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S. Hrg. 104-^33 EXECUTIVE BRANCH REORGANIZATION Y 4. G 74/9; S. HRG, 104-433 Executive Branch Reorganization* S HEARINGS BEFORETHE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED FOURTH CONGRESS FIRST SESSION MAY 17, 1995 AN OVERVIEW OF HOW TO DO IT MAY 18, 1995 VARIOUS PROPOSALS Printed for the use ofthe Committee on Governmental Affairs l^ts U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1996 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC20402 ISBN 0-16-052584-5 S. Hrg. 104-^33 EXECUTIVE BRANCH REORGANIZATION Y 4. G 74/9; S.HRS, 104-433 Executive Branch Reorganization* S HEARINGS BEFORETHE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED FOURTH CONGRESS FIRST SESSION MAY 17, 1995 AN OVERVIEW OF HOW TO DO IT MAY 18, 1995 VARIOUS PROPOSALS Printed for the use ofthe Committee on Governmental Affairs U.S. GOVERNMENT PRINTING} OOFFFFIICCEE "^^^ ' ' WASHINGTON : 1996 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC20402 ISBN 0-16-052584-5 COMMITTEE ON GOVERNMENTALAFFAIRS WILLIAMV.ROTH,Jr., Delaware,Chairman TEDSTEVENS,Alaska SAMNUNN,Georgia WFIRLELDITAHMOSM.PCSOOHNE,N,TeMnnaeisnseee. JCOARHLNLGELVEINNN,,MiOchhiiogan THADCOCHRAN.Mississippi DAVIDPRYOR,Arkansas CHARLESE. GRASSLEY, Iowa JOSEPH I. LIEBERMAN, Connecticut JOHNMcCAIN,Arizona DANIELK.AKAKA, Hawaii BOBSMITH,NewHampshire BYRONL. DORGAN,NorthDakota FranklinG. Polk,StaffDirectorandChiefCounsel JohnMarshall,ProfessionalStaff LeonardWeiss,MinorityStaffDirector MichalSueProsser,ChiefClerk (II) CONTENTS Openingstatements: Page SenatorRoth 1,49 SenatorGlenn 3,51 SenatorStevens 6 SenatorAkaka 7 SenatorLieberman 8 Preparedstatements: SenatorGrassley 9 WITNESSES Wednesday, May 17, 1995 Hon. Charles A. Bowsher, Comptroller General, U.S. General Accounting Office 10 Hon.AliceM.Rivlin,Director,OfficeofManagementandBudget 12 ScottFosler,President,NationalAcademyofPublicAdministration 32 Alan L. Dean, Senior Fellow and Former Chairman, Board ofTrustees, Na- tionalAcademyofPublicAdministration 34 AndrewFoster,ChiefExecutiveoftheAuditCommission,UnitedKingdom .... 37 PaulC. Light,ProfessorofPublicAffairsandPlanning,HubertH. Humphrey InstituteofPublicAffairs,UniversityofMinnesota 39 RobertS.Gilmour,ProfessorofPoliticalScience,UniversityofConnecticut .... 41 Thursday, May 18, 1995 Hon.SpencerAbraham,U.S.SenatorfromtheStateofMichigan 54 Hon.LauchFaircloth,U.S. SenatorfromtheStateofNorthCarolina 56 Hon. SteveGunderson, Representativein Congress from theStateofWiscon- sin 63 Hon.SamBrownback,RepresentativeinCongressfromtheStateofKansas .. 69 Hon. Robert S. Walker, Representative in Congress from the State ofPenn- sylvania 71 Hon.ScottL.Klug,RepresentativeinCongressfromtheStateofWisconsin ... 76 Donald F. Kettl, Robert M. La Follette Institute ofPublicAffairs, University ofWisconsin-Madison, and Center for Public Management, The Brookings Institution 81 ScottA.Hodge,TheHeritageFoundation 84 MurrayComarow,formerExecutiveDirector,AshCouncil 87 JeffreyA. Eisenach,President,TheProgressandFreedomFoundation 90 Alphabetical List of Witnesses Abraham,Hon.Spencer: Testimony 54 Preparedstatement 219 Bowsher,Hon. CharlesA.: Testimony 10 Preparedstatement 103 Brownback,Hon.Sam: Testimony 69 Preparedstatement 227 Comarow,Murray: Testimony 87 Preparedstatement 251 (III) IV Page Dean,AlanL.: Testimony 34 Preparedstatement 127 Eisenach,JeffreyA.: Testimony 90 Preparedstatement 255 Faircloth,Hon.Lauch: Testimony 56 Preparedstatement 220 Fosler,Scott: Testimony ^ 32 Preparedstatement 115 Foster,Andrew: Testimony 37 Preparedstatement 139 Gilmour,RobertS.: Testimony 41 Preparedstatement 134 Gunderson,Hon.Steve: Testimony 63 Preparedstatement 222 Hodge,ScottA.: Testimony 84 Preparedstatement 246 Kettl,DonaldF.: Testimony 81 Preparedstatement 238 Klug,Hon.ScottL.: Testimony 76 Preparedstatement 231 Light,PaulC: Testimony 39 Preparedstatement 130 Rivlin,Hon.AliceM.: Testimony 12 Preparedstatement 110 Walker,Hon.RobrrtS.: Testimony 71 Preparedstatement 230 APPENDIX Preparedstatementsofwitnessesinorderofappeareince 103 Agencymissionstatements 146 Informationforregionalofficesformajordepartmentsandagencies 158 Seniorlevelstaffreduc—tionsummary 210 1991PanettaProposal Ex—ecutiveBranchReorganization 216 1971AshCouncilProposal Executi—veBranchReorganization 217 1995HeritageFoundationProposal ExecutiveBranchReorganization .... 