Mick Mulvaney, the new Director of the Office of Management and Budget (OMB) will have major fingerprints on the President’s budget presentation tomorrow night in his address to Congress.
While the press has been focused on Mulvaney’s Congressional record on military spending, Social Security, Medicare, and “entitlements”, a subtler impact on social policy needs to be appreciated. (Mulvaney is well-known for his role in the Tea Party, the Freedom Caucus, and the Republican Study Committee — all fiscally ultra-conservative groups.)
Director Mulvaney has indicated he will revive a Bush Administration budget management tool, the Program Assessment Rating Tool (PART), as the basis for evaluating future program funding requests.
The rhetoric of this proposal is that he will re-institute an evidence-based approach to budgeting and resource allocation.
Historically, PART follows a long tradition of budget and program management systems, starting with the Planning, Programming, Budgeting System (PPBS), implemented by Robert McNamara and others in the Pentagon. PPBS was followed by Management by Objectives (MBO) in the Nixon Administration, and Zero-Based Budgeting (ZBB) in the Carter Administration. The passage of the Government Performance Accountability Act in 1993, reauthorized in 2010, led to numerous improvements and expansion of government information and evidence in budget planning for federal programs.
The Obama Administration implemented a “performance and analysis” program that lodged considerable responsibility for accountability and decision-making in the agencies. However, for all of this history, most observers of the budget process see little linkage between evidence of program performance and fiscal decisions.
The Bush Administration’s PART system produced scores or ratings of federal programs based on assessments of program purpose and design, strategic planning, program management, and program results. The particular questions that guided the scoring was based on a schema of different program types, such as competitive grant programs or regulatory programs. Program results or outcomes accounted for half of the weight of the total score. Once programs were scored they were sorted into five categories of performance: effective, moderately effective, adequate, ineffective, or results not demonstrated.
There were numerous areas of controversy in the design and implementation of Bush’s PART:
- What constitutes evidence of program performance and who gets to decide?
- What happens to the results of this budgeting process, especially when it goes into the legislative and appropriations machinery?
The overall critique of the Bush Administration’s PART system was that it did not ultimately lead to changes in programs and appropriations because the budget guidance was nearly always swamped by advocacy and Congressional politics.
Despite this history, implementation of some version of PART appears to be a priority for Mulvaney and the new administration.
Analysts at both the Brookings Institution and the Heritage Foundation have advocated adoption of a revised version of this approach, as well as other reforms to budgeting and public management. [i]
Why might we expect PART 2.0 – or whatever new name performance budgeting receives – to be more influential than past attempts? First, in order to reach the ambitious needs for budget savings to finance other expensive priorities of the President (e.g., defense, border security, infrastructure, etc.) the administration will need a big stick to justify cuts in social programs. Performance-based budgeting systems like PART provide the aura and possibly the reality of a rational and objective basis for those cuts.
Second, Mick Mulvaney will likely exert outsized influence in the new administration, especially given the weakness of many of the other domestic policy secretaries.
Third, the alignment of this approach with the goals and values of many of the budget hawks in the Congress – including Speaker Ryan – means that there is less likelihood that the Congress will undermine or sabotage the budget analysis coming out of the administration than has happened in recent history.
For proponents of evidence-based policy making, systematic attention to program outcomes and alignment of program performance should be seen as a good thing. However, (as my colleague Larry Lynn taught me), it is less the case that the budget “system is the solution” than how it is implemented and used. If a performance based budgeting system is merely a fig-leaf for rationalizing and covering decisions that otherwise are driven by ideology, it will not necessarily lead to more rational and principled resource allocation in programs; just “cover” for making significant budget cuts.
As in most policy management, performance-based budgeting is complex and riddled with important details. Many program areas simply do not have a sufficient evidence base for this kind of decision-making. Interpretation of evidence is a contact sport (as the long history of argument over Headstart evaluations demonstrates). The analytic capacity that is needed in the administration, the agencies, and the Congress to legitimately weigh evidence on program performance is tremendous, and the system will only be as good as the quality of the input it receives.
[i] Andrew Feldman, Strengthening Results-Focused Government: Strategies to Build on Bipartisan Progress in Evidence-Based Policy (January 2017);
and David Muhlhausen, Evidence-Based Fiscal Discipline: The Case for PART 2.0 (September 2016)