What the smartest man in Washington doesn't understand. And why it will hurt you.

• Author: DeParle, Jason
• Position: Office of Management and Budget, includes related article

What the Smartest Man in Washington Doesn't Understand. And Why it Will Hurt You.

The piles of briefing materials that crossed George Bush's transition desk probably didn't contain a 1964 Burt Lancaster film called Seven Days in May. That may have been the first major mistake of his presidency. In 118 minutes, the film could have taught him more about government than any volume of Heritage Foundation reports and CIA cables. In fact, it could have taught him the most important presidential lesson he could learn.

The film opens with ominous news: President Jordan Lieman has just discovered that the Joint Chiefs of Staff are plotting a coup. The word comes not through the extensive bureaucratic channels that are supposed to keep the president posted but by way of a lone colonel who happens to stumble across the plot. The president needs to know more, and he needs to know it quickly, but where can he turn? He calls on his oldest (though drunken) friend, Senator Ray Clark, for the treacherous mission. "I don't like sending you. . ." the president apologizes, "but if there were anyone else I could trust. . . ." Clark has to dash around the Texas desert, sweet talk a hooker, and escape from the plotters' prison, but in the end he gets the job done. The threat is defused, and the Republic endures.

While the odds of a contemporary coup may be slight, the film's instructive potential remains great. Should it make its way into the White House theater anytime soon, Bush would do well to ask himself these questions: Why wasn't the president getting a steady stream of information all along, as the plot was developing? And why, once he stumbled upon it, could he trust only a personal friend to tell him the truth?

The absence of a military revolt notwithstanding, you can bet that Bush, like Lieman, presides over a government in which any number of major and minor disasters are ticking along undetected. "It's incredible that a secret base could have been constructed without our hearing about it sir," Lieman's aide murmurs in the film--but, as anyone familiar with the federal government knows, it's not incredible at all. While Washington has so far escaped a coup, in recent months it has been hit with the equivalent in bureaucratic bombshells: a $166 billion explosion called the S&L crisis, a $130 billion breakdown in our nuclear weapons plants, and a fairy tale of greed and neglect at HUD, whose bill--$10 billion or so--is smaller than its sordidness. The main difference between the film and reality is that reality hasn't been fortunate enough to have a happy ending.

In film or in fact, the president shouldn't have to rely on drunken old senators to save the day. Generals, cabinet officers, and agency heads are supposed to keep him in the know. And, within his bureaucratic army, one sentinel in particular should make certain that the president has the information he needs: the Office of Management and Budget. As the political scientist Richard Neustadt told John Kennedy during the 1960 transition, OMB (then called the Bureau of the Budget) is "the nearest thing to institutional eyes and ears and memory. . . which will be available to you."

Eyes and Ears to a president! It's quite a responsibility, and it's no surprise that OMB enjoys a position of almost unparalleled prestige in the government. Two of its recent directors--first David Stockman and now Richard Darman--were said to be the smartest people in Washington. And both, in fact, are supremely smart men. The same goes for most of the organization's staff. Hardly anyone describes it without resorting to phrases like "cream of the crop," which in some sense it is.

Why, then, is it that HUD coups, and S&L coups, and weapons-plant coups, and any number of other bureaucratic bungles are catching us unaware? Perhaps the most instructive scene of Seven Days in May comes just after the president learns of the planned mutiny. His aide says, "Yes, sir, I'll call Bill Condon in the Bureau of Budget--right now," rightly assuming that if anyone should have the details, he should. But poor Condon may be the most authentic Washington figure Hollywood has produced: he doesn't have a clue. For those of us stuck not with film presidencies but with real ones, an obvious question arises: If OMB is so smart, why is the government so screwed up?

Deregulating in the dark

The problem is that the agency employs the wrong kinds of people and has them do the wrong kinds of things. OMB sports a building full of numbersmen--grand totalers adding up the digits, with adding machines whirring and slide rules flying. But to serve as the president's eyes and ears, OMB needs to go beyond numbers to program analysis--it needs to know what programs are working, what programs aren't, and why. When it looks at, say, the Department of Energy, it should be asking questions like these: How many different nuclear weapons plants do we need? Are they working? Or are they sending radioactive waste into the Georgia groundwater? If so, what can we do to fix them?

