TRILLIONS HIIDING IN PLAIN SIGHT

Originally published on Newsmax: http://www.newsmax.com/ScotFaulkner/democrats-dollars-zika/2016/06/20/id/734683/

Congressional Republicans and Democrats are lying to Americans.

Congress is barely halfway through approving the 2017 Appropriations.  It has only thirty legislative days before the start of the next fiscal year.  This all but guarantees a battle over a continuing resolution or omnibus spending bill.

Recently, a Republican Congressman let slip that there are billions in “unobligated balances” that could be reallocated for fighting the Zika Virus.  It was a lightning bolt of real information that everyone ignored. This was an unintended glimpse at one of the biggest lies in Washington, DC.

Members from both parties appear on cable news hand wringing about how it is impossible to stop federal spending from devouring the country.  Liberals and Democrats assert the government is underfunded and understaffed for meeting pressing needs.  Raising taxes and expanding hiring are their only solutions.  What now passes for conservatives and Republicans express helplessness because of Obama’s veto pen and their concern that any confrontation may lead to another government shutdown.

Republicans and Democrats wail over no funds to combat the Zika Virus, terrorism, and other possible crises.  Their machinery for endlessly taxing, spending, and borrowing incessantly rolls on.

The result of this united capitulation is the perpetual growth in government spending and borrowing.  Federal spending has risen from $3.517 trillion in 2009 to $4.147 trillion for 2017.  During this same period, government debt has soared from $11.875 trillion to over $20.149 trillion, with annual increases of nearly a trillion in borrowing projected every year thereafter.

Every year funds are allocated for federal projects and programs based on estimates.  Congress adds money when those estimates fall short, even if caused by waste and fraud.  Funds sit idle when spending is less than expected.

Since President Obama took office, $914.8 billion in unexpended, unobligated, funds have piled up across the federal government.  It is dutifully reported under “Assets and Balance Sheets” on page ten of the budget released each year by the Office of Management and Budget (OMB). 

You read that correctly, nearly a trillion of your tax dollars is sitting unused in plain sight. 

Another $1.028 trillion remains unexpended among general accounts and $461 billion remains unspent in trust funds.  While these funds are technically obligated, the fact that they languish raises questions about their use and their management.

That is over $2.405 trillion sitting doing nothing.  It is available right now.  It only takes the push of a button to instantly shift these funds to fighting Zika, bolstering our military and homeland security, repairing our infrastructure, debt payments, or tax relief. 

This is how the Establishment from both parties plays Americans for fools.  The funds are hiding in plain sight.  No one talks about it, because it would reveal the lie behind the Washington elites claiming helplessness.  On rare instances, someone lets slip their knowledge of this money.  In June 2012, to his eternal credit, Senator Tom Coburn issued a blistering report, “Money for Nothing” that exposed these funds in detail.  Not even conservative media covered it.

The budget debate would be very different if Americans called out Washington politicians on their dirty little secret.

Why Not Crowd Source Federal Budget Policy?

Published in The Washington Examiner

http://washingtonexaminer.com/op-ed-why-not-crowd-source-federal-budget-policy/article/2526579

European and American politicians are in a quandary -- how can they cut spending while avoiding public outrage?

Austerity riots and strikes have become commonplace throughout Europe. In America, the arbitrarily heavy-handed spending cuts, known as the sequester, have reduced voter support for Congress to record lows.

Maybe it is time for governments to copy the private sector. For years, corporations have asked their customers what they want. Business websites and social media are filled with requests for customers to develop new flavors, new products and their own ads.

This digital customer empowerment is called "crowd-sourcing." Imagine if governments asked their voters what programs to cut and by how much?

Direct voter input into spending has existed since the voluntary check-off for funding America's presidential elections was added to income tax returns in the 1970s. What if this check-off procedure expanded into all discretionary spending?

In America, April 15 is Tax Day. Imagine if Tax Day also became Budget Day? The Internal Revenue Service would provide everyone with a budget form that listed all discretionary federal programs.

Each taxpayer would be given a hypothetical $100,000 to allocate for these programs. A pro-forma budget showing how the $100,000 was allocated for the prior fiscal year would provide both a template for taxpayer input and a major learning experience. Imagine if every taxpayer saw how the federal government really spent their money?

The budget forms would be submitted with their tax returns. In essence, there would be a nationwide vote on spending every April 15. Every taxpayer's choices would be totaled, and the percentages of the choices for each program would be applied to the actual federal budget moving through the Congress.

