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GRACE COMMISSION
IPO28 1G
I n r e s p o n s e t o numerous r e q u e s t s f o r i n f o r m a t i o n o n t h e G r a c e Commission
i t s r e p o r t s , o r f o r a c o p y o f t h e Summary R e p o r t i s s u e d on J a n u a r y 1 2 , 1984,
A F a c t S h e e t p r o v i d e s i n f o r m a t i o n o n where c o p i e s o f t h e G r a c e Commission's
purchased. An a d d r e s s i s p r o v i d e d f o r t h e Government P r i n t i n g O f f i c e ( G P O ) ,
where c o n s t i t u e n t s may p l a c e o r d e r s f o r c o p i e s o f t h e R e p o r t s , o r o b t a i n a l i s t
o f F e d e r a l d e p o s i t o r y l i b r a r i e s , which may h a v e r e f e r e n c e c o p i e s o f t h e r e p o r t s
a v a i l a b l e f o r use.
CRS a t 287-5700.
We hope t h i s i n f o r m a t i o n w i l l be h e l p f u l .
Congressional Reference
Division
THE PRESIDENT'S PRIVATE S E C T O R SURVEY ON COST CONTROL
FACT SHEET
INFORMATION A N D REPORT AVAILABILITY AFTER PPS SCC
PPSSCC e x p e c t s t o c l o s e i t s o f f i c e s i n W a s h i n g t o n o n
A l s o , t h e G o v e r n m e n t P r i n t i n g O f f i c e nas r e p o r t s
a v a i l a b l e a t s p e c i f lc G o v e r n m e n t D e p o s i t o r y l i b r a r i e s a c r o s s
S u p e r i n t e n d e n t o f Documents
U.S. G o v e r n m e n t P r i n t i n g O f f i c e
W a s h i n g t o n , D.C. 20402
( 2 0 2 ) 783-3238
I n a d d i t i o n , J a n e t C o l s o n , F r e d Bona o r C h r i s T o f a l l i
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1730 Pennsylvania Avenue Suite 450 Washington, D.C. 200%
(202) 466-5170
S u r v e y ' s p l a n i s i m p l e m e n t e d , t h e d e f i c i t would b e o n l y $37
b i l l i o n i n 2000. If a l l t h e s a v i n g s r e c o m m e n a a t i o n s a r e p h a s e d
i n , t h e c u m u l a t r v e s a v l n g s t h r o u g h t h e y e a r 2000 w o u k be
$10,532,000,000,000--$lo . S t r i l l i o n - - t a k i n g i n t o account
i r i f l a t l o n and compound i n t e r e s t . T h a t would b e $130,000 p e r
c u r r e n t taxpayer.
A key p o r t i o n o f t h e r e p o r t l i s t s t h e e q u i v a l e n t numDer of
median income f a m i l i e s t h a t i t would t a k e t o p a y e q u i v a l e n t
t a x e s t o cover t h e P r i v a t e S e c t o r Survey savings. The $424.
b i l l i o n i n s a v i n g s and r e v e n u e e n h a n c e m e n t s o f t h e S u r v e y i s
e q u a l t o t h e t a x e s o v e r t h r e e y e a r s p a i d by 6 3 , 7 7 3 , 8 2 0 median
income f a m i l i e s .
" T h e s e p r o j e c t i o n s , " Mr. G r a c e w i l l p o i n t o u t t o P r e s i d e n t
R e a g a n , " a r e t n e r e s u l t o f v e r y c a r e f u l s t u d y and d r o v e u s t o
seek o u t every p o s s i b l e savings opportunity, 'like tireless
~ i o o a n o u n d s , ' a s you r e q u e s t e d . " The r e p o r t , s u p p o r t e d by 1 . 8
m l l l i o n s a g e s o f back-up, highlights f l n d l n g s f r o m t h e o r i g r n a i
3 6 tasic f o r c e r e p o r t s o n f e d e r a l d e p d r t m e n t s , a g e n c i e s a n d
f u n c t i o n s t h a t c r o s s - c u t t h e e n t i r e government, i n a d d i t i o n t o
11 s p e c i a l s t u d i e s o n o t h e r i m p o r t a n t i s s u e s . In addition t o
t h e $ 4 2 4 b i l l i o n o f s a v i n g s and r e v e n u e e n h a n c e m e n t s , t h e
S u r v e y i d e n t i f i e d c a s h a c c e l e r a t i o n s . o f $66 b i l l i o n w i t h
concomitant i n t e r e s t c o s t savings.
An i m p l e m e n t a t i o n and r e v i e w p r o c e s s h a s b e e n i n p l a c e
w i t h i n t h e W h i t e House f o r f i v e months. Each P r i v a t e S e c t o r
Survey recommendation h a s been p l a c e d on a computer s h e e t f o r
r e v i e w by d e p a r t m e n t s , a g e n c i e s , OMB, a n d W h i t e House a n d
Survey r e p r e s e n t a t r v e s .
