The President believes that often the best ideas come from outside Washington and from those who work day in and day out on the frontlines. That was the thinking behind the SAVE Award we launched last year – a way to get ideas directly from federal workers all over the world about how to cut waste and save taxpayer dollars.

In just three weeks, federal employees submitted more than 38,000 ideas identifying opportunities to save money and improve performance. After these were winnowed to a final four, the top idea was voted on by tens of thousands of Americans, and the winner – Nancy Fichtner from Loma, Colorado – came to the White House to present her proposal to save money in how the VA uses prescription medication.

As we head into the FY 2012 budget season, the President today kicked off the second annual SAVE Award, asking workers on the frontlines to take a hard look again and to share their ideas and insight at SAVEAward.gov.

In a change from last year, we also are asking federal employees to help rate the submissions from their fellow workers. This new feature will allow employees to apply their insight to the evaluation process, making sure the best ideas make it into the FY 2012 Budget.

In line with the spirit of the contest, the reason SAVE is back for a second year is that it works. I’ve written previously about some of the great ideas that came out of the first year’s SAVE contest. In March, the Department of Homeland Security (DHS) made a shift from paper to electronic payroll statements, helping save on printing, shipping, and distribution costs that add up quickly. More recently – thanks to the SAVE Award – the Air Force changed its cellphone arrangement, saving taxpayer dollars by tailoring plans to actual usage patterns.

These ideas represent small, but powerful, examples of how federal employees can use their experience and knowledge to streamline what works and help identify what doesn’t. If you’re a federal employee reading this blog post, go to SAVEAward.gov now and send in your idea now.  You’ll be helping to modernize our government, and just may end up in the White House briefing the President about your idea.

Peter Orszag is the Director of the Office of Management and Budget

As I’ve written before, one source of ineffective and inefficient government is the technology gap between the public and private sectors.

While a productivity boom has transformed private sector performance over the past two decades, the federal government has almost entirely missed this transformation and now lags far behind on efficiency and service quality.  We are wasting billions of dollars a year, and more importantly are missing out on the huge productively improvements other sectors have benefited from.

Quite simply, we can’t significantly improve the efficiency and effectiveness of the federal government without fixing IT.

That’s why today, in our ongoing effort to make sure that taxpayers’ dollars are spent on projects that work, we are taking three specific actions to advance IT reform.

First, I am directing all executive departments and agencies to stop issuing new task orders or procurements for all financial system modernization projects – an area of persistent problems – pending review and approval by OMB of new, more streamlined project plans.  Financial system modernizations projects in the federal government have become too large and complex.  By setting the scope of projects too broadly rather than focusing on essential business needs, federal agencies are incurring substantial cost overruns and lengthy delays in planned deployments.  Compounding this problem, projects persistently fall short of planned results once deployed. For instance, the Department of Veterans Affairs (VA) has invested over $300 million in two financial system projects over the past 10 years. The first project ended in failure and no operational capability has been realized with the second.
 
Across the government, there are approximately 30 financial systems projects that are affected by this policy. The total cost expended on these projects is anticipated to be $20 billion over the life of these projects, with an approximate annual spend of $3 billion. OMB expects this new process to result in a significant reduction in these amounts.

Second, the Federal Chief Information Officer Vivek Kundra will undertake detailed reviews of the highest risk IT projects across the federal government.  Agencies will be required to present improvement plans to the CIO for projects that are behind schedule or over budget.  Where serious problems continue to exist, there will be adjustments to Fiscal Year 2012 agency budgets.

Third, OMB’s Deputy Director for Management Jeff Zients will develop recommendations, within 120 days, for improving the federal government’s overall IT procurement and management practices.  These recommendations will address the root-causes of problems plaguing federal IT projects and focus on proven best practices from inside and outside the federal government.  They will include higher standards for project management practices and personnel, additional mechanisms for holding managers accountable for project results, and more rigorous review processes.
 
Together, these three steps will provide a strong start to our reforming of federal IT, which is essential to improving the effectiveness and efficiency of the Federal Government and giving taxpayers more value for their tax dollars.

Peter R. Orszag is Director of the Office of Management and Budget

CBO Director Doug Elmendorf recently gave a presentation on health costs and the fiscal outlook.  Doug concludes that the federal budget remains on an unsustainable course even after enactment of the Affordable Care Act, and I wholly agree with him. 
 
There should be no ambiguity about whether we face unsustainably large deficits over the medium- and long-term.  We do.  That is why the Administration’s Budget proposes significant additional deficit reduction and that is also why the President has formed a bi-partisan Fiscal Commission charged with recommending measures to achieve medium term fiscal sustainability and to meaningfully improve the long-run fiscal outlook.

