Recovering from the Recovery Act, Part 2

President Obama put Vice President Biden in charge of the implementation of the $787 billion Recovery Act. Ed DeSeve had an eagle eye’s view of the interaction between agencies, states, localities, and non-profits. He shares his lessons learned from Recovery Act implementation, as well as advice for “the next big implementation challenge,” whatever that might be.

Last month, the IBM Center issued a report examining the implementation of the Recovery Act from a “bottom-up” perspective of several cities in the state of Virginia, and what insights they offered from their implementation experience. Now, here’s a new report with a “top-down” perspective, authored by Ed DeSeve, who oversaw the implementation of the Recovery Act from Vice President Joe Biden’s office.

While he does not mention it in his report, probably the highlight of his experience may not have been meetings with the President and the Cabinet, but rather his being mocked by Stephen Colbert on his late night TV comedy show, as G. Edward “Deceive!”

Background. The American Recovery and Reinvestment Act of 2009 (Recovery Act) was passed in February 2009, providing $787 billion of tax benefits; grants, loans, and contracts; and entitlements in more than 250 appropriation accounts across more than 25 federal agencies and 65 programs.

President Obama assigned the overall management responsibility for the program to Vice President Biden, who acted swiftly to create a management structure that relied on innovative processes and technologies. DeSeve, served as the Implementation Coordinator on Biden’s behalf with three titles: Special Advisor to the President for Recovery Implementation, Assistant to the Vice President, and Senior Advisor to the Director of the Office of Management and Budget.

Looking Back: Lessons Learned. Reflecting on his experience in that role, DeSeve identifies seven primary lessons from the implementation of the Recovery Act:

• Attention from the top matters. There is no substitute for the president and the vice president being fully engaged.
• Transparency minimizes fraud. Having many sets of eyes and ears, including the public’s, committed to avoiding problems pays dividends if properly organized
• Financial information can be transmitted in an almost-real-time environment. Having weekly financial data and quarterly recipient data made course corrections possible and constant reporting required both agencies and recipients to exercise greater care about the data.
• New technology enables direct reporting. The use of existing successful technology-based reporting models and the Internet can make data transmission faster and more reliable, minimizing the need for intermediaries.
• Geospatial mapping makes data more understandable. The availability to the public of data that they could relate to their own neighborhoods was an extremely powerful tool in promoting program acceptance.
• Collaboration through networks was essential. Using clear principles, a series of networks was developed that aligned incentives and accountability in a way that promoted rapid and effective performance.
• The Recovery Act provides a template for agency planning in the future. As the GPRA Modernization Act of 2010 is implemented, agencies should be looking to the lessons of the Recovery Act for guidance.

Then, in a particularly intriguing epilogue to his report, DeSeve suggests how government leaders can address future major challenges on the scale of the Y2K crisis, Hurricane Katrina, or the SARS epi­demic. DeSeve offers guiding principles for how to successfully meet future challenges when acting on big problems . . . because we will face them again!

Looking Forward: Lessons in Creating and Using “Managed Networks.” Managing complex problems requires a new approach based on an integrated system of relationships that reach across both formal and informal organizational boundaries. The approach used to implement the Recovery Act—the use of managed networks—reflects some of the guiding principles for how to successfully meet future challenges when acting on big problems. Some of the major lessons learned were:

• Act quickly. The Recovery Act was signed less than one month after President Obama took office. This was accomplished by close coordination with Congressional leadership and continued dialogue with key senators and representatives.
• The president and vice president must provide strong direction. There is no substitute for presidential leader­ship. Designating the vice president as the single “responsible individual” made all the difference. Vice President Biden could speak to the cabinet, to governors, and to local officials with all of the power of the Office of the President behind him. There were no turf wars or bureaucratic shuffles that he didn’t sort out—often imposing his rule that the problem had to be fixed within 24 hours or he wanted to know the reason why.
• Collaboration maximizes speed of execution. Speed was of paramount impor­tance in recovery implementation. The sheer number of actors—more than 250,000 prime recipients alone—meant that collaboration had to replace command and control as the opera­tive model. The mantra of “managed networks” was put in play at the very beginning of the Act’s implementation and was the watchword throughout.
• Federalism is a key form of collaboration. It was essential to eliminate the adversarial relationship that often exists in dealings between the federal government and states and localities. States were responsible for delivering or overseeing more than one-third of Recovery Act funds. Having state and local governments as full partners made the Act’s implementation swifter and less prone to error.
• Information must be transparent, timely, and relevant. The rapid, open transmission and reporting of relevant information served as a deterrent to fraud. Recovery Accountability and Transparency Board (RATB) Chairman Earl Devaney often spoke of enlisting the “citizen inspectors general” and one local recipient quipped, “No one would steal this money with everyone watching.” This phenome­non of citizen inspectors general and everyone watching was empowered by the collaboration of OMB and RATB with recipients and oversight agencies.