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NATIONAL PARTNERSHIP FOR REINVENTING GOVERNMENT
(formerly NATIONAL PERFORMANCE REVIEW)
Vice President Al Gore's Address at the
National Press Club, Washington
on
Governing in a Balanced Budget World
March 4, 1996

VICE PRESIDENT GORE: Thank you very much. Thank you. Thank you very much, ladies and gentlemen. I'm grateful to you for the invitation to come here today. And Sonja, I appreciate that introduction. For a stiff guy, I really appreciated those kind words. It's been so cold lately, people who don't know me better have thought I was frozen stiff. Let me also acknowledge the other distinguished head table guests and some of my colleagues in the administration who are here today Bruce Lehman, Assistant Secretary of Commerce and Commissioner of the Patent and Trademark office and Mort Downey, Deputy Secretary Department of Transportation, Elaine Kamarck, who has been the staff director at our Reinventing Government effort and others.

Before I give my remarks today about our next phase in reinventing government, I would like to begin with some comments on another subject. Earlier today in Tel Aviv, evil once again touched the lives of innocent men, women and children, and has outraged civilized peoples throughout the world. On behalf of all Americans, and in echoing the comments of our president just an hour ago, I send my deepest, heartfelt condolences to the people of Israel, and to the families, friends and loved ones of those who have been hurt by this senseless act of terror. Yesterday, President Clinton spoke to Prime Minister Peres in the aftermath of the incident yesterday, to express our condolences and our solidarity. Today, once again we reaffirm our determination to end the violence and to help sow a new era of peace and hope and reason throughout the Middle East. Mark my words, the terror will be stopped. the enemies of peace will be defeated. The forces of division and hate and fear shall not prevail. These deaths, this pain, shall not have been in vain. As the house of Israel celebrates the festival of Purim, let all the world join with them in friendship and in remembrance. As we are reminded in Esther 9:22, today let us turn our sorrow to gladness, for peace once again will bloom in the hearts and minds of all humankind.

Now, I would like to turn to the topic that I came here to speak about.

Two weeks from today, President Clinton will present a budget plan for fiscal year 1997 and the following five years. This budget, which he outlined last month, will be balanced. Next year, whoever wins the presidential election of 1996 -- and I'm predicting Bill Clinton will win that election --
(Applause.)
I appreciate the guests here, including some who share that sentiment, but whoever wins the election in the fall of '96 will present his budget plan for fiscal year 1998 and beyond, and that budget will also be balanced. And so it will go. Balanced budgets followed by balanced budgets. And when those of you here who are reporters cover the White House in the year 2001, 2015, maybe even 2050, chances are good that the president will present to Congress a budget plan in which government outlays do not exceed government revenues.
I think we have witnessed the formation of a durable bipartisan consensus that our nation must and will have a balanced budget. Of course, deep disagreements continue to divide President Clinton and the Congress, but these disputes do not concern whether to bring the budget into balance, they concern how to bring the budget into balance. Make no mistake, these "how" disagreements are vitally important. They illuminate profound differences in Democratic and Republican values. But still, amid all the huffing and puffing, one truth endures: Although we disagree on the route, we share a common destination. The budget will be balanced. Everybody might as well get used to that fact. For the first time in a generation, we live in a balanced budget age.

And that new environment, together with the birth of the information economy, the death of the Cold War, and an assortment of end-of-the-century jitters, has raised an old question with a new sense of urgency. How should the federal government operate? President Clinton identified this question early in his term, and three years ago he asked me to begin working on it. And I'm proud of what our federal employees have done to reinvent government. With their help, their ideas, their leadership, we are eliminating 16,000 pages of regulations. And by implementing the suggestions that federal employees who work on the front lines have been providing to us, suggestions that have never been heard clearly on a sustained basis before, and indeed have sometimes not even been offered because of the fear that those who stuck their necks out would get their heads chopped off, by hearing and implementing their suggestions, we have created the smallest government since the administration of President John F. Kennedy. Indeed, we have reduced the size of the federal work force by more than 200,000 positions in the last three years. Because of our efforts and our partnership with federal employees, the government work force as a percentage of the civilian work force is now smaller than it has been since 1933. But we haven't just shrunk the size of the government.

