The foreign policy agenda for the incoming Obama administration is finally taking shape with the recent pick of Hillary Clinton as Secretary of State. Senator Clinton is expected to bring President-Elect Obama's agenda of increased diplomacy to the forefront. According to an article published by CNN on December 1, 2008, "Clinton said she would work to restore America's position as "a force for positive change" in the world." The United States Agency for International Development (USAID) being one of the three pillars of US foreign policy (Defense and State being the other two), is expected to play a more important and more dynamic role in future.

However, this is not to say that USAID did not play an important role in the current Administration's agenda. The Bush administration's vision for USAID was different, with the agency's primary focus on global healthcare issues, and utilizing USAID to help rebuild Iraq and Afghanistan.

The Global Health programs are highlighted most by the US President's Emergency Plan for AIDS Relief or PEPFAR Program. This program, which was launched during 2003, is the largest commitment by a nation to fight a single disease in history with a commitment of $15B over the initial 5 years of this program (2003-2008). The program was recently renewed for 5 more years during July, 2008, and available funding was increased to $48B through 2013.

USAID has been heavily involved in rebuilding infrastructure in Iraq and Afghanistan, primarily focusing on developing their infrastructure, and enhancing their capacity to govern. According to a recent GAO Report on contract activity in Iraq and Afghanistan published on October 1, 2008, USAID has 276 active contracts with approximately $1.768B in funding in Iraq and Afghanistan for fiscal year 2007, and the first half of fiscal year 2008.

Under the New Administration's foreign policy lead from the Department of State, expect USAID's Bureaus of Economic, Growth, and Trade (EGAT), and Democracy and Governance (DG) to be heavily invested in over the next few years to help improve America's global image, and provide needed legal and governance assistance to friendly Governments, with the Bureau of Global Health (GH) continuing to lead in many global health issues.

The National Conference of State Legislatures (NCSL) held its annual StateVote Conference on November 7, 2008 in Washington, DC. The experts presenting at the conference summarized election results, hypothesized on what the results mean for the future of the states, and gave predictions on where states are headed. Without the aid of holograms or interactive touch-screen digital maps, Tim Storey, a senior fellow in the Legislative Management Program, kicked off the conference by painting a picture of the new political party control in State Legislatures. He explained that while Democrats made major gains across the board, the Republicans weren't without their own victories. According to Storey, 12 chambers on average change party control every election cycle. The results of this election fell in line with that statistic, thus showing that this election, at least on the State Legislature level, was nothing exemplary. [Don't forget to check out INPUT's new report on the IT implications of the recent state elections.]

Next up on the agenda was Jennie Drage Bowser, an expert on campaign finance reform and ballot initiatives and referenda. She ran through the results of important ballot measures but finished up by saying that the only prevailing trend to extrapolate from the results was that there was no trend. There was no one predominant issue present in most ballots, but rather a smattering of fiscal and social issues such as taxes, energy policy, gambling, gay marriage, abortion, death with dignity, and affirmative action. Ms. Bowser did say that if there was going to be an overarching theme, it would be risk aversion. There were 59 initiatives on the ballots (the same number as 2004), but only approximately 42% of those initiatives passed, compared to 56% in 2004. Given the precarious state of the economy, voters appear reluctant to spearhead new programs.

While the poor economy and risk aversion could possibly be considered themes of the ballot initiatives presentation, they certainly were the themes of the state budgets presentation. William Pound, the Executive Director of the NCSL and an expert on fiscal and public finance issues, and Corina Eckl, the Director the Fiscal Affairs Program at the NCSL, laid out a rather gloomy forecast for state budgets, and emphasized the role that Rainy Day funds will play in closing budget gaps and returning to balanced budgets. Revenue Performance is down. Consumer confidence is down, so people make fewer purchases, resulting in a drop in sales tax revenue. As unemployment rises, personal income tax revenue falls. As business profits drop, corporate income tax revenue drops. Several legislatures have called special sessions to address the increasing gaps. To balance the budgets or merely stave off widening gaps, some legislatures have called for layoffs, travel bans, or reduced benefits. Many states are experiencing severe budget cuts already, and others are predicting cuts in the near future. Targeted programs include education, Medicaid, corrections, and aid to local governments.

