Senator Lankford Questions OMB Deputy Director on the Administration’s Federal Government Reorganization Plan

WASHINGTON, DC –Senator James Lankford (R-OK) today questioned Deputy Director for Management Margaret Weichert of the Office of Management and Budget on the Administration’s proposal to reorganize the federal government during a hearing for the Homeland Security and Governmental Affairs Committee (HSGAC). Lankford and Senator Ron Johnson (R-WI), chairman of HSGAC, introduced a bill in June that would expand the executive branch’s authority to reorganize federal agencies. This hearing gave Members the opportunity to ask questions on the Administration’s process to develop a plan that would streamline the services of the federal government to better serve the American people.

During his questioning of Weichert, Lankford asked how the Administration plans to review federal property. In June, Lankford introduced a bipartisan bill to streamline the federal inventory review process to save taxpayer money by directing federal agencies to more frequently assess unneeded federal property.

Excerpts:

(3:18-5:36) Senator Lankford: Let me bring up something else this committee spent a lot of time talking about, and its real property. You address this as one of the ideas, I’m trying to be able to resolve this. One of the things we’ve started looking with how GSA disposes of properties that either underutilized or unutilized property, but also how we’re doing leasing or buying. Recently, I was going through some reports and looked at the request for the Department of Transportation headquarters, here in Washington, DC. They’re requesting to be able to buy the facility. Well, that’s a great idea, it’s the headquarters, we’ll probably have a Department of Transportation for a very long time, so we should probably own the facility. The problem is, we’ve been leasing that facility for fifteen years, at approximately a cost of $750 million. To lease it for fifteen years. Now, we’re being offered to buy the facility for $750 million. We’re paying for the building twice. The first fifteen years there’s very little maintenance of the building, so for the owner of the building to lease it to us, it’s no skin off their nose because air conditioners are going to work, all those kinds of things are not an issue. Now it will be, and we’re going to own it then. It was a terrible idea fifteen years ago. Trying to be able to fix how we’re disposing of property, when we’re buying and leasing a property, this is a very big issue for this committee. Senator Carper spent a lot of time on this issue. What are some of the proposals that you’re already looking at for that area?

Deputy Director Weichert: So, I think it’s a great idea, one of the very specific things that get to the heart of this idea is the federal capital revolving fund. You know, back in business school, there’s a very classic finance truism, you know, when you compare a lease by decision. Usually the only rational economic reason for a lease decision is if there’s a tax benefit to that decision, and obviously, government doesn’t have a tax benefit for that decision. The other reality could be a cash flow consideration and how the actual money gets allocated and very often some of our leasing decisions are made because of the nature of the appropriations process. So, what’s in the proposal actually looks at a federal capital revolving fund that would essentially free us up to make more rational decisions about a lease/buy decision if we really think the asset would be valuable for us in the long term. 

(5:37-7:18) Senator Lankford: One of the things you looked at was a territorial issue, of who kinds of runs this space and who has this lane. Whether that be in small business lending or in small business programs which are scattered all over the federal government. Whether that be in veteran’s cemeteries, which are also scattered all over multiple agencies. Whether that be in other projects and other grant-making, which again is scattered everywhere. How did you make the determination to say that there’s a wide variety of entities doing basically the same thing, we need to be able to consolidate, or do we need to be able to streamline that within the agencies?

Deputy Director Weichert: Yes, I think there are a number of things, again, in the proposal that speaks to, you know, how do we leverage data to really be much more thoughtful about how we’re making decisions, that’s very much something in the private sector, and so, relocation analytics and being more thoughtful about that are critical components of the proposal. A range of smarter leasing activities that will allow us to make improvements to how we make decisions about our leasing decisions, and then the number of process improvement included build on the FASTA work that has already been put in place. So, I think there a range of ideas that are fairly tangible and designed to provide incentives for agencies to do the right thing that perhaps they don’t have those incentives today, and then to provide data to make it easier for them to do that.

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