The fact that more action must be taken on the deficit even after enactment of the Affordable Care Act, however, is a distinct question from whether the health legislation helps to improve our fiscal course — which it does. 

In particular, CBO estimates that the Act will reduce the deficit by more than $100 billion over the next ten years and more than $1 trillion in the ten years after that.  That’s more deficit reduction than has been enacted in over a decade.
 
Perhaps more importantly, the Act has the potential to fundamentally transform our health system into one that delivers better care at lower cost.  This potential isn’t fully captured in CBO’s numbers, and that’s appropriate.  CBO produces its estimates based on what has happened in the past, and we have never enacted such a fundamental transformation. 
 
The new law incorporates the most promising ideas from economists and leaders from  across the political spectrum to control health care costs.  As I have written before, this includes the vast majority of the options CBO itself suggested for reducing long-term health care cost growth.  And we now have a variety of new institutions that will be devoted to guiding policy toward higher-quality and lower-cost outcomes.
 
The bottom line is that we are on a long journey toward fiscal sustainability — but that should not diminish the importance and potential of the Affordable Care Act.

Peter R. Orszag is the Director of the Office of Management and Budget

Today, the President sent to Congress the Reduce Unnecessary Spending Act of 2010 to establish a new, expedited tool to reduce unnecessary or wasteful spending. Under this new expedited procedure, the President would submit a package of rescissions shortly after a spending bill is passed. Congress is then required to consider these recommendations as a package, without amendment, and with a guaranteed up-or-down vote within a specified timeframe.
 
The Reduce Unnecessary Spending Act will empower the President and the Congress to eliminate unnecessary spending while discouraging waste in the first place. This is critically important both because we should never tolerate taxpayer dollars going to programs that are duplicative or ineffective and because, especially in the current fiscal environment, we cannot afford this waste.
 
Indeed, the expedited rescission authority in the Reduce Unnecessary Spending Act would be particularly effective in reining in programs that are heavily earmarked or not merit-based as well as those that are plainly wasteful and duplicative. For instance:

• The State Assistance Grants for Water Infrastructure at the Environmental Protection Agency currently consists of $157 million in non-merit-based, earmarked funding instead of being allocated through the regular formula allocation process.
• The Department of Transportation was given $293 million for earmarked surface transportation projects that also circumvent formula grant funding.
• The Department of Commerce was allocated $20 million and the USDA was given $5 million to fund public broadcasting even though this activity is ably supported through the Corporation for Public Broadcasting.
• The Department of Housing and Urban Development was allocated $17 million for the Brownfields Economic Development Initiative, a worthy goal that duplicates the function of the CDBG program.

The Reduce Unnecessary Spending Act of 2010 alone is not enough to cut waste, streamline government operations, and create a government that is more responsive to the American people. Rather, it is part of a larger effort the President has undertaken to rein in wasteful spending. This effort includes: the $20 billion in terminations, reductions, and savings the President included in both his budgets; our work with Congress to curb earmarks; the signing into law of statutory PAYGO; the Administration-wide effort to curb the $100 billion in improper government payments; and the three-year freeze on non-security discretionary funding that the President put forward in the FY 2011 Budget.
 
We look forward to working with Congress in passing the Reduce Unnecessary Spending Act and creating a government that is effective and efficient.

Peter R. Orszag is Director of the Office of Management and Budget

A Congressional Budget Office (CBO) letter released yesterday has sparked a new round of old questions about the cost of the recently enacted health insurance reform law, the Affordable Care Act. The letter simply updates CBO’s calculation of the size of discretionary authorizations included in the legislation. 

CBO’s tally, which is not included in its estimate of the cost of the law, has led some to erroneously conclude that the law includes more spending and less deficit reduction than CBO has previously reported.

As I have said before and independent analysts have echoed, this is incorrect: 

• Authorizations are just that — they are not spending. That is, they are expressions of what Congress would like to spend money on, not what it will spend money on. This is important since Congress frequently does not fully fund authorizations and many are never funded.  As CBO itself says in the letter, authorizations “are subject to future appropriation actions, which could result in greater or smaller costs than the sums authorized by the legislation.”
• The President has made a firm commitment to freezing non-security discretionary funding for the next three years — a commitment he has said would be enforced by his veto pen.  As a result, any actual new funding would have to fit within this freeze and so would have to be offset by budget cuts elsewhere.
• It is also worth noting that a number of these authorizations — including the largest authorization reported in the CBO letter — are simply new authorizations of spending that already exists.  In other words, funding such authorizations does not result in new spending.

