Your new chief executive



• Fewer middle managers in Washington.

• The end, perhaps, of several unpopular pay-for-performance programs.

• Dramatic cuts in contract spending.

• White House “SWAT teams” — overseen by a chief performance officer — that will sweep into agencies to check whether program managers are meeting tough performance goals.

Perhaps one thing that won’t change in the Obama administration is a strong focus on making sure programs perform as intended — continuing a core focus of the Bush administration.

Obama has pledged to reform the Program Assessment and Rating Tool (PART), which was one of the Office of Management and Budget’s biggest initiatives under the Bush administration. Under the PART program, OMB officials review each major program to see if it is correctly managed and showing results. OMB considers those reviews when fashioning each year’s budget. Obama has pledged to make the process more transparent, and to involve Congress in crafting program assessments.

The president-elect proposes to expand PART to focus on cross-cutting programs. Many of the urgent issues that will confront his administration — financial regulation, food safety, public health and veterans care — involve programs at multiple agencies.

“Obama will also ensure that programs are not only measured in isolation, but are assessed in the context of other programs that are serving the same population or meeting the same goals,” the Obama team wrote in a memo.

A chief performance officer would work with agency heads and a special “SWAT team” at the Office of Management and Budget to implement recommendations from the new PART.
Experts say some changes are welcome — but too many could be self-defeating.

“We’re not fans of PART in its current form, but federal employees are burned out,” said Adam Hughes, fiscal policy director at OMB Watch, a nonprofit watchdog. The constant change “turns performance management into a compliance exercise that’s not relevant to employees.”

Clay Johnson, OMB deputy director for management, led the Bush administration’s push for better performance management. And he thinks the Obama administration will continue that focus.

“He’ll focus on those things because they’re basic to the health of any organization,” Johnson said. “We have increased the focus on desired outcomes and I’m confident [Obama] will want to take this focus to a new level, and focus on additional opportunities of note.”

Johnson expects the president’s management agenda will also continue. The PMA assesses agencies on their performance in key areas, like human capital and financial management. Johnson said programs like PMA and PART offer opportunities for improving the government without huge new spending.

“We can spend a lot more attention and time and mental energies on what we get for our money than we do presently,” Johnson said. “Very little attention is paid to what we get for what we spend. … What we get for the money needs to be [an] even greater [priority] than it is now in the executive branch and the legislative branch.”
Obama’s management plan also cites what he calls the “bloated bureaucracy.” It calls for fewer middle managers in Washington, and more workers in fields offices around the country. The campaign wouldn’t offer specifics on how many employees might be relocated, or which agencies might be affected.

At the Democratic National Convention in August, Obama pledged to go through the federal budget line by line, eliminating programs that no longer work. He repeated the promise dozens of times on the campaign trail.

But experts remain skeptical that a thorough budget review will produce real savings. Much of the federal budget is consumed by entitlement programs and interest on the national debt. And cutting discretionary spending is a political challenge, said John Kamensky, a senior fellow at the IBM Center for the Business of Government.

“It’s been done before, and the things that are identified are usually politically impossible to do,” Kamensky said. “Political concerns take lots of things off the table.”

Kamensky pointed to the National Performance Review launched by the Clinton administration. It identified opportunities to cut discretionary spending without negatively affecting government operations — like eliminating the Selective Service program and closing down the National Guard.

Experts are also divided on what an Obama presidency will mean for the size of the federal budget. Obama has proposed some huge spending initiatives: His health care plan would cost between $50 billion and $65 billion over the next five years; his energy plan, $150 billion over 10 years; his infrastructure plans, $60 billion over 10 years.

But the ballooning deficit and the $1 trillion financial bailout will constrain his policies ambitions.

And Obama will face conflicting pressures from Congress, as Democrats encourage spending to bolster the economy and Republicans push for a return to fiscal sanity after the excesses of the Bush administration.

“There will be lots of pressure to cut back,” Kamensky said, “and lots of pressure to spend. It’s very problematic.”

