Like his two immediate predecessors, President Obama has made government management a priority. Since taking office, his administration has stressed performance measurement and evidence-based decision-making. What progress then has been made by President Obama's management initiatives? And with a Congress focused on spending reductions, what are the implications of program performance measurement for state and local governments?
The Four Legs of Obama Performance-Oriented Reforms
The Bush administration was quite active in management reform. Its agenda included the President's Management Agenda (PMA), and the Program Assessment Rating Tool (PART), which was a questionnaire-based effort to analyze the success and failure of more than 1000 spending programs.
The Obama administration did not continue either of these endeavors, but rather has put its own stamp on management and performance reform by focusing on at least four separate initiatives over the first two years:
- Establishing an infrastructure to assess the impact of the American Recovery and Reinvestment Act (ARRA) on jobs. Implementation of ARRA, starting in early 2009, represents the administration's earliest attempt to systematically measure performance both in terms of jobs saved or created (with an ultimate goal of 6.8 million), and funds distributed.
- Identifying a list of programs that should have funding reduced or eliminated because of inadequate performance. The 2010 budget included $17 billion worth of terminations or reductions; the 2011 budget included $23 billion worth. According to the administration, roughly half of these were approved by Congress. In the 2012 budget proposal, there was an expanded effort to reduce or eliminate funding for programs. The list, if approved, would save $31 billion in fiscal year 2012. This initiative goes beyond prior proposals in that some of the programs identified are supported by President Obama, but are still recommended for reduction or elimination in pursuit of fiscal responsibility. These proposed reductions will likely be taken quite seriously in the FY12 budget process, given pressures (most acutely felt in the House of Representatives) to reduce spending.
- Having agencies establish, with instruction from the Office of Management and Budget (OMB), "high-priority performance goals". First outlined in fiscal 2011 for 24 selected agencies, these goals had to be attainable in 12 to 24 months and without requiring any additional funds. The FY 2012 budget emphasizes continuation of these initiatives and discusses ongoing efforts by these agencies to track progress toward achieving these goals. The budget also describes a new online tool, called Performance.gov (not yet available to Congress or the public). The tool will be used by agencies to monitor progress toward and deviations from objectives. There is, however, a notable absence in the fiscal 2012 budget of any data on agencies' progress toward the short-term goals set last year.
- Committing significant time and resources to program evaluation, in part to assist with identifying what works and what does not. In the fiscal 2011 budget, the Obama administration was more explicit about the importance and role of program evaluation than any administration in recent memory. It explicitly embraces a traditional view of program evaluation, compared the Bush administration's PART approach -- which was more comprehensive (more programs) but also more superficial (fewer detailed evaluations). Under President Obama, the OMB oversaw a competitive process for awarding funds to agencies to conduct program evaluations. As a result, 17 agencies were approved and funded in the 2011 budget to evaluate individual programs or expand their general evaluation capacity. An additional 19 evaluations or capacity-expansions are slated for 2012. Clearly, the Obama administration is committing resources to beef up performance assessment capabilities.
Putting Obama's Performance Agenda in Context
There is less apparent progress two years into Obama's presidency than was made at a comparable point in the last two administrations. While does include detailed data on financial and employment implications of ARRA, there is less transparency in other realms. In the case of program evaluation, this is understandable, since even the evaluations funded a year ago may not have had time to be completed. The lack of transparency concerning high-priority performance goals is harder to understand. The fact that readers of the fiscal 2012 budget cannot find any information on actual performance to date, relative to the set of 12- to 24-month performance goals unveiled a year ago, is not a positive development for transparency and accountability.
What are state and local governments, some of which have made substantially more progress using performance information for budgeting and management, to make of all of this? A few points seem worth making.
First, it is hard to overstate the extent to which everything between now and November 2012 is likely to be about the budget. The current debate about the 2011 budget, which is almost 6 months late in being enacted, foreshadows continuing efforts to reduce spending and the deficit. Most likely, in this context, performance will not be used as part of an effort to improve programs but rather as justification for eliminating them.
Second, this debate is likely to continue to feature disagreements between the administration and Republicans in Congress about whether all program reductions and terminations should go toward deficit reduction, or whether some of the savings should be reinvested in programs that are a higher priority, or work better, or both. The President argued explicitly in his budget for the latter; this is not the current view of most congressional Republicans.
Third, history tells us that just because a given administration claims commitment to evidence-based decision-making does not necessarily mean that more decisions will be based on evidence. When spending reduction is a priority, however, weak claims may be more difficult to sustain. This was recently evidenced by the House's cancellation, at long last, of a second engine (that the Pentagon neither wanted nor needed) for the F-35 fighter jet.
Fourth, while deficit reduction may be in the long-term financial interest of the country, it is not good in the short run for state and local governments, many of which may lose ARRA money at a time when their economies and tax systems have not yet rebounded from the effects of recession. Good ideas for new spending from state and local governments, even those backed by evidence, are likely to fall on deaf ears.
The bottom line is that the performance agenda must co-exist with the pressures to reduce spending and the deficit. Increasingly, performance measures and evaluation will be used to identify possible areas of reduction. This could bring about the second coming of the "tastes great -- less filling" debate during the early Clinton administration, which concerned savings resulting from the recommendations of the National Performance Review. The quandary is that, if agencies believe the purpose of the performance agenda is to help them manage their agencies more effectively ("tastes great"), they will be more likely to support the program than if they believe it's just a tool used to justify cutting budgets ("less filling").
Pressure from congressional Republicans may result in an agenda focused more on spending reduction and less on management improvement. Divided government, and the general antipathy of conservative Republicans and Tea Party activists toward public programs and government spending, may provide some impetus for data-driven budget reduction. It's just as likely, however, that the process of budget-cutting will be informed by factors that have nothing to do with program performance.