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The Magic of Re-reinventing Government

Before the ideological war over entitlement reform begins, Congress should look to the ways technology can reduce the cost of government. All trillion of them.

Last summer I got pick-pocketed in Chicago. I was walking back to my hotel room after dinner when, mid-block, I reached down, found nothing where my wallet should have been and went straight to panic mode. Thanks to FedEx and my passport, I was able to make it onto an airplane and back to the West Coast, where the pocket-picking gave me a delayed lesson in governmental competence, via the seemingly simple and parallel tasks of replacing a Social Security card and a driver's license.

The Social Security office in Santa Barbara, Calif., is located in an outdoor mall downtown, but it's not at ground level, where most shops are, but around a corner, up a winding stairwell, around another corner or two and down a hallway carpeted in purple. As you enter the fluorescent-lit but somehow cave-like waiting room, a sign tells you to take a ticket; the sign has an arrow but doesn't point to anything specific. If you happen to notice it, a computer monitor on a table, way down at waist level, does offer three explanations of how to obtain the proper ticket. But you have to bend over and read all the way through before you can understand. Many people do not understand but spin around, looking this way and that, until a squat guard extracted from a Gabriel García Márquez novel and placed behind a nearby table explains the procedure.

The waiting cave has four rectangular openings in one of its walls, each of which can be closed with a wooden panel that slides up and down. When I got there, the panels were up at two of the openings, and citizens sat on chairs before them, receiving super-slo-mo government attention. Six or so other people waited their turns on chairs specially designed to make older people ache. A mechanical gizmo on the wall displayed the number being served, but it behaved erratically; it would stay on one number for eons, and then inexplicably jump two or three or four.

After about an hour, three people ahead of me had been helped, and the waiting room had filled with at least 15 more. The process wasn't just slow; it was bizarre: When a client consultation ended, the Social Security employee involved often pulled his or her wooden screen down, closing the window. Some indeterminate amount of time later, the wood screen would raise at a different window, and a different Social Security employee would call out a number. Or the Gabriel García Márquez guard would simply tell someone to go next, without regard to numbers. Or a Social Security employee would open a door at the far end of the room and call an out-of-sequence number.


Finally, the last number before mine was helped, and I felt better. I was next. It couldn't be long. Then the gizmo on the wall went click — and skipped right over my number. If I remember right, I had number 31, but the gizmo snapped directly from 30 to 32. It was a ghastly, Kafkaesque moment. I'd been elided, hurdled, consigned to numerical limbo. Now I'd never be helped, and there was no one to complain to. Except ...

A guard from The Autumn of the Patriarch.

Of course, I eventually got my duplicate Social Security card. But a two-minute transaction had been turned into 75 minutes of misery, apparently just because that's how things work at the Social Security office in my town.

The California Department of Motor Vehicles office in Santa Barbara was another story. It was easy to find. The DMV employees worked in the center of the room, behind a counter, where you could see them, watch them, hear them. If you needed something, you could even — gasp — talk to one.

I walked in, was handed my numbered ticket by a pleasant human being, and no more than a couple of minutes later the number was called. After a stop at a preliminary station — where a woman was efficiently helpful — I was sent to a man who genially handed me the written test. When I was done, he immediately graded it, took my picture and thumb print and — voilà, 15 minutes after I began the process, I had a replacement driver's license.

When I asked the DMV test-grader his name, so I could compliment him to his supervisor, he laughed and said, "Tell 'em Richie needs a raise." So now I'm telling the people who make such decisions: Richie in the Santa Barbara DMV needs — and deserves — a raise.

I don't think it's stretching much to say the obvious difference between Richie and an indifferent cipher at the Social Security office has relevance to the angry debate about national finance that has convulsed our recent political life. It's the difference between efficiency and its opposite, and it's relevant for a simple reason: As crazy and ideologically divided as our politics have become, I doubt you can find a single congressperson — Democratic, Republican, independent or Tea Partying — who wants to make a career out of standing strong for incompetence with an absurdist twist.

In the weeks before you read this column, the National Commission on Fiscal Responsibility and Reform — a bipartisan group studying ways to improve the federal government's medium- and long-term fiscal situation — should have made its initial recommendations to Congress. I can't predict all of those recommendations, but even without knowing how the changes from this November's election will play out, I can confidently project that they will spark a debate stuffed with ideological misinformation and partisan grandstanding.

