Fiscal Summit and America’s Fiscal Challenges

Was it a parade of stars or a suicide mission?  Last week I attended a one-day wonk fest on the country’s long term fiscal outlook, the “2010 Fiscal Summit.”  It offered a rainy forecast, with possible thundershowers and occasional tornados.  It was organized by the Peter G. Peterson Foundation, which is dedicated to educating the public about the looming fiscal decisions our country needs to make.

Participants included political and news media rock stars:  Bill Clinton, Bob Rubin, Alan Greenspan, Paul Volcker, Alice Rivlin, Peter Orzag, Leslie Stahl, Bob Schieffer, Gwen Ifill, and of course Peter G. Peterson and David Walker (who heads the Foundation).

The Foundation has been trying to put a spotlight on the nation’s increasing fiscal challenges in recent years, with documentaries such as “IOUSA.” But in recent months, it has been promoting the need to come to some decisions.  The recent creation of President Obama’s Commission on Fiscal Responsibility and Reform (aka The Deficit Commission) – which is to offer solutions by the end of the year – created an opportunity to showcase the importance of the need to act soon (after the Fall election, of course).  The co-chairs of the commission – Erskine Bowles and Alan Simpson – participated along with several members of the commission.

Defining Success.  Simpson referred to the commission’s work as a “suicide mission” and that he held out hopes that “we may only move the ball a yard.”  However Bowles observed that success may well be at least educating the American people of the nature of the choices we face so they’ll put pressure on their elected officials to act.  He observed that “we need to develop citizen trust and confidence that this is not for political gain but to solve a problem.”  Both he and Simpson think that “we need a set of facts and figures that everyone agrees on, as a starting point.”  A low bar, but President Obama says he’ll support whatever the Commission agrees to!

Management Matters.  While most of the conversation centered on more taxes and fewer services, former President Clinton and OMB Director Orzag both offered a different path. Clinton said that we are facing the typical problems of every maturing society.  Once a society becomes successful, it becomes rigid and obsessed with security – economic, social, and defense – and these rigidities need to be overcome.

He observed that our current education, health care, financial, energy, defense, and tax systems are all rigid, highly inefficient delivery systems.  He says we have to dramatically change the way we deliver services in each of these systems.  He observed “Congress understands the problem but isn’t organized to deal with it.”  He thinks one option might be to create a super committee that over a two-year period puts in place the changes needed to deal with the long-term deficit problem.

Orzag focused specifically on the inefficiencies in the health care system, saying it is the biggest driver of the deficit.  He hopefully offered that the new legislation creates several institutions that will begin to shift the entire system from paying for the quantity of services to paying for the quality of services.  How these new institutions are stood up – the Medicare Advisory Board, the Payments Advisory Board, and the Innovation Center – will determine the success of these efforts.

Resources.  There are lots of places trying to market the facts and figures, and some solutions, but they don’t seem to be getting traction among the general public:

Next Steps. The Summit ended with a concrete step towards creating grassroots political attention (beyond the Tea Party) with the announcement of a simultaneous 20-city citizen dialogue on ways to fix long term fiscal challenges. The goal is to create “a shared sense of urgency,” noted Walker.

Maybe you’ll be one of the lucky ones selected to participate in one of these town meetings on June 26th (the Saturday before the 4th of July weekend!).  And in the meanwhile, the Deficit Commission plans monthly meetings through the end of the year.

But will it work?

The Congress has passed and the President has signed the new health care reform legislation.  But, will it work?

This is the question that The Brookings Institution’s R. Kent Weaver raises in a new Issue Brief:  “But Will It Work?: Implementation Analysis to Improve Government Performance.”  According to Weaver, even though many implementation problems occur repeatedly across programs and can be predicted in advance, legislators often pay little attention to them when programs are being enacted or overhauled.    Weaver’s solution is to have the Government Accountability Office (GAO) perform implementation analysis for major legislative proposals in Congress, much like the Congressional Budget Office does with budget scoring.