The bottom line remains the same: the Affordable Care Act is the largest deficit reduction package enacted in over a decade according to CBO. It will reduce deficits by more than $100 billion in the current decade and more than $1 trillion in the decade after that — and that will not change.

Peter R. Orszag is Director of the Office of Management and Budget

With momentum building, it’s no surprise that opponents took to the morning talk shows and the Sunday newspaper op-ed pages in an attempt to undermine one of the signature accomplishments of the legislation under consideration today: the fact that it reduces the deficit by more than $100 billion over the first decade, and more than $1 trillion in the decade after that.

Especially at this late hour, it’s important to get the facts right. So let’s consider their main charges one by one.

First, critics charge that the bill uses 10 years of savings to pay for six years of spending. As I have posted before, if this were what we were doing, then health reform would blow a hole in the deficit after the first decade (or the budget window). Yet, as CBO has made clear again and again and in its final score issued last night, the opposite is true with health reform. In fact, the reform would reduce the deficit by a half percentage point of GDP -- or more than $1 trillion -- over the legislation’s second 10 years.

Second, we have heard that the bill is double counting Medicare savings.  To put on the green eyeshade for a moment, let’s be clear: the bill has been scored by using standard budget accounting – the same methods used for years. And again, CBO confirms that health reform will reduce the deficit over 10 years and over 20 years.

Looking at the budget as a whole, this bill will leave us with less debt over time, and that is what matters.

Third, critics contend that there is no way that savings and revenue adjustments put forward will actually happen.  No one has a crystal ball, but we do know how Congress has acted in the past.   When tough decisions were made in the past about our central benefit programs, these changes have tended to stick. As I have noted before, the Center on Budget and Policy Priorities (CBPP) has studied Medicare savings and found that: "Virtually all of the Medicare cuts enacted in 1990 and 1993, which accounted for a significant portion of the savings in those large deficit-reduction packages, were implemented...And most of the savings enacted in 1997 other than the SGR cuts – nearly four-fifths [emphasis theirs] – were implemented as well." 

Fourth, some have charged that there are hidden costs not being counted in the CBO score. One source is authorizations for discretionary spending for items related to health reform. Authorizations are just that; they are not expenditures, and Congress often does not act on them -- or can do so while cutting elsewhere so the overall amount of discretionary spending doesn’t increase.  The other source for these alleged secret costs is the need to fix the Sustainable Growth Rate (SGR) in Medicare, which otherwise would cut physician payments drastically. An SGR fix, however, is not in this bill -- so adding its costs to the legislation posits a piece of legislation that doesn’t exist. Moreover, and more importantly, the need to address the SGR is a longstanding issue that pre-dates health reform and would be an issue even if Congress didn’t undertake health reform.  Both Democratic and Republican Congresses and Administrations have applied temporary fixes in the past.

This brings me to a final point. Perhaps people are appropriately skeptical about some of these budget figures because over the past decade, budget gimmicks and fiscal irresponsibility became the norm. Massive tax cuts (which weren’t paid for) were passed and were presented as temporary to make them seem less expensive – even as supporters fully intended to make them permanent. New health care entitlements were signed into law without any offsets. Budget windows were manipulated to blind people from true costs. It is truly, and sadly, ironic that the central critics of the fiscal underpinnings of today’s health reform legislation are those who supported these policies --and led the way -- as our country spiraled from surplus down into deep budget deficits.

The legislation before the House represents the most important deficit reduction package that would be enacted in over a decade -- and, perhaps more importantly, represents the first serious piece of legislation that would begin the process of addressing our long-term fiscal imbalance by re-orienting the health system toward quality rather than quantity.  We stand by its CBO score. Later tonight, we expect a majority in Congress to stand by it as well – ushering in, among other things, a new era of fiscal responsibility.

Peter Orszag is the Director of the Office of Management and Budget

Today’s Congressional Budget Office (CBO) estimate of health insurance reform legislation reaffirms what we have said for the past year: that fiscally responsible health insurance reform is not only possible, but also is an important step toward long-term fiscal sustainability.

The new CBO estimate finds that health insurance reform will reduce the deficit by over $100 billion in this decade and by more than $1 trillion over the following 10 years. If enacted, this would be the most significant deficit-reduction package passed into law in over a decade. And it will begin to transform our health care system into one that delivers higher quality at lower cost, boosting the bottom lines of American businesses, families, and the federal government — all the while providing those with health insurance with new choices and a host of new consumer protections and expanding coverage to 32 million Americans.