Again, in partnership with federal employees, we are actually making it work better. We've got a long way to go and we understand that very well, I'm going to be talking about that today, but we have made progress and we're beginning to make even more rapid progress. For example, when we came to office the Federal Emergency Management Agency was a disaster. Now it's renowned for its assistance in response to disasters, praised on a bipartisan basis every time it is called upon to respond. The Social Security Administration now gives world-class service to our senior citizens. The Small Business Administration has reduced its size, cut its paperwork dramatically, and increased its loans. Compared to the steady growth of the bureaucracy year-in and year-out, which our country was accustomed to before Bill Clinton was elected president, these recent achievements compiled over the last three years represent a new pattern and are remarkable, although they have generally been unremarked upon.

Now, that's not for a lack of trying on our part. In fact, I even wrote a book to showcase our success. None of the royalties go to me, they all go to establish cash awards for federal employees who perform at an excellent level in providing service to the public. But, alas, unlike some other Washington potboilers, this book did not climb to the top of the best seller list, and so today I'm announcing here at the Press Club that we are issuing a new edition, which I have here this afternoon.
(Applause.)
Those of you in back may not be able to see the cover ... This is the new -- this is the new version of "Common Sense Government" --
(Applause.)
I'm predicting best seller status. The book is filled with success stories of how we are restoring common sense to governing.

But we're not done. The balanced budget has raised the bar from where it rested just three years ago. Reforming the federal government is much more than the sensible idea of a sensible president. In the era of balanced budgets, it is now a central responsibility of a responsible chief executive. Like the hot breath of competition in the private sector, the icy breeze of a balanced budget has forced those of us in government to move faster and farther. And so today I am announcing six steps to reform how the federal government will operate in the future, starting now.

First of all, we're going to dramatically change the way many agencies provide their services. Today, I'm proposing to create within existing departments something we call "Performance-based Organizations," or PBOs. Let me explain how these new operations will work. You know, over the years people have said, "Let's make the government run like a business." And that has usually meant in practice sticking a business man with no government experience in charge of a government agency. The players changed, but the rules of the game did not.

And, by and large, neither did the results. These poor results then uncorked more rhetoric about how the government needed to become more businesslike. Well, we've got good people trapped within bad systems, it is the systems that need to change, not the personalities. Although, from time to time, change is needed there, too. But the reality is that government is not a business. Making policy and enforcing regulations are things that only governments do. They can't be measured by business standards and really shouldn't be, but there are other functions of government that do resemble the activities of a business and can be measured by business standards. Functions such as processing patent applications, issuing benefits and loans, selling groceries to the military. There's a long list. Much of government can and should operate more the way a top-notch business would. But the systems of government presently don't allow them to do that.

We want to change that, and that is what Performance-Based Organizations will do. These PBOs would be run by chief executives who sign contracts and will be personally accountable for delivering results. The chief executives might come from the private sector or might come from the ranks of the civil service. Some of the most talented, creative, hard-driving, successful managers I've ever encountered in my life come from the civil service. They might -- these new managers might come from either private business or the civil service. Either way, their performance will be measured by criteria such as efficiency, cost, and service. Their pay and job security will be tied directly to performance.

We recognize that simply applying a new set of rules to the people at the top will not affect the performance of an organization. We need to change the whole culture of these organizations and so, for these PBOs, we're going to toss out the restrictive government rules that keep them from doing business like a business. All the red tape, personnel rules that keep managers from using people effectively, the budget restrictions that make planning or allocating resources almost impossible. In return for that flexibility, they will be held strictly accountable for results.

Now, we'll need help from Congress to make this happen. I believe that we will receive it. I don't anticipate any partisan disagreement about this particular initiative. Last September, I announced our plans to convert the Patent and Trademark Office into a PBO, and the legislation is even now moving through the Congress. This new organization would process patent applications, but its new chief executive would be free to manage its 5,500 employees and its $600 million budget in the most cost-effective ways possible. And if the CEO does not deliver results, he or she will get the axe. To the inventor applying for a patent, dealing with this new PBO will mean an answer in sixty days, instead of nineteen months.

