[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
BUILDING AN EXECUTIVE-LEGISLATIVE PARTNERSHIP FOR PERFORMANCE BUDGETING
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, NOVEMBER 17, 2009
__________
Serial No. 111-17
__________
Printed for the use of the Committee on the Budget
Available on the Internet:
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COMMITTEE ON THE BUDGET
JOHN M. SPRATT, Jr., South Carolina, Chairman
ALLYSON Y. SCHWARTZ, Pennsylvania PAUL RYAN, Wisconsin,
MARCY KAPTUR, Ohio Ranking Minority Member
XAVIER BECERRA, California JEB HENSARLING, Texas
LLOYD DOGGETT, Texas SCOTT GARRETT, New Jersey
EARL BLUMENAUER, Oregon MARIO DIAZ-BALART, Florida
MARION BERRY, Arkansas MICHAEL K. SIMPSON, Idaho
ALLEN BOYD, Florida PATRICK T. McHENRY, North Carolina
JAMES P. McGOVERN, Massachusetts CONNIE MACK, Florida
NIKI TSONGAS, Massachusetts JOHN CAMPBELL, California
BOB ETHERIDGE, North Carolina JIM JORDAN, Ohio
BETTY McCOLLUM, Minnesota CYNTHIA M. LUMMIS, Wyoming
CHARLIE MELANCON, Louisiana STEVE AUSTRIA, Ohio
JOHN A. YARMUTH, Kentucky ROBERT B. ADERHOLT, Alabama
ROBERT E. ANDREWS, New Jersey DEVIN NUNES, California
ROSA L. DeLAURO, Connecticut, GREGG HARPER, Mississippi
CHET EDWARDS, Texas ROBERT E. LATTA, Ohio
ROBERT C. ``BOBBY'' SCOTT, Virginia
JAMES R. LANGEVIN, Rhode Island
RICK LARSEN, Washington
TIMOTHY H. BISHOP, New York
GWEN MOORE, Wisconsin
GERALD E. CONNOLLY, Virginia
KURT SCHRADER, Oregon
Professional Staff
Thomas S. Kahn, Staff Director and Chief Counsel
Austin Smythe, Minority Staff Director
C O N T E N T S
Page
Hearing held in Washington, DC, November 17, 2009................ 1
Statement of:
Hon. John M. Spratt, Jr., Chairman, Committee on the Budget.. 1
Prepared statement of.................................... 2
Hon. Paul Ryan, ranking minority member, Committee on the
Budget..................................................... 3
Questions for the record................................. 28
Hon. Robert B. Aderholt, a Representative in Congress from
the State of Alabama, questions for the record............. 29
Jeffrey D. Zients, Chief Performance Officer and Deputy
Director for Management, Office of Management and Budget... 4
Prepared statement of.................................... 7
Responses to questions for the record.................... 29
BUILDING AN EXECUTIVE-LEGISLATIVE
PARTNERSHIP FOR PERFORMANCE
BUDGETING
----------
TUESDAY, NOVEMBER 17, 2009
House of Representatives,
Committee on the Budget,
Washington, DC.
The committee met, pursuant to call, at 10:03 a.m., in room
210, Cannon House Office Building, Hon. John Spratt [chairman
of the committee] presiding.
Present: Representatives Spratt, Schwartz, Becerra,
Doggett, Berry, Yarmuth, Scott, Bishop, Connolly, Schrader,
Ryan, Lummis, Austria, and Latta.
Chairman Spratt. Let me call the hearing to order and
welcome our witness as well as the guest here today and the
members on the committee.
We continue today our discussion on performance budgeting
and management improvements in the executive branch and, in
particular, on ways we can make our government more cost
effective. To ensure that tax dollars are spent wisely and
well, among other things, we need to fix goals, we need to
evaluate effectiveness, we need to purchase goods and services
for a fair price.
We are honored to have as our witness today Jeffrey Zients,
OMB's Deputy Director for Management and chief performance
officer. He is the guy who holds the job that I just described.
It is a big job.
I am sure your time is very precious, and we appreciate
your finding the time to come and testify to us.
I would also like to thank my colleagues on the Republican
side for working out with our side on setting this hearing up.
This is an ongoing dialogue between our committee and the
administration on performance budgeting and management
improvements in general.
Above all, I want to thank and recognize Congressman Kurt
Schrader of Oregon, whose commitment to this subject and
experience in this field have been essential to us in
developing this hearing. Before he came here, Congressman
Schrader, as a member of the State legislature, played a major
role in designing Oregon's initiatives in this realm. His State
encourages State agencies to focus their efforts to achieve a
better return on the State's investment.
Congressman Schrader continues to work with Oregon
Solutions, a public-private partnership which engages
communities in solving public problems. Before turning to Mr.
Ryan for his opening statement, I would like to yield the
balance of my time to Congressman Schrader to say just a few
words.
[The prepared statement of Mr. Spratt follows:]
Prepared Statement of Hon. John M. Spratt, Jr., Chairman,
Committee on the Budget
Good Morning. I'd like to welcome all of you to our discussion of
performance budgeting and ways Congress and the Administration can work
together to make our government more effective and more cost-effective.
The American public deserves to know that we are spending their tax
dollars wisely, and that means setting clear goals, evaluating programs
for effectiveness, and purchasing goods and services for a fair price.
I thank my colleagues on the other side of the aisle for working with
us, and I hope this bipartisan hearing will be the beginning of a
constructive, ongoing dialogue between our Committee and the
Administration about fiscal responsibility.
I would also like to recognize Congressman Kurt Schrader of Oregon,
whose persistence and thoughtfulness on this issue is a primary reason
we're holding this hearing. Before he came to Washington, Congressman
Schrader played a key role in helping Oregon's state agencies re-focus
their efforts to meet clear, simple goals and deliver a better return
on the state's investment, and he continues to work closely with Oregon
Solutions, a public-private partnership which engages communities in
solving public problems. We are grateful for his leadership on this
important issue. Congressman Schrader, would you like to say a few
words?
Mr. Schrader. Thank you, Mr. Chairman. I appreciate your
help in organizing the hearing and allowing me the opportunity
to speak here today.
Mr. Zients, thank you for agreeing to testify before the
House Budget Committee. I was very pleased when President Obama
set up the position earlier this year, and I am really glad to
see you settling into your position at this time.
Performance management has been a big issue for me for a
long time. I spent most of my time in the Oregon legislature
developing a culture of measurement and achieving outcomes. In
most legislative bodies, there is a complete disconnect between
the lofty goals of educating a workforce, ending hunger,
stopping drugs, helping the homeless, and the actual budget
process itself. There is an obvious need to link the budget
outlays to intermediate outcomes that move us measurably
towards achieving our goals.
While much has been written on outcome- and performance-
based budgeting, implementation has often foundered in the
public arena where buy-in by either the executive or
legislative body is incomplete. Oregon has spent the last
decade with its governor and legislature committed to
developing culture performance outcomes, steering committees to
develop the procedures involve both the executive and
legislative branch. The agency would propose outcomes, but it
would be modified by the legislature in the course of their
deliberations.
What has resulted has been an appreciation, I think, by the
executive agencies and the legislature of how their actions do
or do not achieve their desired goals and the ability to
allocate resources more effectively and strategically.
Oregon is not alone. States with diverse political
environments have made performance measurement an important
part of their budgeting process. Texas, the home of my
colleagues Mr. Doggett, Mr. Edwards, and Mr. Hensarling on this
committee, began instituting performance measurements nearly
two decades ago.
Here in Congress, there have been various efforts to
improve Federal budgeting throughout this century. Most
recently, these efforts were pursued by successive Congresses
and two Presidents with different politics. President Clinton
established a National Performance Review, and the 103rd
Congress passed the Government Performance and Results Act of
1993. Codifying performance plans and congressional
involvement, they developed a development of these strategic
plans.
President George W. Bush continued these efforts with a
Program Assessment Rating Tool, and in this Congress we have
already passed the Weapons Systems Acquisition Reform Act of
2009 to improve how our defense dollars are spent.
Government performance is a bipartisan and interbranch
issue supported by Democrats and Republicans, multiple
Congresses, and Presidents. Those of us here today have the
opportunity to work together on this issue again at a time when
it is more important than ever for us to spend taxpayer money
wisely.
And I yield back.
Chairman Spratt. Mr. Ryan.
Mr. Ryan. Thank you, Mr. Chairman. I also want to welcome
our witness, OMB's Deputy Director for Management and the
administration's chief performance officer, Jeffrey Zients.
Welcome, Mr. Zients. Nice to have you here today.
I think everyone here can agree: Ideally, government
programs should function efficiently. And that means providing
the maximum level of services for the lowest possible costs.
But the common and entirely justifiable view is that the phrase
``government efficiency'' is often a contradiction in terms.
That view is not entirely fair. Over the years, Congresses
and administrations have tried by various measures to
systemically evaluate programs, weed out waste and duplication,
and make the government work better. Of course, without any
particular striking exception, the government always seems to
come up well short of that goal. So progress is clearly in
need.
Medicare is a classic example. Medicare has a critically
important mission to provide health care for the elderly, but
it has a $38 trillion unfunded liability. That means, with all
its good intentions, the Federal Government has overpromised
benefits for future beneficiaries by $38 trillion more than the
program can actually pay.
And we just learned that Medicare last year had a whopping
improper payment rate of 12.4 percent. That is $47 billion lost
to fraud in a single year, in a single government program; and
this comes after years of efforts to prevent fraud. The great
goal of Medicare is to get the fraud rate down to 10 percent,
and even that seems a bit lofty for this massive Federal
entitlement spending program.
