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







                WASTE IN GOVERNMENT: WHAT'S BEING DONE?

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

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 9, 2014

                               __________

                           Serial No. 113-102

                               __________

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              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, 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
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on January 9, 2014..................................     1

                               WITNESSES

The Hon. Tom Carper, a U.S. Senator from the State of Delaware
    Oral Statement...............................................     4
    Written Statement............................................     8
The Hon. Tom Coburn, a U.S. Senator from the State of Oklahoma
    Oral Statement...............................................    10
Mr. Thomas A. Schatz, President, Citizens Against Government 
  Waste
    Oral Statement...............................................    27
    Written Statement............................................    29
Mr. Chris Edwards, Director of Tax Policy Studies, CATO Institute
    Oral Statement...............................................    62
    Written Statement............................................    64
Mr. Brandon Arnold, Vice President of Government Affairs, 
  National Taxpayers Union
    Oral Statement...............................................    72
    Written Statement............................................    74
Ms. Jaimie Woo, Tax and Budget Associate, U.S. Public Interest 
  Research Group
    Oral Statement...............................................    79
    Written Statement............................................    81

                                APPENDIX

Opening Statement by Ranking Member Cummings, Reps. Bentivolio 
  and Cartwright.................................................   114
Staff Report submitted by Rep. Mica..............................   118
2012 Congressional Ratings for the Council of Citizens Against 
  Government Waste submitted for the record by Chairman Issa.....   122
Feb. 2013 publication ``Prime Cuts Summary'' submitted for the 
  record by Chairman Issa........................................   129
U.S. PIRG publication ``Toward Common Ground 2013'' submitted by 
  Chairman Issa..................................................   155
Mr. Edwards responses to questions for the record from Rep. 
  Collins........................................................   174
NTU responses to questions for the record by Rep. Speier.........   176
U.S. PIRG responses to questions for the record by Rep. Collins 
  and Rep. Speier................................................   180
Citizens Against Govenment Waste responses to questions for the 
  record by Rep. Speier and Collins..............................   186
 
    WASTE IN GOVERNMENT: WHAT'S BEING DONE?
                              ----------                              


                       Thursday, January 9, 2014

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                           Washington, D.C.
    The committee met, pursuant to call, at 9:35 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Mica, Turner, Duncan, 
McHenry, Jordan, Chaffetz, Walberg, Lankford, Amash, Gosar, 
Gowdy, Farenthold, Woodall, Collins, Meadows, Bentivolio, 
DeSantis, Cummings, Maloney, Norton, Tierney, Clay, Lynch, 
Connolly, Speier, Duckworth, Kelly, Davis, Cardenas and 
Grisham.
    Staff Present: Will L. Boyington, Press Assistant; Molly 
Boyl, Deputy General Counsel and Parliamentarian; Lawrence J. 
Brady, Staff Director; Katelyn E. Christ, Professional Staff 
Member; John Cuaderes, Deputy Staff Director; Adam P. Fromm, 
Director of Member Services and Committee Operations; Linda 
Good, Chief Clerk; Tyler Grimm, Senior Professional Staff 
Member; Frederick Hill, Deputy Staff Director for 
Communications and Strategy; Christopher Hixon, Chief Counsel 
for Oversight; Mark D. Marin, Deputy Staff Director for 
Oversight; Laura L. Rush, Deputy Chief Clerk; Sarah Vance, 
Assistant Clerk; Peter Warren, Legislative Policy Director; 
Rebecca Watkins, Communications Director; Jeff Wease, Chief 
Information Officer; Sang H. Yi, Professional Staff Member; 
Beverly Britton Fraser, Minority Counsel; Aryele Bradford, 
Minority Press Secretary; Jennifer Hoffman, Minority 
Communications Director; Adam Koshkin, Minority Research 
Assistant; Juan McCullum, Minority Clerk; Leah Perry, Minority 
Chief Oversight Counsel; Brian Quinn, Minority Counsel; Dave 
Rapallo, Minority Staff Director; and Daniel Roberts, Minority 
Staff Assistant/Legislative Correspondent.
    Chairman Issa. The committee will come to order.
    The Oversight Committee exists 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 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 strikes at the heart of the committee's 
mission: finding and rooting out waste in the Federal 
government. At the beginning of every session, Congress holds a 
hearing to learn from experts about the status of wasteful 
spending and recommit ourselves to eliminating it. Much like 
the fiscal outlook in the past, the hearing today will be grim; 
grim both because of actual waste and because of organizational 
waste.
    President Obama has overseen the highest postwar deficits 
on record, and last year we had, in spite of tax increases that 
continue to pile up, a $680 billion deficit. The American 
people have a burden on top of their mortgage on their home of 
$140,000 per home. Real perspective is that this is 
unsustainable. If your home were going further in debt every 
year, you would ask, how long can I tolerate it? And yet in 
just a few years, your home will be a quarter of a million 
dollars in debt if we do not quickly reverse the waste and the 
unnecessary growth in government.
    This committee does not appropriate, nor do we tax. Our 
committee's responsibility is to find within the authorized 
mission of the government the kind of waste and inefficiency 
that can be eliminated to deliver to the American people a 
better value. Reasonable estimates are a better value could 
save $200 billion of the stockholders' hard-earned money. In 
other words, we could eliminate a third of the deficit simply 
by eliminating known and recognized waste.
    Our first panel today are our partners in the Senate, 
Senator Carper and Senator Coburn. No two people have been more 
willing to speak out against the organizational waste and 
misspending than these two Senators. Our second panel will be 
four individuals who represent organizations that are heavily 
contributed to the spending reform discussion.
    First, though, we will hear from our Senators. It is my 
great pleasure to welcome my colleagues, Dr. Coburn, who 
releases the Wastebook every year, and recently released this 
year's chronicles, the kind of waste that can be eliminated, 
and chairman, Senator Carper, has been a good partner in this 
discussion. I look forward to their hearings.
    I will remind my colleagues that any questioning or any 
further comments after their opening statements will be at the 
discretion of the Senators, and I take pleasure in introducing 
the ranking member for his opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman. I am very 
pleased that you called this hearing today. This is the bread 
and butter of what our committee does, and I hope today's 
hearing will further this important discussion, which we have 
had regularly in similar hearings over the past few years. I 
thank all the witnesses for taking time out of their busy 
schedules to be here today with us and participate in this 
hearing.
    I am delighted that Ranking Member Coburn has joined us at 
our first hearing this year to help set the tone for rooting 
out government waste. Senator, I want to say to you I have seen 
your reports, and I agree with many issues you identify. Since 
this may be one of our last opportunities to work together 
before your retirement, I look forward to an effective and 
rewarding collaboration, and I thank you for not only your 
service to your constituents, but your service to our Nation.
    Mr. Chairman, I also appreciate that you agreed to my 
request to invite our good friend Chairman Carper to share his 
thoughts and views with us as well. Chairman Carper has been 
tireless in his efforts to make Federal agencies work more 
effectively and efficiently. Senators Carper and Coburn have 
been at the forefront of legislation that has resulted in 
billions, and I repeat billions, of dollars in savings for the 
Federal Government.
    Today we have a unique opportunity. We have in the room the 
chairman and ranking member of the Senate Homeland Security and 
Governmental Affairs Committee. We also have the chairman and 
ranking member and additional members of the House Committee on 
Oversight and Government Reform. These are the two key 
committees that are responsible for reducing waste, fraud, and 
abuse in our government.
    I propose that we use some of our time today to set a 
bicameral agenda for the coming year. Although we have 
relatively little time remaining in this Congress, I propose 
that we try to identify some of the top reform proposals we 
might be able to achieve on a bipartisan basis. Let us begin 
with a process today to identify issues on which we have common 
ground and hopefully save taxpayers billions of dollars going 
forward.
    The Government Accountability Office's annual high risk 
list and duplicative programs report give us a critical tool 
for focusing our oversight efforts. Inspector general 
recommendations are another key we can examine, and then, of 
course, we have proposals from groups like those here today.
    One agency that comes up repeatedly every single year in 
virtually every single report is the Department of Defense. 
This makes sense because it is the largest Federal agency with 
the biggest budget. The Department's financial management as a 
whole continues to be designated as high risk because GAO 
determined that DOD has not been able to control costs, ensure 
basic financial accountability, measure performance, prepare 
auditable financial statements, and prevent and detect fraud, 
waste, and abuse. It would be a big step in the right direction 
if DOD could produce for the first time an auditable financial 
statement.
    DOD has also experienced significant problems with 
management and oversight of the $365 billion obligated for 
contracts last year alone. The Congressional Research Service 
reports that DOD acquisition programs have experienced poor 
performance against the backdrop of war in Afghanistan, 
spiraling contract costs, and decline in the size of defense 
acquisition workforce.
    DOD also leads the Federal Government with wasteful, 
duplicative IT investments, and I know this is something that 
our chairman is most interested in. In testimony before the 
committee last year, GAO warned that several DOD IT investments 
experienced significant performance problems and were, indeed, 
high risk. One specific example that GAO highlighted was a 
contract that the Air Force cancelled in December 2012 after 
spending $1 billion on expeditionary combat support system. 
Despite these and other examples of waste, some progress is 
being made that we should be proud of and build upon.
    Finally, President Obama made it a priority to reduce 
improper payments when he took office, and improper payments 
have been reduced from $125 billion in 2010 to $106 billion in 
2013, but that is still not good enough. Chairman Carper and 
Ranking Member Coburn have been active with legislation on this 
topic, and I hope Chairman Issa and I can partner with you 
going forward.
    There is also improvement in financial management within 
government agencies. For example, the Department of Homeland 
Security has obtained a clean audit of its financial statement 
for the first time in the agency's 10-year history. This 
committee has been an integral part of improving financial 
management at DHS, and it is good to see positive results from 
our continued oversight.
    Moving forward, we have to continue this progress by 
conducting our oversight efforts in a sustained, dedicated, and 
bipartisan manner. It is not enough for us to convene hearings 
and hope for the best. We need to work cooperatively and 
diligently to find tangible solutions to minimize government 
waste and maximize efficiency. After all, ``government reform'' 
is part of the name of this committee.
    I anxiously look forward to the testimony, and I thank you, 
Mr. Chairman, for the courtesy.
    Chairman Issa. I thank the ranking member, and I thank you 
particularly for alluding to FITARA, something that we have 
worked on on a bipartisan basis.
    All Members will have 7 days to submit their opening 
statements.
    And we now welcome our first panel of witnesses. Senator 
Carper and Senator Coburn, you need no introduction, and, more 
importantly, I will not belabor the time necessary to get to 
your important statements by suggesting one.
    Chairman Carper, you are recognized.

                       WITNESS STATEMENTS

STATEMENT OF THE HON. TOM CARPER, A UNITED STATES SENATOR FROM 
                     THE STATE OF DELAWARE

    Senator Carper. Mr. Chairman, to you, to our friend, the 
ranking member Elijah, to many of our colleagues with whom Dr. 
Coburn and I have worked, including the fellow from Utah over 
here most recently on really surplus property, properties that 
we don't need, excess properties, wasteful properties. I have a 
prepared statement. I would ask, if we could, that it might be 
included for the record, Mr. Chairman.
    Chairman Issa. Without objection, both of your entire 
statements will be placed in the record. We are not running a 
clock on you, but it isn't the Senate, so bear that in mind.
    Senator Carper. Thank you.
    I would like to think that there are three--first of all, 
thank you for this hearing. Thank you for giving us a chance to 
participate. Last year when Dr. Coburn and I were renewing our 
positions as ranking member and chair of the Homeland Security 
and Governmental Affairs Committee, we invited both you and 
Representative Cummings to come and lead off our hearing on 
postal reform. I am encouraged to report today that I think Dr. 
Coburn and I, we have been working on bipartisan legislation, 
and I think we are very close to hammering out the last final 
details to enable us to move to a markup in our committee we 
hope this month, and to be able to report out a bipartisan 
bill, and to have--I think we are having some discussions with 
you already on the direction we are going, but we wanted to 
have more.
    In terms of deficit reduction, part of what they are doing 
over at the Postal Service is rightsizing the enterprise, 
figuring out how to spend less money, get a better result for 
that, and we need to take that kind of lesson across the way in 
our government.
    I like to think there are three ways, three keys to deficit 
reduction. One of those is entitlement reform. The largest part 
of our spending is entitlement programs. They are important, 
but if we are going to make progress on deficit reduction, we 
can't ignore them.
    What I suggest we do is three things. I think Dr. Coburn 
agrees with it; I think the President agrees with it. One, 
reform the programs so that they save money, so we save the 
programs for our children and grandchildren, and that we do so 
in a way that does not savage old people or poor people, those 
three things.
    The second thing to do for deficit reduction, I think we 
need some additional revenues. When we had balanced budgets for 
4 years between 1997 and 2000, revenues as a percentage of GDP 
was about 20 percent for 4 years. Spending as a percentage of 
GDP was about 20 percent for 4 years. We had 4 years of 
balanced budgets. And I think we need tax reform. I serve on 
the Finance Committee. We are trying to do that working with 
Dave Camp and Sandy Levin over here, but we need tax reform 
that, one, I think lowers corporate rates so that we are 
competitive with the rest of the world, but also generates some 
revenues for deficit reduction.
    The third thing we need to do is look at everything we do 
in government, everything we do in government, and ask this 
question: How do we get a better result for less money or the 
same amount of money in everything we do? It is almost like a 
culture change, from a culture of spendthrift towards a culture 
of thrift, and that is what Dr. Coburn and I do with our 
committee, and I know it is a lot of what you do.
    Most of you know Mike Enzi, Senator from Wyoming. Mike Enzi 
has what he calls the 80/20 rule, and his 80/20 rule has 
enabled him to work with Ted Kennedy when he was alive, and 
they were both leaders of the Health, Education, Labor & 
Pensions Committee, and they got a lot done. I asked Mike Enzi, 
I said, how do you get so much done? He says, Well, we 
subscribe to the 80/20 rule. I said, What is that? He said the 
80/20 rule is that we agree--Ted and I agree on 80 percent of 
the stuff; there is 20 percent of the issues we don't agree on; 
and what we decide to do is focus on the 80 percent where we 
agree, and the 20 percent that we don't, we set that aside for 
another day. And they make great progress as a team, Democrat 
and Republican. I think Dr. Coburn and I make pretty good 
progress, and I think you set a good example for us in some of 
the same regards.
    I want to take maybe just a couple minutes and focus on the 
third of the three pieces I talked about with respect to 
deficit reduction, and that is how do we get a better result 
for less money in everything we do. Representative Cummings 
mentioned improper payments. Dr. Coburn and I have gone back to 
that well again and again and again. We have introduced 
legislation, passed it in 2010 with your strong support, again 
enhanced it again in 2012. We introduced new legislation today 
so that--not today, but this year, last year, so that we don't 
continue to waste money on benefits to people that are dead, 
and a lot of commonsense--a lot of commonsense stuff.
    Elijah is right. When we--in fact, when I was new in the 
Senate, George W. Bush said, we know we are spending a lot of 
money, wasting a lot of money in improper payments. Let us do 
something about it. We passed legislation that said let us 
start that we want agencies to keep track of improper payments 
and report that. That was 2000, I think. 2010, Dr. Coburn and 
I, with your help, support, we updated that so that not only 
would agencies be required to report--identify and report 
improper payments, but we wanted them to stop making them, and 
we wanted them to go out and try to recover monies that were 
improperly paid, and we said we want the managers of agencies 
to be evaluated in part on how well they are complying with 
this law. And as Representative Cummings says, improper 
payments have been dropping since then.
    We enhanced that bill last year. We have offered 
legislation in the Senate called the PRIME Act, which would 
enable us to do--to waste less money in Medicare and Medicaid. 
People say we can't curb spending or curtail spending in those 
entitlements. Well, we can, and there is a lot of things we can 
do. We put it in the PRIME Act, it has been made part of the 
SGR legislation that is coming out--that has come out of the 
Finance Committee, and we hope it is something that you can 
embrace here in the House. It will enable us to save money in 
these programs, save the programs, and not savage old people or 
poor people.
    The other thing I want to mention, if I can, is that we 
have hundreds of thousands of properties that the Federal 
Government owns. Some of them are defense related; many are 
not. Some of the properties we own; a lot of them we lease. We 
waste huge amounts of money, billions of dollars every year, in 
maintaining these properties that we don't fully use or don't 
use at all, maintaining the properties, heating them, cooling 
them, securing them, and it is a real thicket to try to figure 
out how to deal with it. It involves not just the Congress, but 
it involves all kind of folks including homeless groups, 
including communities across the country.
    We have got to deal with this, and Dr. Coburn and I are 
committed to getting it done this year, and we welcome very 
much the opportunity to work with Republicans and Democrats on 
this committee. That is just one of the areas where we can get 
a better result for less money and save money that we are 
foolishly wasting.
    I would just say again, Enzi has got it right, that 80/20 
rule. There is a lot to it. Let us focus on that 80 percent 
that we can agree on. We can't do it by ourselves, obviously 
you can't do it by yourselves, but if we can marry our fortunes 
together, work with OMB, especially with GAO, who gives us that 
great high risk list every 2 years with our--really that is a 
to-do list--we can get a lot done. And a lot of this stuff like 
improper payments, the administration actually agrees with us, 
and property reforms they agree with us, and we want to get 
something done, so let us just do it. Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    [Prepared statement of Senator Carper follows:]


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    Chairman Issa. They might remind us all that they agree 
with us on 5-day instead of 6-day delivery, too. We will get 
there.
    Dr. Coburn.

