Trump tries to clean house

So how is America doing under Trump? As we approach Independence Day, the Washington Examiner magazine takes a look at three aspects of the United States: How its standing in the world has shifted; whether government is performing better or worse; and how the health of the family has changed.

Trump said “the forgotten men and women of our country will be forgotten no longer. Everyone is listening to you now.” Here’s a look at whether members of the administration have listened, and what they decided to do with what they heard.

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Trump won the presidency promising more accountable government, and policies geared toward helping citizens, as opposed to immigrants or foreigners.

Part of the agenda to Make America Great Again was to make the government popular again, to restore the trust it has lost since Trump’s youth.

“It used to be cars were made in Flint and you couldn’t drink the water in Mexico,” Trump said in one of his most scripted campaign comments. “Now cars are made in Mexico, and you can’t drink the water in Flint, but we’re going to turn this around.”

When Trump pledged on the Capitol steps that his inauguration “will be remembered as the day the people became the rulers of this nation again,” the health of the U.S. government had been in decline for decades, as judged by his backers.

So far, Trump hasn’t been able to reverse that deterioration, at least according to opinion polls. And some of his biggest proposals to do so have already failed, such as debt reduction and infrastructure reform.

Yet Trump has brought the creation of new regulations to a halt, a major unilateral change in the way government works.

“We’re going to get back below the 1960 level, and we’ll be there fairly quickly,” Trump said of federal rules in December, while theatrically cutting red tape with ceremonial scissors.

By executive order, Trump required agencies to undo two new rules for every new one implemented. He also instituted a regulatory “budget,” mandating that the net economic costs of new rules be offset by cuts to old ones.

Those policies haven’t cut regulations back to 1960s levels. And some of the rules that the administration has eliminated to meet the two-for-one rule have been exceedingly minor, such as the elimination of a restriction on imports of pitahaya fruit from Ecuador. But Trump’s orders have stopped the growth of regulation and reshaped the trajectory of government.

And Trump has more plans for government reform and civil service renewal, even if they’ve been overshadowed by an ever-revolving carousel of controversies. It’s a goal that outside experts think has some promise.

Thiel said it

“Just as much as it’s about making America great, Trump’s agenda is about making America a normal country.”

That was the rationale for supporting Trump that Peter Thiel, the entrepreneur and philanthropist, presented in a Halloween appearance at the National Press Club in Washington.

The billionaire PayPal co-founder, Facebook board member, and investor argued that Trump was the pro-tech, good-government candidate, despite what the rest of Silicon Valley thought.

“A normal country doesn’t have a half trillion dollar trade deficit. A normal country doesn’t fight five simultaneously undeclared wars. In a normal country, the government actually does its job,” he argued. “The Manhattan project, the Interstate Highway program, the Apollo program — whatever you think of these ventures, you cannot doubt the competence of the government that got them done. But we have fallen very far from that standard.”

The public agrees with Thiel.

Decades ago, during the administrations of Eisenhower, Kennedy, and Johnson, the vast majority of the public said they trusted the government, according to Pew Research findings. But trust began to fall during Johnson’s tenure, and bottomed out under Carter. It has never recovered above 50 percent since, except for during the days after Sept. 11, 2001.

If Trump has drained the swamp, the public hasn’t heard about it yet. Fewer than one in five say they trust the government today, about the same level of trust as under former President Barack Obama.

And by the standards Trump and Thiel laid out, Trump hasn’t given the people much reason to elevate their opinion of government competence. (Thiel did not respond to a request for comment).

Opportunities missed

With congressional Republicans, Trump did push through a major overhaul of taxes. But the law did not simplify and rationalize the incredibly complicated tax code as much as reform advocates had hoped.

In fact, while it scaled back many tax breaks and preferences, the law only fully eliminated just one of the many “tax expenditures” embedded in the code: A $20-a-month write-off for employer subsidies for bicycle commuters.

Meanwhile, the Trump administration has so far fallen short in its bid to modernize the country’s infrastructure system, an area in which the U.S. government compares unfavorably to other countries and past versions of itself.

The U.S. ranks 36th in the world in terms of the ease of obtaining construction permits, according to the World Bank, behind Mauritius and Chile.

