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S. Hrg. 103-401 IMPROVING GOVERNMENT ORGANIZATION AND PERFORMANCE Y 4. G 74/9: S. HRG. 103-401 Inproving Governnent Organization a.. • HEARING BEFORE THE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED THIRD CONGRESS FIRST SESSION MARCH 11, 1993 Printed for the use of the Committee on Governmental Affairs - APR1 9 V U.S. GOVERNMENT PRINTING OFFICE 65-990cc WASHINGTON : 1994 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments.CongressionalSalesOffice.Washington.DC 20402 ISBN 0-16-043583-8 S. Hrg. 103-401 IMPROVING GOVERNMENT ORGANIZATION AND PERFORMANCE Y4.G 74/9: S. HRG. 103-401 Inproving Covernnent Organization a... HEARING BEFORE THE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED THIRD CONGRESS FIRST SESSION MARCH 11, 1993 Printed for the use of the Committee on Governmental Affairs APR 1 9 r U.S. GOVERNMENT PRINTING OFFICE 65-990cc WASHINGTON : 1994 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments.CongressionalSalesOffice.Washington.DC 20402 ISBN 0-16-043583-8 COMMITTEE ON GOVERNMENTAL AFFAIRS JOHN GLENN, Ohio, Chairman SAM NUNN, Georgia WILLIAM V. ROTH, Jr., Delaware CARL LEVIN, Michigan TED STEVENS, Alaska JIM SASSER, Tennessee WILLIAM S. COHEN, Maine DAVID PRYOR, Arkansas THAD COCHRAN, Mississippi JOSEPH I. LIEBERMAN, Connecticut JOHN McCAIN, Arizona DANIEL K. AKAKA, Hawaii BYRON L. DORGAN, North Dakota Leonard Weiss, StaffDirector David Plocher, Counsel Mark Goldstein, Professional StaffMember Franklin G. Polk, Minority StaffDirector and ChiefCounsel Michal Sue Prosser, ChiefClerk (II) CONTENTS Openingstatements: Page SenatorGlenn * SenatorRoth SenatorLevin J° Senator Dorgan • j" SenatorLieberman jj: SenatorPryor SenatorMcCain j*~£ SenatorStevens j' SenatorCochran i8 Prepared statements: SenatorSasser J? SenatorKerrey dd WITNESSES Thursday, March 11, 1993 Hon Harry Reid, U.S. Senatorfromthe State ofNevada 18 Hon Charles A. Bowsher, Comptroller General, U.S. General Accounting Office; accompanied by William M. Hunt, Director ofFederal Management Issues; and David G. Mathiasen, SpecialAssistant 25 Leon E. Panetta, Director, Office ofManagementand Budget 41 David Osborne, Author of"ReinventingGovernment" .. o< Martin L. Gross, Author of "The Government Racket: Washington Waste fromAto Z" •••••: £> Peri E. Arnold, ProfessorofGovernment, Notre Dame Universi:ty b/ Alphabetical List of Witnesses Arnold, Peri E.: Testimony j?' Prepared statement 1U° Bowsher, CharlesA.: Testimony £? Prepared statement B1 Gross,Martin L.: Testimony Prepared statement 1jUgU Osborne, David: _ Testimony j>' Prepared statement yd Panetta, Leon A.: Testimony Prepared statementwith attachments £°'7 Reid, Hon. Harry: Testimony £° Prepared statement iil APPENDIX Prepared statements ofwitnesses in orderofappearance 81 (III) IMPROVING GOVERNMENT ORGANIZATION AND PERFORMANCE THURSDAY, MARCH 11, 1993 U.S. Senate, Committee on Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 9:32 a.m., in room SD-342, Dirksen Senate Office Building, Hon. John Glenn, Chair- man ofthe Committee, presiding. Present: Senators Glenn, Levin, Pryor, Lieberman, Dorgan, Roth, Stevens, Cochran and McCain. Also present: Senator Kerrey. OPENING STATEMENT OF SENATOR GLENN Chairman Glenn. The hearing will be in order. This morning, the Committee on Governmental Affairs meets to consider the critical issue ofimproving the performance and organization of the Federal Government, a giant task, if there ever was one. At the same time I say it is a giant task, I also would say it is a very unique opportunity, because rarely in our history have calls We for government reform come together in such a positive way. now have what may bejust the right mix ofpolitical consensus and public pressure to successfully overhaul the government. Americans voted for change last November, and the need to change government is one reason why. There is a profou—nd feeling in the country that government has not been doing itsjob notjust that tax dollars are wasted, but that government cannot be counted on to help improve the Nation's future or to support the current aspirations of ordinary Americans. This leads to the obvious question of whether the present government organization can operate effectively in these days. Thus, I commend President Clinton for making a bold beginning, for proposing an economic plan that focuses on investment and the future, and for establishing a task force under the direction ofVice President Gore to eliminate wasteful spending and streamline Fed- eral programs. Indeed, the Vice President's National Performance Review is perfectly complementary to the efforts that this Committee has long been involved with, namely, the creation and support of inspectors general and chief financial officers to fight waste and to improve accountability for financial and general management. The public demands we do more, and rightly so, and that is what today's hearing is about. While Congress and the public hope the (l) President can take advantage of a 6-month government-wide performance review, many of our problems are more complicated and more substantial. They can only be solved through a comprehensive and collective approach using the talents and experience of both the Executive and Legislative Branches. This broader effort is embodied in the four government reform commission bills now before this Committee: S. 15 was introduced by Senator Roth; S. 255 was introduced by Senator Campbell; S. 432 