[Senate Hearing 115-6177]
[From the U.S. Government Publishing Office]
S. Hrg. 115-6177
EXAMINING OMB'S MEMORANDUM ON THE
FEDERAL WORKFORCE PART II: EXPERT
VIEWS ON OMB'S ONGOING GOVERNMENT-WIDE REORGANIZATION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
REGULATORY AFFAIRS AND FEDERAL MANAGEMENT
of the
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
----------
SEPTEMBER 13, 2017
----------
Available via the World Wide Web: http://www.fdsys.gov/
Printed for the use of the
Committee on Homeland Security and Governmental Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
EXAMINING OMB'S MEMORANDUM ON THE FEDERAL WORKFORCE PART II
EXPERT VIEWS ON OMB'S GOVERNMENT-WIDE REORGANIZATION
S. Hrg. 115-177
EXAMINING OMB'S MEMORANDUM ON THE
FEDERAL WORKFORCE PART II: EXPERT
VIEWS ON OMB'S ONGOING GOVERNMENT WIDE REORGANIZATION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
REGULATORY AFFAIRS AND FEDERAL MANAGEMENT
of the
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 13, 2017
__________
Available via http://www.fdsys.gov
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PUBLISHING OFFICE
28-405 PDF WASHINGTON : 2018
____________________________________________________________________
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana KAMALA D. HARRIS, California
Christopher R. Hixon, Staff Director
Margaret E. Daum, Minority Staff Director
Laura W. Kilbride, Chief Clerk
SUBCOMMITTEE ON REGULATORY AFFAIRS AND FEDERAL MANAGEMENT
JAMES LANKFORD, Oklahoma, Chairman
JOHN MCCAIN, Arizona HEIDI HEITKAMP, North Dakota
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
MICHAEL B. ENZI, Wyoming MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana KAMALA D. HARRIS, California
John Cuaderes, Staff Director
Clark Hedrick, Professional Staff Member
Eric Bursch, Minority Staff Director
Ashley Poling, Minority Counsel
Katie Delacenserie, Subcommittee Clerk and Committee Archivist
C O N T E N T S
------
Opening statement:
Page
Senator Lankford............................................. 1
Senator Heitkamp............................................. 3
Prepared statement:
Senator Lankford............................................. 27
Senator Heitkamp............................................. 29
WITNESSES
Wednesday, September 13, 2017
Robert Shea, Principal, Grant Thornton Public Sector............. 5
Rachel Greszler, Research Fellow in Economics, Budgets, and
Entitlements, Heritage Foundation.............................. 6
Chris Edwards, Director, Tax Policy Studies, Cato Institute...... 8
Anthony M. Reardon, National President, National Treasury Union.. 10
Alphabetical List of Witnesses
Edwards, Chris:
Testimony.................................................... 8
Prepared statement........................................... 51
Greszler, Rachel:
Testimony.................................................... 6
Prepared statement........................................... 40
Reardon, Anthony M.:
Testimony.................................................... 10
Prepared statement........................................... 60
Shea, Robert:
Testimony.................................................... 5
Prepared statement........................................... 31
APPENDIX
Statements for the Record from:
American Federation of Government Employees.................. 69
National Council of HUD Locals............................... 76
Heritage Foundation.......................................... 84
Hertiage Foundation Blueprint for Reorganization............. 273
Partnership for Public Service............................... 374
EXAMINING OMB'S MEMORANDUM ON THE
FEDERAL WORKFORCE PART II: EXPERT
VIEWS ON OMB'S ONGOING GOVERNMENT-WIDE REORGANIZATION
----------
WEDNESDAY, SEPTEMBER 13, 2017
U.S. Senate,
Subcommittee on Regulatory,
Affairs and Federal Management,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:02 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. James
Lankford, Chairman of the Subcommittee, presiding.
Present: Senators Lankford, Heitkamp, and Harris.
OPENING STATEMENT OF SENATOR LANKFORD\1\
Senator Lankford. Good morning, everyone. Welcome to
today's hearing entitled ``Examining OMB's Memorandum on the
Federal Workforce Part II: Expert Views on OMB's Ongoing
Government-wide Reorganization.'' Thank you all for being here,
for our witnesses to be here, and for others that are engaged
in this. This is the Subcommittee's second hearing on the
Office of Management and Budget (OMB's) ongoing governmentwide
reorganization effort. Let me give you some quick context.
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\1\ The prepared statement of Senator Lankford appears in the
Appendix on page 27.
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Three months ago, we heard from four Executive Branch
agencies regarding their plans and progress toward achieving
the targets and deadlines outlined in OMB's memorandum titled
``Comprehensive Plan for Reforming the Federal Government and
Reducing the Civilian Workforce.''
In our first hearing on the reorganization, the Departments
of Commerce, Justice (DOJ), Agriculture (USDA), and Homeland
Security (DHS) praised OMB's leadership and inclusive approach
in managing the reorganization process to improve the
effectiveness and efficiency of the Federal Government. These
four agencies lauded OMB's decision to collect input from
Federal employees, managers, executives--and most importantly--
the American people to streamline operations, eliminate
duplicative programs, and reduce wasteful spending.
Further, we learned that OMB provided agencies with an
aggressive yet achievable timeline to complete and submit their
proposals for consideration. Agencies were to submit three
items to OMB by June 30, 2017: draft agency reform plans, plans
to maximize employee performance, and progress reports on
``near-term workforce reduction actions.'' All four of those
agencies we asked when they were here if they were going to
meet their deadlines. All four agencies said, yes, they would
meet those deadlines. By the end of September, agencies are
supposed to incorporate OMB's feedback and submit their refined
draft reform plans to OMB.
At this point in the reorganization efforts, this
Subcommittee has heard positive news from many Federal agencies
regarding their progress toward achieving the OMB
reorganization's goals. We are also well aware of the costly
duplication of programs performed by different agencies across
government--the reason for this whole study. Let me give you an
example of that. The Government Accountability Office (GAO)
keeps a running list of duplicative Federal programs. They have
already identified 79 new examples this year, and currently GAO
estimates that 395 such examples have not been fully addressed,
that is, duplicative Federal programs. For example, the Federal
Transit Administration (FTA) administers $3.6 billion in grants
to be awarded toward transit resiliency projects. However, GAO
reports that it is likely that the Federal Transit
Administration grants duplicative funding that is also coming
from other agencies. In addition to the Department of Justice
Criminal Division, DOJ has four Divisions which operate their
own separate criminal sections.
Timely and common sense reorganization is something we
should work towards in order to make government more responsive
to the people it serves. Congress needs to be included in this
process, especially if OMB plans to request executive
reorganization authority or other legislative changes.
The reformation of Federal bureaucracy should not be a
partisan issue. In fact, it is something Presidents from both
parties have done for more than 20 years. In his State of the
Union address in 1996, President Clinton famously declared that
the era of big government is over. He committed--this was his
quote--``to give the American people a smaller, less
bureaucratic government in Washington and one that lives within
its means.'' Similarly, President Obama remarked that ``we live
in a 21st Century economy, but we have still got a government
organized for the 20th Century.'' President Obama went on to
say, ``our economy has fundamentally changed--as has the
world--but the government has not . . . The needs of our
citizens have fundamentally changed but their government has
not. Instead, it has often grown more complex.''
Presidents Clinton, Bush, and Obama all sought to reform
the Federal Government to make it leaner and more efficient for
the American people. All of them took steps to modernize and
reform government, but the job is clearly not complete. We have
a duty to put partisanship aside so that we can accomplish
reform that is still so necessary.
The Subcommittee intends to continue to work with this
Administration to ensure this reorganization effort is
transparent and ultimately successful. We look forward to
hearing testimony from OMB on this matter in the near future.
Thankfully, our four expert witnesses today are from a
diverse array of outside groups, and they will provide the
needed insight into OMB's approach and central role in
implementing the reorganization. Today's witnesses possess
prior Executive Branch experience and management reform
expertise, which enables them to offer valuable perspectives on
the reorganization.
I have the privilege of serving thousands of Federal civil
servants from Oklahoma, and I will seek to ensure this
reorganization hears their input, improves their effectiveness
as they serve the American people. That is what they love to do
and what they are being impeded to do by our organizational
structure. I look forward to hearing from our witnesses today
on how we can work together to deliver a successful
reorganization to the American people.