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4
System f a i l u r e s ($160.9 b i l l i o n ) and p e r s o n n e l
mismanagement ( $ 9 0 . 9 b i l l i o n ) t o g e t h e r compr i s e w e l l o v e r
one-half of t h e t o t a l savings p o s s i b i l i t i e s , t h e r e p d r t w i l l
s a y , and " t h e y a r e a t t h e f o u n d a t i o n o f i n e f f i c i e n c i e s i n t h e
(more)
Tne c o m m i s s i o n f o u n d t h a t : o n e t n i r d o f a l l income t a x e s
i s consumed by w a s t e a n d i n e f f i c i e n c y ; o n e t h i r d i s n o t
c o l l e c t e d d u e t o t h e u n d e r g r o u n d economy; a n d 1 0 0 p e l c e n t o f
a l l i n c o m e t a x e s a r e a b s o r b e d by i n t e r e s t p l u s g o v e r n m e n t
c o n t r i b u t i o n s t o t r a n s f e r payments.
a
Of t h e $424 b i l l i o n o f s a v i n g s a n d r e v e n u e e n h a n c e m e n t s ,
some $ 9 4 b i l l i o n a r e f r o m d e f e n s e - r e l a t e d a r e a s . The S u r v e y
s t u d i e d t h e small a s w e l l a s t h e major items of c o s t s a v i n g s ,
i t e m s o f b r o a d n a t i o n a l i m p a c t a s w e l l a s t h o s e o f a more
localized nature. A f e w random e x a m p l e s a r e :
I n t h e N o r t h w e s t , t h e F e d e r a l Power M a r k e t i n g
A d m i n i s t r a t i o n i s s e l l i n g subsidized power a t o n e - t h i r d o f
maruet r a t e s . I f t h e F e d e r a l power w e r e p r i c e d a t m a r u e t ,
t h e r e woula b e a t n r e e - y e a r i n c r e a s e i n r e v e n u e s o f $ 4 . 5
b i l l i o n , which e q u a t e s t o t h e t h r e e - y e a r p e r s o n a l income t a x e s
b
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Federal pensions t o provide b e n e f i t s comparable.to those of the
b e s t p r i v a t e s e c t o r plans, s l i g h t l y b e t t e r i n t h e c a s e of
m i l i t a r y p e n s i o n s , would r e s u l t i n t h r e e - y e a r s a v i n g 3 o f 5 6 0 . 9
b i l l i o n , e q u i v a l e n t t o t h e t h r e e - y e a r income t a x e s o f 9 . 2
m i l l i o n m e d i a n income f a m i l i e s .
A r e l a t i v e l y small item i n the o v e r a l l , but representatrve
o f many, 1s t n e p r o h i o r t i o n o f c o m p e t i t i v e b i d d i n g o n t n e
movement o f m i l i t a r y e m p l o y e e s ' h o u s e n o l d g o o a s t o / f r o m A l a s k a
and Hawaii, d e s p l t e a Department o f Defense t e s t snowing t n a t
c o m p e t i t i v e b i d d i n g would r e d u c e c o s t s by a s much a s 2 6
percent. E l i m i n a t i o n o f t h i s p r o v i s i o n would s a v e $ 6 9 . 5
million i n three years, equivalent t o the three-year income
t a x e s o f 1 0 , 4 0 0 m e d i a n income. f a m i l i e s .
The S u r v e y f o u n d C o n g r e s s i o n a l i n t e r f e r e n c e t o b e a m a j o r
problem. For e x a m p l e , b e c a u s e C o n g r e s s o b s t r u c t s t h e c l o s i n g
of bases t h a t t h e m i l i t a r y wants t o c l o s e , t h e three-year waste
i s $367 m i l l i o n . I n t o t a l , PPSS recommends t h r e e - y e a r s a v i n g s
o f $ 3 . 1 b i l l i o n by c l o s i n g e x c e s s m i l i t a r y b a s e s , e q u i v a l e n t t o
t h e t n r e e - y e d r income t a x e s o f 466,000 median income f a m i l i e s .
s e r v i c e s c u r r e n t l y p e r f o r m e d by t h e f e d e r a l g o v e r n m e n t c o u l d
(more)
7
more e f f i c i e n t l y a n d c o s t - e f f e c t i v e l y b e p e r f o r m e d o u t s i d e ; t h e
P r i v a t e S e c t o r Survey n o t e s t h a t b e n e f i t s t o i n d i v i d d a l s appear
t o b e m i s d i r e c t e d a n d a r e n o t b e i n g r e c e i v e d by i n t e n d e d
recipients.
came f r o m t h e f e d e r a l g o v e r n m e n t .
The r e c o m m e n d a t i o n s o f t h e S u r v e y c a n b e i m p l e m e n t e d by
P r e s i d e n t i a l a u t h o r i t y ( 2 7 percent) with t h e balance ( 7 3
percent) requiring Congressronal a u t h o r i t y . Mr. G r a c e n o t e s ,
" t h e p r o j e c t was s t r u c t u r e d a n d s t a f f e d t o e f f e c t e n d u r r n g
l m p r o v e m e n t s o t h a t o u r c n l l a r e n a n d g r a n d c h i l a r e n would n o t
l n h e r l t a s i t u a t i o n t h a t would b e d e v a s t a t i n g t o t h e m a n d t o
t n e v a l u e s o f o u r economlc and s o c i a l s y s t e m . "
THE PRESIDENTS PRIVATE SECTOR SURVEY ON COST C O N T R O L
Annual Interest
Federal Debt on Federal Debt
I$ trillions) ( $ billions)
$ BILLIONS
Deficit
SZTrillion
$ Billions % of Total
Program Waste $ 160.9 37.9%
System Failures 151.3 35.7
Personnel Mismanagement 90.9 21.4
Structural Deficiencies
Other Opportunities
Total