introduced by Senator Lieberman and cosponsored by Senator Kerrey, who we are pleased to have with us today; and S. 101, my bill, to establish a bipartisan commission to recommend changes and to write legislation to streamline and reorganize government to better focus on our Nation's needs. In addition to these commission bills, the Committee has before it Senator Krueger's legislation, S. 436, to statutorily create a government-wide performance review, like the President's, and Sen- ator Reid's sunset bill that would require periodic reauthorization of Federal programs. Indeed, we are pleased to have Senator Reid who is going to be testifying before the Committee today. A number of years ago this Committee did a lot of work on the sunset and zero-based budgeting concepts and passed legislation through the Senate, but failed to get House agreement. At the beginning of this year, I asked the staff to review those previous efforts with a view toward implementing them now, so I am particularly glad to have Senator Reid's bill before us. Each ofthese pieces oflegislation will be considered by the Com- mittee and will contribute much to our deliberations. I am sure we are all a bit suspicious ofgrand plans and commissions. Grand plans and commissions, how many we have heard of. Too many of them have come and gone, leaving behind dashed hopes and recommendations collecting dust on many, many shelves. But every now and then, the time is right. The time was right 45 years ago, when a commission led by former President Herbert Hoover successfully streamlined a government grown too large and disorganized through the trials ofthe Great Depression and later World War II. Many ofthe changes recommended by the Hoover Commission were approved by the Con- gress, and they were approved because of a consensus that we needed a more effective government for what was clearly a changing world. I believe the time is also right today. All of us are well aware that our Nation and our world are changing rapidly. And we are equally aware or should be aware that a government still largely organized for the Great Depression and later the Cold War cannot possibly help America meet the challenges oftoday or ofthe future. Farming has been completely transformed in the past half-century. Yet, the Agriculture Department still retains an office, sometimes several offices, in nearly every county in the Nation. Job training and development is of paramount importance to America's retaining a competitive edge in a global economy, but our citizens must wade through a bewildering array of 125 different job programs funded from 48 different sources in 14 different agencies, just to try to get help. Now, does this mean we go to a more mission oriented-type organization ofgovernment? I do not know, but I know that we are not doing the properjob when we have an organization like this in government right now. That isjust one example. I know, as I am sure my colleagues know, that reforming the government historically has proven to be very, very difficult. And while a credible effort by a commission will by its nature be controversial, this does not relieve us of the obligation to improve the government's performance ofits responsibilities to its citizens. I believe a commission, with a mechanism to ensure congressional action on its recommendations, can do much for long-term reform. I also believe, however, that there is much to be done now. In addition to continuing the work begun by the Inspectors General and Chief Financial Officers Acts, we can institute reforms for which there already exists a consensus. One such initiative would improve the performance of Federal programs, and is an effort that is critical to restoring government's public credibility. To his credit, Senator Roth has long been a leader in submitting legislation in this area, and I think that S.20, which is the result of our work together over the past year or so in this Committee, will help bring a more meaningful and effective approach to the role and responsibilities of government. S.20 unanimously passed the Senate in the last Congress, and I am cer- tain it will pass again. We look forward to working with the House and the administration to quickly enact this important bill. With us this morning to testify is our colleague Senator Harry Reid —from Nevada. He will be followed by the Honorable Leon Pa- netta although Leon may be a little late, he is over in the House testifying this morning and may not be here until about 10:30, so we may change the order a little bit. But ifhe arrives, we will take him on. He is Director of the Office of Management and Budget, of course, and he will discuss the new National Performance Re- view, as well as our longer-term commission proposals and our performance measurement legislation, S. 20. Also testifying is the Honorable Charles Bowsher, Comptroller General of the United States, who has appeared before our Committee many, many times. Our final panel has Mr. David Osborne, author of "Reinventing Government," Mr. Martin Gross, author of"The Government Rack- et: Washington Waste From A to Z," and Professor Peri Arnold of the University of Notre Dame, who is an expert on the history of Executive Branch reorganization. So we welcome you all this morning and look forward to your testimony this morning. Prepared Statementof SenatorGlenn This morning, the Committee on Governmental Affairs meets to considerthe critical issue ofimprovingthe performance and