These spending priorities could be immediately binding or be advisory for the first few years. Either way, the Budget Day results would be a major news event. Even advisory choices would be revolutionary if the people's "crowd-sourced" decisions contradict the allocations proposed by Washington's power elite.

As the kinks are worked out, and people became savvier about how to allocate their $100,000, even the advisory referendum could evolve into mandating the spending priorities.

For example, require a two-thirds vote of both Houses of Congress to provide more or less funds than were allocated by the Budget Day results. National disaster assistance and declared wars could be exempted.

The April 15 Budget Day spending vote would become as important as Election Day. Tax preparation companies would develop "neutral" forms for people wanting to keep the same mix of spending each year.

Liberal and conservative interest groups would develop their own budgets for people to use. These would have the same impact as sample ballots. Taxpayers would be free to use them or do their own versions.

A similar process could be launched in European countries. A "budget day" would be created, and voter check-offs would be submitted.

Taxpayer budget choices will have immediate and fundamental impacts. In America, instead of spending their time swaying politicians, the special interests and federal agencies would have to persuade the 132 million people who file tax returns. Similar ripple effects would be felt in Europe as each nation implemented its own "crowd-sourced" budget processes.

Budget Day would open the door to building budgets that have widespread support -- because they would be democratically created. This process would also educate the electorate on the kinds of trade-offs and limitations being faced by politicians, opening eyes and minds to a common understanding and commitment to fiscal sanity.

Scot Faulkner is a former chief administrative officer for the U.S. House of Representatives. His blog is citizenoversight.blogspot.com.

9,528 Opportunities Ignored

America should be having a serious discussion on the size and cost of our Federal Government, and what to do about a debt burden that has already sailed our nation off the fiscal cliff. Instead, disinformation has buried what little integrity is left among the participants.

Senator Mary Landrieu (D-LA) recently spoke on the Senate floor: "I am not going to keep cutting the discretionary budget, which by the way is not out of control, despite what you hear on Fox News."

There are many reasons why Senator Landrieu is wrong. In fact, there are 9,528 reasons. That is the approximate number of audits and investigations conducted by career employees during 2012 on federal programs, projects, agencies, and contracts. The General Accountability Office (GAO) issued 768 reports, which contained 1,807 recommendations for operational improvement. One can also glean from public documents approximately 8,760 audits and investigations conducted by the 73 Inspector General Offices among the cabinet departments and independent agencies of the Executive Branch.

Every one of these 9,528 efforts found waste, fraud, and abuse. Every one of these reports identified opportunities for improving operations and made specific recommendations. The Department of Labor’s Inspector General’s Office conducted 66 audits that identified $2.4 billion in waste. The office also opened 585 investigative cases, obtaining 633 indictments and 433 convictions. They also recovered $398 million that had been criminally diverted. There is similar documentation of mismanagement, inefficiency, and ineffectiveness within every report issued by the GAO and the 73 Inspectors Generals. In 2012, these reports documented over $650 billion in waste. That translates into at least $6.5 trillion in possible spending cuts, over the next ten years, without harming one legitimate beneficiary of government services.

It is time for every politician and pundit to admit that there is definitely “room for improvement” in the way the federal government manages our tax dollars. Tragically for America, very few of these 9,528 reports receive any public airing in Congress. Liberals do not want to admit there is “room for improvement” because that will pull the rug out from under their argument for more taxes. Conservatives do not want to admit there is “room for improvement” because that will pull the rug out from under their argument for ideological cuts. Conservatives would also have to admit that there is more than $100 billion wasted annually in the Defense Department. This waste has nothing to do with keeping America safe, in fact, it degrades our safety.

Everyone should be upset that even one penny of tax dollars is misspent. That goes for whether you love a program/project or hate it. Unfortunately, no politician or pundit is willing to rise above their partisan mud-wrestling to think about our country. In rare situations the level of corruption and dysfunction created a bipartisan mandate for strategic change. This happened at the General Services Administration in the early 1980s when years of multi-million dollar criminal activity, and 48 convictions, allowed for a top to bottom rethinking of the agency. The result reduced staff by 20,000 and saved $3 billion. This also happened in the House of Representatives in the mid-1990s when high profile scandals, and the first change in party control in forty years, allowed for a fundamental reinventing of Congressional operations. The result cut support staff by 48%, established financial integrity, and saved $148 million.

