We still have work to do, for while the era of big Government is over, the era of big challenges is not. Achieving educational excellence, finishing welfare reform and our campaign for safe streets, helping families to succeed at home and at work, balancing the budget, keeping America strong and prosperous, reforming campaign finance and modernizing Government operations so that, together, we can meet the challenges and seize the opportunities of this remarkable time.

President Clinton
December 11, 1996

The President's challenge is an awesome one--literally, how to do more with less, and how to do it better.

But it is the challenge that we face, shaped by the fiscal and political realities of our times. The President has worked hard to reduce the deficit, and he wants to work with Congress to finish the job and balance the budget by 2002--a goal that is widely shared in Congress and across the Nation. Consequently, departments and agencies no longer can count on more funding each year. For the foreseeable future, their resources will be constrained, perhaps severely so.

And yet, the Federal Government has a legitimate role to play in fulfilling the President's goals. Over the last four years, the President has used Federal resources and the power of his office to begin achieving educational excellence, expanding opportunity, cleaning up the environment, investing in promising research, ending welfare as we know it, protecting health care and pensions, making the tax system fairer, and keeping America strong. The public wants further progress on these and other issues and, with limited resources, the Federal Government must be able to respond effectively.

Led by Vice President Gore's National Performance Review, the Administration promised to create a Government that "works better and costs less." And we have made a good start. We are saving money, cutting the work force, eliminating needless regulations and improving the ones we need, streamlining bureaucracies, cutting red tape, and finding numerous ways to better serve Government's "customers"--the American people.

Costs Less

The Administration has:

Works Better

Departments and agencies are:

A Toolkit of Strategies and Techniques

The Administration is proud of its accomplishments, but our work is not done. As we move forward, the challenge will only get harder. Spurred by the Vice President, the Administration has identified many ways for agencies to improve their Performance and cut costs. Some of these tools focus on eliminating obsolete processes; others focus on improving the ones we have. Because agencies and programs operate in such different ways, not all of these tools, techniques, and strategies apply to each agency and department. But every agency and program can benefit from a number of them.

Based on what we have learned over the past four years, we plan to employ the following seven tools, as shown in Table IV-1.
1 Restructure Agencies
2 Improve Effectiveness of the Federal Workplace
3 Reform Federal Purchasing Practices
4 Expand Competition to Improve Services and Reduce Costs
5 Follow the Best Private Sector Practices in Using Information Technology
6 Improve Credit Program Performance
7 Improve Business Management Practices

1. Restructure Agencies

A smaller Government is not an end in itself. We want to change the way it operates. In place of highly-centralized, inflexible organizations that focused on inputs, the Administration is creating more flexible, decentralized management structures within agencies to focus on results. Agencies are streamlining their work forces, collapsing redundant layers, increasing spans of control, and creating leaner headquarters. Many are closing small, inefficient field offices while strengthening the services they provide to customers through increased electronic communications and systems. And some agencies are fundamentally changing the way they work with State and local governments and with the private sector by creating partnerships to focus on joint goals and the progress toward meeting them.

2. Improve Effectiveness of the Federal Workplace

What was true in 1993 remains true today. The main agents for change are Federal employees themselves. With a quarter of a million fewer of them than in 1993, we are asking those who remain to do more with less. They are working harder and smarter each and every day, and our efforts to reinvent Government would be nowhere near as successful were it not for their enthusiastic leadership and support. We must, however, continue to downsize and restructure, if only because of the limited resources that a balanced budget will offer. As with the previous personnel cuts, the Administration plans to closely manage and target further downsizing. Agencies need to avoid workplace disruptions and employee disputes and, when they occur, resolve them quickly and fairly. Employees and managers need to plan and work together for common goals. In addition, the President proposes a 2.8 percent pay raise for both civilian employees and the military. 3

3. Reform Federal Purchasing Practices

Prior to this Administration, efforts to make Government work better and cost less were often hindered by the Government's unique acquisition system. It was heavily rule-driven, leaving little leeway for Federal managers and employees to exercise good business judgment and common sense and providing too much incentive for wasteful and costly litigation. With leadership from the National Performance Review, the Administration issued an early call for fundamental reform and--with strong bipartisan support that helped produce the 1994 Federal Acquisition and Streamlining Act--is transforming the system into one that operates much more like private sector acquisition. The Administration seeks a Government acquisition system that performs like those of our most successful companies and, to achieve it, is pursuing important reforms.

4. Expand Competition to Improve Services and Reduce Costs

Competition spurs efficiency. Agencies that provide administrative and other commercial or industrial products or services to "captive customers"--be they other agencies, or individuals or businesses--lack the stimulus of competition to sharpen their Performance and control their costs. The Administration's effort to expand competition encourages agencies to compete with one another, and with the private sector, to provide common administrative support services. More competition will bring new technologies, capital, management techniques, and opportunity to Federal employees and their customers.

