Government Executive - Authors - Timothy B. Clarke

The Health Care Test

Timothy B. Clarke — Tue, 01 Feb 2011 00:00:00 -0500

The health care law's fate will help define government reach for years to come.

In the 235-year-old struggle to define the role of government in our country, the Patient Protection and Affordable Care Act enacted in March 2010 looks to be a milestone. From every corner of the constitutional landscape, it is attracting the kind of attention rarely seen since Franklin Roosevelt's New Deal produced novel theories of government power that were challenged repeatedly in Congress and the Supreme Court.

Now an epic struggle to kill the health care law will be the leading edge in a broader attack on federal powers to regulate other key sectors of the nation's economy. Also in the crosshairs are the new financial regulatory law, the huge federal institutions propping up the housing markets and government efforts to curb greenhouse gases. The Affordable Care Act is so important in this debate because the law does, as its critics say, move the United States further toward a welfare state. To be sure, we already have programs that give people cash grants and subsidies, but we do not have the kind of cradle-to-grave approach found in Europe. We take care of seniors and veterans, and offer tax credits for the working poor, and occasionally single out special groups as Congress did in December 2010 with Sept. 11 first responders, but we haven't said to the middle class that government will step in broadly to assure their health, education and welfare.

The Affordable Care Act seeks to promote the welfare of middle- and lower-income citizens by providing subsidies and offering peace of mind about the unaffordable health care bills people fear they might face.

Is this "socialism," as critics charge? Or is it government fulfilling its obligation to shore up the middle class?

It's instructive to look back on what is often considered the most successful of programs to build the middle class, the 1944 Servicemen's Re-adjustment Act, known as the GI Bill. When it was under debate in Congress, opponents beat back proposals to extend its benefits to more people through a British-style welfare agency. But as University of California-Berkeley assistant professor Kathleen J. Frydl observes in The GI Bill (Cambridge University Press, 2009), the broad menu of loan guarantees for a house, business or farm, tuition, unemployment compensation, and no-cost health care, constituted a welfare regime for a large class of people. Thus, she writes, "Over a discrete period of time, for veterans and their families, there was a strong welfare state, a provisional but impressive victory of social policy and federal power [but which] came at the expense of more universal coverage."

The GI Bill helped create the American middle class. But since it ended, there has been no other program to bolster this group-the current White House's middle-class task force notwithstanding.

Frydl observes the GI Bill found support in Congress in part because an important institution, the Veterans Administration, already was in place to provide an administrative home for all the new programs. "The creation of policy is, in the United States, only the beginning of the story," she writes. "Regulatory power, those countless decisions made by agencies during implementation, or remedial schemes designed to rectify faults of the original policy, are both tremendous reservoirs of state power."

As with the GI Bill, the Affordable Care Act confers sweeping regulatory duties to government agencies. While the law's big-government philosophy is under attack in Congress, the health care program seems more vulnerable at the moment in the regulatory arena. House Republicans have said they will examine "every dime the administration is seeking to spend on implementation." And a key provision of the law is headed for review by the Supreme Court after a Virginia judge ruled the requirement that individuals buy health insurance fails to pass constitutional muster.

As National Journal reported in December, the newly powerful GOP contingent in Congress will "lay an oversight paper trail" critical of many administration policies, and then will move, as GOP majorities did in the 1990s, to defund or block steps agencies must take to implement laws and regulatory strategies.

All of this will constitute an attack on the power of government. But in defining the scope of the U.S. welfare state, no battles are more important than those under way in Congress and the courts to decide if the new, fragile health care law can long survive.

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In the Crosshairs

Timothy B. Clarke — Sat, 01 Jan 2011 00:00:00 -0500

Federal executives look ahead to a tough two years.

President Obama's announcement on Nov. 30 that federal civilian workers would go without raises for the next two years was the first of many moves that will test federal managers in the months ahead. This year and next could see pay cuts, furloughs, reductions in force, termination or downsizing of federal programs and agencies, and new challenges to such heretofore impregnable bastions as the Federal Reserve and the military services.

Deficit study commissions have proposed sweeping reforms. The chairmen of the presidentially appointed National Commission on Fiscal Responsibility and Reform recommended changes that would affect virtually every American by imposing higher taxes and cuts in the major entitlement programs. With their original thinking and comprehensive plan, chairmen Alan Simpson and Erskine Bowles gained 11 supporters among their 18-member commission in final voting on Dec. 3.