Of course, to make matters worse, in the meantime Congress
is about to add a $1 trillion new health care entitlement that
is similar in design to Medicare, and we are significantly
expanding Medicaid, which is already bankrupting the States.
This is far from the first administration to propose such a
program performance initiative, and frankly, this isn't the
first such fiscally responsible sounding measure this
administration has hailed even as it continues to pursue
enormous expansions in size, scope, and cost to the Federal
Government.
Now, I do believe performance measures, such as those we
will be discussing today, can help highlight which programs are
failing or are in need of reform, but it cannot make the
difficult political decisions to actually eliminate failing
programs or, more important, restructure currently
unsustainable entitlements.
So my concern is that, despite Mr. Zients's best intentions
and the genuine merits of performance-based budgeting, this
initiative could be diminished to marginal tinkering to
programs with major structural flaws, or it might simply cover
Congress's failure to take real steps necessary to get control
of the dangerous explosion of Federal spending, deficits, and
debt. I truly hope that is not the case.
Mr. Zients, I look forward to learning more about the
administration's proposals at today's hearing.
Chairman Spratt. Thank you, Mr. Ryan.
By way of introduction I should tell everyone on the panel
that the Deputy Director comes here well qualified. He
graduated from Duke summa cum laude. The only problems with his
education is that he did not have an opportunity to study under
David Price while he was there. They overlapped, I believe.
He has served as the CEO of a major business firm and as a
management consultant. He brings huge talents and experience to
this job, and he needs them for the task that is set out before
him.
We are glad you are here. We look forward to your
testimony. We will, as practice, make your testimony in its
entirety part of the record, but you can summarize it as you
see fit. You are our only witness today, so you are welcome to
take your time in explaining your position. We are eager to
hear what OMB has in store in the way of management
efficiencies and oversight systems.
Thank you again for coming. The floor is yours.
STATEMENT OF JEFFREY D. ZIENTS, CHIEF PERFORMANCE OFFICER AND
DEPUTY DIRECTOR FOR MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET
Mr. Zients. Members of the committee, I appreciate the
opportunity to come before you today to discuss the Obama
administration's efforts to improve the performance of the
Federal Government.
The President believes that it is more important than ever
to maximize the effectiveness of every tax dollar we spend.
When programs work, we should support them; when programs do
not work, we need to fix them or end them. To accomplish this,
we need to measure the performance of programs and continually
search for more effective and efficient ways to operate.
During my 20 years in the private sector as a CEO and
adviser to CEO, I found that leadership, measurement, and a
motivated workforce creates the foundation for good
performance. I am confident that the same is true in
government.
Congress and previous administrations laid some of the
groundwork for government-wide performance management,
including the Clinton administration's GPRA and the Bush
administration's PART. The result is that today we have
thousands of metrics and plans.
I believe the test of a performance management system is
whether it is used. Despite the extent and breadth of these
historic efforts, the current system fails this test. Congress
doesn't use it, agencies don't use it, and it doesn't produce
meaningful information for the public. There is too much focus
on process and not enough on outcomes. We do not track progress
and goals which cut across agencies. Overall, too much emphasis
has been placed on producing performance information to comply
with a checklist of requirements.
This must change. Federal managers and employees at all
levels must use performance goals and measures to set
priorities, monitor progress, and diagnose problems.
The fundamental problem with the past performance
improvements has been the lack of involvement of Congress. We
would like to work with you to develop mechanisms to better use
performance information to inform budget decisions. This
committee has the ability to see the big picture, and I believe
there are opportunities to leverage your unique perspective to
look across programs that are trying to achieve similar goals
and better understand which are working and which are not.
Also, we plan to work with Congress to build on promising
performance management developments in State and local
governments and other countries. Several States, including
Oregon, Virginia, Texas, and Ohio, show how government can
clearly communicate State performance priorities, track
progress against goals, and make results transparent to the
public.
Local governments, including New York City and Baltimore,
have effectively used performance management practices to
improve outcomes and drive down costs. Other countries,
including the United Kingdom, offer instructive lessons.
We are committed to taking the best of what works in other
governments, in the private sector, and in recent Federal
efforts to create a new performance management system. This
system will be the foundation for our efforts to improve the
efficiency and effectiveness of the Federal Government.
As we develop this management system, there are five key
principles we will follow.
First, senior leader ownership: It is critical that senior
agency leaders own the overall performance management process
and their agency goals and measurements. Secretaries and deputy
secretaries will be charged with setting of agency goals and
will be held responsible for performance against those goals.
Second, cascading goals: A clear line must link agency
strategic goals and measurements to programs and to individual
employees.
Third, outcome-oriented cross-agency targets: Outcome-
oriented goals and measures connect government agencies to
their missions. Similarly, achieving broad government outcomes
often requires contributions from multiple actors across
different agencies.
Fourth, relentless review: Measurement has no value if it
is not used. Clear communication of goals, progress against
targets, and frequent reviews of performance against plans are
essential. These reviews must be performed at all levels of
government.
Fifth, transparency: Achieving important government goals
requires the active engagement of Congress, the public, and the
overall government workforce. Transparency plays a critical
role in creating accountability and stimulating idea flow.
Using these five principles, the administration is
committed to driving performance gains across the Federal
Government.
We have already begun to move forward on several fronts. In
this year's spring budget guidance, OMB asked every major
agency to identify a small number of outcome-oriented, high-
priority performance goals which they intend to achieve in the
next 12 to 24 months. Senior leaders are actively involved in
this effort, including secretaries and deputy secretaries. This
level of involvement, I believe, is a significant break from
the past. Agency leaders will review their progress against
their goals on an ongoing basis. Agencies have also identified
goals, such as climate change and homelessness, that are high
priority for multiple agencies and require close collaboration.
In June, we launched the IT Dashboard, which displays cost
and schedule variance for every major Federal Government IT
project. The IT Dashboard is already having an impact. The VA
has put on hold 45 over-budget or behind-schedule projects
until it decides which to continue and which to terminate. We
plan to roll out similar dashboards for other government
functions.
In September, the United States Citizenship and Immigration
Services set up a system that allows applicants to see their
status via the Web or e-mail updates and the processing time of
their case compared to other similar cases. This makes what has
been a notoriously opaque process much more transparent. We are
encouraging agencies to identify other service areas which can
benefit from similar customer facing systems.
For certain types of programs, ongoing measurement is not
sufficient. These programs require periodic in-depth
evaluations to determine their effectiveness. On October 7, OMB
encouraged Federal agencies to request fiscal year 2011 funding
to conduct significant pilot evaluations in strength and agency
evaluation capacity.
Among the Obama administration's Cabinet and sub-Cabinet
appointments are several former governors and State officials
who have experience using performance goals and measures to
drive government performance. We are enlisting them and other
leaders across Federal agencies to work together as a vanguard
for Federal performance management with particular emphasis on
adopting best practices from State and city performance
management systems.
As we move forward, we will also identify current
measurement efforts that are not used and are burdensome. We
will either eliminate them or streamline them. This will
include making the performance and accountability reports more
useful by scaling back their hundreds of pages per agency per
year.
OMB is using performance information to inform budget
decisions. The President's fiscal year 2010 budget proposed
reduced funding or the termination of 121 programs. Agency
goals and relevant performance information are also informing
our internal fiscal year 2011 budget discussions. Overall,
across the last several months, we have made progress in
setting up our new performance management system and have begun
to pilot key parts of it.
That said, we have a lot of work to do to put in place a
system that is truly used by key decision-makers across
government. As we undertake these efforts, we would like to
work with the Budget Committee to make sure the information you
receive from agencies serves you well. We look forward to
partnering with you as we learn more about the committee's
performance improvement priorities.
We have already had productive conversations with members
of this committee, including Representatives Schrader and
Cuellar, and I want to thank the committee for holding this
hearing and for your belief in improving Federal performance. I
look forward to working with you to achieve this objective.
Mr. Chairman and members of this committee, I would be
pleased to answer any questions.
[The prepared statement of Jeffrey Zients follows:]
Prepared Statement of Jeffrey D. Zients, Chief Performance Officer and
Deputy Director for Management, Office of Management and Budget
Chairman Spratt, Ranking Member Ryan, and Members of the Committee:
I appreciate the opportunity to come before you today to discuss the
Obama Administration's efforts to improve the performance of the
Federal government.
The President believes that it more important than ever to maximize
the effectiveness of every tax dollar we spend. We must be aggressive
in identifying which programs work, and which do not. When programs
work, we should support them and continue to push for improved
performance. When they do not, we need to reform or terminate them. To
accomplish this, we need to measure the performance of programs and
continually search for more effective and efficient ways to operate.
During my 20 years in the private sector as a CEO and advisor to
CEOs, I found that leadership, measurement, and a motivated workforce
create the foundation for good performance. I am confident that the
same is true in government.
Congress and previous Administrations laid some of the groundwork
for government-wide performance management, starting with the Clinton
Administration's implementation of the Government Performance and
Results Act (GPRA). The Program Assessment Rating Tool (PART) developed
by the Bush Administration tried to create metrics at the program
level. The result is that today we have thousands of metrics and plans
in a number of overlapping systems.
The test of a performance management system is whether it is used.
Despite the extent and breadth of these historic efforts, the current
approach fails this test. Congress doesn't use it. Agencies don't use
it. And it doesn't produce meaningful information for the public.
Most metrics are process-oriented and not outcomes-based. We do not
track progress on goals that cut across agencies. Overall, too much
emphasis has been placed on producing performance information to comply
with a checklist of requirements instead of using it to drive change.
This must change. Federal managers and employees at all levels must
use performance goals and measures to set priorities, monitor progress,
and diagnose problems. They must learn from practices that work and
those that do not. They need to learn how to use goals and measures to
motivate the best from our workforce and our service delivery partners
to achieve greater results and to allocate scarce resources wisely.