Those rankings don’t adequately tell the story of America’s shortcomings. For example, in the past decade, Beijing has added 270 miles of subway tracks, according to the urbanist Yonah Freemark. That expansion is more than twice the size of Washington, D.C.’s Metro. Over the same timeframe, the Metro has languished, hemorrhaging riders and money.

New projects are hard to attain, and outrageously expensive. The problem is that the federal government itself imposes a number of restrictions on new projects, in addition to any set at the state and local level.

In pushing for reform, the White House noted that it takes an average of seven years for a complex highway project just to go through environmental review. During the process of getting a project off the ground, in addition to delays from private lawsuits, any number of public officials can slow or kill it, creating what the political scientist Francis Fukuyama has termed a “vetocracy.”

The Trump administration sought to untangle the vetocracy, and also to muster $1 trillion to spend on roads, bridges, tunnels, and other infrastructure.

Yet it failed to bring Democrats on board, and the effort fizzled. In fact, the White House’s repeated attempts to drum up support during designated “infrastructure weeks” became a literal punchline, as those meager PR efforts were routinely upstaged by controversies surrounding the president.

In a recent public appearance, former Trump economic adviser Gary Cohn, who’d been tasked with advancing the infrastructure package, regretted that the vetocracy was never even brought up. “There was never a debate on how obsolete our infrastructure is, how old our infrastructure is, if we could pay for it what would we do,” he told the Washington Post.

So the big push to rebuild at home has petered out. At the same time, Trump’s promise — such as it was — to ramp down spending and military involvement abroad has not come to fruition.

Yet spending on the military has gone way up, and the government’s fiscal position has suffered as a result. To win that, he had to agree to Democrats’ demand for greater domestic spending.

The total government deficit for 2017 rose to $666 billion, or 3.5 percent of total economic output. It’s expect to rise in the next two years as well.

Fiscal order

The government’s fiscal situation has been worsening for years now. In the past decade, the public debt has more than doubled, from around 35 percent of gross domestic product to 77 percent. It’s on pace to approach 100 percent in the next decade, in the unlikely scenario that the country avoids any recessions or expensive wars.

Not all of the run-up in the debt can be attributed to the fallout from the financial crisis. The reality is that there is a long-term mismatch between regular government spending and revenues, a gap that will only grow as the Baby Boom generation ages further into retirement.

Because the government is spending more on retirement and healthcare for seniors each year, it has less to spend on everything else, making government management trickier.

Set aside all social insurance programs, such as Social Security and Medicare. Set aside all defense spending. What’s left is what comes to mind when most people think of “government”: Agency personnel, law enforcement, infrastructure, grants, welfare, housing, national park management, job training, and so on.

That is a category of spending that budgeteers refer to as “non-defense discretionary” spending

Decades ago, it accounted for about 4 percent of GDP. Today, it’s closer to 3 percent, a difference of around $140 billion today. That is, the actual government, setting aside social insurance and the Pentagon, is smaller by a quarter.

The Congressional Budget Office estimates that non-defense discretionary spending will fall to just 2.8 percent of GDP within the decade. Over time, Uncle Sam will be spending less and less on actual governance, and more and more on social insurance and interest on the debt.

One major casualty of the government funding squeeze is research and development. Even though there is broad agreement that government has a role in funding basic research, it has withered. Through the National Institutes of Health, the National Science Foundation, NASA, and other agencies, the government spent about 1 percent of GDP on research for most of the 2000s, according to the American Association for the Advancement of Science. But funding shrank during the Tea Party era, down to 0.67 percent in 2017.

On that score, Trump has actually turned things around. The budget deal that he helped cut with Democrats in February paved the way to the biggest increase in R&D spending since Obama’s stimulus.

Civil service reform

Corporations are people, Mitt Romney famously said. So is the government.

Ultimately the government is nothing more than its workers. And there are glaring, long-running problems with the federal workforce.

“We largely have a legacy government that hasn’t kept up with the world around it,” said Max Stier, president of the nonpartisan Partnership for Public Service.

Much of the federal hiring, compensation, and management system was designed for the 1950s economy. And despite the major changes in the world since then, it hasn’t changed much.

