play here, is accountability. If
the right thing is not done, if the results aren't achieved, if
the resources aren't used judiciously and prudently, then there
has to be a consequence. And if you don't have that, then
people are going to ignore you. They'll just absolutely ignore
you. And it doesn't matter whether it's in the public sector,
private sector, not-for-profit sector.
So incentives, transparency and accountability. Linking
resources to results is one step. But we also have to deal with
the human capital dimension, which involves performance
appraisal systems and other actions.
Mr. Horn. Would you like to add anything, Director?
Mr. Daniels. No, it's well said.
Ms. Pryce. Mr. Chairman, may I just ask--you talk about
consequences. Do you have anything in mind other than monetary
consequences, budgetary consequences, or is that what you're
referring to? I mean, do you have other thoughts?
Mr. Walker. I think there can and should be consequences to
a program. There should be consequences to the departments and
agencies, and there should be consequences to individuals as
well. Obviously, to the extent that you link it from a monetary
standpoint, it is going to have an effect on how much resources
you're going to be given or not given. It is going to have an
impact on how much of a raise you're going to receive or bonus
you're going to receive or not receive. In time it could be
that if appropriate steps aren't taken, there would be a
consequence as to whether or not the program continues or the
policy continues in total or in part.
While OMB is from a conceptual standpoint doing a very good
thing by trying to look at these programs, on the spending
side, I think it's important we don't forget about tax
preferences. There's a tremendous amount of money involved in
tax preferences. What are we getting for those? Like, for
example, the health care preference.
In some cases, I would argue the incentives that are being
provided on the tax side and the spending side are working at
cross purposes. They're not well aligned, and they exacerbate
our problem, and I will be happy at some point in time to
elaborate on that, if you want.
Mr. Daniels. And I would chime in, if I may. I think that,
first of all, ultimately there should and will need to be
consequences for managers who fail to deliver. And that happens
all too rarely. Now, some harsh things were said; and, as I've
indicated, I agree with most of them about the Department of
Defense. But a captain who runs a ship aground will suffer
immediate consequences, and throughout that branch of our
Government it's not at all unusual for failures of performance
to result rather quickly in sanctions and, conversely, great
success to be rewarded. That happens very rarely in most of the
rest of the Government, and that will need to be part of the
picture ultimately.
I also agree about tax expenditures. The only thing I want
to say about this is that it is going to be a long journey, and
we've tried to start where we thought it was most practical to.
We certainly agree in theory that as soon as we can we want
them moved to all the programmatic activity and ultimately to
the things like tax expenditures. We chose--we tried to be
selective in this first year in identifying those activities
that were most susceptible to measurement, and we'll value the
committees' and the whole Congress' input as we try to make
that process better next year than it was this.
Mr. Horn. You know this, and the General knows this, but
let's get it on the record. Many Federal programs lack reliable
data to serve as a basis for evaluating their performance
results. Also, according to the GAO, many agencies have a
limited capacity to conduct program evaluations. How will the
PART process deal with those challenges?
Mr. Daniels. Again, it starts by putting the burden of
proof on the program that it will be an expectation that
evidence of performance--quantitative and concrete and reliable
evidence be provided. And the--no one is blind to the
difficulties here of measurement, but we can't any longer let
the perfect be the enemy of the good. We've got to get started.
That's what we've embarked on. And, let's be honest, most
programs would prefer and the people running them would prefer
not to be measured. So some programs haven't made an attempt,
any honest or any genuine attempt to develop the kind of
evaluations that are readily available.
So I once heard George Shultz tell what must be an old
diplomatic joke. Why does the Frenchman kiss the lady's hand?
And the answer is, he has to start somewhere. And that's what
this year is about.
Mr. Horn. I think Benjamin Franklin got ahead of George
Shultz on that one.
Mr. Walker. Mr. Chairman, could I mention something on
that? That's a hard one to follow, but I'll try. Mine won't be
as exciting as Mitch's.
But I think all departments and agencies basically have to
do certain things. One, they have to say, why were we created?
What was the statutory basis for our creation? What is our
mission? What are we trying to accomplish? How do we measure
success?
