Jacob Lew is all but assured his second term as the director of the Office of Management and Budget.
Senators from both sides of the aisle praised Lew during his nomination hearing Thursday before the Senate Homeland Security and Governmental Affairs Committee.
“Your long career managing budgets, finances, technology and operations in the government, private and academic sectors-including having been the budget director under President Clinton-by itself speaks well for your qualifications for this job,” said Sen. Joseph Lieberman (I-Conn.), chairman of the committee.
Sen. Scott Brown (R-Mass.) came right out and said he would vote to confirm Lew.
But even with all this praise, the committee laid high expectations on Lew’s shoulders once confirmed.
“From the OMB director we need common-sense analyses of what is working and what is not,” said Sen. Susan Collins (R-Maine), ranking member of the committee. “We require honest assessments of fiscal realities, untarnished by political calculus. And we expect the courage to admit mistakes and change course.”
Lieberman said he would like to hold a committee vote on Lew’s nomination early next week. Lew would replace Peter Orszag, who left July 30.
Lew, who currently is the State Department’s deputy secretary for management and resources, said he would focus on being more bi-partisan, and spend a considerable amount of time working on management issues.
“If confirmed as OMB director, making government more efficient and more effective, more open and responsive to the American people will be a key priority of mine as it is of the President,” he said. “And while we should aspire to never waste taxpayer dollars, regardless whether the budget is in surplus or deficit, the management of the federal government is particularly important during lean times.”
To that end, Lew promised to review every agency program during his first few months on the job.
“It is an exhaustive process and an exhausting process,” he said. “It is the way that you use the very capable staff of OMB to ask questions about every program in the federal government.”
He said he has tried to manage State that way where he shifted resources around to meet their highest priorities.
Committee members pressed Lew on several budget issues, including freezing all discretionary spending and freezing federal pay and hiring.
Lew would not commit to either.
He said the President already proposed to freeze non-security discretionary spending for three years. But that alone will not solve the country’s fiscal troubles.
“My own view is caps on discretionary spending as part of an overall budget agreement are effective and it’s the right place to have a debate on long term discretionary spending,” he said. “The thing I fear, while discretionary spending is important and we need to constrain it, is it is a small part of the total problem. If we don’t address other issues, we will not be at a place to turn the corner.”
As for a freeze on hiring and pay raises, Lew hesitated supporting either because he said insourcing of contractor jobs could cause both to increase.
“If we want to move functions into government and it costs us more to hire contractors than government employees, we need to move away from the notion that it’s just about head count,” he said.
While many of the committee’s hearings focused on budget issues, Lew offered some idea of his management philosophy.
“The challenge for OMB and the OMB director is not to let budget issues dominate so completely that you can’t focus on running the government well,” he said. “I tried when I was at OMB last time to do it in two different ways. First, I focused on priority management issues. There was a list at the time of 10-12 issues where I was engaged with deputy director for management and the appropriate program office trying to solve specific agency problems where they came to me on a periodic basis and I was part of the management team. You can’t do it on 100 issues; you just wouldn’t have the time. But if you identify the top 10-12 issues, you can do it even with a busy schedule an OMB director has.”
Lew added that he would pay close attention to functional issues such as technology, procurement reform and performance management, as well.
“There was a period of time when performance measurement shifted away from the core objectives of agencies and became less directly central to ‘are we getting done what we set out to do?'” he said. “I think we are coming back to trying to measure performance of an agency against what it puts out as its goals. I think it’s important in any performance measurement system to separate the question of ‘how do we determine our core values?’ from the question of ‘are we doing them well?'”
Sen. Daniel Akaka (D-Hawaii) also pressed Lew about whether OMB needs a full-time privacy official.
Lew said last time he was at OMB, the agency did have a privacy counselor. But he also pointed out that there was no Office of E-Government and IT.
“There are many ways to organize around privacy, and this administration takes privacy very seriously,” he said. “I will develop my own view of how the current organization works.”
Lew’s written responses to the committee’s questions also offered several tidbits about him and OMB’s initiatives:
OMB is seeing agencies plan across agency boundaries for the 2012 budget.
Lew is a fan of CXO councils, whether for CIOs or CFOs or performance improvement officers to help identify shared goals.
Lew is interested in promoting the acquisition workforce fund and would talk to the Defense Department about how they have managed their training fund. The administration asked for more than $150 million in 2012 for such as fund for civilian agencies.
He also said that procurement reform is both a management and budget issue, and these offices must coordinate to ensure policy development will address both aspects.
Lew supports a change to the Federal Acquisition Regulations to clarify and better define when an organizational conflict of interest occurs during contracting.
The General Services Administration and OMB are working on real property guidance, and agencies are required to submit plans for how they will reduce real property and how much savings are expected.
Lew also discussed biennial budgeting, a common discussion over the past two decades. He said there would be some difficulties in implementing because planning would be almost three years out for some investments. He didn’t come out for or against the idea, however.
He said he didn’t see a need to codify the federal CIO position.
Lew said the most pressing cybersecurity issue right now for agencies is workforce recruiting, hiring and training. He said the Federal Information Security Management Act (FISMA) and moving to continuous monitoring also are big focus areas.
Lew would encourage agency CIOs to hold TechStat like sessions at the agency level and OMB led TechStat sessions would complement the budget process.
Lew said OMB and the CIO Council currently are developing recommendations to improve IT management and procurement processes. This document should be out by mid-October.
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