As anyone familiar with State and Local government already knows, State and Local lags behind the rest of the government, so while the economy might have already jumped off the cliff, the states are just arriving at the edge. The situation will get much worse before it gets better. The silver lining is that despite shrinking coffers, state governments cannot close shop and head for home – their needs for services and technologies are still growing. They need more with less, and the vendors that can position themselves correctly will remain successful. Contractors need to offer a solution that is both versatile and efficient in addressing multiple issues and can be easily implemented or configured for varying needs. The contexts of government needs might be evolving, but the needs have not gone anywhere. Contractors are encouraged to browse through INPUT's opportunities database to find Forecast-Pre and Pre-RFP opportunities (member login required) in order to be on the cutting-edge of the new face of government solutions.

Of all the changes that will take place with the new Congress in 2009 there may be few that have the potential to impact federal contractors as much as the leadership and composition of the House Oversight and Government Reform Committee. Most of the federal acquisition and procurement reform initiatives that impact technology contractors in recent years have originated in this committee.

Retirements, Defeats, & Bigger Opportunities

Since Rep. Tom Davis, the top Republican on the committee and widely considered a friend to technology vendors, announced his retirement all eyes turned to Rep. Chris Shays of Connecticut and California Rep. Darrell Issa and the impending competition over who would assume the ranking member spot on the committee. But with Shays' defeat on Tuesday it is uncertain if any other member of the Republican caucus can vie for the position over Issa, who has officially announced his intent to seek the position.

To further complicate the issue, the current committee chairman, Henry Waxman, D-CA, has gone public in challenging fellow Democrat Rep. John Dingell of Michigan for the chairmanship of the House Energy and Commerce Committee. It will take some time before we know whether Mr. Waxman will succeed in this coup, of sorts, but if he does move then that means additional leadership transitions on the Oversight committee. Media reports suggest the most likely contender to succeed Waxman as chairman would be Rep. Edolphus Towns, D-N.Y., the committee's senior member. Other potential contenders include Reps. Paul Kanjorski, D-PA., and Carolyn Maloney, D-N.Y.

INPUT's Take

What will all this mean for federal IT contractors? At this early point there are more questions than answers.

• If Rep. Waxman does leverage his way to chair the House Energy and Commerce Committee will that result in broader-sweeping reforms in government acquisition? Or will he have larger fish to fry like energy policy, health care and the environment? Will the contracting community see another attempt at a round of sweeping reforms that get clogged in debate, or will the practice of adding piecemeal reforms to larger bills like the Defense Authorization bill continue to be the approach? Rep. Waxman has been a strong proponent of acquisition reform and a move could quell the momentum we have seen in recent years.

• In the wake of Freddie Mac and Fannie Mae will the Reform panel even take up additional procurement reform or contractor oversight initiatives? They may be more likely to spend their time deconstructing the ongoing financial challenge. On the other hand, if the new congress takes a more combative stance toward the contracting community then we could possibly see sweeping changes.

• How will Rep. Issa shape his role on the panel, assuming he lands the ranking slot? Will he be effective in providing the balance necessary to any such deliberative body? And will the federal vendor community look to him for support or will they seek other channels? Popular opinion is that the exit of Tom Davis leaves a void on the committee and in the House that many may rush to fill.

• And what might we see out of Mr. Gerry Connolly, Davis' Democrat successor in Virginia's 11th Congressional district? Is it possible that he might receive from his party's leadership a seat on the Oversight and Reform Committee? This Northern Virginia district is a hub for many government contractors and high-tech companies and Connolly currently serves as Director of Community Relations for SAIC, one of the largest federal government contractors.

Earlier this week the Department of Homeland Security Federal Emergency Management Agency (FEMA) released Fiscal Year 2009 Application Guidance for 14 federal grant programs, which total more than $3 billion. The funds are aimed at assisting state and local governments strengthen community preparedness. Along with FEMA's Application Guidance, DHS announced its target allocations for FY09 State Homeland Security Program and Urban Area Security Initiative grant programs.

