If Successful, New Efficiency Efforts Would Be Steps in the Right Direction

Blog Post
Monday, June 14, 2010

If the Obama administration follows through on its newly announced effort to identify and weed out unproductive federal programs, it could build public confidence and support for more sweeping fiscal reforms in the future.

The White House has asked federal agencies to submit lists of the programs that are “least critical” to their missions.  These programs should total at least 5 percent of  each agency’s budget, according to a memo issued by Rahm Emanuel, the President’s chief of staff, and Peter Orszag, the White House budget director.

It would be easy to dismiss the administration’s announcement of this effort as simply a public relations exercise.  But two points are worth noting:

  • Administration officials say they are considering not just paring back many programs but eliminating them entirely. This would be consistent with the concerns they have expressed in the past over redundant programs. If one program will do the job, we don’t need two – or two dozen.
  • The President wants Congress to pass legislation that would create a reasonable incentive for top officials in federal agencies to seek the elimination of some of their own programs. The agencies would be able to use half of the money saved for their programs with higher priorities.

In an ideal world, such incentives would not be necessary to encourage agency officials to help identify problematic programs. But the “spend it or lose it” attitude is widespread in government, as it is in the private sector. The administration’s plan at least attempts to deal with this problem.

The memo from  Emanuel and Orszag makes the case for greater efficiency in forceful terms:

“We face extraordinary challenges -- jump-starting our economy, rebuilding our infrastructure, transforming our energy supply, educating our children, safeguarding our men and women in uniform, and achieving diplomatic and military success overseas. At the same time, our nation’s finances are on an unsustainable course...

The bottom line is that we do not have the luxury of simply spending more; we must continually review all spending to make certain every dollar addresses a clear need or problem...‘’

Orszag said that the Office of Management and Budget would not necessarily try to eliminate all of the programs that agencies list. But the lists will be used in putting together the President’s budget for the coming fiscal year. This approach makes more sense than across-the-board cuts that would hit good programs as well as ineffective ones.

This is one of several recent attempts by the administration to respond to rising public concern about high deficits. Others include ordering federal agencies last week to find $3 billion over the next year by consolidating facilities, selling assets and reducing energy use.

Even if these newly announced efficiency efforts succeed, the savings would amount to only a fraction of the money the government will need to address the massive deficits projected for the next decade and beyond. But the efforts that have been announced would at least be moving in the right direction. That’s why the administration needs to follow through on them as well as prepare for the heavier lifting to come.