5. Follow the Best Private Sector Practices in Using Information Technology

Well-managed information technology should improve the Government's productivity while cutting its costs. Table IV-3 at the end of this chapter lists some of the most important investments in information technology for which the President is proposing funding. To ensure the maximum return on investment, agencies can now copy the successful practices of private firms, due to their new authority under the 1996 Clinger-Cohen Act. These practices--reengineering, buying and managing smart, integrating information--ensure that the technology provides workable solutions to real problems at a reasonable cost.

6. Improve Credit Program Performance

To fulfill its stewardship responsibilities to taxpayers, the Government must manage its cash and loan assets as wisely as possible. Specifically, it must design and administer its loan programs prudently, and provide incentives to ensure that it can collect its "receivables" (that is, the amounts owed) in a timely fashion. At the end of 1995, contingent liabilities (that is, outstanding guaranteed loans) totaled $737 billion, and non-tax receivables totaled $245 billion, of which $50 billion was delinquent. The 1996 Debt Collection Improvement Act gives agencies a range of new tools to improve credit program Performance.

7. Improve Business Management Practices

The Administration is trying to transform a Federal Government with vestiges of early 20th Century thinking into one suited for the next century, and seeking to provide financial accountability for Government spending. An efficient, effective Government needs sound financial management, reliable information, and, where appropriate, fees from those who benefit from Government's business-like activities. The Administration is taking a coordinated approach to electronic process initiatives in order to re-engineer financial services; aggressively implement electronic purchasing, payment, and funds transfer; and improve the quality and timeliness of financial reporting. Public Confidence in Government

The tools discussed above are designed to do more than let agencies function better for their own sake. Ultimately, they are designed to help agencies provide better, more effective services to the American people.

Already, agencies are assessing what their programs actually accomplish and what we must do to improve their Performance. The Government Performance and Results Act (GPRA)--the landmark legislation that enjoyed broad bipartisan support in Congress before the President signed it in 1993--makes agencies more accountable for, and focused on, what their programs achieve. The law provides the Administration, working with Congress, an unprecedented opportunity to give the American people a comprehensive picture of what they are getting for their taxes.

GPRA requires all agencies to send strategic plans to Congress by September 30, 1997 and make them available to the public. Each agency will define its mission, and set out its long-term goals for fulfilling it. Complementing the strategic plans, agencies also will create annual Performance plans, establishing Performance targets for the year ahead. Agencies will send the first of these Performance plans, for 1999, to Congress and make them available publicly in February 1998. Finally, at year-end, GPRA requires agencies to compare actual Performance against target levels in the Performance plan, and to feature the comparisons in annual reports on Performance to the President and Congress. Agencies will complete the first of those reports, for 1999, by March 2000.

For the challenges ahead, agencies now have many of the tools they need from not only GPRA but, as illustrated above, from the Federal Acquisition and Streamlining Act, the Debt Collection Improvement Act, the Clinger-Cohen Act, and the Paperwork Reduction Act. Others, however, will require legislation. Working together, the Administration and Congress can build on the groundwork they have laid. Working together, we can help agencies improve the Federal Government's Performance in a balanced budget world.

