[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
REDUCING WASTE IN GOVERNMENT: ADDRESSING GAO'S 2013 REPORT ON
DUPLICATIVE FEDERAL PROGRAMS
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
APRIL 9, 2013
__________
Serial No. 113-13
__________
Printed for the use of the Committee on Oversight and Government 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 April 9, 2013.................................... 1
WITNESS
The Honorable Gene L. Dodaro, Comptroller General of The U.S.
Government Accountability Office
Oral Statement............................................... 5
Written Statement............................................ 7
APPENDIX
The Honorable Elijah E. Cummings, a Member of Congress from the
State of Maryland, Opening Statement........................... 83
GAO Response to Follow-up from Duplication Hearing: IRS and
Return on Investment (ROI)..................................... 85
REDUCING WASTE IN GOVERNMENT: ADDRESSING GAO'S 2013 REPORT ON
DUPLICATIVE FEDERAL PROGRAMS
----------
Tuesday, April 9, 2013
House of Representatives,
Committee on Oversight and Government Reform,
Washington, D.C.
The committee met, pursuant to call, at 2:05 p.m., in Room
2153, Rayburn House Office Building, Hon. Darrell E. Issa
[chairman of the committee] presiding.
Present: Representatives Issa, Lankford, Duncan, Lummis,
Woodall, Collins, Meadows, Bentivolio, DeSantis, Cummings,
Norton, Connolly, Duckworth, and Horsford.
Staff Present: Will L. Boyington, Press Assistant; Molly
Boyl, Parliamentarian; Lawrence J. Brady, Staff Director; David
Brewer, Counsel; Daniel Bucheli, Assistant Clerk; Steve Castor,
General Counsel; 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; Christopher Hixon, Deputy Chief
Counsel, Oversight; Michael R. Kiko, Staff Assistant; Justin
LoFranco, Digital Director; Mark D. Marin, Director of
Oversight; Tegan Millspaw, Professional Staff Member; James
Robertson, Professional Staff Member; Peter Warren, Legislative
Policy Director; Rebecca Watkins, Deputy Director of
Communications; Eric Cho, Detailee; Krista Boyd, Minority
Deputy Director of Legislation/Counsel; Beverly Britton Fraser,
Minority Counsel; Adam Koshkin, Minority Research Assistant;
Elisa LaNier, Minority Deputy Clerk; and Dave Rapallo, Minority
Staff Director.
Chairman Issa. The committee will come to order.
We 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 Oversight and Government 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. It is our job to work tirelessly, in
partnership with citizen watchdogs, to deliver the facts to the
American people and bring genuine reform to the Federal
bureaucracy.
Today's hearing will focus on the GAO's third annual report
on areas of duplication within the Federal Government. The GAO
is our key partner in eliminating waste, fraud, and abuse and
providing transparency and an honest, nonpartisan view of
government and its spending.
In the past, the GAO has made almost 300 recommendations
among 131 issue areas to Congress and to the executive branch
to reduce cost, duplication, fractured and overlapping
programs. As of today, sadly, only 16 of 131 have been fully
addressed.
However, to be timely, just tomorrow we expect the
President's budget to have a number of these addressed. Perhaps
sequestration was the impetus, perhaps simply a fifth year of a
Presidency. But as budget pressure increases and the American
taxpayer says, ``I cannot afford to buy the same services
twice,'' both Congress, including the GAO, and the executive
branch must find these programs--must find this waste and must
do our job differently.
One of the things that this report cannot do is it cannot
talk about the pure inefficiency of branches thinking
separately. Even when there is not pure duplication, ultimately
every part of government, every administrative part, at least
26 different entities, buy separately, think separately, staff
separately, and have separate executives to do substantially
the same work.
I am pleased that the committee has already been
responsible to the GAO's--or, responsive to the GAO's
nonpartisan recommendations. Several of the cost-saving
recommendations addressed by the GAO were addressed in the
Federal Information Technology Acquisition Reform Act that was
unanimously voted out of this committee last month.
IT procurement is a classic example that I believe all of
us on the dais and all of us in America can understand. The
buying of computers, the buying of software to meet the basic
needs of communication and of contact with the public, and
database management is, in fact, the same both in and out of
government, for the most part, and certainly the same within
government.
If we implement this and other harmonizing programs, we can
save many of the dollars that the Comptroller General will
speak of today. But only a thorough reorganization of
government will, in fact, prevent these from happening again.
My first question today to our witness will be just that.
Isn't it inherent within our government that as long as we have
individual budgets, individual authority, individual freedoms
by Cabinet positions and bureaucrats, won't they inherently try
to build their organizations, not because they are evil, not
because they choose to waste money, but because ultimately it
is their career?
We need to change that. We need to create a career path in
government that says, where you are in government and what you
do in government do not have to be based on protecting your own
bureaucracy. Congress must focus on this. And I am delighted to
say that, with the President's pre-announcement of as much as
$25 billion addressed by the GAO and others, we will, in fact,
for the first time see a budget that dramatically reduces
duplication.
As I said earlier, this isn't enough. And fundamental
change must be in Congress' hands, and we must rise to that
occasion.
And, with that, I would like to recognize the ranking
member for his opening statement.
Mr. Cummings. Thank you very much, Mr. Chairman. And I
thank you for holding this very important hearing.
And I want to thank you, Mr. Dodaro, for being here to
testify about GAO's findings.
Today's hearing will examine GAO's latest annual report on
duplication in Federal programs and opportunities for
significant cost savings.
And before I go on, let me, Mr. Dodaro, thank you and your
hardworking staff for the excellent work that you all do. So
often, Federal employees do not get the credit that they are
due, but the integrity and the excellent work that you all put
out is a real benefit to not only the Congress but the people
of the United States of America. And I just want to make sure I
say that.
Hearings like this one provide an important opportunity to
identify ways to cut government waste, save money, and make our
taxpayer dollars go further. But holding hearings is not
enough. Congress must follow up with concrete action to save
the taxpayers money.
GAO issued two of these reports previously in 2011 and
2012, and GAO made 300 specific recommendations to the
executive branch and to Congress. This year's report provides a
status update on those recommendations, and it finds that
Congress is doing a much poorer job than the executive branch
in implementing these recommendations.
Specifically, GAO finds that the executive branch has fully
or partially addressed 80 percent of their recommendations, but
Congress has fully or partially addressed only 32 percent of
their recommendations. This is a poor record that Congress
should strive to correct.
In this year's report, GAO highlights 11 areas of
unimplemented recommendations from its previous reports that,
if implemented, would save billions of dollars. Seven out of
the 11 areas would require congressional action, but so far
Congress has failed to act.
For example, in previous reports GAO found that the Federal
Government could save up to $2 billion over the next 10 years
if Congress authorized the Department of the Interior to revise
the royalty rates for oil and gas revenues in the Gulf of
Mexico. But Congress has failed to act on this recommendation.
As a result, it is listed yet again in the GAO's report for
2013.
GAO's new report also identifies additional ways our
government can save money. For example, according to GAO, if
Congress limited subsidies for crop insurance, it would save up
to $1.2 billion a year. GAO found that agencies could save
billions of dollars by improving oversight over their
information technology investments, and GAO also found that
agencies could save millions of dollars by using cloud
computing.
It seems to me that this is one hearing in which Democrats
and Republicans can join forces to eliminate waste, fraud, and
abuse.
I shall never forget, Mr. Dodaro, when I first ran for
Congress and was 15 points behind. And I hired this guy to
manage my campaign, and he said, Although you are 15 points
behind--and the race was only a 2-month race--he said, Always
remember this. He says, Most people know what to do, they know
the plan, but they don't execute it. He said, If you execute
the plan, you are going to win. And I won by 15 points.
And so I think this is about coming up with a plan and
trying to execute it, make it happen. So whether you believe
the savings should go toward deficit reduction or making our
current government programs more effective and efficient, we
should all be able to agree that a dollar wasted here is a
dollar that is not put to better use elsewhere. I think
Republicans and Democrats will agree that we want to see the
taxpayers' dollars spent in an effective and efficient manner.
Mr. Dodaro, I look forward to hearing your testimony,
including specific recommendations to cut waste and save the
government money. I would also appreciate your guidance on
steps we can take to remove some of these longstanding
recommendations from your list so we are not here again in 2014
asking the same questions.
And as I said a little earlier, I compliment your staff,
but we also want them to feel that we are doing what they have
suggested that we do after all of their hard work.
And, with that, Mr. Chairman, I yield back.
Chairman Issa. I thank the gentleman.
Chairman Issa. Members may have 7 days to submit opening
statements for the record.
Chairman Issa. We now have the honor of welcoming our
primary witness and the ladies and gentlemen he brought with
him.
The first witness is the Honorable Gene Dodaro. He is
Comptroller General of the United States.
We are also pleased to welcome several experts from the
United States Government Accountability Office that will be
with him here today. And we would ask that they also rise to be
sworn in a minute.
I would like to recognize, though, specifically--and there
may be others, but--Ms. Janet St. Laurent. She is the Managing
Director of Defense Capabilities and Management. Mr. Joel
Willemssen is Managing Director of Information Technology. Mr.
Mark Gaffigan is Managing Director of Natural Resources and
Environment. And Ms. Cathleen Berrick is Managing Director of
Homeland Security and Justice.
Will those individuals and anyone else who may provide
information to the Comptroller General please rise to take the
oath? Would you please raise your right hand?
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?
Please be seated.
Let the record reflect that all witnesses have answered in
the affirmative.
Gene, you have been here so many times, it is almost crazy
to say look at the lights. Your statements are always
sufficiently short, and our questions are always long. So your
entire opening statement will be placed in the record, and you
are recognized to give your abbreviated opening statement.
STATEMENT OF THE HON. GENE L. DODARO, COMPTROLLER GENERAL OF
THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Dodaro. Thank you very much, Mr. Chairman. It is a
pleasure to be here this afternoon.
Ranking Member Cummings, I appreciate your comments about
our staff.
Members of the committee, I am very pleased to be here
today to discuss our most recent report on ways to make
government more efficient and effective. We, in this report,
highlighted 17 areas where we have focused on areas of
fragmentation, overlap, or duplication in the Federal
Government and made recommendations to address these issues.
For example, from 2002 until most recently, the Department
of Defense has moved from two camouflage ground-based uniforms
to up to seven so that they are service-based purchases rather
than joint purchases, thereby foregoing the opportunity for
tens of millions of dollars of savings but also, importantly,
from ensuring equivalent protection of servicemembers during
joint operations. We have made recommendations to address that
issue.
Also, in the Medicaid program, which is an area where there
is a large amount of improper payments, billions of dollars a
year, the Department of Health and Human Services, CMS, has
taken a number of actions. However, we have pointed out one
action where they actually hired two contractors for every
State--one to review the data to decide which claims to audit
and another contractor to audit the claims. We said that is
inefficient, duplicative; one contractor will do.
