Current Position: Former Chief Performance Officer-designate (since February 2009)
Credit: Linda Davidson/TWP
Why She Matters
An advocate of government accountability, Killefer would have been tasked with the enormous job of sifting through the federal budget and looking for wasteful spending. She would have worked closely with the director of the Office of Management and Budget (OMB) Peter Orszag. But Killefer withdrew her name from nomination in February 2009.
"I recognize that your agenda and the duties facing your Chief Performance Officer are urgent," wrote Killefer in a letter to President Barack Obama. "I have also come to realize in the current environment that my personal tax issue of D.C. Unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid. Because of this I must reluctantly ask you to withdraw my name from consideration."
Killefer was going to be charged with weeding out inefficiencies in federal programs and creating more accountability in government. She’s a veteran of the consulting firm McKinsey & Co., and has written about the failure of the government to successfully hold its employees responsible, which leads to productivity failures. A 2006 report authored by Killefer advocated changing the structure of government to resemble the private sector. The report concluded it would increase productivity without increasing costs.
Killefer was going to step into the White House budget office as President Barack Obama began pushing his two-year, $800 billion stimulus plan, which will add to a whopping deficit pegged by the Congressional Budget Office (CBO) as more than a trillion dollars in 2009. On the day Obama announced Killefer's appointment, the CBO released a report saying that the gap between what government spends and what it makes will reach eight percent of the entire economy by the end of September 2009. It’s the first time since the end of World War II the gap has grown so large.
At a Glance
Current Position: Senior Director, McKinsey & Co. (since 200)
Career History: Senior Director, McKinsey & Co. (2000 to Present); Assistant secretary for management and chief financial officer at the Treasury Department (1997 to 2000); McKinsey & Co. (1980 to 1997)
Birthday: N/A
Hometown: N/A
Alma Mater: B.A (economics) at Vassar College in 1975; an MBA at the Massachusetts Institute of Technology in 1979
Spouse: N/A
Religion: N/A
DC Office: N/A
Email: N/A
Web site: N/A
Path to Power
Killefer earned a bachelor’s degree in economics from Vassar College in 1975. After working for two years, she returned to school at the Massachusetts Institute of Technology, where she received a master’s in business administration in 1979.
In 1980, Killefer joined McKinsey for the first timeand stayed there for 18 years. In 1997, she joined the Clinton administration’s Treasury Department as assistant secretary for management and chief financial officer, positions she held until Clinton departed. Killefer then returned to McKinsey’s Washington office as a senior director, where she stayed until January 2009.
The Issues
Along with Orszag, Killefer’s assignment was going to be to find ways to save money within the budget by increasing productivity and cutting costs and thus hopefully freeing up some money for Obama's ambitious agenda.
"In order to make these investments that we need, we'll have to cut the spending that we don't, and I'll be relying on Nancy to help guide that process," Obama said. He added that she’s “an expert in streamlining processes and wringing out inefficiencies so that taxpayers and consumers get more for their money."
Streamlining Government
In 2006, Killefer along with three other employees at McKinsey, released a report entitled, "How Can American Government Meet Its Productivity Challenge?” In it, the authors note that in 1994 the Bureau of Labor Statiscis stopped reporting measures of government productivity.
“The statistics suggest that government lagged private sector productivity up until that point and our hypothesis is that, since then, this gap may well have grown,” the authors wrote. “If the government is to start catching up, it could gain valuable insight by looking at what has been driving private sector productivity.”
The report recommended speficic changes to the federal structure aimed at cutting costs, including:
- Measuring productivity again and providing an easy and transparent indication of progress.
- Setting ambitious productivity targets.
- Giving agency managers incentives for reaching productivity goals.
- Creating a chief operating officer position at each agency.
- Strengthening OMB’s management role.
Killefer would have had the opportunity to implement these recommendations.
The budget problems "have developed over decades and will take time to address. But there is an urgency to begin now," said Killefer when Obama announced her as his performance chief.
Orszag and Killefer
Orszag generally agrees with Killefer's approach. When he directed the CBO, Orszag developed a report that was released in December 2008 that outlined how overhauling the U.S. health-care system could save the federal budget more than $700 billion a year. With the budget deficit expected to top $1.2 trillion in 2009, finding and eliminating inefficiencies will become even more critical.
Taxes
In February 2009, Killefer suddenly withdrew her nomination for chief performance officer. Soon after Obama had announced his nomination of Killefer in January 2009, the Associated Press reported that the District of Columbia had placed a $946.69 tax lien on Killefer's home in 2005 for failure to pay unemployment compensation taxes for household employees. Killefer paid the amount five months later.
She was the first Obama nominee to withdraw her name after tax troubles were made public. Health and Human Services Secretary-designate Tom Daschle was under fire for his failure to quickly pay $140,000 in taxes for his use of a car and driver. Daschle announced his withdrawal from nomination hours after Killefer's decision became public. Treasury Secretary Timothy Geithner had failed to pay the employer match on Social Security and Medicare taxes while he worked at the International Monetary Fund, which he was responsible for. The Senate still confirmed him in January 2009.
The Network
When Killefer was at Treasury during the Clinton administration, she worked for secretaries Robert Rubin and Larry Summers. Rubin resigned as a director of Citigroup in January 2009 and Summers joined Obama’s administration as the head of the National Economic Council. As his deputy, Killefer will work closely with incoming OMB Director Peter Orszag.
Killefer worked at McKinsey at the same time as Diane Farrell, co-deputy director of the National Economic Council.
Campaign Contributions
Killefer has donated $7,050 to Democratic candidates since 1998.
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