Presidential Hopefuls Should Debate Government Management, Says Volcker

Republican presidential contenders take the stage for their Nov. 10 debate. Republican presidential contenders take the stage for their Nov. 10 debate. Jeffrey Phelps / AP

The current line-up of tough-talking presidential candidates should be made to devote an entire debate to the management of government, former Federal Reserve chairman-turned government reformer Paul Volcker said on Friday.

“I don’t think I’ve ever felt so much unhappiness with the way our government works,” said the economist now leading the nonprofit Volcker Alliance, commenting on the release of a new paper cataloguing government agency “breakdowns” of the past 15 years. “Yes, the debates should raise questions on policy but also at issue are the basic assumptions about what government and the Constitution stand for,” he told an audience at the National Press Club.

Episodes of ineffective government such as the botched launch of and the rise of ISIS “are particularly troublesome year after year because of the lack of attention to performance, of putting policy into action, he said. “The breakdowns underscore the unhappiness with government.”

Acknowledging a “slim chance” that candidates will focus on management, Volcker heard his comments echoed by Paul Light, professor of public service at New York University, whose new paper documents 48 federal agency breakdowns since 2000. They range from failing to “connect the dots” in identifying the threat of the terrorist attacks of September 11, 2001, the Enron bankruptcy and the 2001 shoe-bomber terrorist plot, to more recent snafus such as the breach of Office of Personnel Management data and the mishandling of personal email by the State Department.

“As of today, it looks like President Obama will have presided over more breakdowns than any other two-term president,” Light said. “More than those under George W. Bush, which is saying something.” The breakdowns—aided by press coverage focusing on scandal—have accelerated since the 1980s, he said.

Episodes such as the misreported hospital patient wait times at Veterans Affairs Department and Secret Service security lapses at the White House are not necessarily Obama’s fault, Light said, but in some cases perhaps he should have known. “Obama promised efficiency and a 21st century government, but gave us the least inspiring reforms I’ve ever seen,” Light said. “He tinkered round the edges,” when it is “time for an overhaul.”

The report, titled, “Vision + Action = Faithful Execution: Why Government Daydreams and How to Stop the Cascade of Breakdowns that Now Haunts It,” argues that “flawed policy and inadequate resources were accompanied by deficiencies in culture, structure, and leadership.” It provides a checklist of the 48 misadventures noting their probable causes and political and policy impact. Second-term presidents, Light noted, “face a greater risk that government will produce more breakdowns.” The next administration may experience a breakdown within the first six months, he predicts.

Also provided is a list of positive government achievements that are now in peril, such as expanding the right to vote and reducing diseases.

Congress is not spared in the paper’s analysis of stalemate in these politically polarized times. There’s a tactic of “dismantling programs as a substitute for repealing the law, “ Light said, citing the funding cuts in the Internal Revenue Service following its controversy over alleged political targeting of nonprofits, and piecemeal cuts in funding for the health insurance exchanges under Obamacare. “Such deliberate breakdowns” occurred under Bush too, Light said. “You can take apart government and weaken until it can’t faithfully execute its job.”

Volcker stressed that the federal government is no longer the model for effectiveness. “Silicon Valley gets more attention,” he said. “Even the best and brightest young people who want to work in public service have to wait six months between their acceptance and performance” verification, he added.  He bemoaned the Defense Department’s outsourcing to contractors and asked, “Does the VA have the professional management skills to run things efficiently and reallocate resources in a fair and rational way?”

The management side of the Office of Management and Budget, the economist said, has been cut to just two or three offices.

The country’s banking regulation system is “visually broken” and needs a review “because the markets have changed, the systems have changed,” Volcker said. “But no one wants to think about that” because agencies seek self-preservation and “lobbyists and Congress like it the way it is.”

The overhaul needs to be done “holistically” rather than with tinkering, “like taking the whole engine out of the car,” Light said. Even if agencies get people hired in 90 days, “the quit rates are high in the first five years because people don’t see” room to advance. “We don’t know why because we don’t do exit interviews—that’s crazy,” he said. The average age of a federal employee is now 48, he said, “with a void at the bottom being filled by contractors. Meanwhile, “title creep” in the upper agency echelons produces titles so long “they can’t even fit on a business card.”

The Volcker Alliance, Light announced, is preparing a rare count of federal contractors due out next February or March. He predicted the count will be met with skepticism by agencies that have no precise inventory of their own.

The paper’s recommendations center on thinning the layers of the federal bureaucracy, reducing duplication and overlap among agencies and “Insisting that policy study and proposals be joined with concerns about effective implementation and management."

Specifically, Light told the audience that could include freezing vacant positions to consider whether they are needed, and perhaps having the Government Accountability Office weigh in on how a new piece of legislation would be implemented “before the bill comes to the floor.”

The precise combination of civil service reform, performance management and changes in the presidential appointments process needs to be worked out with some push from presidential candidates, Light said. “We should put them on the spot to get ready for an overhaul. Let’s not let them get away with just saying government should be more businesslike. Let’s pin them down.”

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