(Budget authority, in millions of dollars)
Program/Project 1996 Actual 1997 Estimate 1998 Proposed Program Performance Benefits
Agriculture: Field Service Center Initiative. 132 91101 Allows "one-stop service'' for farmers and producers.
Commerce: Advanced Weather Interactive Processing System. 58 100117 Improves the timeliness and accuracy of forecasts. Lowers the costs of generating forecasts through reduced staffing requirements.
Commerce: Census 2000.............. 620 67 Reduces errors, the number of temporary employees needed, and publication costs.
Defense: Defense Messaging System.. 121 167 203Provides timely, reliable, standardized, and secure communications worldwide and in the field.
Education: Direct Student Loan Servicing System. 85 135 172 Provides efficient and accurate servicing and record keeping for direct student loans.
Education: National Student Loan Data System. 23 28 32 Identifies institutions with high default rates for corrective action or elimination from student loan programs. Prevents students with previously defaulted student loans from receiving additional aid.
Education: PELL Grant Systems...... 6 11 11Distributes grant funds to institutions and supports sound financial management.
Education: Guaranteed Student Loan Data System. 24 23 20 Makes payments and maintains records for transactions between the Education Department, guaranty agencies, and banks, as well as improving debt collection of student loans.
Education: Student Aid Application System. 50 50 52 Assists institutions and students by providing a standardized way to determine financial aid eligibility.
Energy: Telecommunications Integrator Services contract. -- 2 4 Lowers operating and maintenance costs and improves sharing of information by promoting interoperability of telecommunications systems.
Health and Human Services: Medicare Transaction System. 20 75 89 Simplifies and streamlines claims processing, eligibility, and managed care information systems while improving service to Medicare customers.
Health and Human Services: National Directory of New Hires. -- -- 30 Will help locate non-custodial parents who flee their home state to avoid making child support payments.
Housing and Urban Development: Information Technology Investments. 4043 66 Provides better internal controls and oversight of Federal grants, verification of the eligibility of recipients, timely and accurate payment of funds, and oversight and servicing of FHA mortgages.
Interior: Automated Land Management Records System. 5142 33 Improves the quality of, and access to, land, resources, and title information for public land managers and the public.
Interior: American Indian Trust System. -- 13 17 Ensures that trust income is collected, invested, and distributed accurately.
Justice: Integrated Automated Fingerprinting Identification System. 84 84 84 Allows the FBI to process routine identification requests in 24 hours and urgent requests in two hours.
Justice: National Criminal Information Center 2000. 6239 --Provides the criminal justice community Nationwide with immediate access to documented information on criminals and criminal activity.
Labor: ERISA Filing Acceptance System. -- 6 3 Increases the speed, accuracy, and integrity of information that three agencies use to safeguard private pensions.
State: Diplomatic and Consular Systems Modernization. 100 144191 Improve delivery and management of information required by diplomatic and consular officers overseas to support the Nation's foreign policy goals and ensure U.S. border security. (Includes user fees and budget authority.)
Transportation: FAA Air Traffic Control System Modernization. 1,368 1,233 1,306 Maintains and improves capability to promote the safe, orderly, and expeditious flow of air traffic.
Treasury: Information Technology Investments. -- -- 500 Provides advanced funding for reengineering and redesign of tax administration systems and operations.
Treasury: Treasury Communications System. 46 115 118 Provides secure data transmission and information services worldwide for Treasury bureaus. (Funded through Treasury's working capital fund, not annual appropriations.)
Treasury: Automated Commercial Environment. 15 15 15 Supports business process redesign, systems architecture, development, and implementation for systems to replace Customs' Automated Commercial System.
Veterans Administration: Benefits Payment System transition. 6 6 7 Ensures that benefits are delivered timely and establishes a modern information technology infrastructure.
Veterans Administration: VA Clinical Workstation Information System. 430 450 456 Allows clinicians at VA hospitals and clinics easy access to complete medical records.
Environmental Protection Agency: Toxic Release Inventory System. 7 7 8 Helps to improve the environment by maintaining data related to the release of certain toxic chemical uses. The data is available to EPA staff, State and local governments, educational institutions, industry, environmental and public interest groups, and the general public.
National Aeronautics and Space Administration: Earth Observing System Data Information System.247 255 245 Archives, manages, and distributes earth science data from NASA missions and providesspacecraft control and science data processing for the earth-observing mission systems.
Social Security Administration (SSA): Automation Investment Fund. 167 235 200 Funds national implementation of a new computing network of intelligent workstations for SSA and the State Disability Determination Services and related technological enhancements, including electronic sharing of information.
General Services Administration: Post-FTS 2000. 10 2131 Beginning in 1998, will offer the Federal Government low-cost, state-of-the-art, integrated voice, data, video, and long- distance telecommunications. (Cost numbers are not budget authority, but agency contributions to the Information Technology Fund for expenses associated with the FTS 2000 Program.)
Nuclear Regulatory Commission: Agency Document Access and Management System. 1 2 2Implements workprocess improvement review and increases staff efficiency through improved information access and elimination of redundant data entry. Reduces maintenance costs by replacing aging legacy hardware and minimizing custom software.
Office of Personnel Management: Retirement System Modernization. -- -- -- Improves product accuracy, customer service, and staff efficiency by reengineering current paper-laden Federal employee retirement processes.
Interagency: Simplified Tax and Wage Reporting System. -- -- -- Reduces employers' tax and wage reporting burden.
Interagency: International Trade Data System. ---- 6 Reduces burden on exports and imports, speeds up shipments, and improves the quality of trade statistics.
Data Center Consolidation.......... -- -- -56 Saves money by requiring all Federal agencies to consolidate or co-locate their data processing centers to fewer larger, more efficient, and cost effective locations, either within the Government or with a private sector provider.
Note: This report is required by the Information Technology Management Reform Act of 1996, 40 USC 1412(c)).

1 As of September 1996.

2 As of December 31, 1996, agencies had eliminated, or proposed for elimination, 87 percent of the 16,000; they had improved, or proposed for improvement, 78 percent of the 31,000.

3Once again, the Administration will consult employee organizations and others before recommending how to allocate the civilian pay raise between locality pay and a national schedule adjustment. NPR Home Page Search the NPR Site NPR Initiatives Site Index Calendar Comments Awards Links Tools Frequently Asked Questions Speeches News Releases Library Navigation Bar For NPR site