The Business of Government Hour

 

About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

Marcus C. Peacock interview

Friday, January 4th, 2008 - 20:00
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The EPA implements and enforces the nation’s federal environmental laws and regulations; the Agency has over 18,000 employees nationwide and an annual budget of $8.6 billion.
Radio show date: 
Sat, 01/05/2008
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Missions and Programs; Managing for Performance and Results; Leadership; Financial Management; Strategic Thinking; Green; Collaboration: Networks and Partnerships...

Missions and Programs; Managing for Performance and Results; Leadership; Financial Management; Strategic Thinking; Green; Collaboration: Networks and Partnerships

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Complete transcript: 

Originally Broadcast September 15, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business.

The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about The Center by visiting us on the web at businessofgovernment.org.

And now, The Business of Government Hour.

Mr. Breul: Good morning. I'm Jonathan Breul, executive director of The IBM Center for The Business of Government, sitting in for Albert Morales this morning.

The environmental problems we're facing today are more complex than those of 30 years ago, and implementing solutions seems more challenging. Recent national and international events continue to affect the environment in unprecedented ways, and scientific advances and emerging technologies offer new opportunities for protecting human health and the environment. Today's environmental problems cannot be solved by traditional regulatory controls alone. They require the combined expertise, perspectives, and resources of governments, industry, and citizen.

With us this morning to discuss his organization and its efforts is our special guest, Marcus Peacock, Deputy Administrator of the U.S. Environmental Protection Agency.

Good morning, Marcus.

Mr. Peacock: Good morning, Jonathan. It's great to be here.

Mr. Breul: Let me begin by asking you a question to give us a sense and an overview of the history and mission of the U.S. Environmental Protection Agency.

Mr. Peacock: As you may recall -- you're old enough to recall -- a resurgence of environmental thought and then action which developed in the late 1950s through the 1960s, and culminated in the year 1970 with a number of things which took place, particularly in the federal government. On New Year's Day, for instance, 1970, Richard Nixon signed NEPA, the National Environmental Policy Act, and created the Council of Environmental Quality, also on the New Year's Day. On April 22nd was the first Earth Day in 1970. And then, of course, nearest and dearest to my heart, by the summertime, July 9th, Nixon sent up to Congress a reorganization plan which recreated the Environmental Protection Agency. And it took pieces from Health, Education and Welfare, from the Department of Interior, U.S. Department of Agriculture, and created this new agency in order to really focus on pollution control.

EPA opened for business -- the first day was December 2, 1970. So we sort of closed out the year with an environmental theme, and Bill Ruckelshaus was the first administrator. And, of course, over the proceeding years, Congress has given us more things to do, more authority, the Clean Water Act, the Clean Air Act, solid waste responsibilities under Superfund and so-called RCRA, the Resource Conservation Recovery Act, and, of course, responsibilities in the pesticide and toxics areas.

What I think about EPA is it has a very clear mission: just to protect human health and the environment. And there are a lot of people who are at the agency because they believe in that mission and want to get up every morning and work toward that goal.

Mr. Breul: Could you give us some sense of the scale of the Environmental Protection Agency's operation? How is it organized? What is the size of its budget and the number of full-time employees? And what is its geographic footprint?

Mr. Peacock: I'll start with -- since I'm a former budgeteer, I'll start with that. We spend about $8 billion a year, which is smaller than most agencies, but we're a regulatory agency. We have about 17,000 employees. Half the budget, half the employees are here in Washington, D.C., at Headquarters or offices near Headquarters. And the rest, the other half, is mostly spread out in 10 regional offices throughout the country, from Boston to Seattle down to Atlanta and Dallas. We also have quite a number of labs across the country, but half of our budget is grants. But most of what we do is produce regulations and guidance, at least that's a lot of what we do, and then implement those.

Mr. Breul: You've provided us a sense of the larger organization. Perhaps you could tell us a little bit more about your area and your specific role within EPA. How would you describe an average day as Deputy Administrator?

Mr. Peacock: Well, once again, I'm not sure there's any average day. I essentially have two jobs as the Deputy Administrator. The first job is I'm a substitute Administrator. If there's something the Administrator wants to do, whether it's make a phone call, make a speech, have a meeting, but he's unable to do it for whatever reason, his schedule or some other reason, then I can substitute for him.

But the guts of my job is the second job I have, which is I am the chief operating officer of the agency. So I manage the day-to-day operations of the agency and look for ways to improve them. Somebody gave me a metaphor some time ago which I thought was pretty good, which is a chief operating officer is like a pacemaker for an organization. So I'm trying to make sure that the heart of the organization is beating at a healthy regular rate, the blood is circulating, getting to all the extremities so that people can do their job. And I look for ways to make the organization even healthier so people can do their job better.

I personally don't directly have a very large staff. The chief operating officer position is implemented through the assistant administrators, the associate administrators, and the regional administrators, and I hold them accountable for the performance of the agency.

Mr. Breul: Regarding that role as chief operating officer, what are the top three challenges that you've faced in your position, and how have you addressed those challenges?

