Making Smart Cuts

As the government looks to operate more efficiently with fewer resources during the current budget crisis, it is crucial that the president and congress communicate a clear vision for what the federal government should deliver and allow agencies some flexibility on how to best achieve cost-reduction targets, according to a new report.

The report, released Tuesday by the Partnership for Public Service and Booz Allen Hamilton, recommends that the president and Congress communicate a clear vision for deficit reduction, in part by designating a high-level official to lead the cost-savings effort and establish measurable goals that include mechanisms for accountability and transparency. The report examines some of the lessons learned from the Clinton-era government downsizing initiative during the 1990s.

"Congress should also use its oversight role to make sure agencies consider mission, employees and customer impact when making cuts," the report states.

The report also recommends that agencies play a role in considering alternative ways of delivering services and performing functions, including embracing information technology. Clinton's reinventing government initiative, for example, was instrumental in changing regulations that made it hard to justify and buy technology because it was considered an office expense. "The regulatory change helped to foster agencies' adoption of new technologies," the report states.

At the same time, however, budget cuts in the 1990s also prevented some agencies from taking advantage of emerging technologies, forcing them to put off IT investments that resulted in outdated systems and unsupported software, the report noted. In addition, agencies that were able to make up-front investments in IT during that time tended to customize off-the-shelf software, which often was costly to maintain and upgrade, the Partnership and Booz Allen found.

But now, agencies can find significant technology savings in ways that were available in the 1990s, in part through buying new systems with lower maintenance costs, employing cloud computing and consolidating data centers, the report states.

"However, no investment in IT will be successful unless agencies take people and process into account," the report states.

In addition to IT investment, the report also calls on government to look at the costs and benefits of other strategies, including across-the-board cuts, programmatic cuts, decreasing administrative costs, personnel reductions, consolidating or centralizing functions, reengineering and outsourcing.