We're going to push forward with this proposal, and we are identifying additional candidates that we will submit in the president's budget in two weeks. One more thing. We realize that PBO, Performance-Based Organizations, isn't very catchy. So we're going to post a few alternative names in the news room section of the National Performance Review's Internet Home Page, and we will let the people decide. Here are the initial choices. PBOs, Charter Agencies, Service Enterprises, Perform America, and, of course, Sea Dogs.
(Laughter.)
"Wizards" was taken.
Let the voting begin, and the way to vote is to contact us on the Internet at WWW.NPR.GOV, and go to the newsroom. WWW.NPR.GOV. Okay.

Now, the second step in reforming government for a balanced budget age is connected to the first step. So, today, on behalf of President Clinton, I pledge that the federal government will, in this calendar year, deliver visible, recognizable and measurable improvements in customer service. The president has asked eleven agencies to lead this effort as his customer service vanguard. With the commitments made by these agencies, 23 million taxpayers will be able to file their tax returns by telephone. A post card is too much trouble. Veterans will get more timely delivery of service. Long lines at the passport office will shrink. And scores of other improvements will demonstrate that government is indeed working better as it costs less.

And of course, starting today, all of these commitments and others specifically articulated will be posted on the Internet to make it easier for taxpayers to hold us accountable. And we want to hear from taxpayers about their experiences in receiving service from federal agencies and departments, and specifically with regard to how we're doing in keeping these commitments that are posted today. If you want to contact us and communicate with us directly about customer service and these particular commitments, go to the White House Home Page on the Internet and go into "What's New" and you'll see them as of right now, they will be posted. And that, incidentally, is WWW.whitehouse.gov.

Well, when we first started talking to government agencies about customer service, very few of them really understood what we meant by the phrase "customer service." Front line employees viewed customer service as keeping their supervisors happy, and the culture of the organization has tended to reinforce that view in the past. Customer service for many heads of agencies meant pleasing Congress and particularly the appropriations subcommittees. Entire federal programs were designed and implemented without ever really finding out what the customers wanted in the first place. And since government had little idea of who its customers were, the idea of setting measurable standards for customer service was really an alien concept.

Working with federal employees, we have changed that. We went out and looked at how the best in business delivered first-rate customer service, and we've started doing the same for our customers. For the first time ever, over 200 government agencies have established and published customer service standards, and they have engineered their processes to figure out how they can meet those standards and steadily improve those standards. Now, just as Federal Express customers know that they're guaranteed to have their package delivered overnight, taxpayers going to a Social Security office will know that they will be seen within ten minutes. Students calling for information on direct loans will know that they will get through to a live human being within 35 seconds.

These and over a thousand other measurable standards mark a dramatic change in the way government views and treats its customers. We're seeing the signs of success already. For example, an independent survey rated the Social Security Administration higher than Nordstrom at providing 1-800 service. Rated them higher than Disney World. Higher than L.L. Bean. In fact, Social Security was rated higher than any American business competing in that category. We have just unveiled one-stop Internet access to the federal government through the U.S. Business Advisory. We're redesigning the telephone book blue pages so that you'll be able to look under P for Passports, not S for State Department.
(Applause.)

And we've challenged all agencies by setting a goal that everyone in America will know that government service is better.

Now, the third way we're going to transform government is to make partnerships with the private sector the rule and not the exception. So far, such partnerships have mainly been in the form of pilot projects scattered through the regulatory agencies. But today I'm announcing our commitment to bring these partnerships into the mainstream of our regulatory philosophy. The vast majority of Americans believe that their government has an important role in ensuring their safety and protecting their environment. Government oversight has helped make our work places safer and kept our food safe and healthy. Strong enforcement of environmental statutes has helped to restore the health of rivers and has brought back the bald eagle. Our challenge is to not only maintain that progress but to actually do better. We know that regulatory agencies can do better by focusing on results rather than process. We've seen it work.

In Maine. OSHA realized that all of its fines and penalties on businesses that were not complying with workplace safety and healthy -- workplace health and safety rules, all of the fines and penalties were producing a lot of income but they weren't producing any improvement in workplace safety. So they abandoned the old way of doing business and formed alliances with management and labor, and focused on results. Well, now, by focusing on results they've identified and corrected fourteen times as many hazards than they did the old way. Productivity is up, and most importantly, injuries in the workplace are down by one-third in their jurisdiction.

