With the economy tanking and international tensions still high, Congress and the president are reassessing proposals for reducing the national debt. The U.S. credit ranking is in jeopardy, even as joblessness remains intractable.
It is no surprise that Congress and the president might ask whether this is the time to take the pedal off the metal on the indirect stimulus embedded in federal fiscal policy. Is this really a good time for tax increases, further benefit cuts and greater pressure on cash-strapped state and local governments to make up the differences?
There are no easy answers, but government reorganization remains an alluring target for the desperately needed savings the Obama Administration and its Office of Management and Budget (OMB) are trying to achieve.
Vice President Joe Biden is now running an internal waste-busting task force. He's looking for just about anything that might save money and made a right-hand man of former Department of the Interior inspector general Earl Devaney, now of the stimulus oversight board.
They'll no doubt find plenty of targets. All they need do is take the inventories already available from deputy OMB director Jeff Zients, who continues to toil on reducing improper payments, useless real estate, and duplication and overlap across the federal program agenda. He deserves accolades for his persistence over the last two years, as Congress and the president make only trivial cuts in the discretionary budget.
Meanwhile Darrell Issa, chairman of Committee on Oversight and Government Reform, has proposed a national oversight board to do the same analysis. Unlike his recent proposal to cut the federal workforce through an attrition-based ax, this idea deserves immediate action. Issa's board would develop a single database to track federal spending and identify cuts, thereby finally implementing the 1990 Chief Financial Officers Act that required agencies and the government as a whole to produce consolidated annual financial statements—the act has never been fully implemented.
The entire effort is eerily reminiscent of President Ronald Reagan's "war on waste." Like Biden and Issa, Reagan knew there was plenty of money buried in needless programs and improper payments. But the war produced little more than a statistical body count of possibilities. Every program had a congressional sponsor. And Reagan was unwilling to put real money behind harvesting savings, which required enough personnel to identify, prosecute and collect the dollars. It's hard to imagine that Congress or President Barack Obama is ready to hire enough IRS agents to collect the $300 billion in delinquent taxes, for example. The IRS remains the most unpopular federal agency in the hierarchy, and revenue agents the least welcome. Just imagine the albatross Obama would carry if he added enough revenue agents to do the job.
There is another option for the kind of comprehensive reform that just might generate $1 trillion or more in bureaucratic savings. It comes from my own Campaign for High Performance Government, which will release its agenda shortly. Funded with a generous contribution routed to New York University by former Federal Reserve Board chief Paul A. Volcker and a grant from the Robertson Foundation for Government, the report contains a long list of familiar programs—such as a long overdue flattening of the federal hierarchy, a reshaping of the federal workforce and a sustained effort to collect the pennies scattered through the hierarchy.
The real trick here is to find a device for getting the job done. Presidents have been trying for decades to saw down the government waste, but have hit nothing but concrete in harvesting the cuts. We need something stronger, be it a military-base-closing commission, renewed fast-track presidential reorganization authority or a joint congressional task force. A blue-ribbon commission won't work—we're already overloaded on toothless commissions that have no authority to implement their work.
I believe the answer is a quasi-government corporation given full power to harvest the waste through fast-track authority. Modeled on the Resolution Trust Corporation that disposed of more than $300 billion in troubled thrifts during the savings and loan crisis in the 1980s, a government reorganization trust could hire enough staff and get the job done. It could then gracefully close its doors.
Such a corporation would need a big grant of authority from Congress and the president, of course. Its plans would need fast-track approval, hopefully in mega-packages of cuts and reorganization that would distribute the pain broadly enough to deflect the congressional self-interest that produced much of the waste in the first place. Comprehensive action would not be quite painless, but it comes close enough to demand attention.