STATEMENT OF THE HON. TOM COBURN, A UNITED STATES SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Coburn. Well, thanks for the opportunity to be 
here, and I thank every member of the committee that is here.
    You know, the problem isn't that the Congress doesn't get 
along. No, we have a $680 billion deficit we all agreed to last 
year. My take is we get along too well. We have Presidents that 
come and go and Congresses that come and go, but the wasteful 
spending continues. Why is that? Why does it happen? I mean, we 
force through in legislation to make the GAO show us where 
duplication is, and there has been one piece of legislation 
come out of Congress in 4 years--it didn't even come out of 
Congress, it came out of the House-- that consolidated one of 
the things the GAO said needed to be consolidated. It is called 
the SKILLS Act. It is the only thing that has happened in 4 
years.
    So the problem isn't that we don't know what the problem 
is. The problem is that we don't act on the problem, and it is 
hard. There is no question. If you talk to the members of the 
Labor and Workforce Committee, it is hard when they 
consolidated 36 programs into 6. That is not easy work. But 
that bill hasn't even been taken up by the Senate or the Health 
Committee in the Senate. So the problem is us.
    Sequestration couldn't even force Congress-- sequestration 
didn't even force Congress to cut, eliminate or consolidate any 
of the government's hundreds of duplicative, outdated or 
ineffective programs, not one. The problem is us. We are not 
acting on the information that we have. We agreed to undo 
modest, automatic spending reductions without eliminating a 
single unnecessary program. Not one. We added $60 billion back 
in spending over the next 2 years, but we didn't eliminate any 
of the waste.
    If you can't find waste in any part of the Federal budget, 
whether it is healthcare programs, defense spending, which is 
ripe with waste, or even the Tax Code, it is only one reason: 
You haven't looked. You have not looked.
    The government has grown so massive that there is only one 
department in the entire Federal Government that actually knows 
all of its programs. That is the Department of Education. They 
put out a list every year. They are the only one. There has 
been attempts to try to force that through the Senate. There is 
a bill in the House to try to make sure every department at 
least has a list of their programs. You haven't moved it; we 
haven't moved it. Before you can fix anything, you have got to 
know what is there. You have to look at it. We haven't looked.
    The Pentagon can't pass a simple audit. They were mandated 
to pass an audit the first time in 1984. We have a bill Audit 
the Pentagon, an act that has real teeth in it if the Pentagon 
doesn't perform. When the NDAA came through, they took the 
teeth out, but put the audit in. Well, we have been telling 
them to do an audit for 30 years. Do you think they are going 
to do an audit without any teeth, without any threat, without 
any consequences of not doing it? And yet it was pulled out. So 
we are not going to do it until we get serious about doing it.
    If you think about it, even in sequestration, you don't 
have to agree with everything that I listed in the Wastebook. I 
could have put 300 there and $60 billion worth of wasteful 
spending, but the one thing you can't disagree with is that 
when we are borrowing $680 billion a year from our kids, are 
these things that we listed in the Wastebook a priority for the 
Government of the United States? And they are not. And the 
reason they happen is because there is not good oversight by 
the committees of authority. That is why they happen. It is not 
meant to embarrass. It is meant to say what are we doing? Why 
are we not looking? Why are we not working to solve the 
problems?
    Representative Cummings, you mentioned a contract with the 
Air Force. In 2010 we notified the Air Force that they should 
cancel that program. That is when they were only a couple 
hundred million dollars into it. Consequence. What are the 
consequences of cancelling that program? They paid a close-out 
fee, but here is the consequences that didn't happen: Whoever 
was managing that contract or who let that contract in the 
first place didn't get fired, and the contractor wasn't sued by 
the Federal Government for nonperformance. So the same thing is 
going to continue to happen until we start demanding 
accountability, and that accountability has to start with us 
first. We can't ask the Air Force to be accountable if we are 
not accountable.
    The Wastebook details 100 projects, $30 billion. You can 
pick with it on whether or not it is accurate and whether or 
not it is right, so take--throw 50 percent of it away, $15 
billion. The question is, is in a time when we are borrowing 
from our future, should we be spending that money now? And I 
would contend that we shouldn't. And so if we are, why is it 
happening? And it is happening because we are not doing our 
jobs, and I am talking collectively, the Senate and the House, 
the committees.
    If you think about the GAO reports that have come out over 
the last 3 years, another one will come this March, what has 
happened based on the information that they have given us? One 
bill out of the House. Nothing out of the Senate. The 
President, to his credit, has taken a lot of that and put it in 
his budgets, saying these are right things to do, we should do 
it. We haven't acted on it, he hasn't acted on it because he 
can't, because we won't do it.
    You know, I would close just by giving you just a little 
rundown of what is out there. Most people don't realize. We 
have 679 renewable energy programs from 23 different agencies 
costing $15 billion a year. Can anybody logically explain why 
we would need 679 programs for renewable energy? Nobody can. 
Each one of those, each one of those 679 has an overhead, has a 
management team, has associated costs with it. We have 253 
different Department of Justice crime prevention programs, 
$4\1/2\ billion. Why do we have that many? Why can't we 
consolidate those?
    Finally, I will end, and I have got a list, I will be happy 
to supply it to all your Members, a summary of what the GAO has 
given us so far in terms of duplicative programs. I met with 
Congressman Collins before this, says, how do you do it? It is 
hard work. You have to win over the heart of the committee 
chairman of jurisdiction and say, won't you do oversight on 
this? Won't you look at it? Won't you try to consolidate it? 
And if that doesn't work, what you have to do is embarrass the 
Members of Congress into doing their job.
    I am embarrassed that we as Members of Congress have 
allowed this list with the multitude of programs that are on 
there, with the duplicity that is in it, that we haven't fixed 
it. And we don't have an excuse. We are guilty of not doing our 
jobs, and the way to turn that around is to start doing it. And 
I understand this committee has jurisdiction to look at it, but 
you can't change it unless the committees of jurisdiction act. 
And so what we need to all be is ambassadors to the separate 
committees that they will, in fact, do the hard work, do the 
oversight, streamline, eliminate, combine, and consolidate so 
that, in fact, we can actually get some savings to spend on 
things that may be much more important. And what I feel is we 
are not meeting the charge, we are not meeting our oath, 
because we fail to do the very, very hard work of having the 
committee hearings, pulling the people in, and saying, what is 
the problem? How do we address the problem?
    And most agencies, by the way, don't know they are a 
problem, either, because nobody in the agency knows all the 
programs. And so it starts with us, and my message would be, we 
need to redouble our efforts on both sides of the aisle, both 
sides of the Capitol, to say that we are going to be good 
stewards. And it is not that the program ideas are bad, but 
when you have 679, there is no way you can justify that to 
anybody.
    And so I would leave you with that. The first thing you 
ought to do is consolidate 679 renewable energy programs into 
maybe two or three and get rid of the overhead, and if you did 
that throughout the Federal Government on all these programs, 
we could actually get to a balanced budget without raising 
taxes, without making hard choices in things that really hurt 
people, and could actually do our jobs.
    Thank you, and I am happy to answer any questions you might 
have.
    Chairman Issa. Thank you.
    Chairman Issa. And if it is all right with the two Senators 
for a few minutes, we will go through informal questions. I am 
not going to yield 5 minutes back and forth, I know you don't 
have the time for it, and I am not going to recognize myself 
except to say that, Dr. Coburn, your Wastebook will be inserted 
into our record today as essentially the collateral material 
for your opening statement, without objection.
    To view Dr. Coburn's ``Wastebook,'' please visit: 
[www.coburn.senate.gov/public/index. cfm?a=Files.Serve&File--
id=Occ34c92-6901-425d-a131-d3151d7216ef].
    Chairman Issa. Mr. Chaffetz, I understand you had a brief 
comment?
    Mr. Chaffetz. Yes. I thank the chairman, and I thank both 
gentlemen here, both the Senators, for their passion. It is 
inspirational to me what you are doing, and knowing there are 
people that truly care.
    I particularly wanted to highlight my interaction with 
Senator Carper. We had a bill here in the House, H.R. 328, that 
last term we passed unanimously, passed unanimously in this 
body, and passed unanimously out of the House, to deal with 
real property disposal. And working together to get that done 
with Senator Carper, there is something like, GAO estimates, 
nearly 78,000 properties that are either not utilized or 
underutilized. Additionally, the GAO estimates that we spend 
about $1.5 billion per year to operate and maintain these 
properties that we don't need.
    My State of Utah, we have got an operating budget of $12- 
to $13 billion, everything we do for the entire year, and yet 
the Federal Government has got 78,000 excess Federal 
properties, spend $1.5 billion.
    We have got to solve that. That is the low-hanging fruit. 
And it does have to happen in a bipartisan, bicameral way, and 
I just wanted to thank Senator Carper in particular for his 
working across the aisle in a bicameral way, and I am 
optimistic that we can actually help solve this.
    Senator Carper. Mr. Chairman, just a brief comment if I 
could.
    Chairman Issa. Of course, Senator.
    Senator Carper. It is a real pleasure for us to work-- both 
of us to work with you. The first things Tom Coburn and I ever 
did together when he was new in the Senate, he was chairman of 
the Republicans in the majority, he was chairman of the Federal 
Financial Management Subcommittee of what is now Department of 
Homeland Security and Governmental Affairs, we went to Chicago 
together, and we visited an old postal facility. It was empty, 
huge facility. It has been empty forever. It is still empty. 
There are tens of thousands of buildings like that, and we can 
do something about it.
    We are determined to get that legislation through; it is 
out of our committee. We are determined to get the kind of 
legislation that we have coauthored together and get it done.
    I wanted to just take a moment, it is in my prepared 
statement, Mr. Chairman, but you have done great work on what 
we call the DATA Act, try to focus on disclosure and try to 
focus on data standards for some of the spending that we do. 
Dr. Coburn and I have worked to get that legislation. Mark 
Warner, Mark Warner has been the lead, as you know, in the 
Senate. But we have reported the legislation out of committee, 
and my hope is that we can get that done. That is one of the 80 
percent of the things that we agree on, and, frankly, so does 
the administration.
    Chairman Issa. Thank you.
    I will now go to the ranking member for a short comment.
    Mr. Cummings. Just one quick question. You know, first of 
all, thank you both for your testimony. One of the things I 
have learned after being on the Earth for 62 years is that a 
lot of times people don't do things because they can't do 
everything that they want to do, so they end up doing nothing. 
Maybe they don't have time, they find excuses, whatever.
    I guess where I am going with this is what do you all see? 
You talk about low-hanging fruit, Senator. I mean, what can we 
reasonably do, and particularly in light of Senator Coburn's 
comments, to get some things done? It may not be everything, 
but at least get some things done so at this time next year we 
will say, well, we were able to chip away at this. I mean, 
what-- I mean, what are the--and then----
    Senator Coburn. It is not hard. It is not hard.
    Mr. Cummings. Yeah, okay.
    Senator Coburn. You get rid of a $680 billion deficit $1 
billion at a time. You have got $5.6 billion being collected by 
people who are on disability for unemployment insurance. You 
have got $100 million going in unemployment insurance to people 
who have net incomes greater than a million dollars a year. 
Those aren't hard things to do. I mean, if you are disabled, 
the very fact that you are disabled, you are not working, that 
is one of the requirements other than the short period of time 
that you might be in a trial period, so it doesn't make sense.
    You know, the low-hanging fruit, it is all over, but it 
requires work. It means we have to move it through the process, 
but unless you start at a billion dollars at a pop or $100 
million to get to a billion, you are never going to get there, 
and what has happened is nobody has started.
    The whole reason I passed the legislation forcing the GAO 
to outline all this duplication was I thought it would 
embarrass us into acting. Boy was I wrong. It hasn't 
embarrassed us at all because we haven't acted. We haven't done 
anything except what came out of the class--I mean, the SKILLS 
Act.
    So you do it by a billion at a time, and once you start 
doing it, what you find out is, you know, it really feels good 
to be an efficient steward of the taxpayers' money, and it 
doesn't have to be--these aren't necessarily controversial 
issues. These don't have to be partisan issues. Do you really 
think we would disagree in eliminating these 679 green 
programs? You know, couldn't we all agree that we want the 
green programs, but couldn't we do it with 10 or 15 instead of 
679? I mean, those aren't controversial issues. The fact is 
just nobody has the initiative to go and do it. We are not 
seeing initiative by Members of Congress to say, I am taking 
this on, I am taking this on, let us get it done.
    And every year we don't do it, every year we don't reform 
contracting at the Pentagon, every year the Pentagon can't meet 
an audit means that they have no idea. Realize, the 
Constitution requires them to give us a report of how they 
spend their money, and they can't, and yet we don't want to put 
any teeth on the Pentagon to force them to do that, that is too 
hard? We need to embarrass our colleagues that are protecting 
the Pentagon from becoming responsible.
    Mr. Cummings. Thank you, Mr. Chairman.
    Senator Carper. If I could just give a quick response, if I 
could.
    Chairman Issa. Of course, Senator.
    Senator Carper. When Dr. Coburn and I were the chairs and 
the ranking member on a subcommittee of Homeland Security and 
Governmental Affairs, Federal Financial Management, it took me 
a while, but I finally realized, as much as we wanted to do 
something about some of these wasteful spending issues, if it 
was just our subcommittee working on it, we weren't going to 
get much done, but maybe if we partnered with the full 
committee, we could get something done. And so we started 
working with Joe Lieberman and Susan Collins, and we realized 
maybe if we work with the House on a bunch of this legislation, 
a lot of the things that we are talking about here, we could 
increase the leverage of a little subcommittee.
    Then we said, you know, over at GAO every 2 years they come 
up with their high risk list. It is really a to-do list for us 
for ways to reduce wasteful spending, inefficient spending. So 
we started meeting with Gene Dodaro, partnering with his folks 
at GAO, and that was helpful.
    We got ourselves a new--the President nominated a wonderful 
woman last year, Sylvia Mathews Burwell, to be OMB Director, 
and they put together good management teams that includes a gal 
named Beth Cobert, and who is now the Deputy for Management. 
They have a management initiative, agenda for the 
administration. So why don't we partner with them as well?
    You have got other people that are going to follow Dr. 
Coburn and I to the witness table, Citizens Against Government 
Waste, National Taxpayers Union, who really care about this, 
are passionate about how do we eliminate wasteful spending. And 
the key is to find that 80 percent of stuff that we agree on, 
all of us, and then we increase the leverage of a subcommittee 
or a committee and get real things done and make the kind of 
progress.
    The stuff that we put in the legislation that Dr. Coburn 
and I authored with input from you, help from many of you and a 
bunch of folks, but the PRIME Act, which is the next step, we 
think, in wasteful spending, put it in the SGR reform 
legislation, the doc fix legislation. Most of it is there. It 
is great stuff. It is great stuff. It doesn't savage old people 
or poor people. It helps save those programs, Medicare and 
Medicaid. It saves them. It saves money.
    Chairman Issa. Thank you.
    Mr. Duncan, I understand you had a quick question.
    Mr. Duncan. Well, I just wanted to express my appreciation 
to both Senator Carper and Senator Coburn. Both of them were 
great Members of the House, and they are doing great work in 
the Senate.
    It is sad that every week, sometimes almost every day, we 
read terrible examples of waste. I read recently about the 
military building a $36 million headquarters in Afghanistan 
that nobody wants, and there is nobody there to use it, it is 
just going to be a brand new, empty building. I remember USA 
Today writing about the billion-dollar air marshal program 
where they are spending $250 million per arrest, and they have 
had more air marshals arrested than arrests by air marshals. So 
many examples.
    And before Congressman Chaffetz got here, Senator Carper 
and I did another property disposal bill years ago. These are 
properties that the Federal Government doesn't even want, and I 
know Senator Carper's been working on that for years. And we 
passed it here in the House, and I don't know, we need to keep 
trying. But Governor Rendell, when he was mayor of 
Philadelphia, he was having problems with some government 
unions, and he said before the Ways and Means Committee, he 
said the problem with government is, he said, there is no 
incentive for people to save money, so much of it is 
squandered. There is no incentive for people to work hard, so 
many do not. That is the problem. We need to give more 
incentives or rewards.
    We have heard, all of us have heard, about how agencies 
spend 60 percent of their budget the first 11 months, and then 
scramble around to spend the last 40 percent in the last month. 
We need to give more incentives to government employees when 
they save some money.
    But I appreciate the work that both of you have done and 
are continuing to do. Thank you.
    Chairman Issa. Thank you.
    Mrs. Maloney.
    Mrs. Maloney. Thank you for calling this hearing, you and 
the ranking member, and I welcome our Senators and former 
colleagues in the House and congratulate you on your work.
    Senator Carper, your oversight on the census was very 
helpful, and I appreciated working with you.
    Dr. Coburn, I think your report is terrific. I am just 
glancing through it. I would like to hear a little bit of a 
history of it. When did you start it? Have you ever been 
successful in getting anything out of government that you have 
identified in the Wasteful report? And why can't we--I 
understand you are marking up an appropriations bill this week 
in the Senate, and Senate rules allow you to connect things to 
it. Why can't you connect a wasteful spending in a bipartisan 
way to this bill that is moving? Take some action.
    And I would like both of you to respond. I was astonished 
at the reports I have been reading through. I think Ms. Woo had 
this report on a plane that even the Pentagon doesn't want, the 
F-35 Joint Strike Fighter. The DOD Chief Acquisitions Under 
Secretary called it an acquisition malpractice. It is going to 
cost a trillion to maintain it, and they have already--the cost 
is now $400 billion, and they are saying it can't fly at night, 
can't land on aircraft, isn't useful in today's type of 
military operations that are more like the Navy SEALs than big 
planes that can't find a place to land and can't fly at night, 
and can't land on a--how would you get this out of the budget? 
How do you get something that even the Pentagon says they don't 
want out of the budget?
    So I am addressing the question to both of you, but, Dr. 
Coburn, could you start first with your history of this study 
that I am glancing at that I think is excellent, but have you 
gotten anything out of the budget that you have identified as 
extremely wasteful? And how do we get this F-35 that even the 
Pentagon is saying is wasteful, can't do what we want, is not 
responding to the type of military that we have in America 
today, which is more of a single swift strike, like the Osama 
bin Laden-type operation.
    Senator Coburn. Well, addressing the F-35, if you look at 
the history of that, when you are building planes, before you 
finish your design, you are going to have cost overruns. So it 
goes back to what I said earlier: Unless you do procurement 
reform within the Pentagon and actually have some adults in the 
room when you are buying something----
    Mrs. Maloney. Well, excuse me. Let me ask you one question. 
How would you do that? Everyone has cost overruns. You can't 
outlaw cost overruns. You can document who is doing it, but----
    Senator Coburn. Well, only the government has those kind of 
cost overruns. In the private sector you have a contract, and 
if you have a fixed-price contract, and if you have a cost 
overrun, it is on the provider, it is not on the buyer. So, you 
know, what we have done is create a culture where you do cost-
plus on development; that is why the Nunn-McCurdy laws were put 
in.
    I would dispute some of the--parts of the F-35 are very 
applicable to what the military wants. There are some 
questionable areas of it, and there is no question it is way 
too expensive, I agree with you.
    We started the Wastebook about 4 years ago, again with the 
whole purpose to try to embarrass some of the agencies into 
thinking about some of the decisions they make. Just remember, 
Homeland Security, for example, you have billions and billions 
of dollars' worth of grants every year, but they don't follow 
them up, they don't see if they were met.
    There is only one agency in the Federal Government that is 
effective at grant writing, and it is the Department of Library 
and Museum Sciences, and let me tell you what they do. It is 
well known throughout the country that if you mess with them, 
and you are not compliant with your grant, and you spend the 
money other than, you are never going to get another grant. In 
other words, they create the proper expectation that when you 
deal with them, you are going to do what you said you are going 
to do, you are going to meet the requirements of the grant, and 
you are going to ascertain.
    You know, do you realize most of the grant programs we have 
people get grants for the same thing from two or three 
different agencies, and none of them even know it? Agencies 
don't have any idea.
    So we need grant reform. We need a mandate on how you write 
a grant, what the requirements are, what the consequences are. 
Homeland Security has no idea where their grant money is going, 
or how effective it is, and whether or not it is risk based. 
Where is the risk? Is the money going there? So it is lost. And 
we have thrown money at things, and we haven't done the 
oversight. I mean, when was the last time a committee of 
Congress said, we are going to do an oversight on the 
Department of Justice crime prevention grants, how well are 
they working, what are their metrics, what are they 
accomplishing? That is how we found out on job training. We 
actually did.
    I went to Oklahoma and looked at every Federal job training 
program in the State, every one of them. We have--in a city of 
17,000 with an unemployment rate of less than 5 percent, we 
have 13 Federal job training programs working. Now, it is great 
about employing people in job training. They don't need a job 
training program. The other thing we found is the State-run job 
training programs are actually effective at giving somebody a 
skill. Most of the Federal job training programs are highly 
ineffective at giving somebody a skill to make a lifetime wage. 
And so when was the last time we had an oversight hearing on 
that?
    Mrs. Maloney. Well, I hope we have some oversight hearings 
on that.
    Senator Coburn. Yeah.
    Mrs. Maloney. But in your report, have you implemented any 
of the suggestions?
    Senator Coburn. Sure, we have done some things. We got a 
lot of squawk back, you know. We actually don't think that 
political science grants to study Congress right now are a 
priority. So I put that in a piece of legislation. They are 
squawking like crazy, the people who like to earn their money 
for doing studies of Congress, political science. Actually 
couldn't that wait until we are actually in a little better 
financial condition?
    It is about perspective. And what would you do if it was 
your money rather than somebody else's money? And that is the 
real problem. We don't treat it like it is our money, and we 
should be.
    Chairman Issa. Thank you.
    Senator Carper. Mr. Chairman?
    Chairman Issa. Let's go to the gentleman from Oklahoma.
    Senator Carper. Mr. Chairman?
    Chairman Issa. Yes, sir?
    Senator Carper. One minute, if I could, in response to 
Congresswoman Maloney's comments.
    You are all probably wondering what am I doing with these 
water bottles and this cup? This is an aircraft. It looks like 
a water bottle, but this is an aircraft. This is a C-5 
aircraft, one of the largest airplanes in the world. We started 
building them in the late 1960s into really about the early 
1980s. They carry a huge amount of cargo, troops, personnel and 
all. This is a C-17. It is a great airplane. It carries about 
half as much as a C-5, flies about half as far without 
refueling. This is a C-17.
    About 12, 13 years ago the Department of Defense and the 
Pentagon and President Bush said, we need C-17s, but what we 
really need are C-5s that have been modernized, have engines 
that don't need to be changed out every thousand flight hours, 
have hydraulic systems that work, avionic systems that will 
enable us to fly into the 21st century. They called for 
modernizing C-5s.
    Chairman Issa. The B models.
    Senator Carper. The Bs. Some As, but mostly the Bs.
    And what we started doing about 8 years ago was modernizing 
two Bs, C-5Bs, and one C-5A. As it turned out, for the price of 
