Who's Looking After the Country's Business?

The current policy which justifies cost comparisons between public activities and private business operations: (1) violates the basic tenet that private enterprise, not the Federal Government, should conduct business activities; (2) uses as its rationale Office of Management and Budget Circular A-76 which is inaccurate, incomplete, and shortsighted; and (3) produces progressively detrimental economic conditions. This policy has been aided and abetted by executive inertia and legislative inaction. The Government's size and ability to manage its affairs are major issues today. Consequently, the Government should not use its limited abilities to manage affairs that are not governmental in nature. For improvement, the executive branch and Congress must: (1) allow core business capabilities to exist in-house if critical to agency mission performance; (2) limit cost comparisons to in-house versus private monopolies; (3) establish a clear policy that simply and briefly states a reliance on the private sector when competition is available; and (4) establish temporary management teams in the larger agencies to oversee an orderly transition of in-house activities to the private sector. If savings on past transitions hold up, the potential government-wide cost reduction is $6 billion plus a healthy expansion of the country's tax base and revenues.