White House Launches `First Wave' of Reform

FROM the White House comes still another horror story of government bureaucracy:

When the Air Force needed 6,000 radio receivers for Operation Desert Shield, it found that Motorola Corporation sold just the right equipment commercially. But Motorola did not want to struggle through producing all the cost and price data required by the Pentagon, and no one at the Pentagon was willing to sign off on a waiver of the rules.

The impasse ended only when the Japanese government stepped in, bought the receivers, and donated them to the Pentagon as a contribution to the war effort.

``This should never happen again,'' said President Clinton Tuesday of government procurement rules so cumbersome that a foreign power has to supply needed military equipment.

The legislative package that the White House announced Tuesday was what Vice President Al Gore Jr. called ``the first wave'' of legislation in the administration's ``Reinventing Government'' effort.

At the heart of the proposals is a White House attempt to strip away the thousands of pages of rules that bind the roughly $200 billion in annual purchases by the federal government.

By buying more off-the-shelf commercial products, such as the Motorola receivers, and fewer goods custom-made to maddeningly detailed government specifications, and by adopting many other common industrial practices, the administration argues it can save billions of dollars a year.

If Congress passes this legislation this year, the White House budget office forecasts that the procurement reforms can save $5.6 billion a year. Administration officials expect that the Congressional Budget Office will forecast savings at a more modest $2 billion to $3 billion.

These savings are in addition to $10 billion in straight budget cuts the administration is submitting to Congress, also based on the months-long National Performance Review of government management led by Mr. Gore. The cuts range from cutting subsidies to wool and mohair growers to closing some Housing and Urban Development field offices. Promised cuts

Clinton promised these cuts last August to conservative Democrats who voted grudgingly for his budget bill. House Speaker Tom Foley also promised them a chance to add amendments of their own for deeper cuts.

Yesterday, Reps. Tim Penny (D) of Minnesota and John Kasich (R) of Ohio announced the cuts they plan to append to Clinton's, amounting to about $100 billion over five years.

While Mr. Penny supports the Clinton proposals to make government work better and cost less, he finds them only modest. ``I don't think people will be satisfied with a big government that works better,'' he says. ``They want to see spending cut.''

White House budget director Leon Panetta says, on the other hand, that proposing deep cuts has little impact if they can't pass Congress. The administration is also opposed to a Penny-Kasich proposal that would limit Medicare spending according to income and use the savings to offset the federal deficit.

Many of the savings Clinton proposes through streamlining government are in fact cuts in defense spending. Three-quarters of procurement savings, for example, will come from the Defense Department. Separately, the National Performance Review has also recommended reducing the federal work force by 252,000. About 44 percent of these cuts would come from Defense.

Mr. Panetta has explained this to members of Congress, says Robert Greenstein, director of the Center for Budget and Policy Priorities, but the members do not widely understand it. Many, in fact, embrace the streamlining with enthusiasm while insisting that defense spending caps not move any lower.

If Congress locks in the savings targets that Clinton proposes, but holds defense spending level, notes Mr. Greenstein, it will force itself to cut much deeper than they expect from domestic programs. Capitol Hill education

``A lot of people, including a lot of members on the Hill, don't understand that a lot of the savings in personnel reductions and procurement changes are in the Defense Department,'' says Greenstein, who often briefs members and their staffs on budget matters. The Clinton procurement changes could have been more ambitious. A Defense Science Board report this summer estimated a potential for defense procurement savings as high as $20 billion a year.

The Clinton plan deals with the forming of contracts, says Erik Pages, an analyst with Business Executives for National Security, but the real savings are in contract management during the 16 years and 840 decision points required to procure the average weapons system.

But scrapping rules and regulations has dangers too, notes Ronald Moe, a government expert at the Library of Congress. ``You're going to have to have a higher tolerance for mistakes.''