And success has to be measured in terms of outcomes. There
may be intermediate measures that they also track because they
know that these intermediate measures, over time, will end up
leading to positive outcomes, but in the end, what it's all
about outcomes. It's about results.
They need to figure out who the key players are who can
contribute toward the desired outcome. Many times it's multiple
departments and agencies within the Federal Government.
Sometimes it's Federal, State and local entities. It could also
be public, private sector players. The Federal Government may
not be the only player in the ball game. Which tools are being
brought to bear? What is the cost? How do you compare the cost
to the positive outcomes, and therefore get a cost benefit
analysis?
That's the type of rigor that people have to be forced to
go through. We need to move from activity-based performance
measures to outcome-based performance measures, and that means
that there has to be some independent assurance above and
beyond what the agencies say. Because human nature being what
it is, whether it's public sector, private sector, not-for-
profit sector, people are going to take the measures that they
are comfortable with and that they think they can look good at.
So you have to have an independent party involved to be able to
assure that the measure is reasonable, relevant and that the
data that is reported is reliable. That's critically important
or else you really haven't accomplished very much other than
another paperwork exercise.
Mr. Horn. Well, we're going to have to--and there's no
use--you're busy people, and so are we. But I want to get in a
few questions now.
What do you think of what I had to say that we get these
people from various parts of the American Government, the
executive branch and the legislative branch, and to get them
to--both authorization and appropriations--and get them off in
the woods, whether it is a Republican at the White House and a
Democrat in the wherever. So what do you think of getting them
together after you've had some staff work out of the OMB and
the Comptroller General's Office?
Mr. Daniels. I think it is a very intriguing idea. I mean,
I don't think we can consult too closely about this. If we were
gathered together, as I understand your suggestion, around the
subject of how well are the programs of today working or not
working, I think this would be very useful. As I said, there's
been so little attention paid to this, so little information,
frankly, available on many accounts, I think it could be a very
healthy and I hope productive exercise.
We need the Congress to begin behaving somewhat more in the
mode of a board of directors. The business analogy is not
perfect, and it shouldn't be, but we ought to, I would hope, be
more aligned than we are around the idea that animates this
discussion. Namely, every dollar taken from a taxpayer and
spent by this Government ought to be spent to good effect, or
we ought to find a different purpose for it. And too often we
don't reach that question.
Mr. Horn. The Congress over 25 years, started with
inspectors general and then we had for about 10 or so years,
the chief financial officer, then the chief information
officer. And I think to--in one way, that we certainly have, I
think, because I read some of these when they come in, and
they're very good about that. So I'd be curious if you think
there's anything else that ought to be done that would aid
people in both the agencies, the White House and OMB and up
here and so how did--is there a better way we can move what
people are doing under the Inspector General, financial and
communications?
Mr. Daniels. I don't know about the--oh, go ahead, David.
Mr. Walker. I think that--first on your other question.
Then I'll answer this one.
I think it would be great if Congress could get together
for half a day with GAO and OMB experts, selected members of
leadership, and leaders of the Budget, Appropriations and
Government Reform Committees in the House and Governmental
Affairs in the Senate to focus on the issue that we're talking
about. Because it's going to take the combined efforts of those
people to make this concept become reality. No matter what the
administration does and no matter what administration it is, if
the Congress doesn't buy into it and if it doesn't have real
implications with regard to appropriations, oversight and
authorization matters, then it isn't going to matter. And so
it's important to do that.
Second, I think one of the dangers that we have right now
at our current management structure is we've got a lot of
silos. We have CFOs, CIOs. We may soon have chief human capital
officer. People also talk about chief acquisition officers and
opther key players.
We're going to have a report that we're going to publish
within the next week, Mr. Chairman, that, as a result of a
roundtable we held last week, I would commend to you and this
committee the summary of that roundtable. I'm confident it will
have some ideas for consideration in this area to try to take a
more integrated approach to this major challenge.
Mr. Horn. Mrs. Pryce and I are going to have to respond to
the Chamber in two votes, and then we want to hear the two
experts in Panel Two, Mortimer Downey, Principal Consultant for
PB Consult, Incorporated, and Patricia McInnis, President and
Chief Executive Officer of Council for Excellence in
Government. So if you can bear with us, we'll be back.
