Hearings of the Committee on Rules

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Wednesday, March 22, 2000

The subcommittee met, pursuant to call, at 9:30 a.m. in Room H-313, The Capitol, Hon. John Linder [chairman of the subcommittee] presiding.

Present: Representatives Linder, Sessions, Dreier and Slaughter.
Also Present: Representative Hastings.

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Mr. Linder. Good morning.

This meeting of the subcommittee will come to order. Since we know Chairman Horn has a conflicting meeting of his own subcommittee in 30 minutes, we will try and move as quickly as possible. I will submit some statements for the record and just merely point out that the task we are here on today is to determine if there is a rule of the House that might affect the way committees formalize their treatment of the Results Act. Some recommendations have been made.

We will hear from OMB and GAO with respect to their outside views and then an academician and former member of Parliament from NewZealand, who will provide some insight and legislative oversight. He was in the Parliament when they were going through this process.

The jurisdiction of the Subcommittee is not to monitor GPRA from the perspective of managing the requirements of the act itself, but from the perspective of its impact on the duties, jurisdictions, and oversight responsibilities of the standing committees of the House. Therefore, the Subcommittee today hopes to do two things. First, determine whether committees automatically provide performance goals when creating or reauthorizing programs, and second, examine the rules governing the House oversight and hearing process to determine whether these rules affect the way in which committees incorporate performance goals into their legislation.

Most of the reviews of GPRA in the past have spotlighted the role of agencies. In order to achieve the goals of this hearing, we want to review the congressional committee process and this institution’s oversight role. Overall, we want to ask how committees think during the drafting process and how committees can better accomplish the oversight goals of the Results Act.

The Results Act is an important tool that committees can utilize to maximize their knowledge of existing federal programs and work with agencies to set meaningful performance targets. It can also be a beneficial team-building mechanism within the House of Representatives, between the House and the Senate, and between the legislative and executive branches.

When fully implemented, GPRA has the potential to transform government by changing the focus of federal programs from money to results. Unfortunately, measuring performance is often difficult because the goals of a statute may be vague or so general in character that it is difficult for committees and others to assess whether an agency or program is working to achieve its intended purpose. Under the Results Act, committees and agencies have been working to develop performance goals, implement policies for an efficient government and improve decision-making.

Reports by the Congressional Research Service indicate that a culture change is occurring in the government toward performance results and that congressional committees are increasingly setting goals. According to CRS, the number of public laws with performance measure provisions nearly doubled from the 104th to the 105th Congresses and the number of committee reports containing performance measure provisions nearly tripled, from 27 to 78. There were instances when committees passed legislation or committee reports contained language requiring use of the Results Act process of establishing goals and evaluating performance and in a few instances committees specified detailed performance indicators and directed that continued funding was contingent upon performance.

The task before the subcommittee today is to evaluate how committees have worked on performance goals – in the past and today – and assess how the current oversight and hearing process plays a role in achieving these performance goals. We will receive some historical perspective from Chairman Steve Horn on the Results Act, the legislative process and how committees work on and advance performance goals. He has been very active in reviewing the Results Act and he will be providing insights into oversight, an analysis of where the committees stand, and whether these performance goals are considered during reauthorization. We will also be hearing from the General Accounting Office and the Office of Management and Budget who will provide an outside perspective on House committees’ role in implementing GPRA and provide advice to better equip committees to achieve the goals of the Results Act. We will then hear from an academician and former member of parliament from New Zealand who will provide some insight on legislative oversight, how committees can define goals and secure quality outcomes, and relate his experience in creating the proper framework for program performance.

Mr. Dreier.

Mr. Horn. Mr. Chairman, always glad to see you.

Mr. Dreier. Thank you very much. And I would like to welcome my fellow Californian. We have to stick together. I just came from the Republican Conference downstairs where our colleague John McCain made some disparaging remarks about our State. So I want to make sure that we do everything that we can to --

Mr. Horn. He has all our water, and he is mad at us?

Mr. Dreier. He said to see his constituency he has to go to San Diego in the summertime. Let me commend you, Chairman Linder, for calling this very timely hearing.

I want to again especially thank Steve Horn for the tremendous work that he is doing as Chairman of the Government Management Subcommittee to ensure that the Government Performance and Results Act is working as intended. As you know, encouraging more programmatic and policy oversight by House committees is a particular priority for Speaker Hastert and for me. We want our committees to continue striving to determine whether legislation is working as intended, the costs and benefits of program implementation, and whether statutes have out lived their usefulness.

Unfortunately measuring program performance is often difficult because the goals or objectives of the statute may be vague, imprecise or so general in character that it is difficult for committees and others to assess whether our agency program or intergovernmental grant is working to achieve its purposes. This was a very important reason why Congress passed the Results Act. Now it is near full implementation. Now that it is there, the Results Act has the potential to transform government by changing the focus of Federal programs from money to results.

Now it is time to look at how agency compliance with the Results Act and congressional monitoring of performance can be further enhanced through the process and procedures of the House.

Let me just say that I appreciate the work that has gone into this by this subcommittee and by you, Steve, and I look forward to your thoughts on this.

 

STATEMENT OF HON. STEPHEN HORN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Horn. I brought over a hearing I will leave with staff. This is titled Performance Management Benchmarking and Reengineering Within Government. We did this on June 20th, 1995, and we had South Carolina testify, we had Minnesota testify. They were the first State to have benchmarking in what they called then Minnesota Milestones. And Oregon is ahead of everybody in terms of both their health plans -- you will remember a few years ago they had about 750 different aspects of health, and they said, hey, we can't pay all that. We will do 550 or something like that. That was really based on are these programs working or aren't they. And that is in essence what we are trying to do here.

This morning I asked the staff, because I didn't have a chance to read this this year, I read it all last year, I said, okay, give me some examples of good performance measures. They said, well, we ought to try the Department of Transportation. So we were just talking to the people down there in terms of air safety, which all of you, and I, worry about every time we are in a plane and the goal on runway incursions which has happened. Their goal for 1999 was only 270. In 1998 it was 325. So we didn't make a lot of progress, but it is down three. It is 322 for 1999. A lot of that is that ground radar is not in place yet, and you are getting strange signals off the software and all that. You will remember FAA spent 4 billion on a radar system, and they are still not out of the woods on that one.

But what we are talking about here is efficiency, effectiveness and accountability. One of the big champions of this has been the Majority Leader. I suggested to him when he first testified before our committee on this whole problem 4 or 5 years ago, I said, why don't you get a war room in your suite of offices. And, very frankly, we need that around here. The President has a national security war room right in the White House in the basement, and he doesn't have a domestic war room, and he should. And that is why I will push in the next month or so for an Office of Management because --

Mr. Dreier. I would argue that they did have a domestic war room. It was the campaign.

Mr. Horn. Well, I am going to get that Office of Management proposal in because the fact is the Office of Management and Budget doesn't do management. They can look you in the face and say, oh, we do management. Well, baloney. Everybody in the whole Civil Service knows they don't do management. And we have got to really deal with that and separate the budget and the management function.

I was a big supporter when Nixon did it, it didn't work. I thought, gee, we can use the budget to get some management matters done with, and it hasn't worked that way. They sort of -- they don't have the team that Roosevelt had or Truman and Eisenhower. I was in the Eisenhower administration. The 20 people over there you could depend on, they wrote the Marshall Plan, they wrote Government Corporation, so forth and on.

Now, back to the results law. It requires long-range strategic planning and annual performance plans, and it requires, frankly, a cultural shift. The General Accounting Office reported 1999 performance plans found only 14 of 35 agencies defined a relationship between program activities and performance goals. Few agencies explained how they would use the funding to achieve their goals. Some progress was made in linking planning with budget requests.

Sustained congressional oversight is obviously essential. Mr. Chairman, I wouldn't have said this 30 years ago, and I thought about it then, and that is we ought to get to a 2-year cycle on just a few committees and see what happens. If we could get an authorization committee, let's say education, or the appropriations subcommittee of Mr. Porter's on Health and Services, Education, Labor, and if we could then focus with our staff to go out in the off year and really see what is happening. I think you will recall our colleague Mr. Lewis, when he took over his subcommittee, he sent an investigator down to New Orleans. They couldn't find any of the housing that Federal money had gone to in New Orleans, and no housing. What happened to it? Whose pocket was it in, et cetera? So we need to get focused on that.

Now, when the 1946 Reorganization Act happened, the Appropriations Committee put together a very good investigative operation with an ex-FBI guy that knew what he was doing and how you run investigations, and they started looking at all sorts of things. That was a centralized operation within the House Committee on Appropriations, and it worked. And as you know, in most of our subcommittees we have a staff of about six, but most of them you are down to one or two, and you don't have time for the investigations that need to be done. Thank heavens for the General Accounting Office. They do a terrific job. And every hearing we have run, and there have been about 80 last year, we try to get 6 months' notice to them, and they do a splendid job to do the research, come in, and give us the basis for turning an agency around.

So I think that will be useful. And the subcommittee has conducted eight hearings on the results act. In the 105th Congress we enacted 28 public laws in this Congress containing performance-related language. That is the authorizing committee, appropriations committee, the whole bit. And they produced 78 legislative committee reports that included performance measures, compared to 27 produced in the 104th Congress.

A number of new laws require agencies to set goals or performance indicators. And, of course, the big disappointment when we first went into this thing last year was that the pilot programs that are clearly focused in the law weren't implemented. And we had to get OMB up there and say, hey folks, you are supposed to get at least five pilots. Well, now they have been doing that, and, frankly, the pilots, I thought, were juvenile last year. It was the kind of thing that you just -- it is a throwaway to keep people happy on the Hill. But I think they are getting serious about it now because we are serious. And I would like to see more Members get involved and not just have staff here, and staff in the executive branch. I would like to see the Budget Director up here with the authorization chairman and the appropriations subcommittee. And since we are the oversight for anything on economy and efficiency, we would like to sit in on that, too. And I think between the three focuses around here, they would know we are serious, and we would get much better stuff than we saw last year.

