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.


Open Gov Plans Released, And . . .

. . . Both the White House and the Open Government advocacy groups plan to assess them.   No good deed goes unnoticed!

The White House says it will evaluate them by May 1st (this implies that OMB posted the agency plans before it reviewed them – this is a huge change!).  The Open Government advocacy groups are inviting others to volunteer to help assess agencies’ plans, based on a set of criteria they’ve developed.  This is somewhat reminiscent of the scoring of agency Annual Performance Reports under the Government Performance and Results Act by the Mercatus Center, but in this case, it’s more open!

Yesterday, White House staffer Beth Noveck, who has been shepparding the Open Government initiative, wrote a blog entry summarizing some of the highlights she’s read so far.  Her summary is worth reading.  For example, the list of “flagship initiatives” is exciting.  HUD is developing a predictive tool to determine where homelessness may increase, in an effort to forestall it.  And the Department of Health and Human Services is developing a dashboard to allow users to track and graphic Medicare spending on different key services, by large hospitals.

I’ve largely missed much of this hoopla because I’ve been attending conferences on the West Coast.  But the topic  of Open Government is on the front burner, even there!

Yesterday, I participated in a panel sponsored by the American Bar Association in San Francisco.  I summarized what’s been going on in Washington regarding the Open Government efforts, but I learned a lot from what’s going on in the field.

Another Potential Assessment Framework.  I was particularly enlightened by a description of how to think about citizen involvement at different stages in the “life cycle” of a policy issue.  Prof. Lisa Bingham, from Indiana University, offered a scholarly model that might serve as a useful assessment tool for agency Open Government Plans, as well as legislative reforms in the future.

Prof. Bingham looked at citizen involvement as described in administrative law and rules and outlined a three-part framework:

Source: Lisa B. Bingham, "Collaborative Governance: Emerging Practices and the Incomplete Legal Framework for Citizen and Stakeholder Voice," Missouri Journal of Dispute Resolution, Vol. 2009, No. 2


Upstream Involvement.  Here, citizens can be engaged in the development of a policy through dialogue and deliberation.  This would include both the legislative and the quasi-legislative elements of policymaking.  Examples include the use of tools such as Deliberative Polling, Citizen Assemblies, and Study Circles.  The objective is to gain informed citizen input before a proposal is completely formed.

Midstream Involvement.  This is the stage where a policy is being implemented. This would include tools such as negotiated rulemaking, participatory budgeting, and watershed networks.  The objective at this stage is to involve citizens in helping define and prioritize how a policy should be implemented.  An example in the recently-passed health care bill is citizen involvement in developing a national strategy for health care quality.

Downstream Involvement. This is the stage where policies are being enforced through judicial or quasi-judicial means.  The tools would include alternative dispute resolution, mediation, and facilitation.  The objective is to avoid the “win-lose” scenarios that would be imposed through agency adjudication or court action.

Prof. Bingham is concerned that the existing federal legal framework deals with these elements in a piecemeal fashion and encouraged consideration of a “Collaborative Governance Act” that would update laws, such as the 1947 Administrative Procedures Act, which did not foresee the existence of the internet and its impact on how government and citizens interact today.  OMB did offer some new, more liberal, interpretations of some of these statutes in memos released in recent days, but Prof. Bingham thinks that legislation may be needed to reach much further.

Open Gov Plans Countdown

Next week, agency Open Government Plans are due to the Office of Management and Budget.

OMB directed agencies back in December to submit plans by April 7th that reflect the input of both agency leaders and the general public.  The plans “should explain in detail” how agencies will improve transparency, promote opportunities for the public to participate “throughout the decision-making process,” and offer “changes to internal management and administrative policies to improve collaboration.”  Plans should describe the use of technology platforms, use of prizes and competitions, and offer “at least one specific, new transparency, participation, or collaboration initiative.”

A lot has been going on behind the scenes, both in government and in the non-profit world, to help create useful plans.

Internal Initiatives.  In addition to the guidance, OMB has created an Open Government “dashboard” to track agency progress and provide links directly to each agency’s Open Government webpages that detail what individual agencies are doing.  For example, the Department of Health and Human Services offers opportunities for the public to suggest ways it can be more open.

