SUFFOCATED BY PROCESS
The lack of accountability within the federal bureaucracy is a major component of the government’s dysfunction, but so is the stultifying set of rules and processes under which the government must operate. This problem is most apparent in federal, state, and local government’s inability to build bridges, roads, and other infrastructure improvements on time and on budget.
President Obama summed up the endless amounts of red tape binding the government from completing projects when he said about the 2009 stimulus bill’s failure to produce construction jobs, “Shovel ready was not as shovel ready as we expected.”
When crafting his infrastructure agenda, President Trump should remember this lesson.
Trump has discussed plans for a $1 trillion infrastructure plan. Spending money under the current rules will be a recipe for failure, just as the stimulus was. If he hopes for it to succeed, Trump will need to insist that the metric for success of this plan be $1 trillion in results rather than in federal dollars spent. In other words, the goal should be for the bill to “cause” $1 trillion in infrastructure to happen. That means that the focus of the bill should be to overhaul the bad rules that slow down contracts, permitting, and building. If he does this correctly, the amount of federal money spent could be very small, since new rules would inspire the private sector and state and local governments to invest much more in projects they have avoided due to the huge amount of regulatory overhead.
When looking for solutions, the Trump administration and Congress should look to successful examples of state-level projects that cut through regulations to finish very fast.
In 1994, after Northridge, California, experienced a major earthquake, Governor Pete Wilson waived a number of rules and regulations that could slow down the rebuilding effort. It also established performance incentives that were not allowed under normal rules. The result was that massive sections of major highways that normally would have taken years to build were replaced within months.
Governor Arnold Schwarzenegger used similar emergency measures to speed up the contracting process for repairs of a section of on-ramps onto a major highway after a gasoline truck blew up and caused them to collapse. They were repaired in a week instead of months.
Governor Mike Leavitt of Utah rebuilt the highway system for the Winter Olympics. He used incentives and metrics to get the job done ahead of schedule, under budget, with minimum impact on rush-hour traffic.
Governor Mitch Daniels of Indiana leased a failing toll road that had been managed by the state to a private company for $3.8 billion. As part of the lease agreement, the company also committed to making $4 billion of highway improvements. Daniels used that money to renovate one-third of the state’s bridges and half of its roads. Because the projects could be built without the long, expensive, time-consuming federal red tape, they were completed in half the time, at two-thirds the typical cost.
In Ohio, Governor John Kasich leased the states’ liquor stores and used some of the money for highway improvements. Because they were using nonfederal money, they could skip the time-consuming and cost-increasing federal red tape, and they were able to complete the construction for about 40 percent less and in dramatically less time.
Phillip Howard, a leading expert on regulatory reform, estimates that consolidating all federal requirements into a one-stop office could save 40 percent in construction costs. The lengthy, repetitive, and at times contradictory federal bureaucratic process takes a lot of time, and the time value of that money is enormous.
Any infrastructure bill should have a very strong, decisive opening section on regulatory reform. That will enable the federal government to create many more projects per billion dollars than it can under the current red-tape-ridden bureaucratic system.
Beyond infrastructure, President Trump and his team should also encourage federal managers to expose as many rules and processes that slow down their work as possible. They should make sure they all know the story of Wollman Rink and feel empowered to make that same standard for faster, cheaper achievement than the standard bureaucratic model in their departments.
A TRUMPIAN LEGISLATURE
For Trump’s agenda to last, he will need to cultivate a legislature that works. This will require a cultural change in Congress that is a long time coming.
Congress is far too insular and isolated to be effective in the twenty-first century. The world is too complicated, there are too many new things happening. Ninety-nine point nine percent of all knowledge is outside Washington, but Congress keeps relying on the same revolving door of lobbyists and staff to shape its thinking.
Congressional hearings are also overwhelmingly used to investigate and castigate failure rather than to learn from success. Oversight is important, but the committee hearing process is a huge opportunity to marshal the best experts and practitioners from all over the country. There is too much focus on failure and not enough on success.
The story of Wollman Rink is again applicable. Trump recognized that he didn’t know anything about skating rinks, so he looked to Canadian experts to figure out how to fix Wollman Rink. Congress’s approach, if it had been given the project, would have been to call up all the people that already failed to fix the rink and learn what they did.
Our success in reforming welfare was due to a deliberate strategy of bringing in stakeholders and experts from across the country to help draft the bill. At the time, we had on our team governors such as Tommy Thompson, John Engler, George Allen, and Mike Leavitt, who had all experimented with welfare reform at the state level. They were prepared to loan us their state welfare directors, who then came up to Washington with us to help reform welfare the right way. We wanted state-level people, because they were the ones actually implementing welfare on the ground. They were the ones actually helping poor people in their states.