In Miami. The Customs Service used to force companies to spend as much time on government paperwork as on their business. One company had to fill out 700,000 forms each year. Then, customs sat down with these firms and figured out what was really needed and what wasn't. Now that company files one form per month. By getting smarter, customs has been able to confiscate more illegal drugs -- seizures are way up -- while at the same time helping legitimate businesses grow. And the people who were waiting in lines, getting off international airline flights, are moving through much faster than before. As a matter of fact, their complaint now is that they're having to wait to get their baggage. And so the airlines are getting their baggage handlers together and challenging them to reinvent the way they handle that job so they can be good enough for government work. (Laughter)

Through programs such as Project XL, Green Lights, and 33/50, we have seen the Environmental Protection Agency and hundreds of companies team up to keep a billion pounds of pollutants from being emitted into the air. We've said, "If you can get the job done cleaner and cheaper, then go to it. And throw the rule book away. Give us a way to measure your progress toward exceeding the goal you've committed to exceed."

Why are these partnerships working? Well, because they're focused on results. The goal is to reduce injuries, stop drugs, cut emissions. Not to make sure that businesses are penciling in the proper lines on the proper forms. And they're working because government and industry are joining hands, not locking horns. The government recognizes that many corporate leaders share the same goals and are interested in working cooperatively to achieve them. And because they know their businesses far better than the government ever could, they also know best how to attack their own problems, using all of the innovation characteristic of the private sector. Treating them as adversaries wastes those positive inclinations, and it stretches federal resources thin instead of focusing them on the biggest problems.

These partnerships will be new for many of us in government and in industry. Old habits are sometimes hard to break. And this new approach will not be without some bumps. But we've seen it work, and we're going to make it happen.

Now, fourth. As we build partnerships with industry, the fourth step in reforming government for a balanced budget age is to forge new relationships with communities. So today I'm announcing that every time a grant program comes up for re-authorization we will ask Congress to turn it into a performance partnership and, if necessary, consolidate it with other programs. At the moment, there are more than 600 separate federal grant programs, each with its own rules and requirements. We're going to shift their focus again from process to performance. Together, federal, state and local governments will set the goals and then communities will decide how best to meet them. The goals are to produce better results, to increase accountability to the public for outcomes, to reduce red tape and micro-management, to provide greater flexibility in how services are designed and delivered. Here's an example.

Among those 600-plus grant programs are a number relating to child immunization. Some provide funds for separate vaccines. Some provide funds for public awareness. Some provide funds to help get children to the clinic so that they can get the vaccines that their parents have learned about. But the goal of the child immunization program ought to be to increase the percentage of two-year -olds who have all their shots. The president's 1996 budget began this push by calling for the consolidation of 271 diverse grant programs into 27 performance partnership grants. We have created 105 empowerment zones and enterprise communities to better focus on the local needs, and we've started signing agreements with states to create these new partnerships. We entered into such a new partnership with Oregon in 1994, to promote healthier children, more stable families, and a higher skilled work force. Just last week, I went to Connecticut to enter into a similar partnership to improve that state's poorest communities through economic development and neighborhood revitalization approached in a brand-new partnership context. Over the next year, we will expand these partnerships across the country.

The fifth step in reforming government for a balanced budget age is to establish a single point of contact for communities in their dealings with the federal government. So, today, I'm announcing that the Department of Housing and Urban Development will, over the course of the next year, select a person to serve as the single point of contact for every single community -- a different person for each community -- every single community with more than 150,000 residents. We're going to give the legendary nameless, faceless bureaucrat a name. And a face. Recognizable to each of these communities who needs an individual who can facilitate the solution of problems these communities have related to the federal government. And they have -- communities have scores of different interactions with the federal government, ranging from Head Start to highways. To get their work with the federal government done, communities had to go door-to-door to door to door. Why? Because these interactions are dictated now by the way the federal government is structured, and not by what the communities need. There is no focal point for dealing with the communities' issues in the executive branch. So we want to establish one, and we will.

The sixth step is to transform the federal work force. So today I'm announcing that we will submit legislation to vastly expand the demonstration authority in civil service law. This expansion of authority will allow large numbers of government agencies to design personnel systems suited to their mission. And again, I do not anticipate any partisan opposition to this particular step. As any CEO can tell you, reinvention will be only as successful as the partnership with the workers. Let me emphasize that our federal work force is one that any private sector executive would be proud of. But the personnel system they toil under is not.