I know both of you are--so you can either stay or go
because----
Ms. Pryce. I just want to thank the gentlemen for their
input today; and, as far as I'm concerned, we can followup
informally on these discussions. We appreciate your testimony;
and I--as far as I'm concerned, you're free to go. Thank you.
Mr. Walker. Thank you very much. I appreciate it.
Mrs. Maloney. I likewise would like to join my colleagues
in congratulating you for your work. I was a cosponsor if this
bill. It's actually the first bill I managed on the floor, so I
have a tremendous interest in seeing that it's implemented. I
appreciate very much your work and will be in touch. Thank you.
Mr. Horn. The recess of the committee with the four votes
that we had to cast on in the Chamber is over. So we thank you
for patience, and that's the way this place is. We never know.
Mr. Downey and Mrs. McGinnis, if you don't mind, we'd like
you to take the oath.
[Witnesses sworn.]
Mr. Horn. Thank you. Thank you for coming. You're well
known to this committee, and so we look forward to your
comments.
Now, we've--all of the written ones automatically go into
our hearing. And you know the thing, both of you, I think. So
we'd be glad to hear from you.
STATEMENTS OF PATRICIA MCGINNIS, PRESIDENT AND CEO, COUNCIL FOR
EXCELLENCE IN GOVERNMENT; AND MORTIMER L. DOWNEY, PRINCIPAL
CONSULTANT, PB CONSULT, INC.
Ms. McGinnis. Thank you, Mr. Chairman.
Mr. Horn. It's modern technology. I was a string-in-a-can
man as a little kid.
Ms. McGinnis. Thank you very much. I really commend your
leadership.
I was asking while you were voting whether this is the
first time these two subcommittees have held a joint hearing,
and it seems to be perhaps even historic. So this is a
wonderful precedent, and we hope that will be many more of
these hearings on this subject.
You know the Council for Excellence in Government well, and
you know our ambitious mission and strategic priorities. We are
interested in attracting and developing the best and brightest
in public service, engaging citizens and improving their trust
and confidence in Government. We have focused a lot of
attention on electronic government as a tool to improve
operations and connect government to the American people and,
finally, to encourage innovation and results-oriented
performance. That's what we're talking about today.
We believe very strongly, as you do, that improving the
development and use of performance and evaluation data to
inform decisionmaking both in the executive branch and Congress
will go a long way toward this view of excellence in government
and raising the public's trust.
GPRA was a big step in the right direction in terms of
linking decisions about the design and funding of programs to
their performance, and that movement has been given renewed
impetus by the budget and performance integration focus and the
President's management agenda.
But, as you well know, this is not the first time the
Government and Congress have thought about managing for
results, and I certainly won't go through the history. I've
included some of it in my written testimony. But the acronyms
are even hard to keep track of because there are so many of
them, from the Hoover Commission to President Johnson's
Planning, Programming and Budget Systems; to President Nixon's
MBO, Management by Objective; to President Carter's Zero Based
Budgeting, ZBB. This concept is a consistent, basic theme
throughout the decades.
So what's different now? I think the enactment of GPRA is a
significant difference because we do have a statutory framework
for this.
Again, the seriousness of this administration and the
President's management agenda are exemplified through this
excellent work on the Program Assessment Rating Tool. But,
despite all that, and even with GPRA, as David Walker and Mitch
Daniels both said, we don't see decisions being made in the
Congress and executive branch very much based on the use of
performance data and the results of high-quality evaluations at
this point. We see promising potential, but that promise has
yet to be realized.
I want to take my few minutes today to go over a series of
recommendations to promote the effective use of this
performance and evaluation data, particularly by Congress, that
were developed and are detailed in a discussion paper called
Linking Resources to Results. This was a study that was done
jointly by the Council for Excellence in Government and the
Committee for Economic Development which, as you know, is a
business group which focuses very much on the performance of
Government.
We have come up with a series of institutional and
procedural changes that we think would--could, if they were
implemented and taken seriously, lead to a quantum improvement
in the quality, quantity, timeliness and utility of performance
and evaluation data.