218 SenatorChristopherS.Bond,preparedstatement 237 EXECUTIVE BRANCH REORGANIZATION: AN OVERVIEW OF HOW TO DO IT WEDNESDAY, MAY 17, 1995 U.S. Senate, Committee on GovernmentalAffairs, Washington, DC. The Committee met, pursuant to notice, at 10:05 a.m., in room SD-342 Dirksen Senate Office Building, Hon. William V. Roth, Jr., Chairman ofthe Committee, presiding. Present: Senators Roth, Glenn, Stevens, Akaka, Lieberman, and Grassley. OPENING STATEMENTOFCHAIRMANROTH Chairman Roth. The Committee will please be in order. This morning's hearingis the first oftwo that the Governmental Affairs Committee will hold this week on how to reorganize the Executive Branch. Tomorrow we will look at several specific proposals to consolidate and eliminate various departments and agencies, as well as to privatize certain functions. Today's hearing, however, is intended to focus primarily on the—general principles that should apply to any reorganization plan an overview of the "how to's," andthe "how-not-to's." lauIntchhiinnkgitinitsoimtphoertsapnetciftihcastowferbeeogrignanoiuzartiionnq.uirWyethinseewdayabegofoodr,e firm, rational basis for the downsizing and restructuring ofthe Ex- ecutive Branch or else we will end up with a mess on our hands. Right now, the environment on Capitol Hill for consolidating and eliminating departments, agencies and functions is almost entirely budget-driven. As someone who has long advocated the need to rethink Executive Branch organization, with an eye toward stream- lining and right-sizing, I thoroughly welcome this new interest in this subject here in Congress. However, as someone who has also advocated creating a Commission taskedwiththoughtfullydevelop- ing a comprehensive plan, I am concerned that we may not be giving adequate consideration to what kind of Government we need forthe 21st Century. The question is not simply which Federal departments and agencies should no longer exist, or which functions should no longer be at the Federal level. Nor is it a matter of simply trying to cut spending, as important as this certainly is. The American people are frustrated, not just that Government costs so much, but also that it doesn't seem to work well. They don't feel it is satisfactorily addressing the problems they find most troubling. They want Gov- ernment to spend less, yes, but they also wantit to perform better. (1) 2 Ifwe are not careful in how we eliminate, consolidate, and reorganize departments and agencies, we will end up having a Govern- mentthat gives evenworse service than itdoes now. To prevent this from happening, and from having a public that is even more frustrated with Grovernment than it already is, we have to do several things. We have to think about what the appropriate role of the Federal Grovernment should be for the coming decades. We need to develop a comprehensive reorganization plan that reflects thos-e new priorities. We need a better understanding ofhow to instill accountability and improved performance in large governmental organizations, and we have to think carefully about how best to make the difficult transition from a Government better suited for the industrial age of mid-20th Century America to one that enters the technological age of a new century. These transi- tional issues are very important because they entail dealing with real people in a shrinkingGrovemmentalworkforce. I am hopingthattoda/s testimonywill help inform this Commit- tee and the Congress on how best to approach the complex issue ofagency and departmentalreorganization. When, for example, should a function be part ofa cabinet depart- ment? When should it be a separate, non-cabinet-level agency? When should it be an independent regiilatoiy entity? When should it be a Government-sponsored enterprise using a corporate model? When should the function be contracted out and when should it be privatized? And are there other alternative organizational arrangements that we may not even have considered yet that might improve accountability for reducing costs while increasing performance? As the Committee withjurisdiction over the structure ofthe Ex- ecutive Branch, including the creation and reorganiz;ation of cabinet departments, these are some of the questions we need to ex- plore ifwe are to do ourjobwell. There ar—e, ofcourse, several other important issues that bear on all of this civil service reform and the better