The year-end tax and unemployment insurance package that Obama and congressional Republicans negotiated focused on stimulating the economy at a cost of $1 trillion in the next two years. But this huge new addition to the national debt can serve only to ratchet up the GOP-led drive to cut back on federal spending programs as budget bills move through Congress this year.

Independent budget experts do not believe the entitlement reductions that are a key ingredient of the Simpson-Bowles package can command majorities in the new Congress. But proposals to curtail the federal workforce and agency budgets seem more likely to proceed, since they can be accomplished through must-pass appropriations bills.

The commission proposes a three-year freeze in federal pay and a 10 percent cut in the federal civilian workforce-a head count reduction of 200,000 to be accomplished gradually by hiring only two new workers for every three who leave. These ideas will be music to the ears of incoming Republicans in Congress, as will the commission's proposal for "serious belt-tightening" at federal agencies. Budgets will be frozen for most, and some will see substantial reductions. By 2015, discretionary spending would be 16 percent below what's projected in the 2011 federal budget.

Such House firebrands as Reps. Paul Ryan, R-Wis., and Darrell Issa, R-Calif., the incoming chairmen of the House Budget Committee and the Oversight and Reform Committee, are itching to shrink federal roles and responsibilities. While Ryan sets spending limits, Issa will be wielding subpoena powers during the extensive investigations he plans of federal activities. Issa has said his committee will "focus on places where money can be saved, where we can literally close agencies or subagencies or programs," and he has talked of enlisting agency inspectors general in his hunt for duplication and waste.

So how will this radically changed climate affect the working lives of the men and women whose careers are devoted to the federal government's missions?

When I put that question to panelists at a recent National Academy of Public Administration budget discussion, William G. Hoagland, for years a leading budget expert on congressional staffs and now an executive at CIGNA Corp., lamented the fact that "the first target is the federal employee," while Norman J. Ornstein, resident scholar at the American Enterprise Institute for Public Policy Research, offered the view that "it will be terrible to be a public administrator over the next two years." Civil servants, they observed, could suffer not only from direct attacks on bureaucratic norms but also from budget uncertainties for much of the year and the absence of political cover for decisions in many agencies that are short Senate-confirmed appointees.

Still, unloved though they might be, federal managers must take heart in the incontrovertible fact that their knowledge and skill are essential to identifying efficiencies and innovative practices in the new drive for a more modest government that begins this month.

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Attacking Poverty

Timothy B. Clarke — Mon, 01 Nov 2010 00:00:00 -0400

A new program holds new possibilities.

There was joy in the Parkside-Kenilworth section of Anacostia on Sept. 21 when Education Secretary Arne Duncan, joined by other Cabinet members and White House officials, announced this poverty-stricken neighborhood of the nation's capital would benefit from a grant to help improve its children's chances for success.

Standing among the luminaries that day was Irasema Salcido, founder of the Cesar Chavez Public Charter School in Parkside. She is the spark plug who organized the DC Promise Neighborhood Initiative's grant application, one of 20 winners among 329 applicants. A Mexican immigrant with a compelling life story of achievement against the odds, Salcido has developed an extensive plan to offer children the kinds of support they need from the cradle through college to succeed. "Ten or 20 years from now, it's got to be different here," she said when I visited her recently. "Our children, successful in their lives, will come back to improve their neighborhood."

The grants Duncan announced were the first installment in the new Promise Neighborhood program President Obama pledged during his campaign after visiting the Harlem Children's Zone, a pioneering education improvement program in a low-income neighborhood of Manhattan.

Education is much in the news. This fall, NBC News' weeklong "Education Nation" series featured Geoffrey Canada, founder of the Harlem program, as a hero, and Randi Weingarten, president of the American Federation of Teachers, as a punching bag. The movie Waiting for Superman made its high-profile debut, arguing charter schools outperform regular public schools, and villainizing teachers unions for opposing reform. And President Obama earned headlines when explaining why he hadn't sent his children to Washington's public schools. In all of this, urban public school systems are portrayed as wholly incapable of preparing children for college and careers. Charter schools, which also are publicly funded, get much better marks, though they educate a tiny fraction of the nation's students, and only some succeed.

Canada's Harlem Children's Zone experience is described in gripping detail in Whatever It Takes (Houghton Mifflin Harcourt, 2008) by journalist Paul Tough. Canada took on a 24-block area in northern Manhattan, determined to better the lot in life of its 3,000 children, 60 percent of whom were living below the poverty line and three-quarters of whom were scoring below grade level on standardized tests. He centered his efforts initially on a charter middle school. But after finding that most kids in the zone weren't prepared to do the work, he began an effort to address their needs from the very beginning.