The central recommendation is the creation of a
congressionally chartered, nonpartisan Center for Domestic
Program Assessment. That's our name. It may not be the perfect
name. We could work on that. But I think it describes what
we're talking about.
The sole mission would be to strengthen and help
institutionalize the link between Government resource
allocation and program design decisions and demonstrated
program effectiveness. And here we're talking not only about
discretionary programs but entitlements and tax expenditures in
this domestic program area.
Such an entity would assess and report regularly and
publicly, and this is a big part of the value of this on the
progress in resolving the country's most significant domestic
issues. It would provide high-quality analysis of performance,
present it in a timely fashion. We imagine that the issues
would be taken up based on some sense of the reauthorization
cycle in Congress, and we would have the ability--this
organization would have the ability to look at programs across
agencies and across committees and subcommittees in the
Congress.
We also called for statutory setasides for program
evaluation which are not consistently used in program
authorizations in order to support independent, high-quality
evaluation of individual programs by Federal agencies. The new
congressional oversight and evaluation procedures, including
some powerful enforcement provisions that we recommend, would
ensure full use of evidence on program effectiveness.
Some of the changes in the House and Senate rules that we
are suggesting: We would suggest requiring that authorizations
for appropriated programs, mandatory spending programs and
significant tax expenditures must have a mandate for an
evaluation of net impact as a condition for floor
consideration; oversight hearings and reports on documented
performance before reauthorization; evidence and potential
effectiveness for new programs would be required before floor
consideration; sunset provisions at least every 5 years for all
major authorizations, mandatory spending programs or tax
expenditures so that Congress could take into account the
performance record before voting on the extension or redesign
of a program.
We would also subject requiring the inclusion in all such
bills, statements of program goals and expected impact which
would also be included in the GPRA strategic and operating
plans.
The enforcement provision: We propose that there be in the
Senate a requirement of a 60-vote majority to waive any of the
above rules and an analogous provision for the House of
Representatives.
We make some suggestions to strengthen the Government
Performance and Results Act and I--with a main suggestion that
I would bring to your attention is our recommendation to amend
GPRA to merge strategic and operating planned segments and
annual performance report segments for similar programs in
multiple agencies so we can look at goals and measures and
results across agencies and programs, rather than just
strategic plans by strategic plan, performance report by
performance report. We think this is consistent with the
administration's initiative in the 2004 budget to pilot the
development of common performance measures across similar
programs, which we applaud.
So, thank you very much, Mr. Chairman and the members of
both subcommittees. We're really encouraged by your interest in
this, and we would like to offer our support and assistance as
you take this issue further. Thank you very much.
Mr. Horn. Well, thank you for that comment.
[The prepared statement of Ms. McGinnis follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Horn. Mr. Downey is well known here, and you both have
MBAs, one at Harvard and one at Yale, and I don't know if that
has any great meaning except that the bricks around the place
are a little different.
But I think I was glad to see the emphasis here. Because
what has burned me over the last few years is that there's been
a lot of schools that have said, oh, we've got a policy school.
And none of them have thought about management, and that really
gets to me. We need people just like you to say the emperor has
no clothes.
Mr. Downey. Well, thank you, Mr. Chairman, for having this
hearing and for your interest in this subject.
It's an interest, obviously, that we share; and I think it
is an interest in managing government better as we all ought to
try to do. That's certainly what we tried to do in my 8 years
at the Department of Transportation, and we really used the
processes of GPRA to the greatest extent possible during that
time period. I think an even stronger linkage between resources
and decisionmaking will make GPRA an even more powerful tool.
Let me just briefly describe what we did. We seized the
opportunities in the act. We became a test bed in the pre-
implementation period. We developed a strategic plan with a lot
of input from outside sources so that we knew what our
constituency and our partners believed. This is very important
in managing what you sometimes think of as a holding company,
creating common goals that everyone in the Department would
understand. We went to greater lengths with the annual
performance plan and with our performance reports.
I think as the process has matured the measures that were
created are transparent and consistent, and there's a lot of
concern within the Department for meeting them. These were
enforced. They were enforced with performance contracts. There
was continuous followup.
