Wednesday, December 8th, 2010 - 18:13
Wednesday, December 8, 2010 - 16:56
Last week, the National Commission on Fiscal Responsibility and Reform made recommendations to our leaders that identify savings opportunities to reduce the national debt. The opportunities target roughly the same time horizon as my report does and identifies nearly four times as much potential savings.
Last week, the National Commission on Fiscal Responsibility and Reform made recommendations to our leaders that identify savings opportunities to reduce the national debt. The opportunities target roughly the same time horizon as my report does and identifies nearly four times as much potential savings. As many of you have, I’ve read through the Commission’s proposal and found that it quantifies some very tough choices that our leaders have ahead of them.
The Commission makes several recommendations on policy, revenue generation and entitlement areas that the IBM report does not address. Examples include increasing support for vulnerable populations, adjusting programs slowly, and avoiding shocks that could impact the recovery of the US economy. The Commission also recommends some sweeping reforms for the tax code, and it encourages the White House and Congress to experience budget reductions as well. All of these recommendations represent serious changes to current practices and will significantly impact the debt. Citizens would benefit from education on the fine points of the proposals and dialogue with political leaders.
There are several key areas of overlap between the Commission’s recommendations and the IBM report. These areas focus on improving the operational performance of the Federal government such as the identification of assets that can be monetized – whether those assets are usage rights to the electromagnetic spectrum that could be auctioned to communications companies, energy that is publicly generated and could be sold at market rates, or publicly held real estate that could be rented, leased, or sold. Both proposals also agree that improper payments must be targeted and eliminated; not only do we have analytical capabilities to identify and prevent improper payments, but also we can no longer afford to spend an additional $200B sending them. Both proposals encourage adopting more efficient infrastructure, less travel, and targeting lower priority programs.
Additionally the IBM report assumes that the same commercial best practices that have allowed our organization (and many others) to improve their performance would make a significant impact on the performance of Federal government. We recommend the use of commercial best practices to target supply chain savings in the Healthcare and Defense agencies. We recommend central provisioning and consolidation of IT support. We recommend consolidation of field offices and greater use of electronic self service for future generations. We recommend greater use of shared services across departments, particularly for back office systems. We believe that these recommendations yield not only reduced costs but improve performance of the government’s mission.
I’ve provided a table comparing the two sets of recommendations; however, the recommendations are not mutually exclusive in any way. I’ll share similar comparisons of the other proposals in the coming weeks.
What is missing from the Commission’s recommendations is the link between recommended cost reductions and revenue enhancements and the improvement in performance of our Federal government. Cost reductions recommended by the Commission, if applied in the context of commercial best practice, will actually improve mission effectives and increase value of government. The Commission very effectively addresses the opportunity cost of not acting now; both the Commission’s report and IBM’s recommendations note the long term squeeze of all discretionary spending to pay the interest on the national debt. Information about the cost of not acting is very compelling, but not “news” for most Americans. Many changes will be needed to our investment mix in the next ten years to ensure that America remains globally competitive and that our government continues to improve the return from our tax dollar – in terms of improved services, mission effectives and operational performance. We’ll talk about some of those issues in greater depth in coming weeks as well.
In the interim, I look forward to your feedback…