We have as diverse a set of missions as any conglomerate -- more so -- but we use a personnel system designed in 1883, that applies a single set of rules to all federal employees, from patent attorneys to park rangers. This one-size-fits-all approach, designed in the last century, just will not meet the challenges of the next century. No corporation would operate this way. Take General Electric. They make light bulbs, secure mortgage loans, and lease cars. G.E. would not try to squeeze such a diverse cadre of workers into a single personnel system, and neither should the federal government. We need a new model, decentralized and focused on the mission of each organization. It should hold federal workers to a higher degree of accountability, give line managers more authority over personnel decisions. That's why we want to change the law and liberate people to build a government that does work better and cost less.

Finally, let me talk for a brief moment about Congress. I've had the privilege of seeing the workings of government through the lenses of both Congress and the White House. As the executive branch moves into a new balanced budget world, the Congress must join us. This may mean conducting some reinventing inside Congress itself. First and foremost, Congress must give the president the line item veto. We will never rid our government of tea tasters and wool and mohair subsidies and all the other things that make taxpayers angry without that tool.
In addition, members of both parties have talked about reforming the committee structure to align congressional oversight more squarely with executive branch organization. A private sector company that reported to multiple boards of directors would have a pretty hard time defining its mission and improving its efficiency. And yet many of our executive agencies report to multiple committees and subcommittees. And some overlap is inevitable. But the current situation is ridiculous. For example, EPA now reports on a regular basis to 28 committees and 43 subcommittees. There are nineteen congressional committees and 33 subcommittees that have jurisdiction over federal programs for children and families. Surely there is room for some streamlining here.

Now what we set multi-year goals for overall budgeting, do we really need to stick to single year appropriations? Can we move to more multi-year appropriations so that government managers have a more stable environment in which to plan and to invest, and so that all of the local and state governments that wait each year for the federal government to conclude its annual appropriations can also have some more flexibility to plan ahead.

These are contentious issues, I know, and I'm sure there are other, equally intriguing, ideas out there. Again, members of both parties in the Congress have put forward some interesting and sound reform proposals. But the point I want to make is that now is the time for Congress to join us in this effort. Two years ago, Congress passed and President Clinton signed the Government Performance and Results Act. This historic piece of legislation, which had bipartisan support, sets us on a path to a performance-based government. What Congress has passed for the executive branch should be matched by its own internal reexamination.

In closing, let me say that today I've outlined six ways that we can fundamentally change government to make it work better and cost less. And if we do all these things we can balance the budget and protect the priorities of the American people. If we don't do these things, we'll balance the budget anyway, but ordinary people could suffer and trust in public institutions could further erode. The landscape has indeed been reconfigured. As the president said in his state of the union address last month, the era of big government is over. But the dusk of big government need not bring the dawn of a fend for yourself society. And in many ways, the elections of 1996 will boil down to a choice. Do we abandon the old way of governing or do we abandon the old-fashioned values that underpin self-government. We think the choice is clear, let the hard work continue. Thank you very much.
(Applause.)

MS HILLGREN: Mr. Vice President, why do you think Hamas has started its bombing attacks now, and how seriously does it threaten the ability of Mr. Peres and Mr. Arafat to lead?

VICE PRESIDENT GORE: Well, I think it's obvious why the bombing attacks have resumed. These terrorists want to kill the peace process. They don't want peace. They want conflict. Violence. And suffering. They believe the best way to end the chance for peace is by resuming the violence and bloodshed. It is a manifestation of pure evil. We must prevent them from gaining their objective by creating the conditions that improve the chances for success in the peace process. The United States will stand with Israel, always, and especially now in the face of this renewed terrorism.
(Applause.)

MS. HILLGREN: What are the prospects for the Russian presidential elections, and what are U.S. interests?

VICE PRESIDENT GORE: Well, I've had all I can do staying out of the Republican election process and avoiding comment on that. I'm certainly not going to get drawn into the Russian presidential election. I appreciate the question, but -- our stakes -- let me address the second part of your question.