A fundamental problem with past performance improvement efforts has
been the lack of involvement with Congress. We would like to work with
you to develop mechanisms to better use performance information to
inform budget decisions. This Committee has the ability to see the big
picture, and I believe there are opportunities to leverage your unique
perspective to look across programs trying to achieve similar goals and
better understand which are working and which are not.
Also, we plan to work with Congress to build on promising
performance management developments in State and local governments and
other countries. Several State websites including in Oregon, Virginia,
and Ohio, for example, show how government can clearly communicate
state performance priorities, progress, problems, and strategies to the
public. Washington's Government Management Accountability and
Performance program and Maryland's StateStat illustrate the value of
goal-focused, data-rich discussions to find the root causes of problems
and to devise smarter strategies to tackle them. Local governments,
including New York City; Baltimore, Maryland; and King County,
Washington have effectively used performance management practices to
improve outcomes, reducing crime and increasing housing starts for
example, and drive down costs. Other countries, including the United
Kingdom and New Zealand, offer instructive lessons.
As the Administration develops this performance management system,
we are committed to taking the best of what works--in other
governments, the private sector and recent Federal efforts--to create a
new performance management system. This system will at the foundation
of our efforts to improve the efficiency and effectiveness of the
Federal government. In developing this performance management system,
there are five key principles we will follow:
1. Senior leader ownership of performance management process. It is
critical that senior agency leaders ``own'' the overall performance
management process and their agency goals and measurements. Secretaries
and Deputies will be charged with the setting of agency goals, will be
held responsible for performance against those goals and their related
measurements and will be expected to be actively engaged in all aspects
of the performance management process.
2. Cascading goals and measurements. A clear line must link agency
strategic goals and measurements to programs and employees.
Unfortunately, few agencies have historically had agency goals cascade
down to unit or program targets or understood how performance against
specific program and unit goals resulted in success--or failure--
against agency-wide objectives. Both linkages are critical to the
functioning of a successful performance management system.
3. Outcome-oriented, cross-agency goals and measurements. Outcome-
oriented goals and measures connect government agencies to their
missions. Too often in the past targets have been internal and process
oriented. Similarly, achieving broad government outcomes often requires
contributions from multiple actors across different agencies and often
inside and outside of government. Goals and measurements must support
coordination across these organizational boundaries. These must also
reflect clear delineation of lines of responsibility, explicitly
identifying who a ``goal owner'' is and what other organizations are
expected to contribute toward a common objective. Similarly, a given
unit's measurements must reflect their differing contributions toward
common goals.
4. Relentless review and accountability. As has been noted above,
measurement has no value if it is not used by decision makers. Clear
communication of progress against targets and frequent reviews of
performance against plans are essential. These reviews must be
performed at all levels of government, including program, unit and
agency level reviews, as well as reviews by OMB and other components of
the White House of overall agency performance. These reviews must be
done on a regular basis, probably at least quarterly. Only this kind of
relentless review process will result in performance management
becoming ingrained into the culture of government.
5. Transparent process. Achieving important government goals
requires the active engagement of the public, Congress, and the overall
government workforce. Transparency plays a critical role in this
engagement, promoting understanding of what we in the government are
doing, stimulating idea flow and involvement of broader groups,
communicating results and creating accountability for agency managers.
Such transparency is therefore critical to the success of any Federal
performance management system.
Using these five principles, we are committed to driving
performance gains across the Federal government. This is an ambitious
undertaking. However, we have already begun to move forward on several
fronts.
priority performance goals for every agency
In this year's spring budget guidance to agencies, OMB asked every
major agency to identify a small number--three to eight--of ambitious,
outcome-oriented high priority goals which they intend to achieve in
the next 12 to 24 months. Senior leaders are actively involved in this
effort, including Secretaries and Deputy Secretaries. This level of
involvement is a significant break from the past. We expect agency
leaders to review their progress against their goals on an ongoing
basis and OMB will monitor progress here also. At the same time,
agencies are identifying goals, such as climate change and
homelessness, which are a high priority for multiple agencies and
require close collaboration.
management dashboards
Management dashboards have proven an effective means for succinctly
conveying real time performance data in both the private and public
sectors. In June, we launched the IT Dashboard, which covers all major
IT projects across government. The IT Dashboard makes it possible to
review cost and schedule variance for every major Federal government IT
project. The dashboard also shows how each agency's Chief Information
Officer has assessed performance. The IT Dashboard is already having an
impact. As a result of this effort the VA, for example, put 45 over-
budget or over-schedule projects on hold until it decides which to
continue and which to terminate. We plan similar dashboards for other
common government functions, including procurement, financial
management, and personnel management.
customer-facing performance information
We have begun using dashboards not just to improve our
administrative functions, but to serve agency customers. In June, the
President charged Secretary Napolitano and the team at the United
States Citizenship and Immigration Services (USCIS) to set up, within
90 days, a system that allows applicants to see their application
status via web or email updates, how long each step in the process
normally takes, and the speed of the applicant's case compared to other
similar cases. The site went live on September 24, exactly 90 days
after President's announcement and makes what had been a notoriously
opaque process much more transparent. We are encouraging agencies to
identify other service areas which can benefit from similar customer-
facing systems.
rigorous evaluations
For certain types of programs, regular measurement is not
sufficient. These programs require periodic in-depth evaluations to
determine their effectiveness. On October 7th, OMB Director Orszag
encouraged Federal agencies to request FY2011 funding to conduct
significant evaluations in social, educational, and economic programs
as well as begin to strengthen agency evaluation capacity. He also
established an inter-agency evaluation working group and instructed all
Federal agencies to make evaluations of program impacts readily
available online.
performance leadership
Dr. Shelley Metzenbaum, who joined our OMB team a month ago, is
leading our performance measurement and management effort. Among the
Obama Administration's Cabinet and sub-cabinet appointments are several
former Governors, state officials, and local officials, who have
experience using performance goals and measures to drive government
change. We are enlisting them and other interested officials across
Federal agencies to work together as a vanguard for Federal performance
management. They are developing real-time systems for measuring their
performance and managing their agencies.
As we move forward, we are also identifying current performance
management requirements and systems that do not meet these principles,
and will either eliminate or streamline them. This will include making
the Performance and Accountability Reports more useful by scaling back
their hundreds of pages per agency per year.
OMB is also using performance measures, evaluations, and other
relevant data about need and program context to inform budget
decisions. The President's FY 2010 Budget proposed reduced funding or
the termination of 121 programs that that had not accomplished the
goals set for them, that operated inefficiently, or that were
unnecessary because the program objectives were being better addressed
by another program. Agency goals and relevant performance information
will also inform our FY2011 budget decisions.
As we undertake these efforts, we would like to work with the
Budget Committee to make sure the information you receive from agencies
serves you well. We look forward to partnering with you as we learn
more about the Committee's performance improvement priorities. We have
already had productive conversations with members of this Committee,
including Representatives Schrader and Cuellar.
I thank the Committee for holding this hearing and for your belief
in improving Federal performance. I look forward to working with you,
with Federal employees across the nation, and with our service delivery
partners to accomplish this objective. Mr. Chairman and Members of the
Committee, I would be pleased to answer any questions you may have.
Chairman Spratt. Thank you very much.
I am going to yield my time now, my first 5 minutes, to Mr.
Schrader, and I will come in and be the clean-up hitter at the
end of everyone else's questions.
Mr. Schrader.
Mr. Schrader. Thank you again, Mr. Chairman. I appreciate
that.
Mr. Zients, given the work that has been done before under
the Clinton and Bush administrations with PART and the
Government Performance and Results Act, how do you see this
management initiative for this administration, relating to
them, replacing them? How is that all going to work together?
Mr. Zients. Good question. Thank you.
Well, first of all, I think we need to make sure that we
don't sort of throw the baby out with the bath water. There are
good aspects to GPRA, there are good aspects to PART. I think
there is too much--there are too many metrics. We tend to
measure in silos, which is how we are organized as a
government--by agency, by program--when many of our issues--
homelessness, climate change, employment programs--tend to go
across. So we need to have the ability to go across in
identifying the issue or the opportunity rather than the silo.
We need to be focused on outcomes-oriented measures. Too
often, measures are input- or process-oriented. So outcomes-
based measures. We need to make sure that we don't have too
many; I think the focus on too many things is ultimately the
focus on nothing. So we need to prioritize.
And then--do all of this and be transparent, and then make
sure that people are using the system--you are using it, senior
leaders across government are using it--and that that use, that
attention, then trickles down or cascades through the
organization, all the way to the individual employee.
So I think there is a decent foundation here, but we need
to take the pieces that fit with what I just described and also
eliminate what doesn't, to remove the clutter, if you will.
Mr. Schrader. Very good points. I totally agree. And if we
can get that alone done, we will have gone a long way towards
improving government efficiency and getting great bang for our
buck with our taxpayer dollars.
But to that end, how do you envision getting Congress
involved? As I alluded to in my opening remarks, a lot of times
that is the nub. I mean, the State to the north of me, Governor
Locke had put a great program into potential effect, and it was
largely somewhat, if you will, at least ignored by the
legislative branch.
How do you envision getting Congress involved in either the
early stages of helping develop the management system; and
then, more importantly perhaps, once the system is up and
running, involve us in working with you on the outcomes that
are desired?
Mr. Zients. I think when you do do the retrospective on the
prior efforts, there has not been enough involvement with
Congress at the beginning in helping to create the system; and
therefore, it is probably not surprising that there hasn't been
a lot of use. So we are reaching out to you and your colleagues
in the House and the Senate, and we want input as to what will
serve you well, because you are an important part of making
sure that this system is used and paid attention to.