A list of the grant programs allocations for FY09:

• Homeland Security Grant Program- $1.7 billion
• State Homeland Security Program (SHSP)- $861.3 million (Target)
• Urban Area Security Initiative (UASI)- $798.6 million (Target)
• Metropolitan Medical Response System Program (MMRS)- $39.8 million
• Citizen Corps Program (CCP)- $14.6 million
• State Homeland Security Program Tribal (SHSP Tribal)- $1.7 million
• Nonprofit Security Grant Program (NSGP)- $15 million
• Operation Stonegarden (OPSG)- $60 million
• Transit Security Grant Program (TSGP)- $388.6 million
• Freight Rail Security Grant Program (FRSGP)- $15 million
• Intercity Passenger Rail (Amtrak)- $25 million
• Port Security grant Program (PSGP)- $388.6 million
• Buffer Zone Protection Program (BZPP)- $48.6 million
• Intercity Bus Security Grant Program (IBSGP)- $11.7 million
• Trucking Security Program (TSP)- $7.8 million
• Emergency Management Performance Grants (EMPG)- $306 million
• Interoperable Emergency Communications Grant Program (IECGP)- $48.6 million
• Regional Catastrophic Preparedness Grant Program (RCPGP)- $34 million

TSGP, PSGP, BZPP, IBSGP, and TSP grant applications are due on January 13, 2009. Applications for the HSGP programs are due March 20, 2009. The other programs and their application deadlines can be found on INPUT's grant portal.

The release of the application guidance is very comforting for many state and local public safety agencies as many state and local budgets have seen cuts and deficits. INPUT estimates that the SHSP and UASI targeted allocations might change with the election of a new President. It is very likely that these allocations will not be approved by congress until after the inauguration of President-Elect Obama. However, there are plenty of other grant programs that should not be discounted. Some of the grant programs leave the door open for a variety of different projects and should be heavily pursued prior to the approval of the SHSP and UASI programs. Please read INPUT's blog discussing Obama's views on Homeland Security.

Now that the votes have been counted, the government contracting community can finally... keep waiting. After enduring an exciting, yet exhausting 5-year campaign season (that's only a slight exaggeration) and wondering how a new administration would impact technology spending, we will continue to wonder for awhile longer.

First things first. Obama must now implement the smoothest transition possible. In all likelihood, he and his advisors started planning this past spring, creating short lists of potential appointees, identifying policy actions (especially those to be implemented within the first 100 days in office), and plans for setting up his White House personnel.

President-elect Obama may look to Ronald Reagan's transition for inspiration. Reagan had one of the smoothest transitions in history, despite the change in party. We can draw some comparisons:

Transition Planning

Reagan began transition planning early (April 1980) by assembling a team of policy advisers. Obama started his planning in the spring of 2008.

Washington Expertise

Reagan surrounded himself with Washington insiders who knew their way around. Obama has drawn a great deal of expertise from the Clinton administration (e.g. former Clinton policy adviser Rahm Emanual for Chief of Staff; former Clinton Chief of Staff John Podesta to lead his transition team; and former Clinton Treasury Secretary Larry Summers to possibly regain the Treasury post).

Leadership Style

Reagan was said to possess a personal leadership style that inspired loyalty among his ranks. Whatever your political persuasion, Obama's reputation for inspiring is difficult to deny.

While the transition is the most immediate topic of discussion, our community is waiting to see how the new President will use technology in his administration. It was used well in his campaign, but will it translate to government?

The good news is that President-elect Obama seems to be fairly technology savvy. And technology plays a big role in implementing many of the policy initiatives that President-elect Obama stressed during his campaign. Healthcare, energy, and homeland security are the hot areas. Green IT, Health IT, unified communications, electronic warfare, and information sharing are specific technology solutions included in Obama's agenda. The real question is: how much can he accomplish in these areas during his term with a dark economic cloud hanging over his head?

As someone with a background in political "science" and macro-economics who spends all day looking at government and economic issues, I'm fascinated by forecasting in the political as well as economic contexts. I'll bet more than a few of the readers of this blog are the same way. So, on the eve of the election, I thought I'd share some of my favorite recent insights in this area. (Can it really be about to end? I can't recall a time a before this election.)

First, Andrew Gelman, who wrote the excellent book Red State, Blue State, Rich State, Poor State - Why Americans Vote the Way They Do, has a blog by the same name where he cites some simple research by a political scientist who has correlated election outcomes against macro-economic data. So, as I read it, this would point to an Obama win along the lines of 51% to 46% with 3% for all the rest. (That's my estimate of a credible forecast based on Gibbs's conclusions.)

