Orszag promises scrutiny of stimulus spending but stalls on tighter rules

OMB nominee says he would post bailout contracts on a public Web site and create an oversight board, but would defer to Treasury on imposing terms of use requested by Democrats.

Office of Management and Budget Director-designate Peter Orszag promised tough oversight Wednesday of coming economic stimulus spending, but deflected questions on whether the Obama administration will impose specific new requirements congressional Democrats want on the use of Troubled Asset Relief Program funds.

Testifying at a Senate Homeland Security and Governmental Affairs Committee confirmation hearing, Orszag said he planned greater scrutiny of stimulus spending by requiring contracts to be posted promptly on a Web site accessible to the public.

"We would favor creating a special board -- an oversight board composed of the inspectors general of the relevant departments and chaired by the chief performance officer that would review problems," he said, including those that might be identified by users of the Web site themselves.

Sen. Carl Levin, D-Mich., pressed Orszag on the incoming administration's attitude toward new restrictions that many Democrats want to put on the second $350 billion of TARP funds that President Bush has requested, at Obama's behest, be released.

They include requiring recipients to track and report on the expenditures, and compelling banks that get the aid to use it to make loans and mitigate home foreclosures.

Levin said the refusal of the Bush administration to adopt these guidelines had hurt the credibility of TARP. He added that he intends to press for their adoption in the new administration and that he had sent a letter to Lawrence Summers, the new head of the White House's National Economic Council, on the issue.

Orszag said the request for the new requirements was "not unreasonable," but that it was a matter within the purview of the Treasury Department, not OMB.

On other issues, Orszag outlined his plans to promote efficiency and cut waste by, among other things, cracking down on federal procurement programs. He noted that while procurement spending has doubled in recent years to more than $400 billion, the number of government contracting officers has remained steady at 28,000.

Federal real estate holdings were another target, he said, noting that 10 percent of the estimated 1.2 billion structures owned by government agencies -- valued at $1.5 trillion -- were either underused or empty. "That is unacceptable," he said.

Orszag said he also intends to rein in government's use of outside contractors because this "depleted the capability'" of the federal work force.

He said he was anxious to help carry out Obama's campaign pledge to "make government cool again," especially in view of the fact that about 60 percent of the government's 1.6 million white-collar employees will be eligible to retire over the coming decade and will need to be replaced.