It was pitiful what I saw last year. They have better strategic plans in most high schools I know. OMB failed to initiate those pilot programs until 3 months after we had a hearing on the subject. Now the agencies do submit performance reports linking them to goals by March31st. If the goals are not met, agencies should explain and provide a schedule of when they will be met. Plans should contain information on the performance consequences of the budget decision, but it shouldn't all be on finance. That is what we are trying to get away from.

How do you measure the satisfaction of the citizen, the taxpayer on a program? I mean, Medicare is a good example. You know what you have done there. You either help the person, or you haven't. I think that is a plus.

So we need greater congressional scrutiny. As I say, we need a 2-year experiment just to see what happens, and if we don't do it now, it is never going to be done because everybody is going to go back to what they did 20 years ago otherwise.

And the Results Act, I think the citizens, when they learn about it, are very impressed by the fact that this was a bipartisan effort of both Democrats and Republicans in the 103rd Congress, and we gave them 5 years to get their balance sheet in order.

And I remember Chris Cox, our fellow Californian, said to the Commissioner of Internal Revenue, you know, if that balance sheet was put in to you by a corporation, you would have the United States attorney indict. Now, gee, should we indict you? Because that was a mess. And Mr. Rossotti is doing a great job in turning that agency around, and that is what it takes. It takes a chief executive that knows what they are doing.

Mr. Linder. Does our schedule make it difficult for Members to get involved in oversight?

Mr. Horn. Well, you know, our schedule here -- and those of you that have been in the State legislature, and I have not been, but the first thing they say when they come here is, don't these people know about a master calendar? And, of course, we are all on two or three committees, and we are on about four or eight subcommittees, and so it is a problem. And we ought to sort of have the green days on the odd numbers and the red days or something on the balance numbers, whatever.

But I have had all four of my subcommittees to somehow meet at the same time, and a computer would solve that so we could space everybody around.

Mr. Linder. How would the schedule be with respect to people going home all the time?

Mr. Horn. We stick around, and our team has been working on Mondays and Fridays.

Mr. Linder. There have been some suggestions as to perhaps House rules changes. That is the perspective that this committee wants to come to with respect to some formalized language in committee reports dealing with commission statements, objectives, goals, et cetera? Do you have any comments on that?

Mr. Horn. I think it is a good idea. I think that is the only way you will get it done, very frankly, and that is what the Rules Committee is for.

Mr. Linder. The Chairman, as you know, has held several hearings here on the biennial budgeting, and OMB agrees with you that they support the 2-year budget cycle, and they said that they simply don't have the time for management that they would like to have. I think they are as overwhelmed as we are with respect to oversight.

Mr. Chairman.

Mr. Dreier. Thank you, Mr. Chairman.

Congratulations on very thoughtful testimony and for the tremendous time and energy that you put into both addressing the concerns of the people of Long Beach, whom you represent in what everyone knows is not a slam-dunk district, and at the same time you put tremendous time and effort into your work here. So I think that you are the best demonstration of the fact that it can, in fact, be done. I think that you represent if not the most, one of the most Democratic districts.

Mr. Horn. It is the most Democratic district in the State held by a Republican, 51 percent Democrat registration, 31 Republican.

Mr. Dreier. Fifty-one Democratic, thirty-one Republican, which, for those who follow California, it is an extraordinary accomplishment for you to do that. But at the same time for you to recognize the importance of the job here in Washington and the fact that you do on Mondays and Fridays have your team working on these things is something that needs to be recognized, because, again, you prove that it can be done.

Now, having said that, when we talk about the problem of the agencies looking at the Results Act and the conflicts that exist there, you know you alluded in response to John's question to some of the problems that we have here institutionally, but while you have been very serious on this, do you get a sense that our colleagues have the same kind of confusion or lack of interest in the act as some of the agencies? And, if so, what steps do you think we can take?

And I think that this biennial budgeting is something that we feel strongly about. You know that, again, as I said in my opening statement, at the beginning of this Congress, I sat down with Speaker Hastert and we talked about the need to dramatically increase what is clearly a priority responsibility of ours, and that is the issue of oversight, shifting from simply political oversight to policy, programmatic oversight, which is again a very, very important part of this job. But I just wonder what your sense is about the seriousness of our efforts.

Mr. Horn. Well, that is the word I was going to use, too, because, frankly, it irks me when I don't see a lot of people show up at subcommittee meetings, and if they are serious -- I remember my freshman here year, a Democratic freshman from Arizona and myself from California were always there. And as you know, when you are always there, the powers that be say, gee, those kids care, and they know what they are doing after they have sat through a few hundred hours of hearings.

And there are some people around here who do a marvelous job at hearings. My friend Terry Everett, who is the Chairman of the investigations subcommittee of the Veterans Committee of this House, he has done a terrific job going out and really finding messes around, and those are the kind of people that ought to get those spots. And others seem to just get it, and be they Democrats or Republicans, they are running around getting PAC money, and that is fine, let them do it, but they ought to focus on their legislative responsibilities. And my attitude is --

Mr. Dreier. I think you are the only Member in the room right now who doesn't right now.

Mr. Horn. Doesn't what?

Mr. Dreier. Doesn't take PAC money.

Mr. Horn. There are 30 of us

Mr. Dreier. In the room I said.

Mr. Horn. You wonder what people are doing. My heavens, I start the hearing on time because my staff knows that gavel goes down at 10:00. If you aren't there, that is tough; no opening statement, et cetera. And so I have had some very good people and some very good Ranking Minority people starting with Carolyn Maloney and Dennis Kucinich and Jim Turner. They all are fine people.

Mr. Dreier. Let me just expand on the issue that Chairman Linder raised, that being the question of biennial budgeting. We have a very strong consensus among Presidential candidates. We had 250 cosponsors of our resolution that we introduced at the waning hours of the first session, and we built that up at that time, and yet there are a number of people who have been strongly opposed to it. And I think that if you look at the examples of success we have around the country, coupled with the problems that we have with the budget process today, along with the need to address what you have as clearly the top of your priority list, this issue of oversight, it seems to me there is something that we ought to move towards.

Mr. Horn. I am going to have to excuse myself. I can make it in 7 minutes. I have a hearing going on.

Mr. Linder. Thank you, Steve, for being here. You brought up Jim Turner's name. He said he could not come, but he did submit a written statement that I will make a part of the record.

Mr. Horn. You will get a kick out of this. It is really first-rate testimony.

Mr. Linder. Thank you very much for coming.

Mr. Linder. We will proceed to our second witness, the Comptroller General of the United States, the head of the General Accounting Office, David Walker.

Before assuming responsibility for the GAO, Mr. Walker served as partner and global managing director of Arthur Andersen's human capital services practices. In his years of public service, he has served as Assistant Secretary of Labor for Pension and Welfare Benefit Programs at the Department of Labor between 1987 and 1989, as Acting Executive Director of the Pension Benefit Guaranty Corporation, as one of only two public trustees for the U.S. social Security and Medicare Trust Funds from 1990 until 1995. He also happens to be from my home area. Welcome, Mr. Walker.

 

STATEMENT OF DAVID WALKER, COMPTROLLER, GENERAL ACCOUNTING OFFICE

Mr. Walker. Thank you, Mr. Chairman. It is a pleasure to be here. As you know, I have a full statement that I would like to be included in the record.

Mr. Linder. Without objection.

Mr. Walker. At this point in time I would like to try to summarize some key points and, frankly, make some supplemental points as well.

Before I get started, I want to acknowledge for the record that I understand this is an important day for Congressman Sessions.

Mr. Dreier. It is his 45th birthday.

Mr. Walker. I wasn't going to say the number of years, but I think it is all right, Mr. Chairman.

Mr. Sessions. And still receiving instructions as a humble servant from my Chairman.

Mr. Dreier. From his elder statesman.

Mr. Sessions. Thank you.

Mr. Walker. I think it is very important, Mr. Chairman, that you are holding a hearing at this point in time. The primary purpose of the hearing is about the Government Performance Results Act and the potential use of the Government Performance Results Act to enhance oversight, among other things. What I would like to do is to provide you some background and perspectives that I think might be helpful to this Subcommittee.

First, as you know, the Government Performance and Results Act, known as GPRA or the Results Act, was passed in large part due to congressional frustration over the lack of timely, accurate and useful performance information over government departments and agencies and programs in order for the Congress to be able to effectively discharge its constitutional responsibilities for legislation, oversight and appropriations. It was intended to provide, you know, a statutory framework to maximize the performance and assure the accountability of the government. This type of information is absolutely critical, whether you be in the public sector or the private sector, in order to maximize economy, efficiency and effectiveness.

I think it is important to recognize that GPRA itself is a means to an end. It is not an end in and of itself. It is intended to be a tool. It is a tool that importantly can serve as a foundation in the Congress's attempt to, as I mentioned, maximize the performance and assure the accountability of the government for the benefit of the American people. But to achieve the intent of GPRA, it has got to be more than an annual paperwork planning exercise. The information that is generated by GPRA has to be an integral part of how government does business every day, and, as Chairman Horn spoke about, it has got to be an integral part of our effort to effectuate a cultural transformation in government.

In many cases government organizations tend to be very hierarchical, very process-oriented, very siloed or stovepiped, and very inwardly focused. GPRA can be a tool that can help to transform government in the way that it does business to be more partnerial, which includes more employee empowerment and accountability; more results-oriented (focused on outcomes rather than outputs); more integrated (transcending organizational walls and boundaries to work on issues that are multidimensional, that require multiple skills and multiple departments and agencies to come together to solve); and more externally focused (focused on what the Congress and citizens care about). This transformation is intended to generate results that the citizens not only care about, but can identify with.

In addition, it is important that the goals that are in these plans be meaningful, be measurable, and be useful to management, meaning in the executive branch that they be useful to the Congress, and that they be understandable and appreciated by the American people.