buying one new C-17, we could modernize two or three of these 
babies. They fly twice as far, carry twice as much. We are now 
getting--in Dover Air Force Base we have C-17s. We also have C-
5s. We traded our Bs for C-5Ns. One of those aircraft a year 
ago set 42 world records for carrying cargo, flying literally 
from here to Turkey nonstop, no refueling. We can fly them over 
the North Pole to Afghanistan.
    For three of these, modernized, they will last another 30 
or 40 years, cost as much as one of these. We have plenty of C-
17s. We don't need to lease aircraft from the Russians, a huge 
aircraft from the Russians. We need to modernize what we have. 
That is what we are doing. We are saving money, better result 
for less money.
    A lot of times we beat ourselves up in the administration, 
and we should, because of the wasteful spending that we do. 
This is an example of something that would make sense. It 
actually does save money and gives us a better result in terms 
of our airlift capability.
    The work that we are doing on improper payments, we are 
down, as Elijah said, from about $125 billion in improper 
payments a couple of years ago down to $106 billion. We are 
going to keep moving that in the same direction. The work that 
Dr. Coburn and I are doing especially in the PRIME Act will 
help us further in that regard.
    Chairman Issa. We are going to go into a lightning round 
very, very quickly, because I am getting more questions, not 
less. So I am going to ask everyone to stay within a minute.
    Mr. Lankford, you were next to ask.
    Mr. Lankford. Thank you, Mr. Chairman, and, Senators, thank 
you for being here as well.
    Senator Carper, you made the comment about the 80/20 rule. 
I have found that to be somewhat of a problem as we try to 
function going between the House and the Senate, even within 
the House or the Senate, because in my short time being here, 
most of the bills that come up are messaging bills rather than 
actual bills to fix a problem. They come with 80 percent of 
things that we agree on, and we decide to stick on 20 percent 
of things that are pure politics that we know will kill the 
bill. So a good idea gets, quote/unquote, voted on, but we know 
it goes nowhere. And that happens both directions, both parties 
are doing it.
    My question for you is, how do we move past that? How do we 
begin to deal with the actual issues and resolve the 80 percent 
of things that we do agree on that we can identify as waste and 
say, why can't we at least get an amendment on this in the 
Senate, why can't we vote it out of the House without adding a 
poison pill to it and to be able to get that moving?
    The comment that I want--I want you to be able to answer 
that. The comment I want to make as well is Dr. Coburn had 
mentioned identifying different programs. That is actually my 
bill, the taxpayer rights. That is something this committee has 
passed, passed with bipartisan support, and we are trying to 
get that to the floor, and it is one of those aspects I would 
like to see move through the Senate as well. It does something 
very simple. It forces every agency to identify every program 
that they have, what the cost is for administration for that 
program, how many people are served with that program, how many 
staff that they have for that program, the statutory 
authorization for that program, and a strange thing in 
government life, and that is the metrics, how do you evaluate 
this program? Because I have seen a tremendous number of 
programs that have no evaluation. The evaluation is how many 
people they serve rather than the effectiveness of actually 
what they do.
    And so I am hoping with the broad support that it had in 
this committee, it can pass with broad support in the House, 
and we would love to be able to have your help in the Senate to 
be able to get that through the Senate. That is a reasonable 
next step after the GAO reports. So your response on just that 
80/20 and how we would be able to move some things with the 
politics of the day.
    Senator Carper. Dr. Coburn and I had breakfast this morning 
with Jeh Johnson, who is our new Secretary of Homeland 
Security. Dr. Coburn mentioned at our breakfast, he said the 
Founders, the people who wrote our Constitution, had in mind a 
system that was hard to get stuff done. They didn't make it 
easy. Part of the job of the Senate is to slow it down, but it 
doesn't mean stop it.
    I am going to go back to what I said before. What we have 
to do is just figure out how to use the leverage of a 
subcommittee, or a committee, or two committees working 
together, working with GAO, with OMB, with all these good 
government groups, and to pull in the same direction, work with 
the administration. And especially--we have got a team at OMB. 
They want to work, they want to do this stuff. The challenge 
for us is to figure out who the people are and to figure out 
how to work together, these different entities, and we can do 
that.
    We have got a couple of great examples. We can set an 
example. Your committee, our committee, we can set an example 
of bipartisan cooperation on something we all agree on. People 
don't want us to waste their money. If I had a dollar for every 
time somebody said to me in the last year, I don't mind paying 
a little more in taxes; I don't want you to waste my money. 
That is what they say. I don't mind paying a little more in 
taxes; I don't want you to waste my money. I don't want to 
waste my money or theirs, and there is so much we can do in a 
common agenda here. Let us do it. And we are doing it.
    Chairman Issa. Okay. As we go to Mr. Tierney, I am going to 
make a commitment and a pledge here consistent with Mr. 
Lankford. Mr. Coburn, Dr. Coburn, take anything out of your 
Wastebook that falls within our mutual jurisdiction. If you 
will make a vote on it with your chairman, I will make sure our 
committee brings the same bill and votes it out to the full 
House. And let us start trying to figure out whether it is $100 
million, which would be a billion over 10 years, or a billion 
that would be $10 billion over 10 years. You pick something out 
of the book or something that is not in the book, and if the 
two of you are prepared to hold a committee vote on it, I will 
guarantee you a vote here on the same bill, and hopefully if we 
can suggest ones to you, we can come to the same agreement. And 
I will begin today scheduling that every week, if we have a 
bill that we agree on, no matter how small, if it falls within 
our jurisdiction, either completely or partially, I will 
guarantee you a vote in this committee on it. So hopefully that 
will give you an opportunity to go through the book and see if 
we can't find it, and whether it is FEHBP, the District of 
Columbia, you name it, let us find something and do something 
every week if necessary.
    Mr. Cummings. Mr. Chairman.
    Chairman Issa. Of course.
    Mr. Cummings. Very briefly. Mr. Chairman, I am very glad to 
hear you say what you just said, because, you know, there is an 
old song that says you have got me going in circles, and, you 
know, you can go in circles and never get off the merry-go-
round.
    Chairman Issa. And doesn't it go, I am dizzy?
    Mr. Cummings. I am not taking it that far, just a circle.
    But my point is that, you know, I think it is good that, 
you know, we have got the four of us here right now, and what 
you just said is so very, very important. And it just goes back 
to what both of the Senators have said, that, you know, we have 
got to--we have got to move forward. And I appreciate your 
comment, and I am going to work with you. We will.
    Chairman Issa. Mr. Tierney.
    Mr. Tierney. Thank you very much.
    Just a comment that about a year and a half, 2 years ago, 
we did a bill identifying 250 tax expenditures and recommended 
just 28 of them be eliminated as low-hanging fruit, which was 
over $60 billion a year, and then suggested GAO take a look at 
the others and recommend which ones should be kept, which ones 
should be changed, which ones should be eliminated, and we 
haven't yet got any bipartisan support on that, but I don't 
think that is a bad way to go, at least a bad way to start.
    The other part we look at is the Defense. I mean, it is 
shameful, I think we can all agree, that the Defense 
Department's inability to even put financial statements 
together that can be used as a basis for audits. So do you have 
any ideas or comments, recommendations on what teeth to put 
into some sort of legislation that would tell the Department of 
Defense that unless they produce financial statements that are 
auditable, and then conduct an audit, something will happen, 
what might that be?
    Second, if you read the Stimson report of last year on the 
military, I think it recommends savings between $200 billion 
and $800 billion over the course of 10 years. But one of the 
recommendations in one of the subsidiary opinions that were 
written were that maybe rather than fight over the particulars 
of what is going to get cut in the Pentagon, we don't do a 
sequestration type of cut, but we say to the Pentagon, your 
budget is going to be reduced by X amount of dollars; you find 
out where you are going to save it, or you save it in these 
particular areas and report back to us how you have done it. Do 
you have any comments on those types of recommendations?
    Senator Coburn. Yeah. I was a member of the Bowles-Simpson 
Commission and actually voted for it, and most of those ideas 
came out of the work that we did in terms of the Pentagon.
    The Audit the Pentagon Act has teeth in it. The Pentagon is 
the only agency that pays their bills themselves. All the rest 
of them--all the rest of the bills of the Federal Government 
are paid by the Treasury, and the teeth that we put in Audit 
the Pentagon is if you can't get an audited Pentagon statement 
by 2017, we will have the Treasury start paying your bills, 
which means--and, by the way, a lot of the bills the Pentagon 
pay aren't due, and a lot of the bills that should be paid by 
the Pentagon aren't paid. It is a mess. And when you go to look 
at anything, there is all this fake accounting to be able to 
justify to make a payment. So the teeth where it was is to move 
the payment from the Pentagon.
    More importantly, you cannot manage what you cannot 
measure. The Pentagon can't measure hardly anything. And so the 
whole drive to get an audit of the Pentagon is not to get an 
audit of the Pentagon, it is to get them to the place where 
they can get management numbers that they can actually make 
decisions on. And the reason you have 20 percent waste in the 
Pentagon at a minimum is because they have no idea what they 
are doing because their numbers aren't any good.
    So it is a fixable problem, but remember, we had that in 
the NDAA, and when they incorporated it, they took all the 
teeth out. So you think we are going to get an audit in 2017? 
No. Because there is no consequences if there is no audit. And 
so we are going to continue the same practice.
    Mr. Tierney. Thank you.
    Chairman Issa. Thank you.
    Mr. Mica.
    Mr. Mica. I think this is a great way to kick off the new 
year. I congratulate you, Mr. Chairman and the Members of the 
Senate, with the responsibility for doing this.
    Listening to it, it is kind of interesting to hear the 
efforts of folks, Mr. Duncan, others, for example, disposal of 
public buildings or vacancies and hearing you talk about your 
early efforts, and we have all passed legislation, I passed 
some with Mr. Denham on that subject.
    But I come to the conclusion you can only eat an elephant a 
bite at a time, so you really have to focus. We haul folks down 
to an empty building; I think the first hearing I did as the 
chair of Transportation was in the vacant Post Office Building 
two blocks from the White House. That was in February 2 years 
ago. Then we went back a year later because they hadn't done 
anything and hauled the bureaucrats down there into the empty 
building. The first time it was 32 degrees outside, 38 degrees 
inside. That tends to get their attention, but it still takes 
time. That is a success.
    We have had successes, but you have to target. We have had 
a lot of failures. Amtrak, we are going to celebrate a billion 
dollars this year in a dozen years in food service losses for 
which we passed a law that you cannot spend money and lose 
money. TSA--Tom, you were here when we created it--started out 
with 16,500. We have 15,000 administrators and 66,000 
employees, totally out of control. HIDTA, another example, set 
up to target some high-intensity drug traffic areas. Some of 
those are still going on, and it is a game that is being 
played.
    So we get constant oversight. I think they just released, 
we did 1600 hearings in the House. You have got to just keep 
going after the bastards until you are successful. I don't know 
anything else you can do.
    Chairman Issa. Senator Carper?
    Senator Carper. Mr. Chairman, I spent a lot of years in my 
life as a naval flight officer, Active and Reserve Duty. When 
we were trying to do something hard in the Navy, we used to say 
it is like turning an aircraft carrier. It takes a long time, 
but if you keep at it, you can turn them. We used to do--if you 
were doing something even harder, it is like changing an 
aircraft engine when the aircraft is in flight, and that is 
really hard.
    Last night I was invited to speak to a bunch of University 
of Delaware students who are down here for part of a semester. 
They are interns. They are doing internships on the cost of 
government here on Capitol Hill and outside of Capitol Hill. I 
asked all of them, I said, did you all know what you wanted to 
do with your life when you were 6 years old? Everybody there 
raised their hands. I said how many of you know what you want 
to do now? They are like 21, 22, 23 years old. Only just a few 
of them raised their hand.
    I said, I don't care what you want to do, if you will keep 
in mind four rules. If you do these four rules in your life, 
you will be successful. Number one, figure out the right thing 
to do and just do it, and that is really for us as well, to 
figure out the right thing to do. People all--we don't want to 
waste money. This is something we can agree on; this is the 80 
percent we can agree on. There is plenty of targets to go 
after.
    Number two is treat other people the way we want to be 
treated. That applies especially to these entitlement programs. 
I want to save money in the programs. I want to save these 
programs for our kids and grandchildren. I want to make sure we 
don't savage old people or poor people. We have got to treat 
these folks, the beneficiaries, the way we would want to be 
treated.
    Senator Carper. The third is to really focus on excellence 
in everything we do. If it isn't perfect, make it better.
    And the last thing is just don't give up turning that 
aircraft carrier, changing that aircraft engine. Just don't 
give up. We know we are right. Just don't give up. We are right 
on a lot of this stuff. We just can't give up. I am not going 
to. I know this guy is not going to. And I sense the same 
spirit here today.
    Chairman Issa. Mr. Jordan.
    Mr. Jordan. Thank you, Mr. Chairman.
    Senators, picking up the chairman's comments and ranking 
member, have you two looked at the annual savings, wasteful 
spending that you see that you agree on, and have you done that 
analysis that you both agree this is wasteful? If you have done 
that analysis, what is that number? And if we have done that, 
it seems to me that is the starting point.
    So have you two done that, looked at Mr. Coburn's book, 
whatever you have identified, we agree on these several 
programs total so many dollars, let's start there, have you 
done that?
    Senator Coburn. We have not done that jointly. Our analysis 
of the recommendations just of GAO is at a minimum, if you just 
followed their recommendations to eliminate duplication, you 
would save $150 to $200 billion dollars a years. That is my 
office's analysis of what the savings are. Just eliminate 
duplication. That has nothing do with the $80 billion of fraud 
in Medicare and Medicaid.
    Mr. Jordan. Right, right.
    Senator Coburn. You know, it has nothing to do with the 
cost overruns in IT in the Federal Government, which are $42 
billion a year, 50 percent everything we spend in IT.
    Mr. Jordan. I mean, there is all kinds of redundancy. I 
mean, there are 77 different means tested social welfare 
programs.
    Senator Coburn. Yeah.
    Mr. Jordan. If you had a handful, maybe you would actually 
help poor people get to a better. So I get all that. But to get 
something moving, to get off the dime, it seems that you two, 
the guys testifying, if you two can say, we agree with this, 
there is our starting point, let's get that legislation in 
front of the chairman, who said he is willing to do that, the 
ranking member said he is willing to do that, and now we have 
got someplace to start and we start to, as Mr. Mica said, eat 
that elephant one bite at a time.
    Senator Carper. Let me just say, one of the smart things I 
think we do is we have a good dialogue with GAO, with the head, 
Gene Dodaro, our Comptroller General.
    And also we, not every hearing, but so many hearings every 
month, we have GAO present at the hearing. They put out this 
High Risk List, as you know, every other year, beginning of the 
Congress, and point out any number of ways we can save money. 
On that High Risk List for years has been improper payments. 
And when we first started collecting improper payments and 
saying what are they, it was, what, $30 billion was reported, 
$40 billion. Finally it peaked out at about $125 billion, I 
think 4 years ago, $125 billion.
    And we have authored, co-authored with your support and 
involvement, one after the other after the other legislation 
going after improper payments. We are down from about 125 
billion, to about 120, to 114, 108, to 106. And we have a whole 
lot more room to improve.
    Another area, the property stuff that we talked about, the 
Postal Service, to make sure the Postal Service is in a 
position to repay the $15 billion that they have borrowed from 
the Federal Government.
    There is a lot that GAO brings to us, and it is a common 
agenda, and that is what we work, that is our to do list.
    Mr. Jordan. I appreciate it. I mean, that is all great. But 
we have got to move quickly here. What I am asking is, can you 
two guys get together and come up with a bill? Get us a bill.
    Senator Carper. Actually, we have. If you look at the PRIME 
Act, it is part of the SGR legislation I talked about. That is 
our bill. That is our bill.
    Mr. Jordan. Mr. Coburn is on that bill?
    Senator Carper. Oh, yeah. We do lot of bipartisan bills.
    Mr. Jordan. All right. Thank you, Mr. Chairman.
    Senator Carper. And we will continue to do those as well.
    Chairman Issa. Last but definitely not least, the gentleman 
from Missouri, Mr. Clay.
    Mr. Clay. Thank you, Mr. Chairman.
    Thank you, Senators, for being here today. Could you 
quickly tell us what you think the challenges are of the 
Federal Government when it comes to the purchasing and 
procurement of information technology? Is it that the Federal 
Government doesn't have the expertise to actually purchase it? 
When you look at agencies like DOD and HHS and all of the 
others, do we have the expertise in those agencies to know what 
we are purchasing, to be able to identify the products that we 
should be securing from vendors? And just how do we approach 
that, Senator?
    Senator Coburn. The answer is this is difficult. This is 
not just difficult in government. I have a son-in-law that 
works for one of the large firms that does this, and his report 
is GE, big companies have the same difficulty. The difference 
is, is they have stops.
    Mr. Clay. Yeah.
    Senator Coburn. They have stop losses. We don't have any. 
We spend $82 billion a year on IT, and at least 50 percent of 
it is wasted every year. And the problem is we don't know what 
we want when we go to buy it. And we are gamed a lot.
    The second problem, as I mentioned with the Air Force 
contract, there are no consequences for nonperformance on the 
contractors and there are no consequences to the procurers 
within the government as a penalty of losing their job or 
losing their position if in fact they screw up. So it is about 
accountability.
    It is a difficult area. My estimate is the private sector 
wastes 25 percent of the money they spend on IT. That is my 
estimate. We waste 50 percent. So we can certainly get better. 
But it is a difficult area.
    And we need to be able to compete. One of the bills that 
Senator Carper and I have is to elevate the salary scales that 
Homeland Security can utilize to bring the proper people in, in 
terms of IT. In other words, we have to be able to compete with 
the private sector. And so we need to do that, and we probably 
need to do that in a lot of areas in government in terms of IT, 
because that is an area where we can't compete. So to get the 
quality people to make those decisions, we have to raise the 
level of salaries we are willing to do that. We have a 
bipartisan bill to do that.
    Mr. Clay. And we also have a responsibility, too, as far as 
oversight over these agencies, and maybe stop the train from 
leaving the station.
    Senator Coburn. Well, I would just give you one other 
point. Too often government tries to buy something off the 
shelf and make the off-the-shelf product fit their system 
rather than buy something off the shelf and make their system 
fit the off-the-shelf. And that is a big, especially with the 
Army, it has been a big waste of money in terms of their IT, 
because they are trying to change--things that we know work 
perfectly everywhere else it is used doesn't work in the Army 
because they are actually undermining the integrity of what 
they bought.
    We have a meeting that we have to be----
    Chairman Issa. I want to thank the Senators for----
    Senator Carper. One minute, if I may, on this point. States 
are laboratories of democracy. We have 50 of them. How can we 
learn from our States?
    I am a recovering governor. We used to do a poor job in 
terms of IT management. One of the things that is wrong, and 
Tom has alluded to it, is we would hire people to work in our 
IT shop, train them, they become skillful, and they get hired 
away for more money either in other governments or most likely 
the private sector. And the same is true here. We need to be 
able to attract and retain the people once they are trained. We 
need to have a set of incentives that do that, a compensation 
system that does that.
    The second thing, old Rolling Stones song, can't always get 
what you want, but if you try sometimes you can get what you 
need. We have a hard time in agencies figuring out not just 
what we want, but what we actually need, what we actually need, 
to know for sure this is what we need in a particular agency 
and to stick with that, not to change it, not to keep changing 
it. We need folks in those agencies who can manage these 
projects, that can manage it, and not be managed by the folks 
that are providing the IT system.
    And the last thing, we have to, like, stick with it, just 
got to stick with it from start to finish. Those are some of 
the things that would help us.
    Mr. Clay. Senator Carper took license with Mick Jagger's 
lyrics. Thank you.
    Chairman Issa. Well, you know, there is probably a song 
that goes, all good things must end, but I am not going to 
quote it.
    Senator, Chairman, Tom, my friend, you have been 
extraordinarily generous with your time and questions, and I 
appreciate that. Just to recap, I think we have agreed that 
there is a lot more we need to do. And I did mean it that, and 
Elijah mentioned it as I was offering it, we will, in fact, 
move what you move if you two can agree to it, because that is 
the beginning of chipping away at a billion dollars at a time.
    Lastly, I think we have talked around FITARA all day. It 
sounds like you have some ideas of some items, either as a 
companion bill or to include with it, that we need to do. The 
President has come out talking about needing to hire better 
people to prevent something like HealthCare.gov from happening 
again. We believe that FITARA is part of an organizational 
change, but we are certainly receptive that with that 
organizational change, with budget responsibility for chief 
information officers and the like, we may have to look at how 
we recruit and retain those people who have those large budgets 
and huge responsibility. So I look forward to this being the 
start of a great year together.
    I flew in those old C-5s. They had a reputation for landing 
more often than taking off easily. I appreciate the work you 
have done to try to modernize a portion of that fleet. I 
refueled a lot of times with those in the air, because you felt 
better if you refueled in the air, because you knew you were 
still flying. You have made a difference, and I think the C-5 
as a portion of the fleet certainly is an area you have had 
leadership on, and I appreciate your mentioning it to a very 
old soldier.
    And with that, we will take a very short recess and reset. 
And thanks again, Tom.
    Senator Carper. Thank you. Thank you all. Thank you, sir.
    [Recess.]
    Chairman Issa. If you would all please take your seats.
    Mr. Mica. Mr. Chairman?
    Chairman Issa. The committee will come to order.
    What is the purpose of the gentlemen seeking recognition.
    Mr. Mica. I ask unanimous consent to insert in the record 
at this point a copy of a report that my staff and I completed 
during the recess that shows that we saved somewhere about in 
the neighborhood of a $0.5 billion as a result of the 
committee's work. I'm looking at conference spending, wasteful 
conference spending, nearly $0.5 billion dollars. It's very 
significant. Maybe you saw some reports about GSA savings, but 
we estimate, again, based on the hearings that we did and 
expanding that government-wide----
    Chairman Issa. The entire report will be placed in the 
record, without objection.
    Mr. Mica. Thank you.
    Chairman Issa. We now go to our second panel of witnesses, 
who patiently sat through that short no-question period with 
the Senators. Mr. Thomas A. Schatz is president of Citizens 
Against Government Waste. Mr. Chris Edwards is director of Tax 
Policy Studies at the Cato Institute. Mr. Brandon Arnold is 
vice president of government affairs at the National Taxpayers 
Union. And Ms. Jaimie Woo is tax and budget associate with the 
U.S. Public Interest Research Group.
    I want to thank you all for being here. You are the main 
attraction, notwithstanding the previous period. And I think 
for all of us, the helpfulness is you know you have partners on 
the Senate side who are equally interested in what you have to 
say.
    Pursuant to the committee rules, I would ask that you 
please all rise to take the oath. Raise your right hands. Do 
you solemnly swear or affirm 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 indicate that all witnesses answered in the 
affirmative.
    This will be a little shorter perhaps in some ways, but 
like the first round your entire statements will be placed in 
the record without objection, and we would ask that you stay as 
close to the 5-minute guideline as possible.
    And with that, Mr. Schatz, you're recognized.