Times have become too partisan to start with strategically rethinking Executive functions and management. It would be horrendous to wait for epic scandal or corruption to trigger another brief moment of bipartisan cooperation. What we are left with is cajoling everyone to admit there is “room for improvement”. Senators and Congressmen have 9,528 reports, generated by objective, nonpolitical, professionals to guide where and how to cut waste. Once the recommendations are implemented, and the management improvements are in place, they can debate whether to reallocate the savings. In the meantime, America’s debt bomb will be partially defused without harming programs, services, or recipients.

Can we all agree that this would be a great way for Congress to spend the next two years?

...Pants on Fire

Elvis and reality have left the building.

The hyper-partisan rants over the fiscal cliff were just the warm-up act for the triple play looming on the horizon. The triple issues of reining-in the debt limit, resolving the sequester, and extending the FY2013 Continuing Resolution seem to require triple the hyperbole.

Obama and Congressional Democrats are filling the air waves with victorious declarations about already reducing the federal deficit by $2.4 trillion. There are many creative tunes being played for this Conga Line.

The first is the timetable. Those who trumpet the $2.4 trillion only whisper “over the next ten years”. The trillion dollar number sounds large until you compare it to total federal spending of $44 trillion over the next ten years. That is a “whopping” 5.4% reduction in total spending. This assumes that the current decisions somehow bind four future Congresses and the next President.

Let’s look at the spending “cuts”. Obama and his supporters cite the Budget Control Act of 2010, which reinstates some of the spending targets from the 1985 Gramm-Rudman-Hollings Act. This is supposedly reducing various discretionary expenditures by $850 billion over the next ten years. Unfortunately, for the past 28 years, the spending targets of Gramm-Rudman-Hollings has been systematically ignored while the federal budget has tripled in size.

Obama supporters also assert that Congressional inaction and gridlock have resulted in Continuing Resolutions that leveled-off spending for a ten-year savings of $585 billion or $58.5 billion a year. This is creative bookkeeping at its best. Just one appropriation bill pushing for more than an inflationary increase in spending would erase these bogus budget savings.

Let’s take a moment to discuss inflation. Buried deep in the analytical tables of the Federal Budget is something called the “Current Services Analysis”. This is where zero-based budgets of the past went to die. “Current Services” is what budgeting should be, but never is. It is how much it would cost for the Federal Government to do exactly next year what it did the pervious year factoring in inflation escalators built into contracts and projects. This tracks to every person, project, program, office, vehicle, and building. The dirty little secret of Washington is that no one uses these numbers. The annual baseline offered by the Administration is well above “Current Services”. Both parties, while in the White House, play this game. Congress and interest groups then wail about budgets being cut when the Administration’s budget request is reduced even though these cuts never fully reduce the increase above “Current Services”. Thus spending ratchets higher no matter who is in charge.

This brings us to “Sequestration”. This $1.2 trillion over the next ten years poison pill of spending cuts was never designed to be real. Back in the summer of 2011, when raising the debt ceiling became a policy act instead of an administrative one, Congress and the Administration agreed to a “doomsday option” – the Sequester. The Sequester was designed to be so horrific that no one would ever want it to occur – thus forcing a real budget solution. Since everyone decided to avoid a real solution the Sequester looms large on the near horizon. Congress can always reverse itself and eliminate the Sequester with a “we were just kidding” floor vote. So trumpeting the Sequester as part of the $2.4 trillion over the next ten years reduction is also bending reality.

The other part of the victory dance is taking more money from Americans and giving it to the federal government. Believing that the federal government’s major problem is lack of our money is foundational to the Administration and Congressional Democrats. The recent tax increase generates $630 billion over the next ten years. In the past, any increase in federal receipts removed pressure to cut spending while increasing the urge to spend more.

The final assertion is that ripple effects of all these “savings” will reduce interest paid on the national debt $300 billion over the next ten years have as much to do with international money markets as they do on the total balance owed.

America braces for the next act in this most irresponsible fiscal fantasy.

Fiscal Flim Flam

The following appeared in the Washington Examiner

http://washingtonexaminer.com/congress-white-house-budget-trickery-now-backfiring/article/2514965

The only way the real fiscal cliff can be addressed is for everyone in Washington, D.C., to stop talking about the fake one. Here's the reality: The bomb is about to explode in the hands of its own maker. There is no disaster looming, only one created by the same Congress and the same president who are now voicing dire warnings about sequestration. The coming demise of federal programs is a manufactured problem, designed to meet the partisan needs of each side of the current debate.

