For Immediate Release
September 7, 1995
PRESS BRIEFING BY
DR. ELAINE KAMARCK, SENIOR POLICY ADVISER TO THE VICE
JOHN KOSKINEN, OMB DEPUTY DIRECTOR OF MANAGEMENT
The Briefing Room 12:15 P.M. EDT
MR. MCCURRY: Good afternoon, ladies and gentlemen. We're going to reinvent government here at the Briefing Room right now. No, actually, we had a very nice event with the President and Vice President. And I'm delighted that Dr. Elaine Kamarck, who is a Senior Policy Adviser to the Vice President of the United States of America is here. She has been the team leader of the National Performance Review and has helped shape a lot of the effort to reinvent government that the Vice President has overseen on behalf of the President. And as we need others to participate and answer questions, we will.
DR. KAMARCK: I will not make any long opening remarks other than to say that we are very proud of both the record of accomplishment represented in this book and the list of savings which we around here have referred to as REGO II -- the new savings that we've been working on throughout this year that are contributing to the President's approach to a balanced budget. We would hope that some people on the Hill will take a good long look at this report and at the ways in which we save money versus the ways in which they're saving money, because we think we've got a path to a balanced budget that is the right way. And obviously we do not think their path to the balanced budget is the right way.
So we're hoping that people on the Hill will take a long hard look at this book, at this recommendation -- at these recommendations -- and that maybe a couple weeks from now we can begin to see some common ground based on a different approach.
And I'll take any questions.
Q: I'd like to ask a couple of philosophical questions. One, do you think that the country is aware of these efforts? And, two, how much insecurity have you caused in Washington and throughout the country, not only by your plans, but also by the forthcoming budget cuts? I think that everyone in Washington who works for the government must be very insecure.
DR. KAMARCK: The first one is, are people in the country aware of these? They're beginning to be. The problem with reinventing government, as all of you well know, is that do it the responsible way and the right way, you do lots of small corrections. You close down pieces of things. You streamline. You strip out headquarters. You do the sorts of things that, frankly, don't make headlines around the country.
However, we believe that this report -- in this report is the beginning of a breakthrough, that between the Social Security story in this report, the OSHA stories and the other stories in this report, we're beginning to see a very different kind of government, and it's beginning to get to the level where actual Americans can feel the change.
As to the insecurities, obviously federal workers in Washington and around the country -- and remember, most of the federal workers are outside of Washington, are insecure because of all of the turmoil that's going on in Washington. However, you should know that the first 160,000 cuts which this administration has accomplished were accomplished through attrition, a buyout program -- the first ever buyout program -- and early retirements. In other words, we took a page out of the corporate America's book and tried to make sure that we downsized in a humane and generous and careful way.
Now, I don't believe, frankly, that if some of the Republicans on the Hill have their ways, that the government will shrink in as orderly and humane a way as we have done it. And that's
Why we are urging the Republicans to take a look at this book and this approach and these changes.
Q: Could you clarify some of the money numbers just a little bit in two ways? I'm trying to figure out if you all have got more that you plan in savings now than you originally did and how they add up. You've got several different -- and the second thing is, I wanted to find out how the overall breaks down in terms of what you can do administratively and what has to be left for Congress to do.
DR. KAMARCK: The reason the numbers are confusing is that we essentially two phases of reinventing government. In 1993, we promised that we would save $108 billion over a five-year period. Because it was 1993, that five-year period was fiscal years '95 through '99. All of the original that we promised -- that was two years ago -- $58 billion of that is in the bank. It's scored -- in other words, it has been passed into legislation, built into spending through congressional actions.
Last December, the President asked the Vice President to do a second round through the agencies and look for more savings. The President alluded to this today when he talked about how corporate America finds that they keep having to go back and do this over and over and over again to retain their competitive edge. We're finding the same thing. So we began last December with a second round through the agencies.
The second round, because it started in 1994, those estimates -- the $70 billion -- are based on fiscal years '96 through 2000. So you can't quite add them up because they're different fiscal years. And those $70 billion are essentially what we refer to as the phase two of reinventing government.
Q: Does that mean for the total period you're talking about here that instead of $108 billion in savings, that you now think you're going to save $178 billion?
DR. KAMARCK: Believe me, we'd love to say that. But the problem is there's an overlap. That's the problem. So we're clearly -- when all is said and done, we will clearly save more money than the $108 billion we promised two years ago. We will clearly exceed that goal. Because the fiscal years are different, though, it's not a straight additive process. That's why we haven't added them together.
Q: Can you render an estimate how much more you will save? If it's not $178 billion, is it $148 billion --
DR. KAMARCK: Oh, it's at least $148 billion, $150 billion, someplace in there, because there is that overlap of a year. But, look, it's much more than the $108 billion originally promised. And there's the $108 billion and then there's a separate $70 billion. I don't know what that overlap is.
