Outgoing OMB chief: Public has a point about government waste

In his farewell address on Wednesday, the director of the Office of Management and Budget said the public is onto something when it criticizes the federal bureaucracy.

OMB chief Peter R. Orszag, whose last day is Friday, told an audience at the Brookings Institution that citizens often are correct when they say federal agencies are inefficient and wasteful in managing programs. He noted two-thirds of respondents to an April Pew Center poll shared that belief.

Government inefficiency can be attributed largely to agencies' failure to adopt technology quickly and to use practices that make the private sector successful, Orszag said. The Obama administration's efforts to remedy outdated and unsuccessful government programs are expected to yield $20 billion in savings in fiscal 2011, he said.

For example, taxpayers will benefit from the replacement of expensive naval ship navigation systems with cost-efficient Global Positioning Systems, according to Orszag. The administration also is identifying excess government property and making plans to dispose of it, which is expected to result in savings of $8 billion by fiscal 2012, he said. And for fiscal 2012 budget submissions, agencies will be required to point out their most inefficient and unsuccessful programs.

Addressing improper government payments is another priority, the departing OMB chief said, noting President Obama signed the Improper Payments Elimination and Recovery Act into law last week. Orszag said during the past three years the government paid out $180 million to dead Americans. "I wish I was kidding," he said.

On a more optimistic note, he said there have been some success stories. The Agriculture Department's Supplemental Nutrition Assistance (or food stamps) program, for instance, has identified $330 million in payment errors.

Bringing the federal government up to speed on technology also is high on the administration's agenda, Orszag said. In addition to making government more efficient, information technology helps make agency actions more transparent for the American people, he noted, saying new dashboards and websites have led to greater levels of openness than ever before. The administration has cut more than $10 million in redundant IT projects, he added.

Orszag also addressed some policy victories, including passage of health care reform and the 2009 Recovery and Reinvestment Act. He added it would have been nearly impossible secure any more than $787 billion for the economic stimulus.

He said he will leave office "confident in the president and his team." President Obama has nominated Jacob Lew, deputy secretary of State for management and resources and former OMB director during the Clinton administration, to take over for Orszag.