With that, I recognize Ranking Member Heitkamp for her
opening remarks.
OPENING STATEMENT OF SENATOR HEITKAMP\1\
Senator Heitkamp. Thank you, Chairman Lankford. I think in
the last 2 weeks, we have seen no greater examples of the
critical need for a trained, experienced, compassionate, and
empathetic Federal workforce. And my great applause goes out to
all the men and women of every agency of the military who have
worked so hard to protect lives, protect property, and offer
hope to so many people who are now in the process of recovery
from both Hurricane Harvey and Hurricane Irma.
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\1\ The prepared statement of Senator Heitkamp appears in the
Appendix on page 29.
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And so I think it is a wonderful backdrop to have this
discussion because I think way too often hearings like this
tend to be perceived to be critical of our great Federal
workforce, and as Chairman Lankford just said, we represent
amazing people who do amazing work who could find much more
lucrative careers in the private sector, but choose instead to
serve our public. And so my kudos and my great gratification
for the work that is being done by the Federal workforce.
I continue to believe that our Subcommittee's oversight of
agency reorganization is absolutely essential. Federal
employees are a critical part of the Federal Government. We
cannot have government, our Nation, and citizens need without a
strong, focused, and vibrant Federal workforce.
While I greatly appreciate the time and insight from
today's witnesses, I am disturbed that the Office of Management
and Budget has declined our invitation to appear before the
Subcommittee on this timely subject. There is no one closer to
the heart of what is going on in this reorganization than OMB,
and it is vital for our Subcommittee to understand the
interplay between OMB and the Federal agencies that it is now
seeking reform recommendations from. It is unacceptable that
OMB chose to not testify at this hearing, and I am going to do
everything that I can to try to ensure their presence at our
next hearing on this topic, and I hope Chairman Lankford will
join me in that effort.
I also will be doing all that I can to protect our Federal
workers, and I look forward to hearing about the impact that
the reorganization process has on those workers thus far in
today's hearing.
Again, I thank the witnesses for their testimony. I greatly
appreciate all of the time that it takes to participate in a
hearing like this. I know it is not easy. Preparation of
testimony is a critical component, and I look forward to your
thoughtful comments on this reorganization process.
Thank you, Mr. Chairman.
Senator Lankford. I am glad to and I would say, Senator
Heitkamp, absolutely we will engage with OMB. They are a
critical aspect of this. The Administration and OMB sparked
this. They have been receiving input from the agencies, and I
would completely agree we need to be able to hear their input,
what they are seeing in the direction they will go, especially,
as I mentioned in my opening statement, if they are pursuing
executive authority to do reorganization or certainly
legislative authority to be able to do it. We have to be able
to partner together.
I would like to proceed to the testimony from our
witnesses, and let me introduce all four of them. We will have
the swearing in of those witnesses, and then we would be glad
to be able to receive your testimony.
Robert Shea is a principal at Grant Thornton where he leads
the public sector strategy practice. Prior to that, he served
in the Office of Management and Budget as Associate Director
for Administration and Government Performance. Thanks for being
here.
Rachel Greszler is the research fellow in economics,
budgets, and entitlements in the Institute for Economic Freedom
and Opportunity at the Heritage Foundation. Before joining
Heritage in 2013, she served as a senior economist on the
Congressional Joint Economic Committee. Thanks for being here.
Chris Edwards is the director of tax policy studies at Cato
Institute. Before joining Cato, he served as a senior economist
on the Congressional Joint Economic Committee. Thank you as
well for your insight again.
Tony Reardon is a 25-year veteran of the National Treasury
Employees Union (NTEU), where he has worked in a variety of
leadership roles. He has served as the national president of
the union since his election in August 2015. Thanks for
bringing your insight to us today.
It is the custom of this Subcommittee to swear in all
witnesses that appear before us, so if you would please stand
and raise your right hand. Do you swear that the testimony you
will give before this Subcommittee will be the truth, the whole
truth, and nothing but the truth, so help you, God?
Mr. Shea. I do.
Ms. Greszler. I do.
Mr. Edwards. I do.
Mr. Reardon. I do.
Senator Lankford. Thank you. You may be seated. Let the
record reflect all witnesses answered in the affirmative.
We are very pleased that you are here. You all have given
tremendous written testimony to us already which will be a part
of the permanent record, and we are looking forward to your
oral testimony and then Senator Heitkamp and I peppering you
with questions on this as we walk through the process together.
So, Mr. Shea, you are first up.
TESTIMONY OF ROBERT SHEA,\1\ PRINCIPAL, GRANT THORNTON PUBLIC
SECTOR
Mr. Shea. Thank you, Chairman Lankford, Ranking Member
Heitkamp, Members of the Subcommittee, for the privilege of
testifying before you today.
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\1\ The prepared statement of Mr. Shea appears in the Appendix on
page 31.
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If implemented properly, the President's Executive Order
(EO) on reorganization could be the most ambitious
reorganization of the Federal Government in its history. To be
successful, a great deal of collaboration with myriad
stakeholders within and outside the Executive Branch will be
critical, and that is just on the front end. The real work
begins when organizations launch the process of integration and
optimization. But we should not even begin this process unless
we agree on what outcomes we are trying to accomplish.
Optimizing business structures to maximize results is
ongoing in the private sector. The Federal Government lacks
such agility, so policymakers are constantly working to find
ways to overcome these bureaucratic barriers to change. Overlap
and duplication among government programs continues to grow. We
are lucky that this Committee has helped lay the groundwork for
substantial reorganization of the Executive Branch. You stole a
lot of my thunder, Mr. Chairman, which is your prerogative.
GAO's most recent report included 79 new actions across 29 new
areas for Congress or Executive Branch agencies to reduce,
eliminate, or better manage fragmentation, overlap, and
duplication.
Now, GAO is quick to point out that not every area in which
there is overlap or duplication would benefit from a
reorganization or restructuring. This Committee, among few in
Congress with broad cross-government jurisdiction, can play an
important role in pushing agencies just to improve their
collaboration among overlapping and duplicative programs.
Though GAO has done a great job highlighting areas of
overlap and duplication, a robust, consistent inventory of
government programs would help even more. If OMB is unwilling
to untangle this important requirement, the Committee should
consider asking an independent entity to do the work to produce
the required inventory.
The most recent, memorable reorganization, of course, was
the establishment of the Department of Homeland Security. We
are still working to get the benefits of integration we had
hoped to gain when DHS was created. The intent was to improve
coordination among disparate entities responsible for securing
the homeland, then scattered across the government. If
connecting the dots to anticipate threats was difficult before,
it would be easier, presumably, if the entities were together
under one cohesive organizational roof.
Many reports highlight the difficulty achieving the vision
of an effective homeland security enterprise even after
consolidating these 22 different entities, and we can always do
better. That is why when President Bush proposed the creation
of the Department, he also sought permanent reorganization
authority. We knew what was proposed would not always work most
effectively, and the ability to reorganize the Department's
agencies would strengthen the Nation's security.
Trust is important in reorganizations, and trust is
developed in government policy formulation by creating a
transparent structure for communication and sharing of
information with key stakeholders.
This Committee knows well that up until the 1980s, as you
said, Mr. Chairman, Congress granted the President
reorganization authority, and since then, every President has
sought it. Congress has not adequately trusted the President to
grant it. We will need to overcome this level of mistrust to
get very far on the reorganization path.
So it is important to document some of the things we have
learned from past reorganization efforts:
It is crucial that we agree on the outcomes we are trying
to achieve before embarking on a reorganization;
Before announcing a reorganization proposal, engage in
active collaboration with internal and external stakeholders;
Do not expect savings early in a reorganization.
Reorganizations are expensive;
And enactment of a reorganization is just the beginning. As
we have seen with DHS, the benefits of reorganization or
restructuring come long after enactment.
I would be remiss not to mention the recent recommendations
of the Commission on Evidence-based Policymaking, of which I
served as a member. We have been hard at work over the past
year to develop practical recommendations you can act on to
strengthen evidence-based practices across government. And
among some of the recommendations we made, establishing a
National Secure Data Service by bringing together existing
statistical expertise now across government, improving privacy
protections with better technology and greater coordination,
and aligning capacity for statistics evaluation and policy
research within and across departments. There is more detail in
my testimony, but I am happy to answer more questions about
that important work.
