Former Fed chairman backs new plan for overhauling government

By Charles S. Clark

June 21, 2011

The latest comprehensive plan for reorganizing the federal government -- timed for release in the midst of a deficit crisis and low public regard for Washington's competence -- is an academic product that has won the blessing of former Federal Reserve Chairman Paul Volcker and Sen. Mark Warner, D-Va.

"It's time to stop tinkering with the small-scale things and embrace reforms to reshape government," Paul Light, a professor of public policy at New York University, said at a Capitol Hill press conference. "The problem with government reform is not too many ideas, but rather the lack of a comprehensive package."

The study, titled "Creating High-Performance Government: A Once-in-a-Generation Opportunity," represents a year's work by fellows at NYU's Robert F. Wagner School of Public Service, financed by Volcker, a veteran of several government reform commissions, and the Robertson Foundation for Government.

In laying out a series of recommendations that could save $1 trillion or more over 10 years, the report bemoaned the lack of action on similar reports in the past, saying, "We see the result in unsuccessful, redundant, wasteful and counterproductive efforts in government."

Volcker told the briefing "the big problem is that you can't run an effective government" without public respect. "When asked the simple question, 'Do you trust government to do the right thing most of the time?,' only 20 percent answer yes," Volcker said. "This is not a new story but it's a serious story."

Warner said improving government efficiency could become a significant part -- perhaps 15 percent to 20 percent of savings -- of the "grander solution" for getting the nation's financial house in order. The diagnosis in the NYU study is built on themes of accountability, effectiveness and productivity. Concretely, the study calls for reducing the number of management layers; harvesting cost savings by eliminating duplication while addressing the backlog of unpaid taxes, improper payments and surplus federal property; and increasing workforce productivity by focusing on the quality and quantity of front-line employees.

For example, in discussing ways to enhance accountability, the report calls the acquisition workforce part of the government's "under-performing administrative structure." That structure endures despite creation of inspectors general (three decades ago), chief financial officers (two decades ago), the Government Performance and Results Act (15 years ago), and the chief human capital officers and chief information officers (more than a decade ago), it says.

The $1 trillion in savings would be accomplished through "an aggressive attack on wasteful spending," as in curbing improper payments, reducing excess federal properties, consolidating data centers, streamlining acquisition, terminating failed weapons systems and reducing the contract workforce (now estimated at 7.5 million jobs) by 500,000 positions.

Light's plan also would eliminate 1,500 Senate-confirmed presidential appointees and require Congress to prepare and review administrative impact statements for all pending legislation. Notably, the report calls for actually adding to the federal workforce in the areas of acquisition, information technology, inspector general employees and Government Accountability Office employees. It would expand the Obama administration's Securing Americans' Value and Efficiency award, with a $100,000 SAVE prize for the federal employee with the best plan for saving government money.

Perhaps most unlike similar plans, it would implement the reforms with a new government reform corporation "to develop legislative proposals for immediate action through fast track, up-or-down votes," the study said.

"For too long we've defined overhaul down to changing the spark plugs and changing the timing," Light said. "We need a broader reform," though not, he added, the simple downsizing approach offered recently by House Government Oversight and Reform Committee Chairman Darrell Issa, R-Calif. (Warner, by contrast, spoke proudly of being the Senate sponsor of Issa's recent bill to create a centralized website that allows the public to track all federal spending.)

Volker told the gathering the NYU study is "very far-reaching." He said, "We've reached a point where something has to break the logjam" caused by politics and ideology. "The reforms won't happen in the next 12 months, but I'd like to see it become an election issue in 2012," he said.

The former Fed chairman lambasted the fact that in the midst of a financial crisis, 10 key positions in the financial agencies remain vacant due to "gridlock in Congress -- it's not right," he said.

"It's getting hard to get good people into government," he said, in part because the hiring process takes so many months. He criticized the outsourcing of government functions in recent years, saying it was done "hit or miss in an ignorant way."

Asked what government does well, Volcker said, "The government does a lot well that it doesn't get credit for. People tend to think of [last year's Gulf] oil spill and [the federal response to Hurricane] Katrina." But "when people get worried about disease and epidemic, the Centers for Disease Control [and Prevention] becomes terribly important and is generally respected," he said.

He also cited the Food and Drug Administration, noting that, because he has investments in health products, drug reviews can be a "pain in the neck, but do we want our drugs protected or not?" He cited the Kennedy administration's successful moon landing project as a boon for U.S. technology. And he praised the Army, which, though famous for its rigid bureaucracy, "somehow works, educates its people and always provides a good general who seems capable. They do a pretty good job."

Warner added the National Science Foundation to the list of government successes, and repeated his plea for a constructive political dialogue. "This demonization of government," he said, "is anti-American."

Warner, who is currently active both in debt negotiations and efforts to improve government performance, said leaders "first need to get of their foxholes, check their parties in at the door and get past their religion in the battle of spending cuts versus revenues. If you can't show the public they're getting value for their dollar," he said, "we won't tackle this financial challenge."

Audience member Jonathan Breul, executive director of the IMB Center for the Business of Government, said he was impressed with the NYU report: "Achieving high-performance government is an extremely worthy objective, and this is a comprehensive memo of actionable reforms and an intriguing implementation plan," he said. "The new ingredient is support by a partnership with Warner and Volcker."


By Charles S. Clark

June 21, 2011

http://www.govexec.com/oversight/2011/06/former-fed-chairman-backs-new-plan-for-overhauling-government/34212/