It's often said that what gets measured is what gets
managed, something you and I learned during the Y2K experience,
that if you're watching it a better job gets done; and I think
the fact that Secretary Mineta and his team have moved
seamlessly into the office and kept the same measures and the
same goals suggests that we got them at least reasonably right.
Resource availability was a clear part of the process. One
thing we did I don't think some other departments did was
rebalance our performance plans in accordance with the
resources. If Congress gave us less than we asked for, we came
back and said, here's what we can accomplish. Sometimes
Congress gives more than the President asks, and we would say
to the agency, now you have more money. How much more are you
going to achieve? And that became their new performance
contract.
But I think with OMB participating now through the PART
there may be even more of a sense of reality and, if the
Congress adopted some of the same approaches, even more
benefit.
The steps that OMB has taken so far are a good start. Their
willingness to publish the results is a very important step,
taking transparency into the budget process, something that
hasn't always been there before.
The Director does point out that these are not the only
factors that he'll use this decisionmaking, and we understand
that. But these will now be decisions that can be measured
against the outcome of a relatively open assessment. A
President will find it harder to not fund programs that are
effective and well managed, even if he doesn't agree with the
necessity for them. And, vice versa, it will be hard to ask for
funding of politically attractive programs if the results are
not there. So I think the public and the Congress will be
better informed.
Like any process, it's not going to be perfect the first
time out. The administration recognizes that. They've reached
out in a number of directions. They have created an advisory
council which I'm serving on. They have involved a lot of
institutions in test runs and discussion. And they have a goal
of implementing this over a period of time, which is the right
way to do it.
There are risks, but certainly the largest risk is that
this initiative, like many of its predecessors that Pat
mentioned, disappears, goes on that list of PPBS and ZBB and
NPR and others. If you believe that performance is something
that should not drop away, maybe something can be done about
that.
I think one reason that GPRA has been a success is that it
is a statute. In our Department, for example we said this is
going to be around a while. It is worth investing in the
infrastructure and the learning process to do it well. So if
there's a linkage between the Government Performance Results
Act and the budget process this may encourage further efforts.
I know there are concerns about jurisdiction and about
tradition and about roles and responsibilities and authorizers
and appropriators. Years ago, I worked on the Budget Committee
staff when the committee first started, and we had to find our
way into the process. But that also has sustained and continues
to provide leadership at the macro level. I think similar
efforts to assure that performance is part of the debate and
results are--in fact, the measure of success will benefit all
of us, particularly benefit the taxpayers and constituents who
want us to do a good job.
So thank you very much for the hearing, and I would be
happy to answer any questions you might have.
Mr. Horn. Well, thank you.
[The prepared statement of Mr. Downey follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Horn. As a former agency official, what advice would
you give the Office of Management and Budget on how to work
with the agencies to get their support and affirmative
cooperation for the PART evaluations?
Mr. Downey. I think the key one will be to make it a
collaborative process, to listen, to learn. Departments can
learn as well, but I think OMB will benefit from the discussion
and then recognize results with resource decisions. If in fact
at the end of the day the better-managed, better-achieving
programs are raised in terms of resources and perhaps some
others are not, the process will go forward. But keeping the
discussion at the professional level and the fact-based level
will be an important part of that process.
Mr. Horn. Do you believe that the--and you might get in,
Ms. McGinnis any time you want, because they're really for both
of you--do you believe the Results Act should be amended in any
way to incorporate the concept of PART evaluations? If so, what
would you recommend?
Mr. Downey. I haven't looked specifically at language. I
certainly would not suggest that in all of its specific detail
that become statutory. But if, in fact, the Results Act
indicated that budget presentations and other actions would
relate to performance, I think it would help if authorizers, as
they come in with new programs, and reauthorize programs, state
what they believe the results should be. We'll enter into that
discussion and similarly on the appropriations.
So anything that would symbolize and assure that this
linkage continues will be a positive step. But I would not
embody every piece of the process in a legislative
prescription.
