Finance

Cutting Washington's Red Tape

A new initiative in Washington aims to cut red tape and offer greater flexibility to state and local governments administering federal programs.
by | July 2011

Navigating federal bureaucracy can be a major headache for states and localities. But that could soon improve, thanks to a new initiative in Washington to cut red tape and offer greater flexibility to state and local governments administering federal programs. In an effort to help governments reduce their costs, the Office of Management and Budget (OMB) has told agencies to quickly find ways to make it easier for states and localities to deal with the federal system.

The effort, launched in February and further clarified in an April OMB memo, puts a special emphasis on eliminating duplicative reporting requirements -- a common complaint among state and local leaders. Being required to submit the same information again and again to secure funding from similar but distinct programs can waste precious personnel and other resources. That can be a huge problem at a time when states and cities are already cutting back. “For the fiscal climate we’re in, the need has come about [to] be more efficient and bring down the costs,” says Stephanie Spirer, a lobbyist with the National League of Cities.

Agencies have also been told to find ways to simplify the process of applying for federal programs, possibly by creating unified applications for multiple programs.

“The goal is not ‘flexibility for flexibility’s sake,’” the OMB wrote in the April memo. “It is to provide flexibility when it will enable state and local governments to focus more attention and resources on efforts that will improve outcomes.” Federal agencies must report on their progress as well as recommendations for future improvements by Aug. 29.

It’s an aggressive plan, says David Quam, who leads the National Governors Association’s Federal Relations Office. “The scope of this is a bit daunting. It’s all agencies, all regulations, all at the same time.”

Still, Quam says he’s optimistic the OMB effort can produce results -- but only by getting extensive, ongoing feedback from state and local leaders. “If this is just rushed forward and ended without looking for outcomes, it will be [just] another exercise,” Quam says. “If, however, this is about really opening those lines of communication and continuing them, then you have something that can be longer lasting and meaningful.”

The push from the OMB is only the latest in a series of steps the White House has taken to increase agency efficiency, including an executive order in January calling for federal agencies to analyze their rules and regulations from a cost-benefit perspective. But the overall effort to cut red tape won’t result in what many Republican governors would consider the best way the federal government can give flexibility to states: a Medicaid block grant.

In March, the administration announced steps states can take to obtain waivers that would allow them to implement health reform in a way that differs from the federal law -- so long as it is just as comprehensive. But there’s a limit to how much flexibility President Obama’s willing to offer when it comes to health care: “I am not open to refighting the battles of the last two years.”

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