Very importantly, in my opinion, based on my public and private sector background, it is essential that whatever goals and performance measures that become part of the GPRA process must be linked with institutional and individual performance measures. They must be directly linked to performance measurement and rewards systems both for the departments and agencies, the programs and the individuals that run them and contribute towards the success of those programs.

While progress has been made in implementing GPRA, much remains to be done. And it is, frankly, going to require efforts on behalf of both the executive and the legislative branch. It is going to require more work on behalf of departments and agencies, OMB and OPM, in the area of human capital, as well as the Congress, because more active oversight is going to have to be a critical component in order to be able to make sure that we are making progress.

And let me say for the record I think that Chairman Horn is exemplary from the standpoint of somebody who recognizes the importance of sound management principles and processes, and who is probably one of the most, if not the most, dedicated person in the Congress to try to focus time and attention on this matter. It is not always a very sexy issue, but it is very important, because while we should have zero tolerance for fraud, waste, abuse and mismanagement, it will never be zero. But to minimize it, making GPRA become a reality, making these other management improvements in laws and regulations that have come about in the last few years become a reality and change the way the government does business can help quite a bit. In addition to minimizing fraud, waste, abuse and mismanagement, transforming the way that government does business can provide a return on investment much, much higher than has been focused on heretofore.

We have an important milestone with regard to GPRA that we are about ready to hit. This is the first year in which departments and agencies have to prepare annual performance reports, and these performance reports should provide valuable information that could be of use to the Congress in order to help in conjunction with the legislative appropriations as well as oversight activities. These reports are due by the end of this month, and they will be the first of what is an annual process as required by GPRA.

I think the other thing that is important, in addition to getting this new information from these annual performance reports, in many ways we are really at a crossroads in our Nation's history. The reason that I say that is that we are relieved from two issues that have been all-consuming in many regards in the past. First, the Cold War is over, and we have won. And secondly, we are not having to fight annual battles to eliminate the budget deficit.

At the same point in time we still face major challenges ahead due to known demographic trends, so, therefore, whether we have surpluses or not, the simple fact is we owe it to the American taxpayer to make sure we are doing everything we can to make sure they are getting a good return on their investment in the federal government.

So in that regard, I believe that we have an opportunity not just to build incrementally on what government has been doing for decades, which in many cases is based upon past wants, past needs, past conditions that existed decades ago. The world has changed fundamentally. Our country has changed fundamentally in the last several decades. We now have an opportunity to step back, to use the information from GPRA to ask ourselves what should government be doing in the future, and how should government go about better performing those roles and responsibilities. And GPRA can be a valuable tool in that regard.

I might add that where congressional committees have used GPRA in the past, including in the House, that it has been with positive results. I give several examples in my testimony about the Veterans' Affairs Committee, the Science Committee, the Government Reform Committee, about the Majority Leader's task force that occurred over a couple of years, as well as the Results Caucus. I know that Congressman Sessions’ efforts generated positive results with regard to the Customs Service in connection with his Results Caucus activities.

I might also add that in addition to GPRA and to using the information that comes out of GPRA, I think it is very important that Congress look for ways that it can engage in a more constructive and strategic partnership with the General Accounting Office to capitalize on the vast amount of information and knowledge that we have to help the Congress do its job. For example, the relevant committees of jurisdiction could, in addition to the annual GPRA information that comes out, look at our high-risk list, look at our performance and accountability series, look at the results of our annual financial statement of the U.S. government, look at our annual budget implication series reports, our annual budget scrub work, look at major outstanding recommendations from the GAO, and look at recent reports that we have issued on various departments and programs, and to use that information collectively as a basis to conduct periodic oversight, ideally annually, but at least once each Congress, of major departments and agencies and major programs.

In addition, the Congress can consider to a greater extent using task forces and other approaches that cross boundaries, jurisdictional boundaries, to deal with issues that are inherently cross-cutting both as it relates to the executive branch and the legislative branch.

Mr. Chairman, I think that in circumstances where the Congress has used GAO, it has proved very beneficial and very rewarding for the American taxpayer. Last year GAO generated $20.1 billion in financial benefits, or return on investment of 57 to 1, and 600 nonfinancial benefits dealing with safety and security and in a variety of other areas. I personally think we can do a lot more if we can engage in constructive good government – a nonpartisan effort to make government work better for the American people. We stand ready to do that, Mr. Chairman.

I will tell you that, as you know, while GPRA does not technically apply to GAO, we have voluntarily chosen to comply with it, and, in fact, it is our objective not only to comply with it, but to try to be able to create models to lead by example. I think that is incredibly important. We are the leading accountability organization in the United States, arguably the world. It is important we lead by example, otherwise we are hypocrites, and we do not want to be hypocrites.

So with that we look forward to working with this subcommittee and other committees in this area of significant interest and concern, and I would be happy to answer any questions that you or the other Members may have.

Mr. Linder. I thank you for your testimony.

Mr. Linder. I have a couple of questions. Steve Horn mentioned that the agencies' responses have been relatively inconsistent. We have also heard other testimony that agencies don't take this all that seriously. Two questions: How do you make them take it more seriously? And, is the Congress and the various committees of Congress, are they taking it seriously?

Mr. Walker. I think the degree of seriousness in which the departments and agencies and, frankly, congressional committees take this matter varies, and that is understandable. In my opinion, there are things that the Congress can and should do in order to help make sure that the agencies do take it seriously. The Congress should be more actively engaged in oversight along the lines of what I recommended, the idea of using the information that is coming out of GPRA, supplemented with the vast amount of knowledge that GAO can provide the Congress, would serve as a basis and it would send a signal to make sure that the departments and agencies are taking this more seriously.

It is also important to set some expectations about where the progress is going to be made and what type of program performance is going to be achieved, and to eventually link that to the resource allocation process. We have got a lot of different programs out there dealing with issues like drug treatment, food safety and various other issues. One of the things we need to make sure of is to understand which ones are working and which ones aren't so we can target the dollars towards the one where we are going to get the biggest return on investment.

I also think that the Senate, which is the other body of the Congress, can also be actively involved in focusing on these issues in conjunction with confirmation hearings to make sure that the proposed leadership, for various departments and agencies and programs know that this is a serious matter and to make sure that they are focusing on it.

Mr. Linder. The notion that we should be putting our dollars where it is the most efficient calls to mind things such as risk assessment and cost-benefit analysis. How do you get the EPA to do that when they say they can't afford to do that?

Mr. Walker. We all have priorities, Mr. Chairman, and I think that EPA is in a difficult situation because it is very difficult to quantify the costs and benefits, but that doesn't mean that we should stop trying. And I think that we are spending a tremendous amount of money in conjunction with EPA as well as other departments and agencies, and, frankly, I just don't think that it is acceptable for us to continue to say we don't know how to do cost-benefit analyses, or we have a difficult time figuring out performance measures. We have to figure out a way to do it. It has got to be a top priority. Otherwise how do we know that we are getting a decent return on investment?

Mr. Linder. In your written testimony you talked a bit about cutting across congressional jurisdictional lines. I believe it was with respect to veterans. Why don't you expand just a little bit on that.

Mr. Walker. There are a number of issues that are of interest, for example, to veterans, just as that one example. Whether it be health issues, whether it be unemployment issues, whether it be a variety of other issues. We are finding that there are more and more challenges facing the country that have to be addressed by the Congress that cross jurisdictional boundaries. They cross jurisdictional boundaries with regard to departments and agencies. For example, for veterans you can have situations dealing with VA, the Department of Labor, and other departments and agencies. They also cross jurisdictional boundaries on the Hill.

One of the things that we have done as part of our strategic planning process at GAO, as part of GPRA, is that we have taken more of a thematic approach in how we are going about doing our strategic planning because we believe that is how issues have to be addresses. Sometimes, in order to be able to effectively address an issue, you have to transcend committees, you have to transcend departments and agencies, and that is why task forces or joint hearings with relevant committees of jurisdiction sometimes can serve as an effective way to be able to address the whole issue rather than just a piece of the issue.

Mr. Linder. Thank you. Doc.

Mr. Hastings. No questions.

Mr. Linder. Mr. Sessions.

Mr. Sessions. Chairman, thank you. General Walker I am delighted you are up here today. I think rather than being my birthday or Chairman Archer's day, it should be Comptroller General David Walker's day on the Hill because what you bring to us is not only an insight and articulation of the term ROI, return on investment, and a lot of other things, but you bring to us, I think, the sobering look at how much work we have got to do. And I am very, very proud of what you and your staff have been able to accomplish.

I would like to today ask two specific questions, one at a time. I hate when people ask me five at one time. I want to talk to you about reform and then inspectors general, and that is the nature of my two questions.

First of all, we talk about -- and as chairman of the Results Caucus we focus or hone in on this thing that is known as the high-risk series, which are those things that appear year after year after year from your evaluations of the performance of government. My question is, and I have been struggling with this for 4 years being in the Congress, I felt like we had to have the process down first that we would then give to agencies the understanding of what they were expected to do. In other words, give them a course in not economics, but in process and the correct way to do things, and put in place the procedures for them to be able to follow to where they could reasonably be expected to become more efficient.

When I came here, I was confronted with another Member who wanted to immediately threaten these agencies with the risk of appropriations dollars, and I hesitated. And I said, no, I don't think that is what we need to do yet. I think we need to place before the administration and agencies and managers of the government the opportunity to learn more about the process.

Can you please discuss with me in a continuum -- in terms of continuum and give people tools they need to come with, these tools, they need to become proficient with these tools. They need to see things a couple years before they are able to-- we are able or should then put those dollars at risk. Can you talk with me about your professional opinion when it is time to more closely link, to more closely hold accountable performance of the agencies to what they talked about and that appropriations dollar?

Mr. Walker. First, Congressman Sessions, as you know, we began our high-risk initiative in 1990. In many cases the programs or functions that are being deemed high risk by us took them many years to get that way, and in some cases it is going to take many years to get off the high-risk list. In fact many of the original programs and functions still remain on the list today. I think we have to recognize that.

