Watching Osborne's government fixes.

• Author: Peirce, Neal
• Position: Commentary - Laboratories of Democracy

I'm stuck with a David Osborne habit I don't quite know how to shake.

It began in 1988 when Osborne wrote Laboratories of Democracy, portraying a generation of ambitious governors making states into powerful policy innovators across the nation.

States are my beat, so how could I not review Laboratories?

In 1992, it was Osborne's Reinventing Government, co-authored with Ted Gaebler. This time he argued that American government leaders--federal, state and local--had to abandon rigid top-down bureaucratic control, "steer rather than row," and delegate major authority to their operating divisions, then focus on results.

Reinventing Government was embraced by hundreds of leaders, Bill Clinton and Rudolph Giuliani among them. It was the important government book of the 1990s. Ironically, its impact was only dulled during the economic boom of the late Clinton years when governments were awash in funds and a lot less attentive to reform.

So now Osborne is back with yet another landmark book, called The Price of Government (Basic Books), co-authored with his Public Strategies Group founding partner Peter Hutchinson, a public service hero himself after tackling such jobs as Minnesota finance commissioner and Minneapolis school superintendent. These are two impatient guys: believers in governments' public missions, but constantly critiquing their performance.

Their prescription is familiar to readers of this column: America's governments are convulsed by a fiscal crisis so deep it may have no end. A "colossally irresponsible president and Congress," as they put it, have blown a hole in national fiscal policy that may leave us with $4.1 trillion added debt in the next decade. But even without that, they note, the rapid graying of America is propelling us toward deep crises in Social Security and Medicare funding that political leaders--neither a George Bush nor a John Kerry, for example--won't confront.

As for the states, 38 cut their budgets by a combined $13.7 billion in fiscal 2002 and 40 by $11.8 billion in fiscal 2003, throwing poor people off Medicaid rolls, dosing schools, cutting university budgets, and slashing assistance funds critical to their own local governments.

The first solution for governments facing red ink, the authors say, is to stop deceiving: no more resorting to accounting tricks, delaying important maintenance, projecting fictional income, or borrowing as California is now doing.

Policymakers must also dismiss, they say, both...