Of course, the electoral college is won on a state-by-state basis, not on national polls. The Wall Street Journal has a nice comparison of state-by-state polling to some key economic indicators, including the decline in housing prices and unemployment rates (which are typically understated in my opinion). I've never seen a rundown like this. The WSJ doesn't draw a definite conclusion from this data, so I won't either. But, it does seem to lean toward Obama.

Finally, an aggregate of polls is only as good as the polls it aggregates. Polling at the national level is tricky enough. By the time you get down to the individual state level, it gets even dicier. The big wrinkle this year is the degree to which the pollsters have included cell phones in their samples. I recently worked a phone bank for one of my county commission candidates and I was calling cell phones with area codes all over the country--a lot more than four years ago, that's for sure. (I asked one chatty long-time resident why she had a California area code and she said she likes for calls to be free for all of her family back home. Go figure!) Polls with cell phones in the sample have Obama leading by even larger margins than those that include only land lines. But, this is the first major test of the cell phone sample in a Presidential election. Will it be another "Dewey beats Truman?"

Oh, well. No one wants to surrender their freewill to economic indicators. All you can do it put blinders on and vote your conscience...or your pocketbook...or some balance thereof. I'll drink a toast to you if you vote for the winner and buy a round for you if you don't.

Sen. Barak Obama (D-IL) economic program spans ten categories. While it is unclear direct State IT investments that will stem from his economic proposals, the following areas may have technology implications for the states.

• Provide $50 billion to Jumpstart the Economy and Prevent 1 Million Americans from Losing Their Jobs: This relief would include a $25 billion State Growth Fund to prevent state and local cuts in health, education, housing, and heating assistance or counterproductive increases in property taxes, tolls or fees. The Obama-Biden relief plan will also include $25 billion in a Jobs and Growth Fund to prevent cutbacks in road and bridge maintenance and fund school re­pair - all to save more than 1 million jobs in danger of being cut.
• Simplify Tax Filings for Middle Class Americans: Obama will dramatically simplify tax filings so that millions of Americans will be able to do their taxes in less than five minutes. Obama will ensure that the IRS uses the information it already gets from banks and employers to give taxpayers the option of pre-filled tax forms to verify, sign and return. Experts estimate that the Obama-Biden proposal will save Americans up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees. A change like this to the Tax system may involve system enhancements and system overhauls to the State's Tax IT Systems.
• End Tax Breaks for Companies that Send Jobs Overseas: Obama believes that companies should not get billions of dollars in tax deductions for moving their operations overseas. Obama will also fight to ensure that public contracts are awarded to companies that are committed to American workers.
• Invest in our Next Generation Innovators and Job Creators: Obama will create an Advanced Manufacturing Fund to identify and invest in the most compelling advanced manufacturing strategies. The Fund will have a peer-review selection and award process based on the Michigan 21st Century Jobs Fund, a state-level initiative that has awarded over $125 million to Michigan businesses with the most innovative proposals to create new products and new jobs in the state.
• Invest In A Clean Energy Economy And Create 5 Million New "Green" Jobs: Obama will invest $150 billion over 10 years to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in hybrids, promote development of commercial scale renewable energy, invest in low emissions coal plants, and begin transition to a new digital electricity grid. The plan will also invest in America's highly-skilled manufacturing workforce and manufacturing centers to ensure that American workers have the skills and tools they need to pioneer the first wave of green technologies that will be in high demand throughout the world.
• Deploy Next-Generation Broadband: Obama believes we can get broadband to every community in America through a combination of reform of the Universal Service Fund, better use of the nation's wireless spectrum, promotion of next-generation facilities, technologies and applications, and new tax and loan incentives.
• Crack down on fraudulent brokers and lenders. Obama will make sure homebuyers have honest and complete information about their mortgage options, and they will give a tax credit to all middle-class homeowners.
• Ensure More Accountability in the Subprime Mortgage Industry: Obama has been closely monitoring the subprime mortgage situation for years, and introduced comprehensive legislation over a year ago to fight mortgage fraud and protect consumers against abusive lending practices. Obama's STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for federal and state law enforcement programs, creates new criminal penalties for mortgage professionals found guilty of fraud, and requires industry insiders to report suspicious activity. 38% of Governors in the 2008 State of the State speeches focused on Community Development prgorams as prorities of their states. General theme centered around mortgage loan crisis. Governors in 9 states urged legislators to pass laws to protect homeowners from foreclosures and mortgage loan scams.
• Encourage States to Adopt Paid Leave: Obama will initiate a strategy to encourage all 50 states to adopt paid-leave systems. Obama and Biden will provide a $1.5 billion fund to assist states with start-up costs and to help states offset the costs for employees and employers.
• Expand Flexible Work Arrangements: Obama will create a program to inform businesses about the benefits of flexible work schedules; help businesses create flexible work opportunities; and increase federal incentives for telecommuting. Obama and Biden will also make the federal government a model employer in terms of adopting flexible work schedules and permitting employees to request flexible arrangements.

