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Managing the government: a hidden challenge for the next president

In January, either John McCain or Barack Obama will enter the presidency with an ambitious agenda to reform areas such as health care, foreign policy, energy policy and environmental regulation.

But the federal government's struggles with the current financial and personnel management situation will pose a serious impediment to implementing new policies, according to James Perry, Chancellor's Professor of Public and Environmental Affairs at Indiana University.

Uncle Sam's bill

"The next president has some monumental challenges, particularly with respect to federal administration financing," said Perry, a national expert on public service and government reform.

"We have a national budget that is going to be in deficit by 400 or 500 billion for the foreseeable future. That's loaded on top of a 10 trillion dollar national debt -- for which we are paying interest amounting to about 9 percent of our current annual expenditures."

Perry said the budget problems will have a long-term as well as an immediate impact.

"Our current undergraduates will be 50, and they are [still] going to be facing monumental national debt which is going to eliminate any prospect for serious discretionary services, or it's going to cost them so much that they think they're living in the former Soviet Union," he said.

There also will be substantial challenges in meeting long-range costs for Medicare, Social Security and other entitlement programs with a runaway budget and faltering economy -- issues that McCain and Obama have been loath to address.

Perry said the American public has relied upon government in crises such as 9/11, the Oklahoma City bombings and the current financial meltdown, but the next administration will have to overcome hurdles to have adequate public support for government.

"We have a disdain for the federal government and for the size of the bureaucracy and people that work in it," he said, "but we're now turning to them to turn around the economy and the important cogs in our financial system."

He said it's important to look for cost savings and efficiencies in the operation of government, but it's essential to provide the services that people need.

"The foundation of government is not efficiency; the foundation of government is provision of quality of life for its citizens," he said.

One challenge is the aging of the federal workforce, as many of the most talented government executives approach retirement. "We need to figure out how to replace all that talent that's going to be leaving," Perry said, although he acknowledged there may be little support for doing so. "Let's face it," he said. "If you told some people that we are going to lose 400,000 bureaucrats in the next five years, and that we may have difficulty sustaining our federal programs, all they would say is 'Can we speed up this process?'"

In fact, Perry said, government hasn't kept up with the market when it comes to providing competitive pay for its workers, and young people are choosing instead to work in the business or nonprofit sectors. Meanwhile, many former government functions have been turned over to contractors whose values are those of profit, not service.

"We have systematically sought to outsource jobs, without paying adequate attention to if the outsourcing is efficient, and if it sustains the public interest," he said.

Perry said good public servants accept accountability and rise to its challenges because they are motivated by a desire to make a difference.

"We will get the federal government we pay for and the federal government we expect," Perry said. "If we expect that all bureaucrats are self-interested and they can be bought cheap, we are going to get poor quality people working for government -- if we get them at all -- and they are going to perform to our expectations."