                 STATEMENT OF THOMAS A. SCHATZ

    Mr. Schatz. Thank you very much, Mr. Chairman, and thank 
you for the opportunity to testify here today. My name is 
Thomas Schatz. I'm president of Citizens Against Government 
Waste, a nonprofit, nonpartisan organization with more than 1.3 
million members and supporters nationwide.
    It is no secret that wasteful spending pervades the Federal 
Government and every agency could perform its functions more 
effectively and efficiently. Recommendations to eliminate 
waste, fraud, abuse, and mismanagement are regularly provided 
by the Government Accountability Office, Congressional Budget 
Office, congressional committees, the President's budget, and 
groups like Citizens Against Government Waste and others at the 
table today.
    For example, since 1993, Citizens Against Government Waste 
has released ``Prime Cuts,'' a compilation of this year's 
recommendations, 557, that would save taxpayers $580.6 billion 
in the first year and $1.8 trillion over 5 years.
    Despite the best intentions of Presidents and legislators 
to address wasteful spending and improve government efficiency, 
the size and scope of government continues to grow. One of the 
main impediments to reducing the mismanagement of the 
taxpayers' money is Congress' tendency to create a program to 
solve a problem rather than spending the time to determine 
whether or not an existing program can address the same subject 
matter. In fact, until the beginning of 113th Congress, there 
was no formal requirement that committees even specify whether 
a reported bill that establishes or reauthorizes a Federal 
program duplicates another Federal program.
    The rules of the House were amended to require both this 
information reported in each bill and provide committee 
chairmen with the authority to request a GAO review of any 
legislation referred to their committee to determine if there 
was duplication. This should help improve transparency, but 
it's not a requirement that Congress not approve a new program, 
it's simply to list that they might have a duplication in this 
legislation. Proposals by Senator Coburn to change the rules of 
the Senate in a similar manner have twice failed to receive the 
necessary 67 votes.
    In addition to preventing more duplication, Congress should 
immediately act to consolidate or eliminate the program 
identified in GAO's three annual reports, which Senator Coburn 
has estimated cost taxpayers about $295 billion annually. One 
prominent example of that duplication and waste is the 209 
science, technology, engineering, and math programs, costing 
$3.1 billion spread across 13 agencies in fiscal year 2010. 
More than a third of these programs were first funded between 
fiscal years 2005 and 2010. Yet the U.S. does not have enough 
workers in the STEM fields, U.S. students remain behind 
students in other nations in math and science education, and 
the new programs created by Congress were a major factor in 
creating such a complex and inefficient system that has failed 
to achieve the intended objectives.
    There are other high priorities for CAGW in addition to the 
foregoing recommendations, such as the Army's Distributed 
Common Ground System, the Medium Extended Air Defense System, 
stolen identity refund fraud, also known as tax refund fraud, 
and mismanagement of information technology.
    The causes of wasteful IT spending include inadequate 
guidance and program management, unclear goals, and last-minute 
project modification. As a result, systems are often subject to 
significant delays, fail to meet agency needs, fail to launch 
at all, or launch without being fully tested. In other words, 
for observers of Federal IT expenditures, it was no surprise 
when HealthCare.gov did not launch as planned on October 1st, 
2013.
    On the positive side, the government is starting to save 
money through the increased use of cloud computing. Even more 
money could be saved through the use of software asset 
management tools, which would prevent the misuse of existing 
software licenses and the purchase of unnecessary software.
    In regard to government-wide procurement, we have supported 
FITARA. We urge Congress to act on it this year. I was pleased 
to see it mentioned this morning. And we will continue to 
support these efforts, because it is the first major 
procurement reform bill since the Clinger-Cohen Act of 1996.
    Unfortunately, in some cases where eliminating waste and 
inefficiency has been accomplished success has been stymied or 
at least questioned, particularly through the suspension by the 
Centers for Medicare and Medicaid Services of some of the 
recovery audits that have helped correct more than $4.2 billion 
in improper Medicare payments.
    Regardless of whether the government is in surplus or 
deficit, there is no excuse for mismanaging the taxpayers' 
money. The American people would be well served if every day 
elected Representatives and Senators came to work thinking 
first and foremost about how they could better manage the 
taxpayers' money and solve problems effectively with the 
resources that are already allocated to the Treasury in 
existing programs. In other words, each Representative and 
Senator should ask questions first and spend money much later, 
if at all.
    Thank you for the opportunity to testify. I look forward to 
answering any questions.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Schatz follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman Issa. And at this time I'm going to ask unanimous 
consent that the 2012 Congressional Ratings for the Council of 
Citizens Against Government Waste be placed in the record, and 
the February 2013 publication of ``Prime Cuts Summary'' be 
placed in the record. Without objection, so ordered.
    Chairman Issa. We now go to Mr. Edwards.

                   STATEMENT OF CHRIS EDWARDS

    Mr. Edwards. Thank you very much, Chairman Issa and Ranking 
Member Cummings. I'm Chris Edwards, editor of 
DownsizingGovernment.org at the Cato Institute.
    The Federal Government faces a dismal fiscal future with 
rising spending and debt. If you look at the CBO long-range 
projection, long-range baseline, that looks bad enough, but for 
reasons I go through in my written testimony, our fiscal future 
is much worse than the CBO baseline shows. The upshot to me is 
that we need to look at every Federal agency and cut and 
terminate waste and low priority programs.
    What is waste? Well, it's government spending where the 
cost is higher than the benefits created for citizens, and in 
my view, it's also Federal activities that the Federal 
Government does a poor job at that could be much better carried 
out by State, local governments, and the private sector.
    As I think Congressman Duncan mentioned, there are stories 
in the media of GAO reports every week about waste in the 
Federal Government. My research for DownsizingGovernment.org 
shows there was waste and cost overruns and fraud and abuse all 
the way back to the beginning of the Republic. The 19th century 
is full of examples of wasteful spending. So what I take out of 
that is that there's a basic structural problem with the 
Federal Government and how it operates. Waste is endemic and 
chronic.
    There's a lot of reasons for that. The Federal Government 
today has become just so huge that Federal auditors and 
oversight committees just can't keep track of all the spending. 
There are 2,200 separate subsidy and benefit programs in the 
Federal Government today. They are all susceptible to fraud, 
waste, and abuse. Unlike the private sector, poorly performing 
Federal agencies never go bankrupt, they're not subject to 
takeover bids, there is no built-in mechanism to provide for 
efficiency in the Federal Government like there is in the 
private sector. Federal managers face no profit incentive, 
giving them little reason to proactively reduce waste and 
fraud.
    The only real solution, then, from my point of view is that 
we need to downsize the Federal Government. How do we do that? 
One thing we need to do is we need to revive federalism. We 
spend $560 billion a year on Federal aid to the States. In my 
extensive research, the aid system is rife with waste and 
inefficiency. Senator Coburn's Wastebook had many, many 
examples, and many of the examples were aid to State programs.
    So why is that? There's really bad incentives built into 
the Federal aid system. State and local governments simply do 
not spend Federal money as frugally and efficiently as they 
spend Federal money. Coburn's report, for example, goes into a 
gold-plated million-dollar bus stop in Arlington, Virginia, 
near where I live. 80 percent of the money for that bus stop 
came from higher levels of government, so Arlington County has 
no incentive to spend the money efficiently. And that happens 
throughout the Federal aid system.
    I think the three layers of government in the United States 
should be sort of like a tidy layer cake, with each layer 
funding its own programs. The citizens would know who's 
responsible for those programs. The aid system makes American 
government sort of like a giant, confused marble cake. Citizens 
have no idea who's responsible for various programs like bus 
stops that go over cost. So I think cutting aid programs would 
be a great way to reduce waste.
    My other recommendations I go into, privatization. Private 
sector companies have built-in incentives to minimize waste. 
Many governments around the world have figured that out. There 
has been a privatization revolution that has gone on around the 
world in recent decades. Over $2 trillion of electric utilities 
and railroads and airports and post offices have been 
privatized all around the world. That revolution has bypassed 
the Federal Government in the United States for some reason.
    Many things the Federal Government does today have been 
privatized in other countries. As this committee may know, 
Germany, the Netherlands and Britain have privatized their post 
offices. Now Canada and Britain have privatized their air 
traffic control systems. Most European countries use private 
airport screening, as I think Congressman Mica is certainly 
familiar with. Passenger rail has been privatized in Britain.
    If you look at a system like air traffic control, our 
system is really falling behind. It's got massive cost 
overruns, it can't handle technology. We're running our air 
traffic control, which is a high-tech business, we're running 
it like a bureaucracy. It makes no sense. The solution here is 
privatization like Britain and Canada have done. The Canadian 
system, set up as a nonprofit corporation, nonsubsidized, works 
extremely well. It's one of the safest systems in the world. It 
is a leader in IT. That's where the United States needs to go 
with air traffic control.
    Similarly, with the Postal Service, as I'm sure you're 
familiar with, Mr. Chairman, the Royal Mail, a 500-year-old 
government company was privatized a few months ago in Britain, 
raised $3 billion for the federal government. The British 
Government did that for the same reasons that we've got 
problems with our USPS: declining mail volume, the need for 
greater efficiency in the modern economy. So if Britain has 
done it, I see no reason why this country can't privatize its 
postal system.
    So in sum, I think reviving federalism and pursuing 
privatization would go a long way to cutting waste in the 
Federal Government. Thank you very much.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Edwards follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman Issa. Mr. Arnold.

                  STATEMENT OF BRANDON ARNOLD

    Mr. Arnold. Yes. My name's Brandon Arnold. I'm the vice 
president of government affairs for the National Taxpayers 
Union. And thank you to the committee and the chairman and 
ranking member for having me today.
    I'd like first of all to say Senator Coburn's done a 
phenomenal job with his Wastebook, as have CAGW with their 
``Prime Cuts,'' and Chris Edwards and the Cato Institute with 
DownsizingGovernment.org.
    At NTU, we approached our guide to reducing wasteful 
spending slightly differently. We actually partnered with a 
group, United States Public Interest Research Group, and Jaimie 
is immediately to my left here, to find areas of the Federal 
budget, mostly wasteful in nature, inefficient, unnecessary 
programs that both the left and the right could agree upon. And 
we published this report, ``Toward Common Ground: Bridging the 
Political Divide with Deficit Reduction Recommendations for 
Congress,'' just last month. It contains 65 specific 
recommendations, again, that the left and the right can agree 
upon, and that would save well over $500 billion over a 10-year 
window.
    Now, let's be honest. If I'm writing this report singly, by 
myself, I would include a heck of a lot more, but, you know, 
when you're cooperating, there's a lot of talk about bipartisan 
cooperation here, we are very pleased to work with U.S. PIRG 
and find stuff that we both agreed upon. I won't--I don't have 
time to--go through all 65 recommendations in this brief period 
here, but the report is included in its entirety in the binder 
there, and I hope you guys will----
    Chairman Issa. Without objection, the entire binder will be 
placed in the record.
    Mr. Arnold. Thank you. I hope you will look at it, share it 
with your staffs, share it with your colleagues, and use it as 
best you can.
    Let me just to touch on a couple quick highlights, if I 
may. Included in that $500 billion figure is up to $152 billion 
in savings from eliminating wasteful subsidies to agribusiness 
and other corporations. This includes things like cutting $2 
billion by eliminating the Market Access Program, which pays 
for large corporations to market their products overseas; 
reducing funding by a billion dollars for the EDA, the Economic 
Development Administration.
    Also, there's $197.2 billion in savings from ending low 
priority or unnecessary military programs. Included in that 
$197 billion figure is reducing by $1.9 billion expenditures on 
military bands. There's as much as $42.3 billion from 
improvements to program execution and government operations. 
That includes $140 million in savings from eliminating 
duplicative catfish inspection program, which has been cited 
numerous times by many groups on the left, right, by many 
outlets of media as being an absolutely wasteful, duplicative 
program that's duplicated at the FDA, as well as at NOAA.
    There's also $131.6 billion in savings from reform to 
entitlement programs, often a tricky area to root out waste and 
fraud, but we found $1.8 billion by stopping improper Medicare 
payments to noncovered chiropractic services and $7.6 billion 
from aligning Medicare lab fees with those in the private 
sector.
    So of those 65 recommendations, I'm pleased to say that one 
has been enacted into law already in the budget deal that 
Congress passed last month. There was a $50 million savings 
that came from the Ultra-Deepwater Natural Gas and Petroleum 
Research program. It's a little bit of a mouthful there. 
Pleased to see that that was included in the budget deal. And 
again, that will save $50 million. So that's one down and 64 to 
go. There's a lot of work to be done.
    The second half of my testimony, and I know Jaimie's going 
to get a little bit more into the report in just a moment, the 
second half of my testimony I try to touch on a few legislative 
changes, more process-based changes that Congress could enact 
to reduce and eliminate waste and fraud. I'll touch on those 
just very, very quickly, and obviously they're there in my 
written testimony.
    But strengthening whistlerblower protections. We took a 
step forward in 2012 with S. 743, which I know was supported by 
the chairman and ranking member, to increase whistleblower 
protections for Federal employees. We took a step back, 
unfortunately, with the Conyers court decision in 2013 that'll 
exempt many Federal employees from whistleblower protection. So 
there's work to be done there.
    Ending the use-it-or-lose-it spending sprees that occur at 
the end of the fiscal year. I believe Congressman Duncan 
alluded to those in his earlier remarks. Reestablishing the 
``Byrd Committee,'' sometimes called the anti-appropriations 
committee. Creating a sunset commission or committee to require 
the periodic review of programs that are no longer needed. 
Auditing the Pentagon. This has been mentioned several times 
today already. Limiting spending. Just reducing spending, 
keeping spending caps in place, requiring agencies and 
departments to prioritize their programs when you start to trim 
away at their budgets can be very effective in reducing waste.
    Touching on entitlement programs, critically important. My 
organization strongly supports the PRIME Act, which Senators 
Carper and Coburn spoke of earlier. And certainly involving the 
executive branch. The legislative branch can't do it alone. The 
executive branch needs to be part of the solution as well.
    I see I'm just about out of time, so I will end my remarks 
there. Thank you.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Arnold follows:]


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    Chairman Issa. And since you get sort of a twofer, Ms. Woo, 
if you'll continue.