See Republican Presidential nominee Sen. John McCain's (IL) position on this issue below. This concludes INPUT's weekly coverage of the candidates via this blog. Click here to see all of our Presidential election commentary.

The latest report from the U.S. Bureau of Economic Analysis (BEA) shows U.S. 3rd quarter economic growth at -0.3%. Given the fact that official figures in this area are generally revised down at a later date, we can be sure that the economy saw a real contraction last quarter. So, whoever wins the White House next Tuesday will have economic recovery as priority #1.

The economic agenda of any Presidential candidate will be embedded in several areas of his or her platform. This part of the agenda rarely related directly back to state and local government IT. However, some key places where the agenda will have impact at these levels are: infrastructure investment, social services and unemployment insurance, education/job training, and university-based research.

Sen. John McCain's (R-AZ) economic program spans eight categories. The most likely places from which IT opportunities might evolve at the state and local levels are in job training and health care, which are woven into several areas of the McCain plan.

• Workplace Flexibility– "Providing workers with more choice in job training assistance..." States are the primary orchestrators of workforce development programs. These state agencies will have to verify the eligible private- and public-sector training options and track the participation and progress of workers moving through the system. Payment systems will have to issue and track disbursements to these service providers while ensuring that there is no waste, fraud, or abuse of the benefits by the service provider or the worker.
• Relief for Families – "John McCain believes we should institute a summer (federal) gas tax holiday." States--generally the departments of agriculture--collect taxes at the pump. Systems that estimate and track collections would have to be modified to exempt the federal tax during the appointed times.
• Government Reform – While Sen. McCain mentions Medicare and Social Security, he doesn't indicate any actions with particular impact on state or local governments. But, when you hear "entitlement reform," you can be sure there will be changes in Medicaid, SCHIP, and other mean-tested programs administered at the state and local levels.
• Supporting Small Businesses – One of the centerpieces of this platform is controlling health care costs. INPUT has previously looked at this part of McCain's agenda.
• Cheap, Clean, Secure Energy for America – "John McCain will make greening the federal government a priority of his administration." By bringing the market-shifting weight of federal purchasing to bear in this area, McCain would greatly expand the availability of facilities-related and other green technologies for purchase by state and local governments--possible from existing federal schedules, such as Schedule 70.
• Better Healthcare – INPUT has previously looked at this part of McCain's agenda.
• Taxes: Simpler, Fair, Pro-Growth and Competitive – No discernable implications for state and local IT.
• Trade – "John McCain will overhaul unemployment insurance and make it a program for retraining, relocating and assisting workers who have lost a job." This reinforces his priorities under "Workplace Flexibility" and "Government Reform" above. As detailed in INPUT's report, State & Local Social Services IT Market, 2008-2013, the Workforce Investment Act (WIA) of 1998 was the last attempt at modernization in this area and progress has been spotty at best. Much more can be done in terms of flexible program design, online services for employers and job seekers, and integration with other family-oriented social services programs.

See Democratic Presidential nominee Sen. Barack Obama's (IL) position on this issue above. Click here to see all of INPUT's Presidential election commentary.

