2) Unless the CTO *really* controls all the various agencies IT budget the CTO will be powerless. Agencies will listen nicely and nod their collective heads; then do whatever the want to because it's their money, not the CTO's.
While this is true, consider what happens when bureaucracy is centralized. Homeland Security for example. Is this arrangement the best way to enable all the different agencies to carry out their security mission? Given that, would consolidating all Federal IT dollars through the CTO and not the agency head be the best way to carry out the agency's mission? Do you break the IT sections away from their agency and put them directly under the CTO/CIO? Will they have cross-matrix reporting and have multiple heads to report to? Does the Department of Defense need the same type of IT as the Department of the Interior? Or Commerce?
I believe the best way to make a difference at the level we are talking about is to:
1) Ensure clear regulations and guidance are issued at the upper levels regarding IT. Yes, they can make agencies follow these rules. OPM circulars and Executive Orders, for example, are two ways to issue directives.
2) Provide a mission and vision agency IT departments can build theirs off of, while integrating into their agency's mission and vision.
3) Work with the CIO of each agency to construct meaningful metrics to watch in the Presidential scorecard (or whatever the new administration calls their accountability tool).
4) Keep looking forward to the future and help agencies get there by becoming their advocate. Federal contracting for large-scale IT solutions is riddled with problems. Why? Work with the agencies and then work with OMB to find ways to fix the Federal Acquisition Regulations. Engage with each agency and establish a relationship were both want to mutually achieve success.
Whether or not Federal IT departments are placed under the CIO/CTO does not mean they can't find ways to get funding around the CIO/CTO (they can always petition Congress). In addition, once centralized, I find it difficult to believe they will be acting with their agency's mission and vision first and foremost in their thoughts. Of course a lot of this might be moot anyway. The way things are going, all that will eventually be left are contracting officials anyway. Everything else will be outsourced.
Just my thoughts. All I'm trying to point out is in public administration, there are two (or sometimes more) sides to every solution, all with trade offs. I believe the best way to achieve goals in today's environment is to engage and find collective solutions. The days of strict hierarchy are, for the most part, over with.