Government Executive - Authors - Cameron Gordon

The Numbers Game

Cameron Gordon — Sat, 01 Nov 1997 00:00:00 -0500

hen the Republicans took over Congress in 1994, federal statistical and research activities seemed headed for trouble.

Freshmen in the House complained that Washington-sponsored research duplicated what was already available from private sources. The prevailing view in the GOP seemed to agree with the famous Disraeli maxim: "There are three kinds of lies: lies, damned lies, and statistics."

At the same time, however, official Washington was just digesting a new law, the Government Performance and Results Act. One of its key goals was to "improve congressional decision-making by providing more objective information on achieving statutory objectives, and on the relative effectiveness and efficiency of federal programs and spending." The new law suggested the need for more collection of information by the agencies, not less.

That leaves many agencies in a quandary. Pushed to do more with less, their managers need to know more about the workings and impacts of their operations. At the same time, budgets are tight, and research, particularly seemingly esoteric policy research on boring topics, is often seen as an easy mark for cutting. Cuts, after all, would play to the stereotypical Republican views on the subject.

Because of these conflicting currents, the movement to slash federal statistical spending has failed to gain steam. A few small programs have been sharply cut, but there's been no rush to downsize, and many research programs survive and flourish despite the climate of austerity, as agencies and congressional allies have found the keys to saving them.

Faces of Research

Policy research is a bit like pornography: you know it when you see it, but it is difficult to define. If one thinks of the Results Act as asking the question, "How are federal programs and policies affecting or likely to affect outcomes in the larger society?" policy research can be thought of as the means agencies use to seek answers.

The federal statistical agencies are the best-known providers of such answers. And chief among them are the Census Bureau and the Bureau of Labor Statistics. Their work-tracking trends in wealth and poverty, employment and unemployment, inflation or deflation, race and ethnicity and more-influences both the operation of existing programs and the formulation of new ones.

Between them, these two agencies spent $875 million in fiscal 1997, about a third of the $2.75 billion spent governmentwide on statistical research. (The Office Management and Budget has identified 70 federal agencies which spend at least $500,000 a year on statistical research.)

These statistics-gathering activities are the tip of an iceberg that includes a host of policy research activities scattered throughout government, often deeply buried within particular agencies.

Although not always easy to characterize, such activities are usually focused on moving beyond the numbers and into interpretation. They are aimed at development of ideas regarding the effectiveness of existing programs, the potential of new programs and the understanding of real-world phenomena and ways in which those phenomena might be changed through government policies.

The scope of policy research is so big as to defy definition. Yet many of the research programs are at the center of both federal managers' responsibilities and the daily lives of U.S. citizens. They include, for example:

The Agency for Health Care Policy and Research in the Public Health Service, which funds research into health outcomes and rural health, conducts the National Medical Expenditure Survey, provides technical assistance to states involved in health care reform and creates practice guidelines for use by various health practitioners.
A joint effort by the Social Security Administration and the Office of the Assistant Secretary for Planning and Evaluation at the Department of Health and Human Services to examine the causes of the growth in adult disability caseloads.
The Compliance Research and Planning program of the IRS, which is designed to examine the reasons and remedies for tax evasion, which costs the U.S. Treasury more than $100 billion a year.
The Advanced Measurement Initiative of the Environmental Protection Agency, which seeks advanced monitoring tools for enforcement of environmental regulations.
The National Advanced Driving Simulator program of the Transportation Department, which helps predict driver behavior to improve safety policies.
The Intelligent Transportation Systems, also within Transportation, which examines uses of technology to reduce traffic congestion in major urban areas.
The federal budget includes no category for such research, but a tabulation of selected items with budget classifications indicating such activities (and reported by the General Accounting Office) suggest that it cost roughly $4.8 billion in fiscal 1996.