Mr. Peacock: When I took my position about a year and a half ago, actually two years ago now, I read a book which someone had suggested -- and I think it was called You're in Charge, Now What? And it was a pretty good book in that one of the things it suggested was to find key people who worked inside the organization or even outside the organization and ask them a similar set of questions, sort of do these interviews. And the great thing about that is after you start talking to a number of people who know an organization well -- in this case, I was doing it for EPA, of course -- you start to get the same answers -- when you're asking, for instance, what are you main concerns about this organization? You start hearing the same answers over and over again. So it's like a truth testing aspect to, well, what are the problems that need to be addressed?

And three of the things I heard over and over again, which won't be a surprise to some people who are familiar with the agency -- the first one is we have a problem with stovepiping. And that's not a problem that you will just find at EPA, but we have different parts of the organization, which they almost have their own statutory authority, and they have developed over time their own culture, and it means it's difficult necessarily for those parts of the organization to talk to other parts of the organization. And so part of my job is to try and make sure that happens.

Another -- a second issue was, and you mentioned this in your opening, Jonathan, we continue to have to transform ourselves from a traditional regulatory agency where we have a limited number of tools in our toolkit to an agency where we have a lot of tools in our toolkit, so that we can use more innovative means, more collaboration to provide incentives for people to be good stewards of the environment, because the source of the problems we face now in the environment are different from what we had 20 and 30 years ago.

Then finally, a third problem would be succession planning. We have a lot of people eligible for retirement in the agency and they're beginning to retire, so there's a lot of institutional knowledge and a lot of expertise that is going out the door. And the question is, do we have the right people to fill those slots so that we can continue to do the job we need to do for the American public? So we're working on ways to make sure we are prepared for those folks.

The interesting thing is the first two things I talked about, stovepiping and the transformation of the agency, I've tried to address those through a new performance management system. And the last thing, succession planning, we're addressing through a specific plan.

Mr. Breul: Well, let's turn our focus a bit and have you describe your career path for our listeners. How did you get where you are now? Where did you begin your career?

Mr. Peacock: Well, first of all, I grew up in Minnesota, which had an effect on -- the culture of Minnesota is one of -- it's a very community-oriented state. I grew up in Minneapolis, and I think it's one of the reasons I'm in public service.

But I headed out to California. I guess I was tired of 40-below winters, but went to the University of Southern California. I got an industrial and systems engineering degree there. And then worked two years in a printing plant in Los Angeles, and had an opportunity to move up in that printing company, but I had this public policy bug stuck in my head that I couldn't get rid of. So I ended up going to the Kennedy School of Government for two years at Harvard and got a master's in public policy.

And then after that, came down to Washington and worked at OMB, the Office of Management and Budget, as a career official reviewing regulations, including EPA regulations at the time; did that for a few years. And then by the early '90s, I went to a consulting firm that Steve Jellinek, a former EPA appointee, was running; did that for a few years. And then through -- I think just dumb luck and serendipity, which is I think the way most people get a job on the Hill, ended up at the House of Representatives Transportation and Infrastructure Committee, and worked there through early 2000.

And then, once again, I think just through dumb luck, was honored to be offered a position at the Office of Management and Budget under the Bush Administration, where I became the associate director for the natural resource programs, which is all the energy, science, and environmental programs in the federal government, including Department of Agriculture and Department of Energy. So it was two years ago that, once again, the President honored me with the opportunity to become the Deputy Administrator at EPA and the Senate saw fit to confirm me into that position.

I feel lucky to be here. Hubert Humphrey, who was a fellow Minnesotan, once said behind every successful man is a surprised mother-in-law. And I think my mother-in-law is surprised, but I'm no more surprised than she is on the path I've been able to take.

Mr. Breul: Well, let's turn to that tenure at OMB, Marcus.

While you were at the Office of Management and Budget, you developed OMB's award-winning Program Assessment Rating Tool, or PART, which is used to rate the effectiveness of federal programs. And you were also involved in the development and implementation of the President's Management Agenda. How have these experiences prepared you for your current leadership role and shaped your management approach and leadership style?

Mr. Peacock: The first thing I have to point out, Jonathan, is I do get a lot of credit for the Program Assessment Rating Tool, or PART, but it was a team effort. And I think you were there at the time, so you probably remember there were about 20 real stars at OMB, the Office of Management and Budget, that helped put this together. In fact, without them, I think it would not nearly have been a success, but would have looked quite different. But with them, it's been very successful.

I guess my last tenure at OMB, once again, I had two jobs. I seem to have two jobs everywhere I go. But I was not only the leader for the Budget and Performance Integration Initiative, which was helping putting together the PART, but also the associate director for the budget. I guess I go back to three lessons I learned in that experience being particularly in the White House campus.

The first was just dealing with the demanding schedule. The director of OMB at the first director at OMB at the time, for instance, would start every morning at 7:30, and typically my schedule would be booked all the way through 6:30 in the evening. And you learn pretty quickly if you're going to survive that you have to delegate, and so there was a lot of delegating. And you also learn how to make decisions very quickly with less than perfect information, which was something else I had to learn.

