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Analysts Charge $108 Billion Savings Claim Is Unsupported

By Ann Devroy and Stephen Barr
The Washington Post


President Clinton's claims that his proposals to streamline government will save $108 billion and trim 252,000 federal jobs are based on tenuous economic assessments and guesses unsupported by facts, according to some independent budget analysts and officials familiar with similar government efforts.

Two days after Clinton unveiled the National Performance Review in a Rose Garden ceremony, the proposals themselves are receiving widespread praise from the experts. But the cost savings claims do not. "The review's chief weakness is its estimates for how much can be saved and how many federal jobs can be shed," said Robert Greenstein of the Center on Budget and Policy Priorities. "Some estimates do not appear to have a firm basis and are likely to prove too high, perhaps by a substantial amount," he said.

Critics said that in some cases the administration tallied savings achievable by certain actions without subtracting the costs of achieving those savings. They also said that the administration did not address the issue of who would do the work being done by the 252,000 jobs that would be eliminated, or whether that work could be eliminated.

In assessing the review, some analysts find not phony numbers per se but incomplete computations. For example, the report said that speeding review of Social Security disability payment beneficiaries who may no longer be disabled would produce $4 billion in savings. While savings are plausible, Greenstein's analysis noted that it would cost $2 billion for additional personel and other costs to accomplish the speedup. That $2 billion was not subtracted from the projected savings to obtain a net figure.

More broadly, critics said, the review's largest savings come from reductions in personnel costs but do not take into account the possible costs of someone else performing the functions of those jobs that will be eliminated. With regard to procurement and printing, for example, the review proposed breaking the monopolies enjoyed by the General Services Administration and the Government Printing Office and farming the work out to the private sector at a lower cost.

But the review does not take into account the costs of writing specifications for contracting out the work or for analysis of the performance of the contracts.

One analyst, Susan Tanaka, vice president of the nonpartisan Committee for a Responsible Federal Budget, said the administration review lacks the economic details and justifications to make a credible analysis of it. But she too noted that not all of the proposals were certain to save the money claimed and that some, such as upgrading technology, may cost money.

"Somehow the savings never materialize, despite spending billions on infrastructure," she said, because large information systems invariably confront unforeseen problems in the design and planning stages.

Leon E. Panetta, director of the president's Office of Management and Budget, yesterday defended the savings projections, but stressed that much would depend on how many of the proposals survive. "We have the opportunity to scrub these numbers for a long period of time and we feel pretty comfortable with the targets that have been put there," he said. The question, he said, was how much Congress will do, not what the administration projects for savings.