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  In short, the GAO was on a burning platform, and it needed to engage in some dramatic and fundamental changes. I had to move boldly to show these doubting members of Congress that the GAO could be an essential, independent tool of government performance, accountability, and transformational reform. Fortunately, “transformation” is my middle name (well, not really), and I had the freedom to act decisively. My job as comptroller general came with a fifteen-year term, the longest of any in the federal government other than judges who receive lifetime appointments. Furthermore, the comptroller general can be removed from office only by impeachment or joint resolution of Congress, and only for specific reasons. These factors gave me a much greater degree of independence and job security than a typical agency head would enjoy. When one party controls the Senate, the House, and the White House, the comptroller general is one of only a very few officials who can speak truth to power without fear of personal reprisal.

  Shortly after starting my job, I addressed all GAO employees, telling them the three main objectives I hoped to achieve during my tenure. They were: (1) to transform the GAO into an agency that led by example and practiced what it preached; (2) to help transform the accountability profession so that it could better meet the challenges and capitalize on the opportunities of the twenty-first century; and (3) to help the federal government make a down payment on its huge unfunded obligations and begin to transform how it does business.

  During the almost ten years that followed, I learned that in making tough transformations, you go from patience to persistence to perseverance to pain before you prevail. I knew where I wanted to take the agency, but I had to work issue by issue to get it there.

  While I was still getting used to my chair, several GAO executives briefed me on the agency’s efforts to prepare the government’s computers for the year 2000 conversion. The GAO had done a huge amount of work for the Congress on this issue and had issued many reports and recommendations. When I was briefed on these efforts, I asked one simple question: Had our team reviewed our own internal efforts on Y2K and had we adopted all of the applicable recommendations we had made to others? Stated differently, were we leading by example and practicing what we preached? Unfortunately, as the look on the GAO executives’ faces told me, the answer was no. This provided me with the perfect opportunity to make my case, which I did then and many times afterward.

  As I learned more about our operations, I was very surprised to find out that while the GAO had existed since 1921, it had never developed an agency-wide strategic, integrated, and forward-looking plan to guide its actions, allocate its resources, and measure its results. In my view, if you don’t have a plan you don’t have a prayer to maximize your value and mitigate your risk. Therefore, we began to put one together, and that made a huge difference in improving our performance. In fairness to the GAO, as you found out a few pages ago, the U.S. government as a whole has never had such a strategic plan, and it has existed for more than 220 years.

  We needed more than a plan. We also had to develop transparent protocols to guide our work. Achieving clear working guidelines helped reduce complaints in Congress and the executive branch that the GAO was treating some unfairly.

  Most important of all, we had to pull ourselves together as an agency with a common resolve. Shortly after starting at the GAO, I brought the top executives together to gain agreement on a set of core values that would serve as a foundation of our work. We finally agreed on three: accountability, integrity, and reliability. These words appeared over our entrance doors, on our business cards, and in all key publications of the agency.

  Accountability described what we did—audits, investigations, program evaluations, legal adjudications, and other things. Integrity described how we performed our work—in a professional, objective, fact-based, nonpartisan, nonideological, fair, and balanced manner. Reliability described how we wanted our work to be received—as timely, accurate, useful, clear, and candid. We talked about these three values so much that they became a kind of acronym—AIR—and, of course, people started calling me “Air Walker” (although I’m confident that “Air Jordan” is not particularly concerned about this challenge).

  I actually had one concern even more basic than our values. From early in my tenure, I didn’t like our name—“General Accounting Office.” It did not reflect what the agency did, and that caused confusion among members of Congress, cabinet officials, and job candidates. Many people thought the agency was made up mainly of accountants focused on financial auditing. These perceptions were very far from the truth. In fact, only about 15 percent of the GAO’s staff and work had to do with traditional financial auditing. We spent most of our efforts assessing the effectiveness of government programs and completing other congressional assignments.

  I decided to push for a change in the agency’s name, after an appropriate period of time had passed. The adoption of the term “accountability” as our first core value aided my effort. As a result, in 2004, and at my request, the Congress passed and the president signed legislation that included a number of human capital and other reforms and changed the name of the General Accounting Office to the U.S. Government Accountability Office. This let us keep the brand name, which was, is, and should remain GAO.

  Before worrying about our name, we set off to demonstrate that the leaner, meaner GAO could operate much more efficiently and effectively than much larger federal agencies. By the time I took my job, the agency already had gone from more than forty field offices to sixteen. I toured all sixteen, then cut the number to eleven. I believed that we should minimize the number of our layers, silos, and footprints in order to maximize flexibility and accountability. In addition, I wanted to put these office closures behind us and promised that there would be no more during my tenure unless we ran into serious budgetary constraints.