OMB is also sponsoring several cross-agency work groups.  One group focuses on improving data quality, as required in the OMB’s December 2009 directive.   The other working group serves as their agency’s representative on Open Government initiatives:  “this group will serve several critical functions.  These functions include (1) the development and sharing of best practices and innovative ideas to promote transparency, encourage participation, and foster collaboration and (2) coordinating efforts to implement existing mandates for Federal spending transparency.”

In addition, the General Services Administration provided an electronic dialogue tool to agencies so they could reach out to the public to get ideas for what they might include in their Open Government Plans.  About two dozen agencies participated in a five-week on-line dialogue, receiving about 2,200 ideas and 3,400 comments on these ideas.  The most popular idea was for NASA to hold a joint conference with other agencies on the use of space solar power.  Another popular idea was to support the use of electronic textbooks in schools. (I’m not sure what either of these have to do with helping agencies develop their Open Gov plans, but that’s one of the beauties of asking for ideas!).

Interestingly, agencies are moving forward with their engagement efforts – even absent a plan!  And these efforts embrace the range of innovative to traditional.

For example, the US Agency for International Development (USAID) teamed with State and other agencies to engage in an international dialogue on how the US government might better define its foreign aid efforts.  That effort engaged more than 10,000 people in 155 countries.  Over a 72 hour period, there were more than 15,000 visits and 9,000 postings.  Topics included “empowering women and girls” (the most popular) as well as “how to inspire a new generation.”

While USAID’s “GlobalPulse 2010” effort seemed to be a cutting edge approach to engaging the public, the Office of Management and Budget seems to be avoiding any Open Gov technology in a high visibility effort it has underway to engage interested parties around a proposed policy letter to define what is “Inherently Governmental.”  This draft policy has great potential to affect both private and public sector employees but OMB’s Office of Federal Procurement Policy (OFPP)  has chosen to use the traditional 30-day comment period, posted in the Federal Register.  Its nod to technology is to allow emailed comments that will then be posted on a website (good luck reading them; the link doesn’t work):

“OFPP invites interested parties from both the public and private sectors to
provide comments to be considered in the formulation of the final policy letter.
Interested parties should submit comments in writing to the address below
on or before June 1, 2010.

ADDRESSES: Comments may be submitted by any of the following methods:
     Facsimile: 202-395-5105.
     Mail: Office of Federal Procurement Policy, ATTN: Mathew
Blum, New Executive Office Building, Room 9013, 724 17th Street, NW.,
Washington, DC 20503.
    Instructions: Please submit comments only and cite ``Proposed OFPP
Policy Letter'' in all correspondence. All comments received will be
posted, without change, to,
without redaction, so commenters should not include information
that they do not wish to be posted.”

It will certainly be interesting to see how Open Gov technologies are applied to the implementation of health care reform!

External Initiatives.  Advocates for Open Government seem to want to find ways to help the government increase its ability to engage the public.  After the OMB directive, a series of “help” sites emerged.  Some are wikis that allow agencies to post best practices.  Others provide in-person workshop opportunities to share ideas.  Here are some I’m aware of:


Open Gov Directions:


USNow (actually a British effort):

So let’s see what the countdown to the OMB deadline brings!

The OMB Prize Memo

OMB deputy director for management ,Jeff Zients, released a 12-page memo, “Guidance on the Use of Challenges and Prizes to Promote Open Government.”

Jason Miller, of Federal News Radio, reports that this memo expands on a commitment made in President Obama’s FY 2011 budget and extends the pilots of the OMB SAVE award competition and several other pilots conducted by agencies last year.  It is now a federal policy to use challenges and prizes as a way of spurring innovation.

Agencies will need to designate someone to run the prize and challenge initiatives for their agencies, and there will be a cross-agency “community of practice” of agency staff to support, design, and manage prizes.

The Administration says it will make available a web-based platform for prizes and challenges by mid-July for agencies’ use.  The memo notes: “. . .a prize should not be an end in itself, but one means within a broader strategy for spurring change.”  It offers six examples of potential prizes.