Many of the federal committee staff members resented the access and authority we gave the state people. They felt that they were the smart people who had spent their lives studying the national system, and they disliked having to share legislative drafting power with people whose only credentials were that they had actually run welfare systems. It was a good reminder of the insular jealousy and isolation of Washington staffs from the rest of the country.
As a result, we produced a welfare-reform bill that turned out to be the most successful social conservative reform of the last half century. Welfare offices across the country became employment offices. Instead of teaching people how to be efficiently dependent, our welfare system taught people how to find and get stable jobs.
President Trump, his senior staff, and congressional leadership also need to realize that you cannot run over people to get what you want. We have already discussed how the American Health Care Act failed because of secret negotiations and artificial deadlines that rushed the process of getting the best ideas and forming consensus.
Every member of the House and the Senate has a measure of power that he or she can exercise to either help you or keep you from your goals. If you run over someone, that person may stand aside just long enough to put a legislative knife in your back when you pass by.
When I was Speaker of the House, we developed a model: listen, learn, help, and lead.
We reached out to as many of our fellow members of Congress as possible, listened to their problems, learned from their situations, offered to help however we could, and used what we learned from the experience to lead in legislating.
We constantly focused on unlocking people rather than trying to bypass or run over them. It was tremendously helpful.
Over the multimonth process of working with people, we trained ourselves to always ask, “Under what circumstances could you do this?” This was an important tactic, because it got the members in the mind-set of saying “yes, if” rather than “no, because.”
Most of the time, this helped both parties get a result they liked. Saying, “Yes, I can do that if…” immediately starts a productive negotiati
on. We had virtually every Republican in the House constantly engaging, looking for “yes, if” answers, because we knew really changing the federal government was going to be a huge task.
BALANCING THE BUDGET
As a candidate, Trump never emphasized balancing the budget. He talked constantly about the scale of the federal debt and Obama’s deficits. However, he seldom discussed balancing the budget, possibly because it would have seemed unrealistic in the middle of a campaign. Just stopping the deficits seemed like a huge task.
Since his first appeal to the American people, he has focused on making America great again, controlling immigration, creating an America-first trade policy, and repealing and replacing Obamacare. Balancing the budget sounds boring. President Trump wants to create jobs, boldly reform the tax system, aggressively deregulate our business sector, and dramatically improve American competitiveness.
Here’s the thing: doing all those things will naturally shrink the deficit and help balance the budget. Simply put, a balanced budget is a product of making government work.
This is the same principle San Francisco 49ers coach Bill Walsh wrote about in his book The Score Takes Care of Itself: My Philosophy of Leadership. Walsh wrote that he didn’t focus on the score of the game. When he coached, he focused on making sure the team executed every play perfectly. If each play was perfectly executed, they would win.
In 1994, just before our Republican majority was elected, the federal deficit was $276 billion. That is a huge number, but we were able to bring the budget to a surplus by 1998. President Trump, however is facing a projected budget shortfall of $559 billion, according to the Congressional Budget Office. At the same time, the national debt has risen from $4.7 trillion in 1994 to more than $19.5 trillion in 2017.
President Trump has a much steeper challenge than we had, but our model is still useful for him to enact the policies that will lead to a balanced budget.
This is how we did it: first, we built a team of House Republicans—and that was very important. Trump should start by working to build strong teams within the House and Senate that work well with his administration.
If Trump doesn’t build effective teams, he will fail. French infantry colonel Charles Jean Jacques Joseph Ardant du Picq said, “Four brave men who do not know each other will not dare attack a lion. Four less brave, but knowing each other well, sure of their reliability and consequently of mutual aid, will attack resolutely.”
For our team in the 1990s, our lion was balancing the budget. We tried passing a Constitutional amendment requiring a balanced budget, which was approved in the House with more than 300 votes, but it failed in the Senate with only 65 votes when we needed 67. We were really only one vote away, but Senator Bob Dole voted with the Democrats to keep the procedural power to bring the matter up again in the Senate. At that point, we could have thrown our hands up and said, “Well, we did what we promised. We had a vote.” But instead, we recognized that while we didn’t have support from two-thirds of the Senate, we still had a large enough majority to overcome filibusters. We leveraged that support and balanced the budget anyway through regular spending legislation.
When we started, the combined budget deficit from 1992 to 1995 was $1.26 trillion. No one in Washington thought we could balance the budget—the same way no one had thought Americans would elect the first Republican majority in the House of Representatives in forty years the year before. But beginning in fiscal year 1998, we created four years of consecutive surplus totaling $659 billion.
Keep this in mind as President Trump is enacting his policies. Remember that before the election, virtually no one in Washington thought he would be elected.
