Carter Returns: Zero Based Budgeting and Broccoli

Those of us who remember the distant past better than today will know that President Carter was elected on a promise to make the government more efficient and effective by moving to zero based budgeting.  That's why the federal government has been so great over the last 35 years.

Now the Senate Ag committee is directing USDA to do the same:

The Committee believes it is necessary to carefully examine each agency’s budget requirements from a zero base, rather than by reviewing only incremental changes as they occur year to year. Such a change in method would both assist the Committee’s appropriating and oversight responsibilities and it will also require agencies to systematically examine all of their budgetary requirements on an annual basis to ensure they relate properly to their mission within the Department. Therefore, the Committee directs the Secretary to develop and present USDA’s fiscal year 2013 budget requirements from a zero base and such presentation should include an examination and justification of each program, project, and activity and allocation of FTEs and related items. The Secretary is further instructed to provide a report to the Committee on Appropriations of both Houses of Congress by November 1, 2011, on the status of this directive.

Other nuggets from the report:

On reorganization, which must:

"follow a thoughtful analysis of implications for budgetary resources, services to customers and employees, and inherent dynamics within the Department that might result. Toward that objective, before moving forward with the implementation of any substantive reorganization, the Department is instructed to conduct a detailed analysis of the savings, efficiencies, and implications of these changes. In addition, an understanding of the methodology used for determining these factors and some form of demonstration of the results anticipated is required. Any timetable for implementation of the changes suggested obviously will be driven by the fiscal resources available and it may be prudent to give consideration to a tiered implementation as conditions dictate rather than a full scale Departmental shift that would be far more complex and potentially expensive. The Secretary is instructed to provide a report, consistent with the guidance outlined above, to the Committees on Appropriations of both Houses of Congress not less than 60 days prior to the implementation of any Departmental reorganization. The Secretary is further reminded of the reprogramming instructions set forth elsewhere in this bill for the purpose of any implementation stage of a proposed reorganization.

My interpretation: Vilsack--be very very careful about reorganizing.

Broccoli Production.—The Committee has been informed that the Department has dedicated funding toward spurring broccoli production in the eastern United States. The Committee is aware that that farmers have invested considerable amounts of time and private funding into research on soils, crop management practices, and new broccoli varieties to develop and maintain a successful broccoli production industry on the East Coast. The Committee directs the USDA to work to ensure that Departmental efforts do not compete with or detrimentally affect privately owned, family-farm business operations.

My interpretation: don't encourage new broccoli farmers because we want to protect the existing one.s

Those Inflexible Bureaucrats

In the hotel business. The NYTimes "Haggler" column covers consumer issues.  Today's is on the problem of hotels charging a "resort" [flat] fee not accounted for in the Priceline bid price.  Lots of resistance to revealing such fees up front--the column closes with this:

"“Most of the hotels charging resort fees have told us that, operationally, they can’t bundle the resort fee into the base rate and then guarantee us that their front desk personnel won’t go ahead and charge it again at the front desk,” he wrote in a follow-up"

When government bureaucrats are this inflexible, they get laughed at.

Exporting Timothy Hay

Via Tyler Cowen, here's a totally totally surprising article from the Seattle Times.

I never in a thousand lifetimes would have expected anyone in the US to make money by exporting timothy hay, but they do, it seems.  The hay on our farm was a mix: timothy, orchard grass, assorted vegetation.  It was not great hay, to say the least.  Apparently this outfit in Washington has great land and can make great timothy hay, hay which looks great, because that seems to be the major criterion for the Japanese who are the leading importers.

The secret is the hay is fed to racehorses (originally here in the US, now in several countries).  So the hay is not important for its nutritional value, it's important for its looks, so the trainer can assure the owner that the horse is only eating the very best, the best because it's greenest.  Given the uncertainty involved in racing, it's like the superstitions ballplayers have, something which gives emotional reassurance to all concerned.

Surprising Factoid of the Day

According to Elixir,A History of Water and Humankind, by Brian Fagan, it took a long while for Europeans  to figure out that the rain and snow accounted for the water in the rivers.  He gives da Vinci credit for first seeing that, but it wasn't confirmed until the 17th century.

On Cross Training and a Mea Culpa

Readers of this blog need to remember I'm a geezer, subject to memory lapses ( and fits of insanity). Today my routine has been disrupted by a routine dental appointment, so I finally remembered to check my comments on this blog.

There's one comment from June I'd like to respond to via a post. The original post suggested cross-training NRCS and FSA employees (I should have included RD when collocated).  The commenter responded that having soil scientists and engineers fill out paperwork is a really good idea (he/she was being sarcastic, I suspect). 

I think I can probably expand my commenter's position.  He/she would say: "Look, NRCS spends its money on technical expertise.  The agency does its work in the field, not pushing paperwork.  Cross train your FSA people in pushing paper all you want, but having trained engineers do paperwork is a waste of government money.  Further, to the extent NRCS pushes paperwork, it's not really NRCS, it's the local soil and water conservation district (i.e., money provided from state funding) employees who do the pushing. "

Let me defend my suggestion, at length:

First, "cross training" does not necessarily mean cross operations.  I don't know what sort of training either FSA or NRCS gives these days to new employees.  At one time FSA had an extensive course for new county executive directors, plus courses for "clerks" as they used to be called.  And new DC employees had a 1 or 2 week course covering what each office in the agency did. I think a couple weeks covering what the sister agencies do would be worthwhile.  At the very least, it might cut the prejudice each agency has towards the other: FSA is just a bunch of paper pushers; NRCS is just a bunch of cowboys who ride around in their pickups, when they aren't cooping. (That's my exaggerated summary of how some employees in the one agency view the other. )  By giving each other an appreciation of the work the agencies do, maybe it might remind the bureaucrats their purpose is neither to push paper nor do soil science, but to help farmers efficiently.  And it opens the way for new ideas.