There were two other things I've learned which I brought on to EPA, and one is to make sure you're always looking at the big picture. It's easy to get caught in a specific issue and disagreement, but you constantly have to be picking your head up and saying, well, what's going on around you. If you're making a decision for instance, if EPA's making a decision on farms and there's a big farm bill debate going on, you've got to think about how that may be viewed in a broader context.

The second thing, which was really I think probably the most valuable lesson, was to be unbiased and open-minded all the time. When the President turns to you, for instance, and says what do you think about this particular issue, you can't be parochial. You have to provide the facts unvarnished. When you're giving your opinion, you have to make it clear that that's your opinion. You have to present the other side in a fair way. And if you can do that and people see you doing that, you quickly become someone who's trusted and someone people want to go to. But if you see it as an opportunity to sell something that you're interested in, people will quickly perceive that as well and you won't be as successful.

That's a lesson that I've carried to EPA as well.

Mr. Breul: How is EPA's Quarterly Management Report helping the agency deliver real results? We'll ask Marcus Peacock, Deputy Administrator of the U.S. Environmental Protection Agency, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Breul: Welcome back to The Business of Government Hour. I'm your host, Jonathan Breul, and this morning's conversation is with Marcus Peacock, Deputy Administrator of the U.S. Environmental Protection Agency.

Marcus, would you tell us more about your agency's strategic plan? How does the plan reflect increased collaboration with EPA's state, tribal, local, and federal partners? And as a follow-up, to what extent does the plan increase the outcome orientation of EPA's long-term measures and opportunities in the coming years?

Mr. Peacock: Let me put a picture in your head which will probably help to see how this all fits together, because I don't think you can just look at the strategic plan by itself. So picture a three-tiered wedding cake, and at the top, you typically I guess have a bride and groom. And the bride and groom are our mission: protect human health and the environment. And that next smaller cake down, the bride and groom are sitting on, that is our strategic plan, supporting our mission. Our strategic plan has five goals. It's protection of water, air, land, protection of communities, and we have a goal for compliance and stewardship. So that's that little cake at the top.

You cascade down to the second larger cake that the smaller cake's sitting on top of, and that's 20 objectives. We have about four objectives per goal. So that in more detail tells us what we need to do to fulfill our goals, and therefore fulfill our mission.

And then finally, at the bottom, you got this large piece of cake, and that's our annual goals and commitments. So those are things, for instance, the Program Assessment Rating Tool measures that we track on an annual basis, or the measures you'll find in our Performance and Accountability Report.

So all these things you know, the intention is for all these things to fit together and cascade down so they're all supporting each other. We've spent a lot of time and continue to spend a lot of time making sure these cakes are aligned so they all sit on top of each other and all support each other.

And there are, of course, parts of that cake which directly address needs that we have, for instance, with tribes and with states. I am trying to bring particularly the tribes and states more into the discussions we have about what the content of the cake should be, the ingredients, and also how those things should be aligned. That's something we've done some of in the past and actually do a good job in some parts of the country, but we can do a better job elsewhere I think. But as we continue to sort of align this cake and make it even stronger, I think there are increasing roles for both tribes and states.

Mr. Breul: EPA has recently introduced a performance management tool called the Quarterly Management Report, or QMR. Would you tell us more about the QMR and its reporting process?

Mr. Peacock: So I'm the chief operating officer. That means I manage the day-to-day operations of the agency, try and make it work better. You cannot do that job, you cannot manage day-to-day operations, using annual measures. That's just not frequent enough. So I realized I needed something more frequent to figure out how we were doing and how we could do it better.

So over the past year and a half, we have put together a Quarterly Management Report. It's about 60 measures that we track every three months. It is now publicly available. You can go onto EPA's website. There's a performance and accountability link there. And how we're doing, the last quarter will show up on the screen so everybody can see how we're doing. The most important thing is now that that's more frequent information and reflects the priorities that we're working on right now, it gives me as the chief operating officer a much better idea of how we're doing and where we're having success and where we're not having success and what I should be spending my time on and what others should be spending their time on.

Mr. Breul: How exactly does it help the agency deliver real results? And to what extent does it complement existing budget, performance, and financial management tools and align back to EPA's strategic plan?

Mr. Peacock: Remember the wedding cake I drew for you mentally? In a way, the Quarterly Management Report is a way to take a slice out of that bottom cake that's got all those annual measures in it. And it takes a slice out of those measures that we think are particularly important, and lets us see how we're doing on them. So that, for instance, if we're having a success in a particular area and I'll give you an example -- for instance, we track across the country our efforts to educate farmers on how to run their operations better.

Water quality is affected across our country by -- in fact, farmers' operations may be sending nutrients in particular, which can come from fertilizer or manure, into water segments. And if farmers just change some of them are simple changes change their operations, we can better protect water quality. So we track how many farmers we go out and educate on how to change their operations. And we found in the West, the number of farmers we were able to reach last year was almost 10 times what it was anywhere else in the country, and we found that out by looking at these results.

And so it begs the question: how did we reach this result? And we found out that in California, we were part of a special initiative with the state of California, University of California Environmental Group, and the Dairy Association in California, and were able to, through this collaboration, reach a lot more farmers in a shorter period of time than we were anywhere else. So once you've identified a success like that, you're able to say, well, maybe we can use this same technique elsewhere in the country, whether it's in Wisconsin or upstate New York. And it doesn't even have to be cows. There's plenty of chicken farms and hog farms out there.