THE IMPACT OF A WORKING GOVERNMENT
Once President Trump makes the bureaucracy accountable, reforms regulatory philosophy, and establishes an effective working structure with Congress, American enterprise will be unshackled and will drive innovation and economic growth.
This is supported by history.
The balanced budget and reforms we put in place strengthened the dollar and allowed for lower interest rates. The practical result was that people did dramatically better, but we followed Ronald Reagan’s principle that a job is the best social policy.
Even liberals were stunned by the success of balancing the budget for four straight years and creating jobs. In 1999, Jack Lew, the former chief of staff for President Clinton and the treasury secretary under President Obama, and Bob Rubin, who was Clinton’s secretary of the treasury, wrote an op-ed in the Washington Post praising the balanced budgets we created:
The president’s plan to retire such a large amount of debt is also the best pro-growth strategy for our economy.… When the government adds to private savings rather than drawing from it, more resources are available for private economic growth, higher standards of living and increased revenues—without any increase in tax rates.
They called high deficits, “a straight jacket on investment and economic growth,” saying that “the deficit reduction achieved by Clinton and the Republican Congress led to economic growth.”
It makes you wonder if Lew forgot these benefits when he was presiding over President Obama’s deficits.
So, to those who will undoubtedly tell President Trump that it’s impossible to make significant changes in Washington, remember that we balanced the budget at a time when it was considered impossible. We know how to effect real change because we’ve done it before.
As always, the prodebt, prospending model will ultimately collapse. Margaret Thatcher captured it best when she told Llew Gardner, a journalist with Thames TV, “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.”
This is the interview from which the famous Thatcher-attributed aphorism “The problem with socialism is that eventually you run out of other people’s money” was born.
The United States used to be a country in which people worked and saved to pay off the mortgage, then left the farm for their children. After decades of liberalism, we have become a country in which people sell off the farm today so they can mortgage their children’s future. It’s fundamentally wrong. We need to understand that in many ways, balancing the budget is a moral, not an economic, issue.
Outside of war and emergencies, it’s simply wrong for us to spend our children’s money.
It will no doubt be a difficult task, but President Trump has the unique opportunity to right America’s fiscal ship. With the help of Congress and the American people, he can make the federal government effective, accountable, and adherent to the same economic principles that guide responsible American families and businesses every day.
Trump has always worked with state and local leaders on his various real estate projects. He has a very practical understanding of what you can and can’t get done. At one point, he was trying to rezone a property, and he was being blocked by a small rural county commission—despite his best efforts. I asked what he was going to do about it, and he said, “You know, sometimes you have to accept reality and be very, very patient. You focus on the projects you can make progress on, not the ones you can’t.” He has a real feel for the depth of state and local leadership and the fact that we should get a lot of decisions out of Washington and bring them back home.
CHAPTER FOURTEEN
BRINGING TRUMP TO STATES AND COMMUNITIES
President Trump’s election is an opportunity to reestablish America as the single most successful, wealthy, powerful, and free country on the planet. I spent much of the previous chapters talking about what Trump and the Republican Congress should do at the federal level to take advantage of our current situation.
But lasting changes in our country don’t start in Congress, they start in our states and communities.
State legislatures, governors, and local elected leaders across the country have a unique opportunity to help establish an alternative model of society and government to replace the bureaucratic welfare state and left-
wing value system that has been growing since President Franklin Delano Roosevelt won election in 1932.
For the last eighty-four years, the Left has had enough strength in Washington to keep state and local officials trapped within the rules and regulations of Washington bureaucrats and Washington politicians. They don’t anymore.
Republicans control the legislatures and the governorships in twenty-five states. As Chris Cillizza of the Washington Post has reported, there are ten states in which the Republican majorities are so massive that the Democrats are virtually powerless to block reforms and new ideas.
As Cillizza outlined in his article, here are the ten states, along with their percentages of Republican officeholders:
STATE: Wyoming
STATE SENATE: 90%
STATE HOUSE: 85%
STATE WIDE: 100%
CONGRESS: 100%
STATE: South Dakota
STATE SENATE: 83%
STATE HOUSE: 86%
STATE WIDE: 100%
CONGRESS: 100%
STATE: Idaho
STATE SENATE: 83%
STATE HOUSE: 84%
STATE WIDE: 100%
CONGRESS: 100%
STATE: Utah
STATE SENATE: 83%
STATE HOUSE: 83%
STATE WIDE: 100%
CONGRESS: 100%
STATE: Oklahoma
STATE SENATE: 88%
STATE HOUSE: 74%
STATE WIDE: 100%
CONGRESS: 100%
Understanding Trump Page 25