Second, some numbers.  Senate Appropriations Committee passed the ag appropriations bill for 2012 today.  According to this summary of the contents, NRCS salary and expenses were cut by $43 million, FSA by $28 million, and the farm loan program by $57 million.  Basic political realities say the service center agencies are going to continue to decline in the number of employees, not only FY 2012 but 2013 and beyond.  That says to me the bureaucracies need to be open to new ways of operating.  (I assume that states, which are equally under financial pressure, are also cutting support for S&CDistricts.) So considering cross operations should be on the table.

Third, somewhere today (Post, Times, online, I forget) there was an article about how a doctor heading a medical practice office (maybe 20 people or so) had reorganized to cut his overhead.  The basis was cross training support personnel and rethinking the way they ran the office.  Part of it, I strongly suspect, was personal.  The doctor said he wanted to greet and work up his patient, rather than having a technician do it.  Part of it was organization and sharing duties.  For example, they mentioned having medical personnel who might not be busy making the reminder calls on appointments and having a job stack for support personnel. Implicitly they were implying that with specialist jobs, people sometimes sat around waiting for patients.  That says to me they had good software which could track the work flow so people could see what needed to be done, but I didn't notice that stressed.

Romney's Short-Sighted Cuts

I think all of the debt reduction proposals probably have a key flaw: they don't distinguish between revenue and expenditures.  What I mean: FSA spends money, IRS takes in money, as do some other government agencies.   It may be logical to apply an across-the-board cut  to the agencies which spend money; it is illogical to apply the same cut to those which take in money.  It's like a family whose wage earner(s) are paid by the hour deciding to economize by cutting everything by 10 percent, including cutting the hours spent working.

Insurance Subsidies: Flood Versus Crop

The Center for Public Integrity has this piece on flood insurance, saying the subsidy runs about 40-45 percent.

They also have an old piece on crop insurance, focusing on the revolving door between crop insurance and USDA.  They report this about Dallas Smith, who used to be a division director in FSA before jumping to the Department under Clinton.

His boss at the time, Smith, maintains that [Ken} Ackerman  [head of RMA] was not removed. Smith, who was then acting undersecretary of farm and foreign agricultural services, asserts that “Ken played an important role in the negotiations throughout. He oversaw the negotiating staff and presented the results of the negotiations to Congress and other oversight bodies.”
But despite Smith’s denials, Ackerman has stated that he was in fact removed as head of the negotiations. Moreover, Joseph Connor, a former analyst at the USDA’s Risk Management Agency, as well as current and former USDA employees, back Ackerman. They state that the real negotiating power was removed from him. And sources close to the USDA say that it was Dallas Smith who was directly responsible.

I'm not sure what the subsidy level for crop insurance is, but using EWG's figures for 1995-2010, it computes to 59 percent.

MIDAS: Remember Year Is Vital I

Coming back to the MIDAS strawman briefly, I just want to emphasize one thing I learned in the 1985-87 time period: the initial planning for the System/36 processes and data slighted the importance of the year.  It was easy to do: most interactions with a farmer at the county office you know which year you're dealing with--it's the current crop or program year.  And because it's just a matter of assumptions, it's a fact which often got lost in our modeling, planning, and system design.

Very briefly, it looks to me as if MIDAS might be making the same error.  I hope not. 

A Weak Obama--Blame the Goo-Goos

There's the perception of Obama as not being a strong leader.  It may be true, but thinking back and comparing him with past Presidents, one problem is that Presidents have lost power since the days of LBJ.

LBJ could arm twist and logroll like no one else we've had in my lifetime. But the Obama good government (goo-goos) regime of transparency and no earmarks limits the feasibility of that.  If I recall Arthur Schlesinger Jr wrote a book attacking the Imperial Presidency, by which he meant LBJ and Nixon, not JFK.  I've not studied the transcripts of LBJ's tapes while he was in the White House, but his "treatment" was legendary.

I can illustrate the sort of thing I mean: Sen. Shelby wants NASA to build rockets in his state.  Sen. Shelby also blocked a Nobelist from going on the Federal Reserve Board and is threatening to block the appointee for the Consumer Protection Board.  Under a President LBJ, there would be a commission appointed to review NASA operations with a view to consolidating them, with Huntsville a prime candidate for the chopping block.  Once Shelby caved, the commission would vanish, or issue a bland report.

But if Obama tried that, all the goo-goos (of which I am one) would be up in arms.

[Updated with link to Shelby article.]

Relying on SSA's Death Master File

This Project on Government Oversight post reports SSA's OIG finds significant problems in the Death Master File, so SSA continues to make payments to dead people.  This is important, because FSA and other government payers rely on hitting the Death Master File to check on payee eligibility. [Updated link]