By paying for itself and more, this legislation represents an important break from the way Washington has done business recently. In the first decade of this century, large, significant domestic policy initiatives—two tax cuts and a Medicare prescription drug benefit — were passed into law without being paid for, adding trillions to the deficit. That is why the President pushed for, and then signed into law, statutory pay-as-you-go (PAYGO) legislation that holds policymakers to a simple principle: if you propose new tax cuts or entitlement expansions, you must find a way to pay for them.

Some have raised concerns that the health insurance reform legislation may have fallen short of this PAYGO principle. That is simply false. CBO’s analysis shows that the combination of the Senate-passed bill and the reconciliation bill will be deficit-reducing according to statutory PAYGO standards — standards that go beyond simple deficit reduction.

In particular, the overall bill — including the Senate-passed bill and the reconciliation bill combined—generates over $100 billion in deficit reduction over the next decade (and more thereafter). For the purposes of statutory PAYGO, however, certain of the bill’s savings are not counted: namely, the deficit reduction coming from increased Social Security payroll tax revenues and from the CLASS Act, a long-term care program.  But even excluding these components the combined bills generate a net reduction in the deficit, and thus are fully compliant with statutory PAYGO. 

The CBO score today should leave no doubt that we are operating in a new fiscal era — one where we abide by our commitment to pay for new initiatives and take steps to restore fiscal responsibility by reining in the single biggest driver of our long-term shortfall.

Peter Orszag is Director of the Office of Management and Budget

This morning, the President signed an executive order establishing a new, bipartisan National Commission on Fiscal Responsibility and Reform.  The Commission’s co-chairs – former Clinton White House Chief of Staff Erskine Bowles and former Republican Senate Whip Alan Simpson – will bring Republicans and Democrats together to help tackle one of our looming fiscal challenges.

With members appointed by the leaders from both political parties in both houses of Congress as well as the President, the Commission’s objective is to put forward proposals to balance the budget excluding interest payments on the debt (the so-called primary budget) by 2015 and to meaningfully improve the long-term fiscal outlook.  Meeting the medium-term target means that by the middle of this decade, we would be paying for the operations and programs of the federal government and not increasing our debt relative to the size of the economy; under current projections, the result would be stable overall deficits (including interest payments) hovering around 3 percent of GDP.  The Commission will also examine changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal government over the long term.

To report out a recommendation, the Commission would need 14 out of 18 votes, ensuring that any report will have bipartisan support. The Commission will issue its recommendations by December 1, 2010, and the leaders of both the Senate and the House have assured us that they will bring these recommendations to a vote before the end of the current Congress.

In the past, our nation’s leaders used extraordinary processes – much like this fiscal commission – to construct solutions that, for example, helped address Social Security’s looming imbalance in the early 1980s. We believe that the National Commission on Fiscal Responsibility and Reform can be just as successful.

Erskine Bowles was a key architect of the 1997 bipartisan budget agreement which helped put it into surplus, and Alan Simpson – throughout his almost two decades in the Senate – was a consistent voice for fiscal discipline and commonsense solutions. I am glad that they have decided to serve their country once more, and look forward to the leadership of both parties on Capitol Hill making their appointments so that this Commission can begin its important work for the American people.

Peter Orszag is the Director of the Office of Management and Budget

Today, the President transmitted the FY 2011 Budget to the Congress.  In about an hour, he will deliver remarks about the Budget, and after that I will be taking questions from the press with CEA Chair Romer.  This post gives readers of OMBlog a brief overview of the document.

After a year in which we took immediate and unprecedented action to rescue the economy from the brink of a second Great Depression, the FY 2011 Budget takes steps to jumpstart job creation, strengthen the economic security of middle-class families, and make the tough choices to put our Nation back on the path to fiscal sustainability.

When the President took office, the economy was on the brink of a depression. The economic crisis required that we take immediate and extraordinary steps to prevent a complete economic collapse that would have caused millions more to lose their jobs. Not all of the efforts we undertook to avoid a deeper recession were popular.   Nonetheless the President did what was right for our country’s future: signing into law the Recovery Act to jumpstart economic growth and taking steps to prevent the collapse of the financial system.

A year later, the economy is back from the brink – and is growing again.  This "statistical recovery," however, is cold comfort for the millions of Americans who have lost their job. The President has therefore called for a package to spur job creation now – including small business tax cuts and investments in clean energy and infrastructure.

To sustain job creation and economic growth into the years ahead and provide room for the private sector to expand, we are also making tough choices in the Budget: cutting what doesn’t work or isn’t necessary and investing in what will help to expand the economy and employment in the coming years.

