Bush put the ‘M’ back in OMB

Agency’s emphasis on management has grown

It was President Nixon who first put the “M” into the Office of Management and Budget. Nixon reorganized the Bureau of the Budget into OMB in 1970, adding program management duties to its mission. Originally created as part of the Treasury Department in 1921, the agency had already moved into the Executive Office of the President in 1939.

Since 1970, a succession of presidents has molded OMB to suit their needs and priorities. The Bush administration took office in 2001 with the belief that OMB had largely been engaged in budgetary matters and pledged to put an emphasis on the agency’s management function.

The primary manifestation of that has been the President’s Management Agenda, which is known for using a score card system that rates agencies’ management efforts as red, yellow or green — the colors correspond to traffic signals — in quarterly progress reports.

Clay Johnson, OMB’s deputy director of management, has described the scoring  system as “shame and humiliation.” Agencies that don’t perform well can’t downplay the rating. On the other hand, agencies that do perform well get a series of green scores to be proud of.

Johnson, discussing the latest PMA score card, said OMB deliberately made it difficult to earn a green score because it was important that the score card be meaningful.

“It’s not easy to be green,” he said. “To get to green and yellow is hard, so the big agencies were having a harder time than smaller agencies. But it became a lot more credible. People realized it served a purpose.”

If every agency had been able to earn green scores quickly, he said, the system would have lost credibility.

“We didn’t invent the score card,” he said. “It preceded us in many places. But it’s a very simple way to communicate what’s working and what’s not.”

The program’s credibility has earned it greater acceptance from Congress, federal employees and in other quarters that it lacked at the start, he said.

“I think Congress initially thought it was a way for the agency to get rid of things they don’t like,” he said.
The management agenda and some other efforts have strengthened OMB’s management role during the Bush years, he said. Today, 35 percent of the agency’s workload is dedicated to management functions.

“In some ways, and one would expect this, the management agenda of this administration was built off the management agenda of the previous administration,” said Stan Soloway, president of the Professional Services Council. “I mean that in a complimentary way, not to denigrate anything they’ve done. They wanted to take what was going on in the management of government and push it to the next level. That’s what you want to see.”

Attention to management
“Even before Clay Johnson came over [to OMB], there was real attention in OMB to management issues,” said Alan Chvotkin, senior vice president and counsel at the Professional Services Council.
“There were several conversations where I remember talking to agencies, and they said these issues were raised at the Cabinet level.”

“The thing to remember is that OMB’s focus is laser-sharp in one direction, and that’s to support the president and the presidency,” said Jonathan Breul, executive director of the IBM Center for the Business of Government. “It’s done that for three quarters of the 20th century and now eight years of the 21st. Fundamentally, OMB is a creature of the administration. You really can’t untangle those two. OMB will turn itself in whatever direction is needed.”

Breul, who served in government from 1981 to 2002, said the Reagan administration turned to OMB to fig ht waste, fraud and abuse. The Clinton administration instituted its reinventing government initiative with Vice President Al Gore in charge, and the Bush administration built on and revised those efforts to bring in the management agenda.

“There’s a continued and progressive path in” trying to improve the management of the government, he said. “Nixon tried to do it using OMB. The Reagan administration tried to do it through the Grace Commission [on government waste]. The Clinton administration one-upped them and did it by tasking the vice president. And the Bush administration upped the ante and made it the president’s management agenda.”

The Clinton administration used a National Performance Review that made little use of OMB or the Office of Personnel Management, Breul said. “The Bush administration, on the other hand, relied on these agencies extensively,” he said.

However, Soloway noted, Gore was directly responsible for the Clinton administration’s efforts. Bush and Vice President Richard Cheney are less visible in whatever direct involvement they have in the President’s Management Agenda.

“That imprimatur gave it an added priority,” Soloway said. “Gore was intellectually involved in this. He got it. I don’t want to say that President Bush and Vice President Cheney don’t get it, but there was a slightly higher level of involvement [under Clinton].”

Soloway served as undersecretary of Defense for acquisition reform during part of the Clinton administration.

The National Performance Review, over the full course of the Clinton administration, generated more than 1,200 recommendations in more than 100 reports and publications, Breul said. By contrast, the Bush administration chose to focus on a few broad areas.

However, the terrorist attacks of 2001 brought an inescapable change to the Bush administration’s plans, Breul said. Those attacks, the immediate U.S. response, the ongoing war in Iraq and Bush’s tax cuts brought an abrupt end to the budget surpluses of the Clinton years.

“The circumstances changed and the desire of the president changed,” he said. “OMB, as a consequence, started dealing with that, particularly in 2002.”

Bush’s business background might have some role in his attention to management, Breul said. “The fact that he’s the ‘MBA president’ is not just lingo,” he said.

However, Bush did not put the same degree of attention on management during his tenure as governor of Texas, said Johnson, who served as Bush’s chief of staff there. Bush was interested in pushing agencies to deliver results in Texas, and he put a great deal of emphasis on choosing the best people to fill state offices, as he does now, he said.

But there was no program in Texas to match the management agenda, Johnson said. Former OMB Director Mitchell Daniels and Sean O’Keefe, former deputy director, “created something here that the governor of Texas did not create,” he said.

Preparing for the future
Experts agree that Bush’s mark on OMB will almost certainly remain in some form into the next administration. However, the extent to which it will retain its present configuration is less certain.

OMB “will continue to support the president right up to the last minute” of the administration, Breul said.

“In their spare time, the various folks at OMB will be opening the aperture,” he said. “They will take a look at what is going on in the world and what needs attention. The smart ones are spending time going out and listening to what is happening in their particular policy field. They’re learning what the issues are and getting themselves ready for the next time. There is no break OMB’s work. It’ll begin immediately, with the inauguration.” 

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