The President's Executive Order on Government
Reorganization presents us an enormous opportunity. Whether we
take the opportunity depends in large part on the collaborative
approach the Administration takes with its proposals and the
willingness of this Committee to enact them. The benefits of
reorganization will not be realized for years. It is my hope we
will see the leadership and commitment necessary to make these
long-overdue changes to our Federal Government.
Thank you.
Senator Lankford. Thank you. Ms. Greszler.
TESTIMONY OF RACHEL GRESZLER,\1\ RESEARCH FELLOW IN ECONOMICS,
BUDGETS, AND ENTITLEMENTS, HERITAGE FOUNDATION
Ms. Greszler. Thank you for the opportunity to be here
today. I would like to spend my time this morning focusing on
three different things.
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\1\ The prepared statement of Ms. Greszler appears in the Appendix
on page 40.
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So first is to provide a summary of some of the
recommendations that we have made at the Heritage Foundation in
our reorganization blueprints.
Second is to look at some of the past reorganization
efforts and their obstacles.
And then third is to recommend what I see as the best
pathway forward toward meaningful reform.
So, first, in response to the President's Executive Order
to reorganize the Federal Government, the Heritage Foundation
researched and compiled two blueprint for reorganization
documents.\2\ In doing so, we sought the advice and expertise
of people with ``in the trenches'' Federal Government
experience, and they provided invaluable insight to these
documents here.
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\1\ The documents referenced by Ms. Greszler appears in the
Appendix on page 273.
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Our first analysis of Federal departments and agencies
contains about 110 specific recommendations. Some of those
include: eliminating the Federal Housing Administration and the
Consumer Financial Protection Bureau (CFPB); transferring non-
Federal functions such as police and fire protection and low-
income housing assistance to State and local governments. We
also recommend streamlining certain offices, such as many of
the Department of Veterans Affairs (VA's) 42 different veterans
services programs, consolidating them into one integrated
service system to better serve those veterans.
We also recommend moving the Food and Nutrition Services--a
welfare program--from the Department of Agriculture to the
Department of Health and Human Services (HHS) and also
transferring the student aid programs from Education to the
Treasury Department.
And, finally, we recommend eliminating programs that
unjustly subsidize certain industries over others, such as the
Corporation for Public Broadcasting, the Export-Import Bank of
the United States (Ex-Im) bank, and the energy loan programs.
Without going into detail, our second report, ``Pathways to
Reform and Cross-Cutting Issues,'' includes proposals for
budget process reform, regulatory reform, restructuring
financial regulators, reducing the Federal Government's
footprint, and, most importantly, in my opinion, is
transforming the Federal Government's personnel policies.
Next, I would like to look at some of the past efforts in
the obstacles to reorganization. Despite the fact that
government reorganization has bipartisan support, it has always
faced significant obstacles. Probably the most significant is
the iron triangle made up of Federal agency administrators,
interest groups served by those agencies, and then the
Congressional committees that oversee them.
For each of these groups, changes to or elimination of
specific agencies or departments could result in the loss of
government-protected jobs, special taxpayer-funded benefits and
services, as well as power.
For example, even when Congress created the new Department
of Homeland Security, something that is a lot easier to do than
eliminating a department, the outcome was an irrational
structure. Although the Coast Guard and the Customs and Border
Protection (CBP) agencies became part of the DHS, their
jurisdiction remains within that of their previous committees
that did not want to give up their oversight.
So in recent history, both Presidents Clinton and Obama
have embarked on well-intended reorganization efforts. The
Clinton Administration's National Performance Review (NPR) was
one of the most persistent reorganization efforts. It generated
1,200 proposals to improve government, and with the help of
Congress, many of the NPR's recommendations were enacted,
including the elimination of over 250 programs and agencies.
Now, while the NPR was successful on many fronts, Clinton's
deference to opposition from public sector unions prevented
necessary and meaningful personnel reforms.
President Obama also wanted to reorganize parts of the
Federal Government, and he asked Congress for the executive
authority to do so. He even stipulated that his plan would
reduce the number of agencies and save taxpayers' dollars, and
he proposed things that Republicans supported, like eliminating
the Department of Commerce. Nevertheless, Republicans refused
to grant him reorganization authority.
Congress has also attempted reorganization. When
Republicans took over Congress in 1995, they attempted to
eliminate multiple agencies. The House spent months passing
legislation through 11 committees to eliminate the Department
of Commerce. But when it got to the Senate, a single Republican
Senator blocked its passage.
So I would like to wrap up by proposing what I see is the
best pathway toward meaningful reform. I recommend a
congressionally created and bipartisan reorganization
commission consisting of independent experts with fast-track
authority. This type of commission would avoid most of the
pitfalls that have hampered previous efforts, and it would
provide an insightful and necessarily independent review and
set of recommendations.
After receiving the commission's recommendations, both
Congress and the President could have an opportunity to submit
their suggested changes, and the commission would be able to
accept or deny those.
Although the obstacles to successful governmentwide
reorganization are significant, both the consequences of
failing to act and the benefits of establishing a more
efficient, accountable, and right-sized Federal Government are
too great to do nothing.
Thank you.
Senator Lankford. Thank you. Mr. Edwards.
TESTIMONY OF CHRIS EDWARDS,\1\ DIRECTOR, TAX POLICY STUDIES,
CATO INSTITUTE
Mr. Edwards. Mr. Chairman and Members of the Committee,
thank you for inviting me to testify today on the OMB-led
effort to improve Federal management and cut spending. As
members know, Federal spending and deficits are soaring in
coming years, and it is threatening a financial crisis down the
road unless we make reforms. The OMB effort can help avert the
risk of a Federal financial crisis in the future.
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\1\ The prepared statement of Mr. Edwards appears in the Appendix
on page 51.
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OMB-led reforms can also tackle another problem, which is
the bloated scope of Federal activities. The Federal Government
today funds 2,300 different aid and benefit programs. That is
twice as many as just as recently as the 1980s. All 2,300
Federal programs are susceptible to management and performance
problems.
The April OMB memo said that there is a ``growing citizen
dissatisfaction with the cost and performance of the Federal
Government.'' That is certainly true when you look at polling
data.
Here is the irony: As the size of the Federal Government
has grown in recent decades and in theory is providing more
services to citizens, trust in Federal competence has plunged,
according to the polling data. So why is that happening? I
think the Federal Government has grown far too large, frankly,
to adequately manage and oversee all this vast array of
programs that it runs.
Consider this: The Federal budget of $4 trillion a year is
100 times larger than the average State budget in the United
States of about $40 billion. So you folks oversee an empire
essentially that is 100 times greater than the typical State
legislator. So the OMB-led effort makes sense. The government
would perform better with fewer failures if it were smaller.
So work in Congress and agencies finds savings. The OMB
memo discusses workforce reforms, and I think there are lots of
reforms there we can make to save money. I think Federal
pension benefits, for example, are excessive. I also think that
there is a problem in disciplining poorly performing Federal
workers. One statistic that has really struck me is that the
firing rate for poorly performing Federal workers is only one-
sixth as high as the firing rate in the United States private
sector. So I think there is a real problem there.
Another issue is the excess layers of Federal management.
Academic research has found that American corporations have
much flatter managements today than in the past, but research
by Paul Light of Brookings has found that the number of
management layers in a typical Federal agency today is twice as
large as the 1960s. We are adding layers of middle management
in the Federal Government. Light thinks that is a cause of
increasing Federal failure. So we should focus on reducing
Federal management layers.
All that said, Federal spending on compensation and
procurement is really only one-quarter of the entire Federal
budget. Three-quarters of Federal spending is cash at the door
and benefit programs for individuals and businesses and State
governments. So how do we reform that spending? Two areas are
of particular interest to me.
One is reviving federalism. Rachel touched on this. The OMB
memo suggests focusing Federal activities more where there is a
``unique Federal role'' and consider devolving other activities
to State and local governments. The Federal Government funds
more than 1,100 State aid programs. There are many problems
with State aid programs, as I have written about extensively. I
think they reduce State policy freedom, I think they breed
bureaucracy, and I think they distract Federal policymakers,
frankly, from focusing on truly national issues.