Q: Administrative versus legislative?
DR. KAMARCK: It's about 50-50. And the reason I say that -- we had a hard time answering that question two years ago, and the reason is that many administrative changes which don't technically require legislation, the oversight committees in Congress get very interested when you start making these changes. And so you do need a fair amount of congressional approval, et cetera, plus when you are saving money, those get built into, of course, appropriations assumptions that Congress works with. But I would say it's about 50-50 in this report.
Q: I'm going after the same thing, but let me ask you one other thing. Of this $70 billion, is all that included in the 10-year balanced budget plan? Does that cover the entire --
DR. KAMARCK: Yes, yes.
Q: I'm totally confused. If you have $108 billion that you originally saved, and then another $70 billion over and above those savings, then why doesn't it come up to $178 billion?
DR. KAMARCK: Well, because of the different estimating years. Look, this is the budget -- these are the budget guys who tell me we have to do it this way. I would love to say $178 billion, but these budget guys won't let me. (Laughter.)
MR. KOSKINEN: It's a good question and Elaine's right, that partly you have a shift in fiscal years, so you're really, to some extent, overlapping that way. The significant overlap in phase two, which is primarily focused at looking at what the government does -- as you look in the appendixes, you'll see that the agencies there are taking very hard looks at cutting back on certain functions, rather than streamlining the way they do it. So as we say, phase one was really looking at how the government operates, and phase two is looking at what the government does.
Well, as you make some of those cuts and decide that you're going to close areas and offices, you're going to quick doing certain lines of business, the modest amount of overlap comes in -- significantly in the personnel, because you had in terms of the how and the streamlining in phase I, as you were shrinking headquarters staffs, as you were trying to put more people into the field, as you were reorganizing and restructuring your field offices, you had a set of savings you assumed.
If you then come at the what the government does and say we ought to go out of this line of business, some of the people you're talking about there that as you calculate what your savings is are going to be the same people that you were counting in the first phase. So we don't think there's a significant overlap in Elaine's estimate in the range of $150 billion is probably correct.
We didn't think that it was worth the effort at this stage with everything else going on to try to track down person by person how many people were in the first group and in the second. We thought we would do better to continue to focus on the scorekeeping for the phase I and then look at the scorekeeping or phase II. But the bottom line is we're clearly well in excess of the $108 billion originally estimated.
Q: So part of the $70 billion that you're talking about in this second round is something that you've already counted in the first go-around?
MR. KOSKINEN: It basically is assumed in primarily the personnel, although in the $108 billion we looked at streamlining and restructuring. Some of the $70 billion will, in effect, be the same personnel.
Q: In which case? If there's part of the $70 billion that's personnel that you already counted in the first round of things, then how can you call the $70 billion new savings? Part of it isn't.
MR. KOSKINEN: That's right. That's the overlap. The reason we have not cumulated the two is because there is the overlap. And what we did not do at this stage when we went through the what business should the government be in was try to force the agencies to tell us of the employees that they weren't going to be using as a result of phase II, how many of those were not actually going to be used in the same fiscal years for phase one. We didn't think that that was an effort that was worth the -- would get us any more information than we had now.
Q: Are these real cuts or are they cuts in expected -- in expected expenditures?
DR. KAMARCK: The $58 billion are real cuts. They are in statute. They're passed. You can't spend money on them anymore, et cetera. The $70 billion are things -- are cuts that are based on 1996 through the year 2000 fiscal year. So since we don't have a 1996 budget yet, they are still in the budget process. Much of this is either going up to the Hill or is on the Hill, in legislation. This is -- remember, this is all part of one great big budget process. And as the President said, this is a prime example of our budget approach, our approach, our values that lead to our balanced budget versus theirs.
MR. KOSKINEN: And we also -- if I can chime in one more time here, the $70 billion in looking at what government does is not necessarily all cuts in the normal sense. A lot of it's privatization, some of it's the sale of -- marketing authorities, sale of --
DR. KAMARCK: Yes, some of it selling things -- yes.
MR. KOSKINEN: -- part of the money in the funds generated are generated actually by changing the way the government does its business.
Q: Can you break down how much of that $70 billion is because, you know, money raised through asset sales?
DR. KAMARCK: You could -- we didn't break that down, but it is all spelled out clearly in Appendix C of the report. So you could actually go through and see. In other words, look under the Energy Department. They have a lot of asset sales. And you can look at it. It's not a huge portion of it. Okay? I mean, it's not -- I wouldn't even say -- I wouldn't even it's 10 percent, would you?
MR. KOSKINEN: It might be 15 percent, but it's in that range.
DR. KAMARCK: Yes, it's in that range.
Q: What's left to do? You were talking about continuing this process. You developed a sideline on regulatory reform. What other initiatives are going to be --
DR. KAMARCK: We have spent the summer releasing individual reports from the agencies. These have not been big news headline-grabbers. But these are the reports that constitute the 16,000-pages of regulations that the President announced in beginning of June that were being eliminated.