                    STATEMENT OF JAIMIE WOO

    Ms. Woo. Good morning. Chairman Issa and Ranking Member 
Cummings, members of the committee, thank you for inviting me 
to testify today on behalf of the U.S. Public Interest Research 
Group. My name is Jaimie Woo, and I'm the Federal tax and 
budget associate for U.S. PIRG. U.S. PIRG is a federation of 27 
State-based consumer advocacy groups. We are a nonprofit, 
nonpartisan organization that advocates improvements in fiscal 
policy, to stop special interest giveaways, increase budget 
transparency and accountability, eliminate waste, ensure 
subsidies or tax breaks serve the public, and make taxes 
fairer.
    As Congress works to pass a budget for the next year, U.S. 
PIRG and the National Taxpayers Union, as Brandon had 
mentioned, have come together to offer a set of deficit 
reduction recommendations worth more than $0.5 trillion 
dollars. This has appeal from across the political spectrum. 
Our December 2013 joint report, ``Toward Common Ground: 
Bridging the Political Divide with Deficit Reduction 
Recommendations for Congress,'' of which I am a coauthor, 
details 65 specific spending cuts over 10 years.
    NTU and U.S. PIRG do not often agree on policy approaches 
to solving our Nation's problems, however, we are united in the 
belief that we spend far too much money on ineffective programs 
that do not serve the best interests of the people. In this 
report, we identified the low-hanging fruit of waste and 
inefficiency in the Federal budget that both Republican and 
Democratic lawmakers should recognize as unproductive uses of 
taxpayer dollars.
    U.S. PIRG's approach to spending cuts is guided by four 
basic principles. Number one, oppose subsidies that provide 
incentives to companies that do harm to the public interest or 
do more harm than good. An example is funding for biomass 
research and development. Large-scale agricultural production 
of corn or other crops used for biomass often involve massive 
amounts of fertilizer, water, and land that drastically change 
the landscape of our country, accelerate problems caused by 
deforestation, and compete with food production, raising food 
prices globally.
    Number two, oppose subsidies to mature, profitable 
industries that don't need the incentive. These companies are 
going to engage in activity regardless of taxpayer support. For 
example, Congress should eliminate the crop insurance program, 
which directly subsidizes insurance premiums to large 
agribusinesses on coverage they should and could purchase on 
their own.
    Number three, support reforms to make the government more 
efficient. According to the Office of Management and Budget, 
the Federal Government owns tens of thousands of unused or 
underutilized buildings or structures, as Senator Carper had 
mentioned earlier. The public should not have to pick up the 
tab for maintaining buildings that are not used. Reducing 
inventory would save nearly $15 billion over 10 years.
    Number four, oppose programs where there is authoritative 
consensus to do so. So this means when there is a strong 
independent agreement across the political spectrum that a 
program is wasteful, or an agency and department receiving the 
funding has argued against it. So, for example, the Army, 
Pentagon, and White House have all said that the Army no longer 
needs additional Global Hawk drones.
    Our report's recommendations are specific, targeted, and 
name individual programs for reductions or elimination. Each 
recommendation is also backed up by authoritative sources, such 
as the Congressional Budget Office and the Government 
Accountability Office. We are long past the time for general 
references and rhetorical calls for attacking nameless, 
faceless programs that contain waste, fraud, and abuse.
    And this is the precise reason that U.S. PIRG did not 
support the recent across-the-board cuts. Such policies fail to 
differentiate between true public priorities and where there is 
genuine waste or inefficiencies in the system. Our organization 
has argued in favor of programs to aid access to higher 
education and measures to ensure the safety of our Nation's 
food supply. Across-the-board cuts equate those programs with 
the wasteful spending we highlighted in our report.
    While not in the report, we also urge committee members to 
review special interest carve outs through tax expenditures and 
loopholes. These expenditures have the same bottom line effect 
on our Nation's deficit as direct line item spending. 
Regardless of whether spending takes place through the Tax Code 
or through the appropriations process, ordinary taxpayers and 
small businesses wind up picking up the tab for that missing 
revenue in the form of cuts to worthwhile programs, higher 
taxes, or more debt.
    We recognize that many of the items on our list challenge 
longstanding subsidies to narrow yet powerful special 
interests. Despite the fact that these expenditures serve 
little or no continuing public service and the public would 
likely support their elimination, there will no doubt be 
intense lobbying efforts to preserve these handouts. We 
strongly urge you to resist those efforts and take the first 
important steps toward addressing our Federal budgeting 
problems and ensuring that any public expenditure is for the 
public interest.
    Thank you, and I'd be happy to answer any questions.
    Chairman Issa. Thank you.
    [Prepared statement of Ms. Woo follows:]


