Archive for February 9th, 2009

Is the Vending Machine Broken?

February 9, 2009

Dr. Donald Kettl says the “vending machine” model of government is increasingly obsolete.  His analogy of a vending machine – where politicians put money in, and out comes a public service through the slot – not only is obsolete, but may prove to be broken when the flood of stimulus money is released.  The better analogy may be the Iraqi power grid after the 2003 invasion. We thought the war damage just needed repaired when in fact the whole system had collapsed because it was dysfunctional in the first place.


Is this just hype?  Maybe not.  USA Today’s front page headline this morning was “$3.9 Billion in Hurricane Aid Still Unspent.”


Why is this a problem?  Well, the typical policy-to-delivery cycle in the federal government takes about five years:    from the point of drafting a bill to authorization, to appropriation, to drafting the program rules, to staffing the program, to competing the grants or contracts, to subcontracting the award at the front line, to the actual delivery of a service.  But the stimulus bill seems to crunch that cycle down to a period of less than15 months.


Not only is the timeframe compressed under the draft stimulus bill, but there are added rules:  grants and contracts must be competed, environmental impact statements cannot be shortcut, US-made steel has to be used in construction. And about a quarter of a billion dollars has been added for oversight. 


But what about implementation?  The latest stimulus bill does recognize “administrative” costs by providing some additional dollars.  However, it is not clear whether these dollars equal or exceed what is being fenced for oversight.  But even if there is a flood of dollars for program management, the hiring, training, and deployment of needed staff cannot be measured in weeks (as assumed) but in months or years.  And the dollars are for a time-limited period, so those being hired would face temporary positions.


The solution may not lie only in additional dollars for staff, but in how government organizes to act.  Right now, the bill authorizes an oversight board – to be headed by the deputy director for management at the Office of Management and Budget — but not an execution or delivery board.  And someone probably needs to be given authority to waive rules (authority like Secretary Paulson was given to manage the bailout funds, in Sec. 135 of that bill).  This could be seen as undemocratic, but without someone having the authority to cut the Gordian Knot of bureaucracy, large portions of the stimulus bill will likely never be spent, since funding for many of the programs in the bill seem to expire on September 30, 2010.  It is “use it or lose it” and the red tape of traditional program implementation may cause it to be lost.


Another step might be to take Dr. Kettl’s advice on creating government-wide collaborative networks and use them to share resources and best practices, and develop joint rules via wikis, etc.  But this would require strong leadership from the center, and a strong willingness to work across agency and program boundaries.  This is typically counter to what Congress and inspectors general have been historically comfortable with, for accountability reasons.  Examples of efforts to work across agency boundaries, such as the Bush-era e-government efforts, were oftentimes blocked even though they offered the potential of saving hundreds of millions of dollars.


But if Congress wants the stimulus monies spent in a way that at least roughly matches what it intends, then it may want to provide new authorities and mechanisms to allow the executive branch to get the job done, because the old vending machine model may not work anymore.