Funding Policy Research

When the Republicans took over Congress in 1994, there were early indications that policy research and data collection might be in trouble. Budget resolutions suggested cuts, and some came true. The Congressional Office of Technology Assessment, with an annual budget of $19 million, bit the dust. The Bureau of Mines, whose budget of almost $60 million funded a lot of research, also was abolished, as were smaller agencies including the Advisory Commission on Intergovernmental Relations and the Administrative Conference of the United States.

But the budget-cutting movement failed to gain momentum. The outlook for policy research now is not as grim as three years ago. Nor are the partisan lines so brightly drawn. And several patterns on funding of federal research have emerged.

The political football factor. When research and data collection efforts become political issues, nonpartisan agencies are in a position to intercept a pass and score a game-winning touchdown. That's because government data shops are seen as reliable and apolitical and thus to be trusted with sensitive jobs.

A case in point this year was the politically charged move to revise the Consumer Price Index. The bipartisan commission appointed to look at the matter argued that the CPI was overstated and that large budget savings in federal benefit programs could result from a change. But neither the commission nor Congress had the expertise to make any revisions in methodology, and so Congress in the end gave more money to the BLS to improve its own CPI measures.

On the other hand, agencies with perceived political agendas can find their research efforts quashed. Thus, the IRS compliance initiative has been stalled by members of Congress concerned with keeping the agency's investigative powers at bay. The agency has alienated a few taxpayers by subjecting them to intensive audits designed to collect information for taxpayer profiles, and they complained to Congress.

Even more controversial was the Interior Department's U.S. Biological Survey. Interior Secretary Bruce Babbitt billed the survey as an overdue attempt to collect essential information on species diversity. But the effort became seen as a vehicle for overzealous enforcement of the Endangered Species Act at the expense of private property rights. So the $200 million-plus research program was radically cut and banished from Babbitt's office to a new bureaucratic home at the U.S. Geological Survey.

Environmental research is OK, if packaged innocuously. Republicans in Congress made environmental research an early target, following through on a threat to cut EPA's budget. But as time passed, an environmental focus in research emerged as a plus in the view both of the administration and Congress, so long as private property rights did not seem directly threatened and the research encompassed regulatory flexibility, technology and performance. Thus clean cars, air pollution research and regulatory reengineering have essentially held their own and even the President's Climate Change Action Plan is continuing, despite congressional critics' early attacks on the motivation behind such research.

Health care and transportation remain winners. The National Institutes of Health, the Transportation Department's University Transportation Centers and the Volpe Transportation Research Center in Cambridge, Mass., to name a few examples, have more than held their own in an otherwise bleak budgetary picture. (Republicans in Congress actually increased the administration's fiscal 1996 budget for NIH.)

The success of these two categories of research is attributable in part to the power of their constituencies-health care recipients, doctors, consulting engineers and urban commuters, to name a few. They've also been helped by the close association between policy research in health and transportation and the much larger federal scientific and technological research functions associated with them. This is particularly true in the health care arena, where billions of dollars are spent on technical research. Since scientific endeavors in health care have turned out to be fairly well-insulated, policy research functions associated with them also have been protected.

The pork barrel factor. Some research programs fare well for the age-old reason that particular members of Congress see them as beneficial to their constituencies. Thus high-speed rail research, undertaken by the Federal Rail Administration chiefly in the northeast United States, is a particular favorite of Washington-area representatives such as Sen. Barbara Mikulski, D-Md.

Sometimes, though, policy research programs are seen as easy targets because they lack easily identifiable or organized constituencies. A couple of years ago a number of legislators, both Republicans and Democrats, proposed sharp cuts in the Social and Behavioral Sciences Directorate of the National Science Foundation, where much of NSF's policy research is conducted. One big reason for the attack was that, unlike some other programs at NSF, such as engineering research, social and behavioral inquiries did not seem to have any clear group out in front in support of them, except policy wonks without much lobbying clout. However, once the cuts were proposed, universities and groups interested in particular areas of research, such as the transportation community, made their opposition known and the cuts were averted.