And then, also, in the area of geospatial or mapping
information, there are billions of dollars spent every year by
the Federal Government to buy this information, and it has been
well reported that there are duplicative investments.
And so we have focused on recommendations to ensure more
effective coordination of a joint committee that is focused on
these activities. It needs to do a better job. OMB needs to
have more visibility and to be able to prevent these
duplicative investments. And it needs to become a priority.
In this case, Mr. Cummings, they have a plan. It is not
executed, Mr. Chairman, and it is not a priority. And it has to
be both, thereby reaping benefits of millions of dollars in
this area.
Now, we also identify 14 other areas where there are
opportunities for cost savings and revenue enhancements.
In cost savings, we have testified before this committee on
the Medicare demonstration pilot on Medicare Advantage and
recommended the pilot be canceled. At the time we did that,
there was the possibility of saving $8.3 billion because this
pilot only rewards average performing plans and is not really
going to demonstrate what it is intended to demonstrate. Right
now, there is still an opportunity to save $2 billion, but
Congress has to act soon in order to cancel this pilot.
Also, in the Medicaid area, there are billions of dollars
spent, in addition to reimbursements for claims, in order to
make sure that there is money provided for uncompensated care.
We think there is not enough oversight over these areas, and
there are costs being reimbursed that are well in excess of the
costs that are spent to deliver those services, and this
doesn't make sense. So there needs to be more transparency and
accountability.
We made recommendations on the revenue side, for example.
We have made a number of recommendations to the IRS in order to
help close a $385 billion tax gap. There are also opportunities
for the Congress to legislate in the tobacco tax area to make
the tax equivalent for similar types of products. That could
garner the Federal Government several hundred millions of
dollars and up to a little over a billion dollars a year and
make that more equitable.
Now, turning to our prior reports, if I could direct your
attention to the chart here, this shows the percent of actions
that have been taken on the 130 recommendations we have had
already. Twelve percent, as you mentioned, Mr. Chairman, 16, or
12 percent, have been acted on. Sixty-six percent have been, or
87 of them, we have partial addressment. And 21 percent, or 27
of those actions, have not been addressed at all. So there are
plenty of opportunities.
And the opportunities are throughout government. I will
show my last chart. This is, for all 3 years, we have 162
areas, 380 specific recommendations for action, that go across
virtually every major department and agency of the Federal
Government. Many here are in defense, HHS, and Treasury, which
are about 56 percent of total obligations for the year.
So, many opportunities, Mr. Chairman. I look forward to
answering your questions today and working with this committee
to make government more efficient and effective on behalf of
the American people.
Chairman Issa. Thank you.
[Prepared statement of Mr. Dodaro follows:]
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Chairman Issa. I will recognize myself for a couple of--a
quick statement and then a couple of questions.
The ranking member in his opening statement mentioned
raising the revenues from drilling of oil and natural gas. That
is not a cost savings. He called it a cost savings. It is a tax
increase, right? It is not one of your recommendations that you
simply increase the percentages that you charge for royalties?
Mr. Dodaro. What we recommended is that the Department--
there were studies showing that other agencies--that other
entities that give those leases were gaining more revenues from
the leases than the Federal Government. So we recommended that
Interior conduct a study to determine whether or not it was,
you know, maximizing the revenue capabilities. The study has
been done, but they haven't made any recommendations.
Chairman Issa. Well, but isn't it true that they actually
don't know what they are entitled to? They are not able to
properly audit how much oil or natural gas they get out? There
is a huge amount of areas that have not been available for
leasing?
In other words, if we were to look at this as a savings--I
kind of look at it as a tax or a revenue, but if we were to
look at it as revenue, we would have to make these things
comparable to the highest and best selling price you could find
in the private sector--in other words, get at least what you
would get on private lands--recognizing that the State of
Texas, for example, has rights in shallow water. So there is a
comparable between the State of Texas in the State versus our
offshore leases and so on. But it would be there, it would be
Federal lands for grazing.
And, ultimately, wouldn't there be a return if they simply
got their audit? And I know this is where you have an expert
about to jump up.
Mr. Dodaro. Right.
Chairman Issa. But if they did proper audits so they
actually knew what they were entitled to and could ensure they
get 100 cents on the dollar of what they are entitled to.
Mr. Dodaro. Yes. And I will ask our expert, Mark, to come
to the table.
But there are really two issues. And we are looking at a
revenue issue, all right? Number one, are we charging the right
royalties in the first place? And, number two, are we really
getting what we are owed due to the volume and extraction of
the oil? So you are exactly right.
Chairman Issa. And, as you know, this committee, on a very
bipartisan basis, went back and forth trying to get the
revenues. There were contract failures that led to no revenues,
when, in fact, that wasn't the intent nor the letter of the law
that Congress passed.
Please, Mark.
Mr. Gaffigan. Thank you, Chairman Issa. Yes. And we enjoyed
working with your staff, Larry Brady and company, on that back
in the day.
There are sort of three parts of this. One is sort of the
product verification, and that is what you are alluding to. We
have 19 recommendations we made to what was MMS and is now----
Chairman Issa. Changed the names, but they are still not
doing their job, right?
Mr. Gaffigan. --still within the Department of Interior.
They have made some progress, and that is why we addressed it
as partially addressed. They have gotten together a committee
that meets to talk about current trends in measurement.
But they are missing in some other areas. For example, they
really don't have real realtime production data so they can
verify, you know, what we are producing.
The other part of it is the diligent development concern.
We have leases that aren't being--that aren't being utilized.
And there have been several proposals in Congress, and Interior
has made some proposals, to charge a rent for those leases that
aren't being used as a motivation to seek development. And that
is part of where that $2 billion potentially could come from.
Chairman Issa. Although that wouldn't be able to come under
current leases.
Mr. Gaffigan. Right.
Chairman Issa. That would be part of the bid process. So
wouldn't there be an offset in that if I know I might have to
pay the rent, in my bidding process I might bid a little less?
Mr. Gaffigan. Yeah, that is definitely a possibility. But
the idea is it would provide that incentive to them.
Chairman Issa. Sure.
Mr. Gaffigan. And the other part is the revenue collection.
We did recommend that they do some studies on what the
government take was compared to others. They have done three of
those studies, but they just haven't acted with the
recommendation to either affirm what we are charging now makes
sense or whether we want to adjust it, up or down.
Chairman Issa. Sure. Well, I can tell you that it is a heck
of a deal until you get into the regulatory time it takes to
get an oil well or a natural gas well drilled sometimes. But
you are absolutely right, we should try to maximize that
revenue.
Switching slightly, Mr. Dodaro, your previous report and
this report continue to identify the IT investment. And I am
particularly interested in your view on what I--if I read it
correctly, from 2012, still today, OMB has essentially been
tasked to find out how much is being spent on IT. We recently
did a hearing on this $80 billion nominal amount.
But if I read correctly, what you are telling me is that it
is underreported, that, in fact, because they are not reporting
their IT expenditures to the OMB and the OMB is not forcing
them to, that, in fact, we may be spending more and spending it
poorer.
Is that a succinct way of saying it?
Mr. Dodaro. Yeah. I will ask Joel Willemssen to come up and
explain that. But I think that that is a correct statement.
And I also would say, Mr. Chairman, I meant in my opening
statement to commend this committee for passage of the IT
Acquisition Reform Act. That act touches on a number of areas
that we have reported in all 3 years.
Chairman Issa. If you stop over at the Senate, mention
that.
Mr. Dodaro. I will. I will be there next month.
Joel?
Mr. Willemssen. Mr. Chairman, as you mentioned, when OMB
talks about the amount of money the Federal Government spends
on IT, it is an understated figure for a variety of reasons.
One is that a number of smaller independent agencies don't
report this information to OMB. That is about 58 agencies. In
addition, there are a number of IT projects, whether they are
R&D projects or space projects, which include a huge percentage
of IT, that are often not reported.
In addition, from a total Federal Government perspective,
we are only talking about a slice of the executive branch. We
are not talking about the legislative branch, we not talking
about the judicial branch. In addition, the intel area is not
included.
So, with all of those exclusions, what is the total amount
spent? Nobody knows. Is it slightly north of $100 billion
annually? Probably, but we don't know for sure.
Chairman Issa. Thank you.
I will mention, the only thing I take away from my time on
the Select Intelligence Committee is that I learned the
definition of ``petabyte'' of data. So I share with you that
that it is a lot of procurement over there.
Mr. Cummings?
Mr. Cummings. Thank you very much.
Mr. Dodaro, you know, the more I am in government--and I
have been here 17 years, been in the State legislature for 14--
you know, I am always reminded of something that my mother used
to say. She said, So often you have motion, commotion, and
emotion, and no results.
You know, the older I get, the more I am concerned about
that. Because we come here, the government spends billions of
dollars for staff, you have people working 365 a year. And the
question is, you know, how do we--you mentioned a few success
stories in your opening. And you, you know--and I know you want
to see things implemented.
Have you seen something that gives you some hope so that
when you go back to your staff you say, You know what, guys,
you know--and ladies and gentlemen, we have done some great
work, and, you know, I think this is an area that we are going
to see some change?
Because I can imagine that--and I alluded to this in my
opening--that when people work hard and give it everything they
have, and then if they see the recommendations put on the shelf
and turn dusty, they begin to wonder whether or not they are
truly feeding their souls. In other words, a lot of people come
to government because they want to make a difference, the ones
I talk to. And so when they don't see those differences being
made, they get frustrated and they may move on to something
else. And these are great people.
So I am trying to get to bottom lines. You know, I go back
to that ``motion, commotion, emotion, and no results.''
Because, as I say to people all the time, we only have a
limited amount of time on this earth and a limited amount of
time in these positions.
The question is, I mean, do you see something, can you tell
us something, based upon the things that you have seen enacted,
that might help us to get there? Are you following my question?
Mr. Dodaro. Yes. Yes. Definitely. Definitely.
First of all, 80 percent of our recommendations at GAO are
implemented. I mean, we are----
Mr. Cummings. So you feel good about that.
Mr. Dodaro. We feel good about that.
Mr. Cummings. Is that something new? Is that new?
Mr. Dodaro. No. That is about the average----
Mr. Cummings. Great.
Mr. Dodaro. And, actually, last year, there were financial
benefits accrued to the Federal Government, over $55 billion,
as a result of GAO work. That is $105 for every dollar invested
in GAO. So we feel good about it.
Now----
Mr. Cummings. But do you all have a party or anything,
like, when you have one of these big--I mean, seriously.
Mr. Dodaro. No.
Mr. Cummings. No?
Mr. Dodaro. No.
Mr. Cummings. Oh, all right.
