Transcript of WashingtonPost.com Live Session with Carl DeMaio
Conducted Feb. 3, 2003 at 2 p.m.

Carl DeMaio, president of The Performance Insitute, was online to discuss the impacts of President Bush's FY04 budget, as well as the latest executive agency "scorecard" performance ratings and the first wave of evaluations. The transcript follows. Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

Carl DeMaio: Hello everyone...ready to talk about the Bush Budget? In his ’04 budget proposal, the President evaluated the results of 20% of all federal programs using the Program Assessment Rating Tool (PART)—more than half of the 234 programs evaluated could not show results for the taxpayer’s money! We're calling this budget the most Transparent and Performance-oriented budget to hit Washington in years. And there are a lot of winners and losers in this year's budget because of the PART. So let's get to the chat. Send in your questions.

Somewhere, USA: So who are the winners and who are the losers as far as the budget is concerned?

Carl DeMaio: Well, excellent question. There is good evidence from the budget to suggest that PART process yielded some winners and losers. On average, the President’s proposal rewards programs deemed "effective" with a 6 percent funding increase, while those "not showing results" were held to less than a 1 percent increase. Message: PERFORMANCE MATTERS! Some programs with low PART scores actually got increased budgets...but only if they enact specific reforms laid out in the President's budget. And I consider that good news. Bad performance doesn't mean an automatic cut. You have time to improve things through reform...and if you don't, next year the cut comes.

Washington, D.C.: Who are the proponents of performance based budgeting? Couldn't those agencies that are under performing be doing so for lack of funds?

Carl DeMaio: Good question. First off, the proponents are the TAXPAYERS. Plain and simple. They have clamored for government accountability for years. Hopefully through performance budgeting we can give it to them. Second, I do believe that many program managers would like performance budgeting because it might prove what your second part of the question alludes to. Perhaps they are not getting their fair share of resources. That's where the PART can help a program: if a program has a demonstrated track record of results, it deserves funding. If it does not, then by all right it should either be put on "probation" and told to improve its results record through reforms or lose its funding to more worthy programs.

Bethesda, Md.: Is there any inclination in the congressional Appropriation subcommittees or committees to actually relate incremental funding to performance? If so, what examples of this are there -- both increases and decreases?

Carl DeMaio: Another good question. From your mouth to the ears of Sen. Ted Stevens we hope! Seriously, when you ask Congress if they look at performance to make budget decisions, they say "Of course!" Having worked on the Hill, that's the message I got back each time I tried working with Members and staff of the Appropriations committees. And in some respects, they DO use performance in their committee deliberations. Now, most of their use is not transparent. I guess that is one key thing that sets this budget apart from previous ones: the President is being transparent about how he is using performance to drive decisions. With the PART being so transparent in this budget, Congress almost HAS to respond to what the President has put on the table. After all, the President FAILED 50% of the programs that were evaluated by the PART in his budget. You can't get any more clear than that. Furthermore, if you look at the recommendations made for these failed programs, many of them require Congressional action. At the least, it will demand Congressional comment in hearings. Alas, the jury is still out on Congress. As the saying goes, "The President proposes, the Congress disposes!" Let's hope that's not true for these PART evaluations.

West Hempstead, N.Y.: Do these program performance evaluations really matter? Will they be used to actually budget these programs?

Carl DeMaio: Well, as I said, a 6% increase for the good performing programs, flat lines (1% or less) for bad performing programs. Here are some other examples from the budget, first two are good and last two are bad: 1) National Weather Service: This program was one of 6 rated as “Effective” and received a $48 million increase in its budget from 2003, for among other accomplishments, raising the Winter Storm Watch advisory lead time by 4 hours since 2000. 2) Energy Conservation Improvement (DOD): This program, deemed “Effective,” demonstrated a cost savings of $4 for every $1 invested. The budget increases doubles this program activity to $70 million. 3) Heath Professions (HHS): This program designed to recruit and place nurses and doctors was deemed “Ineffective” resulting in a redirection of its budget by $13 million to other programs within HHS with better performance in placing health care professionals where they are needed. 4) Comprehensive School Reform: This program that provides funds for failing schools to design and implement various reforms was categorized as “Adequate.” However, because the program was found to be redundant to the Title 1 Program and limited data available indicates the program does not contribute to student performance, the ’04 budget proposes to redirect all $235 million of this funding to the Title 1 program.

Washington, D.C.: Why are we talking about FY04 when Congress hasn't even appropriated FY03?