Weaver’s Issues in Governance Studies Issue Brief outlines major elements of  Implementation Analysis and argues that it could lead to major improvements in policy performance.   He identifies a number of problems that are likely to be highlighted by Implementation Analysis:

–  Interpretation  (i.e., leaving legislation open to later interpretation)

–  Organizational mission issues (potential conflicts between established organizational missions and new tasks)

–  Organizational and coordination issues (where cooperation of several organizations will be needed)

–  Resource and organizational capacity constraints (a realistic assessment of financial, workforce and technology resources)

–  Time lines (underestimating organizational and resource challenges involved in policy change)

–  Political interference (mechanisms to insulate decisions from inappropriate interference)

–  Program operator issues (problematic  behavior of front-line workers)

–  Target compliance issues (the “targets” of government policies may fail to behave in ways that were anticipated)

Kent Weaver concludes his very thoughtful set of recommendations with sensible modesty, acknowledging that “Implementation Analysis is certainly no panacea to avoid government problems.”   He concludes, however, that “Implementation Analysis offers a potentially powerful new tool to ensure that governments make informed decisions and that government policies live up to their promise.”

Doing Big Things in Government

The release of a new book, “If We Can Put a Man on the Moon . . . ,” by Bill Eggers and John O’Leary, helped set the stage for the National Academy of Public Administration’s annual meeting that centered on management issues related to health care reform.

The authors examine big successes undertaken by the government – like the Manhattan Project, the Marshall Plan, the Berlin Airlift, and the moon landing – and draw some lessons about what each took to be successful.  They also contrasted these successes with failures such as Boston’s Big Dig, Iraqi reconstruction efforts, and Hurricane Katrina.

In surveys of senior career executives in the federal government, “60 percent said that government was less capable of executing large projects today than it was thirty years ago,” noted the authors.

The authors declare: “This book is about executing large, important, public initiatives. . . making sound policy choices is critical . . . however, brilliant policies poorly executed will likewise disappoint.” They then look at large government undertakings from a process perspective, identifying six key elements:

  • The undertaking must start with a good idea.
  • The idea must be given specifics, often in the form of legislation, that become an implementable design.
  • The design must win approval, as when a bill becomes law, signaling commitment.
  • There must be competent implementation.
  • The initiative must generate desired results.
  • Over time, the initiative must be subjected to reevaluation.

The authors take on each of these steps, describing potential pitfalls as well practical principles, tools, and techniques to be successful.  They provide entertaining, well-written stories of people and projects, from the efforts of Coast Guard Admiral Thad Allen in the wake of Katrina; to the implementation of the 2003 London traffic congestion charging program by Mayor Ken Livingstone; to the rolling blackouts in the California energy crisis of the late 1990s created by well-meaning but ill-designed state legislation, that led to the recall of Governor Gray Davis.

Their book contains insights and warnings helpful to the ongoing health care reform debate.  For example, they note that poor policy design “occurs because the work of drafting a bill that launches a major initiative isn’t generally treated like the design process it truly is.  Instead of a sound, executable design, the goal of the legislative process is often producing a bill that can pass . . . “  The authors continue, “Fully 45 percent of federal executives say that policy is rarely designed by those with relevant experience.  The dramatic disconnect between policy designers and policy implementers is perhaps the most broken part of the journey to success.” They recommend role playing and scenario planning efforts, like those used by military strategists and the private sector before it launches major initiatives.

They conclude with a warning:  “The tendency to see the enactment of legislation as an end unto itself, to claim credit for a great achievement upon the creation of a new law, is one of the most destructive tende3ncies in democratic governance.”

While Congress leads the legislative and policy design, the executive branch (and the Government Accountability Office) could proactively offer insights on the implementability of the pending legislation.  Eggers and O’Leary offer an ideal(istic) approach, recommending an objective “implementation feasibility assessment” to be done by an independent review board, much like the Congressional Budget Office offers its independent assessment of the cost of legislation.  However, that is not likely to happen any time soon!