“The American people and businesses face a government system that was designed in the middle of the 20th century and hasn’t kept up,” Margaret Weichert, director for management at the Office of Management and Budget, told reporters last week.

The workforce is old — just 6 percent of employees are younger than 30, according to Stier. Morale is poor, and employee engagement badly lags that of the private sector, according to the Partnership’s metrics. It’s also unaccountable: Fewer than a third of workers think that their office deals with poor performers who don’t improve. Not only does the public not trust the government — the government doesn’t really trust itself.

With almost no fanfare and little controversy, the Trump administration has moved to address the problem, starting with a little-noted pledge in its fiscal 2018 budget to “make government work again.”

Last week, the Trump administration released a major government overhaul proposal, a reorganization that would merge the Labor and Education departments into a Department of Education and the Workforce. It would also move the food stamp program out of the Department of Agriculture and into a newly renamed Department of Health and Public Welfare.

The plan is ambitious, and most of its major planks have low odds of passage, given the unfavorable prospects of Democratic cooperation on the legislation that would be needed to combine departments.

“Nothing about the Trump administration’s behavior indicates it has any clue how to make government run more smoothly or efficiently for the American people,” House Democratic Leader Nancy Pelosi said of the plan.

But Weichert said the administration’s ambitions are long term.

“This reform plan will not be implemented overnight, but rather can be used to frame the public discourse over the coming years,” she said. “This is the beginning of a national dialogue on government reform.”

In March, the White House published a 52-page plan for overhauling government management. It wasn’t heavily promoted and it got no attention outside of publications dedicated to covering the federal workers.

Yet the document, the President’s Management Agenda, “is a very thoughtful and constructive look at what needs to change in our government to make it more effective,” Stier said.

The agenda sets three major goals, meant to be pursued across agencies: Modernizing the government’s IT, using data in government business, and better managing the workforce. It named people responsible for meeting the goals, and set up reporting requirements.

The administration wants to actively manage the workforce by allowing managers to reward good workers and remove underperformers, improving hiring, “re-skilling” workers with outdated jobs, and more.

“As a document it’s an excellent document,” said Terry Gerton, CEO of the National Academy of Public Administration.

Yet Gerton noted that the devil is not just in the details, it’s in seeing them executed.

So far, Trump has only taken one major step toward civil service reforms since putting out the agenda, and that action was a little more partisan than the tone of the agenda would have suggested. In May, he signed an executive order making it easier to fire federal workers and curbed the influence of government unions.

Combined with a government hiring freeze Trump put in place shortly after taking office, the order “suggests a body-count approach to civil service reform that hasn’t been useful in the past,” said Paul Light, a professor of public service at New York University.

Focusing too much on the federal workforce is a mistake, Light argued, because nowadays federal employees are only a subset of the total workforce the federal government uses. For every federal worker, there are 2.6 contractors or grantees who carry out work for the government, according to his data. Trump’s hiring freeze actually has not had a visible impact on the size of this total workforce: There are about 7.3 million people in total working for the federal government, the same as in 2015 under Obama.

Another big problem is that seeing big reforms through will take political and institutional capital that Trump may not have or be interested in spending. It will also take the normal kind of capital: Gerton noted that “re-skilling” employees means footing the bill for them to take courses, travel to seminars, and so on.

Even if Trump wanted to spend the money, he’d have to convince Congress to go along with it. And there is the even larger problem: Congress’ dysfunction has hurt the federal workforce for years.

Experts agree that Congress’ inability to regularly pass budgets in recent years is one of the largest impediments facing the federal workforce. Without being able to plan for the future and understand what will be funded on a longer timeline, agencies aren’t able to set priorities, including where to dedicate their own manpower.

Others have failed

For Trump to follow through with the civil service agenda and to bring Congress on board would be a remarkable feat of management capability.

Obama, too, set lofty goals. In 2012, he proposed merging a number of different agencies that interact with business and establishing a “secretary of Business.” Other priorities took precedence.

Trump also has a lot going on. Setting aside his negotiations with North Korea, at the moment, he’s escalating a number of high-stakes trade negotiations, while trying to pull off a major immigration policy overhaul in spectacularly controversial fashion. It’s an understatement to say that it’s too early to say whether he’s improved government effectiveness until those matters are resolved.