Carl DeMaio: Excellent question. I'm a BIG believer in Biennial Budgeting--since it already takes us 2 years to get a budget passed. Seriously, it is unacceptable to taxpayers and pretty demorializing to civil servants working in the agencies when our elected leaders cannot get the budget passed on time. In my opinion, Members of Congress should get docked pay and benefits for each day the budget is late. Pure and simple. ;-)

Central Valley, N.Y.: Should the loss of Columbia be taken into account when considering NASA's shuttle program performance results today?

Carl DeMaio: Actually, the Shuttle Program was assessed using the PART and was deemed "Moderately Effective." It also was slated to get a $766 million increase. All of this was decided BEFORE Saturday's tragic events. Here's the scoop that disappoints me. This morning when OMB released its PART scores, it included detailed evidence to support each of its scores for 233 programs. the 234th program was the Shuttle Program and OMB failed to release that information. For a budget that is so transparent in so many respects, I think this was a real mistake by OMB. I wish they had not done that. They should release the Shuttle Program's PART scoresheet immediately.

Clarksville, Tenn.: How seriously should taxpayers view the PART rating system? Can't any rating system do whatever one wants it to do? I mean, rating systems aren't generally used and promoted UNLESS they are generating the desired outcome, are they?

Carl DeMaio: Taxpayers should view PART very seriously. The questions are pretty straight-forward and common-sensical. Anyone who wants to claim this is a biased tool need only review the questions and judge for themselves. PART offers credible, fair, methodological and systematic criteria that focuses on four aspects: relevancy, planning, management and results. Only the first aspect can be considered somewhat "philosophical" if you really really stretch the questions. It is an excellent starting point. I encourage federal managers and taxpayers to read the PART questions and offer feedback. It is their government...they should help evaluate it!

Charleston, S.C.: I recall Sen. Hutchinson getting millions for Arkansas because he was in a tuff political race. He got this in the last "performance based" (budget 2003) I know performance matters but it's an insult (in my opinion) to pretend any presidential budget is some sort of purely performance based vehicle. Are you here to tell us there are no political gifts that will come out of this budget or that the White House will strongly fight political pork and gifts added in the congress? Is that what we are supposed to believe!?

Carl DeMaio: Budgets are NOT economic documents, they are poltical documents (even in the private sector!) I agree with you, we have far too much pork in the budget each year. The 2003 was not as performance based as this one. These 234 programs run the spectrum of good, bad and ugly. Of politically popular to unpopular. Most pork comes not at the level the PART is assessing, but at the "Set Aside" and "Rider" stage in Congress where language is added mandating these programs fund specific initiatives. That's where most of this pork is located.

Bethesda, Md.: Does this impact the way government workers will be paid going forward?

Carl DeMaio: Not officially yet. But hopefully soon, we'll move to a performance-based pay system. I'd like the programs to "get" performance right first, then use those measures for employees. God forbid we use the current measures most programs are using. they are just awful! The Administration has, however, made a proposal to set aside $500 million for a performance-pay fund. I hope Congress acts on this solid idea soon. Finally, we already are SUPPOSED to have a performance system for our SES (Senior Executive Managers) in government. However, those SES plans are pretty fuzzy and are too loose. They read like a "Choose Your Own Adventure" Novel. :-)

Washington, D.C.: So the shuttle failed. A failing score means less money next time, right? How will giving less money help the space program? I know more money isn't necessarily better outcomes, but less money seems to promise ONLY worse outcomes.

Carl DeMaio: Please check the budget, the Shuttle got an increase...weeks before Saturday's devastating loss. $766 million.

Indianapolis, Ind.: If this rating systems is so effective why is so much pork successfully loaded into every budget? And abuse of the appropriations processes is bipartisan. I recall the 2003 budget was called transparent and performance related. Haven't we been "there" already?

Carl DeMaio: I totally agree. Democrats and Republicans are equally adept at adding pork to the budget. I have always believed that there is not much difference between a Democrat Appropriator and a Republican Appropriator. Both know how to spend the same $1 five or six times.

Arlington, Va.: What happens if a critical department is not doing well by these standards and it doesn't improve? How do we lessen the funding if it's critical?

Carl DeMaio: There's the rub. That's when you really have to emphasize reform. Look, most of these programs have excellent intentions. But intentions are not enough. We need actual results. For a program that habitually does not demonstrate results, perhaps we need to consider alternatives such as state and local government, a different federal agency, the private sector, etc. Pouring more money into failure certainly isn't the answer. I've always said that performance-based government cannot be divorced from policy formulation and execution. Your question hits this concept head on.