We are working very hard to make sure that the regulatory agencies do what they promised us they would do. OSHA is one of our biggest pushes. That is a huge symbolic change if we could make OSHA by this time next year a different place.
And then we are developing a new concentration on making the government that is still here work better so that average Americans can feel it. We were very, very excited about the Social Security's 1-800 number. The federal government, under the leadership of the National Performance Review, has benchmarked with AT&T, Federal Express, and some of the biggest companies in America, on telephone technology. And I think you'll see in the next couple years an explosion as the government rushes to catch up with the private sector in the use of basically government and computer technologies. All of these things are being done so that in fact people get the same level of service and convenience from their government interactions that they do from their private sector interactions.
I have a theory about why people in the last 20 years have gotten so down on the government. And if you look at any poll data, they really have.
Q: Presidents. (Laughter.)
DR. KAMARCK: I think the reason people think the government is just -- government employees aren't any good and they waste money is the disparity in their experiences in the private sector and their experiences in the government sector are huge. You know, you go to -- you do your banking in these fancy machines any time of the day or night you just walk up; it's convenient; it's easy. You go to a government office and you automatically are back in the 1950s.
And so what we're trying to do is dramatically move the government in the next year so that the distance between the best in the private sector and the government is just not as great, and people feel that they're actually getting value from their government.
Q; How are you going to do this?
DR. KAMARCK: The classic -- classically, the way the private sector has been doing it -- by reengineering work processes, by using computer technology, by changing --
Q: If you start engineering processes, you're going to be doing this for 20 years.
DR. KAMARCK: Reengineering processes can be done in three months. In fact, in Miami they did them in two weeks. You do them real fast when you need to. And we've got some good examples of that.
Q: I'm missing the first part. Do you expect any government agencies to actually disappear in the next few years?
DR. KAMARCK: I mean, small agencies, yes. There's a lot of small agencies, there's a lot of programs disappearing in the next few years. We do not believe that, for instance, the Commerce Department should disappear. And let me give you just the easiest explanation why not. If tomorrow the same people are sitting in the same office, doing the same work, but their letterhead is different, we don't call that reinventing government. And we don't call moving boxes around and deciding to put this over in this department -- we don't call that reinventing government. We call the kinds of changes in here that actually save money and-or improve service -- that's what we mean by reinventing government.
Q: What about Energy -- is there a will here to fight to keep Energy alive?
DR. KAMARCK: Yes. And, listen -- I mean, look at what they've done there, and it's a documented sum in this report -- $23 billion of these savings are coming from the Energy Department. They have hugely chanced the way they do business. They've gotten down to the core missions that they must do in the future, and they're shedding old ones right and left. I believe that the reason the Energy Department is probably going to make it through this Republican Congress when, if you remember, back in November, that was on the top of their list, is that, as Hazel O'Leary goes around town, people say, oh, yeah, you've done it actually the right way. It doesn't make an awful lot of sense to take the people in the Forestall Building, keep them doing the same kind of job and just tear that sign "Energy" off the door and slap on the Department of Defense, which is basically what all the plans to get rid of the Energy Department do.
Q: And they keep cutting her appropriations.
DR. KAMARCK: Well, but she's also right in step with that. She's changing the way she does business. She's getting rid of a lot of old stuff. So that she can cope with. But there's no reason to throw out Cabinet departments if all you're going to do is take great big pieces of them and put them someplace else.
Q: Can you give us examples of agencies that will be eliminated? And can you also explain why the appendix doesn't list any DOD cuts?
DR. KAMARCK: Mostly because we just haven't gotten finished with DOD's work. DOD is doing -- their round two of reinvention is two very important things. They're continuing acquisition reform and they are doing an extensive amount of privatization of DOD services, et cetera. And we expect sometime in the next two months to have a very major presidential announcement of DOD's round two reforms.
Q: Agency cuts? Who should go?
DR. KAMARCK: Agency cuts? We've got a list in here of agencies -- the Interstate Commerce Commission, the Uniform --
Q: I mean new in this report that we haven't heard before.
DR. KAMARCK: I'm sorry, I don't have that right out, but you'd have to look through the appendix and they're in there.
Q: The $58 billion that's in the bank, that's over a five-year period.
DR. KAMARCK: Right.
Q: How much of that is accounted for by procurement reform?
DR. KAMARCK: About $12 billion of that is by procurement reform. This is less than our original estimate from the savings from procurement reform, and the reason, though, is not that we're not saving as much; the reason is that we estimated that on a $200 billion a year procurement budget for the government, and that budget came down faster than we thought. So, in other words, we're still saving the same percentage, but it is of a smaller procurement budget.
THE PRESS: Thank you.
2:34 P.M. EDT