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    Chairman Issa. I'll now recognize myself for a short round 
of questioning.
    Mr. Edwards, as you know, I'm a fan of your organization, 
but let me get into a question on the post office since that's 
within the jurisdiction of this committee. Privatization of the 
post office, do you imagine that anybody would take the post 
office even for free today?
    Mr. Edwards. Well, as I mentioned, you know, Britain did an 
IPO for their post office. They sold 52 percent of the 
ownership.
    Chairman Issa. I understand that. The post office is 
currently losing 16.2 or so billion dollars without paying a 
cent in tax, if you look at the deferrals, et cetera, in other 
words if you account for it the way you would a public company. 
On $60 billion of gross revenue, that's not a win.
    So very briefly, time's limited, but very briefly, isn't it 
true that we would have to do a dramatic reorganization, 
exactly the one that has been stalled for years, before the 
post office would in fact be privatizable?
    Mr. Edwards. You could do it either way. In Britain under 
Thatcher they made major changes to companies before they sold 
them off. But the way an entrepreneur would think about it is 
you can take government assets, you can make them a lot more 
efficient. So the post offices in Germany, Britain, and 
Austria, they became a lot more efficient after privatization 
and they went from deficits to surpluses. So just because the 
government can't make money doesn't mean entrepreneurs can't.
    Chairman Issa. Look, on a bipartisan basis we've been 
trying to get the post office fixed, and I just want to make 
sure that I use this opportunity to make one thing, I think, 
clear, but I want to use you, if you agree. We would have to 
throw $100 billion or more into the deficits that exist against 
an existing current and retired workforce if we were to 
transfer it to the public sector as it is today. And even if it 
has the ability to make a profit, let's just say it has the 
ability to make a $5 billion profit, you give it a 10 cap, 
that's $50 billion, no one is going to absorb our current 
obligations to our legacy employees based on that, are they?
    Mr. Edwards. That may well be true, but the British 
Government took over the unfunded liabilities of the Royal 
Mail's pensions before they privatized.
    Chairman Issa. Okay. So even looking at the British system, 
we would have to take that tens of billions or hundreds of 
billions of dollars of legacy liability. So the American people 
have a very expensive decision even if we were to, as I said, 
give away the post office.
    Mr. Edwards. I think that's probably true, but what you're 
looking for is economic growth and efficiency, which benefits 
the overall economy. To my mind, that's kind of a small and 
narrow issue. If you can have a more efficient mail system for 
decades in the future, it's worth taking a hit now.
    Chairman Issa. I completely agree with your last statement, 
and that's why we're trying to reform the post office and then 
let a future group look at a at least breakeven post office for 
whether there's opportunities to be a little bit more private 
than they currently are.
    Mr. Arnold, I'm not trying to be the adversary, you guys 
are my heroes, but I served for 10 years in the military, off 
and on Active Duty and then in the Reserves. When we look at 
the savings of DOD, wouldn't we be better off transferring $65 
billion to $69 billion of noncore military activities out of 
the Department of Defense as a first step rather than looking 
at the millions of dollars that are spent in total on, for 
example, my Marine bands? I might note that there are Medal of 
Honor recipients who were Marine band people in Korea. Marine 
bands also are infantry trained and they fight.
    Mr. Arnold. Well, I think the expenditures that we list 
with regard to Marine bands, they're not booting these 
individuals out of the military, but at the same time we're 
spending a tremendous amount on a service, a portion of the 
military that I think is probably not directly related to 
national security, which should be the primary function of the 
Defense Department. And I think that was the kind of framework 
that we're operating with when we're looking at the Defense 
Department holistically, is what is necessary for national 
security and what can we trim away, given the fact that we're 
running $600, $700 billion dollar annual deficits.
    Chairman Issa. Well, I appreciate that, although we pay for 
the cost of the Medal of Honor when it's awarded. It's part of 
the esprit de corps, it's part of what the military is.
    I want to make cuts in the military, I really do, but I 
want to make the cuts that leave us with a military that's 
effective. And I often see those kinds of cuts and I push back 
pretty hard, as you can imagine, because I believe that we can 
trim. But I can tell you this: the Department of Defense 
Pentagon building is completely filled and has overflow 
annexes. The military is a fraction of the size it was in World 
War II, when we didn't have computers, and yet not a single 
office is empty in the Pentagon. And so I would hope that the 
committees of jurisdiction would look and ask the question of, 
why are there more civilians working for the Department of 
Defense than there are uniformed personnel? Why is there not an 
empty room at the Pentagon when, in fact, the military has been 
reduced in size? So that's a little bit of maybe my pushback.
    I do appreciate a lot of the other areas that you propose, 
and I recognize that I've already run over my time on just two 
subjects.
    Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Schatz.
    Mr. Schatz. Yes?
    Mr. Cummings. This is your report. Is that right?
    Mr. Schatz. Yes.
    Mr. Cummings. And I was just looking here about, and it's, 
you know, about page 36, I guess it is, and it talks about 
eliminating the Legal Services Corporation. And there are so 
many people who do not have access to legal services. Can you 
talk about that briefly?
    Mr. Schatz. Yes, sir.
    Mr. Cummings. Yeah.
    Mr. Schatz. As a retired attorney, I know that attorneys do 
provide pro bono services, they are essentially required to. 
And certainly on the form to renew your license it says, are 
you providing pro bono services?
    We think a lot of the services that are provided through 
the Legal Services Corporation could be provided through the 
private sector, through nonprofits, and not necessarily by the 
Federal Government. Of course before 1974 there was no Legal 
Services Corporation. I don't know that there's any evidence 
that the representation was better or worse prior to that time.
    Mr. Cummings. You know, I just think that our society is 
getting to a point where there are folks--and as a lawyer who 
practiced many years, I saw a lot of people come into court, 
and they were had a decided disadvantage. And although we have 
a legal system, a Constitution, legal rights, if people don't 
have counsel they are kind of out of luck.
    And I understand what you're saying. A lot of people say 
leave it to the pro bono. And as you probably know, in Maryland 
you really have to do quite a bit of pro bono. But even that, I 
don't think, captures so many people, the people that I see 
in--well, I used to see in courts.
    And this is a very interesting document. I want to really 
go through it. How did you all come up with these items?
    Mr. Schatz. Citizens Against Government Waste has been 
producing ``Prime Cuts'' since 1993. We use sources, in those 
days certainly a lot of old Grace Commission recommendations, 
some of which are unfortunately still not implemented. CAGW 
grew out of the Grace Commission. We also look at the 
Congressional Budget Office produces its report every year, GAO 
reports, the president's budget, budgets put out by members of 
Congress, such as the Republican Study Committee and others. It 
always ties back to something.
    Mr. Cummings. Sure.
    Mr. Schatz. And the database shows you where it came from.
    Mr. Cummings. Well, Ms. Woo, you know, the establishment of 
the Do Not Pay List is one of the most recent tools that 
resulted from Chairman Carper and Ranking Member Coburn's 
recent legislation on improper payments. The list permits all 
agencies to link databases, such as the General Service 
Administration's excluded parties list system, to check the 
eligibility of a payee to receive government funds.
    What else would your organization propose to help decrease 
the level of improper payments? You can imagine when the 
American public hears about improper payments and then see a 
situation where we're trying to come up with $6.4 billion to 
give their neighbors, their relatives, and friends an 
opportunity to get unemployment and survive, and we are losing 
money through improper payments, billions. That's something 
that's very alarming. And I'm just wondering, what would you 
propose?
    Ms. Woo. Thank you, Mr. Cummings. In terms of the 
entitlement reforms that we have listed, including the improper 
payments for noncovered chiropractic services that Mr. Arnold 
had mentioned, that is an area that I could actually follow up 
with you on in terms of getting back to our healthcare 
advocates and our healthcare team, and then I could provide you 
a better answer at a later time.
    Mr. Cummings. All right. Do you any of you all have an 
answer to that question, the improper payment issue?
    Well, let's go on to DOD. You know, when you look at DOD 
and you look at the situation where they can't even provide an 
audit, I mean, come on. Is it too big to control? And what do 
you all recommend with regard to DOD? Chairman Issa made some 
suggestions, and basically it's just transferring certain funds 
out of there. They have all kinds of funds there for things 
like medical research and things of that nature. But, I mean, 
did you all have any other suggestions on that?
    Mr. Schatz. Well, it helps to know what an agency is 
spending, what a department is spending.
    Mr. Cummings. Yeah. He said--I think Coburn said it.
    Mr. Schatz. Right.
    Mr. Cummings. If you can't measure it----
    Mr. Schatz. Audit, right.
    Mr. Cummings. --you got a problem.
    Mr. Schatz. Right. We agree with you. I mean, Citizens 
Against Government Waste helped expose the $436 hammer and the 
$640 toilet seat, which we don't see as much of anymore, but I 
think things like FITARA and other reforms on procurement will 
help reduce wasteful spending throughout the government, 
including DOD. That's an important step to take.
    Mr. Edwards. I would say two general things about the 
Pentagon. You're right, it's hugely wasteful. I like spending 
caps combined with executive branch flexibility. I like the 
current spending caps. I'm disappointed with the recent budget 
deal. I think, you know, the Pentagon, if we gave them more 
flexibility to make these decisions to cut weapon systems and 
the like that they don't want and they don't need and we put 
tight caps on them, they would themselves find more efficiency.
    I also think one of the problems with the Federal 
Government again is because it is so huge, many Members spend 
their time on lots of little activities that, frankly, should 
be in the realm of State and local government. I think if we 
trim some of the extraneous functions of the Federal 
Government, more Members of Congress would focus more on some 
of the core functions, like Pentagon waste.
    Mr. Cummings. Thank you. I see my time has run out.
    Mr. Connolly. Mr. Chairman. Mr. Chairman.
    Mr. Mica. [presiding] Yes.
    Mr. Connolly. Could I just ask Mr. Schatz.
    Mr. Mica. Yes.
    Mr. Connolly. I couldn't quite hear Mr. Schatz. Did I 
understand Mr. Schatz to say FITARA, FITARA would save some 
money?
    Mr. Schatz. FITARA would help.
    Mr. Connolly. Very wise insight, Mr. Schatz. Thank you very 
much.
    Mr. Schatz. I never know if something's going to be good or 
bad when I get up here.
    Mr. Mica. Thank you, Mr. Connolly and Mr. Cummings. I guess 
I'll recognize myself next, having assumed the chair for Mr. 
Issa here.
    One of the things that's frustrating to me is--and these 
are great groups. You know, you've got Citizens Against 
Government Waste, Cato, National Taxpayers Union, and Ms. Woo, 
all of you working sort of in the same vein. But sometimes the 
voices are a little bit like Congress, they're not unified. Is 
there an attempt to come together with any of these groups? Do 
you all come out with a common policy? I mean, we have the 
groups here and then there are many others out there that are 
looking at saving taxpayer dollars. Is there some association 
and do you meet and do you decide on some priorities?
    Mr. Schatz.
    Mr. Schatz. Yes, Mr. Mica. Sometimes there's too many 
emails. I mean, we really, certainly with NTU in particular, we 
work very closely. It's kind of a joke around the office, if 
NTU has signed it, we'll sign it as well, and it's really true. 
And I think over the years there has been a lot more 
coordination. For example, the alternate engine for the Joint 
Strike Fighter we first identified as an earmark back in 2006. 
Over time, other groups joined with us.
    Mr. Mica. But do you also have a joint policy on----
    Mr. Schatz. It's more coalition letters----
    Mr. Mica. Because I think that would be helpful.
    Mr. Schatz. Well, we need it to be successful, because 
there are so many people that want to spend money, we have to 
work together.
    Mr. Mica. As I said earlier, you know, you just have to be 
persistent in this business and then hit a good lick. A good 
example, and I should have submitted this earlier, I did put 
this in the record, but this is the oversight on conference 
spending report that I alluded to. And while I gave credit to 
the committee, because we did follow up, it wasn't just GSA. 
And I have to give probably the most credit to the guy in the 
hot tub, the GSA guy in the hot tub. I mean, he made it go 
viral.
    I remember we did a hearing on the subject. Nobody 
attended, no one paid any attention until that guy became 
viral. But from that, we did IRS, we did VA, we did DOD. This 
is about $0.5 billion a year in reduced spending on 
conferences, so these are a success.
    My point, too, is that I don't see a lot of these groups 
joining in. It's not that you want to become cozy with 
Congress, but when we are on a roll, it does help. The public 
buildings, I mean, the history of public buildings and all the 
different bills and people who have attempted--I remember we 
were in the minority--it's great to be in the minority, but not 
for too long. I'm sorry, Mr. Cummings. I just bring that up. 
But when you're there, you can do productive things, and we 
produced a report, ``The Federal Government Must Stop Sitting 
on Its Assets,'' and we outlined all the public buildings, 
Amtrak, I mean, just incredible assets that the Federal 
Government has. But the problem is you don't get unified 
support from out there with some of these groups to go after 
these targeted things.
    So while you heard a lot of how we need to coordinate with 
the Senate and pick priorities, I think it would be good for 
your groups to coalesce and get behind some of these items. It 
would, again, enhance our efforts. And then when we do things, 
like Coburn talked about consolidating programs, the 
transportation bill consolidated between 20 and 30 programs. 
Now the bureaucrats, the little bastards are running around 
trying to justify their existence. We eliminated or 
consolidated, but nobody is focusing on the bureaucrats who are 
trying to justify their existence. They have nothing to do, 
because you eliminate the program, but they come up. Now the 
rules, dear God, they've come out with rules to justify their 
existence.
    Anyone want to comment on this new administer by 
regulation? It's a new phenomena. Mr. Schatz, Mr. Edwards, Mr. 
Arnold, Ms. Woo?
    Mr. Schatz. Mr. Mica, we'd be happy to come up on a regular 
basis and meet with your staff and the staff of any other 
committee that's interested in consolidating any program.
    Mr. Mica. No. We have already done this.
    Mr. Schatz. Well, we haven't done enough, because we still 
have them.
    Mr. Mica. This is a new phenomena. It's a new phenomena. 
It's rule by edict, fiat, regulation. And, again, we don't have 
a focus on what's going on there. There is some oversight. The 
administration's been kind of clever, too, now, in ruling by 
fiat and executive order to pack the District Court of Appeals. 
That's been the only recourse. You could pass a bill from the 
House and there's nothing done in the Senate, and the edict and 
the executive order prevails. Are you all paying any attention 
to that?
    Mr. Edwards. I'll give a general comment. The groups 
represented here are, frankly, pretty small, compared to the 
huge firepower and staffing power of the GAO and CBO. We have 
to----
    Mr. Mica. But they just do reports and they have to be 
politically correct. You guys don't have to.
    Mr. Edwards. I agree with you. So we have to pick and 
choose. For example, I've written extensively about TSA reform 
in the last half year. I know that's something you've been very 
supportive of and a leader on. But, you know, it is difficult 
for outside groups, because most of the experts on Federal 
programs are in the executive branch and are staffers in 
Congress and are in the GAO. You know, outside groups, we need 
to pick and choose our battles, because our funding is limited. 
And so we'd love to work better more with you.
    Mr. Mica. Well, again, combined firepower, maybe some 
unified effort.
    I'm exceeded my time. Let me yield to the gentlelady from 
New York, Ms. Maloney.
    Mrs. Maloney. Well, I want to thank all of the panelists 
for your excellent presentation and your hard work in a 
tremendously important area.
    The prior panel had a consensus that one of the most 
mismanaged agencies was the Pentagon, and they were united in 
their belief that the Treasury should be paying their books or 
paying their checks, writing their checks, as opposed to the 
Pentagon. They pointed out the Pentagon was the only agency in 
the entire government that themselves pays their checks. And 
I'd just like to go down the aisle. Do you believe that the 
Pentagon should be able to pay their checks or should they be 
just like every other agency and have Treasury pay them? Just a 
yes-or-no answer. Mr. Schatz?
    Mr. Schatz. Yes.
    Mrs. Maloney. Pardon me?
    Mr. Schatz. They should turn it over to another agency.
    Mrs. Maloney. Yeah. Mr. Edwards?
    Mr. Edwards. Yeah, I agree with that. And I think one thing 
Congress can do, could give the Pentagon a fixed amount of cuts 
they want to see from efficiency, but then give the Pentagon 
flexibility to find those cuts and propose them to Congress.
    Mrs. Maloney. Mr. Arnold.
    Mr. Arnold. Yes, I agree.
    Mrs. Maloney. Ms. Woo.
    Ms. Woo. I will say that U.S. PIRG has worked with NTU on a 
number of different reports. We've written in conjunction about 
the common grounds. And we've also worked with Senator Coburn's 
office to help write this report.
    On that matter, I would say that U.S. PIRG is not an expert 
on defense policy and defense spending and so forth, and so I 
will give a yes or a no answer on that, but we do take the 
authority and the authoritative consensus of various experts, 
you know, in the Pentagon in and the White House and so forth.
    Mrs. Maloney. Well, Ms. Woo, you were very strong on the F-
35 Joint Strike Fighter debacle, as you called it in your 
report, or NYPIRG did, and this is one of the key programs that 
NYPIRG and NTU, their joint recommendation is cutting it, the 
Joint Strike Fighter, which is the largest weapon system in 
history and largest contract in history for the Pentagon. And 
so far, the DOD has spent 12 years developing it, and by all 
consensus, their own consensus, it's deeply flawed and has 
escalated with cost overruns to over $400 billion. Not only are 
the overruns now at $400 billion, they're estimating that it 
costs a trillion dollars to maintain these planes.
    And the price tag is not the only frightening thing about 
this acquisition. DOD entered into the contract to purchase 
these planes while critical testing is ongoing, a practice 
called concurrency. So at the end of 2012 the DOD had procured 
121 aircraft at a cost of $28 billion, but as of 2012 only 22 
percent of the testing that they want to do has been completed.
    So I would say that this is an area we can work on. We 
shouldn't be handing out contracts before you've tested them. 
And I'm going to put in a bill to that effect. And according to 
the Pentagon's own Office of Operational Tests and Evaluation, 
in 2013 the plane has, ``no night capacity.''
    So my question, Ms. Woo, would you think that a fighter 
plane should be able to fly in the night?
    Ms. Woo. I do believe that.
    Mrs. Maloney. Okay. And do you agree with DOD's own 
statements from the chief of acquisition called it--and I 
quote, this is a quote from the chief of acquisition, I find it 
startling. He calls it, ``acquisition malpractice.'' Now, would 
you agree with the head of the chief acquisition, Under 
Secretary Frank Kendall, would you agree that it's acquisition 
malpractice which has happened? This is the DOD talking about 
their own procurement system.
    Ms. Woo. Yes.
    Mrs. Maloney. And does the acquisition--what I don't 
understand, and we can get into a longer conversation on this 
is, you know, how does an acquisition of a fighter plane become 
such a debacle that the own acquisition officers are calling it 
a disaster?
    But my main question is what steps does DOD need to take in 
order to eliminate the wasteful and unnecessary F-35 program? 
And it's noted in other reports, it may have been yours, Ms. 
Woo, or someone else's, that it doesn't even address the way 
that we are moving militarily. It can't land on an aircraft. 
The Navy has these big boats that the planes land on; the Navy 
plane cannot land on their own aircraft. So how do you move it 
around? And we seem to be having these smaller strike forces as 
opposed to a huge plane that can't fly at night and can't land.
    So what are the steps that DOD would need to take to 
eliminate what by their own acquisition leadership Mr. Kendall 
is calling an acquisition disaster? What are the steps? Anyone? 
How do you get rid of a wasteful item in the budget? How would 
you do that?
    Mr. Schatz. Well, one of the recommendations we have in 
prime cuts is to reduce the cost growth in the major defense 
acquisition portfolio by 20 percent over 5 years. GAO has done 
a lot of work on this. It's simply changing the way that 
procurement is achieved at DOD, and it's been an ongoing 
problem for many, many years. So it's a big operation. We're 
happy to work with this committee and others to try to reform 
it in the future.
    Mrs. Maloney. Any other comment? How do you get rid of a 
wasteful acquisition like this? How do you get rid of it? 
You've identified it. Now how do you get rid of it?
    Mr. Arnold. I don't know that it's fair to put the onus 
solely on DOD. I think it's probably going to require 
congressional action as well, and you're talking about these 
massive weapons systems, you're talking about a lot of 
parochial interests that are involved. So it's extraordinarily 
difficult, but I think Congress needs to run point. I mean, we 
have a significant number of weapons systems and other things 
being done by DOD that they say they do not need and they do 
not want, yet they are obligated by law to continue to contract 
and produce, to maintain. So Congress needs to step in at some 
point, and there's a lot of options in our paper and the 
publications that Coburn and others have put out that Congress 
can introduce legislation and pass it and stop these things 
from taking place.
    Mr. Mica. I thank the gentlelady and the witness.
    Mr. Lankford.
    Mr. Lankford. Thank you, Mr. Chairman.
    Mr. Edwards, I want to ask you a question about 
incentivizing agencies and agency individuals. Right now the 
incentive for an agency is to add more staff, and to try to 
chase down more dollars, and to spend as much as you can at the 
end of the year. How do we split that incentive?
    You mentioned spending caps. Sequestration caps and other 
caps really hit at every single program. Some--there are some 
programs that run more efficiently than others, but a cap like 
sequestration hits all of them with equal amount of fury.
    If I hand to an agency the authority to say I need you to 
cut 7 percent from your budget or 27 percent from your budget, 
there's very little oversight of which programs they're going 
to cut. They'll keep the ones they like the best, and they'll 
cut the ones that probably I like the best.
    So talk through different options that you have seen for 
incentivizing agencies in reduction.
    Mr. Edwards. I mean, I think ultimately for reasons I go 
into in my testimony, I list 15 reasons why the public sector 
will never be anywhere near as efficient as the private sector. 
The profit motive in the private sector is hugely powerful.
    Mr. Lankford. It is.
    Mr. Edwards. And the government doesn't have that. 
Government, there's been lots of talk for pay for performance 
in the Federal Government for decades, but it never really 
happens, and I don't think it can. The government has more 
rules because of basic structural reasons to prevent public 
corruption and because they have no clear motive like lowering 
costs and maximizing revenue.
    So I think the focus should be on fully eliminating 
programs and also capping spending, giving executive branch 
agencies more flexibility. I think executive branch agencies 
should and can do more to evaluate their own programs. Perhaps 
agencies should be required to do detailed analyses and rank 
order their most efficient or highest-priority programs to the 
lowest-priority programs, and make the information public so 
that Congress can see it and Congress can use it for 
decisionmaking. More information is always better.
    You know, one thing that I find really striking about the 
Federal agencies, you go to their Web sites, it's all good 
news, it's all essentially propaganda about all the great 
fabulous things they do, but I don't think that's fair to 
taxpayers. I think Federal agencies should be required to 
provide more balanced information about their programs, their 
failings, and what the low-priority activities they do are. And 
the ultimate decision is up to the Congress, but I think 
agencies can do more to provide information to Congress about 
where they fail.
    Mr. Lankford. Yeah, I would agree. The taxpayers' right to 
know that Dr. Coburn had mentioned earlier, that's my bill here 
in the House we've talked about this committee has passed. We 
had bipartisan input into that bill, and it has passed. I hope 
the full House will pass it on and we will send it over to the 
Senate.
    But just the basics of doing what every program is, how 
much we spend, how many people they serve, and the metrics, if 
there are any metrics, for the program would be a tremendous 
asset to Congress to make those decisions, because right now 
there's no description of all those programs or a listing of 
the programs. So what Dr. Coburn mentioned earlier about the 
hundreds of duplicative programs, it's very difficult to go 
through the tedious work of identifying all those programs 
because they all have different descriptions and different 
locations.
    Mr. Edwards. That's right.
    Mr. Lankford. Mr. Schatz as well, I appreciate, you had 
mentioned earlier about the rule change in the House. I'm proud 
to say that was actually my rule change that went through on 
that one as well to try to identify some of the duplicative 
programs.
    We have a long way to go on that, and you're right, there's 
not enough teeth to it, and I appreciate you bringing it back 
out because that is something that I hope in the years ahead we 
can continue to add more teeth to it so it's more than just 
identifying and listing, yes, this is duplicative, but a 
prohibition to that as well.
    Are there other rule change things that you have seen that 