Statistical sampling and modernization are still politically charged issues. The statistical agencies face several unique issues. The most contentious is whether the 2000 census should use statistical sampling to augment the actual enumeration of people. Advocates of sampling note, as did L. Nye Stevens, GAO's director of federal management and workforce issues recently, that "the 1990 census, though it was the most expensive in history, for the first time produced results that were less accurate than those of the preceding census."

Sampling advocates feel that sampling of hard-to-count segments of the population would produce a more accurate count of the population. The debate engages suburban (mostly Republican) congressmen and their inner-city (mostly Democratic) counterparts. The Republicans fear a sampling procedure would shift the count toward Democratic constituencies. Whether this would be the result of a statistical sample is not at all clear, but a rider prohibiting the census from using the procedure was attached to one of the appropriations bills earlier this year, ensuring that the battle would continue.

Modernization of existing data collection routines and definitions is another issue. Most government economic data collection programs came of age during the 1950s and 1960s, when the economy was simpler and when computers were less powerful. Despite dramatic changes in both areas, statistical agencies are still tinkering with basic data designs developed 30 or more years ago. The result, say critics, is a slow deterioration in the accuracy of government economic information. For this reason some claim that although funding levels have been relatively steady, major new investments in systems redesign need to be made.

Concern about data quality has also motivated some to push for consolidating the statistical agencies under one roof. During the 104th Congress, this became a hot topic because of the proposal to close down the Commerce Department, home of the major statistical agencies, including Census Bureau. A bill for creating a statistics super-agency was introduced but, after some serious consideration, has gone nowhere. Given Washington's inertia in changing its institutions, the status quo of federal data collection seems likely to continue.

Demand for Information

All in all, the outlook for federal policy research and data collection programs seems brighter now than in the recent past.

Demand for more and better performance information is growing, albeit slowly. Two years ago, the President's budget contained barely any performance information. This year, almost every agency and major program has at least included one piece of performance-related information in program descriptions. OMB's requirement that agencies start providing such information, and Congress' continuing interest in it, play to one of the main strengths of policy research programs, namely their ability to answer questions about how programs achieve their results and how they might be improved.

Tight budgets, ironically, also may strengthen the research programs' utility. Agencies, after all, need to provide ever-more convincing evidence that their programs are working, or demonstrate why new policies will work in the future. Policy research shops are often best-positioned to provide such information.

At the same time, the fiscal squeeze that sometimes made research activities seem a luxury seems to be easing. Strong economic growth has already lowered the federal deficit to its lowest level since the 1970s.

How long might we expect the favorable climate for research to last? Perhaps that's a question best answered by your friendly neighborhood policy research shop.

Cameron Gordon is an assistant professor at the University of Southern California's Washington Center.

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Stretching the Dime

Cameron Gordon — Thu, 01 Aug 1996 00:00:00 -0400

ike Scrooge, the people running federal programs and agencies have seen in this bleak budget year a grim Christmas portrait of present and future. Not so fortunate as Scrooge, they have little hope that improvements in their performance will change the depressing outlook.

The message was conveyed early in the year by the unprecedented length of furloughs inflicted on hundreds of thousands of federal workers. It was reinforced by an unprecedented 13 continuing resolutions, each providing reduced operating levels for many agencies. Some small agencies were actually eliminated. And even when, in April, Congress and the President finally reached a fiscal 1996 funding agreement, the real aim was to balance the federal budget by 2002 at a considerable cost to agency budgets.

So the unmistakable message of fiscal 1996 has been to expect a future of shrinking appropriations.

An appropriation, as every manager knows, is the authority to obligate funds for payment by the U.S. Treasury. That authority is granted through Congress with the agreement of the President. Lately, such agreement has been difficult to reach, and where it exists, the tendency has been to agree on lower rather than higher funding.

So what is an agency to do when it finds its power to obligate funds is limited or reduced? Hold a bake sale? Look for loose change behind the sofa? Actually, there are more options than one might think, but they come with a number of pitfalls.