If past is any kind of prologue, Republicans will suggest that government is the problem, not the solution, and advocate massive cuts in government spending and — in that piece of GOP dogma that seems to be more doggedly asserted, the more it is disproven in practice — tax cuts that will increase business investment and overall tax revenue.

If they follow past form, Democrats will argue in favor of higher taxes on the wealthy, significant cuts to defense spending and a pay-as-you-go budgeting system, similar to what existed in the Clinton years. Those changes, the D's will insist, can provide the gradual path toward balanced budgets that leads a confident financial sector to invest in a "green" alternative energy revolution that sparks economic growth strong enough to fill the treasury.

Both parties will likely demagogue the major entitlements — Social Security and Medicare — that account for most of the massive amounts of red ink in deficit projections for the "out years" of coming decades. They will accuse one another of being unserious about entitlement reform, and, if past is any kind of prologue, they will both be correct.

And unless I miss my guess entirely, after the fiscal responsibility commission makes its recommendation in December, relatively few members of Congress will be talking about a report issued in October by the Technology CEO Council, a group of chief executives from major employers in the high-tech industry, including IBM, Dell, Intel, Motorola, Micron Technology, Applied Materials and EMC Corp. Titled "One Trillion Reasons," the report lays out seven "commercially proven best practices" for maximizing productivity, and it claims the federal government could save $1 trillion — yes, spelled with a "t" — by 2020 if they were adopted. As a card-carrying journalistic skeptic in good standing, of course, I rolled my eyes a few hundred times on first contact with the report. Much of the rest of the press appears to have had a similar reaction; the report got perfunctory coverage, at best, when it was released.

But once I made it beyond the report's executive summary, my eyes stopped rolling. The report doesn't suggest pie-in-sky budget cuts that would be fought tooth-and-nail not only by the corporations, lobbyists, employees, unions, cities, counties and states the cuts would impact, but also by the congresspeople who represent them. It simply suggests the government begin to use technological systems that have produced dramatic savings for firms and governments that have already instituted them. For example, the report projected the government could save $200 billion over 10 years just by using "new analytical techniques" that identify improper payments sent out by the government. Could enough of these kinds of improper payments really be found to save this kind of money?

To find out, I contacted Bruce Mehlman, executive director for the Technology CEO Council, and he directed me to a "central" figure in developing the report: Jonathan Breul, executive director of the IBM Center for The Business of Government and, formerly, a longtime senior executive in the Office of Management and Budget. Breul says that all seven recommendations in the council's report are "proven, credible techniques" that have long been used in the private sector — and, perhaps more important, in government, both in the U.S. and elsewhere.

Perhaps it's because of the two decades he served at OMB, but my immediate impression of Breul was one of nearly complete competence combined with a savant's recall of facts relating to his subject. Ticking off figures at near-warp speed, Breul said the OMB has found the federal government made close to $100 billion in improper payments in 2009. The error rates in some programs are as high as 25 percent. And they are errors; the government sends Medicare payments and tax refunds to people who are in prison or dead or obviously lying. But Breul says there are "all sorts of forecasting and risk factors" that the appropriate software and other tools can screen for, identifying improper payments both before and after they are made.

These screening systems are not experiments that will cost the government billions in information technology before they even start to save money. They are at work now — often at no cost to the government. Breul mentioned programs in North Carolina and New York in which IBM is helping state governments retrieve or pre-empt improper Medicaid payments and tax refunds. In those programs, IBM earns its money as a percentage of improper payments avoided or recouped, sort of like a plaintiff's lawyer on contingency, so the government has little in the way of startup costs. Similarly, The Washington Post reports, the LexisNexis information company has conducted a pilot program that helps counties in Florida, Georgia, South Carolina and Texas identify people who are claiming unwarranted homestead property tax exemptions for vacation homes. The result? Multimillion-dollar benefits to local governments.

The Technology CEO Council's report includes six other recommendations, including programs to consolidate information technology — combining data centers, using "cloud" computing, standardizing software, and so on — that could save the federal government $200 billion over 10 years. Improvement of supply chains — something the U.S. Postal Service has already done, saving $2.5 billion — could save the rest of the federal government as much as half a trillion over 10 years. The list goes on. Reductions in energy use: $20 billion. Requiring agencies to share finance, legal, human resources and other standard organizational operations: $50 billion. The report suggests another $200 billion could be saved by changes in how the government operates in the field — including an increase in the online services government offers citizens — and by disposing of at least some of the government's huge trove of surplus and underused buildings and land.

