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Reforming government is a difficult and thankless task. Political leaders find that reform is almost always unpopular in the short term because it disrupts existing power arrangements. And if they manage to produce reforms that bear lasting and positive results in the long run, they are often out of power by the time the reforms bear fruit. I should know–I’ve been there.
As the person in charge of the National Performance Review (a.k.a. "Reinventing Government") in the Clinton Administration, I was reminded on a daily basis how hard it is to achieve the overall goals of a government reform movement. Presumably simple things, such as closing obsolete offices, were likely to step on the toes of a powerful congressman or senator who was accustomed to using the office for patronage purposes. Expensive services that should have been outsourced were often unionized, and the attempt to make them competitive angered powerful unions. Stricter regulations on industries were likely to cause them to assert that they’d have to raise prices or stop serving customers.
And when we were successful, credit was often missing. In teaching public policy and public administration, I have tracked the innovations of the National Performance Review for many years and watched, with resignation, how many of them went from reform to status quo, with no credit given to the original reformers. And yet, sometimes, reforms do last, and even stay coherent enough to gain recognition years later. My final reform activity before leaving government was to put together the Aviation Safety and Security Commission, created by President Bill Clinton and chaired by Vice President Al Gore in the wake of the crash of TWA 800 off the coast of Long Island in 1996. The Commission’s report, issued in early 1997, recommended a series of changes in Federal Aviation Administration (FAA) regulations, with the goal of achieving a dramatic reduction in airline fatalities in a decade. In order to achieve that goal, the FAA was instructed to make substantial changes to their regulations regarding airline safety. There was much kicking and screaming on the part of industry and the FAA along the way.
I left government shortly after the report was finished, wondering if anything at all would happen as a result of it. Ten years later, I was teaching at Harvard when I picked up the New York Times to read an article discussing a significant improvement in airline safety over the past ten years. That in itself was gratifying. But what was more gratifying, and totally surprising, was that the article gave credit to reforms begun by the Aviation Safety and Security Commission–and then the "Today" show even picked up the story and ran a ten-year-old clip of a much younger Al Gore, announcing the reforms!
The lesson for reformers is not to despair; while some reforms fail, others succeed, and their task may not, after all, be a thankless one. This lesson is extremely important for the Obama Administration. They have a mandate to re-do the entire financial sector of the American economy, provide national health insurance, and reform our energy sector to save the planet. Like reinventing government, these are all wonderful goals in the abstract, but they will be hard to achieve. The new President even made a nod to this problem in his inaugural address, warning of sacrifices and unpleasant decisions ahead. But how can we know which will succeed, and how can we better guide more of them toward that goal?
How and under what circumstances reforms succeed is the topic of University of Virginia political scientist Eric M. Patashnik’s excellent book, Reforms at Risk: What Happens After Major Policy Changes Are Enacted. It’s an important book, for obvious reasons–as the Obama Administration settles in to a long, hard slog of reform across the broad swath of government activity, it will need to understand not only how to get reforms passed, but how to make sure they’re carried out.
The last time the United States had an economic crisis as serious as the one we now confront, Franklin Roosevelt was President and Washington, D.C., was a sleepy Southern town that housed a small and relatively limited federal government. As Roosevelt whirled through his unprecedented 100 first days in office, he created not only policy, but the organizations that would implement policy. Even then, the entirely new and rapidly expanding federal government still fit easily within the geographic limits of the District of Columbia; it didn’t need to spill across the Potomac and all the way to Baltimore, as it does today.
Indeed, the biggest difference between then and now is the large and complex permanent government that is, depending on your politics, Roosevelt’s best or worst legacy to America. It’s not only expansive, but intricate, with bureaucracies layered upon each other, all of which are necessary parts of implementing reform and any of which could derail it. This means that, for the Obama Administration, getting the policy right is only the beginning of a very complex process. The recovery packages (for there may well be more than one) will have to be implemented through a maze of federal, state, and local bureaucracies, each of which is bound by a further maze of statutes and regulations. Such things didn’t exist in the 1930s–if Roosevelt wanted to build a bridge, no one demanded an environmental impact statement. Hopes that a stimulus package would be ready for Obama’s signature on Inauguration Day were shelved thanks to partisan back-and-forth, but the real impediment to getting the money into the pockets of welders and carpenters will be the bureaucratic maze of modern government.
But bureaucratic barriers aren’t the only problem with implementation. Because of the intense focus on the political horse-trading and posturing that goes into crafting legislation, too often we see bills pass with flaws that become immediately obvious the day they are implemented. Take Hope for Homeowners, a program at the Department of Housing and Urban Development. It was passed with great fanfare (at least in political circles) by Congress in the summer of 2008 to help homeowners prevent foreclosure by allowing them to convert their mortgages to 30- or 40-year fixed-rate ones insured by the government. The program was clearly crafted as a political sop, and to that extent it was a small but successful attempt to reassure the public that the government was helping out.
