Chairman Lieberman, I commend you, Ranking Member Collins, and the other members of this Committee for holding this hearing. In these times of economic fragility and spiraling deficits, it is vital that the federal government work to increase accountability and trim excess. It also must provide smarter and better services for the American people and America’s businesses. The Business Roundtable (BRT) believes the Reforming and Consolidating Government Act of 2012 proposed by the President and introduced by Chairman Lieberman as S.2129 can help accomplish these purposes.
BRT is an association of chief executive officers of leading U.S. companies with over $6 trillion in annual revenues and more than 14 million employees. BRT member companies comprise nearly a third of the total value of the U.S. stock market and invest more than $150 billion annually in research and development—nearly half of all private U.S. research and development spending. BRT companies pay $163 billion in dividends to shareholders and generate an estimated $420 billion in sales for small- and medium-sized businesses annually.
There is widespread agreement that our government faces rapidly building fiscal pressures. These pressures jeopardize our future by stymying economic investment and increasing our crippling debt burden. At the same time, our government is bloated and hamstrung with unnecessary duplication and fragmentation. Overlapping programs waste tax dollars and slow job creation, forcing businesses to muddle through layers of regulation and inefficiencies to access the services they need to grow and export.
BRT believes the federal government can help curtail out-of-control federal spending and fuel economic recovery by turning to organizational efficiencies and new technologies to reduce expenditures and increase accountability. In particular, BRT believes the government can free billions of taxpayer funds for investment and job creation by streamlining the operations of its many departments and agencies.
The Government Accountability Office (GAO) agrees. In a recent report, GAO identified 34 areas spanning multiple organizations where the government could modernize and reduce inefficiencies. See GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Mar. 2011). These areas highlight numerous instances of counterproductive regulations and poor resource usage, including the proliferation of over 2,000 federal data centers that are hardly used and yet cost hundreds of millions of dollars. See id. at 5–7, 66–68.
I also know firsthand, from my time as Governor of Michigan, that government efficiency is a highly desirable goal, and that progress requires a dedicated leader and the cooperative efforts of both the legislative and executive branches of government. My own experience has shown it is possible to both improve performance and reduce costs if government functions are properly consolidated, organized, and managed.
Unfortunately, the routine methods available for pursuing greater government efficiencies often are not capable of making the reforms our government needs. Bureaucracies grow faster than reforms take hold, and limited cost-reduction and consolidation initiatives cannot stem the challenges of fragmentation. Congressional efforts to improve results and enforce meaningful oversight also are frequently hampered by ideological splits and partisan gridlock. Our government and citizens need new tools for saving money and bringing change.
That is why the Business Roundtable proposed legislation late last year to give the President the power to rearrange government and make it more efficient. Reorganization authority is not a new idea, but it is perhaps needed more now than at any time before. When I spoke late last year to Members of Congress and Administration officials about BRT’s proposal, the reception was warm and energetic. And I was very pleased that the President proposed reorganization authority legislation in January.
Mr. Chairman, your bill, the Reforming and Consolidating Government Act of 2012, which is very similar to the legislation BRT proposed, would provide the President with the tools he needs to run the government more like a successful business. Your bill caters to no special interests, promising only to make the federal government leaner and more consumer-friendly. The bill specifically is modeled after the Reorganization Acts of 1977 and 1984 (5 U.S.C. § 901, et seq.), which Presidents Carter and Reagan had available to use to reform various agencies and reduce government largess. See CRS Report RL30876. With similar authority, the President today could take great strides toward reforming our outdated bureaucracy so that it can provide the high levels both of service and efficiency to which a 21st Century government should aspire. Moreover, by permitting the elimination of wasteful programs and practices, the bill would help restore responsibility for what we spend and accountability for how we spend it. As the President has explained, the bill would provide the “same sort of authority that every business owner has to make sure that his or her company keeps pace with the times.” White House, President Obama Announces Proposal To Reform, Reorganize and Consolidate Government (Jan. 13, 2012).
The Reforming and Consolidating Government Act of 2012 contains a number of key provisions:
First, the bill would give the President broad authority to restructure the executive bureaucracy through congressionally approved reorganization plans. These plans may create, abolish, transfer, or rename executive agencies and departments to achieve results. Furthermore, unlike past iterations of reorganization legislation, the bill requires that any plan proposed by the President decrease the number of federal agencies and departments or save costs. This change will ensure that the bill has meaningful results.
Second, as did prior reorganization authorities, the bill would allow the President to submit multiple plans to Congress for expedited consideration. It also would let the President amend those plans after submitting them to accommodate congressional concerns and suggestions. In this way, the bill would permit the President to work ambitiously with Congress to change the Executive Branch to pursue efficiencies.
Third, the bill would provide for an up-or-down vote of Congress on every reorganization plan. Through its two-year sunset date, the bill also would allow Congress to reconsider or recalibrate its grant of reorganization authority to the President after seeing real results. This formulation means that a reorganization plan would not take effect without affirmative, congressional approval. BRT believes this system could work, but we would prefer a somewhat different approach. Under the BRT proposal, a reorganization plan would go into effect unless Congress enacted a joint resolution of disapproval. In this way, each reorganization plan would not require congressional approval; but, at the same time, Congress’s prerogative to reject a reorganization plan would be preserved.
When government and business work hand-in-hand, we see a constant evolution of efficiencies that translate into path-breaking improvements in the quality of Americans’ daily lives. Burgeoning government deficits and bureaucratic inefficiencies lately have limited the benefits of this traditional relationship, harming American competitiveness and slowing job creation. But BRT believes that good-government initiatives like the Reforming and Consolidating Government Act of 2012 hold the promise to restore fiscal and operational soundness to our government, reinvigorate its relationship with business, and keep America working. It is for this reason that we urge the prompt and favorable consideration of this bill.
Mr. Chairman and members of the Committee, we thank you for the opportunity to share our views. We look forward to working with the Committee to improve our government and spur economic recovery.