I've been reporting on government long enough to know that many of these recommendations will be resisted in the magical-realistic world of the federal government. Whenever anyone starts talking about consolidating operations across government agencies, I wonder whether he or she has ever spoken to anyone in the government. But Breul obviously has, and in our conversation, he acknowledged that many a government agency is its own fief, with prerogatives that are jealously guarded. Consolidations of operations among agencies are "darn difficult" to institute, he admitted. Still, he says, the federal government has consolidated one large set of payroll systems, cutting payroll costs by about two-thirds at the Environmental Protection Agency and the Department of Health and Human Services.

"No. 1, somebody's got to put his shoulder to the problem and push back," Breul said.

The Obama OMB made agreeable noises in the wake of the Tech CEO Council's report, with acting director Jeffrey Zients noting on the OMB blog that, under the president's Accountable Government Initiative, the office has been working for more than a year and a half on efficiency programs similar to those proposed by the tech council. (The blog post was even headlined, "Seeing Eye to Eye with the Tech CEO Council.")

I have no reason to doubt the sincerity of the Obama administration's interest in accountability and efficiency, but I also know the enormous inertia contained within the federal bureaucracy, regardless of who the president might be. The employees at the Social Security office don't behave as all-powerful rulers of a surrealist domain with its own definitions of time and counting because they are bad people. They behave that way because their supervisors have lived their professional lives in a culture that views itself as self-contained and immune from oversight or fundamental change.

If it is serious about effecting major long-term debt reduction, the new Congress should, first off, quit stalling the president's appointments to fill out the OMB's top-level staff, who will be critical to any government-efficiency effort. (For one example of outlandish magical realism at work, in November, a senator in Obama's own Democratic Party, Mary Landrieu of Louisiana, was blocking Jacob "Jack" Lew's nomination for director of OMB, The Wall Street Journal reported, "in protest over the administration's offshore oil-drilling policies." And Landrieu continued her hold on the nomination even after the administration lifted a moratorium on offshore drilling.) Next, Congress should quickly call hearings — in the appropriate House and Senate committees — on "One Trillion Reasons" and the administration's response to it. Then it should, in relatively short order, pass legislation that provides budgetary and other authority so the executive branch can pursue these seven reforms as broadly across and deeply into the federal bureaucracy as possible. The legislation should, of course, also set savings benchmarks that Congress can monitor.

But if it's serious about putting America's national accounts in order, Congress needs to go beyond these specific recommendations to investigate and then institute programs that bring the full innovative power of the digital technology revolution directly to bear across the government. It's a revolution that has remade the private sector, in America and around the world, but has been only fitfully adopted by slow-moving federal agencies that fear its power to simultaneously cut costs and increase efficiency. Those fears are realistic. If the leaders of our government ever turned serious about encouraging the high-tech sector to revamp the bureaucracy, tens of thousands of government employees might well lose their jobs in a relatively short period of time. I have seen this process of creative destruction and rebirth work close up in the media industry, and it is, indeed, often frightening and cruel. As they're happening, layoffs never feel particularly creative.

But it's a process that must be brought to the government if the U.S. is to restore the federal fiscal discipline that encourages the private investment needed to power a broad economic expansion that puts not tens of thousands but millions of people back to work. Although originally popularized by then-Vice President Al Gore, the process of reinventing government as a technologically advanced and at least semi-efficient activity is at its heart-of-hearts nonpartisan. There's no rational basis for any politician — Republican or Democrat, liberal or conservative, in Congress or at the White House — to support incompetence that picks taxpayer pockets and runs the government into the red.

Of course, as Congress looks at long-term debt reduction, Social Security and Medicare reform will have to be discussed, and the ideological hobby horses that are sometimes called "vision" will doubtless be ridden wildly through the Capitol, stopping only for television cameras. But when it brings multitrillion-dollar savings and a new culture of innovation into the government, enabling an economic boom based on fundamentals rather than chicanery, competence becomes vision, in a transformation that will, after the fact, appear almost magical.