So Canada created a "baby college" to educate young pregnant women about how to keep their babies healthy and eager to learn. He drew in many other services in his zone, creating what Tough calls a "cocoon of educational, emotional and medical support that starts at birth and never stops." The relentless focus on educational achievement and getting children into college that Canada embraced and the Promise Neighborhood program supports could constitute the first serious national attack on poverty in a generation, experts believe. It could create the "contamination" effect Canada would like to see if college graduates return in substantial numbers and begin influencing behavior in Harlem.

Salcido hopes her plan will earn her another grant next year to step up the program. But federal money isn't the be-all of her efforts. Parkside already stands to benefit from a new early-childhood Educare facility established with help from a foundation started by Susan Buffett, daughter of billionaire investor Warren Buffett. Hospitals and many other partners have joined in Salcido's crusade, seeing a duty to help provide the promise of a better life for the neighborhood's children, fully 40 percent of whom are living below the poverty line.

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Collaboration and Control

Timothy B. Clarke — Wed, 01 Sep 2010 00:00:00 -0400

Web 2.0 meets government's desire to shape the message.

Social media and other innovations of Web 2.0 can greatly benefit private and public institutions, says Andrew McAfee, author of Enterprise 2.0: New Collaborative Tools for Your Organization's Toughest Challenges (Harvard Business School Press, 2009). McAfee makes a persuasive case that wikis, Facebook pages, blogs, prediction markets and even Tweets are effective tools for collecting the wisdom of the crowds.

In his book and also during a speech at the recent Excellence in Government conference, McAfee acknowledged it's difficult to justify investments in Web 2.0 because its benefits are hard to quantify. It's also not easy to persuade people to embrace and use the technology.

Indeed, full adoption of social media by government would seem to entail a particularly steep climb, given the strong desire by officials to control information and shape the message, and the harsh consequences that can befall those who stray from the narrow party line.

"Enterprise 2.0," as McAfee calls tech-savvy organizations, is all about using technology to bring together many brains for the greater good.

Different technologies work well to deepen connections and to share knowledge among people who already have strong ties, and to connect those with weak ties, potential ties or none at all. Wikis are strong tools for those already connected. They allow contributions by many people, and a process of constant editing and updating. The federal intelligence community's Intellipedia, for instance, has enabled much more information sharing than in the past. In a private sector example, McAfee writes about Vistaprint, a small high-tech company that needed to keep new and current employees up to speed on rapidly evolving engineering knowledge. A continually evolving wiki offered an answer.

Meanwhile, Serena Software faced a problem that many federal agencies share: a widely dispersed workforce. Eight hundred employees worked in 18 countries, with 35 percent working from home, so there was little chance to meet colleagues face to face. Serena's leaders worried about a diminishing sense of community among employees. So they promoted adoption of Facebook, connecting people with previously weak ties.

Writing in some detail about the intelligence community's adoption of Web 2.0, McAfee observed that beyond wikis, blogs also have proved important, especially in converting potential ties into actual ones. Blogs are easy to use and can create rich conversations, deepening knowledge on particular topics. In what's perhaps a hybrid of these techniques, Transportation Secretary Ray LaHood has just announced IdeaHub, a tool that will connect and collect the wisdom of his department's 55,000 employees.

Prediction markets, which Google and others use, allow previously unconnected people to bet on outcomes-of elections, for example-in what's proved an effective means of foretelling the future. Wouldn't it be interesting to know whether the collective wisdom of our huge intelligence establishment would predict success or failure in Afghanistan?

President Obama has promoted the ideals of openness, transparency and collaboration. Data.gov and various Web 2.0 initiatives are good starts. But a true culture of openness seems a long way off. It's just too hard to let 1,000 messages bloom in a government that grows ever more hierarchical.

Obama himself exerts unprecedented message control, with Twitter posts and Flickr photos the White House likes better than what might emerge from mainstream media. White House blog posts convey the image of openness while Obama resists the give and take of the formal news conference. Indeed, the perils of unauthorized comment were driven home in the case of Rolling Stone's article about "The Runaway General," Stanley McChrystal, erstwhile U.S. commander in Afghanistan. Nine days after McChrystal's firing, the Defense Department tightened restrictions on officials dealing with the media.

And so goes the yin and yang of government transparency.

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Turning Point

Timothy B. Clarke — Sun, 01 Aug 2010 00:00:00 -0400

Choices we make now could spell prosperity or decline.