use of technology, just to name two. While the hearings today and tomorrow will focus primarily on structural issues, this Committee is well aware that major operational reforms are needed if the Federal Govern- ment is to function well. I intended that these issues too will be addressed this yearbythe Committee. [The prepared statement ofSenator Rothfollows:] PREPAREDSTATEMENTOFSENATORROTH Thismorning'shearingisthefirstoftwothattheGovernmentalAffairs Commit- tee will hold this week on how to reorganize the Executive Branch. Tomorrow we will look at several specific proposals to consolidate and eliminate various departments and agencies, aswell as toprivatizecertainfunctions. Today's hearing, however, is intended to focu—s primarily on the general principles that should apply to any reorganization plan an overview of the 'how to's', and the 'how-not-tos', in otherwords. speIcitfhiicnskoiftriemoprogratniaznattitohna.tWweebneegeidnaougrooidn,qufiirrym,thriastiwoanya,lbbeafsoirsefloarunthcehidnogwinnstiozitnheg and restructuring ofthe Executive Branch, orelse we will end up with a mess on ourhands. Right now, the environmenton Capitol Hill forconsolidatingand eliminatingde- partments, agencies, and functions is almost entirely budget-driven. As someone whohaslongadvocated theneed torethinkExecutiveBranchorganization,withan eye toward streamliningand rightsizing, I thoroughlywelcome this new interestin thesubjecthereinCongress. However, assomeonewhohasalsoadvocatedcreating acommission taskedwith thoughtfullydeveloping a comprehensive plan, I amcon- cerned that we may not be giving adequate consideration to what kind ofgovern- mentweneedforthe21stCentury. The question is not simply what federal departments and agencies should no longer exist, or what functions no longer engaged in. Nor is it a matter ofsimply trying to cut spending, as important as this certain—ly is. The American people are frustrated, notjust that government costs so much but also that it doesn't seem to work well. They don't feel it is satisfactorily addressing the problems they find most troubling. They want government to spend less, yes, but they also want it to perform better. Ifwe are notcareful in how we eliminate, consolidate, and reorga- nizedepartmentsandagencies,wewillend uphavingagovernmentthatgiveseven worseservicethanitdoesnow. Topreventthisfromhappening, andfromhavingapublicthatisevenmorefrus- trated with government than it already is, we have to do several things. We have to think about what the appropriate role ofthe federal government should be for the comingdecades. We need to develop a comprehensive reorganization plan that reflects those new priorities. We need a better understanding ofhow to instill accountability and improved performance in large governmental organizations. And we have to think carefully about how best to make the difficult transition from a government better suited for the industrial age ofmid-20th Century America, to onethatentersthetechnologicalageofanewcentury. Thesetransitionalissuesare veryimportant, because theyentail dealingwith real peoplein ashrinkinggovern- meTnhtiasliwsorwkhfyorcIe.am concerned about a piecemeal reorganization effort—ehminating afewdepartmentsand agenciesthisyear, and perhapsafewmorenextyear,with- out any real thought as to where we want to end up and how best to get there. I am equallyconcerned thatthe counterto suchpiecemeal reorganization seems to beanoppositiontoanyrestructuringoftheExecutiveBranch. Therefore, Iamhopingthattoday'stestimonywillhelpinformthisCommitteeon howbesttoapproach thecomplexissueofagencyand departmentalreorganization. When, forexample,should afunctionbepartofacabinetdepartment?Whenshould itbe aseparate, non-cabinet-level agency?When should itbe anindependentregu- latory entity? When should it be a government sponsored enterprise, using a corporate model? When should the function be contracted-out, and when should it be privatized? And are there other alternative organizational arrangements, that we may not have even considered yet, that might improve accountability for reducing costswhileincreasingperformance? As the Committee withjurisdiction over the structure ofthe Executive Branch, includingthecreation and reorganizationofcabinetdepartments, thesearesomeof thequestionsweneedtoexploreifwearetodoourjobwell. — There are, ofcourse, other very important issues that