I think we have to recognize that one of the things we talked about before was a cultural transformation. Cultural transformation in the government, the private sector or the not-for-profit sector takes years. On the other hand, we need to make considered and continued progress, and we have to be satisfied that people are doing that, and they are taking the necessary steps and taking it seriously to make that progress.

My view is that we need to make sure that we have measures that are meaningful, that are measurable, that the Congress feels comfortable with, that are useful for management, and that are understandable and appreciated by the American people. We need to set some expectations, clearly defined expectations, about what type of progress is going to be made within what period of time. And then after we have done that -- and we are not quite there yet -- then I believe we need to start linking it more directly to resource allocation.

I also think that we have to step back and say in many cases we have multiple departments and agencies, multiple programs, multiple government tools working to try to achieve a stated policy, and somehow we have to have mechanisms that step back and look beyond the silo and look more comprehensively at what are we trying to accomplish, who all is playing on the field, what is their role, and what impact do they have, what type of return are we getting on that impact. The government tools include not just dollars going out with regard to the appropriations process, but also tax incentives and regulatory policy. It also includes loan guarantees and other mechanisms that are part of this portfolio of things that government has and will do to try to achieve the desired outcome.

The last thing that I would say is there are three things that are necessary to maximize performance or assure the accountability of any enterprise: people, process and technology. GPRA is about process. The CFO Act is about process. Technology includes the Clinger-Cohen Act and the Paperwork Reduction Act. The people dimension is the missing link. We have got to link performance measurement and individual rewards to programmatic plans and goals.

Mr. Sessions. To drive behavior.

Mr. Walker. Yes, to drive behavior. People will act based on how you measure them, and that is basic no matter what kind of rule applies. We have to make more progress on that front.

Mr. Sessions. So digging down a little bit, you would believe -- what year would it be appropriate to bring the IGs-- let's just pick one small agency, the Pentagon -- to bring the IGs in and put them at a table, to put the CFO at the table, and put the Secretary at the table, and to gather the information about who said what, and he said, she said, and who backed up whose policy; and when do we get to that point which is very similar, General, to what could happen at a board meeting in the private sector, which is what could happen at a shareholders meeting, which could happen in day-to-day life in the real world, where performance and standards and expectations are established.

Mr. Walker. I think we need to start doing that right now. The question is how do you link it to resource allocation? I think DOD, frankly --

Mr. Sessions. First accountability internally.

Mr. Walker. First accountability. I think DOD is the biggest challenge of all. It is the biggest cultural transformation challenge. It has the biggest silos. It has probably the biggest lack of accountability.

Let me give you one example: acquisitions. I can tell you we spend billions of dollars every year on acquisitions, most of which relates to DOD. They don't follow commercial best practices. The result of not following commercial best practices is, A, waste, wasted dollars; B, compromised performance standards; and C, questionable cost benefit on certain things, and a fundamental missing focus on wants versus needs versus affordability. We ought to be focusing on that right now. This is real money.

The same thing exists in other areas. For example, let's take infrastructure, not just DOD, VA, all the other departments, and as agencies that have tremendous infrastructure where we used to be very decentralized, we used to have a lot of bricks and mortar, because we needed a lot of bricks and mortar when we didn't have technology working for us, or when, for example, our populations with regard to VA or DOD, in the medical area were very different. We need to step back and look at not what it was, but where it is, and where it is going, and what does it mean with regard to what we ought to be investing in, and where we ought to target those investments, and where will we get a return, and where we are just throwing money away. So those would be a couple of examples.

I think the IGs are on the front line. They are on the front line of fraud, waste, abuse and mismanagement, and they are on the front line of the financial auditing and other type of activities with regard to their respective departments and agencies. Where we can help is cross-cutting issues, longer-range issues, which, quite frankly, need more focus, and where we are uniquely positioned to help the Congress address.

Mr. Sessions. So as not to dominate this session, I would like to go to the second question. Inspectors general by the nature of not only their appointment either by the President or by the head of an agency, I am increasingly concerned, and they are also, with their ability to in essence tell the king that he has no clothes without being in trouble. Sometimes they are butchered, for saying the obvious and doing the right thing.

From your perspective, is there something that this Chairman should look at as well as Chairman Horn of strengthening, of confirming, of reaffirming doing the right thing that would aid and support a reasonable inspector general to continue doing the outstanding performance that they do today?

Mr. Walker. I think one of the things that could be done goes back to the fact to how do you revitalize the oversight process. The IGs have a role to play with regard to that. So in addition to what comes out of GPRA, in addition to the vast amount of knowledge that GAO can bring to the table, you should tap the knowledge of the IGs such that once a year or at least once each Congress each of the relevant committees of jurisdiction are conducting meaningful hearings on key issues that relate to either legislative matters, oversight matters or appropriations matters. I think that would help.

Mr. Sessions. Bring them more into the process.

Mr. Walker. Yes. One of the things we are trying to do is coordinate with the IGs. We all have limited resources. We have done our strategic planning. I know the IGs have individually done their strategic planning, but we are trying to work with them so collectively they can do some strategic planning such that we are not duplicating efforts, such that we are maximizing the use of our available resources, again, having them focus more on things within their control and having us focus more on cross-governmental activities, on longer-range activity that, frankly, they don't have the perspective to do and may not in some cases have the skills to do.

Mr. Sessions. This country is well served by your commitment to doing that. I appreciate you doing that.

Mr. Linder. Just follow up with one point he was getting to with respect to the IGs. Does your agency find it often in confrontation when you start going into looking at some agency's activities?

Mr. Walker. Our relationship with the departments and agencies varies. I will tell you what our desired relationship is, and in most cases if we are not already there, we are making progress towards getting there.

First, we are part of the legislative branch. In part we are a watchdog. We don't forget that. We know who we work for. We work for the Congress as an institution. Part of our job is to find out what is not going right in the area of economy, efficiency and effectiveness.

At the same point in time, I strongly believe in a concept called constructive engagement. And by that I mean our objective, and, I think, the Congress's objective, is to maximize performance, assure accountability, and get positive results for the American people. It is not only what you do, but how you do it that can have an impact on getting results.

So, therefore, the way that we go about it is we not only are looking for what is wrong, we are providing best practices guides, we are providing tools and methodologies; for example, self-assessment checklists in the area of human capital and people management designed to try to help the agencies help themselves to do what they need to do to make things better for the American people.

In addition, when we find out they are making some progress in an area, we want to acknowledge that. If we see a best practices, we want to share them. Take the IRS as an example. I meet with Charles Rossotti every 3 months. We could make a recommendation of what IRS could do to do something better every day, probably more than one a day.

Mr. Linder. Go away comes to mind.

Mr. Walker. We do make a lot of recommendations. On the other hand, it is also important we step back to make sure they are setting their priorities right, they have got the right people focused on the right issues, that they are making progress such that we can put things in perspective, because that is an example of what I would call a challenged agency. It has taken them a lot of years to get where they are, and it is going to take a lot of years to get to where they need to be. The key is make sure that they have the right people, focused on the right things and they are getting results.

That is how we are trying to do it. Now, our relationships vary, but in general we are moving towards this type of relationship even with some of these agencies that we haven't had it before in the past, and I think we will all be better off for it, quite frankly.

Mr. Linder. Doc, you had something to add.

Mr. Hastings. Thank you, Mr. Chairman. I apologize for coming in late. You may have addressed this, but this committee is also dealing with the issue of biennial budget, and those that have testified principally in favor of the biennial budget have emphasized in their remarks that this gives the Congress more time for oversight. If you addressed this, I apologize for that, but I would like to have your response to that.

Mr. Walker. Thank you, Mr. Hastings. I did not directly address it. There is something in my statement, but I am happy to do so.

Sue Irving testified before the Rules Committee a couple weeks ago on this issue. I think clearly there is a tremendous amount of time and effort spent not only on behalf of Congress, but also OMB, on the annual process right now. I think that by looking at biennial budgeting, that does provide an opportunity to free up additional time to be able to focus on other issues, and I think freeing up some additional time is important, but that doesn't necessarily mean that it will be focused on oversight. One of the things that this committee needs to think seriously about is what needs to be done from a Rules perspective; what, if anything, needs to be done from a leadership perspective in order to assure that there is time and attention being focused on oversight; and that if additional time is generated through going to biennial budgeting, that, in fact, it does result in additional oversight activities, because in some cases these aren't sexy things, but they are important things, and they may not be the natural tendency for people to do. I do not think that biennial budgeting is a panacea, but it is something that could help.

Mr. Hastings. Thank you.

Mr. Linder. Would that have an impact on how we look at GPRA?

Mr. Walker. It could. It could have an impact. It could have an impact, for example, on how frequently we require reporting under GPRA. I think that whether or not you have biennial plans under GPRA, whether or not you change the time frames for the strategic planning, it that could affect that.

But irrespective of that, departments and agencies, programs ought to have annual goals, and the reason I say that is because you have got to link it to your performance measurement rewards systems for individuals. Those decisions are made at least annually, who are you going to promote, who are you going to give bonuses to, who are you going to discipline. So, therefore, even if you don't have reporting process on an annual basis in the Congress, they still have to have those annual measures because they have to be linked with their performance management system.

Mr. Linder. I want to thank you for your time. You have been very helpful. I hope you will be willing to respond to written questions we might have for you.

Mr. Walker. Absolutely, Mr. Chairman. Thank you .

Mr. Linder. At this time I would like to insert in the record a statement from Virginia L. Thomas, Senior Fellow of Government Studies at Heritage. Without objection, make it part of the record.

Mr. Linder. We will now proceed to the third witness, the Controller of the Office of Management and Budget and head of the Office of Federal Financial Management. Joshua Gotbaum has served as Assistant Secretary of the Treasury for Economic Policy, Assistant Secretary for Economic Security at the Department of Defense, and Associate Director for Economics in the White House domestic policy staff in the Carter administration.

Before returning to government service in 1994, Mr. Gotbaum also spent 13 years as a general partner of a New York investment firm, providing financial advice and assistance to corporations. His current responsibilities at OMB include policy and programs affecting the financial management of the Federal Government, including its annual financial report and audit. The Office of Management and Budget has direct reporting requirements for providing information, data, findings and recommendations related to strategic plans and performance goals and measurements.