I think that this committee could play a particularly
valuable role in that, looking across the silos and helping
with some issues that do go across programs and helping us to
think that way and organize that way. And the more that we can
tie performance management to the budget, the more successful
it will be in actually having the system be used and actually
have it drive results.
Mr. Schrader. If you could discuss just for a moment how
you might shift resources using performance-based budgeting in
light of a particular crisis or a policy objective that
Congress is attempting to achieve in any given session, how
would that impact the use of your outcome-based budgeting
system?
Mr. Zients. I think that if you were to take one of these
issues that does cut across, and you would say, Okay, there are
a dozen or two dozen programs that are attempting to accomplish
the mission of that cross-cutting issue or opportunity--let's
say, homelessness--and understand:
What do we know about each one of those programs?
What do we know in terms of how they are performing versus
their outcomes-based measurements?
Are they performing at the target, below the target, or
above?
Have there been any evaluations done of those programs as
to how those programs perform on their own, and then in
comparison to other programs?
We can then say, Okay, that issue is important; now let's
make sure we fund the programs that are working well and not
fund or fix the programs that aren't working.
Mr. Schrader. Excellent. That is great.
You talked about already directing OMB to talk with the
agencies about priorities in the next 12 to 24 months.
Oftentimes it has been my experience that to achieve certain
outcomes it takes several legislative or congressional sessions
to get there. It can take years more than just a couple years.
How do you envision the outcomes? There are intermediate
outcomes, there are long-term outcomes; how do you see the
relationship of what you are doing related to the long-term
budgetary implications that this Congress would be involved in?
Mr. Zients. I think that if targets are too far out in the
future, people tend to discount them and they don't really
drive performance. So in this effort where each agency has
identified three, four, five--maybe as many as six, seven,
eight, depending on the size of the agency--high-priority
performance goals, we are looking for metrics across a year-to-
2 period of time.
It doesn't mean in 24 months we are complete, but we want
to see how agencies are tracking against those milestones. And
if they are performing well, you know, we will obviously
encourage continued strong performance. If people are missing
targets, we will call that out and look for mid-course
corrections and ultimately want to ensure that those targets
are met.
So I would think that that type of information, how are
agencies doing against their targets, what does the trajectory
look like, would inform future budget decisions.
Mr. Schrader. I found that if you don't have intermediate
outcomes, you lose focus entirely. But you have to have your
eye on the big prize, and those intermediate outcomes hopefully
get you on that trajectory.
Mr. Zients. Exactly.
Mr. Schrader. One more question if I may, Mr. Chair.
You also referenced some rigorous in-depth evaluations
periodically. Are you envisioning that like a zero-based
budgeting exercise or something similar?
Mr. Zients. It could play into a zero-based budgeting
exercise, but it is actually a slightly different take, which
is to say, there are programs where we have measured them and
we are seeing how they are performing against their targets and
goals as I just described.
But at the same time, you need to step back and say, How is
this program doing versus other programs serving the same goal?
How is this program doing versus a control? And, therefore, you
need a rigorous evaluation of those programs periodically to
understand what kind of return the taxpayer is getting on the
dollar.
I don't think as a generalization we do enough evaluation
across government. So the guidance encourages agencies to build
their evaluation capabilities; to start to work in cross-agency
groups to share best practices; to make all evaluations,
historic and future, transparent because sometimes evaluations
end up on a shelf somewhere; and also, to encourage agencies to
put forward proposals for additional evaluations to be funded
in the fiscal year 2011 budget.
So I think evaluation dollars can have a very high return
for all of us.
Mr. Schrader. I appreciate that. If we can actually get
Congress and the administration on the same page with
performance measurement, we will have done yeoman's work and
probably be one of the better achievements in this Congress, in
my humble opinion.
I yield back, Mr. Chairman.
Chairman Spratt. Ms. Lummis.
Ms. Lummis. Thank you, Mr. Chairman. And I applaud Mr.
Schrader's attention to this project. I think it could be very
worthwhile.
Thank you for being here, Mr. Zients.
Five months ago, Peter Orszag directed Federal agencies to
identify high-priority goals. And you mentioned a couple of
them, homelessness and climate change. Has there been a
publication of those goals so we can see what your goals are
and compare them to our goals? Or when do you expect that to
become available?
Mr. Zients. We are in the midst of the budget process at
OMB, and I can tell you that those high-priority performance
goals--I am impressed by the first round that were submitted.
There is some variation across the agencies. Some of them
still need some work. But we are starting each budget
discussion with those high-priority performance goals and
ensuring that they are the right goals, and then the budget
discussion follows those goals. When the President releases the
budget in February, we plan to release those high-priority
performance goals with the budget.
Ms. Lummis. And are those performance goals tied to
specific budget items? In other words, can we expect to see a
deficit reduction component associated with those goals or real
savings associated with that?
The reason I asked, and I think that Representative
Schrader has hit on it, I have seen polls that show that the
average Democrat believes that almost half of Federal dollars
are wasted, and the average Independent and Republican believes
that more than half of Federal dollars are wasted. So clearly,
the American people are and have a right to be a bit cynical
about how Federal dollars are spent. And it is incumbent upon
all of us to set up manners in which a transparent system can
be used by the public to evaluate whether their dollars are
being used well.
Is that going to be available to the public?
Mr. Zients. Well, the high-priority performance goals are
very much focused on management, so not on policy. And so it
goes right to the issue you are talking about, which is how
well do our government services perform?
And I think there are two aspects to that. One is, how
efficient are they? And the second is, how high is the quality
of the service? How good is the citizen interaction with the
service?
And, yes, many of the high-priority performance goals
address citizen facing services, both their efficiency and
their effectiveness, meaning their service quality. And, yes,
we do plan on making those goals, the broad goals and the
supporting metrics and the milestones and the plans, available
to the public.
Ms. Lummis. And are there savings that will be tied to
budget reductions associated with those goals?
Mr. Zients. As I said, the goals themselves have to do with
becoming more effective and more efficient. So, yes, there
ultimately will be savings, a separate exercise as part of the
OMB budgeting process, to identify taking all available
evaluation and metrics and other knowledge we have,
recommending programs that should either be terminated or
funding should be reduced. So in fiscal year 2010, I think
there were 121 of those programs presented as part of the
budget, and we will do a similar exercise in fiscal year 2011.
Ms. Lummis. Let me give you an example of an agency that,
as the bill passed the House this year, received an over-35-
percent increase in their budget, which is a stunning number to
me. I can't imagine a Federal agency being able to expend that
big of a budget increase. And that was the EPA.
How will you monitor one agency's massive expansion of
dollars under these types of performance bills?
Mr. Zients. Understanding the right outcomes-based measures
and ensuring that the agencies are performing against those
measures--and if they are not, that corrective actions are
taken--and making those metrics available to the public and for
all of you to monitor progress against.
Ms. Lummis. Thank you, Mr. Zients.
Thank you, Mr. Chairman.
Chairman Spratt. Thank you, Ms. Lummis.
Mr. Doggett.
Mr. Doggett. Thank you very much.
And thank you, Mr. Schrader, for your interest in this.
I was involved in some of these performance evaluations
back in my days in the Texas State legislature, and I think
this is really important. And I appreciate your service at OMB,
but as you know, my concern is about the half of the budget
that OMB is doing nothing on, and that is the tax expenditure
side. In fact, it probably is more than half of the budget
according to the determinations that the Government
Accountability Office has made.
By ``tax expenditures,'' I am referring to the special tax
breaks, known as tax expenditures, that are designed to reward
particular activities or to advantage specific groups of
taxpayers that are often described as spending programs hidden
within the Tax Code. As best I can determine, OMB has done
nothing about the tax expenditure portion of the budget with
the notable exception of taking the appendix A on performance
measures and economic effects of tax expenditures that the Bush
administration OMB put into its budget year after year, and
copying it--I think verbatim; you may have changed a word or
two--and putting it into the budget that the President
submitted in February.
Is there anything else that OMB has done, other than
copying those words from the Bush budget and giving us appendix
A in the same form we have seen it year after year?
Mr. Schrader. I agree with you that there we are talking
mostly, or this morning has been focused on spending programs,
and there is a whole other side of this which is the tax side.
And the President is committed to maximizing that the impact of
every dollar we collect and every dollar, I suppose, that we
don't collect. And it is--those types of programs oftentimes
are part of the collection of programs to serve different
purposes like homelessness or other cross-cutting issues. It
has not been the first area that we have focused on in the
first few months.
Mr. Doggett. Have you done anything on it?
Mr. Zients. It has not been an area of focus for us. It
will be going forward.
Mr. Doggett. Is it correct that to this point all you have
done is to reprint appendix A out of the Bush administration
budget and put it in your budget?
Mr. Zients. I don't have specific knowledge on that.
Mr. Doggett. Well, if you compare them side by side, there
may be a word or two change, but it looks to me like it is a
reprint.
Just to give you an example. And I was encouraged by the
comments in the President's budget that programs will not be
measured in isolation, but assessed in the context of other
programs that are serving the same population and meeting the
same goals.
Instead of picking on somebody else's tax expenditure, I
will talk about one that I authored, which is the higher
education tax credit that is part of the stimulus program.
I don't see how you can evaluate--as Mr. Schrader has
suggested we need to do, and I agree with him--Pell grants,
Perkins loans, work-study without evaluating and comparing them
with a rather substantial tax reduction--$14 billion was the
score, approximately, on the higher education tax credit that I
authored--and comparing all three.
But I don't see OMB doing anything on that, and I am
concerned that when we get the budget next February, it will
have the same appendix reprinted.