A look at the last couple years shows how agencies have been stretching the dime, or finding new ways to cope with their reduced resources.

When an agency finds its ability to spend Treasury funds limited, the immediate reaction is to begin cutting back. Before the passage of final 1996 appropriations, many agencies were forced into a triage process, where they cut back on things like travel, overtime, cash awards and bonuses, temporary employees and office space. In the worst cases, employees were forced to take unpaid leave.

In March, for example, the Social Security Administration laid out contingency plans for budget cuts of 10 percent. The plans included up to 55 furlough days, reductions in the purchases of training and office supplies and cuts in travel. The Occupational Safety and Health Administration meanwhile cut its travel budget by two-thirds, from $9 million to $3.5 million, to meet the strictures of one of the continuing resolutions. In addition, OSHA virtually stopped training its inspectors. At the Environmental Protection Agency, about 500 temporary workers were laid off in an effort to insulate full-time employees from anticipated budget cuts.

Other agencies have deferred the implementation of new projects to conserve cash flow. Sometimes these coping strategies become permanent ways of operating. The Office of Management and Budget estimates that federal employment, measured in terms of full-time equivalents, has fallen by almost 8 percent between 1993 and 1995.

Easy Cuts

But all this scrimping to make ends meet has its limits. Many of the easy cuts have already been made. The cuts now in the works have more impact on agency operations and missions. Less travel and training money at agencies such as the IRS, Food Safety and Inspection Service and EPA can mean fewer inspections, according to officials at those agencies. Fewer people may mean that less of the agency's work gets done or that it takes a lot longer to get the work done.

Many of these courses of action cannot be taken easily, or without consideration of the consequences. Unpaid furloughs require authority from Congress. Legislators granted that authority to some agencies in fiscal 1996 continuing resolutions. Reductions in force often unwind quite messily, and can be challenged, as is the case with a planned RIF at the U.S. Information Agency. The American Federation of Government Employees local has filed an unfair labor practice charge in that case. Furloughs, too, are under review by the courts.

Some short-term strategies can interfere with long-term responses to change. For example, if an agency wants to reduce overhead expenses by relying more on temporary help in the future, it might be penny-wise and pound-foolish to lay off qualified and experienced temporary workers to meet current budget shortfalls. Similarly, restructuring plans won't work without certain types of employees, such as personnel specialists, to ensure the seamless implementation of the proposals. Laying off such employees to gain short-term savings could undermine long-term plans with greater budgetary kick.

Squeezing Dollars

Tight times in the government have been with us long enough that many managers have gone beyond mere cutting of frills and nonessential expenses. Call it reinvention, or performance management, but another response to the falloff in appropriations is to make reduced funding do more work.

Pressure to do more with less has been coming from both ends of Pennsylvania Avenue. The Clinton Administration's "Reinventing Government" initiative is well-known. Recently, the National Performance Review proposed converting six programs into "performance-based organizations" in which performance goals are negotiated with the parent agency. (See "Command Performance," page 20.) Under the plan, programs would be headed by chief executive officers with fixed-term contracts-including customer service and taxpayer savings goals-and eligibility for six-figure bonuses. The CEOs would head organizations whose personnel, while retaining federal pay and benefits, could be managed with more flexibility than current civil service rules permit. Candidate agencies are the Animal and Plant Health Inspection Service, the Patent and Trademark Office, the National Technical Information Service, the Defense Commissary Agency, the Federal Housing Administration, the Government National Mortgage Association, the Office of Personnel Management's Federal Retirement and Insurance Service, and the St. Lawrence Seaway Development Corporation. Nearly 33,000 federal employees could be affected-if Congress goes along.

Over the last three years, the NPR has spawned many proposals to boost agency effectiveness and many agencies have taken the initiative to reorganize their programs. SSA is cross-training employees, for example, allowing them to do more than one job to maximize use of their time and skills. The agency's Direct Service Unit teaches worker volunteers to answer toll-free calls, do disability reviews and perform other tasks to help reduce backlogs of uncompleted work and to help spread the workload during peak demand. The IRS also has used cross-training to help employees better respond to taxpayer inquiries and perform other taxpayer service and revenue collection tasks.