The memo also identifies some potential legal authorities under which agencies create prizes, in addition to the potential use of existing grants and cooperative agreements.  The memo also says that “An agency without explicit prize authority . . . “ may be able to do so under the “’necessary expense’ doctrine” but that they should consult first with their agency counsel!

This won’t be easy, though.   It goes on to discuss the importance of Federal Advisory Committee Act compliance and ethical issues, and cautions against the federal endorsement of products or services, violating intellectual property rights, complying with the Paperwork Reduction Act, the Privacy Act, etc.

So, in the end, “If you have any questions regarding this memorandum, please direct them to!  Or check with your friendly agency general counsel!

Topic 1: Performance Improvement and Analysis

Since the enactment of the Government Performance and Results Act in 1993, all agencies now have strategic plans and performance measures supported by an infrastructure of staff and processes build to collect and deliver performance data.  The Obama Administration took office promising to appoint a “chief performance officer” to improve performance.

Progress to Date. President Obama appointed Jeffrey Zients to the role of deputy director for management at the Office of Management and Budget (OMB) and as his chief performance officer.  Budget guidance, OMB memoranda to the heads of agencies, personnel appointments, and public statements thus far indicate that the Obama administration has set a strategy for performance improvement that focuses upon three key elements: leadership in improving performance; setting  priorities among goals, and demonstrated use of performance data.

Key Challenges to Improving Performance. Six sets of challenges face the Obama administration’s promise of performance improvements:

  • Sustaining performance leadership committed to driving performance improvement.
  • Mitigating the downsides of focusing on a limited set of high-priority performance goals.
  • Forging cross-agency collaboration and coordination on cross-cutting policy issues.
  • Integrating performance data into agency budget submissions
  • Ensuring coordination within OMB between its different components
  • Effectively engaging Congress in the design and use of a federal performance framework.

Research Questions Based on Forum Discussions. Following are highlights of some of the research questions developed:

  • What can federal agency managers learn from the “performance-stat” movement in cities and states that can be applied at the federal level?
  • What are the success factors in implementing a performance management system?
  • What factors shape the use of performance information?
  • How will the introduction of high-priority goals engage federal agency leaders in the use of performance information?
  • How should government leaders set priority goals, demonstrate progress, and explain performance trends?
  • How best should public managers engage the public, the legislature, and outside experts to develop performance processes that improve results?

(Note:  the background discussion paper for this topic was prepared by Kathryn Newcomer, George Washington University)

Using Performance Measures

The federal government’s chief performance officer, Jeff Zients, declared at a recent Senate hearing: “The test of a performance management system is whether it is used.”  He thought federal agencies were failing the test.

So what should agencies do?  Well, last week, the Association of Government Accountants (AGA) released a research report last week that offers practical and concrete advice based on a recent study,“State and Local Governments’ Use of Performance Measures to Improve Service Delivery.”  According to AGA’s Hal Steinberg who led this effort, “This project was intended to determine how performance measures are used by governments to improve service delivery and also to describe their efforts in such a way that other governments can adopt similar practices.”

The study identified the key elements of performance management that contributed to service improvements.  It validated these elements via a series of case studies of four local governments (Baltimore, MD; Fishers, IN; New York City, NY; Westminster, CO) and Washington state government, as well as a broader survey of 175 other localities.

Key Findings.  Not surprisingly, the study concluded “. . . success appears to depend on the commitment and involvement of a chief executive who sees the process as a tool for improved performance, and not just a compliance activity.”

Other key success factors included:

  • the use of consistent measures from period to period to sustain attention on the measures, at the same time recognizing that measures can and should be modified when necessary to reflect changing requirements or expectations of stakeholders
  • regular and frequent analysis of the performance results data in comparison to prior periods, targets or benchmarks.
  • regular reviews of the analysis and results by the chief executive and/or his designee with the responsible agency heads, and
  • agreements with the agency heads on steps to be taken when the data reveal the need and opportunities for improvement.