Our stakes are not with any individual, never have been and never will be. Our stakes are with the process of reform and democracy and the movement toward economic freedom, and we have expressed our support for those who move those important processes forward, regardless of what Russian political party they might be in. We do not have any favorite personality. We have values that we believe in and that's really what our stakes are in the decisions made by any other country around the world.

MS. HILLGREN: Speaker Gingrich said a few days ago that a budget accord will be reached within two weeks. Do you see that happening? A full budget accord or a partial one?

VICE PRESIDENT GORE: Well, I think that the speaker and individuals working with him, just like individuals who work with President Clinton in the White House, want to see an agreement reached. Now, you've asked me to look into the crystal ball and tell you whether it will happen or not. I don't know. I hope that it will. But it will only happen if it embodies an agreement that protects the president's priorities, which include, as he's often said, protecting Medicare and Medicaid, protecting the environment and education, and ensuring that there are no tax increases on working families. We can balance the budget and will balance the budget consistent with those values. We can also conclude an agreement with the Congress that spells out a specific way to reach those objectives and I hope that we will. But it's up to the Congress. And we're ready to talk on those terms at any moment.

MS. HILLGREN: According to the Post you were the "Buchanan" of the White House in the balance budget talks with Congress, is this a fair description?

VICE PRESIDENT GORE: No. (Applause and laughter.) Anything else I say would get me into trouble.

MS. HILLGREN: Looking at the question as objectively as you can, don't you have the Republicans to thank for these next several decades of balanced budgets?

VICE PRESIDENT GORE: No, not -- no! Absolutely not. Look at the rhetoric and look at the results. Don't be misled by the rhetoric. Concentrate, instead, on the results. What we saw under twelve years of Republican rule was a quadrupling of the debt and the creation of annual budget deficits of $300 billion a year as far as the eye could see. That was a catastrophe for America. The budget of this year would not only be in balance, it would be in surplus, except for the interest that we are obligated to pay on the portion of the national debt created between 1981 and 1993. That is a fact.
(Applause.)
That is a fact. I want to make it clear to the C-SPAN audience that the applause is not coming from these objective journalists assembled here from news organizations, but rather from the guests who have taken the time to look at the facts and who --
(Laughter.)
No, no, I --
(Applause.)
-- who are not -- what I meant to say was, who are not obligated to be nonpartisan. But, seriously, that is a -- that is a--striking statistic. You can take all of the national debt up until 1981 and we could pay the interest on that every year fine, with no problem. You just take the Reagan-Bush portion of what we have borrowed during the previous twelve years and the interest on that one portion of the debt -- now is much larger than our annual budget deficit. So while the deficits increased each year during the Republican administrations, under President Clinton the deficit has come down three years in a row for the first time since Harry Truman was president. It has now been cut in half in absolute terms, and as a percentage of our gross domestic product. And it has contributed, along with reinventing government and along with increased investments in education and job training and science and technology and protection of the environment, to a turnaround in our economic circumstances.

While the old approach with increasing deficits produced a triple-dip recession with widening unemployment, in the last three years we've had positive economic growth in all fifty states simultaneously for the first time in decades. We've created 8 million new jobs in America with higher than average wages, the stock market has almost doubled in value, it's up 75 percent of its value in only three years, we've seen more new small businesses created in each of the last three years than in any other year in American history, home ownership reached a 15-year high, we are seeing the auto industry return to being number one in the world for the first time since the 1970s.
We're seeing dramatic progress in reducing unemployment, African-American unemployment's come below double digits for the first time in 25 years, the inflation rate has come down to its lowest level in thirty years, and while there is a great deal of work to be done, and a great deal of economic anxiety and distress and a growing income gap, we are finally moving in the right direction instead of the wrong direction, making progress instead of losing ground. And part of it is reducing the budget deficit.
(Applause.)

MS. HILLGREN: Before I ask the last question, I would like to present you with a National Press Club mug --

VICE PRESIDENT GORE: A mug?

MS. HILLGREN: A mug. A mug, and a certificate of appreciation, and I would like to know, why don't you call this new organization, "The Bullets?"
(Laughter.)

VICE PRESIDENT GORE: Well, like Wizards, it's--it's taken, at least for a while, and we thought these other possibilities, including Sea Dogs, would--ought to be subjected to a vote. Thank you all very much for having me here today. Appreciate it. Thank you. Appreciate it.
(Applause.)

End of Event