The OMB memo says that agencies should do ``fundamental
scoping'' of their activities, and I certainly agree, and I
think we ought to look at State aid programs that the Federal
Government ought to devolve to State and local governments.
So a last point is that the OMB memo touched on the idea of
comparing the costs of Federal programs to the benefits. Are
the costs of particular programs justified by the benefits they
produce to society? Well, cost-benefit analysis is a standard
tool of economics that tries to judge the overall net value of
programs. Since 1981, Federal agencies have been required to
perform cost-benefit analysis for major regulatory actions. So
we often see news stories about whether the Environmental
Protection Agency (EPA) cost-benefit analysis and, the results
of those analyses show for regulations. There is no general
requirement, however, to perform cost-benefit analysis on
Federal spending programs. The Congressional Budget Office
(CBO) and the GAO do not generally do cost-benefit analysis.
So supposing the Congress is considering spending $10
billion on an energy program. Does the program make any
economic sense? Right now, we are flying blind. There is no
overall analysis that would show. A cost-benefit analysis would
look at whether the program's expected benefits were higher
than the costs of the $10 billion in tax funding plus the
additional damage caused, called ``deadweight losses'' of
taxation. I think policymakers should require agencies to
evaluate more programs with full cost-benefit analysis.
There is disagreement about the results of such studies.
They can be very complicated. But I think the whole cost-
benefit analysis process is useful because it would require the
government to at least try to quantify the merits of its policy
actions.
That is all I have, and thanks for holding these important
hearings.
Senator Lankford. Thank you very much, Mr. Edwards. Mr.
Reardon.
TESTIMONY OF ANTHONY M. REARDON,\1\ NATIONAL PRESIDENT,
NATIONAL TREASURY EMPLOYEES UNION
Mr. Reardon. Chairman Lankford, Ranking Member Heitkamp,
and Members of the Subcommittee, thank you for allowing NTEU to
share its thoughts on the Administration's plans to reorganize
the Federal Government.
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\1\ The prepared statement of Mr. Reardon appears in the Appendix
on page 60.
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NTEU is in favor of improving the efficiency and
effectiveness of Federal agencies to ensure that they are
providing the services that Americans rely upon and that
taxpayer dollars are spent wisely. However, we are deeply
concerned with the agencies being directed to make reductions
in the workforce based only on proposed budgets that do not yet
have congressional approval, which will drastically impact the
ability of agencies to meet their missions. Additionally, it is
our fear that staffing reductions are being proposed with the
aim of outsourcing functions and services that, based on past
experience, will only cost taxpayers more money and will
provide the public with less transparency and accountability.
It is important, however, that such reform efforts not take
place in a vacuum. Rather, we believe that only by having
senior officials working closely with front-line employees and
their representatives will real positive reform take place.
Federal employees are an essential source of ideas and
information about the realities of delivering government
services to the American people.
Experience has shown that involving employees and their
representatives in pre-decisional discussions concerning
workplace matters results in better, higher-quality
decisionmaking, more support for those decisions, and more
timely implementation.
It is in this vein that I reached out to and met with then-
OMB Senior Advisor Linda Springer to discuss our desire to be
part of the reorganization planning. I also asked our chapters
to provide ideas that I could share with agency heads. I am
pleased to say that the response from our members was
overwhelming. After collecting these ideas, I wrote letters to
agencies and offered to meet to discuss these suggestions. The
recommendations provided were generally as follows:
To increase telework and/or hoteling to reduce real estate
costs and increase employee productivity;
To consolidate management layers, because we continue to
see top-heavy management organizations with higher-than-need-be
supervisor-to-employee ratios;
To hire more support staff so that employees with more
complex work could spend less time performing administrative
functions;
To empower front-line decisionmaking in order for agencies
to breed individual and group confidence, enabling people to
work both more efficiently and more effectively;
And, finally, to fill existing vacancies so that agencies
can meet their missions.
One of the major concerns NTEU has with the reorganization
effort is its call for increased outsourcing of government
functions. NTEU has long maintained that Federal employees,
given the appropriate tools and resources, do the work of the
Federal Government better and more efficiently than any private
entity. When agencies become so reliant on Federal contractors,
the in-house capacity of agencies to perform many critical
functions is eroded, jeopardizing their ability to accomplish
their missions.
NTEU has witnessed prior efforts to improve government
services fail. We have seen overly ambitious efforts to reform
the civil service that eroded employee rights and morale, as
well as haphazard efforts to reduce the number of Federal
workers by cutting an arbitrary number of personnel,
implementing a hiring freeze, or failing to replace departing
employees.
In fact, one of the biggest failures of the Clinton-Gore
Administration's so-called Reinventing Government initiative
was the hollowing out of agencies, leaving them unable to
conduct proper workforce planning, and without a skilled
workforce in place.
Finally, it should be noted that the Federal Government's
current inability to carry out its basic functions without
threats of a default or shutdown undermines any confidence that
massive reform efforts can be successfully achieved.
Thank you again for the opportunity to share my views with
you today, and I am happy to answer any questions.
Senator Lankford. Thank you all for your testimony.
This conversation will be a conversation. I am going to
make a couple of questions here, pass it to Ranking Member
Heitkamp, to do some questions, and then we will just have an
open dialogue, and we will go back and forth. So I would like
for this to be a dialogue not only among the four of you, but
with us, and then we will be able to keep that moving, because
this is exceptionally important that we get some context areas.
So from my perspective, the things that I want to be able
to gain from today is not only a set of ideas that you have
already presented, the things to be able to notice and to be
able to watch for in a reorganization, but obviously, we are
going to work with the legislative issues, not only executive
authority and releasing that to the Executive Branch of what
authorities they have to be able to accomplish that, but
actually putting into legislative action whatever has to be put
into structure. All of these agencies were created by Congress.
All of the structures were created by Congress. Congress should
still be involved in the engagement of how the oversight is
done.
So there are often executive agencies where the Executive
Branch is given the responsibility to run it, they were created
by Congress. The parameters that were done for them were
created by Congress, that is, the American people were speaking
into it. So there is still a responsibility to be able to
engage in that issue. So ideas and insight that you may have in
structure and format are exceptionally helpful to us in that.
Mr. Reardon, I want to be able to make a couple comments to
you, and I appreciate your comments and your list on it. It is
very interesting to me, because very often I will visit with
our front-line employees, as you mentioned as well. And I have
the habit of when I go into agencies in Oklahoma to not just
meet with the people that I am assigned to meet with, but to
get past that and to get to cubicle world and get a chance to
visit with many of our great employees that are in cubicles.
This is a comment I heard from the last place that I
visited, and I will leave the places and people out on it
because I have not asked them specifically to mention it
publicly. I remember walking into a place, and when I am
walking through just meeting people on it, I had a Federal
employee that came and caught me, introduced themselves, and
said, ``We have a lot of work to be able to do. There are a lot
of things we are doing we should not do. There are a lot of
things that we are doing that are wasteful, that I know I am
filling out papers that no one is reading. I want to do
purposeful work. That is why I came.'' And there were just a
million things that she had on her mind.
I put that in context with a previous place that I had gone
to, when I am walking around through the cubicles, and I walked
up to a lady that was in one of the spots, and I said, ``Tell
me what you do.'' She looked up from her desk and smiled at me,
and she said, ``I do what we should not do. I love my job. I
love the people I work with. But the tasks that I do the
Federal Government should not do at all. But I do it every
day.''
I want to make sure their opinions are being heard, because
they have ideas. They know the loss that is happening and where
they are spinning their wheels and not accomplishing things.
How can we pull those opinions out and get them to a larger
voice? And is it your perception at this point that OMB is
hearing from those individuals who have those practical ideas?
Mr. Reardon. Mr. Chairman, I very much appreciate your
question, and I, too, agree that front-line employees need to
be heard from. And I do not believe that at the present time
that is occurring effectively.
I believe that, without question, agency management and
front-line employees must engage, work together, and figure out
some of those things that you are talking about. Where
paperwork is unnecessary or duplicative, or they are doing work
that, as the young lady mentioned, they should not be doing, I
totally agree. That all has to be worked out, and those changes
must be made.
But one of the things that I am concerned about is that
front-line employees are not really being heard. I can tell you
that I have those same conversations. In fact, I recently had a
conversation with some Internal Revenue Service (IRS) employees
from Oklahoma, and----
Senator Lankford. Great folks, by the way.