Welcome. Thank you for coming here.

STATEMENT OF JOSHUA GOTBAUM, EXECUTIVE ASSOCIATE DIRECTOR AND CONTROLLER, OFFICE OF FEDERAL FINANCIAL MANAGEMENT, U.S. OFFICE OF MANAGEMENT AND BUDGET

Mr. Gotbaum. Thank you, Mr. Chairman. I must apologize to the committee in advance. I have a cold, so this is not my attempt to cater to the frog lobby.

Mr. Chairman, we are, to be quite honest, honored and gratified to be asked by this committee to give our opinion on how the Congress can better take advantage of the GPRA. We think that the law is extremely important. I am going to talk a bit about that. But I want to say at the outset that as one who is a respecter of the perquisites of the Congress, I thought it would be best if I talked about OMB – we are, after all, an oversight agency, too. Like you, we don't have as much staff as the agencies that we look at. Like you, we have limited time, et cetera. So I thought the best way to do this, if it was all right with the committee, was to talk about our experience, talk about the lessons that we have learned, rather than, frankly, be presumptuous and say we think this is what the House Rules Committee should do. With your permission.

Mr. Linder. You are welcome to do whatever you like.

Mr. Gotbaum. I want to start by saying we think this is extremely important and just say why, because it gets to the question that Mr. Hastings raised and you raised about a biennial budget, et cetera. As you know, I worked in both business and government, and there is a very, very important difference between the two. Businesses have a neatly defined bottom line. They either do or don't make a profit. It means that all the way up the chain at Ford Motor Company or any other company, a plant manager can check plant profitability, a division manager can check division profitability, the CEO can check corporatewide profitability, and the shareholders can also check out how the organization is doing by profit.

Government is a much messier and more complicated case. What GPRA does is it forces us to create a bottom line. That is really why it matters. What it does through this process of forcing agencies to say what are your goals and what are the measures by which you achieve them, it is in effect forcing folks to create a bottom line against which they can be measured. We think this is really important.

I should also be clear, Mr. Chairman, it is not that we think it is new. We at OMB and, I suspect, all of the oversight committees of the Congress have always been asking questions like how long is it going to take to get a particular weapons system in, or how many people are going to be served, et cetera. But what GPRA did and why we think it is quite important is it added the force of law to this. It stiffened everybody's backbone. It required a set of processes.

And we have made some important progress in that area. We have worked with agencies. We have worked with agencies on developing their plans, on developing their measures. I will talk a little bit about how they have changed their measures over time, because I think one of the important things is the lessons which they have learned as much as the lessons we have learned.

So we have made real strides, but no one should pretend we don't have a very long way to go. We do. So part of my message this morning is that in order to achieve that point that Mr. Sessions talked about, which is how you bring people along, how do you get them from a point where they are not paying as much attention to results as you would like to the point where they do pay attention, we have learned some lessons, and with the committee's permission, I thought I would just tick off those, because we have learned them. We think they are worthwhile.

My last point about why GPRA matters is that when it is implemented, when you have performance information you can track, that makes your job easier. That makes our job easier. In other words, if I know that a particular agency, let's say a grant-making agency, has as a goal that it will provide training for so many thousand teachers or so many thousand police officers to counter terrorism, then I can change the questions I ask from “How are you doing?” and “You seem like nice folks, are you wearing a nice tie, are you working hard?” to “Did you do the job or not?” “Did you meet the goal or not?” So my last point about why GPRA matters, is that it makes our job as oversight folks easier.

Now, implementing that system is a ton of work. My first lesson is you have got to walk before you can run, because, as General Walker said, this is a cultural change. This is taking agencies who used to come to us and to you and say, “I did my job, I spent my budget allocation.” In other words, they were measuring inputs. And some say, no, that is not what you are going to do. What you are going to do is you are going to set goals and set measures and ask how do you achieve them? Those goals and measures have to relate to what you actually do.

So this requires not just somebody sitting in the room. It requires changes in the management structure, because, as General Walker pointed out, the reason you want to do this is because you want people to incorporate this into management. It requires changes in their information systems. And I don't need to belabor the point about how difficult it is for government information systems to get approved.

Since GPRA requires all those things, and because what we find is there are false starts, you have got to push. You have got to do exactly what Mr. Sessions said, which is recognize that we need to push over time, and that there are going to be some false starts. But you have got to walk before you can run.

Second point is that performance measures evolve. And the reason I think this is really important is that there is a tendency and there is a desire on the part of oversight agencies like us and, I suspect, Members of Congress, but I don't want to be presumptuous, but to say, “Can't you give me the measure?” And what we have seen as we worked on this process, and we worked on this process pretty intensively, is that there is learning involved. Governments learn by doing, just like everybody else.

I want to give you some examples so you can get a sense of this. The Department of Transportation, Coast Guard, which is a good agency, works hard, and works very seriously at management, as it has for a long time. When they did their first set of performance goals, they said, “it is our goal to reduce fatalities among maritime workers.” This is a perfectly sensible thing. And then they realized that, first of all, fatalities among maritime workers were declining; and secondly, it turns out that injuries among passengers, recreational boaters, et cetera, were a bigger problem, a larger problem, a growing problem. So they changed their whole goal. They said, what we are going to do is to move to look at fatalities and injuries among passengers.

OSHA, an agency which I know has had some controversy over time, was another case. They were trying to comply with GPRA, so they started measuring how many audits they did, how many inspections they did, etcetera. Then they realized, “That is not really what our goal is. Our goal is to reduce accidents.” And so what they then started to do was to say, “We are going to start measuring accident rates and focus our resources where there are high return.” This has two benefits. It makes them more effective and reduces the burden on small business. It was an important change.

For agency after agency after agency, Mr.Chairman, the critical point we have discovered is that performance measures evolve over time. We try to push them from moving from the notion of input (just dollars spent) to outputs and outcomes, and there are various steps along the way. For example, we get grant-making agencies who say, “The measure I am going to use is how fast I turn out a grant or how many dollars I push out the door.” And then we say to them, “Well, how about some measure of how many people are helped; what is happening to the level of training, if you are training somebody, et cetera?” So the second point is these measures evolve over time. We at OMB, because we provide oversight to agencies for GPRA, also changed our guidance to the agencies. The first year we said, “Give us your goal, and give us your performance measures.” Then we realized that isn't very useful without some history and some background. So now we have changed our guidance: You have to give us 3 years of data so we know what the trends are.

What we said to them after we realized that we missed the boat the first time around is “You have got to focus and report on major management issues. This was a point that was raised by the GAO, and we agree it is the right thing do so.

Third point, and this amplifies my point about OMB: GPRA requires active engagement. It really does require oversight agencies to be involved and to reach in and to talk with agencies about their performance goals and their performance reports. That is something OMB does, and it is something which agencies respond to. And I would suspect that to the extent that the Congress reached in and talked to them, agencies, too, would respond. When they finished the job and really got to something that worked, that would then make their job with oversight easier.

The next point is flexibility. Different agencies are really different. The goals and measures for Social Security when they are doing disability judgments, and there ought to be goals and measures for when they are doing disability judgments, ought to be pretty different than the ones we use for the National Institutes of Health. That doesn't mean you can't do both. It just means you have got to recognize they are different.

The next point of this is the one where we are working hardest and is, frankly, the most difficult, is the point that General Walker made: integrating this into decision-making. GPRA is not just about creating reports. This is about saying to agencies, “What are you doing?” and then making sure that they integrate those goals into their management and into our budget and resource decisions.

Mr. Chairman: we are working at this. We are a long way from the promised land, but we are working at it consistently. I generally don't spend a lot of time talking about the interstices of the Federal budget, that is the President's prerogative, but, for example, in the Bureau of Prisons, they have a serious overcrowding problem. And so what we did in our last budget is we started tying our budget requests and our budget analysis to goals to reduce Bureau of Prisons overcrowding. So now, instead of the Bureau of Prisons walking in and having an argument with us about “We want a 3 percent increase or 5 percent increase or 10 percent increase,” that discussion is “What is your current and projected overcrowding rate, and how are you going to efficiently reduce it?” It is a very different discussion.

Same with the Indian Health Service. I put some other examples in my testimony. But the game here is to bring performance information into management and to bring it into budgeting.

The next point, and, again, Mr. Sessions appreciates this, this is one that I have to say, Mr. Chairman, I think is really important, is: don't shoot the messenger. We have found that when an agency makes a good faith effort but doesn't meet their goal, or when they discover that their goal ought to be changed – and this happens a lot – we need to be careful. If we engage in public criticism, then the lesson that the agency learns is “if you do analysis, you are going to get killed by OMB,” so we don't. To be quite honest, this poses a tension for us, because of our own oversight committees. Chairman Horn is my Chairman, and wants to know what OMB is doing about GPRA. And yet if we engage in public criticism of agency behavior, they are going to clam up.

And so what we found, Mr. Chairman, and we think important, is a combination of carrot and stick. We have to do a combination of encouraging folks publicly while privately sitting down and saying, “Guys, this can be improved, and here is how.” We do it, and we find that it is effective to get agencies to internalize GPRA because that is our own performance goal. Our performance goal is to put performance data into their systems. And so this combination of carrot and stick, of public encouragement and private criticism, really matters and is really quite important.

My last point is about realism. There are folks who thought when GPRA was passed that this was the millennium, it was going to create objective scientific decisions about government functioning. That is not true. Even with the best performance information in the world, the executive branch and the Congress still have to decide whether the last $10 million goes into defense or environment or law enforcement or whatever. And so from our perspective, performance date is a tool. It doesn't relieve us from the obligation from proposing choices to you, and obviously doesn't relieve you from the obligation to make choices about them, but it is a tool which helps. It is a tool which, if used properly, can make our job easier, can make the oversight job easier. That is why we are encouraged. We think it is important. And we hope that it will continue to get the bipartisan support that it has had in Congress.