Congress and the White House assert that $1.2 trillion must be cut from the federal budget over the next 10 years. This multiyear effort commences on Jan. 1, 2013, with $50 billion in cuts from the Defense Department and $70 billion from discretionary domestic programs. Everyone in Washington, D.C., including the pundits, has been creating increasingly apocalyptic visions of what will happen should these cuts occur.

It never had to be this way. There is currently $2 trillion in unexpended balances arrayed throughout the federal government for the current fiscal year. According to both the Office of Management and Budget and the Congressional Budget Office, $687 billion of these balances are completely unobligated.

Again, in 2012, the Government Accountability Office, or GAO, and the 73 department and agency inspector general offices identified more than $650 billion in annual, ongoing waste. The vast majority of these findings, and the actions recommended to address them, have never been acted upon by either the executive or legislative branches.

Finally, there's the federal government's legendary and perpetually unaddressed inefficiency. Large private corporations, like Walmart, have at most five layers of management between their front line service personnel and top executives. The federal government has upwards of 23 layers.

Given these three facts, why are our political leaders saying that federal spending cannot be cut, and that they must have more of our earnings and wealth to make ends meet?

The sequestration cuts are a bogeyman, specifically designed to inflict as much damage as possible on American citizens. For example, 53 percent of the sequestration cuts within the Department of Education are within the Elementary & Secondary Education Act programs -- funds sent to states to supplement the salaries and hiring of teachers. The sequestration cuts 60.9 percent of these funds. That is why so many politicians and pundits are predicting massive teacher layoffs. Meanwhile, the sequestration targets only 4 percent of the Department of Education's headquarters budget. The bureaucrats wouldn't be missed, but they are safe. The teachers will be missed, and they are ground zero for cuts.

What should have been a serious management exercise has become a race to see who can paint the worst scenario should budget talks fail. Democrats cite the collapse of social services and education, while Republicans predict massive layoffs of defense contractors and the hollowing out of our military. Both sides predict chaos in the economy leading to a second recession.

Democrats won the election, so they are now in the best position to use this crisis that both parties manufactured. They are setting off a stampede for more tax revenue that Congress will probably just spend away anyway. Had Republicans won, they would probably be calling for ideologically focused spending cuts (like public broadcasting) to prevent the ruin of the military.

Congress and the White House designed the sequestration to wreak destruction on government services and the economy as a way to create a false sense of urgency for a substantive budget solution. Their plan, if it was a plan, has backfired.

What were they thinking?

Elephants supposed to “never forget”, but do they ever learn? They didn’t learn much from being defeated in 2008 [see http://citizenoversight.blogspot.com/2008/11/perdition.html  ]


The 2012 elections provide a new cornucopia of lessons learned. Only time will tell if any of them sink in. Here are just a few of them…

Getting out the Vote
Project ORCA was a dismal failure. It was supposed to either supplement or supplant local Republican GOTV efforts. It did neither. Poorly trained and clueless ORCA workers siphoned resources away from real voter efforts. Worse – ORCA was an ill-conceived band-aid for the decades-long decline of Republican precinct capabilities.

Democrats figured out years ago that early voting would be a boon to their cause. Republican leaders hung onto getting out their vote on Election Day – ceding up to thirty days of voting opportunities to the Democrats. Worse – if Republican rhetoric is to be believed – that their supporters work for a living and are family focused – then why assume that these busy working people will either get up early to stand in long voter lines before going to work, or delay being with their families after work to stand in long voter lines? OCRA not only shrunk GOP voting efforts to one day – it shrunk it to the first and last hours of the voting day. No wonder 3 million less Republicans voted in 2012 than 2008.

Voter Fraud
There is always some voter fraud. This happens in the original voter registration or in counting the votes. Republicans chose to ignore these facts to focus on possible irregularities during actual voting. Countless days and weeks of activism, along with mountains of political capital, was spent on solving the one part of the process that worked. Imagine if all this Republican effort was spent on early voting. It also gave the Main Stream Media (MSM) an easy and ongoing target to pummel the GOP.