Ms. McGinnis. I think I would reiterate the recommendation
in my testimony that GPRA be amended to give more emphasis to
cross-cutting issues and the results of a cumulative impact of
several programs across agencies. I think that's consistent
with what's happening with budget and performance integration
and the use of common measures, but it's also an area of the
PART that could be strengthened.
Mr. Horn. Well, let me go back to what I asked the
Comptroller General and the Director of OMB. As you know, the
Congress put into law inspectors general and we also, 10 years
later, put inthe office of--the committee decided first to put
the financial part there and then with high technology we had a
communications there. And those--some of them I thought were
just not doing much, and some were dumped on the old assistant
people in management and administration and put it in that.
Well, the whole purpose of it was to focus in one area and
to, in the case of chief financial officer, chief information
officer. And do you think that's good? And how do you integrate
their thoughts with this?
Ms. McGinnis. I think integration is a key word, because
one thing, one danger of creating all of these different chiefs
is that they are working in their own stovepipes. So that's why
this model of deputy secretary as chief operating officer which
has evolved I think is so important as a place to bring all of
these pieces together and also why the President's Management
Council I think is such an important integrating organization.
And it has--it was started in the Clinton administration, it
has continued in the Bush administration, and I think matured
over time to the point where it is more and more being seen as
a strategic group of managers who are charged with pulling
together financial management, information management, human
capital management, the inspectors general. And that's all a
good thing.
The fact that budget and performance integration is one of
five elements of a coherent management strategy, I think it's
woven together actually quite well. And anything that you and
we can do to strengthen that capacity and integration would
only be a step in the right direction.
Mr. Downey. I think if there is a point of accountability
for good management, that person, that institution should
benefit from the work of all of those players, the IG, the
chief financial officer and the like, but somebody needs to
have the job of pulling them together and linking what they do,
which sometimes is more narrow in focus to achievement of
results within the Department.
In our Department, for example, the IG has been a very
strong contributor to management, even as he maintains
independence. He's a participant in the process and brings a
valuable insight. But it's only one piece. The CIO only brings
one piece. Someone else has to look at how they all come
together and how do they relate to what the Department is
indeed achieving.
Mr. Horn. Well, you were well-known as the Deputy Secretary
for Management there, and that's where people would go to, I
would think, and I agree with you on that.
What bothered me is we've gone through this homeland bit.
We had proposals before them, and they just wipe them out on
management. Presumably, those were on orders of the White
House. I don't know who's calling that or what they're trying
to do, but maybe they ought to ask their own Office of
Management and Budget.
Because when you're merging all of these things that go
back 200 years there a corporate culture, be it Coast Guard or
Customs or whatever, and we tried to put it in there because if
you look on it as a corporate--three different companies
merged, it's very difficult.
My example for that is the Atlantic Arco. They moved one
night from New York over to Los Angeles, and they had three
cultures to work. That meant that one of the top people, in
this case, the Executive Vice President, got the people and
worked them in together. So when one part of the system comes
in, they don't gripe a lot and they put in somebody from that
in order to get good management.
When we've got ones that have dozens of things, much more
than a few of them, and I don't know how they're going to put
them together without a deputy secretary for management.
Now, the appropriators 2 years ago demanded it and put it
in the State Department money and I don't know how that's going
out right now. Do you have any thoughts and that?
Mr. Downey. I certainly agree that the Homeland Security
Department will need that kind of attention. You use the word
``cultures,'' and that's indeed what they're going to have to
deal with.
Bringing a lot of different agencies together in one
department doesn't always work well. It takes particular
attention to make it happen.
DOT, for example, 35 years old, it's still got a lot of the
remnants of past ways of doing business. I think we changed it
substantially. We changed it, actually, by deliberately
attacking the culture, as opposed to the organization. When
Secretary Slater came in, he said, let's throw away ideas of
reorganizing. Let's just figure out how everybody can work
together as one DOT. Having those common goals was really the
first step.
I'm sure the Coast Guard will work out well in the new
department, but I have been in the Coast Guard in two different
departments, and this will be my third.
Mr. Horn. Yeah, well, Admiral Loy is doing a great job now.
He's got the heat. A lot of us were at a luncheon with him
yesterday.