Should we countenance another round of stimulus spending, adding billions more dollars to the national debt, or should we finally begin a serious effort to cut deficits and debt in the interest of longer-term prosperity? Congress is all but deadlocked on that issue.

Are we at a point in our history where choices made now will put us on the path either to renewal of the free enterprise economy of our forbears, or lead us down the road to European-style statism, reliant on powerful bureaucracies and confiscatory taxation? Do the choices we make during the next policy cycle imply that the nation will head either for prosperity or decline?

It seems our government might have reached a crucial turning point-after years of fiscal indiscipline, concomitantly expansionist policies and failure to focus on the long-term needs of our society. The congressional deadlock is itself evidence of the struggle to set the nation's course, as Obama administration stimulators and their allies in Congress have not been able to carry the day over those who can no longer support the borrow-and-spend policies of the past decade.

Even small, temporary steps to keep the economy from receding-such as extending unemployment insurance-now are attacked as unwarranted expansions of government and irresponsible additions to the national debt. Only after months of debate did the Senate muster enough votes to pass an extension of jobless benefits in late July.

Framing this debate in a philosophical context, and with a longer-range view of government's role in America, Arthur C. Brooks, president of the American Enterprise Institute for Public Policy Research, and a distinguished group commissioned by the Center for the Study of the Presidency and Congress this spring issued cogent analyses arguing that decisions made now will have great bearing on the nation's future prospects.

Brooks lays out his case in a May 23 essay in The Washington Post. He sees a "new culture war [pitting] the forces of free enterprise [against] an expanding and paternalistic government." Brooks puts Obama squarely in the second camp, citing the president's 2009 speech chiding people who "chase after all the usual brass rings [and] after the big money . . . and worry about whether [they] have a fancy enough title or a fancy enough car . . . [a] message that's . . . been in our culture for far too long-that through material possessions, through a ruthless competition pursued only on your own behalf-that's how you will measure success."

Seventy percent of Americans favor the free- market economy, but they're losing to the 30 percent who want government spending and ownership (GMC, major banks), regulation and income redistribution, Brooks argues. Happiness, the pursuit of which is our third inalienable right, does not come with a welfare check but rather with the opportunity to succeed, he argues convincingly.

Brooks' argument against government expansionism is echoed in less ideological form in the final report of the CPSC's Strengthening America's Future Initiative, issued in April. It too posits a key turning point and seeks to lay out ideas for "regaining our strategic and financial freedom of action, unity at home and standing abroad." CPSC President David Abshire, former Colorado Gov. Roy Romer, leading defense industrialist and Pentagon official Norman Augustine, and former Comptroller General David M. Walker led the initiative's steering committee. Walker is now president of the Peter G. Peterson Foundation, which funded the study.

It raises the alarm about the looming fiscal crisis. Interest on the nation's debt soon could be the largest item in the federal budget, buying us nothing of value, the study notes. And it steps up the argument a notch, suggesting we soon might face a situation analogous to the time when, as one of its leading creditors, we forced the British government to abandon a plan to regain control of the Suez Canal. In "an American Suez," China and other major purchasers of U.S. debt might similarly face what British leader Harold MacMillan called "the last gasp of a declining power."

While focusing principally on the fiscal challenge, the CPSC report recommends government undertakes comprehensive political and programmatic reform-in electoral practices; congressional committee restructuring; civil service training; new policies to enhance educational achievement and proficiency in math, science and engineering; energy consumption; infrastructure improvement; immigration policies; and more.

In a June 8 speech at the Center for American Progress, Peter R. Orszag, the Office of Management and Budget's departing director, touched on the administration's spending restraint program: its request that agencies submit budgets encompassing a 5 percent cut to facilitate its plan for a three-year freeze on discretionary spending without killing all new initiatives.

Most of Orszag's speech focused on improving execution of government programs, with special emphasis on bringing Web and other technology practices up to private sector standards. Federal management gains are important, to be sure, but as to the essential steps we need to remain a great nation, Obama has kicked the can down the road, hoping the fiscal reform commission he appointed will produce politically palatable solutions when it reports in December.

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War of Words

Timothy B. Clarke — Wed, 28 Jul 2010 00:00:00 -0400

Can a federal agency be transformed through "openness" and "transparency"? If so, then these abstract new buzzwords would gain significance among those charged with making Obama administration directives a reality in many corners of the federal establishment.