And yet, as of December, it had attracted only 312 applicants and refinanced only 25 mortgages–a tiny fraction of the more than 400,000 people whose mortgage exceeded the value of their house and who needed help. What happened? Suddenly, all the flaws that had been glaring but ignored in the political theater leading up to its passage became obvious. HUD Secretary Steve Preston blamed Congress for creating a program that set up too many hurdles for homeowners. Congressman Barney Frank blamed the Bush Administration for putting the hurdles in the program in the first place. Lenders balked at the provision insuring loans only up to 90 percent (though this was later increased). In short, the program may have made political sense, but in the end it didn’t make much economic sense to the people it was supposed to help.
Hope for Homeowners stands as a cautionary tale for the new Administration. Politicking is inevitable in any legislation, and even more so when the price tags reach into the twelve digits, as Obama’s stimulus plans will. Congress will be demanding accountability, and individual congressmen will be demanding their cuts. Given the ballooning deficit, the government will, quite rightly, try to limit its costs. The combination of the two is likely to create programs that are unattractive to the customers and difficult to implement.
With the stakes this high, smarter implementation matters more than ever. But for scholars and journalists alike, the study of policy implementation is the lonely step-child of government. This is evident in academia, where books on policy often make it as popular general public reads, while books on the minutiae of government functioning usually end up as suggested reading on upper-level political science courses–and little else. (David Osborne and Ted Gaebler’s 1993 book Reinventing Government stands as the sole exception to this rule in recent history.) And it is evident in journalism, where the passage of legislation attracts great attention, while the actual implementation of the bill is rarely covered–except in those instances where failure is so catastrophic (FEMA during Hurricane Katrina) that the implementation story can’t be ignored.
"What is required to initiate policy," says Patashnik, "should not be confused with what is required to sustain it." [Italics are in the original.] The initiation of policy is exciting; high-profile congressional actors debate the great issues, television anchors announce each step in the drama, and the public follows everything closely. In the coming months, the debate and drama of Obama’s stimulus bill will be analyzed for early clues regarding the effectiveness and savvy of the Obama Administration. It will be dissected, blogged about, and rehashed in dozens of hours of TV commentary. No doubt someone is already writing a book about it.
What we will not see as clearly is what happens, as Patashnik puts it, "after the curtain falls on the high drama of legislative enactments." Such sustained attention is hard to maintain, as the series of case studies in his book illustrates, and in the absence of attention, reforms are usually eroded over time. Each of his six case studies tells a slightly different story about government reform, but all of them are important.
Some government reforms are hailed upon passage but fail to change the underlying politics that created the problem in the first place. This was the case with tax reform and agriculture reform. Policy elites applauded passage of the Tax Reform Act of 1986; it was a rare instance in which a series of tax breaks for the few were rescinded in order to make way for lower rates for the many. But by 2005, a presidential panel reported that "constant legislative tinkering" had led to passage of more than 15,000 changes in the tax code since its passage, many of which hindered or reversed elements of the 1986 law. As exemplary as the 1986 tax reform package was, there had been no concurrent change in the underlying political dynamics that led members of Congress to enact particularistic provisions into the tax code. Ditto for agricultural reform. In 1996, Congress passed the "Freedom to Farm Act," chock-full of subsidy reforms, to bipartisan praise. But by 2002, substantial subsidies were back, a victim of a drop in farm prices that, while not related to the bill itself, served to undermine some of its key provisions.
Other government reform packages fail spectacularly but offer important lessons to subsequent reformers. Rather than dying a slow death from a thousand cuts like tax reform, the 1988 Medicare Catastrophic Coverage Act, which expanded medical benefits to the elderly by raising premiums on beneficiaries, was repealed almost immediately. Patashnik calls it "one of the shortest-lived pieces of social policy in U.S. history." The dramatic revolt against MCCA caught lawmakers by surprise, as wealthy seniors objected to being forced to pay for coverage that they already had. Politicians didn’t realize that seniors, especially well-to-do seniors, would object so strongly and thus the bill failed upon implementation, even though the flaw was originally in the design. The lessons of that failed reform were present in the creation of the Medicare Prescription Drug benefit in 2003–participation in that program is voluntary–and the same lessons are present in the minds of those who are setting out to reform our health care system.
Other reforms, like the procurement reform legislation that was part of the Clinton Administration’s reinventing government initiative, fix some problems but don’t guarantee a change in the underlying culture. Procurement reform managed to end the bureaucratic nightmare of MIL-SPECs (short for military specifications), the detailed descriptions of things the military needs to buy, everything from aircraft carriers and weapons systems to chocolate cake mix and socks (as the National Performance Review originally pointed out, the MIL-SPECs for chocolate chip cookies were 20 pages long). In addition, it initiated the use of credit cards for everyday off-the-shelf items and saved the government the bureaucratic cost of sending out three competing bids for the purchase of scotch tape. But while credit cards are still used and MIL-SPECs are more or less gone, the spirit of those reforms has stalled, while bureaucratic culture, and the way it militates against reform, is alive and well. Patashnik writes, "It also seems clear that the attempt of reformers to encourage more risk-taking and innovation among the procurement workforce is in serious jeopardy. The focus today is again on procedural compliance and avoiding trouble."