Chairman Issa. We would investigate----
Mr. Cummings. That is right, you would be investigated.
Mr. Dodaro. Yeah, right, right, right. We just keep feeding
our souls. We just keep going at it.
Chairman Issa. You can have ``Donut Friday.''
Mr. Dodaro. But, I mean, among that, though, I will just
give two examples of good successes related to this area.
We recommended that the ethanol tax credit be looked at
because it was duplicating the renewable fuel standard.
Congress let that tax credit lapse, and that was about $5.7
billion in revenue losses to the Federal Government.
We also recommended that--DOD was planning on sending all
the families of the servicemembers over to South Korea to
enable them to have more of a normal tour of duty over there.
We said, you know, that is going to cost a lot of money; have
you done a business case? They did the business case, decided
against it, avoided over $3 billion that would have been spent
on that activity.
And there are stories like that all the time. We are here
talking about some tough issues that haven't been addressed yet
and need to be addressed. But be sure that the people at GAO
are working hard to make sure that these things do get
addressed.
Mr. Cummings. I want to go back to, you know, this whole
oil and gas royalties. In that report 2 years ago, you found
that the Federal Government could receive an additional $1.7
billion in oil and gas royalties over the next 10 years if the
Federal Government started getting a fair market value for the
leases. Is that right?
Mr. Gaffigan. The estimate that we got from Department of
the Interior was $2 billion over 10 years. About $800 million
would come from the rents that I spoke of and another $1.2
billion from changes to the royalties.
Mr. Cummings. And GAO has also included management of
Federal oil and gas resources on its annual high-risk list for
the last 3 years. Is that right?
Mr. Gaffigan. Right. I think we put that on in 2009.
Mr. Cummings. And do you get frustrated?
Mr. Gaffigan. We stay at it. We see some progress being
made. There is still some work to be done. For example, we were
concerned about the reorganization, and we think they came
through on that with the high-risk series.
But we still think in two major areas they have some work
to do: the revenue collection, which we alluded to, and as well
as the human capital challenge of having the staff to be able
to implement these programs.
Mr. Cummings. And you all said, Mr. Dodaro, that the
administration had at least partially implemented 80 percent of
the recommendations and the Congress, 32 percent. Is that
right?
Mr. Dodaro. That is correct. And, actually, if you look at,
though, to put it in perspective, if you just look at fully
addressed, executive branch and Congress are about the same,
about 20 percent. But if you look--the executive branch has a
lot more partially addressed areas. In order to get a partially
addressed in Congress, you have to get a bill at least reported
out of committee to be able to do it.
But what you said is correct.
Mr. Cummings. Now, last year, the Obama administration
requested a legislative change from Congress to allow it to
implement certain recommendations. The administration requested
authority from Congress in its fiscal year 2012 budget request
to charge a $4-per-acre annual fee on nonproducing Federal oil
and gas leases, but Congress still refused to consider
legislation to implement this recommendation, according to your
report. Is that correct?
Mr. Gaffigan. That is correct. And that is the basis of the
estimate from Interior of almost $800 million over 10 years.
Mr. Cummings. I see.
I see my time has expired. Thank you, Mr. Chairman.
Chairman Issa. Thank you.
I just want to ask a clarifying question so everybody else
understands what is in Congress to do and what is in the
administration to do.
We in the House, including you, have about $4.5 billion in
budget. You are not talking about us saving money on our
budget. When you talk about ``congressional,'' you are talking
about the need to pass laws, presumably that the President
would sign, and that is what is on our plate.
When you talk ``the President,'' you talk about an
Executive authority. He gets on the phone and says to the OMB
Director, Do it.
Am I correct that that is----
Mr. Dodaro. Yes. Yes. That is exactly right. That is
exactly right.
Chairman Issa. Okay. And I think the gentleman knows that.
I just, hopefully, for all the new Members particularly, that
one of them--I am not trying to make excuses for our body, but
one of them requires that we get the Senate to agree with us,
the President to agree with us, and make a law. The other is,
in fact, direct. All you have to do is order it done, and if it
is not done, you find somebody new that you order to have it
done.
It is a little bit of a difference. And I am not making
excuses because I think we should have a ``partially done'' on
every one of your recommendations.
And speaking of people that would get a lot of that done,
we now recognize the gentleman from Oklahoma, Mr. Lankford.
Mr. Lankford. Thank you, Mr. Chairman.
There is a semi-unprecedented recommendation that is in the
middle of all this, as well, and it is the Medicare Advantage
demonstration program. GAO seemed to stick its neck out last
year and to say there is a program that HHS is implementing
that, I think the term was, is outside the bounds of the
statute, what they are given permission to do. And it is about
an $8 billion program that you said is not only wasteful but it
is probably not even legal, though, obviously, you didn't make
that statement. The GAO was very careful to say, We are not
attorneys, we are not making this recommendation about the
legality of it.
But of all the demonstration programs that have happened
since 1995, it is larger than all of them combined. You
recommended and said, This program is not demonstrating
anything; we recommend to the administration that it be
canceled. Was that program canceled?
Mr. Dodaro. No.
Mr. Lankford. Can you determine why the program came into
existence? A program that is outside of the bounds of the
statute, that they don't have legal authority to do, that is
larger than all of the demonstration programs combined. Were
you able to get an answer from the administration why they are
doing this program at all?
Mr. Dodaro. Yeah, with the chairman's permission, I would
like to bring up another person who wasn't sworn in.
Chairman Issa. Oh, no, absolutely.
Mr. Dodaro. Okay. James Cosgrove was our witness before
this committee and is our expert on this matter.
Chairman Issa. Just to be technical, please rise and raise
your right hand.
Do you solemnly swear the testimony you will give will be
the truth, the whole truth, and nothing but the truth, so help
you God?
Let the record reflect an affirmative also.
And you are in.
Mr. Lankford. What is your best guess of why the
administration did it in the first place?
Mr. Cosgrove. The stated intention from the administration
was that they wanted to test a way of giving plans a stronger
incentive to improve their quality.
Mr. Lankford. The way they had designed the program, was
that possible to get that outcome?
Mr. Cosgrove. What we determined was that it was impossible
for an evaluation to be done to see whether the demonstration
worked or not, which is why we recommended that the
demonstration be canceled.
Mr. Lankford. So they dumped $8.3 billion over 3 years into
a program to demonstrate something that it is not possible to
demonstrate something with. Why would they do that? They are
very smart folks. Could you ever determine, did you ever get an
answer back from them?
We had a hearing with this committee, as well, to try to
ask some of the same questions. Were you able to determine why
they are spending this 8-point-some-odd billion dollars?
Mr. Cosgrove. What we have is simply their stated reason
for doing the demonstration.
This is also in the context that Congress passed and the
President signed into law provisions that would have given
plans an incentive to increase their quality. CMS, instead of
implementing those provisions, set those aside and implemented
the demonstration program instead.
Mr. Dodaro. We are still, in this report that we are
talking about today, recommending that this demonstration be
canceled. There is still $2 billion that hasn't been spent yet
that the Congress could act to stop the demonstration.
Mr. Lankford. Correct. So Medicare Advantage was to be cut,
based on the existing law that is sitting out there. The
Affordable Care Act I assume is what you are talking about when
you talk about the law that has been passed. There was a
reduction in the Affordable Care Act. That reduction was
replaced with this demonstration program, appropriately right
before last year's election, to sustain it over 3 years, and
then it goes away at that point.
So we are still trying to figure out where they came up
with $8 billion to be able to move into a program that everyone
said this is not legal and that everyone has said this is
wasteful, it is not actually demonstrating--you can't do a
demonstration project that doesn't demonstrate anything, and be
able to just insert money into the process on that.
We are still dealing with the same dynamic here of now we
have $2 billion left. Their full recommendation is, continue to
cut this off for next year because it is not actually
accomplishing anything? Is that correct?
Mr. Dodaro. Yes.
Mr. Cosgrove. Yes.
Mr. Lankford. There is also the Medicaid portion of this,
as well, to deal with the uncompensated care. Can we go through
a little bit of those recommendations also? Because you made
some pretty strong recommendations on that. This is a high-risk
area and has been for a while.
Mr. Dodaro. Yes. I would like to bring our expert up on
this, Mr. Chairman, Carolyn Yocom, please, if I might indulge
the committee.
Chairman Issa. 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?
Let the record reflect another yes.
Mr. Lankford. Thank you.
Let's talk a little about the recommendations that are
there for uncompensated care reimbursement from Medicaid going
to the States. What was the recommendation?
Ms. Yocom. One of the main recommendations had to do with
the way that States calculate their disproportionate share
payments and the use of supplemental payments. In general, the
issue that--there are several issues. One of the main points is
getting some transparency and some accountability to how States
are managing these payments.
We have also suggested that Congress require CMS to take
three broad actions: first, to improve the State reporting of
these supplemental payments; secondly, to clarify the methods
of calculating how these payments will be made; and then,
thirdly, to require independent audits of these payments.
Mr. Lankford. Are there some States that are more prone to
these supplemental payments than others?
Ms. Yocom. That is a difficult question to answer because
we don't have the full picture of all the supplemental payments
that are out there.
Mr. Dodaro. But the nature of these payments has grown over
the years quite extensively, correct, Carolyn?
Ms. Yocom. Yes.
Mr. Lankford. Right. But, at this point, we don't even know
which States are more open to this or using it more often than
others, even able to get that level of information from CMS?
Ms. Yocom. We really don't. What we know is that reporting
on these payments is improving but it is still not 100 percent.
And we know that from 2010 there was $32 billion and in 2011 it
is up to $43 billion, so they are on the rise.
Mr. Dodaro. And, basically, I believe in this area that
Congress will need to act to require CMS to take these actions.
And I believe it is appropriate. There is a lot of money at
stake here, and there is not a proper amount of transparency
and accountability.
Mr. Lankford. Thank you.
With that, I yield back.
Chairman Issa. I thank the gentleman.
We now go to the very timely gentlelady from Illinois, Ms.
Duckworth.
Ms. Duckworth. Thank you, Mr. Chairman.
Mr. Dodaro, I was particularly interested in the portion of
the report which deals with the need for better collaboration
between the VA and the DOD in their delivery of healthcare
services. I think a lot of folks in the civilian community
think that it is the same population, and oftentimes it is not.
For example, the VA has not had to deal with combat
veterans giving birth before, but since Iraq and Afghanistan we
actually now have female veterans of childbearing age, and yet
that care is not available on the VA side. So, being able to go
to DOD for that care will actually cut down costs, as opposed
to sending them to civilian providers.
I was especially interested in your discussion about
improving the exchange of electronic health records between DOD
and VA, and I was hoping that you could perhaps elaborate and
summarize that. Because they are the two systems. We do have in
Illinois and also in Georgia two joint DOD-VA facilities that
are supposed to be becoming a single system and they are really
not.
Could you speak to that a little bit?
Mr. Dodaro. Yes. I find this area very perplexing. And Mr.
Willemssen has been following it for many, many years, and I
would like him to provide--he will give you a thorough answer.
Mr. Willemssen. Congresswoman, in 2011, the DOD and VA
Secretaries agreed that they were going to pursue a unified,
single system for veterans and Active Duty personnel.
Unfortunately, just this past February, they elected to no
longer pursue that route, and they now are going back to trying
to have interoperable exchange of information between the major
two systems.
We testified on this in late February and expressed concern
about the lack of a plan to do that and how they are actually
going to carry it out. Not the least to say is the amount of
time that has passed and the money that was spent in trying to
develop that single system, which has now been set aside, and
they are going back to their original plans of trying to go
with the two systems.
Ms. Duckworth. What was the reason for going with the two
different systems?
Mr. Willemssen. At the February hearing, the DOD and the VA
witnesses said that they thought they could do it in a more
cost-effective manner by continuing with the two systems.
However, when pressed on that, they said the analysis of that
was not yet complete. So we will have to wait and see whether
the conclusion of that analysis bears that out or not.
Mr. Dodaro. I think the analysis also ought to include an
analysis of using one of the two systems that they currently
have and just going with it and having the other agency adopt
that system, as well.
I mean, this has gone on way too long. I think a lot of
people, both veterans and military, Active Duty military,
deserve a better system. And it is possible. The technical
difficulties aren't the problem here; it is a management
decision, and there needs to be some action taken. I would
encourage the Congress to have active oversight over this issue
until there is a satisfactory resolution.
Ms. Duckworth. Am I correct in my understanding that
between the two systems, the VA's VistA system and the DOD's
AHLTA system, the VistA system is generally perceived to be the
better system but we are not abandoning AHLTA? Is that
understanding correct?
Mr. Willemssen. AHLTA is not being abandoned at this time.
That is correct.
Ms. Duckworth. But it is not--but the VistA system is
superior. Is that--from the practitioner's point of view, those
who have to use it.
Mr. Willemssen. I would hesitate to come to that
generalization. It depends on the user population you are
talking to. But as a generic conclusion, most would probably
agree with your statement.
Ms. Duckworth. So, then, if we were to go with what you
just said, Mr. Dodaro, as a recommendation, which is just use
one of the two instead of trying to build a whole third one,
which is even more expensive, how do we go about doing that? Is
it a requirement from the White House? Is it Congress saying
that you will use one of these two systems? That seems to be
meddling down to a level in the services that we may not want
to get into.
Mr. Dodaro. Yeah. Well, my recommendation would be for the
Congress to ask for the analysis that supports their current
decision and ask for that analysis to be expanded to include
the pros and cons of going to one of the two other systems and
to see, at that point, you know, what the proper decision would
be. And if the Congress then is not satisfied with that
decision, it can legislate.
Ms. Duckworth. Do you think that--in their testimony, well,
what they are saying is it is too expensive to develop a new
system and they are going back to the two. Is it because they
were each counting their money that each was spending and not
the cumulative between the two together? Do you see what I am
saying?
Mr. Willemssen. I want to clarify one thing. When the 2011
decision was made to go to a unified system, it was not
necessarily stated that they would develop a brand-new one. In
fact, we assumed they would default to one of the existing
ones, from a cost perspective. So I just wanted to make that--
clarify that for you.
Ms. Duckworth. Thank you. I think this goes back to Mr.
Chairman, what he has been working on with the purchase of
software.
And I yield back my time.
Mrs. Lummis. [presiding.] The gentlelady's time has
expired.
We will now yield our time to the gentleman from Georgia,
Mr. Collins.
Mr. Collins. Thank you, Madam Chair.
Just a quick question. You used a term there, and before I
get to it, you talked about depending on the population that
was using it. Is that just a very nice way of saying that this
is the one I am trained on so I like it better?
Mr. Willemssen. Yeah, and depending on the practitioners.
Mr. Collins. Right. So, basically, we are not talking
costs, we are not talking effective. We are just saying, I was
trained on this, I like this better. We are not looking at a
big picture.
I think we are hitting--I think that right there may have
summed up the entire hearing that is really concerning me, is
we are looking at what we like, we are looking at what we are
trained on. And in many of these departments--but I appreciate
the way you said that. It was a very nice way of saying it,
just basically I like what I am doing and I don't want to
change.
Mr. Willemssen. That is correct.
Mr. Collins. Okay. Thank you.
An overview question here. One, as I was looking over this
report, which are always fascinating, I was--as a boy from
north Georgia growing up, I didn't realize catfish needed that
much inspection, but--I usually just caught them. You know, I
inspected them and said, Yep, that is a good one, put it in the
bucket, you know, we are good.
An overview question here. What is the greatest problem--
and it may not be an easy answer--fragmentation, duplication,
or overlap?
Mr. Dodaro. Well, of the three, we typically find most of
it in the overlap area.
Mr. Collins. Okay.
Mr. Dodaro. Among those three options, I would say.
Mr. Collins. Okay.
Going back to the reality of what you had commented on
earlier, I was reading in the report on page 211, and it came
to the checked baggage screening, TSA. And this one really
disturbed me as we were going along. And, basically, your
report says that TSA has not yet conducted a study to determine
about the 90 percent cost-share. And it went on and actually
stated this. It said that it generally applies--the
reimbursable agreements of the checked baggage--absent
direction from Congress that TSA conduct a study, the agency
currently has no plans to do so.
Ms. Berrick. That is correct.
TSA was actually mandated to do that study back in 2004.
They attempted to do the study in 2006, but they really
couldn't reach consensus. Some of the issues they were
grappling with was, what was the appropriate Federal role in
terms of paying for these systems? They also couldn't reach
consensus on who benefited the most. Was it the Federal
Government? Was it the traveling public? Was it the airports?
Because there are significant benefits to the airports,
themselves, in terms of fewer bags being lost and stolen.
So they couldn't reach consensus, so they decided just to
stay with the 90 percent cost-share. And they identified that
they wouldn't review that again unless Congress directed it.
Mr. Collins. I mean, again, shouldn't the appropriate role
of any Federal agency, stewards of taxpayer dollars, be to run
the most efficient, most productive organization that they can
and not to bog down in what-if scenarios?
Ms. Berrick. We agree. We think they need to tackle this
issue. We think they need to look at it. There are
opportunities for savings here.
Also related to checked baggage, we also identified that if
TSA deployed more of these in-line systems, they could achieve
significant savings just in reduced personnel costs.
Mr. Collins. Well, I think it is very disturbing that they
had a mandate do it, they chose--that they found problems and
stopped. I mean, it is a story here almost like my child. When
my child, once I tell him to do something, he says, Well, it is
hard, Daddy, I don't want to do it, so we give up. This is the
part that most Americans don't understand and they don't get
when we come to this.
Moving along, page 41, the uniform procurement. As a member
of the Air Force, this one is one, as just a general member, it
is like any new--and with no offense to my higher-up generals--
it is like the new general comes along, ``We need a new
uniform.'' That is crazy. And especially when we are doing--is
this a service branch issue?
And I agree with my colleague here, not wanting to meddle,
but why do we come along in looking at the cost of production--
I am still trying to figure out why it took $400,000 to redo
the Navy uniform when they actually look like the others. I
would have done it for a lot less than that because it is the
same pattern.
What can we do there? Or is there anything we can do there
to continue this process? I know the Air Force has now decided
that they will use something with Army, but they are not really
sure what they can use. I can use a lot of examples here of
people that didn't like the new ones. And, really, a force
protection issue here.
Can you elaborate on that real quickly?
Ms. St. Laurent. Yes, I definitely think there is more that
the Department of Defense can do. It has a board that is
responsible for establishing policies and procedures with
regard to uniforms and managing this whole process.
And there are a couple of issues. One is certainly from a
cost perspective. The Defense Logistics Agency will waive a fee
if two services go together and procure uniforms. And that is
really probably just the tip of the iceberg here in terms of
potential cost savings because there could be further
efficiencies and economies of scale if two services are
purchasing uniforms.
I think a lot of this, again, stems to each service has
their own culture, each service has their own acquisition
process. And it is often easier for them to be able to go their
own route, do their own testing, and develop a uniform exactly
to their own specifications.
But particularly in a joint environment, there are also
security and safety risks if you have people in a combat
environment with different types of uniforms, different
camouflage patterns.
Mr. Collins. I have experienced that in Iraq.
Real quickly, and I am out of time, but are personnel
costs--I know you look at the cost of the program savings, but
is personnel, like elimination or others, included in your
potential cost savings or streamlining?
Mr. Dodaro. It depends on which of the options we are
talking about.
Mr. Collins. Okay. And I will have some questions I will
provide after, because I would like some answers on that.
Mr. Dodaro. Yeah, we'd be happy to talk to you more about
it.
But I would just say on one point, this combat uniform
issue, if you look at many of our other options, there are much
more expensive examples of what is happening here--unmanned
aircraft systems, electronic warfare. There are huge
opportunities there to be more efficient in the Department.
Mr. Collins. Well, thank you for your work.
And I yield back my time.
Mrs. Lummis. Thank you.
The chair now recognizes the gentleman from Nevada, Mr.
Horsford.
Mr. Horsford. Thank you, Madam Chair.
Mr. Dodaro, good to see you again. Thank you for your
agency's work.
I have a technical question first, just on the report
itself. Once you do a review of an agency, I am reading through
here, sometimes an agency comments, sometimes they don't
respond at all. What is the requirement on an agency to respond
to your--the GAO's recommendations?
Mr. Dodaro. Yeah, there is really no requirement. We give
them an opportunity in accordance with our procedures and our
generally accepted auditing standards, provide them an
opportunity to comment. There is no mandatory requirement that
they do so.
Mr. Horsford. That seems like a fundamental flaw in the
process, as well. As a former State legislator, you do an audit
or a review of an agency, at a minimum that agency should
respond to those recommendations to say whether--you know, and,
again, sometimes they have, they agree. Sometimes they explain
further why there may be an overlap or duplication. And
sometimes they don't respond at all, which, to me, if they are
not responding at all, that is completely being unresponsive.
Mr. Dodaro. Yeah, I don't disagree with you at all on that.
And two things I would say. One is it is relatively rare when
they don't; usually they do. And they will agree or disagree.
Sometimes they will comment on our findings but not on the
recommendations. If I think it is a significant issue, I try to
meet with the heads of the agencies and talk them through those
issues. But, by and large, we get good comments and good
cooperation because they know it is in their interest.
Mr. Horsford. Okay.
So let me turn specifically to the higher education
assistance portion. And another technical question is, you say
here that, as of April 9th, GAO has not been able to assess the
2013 areas identified. What does that mean?
Mr. Dodaro. Let me ask Barbara.
Madam Chair, we need to have her sworn in, please, if I
might?
Mrs. Lummis. Thank you.
Please raise your right hand. 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?
Thank you, ma'am. You may take your seat.
Let the record reflect that the witness answered in the
affirmative.
Ms. Bovbjerg. My name is Barbara Bovbjerg. I am the
Managing Director for Education, Workforce, and Income Security
Issues.
And we wanted to discuss higher education assistance,
because there are three different kinds of assistance out
there. There are grants, like the Pell Grants. There are
student loans, loans to students and parents. And there are tax
benefits. And these are not necessarily well-coordinated.
There are programs in Education, in the Veterans Affairs
Department, in DOD that assist students with education. There
are multiple tools for different situations; they don't all get
used. There is not a lot of coordination across agencies.
Mr. Horsford. But on this report, it shows an ``A'' next to
``Completion.'' What does that mean?
Ms. Bovbjerg. You are talking about the STEM program, I am
thinking.
Mr. Horsford. No, it says, Area 16, Higher Education
Assistance. You know, if it is fully enclosed, it has been
addressed; if it is half-enclosed, it is partially. And then
there is a thing that says, ``A, as of April 9, 2013, we have
not assessed the 2013 areas identified.''
Mr. Dodaro. Oh. Okay. It is because it is a new issue, it
is really not addressed. That is a footnote A. That means it is
a brand-new issue, and so we haven't yet--they haven't had a
chance to implement it yet.
Mr. Horsford. Okay.
So let me ask my question specifically. And you pointed out
the three agencies--actually, four different Federal agencies
that administer Federal aid. On one of them, the report states
that, in 2009, 1.5 million taxpayers failed to file for an
education credit for which they were eligible.
Have the Treasury and Education Departments taken any steps
to improve the public's knowledge of these education tax
credits, to your knowledge?
Ms. Bovbjerg. As in many areas, they are starting to think
about this. We had suggested that they look at the
demographics, at the characteristics of the households and
individuals who were eligible but didn't file.
We also asked that they improve the information to them.
People don't well understand how these programs work. They also
don't understand how the Federal aid programs work generally.
So the application, the FAFSA that you fill out for Federal
financial assistance, even though there has been an effort on
the Department of Education to streamline that and to
prepopulate it with IRS information, it can be difficult and
tedious for people to fill out, and people don't.
And so there are people who not only don't get to take
advantage of the tax benefits that could accrue for education
expenditures, but there are doubtless people who don't apply
for benefits for which they would be qualified and perhaps do
not get the education to which they may be entitled.
Mr. Horsford. Yeah, and, obviously, that is troubling at a
time when the costs for education are going up.
Madam Chair, I know my time has expired. I don't know if
the time of her having to be sworn in counts against me or if I
get any extra time or not.
Mrs. Lummis. I will grant the gentleman additional time.
Mr. Horsford. Thank you.
On the improper payments in the VA's comprehensive Post-9/
11 GI Bill program, apparently that quadrupled between 2009 and
2010. And your report recommends that the Department of Ed
share best practices with the VA and the Department of Defense.
In what ways do you recommend that that collaboration occur?
Ms. Bovbjerg. Well, one of the issues when this program was
first implemented was how to get improper payments back. And if
the funding is going to the schools, it is much easier to get
things back because we have institutional relationships and
there are a number of people getting funding via the school. We
can withhold money--we can do different things to get that
money back. It is much more difficult when it goes to the
individual.
And this was something that was really a little bumpy at
the beginning of the Post-9/11 GI Bill implementation. And we
felt that the Department of Education has for many years run
grant programs and loan programs for students in higher ed and
that they might have been able to help with certain common
practices that are used.
Now, in the VA's defense, they have begun talking to the
Department of Education. I don't want to hold out the education
programs as being perfect, by any means, but, certainly, there
is a level of experience and lessons learned from many years of
practice that could help.
Mr. Horsford. Thank you.
Thank you, Madam Chair.
Mrs. Lummis. Thank you.
And now we will--the chair recognizes the gentleman from
Michigan, Mr. Bentivolio.
Mr. Bentivolio. Thank you, Madam Chairwoman.
My question deals with combat uniforms. Now, just for
clarification's sake, the two uniforms we went from was desert
camo and forest BDU, if I am not mistaken? ``BDU'' meaning
battle dress uniform. Correct?
Ms. St. Laurent. Yes. There were--we went from two to seven
different uniforms.
Mr. Bentivolio. So these are not----
Ms. St. Laurent. Different patterns.
Mr. Bentivolio. Right. These are not Class A's, they are
not dress whites. These are everyday-wear working uniforms,
correct?
Ms. St. Laurent. Yes. Correct.
Mr. Bentivolio. Great. That is what I thought. And we went
from--if I am not mistaken, the difference between the old
forest green camouflage for a Marine and an Army was the name
of the branch, upper right-hand pocket, and I think the Marines
wore their sleeves differently than the Army? Correct?
Ms. St. Laurent. Again, there have been a number of changes
made----
Mr. Bentivolio. Yeah.
Ms. St. Laurent. --over the years.
Mr. Bentivolio. A number of changes. Now we have seven. We
have the blue digital Navy, Air Force; Marine brown digital;
Army gray-greenish digital. And we have a--do we have a special
camouflage? I am trying to find the other three or four.
Mr. Dodaro. There are pictures of them all in our report.
Ms. St. Laurent. Right.
Mr. Dodaro. Let me get the page.
What is the page?
Mr. Bentivolio. Okay. Well, I will look at that.
Mr. Dodaro. Yeah, we have them all listed, pictures of them
in the report.
Mr. Bentivolio. All right. But I think I saw an $82 million
savings if we reduced it to one?
Ms. St. Laurent. Right. That would be the savings
estimated, for example, if the Army and the Air Force go
together in designing a new uniform. And the savings that we
are reporting, these are the savings because the Defense
Logistics Agency, which procures uniforms for all the services,
will waive their initial inventory fee if two or more services
join together in a procurement of a same uniform.
Mr. Bentivolio. And that was the $82 million that I read?
Ms. St. Laurent. Uh-huh.
Mr. Dodaro. Yes.
Mr. Bentivolio. So what is your estimate of the cost
savings, for instance, if we went to just one digital uniform?
Ms. St. Laurent. We don't have a specific cost estimate.
Again----
Mr. Bentivolio. Okay. But it would be considerable?
Ms. St. Laurent. It would probably be significantly more
because we would expect that there would be economies of----
Mr. Bentivolio. Scale.
Ms. St. Laurent. --scale in the procurement of the
uniforms, as well as some savings in the design and
acquisition.
Mr. Bentivolio. And the only difference would be the name
of the branch, and possibly the way they wear their sleeves or
their hat would tell the difference, correct?
Ms. St. Laurent. Right. Each service has to examine, look
at their mission and determine where do you need pockets, how
much material do you have to carry, and those kinds of things.
So that is why the current Department of Defense guidance does
not require all the services to have the same uniform. But it
highly encourages them to explore opportunities to partner
together and see if they can reach compromises and work through
the requirements.
Mr. Bentivolio. Okay. So when you said cargo pockets, I
mean, it is my understanding the cargo pocket on your leg has
to be big enough to fit an MRE. So an MRE is eaten by all
branches----
Ms. St. Laurent. Right, that is correct. But, again,
looking at the services' different missions, they may be
carrying different types of equipment and want to modify things
a little bit.
Mr. Bentivolio. Okay.
Ms. St. Laurent. So that is where some of the individual
requirements come from.
Mr. Bentivolio. Have there been any studies on exactly what
the cost savings would be if we went to one uniform?
Ms. St. Laurent. No. We checked with the Department of
Defense, and we do not think that they have--we do not think
that they have identified or done any particular studies. So,
again, our analysis was based on the Army and Air Force going
together and the inventory fees that could be saved.
Mr. Bentivolio. Eighty-two million dollars. Thank you very
much.
I yield back my time.
Chairman Issa. [Presiding.] Would the gentleman yield?
One quick follow-up. In this year's statement, you talked
about the uniforms, obviously the branches buying additional
uniforms. Have you ever looked into the aborted program to
consolidate non-uniformed service personnel in combat, their
uniforms?
Apparently, they have repeatedly had these studies to try
to come up with sort of what--when I visit Afghanistan or Iraq,
civilians, other employees, the press, they are in haphazard
different uniforms, sometimes sort of camouflage. I have become
aware of it on multiple occasions, that apparently they keep
getting ready to design one and then they can never get buy-in
from the services.
Does that fit at all into sort of this, not invented here,
I won't buy an Army solution even for civilians?
Ms. St. Laurent. We focused on the service uniforms,
military officials in this study, so we haven't looked
specifically at that issue.
Chairman Issa. Okay. Thank you.
I thank the gentleman.
We now go to the gentleman from Virginia, Mr. Connolly.
Mr. Connolly. Thank you, Mr. Chairman.
And thank you and Mr. Cummings for holding this hearing. I
think this is one of the most important hearings we have every
year, but I guess it is not sexy, looking at the press table.
And yet, when we think about the potential for savings----
Chairman Issa. Would the gentleman yield?
Mr. Connolly. I would.
Chairman Issa. You cannot insult the esteemed members of
the press who are here. I would like to personally thank the
esteemed members of the press who saw the importance of this.
Mr. Connolly. That is right. But thank you for being here.
I just wish more of your colleagues understood how important,
actually, this topic really is.
General Dodaro, you had 381 recommendations--and thank you
to you and your able staff for this very illuminating report.
You had 381 recommendations since 2011, I think. What is the
total estimated ballpark figure of savings to the government if
all 381 were implemented?
Mr. Dodaro. The estimate we have is tens of billions of
dollars. We don't have a specific estimate.
Mr. Connolly. Well, actually, it is a lot more than that.
Just, I am going to get to one of them, tax collection. But, I
mean----
Mr. Dodaro. Well, if you closed the tax gap, you could, you
know----
Mr. Connolly. Yes. And improper payments.
Mr. Dodaro. Right, right.
Mr. Connolly. There is another $125 billion a year, so, I
mean----
Mr. Dodaro. We are being very conservative.
Mr. Connolly. You really are.
Mr. Dodaro. Yeah.
Mr. Connolly. I mean, because this committee actually has
explored just those two items, and they exceed $500 billion a
year, just those two.
Mr. Dodaro. Which two.
Mr. Connolly. Well, the tax gap----
Mr. Dodaro. Well, the tax gap is $385----
Mr. Connolly. And improper payments are $125 billion a
year, maybe more.
Mr. Dodaro. Right. Right.
Mr. Connolly. So uniforms is interesting, and certainly we
should effectuate an efficiency. But when we are looking for
savings, we ought to go, it seems to me, after the big stuff.
And let me do that. In your looking at the tax gap, the
figure from 2006 is $385 billion estimated. Is that correct?
Mr. Dodaro. That is correct. That is the net tax gap,
right.
Mr. Connolly. Net tax gap. Now, could you define for us
what ``tax gap'' means?
Mr. Dodaro. ``Tax gap'' means the difference between taxes
that are owed but not collected. For example, the voluntary
compliance tax rate is about 84 percent, so about 84 percent of
citizens voluntarily comply and file their taxes. And it has
been that way for a number of years now. So if you think about
it that way, 16 percent of the population is not properly
filing their taxes.
And that can include companies, as well. The tax gap is
really widely distributed across both corporations and
individuals and different types of taxes.
Mr. Connolly. And, in fact, you went into that, General, in
the report, saying that taxpayers' underreporting is less
likely to occur when the tax information is also reported to
the IRS by a third party. Is that correct?
Mr. Dodaro. That is correct. That is correct. And we
recommend more third-party reporting.
Mr. Connolly. What does that mean?
Mr. Dodaro. That means getting information from other
agencies outside the IRS or the particular employer of the
individual. For example, there is a number of reports that are
out there that show business activity of different businesses,
and we have suggested IRS get those reports and compare them to
the businesses that are reporting taxes to compare the data.
Mr. Connolly. Okay.
Mr. Dodaro. The data-matching aspect of this is the most
efficient and effective way to spot potential problems.
Mr. Connolly. And why would we be leaving $385 billion of
revenue that is owed the government--not new taxes, not cutting
critical investments--why in the world would we leave $385
billion, given our fiscal crisis, on the table? But for what?
Mr. Dodaro. That is one of the reasons I have included it.
It has been on our high-risk list for years, and I have
included it in every single one of these three reports that we
have put out. I just think we are not focusing enough
attention----
Mr. Connolly. Well, General, could it have something to do
with resources at the IRS?
Mr. Dodaro. In some cases, resources would be helpful, but
not in all cases.
Mr. Connolly. What is the ROI, what is the return on
investment for every dollar in collection resources we invest
in IRS? Do you know? Would at----
Mr. Dodaro. My experts tell me they don't have good data on
that.
Mr. Connolly. Would at least $1.60 be in the ballpark, do
you think?
You can get back to us.
Mr. Dodaro. Yeah.
Mr. Connolly. You can get back to us.
Mr. Dodaro. Okay.
Mr. Connolly. But if you could get that for the record.
Mr. Dodaro. All right.
Mr. Connolly. And then I have 37 seconds, so real quickly,
the chairman and I have introduced a bill, as you know, called
FITARA in trying to streamline and make more efficient and
effectuate savings in our Federal IT acquisition process. And
in that bill there is something called the working capital
funds to help cloud service transitions for a period of up to 5
years.
Real briefly, if the chairman will entertain it, would you
comment on that provision? Because I think it is consistent
with some of the findings in your report.
Mr. Dodaro. Yes. I will ask Mr. Willemssen----
Mr. Connolly. If the chairman would allow the answer.
Chairman Issa. Of course.
Mr. Connolly. I thank the chair.
Mr. Willemssen. Yes, Congressman, that provision would be
clearly consistent with our message in the cloud area. And we
are in--that is in part why we are supportive of the bill. The
bill overall includes at least eight areas that are included in
our duplication report that was issued today.
Mr. Connolly. Thank you very much. And I knew the chairman
would like to hear that.
Chairman Issa. Would the gentleman yield?
Mr. Connolly. Absolutely.
Chairman Issa. General Dodaro, the gentleman asked about
additional audit. And no question at all, I think he had an
accurate, known figure. But isn't it that watchdog groups and
others have come up with items that would, in fact, provide
data that would give you a sense of people who you can't audit
because they haven't filed a return that are in the cash or
somewhat-cash economy? Isn't that a big part of that
nonreported? You know, the 84 percent is who you audit, but the
16 percent would be the ones you are not auditing, right?
Mr. Dodaro. Well, it could be. It could be the ones you are
not auditing. I agree with you. That----
Chairman Issa. Has the IRS ever audited someone who didn't
file taxes?
Mr. Dodaro. Well, only if they would get a tip or
something----
Chairman Issa. Yeah.
Mr. Dodaro. --from somebody that indicates that they are a
nonfiler in that area.
But there are other things that--like, we recommend that
Congress give IRS math authority so they could fix some of
these returns when they come in. That doesn't cost any
additional money.
We recommend that IRS, in our most recent report, redirect
some of their resources from auditing lower-income taxes
returns to the higher-income taxes. They would get more ROI
back on the money that they, you know, spent. Same amount of
resources they would have, auditing different types of tax
returns, yields more revenue back to the IRS.
So we have a long list of recommendations in this area that
we think could be implemented without additional resources that
would yield greater revenues to the government.
Chairman Issa. Okay. I thank the gentleman.
We now go to the gentleman from North Carolina, Mr.
Meadows.
Mr. Meadows. Thank you, Mr. Chairman. And thank you for
holding this hearing on this important topic.
And as I have just come back from the district, this
particular issue continues to come up over and over again.
American--the hardworking American taxpayers have a hard enough
time paying for something once, but paying for it twice is
really a problem.
And so I want to focus a little bit on something that was
put in your GAO report on renewable energy initiatives. And I
have an energy background going back some 35 years ago. And as
we looked at that initiative, Federal spending over a 7-year
period from 2002 to 2008 averaged about $4 billion a year and
increased in 2010 to some $15 billion.
And in quoting you--this is a quote: ``We found that
Federal support for renewable energy is fragmented, as 23
agencies and their 130 sub-agencies implemented hundreds of
initiatives in fiscal year 2010. We assess that the Federal
wind energy initiative found that there were 82 wind-related
initiatives that we examined that had overlapping
characteristics.''
And so my question is this. In 2012, the GAO found that
there were 700 government initiatives to promote renewable
energy, and the report finds that there was overlapping
initiatives throughout this entire area. Would it be safe to
say that the Obama administration's spending on renewable
energy is lacking coordination?
Mr. Gaffigan. I would say that this has been a problem even
before the Obama administration, in terms of the number of
initiatives we have out there.
Just to go out and do the inventory and come up with those
numbers was a huge effort on our part. We couldn't go out and
go to one source. You would think you could go to the
Department of Energy and get that number, right? But the
Department of Energy is just one of those agencies involved in
dealing with renewable energy initiatives.
And we have in the body of the work that we have worked on
energy issues for a long time, this has been an issue going
back as long as I have worked in the area, in the early 1990s.
Mr. Meadows. Okay. Well, let me----
Mr. Dodaro. It is also----
Mr. Meadows. Okay. Go ahead.
Mr. Dodaro. It is also fair to say that a number of those
initiatives were enacted by Congress, as well, that they
weren't just administration initiatives. It is a mixture of
both.
Mr. Meadows. Well, but let's look at the coordination. If
this was a problem and we had a problem with coordination, why
would we increase the spending by 400 percent because we take
an inefficient program and make it more inefficient?
Mr. Gaffigan. I don't think we spoke to the efficiency of
the particular initiatives. There are a lot of initiatives out
there, and some of them, you know, some initiatives, some
projects may benefit from multiple sources.
What we are trying to point out is, does anybody have a
sense of all these different initiatives, as the Comptroller
General mentioned, established by Congress many of them, both
on the tax side, the tax expenditure side, which tends to have
the least amount of transparency, as well as program
initiatives that every administration puts forward.
Mr. Dodaro. But I think this goes back to Chairman Issa's
point, too, about the visibility over these things. Nobody
really had visibility over it. Nobody is responsible for
focusing in on this. And if it wasn't for us going in and
identifying this, nobody would know how many programs there
were.
Mr. Meadows. Basically, if it is green, it is good. And
that is what we are--and that is why I wore my tie today, to
make sure that--but as we look at this, let's go on a little
bit further then. How much cost savings could we achieve if we
resolved this coordination problem? I mean, what are we looking
at?
Mr. Gaffigan. Yeah----
Mr. Meadows. Seven hundred government initiatives.
Mr. Gaffigan. Yeah. That is very hard to say, because we
think that there could be some cost savings, but there also
could be greater efficiencies, you know, more effective
programs. So it is a combination of those two things.
The first step is to figure out what all these initiatives
are. And even though we did those numbers, in 2011 they are
going to change, in 2012 they are going to change, in 2013 they
are going to change, because initiatives are coming in and
going out. So it is very difficult to get a sense of the
snapshot every time. It is a huge amount of our resources just
to figure out and identify those 700 initiatives.
Mr. Meadows. And so those are changing on a regulatory
basis? Because Congress is not changing it from year to year.
Mr. Gaffigan. Well, there are programs being, you know,
implemented and different emphasis on various programs within
the government. So----
Mr. Meadows. From a regulatory standpoint?
Mr. Gaffigan. I think it is a combination of changes in the
Tax Code. You know, you have different Tax Codes that may be
expiring and being renewed. Some are renewed, some aren't. So
there is the changing landscape. And then agencies are making
decisions on what to emphasize.
Mr. Meadows. All right. Let me--I am running out of time--
let me ask one last question here. As we have seen, you know,
there has been quite a bit of malfeasance uncovered within the
administration in terms of spending on green energy over the
last 2 years. And as we see this--you know, a lot of it coming
from the Department of Energy.
What energy efficiency programs do you find most concerning
out of these 700 government initiatives?
Mr. Gaffigan. Well, there is a lot of work we have done in
the energy sector. I would say when we looked at the Loan
Guarantee Program, we had some concerns about documentation of
that program.
But, by and large, our main concern was just bringing forth
the notion that no one had a good sense of how many different
initiatives there were, and was there good coordination.
Mr. Meadows. So if you were to eliminate three--I can see
my time has expired. Would the chair yield for one last
question?
Chairman Issa. I ask unanimous consent the gentleman have
an additional 30 seconds.
Without objection, so ordered.
Mr. Meadows. Okay.
As we see this, if you were to put three programs that if
you had a magic wand you could make disappear and save the
hardworking American taxpayers money, what three programs would
those be?
Mr. Gaffigan. You know, we haven't identified programs that
we would eliminate. And, I mean, ultimately, that is Congress'
decision in terms of policies.
What I would say is, if we want to make savings in green
energy, renewable energy, we have to address the question and
the issue of fossil fuels, which we are very heavily dependent
on both for transportation and less so in the electricity
sector, and recognize that we pick those because they are the
most cost-competitive sources of energy. And to force changes
through government interaction is just one piece of that. And
we have to really get an understanding of what government role
should play. Should it be in the R&D sector? And those are
policy decisions that are made by the Congress.
Chairman Issa. The gentleman's time has expired.
Mr. Meadows. I thank the chairman, and I yield back.
Chairman Issa. What are you yielding back? I thank the
gentleman.
We now go to the gentlelady from the District of Columbia,
Ms. Eleanor Holmes Norton.
Ms. Norton. Thank you, Mr. Chairman.
This is always an important hearing, but it also is more of
the same. And I want to suggest--ask a question concerning
approach. The gentleman before me spoke of coordination. I want
to speak of consolidation. I think both are important.
But it is in the nature of government, Mr. Dodaro, that we
are going to have functions that overlap, even duplicate,
because we have 12 appropriations subcommittees and they are
pretty independent. We have many more authorization committees
and subcommittees. And so it is the nature of the beast that
they are going to put out duplicate programs. There comes a
point when one has to look at those programs and say--make the
kind of evaluation, the very helpful evaluation, you have made.
May I say how much I appreciate that a part of your report
opens with a definition of the differences between
fragmentation and overlap and duplication, although I do note
that you still lump them all together in the text. And yet
there is a tremendous difference, considering, for example,
that you could easily have programs that are fragmented because
it is too early to put them together, or that overlap for
reasons that would be perfectly sensible.
But, at some point, if they are to be retained, one has to
ask the questions that the GAO has asked. So I went out to get
from staff the latest version of an attempt to consolidate--in
other words, an approach that would try to take this and keep
it from having a revolving-door aspect, as I think you will
find the next time the Appropriations Committee comes out with
yet another--with yet another provision.
Now, the President, in 2012, early 2012, submitted a
proposal to consolidate some agencies within the trade-related
sector. Now, put aside the sector; that is really not my
question. As I recall, we had a hearing on that. That did not
move forward.
It seemed to me fairly compelling, so I went looking for
the letter, because it was focused on business and trade, and
it indicated that it was difficult for firms and especially
small business to get assistance. And so the proposal was to
have one phone number, one mission. And it was said that this
would help business succeed and support competitiveness,
exports, job creation. Now, of course, that is all description.
We would have to see if that would happen.
But does there not come a point when GAO itself, perhaps,
might suggest a more comprehensive approach than simply
pointing out the pockmarks and hoping that somebody will pick
them up? The President hasn't had this authority since Ronald
Reagan.
My question goes to the authority. Do you think that, given
the nature of the problems you continue to uncover on an annual
basis, that some of them might be eliminated through
consolidation of some of the functions themselves?
Mr. Dodaro. Yes. In certain areas, we have recommended
that. For example, we have looked at the loans--loan programs
at HUD and at Agriculture in the rural housing area. In fact,
HUD is giving as many loans in rural communities as the Rural
Housing Authority is in urban counties. And so----
Ms. Norton. So how would you consolidate that?
Mr. Dodaro. Well, you would put the two agencies together.
You could locate them at HUD. HUD has a more extensive network.
You could create another entity. I mean, there are different
options for how to do it, but where we have identified that
opportunity, we have pointed that out in those areas.
Ms. Norton. Uh-huh.
Mr. Dodaro. And I might say, as it relates to the scope of
our work, I mean, we were mandated by Congress to have a
routine set of audits and annual reports that outlined
duplication across Federal Government agencies. I mean, that is
why we are issuing these products. In some cases, you can do
some consolidation, of course. And where we think it is
appropriate, we have pointed it out.
Ms. Norton. Well, I appreciate that you have pointed it
out, because there is a kind of repetitive nature to this
report. And the problem--I am not bothered by the repetitive
nature. I am bothered by the fact that the next appropriations
cycle is going to dump equal amounts of uncoordinated and
unconsolidated even, of course, programs.
So this particular one didn't move forward. I never was
able, frankly, to get a view because we didn't--we never got
that deeply into it. But it does suggest that--and, by the way,
only the Congress can give the President that authority, isn't
that not the case?
Mr. Dodaro. That is correct.
Ms. Norton. Finally, could I ask you, on----
Chairman Issa. Would the gentlelady yield for a second?
Ms. Norton. Yes.
Chairman Issa. Your question is a good one, but if we
perhaps could ask it both ways. We can give them the authority,
but, of course, the President can either get the authority to
do something he hasn't asked for or he can ask for
reorganization specific and then get that bill from the
Congress. Either one is allowed.
Ms. Norton. Say that again. He can either ask for it or?
Chairman Issa. As you were alluding to, since Ronald
Reagan, off and on, there has been reorganization authority.
But Congress has the actual right, and we abrogate our rights
when we give reorganization authority.
On the other hand, if the administration asked for a
reorganization that he had planned and said, ``I would like to
do this, this, and this,'' then, in fact, he would be asking
Congress to pass a bill, and he would send us a draft bill.
The two are rather interesting differences. And the only
reason I mention that is, every time Congress sends a proposal
for effectively reorganization, the administration--we could
sua sponte pass a bill and send it to the White House, where
the President could say, I like parts of this, I don't like
parts of this, and ask for it.
But I think the gentlelady's point is good. Without a
reorg, without real change in the organization, you will
probably not have full implementation of these at all.
Ms. Norton. Indeed, that is a very important point that the
chairman makes. And I note that the President asked for fast-
track authority. Because once you do it by saying, Here are a
set of agencies, then what you do is to have the Members, who,
for reasons of their own, perhaps that function is in a
Member's district or in a Member's State, pick and choose, and
they pick the bill apart.
So the experience has been that if you don't give the
President the authority in some kind of fast-track order, the
way we do with trade itself, the notion of consolidation
becomes just that, a notion.
So I am not--I just wanted to get on the record that that
would be a way, although we haven't used it in some time, to
deal with the overlapping. I don't even want to use that word
because my next question is going to be, is there a way to
unbundle how much of it has been fragmentation, how much of it
has been overlap?
Because you appear to understand and want us to understand
the difference. In this graph that you have on page 2, that
speaks of what fragmentation means, what overlap means, and
what duplication means, and, hence, a final--you know, somebody
needs to go, with the duplication.
Chairman Issa. The gentlelady's time has expired, but
please answer.
Mr. Dodaro. Right.
I mean, we can segregate that out. But I would make a very
important point. We are just not reporting fragmentation to say
things are fragmented. We are only pointing out areas of
fragmentation where we believe there to be inefficiency.
Ms. Norton. No, I understand that.
Mr. Dodaro. You know, because you are right, I mean, we
could point out a wide range of things that are fragmented but
are not necessarily leading to inefficiencies.
Ms. Norton. No, and I appreciate that, that this involves
the analysis----
Mr. Dodaro. Right.
Ms. Norton. --that shows there is an underlying problem.
Mr. Dodaro. Right. But we could identify that, recognizing
in some areas there are both fragmentation and overlap and
duplication. So there are elements of some, elements of three
of them in several different areas. But we can attempt to
isolate those and provide the committee with a listing.
Chairman Issa. If you would do that.
Ms. Norton. I would appreciate it.
Chairman Issa. The gentlelady from Wyoming is recognized.
Mrs. Lummis. Thank you, Mr. Chairman.
And I would like to continue this conversation with the
opportunity, I hope, to not only ask you questions, Mr. Dodaro,
but also our chairman and the delegate because of their
longtime experience on this committee.
Has there ever been a joint reorganization council in the
Federal Government between the executive and legislation
branch?
Chairman Issa. There has. Probably--the Hoover Commission
probably would be the huge success story where it was long-
term, ongoing, and bought in by all the bodies.
Most recently, I think the Homeland Security standup would
be a major reorganization, where the administration came to us,
said what they wanted in this new entity, and then we passed a
bill.
Those would be the two most current examples, one doing it
one way, one doing it the other way.
Mrs. Lummis. Do they work better if they are topical, or
can you do something broader than a consolidation on one topic?
Meaning----
Chairman Issa. I think that is where somebody has to come
up and talk about the success of Hoover, because it is the
poster child for how you do it right.
Mr. Dodaro. If I could have Mr. Mihm come up and be sworn
in.
Chairman Issa. Please raise your right hand. Do you
solemnly swear the testimony you are about to give will be the
truth, the whole truth, and nothing but the truth?
Let the record indicate the witness answered in the
affirmative.
Mr. Mihm. Well, first, Mr. Chairman, thank you very much
for raising the Hoover Commission. I mean, it is music to my
ears, as a management geek here.
The reorganizations that work best are those in which the
Congress is deeply involved at the outset in making sure that
they understand what the proposals are going to be, what will
be done, and how it will be done.
One of the concerns that I know various Members raised, you
know, as regards to the last reorganization proposal that came
in from the administration was that they hadn't been brought in
at an early enough point to understand the implications of
this.
And it doesn't mean that at the end of the day that it
couldn't all have been resolved. But the experience, as the
chairman just mentioned, of the Hoover Commission, of where you
get the Congress and where you get the administration,
supplemented by outside experts that can help them on that,
deciding on an approach, whether it be a comprehensive or an
agency-specific approach, such as the Department of Homeland
Security, getting them all working together is really the best
way to do it.
Mrs. Lummis. Well, Mr. Chairman, I want to follow up with
this line of questioning then.
How long has it been since the Hoover Commission completed
its work? Is it a----
Chairman Issa. You weren't born, young lady.
Mr. Mihm. It has been a while, yes, ma'am.
Mrs. Lummis. Is it time--is it time to do it again?
Mr. Mihm. There is certainly, you know--it is, you know,
given the current fiscal crisis, given how difficult the set of
policy questions are that Congress confronts, given the track
record of our overlap, duplication, and fragmentation efforts,
it is certainly may be worthwhile to step back and say, do we
have the right organization in shape here for a 21st-century
government?
Technology has changed fundamentally in the way we can
deliver services, and yet the basic institutional structure of
Federal agencies, the way they deliver programs, has not
changed in generations. In some cases, we have agencies that
were put together to deliver services for an earlier time, an
earlier client base. That continuously needs to be refreshed.
Whether or not we do it on a big, broad commission or do it on
a case-by-case basis is a different question. But, certainly,
we need to be reviewing not just the increments but the base of
government in the current environment.
Mrs. Lummis. Now, was the Hoover Commission created by
Congress?
Mr. Mihm. I will have to----
Chairman Issa. Technically, yes.
Mr. Mihm. Thank you. I will take the chairman's----
Mrs. Lummis. And with the assent and participation of the
executive branch?
Mr. Mihm. Right.
Chairman Issa. Yeah, it was actually Presidentially asked
for, authorized, and then included all of them.
And do you remember how many years, sort of, between the
beginning and the end? It was huge. Hoover 1 and Hoover 2.
Mr. Mihm. There was Hoover 1 and Hoover 2. I will have to
refresh the history on that, but, you know, there were a number
of years there.
I mean, there have been other attempts. You know, there was
the Ash Council and other councils that have--you know,
President Nixon, of course, had a huge effort. President Carter
had a reorganization effort that was attempted.