Mr. Reardon. They are great folks, along with--we have many
CBP employees, Office of Field Operations employees in Oklahoma
as well.
Senator Lankford. Which, by the way, while you are
mentioning that, some of them are in an office complex that
they should not be in, and we are in the process of trying to
get them out of that space because their space is the problem.
Mr. Reardon. The IRS folks?
Senator Lankford. Yes.
Mr. Reardon. I am in 100 percent agreement. That, in fact,
is why I was speaking to them yesterday in Tulsa. Thank you.
Senator Lankford. Yes.
Mr. Reardon. So I believe that many of our Federal
employees, certainly those in the 31 agencies where we
represent folks, they do not feel that they are being listened
to. They do not feel as though they have a voice. And I think
one of the important elements that we bring is that, as I said,
we represent employees in 31 agencies, so we have a very
interesting perspective. We know what is going on in all those
agencies. And so where our front-line employees in a particular
agency would be involved in some reforms, we would be able to
deliver some best practices that are occurring in different
agencies and bring them to the debate. But I do not believe
that is happening.
Senator Lankford. Well, OMB has promised us that they are
in the process of that. The four agencies that we visited with,
one of the questions that Senator Heitkamp and I had for them
specifically when they came is: How are the Federal employees
that work in these agencies, how are they contributing to the
ideas? They talked through how they are doing it, through
online, through emails, how they are reporting that back up,
how they are receiving it, the thousands of comments they are
receiving. So it is our hope that not only are they being
heard, but that OMB will actually apply some of those things,
because there are some very practical, specific reforms that
can be done if those individuals are heard.
Mr. Reardon. Can I offer one other thing?
Senator Lankford. Sure.
Mr. Reardon. One of the models that I think is really
outstanding is, for example, in the Federal Deposit Insurance
Corporation (FDIC). They have these workforce excellence
committees that bring together front-line employees as well as
management groups. And I will tell you, I have seen it
firsthand and Chairman Marty Gruenberg and I see this
firsthand: that these front-line employees and these managers
get in these committees, and they operate not as labor and
management. They operate as FDIC employees, and they tackle
really important issues within the FDIC, bringing about
efficiencies, doing work that says how should we do things to
make it better for our operation, for the banks, so on and so
forth. That for me is a real model and something that we should
be looking across government to emulate.
Senator Lankford. Senator Heitkamp.
Senator Heitkamp. I think there are two steps to this
process, and the first step is the low-hanging fruit, where we
could all sit down, across the ideological spectrum, and say,
``This is crazy. Why are we doing it this way? Why can we not
be more efficient in what we do? Why do we have to have three
agencies that do exactly the same function that are just in the
business of turf protecting when we have so much other
important work to do?'' And so, there is enough work to do in
this country. We do not need to make work. And I think we can
all agree that that is the baseline.
Another really interesting kind of parallel here is this
agreement that we are management heavy, that we have too many
layers of management. It probably creates little fiefdoms. It
probably creates more competition for protection of that
function than what it should.
And so I want to explore the management structure and what
you perceive, I think, Mr. Reardon, because you are probably
closest to what is happening with reorganization right now. Is
this an issue that is being tackled by any of these agencies
that are now looking at government efficiency?
Mr. Reardon. Thank you, Ranking Member Heitkamp. I am close
to this, and from what I have seen in my experience, agencies
are not tackling it effectively enough.
If, for example, you look at CBP, right now in CBP there is
something on the order of one supervisor for every 5.7
employees. In 2003, I believe it was, that number was one
supervisor for every 12 employees.
Now, I ask you to couple that with the fact that across
CBP, we are short something on the order of 4,000 CBP officers
and 631 agriculture specialists. And it is important to
recognize what these folks do. Not only do they help protect
our country through the ports of entry (POE), but they also
protect us, insofar as the agriculture specialist, making sure
that pests do not come in and ruin our crops and so forth. And
so there is also an economic element to this because they help
move people, tourists, as well as freight into and out of our
country.
So it is important to make certain that we have the
staffing that we need for these agencies such as CBP.
Senator Heitkamp. I just want to kind of add to my
frustration about what happens to Border Patrol and agents who
are front line. When we had the surge at the border of
unaccompanied minors, they carry a gun, but they were changing
diapers. That makes no sense.
Mr. Reardon. Right.
Senator Heitkamp. That is not the function that they signed
up for, and it creates morale problems, and it creates real
challenges for those Border Patrol agents. So getting them back
on patrol should be our top priority.
But if you take a look at reorganization coming from
Congress, probably the worst example, in my opinion, is the
Department of Homeland Security. Why is that? Because as Ms.
Greszler said, there was no oversight. There is no consistent
oversight from Congress. We shoved all these agencies together,
said, ``Good luck.'' We bring them in and we beat them because,
your morale is poor, you are not functioning the way you want
to function. But we take no responsibility on this side of the
dais for the challenges that we have created with no commitment
to overall oversight. And I think you see that repeatedly.
And what I would like to just reiterate, this Subcommittee,
is incredibly committed to actually creating an oversight
system of the work that is being done right now, whether it is
in the planning or whether it is in the implementation of this
oversight. We cannot just have this oversight, this new
reorganization, been there, done that, now we all can take a
bow when we go out to talk to the cameras, and then behind it
is chaos. We need to take responsibility here for what we are
not getting done, and I think the Department of Homeland
Security is a critical component.
Mr. Edwards, you raised this question of the tiered
management system. How pervasive, when you do the judgment--you
just heard Mr. Reardon say, 1:6, 1:12. When you think about
benchmarks for management to front-line workers, what do you
think that ratio--let us assume you agree that these are all
functions we should be performing in the Federal Government.
What do you think that ratio should be?
Mr. Edwards. I do not know what it should be precisely. I
mean, there is a whole academic literature on span of control
and the like.
Senator Heitkamp. Right.
Mr. Edwards. But there is academic research that I have
looked at major U.S. corporations. They are flattered that
their spans of control have increased.
Senator Heitkamp. Can you give the numbers you gave in your
testimony again? You said the United States Government----
Mr. Edwards. So Paul Light of Brookings has found that the
number of layers in the typical Federal agency has doubled
since the 1960s, and he has done this interesting analysis
looking at titles of Federal employees, and there are far more
employees today than in the past that have long, fancy titles
like Assistant Deputy, da, da, da, rather than front-line
folks.
One of the points he makes is that--and we saw this after
Hurricane Katrina, which I read quite a bit about and looked at
the official reports on. There is no doubt in my mind that one
of the chief screw-ups, Federal screw-ups after Hurricane
Katrina was that the Department of Homeland Security was new,
there were so many different layers, that the communication
became very difficult. And there was this huge complexity of
decisionmaking. No one knew who was responsible for what.
So I think communication flows more quickly when you have
fewer layers of management. I think rules and regulations are
easier because everyone knows who is responsible.
Senator Heitkamp. I just want to tell kind of a personal
story before we hear from Mr. Shea. I once was a Federal
attorney, and every time I wrote a letter, I had a routing
slip, and it had to be signed off by four levels. And, of
course, you have to justify your existence, so you send it back
with changes. And by the time the top guy changes what you just
did, the bottom guy does not like it. And so you can imagine
the lack of number one efficiency, but accountability, at the
end who was really accountable for that letter? There was no
one accountable for that letter.
And when I went to State government as an attorney, I went
into my supervisor, and I said, ``Can I have the routing
slip?'' And he said, ``The what?'' I said, ``The routing slip
where I have to get approval to send this letter out.'' And, I
am 25 years old or 26 years old, and he looked at me and goes,
``Well, did you research that letter?'' I said, ``Yes.'' ``You
think you said the right thing in that letter?'' I said,
``Well, yes, I worked pretty hard on it.'' He goes, ``Then sign
it and send it.''
And you know what? The message to me was, look, you are
accountable. And when you add those layers of supervision, you
eliminate accountability for the work that is being done, and I
think it creates an attitude that maybe I do not have to take
responsibility for this because it is going to be the guy at
the top.
Mr. Shea, you wanted to comment before I turn it back over
to Senator Lankford.
