Turning Point

he following is excerpted from a July 17 speech by Paul A. Volcker, chairman of the National Commission on the Public Service, at Government Executive's Excellence in Government conference in Washington.

Survey after survey confirms what we all sense in the attitudes of many of those in government as well as outside, among our friends and even our own children. The healthy American tradition of skepticism about government has too often descended into cynicism. Trust in our leaders and our officials to instinctively do the right thing-to act effectively and efficiently in the public interest rather than in the special interest or the bureaucratic interest, or to act at all-has eroded for decades.

For a brief while, it seemed that the events of Sept. 11, with all the challenges that attack on America set out so forcibly, could be a turning point.

I live in New York, a city that likes to think of itself as the center of finance and private enterprise. I've spent most of my life in the world of finance, a world filled in the 1990s with a strong sense of unique achievement and triumph. Then, for a moment amid the tragedy, there was a profoundly different perspective.

Suddenly the heroes were not investment bankers displaying their Lucite tokens of paper deals or financial engineers thinking up ever more abstruse techniques for structuring transactions. It was the firefighters and the police who were on the spot, responding with a sense of duty, with skill and with physical courage. There was a mayor rising above city politics and using his platform with great skill and grace. In essence, it was public servants who inspired our pride. And all of us were forced to recognize that government was not-never could be-irrelevant in a world filled with risks and hazards almost beyond imagination.

Alas, that surge of pride has passed. It's not that all is forgotten, that the challenge is gone. But the bright light focused on internal security has exposed our inability to foresee and cope with the threat, and emphasized weaknesses in both the personnel and procedures of government. Somehow our elite intelligence agencies and others, hamstrung by their own bureaucracies, failed to cooperate. Too often, priorities of other agencies were out of date. The reservoir of trained and experienced manpower had diminished. Bureaucratic preoccupations were too parochial, and mired in old technology.

On a larger scale, the organization of the federal government has come into question. The president has been provoked to suddenly propose a major reshuffling of departments, agencies and bureaus. In one stroke, he would move to free a large fraction of civil servants from the constraints of embedded civil service practices.

So, we have an intriguing paradox. There is an overpowering sense that government should do something about it-about our internal security and about our financial security. At the same time, there is a lingering sense that our federal government simply hasn't been up to its job.

What is clear is that government-especially the federal government-is not a favored career choice among our best and brightest. We face a sharp buildup in retirement of those who entered the federal government a generation or more ago, when enthusiasm for the challenge was strong. Too many of the good and talented that are still attracted to the career service leave too soon, frustrated by their inability to use their talents with full effectiveness, disappointed by the attitudes or ineffectiveness of their colleagues or their superiors, and especially by the lack of prospects for a satisfying career with reasonable pay at the senior levels.

Meanwhile, the chronic problems of the political appointment process only seem to get worse. The new Bush administration has exceeded even abysmal earlier records of length of time taken to fill presidential appointment positions. At the opposite end of the spectrum, the delays and difficulties in recruiting at the entry level are a turnoff for all but the most persistent.

What may be less familiar is the extent to which agencies have sought, and have achieved, freedom to a greater or lesser degree from standard civil service requirements and restrictions. The new Transportation Security Administration, the Federal Aviation Administration, the Internal Revenue Service, the Central Intelligence Agency and the Federal Deposit Insurance Corporation are leading examples. The Securities and Exchange Commission may be next in line. And what could be more dramatic than President Bush's proposal for a new Homeland Security Department that, in one fell swoop, would provide a full range of flexibility in personnel practices to the secretary and to the Office of Personnel Management.

The relatively simple and symmetrical model of administrative government embedded in the Report of the Hoover Commission a half century ago has lost relevance. The standard departmental organizational pyramids, now staffed with more and more political slots, and the governmentwide career civil service template don't fit the facts of the new century.

There is a sense, widely shared by members of the National Commission on the Public Service, that the time has come for real change-for not just tinkering around the edges, but for something much more fundamental. We need a model that fits into the 21st century, a model that will facilitate more flexible management and be responsive to the potential and the techniques of modern technology. Agencies will need to be able to appeal to and recognize talent from inside and outside the civil service and to let go those unable to perform or to adjust to demanding performance standards.

I recognize all of that is a very tall order, much easier to say than to achieve. But there is one lesson I have learned about shaping public policy in our great democracy. Out of a sense of crisis comes the opportunity for change.

The wave of retirements on the near horizon is said to threaten to denude the federal government of irreplaceable talent and experience. But can it not provide an extraordinary opportunity to deal with redundant layers of bureaucracy and enhance career paths for the most effective and energetic, whether drawn from within or outside the civil service?

The current ad hoc efforts to partially modernize agencies one by one has obvious dangers in administrative incoherence and inconsistency, while weakening needed protections against arbitrary treatment of staff. At the same time, shouldn't that confusion be interpreted as a demand for a systematic reassessment of how government should be organized to do its work?

And, not so incidentally, isn't all of that a prerequisite for a more flexible and sensitive system of salary administration, up and down the line, better reflecting the competitive marketplace and specialized professional and technical needs?

The comptroller general, the OPM director, and Congress members have all been willing-even eager-to come to our tiny, private and little-noticed commission to echo the theme that this is the time to act. Effective administration of the federal government, like any organization, will require dedicated leadership. That leadership will need to have clear goals. It must have the tools and flexibility to do the job, drawing on the talents of both long-term careerists and those from outside government willing and fit to do public service. Performance standards are important, and so will be the ability to disseminate rewards and to hire and fire.

Much of that is common to effective management, public or private. What is so unique, so difficult, so necessary in government is to respond effectively to political direction, with all its diverse, changing and often conflicting priorities. And the needed administrative flexibility cannot be a license to evade the discipline and safeguards that are inherent in effective public service-the need for openness and transparency, avoidance of conflicts of interest, levels of pay broadly acceptable to the public, the protection of employee rights, and defense against political bias.

We all share a profound concern about the state of our government and its role in dealing with threats to our country and our way of life. We can't just stand still, encased in management structures and bureaucratic patterns set out in a simpler and more settled time.