The fiscal belt-tightener

President-elect picks agent of change for govermnent performance.

By Max Cacas
FederalNewsRadio and the Associated Press

The newest appointee for President-elect Barack Obama says her goal is to wring every available efficiency out of a government which faces huge economic challenges in the year ahead.

In his first news conference at the Presidential Transition Headquarters in downtown, D.C., the President-elect talked about the stakes involved in the naming of his new Chief Performance Officer.

As I said yesterday, our problem is not just a deficit of dollars, it’s a deficit of accountability and a deficit of trust. So change and reform can’t just be election-year slogans. They must become fundamental principles of government.

And that’s why the appointment I’m announcing today is among the most important that I will make.

During the campaign, I said that we must scour this budget line by line, eliminating what we don’t need or what doesn’t work, and improving the things that do.

As the first chief performance officer, working with Peter Orszag and Rob Nabors at the Office of Management and Budget, Nancy Killefer is uniquely qualified to lead that effort.

For nearly 30 years as the leader of McKinsey & Company and as assistant secretary for management, chief financial officer and chief operating officer at Treasury under President Clinton, Nancy has built a career out of making major American corporations and public institutions more effective, more efficient and more transparent.

And just to underscore Killefer’s reputation an “agent of change”, the President-elect had this anecdote.

When Nancy was offered her first position at Treasury, she responded, and I quote, “If you are willing to embrace significant change, then you’re looking at the right person. But if you just want to keep the trains running on time, don’t ask me to do this job.”

And just to make it clear, Obama laid out the agenda ahead for Nancy Killefer.

I will be instructing members of my Cabinet and key members of their staffs to meet with Nancy soon after we take office, and on a regular basis thereafter, to discuss how they can run their agencies with greater efficiency, transparency and accountability.

I will also see to it that we apply these principles of budget reform to the economic recovery and investment plan. This plan will call for dramatic investments to revive our flagging economy, save or create 3 million jobs, mostly in the private sector, and lay a solid foundation for future growth.

In order to make these investments that we need, we’ll have to cut the spending that we don’t, and I’ll be relying on Nancy to help guide that process.

For her part, Killefer said she was looking forward to her new job, and also said something that will likely be music to the ears of the Federal Employee unions who have felt shut out of the conversation under the past eight years of what they see as a labor-unfriendly Bush Administration.

The people who deliver those services, the government employees themselves, will be central to this effort. I am convinced that the success of every policy of this administration will be influenced by the people executing it. And I am committed to engaging and drawing on the talents of the federal workforce in order to deliver on our promise of a new, more efficient and effective government.

Killefer served as assistant secretary for management, chief financial officer, and chief operating officer at the Treasury Department from 1997 to 2000 during the Clinton Administration. At McKinsey, Killefer works with the retail, hotel and pharmaceutical industries on management, marketing and efficiency issues. She also chaired the IRS Oversight Board from 2001 to 2005. Killefer has also served on the board of the Partnership for Public Service since 2006.

The president-elect outlined one area where he expects Killefer to spearhead his administration’s environmental agenda:

Part of our stimulus package is going to involve revamping all federal buildings so that they’re energy efficient. If we — if we do that effectively then over the long-term we are going to save billions of dollars in energy costs for the federal government and for taxpayers.

That’s the kind of charge that Nancy’s going to have, is identifying where are areas where we can make big change that lasts beyond the economic recovery plan and will save taxpayer money over the long term.

For some perspective on Killefer as a federal manager, The Daily Debrief talked to Jim Flyzik, President of the TheFlyzikGroup, and Chairman, AFCEA’s Homeland Security Committee. Killefer and Flyzik worked together at the Treasury Department:

She was a delight to work for, her leadership and support helped me be successful in many ways. She was there with Bob Rubin and Larry Summers, worked alot around the issues of the IRS.

Flyzik added that she was also influential in the Clinton Administration’s “Reinventing Government” initiative.

Killefer’s appointment requires Senate confirmation and will be handled by the Senate Homeland Security and Government Affairs Committee. The panel’s spokeswoman Leslie Philips says Chairman Joe Lieberman promises to consider the pick “as quickly as possible so the President-elect has his budget team in place at the earliest possible date.”

President-elect Obama said Wednesday that reforming massive government entitlement programs – such as Social Security and Medicare – would be “a central part” of his effort to control federal spending.

Noting that the Congressional Budget Office had just estimated he would inherit a $1.2 trillion federal deficit for fiscal 2009, Obama promised to cut unnecessary spending.

“We expect that discussion around entitlements will be a part, a central part of those plans,” Obama said. “And I would expect that by February in line with the announcement of at least a rough budget outline we will have more to say about how we’re going to approach entitlement spending.”

For the first time, Obama gave a ballpark price tag for his massive economic plan aimed at generating jobs and jolting the country out of recession. Aides have said it could cost as much as $775 billion over two years. Outside economists have suggested as much as $1.2 trillion would be needed.

“We expect that it will be on the high end of our estimates but will not be as high as some economists have recommended because of the constraint and concerns we have about the existing deficit,” Obama said.

He plans to give a speech on the economy at George Mason University in Virginia on Thursday to lay out his reasons why Congress should quickly pass his still-evolving economic plan.

AP White House Correspondent Jennifer Loven contributed to this report

On the Web:
Transition website –

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