The Budget thus institutes a three-year non-security discretionary freeze that will save $250 billion over the next decade.  We're not putting forward an across-the-board freeze, but rather an overall cap on non-security discretionary funding in which key investments are expanded but we cut back on programs that are ineffective, duplicative, or just wasteful.  As part of that overall effort, we identified more than 120 programs across the government that should be terminated or reduced – generating $20 billion in savings.

At the same time, we are making critical investments in the areas critical to building a strong economy in the 21^st century. That is why we increase funding at the Department of Education by $2.9 billion or 6.2 percent, make the largest proposed request for Elementary and Secondary Education Act programs while reforming it to be more effective, and provide more money for Pell grants and Race to the Top.

To build a more modern infrastructure, the Budget establishes a new $4 billion dollar National Infrastructure Innovation & Finance Fund to focus on infrastructure investments of national and regional significance.

To help put the nation at the top of the pack when it comes to the new clean energy economy, the Budget includes more than $6 billion in funding for clean energy technologies while also eliminating existing fossil fuel subsidies. And to continue our country’s proud, innovative history, the Budget invests $61.6 billion for civilian research and development – an increase of $3.7 billion, or 6.4 percent, over 2010 levels. 

As we focus our efforts on spurring job creation and jumpstarting economic growth, we also have to change business as usual in Washington and restore fiscal responsibility. Because of the irresponsibility of the past decade, we’ve seen a projected 10-year surplus of over $5 trillion at the end of the Clinton administration turn into a projected 10-year deficit of over $8 trillion the day President Obama took office.

The Budget lays out a plan to put the country back on a sustainable fiscal path.

First, we have already taken action to avoid making the hole any deeper. The Administration proposed, and the Senate just joined the House in passing, statutory pay-as-you-go (PAYGO) legislation. PAYGO forces us to live by a simple but important principle:  Congress can only spend a dollar on an entitlement increase or tax cut if it saves a dollar elsewhere.  In the 1990s, statutory PAYGO encouraged the tough choices that helped move the Government from large deficits to surpluses, and it can do the same today.

Second, economic recovery – on its own – would take our deficits from 10 percent of GDP to 5 percent of GDP. To take them down further, the Budget proposes a series of policies including: the three-year non-security freeze mentioned above; restoring some balance to the tax code by allowing the 2001 and 2003 tax cuts to expire only for those making more than $250,000 a year and reducing the rate at which these same households write-off itemized deductions; ending subsidies for oil, gas, and coal companies and closing other loopholes; and putting in place a responsibility fee on the largest banks to compensate taxpayers for the extraordinary direct and indirect help they provided while also discouraging excessive leverage.

Third, these policies will take deficits down to 4 percent of GDP – amounting to $1.2 trillion in deficit reduction excluding war savings. But that is still not enough, and the only way to solve this is to change Washington, and bring Republicans and Democrats together to work on this problem. That is why the President wants to establish a bipartisan, fiscal commission to look at a range of proposals and put forward a bipartisan recommendation to balance the budget excluding interest payments on the debt by 2015. This type of process has worked in the past, and if everyone in Washington puts the national interest first, we are confident it will again.

Finally, as I have said many times before and will again (since it’s still true!), the key to our long-term fiscal future is fiscally-responsible health insurance reform. All our steps to rein in the deficit will be for naught if we do not reduce the rate of health care cost growth over time.  The legislation passed by both the House and Senate will reduce the deficit over the next decade and put in place the key pieces that will help to bring down health care costs over time. Congress must now deliver on this promise of fiscally responsible health reform – the stakes are high, both for the millions of Americans who lack a stable source of health insurance coverage and for the fiscal well-being of the Nation itself. 

If we take follow the plans laid out in the Budget, I am confident that we will be able to spur job creation now and in years to come and put our Nation back on a fiscally sustainable path, which is critically important to the future growth and prosperity of the United States.

Peter Orszag is Director of the Office of Management and Budget

In May, we released our Terminations, Reductions, and Savings volume. It put forward more than 120 cuts and reductions, totaling $17 billion, to programs that were duplicative, ineffective, or outdated. At the time, cynics said that we’d never be able to eliminate these programs – some of which had been around for decades. And it’s true that every one of the programs has a supporter, and there have been – and will continue to be – vocal and powerful interests that oppose almost any budget cut.

But with the 2010 appropriations process now over, the Washington Times ran the numbers and came away impressed with what the Administration was able to accomplish: "President Obama notched substantial successes in spending cuts last year, winning 60 percent of his proposed cuts and managing to get Congress to ax several programs that bedeviled President George W. Bush for years."

Citing data from the Committee for a Responsible Federal Budget, the newspaper noted that the 60 percent success rate was better than the prior administration’s best year (40 percent in Fiscal Year 2006), and well ahead of the under 15 percent success rate in 2007 and 2008.

I'm proud of what we were able to accomplish in conjunction with the Congress, but it's just a start in what we need to do to streamline programs that work, end those that don’t, and make government more efficient and effective. That’s why this fall we ran the SAVE Award contest, receiving more than 38,000 ideas from frontline workers on how to save money. We undertook contracting reforms that will save $19 billion this year, and $40 billion by next year. We’ve put forward an ambitious effort to reduce the $100 billion in improper payments – money that the government pays out by mistake – each year. And we initiated a rigorous process of evaluating program effectiveness – including funding whole new studies – so that we can find out what works and what doesn’t, and make budget decisions accordingly.

In a few weeks, we will release the President’s Fiscal Year 2011 Budget. There will be more proposals for terminations, and we will hear the complaints from the special interests. But programs that are unnecessary, duplicative, or ineffective should not continue, and we look forward to building on the successes from last year in ending programs that don’t make sense.

Peter Orszag is Director of the Office of Management and Budget

Chief Performance Officer Jeff Zients, a key member of our OMB team, has been focused on making government more effective and efficient by closing the technology gap between the public and private sectors. Zients has been working together with Chief Information Officer Vivek Kundra on getting a better return on the government’s technology spending. This is not just about cool gadgets and launching new websites— information technology has the power to transform how government works, and revolutionize the ease, convenience, and effectiveness by which it serves the American people. 

Twenty years ago, people who came to work in the federal government had better technology at work than at home. Today, that’s no longer the case. The American people deserve better service from their government, and better return for their tax dollars. This forum is part of our efforts to modernize government and bring us into the 21st century.

Tomorrow, the White House will seek ideas from the public about how government can improve its use of technology at obamawhitehouse.archives.gov. I encourage everyone to contribute their ideas on how to make government perform better and help us deliver on the President’s commitment to change how business is done in Washington.

Peter Orszag is Director of the Office of Management and Budget

Click here to start voting.

If you haven’t seen it yet, you can watch the President annouce the four finalists.

Peter Orszag is the director of the Office of Management and Budget

On his very first day in office, President Obama signed a memorandum to all federal agencies directing them to break down barriers to transparency, participation, and collaboration between the federal government and the people it is to serve. 

As an example of the steps taken in response, the White House, for the first time ever, now publishes the names of everyone who visits.  We are also publishing online never-before-available data about federal spending and research.  At Data.gov, for instance, what started as 47 data sets from a small group of federal agencies has grown into more than 118,000 today – with thousands more ready to be released starting this week.  And in March, the Attorney General published updated FOIA guidelines, establishing a presumption in favor of voluntary disclosure of government information – an important step toward enabling the American people to see how their government works for them.  There have been other advancements, from providing online access to White House staff financial reports and salaries, adopting a tough new state secrets policy, reversing an executive order that previously limited access to presidential records, and web-casting White House meetings and conferences. 

By themselves, however, these steps do not provide the transformation in the philosophy of governing that the President wants.  They are improvements over past practice, to be sure, and valuable ones.  But more needs to be done.

That is why, at the end of May, the Administration launched the Open Government Initiative (OGI).  This unique outreach effort, led by the Office of Science and Technology Policy, sparked a never-before-seen collaboration between the public and the government.  We asked questions, and you provided answers.  We responded, and you offered alternatives.  By the end of the three-month outreach period, tens of thousands of Americans participated, and thousands of ideas were generated.

Since the OGI outreach ended, we’ve been pouring over the suggestions.  We’ve talked with outside experts.  We’ve evaluated and re-evaluated the steps we want to implement government-wide.  And as a result, today we are releasing two documents:

• The Open Government Directive (view as html, download as pdf, txt, doc or view on Slideshare)
• The Open Government Progress Report to the American People (download as pdf or view on Slideshare)

The directive, sent to the head of every federal department and agency today, instructs the agencies to take specific actions to open their operations to the public.  The three principles of transparency, participation, and collaboration are at the heart of this directive.  Transparency promotes accountability.  Participation allows members of the public to contribute ideas and expertise to government initiatives.  Collaboration improves the effectiveness of government by encouraging partnerships and cooperation within the federal government, across levels of government, and between the government and private institutions.