And with that, Mr. Chairman, I would be happy to answer questions.

Mr. Linder. Both you and General Walker talked about this. This is a people-driven process. In my district, I have one company with two plants, about six years ago they were getting into quality management. And it was driven strongly by the board. And I spent about three hours in one plant and 6 miles over, about 2 hours in another plant, and they were totally different. One worked, the other didn't. One was clearly bottom up information, the other was clearly top down. The people couldn't change the culture. That is something we are going to have to continue to drive.

One thing that concerns me about government agencies, as well as other agencies, is mission creep. They find that the job that they were charged with is quietly going away, the responsibility, the problem they are dealing with. Rather than saying we have achieved something and will end what we are doing, they just find another job to do or recreate more work. Right now I would be curious to know if the OMB is interested in the fact that the food stamp people are advertising on the air for more people to come and get their food stamps.

Because the decline of people on welfare in the last four years has reduced the number of people in food stamps, I think they are getting nervous about their money source. They are advertising. What does OMB do about the mission creep idea? Although I understand with the Coast Guard within its own area of responsibility would concentrate on a different kind of water safety, some agencies will go outside their area and look for something else to do.

Mr. Gotbaum. Mr. Chairman, this is a real issue. I have got to be honest, I am not personally acquainted with the food stamp issue you raised.

Mr. Linder. Please turn on your mike.

Mr. Gotbaum. I am not personally acquainted with the food stamp issue you raised. I am happy to come back and respond for the record.

I do think, however, there is one aspect of this that I believe consistent with an agency's mission. One of the concerns that I have had watching agency implementation and performance is that the concept which we used routinely in business– market share and market penetration. This is not something that government agencies systematically collect or even think about. Think about it: If you were authorized by Congress to provide some service or some benefit, wouldn't one of the things that you would want to know is what fraction of the population that is eligible for the service gets it? (And to follow on General Walker's point, how satisfied they are with it?).

So I would encourage, as part of the GPRA process, forcing agencies more and more to say not just “How hard are you working?”, but “What are your results? What fraction of the population are you getting? How is that population changing?”

One of the things that the Department of Housing and Urban Development did that was really very ambitious but impressive is to start setting goals about reducing the disparities in unemployment rates between central cities and suburban areas. Some of us might say that there are a lot of things that go into that that the Department of Housing and Urban Development will never effect, but it is useful and important for them to say we are going to measure this, we are going to track it, and it is going to become part of how we evaluate ourselves.

As to the issue of mission creep, personally, I think that one of the advantages of GPRA is that it forces people to define their missions more concretely. It forces an agency to go from saying how do we do grants about health to saying we are trying to effect the following three diseases or trying to affect the training.

And so, if implemented, Mr. Chairman, I think the result will be that you will have better defined missions. And when people want to move beyond their mission, you will know it. It will be easier for you to figure out whether it is a good idea or a bad idea. So again, part of why we are enthusiastic about GPRA is because it makes the job of watching what agencies do easier to do. We think you would be helped by this process.

Mr. Linder. Are you familiar with the copy of the Committee on Transportation Infrastructure Straw Plan, as they call it, in which the committee found a strategic performance plan to be so flawed that they actually drafted their own for the agency?

Mr. Gotbaum. I must apologize, Mr. Chairman. No, I am not. This was for the Department of Transportation as a whole or subcomponent?

Mr. Linder. The full committee is the one that drafted it for an agency that they have oversight over. It is the first one that we can think of where a congressional committee took the initiative to draft a version of a strategic plan. We will get a copy and send it out to you.

Mr. Gotbaum. That will get attention, sir.

Mr. Hastings. Real quickly, next Thursday, I believe the Results Act Plan is supposed to be made available to the Congress. I was just wondering if the administration, you think they will meet that deadline.

Mr. Gotbaum. As you might expect, Congressman, this is something which we are extremely mindful of. There are about 100 agencies that file reports now on GPRA, I am not sure whether it is just above or just below. Almost 100 of them. What we have been doing is tracking and talking to them for months. We have been reviewing drafts, et cetera. And the absolute lion's share of them will come in at deadline. I will tell you right now there are a couple that are not going to make it, and we know they are not going to make it. We then are faced with the choice: do we say “Whatever you have on March 31st, put out the door,” or “Take another week or two and get this thing clean enough so that it is a respectable report?” That is a judgment we have to make on a case-by-case basis.

I will tell you, sir, we think it is important to align performance information with financial information. There is one agency (which I will not name because they are trying to do the right thing) which is to try to align their financial reporting with their performance reporting, so that they can report to you and to us what the taxpayers get for what they pay. It is a good thing. They are running into enough snags, so they said we can either publish our performance report by the 31st or we can publish a combined performance and accountability report some time in the month of April. I can't tell you where we are on that but I can tell you my personal inclination is to say you would be advancing government if you took the two weeks and did the job right. The vast majority of reports are going to come in on time. Then you are going to look at them, we will look at them, et cetera.

And, to get back to General Walker's point, the critical issue is not the report; it is what happens with the report. It is what happens in the making of the report. It is that folks like us who provide oversight within the administration and like you who provide oversight for the Congress, take these things, look at them, use them, and engage. That is where the rubber meets the road.

Mr. Hastings. For those agencies that you suggest that may not meet the deadline what should our response be as a Congress?

Mr. Gotbaum. I am serious about the prerogative, so I don't want to be presumptuous, but I would hope the first question would be: why? And then, as with every other aspect of government performance, if you decided that they were trying to do the right thing and just didn't quite make it, that your response would be different than if we were just playing for time.

Mr. Hastings. I think that is a fair assessment. Maybe that ought to be the first question you ask too.

Mr. Gotbaum. I promise you it is, sir. OMB is not a large agency, but it is 500 people. The way we work is that the agency relationships are kept on the budget side. We find the power of the purse concentrates people's minds. So what we do is we say to the budget shop that is responsible for, say, the Department of Transportation, “Guys you need to review the plan.” “You need to tell us whether they are doing a good job or bad job.” And that is how we focus it.

Mr. Hastings. Going through this budget process when you are submitting your budget to the Congress, were there any agencies, you mentioned some agencies that may not meet the deadlines, presumably this information isn't something that just popped out here in the last week or so. Presumably I make the presumption that you were aware of some of these difficulties earlier on. Was any of this reflected in your budget to the Congress as to increase or decrease or something to that effect?

Mr. Gotbaum. The answer, Congressman, is yes. But I guess there are two points here. One is we think that the budget is a tool. We think that how aggressively an agency is being responsive to us and to you is something that weighs in the mix. I don't want to mislead you by telling you that is the only thing. There are agencies – and again, I don't think it is appropriate here to name them – that they recognize that the consensus behind their mission is so powerful that they can sometimes glide, and we have to push them. What we try to do, though, is to work privately – because public spankings don't work – We try to say agencies, “If you come forward and make a case and set real goals, we will fund it.”

I will give you some examples and they are agencies that had controversy. The Health Care Financing Administration of the Department of Health and Human Services, their computers were a mess. Now partly, they were a mess because they have a very complicated structure, and partly they were a mess because they implement a very complicated set of laws. But they were a mess. They came forward and said we want to modernize our computers. And it was a plan that was not well thought through. Medicare was sufficiently important that we did support a budget increase, but because it wasn't laid out, because they hadn't really adhered to the notions of process, laid out goals, laid out milestones and laid out measurable results, it didn't sell.

So what we did is went back and worked with them. We said let's together develop a plan. Let's together lay out some milestones. Let's together figure out what it is costing and let's present it. Since that has happened, their appropriators and their authorizers have been much more responsive, as we hoped they would be. Part of what we do is try to provide positive examples by saying if you really do this, then you get results.

Mr. Hastings. In light with that, since you are part of the executive branch, and of course we are the Congress, again, I am going to make an assumption that there is probably something that has to be changed, either legislatively or statutory or something like that. Have you come to the Congress with some changes on how you can make your job better, that Congress can enact because of their authority or because of authorizations with the various agencies?

Mr. Gotbaum. On GPRA, Congressman, we have not yet. I will tell you why. Even though this is a law that Congress passed some years ago, we are still in relatively early days of the GPRA process. I mentioned that – because it requires changes in management, changes in systems, etc – This is a labor of years. It is not a labor of months.

We are just getting the first performance reports this month. (Now, we have seen a lot of drafts so some are them are not going to be a surprise.) Therefore, we thought it was probably premature to suggest how we ought to change the law. The law was actually pretty generous and pretty flexible in that it says: you set goals, you set standards, you produce reports, but it wasn't particularly restrictive in that regard. It gave everybody a lot of room. And so we are a little early for coming to a firm view that we can justify to you about what changes might make sense. I am absolutely certain that at some point it will be entirely appropriate. I don't know what: Whether we will ask you to put the force of law behind some notion of cross cutting measures across agencies; or that we need to move beyond reports, and instead have agencies report on how they have integrated GPRA into their systems.

Mr. Hastings. You are at least prepared, if the time comes, to make a recommendation? I assume that is in the back your mind, at least some place where, if need be, you are prepared to do that to follow that law.

Mr. Gotbaum. One should never assert that one knows with confidence that one could herd all the --

Mr. Hastings. Certainly something you have on the table.

Mr. Gotbaum. Yes, it absolutely is, sir. But this is not a one-size-fits-all process. This is one that we are going through for the first time. I just want to be honest with you that we are not sure yet what recommendations might be.

Mr. Hastings. Thank you.

Mr. Linder. Mr. Sessions.

Mr. Sessions. Thank you. First thing I would like to do is accuse you of negotiating in good faith today. I appreciate you being here. With that, no measure I am going to take today should be taken otherwise. We do appreciate you being here. We do appreciate your forthrightness. However, with that said, I would like to engage in just some general questions with you. I assume by you being here, you are the point of contact for the administration on what we would call waste and fraud abuse, these kinds of matters, what the General is here for. Is that true? Or is there somebody else

Mr. Gotbaum. I would say since there is, or at least there ought to be a deputy director for management for OMB, and since the Senate has not seen fit to confirm her, then I would say I am the senior person within the Office of Management and Budget. I think it is important to say that part of our view of this is, as I hope I have made clear, we do our job as much the way you seem to be doing this, encouraging agencies to internalize these and make improvements themselves.

