Republicans Need a Realistic Plan for Government Reform
The Trump administration’s proposal to rescind $15 billion in previously appropriated funds is notable mainly for its insignificance. The Congressional Budget Office (CBO) estimates the plan would reduce federal outlays by $1.3 billion over 10 years, or 0.002 percent of total federal spending over this period. Most of the rescinded funds wouldn’t be spent even if they remained available permanently.
The Trump rescission plan fits a pattern of bold initial promises followed by less-than-impressive results. When the administration began in early 2017, officials said they would transform government by running it more like a business and cut costs. Instead, President Trump is on track to leave to his successor a government that looks pretty much like the one he inherited from President Obama — only bigger and more expensive.
It is true that the administration is leaving many personnel positions unfilled, but those jobs won’t be eliminated from the bureaucracy permanently. The administration’s regulatory agenda has rolled back prominent rules issued during the Obama presidency, but those regulations can be reinstated by a new administration. Moreover, eliminating a few recently issued regulations won’t change the fundamental mission or business practices of federal agencies.
Early in 2017, the White House established the Office of American Innovation to help identify ways to modernize government practices and make them more efficient. In April 2017, Office of Management and Budget Director Mick Mulvaney announced he was leading an ambitious, government-wide initiative to develop a plan for federal agency reorganization and reform. He promised that after several months of study involving every department in the government, he would release the full plan in conjunction with the president’s budget for fiscal year 2019, which was submitted to Congress in February of this year.
The new White House office hasn’t produced anything of consequence, and the Mulvaney memo seems to have been largely forgotten. When the budget was released, there was only a passing reference to what was promised a year ago, along with a revised commitment that the full reorganization plan would be released in March. It is now May, and there’s still no sign of it.
Many federal agencies have initiated smaller, internal efforts at reform, prompted by the Mulvaney memo. The Department of Health and Human Services is moving some functions from one agency to another to improve operational efficiencies. The Department of Education is working on a reorganization plan that would reduce political appointments and consolidate some offices. The Department of Agriculture is also embarking on a fairly ambitious internal reorganization effort.
But these plans fall short of the deep, systemic changes that the original Mulvaney memo was clearly trying to achieve. Among other things, there’s no government-wide effort underway to rationalize functions across agencies.
The first two budgets submitted by the Trump administration proposed deep cuts in appropriated spending for domestic agencies and programs. Some of the cuts could reasonably be viewed as stemming from a broader vision of reform, while others were more about cost-cutting. Nearly all of the cuts and reforms proposed in the 2018 budget were rejected in the $1.3 trillion omnibus appropriations bill signed into law by the president in March. The prospects for the reductions included in the 2019 budget aren’t any better.
Congress is clearly a big part of the problem. There’s not much interest in reforming government in Congress, even among Republicans. The rescission proposal was born out of frustration among Trump officials with the large domestic spending increases included in the omnibus appropriations bill. But, after threatening to request major cuts in scores of programs, the administration’s rescissions plan targets spending authority that is of no real consequence. There is still talk of larger cuts to come, but that’s doubtful at this late stage in the fiscal year. Moreover, there’s no chance of additional, deep cuts getting passed in Congress.
A more promising approach, based on achieving incremental progress, can be found in the little-noticed “management agenda” released by OMB in March. The plan is focused on reducing costs to taxpayers by improving the management practices of federal agencies. The agenda lays out a number of high-level priorities for improvement. These include: the government’s IT acquisition practices, more sophisticated use of data in operations and decision-making, the skills and capabilities of the federal workforce, and better customer service, among other things.
This agenda isn’t ideological, and it isn’t tied to budgetary savings. It could serve as a starting point for a more realistic government reform effort, one that might attract more support in Congress, including from some Democrats. While the federal government is massive and wastes significant resources, there is no agreement even among Republicans on eliminating entire functions, programs, or agencies. But there is broader agreement that the government is too slow to adapt to changing societal needs, should be modernized, and could do more with less if pressed to do so.
The administration should expand on its management agenda and tie it to achieving realistic budgetary goals. Improving government productivity even by 1 percent annually could reduce spending over the next decade by $1 trillion. Government managers with consumer-facing responsibilities should be given more flexibility and incentives to redesign their agencies’ business practices to better serve the public while also cutting costs. The next Trump budget should explicitly tie limits on appropriated spending to assumptions of productivity improvement and investments in improved services for the public. It would be hard for Congress to reject this approach to budget discipline.
A new presidency always includes unrealistic expectations. Even so, the gap between initial ambitions and current reality seems particularly wide with this administration. There’s still time to make progress on government reform. But it’s likely to come from better management of existing agencies and programs, not a far-reaching plan of government-wide reorganization, which the administration seems unlikely to produce at this point, and which Congress wouldn’t pass anyway.
James C. Capretta is a RealClearPolicy Contributor and holds the Milton Friedman chair at the American Enterprise Institute.