Essential Elements. The research identified via the case studies several essential elements that must be present in a governmental system before it is likely to use performance measures to improve service delivery.   These were validated via the broader survey:

  • chief executive commitment and involvement in the overall process
  • relevant measures of at least outputs and eventually outcomes
  • periodic review and revision of the performance measures
  • frequent, regular collection of performance data
  • comparison of performance data to prior periods
  • regular review and analysis of performance results to ascertain the reasons for less-than-desirable performance and identify the opportunities for improvement
  • chief executive and other senior management participation in the reviews
  • agreement between chief executive and department managers on improvement plans
  • follow up on progress (or lack thereof) of improvement plans

Supporting Elements. In addition to the essential elements, the study also identifies several elements that survey respondents thought were important practices:

  • explicit targets for the performance measures
  • frequent comparisons of performance data to targets
  • comparison of performance data to the corresponding data from similar jurisdictions
  • intragovernmental comparisons (in states and larger jurisdictions)
  • support staff involvement in the reviews of performance results
  • budget reviews and deliberations considering the performance targets and results
  • budget resources allocated to programs rather than solely to object classes
  • programs for obtaining and considering constituents’ views
  • some process for assuring the data’s reliability
  • regular external dissemination of performance results

AGA concludes:  “This report demonstrates that the use of performance measures has already been adopted by many governments. It also provides guidance with which other governments can start to follow suit. The most significant missing piece is the desire and discipline to start and maintain the process-and that is ultimately up to each government body.”

Cutting Contractors

 OMB released a report today, “Acquisition and Contracting Improvement Plans and Pilots:  Saving Money and Improving Government,” which follows up on its July 2009 directive that agencies trim 7 percent – about $40 billion — from their contracting budgets over the next two years by improving their buying processes.

OMB says that agencies have undertaken several steps to achieve $19 billion in savings for the first year:

  • The 24 largest agencies, covering 98 percent of contract spending – have submitted plans with specific actions they will take to cut contracting costs and improve efficiencies.
  • Agencies have identified initiatives to save 10 percent of money spent through new high-risk contracts (noncompetitive, cost-reimbursement, or time-and-materials/labor-hour contracts).
  • Agencies have identified at least one pilot initiative where over-reliance on contractors may affect performance and then reassess the workforce mix.

OMB also reports that the Chief Acquisition Officers Council is “identifying new strategic-sourcing approaches, and how to structure contracts so as to provide better value for a lower price for commonly acquired goods and services.”

In a related story, the Washington Post’s Ed O’Keefe reports OMB deputy director Jeff Zients said “The government is the world’s largest total buyer of goods, but has permitted agencies to act as separate customers for too long, contributing, in part, to wasteful spending” and that OMB will increase most agencies’ acquisition workforces by about 5 percent in the coming fiscal year.

OMB offered several examples of how agencies are trimming their contracting costs:

  • Homeland Security standardized department-wide its desktop operating systems, e-mail, and office automation.  These standardized requirements allowed the Chief Information Officer to award a single contract, resulting in expected savings of $87.5 million over the next six years.
  • Energy’s National Nuclear Security Administration (NNSA) launched a contracting tool that puts a service need up for bid “like e-Bay” that serves as a reverse auction where bidders offer their lowest price.  NNSA is seeing an average cost savings of 18 percent so far.
  • IRS switched from cost-reimbursement to a firm-fixed-price contract vehicle for processing support services, saving $6 million over the old approach.
  • Labor is investigating the potential benefit of in-sourcing a subset of contracted workers who currently process foreign labor certifications to see if this allows increased efficiency.

OMB says it will launch an on-line dashboard in spring 2010 to “allow the public to track whether agencies are progressing in their efforts. . . . Where progress is insufficient, OMB will work with agencies to develop aggressive steps to meet their targets.”

The Washington Post article also noted: “One item missing from the report is eagerly anticipated guidance on the definition of “inherently governmental functions,” a critical term in the contracting community that would clarify the tasks and services contractors should no longer conduct. Obama asked OMB to provide guidance on the matter in March. The agency promised to deliver an answer by year’s end, but officials said they need a few more weeks.”