Bridgeport resident David Walker, former U.S. Comptroller General, writes in a commentary that also appears in the Washington Times that “The federal government’s ultimate fiscal goal should be to reduce and stabilize debt/GDP at a reasonable and sustainable level …”
The United States is a great nation but we face many serious challenges that need to be addressed. Two key ones relate to the need to ensure fiscal sustainability and achieve government transformation. As a recognized expert in these areas, I have several thoughts that I believe President-Elect Trump needs to consider.
With regard to fiscal sustainability, the incoming Trump Administration is understandably focused on how to grow the economy and create more job opportunities in the U.S. Many of President-Elect Trump’s announced top priorities have this goal in mind (e.g., regulatory relief, tax reform, infrastructure investment, trade policy, immigration reform). There is no question that additional economic growth will help increase federal revenues; however, growth alone will not ensure fiscal sustainability over time. Basic math, the current composition of the federal budget, and known demographic trends dictate that efforts need to be made to significantly reduce projected federal spending over time as compared to the baseline, especially in connection with health care costs. While President-elect Trump has not publicly acknowledged it, this will eventually require a fundamental review and reassessment of all major mandatory spending programs, including Social Security and Medicare. Mandatory spending programs currently comprise about 70% of the federal budget and are growing faster than the overall budget. Social Security and Medicare need to be made solvent, sustainable and secure in a fiscally responsible manner.
How you keep score matters, including in connection with fiscal affairs. It’s time to move beyond annual deficit and aggregate debt level metrics. The federal government’s ultimate fiscal goal should be to reduce and stabilize debt/GDP at a reasonable and sustainable level (e.g., 60%) by a date certain (e.g., 2035). As a result, current budget and fiscal rules should be revised to focus on this debt/GDP approach rather than on annual or 10-year projected deficits and the current debt ceiling limit. By focusing on debt/GDP, we will be able to recognize the actual results of both our pro-growth strategies and fiscal responsibility efforts.
With regard to government transformation, the federal government is operating based largely on organizational models and human capital practices that date from the 1950s. It’s time to review and reassess what the federal government does, how it does business and who does its business. For example, many federal entities, including DOD, have become bloated, overlapping and inefficient bureaucracies that need to be restructured, streamlined and modernized. Shockingly, despite being in business as a Republic since 1789, the U.S. Government still lacks a strategic framework that is future focused, outcomes oriented and resource constrained. OMB should develop such a framework, including how best to address the systemic operational challenges noted above, on behalf of the President and in partnership with key leaders in government and outside experts.
Effectively addressing the above challenges will require having an adequate number of political and career executives with the right backgrounds, including change management and federal government experience, as well as the ability and commitment to make real change happen. They will need help from qualified and independent contractors to figure out what needs to done and to implement needed changes. These transformation efforts should be facilitated by a renewed Presidential Reorganization Authority, a streamlined and expedited Congressional consideration process, and a modernized human capital system (e.g., classification, compensation, hiring, firing, transfer and layoff rules). The modernized human capital system should focus primarily on skills, knowledge and performance rather than length of service. At the same time, it is critically important to retain appropriate protections against discrimination and political retribution.
As someone who has led major transformation efforts in all three sectors of the economy, I know first-hand that achieving the needed changes in government is much tougher than in the private or non-profit sectors. President-Elect Trump has nominated some very successful people to-date; however, very few of them appear to have direct transformation or change management experience in the federal government. Hopefully, he will appoint highly qualified Deputies and other key staff that can help him, his Cabinet, and other agency heads make the needed changes a reality. While this effort needs to start soon, it will take years to fully complete.
In the November elections, the American people clearly expressed their dissatisfaction with the status quo and a desire for real change in Washington. The new Trump Administration and Congress must work together to solve large known and growing problems, including in connection with fiscal sustainability and government transformation issues. It will take patience, persistence, perseverance and pain before we will prevail, but prevail we must, and if we work together, we will prevail!