  I expected to get a lot of blowback from senators and members of Congress whose states lost jobs because of these office closures. Fortunately, we did not, in large part because of an extensive outreach effort with key congressional leaders and the affected congressional offices to explain what we were proposing to do and why we needed to do it.

  We also restructured. We reduced the number of organizational units from thirty-five “Issue Areas,” relating to a number of fairly narrowly focused subject areas, to thirteen “Teams,” relating to a broader range of key subject areas (such as defense, health care, physical infrastructure, and acquisitions). And we eliminated a layer of senior management without laying off a single person. The moves were merit based and designed to match each individual’s skills with the GAO’s institutional needs. We didn’t just eliminate positions; we also created flexible new units to manage quality control, strategic planning, external liaisons, equal opportunity, and other GAO-wide functions.

  Since we were in the performance and accountability business, we worked to develop a balanced set of measures to assess our own overall performance. We focused on our results, our people, our clients, and our external partners. Historically, the GAO had used the number of reports that it generated as a performance metric. The culture favored a very thick “Chapter Report,” even if it took years to produce and had little impact. I challenged that culture.

  Our new performance metrics focused on things like the number of recommendations that we made, the percentage of our recommendations that were adopted within a reasonable period of time (generally four years), the financial benefits that accrued from adopting our recommendations, and other benefits that could not be translated into monetary terms.

  You won’t be surprised to learn that our efforts to change how we worked were not as challenging as our efforts to reform how our staff was organized, evaluated, and paid. This was not only a touchy topic but a vitally important one, since human capital represented about 80 percent of our agency’s budget.

  We set out to dramatically reform the agency’s performance appraisal system, which had tended to give everybody high marks. We installed a dramatica
lly different system, in which the average employee rating fell from 4.62 to 2.19 out of 5. In the old system, 20 percent of our employees had received a perfect 5.0; in the new reviews, only 2 percent earned perfect marks. This caused some obvious concerns among staff members, who found out for the first time how they were ranked in their peer group. As time went on, we began to tie a portion of our employees’ pay to our new performance appraisal system. That’s when we started to hear some grumbling from the ranks.

  Then came by far the biggest single human capital challenge during my tenure. We restructured the GAO’s mid-level professional staff to help promote the principle of equal pay for equal work. I am a big believer in that concept—and in ensuring that pay systems are competitive, affordable, and sustainable. In my view, the existing system was not only inequitable, but it resulted in excess compensation being paid to a large number of senior auditors and analysts, among others. While these were good people who were performing at an acceptable level or above, they did not have supervisory or other highly specialized responsibilities that justified their pay range. In fact, because of the way the GAO’s classification and pay systems had been structured in the late 1980s, nonsupervisory senior auditors or analysts could be paid more than an assistant director two tiers higher. This made no sense to me and it didn’t pass a straight-face test when you discussed it with the general public.

  As we set out to unscramble the egg, we promised that no one’s pay would be cut, even if it was significantly in excess of prevailing market levels. At the same time, some of those overpaid employees might see their pay frozen for a period of time. Many employees were not happy with this change, even some who were not affected by it. As a result of this mid-level restructuring, a portion of the GAO’s workforce joined a union. A lot of people thought I would be upset about that, but I wasn’t. Both of my grandfathers were union members, and one was head of his union local. Having a union represent these employees actually made it easier to deal with some issues, although it was tougher to deal with others.

  The GAO’s human capital transformations, even the controversial mid-level restructuring, were eventually put in place. In my view, it was better to complete these transformations quickly rather than wait and possibly never get them implemented. Furthermore, once the new rules are in place, any changes have to be negotiated.

  In fact, all the transformational reforms outlined in this chapter were achieved employing the incentives, transparency, and accountability concepts discussed earlier in this book. They have all survived my tenure and are likely to stay in place for many years. The bottom line is that despite an approximate 12 percent reduction in the GAO’s personnel, the agency’s results improved dramatically across the board. For example, financial benefits per GAO employee more than tripled, and the overall return for each budget dollar invested in the agency more than doubled. The numbers speak for themselves. They are clear and compelling. (See figure 11.) These results were achieved through a true team effort, and everyone involved can take pride in the achievements. In particular, the GAO’s executive committee, which I chaired, and which included Gene Dodaro, Tony Gamboa, Gary Kepplinger, and Sallyanne Harper during most of my tenure, deserves special recognition. Many other GAO executives and employees also contributed to our collective success.

  Figure 11 Progress of the Government Accountability Office. At the GAO, we sought to lead by example and show that transformation is possible in government.

  While the GAO is not a huge agency, our efforts demonstrate that real transformation is possible in the federal government. The reforms we accomplished at the GAO are scalable and transferable to other agencies. Hopefully, they will be adopted in time.

