Monday, June 9, 2008


The Senate once again proved how much it is out of touch with reality.

On June 8 it finally voted to privatize its restaurants. Senate food operations have been losing money since the 1970s. More importantly, the restaurants have been costing American taxpayers up to $2 million a year to cover these losses. Senate staffers have also been “voting with their feet” by patronizing the House’s better run, and higher quality, private restaurants for years.

The House of Representatives privatized its restaurants in 1993. Privatization turned their operating losses into a profit center. During my tenure as the Chief Administrative Officer of the House, I met with my colleagues in the Senate and with Republican Senate leaders. I repeatedly asked them why they weren’t privatizing their restaurants. Their excuses were that “the situation wasn’t that bad”, “we can fix the problem internally”, or “we can’t get enough votes for privatization” (even in the Republican-dominated Senate!).

Thirteen years later, and after an additional $18+ million in taxpayer subsidies, the Senate finally did the right thing. It took Senator Dianne Feinstein displaying dogged persistence and some unprecedented intestinal fortitude to force this reality check through the Senate. A die-hard group of Senators opposed restaurant privatization to the bitter end. They explained that they opposed privatization efforts elsewhere in the federal government and did not want to look like hypocrites. This raises an intriguing question – why would anyone want to preserve obviously inefficient operations anywhere in government?

The bias for symbolic, dogma-based, decisions over management-based decisions has driven up the cost of government for generations. This does a disservice to taxpayers who pay the bills and all those who are the beneficiaries of government services.

Over the years I have conducted cost reviews of government programs. Universally, I have found at least 36 percent of government operating overhead to be avoidable waste. This is amongst programs that are considered “well-run”. As a staffer conducting Congressional oversight, and later as a government executive, I have uncovered federal programs that do not generate any tangible value at all! In other cases, I have found programs that provide some marginal benefits, but at ludicrously wasteful levels of inefficiency.

Overall, American taxpayers obtain an average of 26 cents of value for every dollar spent by their government. So, out of a $4 trillion federal budget, we are obtaining slightly over a trillion dollars in actual value with the other $3+ trillion ripe for cost-reduction. And we still have politicians and pundits asserting that they don’t know where and what to cut!

No comments: