[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
      EXPLORING GAO'S HIGH-RISK LIST AND OPPORTUNITIES FOR REFORM

=======================================================================


                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 14, 2013

                               __________

                            Serial No. 113-3

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        VACANCY
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 14, 2013................................     1

                               WITNESSES

Mr. Gene L. Dodaro, Comptroller General of the United States, 
  U.S. Government Accountability Office,
    Oral Statement...............................................     5
    Written Statement............................................     8

                                APPENDIX

The Honorable Elijah E. Cummings, a Member of Congress from the 
  State of Maryland, Opening Statement...........................    67
The Honorable Gerald E. Connolly, a Member of Congress from the 
  State of Virginia, Opening Statement...........................    69
The Honorable Matthew Cartwright, a Member of Congress from the 
  State of Pennsylvania, Opening Statement.......................    71
SAS RX ALERT: Propofol and Brevital Information..................    72
GAO Responses to Questions for the Record from The Honorable Paul 
  A. Gosar, a Member of Congress from the State of Arizona.......    75
GAO Responses to Questions for the Record from The Honorable Trey 
  Gowdy, a Member of Congress from the State of South Carolina...    78


      EXPLORING GAO'S HIGH-RISK LIST AND OPPORTUNITIES FOR REFORM

                              ----------                              


                      Thursday, February 14, 2013

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                           Washington, D.C.
    The committee met, pursuant to call, at 10:53 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Mica, Turner, Duncan, 
Jordan, Chaffetz, Walberg, Gosar, DesJarlais, Gowdy, 
Farenthold, Woodall, Massie, Meadows, Bentivolio, Cummings, 
Norton, Connolly, Speier, Cartwright, Pocan, Duckworth, 
Cardenas, Horsford and Lujan Grisham.
    Staff Present: Alexia Ardolina, Assistant Clerk; Robert 
Borden, General Counsel; Molly Boyl, Parliamentarian; Katelyn 
E. Christ, Professional Staff Member; John Cuaderes, Deputy 
Staff Director; Gwen D'Luzansky, Research Analyst; Adam P. 
Fromm, Director of Member Services and Committee Operations; 
Linda Good, Chief Clerk; Tyler Grimm, Professional Staff 
Member; Frederick Hill, Director of Communications and Senior 
Policy Advisor; Christopher Hixon, Deputy Chief Counsel, 
Oversight; Mitchell S. Kominsky, Counsel; Mark D. Marin, 
Director of Oversight; Tegan Millspaw, Professional Staff 
Member; Mary Pritschau, Professional Staff Member; Laura L. 
Rush, Deputy Chief Clerk; Scott Schmidt, Deputy Director of 
Digital Strategy; Matthew Tallmer, Investigator; Peter Warren, 
Legislative Policy Director; Rebecca Watkins, Deputy Director 
of Communications; Meghan Berroya, Minority Counsel; Jaron 
Bourke, Minority Director of Administration; Krista Boyd, 
Minority Deputy Director of Legislation; Counsel; Carla 
Hultberg, Minority Chief Clerk; Elisa LaNier, Minority Deputy 
Clerk; Una Lee, Minority Counsel; and Dave Rapallo, Minority 
Staff Director.
    Chairman Issa. The hearing will come to order on, 
``Exploring GAO's High-Risk List and Opportunities for 
Reform.''
    We on the Oversight and Government Reform Committee exist 
to secure two fundamental principles. First, Americans have a 
right to know that the money Washington takes from them is well 
spent. And second, Americans deserve an efficient, effective 
government that works for them.
    Our duty on the Government Oversight and Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold government accountable to taxpayers, because taxpayers 
have a right to know what they get from their government.
    Our obligation is to work tirelessly, in partnership with 
citizen watchdogs and the GAO, to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy.
    Today we are having our broadest oversight hearing that we 
have in any one Congress. That is because the GAO's report is, 
in fact, on all spending of government and all risk to 
government and, in fact, is the most important report 
published. Each 2 years, General Dodaro and his staff assess 
all the risks to the government, in size of the risk in dollars 
but also in the likelihood of success or failure. This risk 
produces the top, if you will, highest threats.
    It also recognizes the success that sometimes occurs 
because of both GAO and this committee's efforts to work with 
government to reduce waste and risk to government.
    This year, by one account, we lost $261 billion, or 7 
percent of our total spending, in fraud and waste. I might note 
that when you annualize that, or if you will decade-ize it, 
that represents $2.6 trillion, about twice what we are looking 
at for the sequestration.
    The 30 areas that this year are on the high-risk list 
represent tremendous opportunities to save those billions of 
dollars. And I might repeat, if we were able to save just half 
of what we waste, we would need no sequestration at all.
    As we are going to hear today, those areas extend from the 
Department of Defense to our weather system, from elements 
related to great storms, such as Superstorm Sandy, to in fact 
the simple mundane Medicaid-Medicare programs that every day 
touch our lives in important ways.
    The truth is, identifying high-risk areas isn't enough 
anymore. It is clear that many of the areas on high risk are 
perennial high risk. Seventeen areas on this year's high-risk 
list have been on that list for more than a decade; six have 
been on that list since inception. I don't expect overnight to 
fix DOD procurement. I don't expect overnight to take Medicare, 
now becoming our largest total expense and eclipsing, if you 
include the dual-eligible Medicare and Medicaid recipients, 
eclipsing both Social Security and our Department of Defense 
individual spending, I don't expect to fix it overnight.
    But with the help of the GAO on a nonpartisan basis, our 
committee and other committees of Congress have an opportunity 
to attack each of these areas and make real improvements. Our 
commitment is to make those real improvements. I am pleased to 
see a particular emphasis on the program of Medicare and 
Medicaid, which are permanent fixtures, that in fact this is an 
area of particular opportunity for reduction in waste and, 
consistent with the Affordable Health Care Act, an area of 
growth in number of recipients.
    The committee has just voted on a bipartisan basis on a 
report related specifically to New York State. During the 
dialogue, we mentioned an equally outlandish problem that 
existed in the State of Texas. These billions of dollars can no 
longer be tolerated. We must find them, not after decades of 
waste and abuse but in fact in real time.
    This committee will have before it today, or have before it 
during this Congress, an updated version of the bipartisan DATA 
Act. It will have an updated version or a version of our IT 
reform on a bipartisan basis. These and other systems that this 
committee is responsible for changing will create the 
opportunity to save money in IT procurement and deliver better 
information to decision makers. It also will create greater 
transparency for the GAO in their work for Congress and its 
work and for all the watchdogs of waste and abuse.
    So, as we begin this hearing today with our esteemed 
comptroller general, we also realize there is legislative work 
for us to do if this list is to be successfully attacked and 
reduced. I look forward to working on both the legislative 
issues and the oversight issues with my partner, the ranking 
member, Mr. Cummings, who I now recognize for his opening 
statement.
    Mr. Cummings. I want to thank you, Mr. Chairman, for 
holding this hearing.
    I believe this will be one of the most important hearings 
this committee will hold this Congress.
    Mr. Dodaro, I also thank you for testifying before us 
today. And I thank you for the work GAO put into creating this 
high-risk report.
    I also ask that you extend the gratitude of this entire 
committee for the hard work of the folks at GAO. As I said 
earlier in a press conference, they have earned the reputation 
for outstanding and accurate work and work that helps our 
government function better. And so we publicly say thank you to 
them.
    Every one of GAO's high-risk reports has been important. 
However, this year's report is especially significant because 
the comptroller general and the nonpartisan experts at GAO have 
made a landmark decision to add the issue of climate change to 
their biennial high-risk report, which details the most 
pressing challenges facing our Nation and the Federal 
Government. In its report, GAO identifies a serious risk facing 
our Nation, one that we cannot continue to ignore. GAO finds 
that climate change poses significant financial risk to our 
Nation's economy, including agriculture, infrastructure, 
ecosystems, and human health. GAO warns that our government is 
not well positioned to address this fiscal exposure. And GAO 
recommends a government-wide strategic approach, with strong 
leadership, and the authority to manage climate change risk. 
GAO finds that the government has already spent tens of 
billions of dollars on damage from severe weather events 
related to climate change. According to the National Oceanic 
and Atmospheric Administration, over the past 2 years the 
United States has experienced 25 weather disasters that cost 
over a billion dollars each. GAO's historic decision to add 
climate change to the list of high-risk challenges facing our 
Nation is a wake-up call for Congress to finally start 
addressing this very, very critical issue.
    Unfortunately, in the last Congress the House Republicans 
voted 37 times to block action to address the threat of climate 
change. For example, they slashed climate change research 
funding by more than a hundred million dollars. They voted to 
prevent the State Department from using funds to send a special 
envoy for climate change to international climate negotiations. 
They voted to zero out the United States contribution to the 
Intergovernmental Panel on Climate Change, the world's leading 
authority on climate change science. They voted to prohibit the 
Department of Homeland Security from using any funds to 
participate in the Interagency Climate Change Adaptation Task 
Force. And they voted to prohibit the Department of Agriculture 
from using any funds to implement its climate change adaptation 
program.
    What GAO is telling us today is that Congress simply cannot 
afford to block or delay action any longer. We must act now to 
implement GAO's recommendations and mitigate the risks from 
climate change.
    For these reasons, I sent a letter to Chairman Issa today 
requesting that our committee hold a series of hearings to 
address each of the four specific areas that GAO highlights in 
its report relating to climate change. And in an earlier press 
conference, Chairman Issa I thought made a very good point, and 
that is perhaps we should look at what responsibilities States 
are playing with regard to climate change and what 
responsibility they should have.
    And I am hoping that we, as I said to him earlier, maybe we 
will have some Governors to come in and talk about their 
responsibility and things that they are doing to prepare for 
weather-type problems that might affect their States.
    Mr. Chairman, when we were here 2 years ago considering the 
GAO's last high-risk report in 2011, you said, it is our 
committee's obligation to conduct vigorous oversight over the 
issues raised by GAO, and to insist on plans to change by each 
of the agencies listed here today. I agreed then, and I agree 
now. With our committee's extremely wide jurisdiction across 
multiple Federal agencies and departments, we have a very 
unique opportunity to conduct hearings that will lead to 
vigorous oversight, responsible funding decisions, and 
legislation to address the growing threats to public health and 
our economy.
    As the President noted the other night in his State of the 
Union, we have seen in the last 10 or 15 years just an 
onslaught of weather-related problems. And I am hoping that we 
all will work together closely to prepare for the fiscal impact 
of those problems.
    With that, I stand ready, willing, and able to work with 
the chairman.
    And with that, I yield back.
    Chairman Issa. I thank the gentleman.
    And as we did discuss, I believe we need to kick off the 
first hearing related to that risk, and I look forward to 
scheduling that hearing, and also suggesting that other 
committees of jurisdiction do their oversight related 
specifically to those areas.
    With that, we now recognize our first witness and the panel 
behind him.
    I am pleased to welcome the Honorable Gene Dodaro, who is 
the comptroller general of the United States. He also comes 
with a small sampling of his team of experts from the United 
States Government Accountability Office that is here today. And 
I will try not to mess up your names, but if you would rise 
just so that the audience can know that he came with a 
tremendous amount of expertise:
    Chris Mihm is the managing director of strategic issues at 
the GAO. Mark Gaffigan is managing director of natural 
resources and environment at the GAO. Cathleen Berrick is 
managing director of homeland security and justice issues at 
the GAO. Phillip Herr is managing director of fiscal 
infrastructure issues at the GAO. That is physical actually. 
Orice Williams Brown is managing director of financial markets, 
an area of particular concern, and community investment at the 
GAO. And Mr. David Powner is director of information technology 
and management systems at the GAO.
    And I am now going to ask you all to stand, because if you 
are going to help the General, you may very well be a witness. 
Would you please raise your right hand?
    Pursuant to the committee rules, please raise your right 
hands. Do you solemnly swear or affirm that the testimony you 
are about to give will be the truth, the whole truth, and 
nothing but the truth?
    Mr. Dodaro. I do.
    Chairman Issa. Let the record reflect that all witnesses 
answered in the affirmative.
    And normally we have that 5-minute clock. For your 
reference, we will have it. If you run a little over, you are 
the whole show today, so Gene, you are recognized.

                       WITNESS STATEMENT

           STATEMENT OF THE HONORABLE GENE L. DODARO

    Mr. Dodaro. Thank you very much, Mr. Chairman, Ranking 
Member Cummings, members of the committee.
    I am very pleased to be invited today to talk about GAO's 
high-risk list update. We do this update, as noted, every 2 
years, with the beginning of each new Congress in order to 
identify areas that we believe are at highest risk of waste, 
fraud, abuse, and mismanagement, or are in need of broad-based 
reform. I am very pleased to report, with this committee's 
help, and I appreciate your support, Mr. Chairman, Mr. 
Cummings, and committee members, of oversight since our last 
report in 2011 that notable progress has been made in the vast 
majority of areas on the high-risk list.
    This has been due in part to legislation passed by the 
Congress. For example, the FDA Authorization Act addressed many 
issues that GAO had recommended for improvements to oversight 
of medical products and devices, for example dealing with drug 
shortages, and also increased inspections, risk-based, in 
foreign operations. Congress also passed important legislation 
concerning the Flood Insurance Program, which is also on our 
list.
    Also, OMB and the agencies have been holding regular 
meetings with GAO, which I personally participate in, in order 
to focus on solutions and to identify ways to make the 
necessary improvements to get off of the list.
    This year, enough progress has been made that we are 
removing two items from the list. First is interagency 
contracts. Interagency contracting actually can be a very good 
and important management tool if done properly. We found, back 
in 2005, they were not done very well. They were out of scope 
in terms of the contracts, lack of competition. One of the most 
notable examples was the hiring of interrogators for Iraq using 
an IT contract.
    Since then, important procedures have been put in place, 
agencies have fixed the problems. The Congress has required the 
Federal Acquisition Regulations to be reformed for best 
procurement decisions. And also requiring a business case 
before new interagency contracts are put in place. And better 
data now is being collected in those areas. So we believe that 
there are adequate mechanisms in place in order to help manage 
this very important tool to help the government leverage its 
buying power.
    Secondly, we are removing the IRS business system 
modernization from the list. It was originally put on in 1995 
due to the IRS being mired with management and technical 
problems with their modernization effort. They have made steady 
progress over the years. They have just deployed the first 
module of the system, which allows now daily updating of 
taxpayer accounts, which will improve taxpayer service and also 
their enforcement activities as well. We have reviewed their 
investment, management practices, and found about 80 percent of 
them meet best practices. And all of their project management 
recommendations do that. Their software development component 
now has been rated at a computer maturity model level three 
under their Software Engineering Institute standards, which 
means it is a good level by industry standards.
    Two important points I would make with these areas we are 
taking off the list. One, we continue to monitor those areas 
after they are off the list. So they may be off the list, but 
they are not out of sight. And so we make sure that the 
progress that has been gained is enduring. Secondly, like the 
other areas that eventually come off the list, they come off 
because of two major reasons. One is sustained congressional 
oversight. And oversight in the interagency contracting, 
Congress insisted on important reforms, required the IGs to do 
continual reviews in this area. In the IRS area, Congress 
required an annual expenditure plan from IRS every year, and a 
GAO review. So continued congressional oversight can play 
enormous dividends in resolving many of these problems.
    The two new areas we are adding this year, one is limiting 
the Federal Government's fiscal exposure by better managing 
climate change risk. It is clear the number of disasters have 
gone from, in 2004, the Federal Government intervening in 65 to 
98 in 2012, which is a record number of years. There is 
indications that the severe weather events, both by the 
National Academy of Sciences and by the government's Global 
Change Management Research Program, that there will be more 
events occurring and more costly events.
    The Federal Government has enormous exposure to these 
risks. First, it is one of the largest property holders in the 
government--in the Nation. There are hundreds of thousands of 
buildings that the Federal Government owns and also defense 
installations along our coast lines. Also, the Federal 
Government holds 29 percent of the property in the United 
States and manages that property. It also manages the Flood and 
Crop Insurance Programs, which we have recommended take into 
account climate science issues in revamping those programs. We 
found--and the government is also the provider of disaster aid, 
over $80 billion over the past year and before the assistance 
for Hurricane Sandy.
    We found that the criteria for the Federal Government 
intervening in a disaster is an artificially low level. It is 
based on $1.36 per person per State. So any disaster that 
exceeds that threshold gets Federal assistance. And it had not 
/been adjusted for inflation for a 13-year period of time. Had 
it been adjusted for inflation, the Federal Government would 
have intervened in 25 percent less situations in terms of the 
Federal Government deciding to get involved.
    We recommended that the Federal Government needs a better 
strategic plan for this area that sets priorities to guide 
investment decisions. Individual agencies have plans, but there 
is no overall central direction and priorities that are set for 
that area and coordinated at the Federal level or with the 
State and local governments.
    I know, Mr. Chairman, you made that point this morning. 
That is in our report. It is very important that the Federal 
Government provide technical information on weather-related 
issues to State and local governments to guide their investment 
decisions in huge amounts of infrastructure. The Federal Flood 
Insurance Programs and the Crop Insurance Programs need to be 
reformed. And we need to set better criteria that takes into 
account the Federal Government's fiscal condition right now.
    The last area we added on the list is gaps in weather 
satellite information due to management problems and 
acquisition problems over the years.
    Right now, the gaps in the polar-orbiting satellites that 
provide early, mid-day and afternoon warnings to feed computer 
weather prediction models and to provide the 3, 4, and 7-day 
forecasts has the potential for a gap to occur as early as 2014 
and could last up to 53 months. This is very important. Without 
that information, you know, one credible organization has said 
that the information from the polar-orbiting satellites, the 
prediction of the path for Superstorm Sandy would have shown it 
going out to sea and not hitting New Jersey at all. And so, 
without this critical information, there are property, lives, 
economic consequences.
    And so we are adding this area to our high-risk list. At 
our recommendation, contingency plans have been developed, but 
they need to be executed, monitored properly. And I think 
congressional oversight could be very beneficial and necessary 
in this area.
    So, Mr. Chairman, that concludes my broad overview of the 
major changes on the list. There are 30 items now remaining on 
the list. I would be happy to answer questions.
    [Prepared statement of Mr. Dodaro follows:]


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    Chairman Issa. Thank you. And I will now recognize myself 
for a few quick questions.
    First of all, my understanding from your report is that the 
FDA has not really solved its problem of meeting its 
responsibility for drug availability, that that continues to be 
an area in which the American people cannot count on both 
generic antibiotics or chemotherapy drugs being in proper 
supply based on this failure. Is that correct?
    Mr. Dodaro. They still have to step up and make some 
changes in order to do that.
    Congress now has given them the authority to have drug 
manufacturers notify them in advance of shortages, which is a 
very important step consistent with a prior GAO recommendation. 
But they must follow through. And once they have that 
information they must then take action. So we're going to 
carefully continue to monitor that situation, Mr. Chairman.
    There are also areas that we've pointed out where they need 
to make sure they do postmarket studies to make sure their 
recalls are done properly as well. So both those areas are on 
our radar screen.
    Chairman Issa. Thank you. And I appreciate that.
    Your concern on FHA, if I understand correctly, is that 
because they issue, effectively, zero-down loans, very similar 
to the loans that got us in trouble with Freddie and Fannie, 
they are technically 4 percent, but after you look at sort of 
closing costs, they are really zero down, that any reduction in 
home values, even short term, could put FHA in a similar 
situation to Freddie and Fannie. Is that correct?
    Mr. Dodaro. Their financial situation is precarious. They 
are--there is high risk. There are capital reserve ratios below 
the levels that it needs to be. So we've added it to the list 
to highlight that. And also the fact that in resolving the 
Freddie Mac and Fannie Mae situation and taking them out 
conservatorship, which Congress still has to do--we have 
modernizing the financial regulatory system on the list--that 
FHA situation needs to be taken into account. There be an 
integrated set of activities there so that we don't increase 
the risk even further for FHA.
    Chairman Issa. And I'll summarize, if you will, from the 
way I heard it, you don't fix Freddie and Fannie, unless you 
fix FHA at the same time, that they are all, if you will, 
subsidized or opportunities that could lead to the Federal 
Government putting up billions of dollars again if anything 
goes wrong.
    Mr. Dodaro. That's exactly right. It's all about solving 
what the Federal Government's proper role should be in the 
housing market.
    Chairman Issa. If I understand correctly when you said that 
by not indexing this $1.36 per capita that 25 percent would not 
even have made the list, effectively what you're saying is we 
have shifted 25 percent more things which are in constant 
dollars State responsibility, we've shifted them onto the 
Federal back, and that's a substantial amount of billions of 
dollars. Is that correct?
    Mr. Dodaro. That's correct, Mr. Chairman.
    And we've recommended that if FEMA revised the criteria to 
take into account State's capability to be able to pay there as 
well. And they've agreed with the recommendation, but I think 
Congressional follow up would be helpful.
    Chairman Issa. Appreciate that.
    And I guess, lastly, along the same line, if, in fact, we 
continue to see water levels rise around our coastlines, which 
represent about half of our States, effectively you've looked 
at Federal installations as one of the risk areas; in other 
words, we need to build and plan both Naval and other military 
installations and Federal property based on the assumption 
that, if you will, things change and where you built 100, 200, 
300 years ago--because some of our forts are just that, they 
are Revolutionary-period forts, need to be planned in a way, 
and essentially, you're calling for internal zoning that the 
Federal Government begins making decisions that abate likely 
changes in water levels and storms and so on.
    Mr. Dodaro. Yes. Yes. Definitely. Defense Department's 
already recognized this risk and beginning to act on that. In 
fact, the Congress also recognized this risk when it passed the 
Bigger Waters Act this past year. And, in fact, that FEMA 
before was prohibited from taking into account erosion over 
time. And now Congress has required that climate science be 
included in FEMA's further efforts on the flood insurance 
program. Please.
    Chairman Issa. Back to the flood insurance portion. My 
understanding is that both of our major insurance programs are 
not run in a way in which the private sector would run their 
insurance. Meaning, we don't adjust our rates to meet the 
likely payout; instead, they are fixed in time. And so they 
can, year after year after year, come up short, ultimately 
shifting to the taxpayer the responsibility for paying out what 
should be insurance by the insured.
    Mr. Dodaro. Yes. That's correct. I mean, we've recommended 
they use better practices. They've agreed to do that, they've 
contracted for studies. But the results haven't yet been 
provided to the Congress. And this is very important. And the 
flood insurance program, even before Superstorm Sandy, flood 
insurance program owed the Federal Government back over $20 
billion. The likelihood of that getting repaid is not high.
    Chairman Issa. I certainly, in closing, would say that if I 
could be insured for the less than the risk, I would always buy 
that insurance.
    I recognize the gentleman from Maryland for his opening--
for his questions.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Dodaro, let me go to page 202 of your report, where you 
talk about the drug shortages. Just want to pick up on some of 
the things that the chairman was asking you about.
    You know, we did some preliminary research and looked into 
this area of drug shortages. And drugs that were lifesaving 
drugs, chemotherapy drugs. And one of the things that we found 
in our research was that we had a gray market going on out 
there where a drug might start out from the manufacturer 
costing $7 a bottle, and by the end of the week, because of the 
gray market, may be selling for $700 a bottle. We also had the 
opportunity to talk to doctors from all over the country, as a 
matter of fact, one doctor from South Carolina, I'll never 
forget it. She came in, and she is at a major medical facility, 
and she said, sadly, we are performing medicine like we're in a 
third-world country because of the shortages. So it is a major, 
major area.
    And I noticed your comments. But I'm just wondering, did 
you go--did you all look into at all the gray-market situation 
where people are improperly ratcheting up and hoarding drugs 
and then jacking up the costs so that we've got hospitals and 
the American Hospital Association now saying that 99 percent of 
their hospitals have drug shortages? I mean, did you all look 
at that at all, or you just looked at it from an FDA monitoring 
standpoint?
    Mr. Dodaro. We primarily looked at it from a FDA monitoring 
standpoint. I can go back and double-check, Mr. Chairman. If we 
have looked into the gray-market issue, I'll provide something 
for the record.
    Mr. Cummings. You may want to look at that. Because you've 
made some--you know, you've made some very good comments here 
on page 202. But we also, I think, to just look at it from a 
FDA-monitoring standpoint, it is, you know, perhaps--I mean, 
it's good. But if we have an underlying cause of greedy people 
on a daily basis literally taking drugs out of the hands of 
Hopkins--of a hospital ranked number 1 in the world, in my 
district, Johns Hopkins, they told me this. And they can't have 
the best drugs possible to treat our constituents because 
people are hoarding them and then putting them on the gray 
market and jacking them up a hundred times, that's a major 
problem that goes to so many things, to our economy, of course. 
It jacks up the costs of medicine. It is a detriment to many of 
our constituents with regard to health care. So I just want--
and would you get me something back on that to let me know how 
deep you went into it?
    One of the things I think the chairman was saying, making 
it a part of our scope of inquiry this session, the next 2 
years, is looking, not only at the FDA piece of this, but 
looking at the--this whole thing of the gray market.
    And so I'd really like to sit down with you, if you haven't 
delved into it and see where--you know, what we might be able 
to do together to try to get to the bottom of that. Because it 
is a very, very serious problem. A lot of Americans do not even 
know about it. But it's very serious.
    I want to briefly go to this whole issue of climate change. 
GAO recognized that the Federal Government has a number of 
efforts underway to decrease domestic greenhouse gas emissions. 
The success of greenhouse gas emission reduction efforts 
depends in large part on cooperative international efforts.
    However, limiting the Federal Government's physical 
exposure to climate change risks present a challenge no matter 
the outcome of the domestic and international efforts to reduce 
the emissions, in part because greenhouse gases already in the 
atmosphere will continue altering the climate system for many 
decades.
    So if I understand this correctly, the carbon emissions 
that are in our atmosphere are already altering the climate 
system and will continue to do so for the foreseeable future. 
Is that correct?
    Mr. Dodaro. Based on the information from the Government 
Global Climate Change Research Program and National Academy of 
Sciences, that's correct.
    Mr. Cummings. Is it GAO's opinion that regardless of the 
outcome of global negotiations to reduce carbon emissions, the 
United States Government should take immediate action to 
mitigate the risks posed by the climate change?
    Mr. Dodaro. Yes.
    Mr. Cummings. Now, you heard the President's testimony the 
other night, his State of the Union, where he talked about 
these catastrophic weather-related incidents seeming to come at 
a greater pace and costing us billions upon billions of 
dollars.
    What do you--just as I--as you close with my questioning, 
tell us what you are recommending again for us to do with 
regard to these catastrophic types of things, storms like 
Sandy, that is costing us so much and costing so much 
inconvenience to our citizens.
    Mr. Dodaro. There are several things. One, we think Federal 
Government needs to be better organized. There needs to be a 
better coordinated effort among Federal departments and 
agencies with a strategic plan and a focus on priorities. We 
looked at all the Federal spending. The Federal Government is 
already spending a lot of money on these areas, but it's not 
well coordinated and it's not targeted and prioritized. So 
that's number one. Particularly important in our budget 
environment right now where we have to make every dollar count 
and we have to make the best investments possible.
    Second, we need to partner with the State and local 
governments. We need to provide them better weather-related 
information. They are already making huge investments with 
their own money and with the Federal Government's money in 
infrastructure. So, in terms of figuring out how to deal with 
roads, bridges, tunnels, et cetera, and provide adequate, 
proper interpretation or--of the science data and make those 
decisions, that is very important. We need to get our act 
together on our Flood Insurance Program and our Crop Insurance 
Program and make sure that that's developed properly. And we 
need to look at how we provide and what the criteria is for 
when we intervene in disaster assistance or whether it should 
be a State and local responsibility.
    Mr. Cummings. Thank you, Mr. Chairman.
    Mr. DesJarlais. [Presiding.] I thank the ranking remember.
    The chair now recognizes the gentleman from Florida, Mr. 
Mica, for 5 minutes.
    Mr. Mica. Thank you. And I am pleased that our committee is 
looking at GAO's 2013 High-Risk List.
    This list is probably a good template for looking at ways 
in which we could have dramatic savings. Right now we're 
practically bankrupt, approaching $16.5 trillion in debt.
    I was wondering, sir, if you could tell me, this list is 
pretty extensive. It's a lot of bad news. There's a little bit 
of good news you shared and a couple coming off the list. But 
wouldn't you estimate there could be tens of billions in 
savings from the recommendations in these high-risk areas that 
you've provided?
    Mr. Dodaro. That's true.
    Mr. Mica. And I think that's why it's so important our work 
continue.
    While they're focusing some on this one report that our 
committee has produced, it's billions of dollars in Medicare 
misspent on New York. Everyone should read that, see it's tens 
of billions of dollars of wasteful spending, programs out of 
control; a program, Medicare, which is so important to provide 
those that need health care, in New York alone, tens of 
billions of dollars outlined here wasted.
    Have you seen this report, sir?
    Mr. Dodaro. No, I have not.
    Mr. Mica. I hope you do and would confirm that.
    Now, I don't have--I chair a small government operation 
subcommittee particularly interested in the managing Federal 
real property. We've heard you testify and others that we own 
thousands--tens of thousands of buildings, structures, the 
biggest property owner in the world, probably; 29 percent of 
all the Federal--of all the property in the United States is 
either owned or managed by the United States, according to your 
report. Is that correct?
    Mr. Dodaro. That's correct.
    Mr. Mica. Well, we're going to do some hearings that will 
probably start with the risk of--high-risk list that you 
provide us, in managing Federal property and look at it. I've 
been at it a week or two. I went out--well, what's stunning 
is--and we did a little bit of this in the Transportation 
Committee. Nobody has control. I was in real estate. I think 
the last folks I'd ever give anything to manage would be the 
Federal Government, including assets. Would you give your real 
estate or assets to the Federal Government to manage?
    Mr. Dodaro. Only with great many conditions.
    Mr. Mica. Well, we went out last week and looked at a 
million square feet of space in Springfield. And I just looked 
at it from a management standpoint, you've got a million square 
feet and a lot of acreage in Springfield, Virginia. Not well 
utilized. Does anyone look at the specific properties with a 
management plan or the best utilization of that asset for 
realization of taxpayer dollars? Is there----
    Mr. Dodaro. There--we've been encouraging Federal oversight 
over that issue.
    Mr. Mica. I don't see it. I mean, I could go through that, 
and as a property manager, to have that valuable asset there, 
it might have made sense 20 years ago, but not today.
    Then the other day, we went out and looked at 7,000 acres, 
nearly 7,000 acres in Maryland, Mr. Cummings. And we have an 
Agricultural Research Center there dating back from maybe the 
turn of the century. They have 500 buildings, of which, there 
are 200 that either need to be demolished or are unusable. What 
stunned me is there was no plan for either utilization of 
either the acreage or the facilities. Do you know of a plan 
or--or do we have any mechanism to even require an agency to 
have a plan to deal with those assets?
    Mr. Dodaro. We've made recommendations along those lines. 
One of the things that we found is that when we went out and 
did the type of inspections that you're talking about doing, 
the data didn't match what was in the database.
    Mr. Mica. They said I was the first Member of Congress, I 
think, since Mr. Hoyer, to go out there. But it's Beltsville. 
It's right in the Capital circle.
    Mr. Dodaro. I know where, right.
    Mr. Mica. And nobody has a clue. I mean, there is an 
incredible asset sitting there. In fact, I think some 
prohibitions have been put on doing anything, which just is 
mind-boggling, again, from somebody who's dealt with real 
estate in the private sector.
    So I think we're going to work with you all to see if can't 
get some of these agencies to have plans to maximize those--
those assets and utilize them.
    The lease--you point out in your report here, lost $200 
million in leases since 2005. Again, it's only a quarter of a 
billion here and a quarter billion there.
    But we're bankrupting the nation through policies and 
practices and lack of attention to maximizing our assets. So 
we'll be back. I think we're going to try to do this on 
February 27th. Work with the minority to set a date and launch 
a little bit more in depth on this report. And we thank you and 
others for working with us.
    Yield back.
    Mr. DesJarlais. I thank the gentleman.
    The chair now recognizes the gentlelady from District of 
Columbia, Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    And Mr. Dodaro, I want to thank you for what is always an 
illuminating report but particularly for adding climate change 
for the first time as a risk for the Federal Government.
    This has come at a time when it could not be more needed. 
We needed the imprimatur of an objective government agency. 
Climate change is not political, and we make it political at 
our own risk. I recall in the past two Congresses, we've been 
dealing with a 100-year flood. That's kind of a silly thing to 
even think about calling it now. And even as we did label it 
100-year flood and force States to update how--how they go 
about preparing for flooding, we recognize that a hundred year 
was not--was a term of--to simply to make people understand 
what was regarded as a rare event, at least in terms of floods. 
Well, we've gone from rare to routine and to unheard of.
    Sadly, during the--after Sandy, there was a very 
contentious debate in here about what to do. And I think part 
of that comes from the unpredictability of budgeting for such 
events.
    Now, nothing of the kind in memory had been seen by New 
York State. So there was no way to play for that. And there was 
certainly no way to budget for that. It was so unusual. Or to 
take another example, shortly after that, was it last week that 
we had the snowstorm that went all the way up into New England? 
And then it had a wind current that resembled a hurricane. You 
know, try preparing for that.
    And yet you name ways in a which we are highly vulnerable, 
not only what we own, but the assistance we give, the 
dependence of the States on us, emergency aid and the rest, 
this is very, very troubling. And what my question goes to, and 
we--we--it's easier to predict a recession or a downturn in the 
economy than it is to predict one of these events. We see 
flowers growing in the wintertime, and we don't know whether 
tomorrow is going to bring springtime weather or a snowstorm.
    And so finally the country, which when climate change was 
first discussed majority of the American people said, yes, we 
think there's climate change, and something has to be done 
about it.
    The last 12 or 18 months has produced a come-back in the 
public on an understanding of climate change. You can 
understand during a recession that people didn't want--said 
they no longer, quote, ``believed'' it. I don't understand the 
nomenclature of ``believing in'' when it comes to science.
    I need to know from you. You know how our budgets, of 
course, are developed. It's one--and I accept what you say 
about the coordination of the Federal agencies and the rest.
    But I have to ask you, Mr. Dodaro, how do you budget for 
the unfathomable and avoid partisan debate when they come up? I 
mean, I heard some Members from New York, who had never seen a 
disaster, say, you just wait--somebody from Mississippi got up 
and opposed it. Well, that's one of the parts of the country 
that does not need to get up on its hind legs on this issue 
because we have readily come forward time and time again. I 
said, I hope that's not the way you look at it. I hope the way 
you look at it is to use it as an example by voting for what 
happens in Mississippi, Louisiana, or some tornado someplace 
where it's unheard of.
    But I don't accept that the present budget process is at 
all responsive to this new world of climate change. And I 
wonder if you could give us some help.
    Mr. Dodaro. Right.
    Ms. Norton. On how to go about, in a budgeted world in 
which we live, making these funds available wherever they occur 
rather quickly without the kind of contentious debate we had 
here over Sandy.
    Mr. Dodaro. Yes. There are two things I would say.
    First, we should not pretend that disasters do not occur in 
our budgeting process, which right now we do not budget for 
anything that might occur. Now, there's a historical record 
here that shows over time how much we've always, you know, 
provided over a period of time. So you have historical data 
that could be used to provide, you know, in anybody's budget, a 
household budget or wherever, you'd have a contingency plan; we 
don't have contingency plans in our budgeting process.
    Ms. Norton. You mean for even the kind of disasters that 
could be expected.
    Mr. Dodaro. Right. That's correct.
    Ms. Norton. Let's begin there.
    Mr. Dodaro. That's a starting point.
    Secondly, we can revisit this criteria for what we decided 
the Federal Government to pay for and what not to pay for and 
what should be absorbed at the State and local level. It's 
badly in need of modernization and upgrading. So that could 
give you a better indication for budgeting purposes as well.
    Third, we need better data on weather-related potential 
changes, good science data that could be objectively collected 
and provided to State and local governments and the Federal 
Government to make investment decisions to justify budgetary 
investments that will then yield proper information in the 
future.
    And then we'll have to, you know, there's going to be, 
obviously, things always that are going to come up that you 
don't expect. But right now, we're pretending we don't expect 
anything. And that's not reality.
    Ms. Norton. Well, we do budget in expectation that there 
will be hurricanes and the rest. And that fund--and then we're 
told that that fund has been used up by the most recent 
hurricane.
    Mr. Dodaro. Right. And there's revisions that are made 
after disasters take place about the additional money that's 
needed during that period of time. The budgeting system is in 
need of reform for these type of efforts. I agree completely 
with your view.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. DesJarlais. Thank the gentlelady.
    The chair now recognizes the gentleman from Utah, Mr. 
Chaffetz, for 5 minutes.
    Mr. Chaffetz. Thank you, Mr. Chairman. And thank you for 
being here and the great work that so many people do within the 
agency. It's a critical role to have the oversight and the 
understanding and the audits that go on.
    I want to try to touch on three topics, if I can. I want to 
start with the Federal real property.
    I have introduced a bill with Mr. Quigley, H.R. 328, to try 
to dispose of these properties. But could you give me some 
further insight? The number has greatly fluctuated on the 
number of underutilized buildings, not too recent--fairly 
recently, GAO had estimated the 45,000 properties that are 
underutilized, that number is now 71,000 that are 
underutilized, yet the annual operating costs remain at about a 
billion five. Why the fluctuation?
    Mr. Dodaro. I'm going to ask Mr. Herr to answer that 
question.
    Mr. Chaffetz. Okay. 
    Mr. Herr. Congressman Chaffetz, one of the areas we've done 
work in recently was looking at the Federal real property 
database that GSA and OMB maintain. We found that, as the 
Comptroller General mentioned, there's a lot of inaccuracies in 
that. And we've been pushing and working with them to really 
update.
    Mr. Chaffetz. When you say ``a lot,'' are we talking by the 
tens of thousands or are we----
    Mr. Herr. One of the challenges is because of the nature of 
the sample we took last year and looking at it, there's about 
400,000 properties and there's another 400,000 structures, not 
including the Postal Service. So getting a comprehensive view 
of that, our suggestion and recommendation is GSA and the 
agencies do a better job of looking at their inventories to 
give a better sense----
    Mr. Chaffetz. I'm looking for more specifics on. I mean, it 
just seems to me that we ought to be able to pull up a list at 
any given time and be able to see all the real property that 
this country has. We can't do it, even within my State of Utah, 
the real property just in the State. So why? We don't even know 
what we own.
    Mr. Herr. That's--there is a--that's part of the challenge. 
In fact, Mr. Mica mentioned the facility out at USDA in 
Beltsville. We had a team visit there last year to highlight 
some of the problems that he was mentioning. This is part of 
challenge is getting your hands----
    Mr. Chaffetz. How inaccurate is it? Are we missing 1 
percent? Based on your sample, how inaccurate was it?
    Mr. Dodaro. Talk about the ones we looked at.
    Mr. Herr. Well, the ones we looked at, we found errors, for 
example, in terms of the valuation of the properties. But in 
terms of doing a sample that we could generalize statistically 
across the country, we weren't able to do that, given the sheer 
numbers involved and what it would take to do a generalizable 
sample.
    Mr. Dodaro. But in the sample we did look at, we found a 
significant number of errors. I'll provide the specifics to 
you----
    Mr. Chaffetz. That would be great.
    Mr. Dodaro. I was concerned enough with the level of errors 
that we found in the small sample to be concerned enough to 
make the recommendations. I would have like to had a 
projectable one, but we just don't have the resources to do 
that. GSA is taking a broader sample and looking. We have not 
seen their results yet. So we will follow up and provide those 
to you as well.
    Mr. Chaffetz. That would be great. Clearly, it's on the 
high-risk list. This is why you're highlighting it. You talk 
about the inaccuracy of the data. What I'm concerned about is, 
in a 24-month period or so, you went from 45,000 properties for 
71,000 properties. That's not a small jump--we're talking about 
real property here, this is--these are big assets and lots of--
but the dollars didn't change. You still projected $1.5 billion 
and it's--and yet the number jumped by about 50-plus percent. 
So that's just a concern that I would like to continue to 
follow up on.
    And I just physically don't understand how the GSA lost 
$200 million on leases since 2005, including $75 million in 
2011 alone. I mean, that's why these departments use the GSA, 
is to make sure we don't make these kinds of mistakes. How does 
that happen?
    Mr. Herr. One of the areas we've identified is the agencies 
do not do a good job of sharing resources. For example, there 
may be Federal agencies located in one area that are not really 
looking and being encouraged to share space or minimize their 
space use and bring in other agencies to work with them.
    Mr. Chaffetz. Well, and one of the--I don't have a Federal 
building in my Congressional district. But I know that as we 
looked at just our own office space, it was unbelievable how 
much more expensive going with the Federal building in Salt 
Lake City would be. I mean, it was ridiculous. So much so that 
I believe our Senator said, ``I'm not paying that rate. I can't 
afford it.'' And if they just simply go across the street, they 
would save significant dollars in doing so.
    So I appreciate looking at that.
    Mr. Chairman, I was going to look at three different 
topics; we barely got through one. But I don't want to hog the 
time. I know Mr. Gowdy is anxious with 20 minutes worth of 
questions. So I will yield back the balance of my time.
    Mr. DesJarlais. Thank the gentleman.
    The chair now recognizes the gentleman from Virginia, Mr. 
Connolly, for 5 minutes.
    Mr. Connolly. Thank you, Mr. Chairman.
    And welcome, General Dodaro.
    Mr. Dodaro, on page 88 of the report, you talk about the 
high risk of the Postal Service.
    Mr. Dodaro. Yes.
    Mr. Connolly. Did you at any time consult with the general 
counsel of your organization with respect to the legality of 
the announced proposed action of the Postmaster General having 
the legal authority to go from 6 to 5 days a week.
    Mr. Dodaro. After the decision was announced, I have asked 
our attorneys to look at the information. They have talked to 
the Postal Service and have obtained their legal analysis. They 
believe the argument to be novel. But we'd have to look at it 
more carefully in order to provide a full legal opinion on the 
issue.
    Mr. Connolly. I don't want to box you in. So what I hear 
you saying is that your attorneys, your general counsel and 
yourself are still weighing the legal arguments coming from the 
Postmaster General. Is that correct?
    Mr. Dodaro. That's correct.
    Mr. Connolly. Would it be fair to say, however, that 
informally the general counsel of your organization has 
expressed, for example, to the committee staff of this 
committee, some scepticism as to the legal reasoning behind 
Postmaster General's announcement?
    Mr. Dodaro. Well, I don't want to speculate informally on 
anything. I mean, one of the reasons--one of the things----
    Mr. Connolly. I'm not asking you--excuse me. General. I'm 
not asking you to speculate.
    Mr. Dodaro. Yeah.
    Mr. Connolly. Did or did not such an informal conversation, 
in fact, take place with the staff of this committee?
    Mr. Dodaro. One of the things we do is ask a lot of 
questions. So it might have--I'm sure they had asked questions 
about the issue.
    Mr. Connolly. Well, let me--certainly, we would welcome 
your opinion when you are ready to render it. There are many of 
us here who think it's an illegal act. And this is a nation of 
laws, and even the Postmaster General of the United States has 
to follow the law. But it's in your report. I think it's a 
relevant question, and we would very much welcome your opinion 
before Congress acts.
    Climate change, General Dodaro. What made you decide to add 
that this year? What about the science and/or the potential 
consequences of climate change made you decide to--and I 
applaud you for doing it--but made you decide this year it 
merited inclusion in this very thoughtful report?
    Mr. Dodaro. Well, there were several things. One, we had 
issued at least three critical reports over the past 2-year 
period, one on the disaster aid limitation, one looking at 
defining the funding of the Federal Government by climate 
change issues, and finding there was no strategic direction in 
the climate change area. Obviously, we also looked at the 
number of disasters that have been occurring. The Flood 
Insurance Program is already on the high-risk list. We were 
concerned about gaps in weather satellite coverages. So we 
decided to take a broader look, you know, at these issues. And 
I felt also, given the Federal Government's precarious 
financial situation that it couldn't afford not to try to limit 
its fiscal exposure in the future in those areas. Those are the 
factors that I considered.
    Mr. Connolly. But as a sort of a preface to all of that, 
there is a certain operating assumption that the science is 
fairly compelling.
    Mr. Dodaro. We take the information from the National 
Science--Academy of Sciences and the Global Climate Change 
Research Program at faith. And we're--an important point here 
is that we're not questioning what may or may not be causing 
the situation. We're saying that science shows there is an 
issue, and we need to do something about it. We're not getting 
into the policy areas of where there needs to be changes and 
how we--how we mitigate whatever might be causing this or the 
international issues that need to be done. We're saying we have 
a problem, we need to deal with it and try to limit our 
exposure.
    Mr. Connolly. I'm sure you're aware of the fact that there 
are some, even here in the Congress, who don't even go as far 
as you do, however, who still are denying the science and are 
denying there's a problem.
    Let me ask, in your analysis, risk analysis, have you also 
looked at the military base, especially Naval base 
implications? I think of, for example, Norfolk. In Virginia, 
many of us are very worried that sea rise could jeopardize the 
largest and oldest Naval base in the United States, as well as 
facilities in Florida, possibly even South Carolina.
    Have you looked at that in terms of dollars and cents, 
relocation costs, you know, reinforcing costs, whatever it may 
be to try to protect those facilities?
    Mr. Dodaro. We note the Defense Department vulnerability in 
the report. We will plan to do more work on those issues going 
forward in this area.
    Mr. Connolly. Mr. Chairman, thank you.
    I know the Committee would welcome that as well, especially 
dollars-and-cents implications, because I think some people may 
be very surprised at what we're looking at.
    Thank you, Mr. Chairman.
    Mr. DesJarlais. I thank the gentleman.
    The chair now recognizes Dr. Gosar from Arizona for 5 
minutes.
    Mr. Gosar. Thank you, Mr. Chairman.
    General, thank you very much. I'm going to harp again. 
Being a healthcare provider, I want to ask you more about these 
drug shortages. Do you think that your recommendations to the 
FDA are sufficient to mitigate this problem?
    Mr. Dodaro. I believe so. We've made those recommendations 
just to reiterate that they need to strengthen their program by 
assessing their resources, systematically tracking data on 
shortages concerning availability of medically necessity drugs, 
strategic priority, and developing relevant results-oriented 
performance----
    Mr. Gosar. Let me ask you a question. Do you believe that 
the FDA is part of the problem?
    Mr. Dodaro. They need to make changes.
    Mr. Gosar. They need to make some big changes.
    Mr. Dodaro. To be part of the solution to the problem.
    Mr. Gosar. I think part of our problem--I'm looking here at 
a drug recall, or a drug-in-stock affidavit as of yesterday. I 
mean, we've got problems with liquid Ibuprofen. We've got 
problem with anesthetics. This is critical mass. Because we're 
putting patients in harm's way and physicians in harm's way, 
making them use protocols and medications that are, many cases, 
got substantial more side effects and problems for patients.
    This is critical mass. It's not just with pharmaceuticals 
but also our medical devices. We have reached a saturation 
point where I will disagree with you. I do not think that what 
you have put out here in your outlines are suitable for reform. 
I think we need to have thorough FDA reforms in regards to not 
only drug manufacturing but FDA's role and oversight.
    You look at--you know, in your report, you cite 
globalization. You know, we don't even control a vast amount of 
some of the products that go into manufacturing of these drugs 
or medical devices. And we're becoming problematic that we're 
dependent upon so many other countries to do that.
    Do you--would you agree with that?
    Mr. Dodaro. Well, it's one of the reasons they're on the 
high-risk list is due to the globalization.
    I have Ms.----
    Mr. Gosar. Seems to me like what we're doing here, is 
we're--we have a disease here, and what we're doing with this 
report is we're treating the symptoms but we're not treating 
the disease. Part of the disease process is the FDA itself. And 
it seems to me that what we need to do here is reform the FDA. 
Would you agree with that?
    Mr. Dodaro. I definitely think there needs to be changes?
    Mr. Gosar. Do you think we need legislation to refer that?
    Mr. Dodaro. I'd be happy to provide our recommendations for 
the record.
    Mr. Gosar. Okay. One of the other things I did want to 
touch about--I mean, and these drug shortages, I got to tell 
you, this affidavit just came from Tucson and from the 
Northeast. So it's not specific just to rural or urban areas. 
These are critical shortages that have to be addressed. I don't 
think like--I don't think that the--the hypothesis or the 
conclusions you've come to are real. I think we're actually in 
worse shortages. Because just because we put out a report 
doesn't mean that we've remedied it. We have actually made some 
of the problems even worse for the gray market. Now we 
understand where we hoard, where we take, where we increase the 
sales. So we've got a huge problem here.
    So go back to my colleagues, Mr. Chaffetz, in Federal 
properties.
    I want to give you a real clear example of Federal 
properties that have a problem. We just got back from a CODEL 
in regards to the State Department, looking at our embassies. 
And in particular, I want to highlight Morocco. Here we are 
spending over $150 million building a new embassy in Morocco. 
And we have yet to assay and look at what the value and 
possibility of sale of our current embassy. Right there, to me, 
it seems to me like in looking at properties--I'm not a real 
estate expert--but it seems to me that when we're making a 
transaction like that, we're looking in the neighborhood of 
somewhere of $60 million to $80 million in assets that need to 
have some assaying.
    Do you know that they had to beg, and as of--there were 
about, I would say, would you say it's about 50 percent 
completed, that embassy? Chairman?
    Mr. DesJarlais. I would say that's correct.
    Mr. Gosar. They have yet to have an assay of the current 
buildings and inventory of properties that they had in Morocco. 
I find that disdainful. This is an instant turnaround of 
quickly $80 million. And we shouldn't be building unless we 
actually know what we have as an inventory and make sure that 
we're selling it. That is disrespectful for the American 
taxpayer. I'm just giving you one example.
    Extrapolate it to Great Britain. It's my understanding 
we're building another embassy for a billion dollars there. 
What other assets do we have there? I mean, this is critical 
mass that can turn money very, very quickly. And I think that's 
what we demand of that.
    So I think some of the things we really need to do is start 
looking at the disease process, make sure that we have clear 
examples, enforce those examples with legislation or 
retaliatory oversight. And then you're going to get compliance 
in a lot more of those aspects.
    I would like for the record, Mr. Chairman, an example of 
the drug shortages as of yesterday to be placed in the record.
    Mr. DesJarlais. Without objection.
    The gentleman's time has expired.
    The chair now recognizes the gentleman from South Carolina, 
Mr. Gowdy, for 5 minutes.
    Mr. Gowdy. Thank you, Dr. DesJarlais.
    General, I want to ask you about two areas, first weather 
satellite. I'm asked from time to time, which is tough for a 
lawyer to understand the science, and so can you help me 
understand how we got to this crisis and what an acceptable 
remedy would be for it?
    Mr. Dodaro. Yes. I'm going to ask Dave Powner, our expert 
in this area, to come up. He'll give you a great explanation.
    Mr. Gowdy. Great. Thanks.
    Mr. Powner. Congressman, this is an area that kind of grew 
over the years. We had a tri-agency program to put in place 
polar-orbiting satellites. If you go back several years, 
there's a long history of cost overruns, technical problems, 
mismanagement of the program.
    What happened was the launch dates kept getting pushed. And 
what we did is we kept buying time with operational satellites. 
If you fast forward now currently, we're in a situation where 
in the 2016 time frame, there's a satellite that basically is 
going to reach the end of its useful life, and we're not 
launching until 2017. That's the best-case situation. That 
provides about a 17-month gap in satellite coverage. And 
depending on if that satellite lasts less than what's expected 
or if there's any further delays, that gap in satellite 
coverage could actually be more. So we're looking anywhere from 
a 17- to 53-month gap in satellite coverage. Our 
recommendations to NOAA has been to put in place contingency 
plans to address those gaps.
    Mr. Gowdy. What do you expect those contingency plans to 
include?
    Mr. Powner. Couple things. One is you could look at one 
extending the current life of the existing satellites. There's 
things you can currently do with that.
    There's the possibility of moving up the launch of the 
current dates. Those are unrealistic in some ways, but there 
are possibilities if you look at those various schedules. And 
then if you look at the contingency plans that need to be put 
in place, various things. You can use other government 
satellites from DOD. Foreign satellites are an option. Other 
weather observations are an option. But all those have certain 
things that go with it. So, for instance, if you use Europeans 
satellites, there are changes to our ground stations. So there 
are associated costs with all those different contingency 
plans.
    Mr. Gowdy. Do you think there's a reasonable possibility of 
a gap, a gap that would have significant consequences to us?
    Mr. Powner. Right now, there is a high probability of a gap 
that could be 17 months.
    Mr. Gowdy. Wow. All right. Thank you.
    General, last area. My colleague from Maryland very 
appropriately and commendably remembered a doctor from 
Charleston, South Carolina, Michelle Hudspeth, who came and 
testified quite emotionally about having to choose which of her 
pediatric cancer patients she was going to treat because of a 
drug shortage. So, again, for folks who may not be following 
this issue, just watching from back home, how did we get in 
this circumstance, and with specificity, particularly for those 
who clammer for bipartisanship, because it exists on this 
issue, because Mr. Issa and Mr. Cummings would both move heaven 
and Earth tomorrow if they could eliminate the shortage. So 
what legislatively or from an oversight perspective can we do 
to remedy the drug shortage?
    Mr. Dodaro. Well, the first step was taken in the last FDA 
Modernization Act last year which gave FDA the authority to 
require manufacturers to notify them. That was part of the 
problem, step one. In order for them to do something about it, 
they need to have adequate information to know about those 
issues. So that aspect has taken shape now. But the question 
is, what are they going to do with that authority to turn it 
into action to try to provide adequate information?
    I'll go back and for the record, as I mentioned to 
Congressman Gosar, provide additional recommendations on things 
that could be done in this area. We have an expert team; they 
just don't happen to be here today. But we'll provide you more 
specific suggestions.
    Mr. Gowdy. We would be grateful, because, again, I know 
that there is a--there is a desire all across this dais for--
for action. And for those who desire work across the aisle, 
which I think includes all of us, this would be a very 
appropriate way. So we would be very anxious to see your 
recommendation.
    With that, I would yield back to Dr. DesJarlais.
    Mr. DesJarlais. I thank the gentleman.
    And I will be going to the gentleman from Pennsylvania, Mr. 
Cartwright, for 5 minutes.
    And I want to apologize to the gentleman from Nevada, Mr. 
Horsford. I did not see you there, so we'll go next to you, 
right after Mr. Cartwright.
    The gentleman from Pennsylvania is recognized.
    Mr. Cartwright. Thank you, Mr. Chairman.
    Well, Mr. Dodaro, according to the United States Global 
Change Research Program, the impacts and costliness of weather 
disasters resulting from floods, droughts, and other events, 
such as tropical cyclones, will increase in significance as 
what are considered ``rare events,'' quote-unquote, become more 
common and intense due to climate change.
    Now, the Federal Government's crop insurance costs have 
increased in recent years, rising from an average of $3.1 
billion per year from fiscal years 2000 to 2006 to an average 
of 7.6 billion a year from fiscal years 2000 through 2012 and 
are projected to increase further.
    Do we--do we have a sense of the scale by which climate 
change will increase the Federal fiscal exposure for the 
National Flood Insurance Program and the Federal Crop Insurance 
Corporation?
    Mr. Dodaro. I don't have estimates of that regard. But I am 
concerned about the potential magnitude, given what we've spent 
so far to respond to these issues. So we're going to be looking 
at the quantification issues, if you will, as we delve in this 
issue in the future.
    Mr. Cartwright. That leads to my next question. I suspected 
you my say that. Is a study needed to look into those issues 
further, sir?
    Mr. Dodaro. I believe so. But it will--as with many of 
these areas, be difficult to come up with some areas. But I 
think we can--we have some work underway in that area right 
now. We'll be happy to brief you on that and provide the 
results when they're ready.
    Mr. Cartwright. Thank you.
    And secondly, GAO recommended in May of 2011 that the 
appropriate entities within the Executive Office of the 
President clearly establish Federal strategic climate change 
priorities, including the roles and responsibilities of the key 
Federal entities, taking into consideration the full range of 
climate-related activities.
    In 2009, GAO also recommended that the appropriate entities 
within the Executive Office of the President develop a 
strategic plan to guide the Nation's efforts to adapt to 
climate change.
    Furthermore, Federal agencies released draft climate change 
adaptation plans on February 9 as part of their strategic 
sustainability performance plans required by Executive Order 
13514 on Federal Leadership in Environmental, Energy and 
Economic Performance. The USGCRP also has a strategic plan for 
climate change science research.
    My question is, how are agency adaptation plans being 
coordinated across the Federal Government?
    Mr. Dodaro. That's our main point. We believe, you know, 
they have the plans, but they're not being coordinated as well 
as they need to be.
    Mr. Cartwright. And do these plans amount to a government-
wide strategic plan at this point?
    Mr. Dodaro. Not in our view. And that's one of our main 
recommendations. And we plan to work with the Executive Office 
of the President and Office of Science, Technology, and Policy 
to help underscore what needs to be done.
    Mr. Cartwright. I thank you for that answer. And I want to 
say that's why I will be working with the GAO to address two 
specific concerns they've highlighted in this report. First, 
I'll be working with the GAO to find the best possible way to 
coordinate the various adaptation reports required by the 
Executive Order and to come up with a national strategic plan 
to prepare for this grave threat.
    So I thank you for your appearance here today.
    Mr. Chairman, I yield back my remaining time.
    Mr. DesJarlais. I thank the gentleman.
    And again, thank you for your patience, Mr. Horsford.
    Now recognize the gentleman from Nevada for 5 minutes.
    Mr. Horsford. Thank you, Mr. Chairman.
    Thank you, General. I want to commend you and your team for 
what is a very good blueprint for the critical challenges that 
are facing our Federal agencies. And not only that you identify 
the high-risk areas, but you also outlined what needs to be 
done. And I would point out what needs to be done by Congress, 
in large part, to move some of these issues forward.
    My focus I'd like to turn to is transportation.
    The GAO report lists funding for the Nation's surface 
transportation system as an area of high risk for the 
government. And the Moving Ahead for Progress in the 21st 
Century Act, which was enacted last year, provides some 
certainty for States. But it also reduces overall funding for 
highways relative to fiscal year 2011. And it will not provide 
the funding that we know that we need to bring our 
infrastructure to a state of good repair overall.
    I'm from Nevada. And our unemployment rate is still 
stubbornly high. Our number two industry has been the 
construction industry. And in large part, my focus is on how we 
can create jobs and get our economy moving while at the same 
time investing in critical infrastructure needs.
    So the report indicates that the 18.4 cent per gallon tax 
on gasoline that was enacted in 1993, it's only worth about 
11.5 cents today. The report goes on to note that the CBO has 
estimated that it will take $110 billion in additional revenues 
to maintain current levels of spending plus inflation through 
2022.
    So, in the short term, are there any realistic alternatives 
to the gas tax to fund transportation that would maintain the 
user-pays principles that have been at the heart of 
transportation funding in the past?
    Mr. Dodaro. I'm going to ask--I'll start, but Phil, come, 
please. Phil Herr is our transportation expert. I'll let him 
talk.
    In the mean--unfortunately, the approach that's been used 
in the last several years is to use general fund appropriations 
in order to supplement the lack of funds from the Highway Trust 
Fund to be able to do that. That's not a long-term answer to 
the situation, particularly given the Federal Government's 
deficit and debt issues. So other things need to be looked at.
    But that's the main reason it's on the list, is order to 
try to get the Congress to come to grips with the financing 
structures there.
    But let me have Phil elaborate, Congressman.
    Mr. Herr. We've done some additional work. There's a 
program that expanded under MAP-21 called TIFIA, which is a 
loan program that helps incentivize private investment in 
infrastructure. We've also completed some recent work that 
talks about other options for collecting revenue that would 
supplement the gas tax as well. But those all obviously involve 
some policy tradeoffs. But there are options there. But you 
correctly point out what some of the limitations of the gas tax 
are.
    Mr. Horsford. So if I could, Mr. Chairman, follow up.
    So with the provision of requires the States to spend a 
specified portion of their allocations, their annual 
allocations, on the improvements of bridges and interstate 
pavement, should--what happens if the conditions fall below 
those standards? And are there considerations given to States 
to use other types of funding sources to make up the gap?
    Mr. Herr. It's an interesting question. This was just 
enacted with MAP-21, so DOT is still working with the States to 
set some of those targets and what some of the process would 
be. But our understanding is with the legislative fix that was 
put in with MAP-21, States would need to dedicate money to some 
of these national projects that have more national 
significance?
    Mr. Horsford. Can they backfill with any additional funding 
outside?
    Mr. Herr. I would have to get back to you for the record to 
see how they are rolling this out.
    Mr. Horsford. Just to close on the Passenger Rail 
Investment Improvement Act of 2008, again, this is a critical 
opportunity for our need to connect Las Vegas and Los Angeles. 
What risks has GAO identified with this program? And what 
happens if continued Federal investment is not available to 
achieve the goals?
    Mr. Herr. In the high-risk or the high-speed rail, we 
actually have had--we have some work ongoing now, but in a 
recent testimony one of my colleagues gave we identified some 
problems with some of the cost estimates that are made 
available seeking Federal funding. So we're looking at ways of 
some of those could be improved. So decision makers would have 
better information.
    The other thing, though, is in many cases high-speed rail 
is quite expensive. So, for example, in the California high-
speed rail situation, their proposal now is calling for a 
fairly large Federal investment, about $38 billion. So--and 
then also some private funds. So a real challenge in that area 
is getting the money to build these and then actually implement 
them and carry them forward.
    Mr. Horsford. Thank you, Mr. Chairman.
    Mr. DesJarlais. I thank the gentleman.
    The chair now recognizes the gentleman from North Carolina, 
Mr. Meadows, for 5 minutes.
    Mr. Meadows. Thank you, Mr. Chairman.
    And thank you for coming to share your perspective today.
    I want to take a little bit broader brush approach. As we 
start to look at this, you know, your report highlights some of 
the needs for a performance matrix, as you would put it. And so 
in what way can we look at departments and agencies providing 
information so that we as Congress can make a better decision 
in terms of tying that to the budget or appropriations? And 
what role do you see OMB playing in that, if any?
    Mr. Dodaro. Well, we have been advocating for a number of 
years a systematic approach, as you mention, to measuring 
performance against established goals in the Federal 
Government. There was legislation passed in 1993. The 
Modernization Act, and that was passed in 2010. And it is 
really important to your point, because agencies are supposed 
to consult with the Congress, establish goals and measures for 
all Federal programs and activities, and then to provide 
regular progress reports against those goals. So that process 
now is in its early stages of getting established.
    We have a role in evaluating whether or not the agencies 
are doing that. OMB has the responsibility for the lead in that 
area. And it is not only goals for individual agencies and 
departments, but it is cross-cutting goals in a number of areas 
as well where multiple agencies provide funding to support an 
overall government-wide goal. So there is an established 
mechanism to do it, but it has to be done properly and well. I 
am pleased to see that the law now requires more consultation 
with the Congress. And we are going to make sure that that 
actually is taking place.
    Mr. Meadows. How can you make sure that that takes place? 
Because, you know, we are in the land of promises here that 
says we are going to have this plan, and ultimately this is 
going to lead to a more effective and accountable government, 
and yet here we are without that.
    Mr. Dodaro. Right. Well, we are going to follow through on 
the facts and see what the agencies have to tell us exactly who 
they have consulted with. And the law requires them to not only 
say that, but what they have done with the advice that they 
have received from the Congress. Now, we are going to make sure 
that works. We are going to talk to Members of Congress and 
their staffs. And I would ask Chris Mihm, who is our expert in 
this area, if he wants to elaborate a little bit further. But 
we are doing work in that area. I am going to make sure it is 
done.
    Mr. Meadows. All right.
    Mr. Mihm. As the Comptroller General mentioned, sir, is 
that there are requirements, statutory requirements now that 
there are for more robust and continuing consultation on the 
part of agencies with the Congress and other key stakeholders.
    One of the things that we have also been making offers to 
do, working with committee staff here on this committee and 
over on the Senate side, is to work with Members of Congress to 
help them extract that information from agencies. That is to 
have the--not just have it be on the demand or a lot of the 
agencies to come up, but have Congress start saying, we are 
ready for the consultation; we want to start talking to you 
about where you are in your goals and your performance and your 
strategic goals. So we remain available to work with you and 
your office and your colleagues on those issues.
    Mr. Meadows. All right. And while you are still there, 
let's look at this. So let's talk about this performance matrix 
and as it comes back to maybe fragmentation, as was 
highlighted. So you have got 45 programs across nine different 
agencies, as you had in your testimony. How do you put together 
a performance matrix without people pointing the finger at this 
agency or that agency didn't meet our overall goal when we 
haven't consolidated under one head?
    Mr. Mihm. Well, the point that you are raising, sir, was 
exactly one of the two major reasons that Congress had in mind 
when they passed the Modernization Act.
    Mr. Meadows. Sure.
    Mr. Mihm. We had requirements for many years to do 
strategic planning and annual planning. That was all agency 
based. And what Congress is looking for with the Modernization 
Act is a more integrated and cross-cutting perspective. So it 
requires OMB on behalf of the President to have some 
government-wide crosscutting goals but also agencies in their 
goals to identify who else are--what other agencies are 
involved in the delivery of products and services that are 
related to the result that they are trying to achieve. One of 
the things that we have been doing, we will have a report 
coming out on this shortly, is taking a sample of the goals 
that the agencies have established and begin to start looking 
at those and seeing have they identified relevant partners that 
we had otherwise identified as part of our work on overlap and 
duplication or that the Inspectors General had identified, and 
then following up and saying, hey, you seem to have missed 
someone that is key to your success. Why is that? And how are 
you coordinating with them to make sure that we don't have the 
overlap and duplication that you are talking about?
    Mr. Dodaro. You are hitting on a very important point. And 
there really is no systematic way that this has been done in 
the past. And really this needs to work if we are going to deal 
with this in a timely way.
    Mr. Meadows. And so is that something that you take the 
lead on? Who takes the lead on that?
    Mr. Dodaro. OMB has the responsibility to implement the 
law. We have the responsibility to make sure that they are 
doing it effectively, providing oversight on behalf of the 
Congress.
    Mr. Meadows. Okay. Thank you very much. Yield back.
    Mr. DesJarlais. Thank the gentleman.
    The chair now recognizes the gentlelady from California, 
Ms. Speier.
    Ms. Speier. Mr. Chairman, thank you.
    And Mr. General, let me say that I, once again, am deeply 
grateful for the work that you and your staff does on behalf of 
the American people.
    Mr. Chairman, this really should be our Bible in this 
committee. We should take every section of this report and, in 
subcommittees and in full committees, go through it and save 
the taxpayers of this country money.
    By your own earlier testimony, you said there is tens of 
billions of dollars. Are you in a position to tell us how much 
would be saved by each of the recommendations that you have 
made?
    Mr. Dodaro. It would be hard to give you a precise 
estimate. But I mean, just for example, in the Medicare program 
alone, there are the latest estimates of $44 billion in 
improper payments. So driving that down will save money. We 
have made recommendations that this pilot program that they 
have in Medicare Advantage be canceled. That if timely action 
had been take there, that was $8.3 billion.
    Ms. Speier. So if we were to take action this year to 
cancel that program and just do the bonus payments, as you 
recommend, how much would we save?
    Mr. Dodaro. I believe--don't hold me to the estimate--but 
it is about between $2 billion and $3 billion.
    Ms. Speier. All right. There is $2 to $3 billion, Mr. 
Chairman, that if this committee gets serious about really 
taking the recommendations of the auditor general, we would be 
in a position to really say we are saving people money in this 
country.
    I also noted that under the health care area, you looked at 
self-referral. It continues to be a problem where physicians 
that own an interest in a high, advanced imaging center tend to 
refer more. And the figure was hundreds of millions of dollars, 
if I am not mistaken.
    Mr. Dodaro. Yeah. I don't have it off the top of my head. I 
can provide it for the record. But it was a significant amount 
of money and a high percentage.
    Ms. Speier. So do you ever get frustrated that you make all 
these recommendations, and years go by and nothing happens?
    Mr. Dodaro. Actually, believe it or not, 80 percent of our 
recommendations are implemented over a 4-year period of time. 
That has been pretty consistent over time. We keep coming up 
with new recommendations.
    For example, in the past, at FHA, we asked Congress to act 
to prohibit seller financed downpayment assistance. And that 
saved over $10 billion.
    Ms. Speier. All right. So there is some good news. Let me 
move onto another topic, the Department of Defense. The Air 
Force just canceled an ECSS contract that was already--that we 
had already spent a billion dollars on. And this is a contract 
that I have asked the committee to explore in kind of a 
postmortem to find out what went wrong. There was an inspector 
general report that recommended that they should cut it off. We 
didn't do it. At some point, we in Congress have to take 
responsibility for not acting.
    Now, there is another report, I believe, Computer Science 
Corporation is the primary contractor for ECSS project, has 
also been awarded a contract for another enterprise resource 
planning system called the LMP, just another acronym, but it is 
for a Logistics Modernization Program, and it is intended to 
streamline the Army's inventory of weapons systems.
    Having said that, the inspector general for auditing within 
DOD has recommended that they not spend any more additional 
money on top of the $1.1 billion already spent on the program 
back in 2009. So what did we do? We continued to spend money. 
It now is $4 billion over budget and 12 and a half years behind 
schedule. When do we stop and say, it is enough? When do we 
stop contracting with the same contractors that are over 
budget, that don't do the job and, you know, go back to square 
one? How would you address that issue?
    Mr. Dodaro. Well, first of all, in the rules, the 
contractor's past performance is supposed to be considered in 
making----
    Ms. Speier. Well, obviously, not here.
    Mr. Dodaro. --funding decisions. Well, there are timing 
issues in terms of when the different contracts would have been 
let, who knew what where and, importantly, within the 
Department of Defense, who is sharing information across the 
department to ensure this doesn't happen. You know, in the 
past, we have looked at whether or not people who were on the 
debarred list were getting contracts. And we found that, in 
some cases, agencies didn't check that list before they went 
ahead and made procurement decisions.
    Contracting has been on our high-risk list for a long time. 
The procurement process doesn't always work effectively. And 
there are high dollar consequences to it. I would welcome 
congressional oversight and more attention to these areas, 
particularly in the Department of Defense, where we spend most 
of this contracting money.
    Ms. Speier. If we made a request of you to do a postmortem 
on the ECSS program, would you be able to do that?
    Mr. Dodaro. Yes.
    Ms. Speier. All right. Thank you.
    Mr. DesJarlais. I thank the gentlelady.
    And the chair will now recognize himself for 5 minutes for 
a line of questioning.
    Mr. Dodaro, I would like to focus a little bit on health 
care. Medicare and Medicaid are both perpetually on the high-
risk list, Medicare for two decades, Medicaid for a decade. 
Together, they are responsible for over 58 percent of all 
government improper payments in fiscal year 2012. What 
recommendation does GAO make about improving their program 
integrity and stopping improper payments?
    Mr. Dodaro. Well, a number of recommendations we have made 
in almost every phase of their process. For example, enrolling 
providers, we need to keep bad actors out of the system 
initially. We have made recommendations that there be surety 
bonds put up by the providers before they are enrolled in the 
programs, and yet that hasn't taken place yet. We think that is 
important so that the Federal Government, if there is a 
problem, can get the money back. We have recommended that there 
be more analytical procedures in place, data analytics, to spot 
trends in fraud in the provider area up front. They have moved 
it forward on that area, but they haven't linked it to the 
payment system yet so that if they do find a potential problem 
they don't stop the payments until they sort through the 
problem.
    Then, once you get providers in, making the payments, doing 
a good review before you make the payments in the first place. 
This prevention and detection area before you make the payments 
really needs a lot more attention. So we have made a lot of 
suggestions there on how to improve the prepayment controls, 
that they are not standardizing the edits across the providers, 
the contractors who make the payments. Then there is, after the 
payments are made, making sure that there is post look at this 
area. We have made recommendations there. And then when we find 
that there is an improper payment that has been made, having 
recovery auditing go in and recoup the money back. So, at every 
level in the process, there is a need for reform.
    We have made many recommendations. I can provide the 
details for the records. But this is an area that we have a 
high degree of attention on and has a lot of potential payback.
    Mr. DesJarlais. As we should. That number is pretty 
alarming. Would you agree there is no future threat to the 
solvency of our country greater than health care?
    Mr. Dodaro. Health care is the primary driver of our 
projected deficits.
    Mr. DesJarlais. Okay. The Patient Protection Affordable 
Care Act establishes a requirement for Center of Medicare and 
Medicaid Services to improve the integrity. The high-risk list 
notes that CMS should implement some of the requirements under 
the Patient Protection and Affordable Care Act to improve this 
integrity. Why hasn't CMS done this?
    Mr. Dodaro. I could provide some answers for the record. It 
depends on which area you are talking about. The process over 
there, my opinion, takes longer than it needs to, to implement 
these changes. But I can provide more specifics.
    Mr. DesJarlais. Okay. I would appreciate that, considering 
the 20 years on the high-risk list. I think that we certainly 
need to target that. With the health care bill just really 8 
months away, the implementation, the IRS has a large role in 
implementing the health care bill and the insurance exchanges, 
which should be in place in less than 8 months. What impact 
will the IRS's system modernization problems have on health 
care delivery in the United States?
    Mr. Dodaro. Let me ask Chris to come to the table to talk 
about that.
    Mr. DesJarlais. Because we had a hearing on this in the 
last Congress, and we know that the IRS was really frankly not 
ready for all that is going to be required of them. There is 
going to be incredible interaction between future patients and 
the IRS, lots of reporting that has to go on, whether you move, 
whether you have a child, whether there is a divorce, a death, 
et cetera. Constant communication is required. And I think we 
established the wait time for someone to call the IRS to be 
like 55 minutes. So can you comment on where we are going to be 
in 8 months?
    As a physician and someone who talks to a lot of 
physicians, we are not terribly optimistic that this is shovel 
ready.
    Mr. Mihm. There are a couple of issues that you are raising 
there of course, sir. One is just on the wait time. I mean, we 
have seen that of course during the filing season, that there 
was just the IRS just in this last year, it didn't come close 
to meeting its goals in terms of how many people were able to 
get through and, you know, did they get busy signals or dropped 
calls and all the rest. We have made some recommendations to 
them that just on the filing season aspect, that they--which 
has implications for what you are talking about. They need do a 
much better job in thinking in a broad, strategic sense across 
the various ways that they interact with the public, being 
walk-in centers, correspondence, telephone calls, information 
that individuals that they can get through the Web. And the Web 
is obviously, over the long term, the way to go.
    Mr. DesJarlais. Is it realistic to believe they can be even 
close to ready in 8 months?
    Mr. Mihm. What we have seen in, more specifically on the 
Affordable Care Act, we have done a number of engagements or a 
number of reports that have looked at where they are on that, 
in particular how their infrastructure, that is their 
governance infrastructure, and risk management is looking. I 
would agree with your point that they have some major risks 
that they are going to have to be able to manage in order to 
effectively deliver this. Because they have, obviously, the 
implementation, or their responsibilities for implementation of 
Affordable Care Act. They have a very difficult filing season 
that is, you know, ahead of them. They have other challenges 
that IRS faces. And so it is going to be quite a difficult 
challenge for them. It is something that we continue to monitor 
on behalf of the Congress.
    Mr. DesJarlais. And as you know, there are still challenges 
out there regarding Federal and State exchanges with the IRS in 
terms of that ruling. That has also been a subject of a hearing 
that we will revisit. I see my time has expired.
    Seeing no other Democratic witnesses, I will now yield 5 
minutes to my good friend and colleague from Tennessee, Mr. 
Duncan.
    Mr. Duncan. Thank you very much, Mr. Chairman.
    And I don't have any questions, but I did want to say a 
couple things.
    First of all, I agree with the gentlewoman from California 
that this is a very important subject. And I hope the GAO stays 
on top of this and continues to issue these reports.
    And I appreciate your work, Mr. Dodaro, and that of your 
staff.
    And I agree with the gentleman from Pennsylvania, and I 
also have concern about the National Flood Insurance Program. 
Because I read recently that 15 of the largest insurance 
companies are making a real killing off of that program. I 
think that is something that we need to look into.
    But when I read the committee memo, it mentions as the 
biggest, of course, programs Medicare and Medicaid and the 
Department of Defense. And I was here earlier this morning for 
the discussion on the New York Medicaid program. And they said 
there were $15 billion in improper payments just in that one 
program, the New York Medicaid program, and that there was one 
contract paying a $5,000 daily rate for institutionalized 
people. I can tell you almost every Federal contract with every 
Federal department and agency has some sort of sweetheart 
insider-type deal. And I would bet that that contract certainly 
was. And we now spend, according to some of the information we 
were given this morning, $990 billion on the two programs, 
Medicare and Medicaid put together. That is more money than 
almost all other countries in the world spend total in their 
complete budgets put together. And these costs are just 
unbelievable.
    And when people say we can't cut Medicare and so forth, 
well, I don't want to cut any poor person out of the Medicare 
and Medicaid, but I will tell you this, there is a lot of 
people and companies getting ridiculously rich off of Medicare 
and Medicaid. And some of those payments need to be--and some 
of those contracts need to be looked into.
    And then the Department of Defense, all those defense 
contractors, they hire all the retired admirals and generals. 
And then they come back to the offices that they were in and 
they get contracts. And it seems to me that that is rampant in 
Medicare, Medicaid, the Department of Defense, and throughout 
the Federal Government that they hire Federal employees, who 
retire at fairly young ages on average, and then they go back 
and they get these contracts from the departments or agencies 
that they worked for. And it is crooked. It ought to be against 
the law. And I hope that in future reports, you will point to 
some things like that out too, Mr. Dodaro.
    Thank you very much, Mr. Chairman.
    Mr. DesJarlais. I thank the gentleman.
    And Mr. Dodaro, thank you very much for taking time out of 
your busy schedule today.
    I am sorry, I yield to the ranking member for a statement.
    Mr. Cummings. I just want to just as we close, again, I 
want to thank you and your staff for your excellent report.
    I want to say to Mr. Duncan, who just spoke, just what he 
said is just so important. You know, we talk about waste, 
fraud, and abuse, and sometimes I think we, you know, we kind 
of talk about it as if it is just a lightweight thing. But as 
Mr. Duncan pointed out, this is serious stuff.
    And when we talk about trying to figure out how we save 
money and all that, you know, I just want you--you all do a 
great job, but I want you to continue to try to show us how we 
can be more effective and efficient in rooting out some of this 
waste, fraud, and abuse, because it is real. I think we kind of 
just say it, and you know, and a lot of times we are not really 
digging deep to get to it. It may call for us highlighting just 
very bad actors. It may call for us making sure that things get 
referred to the proper authorities, like Justice or whatever.
    But we have got to get to this because if we have got the 
kind of money that he was talking about just going out the door 
and some folks getting rich, but at the same time, the money 
not going to the very folk that we intend it to go to, it just 
seems like, you know, maybe we need to zero in on, okay, now, 
how do we go from research to truly being effective and 
efficient in making that research bear some fruit? There is 
nothing I hate more than research that gets placed on a shelf, 
only to be dusted off and put in a microwave 5 years later or 
10 years later and reissued, and the problem just keeps going 
on and on and on.
    So I just hope that--I know your staff is very focused, I 
know they want to make sure they do the right thing. And again, 
I just want you all do everything in your power to help us be 
even more effective and efficient even than we are. All right?
    Ms. Speier. Would the gentleman yield?
    Mr. Cummings. Of course.
    Ms. Speier. I just want to associate my remarks with those 
of yours and those of Mr. Duncan's.
    You know, there were very few members here today. This 
should be a mandatory meeting for every member of this 
committee. Because this particular report of high-risk problems 
in the U.S. Government should be something that every member of 
this committee is familiar with, and it should be the road map 
for much of the work that we do in our subcommittees.
    And I know you are serious about making some in-roads in 
terms of getting rid of the fraud and abuse. I know that the 
general is, and all the staff that works with him. We have got 
to work together to resolve this because otherwise, it is just 
all cheap talk.
    I yield back.
    Mr. Cummings. Well, I must say, and I give the credit--Mr. 
Chairman, as I just take 30 more seconds--to Chairman Issa this 
morning in our press conference. He recommitted to making sure 
that we do those things that we are talking about so that we 
could be more effective and efficient.
    And that is why I was just saying to you, Mr. Dodaro, if 
there are things that you can help us with so that we can--I 
know you have got your recommendations and whatever. But again, 
you know, you know what, you know, one of the things I worry 
about is that when I look back on my tenure as a Congressman, I 
don't want to look back with regret that I failed to do the 
things that I could have done to help my constituents. And so 
sometimes maybe we need help, maybe we need tools, maybe we 
need advice. And if you or your staff--maybe we need a new era 
of how to really take these reports and bring life to them.
    Because, you know, those wonderful people, great government 
servants sitting behind you, many of whom, probably all of whom 
could be making more money doing other things, but they come to 
government service to feed their souls, to feed their souls. 
And they come to make a difference. And I want them, in feeding 
their souls, to be effective, too. I don't want them to say, 
well, you know, we gave a report, and it got placed on the 
shelf and, you know, it never went anywhere. And so, at some 
time, at some point, then their morale goes down. And it is 
just logical. So again I want to thank you. You were about to 
say something, and then I am finished, Mr. Chairman.
    Thank you very much.
    Mr. Dodaro. I would just like to make a couple points in 
regard to your comments, Mr. Cummings, Congresswoman Speier. 
Number one is the high-risk program will remain a top priority 
for GAO as long as I am Comptroller General. My term goes to 
2025. I made a commitment at my confirmation hearing that this 
would be a high priority. It will remain so.
    The second point, I would say one of the things that could 
be done that this committee could talk about is assigning some 
of the high-risk areas to either the subcommittees or 
individual members on the committee so that they can become 
well versed and deep in these issues, and we could work with 
them. That has been done in the past. And there was a high-risk 
caucus at one point in the Congress when we first started the 
programs, and it had some good effect. And they could put more 
pressure on the agencies or understand the issues deeper. So I 
would say do that.
    Third point and my last point is that you can do some 
things to help us. We are at our lowest staffing level since 
1935. Now, obviously, the Federal Government is in a much 
different position now than it was in 1935. We need some help, 
not a lot. We returned $105 for every dollar spent on GAO this 
past year. We added more than $55 billion in documented 
financial benefits as a result of implementing our 
recommendations. Over the last decade, that comes to about a 
half a trillion dollars. So we think we are a good investment, 
but we need some help.
    And so we appreciate whatever this committee could do. So 
thank you very much. It has been a privilege to be here today. 
And you have our commitment that myself and all the dedicated 
and talented people at the GAO are at your disposal to make 
headway in making government more efficient and effective for 
the benefit of the American people.
    Mr. DesJarlais. I thank you for that.
    I thank the ranking member, and certainly thank Ms. Speier 
for her comment.
    And in the spirit of summarization, I will add for all 
those folks that are watching this hearing today, I agree this 
is an incredibly important issue. As we look at our out of 
control debt, deficit, and spending problems, we hear calls for 
revenue increases. And for American people watching this 
hearing and listening to the high-risk list and how long things 
have been on the high-risk list, I think they would be very 
discouraged, if not disgusted, that we are not doing better. 
And I think it would be a shame to ask the American people for 
another dime of revenue until we start to solve these problems.
    So, in that spirit, I am looking forward to working with my 
colleagues in addressing these important issues. So again, I 
will thank you for taking time out of your busy schedule, as 
well as your staff, to appear before us today.
    And the committee stands adjourned.
    [Whereupon, at 12:44 p.m., the committee was adjourned.]
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