To be more specific, I know that GAO called on OMB long
before this administration, and you were there, asking them to
implement some specific recommendations. As best I can
determine, not a single recommendation GAO made back in 2005
has been implemented by OMB, and I don't even see any plans to
implement it.
In the fiscal 2002 budget, OMB announced that IRS had a 10-
year panel sample that would facilitate the evaluation of tax
expenditures; and as recently as 2006, OMB described this data
set as permitting, quote, ``more extensive and better analysis
of many tax provisions than can be performed using only annual
data.''
2008, just before you came on board, marked the tenth year
of that 10-year study. What are OMB's plan for that data
system, data set, and what specific plans does OMB have, as you
said, going forward, for gathering the data needed to perform
the evaluation of tax expenditure programs? And how will the
future be any different from the past years of neglect on this
issue?
Mr. Schrader. First of all, I totally agree with the
horizontal approach, and that the tax expenditure side should
be part of that, along with the programs that we are talking
about. So 100 percent agreement there.
I think a lot of these programs are actually more conducive
to the evaluation than they are the measurement. So I think
part of the evaluation push will coincide with looking at these
types of programs.
And there is a lot going on. As I said, there are a lot of
current programs that we are evaluating in terms of
measurement, what we should keep and what we should not keep.
And I will lean in to the area you are talking about. It is not
an area that I have spent much time on to date, but it is
certainly a priority going forward.
Mr. Doggett. Well, just in conclusion, Mr. Chairman, we are
about to take up in coming weeks what are called the extenders
tax provisions. This is an annual ritual where lobbyists come
and talk to staff of the Ways and Means Committee and the
Senate Finance Committee, and the extenders get extended with
little or no evaluation or consideration of whether they serve
any worthy purpose whatsoever.
The last 14 budgets, well before your time, that have come
out of the executive branch have bemoaned the fact that
evaluating tax expenditures was a significant challenge. To
date, no one has accepted that challenge. These are a huge part
of the budget. At a minimum, the GAO's recommendation of 2005
to place the tax expenditure for higher education next to the
direct expenditure for higher education would help the public
and the Congress in evaluating what resources we are allocating
for good purpose or ill.
But I would just urge you, as I will be urging in the
strongest terms when we consider the President's budget this
next year, that this needs attention and needs attention
yesterday.
And I appreciate your service and your attention to this
matter.
Mr. Zients. Thank you.
Chairman Spratt. Thank you.
Mr. Austria.
Mr. Austria. Thank you, Mr. Chairman.
And, Mr. Zients, thank you for your testimony today. I
appreciate it very much, as this committee, I am sure, does.
And I think the question again comes down to how we here in
Congress and the administration can ensure that citizens, the
taxpayers, get the most out of the tax dollars that they send
to Washington, D.C.; and I want to bring up some of the things
that you talked about as far as efficiency and effective.
I think, unfortunately, all too often what is forgotten
about government programs is that no matter how important or
well intentioned they might be, they impose a cost on the
economy. Every dollar spent by the government is a dollar taken
away from someone else who might spend or invest it on growth-
producing activities. So when we decide what we want government
to engage in, whether it be a large or small activity, we
should consider the cost of collecting the taxes, increasing
the debt compared to the value of the government's programs.
Do you incorporate in your analysis the government's
performance at all? That would be my first question.
Mr. Zients. The performance?
Mr. Austria. The performance as to how much money it is
costing to collect the taxes, to run the plan efficiently,
because again, every tax dollar that we are spending here in
government is being taken out of the private sector.
Mr. Zients. I think that is really at the heart of what I
view my team's mission, which is to make sure that where we are
spending dollars, we are spending them wisely; that programs
that don't work we identify and we either fix or terminate, and
programs that do work we continue to drive their performance
and make them better.
So, yes, I think the performance of government is front and
center for what we do. I think it is important, as I said
earlier, to understand how we best serve you and your needs as
to which programs, which metrics, which cross-agency goals are
most important, and make sure that we design a system that you
find useful as you go about your important work.
Mr. Austria. Mr. Zients, let me also just kind of follow up
and again kind of throw in a little bit of my opinion.
I think one of the fundamental problems with government
programs is that they lack any natural incentive to promote
efficiency. And that is why I think what you do is so
important.
So for a number of years now, we have been paying agencies
more through cap adjustments--and I want to talk about that--
you know, to do what they should be doing in my opinion,
anyway, and that is attacking waste, fraud, and abuse. With
that in mind, I have got two questions.
If we really want to promote greater efficiency in
government agencies, don't we at some point have to simply just
restrict their budgets and force them to get by with tighter
limits and work more efficiently and more effectively with the
dollars that they have?
Mr. Zients. I think it is hard to generalize. But
certainly, I think looking at how efficient they are and
insisting we become more efficient, as has the private sector
across time, is a very good discipline.
I think--one of the observations I have from 20 years in
the private sector is, a lot of the efficiency gains and
service quality gains have been driven by information
technology. And there are pockets of information technology
sophistication and leading-edge use in the government. But for
the most part, we are way behind. And I think that we need to
understand how we leverage information technology and other
breakthroughs in management and operations to drive better
efficiency, which happens also to be correlated with better
service.
So I think a discipline of ``you should be getting better
and better each year'' is a good discipline, whether that is
through lower dollars or lower budgets or higher output; it can
be a combination depending on the situation.
Mr. Austria. Mr. Chairman, one follow-up to that.
I think, in any case, the testimony you have given today--
the analysis, the metrics, I think, are useful; but I think, as
a committee member, you know, when can we expect to see some
results?
And I want to follow up on what the Congresswoman from
Wyoming, Ms. Lummis, was talking about as far as being able to
see from a transparency standpoint that efficiency, that
effectiveness, starting to see savings results from these
efforts.
Mr. Zients. I think it is extremely important that we get
results fast.
I think--Congressman Schrader and I were talking
beforehand. And this is not an overnight effort; this is a
complex system that we are going to put in place that is going
to drive performance, hopefully for many, many years to come.
That said, I think it is important that we have some fast
results. I think I highlighted a few of those with the IT
Dashboard as an example in the testimony. But there are also
areas like contracting where we spend $530 billion a year. We
have put a stake in the ground, the President put a stake in
the ground on March 4 that we are going to save $40 billion by
fiscal year 2011. So we are right now reviewing plans from each
agency as to how they are going to bring forward their $40
billion.
So while we are building a system that is going to be built
to last and serve, hopefully, many Congresses, I want to make
it clear that we are very interested in having immediate
results that save taxpayer dollars and improve the services
that we provide.
Mr. Austria. Thank you, Mr. Chairman.
Chairman Spratt. Mr. Scott.
Mr. Scott. Thank you, Mr. Zients, for being with us today.
One of the things that concerns me is the fact that CBO doesn't
score prevention. In the health care bill there are some
prevention activities that just aren't scored. I serve as Chair
of the Crime Subcommittee, and prevention strategies are not
scored; and, in fact, wasteful strategies aren't scored either.
Pew Research Forum calculated that any incarceration rate
over 500 per 100,000 was actually counterproductive. We are
already at 700 per 100,000. Some communities lock up minorities
at the rate 4,000 per 100,000, and still we are passing
mandatory minimums and other things that just will make the
situation worse.
How would performance budgeting help us get out of this
mess?
Mr. Zients. I think that as to the health care piece of it
is not a place where I have spent a lot of personal time. It is
something that the President and Director Orszag are obviously
deep in on.
Other metrics that are performance based, like the ones you
described should be part of what we measure--agency performance
and how we measure it. So it is not a terrain that I have
personally spent a lot of time on, but what you are describing
are the types of outcome-based metrics that should be part of
what we are doing.
Mr. Scott. You mentioned saving money in contracting.
Everybody knows that you can save money in contracting by
bundling contracts and skipping the bid process and just
going--letting people pick and choose and not going through the
expense of a formal bid. You would give up, however, the
opportunities of small businesses to participate in fairness,
because if people can pick their friends, if you are not a
friend, you don't get covered.
How would you balance efficiency and cost effectiveness
with making the contracting process fair and open to all,
including small businesses?
Mr. Zients. Right. I absolutely agree with the importance
of small and minority-owned businesses in the contracting
process. What you just described didn't strike me as efficient.
Actually, I think there is not enough competition in
contracting. Too often there is only one bid or there is no
bid, and it goes to one contractor. So I think increasing
competition is a good thing to contribute to increasing
efficiency. Too often we rely on what are called high-risk
contracting vehicles, so cost-reimbursement contracts or time-
and-material contracts, or as I said, contracts that aren't
competed, are all high-risk vehicles.
We have asked every agency to reduce the percent by 10
percent.
So I think the sort of loose network that you described--
returning of favors, if you will--I am not sure how much of
that exists; but to the extent that exists, I would argue, that
is inefficient. And that is the kind of--there is the kind of
practice we want to change through increasing competition and
moving more towards fixed-price contracts while at the same
time absolutely understanding the importance of the small
business minority communities.
Mr. Scott. In my former work in the State senate in
Virginia, we worked with trying to coordinate agencies with
similar or overlapping missions and tried to coordinate those
activities from a mission perspective.
In the education area, you kick the kid out of school with
no services that would save them money in the education
service; but if someone from the criminal justice system is
around the table, they might suggest that is not a good policy.
How does the performance budgeting--how does the
performance budgeting work across agencies in making sure they
are properly coordinated?
Mr. Zients. I think you are exactly right, and we can learn
from States like Virginia. And I think today we don't do a good
job. Today, it is really done in these silos at the level of
over 1,000 different programs. So I think through the high-
priority performance goal exercise that I described, we have
already identified several situations where agencies are coming
to the table for the first time to coordinate on their share of
high-priority performance goals. This is a start, but the
system that we are envisioning, the system that we will
develop, will absolutely not start at the level of how we are
organized, but instead start at the level of serving, in your
example, an individual student.