I was curious, I have great respect for Secretary Mineta.
He was sort of a mentor for me when I came to Congress. In that
luncheon he had, just after he was sworn in, he said he was
going to move the Senior Executive Service around. And I
thought, gee, there's a good idea. Because with some agencies,
when they move people around, they say, oh, we're trying to get
rid of that guy. But the fact is, we ought to get growth and
get different things and have it made that they're really part
of the team. And how's that going in the executive branch
generally?
Ms. McGinnis. Actually, I was thinking in order to create a
culture a performance culture where the whole is greater than
the sum of the parts, you do have to shake things up a little
bit. It's about management and placing an emphasis on this.
But the example that comes to my mind is FEMA. When FEMA
was transformed from what some of your colleagues called the
worst agency in Government to what the same colleagues called a
couple of years later one of the best agencies in Government,
one of the strategies that was used was to ask every single one
of the career senior executives to change jobs. And you can
imagine there was some resistance to that. But they all ended
up changing jobs, and it does provide--I think it helped to
create a coherent and effective culture.
Now, FEMA is a much smaller agency than we're talking about
on the scale of Homeland Security, but I think it's a concept
and a lesson and a practice that ought to be applied there. Not
just within agencies, but across agencies.
Mr. Horn. That's well said. Because my organization that I
am the--really, I can't say more for it, and that was that
1990's where they turned that around. And you're right. And
with every disaster that seemed to happen every week, and they
had great leadership and that's what's key.
So, is there anything in the Results Act that you feel
needs anything legislatively?
Ms. McGinnis. Well, again, revisiting this issue of calling
for cross-cutting planning and reporting on performance, so
that you're looking at an issue in the way that the American
people would think about it, not agency by agency but around a
specific set of programs focused on health or education or
whatever other subject. I think that's the one area where some
attention and change may be in order.
Mr. Downey. I would agree with that. It could be done
without legislative change, but the legislative change sends
the right message.
We did some of that as well. I had a lot of discussions
with the Interior Department fisheries people and the Coast
Guard trying to define how would we measure success in those
common programs, and we finally all agreed it was from the
point of view of the fish.
Mr. Horn. That's the great Benchley joke. Do you remember
that one when he was at Harvard? He was studying international
law. And this is Benchley, the great comedian. He said to the
professor that I've read a lot of the books and he said I've
felt that there's a lot said about America in this and a lot
from Great Britain, but he said I want to write about the use
of the fish. And so that was it. He probably got an A.
So, yes, that is something now. I agree with you. You don't
really need legislation if OMB is working it under PART. I
think that would solve the problem. And they're doing it. So
that's great.
So anything else you'd like to add, put on the record?
OK. Well, thank you very much for sharing your experience
and your talents. So thank you very much.
We're going to thank--Mrs. Maloney did not have a chance to
be here and she's been a wonderful right hand for us over the
last years. Without objection, her statement will be put in the
record after my comments.
Now I'd like to thank the people on the staff that put all
this together and does it all the time.
That's Bonnie Heald is the staff director; Henry Wray is
the senior counsel right behind me; and Dan Daly, counsel. Dan,
where are you? There you are. And Chris Barkley, our faithful
majority clerk. And there he is.
Believe me, when you move around America you appreciate all
the things the clerk does. Because then my back is not broken,
his is. And if the Federal compensation wants a witness I'm a
witness to you.
Minority staff: David McMillen, really wonderful
professional. He's been around here how many years now--8
years. Yeah, and we all depend on him. It isn't a minority or
majority thing. We get good ideas from him. Jean Gosa same way,
minority clerk.
The Rules subcommittee staff that is with Mr. Dreier and
Ms. Pryce is Chin-Chin Ip, the staff director. Is he right back
here--or her? Yeah. I never know who is backing up that wall.
Court reporters: Christina Smith and Julia Thomas. Thank
you very much. We appreciate what you're doing.
With that, we are adjourned.
[Whereupon, at 4:10 p.m., the subcommittees were
adjourned.]
[The prepared statements of Hon. Stephen Horn and Hon.
Carolyn B. Maloney follow:]
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