But there really hasn't been a zero-base one. The closest
we came to that in recent memory has been the National
Performance Review under President Clinton, of course. But that
really wasn't a big reorganization. That was about improving
effectiveness of government with some reorganization elements.
Mrs. Lummis. And did it? Did the Clinton administration
performance reviews improve performance?
Mr. Mihm. Overall, when we looked at--we have done a number
of reviews of the 380 or so recommendations that they made. You
know, we thought they were sensible recommendations.
They certainly--one of their big achievements, I think,
was--whether or not we give the NPR credit for this--was
bringing a focus to customer service within many Federal
agencies. Agencies hadn't been familiar with thinking of the
public in which they deal with as customers that have a right
to polite, fast, and efficient and effective service.
Certainly, one of the other pieces that was put in place
during the National Performance Review era, but it was a
congressional initiative, was the Government Performance and
Results Act. Congress, of course, has modernized that within
the last couple years to try and get agencies to do a better
job in setting long-term goals, annual performance goals,
measuring performance, and, most importantly--and this was the
thing that we haven't done since the first GPRA was passed in
1993 and a point of personal frustration for me--is to begin to
get agencies to do a better job in using that performance
information in order to improve performance.
Mrs. Lummis. Uh-huh.
Mr. Mihm. We produce volumes of information and data on how
programs are doing. We do a very poor job across government in
using that information to pinpoint improvement opportunities,
making changes, and then following up rigorously to see if
those changes were actually effective. And if they were, let's
leverage them; if they are not, then let's go to something
else.
Mrs. Lummis. I thank the gentleman and the chairman.
Chairman Issa. And just for the record, the Hoover
Commission was officially named the commission when it was
organized by the executive branch, and the body was appointed
by Harry S. Truman. But it went on to, Hoover 1 and Hoover 2,
throughout the Eisenhower administration.
And I believe it is the last one that was essentially
chaired by a former President. Is that right?
Mr. Mihm. That is my understanding.
Chairman Issa. And perhaps that is the hallmark difference
between it and other notables.
With that, we go to the gentleman from Tennessee, Mr.
Duncan.
Mr. Duncan. Well, thank you, Mr. Chairman. And thank you
for trying to continue to call attention to this staggering
problem.
And I want to, first of all, commend Mr. Dodaro and his
colleagues. And I suppose you could say that I am hopeful but
not optimistic. It seems to me that we have allowed the Federal
Government to get so big and so bureaucratic that it just is
out of control and these problems just continue.
In fact, the Washington Examiner story today says,
``Government overlap and duplication have dogged the Federal
Government for years. President Reagan formed the Grace
Commission to identify examples of the problem, and President
Clinton assigned to Vice President Gore to the task of ending
it by 'reinventing government.' But the new GAO report makes
clear that the examples continue to pile up.''
And then I was given this a short time ago. It is from a
report, and it says, quote, ``The last major study of Federal
surveying and mapping nearly 40 years ago found a disturbing
proliferation of duplication of activity among many different
agencies. Today these activities are found among an even
greater number.'' And that was from a 1973 report, 40 years
ago.
And, you know, it is really sad. I mean, you have done a--
you and your colleagues have done what I think is an absolutely
great job finding all these examples. The Justice and Treasury
Departments' forfeiture programs lost $2.2 billion in 2011
because the agencies cannot find a way to share storage
facilities. Drug abuse prevention programs are strewn over 76
programs, costing taxpayers $4.5 billion. Veterans
Administration, which seems to feel that they are immune from
efforts to save money or immune from criticism because we all
love veterans, but I think there is waste and inefficiency even
in the VA. And your report says it could save $1.2 billion by
consolidating employment training programs. And contractors for
the Defense Department foreign language services run over 159
separate contracting organizations. I mean, it just goes on and
on.
Let me ask you this. How hopeful are you, Mr. Dodaro, that
5 years, 10 years from now, we won't be coming back finding
that this program is just as bad or worse?
And, secondly, what do you--I was not able to get here for
your testimony. Maybe you have covered this. But how much do
you do in follow-up, like when you suggested to the--when you
suggest that the training programs could be consolidated, do
you write the VA and suggest that? And then when nothing
happens, do you contact them again 30 days or 60 days or 90
days later? How does that work?
Mr. Dodaro. First, we regularly follow up on all our
recommendations on an every-6-month kind of cycle. And if we
don't see enough progress made by the executive branch, then we
will work with the Congress to try to get them involved.
Part of the issue here is that when we identify these
programs and activities, they cross multiple Federal
departments and agencies. And, really, OMB isn't the only
position to help be a catalyst to look across the executive
branch agencies. In my opinion, a fundamental flaw of our
current organization in the executive branch in the government,
notwithstanding the need to update them, as we were just
talking, is there is really no accountability when multiple
agencies are involved in the process. And more and more
problems are requiring multiple agencies to be involved, I
mean, because of the complexity of the problem.
So if we do ever get to the point of studying the
government's organization, we have to deal with that
fundamental issue. Because no matter how you reorganize the
government, there are going to be multiple agencies that are
going to have to be involved, and we need a way to be able to
do it.
On your point about am I optimistic, I am cautiously
optimistic. My term goes to 2025. I am hopeful that I won't be
reporting all these same issues in that year. But I can tell
you that it won't change unless the Congress gets involved in
this process with active oversight.
The only times--and I was before this committee recently in
February talking about our high-risk update. And the only areas
that come off the high-risk list are where you have top-level
executive branch attention and Congress is relentless in its
oversight. Without those two elements, I mean, particularly in
this overlap and duplication area, you know, you are not going
to see very many major changes.
Mr. Duncan. You probably don't want to criticize any
particular department, but I would be interested to know if
there is one department that, more or less, is worse than
others. Or the other side, is there one department that you
feel does the best job in responding to your suggestions?
Mr. Dodaro. Well, first, in my opening statement, I talked
about how pervasive this problem is across government. We have
recommendations for virtually all major Federal departments and
agencies.
I would say that the areas where there is a need for
rigorous follow-up on the part of Congress is the Defense
Department and CMS, the Centers for Medicare and Medicaid
Services. I would say those two departments need attention in
order to effectuate implementation of our recommendations.
Mr. Duncan. All right. Thank you.
Thank you very much.
Chairman Issa. Thank you.
General, you have been very kind.
I am going to do a short couple more questions. Is anyone
else going to want a second round?
Okay, seeing none, I will be brief.
Mr. Duncan just brought up a point, and you named two great
names: CMS, meaning Medicare and Medicaid; Department of
Defense, meaning all of what it obviously means. Isn't that
sort of saying that look for where the big dollars are and you
look for the big savings, something that Mr. Connolly said very
well? And, fortunately, he said it to a national television
audience that is watching it, not just the fine gentlemen in
the room.
To that extent, when we look at those large dollars, the
Department of Defense, duplication within the Department of
Defense, isn't that a self-inflected wound? Waste and
duplication and fail to get information and do their job right
within CMS and, obviously, all the Medicare funding, isn't that
primarily a self-inflicted wound?
And I ask that for a reason. A lot of what you did in this
fine study is you talked about a lot of diverse groups--you
know, fisheries and catfish and just everything under the sun.
But the big dollars, the ability to reorganize DOD so that you
don't have a Pentagon just as filled as it was at the height of
World War II--and you try to explain why there have to be as
many people in this day and age in the white-collar, non-
uniformed part of DOD, and the answer is because of,
essentially, a wasteful way of management. And when you look at
CMS, and we just had a hearing on $15 billion that was simply
paid out in excess of what the law allowed, aren't we, to a
certain extent, having to find ways to make them do their job
better?
And the question comes from, isn't that where something
like the DATA Act, which was passed out of this committee
unanimously in the last Congress and again is going to go
through a process in this Congress, isn't that part of the
process? Create a level of transparency to where these large
agencies, it becomes so transparent, particularly potentially
even to watchdogs and the public, that you can get them to do
their job where it is really all in their turf?
Mr. Dodaro. Definitely. Definitely. I am very supportive. I
think that transparency is needed. I think there needs to be a
statutory underpinning so it is enduring over time and there is
consistency. Data standards need to be put in place.
I am very supportive of the need to have that type of
legislation that would require that level of transparency, and
from that transparency, can lead to better questions, can lead
to better oversight and hopefully better results.
Chairman Issa. Now, the DATA Act calls for recipient
reporting. In a sense, I think I heard you say that this is one
of the problems with the IRS, is they are not looking at both
sides of the transaction in order to find people who don't
report here but they report to Visa and Mastercard, they report
to a lot of other transactions; that if you looked at that, you
would realize that you are missing the very report you needed.
Is that basically the same thing you are looking at in the
DATA Act? Do you see those as the same sort of a problem? That
government, if they are going to audit, has to, whenever
possible, get information from multiple sources in order to
realize what they don't know?
Mr. Dodaro. Oh, that is definitely the case. That is
definitely the case. And I think the implementation of the
Recovery Act was a perfect example of how that could be used
effectively to minimize fraud, waste, and abuse in programs.
Chairman Issa. Yeah.
And I think, for the freshmen that are here, the Recovery
Board is still in business for a reason: that Congress has
recognized the need for it, kept it open, kept the mission for
it. Because I think Congress and the GAO, certainly, we have
recognized that it serves a purpose of showing you can do
better.
Mr. Dodaro. Yes.
Chairman Issa. General, I am very thankful for every
appearance here, but I think the discussion, because of Ms.
Lummis, that occurred of the Hoover Commission--and she has
left now, but Delegate Norton--the idea that, in fact, we have
to create--and this committee is the committee of
jurisdiction--create an environment in which Congress buys in,
the executive branch buys in, to be honest the private sector
has to be included, if we are going to have the kind of
reorganization that in 2025 you can say, ``On my watch, we made
it better.''
Mr. Dodaro. I think it is imperative we do that,
particularly given our fiscal precarious nature. I mean, we
can't afford to continue to operate the way we are operating,
and it needs fundamental reexamination. We can do better, and
we have to.
Chairman Issa. And I am going to close with one thing. The
ranking member opened thanking your staff, which I will
reiterate thanking your staff.
I also will perhaps decry in a strange way the fact that
sequestration hit your part of Congress, too. And I realize
that you are now doing more oversight, more investigations,
more of everything you are mandated to do, and you are doing it
with less. So I would like to see that reversed as soon as
possible. I don't think you lay off the auditors when you have
a problem with accountability.
But I want to thank you for the good work you are doing----
Mr. Dodaro. I appreciate---
Chairman Issa. --and all the men and women that work for
you.
Mr. Dodaro. Thank you. I appreciate those kind remarks and
for your support.
Chairman Issa. You will continue to have it.
We stand adjourned.
[Whereupon, at 3:50 p.m., the committee was adjourned.]
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