Successful reforms, on the other hand, survive because they change something fundamental; as Patashnik puts it, they "re-configure the political dynamic." Airline deregulation has survived because it "destroyed the structural underpinnings of the old policy subsystem." And the emissions trading system for acid rain has survived because the political bargain struck to get it in the first place survived "long after its enacting coalition left the political stage." The lesson? Reforms can’t dance around the edges of an issue–they have to change the rules and culture if they are to be successful.
Patashnik’s case studies are insightful, but what does this book tell us about the crises of our day? Obviously, it is a reminder that implementation matters. But it is also a reminder that legislative compromise isn’t just about getting a bill passed; sometimes it’s critical to getting a bill implemented once it becomes a law. Patashnik warns that "side payments are often needed to grease the passage of general-interest laws." Side payments are those sweeteners or exceptions in a major piece of legislation that are added to pick up a vote here and a vote there, but also make it easier for affected constituencies to accept a reform once it’s in place. At the same time, side payments can be deadly. In the summer of 2008, a climate change bill failed in Congress because, in part, it was loaded up with side payments designed to take the sting out of what would certainly be an increase in the price of gas and electricity. In short, special pleadings in reform legislation can get so out of hand that they cause the initial reform proposal to become buried in a storm of exceptions and deals.
But even if a reform gets passed and implemented correctly, Patashnik warns that it is still vulnerable to attacks down the road: "A significant threat to the sustainability of many general-interest reform measures is the particularistic interventions of future Congresses." If the economic crisis gives Obama room to pass a set of tough financial regulations, his Administration will still have to be on guard against Wall Street interests lobbying, a few years from now when the mood is brighter, to walk back those rules and even ignore new and different financial instruments–which is how we got where we are today in the first place.
And, of course, reforms that are enacted to solve problems often create new ones. This is already obvious in the difficulties Congress has been having in designing a home foreclosure policy. You may be helping people who have no one to blame but themselves, with tax dollars from people who did not over-leverage and are still paying their mortgages. In doing so, you might be creating a moral hazard that telegraphs a message for government support when mistakes are made, unwittingly ensuring more mistakes down the road.
So what is a new administration to do? First of all, pay as much attention to design and implementation as you do to the politics of getting the deal cut in the first place. I have no doubt that somewhere in the vast HUD headquarters there were veterans of the federal government who watched the creation of the Hope for Homeowners program and could have warned policy makers that, as they say in Texas, "that dog won’t hunt." But all too often political appointees don’t talk to the civil servants while drafting the legislation, when the obvious flaws could have been caught.
A second way to improve implementation is to urge Congress to eschew wrangling over details of the legislation in favor of stepped up oversight of reforms actually being implemented. As the economy worsens, Congress is rightfully suspicious that the Bush Administration’s bailout package was a giant boondoggle to Treasury Secretary Hank Paulson’s friends. That could lead them to micro-manage every piece of future legislation to ensure accountability. But accountability is best achieved not in the process of legislative drafting, but in the process of legislative oversight. And oversight, as we know from the work of Tom Mann and Norm Ornstein in their recent book The Broken Branch, is something that Congress has practically stopped doing in recent years.
Of course, more oversight is easier said than done. All too often oversight becomes a headline game, given to promoting the impression that the congressman or senator in question is a brilliant public servant and the bureaucrat or political appointee on the hot seat is a bumbling idiot (Republicans especially love this form of oversight, since it reinforces their general opinion about government as inept).
Nevertheless, a Democratic Congress and President ought to revive the oversight process and have it concentrate on solving problems in the actual implementation of programs. They ought to think of their job as helping the executive branch make the programs they pass work–even if it means having to go back to the drawing board and make adjustments as they go.
A third way to improve implementation is to distinguish between systemic and personal problems. Bernie Madoff, the con man who swindled investors of some $50 billion, is simply a crook, and no amount of new reforms, however well-implemented, will prevent the next one from trying a version of the same thing. But the systemic problem is at the Securities and Exchange Commission and other watchdog agencies, which failed to see the warning signs and investigate closely enough.
When the Administration gets to systemic changes involving health care and climate change, honesty will be the best policy, even if it makes the politics harder. American citizens have never trusted government very much, and the Bush Administration managed to push trust down to some of the lowest points in history. Nevertheless, lawmakers shouldn’t pretend that a cap-and-trade system won’t raise the price of gas and electricity; nor should they pretend that changes in the tax deductibility of health insurance won’t result in higher costs for some. That said, worse than asking for sacrifice is pretending it isn’t required, when anyone and everyone can see it is. Since many of the reforms that Obama will need to make will involve some initial sacrifice, if people do not trust the government, they will not be willing to sacrifice for the promise of a better society. It seems a paradox, but Obama can resolve it if he explains both the upsides and downsides of his proposals. That won’t convince everyone to support him, but it will increase trust in the government, which will make implementation a lot easier.
The bottom line is that when the lights go down on the brilliant economists and public servants whom Obama has recruited, the work will have just begun. The case studies in Patashnik’s book should be read as cautionary tales for the incoming Administration: Implementation matters.Kamarck.pdf