And so this is an instance where we've been able to take something we've seen in the Quarterly Management Report and through our performance system and find out whether or not this may be a best practice that can be used elsewhere that will achieve much larger and greater performance across our agency, and therefore, better protect water quality and achieve our mission, which remember is at the top of the cake, of protecting human health and the environment.

Mr. Breul: It sounds to me that the example you just gave really illustrates an approach of learning and doing rather than just reporting. Is that correct?

Mr. Peacock: Yeah, I feel good about where we are in our performance management system. But I think it was Will Rogers who said, you may be on the right track, but if you just sit there, you'll eventually get run over. I have no intention of being run over. In fact, my goal for the coming year is to increasingly use this information to learn more about what is happening in the agency and do things differently.

We have a very clear mission, as I've told you, of protecting human health and the environment. So I'm not so concerned about what we're doing because we all know what our goal and mission is, but it's how we're doing it that I am very interested in. And if we can figure out ways to do things differently so that we achieve our mission better using this system, then I think not only will the system have proved itself, but it will be something that will be used for years to come.

Mr. Breul: Let's talk for a moment about the President's Management Agenda. In the last scorecard from the Office of Management and Budget, unlike EPA, about half the federal agencies received a red rating in financial performance status. What has your organization done to progress to a green rating in this area? And could you tell us from your perspective why this is such a challenging area for so many federal agencies?

Mr. Peacock: Jonathan, this is in the financial management agenda item?

Mr. Breul: Yes.

Mr. Peacock: We got to green, a green score, back long before I came here, came to EPA, but I think it was back in 2003. And I remember I was at OMB at the time, and the agency did that by focusing on three things, three characteristics they wanted to see in the financial management system, and that's really what drove them.

The first thing was to make sure there was quality information. And by quality, they meant accuracy as well as timeliness. Make sure not only the number is right, but it's there in time for people to be able to use it, so quality information.

The second thing was that the information was going to be useful to managers. We've got so many different, for instance, measures and financial information in the agency, it's almost too much. So you want to focus on those particular data elements which you know are going to be useful and be used.

And then the third thing is to be able to put it into a single system so that it's easier to comply with federal requirements, you don't have to go around to a lot of different systems to make sure they're all compliant, but you get one system that you can focus on, and also links back to the strategic plan, which is a lot easier to do if you've got it in one single system.

And the results of that were not just a green score, because that's a nice thing to have, but of course, you're looking at results, but we've now had seven consecutive years of clean audits. We have no material weaknesses. We have had no Anti-Deficiency Act violations for several years now. The nice thing is we've set a platform for ourselves to continue to improve.

For instance, we now have a green plan that we've laid out -- even though we're already at green, we have a green plan where we're continuing to make stronger links between the financial information we have and the performance information we have. We've already, for instance, made stronger links between grants so that we have more information on the outcome of our grants and the money we're spending, and we're moving on to now purchase card management and emergency management.

Mr. Breul: Budget and performance integration lies at the heart of ensuring both a strategic allocation and the effective use of funds. Many agencies are working to implement a budget-performance integration initiative as part of the President's Management Agenda. Can you tell us about EPA's effort to get to green and sustain the status for the budget and performance integration?

Mr. Peacock: I'm very proud of the fact we got to green on budget-performance integration earlier this year. That was a sigh of relief from me because, you know, I managed this initiative when I was at OMB, so it was important we got to green at EPA on it. And the biggest challenge we had was coming up with good measures, especially good efficiency measures. You know, there are some things an agency does which it's fairly easy to come up with measures, and there are other areas which it's just inherently difficult.

Two difficult areas are enforcement and research and development. And we have an enforcement office and we do a lot of research and development, so in particular, coming up with measures, particularly efficiency measures, for those two areas was difficult. And an efficiency measure, you're not just looking at what you're performing, what you're doing, but how much money it's taking to do what you're doing.

And so part of the progress we track, of course, is through the Program Assessment Rating Tool measures we get, and those have continued to improve. I know back in 2002 well, the vast majority of our ratings were "results not demonstrated," so we didn't even know how our programs were doing. But as we've been able to put these performance measures in and track them, we've been able to figure out how we're doing. And now, I think we've reduced the number of programs that are "results not demonstrated" to well below 10 percent of the programs that were rated.

One of the problems we have to deal with, though, in setting measures is, as I mentioned before, we have too many measures at the agency. I think there's still over 400 measures we deal with at the agency, and we're trying to reduce those. Because if you have too many measures, that actually starts to undercut a performance management system. And by getting rid of measures and making sure they're useful to managers, that's when you start to gain credibility and start to actually get some wisdom from the information that you're taking in.

Mr. Breul: Well, you've really experienced a turnaround in terms of EPA's performance based on the Program Assessment Rating Tool. Do you have any lessons learned you'd like to share with your colleagues?