Mr. Scott. You mentioned Virginia. Virginia has frequently
been designated the best-managed State in the country. What is
Virginia doing that we should learn from?
Mr. Zients. Virginia has a handful of important goals,
outcomes-based goals at the State level, that they make public.
They benchmark their performance versus other States. They have
performance agreements with the folks who are running those
agencies, who are responsible for meeting those goals, regular
reviews of performance against. And then those goals in turn
cascade through the agencies down to individuals.
So it is--I think it is Virginia is a leading State. The
results have followed. As you said, they have been recognized
by Pew and others over and over again as a well-managed State.
So I think there is a lot we can learn from the States. And we
want to build on the best of the States' efforts, Oregon,
Texas, Virginia come to mind; cities, Baltimore, New York, and
other cities; and then pockets of good performance through the
Federal Government and take sort of a best-practice approach.
We don't need to reinvent the wheel. But I think there is a
lot to learn from Virginia and other States.
Chairman Spratt. Mr. Yarmuth.
Mr. Yarmuth. Thank you, Mr. Chairman. I do have a question
that I want to get to in a minute, but I have to comment on a
couple things that have been said here.
The first--and I am sorry he has left--was Mr. Austria
saying that every dollar that comes into the Federal Treasury
is a dollar that we deprive the private sector of. And I would
just like to remind Mr. Austria and those others who
continually try to demonize government that last year, at the
request of the Bush administration, we allocated $700 billion
to bail out the private sector. And in fact, $300 billion or so
of that is still out there in the private sector helping to
alleviate their problems.
We have about $290 billion from the American Recovery Act
that went back into American citizens' pockets, which
presumably is out there in the private sector being spent and/
or saved. And there are examples of that. There is example
after example of Federal tax dollars actually going not only to
support the private sector but to go into the private sector.
The second comment I want to make is one you made, Mr.
Zients, when you talked about the efficiency of the private
sector. And certainly there are things that are done in the
private sector that probably should be replicated in the
Federal Government. But there are a lot of things, having spent
most of my life in the private sector, that they are not always
the most efficient way of operating. And all we have to look at
is the number of eight-digit salaries that have gone to people
who have run companies into the ground.
Anyway, that being said, I do have a question.
One of the inevitable things that we do here when we pass
legislation is to create unintended consequences; and in fact,
probably everything we do creates unintended consequences. Is
there a way that the performance measures that you are setting
up will catch unintended consequences of programs and agencies,
or is that something that we need to leave in the oversight
function of Congress?
Mr. Zients. I think the rigorous review of how programs
will do, are doing, versus what they set out to do, will
inevitably uncover some of those. But I don't think it is the--
it is not the intention, it is not the primary objective of the
programs. But I think that those reviews of how programs are
doing versus their targets and goals, my experience so far in
the Federal Government and in the private sector is oftentimes
you will find those unintended consequences.
I do want to comment in that having spent my whole career
in the other Washington, if you will, in the local business
community, I do think there are things we can learn from the
private sector. But I do want to tell you that I bring a lot of
humility to how different this sector is, how big it is, and
how a lot of what happens here is unique to this sector, and
how there are a lot of good things happening in the Federal
Government. So I don't want you to misinterpret the private
sector.
Hopefully, there is some transference possible, but I don't
think that is the lead by any stretch.
Mr. Yarmuth. I take it and I agree with you absolutely.
Kind of extending that question a little bit about
unintended consequences, how is your system and your program
going to relate to Inspectors General and the GAO in terms of
how--what is the relationship going to be?
Mr. Zients. Yes. One of my roles is to chair the inspector
general counsels, I do spend a lot of time with IGs and I think
they play a very important function. I think that we want them
to continue to play the role they play so effectively. At the
same time, I think they do have ideas about how we can prevent
waste, fraud, and abuse. So I am encouraging that community to
continue, obviously, the role it plays and to keep it very
independent and strong.
At the same time, start to bring forward, as I think the
Recovery Act has shown, the ability to preempt rather than
simply look backwards in a rearview mirror.
So I think IGs are very important in their watchdog
capacity and also the capacity of helping us identify how we
can be better. I have worked with GAO now on several issues and
have a lot of respect for the rigor of their analytics, and we
are working together on several GAO high-risk-list issues,
including security clearance, where I was here a few weeks ago
to testify. And I found it very helpful to work closely with
GAO to understand not only what is the problem, but how do we
actually solve the problem. So I think both GAO and IGs have a
very critical role in this moving-forward agenda.
Mr. Yarmuth. One last comment. Having spent 25 years or so
in the media before I came to this job, it is going to be
interesting to see whether the good stories, the success
stories that you have to tell are covered as well as the
negative stories you have to tell.
I am all for transparency, but I hope we get balanced
coverage.
Mr. Zients. I couldn't agree more. And I do think there are
pockets of good performance, and hopefully we will create many
more together.
I think it is important to recognize those and to celebrate
those, while at the same time where there are problems we are
transparent and we uncover them and we do things to fix those
problems.
But I think recognition and reward and positive publicity
is part of the package here.
Mr. Yarmuth. Thank you very much.
Chairman Spratt. Thank you. Mr. Becerra.
Mr. Becerra. Mr. Chairman, can I pass?
Chairman Spratt. Sure. Ms. Schwartz.
Ms. Schwartz. Thank you. I appreciate weighing in on this
hearing and hearing some of your comments.
I wanted to follow up on a couple of things that you said
in response to some of the questions. First, I did want to say
I appreciate some of the goals that have already been set, and
they are pretty demanding goals, I think, in terms of the way
you do Federal contracting and making sure that those are
Federal contracts to the private sector and making sure that, I
think you have said--my notes say $40 billion in savings is the
goal, and 7 percent savings by 2011 in baseline spending and
reducing dollars obligated under high risks that are no-bid
contracts by 10 percent. Those are all pretty ambitious goals
and look forward to your meeting them.
What I wanted to ask about is I think what is actually
maybe more complicated because those goals can be met. The
subcontracting to the private sector is very important, making
sure we evaluate how those dollars are being spent. But the
issue of program evaluation and how you actually do plan in a
time-sensitive way to do the kind of evaluation of what is
working and what isn't; not only each program by itself, but in
the context of what our priorities and goals are for that
department, for the Nation. You know, it is a program to be
working, but if it is doing something nice over there but
really doesn't meet our basic priorities in the kind of
economy, the kind of revenue-sensitive situation we have for
the budget for the government, it seems to me that you are
looking at not only does the program work or not, but does it
actually meet our overall goals that we have set for that
department.
So even if the program is functioning well but does not
meet our overall goals, what kind of action are you going to
take on that, is really my first question.
And I did want to follow up on your question about health
IT. You acknowledge that--not health IT, but information
technology that you are using to monitor programs, again, I
assume, in a time-sensitive way, and to create more efficiency
within government.
If you could also speak to--you acknowledge that it is a
problem, but--two questions about that. One is it takes an
investment to put in the kind of information technology--I am
well aware of this because of the health information technology
that I have worked on. But that takes some cost to us, spending
money to get systems computerized, really make sure we have the
right software, make sure it is interoperable, make sure that
that information is shared publicly and used by managers to
make decisions.
Could you speak to not just acknowledging the importance of
using technology, information technology, but then how are you
going to, one, move it up to scale and then use it in a way to
do the kind of timely evaluation of our programs that I talked
about in the first part of my question?
Mr. Zients. I think in the first part what matters, I
think, we are uncovering through that high-priority performance
goal exercise; so, which programs really fit with those handful
of priorities. And that is the beginning of a prioritization
exercise, so that things that matter less either are not funded
at all or funding is reduced to those areas and funneled to
those areas that matter more.
The evaluation memo that went out from Director Orszag is,
I think, has laid out the vector of what you are describing,
which is, let's take everything that we have done historically
on evaluation and make it transparent so nothing is on the back
shelf anymore; let's build agency capabilities to do more
evaluations; let's have agencies work together to evaluate
programs or issues that run across agency. And then if we are
going to make it part of the funding of the fiscal year 2011
budget, is to fund more evaluations.
I think we need more rigorous evaluation of what we are
doing. And some of those evaluations do take time but others
take less time. And I think when we spend those dollars on
evaluation, we need to prioritize and do it in those areas that
we believe are most--have the highest spend and where we
believe that the evaluation will have insights to really drive
future decisions. On IT----
Ms. Schwartz. Just to finish up on that. So is the
evaluation being done by the government agency, of are you
building that into money that is being spent for a program to
say they have to report back on their effectiveness and cost?
Mr. Zients. Agencies will do rigorous third-party
evaluations of how they are performing versus their own targets
but also against alternatives and control samples, so it will
be very rigorous and independent.
The IT piece, it is a little bit--and again I am
generalizing here because there are pockets of success--but it
is a little bit lose/lose in that I do believe in many areas we
are behind where we should be on IT, yet we spend a lot of
money. We spend $76 billion a year on information technology
and we have too many projects that are behind schedule or over
budget or never are implemented or don't achieve their intended
results.
Now, this is not unique to our sector. It is hard in the
private sector also to do large-scale IT. But we need to really
think through how we have the project management capabilities
to get this done. We move pretty slowly on IT, and as we all
know, technology moves fast; so sometimes it takes several
years just to begin a program, a project. And by the time we
start it, sometimes the technology is a few generations behind.
We also need to have technology driven and owned by senior
leaders. When IT is done in a silo, it is inevitably
unsuccessful. So we need to, I believe, improve IT project
management from spec development through completion.