Allow me to offer a tentative answer to that question by describing the ambitious openness program developed during the past year by Blair Levin and his team as they designed a national broadband strategy at the Federal Communications Commission.

First it is worth noting that the Obama transparency initiatives build on a long history of government disclosure laws dating back more than 100 years. Transparency policies have surged in the information age, especially since the Internet has made gathering, analysis and transmission of data so much easier. The trend is described in Full Disclosure: The Perils and Promise of Transparency, (Cambridge University Press, 2007), by Archon Fung, an associate professor of public policy at Harvard's Kennedy School of Government, and two co-authors.

Full Disclosure asserts, "The emergence of targeted transparency as mainstream policy represents an unlikely political innovation [in light of] enduring values and political interests that usually favor secrecy." Obstacles notwithstanding, agencies have used programs to force transparency on such topics as nutrition labeling, school performance and tougher corporate financial reporting standards. In one case, Fung writes, the Transportation Department's development of a system for rating rollover probabilities in sport utility vehicles induced automakers to speed introduction of stability control technology.

If Fung is among leading theoreticians of the transparency movement, then Levin has emerged as a leading practitioner. His story centers on development of the National Broadband Plan, released in April, as a blueprint for a more wired and more productive nation.

Congress ordered the plan in the 2009 American Recovery and Reinvestment Act. Levin, who served as FCC chief of staff under former chairman Reed Hundt, was chosen to lead the effort. With four of the 12 months allotted for the study already gone, one of Levin's key assistants, J. Erik Garr, swept aside cumbersome personnel practices and, using Recovery Act authority, managed to hire about 50 people in eight weeks. Most made enormous financial sacrifices to join the team, Levin said. "We benefited from a lot of public spiritedness," says Phoebe L. Yang, who signed on as chief counsel to the broadband task force.

According to Levin, the team of FCC rookies worked with veterans from the inside to assemble a lot of data and to devise public participation processes that would transform the agency. In recent years, FCC's agenda rarely had been announced in advance and its decision-making process seemed an inside game agency staff and corporate lobby- ists played behind closed doors. By contrast, Levin's team identified roughly 30 avenues of inquiry. It assembled data, some purchased, on which it proposed to base decisions, and invited critiques of these data collections. Then the broadband team held about three dozen open meetings on the issues. Modern videoconferencing technologies allowed some 10,000 people to participate, many of whom watched the proceedings online, e-mailing questions and comments to meeting organizers.

All along, transparency and public participation were key goals. At the turn of the year, the broadband team unveiled proposed solutions to issues and the factual basis for those solutions, and invited public comment. An active blog-and-comment culture rose up at broadband.gov, discussing how a better system could help improve health care, education, energy and the environment, economic opportunity, government performance, civic engagement and public safety.

"Connecting America: The National Broadband Plan," runs 360 pages in the printed version. As a technology of importance to the nation's future, it says, broadband compares with railroads, universal telephone, electric and television service, and the interstate highway system of earlier eras. But financing its infrastructure, and achieving its adoption, especially in low-income communities, has proved difficult. Using a telephone or television is intuitive, but not so with computers. So in part to serve the interests of social equity, the report proposes a "digital literacy corps" to bring people up to speed.

Broadband can serve many public purposes: building a smart grid to save energy, better interconnection of public safety personnel, growth in mobile and other technologies that companies can market in the United States and abroad, and improved techniques for educating students.

Levin likes to cite the school textbook as a dinosaur just waiting to be extinguished by online services that can update information easily, link to useful sources and offer rapid feedback on what techniques work best in disciplines like mathematics. But, as he notes, hidebound school boards and entrenched textbook publishers would have to be brought on board.

The broadband plan includes more than 200 recommendations for action by institutions in the private, nonprofit and public sectors. FCC has outlined 64 initiatives to define and regulate the Internet and its capabilities -- all of them more open and transparent than those of earlier times. The broadband.gov Twitter feed ranks behind only the White House and the Centers for Disease Control and Prevention in attracting followers. And by placing broadband at the center of its agenda for the next three to five years, the commission has for the first time offered a roadmap for citizens -- a transformative step for openness and change.

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War of Words

Timothy B. Clarke — Thu, 01 Jul 2010 00:00:00 -0400

Openness transforms an important regulatory agency.

Full Disclosure asserts, "The emergence of targeted transparency as mainstream policy represents an unlikely political innovation [in light of] enduring values and political interests that usually favor secrecy." Obstacles notwithstanding, agencies have used programs to force transparency on such topics as nutrition labeling, school performance and tougher corporate financial reporting standards. In one case, Fung writes, the Transportation Department's development of a system for rating rollover probabilities in sport utility vehicles induced automakers to speed introduction of stability control technology.