bear on all ofthis civil service reform and the better use oftechnology, to namejust two. While the hearings today and tomorrow will focus primarily on structural issues, this Committee is well-aware that major operational reforms are needed ifthe federal government is to function well. I intended that these issues too will be addressed this year by theCommittee. Chairman Roth. I would like to call upon ranking member, Sen- ator Glenn. OPENINGSTATEMENTOFSENATORGLENN Senator Glenn. Thank you, Mr. Chairman. I welcome today's witnesses. I lookforward to hearingtheirtestimony on how to reorganize Executive Branch agencies and programs and functions. As Senator Roth has stated. Government reorganization must be done in a comprehensive and deliberate manner. It cannot be and should not be a furtive exercise where we just rearrange deck chairs or bureaucratic boxes, and giving them new forwarding ad- dresses and shippingthem to someone else in the Federal bureauc- racy. Nor, in our effort to pare the Federal Government's fat, should we ever sever its muscle and cut its bone. We may end up with a smaller Federal Government that way, but it will be one that is even less effective and efficient than the one that we have now. This Committeehas alongstanding, bipartisantradition ofexam- ining Federal Government reorganization issues. Two years ago the Committee reported out legislation that Chairman Roth and I au- thored to create a Commission to reduce the costs and increase the effectiveness ofthe Federal Grovernment. We didn't envision this as just any old Commission that would convene a bunch of talking heads in order to produce some thick studythatwould gather duston a shelf. We have too manyofthose Commissions already. Rather, the Commission's recommendations on Government reorganization and consolidation would have to be considered by Congress on a fast-track basis, so we gave it some real authority. Unfortunately, the bill did not move beyond Com- mittee, but I would be interested in hearing from the witnesses whetherits resuscitationwouldbeworthwhile. Clearly, we need to reorganize, consolidate and even eliminate a number of the programs and operations of the Federal Govern- ment. For example, take the myriad of Federal Advisory Commit- tees sprawled across Government. Do we really need the Idaho- Eastern Oregon Potato Committee, the Colorado Potato Adminis- trative Committee, the State ofWashington Potato Committee, the Oregon-California Potato Committee or could they all be peeled off and consolidated into one? [Laughter.] Perhaps under the auspices of the National Potato Promotion Board or some similarorganization. Another one ofmy favorite Advisory Committees is ajoint Mexi- can-U.S. Defense Commission established by FDR to ward off a Nazi invasion from Mexico. As far as I can tell, they are still wait- ingforthe invasionto occur. Through presidential executive orders followed up by efforts of the National Performance Review, we have cut the number ofFed- eral Advisory Committees by over 350. We obviously have a long ways to go yet. With accumulated savings approaching $30 million, that still leaves over 400 Advisory Committees mandated by Con- gress, not just ones that were formed over by the Executive Branch, but another 400 Advisory Committees mandated by Con- gress over the years. I plan to introduce shortly a measure that would impose sunset limits on all of these groups and force Con- gress to consider which ones are truly necessary and only continue those that perform avaluablefunction. This Committee has worked long and hard over the years, often with very little fanfare, on trying to improve the efficiency and effectiveness ofthe Federal Government; two things that are written into the mandate for this Committee. We have installed inspector generals in all of the major departments and agencies of Govern- ment, some 61 in all now, and they are doing a goodjob. We have improved Federal financial management. Federal accounting sys- tems, the CFO Act. It is hard to believe we required no bottom-line audits every year from departments and agencies until 1990 and beyond, when we finally put that in. It is almost hard to believe. We held tough oversight hearings on contracting abuses, and we strengthened agency information management and controls. Now we will be looking at Government consolidation and reorganization.