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Posted at 03:20 PM ET, 04/14/2011

Government reform: The big-ticket budget item Obama and Ryan missed

President Barack Obama has finally entered the debate about big-ticket entitlement and spending reform with a $4 trillion package. About time, eh? He now stands in the ring against House Budget Committee chairman Paul Ryan (R-Wis.) and his $6 trillion proposal.

The lines between the two proposals could not be clearer. Obama’s proposal features higher taxes, defense cuts and a much more deliberate approach to health cost control. Ryan’s is not only bigger, it’s much more aggressive and, therefore, more attractive to Americans who told the Washington Post/Pew Research Center that last week’s budget negotiations were ridiculous.

Ryan’s proposal is no doubt brutal and sets liberals afire, but it also sets the mark for total savings. Obama and his Democratic allies will have to come up with a trillion or more to make a midpoint compromise, which has been the favored strategy as his party tries to compete with the House Republicans.

However, neither proposal deals with the big-ticket savings that could come by way of bureaucratic reform. By even conservative estimates, the federal government could save hundreds of billions through aggressive action. But neither Obama nor Ryan has a clue about how to score the savings or achieve even modest implementation. Comprehensive reform wanders through Congress and the White House searching for a sponsor.

Just think of the possibilities:

A full-scale attack on improper payments? $150 billion a year.

A full winnowing of backlogged delinquent taxes coupled with intense deterrence against annual tax cheating? $300 billion this year, and another $50 billion to $60 billion a year far out into the future.

Full liquidation of the federal government’s useless buildings and other real property? $10 billion a year perhaps.

Consolidation of the government’s 22,000 data centers? Who knows for sure, but let’s say $5 billion a year.

Consolidation of overlapping programs and agencies? Let’s say $10 billion a year in administrative savings alone, even though the savings would almost certainly be much greater.

A thoughtful “rebalancing” of the federal workforce to eliminate unneeded higher-paying and redundant jobs, while restocking lower-paying jobs on the front-lines of government? Perhaps $10 billion a year, maybe more.

Flattening the bloated federal chain of command to no more than six layers between the top of agencies and the bottom? Maybe only a few billion a year, but a vast increase in accountability.

An aggressive downsizing of wasteful contract jobs? Hard to estimate, but put it at $10 billion a year.

An effective procurement system based on the Center for American Progress plan? $30 billion a year perhaps.

Early termination of failing weapons systems, information technology projects and unworkable programs? Maybe $10 billion to $20 billion a year.

Greater investment in preventive programs that will save money in the long term? Not sure, but try $30 billion a year starting.

Alas, there is no constituency for these reforms just yet. Well-intended good-government groups mostly continue to nibble at their edge of the problem. They don’t have lobbyists, media budgets, high-priced campaigns or much support from the White House or Congress.

Nor do they have the capacity to score their savings for congressional consideration. How can Obama or Ryan promise savings they can’t quite measure? That hasn’t stopped them from estimating monster savings from health cost containment, of course, but it looks as though reorganization needs to meet a higher bar. As one senator told me recently, “if it ain’t a scorable event, it’s going nowhere.”

The problem is, even the Congressional Budget Office doesn’t know how to do the calculations, and the list of targets is still murky. Just like the obsolete military bases that had to close after the Cold War, the list of closures, liquidations and rebalancing options is still too vague to make the list of “scorable savings.”

The Gang of Six has the responsibility now. Led by Sens. Mark Warner (D-Va.) and Saxby Chambliss (R-Ga.), the gang just might take on the issue. Add my estimates up, and we’re talking about more than $1 trillion over ten years, and possibly much more. Warner knows there’s money in reorganization--he saved a ton as governor of Virginia by streamlining the state’s bloated bureaucracy, and along the way he got better customer service, higher productivity and greater trust. We can’t wait until 2016 when he’s elected president. Luckily, he’s ready to engage now.

The Simpson-Bowles commission made its own attempt at management reform, but it was feeble at best and unworkable at worst. It’s time for a bit of sophistication, not across-the-board pay freezes and hiring cuts. These shopworn strategies have been tried before in every administration, including Obama’s. They don’t produce much, and often undermine the productivity and higher performance we need to prevent further breakdowns in government.

Now is the time for all good-government groups to rise to the challenge. Instead of working their own pieces of the problem, they should come together to press for comprehensive reform. Some groups want a faster hiring process, for example, but they are likely to get a faster firing process instead. Others simply bemoan the lack of action in the past without providing any guidance for the future.

There are exceptions to the pattern, however. The Center for American Progress, Cato Institute, Project on Government Oversight, OMB Watch, the Heritage Foundation and a mix of other groups both left and right all have good ideas to share. Perhaps they could create their own gang of six, and hammer out a compromise between their competing views. Doing so would not only set an example for Obama and Congress as the enter the intense negotiations over the debt-ceiling renewal, they just might make a difference in shaping the final package.

I believe the probability of seeing comprehensive reform has increased dramatically over the past three months, in large measure because of Warner. But the increase has taken the probability from near zero to, oh, let’s say 20 percent. That’s not bad, but we’ve got to move the needle to 100 percent.

Getting there takes an alliance for good government. Perhaps the leaders in the good-government community might share a tweet or two calling for their own negotiations. It couldn’t hurt, and just might honor the promise of a government that works better and costs less.

It’s time for good-government groups to answer the 911 call, even if they define good government in such varied ways. Get ‘em together, hammer out a compromise and push it hard.

By  |  03:20 PM ET, 04/14/2011

 
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