The broadband plan includes more than 200 recommendations for action by institutions in the private, nonprofit and public sectors. FCC has outlined 64 initiatives to define and regulate the Internet and its capabilities-all of them more open and transparent than those of earlier times. The broadband.gov Twitter feed ranks behind only the White House and the Centers for Disease Control and Prevention in attracting followers. And by placing broadband at the center of its agenda for the next three to five years, the commission has for the first time offered a roadmap for citizens-a transformative step for openness and change.

Blair Levin and Archon Fung will be among the distinguished speakers at the Excellence in Government Conference at the Ronald Reagan Building in Washington on July 19. Sponsored by Government Executive, the National Academy of Public Administration and other good-government groups, the conference is designed to inform its audience of federal practitioners about the latest developments in the movement toward a more open and transparent public sector.

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Pay as Topic A

Timothy B. Clarke — Tue, 01 Jun 2010 00:00:00 -0400

Feds, lobbyists and Wall Street all are in the salary spotlight.

Suddenly, people's pay has emerged as Topic A from Main Street to Wall Street and from K Street to the halls of official power in Washington. Debate about skewed distribution of income and wealth generally has been framed in abstract terms. Now everyone seems focused on the actual numbers in the compensation packages of people-from lofty hedge fund barons to modestly paid GS-12s in the federal government. Corporate pay practices have emerged as an important public policy issue, and income inequality has newfound visibility in our times of wrenching unemployment.

You know pay is an issue when commentators, politicians and USA Today suddenly are claiming the average federal lawyer or nurse is making more than their counterparts in the private sector. Never mind that the Federal Salary Council declared last fall that an average raise of 26 percent in 2011 would be needed to catch up with private sector pay rates. In March, Office of Personnel Management Director John Berry appointed a new task force to validate public-to-private comparisons.

Federal salary critiques might resonate on cable television, but it's a penny-ante debate when you consider the earnings of others in the spotlight. The billion-dollar payouts to hedge fund managers now make the front page. Top executives' compensation in the seven companies that took federal bailout money have been subject to scrutiny and limitations by federal pay czar Kenneth Feinberg, who has pressed for tying pay to long-term performance instead of short-term profits. When Goldman Sachs chief executive officer Lloyd Blankfein took a $9 million bonus for 2009, half what might have been expected and mostly tied to stock performance, he was praised as having heard the call for greater restraint.

Inside the Beltway, the pay drama heated up when Rep. Barney Frank, D-Mass., banned his staff from communicating with a former top aide, now a highly paid lobbyist for financial industry players that Frank regulates. As coverage of Frank's edict unfolded, the press reported that former staffers typically are paid up to $600,000 a year to lobby and former members of Congress up to $3 million. Our sister publication National Journal in March reported that lobbyists earned a record $3.5 billion in 2009, recession notwithstanding. And in April, National Journal's biennial survey of salaries at nonprofit groups placed John Castellani, president of the Business Roundtable, at the top of the heap with $5.6 million. He's one of 89 trade group executives earning more than $1 million for their work, much of which is focused on influencing an increasingly activist government.

Many feds make their way into the ranks of high earners. It's a well-traveled route in such specialized fields as regulation of securities, food, drugs, communications, air and water pollution, highway safety, taxation and antitrust enforcement. With federal contracting now exceeding $500 billion a year, big firms like Booz Allen Hamilton have eagerly recruited such federal stars as former National Intelligence director Mike McConnell, former Internal Revenue Service executive Dave Mader and recently retired intelligence community human capital chief Ronald Sanders. Former Homeland Security Secretary Michael Chertoff and retired CIA director Michael Hayden have formed their own firm, and the market for senior military officers remains robust. Three former Energy Department leaders-James Decker, David Garman and John Sullivan-not only have established a successful post-government firm, but also are preparing to teach senior executives how to position themselves for private sector success after retirement.

These former feds don't enjoy the huge pay days of Blankfein, Oprah, Tiger or Lady Gaga, but their careers show that the public sector offers plenty of honorable paths to a very decent living.

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The Jobs Dilemma

Timothy B. Clarke — Thu, 01 Apr 2010 00:00:00 -0400

Looking for a longer view.

President Obama's final push to secure health care reform legislation in March was something of a distraction, he admitted, from the most pressing issue: "jobs, jobs, jobs."