organization ofthe Federal Government. We have a unique opportunity. Rarely in ou—r history have calls for governmental reform come together in such a positive way we now have what may be just the rightmix ofpolitical consensus and publicpressure to successfully overhaul the government. Americans voted for change last November, and the need to change government is one reason why. There is a profound feeling in the country that government hasn't been doing itsjob—notjust that tax dollars are wasted, but that government cannot be counted on to help improve the Nation's future or to support the current aspirations ofordinaryAmericans. This leads to the obvious question ofwhetherthe presentgovernment organization can operate effectively in these days. Thus, I commend President Clinton for making a bold beginning, for proposingan economicplan thatfocuses on investmentand thefuture, and for establishingatask force under the direction ofVice President Gore to eliminate wasteful spending and streamline Federal programs. Indeed, theVicePresident'sNational Performance Re- view is perfectly complementary to the efforts that this Committee has long been involved with, namely the creation and support ofInspectors General and ChiefFi- nancial Officers to fight waste and to improve accountability for financial and general management. Yet, the public demands we do more. And that is what today's hearing is about. While Congress and the public hope the President can take full advantage of a 6- month government-wide performance review, many ofour problems are more com- [>licated and substantial. They can only be solved through a comprehensive and col- ective approach using the talents and experience ofboth the Executive and Legisla- tive Branches. This broader effort is embodied in the four government reform commission bills now before this Committee: — —S. 15, introduced by SenatorRoth; —S. 255, introduced by SenatorCampbell; S. 432, introduced by Senator Lieberman, and co-sponsored by Senator Kerrey, whowe are pleased to have with us today; and —S. 101, my bill to establish a bipartisan commission to recommend changes, and to write legislation to streamline and reorganize government to better focus on our Nation's needs. In addition to these commission bills, the Committee has before it Senator Krueger's legislation (S. 436) to statutorily create a government-wide performance review (like the President's), and Senator—Reid's sunset bill that would require periodic reauthorization of Federal programs indeed, we are pleased to have Senator Reid here today to testify before the Committee. A number ofyears ago, this Committee did a lot ofwork on the sunset and zero based budgeting concepts, and passed legislation through the Senate, but failed to getHouse agreement. Atthe beginningofthisyear, I asked the staffto reviewthose previous efforts, with a view toward implementing, so I'm particularly glad to have SenatorReid's bill before us. Each ofthese pieces of legislation will be considered by the Committee and will contribute much to ourdeliberations. — I am sure that we are all a bit suspicious ofgrand plans and commissions too many ofthem have come and gone, leaving behind dashed hopes and recommendations collecting dust on a shelves. But every now and then, the time is right. The time was right 45 years ago, when a commission led by former President Herbert Hoover successfully streamlined a government grown too large and disorganized through the trials ofthe Great Depression and World War II. Many oft—he changes recommended by the Hoover Commission were approved by the Congress and they were approved because ofa consensus that we needed a more effective government forwhat was clearly a changingworld. The time is also right today. All of us are well awar—e that our Nation an—d our world are changing rapidly. And we are equally aware or should be aware that a government still largely organized for the Great Depression and later the Cold War cannotpossibly helpAmericameetthe challenges oftoday or ofthefuture. Farming has been completely transformed in the past half-century, yet the Agri- culture Department still retains an office, sometimes several offices, in nearly every county in the Nation. Job training and development is ofparamount importance to America's retaining a competitive edge in a global economy, but our citizens must wade through a bewilderingarray of125 differentjob programs to gethelp. I know, as I am sure my colleagues know, that reforming the government historically has proven to be very difficult. And while a credible effort by a commission will by its nature be controversial, this does not relieve us ofthe obligation to improve the government's pe—rformance ofits responsibilities to its citizens. I believe a comm—ission with a mechanism to ensure congressional action on its recommendations can do much for long term reform. I also believe, however, that there is much to be done now. In addition to continuing the work begun by the IG and CFO Acts, we can institute reforms for which there already exists a consensus. One such initiative would improve the performance of Federal programs, and is an effort that is critical to restoring government's public credibility. Senator Roth has long been a leader in submitting legislation in this area and I think that S. 20, which is the result ofour work together on the Committee, will help bring a more meaningful and effective approach to the role and responsibilities of government.