Indianapolis, Ind.: I wonder if you have any information about how Mitch Daniels' reputation is holiding up in accounting/budget/economic cirlces? I have to admit he's not as attractive a candidate for governor here in Indiana that he once appeared to be.

Carl DeMaio: I think Mitch Daniels is quite highly regarded. He's been the lone voice of fiscal sanity over the years as some in the agencies and many in the Congress have wanted to spend money like drunken sailors. He's had an amazingly tough job to do. OMB is always saying "NO" and having to say no to powerful people doesn't exactly get you voted "most popular." I've seen Budget Directors come and go. I give him high marks, as I did for Frank Raines (Clinton).

Washington, D.C.: The logic of rewarding performers looks good on paper, I admit. But what about the other side of the coin. If a program is doing poorly and gets its funding reduced, who are the real losers? If a program that helps the uninsured children get CHIP or something else gets poor marks (in part perhaps because the health system is fragmented and poorly funded to begin with) and has its funding reduced, won't the result be: --Less kids will get insurance coverage, more kids will have preventive health services --Inpatient admissions will increase because the emergency rooms will be utilized more often as a result --The entire healthcare system will incur those expenses and costs will go up (even more) In this example, the losers are not just the state agency that performed poorly, but the population the program serve(s)(d) and the general public bares the repercussions. And isn't this always the case - by the very nature of public programs, a similar story could be told.

Carl DeMaio: Your last line hits the heart of the issue in evaluating programs. We need to "Tell the Story" even if we don't like the ending. Programs need to lay out their "logic" as you put it and demonstrate what obstacles they are encountering to achieving their mission. If this is a fragmented health care system, then the program should assume this as fact and plan around this reality or attempt to change it. Simply throwing our hands up in the air and saying "it's just too difficult" is not why we are in government. We are accountable for things inherently beyond our control. If we can't make a difference, let's not pretend. The resources we are squandering in a program without a plan can be better spent on a program that DOES understand how to deliver results.

Question: If something gets flat funded does that account for inflation? Otherwise, it is actually a decrease, correct?

Carl DeMaio: Depends on who you ask. Some contend it is an increase, other say a decrease. this gets back to the age-old Washington argument over what actually constitutes a "cut."

Arlington, Va.: So are the PART numbers seen as a warning to under performing agencies? What sort of criteria was used here?

Carl DeMaio: You can view the criteria in its entirety. You'll find it pretty common-sensical. see www.transparentgovernment.org or www.whitehouse.gov/omb

Bethesda, Md.: How does the budget account for new programs. For example, if the space program issues highlight a need for an entirely new way of doing things, where does that money come from?

Carl DeMaio: That really cuts to the heart of why we have a deficit. Programs get added each year, but we rarely go back and look at the "Base" or the existing programs to see what to cut to make room for new programs. If we don't re-allocate from existing programs, there are only two options: deficits or taxes. Neither are particularly good for ensuring we all have long-term job security in this country.

Normal, Ill.: Are programs deemed good performers automatically given a 6 percent budget increase, regardless of any perceived need for more money? (Perhaps the funding they cuurently receive is perfectly adequate to do the job and a 6 percent increase would simply be a WASTE of taxpayer money.) Also, can we expect entire departments of the federal government to be consolidated or altogether eiminated as a result of this process?

Carl DeMaio: No, budget figures were allocated on a program-by-program basis. Across the board increases--like across the board cuts--are bad governance. Some programs got MORE than 6%, others less. The 6% was the average increase for "good" programs under the PART. Some consolidation will be seen--some programs under the PART had funding shifted to other programs. For meaningful reorganization of the federal government, I think we need a Hoover 3 Commission to do a comprehensive job.

Arlington, Va.: While it's rather early to make judgements, what has been the reaction of Congress and, more importantly, federal program managers to the PART? Do they feel the results will accurately gauge program performance?

Carl DeMaio: That's the lingering question. I think if they are smart, federal managers at each agency should download the PART today and take a self assessment. Then, they should start to improve their "performance case" with meaningful performance measures. This isn't going away, trust me. As for Congress, the jury is still out. It is unlikely that they will be able to totally ignore the evidence presented using the PART. Sure, they will do a good job trying to ignore it if it relates to a pet project of theirs. That's where I hope the media and general taxpayer will come in and apply pressure. At least...that's the hope.

Carl DeMaio: Thank you everyone for stopping by. If you want more information on the budget, visit www.transparentgovernment.org or www.whitehouse.gov/omb. Good luck...and thanks for helping advance the cause of improving government performance.