Mr. Peacock: You know, once again, our biggest issue was having good measures to measure the performance of these programs, and we worked very hard on that. I mentioned before the difficulty of efficiency measures, particularly in research and development. Realizing that this was not a problem just EPA had, but is a problem for any research and development organization in the government, we went to the Office of Management and Budget and co-requested with them that we get a National Academy of Sciences panel together to look at what would be the best possible efficiency measures for a research and development program. And I think the panel -- we've had a number of meetings and they will probably report back to us fairly soon. Our goal is to be at the cutting edge of having the best possible measures, for instance, for research and development. And I think it's that attitude of trying to get the best measures and get them in place that's resulted in the success.

I mean, our scores alone, as I mentioned, have gotten better. You know, not long ago, over 90 percent of our PART ratings were below the adequate level, and that's completely flipped now. Now, 90 percent of them are adequate or better. I will say we still do not have a single program that's been rated effective, so we still have some work to do.

That reminds me, my daughter came home from -- she's going to an educational camp and she came home the other day and I asked her, well, what did you learn today? And she replied not enough. They want me to go back again tomorrow. And I think that's the attitude we have to take is, we're never going to know enough to be able to be absolutely perfect at running these programs. But the nice thing about the Program Assessment Rating Tool process is it shows you how to get better every year.

And so we've been trying to climb up that ladder.

Mr. Breul: What about EPA's efforts to improve water quality and control greenhouse gas emissions?

We'll ask Marcus Peacock, Deputy Administrator of the U.S. Environmental Protection Agency, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Breul: Welcome back to The Business of Government Hour. I'm your host, Jonathan Breul, and this morning's conversation is with Marcus Peacock, Deputy Administrator of the U.S. Environmental Protection Agency.

Marcus, this year, the U.S. Supreme Court decided in Massachusetts v. EPA that the Clean Air Act provided EPA the statutory authority to regulate greenhouse emissions for new vehicles. Would you elaborate on EPA's response to this decision, and how it's taking the first regulatory steps to control greenhouse gas emissions for new motor vehicles determined to endanger public health under the Act?

Mr. Peacock: Regardless of how one feels about climate change or climate change policy, it's a very exciting time to be at the Environmental Protection Agency just for this issue alone. The President called on the Environmental Protection Agency and the Department of Transportation to take the first regulatory step to draft a proposal to control greenhouse gas emissions from vehicles, and that includes cars and trucks. And we will propose a regulation by the end of the year and go final with the regulation at some point next year, in 2008. This is a big deal. I'm not sure people really understand that this is taking place. They certainly will once the proposal comes out.

Climate change is a serious, important challenge. You know, I look at my two kids and I wonder what kind of world they'll live in. That increases the emphasis to make sure we deal with problems like this well, handle them well.

And, frankly, there's a huge amount going on. We've invested over $37 billion since 2001 on climate change science, on climate change research and development, and activities. We have programs at EPA that are helping reduce emissions right now, including the Energy Star Program and Climate Leaders Program, which I'm very proud of. And those are some of the things we actually track through the management reports we were talking about earlier, Jonathan.

The President has asked Congress to enact legislation that would reduce gas consumption by 20 percent over the next 10 years. It's called the 20 in 10 Proposal. This would help climate change. The President has set a goal of increasing the use of renewal and alternative fuels by 35 billion gallons over this period, and that's an important part of reaching that goal of the 20 percent reduction in the next 10 years.

One thing that we've learned about climate change over the past several years is we're not going to be able to lick this problem without bringing developing countries, and I'm thinking particularly of China and India, into the fold. By one estimate recently, China now exceeds the U.S. just in terms of gross greenhouse gas emissions -- if they haven't exceeded us, they will soon. Now, the interesting thing is we in this country already have available a lot of good technology to reduce greenhouse gas emissions that they're not using China.

So for instance, one of the programs that we work on with the Department of Energy is the Asia-Pacific Partnership. And it's a way to get technology we have over here that would reduce greenhouse gas emissions into China. And the great thing about that is it not only reduces air pollution in China, greenhouse gas emissions in China, but it's also good for our economy. The Chinese recently purchased over $50 million worth of Caterpillar diesel engines from Caterpillar to use in China, so that also benefited the U.S. economy. So it's that kind of program that we're trying to encourage and grow.

Overall, I think the President is in a unique position to be able to bring all these countries together. In fact, he's called on having the 15 key countries come together to set a greenhouse gas emissions reduction target. That's the desire and hope. And the first meeting of those countries will be in late September, so it's really a historic time to be at the agency to be addressing this issue.

Mr. Breul: Federal financial management approaches are changing rapidly. OMB recently launched a new budget formulation and execution line of business, which seeks to improve budget processes government-wide. Could you tell us a bit more about this effort, and specifically what role EPA is playing in this area?

Mr. Peacock: Yeah, we actively support this effort. I think this is something that's very good. I don't know who said this, but it isn't me, but it stuck in my head, but if you continue to do what you've always done and you continue to think as you've always thought, you'll continue to get what you've always gotten. And this is an instance where we are going to change the way we're doing business. We're going to change the way we're thinking and we're going to get something much better out of it. We've been helping OMB in this effort in helping define the requirements and the architecture that we'd like people to shoot for. And in particular, we've helped develop a decision matrix that agencies can use to evaluate their current budget formulation and execution systems, and shows where improvements can be made.