Peter Orszag is the director of the Office of Management and Budget

The response was amazing. In just three weeks, we received 38,484 entries from Federal employees all across the country. The ideas ran the gamut from the commonsensical to the complex. OMB staff assessed the ideas, passing back the best ones to agencies to include in their submissions for the FY2011 Budget. And the suggestions that were in need of government-wide action stayed here at OMB for our staff to begin working on. Over the coming months, we hope to implement many of these excellent ideas.

We need your help choosing a winner. Watch the President's video and go vote for your favorite ideas:

The winner will be able to present their idea to the President in person, and will have that idea included in the FY2011 Budget.

Now more than ever, it’s time to fix or end government programs that don’t work and waste Americans’ hard-earned tax dollars. The SAVE Award is just one step we’re taking to bring new thinking into how your government is run and to instill a new of responsibility for every dollar that is spent.

Peter Orszag is the director of the Office of Management and Budget

One of the criticisms leveled by skeptics of health insurance reform is that the hundreds of billions of dollars in Medicare savings being proposed won’t actually be implemented since efforts to cut waste never stick. "Congress is notorious for passing Medicare savings, and then after the cuts take place and the political groups get activated, we restore all the money," one Republican congressman told the Wall Street Journal last month.

A new report by two former CBO officials – James Horney and Paul Van de Water – now working at the Center on Budget and Policy Priorities shows that this criticism is, in their words, a "mistaken belief."

"Virtually all of the Medicare cuts enacted in 1990 and 1993, which accounted for a significant portion of the savings in those large deficit-reduction packages, were implemented," they wrote. "And most of the savings enacted in 1997 other than the SGR cuts – nearly four-fifths [emphasis theirs] – were implemented as well."
 
The Balanced Budget Act of 1997 was a huge success. So much so that over time, one-fifth of the cuts from that year’s deficit-reduction legislation (other than the SGR cuts) was restored. But as Horney and Van de Water point out, this was done because Medicare spending slowed dramatically from an average rate of about 10 percent per year in the previous decade to an actual reduction in the year-to-year rate from 1998 to 1999. Also, the federal budget was in surplus from 1998 to 2001; in this environment, Congress chose to ease some of the cuts. Needless to say, after the past eight years and the economic crisis, we are unlikely to be so fortunate.
 
Moreover, with PAYGO policies in effect any rollback of the cuts would have to be balanced with another offset. This will be a powerful incentive for Congress not to tinker with the savings package.

Finally, the authors point out the inherent flaws with the SGR provisions in the 1997 legislation that led the President and Congress to prevent the measure from taking effect over the past seven years. Fundamentally, the blunt cut in physician reimbursement rates was just that – done without any of the systemic reforms needed to actually bring down the cost of health care. In contrast, Horney and Van de Water write "the Medicare provisions in the health reform bills seem well designed to accomplish their assigned tasks and are not based on crude formulas likely to result in unanticipated, unacceptably large cuts."

The rest of the report details the other key elements of fiscally-responsible health reform – all contained in the bills under debate. Check it out; it’s worth the read.

Peter Orszag is Director of the Office of Management and Budget

As I've said time and again, the President is committed to signing a health reform bill that is deficit neutral in the first decade – and deficit reducing thereafter.  The legislation under consideration in the Senate and the bill passed Saturday by the House both meet these tests.

But health reform effort must go beyond simply being deficit neutral over the first decade and deficit reducing thereafter; it must also begin the process of transforming the health care system so that it delivers better care, not just more care.   Building the health care system of the future requires information technology; cutting-edge research into what works and what doesn’t; incentives for doctors and hospitals to focus on the quality of care; prevention and wellness; and a process that allows policy to adapt flexibly to changes in the health care marketplace over time.

The House and Senate versions of reform share a variety of measures that will help create this health care system of the future, which will help to contain health care cost growth while also providing Americans with higher quality care.  In addition to historic investments in health information technology, research into what works and what doesn't, and prevention and wellness investments that were included in the Recovery Act, some of the key provisions under consideration in the health reform bills include:

• Changing the way we pay hospitals, to discourage mistakes and unnecessary readmissions.
• Creating incentives in the payment system to reward quality of care rather than just the quantity of procedures.
• Giving physicians incentives to collaborate in the coordination of patient care.
• Investing in research into what works and what doesn’t in health care.
• Reducing hospital-acquired infections and other avoidable health-center acquired conditions through rigorous reporting and transparency.
• Imposing a fee on insurance companies offering high-premium plans — which would create a strong incentive for more efficient plans that would help reduce the growth of premiums.
• Establishing a Medicare commission — which would develop and submit proposals to Congress aimed at extending the solvency of Medicare, slowing Medicare cost growth, and improving the quality of care delivered to Medicare beneficiaries.