So he also was encouraging Congress to produce another "jobs" bill-no longer called by the out-of-favor name of "stimulus." The $150 billion measure would add to the nation's debt, prompting the Committee for a Responsible Federal Budget to demand the final bill use so-called pay-as-you-go principles to offset the new spending. Increasing worries about loading more debt on our children and grandchildren might constrain government's willingness to continue expensive recovery efforts, as the March 3 statement by the committee-of distinguished federal budget experts-suggested.

Private economists estimate the stimulus program has saved or created up to 2 million jobs, and many think this was essential to avoiding a deeper economic downturn. But the stimulus must be viewed principally as a short-term fix, not as a solution to the longer-term structural problems our economy faces. By all accounts, unemployment will remain high after stimulus spending ends. So the question becomes: What should government do next?

The sustainability of stimulus jobs appears especially problematic in the public sector. The Web site Recovery.gov, which tracks jobs attributed to the stimulus program, has no estimate of how many are public. But the 2010 Economic Report of the President credits the program with supporting at least 325,000 education jobs through the third quarter of 2009. Nearly all of these would be on state or local government payrolls-along with tens of thousands of others in police, fire and other occupations. State and local budgets are in miserable shape, so these jobs are certainly in jeopardy as stimulus winds down. And, of course, the answer to our employment challenge does not lie in the public sector-which will shrink further if it can't generate more revenue from a healthier private sector.

The longer-range challenge American workers face is brilliantly described in The Atlantic's March cover story titled "How a New Jobless Era Will Transform America." Journalist Don Peck notes that unemployment and underemployment (which includes involuntary part-timers and discouraged job seekers) has climbed above 17 percent, and many people are suffering chronic unemployment- "a pestilence that slowly eats away at people, families, and, if it spreads widely enough, the fabric of society." Recovery will be retarded, he says, by such trends as accelerated outsourcing and slowing business innovation.

Peck writes with concern about prospects for the young millennial generation, conditioned to expect great things but not, perhaps, to independent entrepreneurship in the face of adversity. He laments too the "mancession" this downturn has created: men have suffered about three-quarters of the 8 million job losses since the beginning of 2008, affecting their families with their own "tarnished identity and loss of self-worth."

So, again, what can government do? Looking ahead, social and economic analyst Richard Florida sees a society of diminished material expectations, but greater social coherence facilitated by government action. In his new book, The Great Reset (HarperCollins 2010), Florida suggests new, perhaps improved, lifestyles will emerge if government at all levels promotes more density and mobility within major metropolitan regions. Like others, including President Obama, Florida believes the country needs to develop more knowledge, professional and creative jobs-and, he argues, systems to encourage innovation and productivity, portability of benefits and better pay in our huge service sector. Education, research and infrastructure investments, and other public policies will play an important role in shaping this new future. But the genius of the private sector will have to be our greatest hope for salvation.

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Sorry States

Timothy B. Clarke — Mon, 01 Mar 2010 00:00:00 -0500

Budget shortfalls will add to Washington's woes.

Just before President Obama projected tides of red ink for years to come, New York City Mayor Michael Bloomberg faced up to his own budget Waterloo.

His $63.6 billion budget proposed to cut money from libraries and schools, increase caseloads for child services workers, eliminate 20 fire companies, close four community swimming pools and raise parking fees. He warned that the state budget proposed by Gov. David Paterson would sharpen the pain, forcing layoffs of 8,500 teachers, 3,150 police officers and many other municipal workers.

New York is not alone: the National League of Cities projects that municipalities will face a shortfall of between $56 billion and $83 billion from 2010 to 2012. State governments face an even larger budget gap.

For people who care about the public sector, these are alarming trends-and portents of what's in store for the federal budget as well.

Federal spending for many years has run at about 20 percent of gross domestic product. Economic recovery spending has now kicked that total up to about 25 percent of GDP. With state and local government consuming another 11 percent of GDP, the public sector now accounts for more than a third of the nation's output. And it's hurting everywhere.

States' general fund spending has been growing at a rapid rate-by 36 percent between 2003 and 2008, compared with 32 percent growth in national GDP and a 17 percent increase in the Consumer Price Index, according to E.J. McMahon, senior fellow at the Manhattan Institute for Policy Research. In New York, Lt. Gov. Richard Ravitch has decried this sort of "spending addiction." States' aggregate budget shortfalls in 2011 and 2012 could total $350 billion, estimates the Center on Budget and Policy Priorities.