Ms. Schwartz. But again, it is not just getting the
information and posting it. Transparency is important but it is
then the use of that information to help informed decisions.
Mr. Zients. I absolutely agree. The information is only as
good as how much it is used to drive the decisions.
Ms. Schwartz. I think my time is up. Good luck.
Mr. Zients. Thank you.
Chairman Spratt. Mr. Becerra.
Mr. Becerra. Mr. Chairman, thank you very much. Mr. Zients,
thank you very much for your testimony.
Let me--I believe other members may have asked this, and I
apologize that I wasn't here for those questions. Any number of
agencies can produce any number of dollars in savings depending
on how efficient we can make them be in terms of their
management. Some agencies are bigger than others. You can go
after FEMA which is a small agency overall, with a very, very
important mission when it is called upon to do it, versus, say,
the Department of--or the Social Security Administration, which
is a huge agency, or the Department of Defense, the largest of
all our government departments. So you can get a different
level of bang for the efficiency in the buck.
I would like to focus on a couple of things. IRS. IRS
probably is the largest producer of savings available out there
for us in terms of its mission, what it does. It collects
taxes. And if the studies are correct, some quarter of a
trillion dollars in taxes go uncollected on an annual basis.
Part of that is because we likely aren't focusing the personnel
that we have at IRS in the best areas to gain the most
efficiency, because there are some people who probably owe the
government $1,000 in unpaid taxes and there are probably a lot
of entities out there that owe the government millions in
unpaid taxes. And unless they focus correctly, we may collect
$1,000 from that one individual American and let lots of
companies get away without paying the millions that they owe
the government in taxes.
And so when it comes to expenditure programs, would your
agency be involved in trying to help the IRS determine how to
best focus its attention so that a nonprofit agency that is
collecting money--there are tax deductions that go with that,
and therefore are foregoing tax revenues--that we are making
sure that that agency is actually using its money for the
intended nonprofit purpose instead of paying their executives
high salaries. Or do we want to make sure that if we have a
program like the first-time home buyer tax credit, that we are
not sending money off to a 4-year old who applies for a first-
time home buyer tax credit, so that we are not being defrauded
out of those $8,000 in tax credits that we are giving to
Americans.
Mr. Zients. Let me start at the beginning of your question,
which is prioritization. There are efforts, and we have talked
about a few of them today, the performance management system
that is the main focus of the hearing today, contracting,
information technology, where they really are horizontal across
agencies. The work we do hopefully applies to FEMA in your
example and the IRS. So we want to create those institutional
capabilities across the government in performance management,
contracting, information technology and some other areas.
That said, there are certainly areas where we believe they
are at the intersection of large and inefficient, and that is
where we want to focus more of our energy.
So to bring that same philosophy to the IRS, there is a tax
gap of I think $300 billion. And closing that tax gap is, I am
sure, important for the IRS and for all of us. And within the
IRS, the commissioner should be prioritizing to say where is
that intersection of it is big and I can get it done.
So that philosophy of systemic horizontal improvement but
at the same time focusing in on some areas that need special
attention in getting early results and returning, in this
situation, dollars to the taxpayers or dollars to the
government is exactly the philosophy that we are embarked on.
Mr. Becerra. I think many of us would have a great deal of
interest in supporting and observing what you do if we had a
clear sense that in terms of trying to extract efficiency in
the management of government we really went after the big
apples.
IRS, I suspect you will find, is strapped. It doesn't have
enough personnel to go out there and do all the work it needs
to do. And that is because too often it gets a bad rap; that it
is just out there like the bad cop trying to get Granny to pay
her taxes when, in fact, there are many, many very wealthy
individuals or corporations that are not doing what Granny has
done, and that is paid her taxes.
I would hope that what we are able to find in the work that
you do is you will focus in on the big guys, the Department of
Defense which does all these no-bid contracts or cost-plus
contracts, which cost the taxpayers tremendous amounts of
dollars, IRS and other agencies, and figure out what they need
to do. In some cases we shouldn't just blame them, because they
don't have enough personnel to do the work; in some cases we
should try to help them be more efficient.
But when you let $250 billion to $300 billion go on an
annual basis because it is uncollected taxes, that is probably
the biggest--the biggest inefficiency we can have in
government.
Mr. Zients. I agree with your philosophy. Contracting,
saving $40 billion across 2 years, of the $530 billion two-
thirds of that is DOD. So clearly if we are going to move the
dial and achieve our $40 billion goal, which we are committed
to doing, hopefully exceeding, DOD has to be front and center
in that effort. And they are, and they are making good
progress.
Mr. Becerra. Thank you. Thank you, Mr. Chairman.
Chairman Spratt. Let me pick up on that point because as
you go through the portfolio business at DOD, you will sooner
or later run into the SAR, the Selected Acquisition Report.
Have you or your office done any work in this area with DOD to
improve upon or at least to see how well working the Selected
Acquisition Report is?
Mr. Zients. As part of my responsibilities I oversee the
Office of Federal Procurement Policy, which interacts with DOD
and the civilian agencies on procurement and is the lead policy
group. I am not familiar with the details of SARs but I do know
that DOD, as I said before, is far and away the largest
contractor. They are making good progress on increasing
competition; reducing the use of cost reimbursement contracts;
moving to fixed price; and also looking at have we in some
situations contracted out or outsourced inherently governmental
functions or areas that we need to make sure we have the
capacity to perform our critical function.
So I think DOD is--I am impressed by their focus. They
obviously have a lot to do when you are contracting for over
$300 billion in the context of, you know, two wars and all the
rest. But I think they are making good progress and they will
contribute to their share, or hopefully even more of the $40
billion target.
Chairman Spratt. I am glad you mentioned the outsourcing
because that is a big issue of concern in the Department of
Defense, how much we are spending on outsourcing. And it has a
repercussion, too, within the Department in the sense you
aren't training and bringing on board people who would
otherwise be developing the management talents that you need
internally are instead being displaced by outside contractors
who charge substantially more than you would be paying for the
talent inside.
I worked years ago as a young officer in the Army with the
development of the SAR. I didn't have much to do with it, but
it was in the office I was working. The guy sitting across from
me was Hank Paulson. One of the other guys in the room was Walt
Minnick, who is now in the Congress. When I came back here in
1983 I went to see--I got on the Armed Services Committee and I
went to check out the SAR, the Selected Acquisition Report.
When I pulled it--that is about 13 years after I had been in
the service--I saw it was essentially the same document it was
in 1971 when I left here. It had not evolved, it had not
improved, it was about the same document. It was a variance
analysis document for measuring cost, schedule and technical
performance. And I guess over the years looking and dealing
with the SAR, the one conclusion I have drawn is if it is used
and it works, it will become more useful; and if it is not used
and it is sort of done as something perfunctory that has to be
done, then it doesn't evolve, it doesn't become more useful.
The SAR should be much much more sophisticated than it is
presently, but it hasn't been used on the Congress well enough.
When we have tried to dictate and put it in legislative
language it always fails--the translation of it into real
action on the bureaucratic side failed us.
I would urge you to take a close look at that because it is
way overdue on overhaul and improvement. And in particular, you
mostly talk about judging performance, which is backward,
looking how results have been produced. The SAR needs to be
adapted so that it is forward-looking. And there are certain
things that are picked out in advance to be watched from a
variance analysis standpoint, so that if something is going
awry, you will know that soon enough to take some preventive
action so you don't have to lose a lot of money and learn the
hard way that the system is not going to be up to specs.
Mr. Zients. I completely agree. We need to have forward--
this conversation we were having earlier with Congressman
Schrader--we need to have forward metrics that we are tracking
our progress against, and if we are not meeting or exceeding
those, alarm bells should go off and we need to fix it.
You know, with SAR and others, I think there is too much of
a compliance mentality rather than let's use this to drive
results. And where that is happening, we should either revamp
and create something that passes the standard of we are going
to use it to manage performance or we should get rid of it,
because it is just clutter and taking up time. I think on
acquisition, one of the root-cause problems is the workforce
itself on acquisitions as we doubled contracting across the
last 5 years.
Chairman Spratt. I will give you two examples. Some years
ago--because I sponsored some legislation to change the SAR.
When I was hiring a legislative assistant to do military and
defense work for me, I put in the RFP, so to speak, that I
would like to have somebody that had that ability to work with
Selected Acquisition Reports, forbearance analysis, because I
would like to be doing some work in that area. And I got two or
three applications from the Beltway consultants of people who
were doing SARS, and I was curious as to how it was they were
doing SARS.
What I found out is that the program management officers in
many cases themselves outsource the SAR, get an outside
management consulting firm to do the work that they should be
doing. And if they are not capable of doing it, they shouldn't
be in the management position with respect to that program.
Mr. Zients. As part of the contracting work, we have asked
each agency to identify an organization where they believe they
might be overly relying on contractors. A significant portion
of the 23 or 24 agencies that are doing the pilot selected
their acquisition organization because they have contractors
doing acquisition. So that is an area it is not unusual to have
contractors in the acquisition area. It doesn't mean that that
is always incorrect. But I think that it is data that so many
of the agencies pick that area of acquisition as an area we are
potentially over-relying on contractors.
Chairman Spratt. Which brings me to the next point. And
that is, we shouldn't get so lost in devising management
reporting systems that we forget that the real payoff comes
from getting good managers.
Mr. Zients. I 100 percent agree.
Chairman Spratt. They are useful and helpful, but they are
no substitute for getting good people.
Mr. Zients. If you want great management you need great
people.
