Administration short on details about program review process

The Obama administration provided little additional detail Thursday on how it arrived at the 121 program cuts recommended in its formal fiscal 2010 budget.

President Obama called the terminations, reductions and savings volume of the budget a first report in the process of going through the budget "program by program, item by item, line by line looking for areas where we can save taxpayer dollars." He said this process will continue governmentwide. Obama repeatedly has asked agency heads to find ways to be more efficient, and said he is proposing "creative" incentives for thrift, such as allowing agencies to reinvest a portion of savings in programs that work.

Asked whether the Obama team used the Bush administration's Program Assessment Rating Tool or something similar to identify inefficient programs, Director Peter R. Orszag said only that OMB is in the process of overhauling the performance metrics system.

"I have said before, and I'll say again, I think the PART system was well-intentioned, but was flawed both in terms of implementation and in terms of design," he said. "In implementation there was not enough buy-in from the people who were supposed to use it, and in terms of design it was much too input-oriented rather than output-oriented."

OMB did provide several paragraphs justifying each proposal to end or scale back a program. In some cases, that included references to reports from inspectors general, the Government Accountability Office, and other research and watchdog groups.

Orszag said overhauling the way the agency evaluates program performance will be a top priority for Jeffrey Zients, Obama's nominee to be chief performance officer and OMB deputy director for management, if he is confirmed. Orszag added that OMB employees already are working to ensure the process can move along quickly once Zients takes office.

Obama called some of the inefficiencies discovered thus far "actually pretty stunning," but was quick to stress that proposed cuts were not a reflection on government employees.

"I want to be clear," Obama said. "There are many, many people doing valuable work for our government across the country and around the world. It's important that we support these folks -- folks who don't draw a big paycheck or earn a lot of praise, but who do tough, thankless jobs on our behalf. This is not a criticism of them."

Some of the programs targeted are obsolete, while others should not have been funded and were "the end result of a special interest's successful lobbying campaign," Obama said. Still others are duplicative, or serve needs that can be met more efficiently elsewhere in government.

While the $17 billion in savings identified in the terminations volume amounts to less than 0.5 percent of the roughly $3.5 trillion budget, Obama called it "a lot of money, even by Washington standards." "To put this in perspective, this is more than enough savings to pay for a $2,500 tuition tax credit for millions of students as well as a larger Pell Grant -- with enough money left over to pay for everything we do to protect the national parks," he said.

Orszag said while health care reform was by far the most important way to produce significant savings, ending wasteful programs sends a strong message.

"Just like a broken window has been shown to lead to increased crime because of the signal it sends, perpetuating inefficient programs with a shrug of the shoulders undermines confidence in government and wastes resources," he said. "We can no longer afford broken window budgeting."

Despite trying to distance itself from PART, Obama's team seems to have taken a performance-based approach to making budget cuts that is similar to the process the Bush administration followed, said Robert Shea, who served as associate director of administration and government performance at OMB under Bush and is now the director of Grant Thornton Public Sector.

Shea said the types of reports cited in the terminations, reductions and savings volume partially shaped PART scores. In addition, many of the career staffers who made initial recommendations on the program cuts have been at OMB since the Bush administration, he noted.

Orszag said about one-fifth of the total savings identified came from programs that previous administrations also recommended for elimination or reduction.

"I view that as a good thing, because it suggests that where they had good ideas and it was evidence-based, we adopted it, too. And that strikes me as being exactly the way it should be," Orszag said.