In its November 2009 report, "Beyond California: States in Fiscal Peril," the Pew Center on the States noted that the Golden State had unsuccessfully sought a $7 billion loan guarantee to pay its bills, issued IOUs to state employees and other creditors, and started shutting state offices several days a month. While this placed California in a league of its own, "the same pressures that drove it toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country," the report says.

Nine states are particularly affected, according to Pew: Arizona, Nevada, Oregon, Florida, Illinois, Michigan, Wisconsin, New Jersey and Rhode Island. In Oregon, school districts cut back to a four-day week for lack of money, spurring voters to narrowly pass a referendum in January raising taxes on high earners and on businesses. In Illinois, legislators faced a $12 billion hole in a $26 billion budget. In Florida, Gov. Charlie Crist shocked the nation when he ordered a halt to medical mercy flights from Haiti until Washington agreed to cover the costs.

"These states' budget troubles can have dramatic consequences for their residents: higher taxes, layoffs or furloughs of state workers, longer waits for public services, more crowded classrooms, higher college tuition and less support for the poor or un-employed," the Pew report notes. Forty-eight states face budget shortfalls in 2010. This year, stimulus money is covering 30 percent to 40 percent of the shortfalls in most of them. In New York, a budget deficit estimated at about $8 billion in the fiscal year beginning April 1 could be in the range of $18 billion to $20 billion the following year, as stimulus funding winds down.

The wolf is at the door of city halls and statehouses across the nation. With federal debt growing fast enough to worry even our foreign creditors, his howl certainly is getting louder in Washington too.

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Besieged, But Not Morose

Timothy B. Clarke — Mon, 01 Mar 2010 00:00:00 -0500

Sampling senior executives' state of mind.

What's on the minds of senior federal executives a little more than a year into the Obama administration?

An unscientific sample of answers to that question was supplied by about 20 Senior Executive Service members who attended a mid-March Executive Summit organized by the Brookings Executive Education program, a partnership of the Brookings Institution and Washington University in St. Louis, Mo.

I was a speaker and "subject matter expert," along with former Office of Management and Budget official Jonathan Breul, now at the IBM Center for the Business of Government, New York University Professor Paul Light and others.

From the three days, I took away the impression that federal executives feel a bit besieged-unable to control the environments in which they work, unloved and micromanaged by Congress, and working in an atmosphere of low public trust in government.

A symptom of their plight is the current debate about what they're actually worth in the labor market. Conservative critics have been calling for cuts in federal pay on the grounds that even in a job-for-job match study (conducted by USA Today) most federal workers earn more than their private sector counterparts. OMB Director Peter R. Orszag told me in March that the administration had considered a pay freeze in light of the income woes of many millions in the private sector, before settling on a small increase. And now, Office of Personnel Management Director John Berry has named a task force to justify federal pay rates.

As Brookings' Darrell M. West told the group, we're in a time of high public cynicism about the political process and the operations of government. "The people don't trust politicians, and they don't think government is very effective in solving problems," he said. Our group of senior executives was loath to agree with negative public perceptions about government performance. They blamed the media for selling them short, and politicians for poisoning the atmosphere with anti-bureaucracy bullpuckey. While Congress is an essential partner for every agency, our group said that too often it micro- manages, delays needed legislation and ignores agency expertise on important issues.

Executive branch performance management also came under fire from the group. The old saw about duplication and overlap is true, they said, for example, in the intelligence community with its 16 separate agencies overseen by a new-and unproductive-layer of bureaucracy, the Office of the Director of National Intelligence. Light, a close student of bureaucracies, said the number of layers in agencies, as measured by new titles in the hierarchies, is up 25 percent to 40 percent in recent years. Participants said measuring results in many programs is difficult, that people are not rewarded on the basis of performance even when it can be defined, and a fear of failure induces program managers to "dumb down" performance measures so everyone can be seen as succeeding.

For all this, participants did not seem unhappy, and were clearly committed to their agencies' missions. A sizable contingent from the Veterans Affairs Department, for instance, spent hours discussing how they could better deliver on Obama's goal of finding jobs for the young, disabled veterans returning from current wars.

And the spirit of innovation was alive: Rodney Wood, the motorcycle-riding director of VA's Financial Services Center in Austin, Texas, told me he's just putting the finishing touches on an idea he had to simplify the complexities of moving people from one location to another. By linking the public and private suppliers of services connected to a change in location, he will simplify the lives of thousands of workers who are reassigned by VA, and perhaps other agencies, every year.

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