Agencies are consolidating offices and facilities to eliminate duplication of services and achieve economies of scale in operations. The Food and Drug Administration plans to eliminate half its laboratories and the Transportation Department announced a reinvention plan to consolidate ten operating administrations into three. The Health and Human Services Department is planning to merge the Office of the Secretary and the Office of the Assistant Secretary for Health into a single corporate headquarters, while the Energy Department has consolidated its Office of Congressional and Intergovernmental Affairs and its Office of Public and Consumer Affairs. The National Park Service is replacing regional offices with fewer, smaller field offices. The Agriculture Department has eliminated field offices and consolidated headquarters units. The list goes on and on.

Sometimes pressure to cut costs results in decentralization instead of consolidation. Several years ago the Bureau of Reclamation made big cuts at headquarters and devolved various functions to the field. In 1995, the National Park Service reduced headquarters staff by 25 percent and moved many employees nearer parks and their customers. In these cases, the agencies hope to eliminate unnecessary administrative services and to test the market by putting services closer to users to see how much those users really want them.

Even basic management techniques such as better accounting and reporting can have an impact on the bottom line. The General Services Administration is an example. Roger Johnson recently left as administrator of GSA after cutting almost $11 billion from the agency's budget and reducing its staff by 4,000 people, to the current level of 16,000, all without layoffs or reductions in services. In a recent interview with the Christian Science Monitor, Johnson tallied the ways he accomplished this task: instituting the use of balance sheets to track inventory, analyzing whether assets were cheaper to rent or to own, and using capital budgeting and planning. Johnson's goal was to gear incentives at the agency toward making better use of its money.

Whether you call it reinvention, reengineering or restructuring, organizational change has received plenty of attention and agencies will continue using it to stretch dollars. Both Congress and the President are pushing for such savings, but here, too, the easy cuts already have been made.

Auditors have begun asking tough questions about restructuring plans now being undertaken. For example, the General Accounting Office has questioned the FDA lab consolidation on the grounds that the expected speedup of work may not come to pass, particularly if a large percentage of analysts refuse to relocate. And has questioned whether the IRS retraining initiative could lead to increased mistakes caused by employees handling too many areas at once.

Even if reforms work, their main cost savings come from reducing staff, which can hurt morale and disrupt operations. Moreover, managers usually need special authority, either from the agency head or from Congress, to make many of these changes. While there is agreement on the need to streamline, the specifics of those efforts are a matter of some contention. Closing field offices, for example, can be an especially sensitive issue for Members of Congress-one reason USDA's initial reorganization plan in 1993 ran into trouble.

Leveraging Money or Mission

If restructuring and cutting back on immediate cash needs can't keep a program alive, and appropriations are not going to be increased, then an agency may have no choice but to leverage its money or its mission.

Leveraging is supplementing existing funds for specific missions with other people's money, whether from another agency or an outside source. The National Gallery of Art was forced to close its popular special exhibit of 19th century Dutch painter Johannes Vermeer last winter due to furloughs. But the Richard Mellon Foundation stepped in with subsidies large enough to reopen the show. Similarly, when Arizona was faced with the closure of its most popular tourist destination-the Grand Canyon-the state donated $17,600 a day to pay National Park Service workers to keep the park partially open during the shutdown. At the time, other states considered negotiating agreements to do the same thing.

The National Park Service is enhancing its efforts to repair the flood-ravaged C&O Canal in the Washington, D.C., area with volunteer labor and private donations. Perhaps most significantly, before eliminating certain low-traffic routes, AMTRAK negotiated with some states, such as Pennsylvania, to have those governments fill in the gaps in funding.

As these examples show, leveraging tends to work best with specific and clearly delineated services with strong constituencies. Even in these cases, it takes time and effort to find contributors and negotiate deals. And leveraging can create problems if reliance on outside money weakens agency control or accountability.