Mr. Shea. You just reminded me of my first days at OMB when
every memo or circular had to be signed off on in physical hard
copy, and you had some documents literally as high as the dais
that some bloke had to carry around from office to office to
get signed. Luckily, we have gone electronic. I am sure they
are giving it the same diligent review they did then.
I think it is important to note--and Rachel said this in
her testimony--that if we do not tackle fundamental personnel
reform in conjunction with reorganizations, you will not get
the benefits that you hope. Agencies cannot recruit and retain
the workforce they need to accomplish their missions. It is the
chief challenge we find when we survey chief human capital
officers (CHCO), chief financial officers (CFO), chief
information officers (CIO).
So unless agencies have the flexibility to mold the
workforces they need to accomplish the mission you hope they
will accomplish when you reorganize them, you will not get
there.
Senator Heitkamp. But I do want to make this point, that we
have created an atmosphere where a mistake could be
catastrophic. So people are afraid of making mistakes, and that
creates paralysis. We have to have a level of tolerance for
things not always being perfect. And I think when you look at
management structures, if you want a zero mistake tolerance
standard, you will get nothing done. I had a Governor who had a
sign on the wall that said, ``If you made no mistakes today,
you really did not get anything done.''
Mr. Shea. You are talking about the culture of an
organization.
Senator Heitkamp. Right.
Mr. Shea. And leadership can overcome structural barriers
to creating that culture in organizations with sustained
leadership. We get to manage in an environment where senior
leadership turns over sometimes as frequently as every 18
months. So you can play an important role in making sure there
is a sustained attention to whatever culture it is you want to
see in an organization, including one that is risk tolerant.
Senator Lankford. So how much common ground do we have on
personnel policies? Let me just talk hiring for a moment. If I
remember the number correctly, because we have done a lot of
studies on this, off the top of my head I think it is 120
different hiring authorities that are out there. No one can
keep track of 120 different hiring authorities, and it has
reached a point that those 120 different hiring authorities,
every agency contacts us and says, ``We want direct hire
authority.'' In other words, ``We want to do none of the
above.'' How do we fix that? Let us just start with that,
because going back to your Customs and Border Patrol Statement,
we had some of the folks here after the President made the
announcement we need to hire--you said 4,000, he said 5,000
additional people that need to be there. Our response was,
``Good luck.'' Right now, Customs and Border Patrol, it takes
450 days to hire one person. It is one of the worst areas we
have in government for hiring people and the length of time it
takes to hire somebody. How do we solve that?
Mr. Shea. So we do not have a lot of common ground. I broke
my pick on trying to get a lot of personnel flexibilities in
place across government. You could rewrite personnel rules in
such a way that made it much easier to hire people, to retain
people. But if you ask--and veterans' preference is a major
barrier, both to hiring people and to hiring veterans. So it is
a major stumbling block in improvement to the Federal hiring--
--
Senator Lankford. By the way, privately, agencies will tell
us that.
Mr. Shea. But if you ask Gene Dodaro and if you find
agencies that have been able to figure this out, leadership
commitment can overcome a lot of existing barriers. So if
people make it a priority--frankly, not a sexy agenda item for
many political appointees, but if you make it a priority, you
can really improve things.
Senator Lankford. OK. Any other comment on that from
anyone? Because I want to be able to move on. We have a million
topics to be able to go through as well.
All right. So let me ask a process question. Ms. Greszler,
one of the things that you focused in on in your report--and
thank you for pulling all those things together--are the
practical aspects and the process things. Today is more
process-oriented for us because we are trying to work through
the specifics. Obviously, the Administration is going to make
their proposal on the specific things in it.
About 6 years ago, I am a young Congressman, and I saw a
major issue in the Department of Transportation (DOT) where
they were overreaching and really doing something that States
should do, not the Federal Government at all. So I had this
great idea and put a bill together and got cosponsors and
dropped the bill. We started building momentum on it to be able
to put it onto a highway bill. And I have an appointment show
up on my calendar from someone from the U.S. Department of
Transportation, and they wanted to come in and visit with me on
the importance of this program. And I described where I was on
it, and they said where they were on it. We were going back and
forth, and it was very polite. And I said, ``I do not
understand, because the States all do this already. Why do we
have to have this additional layer on the Federal level when
every State already does this? Is there any State that is not
doing it well?'' And he said, ``No. Every State is doing it
well.'' I said, ``Then why do we have to do this?'' And his
exact response to me was, ``I have people that do that every
day.'' And I thought that is not the answer I was looking for.
I was looking for safety, soundness, some essential thing. He
was, like, ``No, I have people for that, so we need to do
that.''
I fought my way through that bill and lost, because many in
my party and others all said, ``No, we need to keep doing that
because we have people for that.''
One of the things that you tried to identify in your report
was the challenge of process trying to move things. You
proposed this commission to do it, and Congress has a love-hate
relationship with creating commissions to be able to do things.
But I would be very interested in process things. When there is
an idea that enough of us can look at and say, ``Yes, that is
an idea we need to seriously take on,'' what would you suggest
based on studying this has been an effective mode for actually
moving the idea into reality?
Ms. Greszler. I think so many times when there is an idea,
even if there is a lot of support for that idea, it ends up
getting tied up in that committee process, because ultimately
you are going to have somebody that comes in, somebody is going
to lose a job. Even if it is a function that everybody agrees
does not need to be performed, there is somebody doing it. And
that is a loss for them, and they are going to argue a lot
harder than the rest of Americans or the other committees.
And so I just see it as so difficult to get little things
through Congress. Even last week the House voted some of the
proposals we include in here, just eliminating or reducing some
of the funding for things like essential air services that
provide up to $200 subsidies for these flights in the middle of
nowhere or Amtrak funding, and, overwhelmingly, that amendment
was voted down. And so things that make sense and that the
Federal Government should not be doing are so difficult to get
through Congress. And that is why ultimately I think, going
forward, if we want to see a big governmentwide reorganization,
you kind of have to step back. I mean, one thing to do would be
to put it in the hands of committees like your own that have
broad jurisdiction, government oversight as opposed to the more
particular ones that would be more inclined to protect their
turf. But even that I think you would face some significant
obstacles, and so that is why I think if you have an
independent commission, it is bipartisan, both sides can elect
people from previous Administrations to look at the idea, I
think there is a broad set of ideas available that everybody
largely agrees on. But you put them in one package, and then it
is about reform. It is not about 5 jobs or 10 jobs there. It is
about making the government as a whole work better for the
people, and I think that is when you can have some people
swallow a little bit of a loss in one area or another.
Senator Heitkamp. I would resist a little bit what you are
saying, Rachel, because I am a huge proponent of the Ex-Im
Bank. You mentioned the Ex-Im Bank in your testimony. I do not
think that is a waste of manpower. I think it is a critical
piece of our trade infrastructure. I am frustrated because we
reauthorized the Ex-Im Bank by almost a 60-percent majority
here, making a statement, hearing all of the arguments, and it
was a tough fight, and we still do not have a fully functioning
bank, because on the outside we have challenges coming from a
number of the groups that are represented here. I get it.
And so, there comes a time when you have to say, look, we
lost that fight. Let us focus on the things that we can agree
on. Let us focus on duplicative programs. Let us focus on not
the ideological programs. Maybe those come later. But we do not
have a big discussion in this country very often about where
are the boundaries.
I will give you a for instance. We had a Banking Committee
where we talked about bitcoins, and everybody was talking about
how they are going to regulate bitcoins. They got to me, and I
said, ``Stop it. It is buyer beware.'' You want to deal in
bitcoins and you lose your life savings, that is not on me. But
the minute the government touches it, it says it is OK, we are
regulating it, therefore, you can now have some sense of
security around using this currency.
So I think we do not have those foundational arguments, and
those foundational arguments, when we get into it, distract
from where the soft spot is, where we can all agree across
ideological barriers.
And so I would say that instead of fighting the fights
about whether we are going to have a Consumer Financial
Protection Bureau or an Ex-Im Bank, let us talk about how we
can reduce the frustration of front-line employees in
performing these functions, how we can identify what Senator
Lankford just talked about, places where we do not need these
folks to be doing what they are doing. We have a lot of other
things they could be doing. And why does anyone want to spend
their life doing something that does not add value to the
American public? They do not. These employees do not.