We've also helped OMB manage the data collection process for federal earmarks. It was really part of a team effort of a number of agencies, and we managed to get the data out I think in just two months, which nobody thought was really possible. And that was at the President's direction.

The benefits of this line of business are going to be tremendous. Anybody familiar with the MAX budget system at OMB, which is kind of a monster -- under this new line of business, MAX will eventually go away. It will be replaced by agencies using their own systems. The numbers and text will move seamlessly from the agencies' systems over to OMB. There'll be no need for reformatting. The budget exercises we get throughout the year will be much easier. They'll be able to be performed on easily available web-based applications.

And overall, it's just going to result in better collaboration across the federal government, not only between agencies and OMB, but also I think with Capitol Hill. We're going to have faster turnaround times. I think it'll take a lot less labor effort. And, frankly, the security I think will also be better as we take some steps out of the process here.

These are all benefits that I think will be achieved after we get this new line of business and this new system in. I think there are some challenges with some agencies in terms of being more automated and being more centralized. But once I think those changes are made, we'll see a dramatic improvement.

Mr. Breul: Turning back to the environment, EPA has worked with states to improve our nation's drinking water and wastewater infrastructure. Would you elaborate on EPA's effort in this area?

Mr. Peacock: This was actually one of the reasons EPA was founded, was to try and control water pollution that was coming out of heavy wastewater treatment plants. Half of our budget, about $4 billion, goes to grants, and most of that is for water infrastructure. The President's committed to providing $6.8 billion from -- that was a commitment made in the '04 budget all the way through 2011 -- to get the revolving level of these water infrastructure loans to $3.4 billion, which is higher than it will ever have been before.

But one of the problems with making water infrastructures sustainable is to realize this is not going to be something that's just going to be solved through more federal money. For instance, people who run water infrastructure, whether it's a drinking water plant or a wastewater treatment plant, like a sewage plant, need to make sure they're running it in a way that you don't run until something breaks, but you have preventative maintenance to make the plant last longer.

Water efficiency is a very important part of this picture. In fact, EPA has a great program called Water Sense, which can help people figure out ways to reduce their use of water, which of course takes stress off water infrastructure. We're doing a lot more collaboration across watersheds so that as people develop partnerships within a watershed, you can figure out ways to make sure that the water in a watershed is used more efficiently and puts less stress on water infrastructure.

And then finally, there's a notion that we should make sure there's full-cost pricing in a lot of areas in the country, and innovative financing of water infrastructure so that the price signals that people get sent in their water bills is correct. The President proposed last year's budget for Fiscal Year '08 private activity bonds, or water enterprise bonds. And this would be a way for counties and localities to get cheaper money to build or improve water infrastructure, and we're very excited about that proposal.

Mr. Breul: You've mentioned that over half of your agency's budget, or about $4 billion a year, goes out as grants. Yet EPA's faced challenges for many years in managing its grant system. Can you tell us what efforts are underway to enhance the overall performance of the grants management system?

Mr. Peacock: Grants management, as I mentioned before, has been a material weakness, an agency weakness for over a decade, since 1996, I think. And in 2003, we released a grants management plan which established five goals to strengthen the oversight, and also to make sure we're getting results from the grants that we send out. We've implemented that plan with top management attention. Both the administrator and myself have spent time on it. In fact, I use it as an example when I go out and give talks to the employees of things we need to improve on and where we have improved.

Our goal this year is to remove grants management as an agency weakness. I'm happy to say the Inspector General has suggested that we do remove it this year. We'll know by the end of the year, but a lot of it has to do with the implementation of this grants management plan, which provided greater oversight of the grants, and also making sure that people who receive EPA grant money are doing the work necessary to provide results which are going to benefit the public.

Mr. Breul: The IBM Center recently released a report entitled "The Blogging Revolution: Government and the Age of Web 2.0," by Professor David Wyld of Southeastern Louisiana University. Wyld examines the phenomenon of blogging in the context of the larger forces at play in the development of second generation Internet.

What role does the use of blogging play in your organization, and do you have any plans to leverage its social networking capabilities?

Mr. Peacock: Well, that's an interesting question. I am only aware of one EPA employee who, through their work, has an active ongoing blog, and that's me. I was told I'm the first Presidential appointee across the government to have an ongoing blog. Secretary Leavitt had one for about a month I think involving pandemic flu. It's a risky proposition, and actually, I had a number of people who suggested I not go down this path and have a regular blog. But for me, there is a lot of opportunity here for the federal government to communicate to people about what it's doing. It makes it more open and transparent, but it does come with some commitments. And the first thing is a time commitment. I have a posting every Tuesday and Thursday, which means I have to make sure I produce those on a regular basis.

It also has risks. I've learned a lot about blogs, one of which is no one can really edit what I write. So there's no General Counsel's Office review or Public Affairs review before something goes up on the Internet. You know, that's a bit risky. But what I'm hoping is as this continues, and I started it sometime ago, it's been going for a few months now, is that people will see it's not as risky as it necessarily is.