A twist on leveraging of money is the leveraging of mission. In this case, outside entities help deliver agency services. To some degree, this is happening with the use of volunteer labor in the C&O Canal restoration. During the budget shutdown, Arizona Gov. Fyfe Symington considered sending in the National Guard to reopen the Grand Canyon before the stopgap state funding deal was sealed. Congressional Republicans wanted to give mission leveraging legislative backing, proposing a bill that would have required the Interior Secretary to accept a state's offer to run a national park or refuge during a shutdown. Interior officials opposed the idea, arguing it would compromise the agency's management control, and the bill was rejected.

Mission leveraging need not take place only in the midst of budget crisis. In small ways, federal agencies are pursuing the idea in their dealings with one another. Recently, the Energy and Interior departments agreed to share data and analysis on development of natural gas and oil resources missions. And the four primary federal campground managers-the National Park Service, the U.S. Forest Service, the Bureau of Land Management and the U.S. Army Corps of Engineers-have agreed to establish a combined reservation system for campsites on federal lands nationwide.

Kicking the Appropriations Habit

Leveraging is one step on the continuum of moving from federally appropriated to nonfederal funding. Many agencies have long accepted outside funding for general overhead. The Smithsonian, public television and public radio all have had individual members and contributors for some time. The United States Advisory Commission on Intergovernmental Relations, a small agency slated for extinction, has accepted general contributions from state governments for years.

Many agencies are considering the more extreme form of mission leveraging known as privatization. NASA is considering setting up eleven new science institutes which would be private entities partly funded by the agency. Major aspects of space shuttle operations also will be performed by private firms. The Pentagon has been working to privatize its maintenance depots. The U.S. Postal Service is considering firms to run its Priority Mail Centers and HHS is looking at privatizing parts of the Clinical Center at the National Institutes of Health, the Agency for Health Care Policy and Research, and the Federal Employees Occupational Health program. In addition, agencies which have been eliminated, such as the Administrative Conference of the U.S. and the U.S. Travel and Tourism Administration might continue their lives as private entities. In the case of USTTA, legislation has been introduced to replace the defunct agency with a public-private partnership.

Such moves toward the extreme end of the continuum aren't easy to undertake, nor are they possible to achieve in many cases. Privatization can be especially problematic. The DoD depot privatization effort has hit strong resistance from federal unions and Members of Congress whose districts would be affected. And while some missions, such as tourism development and public radio, might be natural candidates for privatization or outside funding, other missions, such as welfare grants, may not be. Also, agencies cannot privatize with abandon. OMB has extensive guidance on the matter and approval from OMB is necessary before agencies can proceed.

There's a middle ground for agencies that must break the appropriations habit, and it often takes the form of making users pay for services. In this increasingly widespread practice, the Park Service has been a leader. The service has proposed to eliminate existing caps on park entrance fees and current prohibitions against fee collection at certain parks. It also wants permission to charge fees for commercial and nonrecreational uses of parks, and establishment of a Park Renewal Fund that would earmark fee collections for park improvements. Legislation embodying some of these ideas has already been approved by the House Resources Committee. A related measure, being pushed by the agency and considered by the House, would raise the amount that park concessionaires pay to the Park Service and open up the process to competitive bidding.

User fees require that the agency have products or services that can be sold, something which does not always hold true. And the current opposition to tax increases makes user fees politically unpalatable as well as unpopular with users accustomed to getting services at little or no cost. Nonetheless, if the choice is between abandoning a service or charging for it, this may be a happy medium.

There is one way to raise cash in a hurry, but it is the agency equivalent of selling the family china. The Department of Energy did something like this when it was authorized to sell up to 7 million barrels of oil from the Strategic Petroleum Reserve to fund a task it needed to complete-transfer of oil out of the reserve's Weeks Island underground storage facility and the decommissioning of the site. While selling assets obviously works as a stopgap measure, it is not sustainable over the long term.

