Orszag: Government can improve efficiency with technology upgrade

By Lori Montgomery
Washington Post staff writer
Tuesday, June 8, 2010; 12:57 PM

Polls show that two-thirds of taxpayers are pretty sure the government is wasting their money. And White House budget director Peter Orszag thinks he knows why: decrepit systems and facilities compared with the private sector.

For example: The U.S. Patent Office receives 80 percent of its applications electronically. But then patent office bureaucrats have to print them out and scan them by hand into an outdated case management system. Average time for approval: three years.

That's why, Orszag told a gathering at the Center for American Progress on Tuesday, President Obama is seeking to modernize and reform government. Orszag said the "far-reaching effort" is critical to achieving the president's pledge to freeze non-security spending and save $250 billion over the next decade.

"Let's be clear: Reducing this waste will not close the significant budget gap we face," Orszag said. "But that fact does not absolve us from the obligation we have to use government resources wisely."

In a 30-minute speech, Orszag identified government's failure to keep pace with the private sector as a chief driver of public skepticism about government's ability to perform efficiently. From 1987 to 1995, when private-sector productivity was rising by 1.5 percent a year, public-sector productivity plummeted, averaging only about 0.4 percent a year. After that, data on the public sector become sketchy, Orszag said, because the Bureau of Labor Statistics -- "paradoxically as part of a cost-cutting effort" -- stopped collecting the information.

Independent analysis suggests, however, that government productivity continued to fall, to something close to 0.3 percent, Orszag said.

There are many villains in this saga. Federal red tape, for example, has produced a hiring process that takes 140 days, on average, to approve a new employee. But Orszag's focus Tuesday morning was on technology and what he dubbed the "IT gap" between government and the private sector.

"How big is this gap? Comprehensive data are hard to find. But anecdotally, the data are telling," Orszag said.

Another example: The U.S. Census Bureau spent two years and $600 million on a contract to develop a handheld computer for field workers that was canceled in 2008 "with nothing to show for it," Orszag said, noting that "census workers out there today are still using pen and paper."

The good news, Orszag said, is that the Obama administration is on the case, riding herd on agencies to improve their technology systems. New "dashboards" detail $80 billion a year in government spending on information technology, permitting agency heads to track the projects. The new system recently helped Veterans Affairs reassess 45 projects, Orszag said; 12 were terminated.

And Obama is expected to order the Center for Medicaid and Medicare Services to use the new system to cut improper payments to providers in half by 2012.

"Just as the dog that doesn't bark doesn't get any attention, effective implementation does not garner headlines," Orszag said. "But it is central to making government work better, reducing waste and actually delivering the services people want and need."

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