Remarks Announcing Federal Procurement Reforms and Spending Cut Proposals

Ladies and gentlemen, the Presidential memorandum on electronic commerce which I have just signed is, as the Vice President said, a direct result of the work done by the National Performance Review. It will make our antiquated paper-based procurement system accessible to anybody with a personal computer. It will open up a world of possibilities to small businesses in America and drive down costs to taxpayers.

This demonstrates why the National Performance Review has been and will continue to be a success. The NPR has become a true action plan for unprecedented cost cutting and reinvention across the entire governmental process. It's dedicated to reforms that will give us a Government that actually does work better and cost less.

We want to give the taxpayer a more efficient Government, to reduce the deficit, to provide new resources so that we can also respond to urgent national needs. The proposals we announce today meet every one of those objectives. By sending to Congress a bill that produces billions in savings, we will now be able to finance an expansion of our anticrime activities at a time when the country desperately needs it. Reinventing Government is working, and I want to say a special word of thanks to the Vice President for his outstanding leadership on this project.

Today I am sending to Congress a significant package of spending cuts, totaling $10 billion, based on the National Performance Review and fulfilling a promise I made to further reduce the deficit by spending cuts in that amount— sending, excuse me, spending cuts in that amount to Congress that could be passed in this calendar year. The Government reform act phases out Federal support for wool, mohair, and honey; consolidates environmental satellite programs; streamlines the operations of the Departments of Agriculture and Housing and Urban Development; reduces costly regulation; and proposes other reforms reflecting more than 20 deficit-cutting recommendations of NPR. These cuts are part of our commitment to put our economic house in order.

With the passage of the economic plan last summer containing about $500 billion in deficit reduction, we've helped to drive down interest rates to historic low levels to keep inflation down. This has meant more private sector job growth in one year than in the previous 4; increases in housing starts; and in mid-October, we know now that auto sales have climbed by 18.4 percent, the largest amount in several years. Orders for heavy equipment continue to rise. While we have still clearly got a very long way to go and many more good-paying jobs to produce, this recovery is beginning to shift into a more promising phase. That's why our progress on continued deficit reduction is very important. We have to maintain the Government's credibility in holding down the deficit and keeping interest rates down in order to provide a stable climate for long-term growth.

We must now move to achieve real savings through procurement reform. While the private sector is becoming more flexible, more innovative, Government has become in many ways over the last 10 years even more bureaucratic. At a time when all businesses are looking for better suppliers and lower prices, the Government is too often losing suppliers and actually paying higher prices by putting up so many costly hurdles and requirements in our procurement system. Procurement waste is costing the taxpayers tens of billions of dollars, and it has to stop. We must fundamentally reform this system, saving billions of dollars and using that money in ways that meet the basic needs of the American people.

Senator Glenn and Congressman Dellums and Congressman Conyers and the other distinguished Members of Congress who have joined us here today have introduced very important procurement reform legislation which will make it easier for agencies to buy the same commercial products ordinary consumers and businesses buy off the shelf. It will cut down enormously on paperwork. It will speed deliveries. It will provide new incentives for small businesses.

At the same time, the Department of Defense has requested, with my support, immediate congressional authorization to undertake seven pilot projects to reform their own procurement processes. These projects will allow the Department to demonstrate innovative approaches to acquiring commercial jet aircraft and aircraft engines as well as items like clothing and medical supplies.

Cost-saving innovations like these are critical to our ability to meet future military needs within our budgetary limits. I might say that the Department of Defense has been so confident of these things that, after we had completed our bottoms-up review, the leaders at the Defense Department said they thought one of the ways that we could actually meet our defense needs over the next 5 years within the tough budgetary restrictions imposed would be to require these kinds of procurement reforms. And I want to thank the Department of Defense for the aggressive attitude that they have taken toward this, and we all look forward to the results they will be achieving now.

Procurement reform also will enhance national security. Procurement regulations today virtually force defense contractors to develop business practices and products that are unique only to the military. This division of industry in the United States into defense and nondefense sectors results in higher prices to the Government, less purchasing flexibility to the armed services, and too often actually denies our military state-of-the-art technologies found in the commercial marketplace. Today 5 of the top 10 U.S. semiconductor producers refuse defense business because of the burdens and special requirements the Government imposes.

Finally, procurement can work by allowing the Government to run more like a business, buying products based on price and other important considerations such as how well a supplier has performed in the past. We want the marketplace, not the bureaucracy, to determine what we buy and what we pay.

According to the NPR report, if Congress does its part in passing the legislation and we do our part in making it work, we could save more than $5 billion in the first year of this reform alone. We ought to take some of that money that your Government has been wasting all these years and use it to uphold Government's first responsibility, which is to keep our citizens safe here at home. With that money, we can make our crime bill even stronger. We can make sure we put at least 50,000 police officers on the street over the next 5 years. We can help States to build more boot camps so we can take young criminals off the street and teach them more respect for the law and give them a chance to avoid a life in prison and live a life of constructive citizenship. We can have more drug courts, like the one the Attorney General started in Florida and the one our administration is helping to launch here in DC, so we can stop sending tens of thousands of criminal addicts back onto the street every year where they'll commit more crimes if they don't get treatment first.

I want Congress to pass this crime bill and pass the savings I've asked to help pay for it. I want them to know that if these cuts aren't passed, I'm going to come back with more cuts. And if those aren't passed, I'll come back with still more. I'll keep coming back until we have the money we need to make America safer.

Procurement reform shares a common border with many of our most important goals: saving taxpayer money, reinventing Government, strengthening our military, improving our economy. But in a larger sense the steps we are taking here today are also about proving to the American people that we can honestly and seriously deal with the issues that matter most to them and that for too long too many have felt powerless to change. We can and will cut the deficit. We can and will run a Government that works better and costs less. We can and will turn those savings to helping America, including helping more Americans be safer in their homes and on their streets.

I'd like to close by introducing to you Lieutenant Colonel Brad Orton. He has a story to tell that reveals the price we continue to pay by doing nothing in this important area. During the Gulf war, the Air Force placed an emergency order for 6,000 Motorola commercial radio receivers. But because Motorola's commercial unit lacked the record-keeping systems required to show the Pentagon that it was getting the lowest available price, the deal reached an impasse. The issue was resolved in a remarkable way that Lieutenant Colonel Orton will now describe, involving the Japanese Government. This should never happen again.

Today is about taking responsibility for doing better, working together to build a better America. We can do this, Congress, the administration, the American people.