And so, I think that one of the things that we could do is
lower the ideological barriers and really get to that
efficiency measurement that we could all agree on. And when you
are talking about cost-benefit analysis, I mean, there is a lot
of discussion here. I am all for that. You know who should be
performing cost-benefit analysis on existing Federal
expenditures? The Appropriations Committee, the oversight
committees that authorize these programs. And we should have a
greater sense of skepticism about the program. We should be a
much more critical reviewer of these programs regardless of our
ideology.
And so I would say that we could really do some great work
here if we just agreed that the hard-line, hard-fought
ideological battles about various agencies got set aside and we
could work on the low-hanging fruit, build trust, build
relationships, and then continue the discussion.
Ms. Greszler. I do think you could structure a commission.
You could give it a narrow window: These are things that you
are going to address, and these are things that are off limits.
But I would worry a little because there are so many of the
issues that are ideological. I see Federal personnel and
compensation reform as crucial to this. No matter how many
agencies you eliminate or reorganizations or duplications you
get rid of, if you do not change the personnel structure, the
way that we hire and fire employees, the way that we compensate
them, I mean the government cannot attract and retain the best
and brightest employees that they want to right now, and it
cannot get rid of the ones that it needs to. And that is
something that, even if you have the perfect structure and you
are only performing the functions you should, you still need
the appropriate personnel organization and way to go about
that. And so I think that, yes, you can limit the functions of
a commission or whatever reorganization plan it is, but there
are always going to be some partisan issues in there.
Senator Heitkamp. Mr. Reardon.
Mr. Reardon. I think it is important to recognize that a
lot of these workload and personnel issues really come down to
a need of process improvements, not really an overhaul of laws.
We can hire people, we can pay them, but the fact is that it
has to be funded. And, when I talk to my members, what I hear
from them are things like, they do not have the resources that
they need to do their jobs. I think I have mentioned this
before, and it still is stunning to me, that, for example, in
the IRS there are people, many people--all over the country--
that do not have office supplies to do their jobs. So, funding
to have the tools and the resources to do the job is important.
I would also mention to you training dollars. Not only
training dollars for front-line employees so that they have the
knowledge to do the work--times are changing, and people need
to be trained to move along with those times, but also training
for managers. Managers have a lot of the tools at their
disposal right now to deal with problem employees. But the fact
of the matter is they are not sufficiently trained to do that
work.
And, ultimately a lot of this, candidly, comes down to
staffing. I mentioned CBP. IRS, for example, since 2010 has
lost on the order of 20,000 employees, 20 percent of its
workforce. And that is obviously the organization that brings
in 93 percent of our country's revenue. Something is wrong
there.
Senator Heitkamp. I think Mr. Shea had a comment.
Senator Lankford. Mr. Shea, were you going to comment on
that? And then I want to add a question if you----
Mr. Shea. Sure. I just want to endorse Rachel's idea. A
similar bill we proposed during the Bush Administration to
create a commission that would produce recommendations and go
to Congress for an up-or-down vote, and you could narrow the
scope of that commission in such a way, and that is based on
the success of the Base Realignment and Closure (BRAC)
Commissions, which were specifically designed to overcome
potential road blocks that they would face in the Congress.
On the cost-benefit analysis, I mentioned in my testimony
the Commission on Evidence-based Policymaking. The government
is investing more and more to rigorously evaluate its programs.
They generally are found not to be effective, but it is really
hard, expensive, and takes a long time to do these evaluations.
It is our hope that if the recommendations of the Commission
are implemented, it will be easier to get that data so that you
can find the few diamonds in the rough that are actually having
an impact and at what cost so that you can compare the cost-
effectiveness of programs across government.
Senator Lankford. OK. So, interestingly enough on that, I
posted on my Facebook page, which I do at times, the topic of
this hearing and just ask folks that are on it any of their
ideas and thoughts on it. Lucy Perez of Oklahoma City posted
this question: ``Why do we not consolidate agencies and Federal
departments that perform similar duties?'' And I think it was
an honest question. Why do we not do that?
When I talk to anyone who has ever been with OMB, they see
the issues and say this function is done loosely by four
different entities. Now, all of them will have a little slight
variation on it, but four different entities basically do the
same thing on it. The American people, definitely the people in
Oklahoma see it; people all over the country see it. We have a
bill called ``The Taxpayers Right-to-Know'' that passed
unanimously in the House and over here is being held up by, I
think, five of my colleagues that do not want to do it. But it
basically forces a list of all of the things the Federal
Government does just so we can set them side by side and
Congress can evaluate just for transparency's sake what are all
the things that we do, where are they. We cannot even get that
list at this point.
So the question is: Help me and help her hear this answer.
What is the issue of why, as it is called, cross-cutting, where
you are looking at different agencies, an agency's silo can
evaluate it, but dealing with duplication in multiple agencies
becomes harder? And how do we get through that?
Mr. Shea. It is kind of a philosophical question. I think,
once a government institution is created, its ecosystem
develops around it. It has offices in OMB that are responsible
for overseeing its management and budgeting. It has oversight
committees in Congress. It has contractors--not like Grant
Thornton, of course, but other contractors who have an interest
in doing business with that organization, so those tentacles
make it really difficult to reform those organizations.
Everybody, I think, has good intent. They want the mission to
succeed. But they become too aligned to the status quo to want
to move to something different. There is an enormous fear about
what will result afterwards. Who will lose? Someone will have
to lose. I do not think that necessarily has to be the case,
but that is the fear.
Mr. Edwards. Can I make a quick comment?
Senator Lankford. Mr. Edwards.
Mr. Edwards. Sort of maybe obvious points, but, if you have
two $1 billion programs in different agencies that essentially
do the same thing, the GAO would say that they are overlapping,
etc. Maybe they are under the auspices of different
congressional committees. The folks who protect both programs,
of course, in Congress would want to defend them both. And if
you combine them to eliminate duplication, people would argue,
well, we should spend $2 billion on the total because they were
each $1 billion programs. So there is an issue saving money.
On the bigger sort of philosophical questions, Robert
said--I have a stat in my testimony that in the private sector,
there is just this automatic renewal that happens. As we all
know, bankruptcy in the private sector in America is absolutely
enormous. There is a pretty standard statistic that 10 percent
of all U.S. businesses go out of business every year, either
through bankruptcy or something else. If the demand for a
product falls, if the costs go too high, it just disappears in
the private sector. And the government, unfortunately, it is
very difficult to shift resources. They get sort of stuck where
they get originally put.
Senator Heitkamp. I think if you go back and take a look,
let us talk about supervision. I have a bill that has been
supported by a lot of folks on supervision. We are going to
reintroduce it this Congress, because I agree with you, I
think--people used to tell me in State government, when I ran
agencies, that you could not fire people in State government. I
said, ``That is news to me because I fired a lot of people who
were not functioning.'' I mean, there is a process. And I think
that we sometimes hide behind that process to avoid that
confrontation. And I think front-line workers who tend to get
promoted, if they are good at what they do, may not be the best
supervisors. And we need to move that along.
But when you look at duplication, we are going through this
whole exercise. We do not need all of this review to know that
there is duplication. We have had GAO come in here incredibly
frustrated because they say the same things over and over
again, the same report over and over again, and nothing
happens. And why is that? Because we do not do appropriate
oversight here. There are no cameras that are going to come in
here--if we were having a Committee hearing on Equifax, we
would have tons of people waiting outside that door. It is the
issue du jour, it is the topic du jour that sucks the oxygen
out of the room in Congress when we should be doing the
yeoman's like work on this side of the dais to improve the
quality and competence of the Federal Government building,
again, the commitment that the American public has and the
sense that they have that we are doing the right thing. It is
not a sexy thing. I think what we are doing here is not sexy.
But we are committed to doing it the right way and making sure
that we have some results that we can build on when we build on
the trust.
And so, Mr. Reardon, you wanted to comment?
Mr. Reardon. Yes, one of the other things that I would add
that I think that we all kind of run into is this notion that
the Federal Government is somehow bad, that Federal employees
are somehow bad, they are swamp creatures, they are in the
swamp.
Senator Lankford. They are right now because of hurricane
relief.
Mr. Reardon. Well, that is exactly true. You are exactly
right about that. They are some of our greatest first
responders, without question. So I think the political
rhetoric--and it has been around for decades, but it has really
taken hold to the point where I have a lot of meetings with our
members, and I routinely have people say to me, ``Why does
Congress feel this way about us?'' And they just cannot get
their minds around why so many in Congress, based on some of
the public statements that are made in the media or maybe by
some in OMB, why people feel so negative about them. And so our
Federal employees, in large measure, do not feel valued.