War on Women/Gays/Science/Privacy
No matter how much conservative talk radio and Fox News denies it, there are large swaths of Republican activists and elected officials, especially at the state level, who yearn for the 10th Century over the 21st. It is a fundamental contradiction to real conservatism and Republicanism to selectively promote unwarranted and aggressive government intervention into personal lives. You cannot assert there is either no or only a limited role for government in society and then create a huge “BUT” flashing in neon lights for imposing narrow theocratic-based dogma.

Originally, faith-based activists within the conservative and Republican movements stood for getting liberal dogma out of schools, homes, and churches. Sometime in the late 1980s things flipped around to replacing left-wing onerous government interventions with right wing ones. Outbursts by Republican Senate candidates were not isolated incidents. They were a mere sampling of a tragically obtuse thread of anti-intellectual totalitarianism that undermines both the movement and the party.

It is long overdue for Republican and conservative leaders to have their own “Sister Souljah” moment with fanatical theocrats. This moment is named for the pivotal Bill Clinton speech where he sealed-off racial hatred in rap music from mainstream public discourse. http://en.wikipedia.org/wiki/Sister_Souljah_moment

Bush Legacy
The Bush dynasty diverted the conservative movement and the Republican Party into an agnostic pandering abyss. [See my earlier post http://citizenoversight.blogspot.com/2012/06/wrong-track.html  ]

Bush 41 purged conservatives from the Executive branch, raised taxes, expanded government, bungled the end of the Cold War, bungled Iraq, and undermined everything Reagan stood for. Why revere him?

Bush 43 turned conservativism and Republicanism into micro-targeted pandering mush. He bungled Afghanistan, launched a totally unnecessary and dilatory war in Iraq, reduced America’s influence in the rest of the world to fixate on Iraq, undermined civil liberties, and expanded government. Why revere him?

Conservatives and Republicans can and should revere true the leaders of our movement as timeless role models – Presidents Lincoln, Teddy Roosevelt, Coolidge, Reagan; intellectual leaders Buckley, Goldwater, and countless other thinkers ranging back to the Enlightenment. None were perfect, and true independent thought requires critically assessing their legacies, but their writings, speeches, and actions will always remain the touch stones from which 21st Century conservatives and Republicans get their bearings.

A few words about Romney

Romney could have won. His flawed campaign was no where near the fool’s errand of McCain 2008. However, there were numerous opportunities lost and self-inflicted wounds that sank him.

No theme – the conventional wisdom was that 2012 had to be about Obama or Romney would lose. How many think 1980 was only about Carter? Americans in 2012 felt powerless. They were being harmed by an out of control economy. They feared a world spinning out of control. They no longer trusted an unaccountable government. Romney could have spoken to these issues, but didn’t.

Bain – What the federal government needs most are Bain-like teams tearing apart, rethinking, and restructuring every agency and program. Romney could have proudly asserted his value proposition of committing to this long overdue weeding of the federal garden. Instead, he ran from Bain and its positive impacts, ceding the field for his opponents to demonize his strongest credential. When pressed on cutting federal programs Romney opted for going after Big Bird instead of using the question to discuss $650 billion in annually documented waste and how his management background could do something real.

Rope a dope – Why did Romney allow Obama to carpet bomb him from April through August? This period of negative ads created a deficit that was almost insurmountable. Why didn’t Romney run ads about his saving the Olympic movement during the Olympics? Why did he make this historic accomplishment a pre-primetime throw-away at the National Convention? Why did it take a pre-convention Fox news interview at his home to finally show he was a normal human? It is sad that highly intelligent and successful Republican business people (Steve Forbes, Pete DuPont, and now Mitt Romney) cannot connect with the party of business. They should all go back and read about how successful utility tycoon Wendell Willkie became a folk hero during his presidential run in 1940.

Class warfare – Republicans chided Obama and the Democrats for fermenting class warfare. Why oh why then did Romney spew his own version of class warfare? “47%” was a gift that kept on giving to the MSM and the Democrats. First, who in their right mind today, thinks that in this world of smart phones anything they do or say outside of their own home will not be documented and shared if it is deemed stupid enough? The “47%” comment is the antithesis of the type of empowering and inclusive conservatism espoused by the late Rep. Jack Kemp. His world view was that everyone can and will become a conservative once they realize how the free market is in their best interest. This positive message has been drowned out by vapid negativity among the so-called conservative and Republican leaders.