So my view, personally, the person responsible for dealing with waste, fraud, abuse, errors, is the agency head, and the IG.

Mr. Sessions. I guess what you are saying then, and I am not trying to get into this, I really want to avoid this, is, as the President of the United States looks to each agency head, not to OMB, he doesn't look to a person, in OMB, to say look, we have got this thing and I am the President and -- who is the person at OMB -- I will get right to it. Have you ever seen this report before? It is what is called the high risk series? Have you ever read it?

Mr. Gotbaum. Yes, sir, I actually have.

Mr. Sessions. You have.

Mr. Gotbaum. I have even engaged in a discussion about it with General Walker.

Mr. Sessions. I am not trying to play hardball at all. I am really trying to ascertain who is the point person for the administration.

Mr. Gotbaum. In that case Congressman, I think I know how to answer your question. We, within the administration, we recognize that management matters, and that the process of getting change in agencies is going to be one that involves both the Office of Management and Budget and the agencies. What we have done in order to do this and to elevate it and to make it visible – this thing with the GPRA creates accountability – we created a list of what are called priority management objectives. This was something that was first devised when Frank Raines was the OMB director. It is not just something that is done with OMB, it is something we discuss with the President's Management Council, and something we discuss with the President of the United States. So what we try to do is to use that as a means of focusing attention. Now the priority objectives are a mix

Mr. Sessions. You include this. Is this part of your, not bible, but part of the resource?

Mr. Gotbaum. Some of the priority management objectives are the exact same agencies. For example, the Federal Aviation Administration. Federal Aviation Administration has lots of challenges. They are on the GAO's high risk list, and have been for a long time. And they are on our list too. They are a separate “priority management objective.” What that means is the folks within OMB who worry about FAA report every month to the Director of OMB: here is what is going on, here is what the plans are, here is what the milestones are.

Mr. Sessions. Question. Is this part of what they are reporting about also, or do you have a separate report information for them to look at? In other words, are they responding to at least this? Now, there may be 10 other things, do we have their attention on what Congress repeatedly looks at? Is this included in part of what they are getting, these recommendations? They are very specific. Is this a part of it?

Mr. Gotbaum. Yes.

Mr. Sessions. It is. And then I will assume that OMB, through the administration, has a series of other things, recommendations as well as some time lines which may be seated with it, which are then contained in the report that comes every month.

Mr. Gotbaum. Yes. Yes, sir.

Mr. Sessions. Okay. So in other words, you would suggest to me that the administration and OMB is not only aware of this, but they have read it, that it is a part of the ongoing dialogue that the agency heads do respond to and perhaps on a monthly basis?

Mr. Gotbaum. I am sorry, Congressman, I don't want to misrepresent it. OMB staff are required to report internally each month.

Mr. Sessions. There is some report that a secretary of an upper agency would have an opportunity that the eyes are on the ball. So in other words -- and I am not taking a question, I am not questioning what you are talking about, but you are kind of having to struggle to find out what that bottom line or profit center might be, my question is, do you see that it is already laid out in front of you and you need to attack this yet? You don't need to search for the answer. Have you accepted this as some guide?

Mr. Gotbaum. Let me try to be clear about the extent to which we use the high risk series and the extent to which we view ourselves as having an independent obligation to form judgments. The GAO is outside the executive branch, as you know. So when General Walker or his staff says an agency is in such state that they are on the high risk list they get attention. No question. And we obviously do look and read and consider their particular form of recommendations. That doesn't mean that the particular department involved, or the particular program involved won't come to their own judgments as to how to resolve this. So that, for example, on --

Mr. Sessions. Do they issue a dissent? Do they offer a rebuttal? Do they formulate a process whereby they say General Walker, thank you so very much for pointing this out? And I note that they are given a chance to provide rebuttal. But my point is if Congress of the United States looking at the same thing that the President of the United States is looking at, or are we talking past each other? Because I kind of heard your comments, not to be taken literally, and only as an observation, not ever as an accusation, because we can't solve the matter with accusations, are we talking past each other now, where maybe we are not sure the government agencies aren't sure really what they are looking at? Maybe we are looking at the different things because we think we have got it.

Mr. Gotbaum. Mr. Sessions, I don't think so.

Mr. Sessions. You think we are aiming at the same thing?

Mr. Gotbaum. I think we are, in fact, aiming at the same target. I think that in the vast majority of cases where GAO has said something is a high risk agency, while we don't have the same designation, we don't put stickers on folks and say “You are high risk.” We do watch. With your permission, I will submit for the record our list of priority management objectives.

Mr. Sessions. I would ask that that be --

Mr. Linder. Without objection.

Mr. Gotbaum. I think you can see that in effect, we have taken our own list. Now some of them are agencies. But remember General's Walker's list is a list by agency. And some of --

Mr. Sessions. Or can be a program.

Mr. Gotbaum. That's right. Some of ours are more general. For example, we have a priority management objective to improve the financial management of government because it needs improvement. We are working on that. We are making progress. We have a priority management objective, which it is actually priority objective number 1, which is to use performance information all across the board, all across the government.

Mr. Sessions. Is there a vote on?

Mr. Linder. There is a vote on and you have about a minute.

Mr. Sessions. I am sorry, having too much fun here. Would you excuse me. I will return. Thank you, Mr. Chairman.

Mr. Linder. May I ask you if you would submit to some questioning in writing. I thank you for your time here. You have been very helpful.

Mr. Gotbaum. Thank you, Mr. Chairman. We appreciate being asked.

Mr. Linder. We will now proceed to our final panelist, Mr. Maurice McTigue, currently distinguished visiting scholar of George Mason University. Mr. McTigue has had advantage on us because he actually served in a parliament that went through this. I must say that your written statement was very eye-opening to me and very helpful to the Subcommittee.

He served in the New Zealand Parliament in 1985 serving as the national party junior whip. November of 1990, Mr. McTigue joined the cabinet as minister of employment and associate minister of finance. In October 1991, Mr. McTigue accepted the positions of minister of state-owned enterprises, minister of railroads, minister of works and development and assumed the Chairmanship of the cabinet's powerful expenditure control committee. He served as minister of labor and minister of immigration. He has represented New Zealand as Ambassador to Canada and non residential high commissioner to Jamaica, Barbados, Trinidad and Tobago and Guyana.

In the United States, he has been sharing the lessons of his practical political experience with policy makers. In the service in Parliament and in each ministry, he helped clarify missions and prioritize activities. Today we hope to gain some insight on legislative oversight. We appreciate you taking the time to be with us. I must say your entire statement will be put in the record without any objection. And you can summarize. But I am anxious to hear what you have to say.

 

STATEMENT OF THE HONORABLE MAURICE McTIGUE, DISTINGUISHED VISITING SCHOLAR, MERCATUS CENTER, GEORGE MASON UNIVERSITY

Mr. McTigue. Thank you, Mr. Chairman. And having listened to the testimony this morning, I congratulate you on the decision that you made that you have to look now at the rules of Congress to see whether or not they maximize the benefits of the new tool that you created when Congress created the Government Performance and Results Act.

From my experience as a parliamentarian, and also my experience as a working farmer, a tool is only useful if you actually use it. And it seems to me that the initiative for the Government Performance and Results Act has now moved to Congress. Before the 31st of this month, all of the agencies should have filed with Congress their first reports on their first year of performance under the conditions of the Government Performance and Results Act.

Before I comment on that, sir, and how we looked at a similar process in our parliament and make some comments that might be of value to you, I want to emphasize the magnitude of the change that has been introduced by this legislation. For government agencies, whether they are here in the United States or anywhere else in the world where this change is invoked, it means about a 180-degree change. They have moved from being accountable for complying with the Appropriation Act, which is very much a relationship between the agency and the legislature, to now being accountable for not only complying with the Appropriation Act, but also showing what benefit to the community came from the expenditure of those dollars. That means that the agency has to concentrate on the interface between the agency and the community itself and find a means of measuring and accounting for the benefit that they produced.

Somebody made the comment before, sir, that it is easy in the corporate world to measure performance, because what you measure are profits, or as is described today, the value to the shareholder. What you have done by passing the Government Performance and Results Act is that you have established a bottom line for government agencies. That bottom line in the public sector is not profit but it is value. What was the value to the community from this particular program? Can I recount a small anecdote, sir, that might help in talking about that value?

You commented before about an agency advertising for people to use food stamps. If you were to look at the original decision to introduce food stamps, it was probably intended to relieve hunger. But that is only the consequence of the problem, it doesn't deal with any of the causes of hunger. If you are serious about results, or value to the community, then it might be appropriate to deal with the consequences of a problem while you find permanent solutions. This heightened awareness very much moves the legislature and the government towards finding solutions to problems. Answering the question what are the causes of hunger rather than how can we relieve the immediate impact of the hunger.

It is when you start to do this that the real benefit of measuring value to the community becomes apparent. In our experience, sir, the scarce resource inside a legislature is the time of the elected members. How can you best utilize that resource? Our solutions to rewrite the standing orders to integrate the procedures of the committees of our parliament in a much more productive way. The process of oversight we tried to view as being the research arm of the legislature. Each of the sectoral committees was expected to become the experts on government programs in that particular area of activity.

The findings of that committee were used to inform the process of appropriation, not to direct it, sir, but to inform it. And our appropriation committee which is called the Finance and Expenditure Committee of Parliament, received from each of those sectoral committees a report on their areas of concern. And it would identify for them their findings, both the good and the bad the area of their expertise. Our appropriators would take that into account when they made decisions about the appropriations, whether they should expand this program or whether they should diminish it in favor of another program that was more successful. If that linkage is built, sir, what you immediately do is that you pass extraordinary power and influence to the process of oversight.

