Myrtle Beach, SC Correspondent — They’re separate files and they’re being scored on the same page, which is the problem.
Waste and fraud are real and worth attacking on their own terms. Nothing in that argument depends on the deficit, and the case for going after a hundred-billion-dollar fraud loss stands whether the budget is balanced or not.
What can’t be claimed is that one offsets the other. Identified savings are in the tens of billions on the most favorable accounting. The bill signed this morning adds trillions across the decade. Those aren’t the same order of magnitude and pretending otherwise costs credibility that the efficiency work needs.
Prescott Valley, AZ Correspondent — The tension is real and it was named publicly last month by the person who had been running the effort, which is unusual and worth taking seriously rather than treating as a personality dispute.
His argument was straightforward: you cannot spend a year identifying savings and then pass a bill that adds far more than you found.
I’d make a narrower version. Waste is a management problem and the deficit is a design problem. Fixing the first is necessary and nowhere near sufficient, because the path is driven by the automatic programs and the interest line, and no audit reaches those.
Anybody who told the public that efficiency would close the gap oversold it, and the overselling is now visible.
Novi, MI Correspondent — Two different exercises and any operations person knows it.
Cutting waste is a margin project. It makes a plant run better and it doesn’t change whether the product line is viable.
The federal line item that grows is interest and the retirement programs. An efficiency initiative doesn’t touch either. It can still be worth doing — most margin projects are — and it should be sold as what it is.
Clermont, FL Correspondent — My clients get audited and they’d like the standard reciprocated, so I’m for the effort.
I’m also capable of reading a score. The bill adds to the path and the savings identified don’t come close to offsetting it, and both of those things happened under the same unified control in the same six months.
That’s not hypocrisy exactly. It’s two different constituencies inside one coalition, each winning its own fight, with nobody reconciling the results.
Orange County, CA Correspondent — The financial framing is that a company announcing a cost program while simultaneously increasing spending faster than the savings would be understood immediately.
Investors would call that a communications exercise and price it accordingly.
The bond market is the analogue here and it prices the aggregate rather than the narrative. Long rates have not behaved as though anybody was convinced by the efficiency argument, which is the market’s verdict on whether these files are connected.
Las Vegas, NV Correspondent — A house that cuts comps while raising the hold on the wrong game hasn’t improved anything. It’s moved money between columns.
I’d still cut the comps. Waste is waste.
What I wouldn’t do is tell the room that cutting comps fixed the hold, because somebody eventually reads the statement.
Knoxville, TN Correspondent — County governments learn early that a one-time saving and a lower operating cost are different animals.
Most of what’s been identified is the first kind. The path is made of the second.
I want the efficiency work to continue and I want it defended honestly, because the strongest argument for it is that a government asking a county to account for eight hundred thousand dollars should account for its own eight hundred million. That argument doesn’t require the deficit at all, and hitching it to the deficit is how it gets discredited when the deficit doesn’t move.
Sydney, Australia Correspondent — From outside, these are being conflated in a way that will damage the credible half.
Every country runs efficiency reviews. Ours produced enormous reports and the ones that changed spending were the ones a parliamentary committee could compel officials to explain, annually, in public.
None of them changed a fiscal trajectory, because trajectories are set by demographics and entitlements and interest. Nobody here pretended otherwise, which is why the reviews survived.
The risk in your version is that efficiency was sold as a fiscal solution. When the arithmetic disappoints — and it will, since it already has — the failure gets attributed to the audit rather than to the oversell, and the audit is the part worth keeping.
Sheffield, Jamaica Correspondent — I’d add what my region learned under fiscal adjustment, since we have had rather more experience of this than we wanted.
Jamaica ran a decade of primary surpluses and brought debt down by a very large margin. It worked, it was painful, and I’d tell anyone that it was worth doing.
What made it work was not finding waste, though we found some. It was a fiscal rule with a number in it that successive governments of both parties were bound by, and an oversight committee outside the ministry that published whether the number was met.
Efficiency campaigns we also ran. They produced good headlines and no trajectory. The trajectory moved when there was a rule.
I say this in support of what your correspondents want rather than against it. The audit is worth having. It is not the instrument that changes a path, and no country has ever found that it was.