There has been a lot of talk here about trust. Federal
employees do not really feel as though they trust management
either. So there are some things that I think we really need to
pay attention to in our current system, and the trust between
the front lines and management I think is certainly one of
those things.
And I would add that, when we talk about first responders
and we talk about CBP officers from San Francisco and around
the country going to help in Hurricane Harvey or Hurricane
Irma, I would also like to point out that the Federal Emergency
Management Agency (FEMA) brings people in to answer phones, and
one of the groups that they brought in were a number of
employees from the IRS. And the IRS did really a great job of
providing people so that they could help.
So there are all kinds of Federal employees who are not
only pulling people out of floods but that do a lot of
different kinds of important work. And so I hope the day comes
where we value the whole Federal workforce.
Senator Lankford. I think trust builds trust, and when so
many Federal employees also share with their family and
relatives how frustrated they are--because they are and they
are stuck in a bureaucracy. They see things that need to
change. They see someone sitting next to them that they cannot
figure out why that person is not working hard and I am working
really hard, that just continues to build this conversation
that happens, that people know some of those issues and want to
be able to work through the process.
So Members of Congress beating up people they have never
met is not appropriate. But the real issues that we need to
address is the effectiveness of what we are doing, the
bureaucracy of what is happening, when we are slowing down our
economy waiting on multiple layers. All those things need to be
addressed.
My question to this group is--and we need to wrap up, and I
want to honor your time as well. OMB is in a process right now,
and part of the reason that we want to be able to have this
conversation and that we look forward to having the
conversation with OMB sitting at that same table to talk
through how they are handling it and what they are doing is
counsel OMB to make sure you do not miss this, and to Congress
for this to have lasting change, you have to do this. So what I
would be interested in is very specific counsel beyond what you
have in your written statements, because your written documents
are all in, or if you want to reinforce something you have
written, counsel to OMB that now that they are looking at the
things that are coming in from all the agencies, they have to
help determine those cross-cutting, because at the end of the
day we have asked OMB to be the one that has the big picture
and the White House to have the big picture to say bring us a
set of recommendations where you see recommendations. I will
keep working on Taxpayers Right-to-Know where we can force
those same things out so every entity, every think tank, every
American, all Members of Congress can also see all of the
duplication, and we can have a national conversation on it. But
until that time we get all that, OMB has it, counsel you would
have for OMB as they are handling this and then counsel you
would have for Congress as we try to walk through and codify
the issues that are needed. And I would be interested from any
of you or all of you on that.
Mr. Shea, you have uniquely got the ball, being in that
chair before.
Mr. Shea. So make sure they know what outcome they are
trying to accomplish and whether what they are proposing is
going to accomplish it better than we are doing it today.
Implement the recommendations of the Commission on Evidence-
based Policymaking so you can actually evaluate whether or not
what we are doing is accomplishing the intended goal. And for
Congress and this Committee in particular, you have to commit
to sustained oversight of the reorganization to ensure that we
adjust in real time to make sure we actually get to where we
are trying to go.
Senator Lankford. Can I ask a quick question on that? Then
I want to move on. For OMB, is it important that they say what
they are going to do before they ask for executive authority to
do it? Because that has been some of the challenge as well. As
you mentioned before, many times Congress will not give the
executive authority because there is an uncertainty of what is
going to happen.
Mr. Shea. So it is really difficult for me to imagine
Congress granting the President reorganization authority at
this time in our history. But perhaps they could enact it for a
future Administration.
Senator Lankford. If this Administration were to take it
on, obviously they are pulling the things together on it. What
do they need to list out specifically to say here is what we
want to do, give us authority to do this?
Mr. Shea. You mean broadly speaking or with each
individual----
Senator Lankford. Broadly speaking.
Mr. Shea. I think, as Rachel suggested and we proposed
during the Bush Administration, an independent commission to
make recommendations that get an up-or-down vote in the
Congress. It can be very narrowly tailored to reducing overlap
and duplication among programs or agencies.
Senator Lankford. OK. All right. Thank you. Ms. Greszler.
Ms. Greszler. And I will just pick up on that. I think that
if they were required to submit detailed--like a list by list,
this is exactly what we want to do, there is not much chance of
Congress granting executive authority.
To OMB, I would say two things. First, just the process in
which they are taking in, they have received over 100,000
recommendations, and so I do not know what they have in place
over there, but something that would categorize them and, where
do we have 1,000 people that are saying do the same thing and
kind of to break it out and here are our broad goals, here are
some more specific things. Where do we have a lot of agreement?
And then also considering making some of those available to
Congress and to the public and just say these were submitted by
public institutions, here is what they are saying.
To Congress, I think it is a big thing on the process, and
so if Congress is going to have to take on some of this,
whether it comes from the President and hear his proposals--
there is going to be something in there that needs
congressional action. I would say the best way to go about that
is through oversight in the Governmental Affairs Committees
because you have the broader jurisdiction; otherwise, I think
everything is just going to get so tied up in the process that
you will not see much come out of it.
Senator Lankford. OK. Thank you. Mr. Edwards.
Mr. Edwards. Robert mentioned the Commission report last
week, the Murray-Ryan Commission on Evidence-based
Policymaking, which I went through, and it is very good,
although it mainly focuses on generating more data. I do not
think that is what we need. I think we need more evaluations,
and as I said in my testimony, I think it is a cost-benefit
analysis which is a standard tool of economics. Some Federal
agencies, like DOT, the Army Corps, already do detailed cost-
benefit analysis. We know how to do this. I think that is where
we ought to put resources.
Looking around on the Internet in the last few days, the
State of Washington has this fantastic website. You go to it;
it has all--I do not know whether it is all, but many of their
major agencies and programs. They have the full cost-benefit
analysis results right there. This program costs the average
taxpayer $100; the benefits are $150; it makes sense. That is,
I think, what we need, and to inform the public about these
programs.
Senator Heitkamp and Rachel had strongly held views about
the Ex-Im Bank, both, I am sure, very knowledgeable viewpoints.
But, we needed hard data in that debate. We needed the CBO or
someone to do the evaluation with a bottom-line number, and
then we can debate over what the numbers are. So I think we
need to quantify the benefits of these programs.
Senator Lankford. OK. Thank you. Mr. Reardon.
Mr. Reardon. OK. Thank you. The first thing that I would
suggest is that OMB instruct agencies to work with us on the
recommendations that we provided those agencies, and they were
contained in my testimony, so I will not go through all of
those again.
To Congress, I would suggest that Congress fund agencies
appropriately, first thing.
The second thing is to enact Senator Heitkamp's forthcoming
supervisor training bill that you had put forward last year.
Finally, I would say it is important to involve front-line
employees and their representatives in whatever work is being
done so that, without question, front-line employee
perspectives are included and taken very seriously.
Senator Lankford. OK.
Senator Heitkamp. We received some great comments from the
Partnership for Public Service, and so I want to ask unanimous
consent to enter that testimony into the record.\1\
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\1\ The statement from the Partnership for Public Service appears
in the Appendix on page 374.
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Senator Lankford. Without objection.
Senator Heitkamp. Thank you.
I have no further questions.
Senator Lankford. OK. Thank you for the work leading up to
this. You did tremendous work in your written testimonies, and
I appreciate that very much. I appreciate the ongoing dialogue
as you have specific recommendations or ideas. Please continue
to be able to bring those. This Committee is very committed not
only just to the philosophical argument but to actually the
practical implementation of what those things will really mean.
Many of the things that you brought up demand really an hour-
long conversation on each of those issues alone. We are
actually just skimming the surface today. But I appreciate the
ongoing dialogue both with our staff and with us as members as
well.
Before we adjourn, I do want to announce that next month
the Subcommittee will hold a hearing to examine how various
State legislatures review administrative rules and how they
interact with State regulators.
That concludes today's hearing. Again, I want to thank our
witnesses for this. The hearing record will remain open for 15
days until the close of business on September 28th, my wife's
birthday, for the submission of statements and questions for
the record.
This hearing is adjourned.
[Whereupon, at 11:19 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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