Answers to these kinds of questions don't come easily and don't emerge from the numbers alone. To get them, OMB needs an abundance of investigative talent--an army of Sy Hershes. (And all the better, if the investigators have had some government experience and know the bureaucratic cons--Sy Hersh after he's worked as a GS-9.) Only after OMB has answered the bigger questions about what's working and why, can it address the ones that now obsess its numbers-oriented staff, such as "What does it cost?" and "Can we afford it?" Phrased differently, the agency needs to knit its "M" functions (management) with its "B" functions (budget)--for without knowing whether a program is needed or works, how can a budget office determine a proper level of funding?

Instead, OMB has segregated its M and B functions and set each side to work furiously at tasks that bear little relation to the real needs of government. On the M-side, it has spent part of its time futzing with minor reforms like paperwork reduction and part of its time waging an ideological war on regulation. But virtually no one on the M-side has been charged with getting out of the Executive Office Building to discover what needs less regulation and what needs more.

While the M-side has ideologues deregulating in the dark, the B-side has technocrats playing with make-believe numbers. OMB sets them to work with endless computations about the federal budget. Rather than perform the program analysis that asks, "Is this job-training program needed, and does it work?" OMB budget examiners spend most of their time answering questions like these: "What would be the potential savings if we changed the means test from $10,000 to $8,000? Estimate the savings three different times, assuming inflation at 4 percent, 6 percent, and 8 percent. Now let's run those figures a few more times, assuming unemployment at 5 percent, 5.5 percent, and 6 percent." Finding the answer may require quite a sophisticated use of mathematical models. And, at some stage in policy planning, the answers are important to know. The problem is that this has become OMB's main function--and it tells you nothing about whether anyone's actually being trained for a job.

Don't assume someone else knows the answer; OMB isn't the only government watchdog asleep on the job. The failure to detect and prevent billion-dollar screw-ups is shared by the agencies themselves, inspectors general, congressional oversight committees, and the General Accounting Office (see John Heilemann, page 38)--not to mention the press, which perversely continues to dispatch its brightest stars to glamor beats like the White House, where they spend their days shouting questions at the president's helicopter instead of digging into the realities of the president's programs. The best we get from watchdogs these days are post-mortem analyses--i.e., the press's too-little, too-late autopsy of the S&L scandal--rather than up-front reporting that could head the problems off. But while oversight failures are widespread, OMB's mission is special. It's the president's watchdog, after all, and the keeper of his purse. If the rest of the government, including the rest of the government's watchdogs, truly felt the president's eyes and ears upon it, there'd be more people too frightened or ashamed to give us the boondoggles we've come to expect.

With the appointment of Richard Darman as budget director, OMB has recently had a special chance to transform itself into the kind of agency it should be. The words "independent program analysis" may not be on many Washingtonians' lips, but if anyone could put them there--and explain how they could help rescue the government--it's Darman. He's the "most brilliant intellect" in government, says Newsweek. (Perfect SATs, says Darman, whose virtues don't include modesty.) Perhaps even more important than his brains is his experience. Darman's held jobs at the Commerce Department, Treasury, Justice, State, Defense, and what used to be Health, Education, and Welfare. There's probably no one in Washington, and certainly no one in the government, who should know more about which programs work, and which don't, and how to find out.

The scene that could have truly shot fear into the hearts of GS-15s, and new life into the government, was this: The new budget director, at his confirmation hearings, declares his intention to become the Oversight Czar. "New Mission Cited for OMB," the Post headline could have read--maybe even, "In Unusual Hire, Darman taps Hersh as Deputy." In so doing, Darman could have secured a reputation for himself as not only smart but wise.

Nothing like that happened. After 10 months, there's no meaningful sign of OMB change, no indication that it will play a more meaningful oversight role in the future than it has in the past. If anything, the agency's existence as a numbers factory has taken on an extra edge of irony: Darman...