2016 & Beyond
There remains a small hope that (1) Obama and the Democrats will overplay their hand, creating backlashes and opportunities, and (2) that the next generation of Republican leaders – Jindal, Christie, Martinez, Fallin, Haley, Rubio, and others at all levels of government, learn from the past while shaping the future.

Life after the Super Committee

My column regarding the Super Committee and what Congress can do now was published in the

New York Daily News on November 28, 2011.

http://www.nydailynews.com/opinion/fight-cut-debt-target-rampant-federal-waste-article-1.982076

The Congressional supercommittee’s failure to eliminate $1.2 trillion in federal debt has launched a new round of “blamestorming” as both Republicans and Democrats brace for the automatic cuts that are set to begin in 2013.

Some perspective and focus are desperately needed. For while indiscriminate cutting may be unwise, it is simply mythical to insist, as some do, that there isn’t room to massively reduce the size of government.

To the contrary, Washington’s fiscal garden is overgrown from decades of negligence. In recent decades political gamesmanship from across the political spectrum has led our federal government to decline into a weed-infested jungle. The way back to proper public horticulture is not new taxes, which would only fertilize the culture of waste and dysfunction. It is also not through heavy handed cuts, as a general herbicide would kill even the fruit bearing plants.

The first step is to identify the weeds. The Government Accountability Office and 73 inspector general offices are filled with investigators and accountants who identify waste, fraud and abuse. Their exhaustive reports track to specific programs, offices and contracts and treasury account numbers — and identify billions of dollars in cost-cutting opportunities.

Yet they are routinely ignored. As a result of this neglect, the amount of documented waste has remained at a consistent 20% of the federal appropriated budget since first complied by the Grace Commission in the 1980s.

President Obama’s proposed appropriated outlays for FY 2012 are $1.34 trillion. That means $268 billion a year is potential waste. Ten years of eradicating waste and sustaining cost avoidance would result in $2.68 trillion in savings, more than double the savings mandated in this summer’s debt deal.

Instead of partisan bickering, our elected officials should review these GAO/IG reports and listen to the staff who wrote them. They should conduct “sweat the details” management reviews. Waste is waste no matter which party’s flag flies over the executive branch.

Simultaneously, Congress should do something it has not done in years, whether under Republican or Democratic control: conduct aggressive oversight and link funding to functionality. Zero-based budgeting has existed since 1969. Sunset provisions have been built into legislation since the 1970s. The Government Performance and Results Act, which holds programs and agencies accountable for actually doing something of value, was enacted in 1993. Eliminating programs and offices based upon audit findings can happen if the will is there.

America’s overgrown fiscal garden is also filled with a bloated bureaucracy. Walmart, the world’s largest corporation, has just five layers of management between its checkout clerks and the CEO. There are 12 layers of managers between a park ranger and the Secretary of Interior. There are 21 layers of management between the person handling TRICARE medical benefits and the Secretary of Defense.

The entrenched interests of Washington, including turf-conscious Members of Congress, play a cynical game of eliminating frontline service personnel and services instead of wiping out the many layers of people whose sole purposes are attending useless meetings and writing unread reports.

The front line is where voters feel pain. When the cry goes up, federal officials say, “see — that is why we can’t touch this program.” It’s a fallacy.

During my time in Washington, we proved budget cutting is possible. At the General Services Administration, a reform team cross-walked Inspector General reports to dysfunctional programs and offices, applied private sector logic to eradicating management layers and linked attrition, retirements and a hiring freeze to reduce the GSA’s workforce from 34,000 to 20,000 in three years. This was a 41% reduction — yet system integrity, processing time, and operational efficiency skyrocketed.

As Chief Administrative Officer of the House of Representatives, we reduced 12 layers of managers down to two and reduced my operations staff by 47.5% in 15 months. Again, services improved along with efficiency.

In each case, real sustainable management reform required hard work, not just issuing news releases. Like a gardener who gets his or her hands dirty by handling individual plants and pulling weeds, legislative and executive branch officials need to do the mundane, but vital, tasks of actually understanding operations and management.
The reason they do not do this is that it is laborious, not glamorous. Our current political culture does not reward results. Maybe enough voters will finally change this culture in November 2012.

[Faulkner served in executive appointments during the Reagan administration and as chief administrative officer of the U.S. House of Representatives.]

Read more: http://www.nydailynews.com/opinion/fight-cut-debt-target-rampant-federal-waste-article-1.982076#ixzz283pmTzKg

Reshaping the Budget Battlefield

Finding government waste is like hunting cows. Actually eliminating government waste is another matter.

