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Orszag Promises More Oversight and Transparency

By Ed O'Keefe



Peter R. Orszag before his confirmation hearing today with the Senate Homeland Security and Governmental Affairs Committee. (Photo by AP/Susan Walsh)

How many cabinet nominees have you seen sip Diet Coke during their confirmation hearing?

Peter R. Orszag, the nominee to head up the Office of Management and Budget opted for a pitcher of the carbonated treat instead of a more traditional glass of water as he faced a second day of Senate hearings before the Senate Homeland Security and Governmental Affairs Committee.

While Orszag's testimony on Tuesday focused primarily on budgetary concerns, today the conversation turned to government performance, retaining and recruiting Federal workers and procurement issues.

"If I am confirmed, I would seek an OMB Version 2.0, where those two arms of the agency are better integrated and you see a more unified whole between performance and budgeting," Orszag said in his opening remarks.

"We also need to clarify what is and what is not an inherently governmental function, a line that has become too blurred in recent years. The use of contractors has grown dramatically, and the result is often that we are depleting the core skills of government agencies," he added later.

In discussions about the federal workforce, Orszag reminded the committee of the impending federal brain drain.

"We need to take a number of actions, including, perhaps most importantly, as President-elect Obama has said, making government cool again," he said. (See Orszag's entire opening statement after the jump.)

The committee's chairman Sen. Joseph I. Lieberman (I-Conn.) thanked Orszag for his emphasis on management issues suggesting that “The M in OMB has not given enough attention. Some administrations do better, others not so good.”

“Maybe it’s time to change it to the Office of Performance and Budget," Lieberman suggested.

“That’d be fine by me. I don’t know if that’s legal,” Orszag replied.

While he seemed focused on managerial issues, Orszag also faced several questions from senators about the budgetary aspects of his expected job, especially regarding the management and oversight of the Troubled Asset Relief Program and President-elect Barack Obama's proposed economic stimulus plan.

"We are thinking of special oversight and auditing processes for this," Orzsag said of oversight of the stimulus package. "We plan to create a Web site that will contain information about the contracts and include PDFs or contracts themselves and also financial information about the contracts."

Among other things, Orszag said he also favored a special oversight board composed of inspectors general and the new chief performance officer that would conduct regular meetings about problems identified by people tracking aspects of the economic recovery plan on the new Web site.

The nominee stated several times that while the federal government's procurement activity has increased dramatically, its number of acquisition officers and other staff tasked with policing contracts has not grown.

"It is absolutely OMB's responsibility to provide oversight and guidance on procurement issues," he said in response to questions from Sen. Daniel Akaka (D-Hawaii).

"This is an area where some increased costs will actually save money. By constraining acquisition officers, we're being penny-wise and pound-foolish, because you might save a little on human capital costs, but you're losing a lot in terms of cost overruns and other problems in the procurement budget."

Regarding the measurement of government performance, Orszag called the PART system "not entirely effective" and said it needs a revamp, because "it's too focused on process rather than outcomes."

"[OMB] should be focusing our metric system on that ultimate outcome and not on what we're doing to get there, and let the agencies focus on what we're doing to get there," Orszag said, adding that details of the Obama administration's government performance measurements will come in mid- to late-February with the proposed budget.

He appeared at ease throughout the proceedings, energetically engaging lawmakers on the finer details of government budgeting and management. Orszag made frequent reference to his son, Joshua, 6, who sat directly behind his father during the hearing. Senators chuckled as Orszag said his son had once nicknamed his former employer, the Congressional Budget Office, the "Congressional Boring Office."

The committee will not vote to confirm Orszag or deputy director-designate Robert L. Nabors, according to a committee news release. Instead, the full Senate is expected to confirm the pair after Obama's inauguration next Tuesday.


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Opening Statement by Peter R. Orszag, as delivered to the Senate Homeland Security and Government Affairs Committee:

Senator Lieberman, Senator Collins, members of the committee, I'm honored to come before you as President-elect Obama's nominee for director of the Office of Management and Budget.

I'd also like to thank Mr. Spratt and Mr. Ryan for their introductions. As director of the Congressional Budget Office, I worked to establish good relationships with members of both parties, and I hope to continue that spirit of bipartisan if I am confirmed as director of OMB.

It is a momentous time to be holding this hearing. In the short run, we face the worst economic crisis since the Great Depression, with job losses of more than 2.5 million over the last year and projected job losses of 3 to 4 million more over the coming year unless we act, and act aggressively.

Over the medium to long run, we face the prospect of daunting fiscal deficits that reflect an unsustainable course that the federal budget is on.

But what I want to spend most of my time with you on this morning is government performance. I'm particularly pleased to be before this committee, because I believe that government performance and budget must be one.

Government performance must be reflected in our budgetary priorities, and then the results of improved performance will yield benefits to the budget.

