For years, critics have been saying that something is missing from the
Office of Management and Budget. To put it bluntly, the agency is doing
only half its job, they argue. Annual budget wars between Congress and the
administration have become so bloody that the management side of OMB's
ledger has been ignored. To foes and maybe even some friends, the term
"effective management" of government programs by OMB is an
oxymoron.

The Bush administration wants to change that. "The president believes
citizens have a right to expect a government that works," OMB
Director Mitchell E. Daniels Jr. told the House Government Efficiency,
Financial Management and Intergovernmental Relations Subcommittee in
September. OMB is determined to link at least part of the budget process
to management performance. "The expectation is that programs will get
additional funds almost automatically," Daniels said. " `How
much?' is the question asked, instead of `How well?' "

OMB started the effort this year by using red, green, and yellow
designations in the federal budget to point out the effectiveness of
programs. Next year, that effort will go far beyond color designations.
"A critical goal for the FY 2004 budget is to improve the program
rating process by making ratings more consistent, objective, credible, and
transparent than they were for FY 2003," Daniels wrote in a July memo
to federal agencies.

To that end, OMB introduced its Program Assessment Rating Tool: 20 percent
of all federal programs will be evaluated on a lengthy questionnaire
filled out by OMB and agency officials. Programs to be evaluated with the
PART range from the school lunch program to the Drug Enforcement
Administration, with the number of programs increasing in subsequent
years.

But even before the first questionnaires are released, critics say they
are concerned that agencies cannot evaluate their own programs and that
OMB will target for bad reviews the programs it wants to eliminate.
"There's a lot of anxiety, but you would expect that," said
Marcus Peacock, OMB's associate director for natural resource programs,
who is heading up the evaluation effort for the budget office. "When
people are being held accountable, they're going to feel somewhat
uncomfortable."

The Government Performance and Results Act, passed in 1993, was supposed
to help the evaluation process, but it has had a limited impact on
spending, Peacock argued. The law requires agencies to file myriad
reports. "If you stack them all up, they're over four feet high, and
I've yet to find anyone who's made a budget decision based on them,"
he said.

Over the years, programs developed goals that were simple to meet, Peacock
said. For instance, one Environmental Protection Agency program measured
its effectiveness by determining whether it delivered a report to Congress
on its effectiveness. And the Smithsonian Institution stated in a draft
budget that it could measure its performance by whether it received more
money from Congress than the president requested.

The new performance review consists of 35 questions-most of them requiring
yes or no answers-developed over several months by OMB, agency, and
outside experts. The review of the questionnaire was intense, Peacock
said. He added that one potentially troubling question-whether a program
met an appropriate federal role-was eliminated because it was highly
subjective and the answer would depend on a person's political
ideology.

Comptroller General David M. Walker, while he applauded OMB's effort,
raised some concerns about the program review during the September
congressional hearing. "Performance budgeting should not be expected
to provide the answers to resource allocation questions in some automatic
or formula-driven process," said Walker, who is head of the General
Accounting Office. In addition, the OMB review will not effectively
evaluate federal projects that cut across agencies. "In such areas as
low-income housing or health care, the outcomes achieved by federal policy
are the result of the interplay of a complex array of tools," Walker
said.

One key congressional Democrat said she is most concerned that OMB will
specifically target programs. "I am not sure that linking vague
measures to the budget process will achieve better government, and I have
strong concerns about the objectivity of that process," Rep. Jan
Schakowski, D-Ill., the ranking Democrat on the government efficiency
subcommittee, said at the September hearing. "We have to make sure
that this is not an effort to single out programs that are political
targets, like welfare and public-support projects."

But in his July memo, Daniels said, "OMB does not view the PART as an
automated approach to making budget decisions." He added that fiscal
2004 "decisions will be fundamentally grounded in program
performance, but will also continue to be based on a variety of other
factors."

Objectivity is not Peacock's biggest worry about the new review process.
"I'm concerned about it being ignored by Congress," he said.
"If this is seen as a credible tool, other people will use it. It
will become part of the budget process."

But congressional authorizers and appropriators are notoriously
independent in deciding the fate of programs. And if the mounds of
unopened oversight reports filling cabinets all over Washington are any
indication, OMB may be facing an uphill fight.