Going Out of Business

Of course, one response to a funding shortfall is to give up activities entirely. Agencies don't like to talk about this because their activities are all undertaken, in theory at least, in pursuit of congressional objectives framed in law. But still, there are many ways to implement broad statutory goals, and many ways not to do so, too, when resources become scarce.

There aren't many examples of agencies shutting down whole programs without explicit direction from Congress. But elements of programs can go by the boards, as was the case with part of the IRS compliance program earlier this year. The IRS was planning to conduct floor-to-ceiling audits of some taxpayers to detect patterns of reporting, but abandoned the effort when its compliance budget was cut. Data collection and research programs are often the first victims of appropriations cuts.

There is nothing wrong with eliminating an activity and, in fact, cessation is commendable if the activity has stopped serving a useful purpose. The trick is setting priorities so the least useful activities are eliminated before the most useful ones.

Considering the Options

Declines in appropriated funding are changing the way agencies operate. That is clear enough. But the changes need not be Draconian, and agencies may find ways to fund parts of their operation that don't require authority to obligate U.S. Treasury funds. Here are some of the questions executives need to pose:

What activities are your agency absolutely required to do and what can it forego if need be?
What does your authorizing legislation say about collecting outside funding, spinning off services or other strategies?
Is the authorization for the activity permanent or temporary-that is, will the authority to do something continue even if appropriations are eliminated for now?
Does the authorization contain any special and perhaps rarely used flexibility?
What has been, or might be, the stance of Congress, the President and OMB with regards to the course of action currently under consideration?

Answering these questions provides at least an outline of options and their potential pitfalls. This sort of strategizing is the essence of the manager's power to respond to congressional appropriations cuts. It may not be easy, but unless a lot of loose change has slipped behind the couch, there is no other way. ]]>

Funding Reconstruction of the CandO Canal

Cameron Gordon — Thu, 01 Aug 1996 00:00:00 -0400

n most people's minds, the Chesapeake and Ohio Canal was little but an abandoned ditch and pathway running west from Washington, D.C., until Supreme Court William O. Douglas began his campaign to promote it as a recreational resource. Douglas led many public walks along the canal towpath as he built a constituency for making the 184.5-mile historic transportation route a national park.

That kind of citizen involvement with the canal lives on. It's evident now in response to the National Park Service's effort to restore the canal from the ravages of this winter's floods. Money to rebuild the canal, amounting to cost an estimated $22 million, was not in the budget, so Interior Secretary Bruce Babbitt kicked off a volunteer repair and fund-raising effort in February with a rally along the canal at Great Falls, Md. Babbitt followed that up with a 60-mile hike from Harper's Ferry, Va., to Georgetown and another rally in April.

Babbitt's activities begat other efforts, including a March for Parks in which participants were encouraged to solicit donations. Interior and the Potomac Conservancy organized volunteer groups to help clear debris from the park and to spread rock and gravel on the towpath. So many volunteers were signing up that by April there was a waiting list.

As of April, about $500,000 had been raised from private donations, and the District of Columbia and Maryland governments had given nearly $1 million to supplement a $2 million emergency appropriation from Congress.

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Struggling for Survival: The Case of the ACIR

Cameron Gordon — Thu, 01 Aug 1996 00:00:00 -0400

ith the signing of the Treasury, Postal Service and general government appropriations bill last November, many thousands of federal employees who work in the agencies it covers breathed a sigh of relief. For them, there would be only one furlough and no more disruptions in pay. But the news was not so good at one small agency funded by the bill, the Advisory Commission on Intergovernmental Relations. Unfortunately for the dozen or so ACIR employees, the bill contained a provision cutting its 1996 budget to just a third of the usual level and requiring the agency to proceed toward closure.

