Governing with Accountability
By Larry A. Liebenow
March 2002
American citizens and American businesses are judged on results every day. Companies that produce high-quality products at the lowest possible cost are rewarded in the marketplace. Those that don't, often fail. Likewise, workers who succeed in their jobs earn promotions and raises. Weak performers don't advance, or worse, lose their jobs.
This kind of accountability — which is at the heart of American capitalism — serves American businesses — and by extension, Americans well. And that is why the U.S. Chamber of Commerce applauds the administration's recent initiatives to use a similar system to make government agencies more accountable for their performance. Giving out grades for results, linking funding with performance, and opening up government jobs to private sector competition are central components of the administration's plan to get more out of government.
Beginning with the just released FY2003 budget proposal, the administration will grade five areas of government agency performance using a simple "traffic light" grading system: green for success, yellow for mixed results, and red for unsatisfactory performance. This year, not one cabinet-level agency received a green light in any of the five areas, and red dots accounted for more than 75% of the government's grades for all agencies, illustrating the value of this system when it comes to identifying opportunities for the government to focus on those operations most in need of improvement.
In future years, the administration will link its funding requests to performance, so that agencies with strong results are rewarded with more money, failures are fixed, and successful management techniques are spread throughout government.
This system of results and performance incentives, though new to government, has been the foundation of our free enterprise system since our nation's birth. Every day, millions of U.S. companies are "graded" by investors, customers and employees. Successful managers pause, evaluate and change direction, if necessary. For example, if a major automobile manufacturer produces a vehicle that has disappointing sales, it doesn't keep churning out the same model the next year. Instead, its engineers go back to the drawing board and attempt to redesign a car that consumers will respond to.
With this new system of government accountability in place, government agencies, like American businesses, will be rewarded for using taxpayer money for high value programs – and government managers will be encouraged to critically examine their departments against agreed-upon objectives and make changes when the agencies they manage come up short.
Critics have called the administration's new report card politically motivated, a gimmick, or a way for the administration to justify cutting social programs to free up money for other administration priorities. The U.S. Chamber's view is different. We believe that with this new process, government will become more accountable, more efficient and more responsive to its citizens – particularly if it opens up certain functions to outside competition. Nearly one billion, or half, of all federal employees perform tasks that could be handled just as efficiently, but for considerably less money, by the private sector. For instance, current law limits to 50% the amount of maintenance and repair work that the Department of Defense can outsource to outside contractors.
Under the administration's plan, jobs ranging from lawn maintenance to payroll services to engineering will now be open to a competitive process. Competition will force a more efficient federal bureaucracy and, regardless of who "wins," will result in substantial savings to taxpayers, improved innovation and greater effectiveness. Businesses and their employees must compete everyday — ultimately to the benefit of the American consumer. Logically then, a similar approach by our government should work to the benefit of the American taxpayer.
The president's plan for government accountability adopts the same basic principle — a commitment to results — that has made American business, its workers, and our economy one of history's greatest success stories. The plan is results-oriented and market-based, allowing for competition and innovation, while minimizing the focus on process and bureaucracy. In our view, this makes the administration's accountability plan a great first step toward ensuring that our government stays focused on the things that count — delivering the right government services to the right people at the right price — just as American business — at its best — does.
Larry A. Liebenow is President and CEO Quaker Fabric Corporation and Vice Chairman of the U.S. Chamber of Commerce.