In our experience and in the meetings that I have had with agencies here, there is one paramount committee as far as government agencies are concerned, and that is appropriations. The others pale into some insignificance by comparison. But if there were a clear linkage between the work of oversight and the fine work of appropriation, then I think that you are empowering that oversight process.

We found some rather neat techniques, sir, in going through this process and they might be useful to you as well. When you look at governments, they really can effectively only move in one or two directions. They can either enhance an existing good, or they can diminish a current or expected evil. If you ask those questions about each activity, what is the good that is being enhanced or what is the evil being diminished? It tends to give you a clear picture of what the outcome is that you are trying to achieve. With that clear picture in mind, you can then look at the activities of the organization, its programs, and see how much each activity contributes to enhancing the good or diminishing the evil? If they don't contribute, they should be stopped. But the best of them are the ones that you would want to invest in more heavily.

In my experience, as a legislator, the quality of the work that can be done as a legislature is entirely in proportion to the quality of the information that comes into your hands. With the Government Performance and Results Act you have set a standard that will give to you much better quality information upon which to base your decisions.

But it presumes, sir, that those who are required to comply will observe the spirit of the law, which requires them to become much more transparent in what they do. That transparency, in my view, implicit in the Government Performance and Results Act expects that the agency in reporting is not reporting just to the Congress, but also the administration, and the citizens of the United States.

That means that its report has to be transparent. It has to be readily available. It has to be easily understandable. And it has to give a clear picture of the performance of that organization during the last year.

There is, in my view, sir, no reason why the quality and the standard for reporting for government agencies should not be at least as high as that required of Fortune 500 companies by the stock exchange. It should be at least as transparent and it should give at least as clear a picture of the success or failure of the activities of this organization. We at George Mason University’s Mercatus Center where I work have been looking at the reports that have been filed so far. They don't meet those standards in the three that have been filed to date. They are hard to find. Even for people in Congress, they are hard to find. They don't meet the transparency requirements. They don't meet the accessibility requirements. They also don't meet the useability requirements.

I, as an ordinary citizen, cannot pick up one of those reports and get a clear picture of whether or not this organization has had a successful year. I would have to get many documents from their strategic plans through and cross-check to see just exactly what the performance was. In my view, that does not meet an acceptable standard. Unless you have the participation of the community in measuring the performance of government organizations as well as the legislature, then you are not going to get the full benefit available from this tool, the Government Performance and Results Act.

So in looking at what you are doing, I think the requirement to report is a very important consideration as far as the Government Performance and Results Act is concerned and as far as the rules of Congress are concerned.

I make one last comment, sir, and that is this: In our experience as we started to review organizations, based upon their performance and their outcomes, you need to be careful not to look only for efficiency, you actually have to look for efficacy or effectiveness. Is there actually progress on this particular problem? Because if they are doing the wrong thing, it doesn't matter how efficiently they do it, or it is probably better that they don't do it efficiently at all, because the problem gets worse.

Can I give you a very brief example, sir? When we looked at the issue of welfare, we had, for years, considered that the role of that agency was to determine entitlement for transfer payments. The organization measured itself on the basis of how many cases can a case worker handle. Something like 75. How quickly can they deal with each client, about 10 minutes, or in good cases, 7. How accurate were they in determining entitlement? Yet, when we looked across the board, we found, for a long period of time, each year we spent more money on welfare; each year we got more people on welfare. What was wrong? The missing component was that when we went right back to the very beginning and said why did we start with these particular programs? The reason was this: that the government wanted to be able to help people and families in crisis until such time as they could get back on their feet. We had forgotten the last part.

So we changed the mission and we said the mission now is to help move people from dependency to independent living. As soon as you measured that, some of the other efficiency measures were seen to be wrong. Measuring people on the caseload that they could handle was bad. Because you loaded them up with cases until they couldn't effectively meet the needs of the customer in front of them. The case loads went down, the time that they spent with each customer when up by about four-fold, but the movement of people from dependency to independence went up by 300 percent. When you begin to look at those things, sir, you get the real benefits that come out of a concentration on results. Thank you, sir. I would happy to answer questions.

Mr. Linder. How much time did it take you to see a cultural change among the agencies to be working with the legislative parliament instead of against it?

Mr. McTigue. In the beginning to say a 75 percent satisfactory compliance, 4 years. There is as much cultural change needed inside the legislature as in government organizations. The difficult part for legislators is to start to look at outcomes and stop looking at inputs, and to facilitate that we made many other changes. Our financial reporting laws were changed, our budget laws were changed and also the financial relationship in terms of the way we managed appropriations. We had a purchase agreement with each agency. That was a contractual agreement with the head of the agency. It specified very clearly what outputs they had to produce. We held them accountable for those outputs. Those outputs were designed to produce a given outcome. If the agency produced all of the outputs, in the quality, the timeliness, the cost that you wanted, but you didn't get the outcome, that was a policy failure and the government's problem. If the agency didn't produce the outputs, that was the chief executive's problem and could be a career-shortening experience for the chief executive.

Mr. Linder. How much of your impetus for change was driven by economics, by budgets and by money?

Mr. McTigue. In the initial stages, probably about 80 percent was driven by a crisis with budgets. We are talking about a period between '87 and about '94, where the world economy was in a recession, and ours was a deeper recession than anywhere else. But it was also driven by, I think, some of the same pressures that you see here that the public was becoming impatient with, problems that they saw continually getting worse and the governments had no real solutions to them.

That was when we started to look at, are we just dealing with the consequences of problems or are we starting to address some of the causal factors? It might cost more in the initial years to start addressing the causal factors, because you have to address those while you are still supporting the consequences. But in the end, you should be able to eliminate the problem.

Mr. Linder. I am hung up on this idea of mission creep, where agencies lose their objective and then find something else to do. Did you experience this?

Mr. McTigue. The answer is no. No. That was because the accountability and appropriation process very strictly kept them to their core business. We would not allow them to move outside of the core business. When a problem was resolved, that diminished the government's activity in that area. Really – it is in the way in which you handle appropriation and, in our case, purchase agreements, that you control what is the core business of each organization. The organization should not be able to move outside its core business without the permission of the legislature because you do control the appropriation of monies. Therefore, permission to allow somebody to move into another area of activity has to show that there are clear benefits that will come from expending the money in that way. One of the important results of that tight focus on achievement by organizations was that we were able to make comparisons across organizations for activities that were delivering similar outcomes. And by doing that, we were able to identify the best programs and invest more heavily in those programs and eliminate the others.

The benefit there was what we got a significant improvement in the result that we produced for the community, the value to the community, normally at a significantly lower price as well.

Mr. Linder. What would you have done if you had an agency providing assistance help for poor people and they were advertising for more customers?

Mr. McTigue. I would have them in here where I would be asking some questions, sir. The first of those questions would be where is the justification? Are there a lot of people out there who are desperately hungry and don't know that you are providing a service that would relieve that hunger? Or are you starting to feed people at the margin where what you are doing is creating a greater level of dependency? Then I would want to stop that activity.

Mr. Linder. This is not new by the way. In the 1970s, we saw ads in college newspapers that said things like “my roommate and I are on food stamps.” And it really helps their advertising to have college students apply for them.

Mr. McTigue. Let me address this in a slightly different way sir. When you are dealing with the consequences of a problem like hunger, you can produce the reverse of the result that you want if you allow the program to continually expand laterally. What you do is you start to take away from people the responsibility to provide for themselves, then you have the government providing for them.

One of the questions you have to ask is if, for example, it was food stamps or it was school lunches, are you creating a situation where parents are now deliberately sending their children to school without lunch because they can get it there, or is the lunch that they are receiving at school replacing other meals that should be provided in the family? If those managing the programs don't know those questions they should not be allowed to expand them until they do know the answers to those questions.

Mr. Linder. The government is lobbying now for full-time, universal breakfast and lunch, so it doesn't embarrass those young people who have to ask for it.

I have one more question. You have heard one of our witnesses say that we cannot simply have a one-size-fits-all approach to this. What is your response to that?

Mr. McTigue. I agree. It is very easy to measure the performance of Treasury. It is much more difficult to measure the performance of the State Department, because you are dealing with so many intangibles in one case, and the other you are dealing with things that are easily measurable. You are going to have to make subjective judgments. But as you insist upon getting better quality information all the time, then you will be much better able to make those subjective judgments about what is the value we are getting for this particular program. Particularly as accounting information becomes better and you are able to get activity based costs of this program as opposed to that, you can then make comparisons between the benefit here and the benefit there. If there is a greater value in one then you might want to invest more heavily in that group.

So in my view the move now is going to be towards a customization of the programs of agencies to the particular cohorts of people that they serve. It is also going to be a customization approach for legislators who are going to have to look at standardization versus specialization to better meets the needs and solve the problems of people so we don't need to support them any longer?

Mr. Linder. I don't know how you formalize your passage of information to the appropriators in New Zealand, but we have authorizing committees that reauthorize programs every given number of years. Is that how you would recommend that we do it?

Mr. McTigue. The answer is yes. But it shouldn't be an automatic procedure. Each time legislation comes back for reauthorization it does so because the Congress has decided that it is important that we question the principles that drive this program on a regular basis. At that time you need to reexamine the principles and determine that this particular law or program remains appropriate to contemporary American society.

Mr. Linder. May I infer from that that had you been here in the Congress in 1993, you would not have found a good reason to continue the National Helium Reserve that had been in place since 1929 to make sure we had helium for our dirigibles for the next war.

Mr. McTigue. I am surprised it escaped Congressmen as long as it did sir.

Mr. Linder. I want to thank you. This has been some of the most interesting and penetrating testimony. I would like to have an opportunity to talk to you on another subject in the future.

Mr. McTigue. I would be delighted to do so, sir.

Mr. Linder. Would you also be willing to receive some questions in writing?

Mr. McTigue. Yes, I would

Mr. Linder. Thank you very much.

This hearing is adjourned.

[Whereupon, at 11:35 a.m., the subcommittee was adjourned.]

House Committee on Rules
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