would be an asset in the days ahead to the functioning of the 
House?
    Mr. Schatz. I think your--it reminds me a little bit of the 
Improper Payments Act. The first one just identified the 
improper payments, then the next two really put some teeth into 
it. So I hope that the rule that has been adopted would improve 
over the years, because if you're prohibited from enacting a 
duplicative and overlapping program, then that helps solve that 
problem to start.
    So I know rules change at the beginning of each Congress. I 
hope if there's a change in leadership, that rule continues, 
because it's really critical. It's amazing it took this long to 
have a rule like that, because one would think any organization 
wouldn't want to create a duplicative program. So we appreciate 
your leadership on that. We're happy to come up with some other 
rules, but I was happy to see that that one was there, because, 
to be honest, when we started our research for the testimony, 
we weren't--we didn't even know it was there.
    So that's something else that perhaps needs to be 
emphasized to the committees, that this is a rule, and they 
should be using it, because, again, if Citizens Against 
Government Waste didn't know much about it, the rest of the 
public probably doesn't know, either. So I encourage more 
information about what you've been doing.
    Mr. Lankford. Right. It's new, and it's a step process to 
be able to push on that.
    I have one quick question as well for Mr. Arnold and Ms. 
Woo. One of the items that you identified was requiring DOD and 
VA to jointly buy prescription drugs. This is something that I 
have tracked through as well. I have seen figures--you have a 
little over $4 billion in savings on that. I've seen figures as 
high as $7 billion in savings on that. I don't know if you 
wanted to mention or add any other detail to it.
    The GAO report came out in early 2000 suggesting that DOD 
and VA jointly purchase prescription drugs. They did it for 
several years, had millions of dollars of savings until 2005, 
and then in 2006 DOD changed its formulary, and they never 
really cooperated again since then. They've studied it, they've 
looked at it again, but I didn't know if you had any additional 
detail on it. That's one of those bipartisan areas to look at 
and say, why wouldn't we try to combine the drug purchasing 
between DOD and VA? Any other comments that either of you have 
on that?
    Mr. Arnold. I think you articulated it pretty well 
actually. I don't know if I have anything additional to add, 
but it's something we strongly support.
    Mr. Lankford. Thank you.
    Ms. Woo?
    Ms. Woo. Just to kind of repeat what you were saying, that 
that collaboration had really declined over the past few years, 
and we're really advocating for that to occur again.
    Mr. Lankford. Okay, thank you. With that, I yield back.
    Mr. Mica. The gentlelady from Illinois Ms. Duckworth is 
recognized.
    Ms. Duckworth. Thank you, Mr. Chairman, and thank you to 
all the witnesses for being here today to share your thoughts.
    Over the past couple weeks, we've been debating whether or 
not we can afford to extend unemployment insurance for a 
lifeline for millions of Americans, and in my home district of 
Illinois, thousands of families were talked about last year 
cuts to the food stamps program. Yet at the same time in this 
very committee we saw time and again the waste that happens in 
government, and it's really infuriating to me to think that I 
have kids in my district who are going hungry, and yet there's 
$900 million worth of unused Stryker parts sitting in a 
warehouse that the Army--that the military paid for but 
couldn't use and continued to purchase.
    I would like to sort of talk a little bit more about the 
DOD and its process. You know, this past year, my first year in 
Congress, two things that happened that really sort of 
crystallized in my mind the waste that happens in DOD, 
especially in--under the Defense Logistics Agency. One was a 
hearing in this very committee on the Supreme Food contract, 
and that is this corporation, Supreme Food Services, that 
provide under a sole contract all the food in Afghanistan for 
the last decade, and, in fact, has now been found to have 
overcharged the DOD by $757 million for that food contract. 
They continue to get extensions to the contract in a 
noncompetitive award process. This is something that the DOD's 
IG itself discovered and brought to light. And then I talked 
about the Stryker part also, again a result of a DOD IG 
investigation.
    Mr. Arnold, could you give me any suggestions that you 
might have as to how DOD can develop some sort of controls over 
the DLA? I know that, you know, we talked about the audit 
process, and I absolutely agree, we need to put some teeth into 
the process of forcing DOD to do the audits, but what about the 
DLA itself? I mean, if the DOD's own internal IG is identifying 
these as problems, what is there that we can do?
    Mr. Arnold. Well, let me confess, first of all, I was a 
coauthor of the study, and I didn't work quite as much on the 
defense aspects of it, so in terms of getting into the real 
technical details, I would have to defer to my colleague, Pete 
Sepp, who did a lot of work, or perhaps some folks at PIRG. So 
I don't know that I have a really articulate answer for you, I 
apologize for that, but I would be happy to get back to you 
after the hearing.
    Ms. Duckworth. No problem.
    Ms. Woo?
    Ms. Woo. In terms of the consolidations that we found that 
could occur in the Defense Department, and a lot of them 
include, and it's listed in our report, consolidating foreign 
language contracts, uniform designs for the armed services or 
support services on joint bases, or consolidating management of 
retail bases. These are all of the smaller things that can add 
up to a lot of money in the end.
    In terms of the process of how that would go about, you 
know, as I mentioned before, U.S. PIRG, we're not defense 
experts, and we don't have anything to say about the process by 
which it would happen, but these are the things that need to be 
addressed, and need to be consolidated, and need to be cut, 
especially because, you know, I think, as Senator Coburn had 
said, we have so many programs, over 600 programs, for other 
departments, and the same for the Defense Department. When 
there are multiple programs for designing uniforms, that needs 
to be addressed.
    Ms. Duckworth. Well, the uniform thing is right after my 
heart. I'm actually the individual who got passed in this 
year's NDAA the single camouflage pattern bill that will save 
the Army alone $82 million by going back to a single camouflage 
pattern, which is what we had for most of my entire time in the 
military up until 2004 when the Marines developed their own.
    Mr. Edwards, let's switch gears a little bit and talk about 
Medicare. I recently had an event in my district where we 
talked--where we taught our seniors to look into Medicare fraud 
and waste, taught them to read their own Medicare statements. 
And one of the things that was quite shocking to me is that the 
regional Medicare representative who came to teach the course 
actually made the statement that they know that 10 percent of 
their payments are to fraudulent and wasteful claims, that they 
know and accept that they have that 10 percent waste, and that 
they're working to fix it, but that comes out to about a 
billion dollars a week.
    It is stunning to me that that is acceptable. I don't think 
that we would accept it in business, and we shouldn't accept it 
in government. Can you talk a little bit about Medicare, just 
the waste portion of it; not just the fraud and abuse, because 
that we can deal with, but the waste?
    Ms. Woo. Yeah, absolutely. I think that's appalling to me 
as well, the fact that they readily knowingly accept that 10 
percent. I think you said 10 percent goes to fraudulent claims 
and improper payments.
    But, yeah, there are a lot of different--as listed in our 
report, there are several different entitlement reforms within 
the healthcare system that we have advocated for. One of them 
is better aligning Medicare payments to teaching hospitals, so 
Medicare--the Medicare Payment Advisory Commission, or MedPAC, 
has actually stated that the cost of teaching hospitals is much 
less than the amount of government funding that we're providing 
them. So better aligning that would save over $10 billion in 
the next 10 years. And then there's plenty of other things: 
Bundling Medicare payments so that a single payment goes to a 
number of different individual episodes in a 3-month period, 
that would also advocate for a more effective use of time, more 
effective and efficient actual services. And so these are the 
types of things that we think that are really important within 
the healthcare system that we can and should change.
    Mr. Mica. Thank the gentlelady. And we'll recognize now the 
gentleman from Michigan Mr. Walberg.
    Mr. Walberg. I thank the chairman.
    And I just arrived back from meeting with Ed and Workforce 
Committee and was delighted to hear Senator Coburn talk about 
the SKILLS Act extensively as being one of our greatest 
accomplishments, even though it be limited, and I think it was, 
downsizing the numbers of redundant programs, 35 ineffective, 
duplicative programs, including 27 identified in the 2011 
Government Accountability Office.
    I guess I would like to ask any of you who would like to 
weigh in, the fact that this has unfortunately languished in 
the Senate, and, in fact, what they are even thinking about 
offering includes only one of our proposals in that SKILLS Act. 
Could you discuss further proposals to remove arbitrary 
roadblocks that will help get Americans back to work in the 
jobs that are currently in demand?
    And I know on my own Michigan Web site, the MIjobs.gov 
lists 52,000 unfilled jobs right now, and most of those--and 
that's--we know there are many more than that, but that's on 
that one Web site, a State government Web site, and the 
majority of reasons why they're not being filled is people 
don't meet the certification requirements, the qualifications. 
They haven't been trained for that.
    So if you could speak to that issue, what proposals would 
you have in mind to remove further arbitrary roadblocks to 
making people employable? Mr. Schatz, I'll start with you, if 
you would care to answer.
    Mr. Schatz. Thank you, Mr. Walberg.
    Certainly creating progrowth policies here in Washington 
would be helpful, and certainly that does not entail creating 
new and duplicative programs, as Dr. Coburn noted. He examined 
the job training programs in Oklahoma. It turned out the State 
was far more efficient at creating jobs because the training 
that they were conducting was related to jobs, and that's 
something that the government should be looking at as well.
    I know that in the House the SKILLS Act was supported 
strongly by Republicans, not supported as much by Democrats, 
some differences in how it should be done, but whether it's 
through legislation, whether it's through progrowth policies, 
tax reform, there are many other ways to help create jobs. The 
government needs to be more out of the way rather than trying 
to force its own view on how jobs should be created, because 
that's not something that we ever found in the Constitution, 
yet Members seem to think creating jobs is one of their major 
functions.
    Mr. Walberg. As opposed to getting out of the way so that 
people who do know how to create jobs can do that, including 
our States. And I think that was one of the best points of the 
SKILLS Act; it did give the flexibility back and the 
opportunity back to the States to do.
    Mr. Edwards?
    Mr. Edwards. A broad comment on job training. I've looked 
in detail at the job training programs over the decades, and, 
you know, it is astounding. The Federal job training programs 
have never really worked very well. Back over half a century to 
John F. Kennedy, every decade or so we reorganize them and 
change them and try to fix them, but the GAO comes back every 
time and basically says, you can't really show that these 
things work very well.
    I think the Federal Government ought to get out of the job 
training business. If you look at the data, it is the corporate 
sector, the business sector in the United States does a much 
more massive job training, on-the-job training, and the Federal 
Government's $18 or so billion is a tiny drop in the bucket. It 
hasn't really worked very well. I'd take the Federal Government 
out of that business.
    In terms of progrowth policies, there's a gigantic--it's 
outside the jurisdiction of this committee, but there's a 
gigantic reform that is on the plate here there should be 
bipartisan support for, and that's corporate tax reform. We've 
got the highest corporate tax rate in the world. It absolutely 
makes no sense. You read in the newspaper every few weeks or 
every month or two about major corporations who are moving jobs 
elsewhere, often because of the corporate tax problem we've 
got.
    President Obama says he's for corporate tax reform, 
Republicans are for it. Why we can't do that I don't 
understand. Our neighbor to the north, our largest trading 
partner, Canada, has a 15 percent corporate income tax; we've 
got a 35 percent rate. It makes no sense at all. That is a big 
thing we can do, because when businesses, they have a lower 
corporate rate, they invest more, they buy more machines, and 
when you buy more machines in investment, you need workers to 
run those machines. A corporate tax cut would be a huge jobs 
bill, in my view.
    Mr. Walberg. Mr. Arnold.
    Mr. Arnold. I'll just--I'll concur with both Chris and Tom, 
but also add at the State level especially we see licensure 
laws that place real strong restrictions on the amount of job 
growth that can occur within a particular field of expertise. 
And we understand when those are created for surgeons, et 
cetera, but when those are created for things like interior 
decorators, they're just protectionism on the part of some 
these trade associations that, again, limit the access of 
people seeking jobs to actually become employed.
    Mr. Walberg. I'm out of time, but could Ms. Woo----
    Mr. Mica. Go right ahead and respond.
    Ms. Woo. Just to add a quick note, in terms of job growth, 
I'm not going to say anything much just in terms of the 
confines of our report, but at the same time, you know, the 
Federal Government is spending billions each year subsidizing 
large agribusinesses, which really put small farmers, small 
businesses at competitive disadvantages. Tax loopholes and tax 
havens where companies are able to shift their profit offshore 
and use a zero percent tax rate or a very, very minimal tax 
rate really puts small businesses at competitive disadvantages 
and really hurts taxpayers in that they have to now pick up the 
tab through cuts to public programs or more debt or higher 
taxes, and that can really put a damper on job growth and put a 
damper on being able to find a job and being able to pick up, 
you know, your household in that kind of way. So, yeah, I end 
my statement there.
    Mr. Mica. Thank you, gentlemen.
    Recognize the gentleman from Illinois Mr. Davis.
    Mr. Davis. Thank you very much, Mr. Chairman.
    You know, I really think that all of the members of this 
committee agree that waste in government and unnecessary 
spending is unacceptable. It also appears to me that members 
will probably agree that this committee is well positioned to 
investigate and examine issues of waste and conduct legitimate 
oversight work that holds agencies accountable and help 
implement necessary reforms.
    Despite the various examples of waste identified during 
today's hearing, there has been some progress in this 
administration that agencies and Congress should continue to 
build upon. President Obama made it a priority to reduce 
improper payments when he took office, and we should be pleased 
to see that over the past 3 years the Federal Government has 
avoided making $47 billion in improper payments and recaptured 
$4.4 billion in overpayments to contractors.
    Another initiative established by President Obama is the 
Securing Americans Value and Efficiency Award, or SAVE Award, 
which taps the knowledge and expertise of frontline Federal 
workers for recommendations to help improve government 
performance and ensure that taxpayer dollars are spent wisely.
    Mr. Arnold, in your testimony, you acknowledge and support 
the SAVE awards, correct? Why do you believe that the SAVE 
awards can be effective in identifying government waste?
    Mr. Arnold. Yes, I did include that, and I think that is 
something that President Obama deserves credit for. I believe 
he's included about 80 recommendations, people from this 
program, into his budgets over the past several years. So, 
yeah, I mean, along the same lines as whistleblower 
protections, providing an incentive structure for Federal 
employees to report on the waste that they are seeing and to 
devise systematic reforms that will help to limit those things 
that are wasteful, it makes a lot of sense. You know, we can 
study budgets and GAO reports and CBO reports all day, but we 
don't have that same on-the-ground experience that these 
Federal employees do, so we need to tap in to their expertise 
as well.
    Mr. Davis. Do you think that we will get from them more of 
an accurate accounting than other types of oversight might 
provide?
    Mr. Arnold. Whether it's more accurate or not I don't know, 
but it's certainly a different perspective, and it's a very 
valuable perspective.
    Mr. Davis. You know, I have always--since I guess being a 
kid, I've always been amazed at the amount of waste, 
inefficiency that was always pointed out in government, and 
I've also been amazed at the notion that the private sector 
automatically is going to be more efficient than any public 
sector activity, and I guess because of the profit motive. 
Given the profit motive, though, does that mean that the level 
of benefit is going to be greater to the public, or the benefit 
is going to be part of the profit that the private sector 
earns, and there might be a kind of balance in terms of public 
interest and what benefits the public?
    I think it's just something to give thought to and 
consideration, but I certainly appreciate all of the areas of 
identification and suggestion that the government or the 
Federal Government is making some progress by no means suggests 
that we're close to where we need to be in terms of ferreting 
out waste and inefficiency.
    So I thank all of you for your testimony, and I yield back.
    Mr. Mica. Thank the gentleman.
    The gentleman from Texas Mr. Farenthold.
    Mr. Farenthold. Thank you very much, Mr. Mica.
    I had a couple of questions. The Wastebook points out that 
we're potentially spending close to $700 million to promote 
HealthCare.gov, a Web site that doesn't work. And I know that 
my colleague from Missouri, Billy Long, has a bill out that 
would require advertising purchased by the Federal Government 
to have a disclaimer like we have on political ads, you know, 
this advertisement was paid for with tax dollars, and sometimes 
it's difficult for the public to know.
    As somebody who worked in broadcasting, we ran PSAs, many 
of which came from government agencies, and we ran them for 
free in available commercial time, but in other cases you've 
got the Federal Government paying for advertising. I certainly 
see a need for maybe advertising for recruiting for our 
military, but driving people to a Web site that doesn't work, 
or at least wasn't working well when some of these ads were 
running, seems to be a problem. Have any of you all looked at 
government advertising expenditures as a source of waste?
    Mr. Schatz. We've looked a little more at sponsorships; for 
example, having agencies sponsor NASCAR, among others. So we've 
taken it from a little bit of a different direction.
    In terms of disclosure, it's not something we've thought 
about, but I think taxpayers do deserve that kind of 
transparency because they should know how that money is being 
spent.
    Mr. Farenthold. I do think Mr. Long's bill would go a long 
way to at least raising public awareness of that.
    Mr. Edwards, you talked a lot about moving stuff to the 
private sector, and I'm a big supporter of that. I think the 
private sector, with a profit motive and unburdened by as many 
rules and regulations as exist within government organizations, 
is a good idea. But I come back to HealthCare.gov. That was 
outsourced to a private company and had huge, excessive cost 
overruns. We've talked a little bit about procurement reforms, 
but, you know, you can't just turn it over to the private 
sector and not have some sort of oversight on the contracting. 
And could you talk a little bit about that?
    Mr. Edwards. I absolutely agree with that, and to go back 
to what Congressman Davis said, the private sector, it's sort 
of a two-part partnership in the private sector. Companies want 
to earn profits, but what we want to do for public policy is we 
want to maximize competition in the private sector to peel away 
any excess profits. So companies want to earn profits, and 
other companies want to grab those profits, and that's why the 
private system, private sector works.
    With Federal contracting, it is a problem, you know. We 
should absolutely minimize sole-source contracts. You know, the 
CGI Federal, I guess the prime contractor on Obamacare, I 
didn't look into the details of that contract, but for Federal 
contracting we should try to maximize competition every way we 
can, maximize transparency, maximize the transparency of the 
competition.
    Mr. Farenthold. But we've also had some hearings with 
respect to contracting reform where, for instance, in building 
contracts, in design/build contracts, you are going out, and 
rather than coming to three or four finalists to come up with a 
very detailed proposal after the initial request, you're ending 
up with 10. So you've got huge costs associated with bidding 
for a government contract and the regulations associated with 
that that have to get built in. So if you're only getting 1 of 
10 contracts you're spending hundreds of thousands of dollars 
bidding on, you've got to recover that cost somewhere else.
    Mr. Edwards. Yeah, but I mean, the private sector, that's 
the way the private sector works. When GE goes out and wants to 
buy--you know, spend the money on IT, they have, you know, 
people, you know, competing to contract. I'm a big--I think 
you're referring to the PPP sort of infrastructure of partial 
privatization. I'm a big fan of it. I think it works well. You 
look at the Capital Beltway in Virginia, it came--the private 
sector put a billion dollars into that. It came in on time and 
on budget. So there may be some extra costs, but I think 
getting the private sector in, private management, and having 
contractors compete is the way to go.
    Mr. Farenthold. All right. I think both you and Mr. Schatz 
talked a little bit about centralizing IT for the Federal 
Government. Are we risking creating another massive bureaucracy 
in a government that looks like it can't compute its way out of 
a paper bag? Are we going to create a bigger problem, or are we 
going to solve something there?
    Mr. Schatz. I don't think I mentioned the word 
``centralizing.'' I think we did talk about giving agency CIOs 
more authority, because that is their job. That was part of 
FITARA, and I think it is important that they have more 
decisionmaking power.
    I will point out, however, that there were no CIOs until 
1989, which begs the question why we didn't have that prior to 
that. And we've had other legislation since then to improve 
management, and it requires continuous work, because, as you 
say, it is so large, and it is quite difficult. But competition 
is important, and I think that this legislation is also very 
important.
    Mr. Farenthold. I see my 5 minutes went by a lot faster 
than I thought it would.
    Mr. Mica. Thank you.
    Recognize the gentlelady from California Ms. Speier.
    Ms. Speier. Thank you, Mr. Chairman.
    I want to thank each of you. I wonder to what extent you 
get a little fatigued, coming here every Congress, making 
recommendations to us. We seem very interested and engaged, and 
then what happens?
    Maybe you could help us by providing me, which I would be 
happy to provide to the full committee, a list of all the 
things that we have actually done as a result of the work 
you've provided to us. You've given us tangible, easy-to-
effectuate recommendations, and I frankly think that very few 
of them have been embraced.
    Let me go to the one that both Mr. Arnold and Ms. Woo have 
agreed is something that the Republicans and Democrats can 
agree on, and that is spare parts and obsolete parts. This is a 
plumbing elbow. I bought it at the hardware store for $1.41. A 
defense contractor charged us, the taxpayers of this country, 
$80 for this. This is a package of washers, $1.22 at the local 
hardware store; defense contractor, $196.50.
    It's outrageous. We have a Defense Logistics Agency, it's 
our hardware store, it's got parts that are going to be there 
for and can be used for the next 100 years, and what do these 
various departments do, these various operations within Defense 
do? They go out to a defense contractor to get the part.
    So you've identified something, and I hope to God we do 
something about this. This is real money. It's $4 billion; is 
it not? Mr. Arnold, is it----
    Mr. Arnold. Yeah. It's $3.9 billion is the number that we 
cited in our report, and actually that was one of the more 
difficult numbers that we had to track down because there was 
just so many conflicting stories about how much is wasted at 
the Pentagon on spare parts. So we did end up citing a GAO 
report, but there are many other studies out there that 
actually would put that number much higher.
    Ms. Speier. I'm not going to ask you to speak to it today, 
but the GAO has just done a series of reports on physician 
self-referral, where in ancillary medical services, whether 
it's an MRI, an IMRT, a laboratory is owned by them, they end 
up referring more of their patients to it, and the result is a 
savings of probably $10 billion or more over a 10-year period 
of time, probably closer to $20 billion over a 10-year period 
of time. I'm interested in whether or not you have looked at 
that issue. You can just respond to me separately on that.
    Mr. Arnold. Yeah, I think that may be addressed by Medicare 
bundling, which is something that we did include in our report. 
If you have a single payment going out to a provider----
    Ms. Speier. It's not a bundling issue, it's a self-referral 
issue.
    Mr. Arnold. I'll have to look at that then.
    Ms. Speier. Okay. Let me move on to crop subsidies. The GAO 
has indicated that we've seen a gross increase in crop 
subsidies. In 2000-2006, it was about $3 billion each year; now 
it's looking at $9 billion per year. The report argues that we 
could save more than $84 billion over 10 years by eliminating 
this program.
    What's most stunning is that the GAO reported that the 
biggest recipient of the subsidy is a corporation; not the 
family farmer, but a corporation who received $2.2 million in 
premium subsidies. Seventy-five percent of these subsidies are 
going to 4 percent of, quote, ``farmers.'' Now my question to 
you is who is in this, quote, ``4 percent''? Ms. Woo.
    Ms. Woo. Yes, that's absolutely correct; 75 percent of the 
subsidies in the crop insurance program are only going to 4 
percent of the recipients. I mean, that 4 percent----
    Ms. Speier. But who? Give us some names.
    Ms. Woo. Oh, I actually don't have that information.
    Mr. Edwards. Ted Turner, for example.
    Ms. Speier. Pardon me?
    Mr. Edwards. Ted Turner is an example. The Rockefellers 
have got it. Jon Bon Jovi, the rocker, has got farm subsidies. 
There's a lot of famous----
    Ms. Speier. Members of Congress?
    Mr. Edwards. Members of Congress, right.
    Ms. Speier. I mean, let's just be fair, Mr. Edwards. I'm 
willing to go after anyone regardless of their political 
affiliation, but who are the 4 percent? Let's get a list of who 