Governments, at all levels, are grappling with the dual tsunamis of an economic downturn colliding with budget busting entitlements and the fundamental inefficiencies of the public sector.

McKinsey & Company recently added their findings to the mountain of reports that identify government waste. According to McKinsey the federal government is wasting as much as $134 billion annually (about 15 percent of $1.21 trillion in discretionary spending).

McKinsey’s numbers are overly modest. Over the thirty years I have analyzed and eradicated public and private sector waste, I have found that the public sector wastes between 30-100 percent on a program by program basis. That means that even the best run programs, at any level of government, wastes double what McKinsey reports. That places the potential federal waste at well over $268 billion annually.

Posting numbers may raise awareness and urgency, but remains a publicity stunt unless real action takes place.

The first positive step is for elected officials to use the tools they already have. They can just say “no” to spending increases. They can refuse to reauthorize programs. They can demand real evidence of tangible and sustainable outcomes before appropriating one penny to a program. These laws are already on the books for the federal government and most state and local jurisdictions. It just requires the political backbone to take such actions.

Unfortunately, elected officials don’t want to anger special interests by eliminating favored programs, no matter how obsolete and ineffective. Instead, they opt for furloughs that hurt working people. Worse, they mandate across the board cuts that ironically reward waste and harm efficiency as the more wasteful programs can easily absorb these cuts while better run programs suffer.

The public should demand more. One way would be to create a public referendum on spending priorities, which would be very different from the failed California initiatives of May 2009. This better way was discussed in a previous column, “Building a Better Budget” [The Washington Times, February 5, 2007]. In that column, I explained how to give every taxpayer a hypothetical $100,000 to allocate within a federal or state budget as part of their annual tax returns. This linked taxes and spending in a powerful and empowering new way. It may take several years to refine this advisory process into a binding one. Either way, direct citizen input into government budgeting would fundamentally shift decision power away from special interests to the betterment of all.

Another possible solution is for federal and state governments to form 21st Century versions of the “Hoover Commission”. Both President Truman in 1947, and President Eisenhower in 1953, turned to former President Herbert Hoover to form commissions which strategically rethought government operations. These commissions recommended consolidation of functions, elimination of duplications, and realignment administrative processes throughout government . Just like an untended garden gets weed infested and overgrown to the choking point, so does government benefit from a “constant gardener”.

The McKinsey report offers another ray of hope when it asserts that, “Simply doing the same tasks in new ways, as it turns out, can be extremely powerful”. One of the greatest impediments to government efficiency is the bureaucratic culture. In this culture, the wrong things are rewarded: more spending, more personnel, more office space, and more activities. Many public officials, especially career managers, see their pathway to prestige and influence through amassing resources, not accomplishments.

Government, at all levels, can use this culture to its advantage. The bureaucracy resists change and efficiency because it fears loss. What if government allowed bureaucrats to reinvest their savings in their own enterprises? Instead of loss, efficiency would be viewed as gain or survival.

The exchange of waste for value has worked in a wide variety of settings. Every public employee can immediately list dozens of procedures and policies that do not make sense and drive them crazy. I have run “cost of quality” or “efficiency” workshops in dozens of federal and state agencies. In every case, the incentive structure was “you are empowered to eliminate these wastes” and more importantly, “you are authorized to keep and use every penny you save”.

Under the “waste for value” approach to reducing waste bureaucrats immediately grasp how their identifying where they are doing “stupid things stupidly” is not a witch hunt for blame, but a scavenger hunt for unleashing previously encumbered resources. This hunt for waste also opens their eyes to the powers of strategic thinking, collaboration, and prevention.

Another element to this scavenger hunt is prioritizing effort to results. An integral element for success is creating a four-quadrant “prioritization grid” where solutions are divided into easy to achieve, hard to achieve, high return on effort, and low return on effort. Recently, one federal operating unit not only realized that over a third of their operating budget was recoverable waste, but also that hundreds of improvement opportunities fell into the “easy to achieve-high return on effort” box. All those involved immediately and enthusiastically proceeded with eliminating their wasteful ways.

No one action will help government “thread the needle” through our current crisis, but a combination of the political will to “just say no”, engaging citizens in directly determining their fate, and redirecting bureaucratic energies are a start.

Indigestion

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!