Chairman Spratt. How do we do that? That is the sleeper
issue, it seems to me, within the efficiency and effectiveness
of the Federal Government. How do we attract----
Mr. Zients. Well, we have to have a hiring process that
actually attracts the best and brightest. If it takes 6 months,
on average, to hire someone--my experience in the private
sector is the best talent doesn't loiter for 6 months, it finds
another home. So we need to be able to hire the best talent and
to hire the best talent you have to streamline the process.
We need to make sure that we are providing enough training
and continuing education. We need to make sure we have an
appraisal system that rewards those that are performing well
and enables us to give out feedback and potential out-
counseling for those who are underperforming.
So I think there is a lot that we need to do on the human
resources side, working closely with Director Barry at OPM, and
it is an area of a lot of focus; because I 100 percent agree
with you, if you want good management get great people.
Chairman Spratt. You need to be doing some face-to-face
interviewing too, if I can tell you how to run your shop. I
know this is free advice and worth what it cost. But so much of
your civil service applications today are generated by the
Internet.
Mr. Zients. To support your point I am so struck by--again,
not to keep coming back to the private sector because it
doesn't have all the answers--but how important part of a
senior manager or any manager's time recruiting and coaching is
and how central it is to their performance review in the
private sector--again, with exceptions because there are good
pockets of performance here too, but for the most part it is
not as front and center for managers to be doing the recruiting
and doing the coaching, and we need to change that.
Chairman Spratt. Two areas where I really think you need
help, big-time, top-flight help--IT, health IT, on which we are
spending billions, literally billions. I think it was $18
billion on the Recovery Act by itself, more money to come with
the health care reform bill that is before us right now. It is
clearly something where we have got to spend, where lots of
money can be wasted if it is not closely supervised by people
who are capable of doing it.
And secondly, maybe even more importantly, with higher
stakes, is financial regulation, the financial institution
regulation. We have got to get people at the FDIC, the
examiners, the people on the ground who are out there making
day-to-day assessments of the quality of loans that banks are
generating and many other things: investment quality, risk
management, things of this nature. We have got to get better
people than we have had. Not to disparage anybody, it is just
that the problem has outgrown, I think, the capacity of many of
our regulators.
Do you have a plan for that? I know this is a little bit
outside the scope of management performance, but in truth it is
one of the keys to management performance and assessment.
Mr. Zients. They aren't two areas that I am deep in
personally, but I agree with you they are a high priority.
Chairman Spratt. Are there other members? Mr. Schrader, do
you wish to ask further questions.
Mr. Schrader. Just, if I may, kind of a closing comment. I
am excited about the prospects of your office and working with
Congress and getting better results, the tendency for our
bodies to micromanage all these agencies. I don't know about
everybody else here, but I am a veterinarian, and so my ability
to micromanage the Defense Department is probably miniscule.
Some of the members have been here a long time and have greater
expertise, but I can manage results.
I don't have to be an expert in weapons procurement if we
set targets and look to see whether or not the procurement
process is getting us where we need to go. I think that is
pretty clear. And I would hope that as you work through the
process, that the outcomes that are worked up in concert with
Congress are posted on a Web site so that--and actually I would
hope they become part of every appropriation bill at the end of
the Congress; that we can look back and see what the benchmarks
were, what our targets were, how close we got, why we didn't
get there, and use that to inform the discussion. Because
sometimes I think we got to avoid the ``gotcha'' mentality.
I also believe strongly that while I agree that certain
agencies should probably be doing some of these things anyway,
the real world in my little corner of the universe, in a small
business, is that I reward employees for extra effort and
behavior. And that gets me results, that gets me great results.
I do better economically. I think my clients do better
economically. And I think that same thing would hold true here
in the government; that our taxpayers would do better if these
resources are strategically invested.
And working across the silos is so critical, Mr. Zients. I
agree with you 100 percent. There are numerous States that have
ways of addressing that, making the management more efficient,
cutting through the middle management bureaucracy--whether it
is a private industry or certainly in the public sector--is
absolutely critical. And I would urge you to look at those
examples that are out there, going forward.
This Congress, myself in particular, is very interested in
working with you in the short term and in the long term to make
sure that outcomes-based budgeting becomes part of the Federal
psyche. Thank you. I yield back.
Chairman Spratt. Mrs. Lummis, any questions?
Mrs. Lummis. No thank you, Mr. Chairman. I do very much
appreciate your presence here today and the attention to the
subject. It is a worthwhile expenditure of time.
Chairman Spratt. Ms. Schwartz.
Ms. Schwartz. No questions.
Chairman Spratt. Mr. Director, your talents, experience,
and ability and your presentation today speak well of the
administration's commitment to the goals that you set out. And
count on us to work with you in any way we can to bring these
to fruition.
Thank you very much for what you are doing and thank you
for taking time to come and lay it out for us this morning. We
very much appreciate your being here.
Mr. Zients. Thank you.
Chairman Spratt. At this point, I would like to ask
unanimous consent that members who did not have the opportunity
to ask questions be given 7 days to submit questions for the
record. Any member who would like to submit an opening
statement may do so as well. Without objection so ordered.
Thank you again.
[Questions for the record and their responses follow:]
Questions for the Record Submitted by Messrs. Ryan and Aderholt and the
Responses by Mr. Zients
questions from ranking member paul ryan
1. Mr. Zients, you mentioned in your testimony that you want to
create a partnership with the Budget Committee because it is in a
unique position to look at government-wide program performance and help
ensure that OMB's measurements are used by Congress. After 16 years of
GPRA, 7 years of PART, and almost a year into the new Administration,
your agency must have a running list of programs that are duplicative,
ineffective, have outlived their usefulness, or are in need of cross-
agency coordination. Will you please provide us with a list of these
programs so that we can get started?
The Administration has identified 121 terminations, reductions, and
other areas of savings that will save approximately $17 billion. The
Terminations, Reductions and Savings volume of the Budget the
Administration proposed in May 2009 identifies programs that do not
accomplish their intended objectives, are not efficient, or that
replicate efforts being completed by another initiative--and recommends
these programs for either termination or reduction. These changes range
from eliminating entitlements to banks and lenders making student loans
that will cost taxpayers $41 billion over the next decade to ending a
$7 million education program that was used by only 15 school districts
and with no evidence that it was improving student achievements. No
matter their size, these cuts and reductions are all important to
setting the right priorities with spending. As part of the FY 2011
budget that will be released in February will identify additional
programs for termination and look forward to working with you on those
proposals.
2. Mr. Zients, are there any legislative changes that can be made
that would help the Administration's performance budgeting effort?
I believe the Government Performance and Results Act (GPRA),
relevant Executive Orders, and requirements for outcomes measurement in
several laws provide a powerful legal foundation on which to build and
do not see the need for changes at this time. My views on that may
change, though, as we gain experience so I would like to hold open the
possibility of answering that question until after we get a chance to
see how well our performance management approach is working and what
barriers we encounter.
3. Mr. Zients, you stated at the hearing that performance
evaluations will be rigorous and conducted by a third party. Who will
be the third party evaluators?
The Administration is committed to rigorous, independent program
evaluations and has devoted time and resources to improving the
evaluation of programs throughout the Federal government. The
Director's October 7th ``Increased Emphasis on Program Evaluations''
memo is that latest sign of that commitment. The third-party
contractors who have the expertise to conduct rigorous evaluations will
vary from agency to agency and from program to program. A competitive
process is typically used to select the contractors who perform these
evaluations.
questions from rep. robert b. aderholt
1. You state in your testimony that ``Secretaries and Deputies will
be charged with the setting of agency goals.'' What do you view
Congress's role to be in the setting of these goals?
OMB has asked agencies to determine the priority goals they will
work to achieve given existing legislative and budget authority. The
goals reflect near-term priorities for agency senior leadership, and
are a subset of the efforts agencies will undertake to implement the
laws passed by Congress. OMB has asked agencies to include the goals in
their annual performance plans and Congressional Budget Justification,
and to engage Congress as appropriate to discuss these priorities.
We welcome efforts by Congress to help agencies achieve these
important performance improvements, including monitoring agency
progress and helping to overcome any barriers which arise. We will work
to facilitate this by ensuring you have accurate and timely reporting
available on progress.
2. You state in your testimony that ``A clear line must link agency
strategic goals and measurements to programs and employees.'' If done
properly, this is a good way to identify underperforming employees.
When your performancebased budgeting initiatives identify such
employees, what is done? At what point are underperforming employees to
be terminated?
It is critical for Federal employees to understand how their
efforts contribute to achieving the broader agency mission, and for
managers to be able to consider the achievement of ultimate outcomes
when evaluating the performance of individual employees. Guidelines for
employee performance measurement are currently set by each Federal
agency under regulations issued by the Office of Personnel Management.
We will work to ensure the government-wide framework we establish
enables agencies to link the measures they use to evaluate individual
employees in the broader context of the strategic planning and
performance reporting framework for the agency.
3. It is my understanding that the Administration has abandoned the
Program Assessment Rating Tool (PART) which received the 2005
Innovation Award from Harvard University's John F. Kennedy School of
Government. Is this true? If so, can you cite cases in which PART
failed to successfully assess certain programs? Could the
Administration not make improvements to PART instead of abandoning it?
Some components of the PART were successful while others were
problematic. We are reviewing the PART now to determine which elements
should be continued as part of our performance management framework,
and which should be discontinued.
4. This past year, the Social Security Administration (SSA) came
under scrutiny for hosting a lavish retreat for many of its employees.
Were there any goals set under your performancebased budgeting
initiative for this retreat? If so, were any of the goals met and what
did you do with the results?
OMB leads performance management efforts on a government-wide
basis, and coordinates performance measurement activities at the agency
and program level. We are not involved in setting performance measures
for individual events.
[Whereupon, at 11:28 a.m., the committee was adjourned.]