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Some Government Programs Just Don’t Work Out. ‘Abandoned’ Shouldn’t Be a Dirty Word.

The rules for spending federal COVID-19 relief funds include a disinvitation to invention. State, local and tribal governments need to be able to try new things — and then stop some of them.

While the ink is barely dry on the Infrastructure Investment and Jobs Act, it’s worth noting that the rules for spending much of the $1.9 trillion from the American Rescue Plan that was signed back in March are not yet final. Public comment on the Treasury Department’s guidance for ARP’s $350 billion in state and local fiscal recovery funds were due over the summer and are getting their last review now. One additional word in Treasury’s final rules could shape whether the rescue plan lives up to its transformational billing, and ultimately whether the new infrastructure and other economic investments do too. The word to add? “Abandoned.”

Too much of our public spending and effort is spent pursuing programs that will probably work because they have been done before, but in truth lead to mediocre outcomes. Too little is spent going after new approaches that by virtue of their newness will only possibly work. Leaders tasked with spending this public treasure need a way to try new things and then stop some of them. Otherwise, we’ll all have spent a generational fortune replicating the inadequacy of the past.

ARP’s ambitions were mammoth. Aimed at ending both a public health and economic crisis, the new programs it contemplated were vast. ARP provides billions of dollars for shoring up public health, reducing poverty, attacking hunger, diminishing inequity and preparing people for the economy of the future. None of these problems are especially tractable.

Fortunately, state, tribal and local governments have been given wide latitude with their $350 billion portion. The bill, which ran 242 pages, had only 16 lines on the limits for spending their fiscal recovery funds. Pretty much everything, so long as it can be tied back to COVID-19 and the economic crisis it wrought, seems fair game. Reporting requirements in the bill are similarly thin, and mostly left to the treasury secretary to determine. The interim rules her department issued used the word “flexibility” two dozen times. All in all, this would seem to lend itself toward ingenuity.

Less auspicious for the prospects of new approaches is that there is also plenty in the bill to signal that failure will not be tolerated. ARP provided an extra $40 million for the Pandemic Response Accountability Committee (PRAC). Established last year by the CARES Act, PRAC is composed of nearly two dozen inspectors general from across the federal government. Their No. 1 goal is to “prevent and detect fraud, waste, abuse and mismanagement.” On top of these funds, ARP allocated more than $87 million to various IG offices. While essential to root out faulty claims and crooked procurements, this all adds up to a potential $127 million-plus disinvitation to invention.

Why? Novelty, while essential, is fraught. I know from my time in government how nervous many great people inside state and local governments are about venturing forth on new fronts. I have heard their concerns about others making political hay should their new efforts not work: Success having been promised and watchdogs having been primed, hearings will be held, headlines will blare and heads will roll.

It is difficult to start and then stop new things, and thus examples are rare. I can recall from my years in city government when Boston ended a pilot program it had started to offer prescription drugs from Canada, but I had to call a former colleague to remind me. The initiative was launched by Mayor Thomas Menino in the face of mounting drug costs, and allowed retired city workers, for example, to obtain medications at cheaper rates. But as national policies evolved and large-scale savings didn’t materialize, the pilot was ended.

That should be happening more often. One additional word in the guidance Treasury provides could tip the balance. As things stand, recipients of the state and local recovery funds need to report along the way on how their money was spent including, among other things, the status on all new projects in one of four categories: not started, completed less than 50 percent, completed 50 percent or more, and completed. Not one of the categories? “Abandoned.” Treasury should add it. Not all new efforts will work. Governments should be encouraged to try some anyway and then end them when they prove unsuccessful.

This may seem like a small tweak in the context of a $1.9 trillion bill, but it would tilt the American Rescue Plan toward a reinvention plan and, ultimately, help tip America toward more effective government. We need a new accountability regime for attempts at solving stubborn problems. We need accountability that is better at discerning among types of failures, punishing ineptitude and corruption but not prudent experimentation. Over time, committee chairs in Congress, inspectors general and even members of the public need to see their oversight roles in a more experimental light. We need state and local leaders to begin spending some of the billions on new approaches — and then to stop spending them on those that prove not to work. “Abandoned” would be a start.

Mitchell Weiss is the Richard L. Menschel Professor of Management Practice at the Harvard Business School and the author of “We the Possibility: Harnessing Public Entrepreneurship to Solve Our Most Urgent Problems.” He was the chief of staff to Boston’s late Mayor Thomas M. Menino.

Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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