the 4 percent is.
    Mr. Edwards. You know, the think tank EWG.org does a very 
good job on identifying the particular farmers who are getting 
particularly the direct payments. The statistic that I think is 
remarkable is that the average farm household in the United 
States now earns income 25 percent higher than the average 
household in the United States, so farm subsidies are a reverse 
Robin Hood program. We're taking from average taxpaying 
families that we're giving to higher-income people. I think 
it's completely unfair.
    Ms. Speier. Now, 80 percent of the farmers, though, get 
about $5,000 on average, so we're talking about a very small 
percentage that is getting the lion's share of this money, and 
if we know who they are, and they're corporations that 
shouldn't be getting it, we shouldn't be offering it.
    The GAO has recommended a cap of no more than $40,000 as a 
farm subsidy. Do you all support that?
    Mr. Edwards. Absolutely. One thing I would point out about 
farm subsidies that people who don't look at it don't really 
get, with the direct payments, it's the landowners get the 
subsidy, it's not even the tenant farmers. So that's why people 
like the Rockefellers and Ted Turner, they own massive amounts 
of land. I think Ted Turner is the largest landowner in the 
country. He gets the subsidies, not the tenant farmers he 
hires.
    Mr. Schatz. Just quickly, as Congressman Mica mentioned 
earlier, cooperating with each other. The farm bill is an area 
where we have cooperated very well over the years, and we have 
a good right-left coalition on that issue. Unfortunately a lot 
of what we wanted didn't get into the farm bill.
    Mr. Mica. Thank the gentlelady and the witnesses.
    The gentleman from Arizona Mr. Gosar is recognized.
    Mr. Gosar. Well, thank you very much, and some of the 
previous comments have led right into my aspect. Competition is 
one aspect for efficiency, but also accuracy in writing 
contracts is another. Would you not agree, Mr. Schatz?
    Mr. Schatz. Yes, I do.
    Mr. Gosar. Mr. Edwards?
    Mr. Edwards. Absolutely.
    Mr. Gosar. Mr. Arnold?
    Mr. Arnold. Yes.
    Mr. Gosar. Ms. Woo?
    Ms. Woo. Could you repeat that one more time?
    Mr. Gosar. Yeah. Competition is one aspect to ensure fair 
competition, but also accuracy in contracts and calculations 
are another part of this; is it not?
    Ms. Woo. I would agree with that.
    Mr. Gosar. Okay. So are you familiar with the prevailing 
wage?
    Mr. Schatz. Davis-Bacon, yes.
    Mr. Gosar. How about you, Mr. Edwards?
    Mr. Edwards. Yes, absolutely. It should be repealed, in my 
opinion.
    Mr. Gosar. Mr. Arnold?
    Mr. Arnold. Yes.
    Mr. Gosar. Well, I mean, I'm of that mindset, too, but, you 
know, I was taken aback by the GAO account last year of the 
audit, and what it showed for us is that we've got a problem. 
So do you believe a fair wage for a fair job that's fair to the 
taxpayer, Mr. Schatz?
    Mr. Schatz. Yes, I do. We've also supported repealing 
Davis-Bacon and the service contracts.
    Mr. Gosar. Okay. How about you, Mr. Edwards?
    Mr. Edwards. Absolutely.
    Mr. Gosar. Mr. Arnold?
    Mr. Arnold. Yes.
    Mr. Gosar. Well, it came to my attention, I agree with you, 
but, I mean, we can stairstep this, because I don't see--
there's no benefit to it. Maybe at one time there was, but I 
don't see much of an aspect now. But would you be surprised 
that 100 percent of the audited calculations for Davis-Bacon 
were fraudulent?
    Mr. Schatz. That doesn't surprise me. I haven't seen the 
report, but it wouldn't surprise me.
    Mr. Gosar. How about you, Mr. Edwards?
    Mr. Edwards. I guess it would not surprise me.
    Mr. Gosar. How about you?
    Mr. Arnold. A hundred percent?
    Mr. Gosar. Uh-huh.
    Mr. Arnold. It's a little surprising.
    Mr. Gosar. It is surprising, isn't it? How about you?
    Ms. Woo. Yeah.
    Mr. Gosar. I'll be honest, I was prepared for maybe 50 
percent or 60 percent.
    So we actually contract calculations for the prevailing 
wage, so the Department of Wages, which is crappy--yeah, you 
heard it from me, crappy--what if we were to exchange that and 
just say let's give up on right now the prevailing wage, and 
let's recalculate it so it's properly done for a fair wage for 
a fair job to the taxpayer and move it to the Bureau of 
Statistics. Do you know how much money we would actually save 
in that calculation per year? Estimate between $15- and $25 
billion a year. Would you be for that?
    Mr. Schatz. That would certainly be helpful.
    Mr. Gosar. I mean, I'm a scientist, I'm a dentist, so 
beauty is in my detail, and I compare--I like facts, and the 
way we're doing it right now, we have no facts to base it on. 
Some people are being overpaid, some people are being 
underpaid, and we don't even have a calibration on which we can 
base our judgment on. So would you think that would be 
something that you could support, just getting accuracy back 
into the prevailing wage?
    Mr. Schatz. Well, it's not just the prevailing wage, 
Congressman, it's everything that Congress receives in terms of 
information, but that would be a good place to start.
    Mr. Gosar. Oh, absolutely.
    How about you, Mr. Edwards?
    Mr. Edwards. Absolutely. And the losers are the citizens, 
because they get less highway maintenance, for example, because 
wages get inflated. So citizens would get more quality services 
and more investment that helps them without this particular 
law.
    Mr. Gosar. I'm going to come back to you, because it's a 
great question.
    How about you?
    Mr. Arnold. Yes.
    Mr. Gosar. Yes.
    And Ms. Woo?
    Ms. Woo. I think that the amount of money that you would be 
getting out of that definitely helps the Federal Government in 
streamlining processes. In terms of what the wage is supposed 
to be or how that's supposed to be calculated, it's not 
something that's in the purview of U.S. PIRG expertise and our 
position.
    Mr. Gosar. But that would be a good thing, getting back to 
facts?
    Ms. Woo. Getting back to facts, absolutely.
    Mr. Gosar. So, I mean, coming back to you, Mr. Edwards, I 
mean, you're exactly right. So, you know, the prevailing wage 
is an average of 22 percent additionally added to Federal 
contracts, just for Davis-Bacon. That means if you were to have 
better accuracy, you could get five bridges for the cost of 
four. Interesting application to our infrastructure problem.
    Mr. Edwards. Right.
    Mr. Gosar. So I actually have a bill that actually just 
changes those six words. It's H.R. 448, the Responsibility in 
Federal Contracting Act. We would like to see that. It is a 
down-to-earth, simple thing that I think everybody could agree 
with, okay?
    I have one more thing that I would like to ask you. What do 
you think the influence of having a sunset clause on every bill 
so that you see bills coming in front of Congress mandated to 
show their worth? What do you think about that application, Mr. 
Schatz?
    Mr. Schatz. We include that recommendation in our 
testimony. We support what Congressman Brady has been doing 
with his MAP Act, which he is reintroducing it, we have long 
testified in support of the Sunset Commission at the Federal 
level.
    Mr. Edwards. I'm very much in favor of that. As you may 
know, the State of Texas has long had a sunset law that's 
worked very well, I understand, so I'm in favor of that 
federally.
    Mr. Gosar. Arizona, too.
    Mr. Arnold.
    Mr. Arnold. I support that as well and actually included it 
in my testimony.
    Mr. Gosar. Thank you.
    Ms. Woo.
    Ms. Woo. I'm not too familiar with that, so I can get back 
to you.
    Mr. Gosar. I would like that. Basically it makes 
accountability a process of the law, that you answer a Fed 
three side 7 years down the road.
    But I would really love to see the calculations based on 
fact, and I think both sides of the aisle could benefit from 
that, so could our infrastructure, and so could our 
contracting, because those savings I was telling you about did 
not include Homeland Security, nor the DOD, because they had 
not been audited, and so the savings could be much more 
magnified just in a simple six words.
    I yield back. Thank you.
    Mr. Mica. Thank the gentleman.
    Recognize, waiting patiently, the gentleman from 
Massachusetts Mr. Lynch.
    Mr. Lynch. Thank you, Mr. Chairman. And I do want to thank 
the panel for your good work and your willingness to come 
before the committee and help us.
    One of the strongest and most effective tools that we have 
on this committee and in Federal Government for making the 
government more efficient is the inspector general community. 
You know, we have 70 inspectors general across the government. 
I have to say, because many of them testify before this 
committee and we worked with them over the years, I would say 
uniformly they do a great job, they really do. In each of the 
last--and part of the work that they do, much of it involves 
rooting out waste, fraud, and abuse in various government 
programs.
    And in each of the last 2 years, the chairman of this 
committee, and the ranking member of this committee, and our 
members have signed a letter to the inspector general community 
generally just asking them how many recommendations they have 
made within various departments, and how many of those 
recommendations have either been left open, which means they've 
been unaddressed, or are actually adopted. And the information 
that our committee has received in response to that request to 
the inspectors general is really staggering. There are nearly 
17,000 open recommendations across the government with a 
potential savings of more than $67 billion.
    So this is where our inspector generals have gone out and 
looked at some of the things that you've talked about and some 
of the Members on both sides of the aisle have talked about. 
They've said, we've got to make these changes, and yet in 
17,000 instances, the Department has basically refused, and 
there's been no change. And fulfilling these unimplemented 
recommendations is really probably a good place to start for 
many of the things that we're talking about here. I mean, do 
you agree on that?
    Mr. Schatz. We not only agree with that, but we've also 
noted that the funding for IGs has not been up to where it 
should be as well. We've written on that extensively over the 
last few years. So it is a good place to start. Between the IGs 
and GAO, literally hundreds of billions of dollars a year could 
be saved.
    Mr. Lynch. Right.
    Mr. Edwards.
    Mr. Edwards. Generally the IGs, I agree with you entirely, 
they do a superb job. It's the one area of Federal spending I 
would increase substantially. I think the IGs really do a great 
job.
    Mr. Lynch. Thank you.
    Mr. Arnold. I agree as well. I think oftentimes the 
problem, IGs do a great job of pointing out this waste or these 
problems, but there's not enough incentive structure for the 
managers at the Federal level to actually implement them. But 
certainly applaud the work of the inspectors general.
    Mr. Lynch. Thank you.
    Ms. Woo.
    Ms. Woo. I would say I agree with more collaboration within 
the Federal Government to root out fraud and waste and abuse, 
and if that's through the inspectors general, I would agree 
with that.
    Mr. Lynch. Okay. When you think about what we're doing 
right now with sequestration, which is, you know, 
indiscriminate, it's across the board, we're giving good 
programs a haircut as well as programs that should be 
completely eliminated, it would seem to me rather than doing 
this indiscriminate cutting to try to reduce the size of 
government and the amount of spending, we should probably 
target these programs that we all agree and the inspectors 
generals have identified as being completely wasteful.
    One of the things that I've been working on with some of 
the Members on the other side is a lack of transparency in DOD 
contracting, and our inspectors general there have--even the 
special inspectors general and the more general ones have 
identified, you know, billions of dollars in savings, but we've 
had a very difficult time in getting transparency for the 
inspector general and also an ability to actually go in and 
make the changes.
    One of the ancillary issues is prescription drugs that the 
gentleman from Oklahoma earlier brought up, and while the VA 
and DOD each have the ability to negotiate drug prices, because 
of the--I don't know how to describe it--just nonfunctioning 
nature of their system, you have the VA on some drugs paying 
100 percent higher prices for the same drug as compared to 
Department of Defense, mostly, and that's the area of brand-
name drugs. So in many cases it's 239 percent higher than what 
the DOD is spending. And then in other cases on generic drugs, 
you have the opposite situation where DOD is spending 200 
percent what the VA is getting on their prices.
    If they were all paying the lowest price, there would be 
billions and billions of dollars in savings year to year, and 
what I'm hoping for is we also have 8 million Federal 
employees, and right now they don't even have the ability to 
negotiate lower drug prices. So imagine if we were to add--
first of all, get both the DOD and the VA down to the lowest 
reasonable price, and then add in the 8 million employees that 
are working for the Federal Government, and have them paying 
the same price, it would be tens of billions of dollars per 
year in terms of what our pharmaceutical costs would be across 
the government. It would be incredible. And in these days when 
we're facing--well, maybe not tens of billions, but several 
billion dollars a year for prescription drugs that are being 
purchased by the Federal Government, and I'm just beside myself 
with the inability of the Federal Government to really get at 
this.
    There may have been a time--I don't believe so, but there 
may have been a time where we could overlook things like this, 
but now that we're facing sequestration, we're trying to cut 
$1.2 trillion out of the budget, and you have unacceptable 
costs across the board like this, I just hope that you continue 
to work with us in terms of, you know, trying to get some of 
this stuff--the prescription drug prices issue is one that I've 
been working on a long time, and unfortunately there are 
probably 10 drug lobbyists for every Member of Congress, so 
it's an uphill fight. But I think the fight is worth it, and 
it's more attainable, I think, because of the good work that 
you all are doing and the people who support you are. So I 
thank you for that.
    Mr. Mica. I thank the gentleman, and his time has expired, 
and I would like to recognize Mr. Woodall, the gentleman from 
Georgia.
    Mr. Woodall. Thank you very much, Mr. Chairman. I 
appreciate you all being here and letting me stand between you 
and lunch. I've gotten to work with most of you on some other 
projects in some other venues and really do appreciate all the 
work that you do. I put your work in the category of those 
things that the government could be doing instead of you doing 
it, though I suspect you do a better job at it, and you do it 
for less, which is why that's valuable.
    So I want to come back to something Mr. Edwards said in his 
testimony, because it's been fascinating to listen to the back 
and the forth, and it really amplifies for me why the work that 
the two of you are doing together, why those collaborative 
efforts are so important.
    I heard Ms. Speier talk about waste and fraud and abuse in 
the Defense Department and how we ought to be able to agree to 
get that out, then Dr. Gosar said well, we've got this Davis-
Bacon issue, and shouldn't we be able to agree to get that out.
    Mr. Edwards, you kind of framed what we're talking about. 
You had three categories, if I can paraphrase you, of spending. 
You had I think what you called silly projects, just those 
absolutely horrendous things that we can all agree have no 
place on the taxpayers' dime or perhaps on anyone's dime. You 
have those projects for which the benefit does not outweigh the 
cost, and then you have those projects that just perhaps the 
Federal Government shouldn't be doing anyway.
    And I listened to Mr. Lynch; he's talking about 
prescription drugs, and I know he's absolutely right. When the 
Federal Government is picking up two-thirds of all the 
healthcare bills in America, if you use that monopoly power, 
you can absolutely drive down the cost of prescription drugs, 
though using the government's monopoly power to manipulate the 
marketplace, I would argue, isn't the role of government, and 
it would fall into that third category of things that the 
government shouldn't be working on.
    Mr. Cummings was talking about the Legal Services 
Corporation and CAGW's identifying of that, and I really 
appreciated your answer, because what you said was not folks 
who can't afford legal services shouldn't get legal services. 
What you said is there are other opportunities to get those 
legal services, and can't we utilize those nongovernmental 
channels?
    Dr. Coburn, sitting in Mr. Arnold's chair, was talking 
about the Army, and he said, golly, they have these software 
problems because they buy software and they try to mold it to 
the Army's model instead of buying good off-the-shelf software 
and molding the Army's model to that. The Legal Services 
Corporation is exactly that example.
    What has happened to the justice system in America that I 
cannot walk in to court as a citizen and avail myself of the 
protection? Should we be changing the government to adapt to a 
very complicated legal system, or should we be changing a 
complicated legal system to make it accessible to those of us 
as individuals? And I don't know how we get started without the 
projects that folks come there collaboratively.
    But let me ask you, for example, you all have timber sales 
in your project, in your list. The U.S. Forest Service manages 
our timberlands. They're not in the conservation business; 
they're in the management business. One of your opportunities 
for savings is just, say, golly, the Forest Service is losing 
more money on their timber sales than they're gaining in timber 
sales. Is that an example of something that should go away 
because that's a bad use of government resources, or is that an 
example of something that still needs to be done? We need to 
manage Federal timberlands. Is the solution to get rid of our 
Federal lands, and that way we don't have to manage them, or is 
the solution to farm that out to the private sector?
    When we identify wasteful spending, we then have to do the 
``and so what's next,'' what do we do to fill that void if it 
creates one? In that example in particular, do you happen to 
have a ``what's next'' vision? Ms. Woo?
    Ms. Woo. I think in that example your suggestion of moving 
that to the private industry is one that we support. Taxpayers 
shouldn't be subsidizing for things that can be done by the 
private industry, especially when the government is very 
obviously losing money in this case. So I think that whereas 
taxpayers shouldn't be subsidizing profit-making ventures for 
private companies in the timber industry, that would apply to 
this situation.
    Mr. Woodall. Well, I think that becomes the question-- 
market access program for our farmers is in there as well, you 
know--is providing markets overseas for our farmers, is that in 
the category of things that the government shouldn't be doing, 
folks should fend for themselves, or is it in the category of 
things that we're doing, but we're not getting an extra dollar 
of benefit for our dollar of taxpayer burden, and so it's just 
inefficient? Would you characterize the things in your book as 
things the government shouldn't be involved in, or the things 
that perhaps we should be involved in but we're just not doing 
well?
    Ms. Woo. I think it would be the first one in this case 
especially, and also really depending on the type of benefit 
that it's providing. So I think it's a little bit of 
combination of both.
    In this case the market access program is funding trade 
associations to have wine-tasting events in Europe, or to have 
a reality TV show in India to, you know, showcase different 
designs. I mean, does that really benefit the taxpayer who is 
paying the $20 million a year for that reality show? I don't 
think so.
    So I do think that it is partially not the government's 
responsibility to do that, but also there is no benefit that 
comes out of it for the average taxpayer.
    Mr. Woodall. I hope you will all keep doing with the same 
fervor that you have always done what you continue to do. I see 
a real opportunity this year. I appreciate the chairman's 
commitment to moving bills forward, and I hope we'll take him 
up on it.
    Thank you, Mr. Chairman.
    Mr. Mica. Thank the gentleman.
    And now waiting most patiently, I believe the last member 
of our committee, the gentlelady from New Mexico, Ms. Lujan 
Grisham, you are recognized.
    Ms. Lujan Grisham. Thank you, Mr. Chairman.
    I, too, want to thank the panel for being here today and 
for your work prior to your testimony today. I don't think 
you're hearing from any Member that we disagree that this is a 
fundamental responsibility of this committee, it's a 
fundamental responsibility of Congress, it's a fundamental 
responsibility of any administration, and as that trickles down 
into investments in the private sector or into other bodies of 
government, those are also those fundamental responsibilities. 
And I also agree that regardless of the climate, whether we 
have resources that we could do anything we desire, or in the 
climate that we have today where we know that we have a fiscal 
crisis in this country that we have to address, that we should 
be mindful about making sure that we aren't wasting any of our 
resources. And I hope that having this hearing and starting 
again that this committee will return to a partnership with you 
and others at looking at ways to make sure that we are not 
wasteful, and that we are getting the bang for the buck that we 
deserve and that our taxpayers and citizens deserve for their 
investments. And so we're clear about that.
    And I know that you touched on this, Mr. Schatz, in your 
written testimony, that there isn't anybody--I can't imagine 
anyone--is going to disagree that paying $900 for a hammer is a 
good idea. And I know that my eyebrows raise and worse every 
time I look at healthcare spending and know that at anywhere, 
anywhere, I can buy a Band-Aid or an aspirin for 1/100th of the 
cost that I'm going to get it in a hospital or a clinic. So it 
doesn't make any sense whatsoever, and there's so many areas.
    I really want us to focus today in your report on that low-
hanging fruit, because I think that many of these program 
issues are in the eyes of the beholder and create, I think, 
interesting debates that prevent us all too often from dealing 
with easy decisions and easy responsibilities by Congress and 
by the administration and listening to recommendations for you.
    I'll give you an example. I mean, some may think that tax 
breaks for millionaires and billionaires are unnecessary. 
Others clearly feel that extending emergency unemployment 
insurance is wasteful. So we're going to continue to debate 
those programs.
    I can give you another example based on some of the 
testimony today. I come from a State where we don't have a 
sunset clause, but we've done sunset clauses on some 
legislation, and because of the political climate, that 
particular issue or program needs to be reauthorized doesn't 
get reauthorized, and we spend wasteful money on a special 
session trying to get that addressed.
    So it depends on what's happening. It's a case-by-case 
basis, but we aren't doing anything on that low-hanging fruit. 
So I need you to grade us on Congress--I've been here only a 
year. On adopting sensible, good government reforms outlined in 
your reports every year, how are we doing on picking up on that 
low hanging-fruit, A to F?
    Mr. Schatz. Not so well.
    Ms. Lujan Grisham. Is that an F?
    Mr. Schatz. That would be an F. Although, as I've 
mentioned, the FITARA bill, which has come out of this 
committee, would be very, very helpful to improving 
procurements throughout the Federal Government. So that would 
be a positive step. Unfortunately, the Senate so far hasn't 
agreed to that.
    Mr. Edwards. I think Congress is doing poorly on cutting 
waste. You know, one of the big problems, as you know, 
especially if you've only been here a year, is that the 
government is so vast that I think that there could be 80 
percent agreement bipartisan on a lot of these issues, but 
Members simply don't have time to dig in and look at them. And 
I think there could be a lot more agreement if we restructured 
the way Congress works somehow so that Members could actually 
focus on some of these issues, there could be more agreement. 
Because I think oftentimes Members sort of reflexively don't 
want to get involved in certain issues if they don't understand 
them, and so I don't know how to overcome that problem. But 
there could be more agreement if there's more understanding.
    Mr. Arnold. Yeah, I would say Congress is doing pretty 
poorly as well. You know, the problem with eliminating waste, 
and I think this has kind of been touched on a little bit, is 
that no matter how wasteful, ridiculous, unnecessary, 
duplicative a program is, and we can all agree upon that here, 
there's somebody that benefiting from it. And maybe on genuine 
terms, maybe on disingenuous terms, but somebody's benefiting 
from it, and those people are going to fight tooth and nail to 
keep that program on the books, and it makes it a lot tougher 
for Congress.
    Ms. Woo. I agree with Mr. Arnold's statement in that I do 
believe that Congress is doing quite poorly, and that's also 
because of when Congress or when the Federal Government gives a 
tax break or when they subsidize a corporation or advertising 
abroad or such things as the Market Access Program, someone's 
benefitting, and it's typically these wealthy corporations. And 
as Ms. Speier had mentioned earlier, it's also Members of 
Congress, it's people who aren't necessarily by benefiting 
helping the average taxpayer who has to shoulder that burden.
    Ms. Lujan Grisham. With the chairman's indulgence just 
quickly, because I'm over, I'm out of time, a couple more 
things. I agree and I appreciate that. And like all Members of 
Congress, I believe we're all interested in getting the right 
work done. This committee, I think, has an incredibly important 
role. And it may be a consequence in working in one of the most 
partisan and unproductive eras of congressional history, but 
I'm confident that we can move these issues forward in a 
bipartisan way. I mean, we've got Chairman Issa and Congressman 
Connolly's IT Acquisition Reform Act, and it passed this 
committee on a bipartisan basis.
    We need this committee to put forward a bipartisan, low-
hanging fruit bill every year, maybe more than just one a year, 
and take the information that we have readily available to us, 
because we're looking at it and we're all agreeing on much of 
it, but we aren't doing anything really about it. So this 
committee still finds those and you do, too, those $900 
hammers. I look forward to many more hearings like this and 
finding real areas of cooperation. We can make a difference. 
Thank you very much for being here.
    Mr. Mica. Well, thank the gentlelady. And I thank all of 
the Members. I know Chairman Issa appreciates everyone's 
cooperation.
    I have to thank our witnesses for their extensive, long 
testimony and participation today and for their work beyond 
this. So we look forward to working with you in this new year. 
And this is a great way to start off the new year, particularly 
for our Oversight Committee.
    So there being no further business before the Government 
Reform and Oversight Committee, this meeting is adjourned. 
Thank you.
    [Whereupon, at 12:38 p.m., the committee was adjourned.]









                                APPENDIX

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               Material Submitted for the Hearing Record


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