ACIR remains deep in the thickets of fiscal doom, but its struggle to survive is instructive. Unlike many agencies, ACIR has two distinct advantages: a permanent authorization and the ability to accept money from outside sources, mainly state governments, as well as authority to carry over that money from year to year. The permanent authorization proved to be of little help at first, however, because the Office of Management and Budget interpreted the appropriations bill language as meaning that the agency could not continue in operation even if outside funding were available.

The agency's initial efforts focused on striking the close-down language from the appropriations bill. If this obstacle could be removed, then with the permanent authorization and the ability to raise non-appropriated money, longer-term survival might be possible. The strategy pursued was to promise to ask for no money in the future in exchange for the removal of the requirement to close.

With the 1996 budget a tangle, there was little progress on either front, so ACIR shifted gears and focused on its authorization. Perhaps the agency could be reauthorized with a more specific, narrow, and even temporary purpose that could meet some need perceived by Congress. Thus the agency focused on special purpose legislation with limited authority and directed and temporary appropriations. As of this writing, ACIR is being considered for inclusion as a research entity to help conduct a study of the gaming industry. Prospects for this bill, and thus for ACIR, were uncertain in early July. To ensure ACIR's servoces don't disappear completely should the gaming bill fail, agency supporters are now working to establish a nonprofit research institute to carry on ACIR's work.

The main lesson of ACIR's experience is focus. The agency tried to keep the whole loaf if possible, but steadily labored to keep smaller and smaller slices in lieu of nothing. ACIR may not succeed even in this quest, but this need not be true for other programs.

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The Worst is Yet to Come

Cameron Gordon — Thu, 01 Aug 1996 00:00:00 -0400

t the risk of sounding like Chicken Little, the sky isn't looking too firmly placed in the firmament, even if it hasn't yet fallen. That's the conclusion emerging from the Congressional Budget Office's newly released "Economic and Budget Outlook" for fiscal years 1997 to 2006. CBO's 10-year look at fiscal trends is gloomy enough, but the longer term outlook is downright alarming, and in both the short- and the long-run the implication is for tighter and tighter operating budgets for federal agencies.

CBO says that if revenue and entitlements policies remain unchanged, and if discretionary spending grows at the rate of inflation, federal deficits will begin to grow steadily in 1997, reaching to more than $400 billion in 2006. This is not a wholly unlikely scenario; indeed it's not far from what has been happening during the past decade and would reflect the lack of consensus for change that has afflicted the government during the 104th Congress. Another path CBO examines assumes that discretionary spending holds steady at 1996 levels, with the freeze reducing the actual purchasing power of discretionary appropriations by more than 25 percent over the 10-year period. Here, deficits level off, but in the range of $180 billion. (See Chart I.)

President Clinton has proposed a fiscal path that would lead toward balance in 2002, though CBO says his policies actually would produce an $81 billion deficit that year. But these policies have yet to be enacted, and there's some doubt the Administration even intends to pursue them in future years. During recent testimony before the Senate appropriations subcommittee headed by Sen. Christopher Bond, R-Mo., the heads of NASA and the Veterans Affairs Department said quite bluntly that they didn't intend to live within the out-year ceilings projected in the Clinton budget. They further claimed the White House was quite aware, and approving, of their intentions. While on the surface this might be seen as good news for these two agencies, it would imply increasingly large deficits. And there can be little doubt that pressure to erase them will continue in a move toward budget balance.

CBO says such a move would be highly useful, and the earlier the better, in light of much worse budget deficit problems looming in the years after 2010. Fast-growing claims on Social Security, Medicare and other entitlement programs by an aging population will send spending zooming out of sight unless changes in these programs are made. Just to keep deficits from an unsustainable pattern of growing faster than the economy, Congress would have to increase revenues by 15 percent to 25 percent, CBO says. Absent such changes, and with discretionary spending growing with inflation, the national debt, measured against the size of the economy, would quickly catch up with and then exceed the peak levels reached during World War II. (See Chart II.)

Thus, deficit politics, already pinching agency budgets, almost certainly will exert a tighter and tighter squeeze as time goes on.

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