As we approach the final stages of this health reform process, we have on the table a robust set of options that represent some of the most auspicious reforms we can take to transform our health care system and rein in health care cost growth. But don’t take my word for it. A bipartisan group of experts recently wrote that health reform legislation under discussion "offers many promising ideas to improve the overall performance of the U.S. health care system.  In addition to steps that would reduce the number of Americans without insurance coverage, the plan includes ways to slow long-term spending growth while building the high-value health care system our nation urgently needs."  Or read what a group of some of the most prominent health care and budget experts wrote in an open letter (pdf) released last week.

As we go through the rest of the process, the Administration will remain focused on ensuring that reform is fiscally responsible and helps to build the health care system of the future.

Peter Orszag Is Director of the Office of Management and Budget

As I've said time and again, the President is committed to signing a health reform bill that is deficit neutral in the first decade – and deficit reducing thereafter.  The legislation under consideration in the Senate and the bill passed Saturday by the House both meet these tests.

But health reform effort must go beyond simply being deficit neutral over the first decade and deficit reducing thereafter; it must also begin the process of transforming the health care system so that it delivers better care, not just more care.   Building the health care system of the future requires information technology; cutting-edge research into what works and what doesn’t; incentives for doctors and hospitals to focus on the quality of care; prevention and wellness; and a process that allows policy to adapt flexibly to changes in the health care marketplace over time.

The House and Senate versions of reform share a variety of measures that will help create this health care system of the future, which will help to contain health care cost growth while also providing Americans with higher quality care.  In addition to historic investments in health information technology, research into what works and what doesn't, and prevention and wellness investments that were included in the Recovery Act, some of the key provisions under consideration in the health reform bills include:

• Changing the way we pay hospitals, to discourage mistakes and unnecessary readmissions.
• Creating incentives in the payment system to reward quality of care rather than just the quantity of procedures.
• Giving physicians incentives to collaborate in the coordination of patient care.
• Investing in research into what works and what doesn’t in health care.
• Reducing hospital-acquired infections and other avoidable health-center acquired conditions through rigorous reporting and transparency.
• Imposing a fee on insurance companies offering high-premium plans — which would create a strong incentive for more efficient plans that would help reduce the growth of premiums.
• Establishing a Medicare commission — which would develop and submit proposals to Congress aimed at extending the solvency of Medicare, slowing Medicare cost growth, and improving the quality of care delivered to Medicare beneficiaries.

As we approach the final stages of this health reform process, we have on the table a robust set of options that represent some of the most auspicious reforms we can take to transform our health care system and rein in health care cost growth. But don’t take my word for it. A bipartisan group of experts recently wrote that health reform legislation under discussion "offers many promising ideas to improve the overall performance of the U.S. health care system.  In addition to steps that would reduce the number of Americans without insurance coverage, the plan includes ways to slow long-term spending growth while building the high-value health care system our nation urgently needs."  Or read what a group of some of the most prominent health care and budget experts wrote in an open letter (pdf) released last week.

As we go through the rest of the process, the Administration will remain focused on ensuring that reform is fiscally responsible and helps to build the health care system of the future.

Peter Orszag Is Director of the Office of Management and Budget

• Bundled payments.  Bundled payments, which pay a fixed amount for an entire episode of care rather than piecemeal for each individual treatment or procedure, would help improve patient care by encouraging better and more coordinated care than under a fee-for-service system.  Bills in both the Senate and the House would develop, test, and evaluate bundled payment methods through a national, voluntary pilot program. Once we see what works and what doesn’t, bundled payments can be quickly scaled up across the country.
   
• Penalties for high readmissions.  Too often, patients are discharged from the hospital without the necessary follow-up care — leading to re-hospitalization, risks to one’s health, and higher costs.  Under the proposals being considered, Medicare would collect data on readmission rates by hospital and would assess penalties on those hospitals with high, preventable readmission rates.
   
• Accountable care organizations (ACOs).  Under the current system, quality and efficiency are not sufficiently rewarded, and there is little incentive for physicians to collaborate in the coordination of patient care.  Legislation in both houses would encourage and reward ACOs, which are groups of providers that are jointly responsible for the quality and cost of health care services for a population of beneficiaries with chronic conditions.
   
• Quality incentives for physicians. These proposals would expand quality incentives for physicians and provide more timely feedback on physician performance based on their submitted data.