How to escape the trap of the ‘clean’ debt ceiling vote

Republicans have painted themselves into a corner in the debate over the upcoming vote to raise the country’s debt limit. President Biden says he wants a “clean” vote — that is, no discussion or deal on any other issues — while Republicans are loudly on record demanding substantial, although unspecified, cuts in federal spending. 

While conservative members may be completely justified in their concern, the likely future is brickbats back and forth up to the edge of a deadline dreamed up by the Treasury Department. If past history is a guide, at the last minute Republicans will vote to raise the debt ceiling. Because Republicans don’t have a unified, let alone explainable, alternative, they run the risk again of looking like petulant children.

There is another strategy.

Many analyses of the current spending, budget deficit and debt situation have cataloged how significantly all three have gone up over any time period during the past decade. What hasn’t been mentioned, and which has similarly grown exponentially, is waste in government programs and spending.

Before throwing themselves off a cliff in pursuit of future spending cuts, House Speaker Kevin McCarthy (R-Calif.) should ask for a government-wide, serious commitment to identify and reduce waste in government spending.

Happily, there is a clear path forward regarding what to do, how to illustrate the benefit and why it’s very likely to garner support across the administration — although it will launch a serious discussion about future spending.

The strategy: introduce a bill first proposed by now-retired Congressman Tom Latham (R-Iowa), which mandated that every government department and agency methodically review operations and programs and identify waste and publicize actions. Numerous watchdog organizations document how much the government wastes. Estimates vary wildly, depending on the definition of “waste,” but it’s at least 10 percent and in some cases much more.

What is the definition of “waste”? How do we know it’s a winner as a political issue? Let’s take the politics first. We don’t think any Democrat can vote against a new version of the Latham bill with a straight face. Next, once they understand its impact, the idea creates a unifying platform for all Republicans, including the most hard-nosed Freedom Caucus cardholders. The secret ingredient: While the media reported the ascension of Jeff Zients as the new White House chief of staff, they curiously left out that in addition to being President Obama’s deputy Office of Management and Budget director, he was also the country’s first chief performance officer.

In 2009, Fortune Magazine declared Zients “efficient, effective and goal-oriented.” We know he understands the situation, saying before the Senate Budget Committee at the time that the “test of a performance management system is whether it’s used,” and noting that “the current approach fails this test” and the problem was that “it doesn’t produce meaningful information for the public.” This concept fits right in with Part IV of McCarthy’s “Commitment to America Plan,” introduced last Sept. 23: “A government that’s accountable.”

The political landscape is accidentally favorable. Although Democrats have labeled as “catastrophic” any failure to raise the debt limit, the White House can hardly disavow its new czar, who actually also seems to believe spending cuts can make a difference.

We know they can. In the late 1990s, the Army and the Navy became believers in the business efficiency techniques of Lean Six Sigma. They adopted the initiatives out of desperation to cope with the Clinton administration’s budget cuts and their own dysfunction. These efforts continue and the Army regularly recognizes the results. ​​In fact, one doesn’t have to look far for proof. In 2006, the Electric Boat company completed 131 LSS projects, which produced a savings of $162 million. They have 200 still in progress.

One of the nation’s great business pioneers, Michael George, whose company was responsible for the examples above and hundreds of others, merged the processes of “lean manufacturing” and Six Sigma. George built successes over decades. Thousands of organizations, including many governmental bodies, have successfully implemented his teachings. In 2010, he created an organization, Strong America Now, to try to make tackling waste an issue in the 2012 election.  We failed in that goal, but George’s efforts serve as a blueprint for the next chapter.

In the bumper sticker of “Waste, Fraud and Abuse,” most of the news you read is about fraud. But waste deserves your attention. Fortunately, the private sector provides an education for even the most skeptical. The first definition of waste, illustrated by the above examples from the Army, is to ask, “What are we doing and can we do it quicker and cheaper for the same or better quality?” The restaurant chain Chili’s is analyzing its business and publicly committing to reducing costs. They have shared numerous examples. French fries were prepared in individual baskets — goodbye, individual baskets. As a result, 40 million fry baskets no longer needed to be individually washed. Next, prep cooks spent each morning counting out shrimp and bagging them separately. Why? Well, it was always done that way. They changed that to save $6 million annually.

Virtually every business and every businessman has stories like these. When JPMorganChase’s former senior executive, Marc Shapiro, was CEO of Texas Commerce Bank in the mid 1990s, he led the institution through a transformation process to find and remove millions of dollars from annual operating costs. One of his favorite props was a bank credit card that had been cut up and then taped back together. The administrative staff for international customers had pointed out that they issued cards to customers out of the country, cut them up so they couldn’t be used, but then had to tape them back together for internal audits. “Wouldn’t it be better just to not issue them?” they asked. That reportedly saved $52,000. These are all examples of the first pass at efficiency.

Back to Chili’s. What wasn’t popular with customers? One version of beef nachos, which were eliminated. Rita the Robot server was cute but didn’t bring in customers, so Rita was booted. The next level of analysis tackles the debate that one person’s definition of waste is another’s porky earmark. Take the example of the new $25 million electric Lummi Island ferry in Whatcom County, Washington. The local congresswoman last year described it as being “in desperate need of modernization.” It replaces a 60-year-old diesel ferry that actually had been working fine and that local residents liked.

These kinds of examples are where “the rubber hits the road” in defining waste. We’re not arguing against handing out the infrastructure grants; we’re suggesting that each potential dollar be examined critically and that Zients’ point of view — i.e., useful information — and McCarthy’s — accountability — should be key aspects in making decisions.

Here’s the proposal: Give the Latham bill a new name and challenge the hardline Republicans to back it enthusiastically. Thank Zients for his endorsement of the principle. Pass the directive with broad bipartisan support and charge the American public to demand results. Ask the question: Is this worth spending your grandchildren’s money on? In 2010, we hired economists to run various financial scenarios. Just applying this analysis across the government got us about a quarter of the way toward balancing the budget in four years. 

As the late Sen. Everett Dirksen said, “A billion here, a billion there — it adds up and pretty soon you’re talking about real money.” Today, he’d be using ‘T’ for a trillion. And it does add up.

Peter O’Rourke was acting secretary of the Department of Veterans Affairs in 2018 under President Trump. He is the former executive director of Strong America Now, and holds a Lean Six Sigma black belt. 

Merrie Spaeth was director of media relations for the Reagan White House and communications adviser for Strong America Now.