Agencies urged to improve relations with states and localities

A second Obama administration should reopen frayed communication lines with state and local governments, better institutionalize performance management, and formalize an elite cadre of career employees to tackle large-scale public projects, a team of academics and agency veterans recommended.

The government’s ongoing response to Superstorm Sandy is an example of the preplanned intergovernmental cooperation that the White House and federal agencies should seek more of, according to authors who spoke Friday at a panel marking release of the final three in a series of nine Memos to National Leaders orchestrated during the past six months by the National Academy of Public Administration and the American Society for Public Administration.

Contrasting the apparent success of the Sandy response with the widely recognized failure of the federal response to Hurricane Katrina in 2005, J. Christopher Mihm, managing director of strategic issues at the Government Accountability Office, said, “failure is caused not by one organization but by a failure of the organizations to work together across boundaries.”

This is particularly true, he said, because “we are currently asking the government to respond using indirect tools and approaches -- grants, loan guarantees, tax expenditures and an intergovernmental network that has devolved onto a vast network of third parties who may not share all goals and responsibilities.”

States and localities are the “primary delivery mechanism” for services and aid, yet virtually no one in Washington talks to them, said G. Edward Deseve, who as deputy director of management at the Office of Management and Budget played a key role in implementing the 2009 Recovery Act. States could face a $60 billion loss if automatic budget cuts known as sequestration take effect in January 2013, and Medicaid costs are rising even before implementation of the Affordable Care Act.

“No one talks to states about taxes,” as they did during the 1986 tax reform, he added, citing the response to Sandy as the “cynosure” that has focused the attention of governments at all levels. “We must find a way to create a network to revivify intergovernmental relations,” Deseve said.

Tom Downs, former Amtrak president and now a consultant withVeolia Transdev, stressed that federal agencies suffer from “a lack of coordination and cooperation with counties and cities.” The majority of investment is with state and local government, yet some $2 trillion in private corporate “retained earnings -- the largest pool available in the world -- is apparently waiting for some certainty on economy to be put to work,” he said.

He called for Congress to create an “owner’s manual” to provide a federal framework for needed private investment in infrastructure of the type no longer funded by states through taxes, user fees and general funds because they are so swamped with debt from pension commitments. That manual would consist of a Council for Fiscal Sustainability and a new Risk Management, Identification, Assessment and Mitigation Board.

John Kamensky, senior fellow at the IBM Center for the Business of Government, said the federal government should formalize a place -- perhaps within OMB -- at which officials can plan ahead on large-scale initiatives. He cited the cleanup of the 2010 BP oil spill, the Recovery Act, as well as historical projects such as the New Deal, the Marshall Plan and the response to the 1964 Alaska earthquake.

Successors to versatile leaders such as retired Coast Guard Adm. Thad Allen, who led the oil spill cleanup, would be trained if 50 or 100 career employees could be assembled, Kamensky said.

His co-author, Dwight Ink, a veteran of multiple agencies going back a half-century, said the current government lacks a structure for quick response, recalling that President Johnson needed only 48 hours to assemble an organization to deal with the Alaska tragedy. That capability “reached its peak during President Nixon’s first term,” he added, but had been taken down by the time President Ford, after the 1970s Arab oil embargo, tasked him with reducing the energy consumed by federal agencies.

Don Moynihan, professor at the University of Wisconsin La Follette School of Public Affairs, reviewed agencies’ progress in embracing performance management, warning of a “tendency to reinvent the wheel.” Agencies have improved at collecting and disseminating performance data during the 20-year-time frame since the 1993 Government Performance and Results Act, he said. “But we’re not at a point where it’s a frequent habit among managers -- that’s the next frontier.”

Obama will induce political appointees as leaders to make it a priority, which is key to getting employees to track routines and actually talk about performance data, Moynihan added. “It’s hard to know the effect on outcomes, but if you’re not using performance management, then you’re not making tremendous difference.”

Downs noted, “performance management is not currently mandatory in personnel evaluations for advance and promotions. Until it is mandatory, it won’t be taken seriously,” he said.

Deseve was asked about implementation of the Affordable Care Act now that Obama’s reelection has solidified its future. He recommended that Nancy-Ann DeParle, who has spearheaded health care reform for Obama, be given a highly visible role in “building trust and relationships” with health care providers and state officials that don’t exist now, he said.

Ink added that the White House should provide the coordination but without competing with agencies, to strengthen their ability to carry out the tasks.

One of the reasons the Recovery Act implementation was so successful, added Mihm, is OMB officials such as Comptroller Danny Werfel shared draft guidance with state and local recipients of federal funds.

To boost intergovernmental relations, “you must have the star team,” Kamensky said. He noted an earlier such effort embodied in the 1970 Intergovernmental Personnel Act too often was used as a place to put federal employees whom managers were unable to fire, or who were transitioning to retirement.

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