Power positions: Federal positions on the front lines

As Barack Obama prepared to take his place as the 44th president of the United States, he created two positions to help enforce his marching orders. The chief performance officer and chief technology officer will play new roles in the administration. President George W. Bush briefly had a CTO, but the position faded after Norm Lorentz stepped down early in Bush’s first term.

Aside from those new titles, certain offices within the executive branch have significant influence over the entire government. A small number of presidential appointees — and the staffs of their agencies — set and enforce most of the policy and management initiatives.

Orszag to wield budget ax
The head of the Office of Management and Budget is the king of the mountain, as far as agency program directors are concerned. Obama appears ready to give the White House budget director more clout than Democratic presidents traditionally do, if only to establish some needed fiscal credibility for his budget-busting economic stimulus plan.

Peter Orszag, the president-elect’s pick for the job, is known for his academic credentials in economics rather than for his political heft, but his mandate is clear. When he announced Orszag’s nomination Nov. 25, Obama said his administration “will not only help design a budget and manage its implementation, it will also help make sure that our government — your government — is more efficient and more effective at serving the American people.”

The question is how much influence Orszag will have over a Democratic Congress that has been itching to get a fellow Democrat in the White House and Republicans out of OMB. Agency directors — and their vendors — are waiting to find out.

“It’s a perfect story for uncertainty,” said Thom Rubel, practice director of government programs as Government Insights. Contractors are on the front lines as agencies try to figure out how much money they actually have available to spend, he said.

Obama described Orszag as an honest broker on economic and budgetary issues, particularly as director of the Congressional Budget Office, a position he has held since January 2007. In that role, he served both Democratic and Republican masters in providing objective, nonpartisan and timely analyses.

Orszag gave Congress and his new boss a taste of that honesty last week when the last CBO budget report under his tenure projected a $1.2 trillion deficit for the current fiscal year. The deficit would represent the largest amount of red ink since World War II.

The new era will compel agencies to examine everything they do, said Stan Collender, managing director at Qorvis Communications. “You’ll sometimes ask an agency to give up its most cherished activities,” he said.

OFPP oversees buying process
Within OMB, the Office of Federal Procurement Policy keeps an especially close eye on the process agencies use to buy goods and services. As the central procurement policy-setting organization for the entire government, the small office has an enormous influence.

Obama has yet to nominate anyone to lead OFPP, but the issues that await the next administrator are piling up, and an overextended acquisition workforce is yearning for a solution to its shortage of workers.

The obvious solution is to hire more workers, but officials and experts say the pool of applicants isn’t there. As a result, agencies that hire acquisition personnel are usually taking them away from other agencies, rather than adding to the government’s total.

OFPP provides overall direction on policies for many aspects of contracting, such as the kinds of contracts agencies can use, limitations on the use of some types of contracts, and competition requirements.

OFPP’s role also includes creating policies to increase the size and skill of the workforce. Many observers say improving the workforce will be the single most pressing issue for Obama’s OFPP head to solve.

Agencies and departments have outreach programs, internships and other efforts to bring new people into government service. OFPP leads the Federal Acquisition Intern Coalition, an effort to coordinate the various agency initiatives.

Trey Hodgkins, vice president of federal government programs for the Information Technology Association of America, said Obama should put his considerable charisma into the effort with a louder call to public service.

Hodgkins said the OFPP administrator can play a part in boosting the workforce, but it will have to be in concert with leaders at the Office of Personnel Management and OMB’s deputy director for management. Those agencies together should work to make the federal hiring process more efficient, he said.

Regulatory affairs office shapes rules
There is another powerful office within OMB that is more obscure than OFPP. The Office of Information and Regulatory Affairs rarely makes headlines, but behind the scenes it exercises extensive power in the federal rulemaking process.

Obama’s pick to head the office, Cass Sunstein, is a Harvard Law School professor who authored several books, most recently 2008’s “Nudge: Improving Decisions about Health, Wealth, and Happiness,” which he cowrote with University of Chicago economist Richard Thaler. The authors advocate for government and businesses to nudge people into making better life choices, not by taking options away but by making the smarter ones more apparent.

The Paperwork Reduction Act of 1980 created OIRA, but it was under an executive order by President Bill Clinton that its power to steer and overrule agency regulations came into play. That gatekeeper role has made it a politically and ideologically contentious role.

The “OIRA-agency relationship will always have a healthy tension, regardless of the details of the process or structure,” said John Graham, President Bush’s first OIRA administrator, who faced criticism for his conservative stances on safety, health and environmental regulation.

Rick Melberth, director of federal regulatory policy at OMB Watch, a regulatory advocacy group, would like to see that relationship change in the Obama administration. He said it should put more emphasis on opening the regulatory process to average citizens.

Jim Tozzi, who was the first deputy administrator of OIRA and ran regulatory review programs during the Nixon, Ford, Carter and Reagan administrations, said that even if information policy plays a more prominent role in OIRA, regulatory affairs will likely remain a primary focus of the office. Tozzi is a member of the board of advisers for the Center for Regulatory Effectiveness.

Melbreth said OIRA has more influence than it should. By serving as the last office to rewrite proposed rules, it takes too much power away from the agencies that will implement the rules.

“There should be greater deference to the agencies [because] they are the ones that have the expertise, they are the ones charged by Congress with developing with regulations,” Melbreth said.

Workforce issues to growing dire
OPM is becoming a more influential — and important — agency as pressure builds around unresolved human capital issues, such as hiring processes, pay-for-performance systems and workforce development.

Under the Obama administration, many of the issues will take on a new urgency, and the expectations are that new leadership, when it is put in place, will set a tone for the change that the president-elect has promised, said Brian DeWyngaert, chief of staff for the American Federation of Government Employees.

The current OPM acting administrator, Michael Hager, is finishing the four-year term of the previous director, Linda Springer, whose term was to expire in June 2009. It is unclear whether Obama will leave him in the post that long.

Federal pay systems will be one of the next administration’s most contentious issues, DeWyngaert said. Agencies have experimented with pay-for-performance systems, which reward exemplary work more than the traditional seniority-based system, but they have encountered some difficulties. In particular, agencies have struggled trying to find ways to measure performance objectively and fairly. Government is not a business, observers note, and some of the obvious metrics for a business — such as sales numbers or profit margins — are not available for agencies.

The Defense Department’s National Security Personnel System is one of the most visible experiments, and the next OPM director might have to decide whether to continue it “or stop it dead in its tracks,” said Carol Bonosaro, president of the Senior Executives Association.

Bonosaro said OPM needs to target bigger issues, such as career leadership. That includes improving the relationship with union leaders.

DeWyngaert anticipates that improving the state of labor-management relations, which he describes as “close to an all-time low,” will be a priority. Many people don’t realize that the federal workforce is heavily unionized, he said.