  So far, we have talked about policy changes and, in this chapter, the transformation in processes we need to make. But there’s one more chapter left, fellow citizens. It’s time to talk about our role—what “We the People” must do to transform our political system into one that works for our collective best interest. Yes, we’ll also be called upon to remember our civics lessons about changing the Constitution.

  Eleven

  FIXING OUR

  DYSFUNCTIONAL

  DEMOCRACY

  How can we go about overhauling our broken government and the bad policies it produces? Good question, especially the “we” part.

  We can start by demanding more truth, transparency, foresight, and accountability from the policy makers who are responsible for the key issues facing our nation. We can also push for major policy and operational reforms, along with the processes that will be necessary to help ensure that they are implemented. We can do all of this and more within our political system. But we also need to repair the American political system, and I’ll show you how.

  First we have to recognize who let our system decay: You and I did. The Constitution gives us citizens the power to choose the people who will represent us and who will lead our government, and, frankly, we have not been doing a great job. You and I are the ones who elected and continue to reelect those partisan bickerers, magic practitioners, and professional politicians who dominate Washington. Now we have to recognize something else: You and I also can change things, and we should start now.

  We have the power. I’m publishing this book at the start of 2010 for good reason. Last year we were obsessed by the emergency steps needed to address our housing and financial crises and to pull us out of the recession that resulted. That’s still not all behind us, of course, but now is a time for chastened new beginnings, to look ahead and to start taking steps to help create a better future for our nation. We have to act responsibly, because we’ve recently seen what happens when people are not responsible.

  There’s only one way to reform a system that will not reform itself, and that’s to form a citizens’ action movement and instigate a grassroots effort to change the status quo within Washington’s Beltway. So here’s your invitation. Onward, soldiers of the sensible center!

  The Peterson Foundation, which I lead, is joining forces with like-minded groups across the nation to build a critical mass of public opinion in favor of saving our future. We all have our separate agendas, but we are all committed to making sure that elected officials start making tough choices before we pass a tipping point and inflict irreparable damage on our country’s future and its place in the world. We don’t need a huge national majority to prevail. We need you—and a growing group of committed individuals who will make enough noise to force Washington to listen, and to act.

  As I’ve emphasized throughout this book, there are no magical answers—only commonsense solutions requiring commitment and lots of hard work. I’m talking about the kind of work Ross Perot did to make sure that the country adopted a more sound fiscal policy in the 1990s. He didn’t perform any magic. He simply told the truth about our nation’s deteriorating financial condition and put the facts in front of us, where we couldn’t ignore them.

  That’s what we have to do today. If we can put the facts before enough people, we will gather the support we need to start a process leading to real reform. After all, things are much worse now than they were then.

  First, let’s diagnose why we need a citizen’s movement apart from our supposedly representative government. According to the textbooks, our elected officials should be working for our best interest. Tell me, now that you’ve read most of this book, do you think they have done that? For example, is it in our nation’s best interest to slide ever deeper into debt and to become ever more dependent on foreign lenders? You know my answer to that one. So what’s gone wrong with our politicians?

  Like most people with good jobs, they want to keep theirs. From day one of their terms, most have a firm eye on the day when voters will decide whether to reelect them, and of course a whole industry of “experts” has arisen around packaging them for reelection. It’s not surprising in this context that they promise to raise your benefits while cutting your taxes. That promise doesn’t make sense, does it? You and I both k
now that it doesn’t, and yet it has worked spectacularly for any number of politicians over the years, to the great detriment of our country.

  When representatives elected on that platform reach office in Washington, they are primed to vote for short-term advantage (more social benefits) and long-term disaster (insufficient revenues). Politicians who earn their keep on one side or the other of that equation create the warring factions that have made our Congress a nightmare of partisan battles and ideological divides rather than a sounding board for honest debate and sensible-center solutions.

  Sometimes these politicians are even asked to sign “pledges” to vote according to the correct ideological line on tax and benefits issues. That puts these representatives in the position of having to make absolute commitments before they even know the facts of an issue. Is that any way to conduct a public debate?

  If you look at the logic prevalent in Washington, you can come to only one conclusion: We have a dysfunctional democracy.

  And so we must talk about how to change our politics, and that’s probably the biggest and most fundamental change we’ll need to make in the years ahead. Partisan battles and ideological divides helped get us into this mess, but they won’t help get us out. Nor will bipartisanship, a concept that is outdated, because it still focuses too much on existing political parties and not enough on the country as a whole. Several polls have shown that a plurality of Americans (including me) now consider ourselves to be political independents. If you seek only bipartisan solutions, you are excluding all of us. What we need now is nonpartisanship.

  You’ll get the drift of that as you read along. At the heart of this strategy is the elemental American effort to build a popular movement. Beyond creating a critical mass of public opinion, we can use this movement to support mechanisms that will be guaranteed to put needed reforms before Congress.