The states have had numerous complaints over how the Bush administration has handled information sharing and cyber security issues. Although DHS has gotten better about soliciting state and local input for new information sharing systems--especially in regard to intelligence fusion centers--and the recent release of the National Cyber Security Iniative have gone a long way toward reassuring them. However, federal funding has been woefully meager for these sorts of initiatives (we're not talking TSA money here), so a prospective Obama or McCain administration has no where to go but up.

The "Homeland Security" platform of Democratic Presidential nominee Sen. Barack Obama (D-IL) spends a good deal of verbiage on these very issues.

Under the sub-category of "Protect Our Information Networks," Obama pledges to...

• strengthen federal leadership on cyber security by appointing a "national cyber advisor who will report directly to the president,"
• initiate a safe computing R&D sffort and harden our nation's cyber infrastructure,
• protect the (public and private) IT infrastructure that keeps America's economy safe, and
• develop a Cyber Crime Strategy (with federal, state, and local law enforcement agencies) to minimize the opportunities for criminal profit.

Under the sub-category of "Improve Intelligence Capacity and Protect Civil Liberties," Obama pledges to "improve information sharing and analysis...across all levels of government," including establishing "a grant program to support thousands more state and local level intelligence analysts." This is no small potatoes. We're talking billions of dollars here in cumulative spending on personnel alone--not to mention the information systems that would be required to support them.

Under the sub-category of "Protect Americans from Terrorist Attacks and Natural Disasters ," Obama pledges to "improve interoperable communications systems." This would include appointing "a National Chief Technology Officer who will have the responsibility to ensure that the current non-interoperable plans at the federal, state, and local levels are combined, funded, implemented and effective." Of course, any "interoperability czar" would have to have significant authority and funds to overcome the sticky consensus-building issues that have hampered interjurisdictional cooperation on this issue for several decades.

Under the sub-category of "Protect Critical Infrastructure," Obama pledges to secure the nation's ports and public transportation facilities. In this case, contractors could expect to see a continued shift of fuding toward the coasts and borders than began when the Democrats assumed the majority in Congress. Prior to that time, the Bush administration was more concerned with "red state" issues such as overland cargo transportation (i.e., trucks and trains) and "agro-terrorism." However, the days of Wyoming receiving more homeland security funding per capita than New York state and DC are long gone.

Under the sub-category of "Modernize America's Aging Infrastructure," Obama employs some of the most interesting approaches of his entire homeland security agenda. For instance, he pledges to "build-in" security into "the design of new infrastructure, so that our critical assets are protected from the start and more resilient to naturally-occurring and deliberate threats throughout their life-cycle." Again, a national infrastructure overhaul would require a level of investment that would dwarf the Iraq War and the recent bailout of the financial system. Adding security to the effort would only be a small fraction of the total cost and much cheaper to include from the start than to bolt on later.

In the end, the Obama agenda relies mostly on symbolism and vague promises of increased attention. But, in a few key places, these assurances would have to be backed up by federal spending that would dwarf the Bush administration's committments in several areas--particularly intelligence analysis and critical infrastructure protection. These would be attractive initiatives for state and local government IT contractors.

See Republican Presidential nominee Sen. John McCain's (AZ) position on this issue above. INPUT will be providing weekly coverage of the candidates via this blog.

Sen. Barack Obama's (IL) Health Care plan includes actions to improve quality and lower overall health care costs through investments in information technology, improved preventive care, and enhanced Chronic disease management. Obama is not a stranger to promoting the use of technology within health care. In 2005, Senator Obama joined Senators Bill Frist (R-TN) and Hillary Clinton (D-NY) in introducing the "Health Technology to Enhance Quality Act of 2005".

Today, Obama says he'll "lower premiums by up to $2,500 for a typical family per year" by investing in electronic health records as well as other efforts.Obama will invest $10 billion a year over the next five years to move the U.S. health care system to broad adoption of standards-based electronic health information systems, including electronic health records.

Obama's plan also would encourage the continuing participation of employers in the health insurance system, expand eligibility for Medicaid and the State Children's Health Insurance Program (SCHIP) and create a new insurance market "exchange" with consumer protections, choice of public and private health plans, and income-based premium subsidies- that would largely replace the individual market.

See Republican Presidential nominee Sen. John McCain's (AZ) position on this issue below. INPUT will be providing weekly coverage of the candidates via this blog.