Why Congress Should Act Like a Board of Directors
The nation’s stockholders deserve a budget process that works.
In the Constitution, “we the people” mandated Congress to set the nation's strategic direction while providing for the “general welfare of the United States.” Through its constitutional powers—including enacting budgets and laws “necessary and proper for carrying into execution” its policies—Congress must also monitor how well the executive branch implements that direction.
We the people are owed the same duty of care from Congress that stockholders would receive from a private sector board of directors when its sets strategic direction, approves budgets and conducts oversight to ensure its decisions are implemented.
But Congress does not exercise sufficient care in its actions concerning the executive branch. Lawmakers fail to make budget allocations based on agencies’ performance, to proactively seek to improve agencies’ performance and to avoid actions that are detrimental to that performance (e.g., continuing resolutions, government shutdowns and threats of shutdown).
Like a private sector board of directors, lawmakers are obligated to not waste taxpayer funds. Congress had the right idea when it passed the Government Performance and Results Act, which requires agencies to report performance results regularly—presumably so the information could be used to create an executive branch budget and allocate funding. Rather than using the results, however, Congress members make budget decisions using other criteria. Maximizing taxpayer value is impossible when agency performance results are not the primary criterion for spending decisions.
Oversight implies an obligation to gather data prior to making decisions. Congress does gather a great deal of data—more than 850 Government Accountability Office reports and thousands of inspector general reports each year—but fails to use the information effectively. Often oversight hearings are scheduled based on the reports, but the focus is almost always on fixing what happened in the past rather than preventing problems in the future.
An effective Congress would be proactive rather than reactive. Acting as a board of directors, it would conduct oversight to avoid future problems, rather than waiting for a GAO or IG report, or a front-page news story. The lessons from a proactive hearing could be applied immediately; lessons learned from a reactive hearing may fix past problems, but cannot guarantee the future.
Sometimes Congress fails to gather needed data, making it impossible to act proactively. Just one example: For years it was well known among Veterans Affairs Department employees that the VA was not meeting its timeliness goals for scheduling veterans’ medical appointments. The cause was also well known: a shortage of doctors on staff due to underfunding. Yet the VA failure did not get on the congressional radar screen until it became a front-page story.
As board of directors, Congress also must not engage in activities that it knows will adversely impact the performance of agencies. It is a fundamental responsibility to establish a budget before the fiscal year begins, so funds can be used effectively. Without a budget, funding levels for necessary investment—particularly in information technology—are uncertain and plans for reorganizations that would increase efficiency cannot be implemented. In addition to affecting citizens who worry about receiving government services on time, the uncertainty also generates fear among federal employees over loss of pay, compelling many good workers to leave government.
Congress’ recent budget decision-making has had little certainty:
- The budget for fiscal 2011 (which began Oct. 1, 2010) was not finalized until April 15, 2011, after seven continuing resolutions and $8 billion was stripped from the previous year’s budget.
- The budget for fiscal 2013 (which began Oct. 1, 2012) was subject to a continuing resolution until March 27, 2013.
- There was no continuing resolution in fiscal 2014 (which began Oct. 1, 2013), but the government shut down from Oct. 1 to Oct. 16, 2013. That shutdown was said to cost taxpayers $12 billion to $24 billion, according to economic analysts.
Nevertheless, the cumulative effect of uncertainty and loss of productivity since Oct. 1, 2010, did not dissuade Congress from pursuing the same path again this year.
Fiscal 2015 started on Oct. 1, 2014, with a continuing resolution through Dec. 11, 2014—more than a quarter into the fiscal year—when funding for all government agencies except the Homeland Security Department was finalized. Six months of the fiscal year elapsed without the certainty of a DHS budget; the funding bill was just passed in March.
Congress owes the same care to the people that is analogous to a private sector board of directors’ duty to stockholders. It is time for Congress to acknowledge its duty and act now to fulfill it.
Robert M. Tobias is a professor for Key Executive Leadership Programs at American University.
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