So I am -- if I am confirmed, I would seek an OMB Version 2.0, where those two arms of the agency are better integrated and you see a more unified whole between performance and budgeting.

Most of the performance issues that government faces today have developed over decades and will take time to address, but there is an urgency to begin now. We need to be open to new ideas and new ways of doing things. Improving performance overall requires not only sustained focus but also a better set of metrics. After all, it is hard to change what you can't see or measure.

Significant improvements to the existing performance management system are both possible and necessary.

Let me touch briefly on several areas in which we can do better, many of which have already been discussed. First, procurement and contracting.

The dollar value of federal contracts has more than doubled over the past eight years to more than $400 billion in 2007, but the number of qualified contract officers has remained flat at about 28,000.

Given that disjuncture, it's not surprising that problems have arisen, especially at the Department of Defense.

In addition to reviewing the use of no-bid, cost-plus and inter- agency contract vehicles, we must improve the quality and quantity of the federal acquires workforce, and I am pleased that OMB is already working with the Federal Acquire Institute to do this.

We also need to use technology to create more transparency around procurement and contracting. Current vehicles such as USASpending.gov suffer from a lack of timely and accurate data and a presentation that is not seen as engaging enough to attract widespread visits.

Technology can be a great way to create transparency that will spur competition and help identify problems.

We also need to clarify what is and what is not an inherently governmental function, a line that has become too blurred in recent years. The use of contractors has grown dramatically, and the result is often that we are depleting the core skills of government agencies.

That leads me to the second topic of human capital. Central to any effort to improve the performance of federal programs has to be a strategy to restore the prestige to and increase the capacity of our federal workforce.

Over the next decade, roughly 60 percent of the federal government's 1.6 million white-collar employees and 90 percent of the 6,000 federal executives will be eligible to retire.

To mitigate and offset these expected retirements, we need to take a number of actions, including, perhaps most importantly, as President-elect Obama has said, making government cool again.

We need to dramatically improve the federal hiring process, and we need to provide more opportunities for civil servants to rise to policy-level offices so that they can aspire to doing -- to seeing the results of their hard work in promotions.

The third key topic is information technology. The current -- the government currently spends $70 billion in non-classified information technology and perhaps another 20 to $30 billion in the intelligence community on information technology.

On the one hand, IT investments can provide much better transparency and provide a platform for more extensive interaction with the American public.

On the other hand, historically, IT investments have not been well integrated into the budget process, and IT investments have often not been aligned with agency missions. They also need stronger management and auditing. Major IT projects have a poor track record in government.

We also need to promote better cyber security. The number of threats continues to grow and represents risk to both key financial and other infrastructure, as well as data.

By Ed O'Keefe  | January 14, 2009; 6:19 PM ET
Categories:  Administration, Confirmation Hearings, Congress, Oversight  
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Comments

Out of control spending coming to a neighborhood near your wallet.

Republicans were trashed, deservedly so, but the Democrats got a FREE PASS on their involvement in the creation of the economic mess.

Is that an intelligent way to run a country? Is it right that Democrats be getting off “scott free,” and will now have free reign over fixing the mess?
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http://pacificgatepost.blogspot.com/2009/01/democrat-responsibility-for-economic.html
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No feet are being held to the fire. Can we assume Madoff arrived just in time to take the brunt of it away from Congress?

Will anything change? No chance. America is heading into the new and never before seen levels of debt. Here comes inflation.

Posted by: JamesRaider | January 14, 2009 11:58 PM | Report abuse

"... Will anything change? No chance. America is heading into the new and never before seen levels of debt. Here comes inflation. Posted by: JamesRaider..."

I am not sure why you think Democrats hold responsibility for the economic crisis. Although I do believe both party members hold an nearly equal amount of responsibility. Any Senator or Representative hold alot of power on Capital Hill... most will not, so called, buck the system in fear of retaliation. New folks in Congress get sucked into the veteran bubble and they all either turn corrupt like the leadership, or they wither away and realize they can't fight it. That hold true for both parties!

However, the leadership of the last 8 years have run this country economically into the ground, while the GOP congress tagged along for the ride and the democrats too power and sheerly failed! But each and every excecutive office was a failure under the Bush admin. Every one! You had a corrupt DOJ and AG that reigned at the pleasure of the President, not the American people... but we just brush it under the rug like it was nothing... there is a story to nearly every Bush department of failure... but we brush them all under the rug like they were nothing. Learn from their failures? History already proved past failures but they didn't learn. Bush/Cheney and cronnies should have been impeached years ago... and I stake MY LIFE that we wouldn't be in the mess we are today! The neo-cons can disagree all they want, but it will never ever change history or facts!

Posted by: darmar40 | January 16, 2009 8:43 AM | Report abuse

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