What the U.S. Government Can Learn from Business

Whatever late compromise is finally agreed upon in the U.S. debt ceiling debate, the most difficult hurdles for any deficit-reduction effort lie ahead. Nearly all the plans under consideration rely on hundreds of billions of dollars of vague discretionary spending cuts over the coming decade — with some combination of triggers, targets, caps, and oversight commissions to ensure that real cuts are actually made. But in light of my time working in the U.S. Department of Commerce, I find that in many ways the debate obscures a fundamental problem: Government lacks the basic tools to cut costs — tools that private firms utilize on a daily basis. In corporate America, global competition has forced companies to focus ruthlessly on cost-cutting and reengineering for the past twenty-five years. But the government is insulated from such market pressures.