Closing the revolving door

One of Obama’s biggest pushes is to clamp down on ethics rules.

He proposes to prohibit executive branch employees from accepting gifts from registered lobbyists. He also plans to tighten “revolving door” restrictions on incoming political appointees; they would be barred from working on contracts or regulations related to their previous employer for two years.

He has also proposed to strengthen the Office of Government Ethics. OGE is currently an advisory agency; it offers guidance to the thousands of ethics officers at federal agencies, but cannot create regulations. Obama wants to change that.

“An Obama administration will give OGE strong enforcement authority with the ability to make binding regulations,” the Obama team wrote in a memo.

OGE’s director, Ric Cusick, is skeptical of the plan, which he said will require a major increase to the agency’s budget and staffing levels. He’s also not in favor of Obama’s plan to record all contacts between lobbyists and executive branch officials; OGE would be responsible for creating and maintaining that database.
“I think the existing legislation on lobbying has been intended to solve some of that problem,” Cusick said. “Whether we could achieve a greater good by keeping track of all such contacts is a problematic thing.”
The president-elect also intends to change the nature of the workplace and work schedule for federal employees.
He’s proposing paid family leave — although offering no details yet — expanded use of flexible work schedules and teleworking.

“It’s time we stopped talking about family values and started pursuing policies that truly value families ... with the federal government leading by example,” Obama said.

An end to pay-for-performance?

He’s said he may roll back controversial pay-for-performance systems; review outsourcing policies; and give collective-bargaining rights to Transportation Security Administration employees.

“While I strongly believe that workers can and should be rewarded for high quality work, the administration’s failure to fund the [pay-for-performance] initiative guaranteed that rewarding one employee would be at the expense of another,” Obama said in one of a series of late-October letters to John Gage, the national president of the American Federation of Government Employees. “This is unfair and serves to reduce morale, rather than improve it.”

Obama also has told union leaders he may dismantle pay-for-performance systems at TSA and the Defense Department if he finds them to be unfair and not transparent.

Though Obama is skeptical of the Bush administration’s pay systems, he has backed merit pay for teachers. John Palguta, vice president of policy at the Partnership for Public Service, said that shows Obama doesn’t oppose the concept of pay-for-performance and could decide to tweak it to be more palatable. And Obama could have greater success than President Bush, Palguta said.

“He’s demonstrated an openness to other points of view,” Palguta said. “He’ll also gather input from a variety of sources, like employee unions, who weren’t involved in developing NSPS and other [Bush] proposals. That will increase the odds of coming up with something that’s workable.”

In a conference call with reporters Nov. 5, Gage said he would work with Obama on his proposals, but that “I don’t think pay-for-performance is or should be high up on the agenda of the administration.”

“We understand he won’t be in lockstep with our positions, but we believe he’ll give us a fair hearing,” Gage said.
In another letter, Obama said getting TSA screeners collective-bargaining rights will be a priority of his, saying that doing so will reduce the agency’s high attrition. “It is unacceptable for [transportation security officers] to work under unfair rules and without workplace protections,” he wrote.

Skeptical of outsourcing

In his letters, Obama also expressed doubts that the Bush administration’s outsourcing efforts are saving the government money, and said his administration will review work that is contracted out.

In a letter addressing Housing and Urban Development Department issues, Obama wrote that “it is dishonest to claim real savings by reducing the number of HUD employees overseeing a program but increase the real cost of the program by transferring oversight to contractors. I pledge to reverse this poor practice.”

He said he would favor hiring more staff at the Social Security Administration to help it confront a large backlog of disability claims.

And in a letter to the National Treasury Employees Union, Obama said he wants to bring down health care premium costs for federal employees. Obama in 2006 introduced S 2247, the Federal Employees Health Benefits Program Efficiency Act, which would require participating health plans to develop systems for hospitals and doctors to submit bills electronically within four years, which he said would cut premiums by 2 percent.

Obama also pledged to order the Office of Personnel Management to implement tougher quality and efficiency standards for participating health plans, which he said would further drive down employees’ costs.


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