I've been surprised by the feedback I've gotten. I've really been overwhelmed by the number of questions and comments that have come through. I'm getting hundreds of hits now every day, which is a great sign. And so I think people are learning from it and communicating using it.

And so for me, if I can demonstrate to other policy officials that this is something that's desirable and is worth the commitment, I'm hoping that more people will do it. There are other federal blogs out there. I expect that that will continue to increase, and hopefully, I'll convince other people to dive in.

Mr. Breul: What does the future hold for the U.S. Environmental Protection Agency?

We will ask Marcus Peacock, Deputy Administrator of the U.S. Environmental Protection Agency, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Breul: Welcome back to The Business of Government Hour. I'm your host, Jonathan Breul, and this morning's conversation is with Marcus Peacock, Deputy Administrator of the U.S. Environmental Protection Agency.

Marcus, our listeners may not recognize EPA's important role in both homeland security as well as responding to natural disasters such as Hurricane Katrina. Could you elaborate on EPA's role in both homeland security and disaster relief efforts?

Mr. Peacock: EPA, we're obviously guardians of the environment, but we also help guard the homeland. And let me talk about Katrina first of all. There's the National Response Plan, which sets out the responsibilities of various federal agencies when there is a disaster. And there are about 22 emergency support functions which are identified in the National Response Plan. EPA supports a lot of those. We're a support agency for a lot of those functions. We actually own one of them with the Coast Guard, and that's Emergency Support Function No. 10, which involves anytime there's an oil or hazardous material spill. So we take that very seriously. And the Coast Guard tends to take the lead if it's in the water or we tend to take the lead if it's on the land. But the fact of the matter is anytime there's a spill, we're usually both working together on it. And Katrina was a great example of where we were used not only in our support capacity, but also in our major function for oil and hazardous material spills.

One of the things I learned through Katrina, however, is you quickly figure out that you don't necessarily just follow what's written on paper. We had boats and personnel down in, for instance, New Orleans very quickly, but we found that rather than using those boats and personnel to go out and take water samples and look for spills, we needed them to take off the roofs of their homes and out of situations where they were having their life threatened.

So another priority for us was to make sure the water infrastructure got back, drinking water, plants, for instance. We worked with teams of people from states and localities to make sure that drinking water and wastewater treatment plants could get back online quickly. And we also took thousands of samples of water, sediment, air samples, and soil samples, and provided that information to emergency responders and to the public so that they had a better sense of the risks that might be posed in the various areas.

And frankly, we still -- we were involved heavily and still involved to some extent with debris removal, all the debris that the flooding and the hurricanes resulted in, and making sure that was properly disposed of. And we still are making sure that it's properly disposed of down in the area, even though it's many months later.

In the homeland security area, there are actually a few homeland security Presidential directives where EPA is given specific responsibility. The two largest areas are water security, and that means helping to make sure our drinking water supplies are secure, and also in decontamination. Many people remember the anthrax attack which contaminated the Senate offices as well as some of the post offices, and EPA was responsible for making sure that those facilities were decontaminated after the anthrax was found.

Mr. Breul: I'd like to transition now to the future. Scientific advances and emerging technologies offer new opportunities for protecting human health and the environment, but also pose new risks and challenges. Would you give us a sense of some of the key issues that will affect EPA over the next few years?

Mr. Peacock: When I think about emerging technologies, there's three buckets for me. The first is technologies that will change our environmental paradigm. For instance, there's work going on in zero emission or clean coal plants, or work going on with hydrogen cars or next generation nuclear plants which could drastically change the way we generate electricity. A breakthrough in any of these areas means that there could be tremendous benefits for protecting human health and the environment.

There's a second bucket is technology that can help EPA monitor and enforce environmental laws. I'm not sure if it's even new anymore because we've gone into it in such a big way, but there are infrared cameras which are now so inexpensive that anybody can buy one. And they'll let you see, for instance, if there are dangerous emissions or harmful emissions coming from pipelines or vessels or any sort of facility. There are now water monitors. You can put a box around your shoulder and go out to a stream, stick a wand into the water, and in real time get a sense of what water contamination or lack thereof there may be in a water segment. And it can even send that information back to a site so that you can read water quality in real time. So that's the second bucket.

And finally, the third is there's technology which holds great promise, but also we've got to make sure isn't harmful. Biotechnology's a good example of that. I think the one we're really grappling with right now is nanotechnology. There are nanotechnology applications that could help us clean up hazardous waste sites and increase fuel efficiency, do a lot of good things for the environment. But we also have to be careful with nanotechnology in that there are applications which may cause more harm than they do good if they're released to the environment. And so we're working with other agencies on a nanoscale materials stewardship program, which is going to develop a way to make sure that new products which use nanotechnology are safe to use.

So in all three of those areas, I think there's a lot of room for promise. We just got to make sure we do it the right way.

Mr. Breul: Well, speaking of the right way, how do you envision EPA will evolve over the next three to five years? And with that in mind, what advice would you give to the next administration in facing these challenges and opportunities?

Mr. Peacock: I mentioned before there is a transition which continues to take place at EPA from a traditional regulatory agency to an agency that's more collaborative, has more innovation. Regulations will always be a part of what we do, and should be a part of what we do. We need more tools in the toolbox.

