Nancy Killefer

Streamlining Government

In 2006, Killefer along with three other employees at McKinsey, released a report entitled, "How Can American Government Meet Its Productivity Challenge?" In it, the authors note that in 1994 the Bureau of Labor Statiscis stopped reporting measures of government productivity.

"The statistics suggest that government lagged private sector productivity up until that point and our hypothesis is that, since then, this gap may well have grown," the authors wrote. "If the government is to start catching up, it could gain valuable insight by looking at what has been driving private sector productivity."

The report recommended speficic changes to the federal structure aimed at cutting costs, including:

1. Measuring productivity again and providing an easy and transparent indication of progress.
2. Setting ambitious productivity targets.
3. Giving agency managers incentives for reaching productivity goals.
4. Creating a chief operating officer position at each agency.
5. Strengthening OMB's management role.

Killefer would have had the opportunity to implement these recommendations.

The budget problems "have developed over decades and will take time to address. But there is an urgency to begin now," said Killefer when Obama announced her as his performance chief.

Orszag and Killefer

Orszag generally agrees with Killefer's approach. When he directed the CBO, Orszag developed a report that was released in December 2008 that outlined how overhauling the U.S. health-care system could save the federal budget more than $700 billion a year. With the budget deficit expected to top $1.2 trillion in 2009, finding and eliminating inefficiencies will become even more critical.

Taxes

In February 2009, Killefer suddenly withdrew her nomination for chief performance officer. Soon after Obama had announced his nomination of Killefer in January 2009, the Associated Press reported that the District of Columbia had placed a $946.69 tax lien on Killefer's home in 2005 for failure to pay unemployment compensation taxes for household employees. Killefer paid the amount five months later.

She was the first Obama nominee to withdraw her name after tax troubles were made public. Health and Human Services Secretary-designate Tom Daschle was under fire for his failure to quickly pay $140,000 in taxes for his use of a car and driver. Daschle announced his withdrawal from nomination hours after Killefer's decision became public. Treasury Secretary Timothy Geithner had failed to pay the employer match on Social Security and Medicare taxes while he worked at the International Monetary Fund, which he was responsible for. The Senate still confirmed him in January 2009.

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