The traditional approach to increasing national competitiveness has been to increase innovation and government investments in research and development, workforce development, and public infrastructure. Given today’s fiscal realities, the nation must explore alternative policy approaches and ways for government to do its business. These alternatives can enhance national competitiveness in an environment where major new investments will be difficult.

After the election this November, the US will face a “perfect storm” in the ongoing battle to control the federal budget, and a serious plan to control health care spending—long postponed—will have to be on the table. • At the end of this year the Bush tax cuts will once again expire unless Congress extends them. • Also at year’s end, the payroll tax cut will again expire.

Moreover, pressure to increase the savings targets is growing. The Department of Defense (DoD) provides an instructive example in this area.

The federal government faces an estimated annual structural budget deficit of $500 billion –700 billion. Deficits of this magnitude represent a major threat to the economic health of the nation. A plan to reduce and eliminate this structural deficit is urgently needed.

We talked this week about David Walker’s recommendations in Comeback America to address and reduce the debt.  In addition to his suggestions about revising the budget process to promote zero based budgeting and required controls on spending, Walker advocates a very thoughtful strategic planning approach across the Federal government. 

This edition of The Business of Government magazine has as its background a period rifewith significant challenges that go to the core of effective public management. Faced withseemingly intractable issues such as an ever growing federal deficit, economic uncertainty,unemployment, and aging infrastructure, it appears that the old adage “doing more withless” has taken on a whole new reality. Addressing the challenges arising from this newreality brings with it opportunities—to try different approaches, borrow new strategies,