Management 101: What the Democrats Need to Learn

Democrats care more about making laws than making them work. That needs to change

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A few days before the oil rig blew up in the Gulf of Mexico, Senator John Kerry called to talk about the big new energy bill that he is sponsoring with Senators Joe Lieberman and Lindsey Graham. Kerry is a committed environmentalist, and the bill he described makes good sense. It targets the biggest polluters and proposes smart incentives for alternative energy, but I found myself reacting with unexpected skepticism to the proposal. Part of my response was knee-jerk and political: the bill would raise fuel prices through a tax on polluters, and even though most of that money would be refunded to working-class Americans, the T word is red meat for demagogues, especially in an election year. But there was a deeper, nagging skepticism as well. Obama's health care reform, and the soon-to-be-passed financial-reform bill, will create scads of new and reinforced regulatory agencies. They will have to be managed well if those new programs are to succeed — and good management is, sadly, neither a government specialty nor a priority for either political party.

Democrats tend to be more interested in legislating than in managing. They come to office filled with irrational exuberance, pass giant fur balls of legislation — stuff that often sounds fabulous, in principle — and expect a stultified bureaucracy, bereft of the incentives and punishments of the private sector, to manage it all with the efficiency of a bounty hunter. This has always been the strongest conservative argument against government activism. Traditionally, Republicans were more concerned with good management than Democrats — until the Reagan era, when the "government is the problem" mantra took hold. If you don't believe in government, you don't bother much with governing efficiently. You hire political cronies for jobs that professionals should be doing. Eventually, you wind up with the former head of the Arabian Horse Association — the infamous Michael Brown — trying to organize federal aid after Hurricane Katrina.

But even if Republicans were intent on managing the necessary bureaucratic evils, and even if Democrats understood that making the government run brilliantly was the key to building support for their programs, there would be problems inherent in the nature of the beast. In a recent book about government efficiency, Harvard professors William Eggers and John O'Leary argue that most bills are designed for passage, not implementation. They are stuffed with special provisions inserted by lobbyists and predatory politicians. They are empretzeled with circuitous funding mechanisms. It is no accident that most major, and even minor, pieces of legislation these days are blast-wall thick, running to thousands of pages. The government's natural hypercaution about scandal lays on another brutal layer of sclerosis: according to Peter Orszag, director of the Office of Management and Budget, it takes 150 days to hire a new employee in the Cabinet departments

And then there is the nature of the bureaucracy itself. Three types of people tend to seek government work: idealists, those looking for sinecures and those who want to build lucrative private-sector careers based on their knowledge of government regulations. All three types present problems. There is a pretty good, but not overpowering, reason government workers are hard to fire: they need to be protected from political pressure. But that protection inevitably produces regulators who, as in a recent notorious case at the Securities and Exchange Commission, spend more time watching porn than riding herd on Wall Street. Too many of their colleagues who are not watching porn are building expertise that will enable them to beat the regulatory system when they exit the revolving door into private finance. Even the idealists, who are prominent in places like the Environmental Protection Agency (EPA), can cause trouble if they are naive and inflexible in their enforcement of rules and regulations.

Bureausclerosis can be mitigated. Orszag learned his trade in the Congressional Budget Office, an agency known for a culture of excellence created by its first director, Alice Rivlin, and reinforced by rewards and punishments that resemble those found in the private sector. And the Obama Administration has worked hard to manage its programs well: the stunning absence of corruption in the disbursement of stimulus funds is attributable, in large part, to Vice President Joe Biden's vigilance. Orszag says updating the government's antediluvian computer systems could increase efficiency dramatically.

But the sheer number of new programs to be managed, if the financial-reform package is added to the health care and stimulus initiatives, should give Democrats pause about trying to pass anything else this year — although Senator Graham, the lone Republican co-sponsor of the energy bill, makes a deft argument for passage: "If we don't pass it, strict EPA carbon regulations will kick in. Our legislative vision will create millions of green jobs, which is something regulators can't do." Absolutely right, but it will also create new taxes, which is something politicians can't do.