I think in the longer term, EPA is going to be increasingly constrained by the statutes, most of which were passed in the '70s and '80s and have not been reauthorized or updated. And it will result in us being more constrained in the sorts of things we can do or the things we have to do, and may result in us being less able to protect human health and the environment.

There's a story about Neil Armstrong. People ask the question why was Neil Armstrong the first man to walk on the moon? If you were the pilot of a spacecraft, you usually stayed in the spacecraft and it was the co-pilot who did the space walk or went out of the vehicle, did whatever. Neil Armstrong was the pilot of the lunar module, but he was also the first one to go out of the -- it wasn't Buzz Aldrin that went out of the door, it was Neil Armstrong that got to go out of the door first. And the fact of the matter is that was forced by the fact that the door to the lunar module, which had been designed years before the astronauts were even picked for the mission, was situated so that Buzz Aldrin could not go through or over Neil Armstrong to get out the door. The pilot was the first person who had to get out of the spacecraft because it was so confined.

And I think EPA, to bring the metaphor back around, may be so constrained in the future that we're going to be forced to do things which may not necessarily be the best things for the public and for the environment. And so unless some of these statutes, unless there's some legislative changes in the future, which may result, for instance, in a reorganization of the agency, we're going to be more and more confined to do those things that we have to do and be unable to address the future environmental challenges that we face.

Mr. Breul: We talk to many of our guests about the government employee pending retirement wave. How are you handling the pending retirement wave, and what steps are you taking to attract and maintain a high-quality technical workforce?

Mr. Peacock: We have 60 percent of our employees are eligible for retirement, so we have a plan to try and make sure that there is some succession planning that's done ahead of time before these people go out the door. And one of the ways we're doing that is through mobility. We have an SES mobility plan, which is moving senior managers around on a regular basis to make sure that the institutional knowledge and the expertise that may be going out the door is backstopped.

And then secondly, we're making sure that there's adequate training of individuals, and that gaps in particular skills that may reveal themselves as we move into the future are being filled by the fact that we're looking at the competencies of the people we have, identifying where they may be gaps, and then filling those in with either people we have in-house, or making sure we go out of house and make sure we hire people who do have those competencies and skills.

Mr. Breul: Well, Marcus, you yourself have had a very interesting and successful career within public service. What advice would you give to someone thinking about a career in public service?

Mr. Peacock: I grew up in Minneapolis, which led me to, I think, a career in public service. It was something that stuck with me as a kid. And so the first thing I'd say to people is they need to do a gut check. Are they going to receive benefits beyond their pay, because pay probably won't do it all, from being in the civil service or in a position where you're serving the public? Because you want to be able to get up in the morning and enjoy what you're doing for a living. When you're in a job where you're serving the public, that's going to make you more effective and just a happier individual.

I would also suggest people look for a job that gives a person, particularly coming in the government, a wider purview of issues, and that may mean a budget office or a general counsel's office or an enforcement office, or to get involved in a hot issue that may be going on so that it's a more intense experience early on and you get a better sense of what you may be interested in.

But in the end, you need to go to a place that rings true to you, where you believe in the mission of the agency. As I said, if you can find an agency which has a mission that you believe in, that you're inherently interested in, that's what leads someone to get up in the morning and say I'm looking forward to going to work this morning and doing what I can to further this mission of this agency. Because that's -- it's not going to be the money you get or anything else you get from the job. It's the satisfaction you receive when you later on come home at night and realize that you spent your day doing something that you think is worthwhile.

I feel very fortunate, being in the environmental area, that I've been able to do that. But part of that was by examining through various points in my career what did I really believe in and what did I really want to do. And that's sometimes difficult for a person to do, but I think that's the key to making sure that you find a career that you're going to be happy in.

Mr. Breul: Marcus, that's great advice. We've reached the end of our time, and that will have to be the last question. I want to thank you for fitting us into your very busy schedule, and more importantly, I'd like to thank you for your dedicated service to our country.

Mr. Peacock: Thank you, Jonathan. I appreciate the work that The IBM Center for The Business of Government is doing here.

I mentioned my blog before. I'd just encourage people to look at that. You may find it interesting. It's called "The Flow of the River." The best way to do it is probably just Google Marcus Peacock, Flow of the River, and you'll be able to find it rather quickly. And of course, I take any comments off that website. And any comments people may have, I've been able to respond to all them so far.

So thank you very much for having me today.

Mr. Breul: This has been The Business of Government Hour, featuring a conversation with Marcus Peacock, Deputy Administrator of the U.S. Environmental Protection Agency.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional support and respect.

For The Business of Government Hour, I'm Jonathan Breul. Thank you for listening.

This has been The Business of Government Hour.

Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at businessofgovernment.org. There, you can learn more about our programs, and get a transcript of today's conversation.

Until next week, it's businessofgovernment.org.

Marcus C. Peacock interview
01/05/2008
The EPA implements and enforces the nation’s federal environmental laws and regulations; the Agency has over 18,000 employees nationwide and an annual budget of $8.6 billion.

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