[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


         RESTORING THE POWER OF THE PURSE: LEGISLATIVE OPTIONS

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

                             JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         GOVERNMENT OPERATIONS

                                AND THE

    SUBCOMMITTEE ON HEALTH CARE, BENEFITS, AND ADMINISTRATIVE RULES

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            DECEMBER 1, 2016

                               __________

                           Serial No. 114-127

                               __________

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


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     JASON CHAFFETZ, Utah, 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
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
TIM WALBERG, Michigan                    Columbia
JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
THOMAS MASSIE, Kentucky              BRENDA L. LAWRENCE, Michigan
MARK MEADOWS, North Carolina         TED LIEU, California
RON DeSANTIS, Florida                BONNIE WATSON COLEMAN, New Jersey
MICK MULVANEY, South Carolina        STACEY E. PLASKETT, Virgin Islands
KEN BUCK, Colorado                   MARK DeSAULNIER, California
MARK WALKER, North Carolina          BRENDAN F. BOYLE, Pennsylvania
ROD BLUM, Iowa                       PETER WELCH, Vermont
JODY B. HICE, Georgia                MICHELLE LUJAN GRISHAM, New Mexico
STEVE RUSSELL, Oklahoma
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama

                   Jennifer Hemingway, Staff Director
                 David Rapallo, Minority Staff Director
                          Corey Cooke, Counsel
                          Katy Rother, Counsel
                           Willie Marx, Clerk
                 Subcommittee on Government Operations

                 MARK MEADOWS, North Carolina, Chairman
JIM JORDAN, Ohio                     GERALD E. CONNOLLY, Virginia, 
TIM WALBERG, Michigan, Vice Chair        Ranking Minority Member
TREY GOWDY, South Carolina           CAROLYN B. MALONEY, New York
THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of 
MICK MULVANEY, South Carolina            Columbia
KEN BUCK, Colorado                   WM. LACY CLAY, Missouri
EARL L. ``BUDDY'' CARTER, Georgia    STACEY E. PLASKETT, Virgin Islands
GLENN GROTHMAN, Wisconsin            STEPHEN F. LYNCH, Massachusetts

                                 ------                                

     Subcommittee on Health Care, Benefits and Administrative Rules

                       JIM JORDAN, Ohio, Chairman
TIM WALBERG, Michigan                ELEANOR HOLMES NORTON, Distict of 
SCOTT DesJARLAIS, Tennessee              Columbia
TREY GOWDY, South Carolina           BONNIE WATSON COLEMAN, New Jersey
CYNTHIA M. LUMMIS, Wyoming           MARK DeSAULNIER, California
MARK MEADOWS, North Carolina         BRENDAN F. BOYLE, Pennsylvania
RON DeSANTIS, Florida                JIM COOPER, Tennessee
MICK MULVANEY, South Carolina, Vice  MICHELLE LUJAN GRISHAM, New Mexico
    Chair                            Vacancy
MARK WALKER, North Carolina
JODY B, HICE, Georgia
EARL L. ``BUDDY'' CARTER, Georgia
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on December 1, 2016.................................     1

                               WITNESSES

Ms. Heather Krause, Acting Director, Strategic Issues, U.S. 
  Government Accountability Office, Accompanied by Edda 
  Emmanuelli Perez, Managing Associate General Counsel, U.S. 
  Government Accountability Office
    Oral Statement...............................................     5
    Written Statement............................................     8
Mr. Kevin Kosar, Senior Fellow and Governance Project Director, R 
  Street Institute
    Oral Statement...............................................    25
    Written Statement............................................    27
Mr. Hudson Hollister, Executive Director, Data Coalition
    Oral Statement...............................................    35
    Written Statement............................................    37
Mr. Stephen M. Kohn, Executive Director, National Whistleblower 
  Center
    Oral Statement...............................................    61
    Written Statement............................................    63

 
         RESTORING THE POWER OF THE PURSE: LEGISLATIVE OPTIONS

                              ----------                              


                       Thursday, December 1, 2016

                  House of Representatives,
  Subcommittee on Government Operations joint with 
                                                the
        Subcommittee on Health Care, Benefits, and 
                              Administrative Rules,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittees met, pursuant to call, at 2:06 p.m., in 
Room 2154, Rayburn House Office Building, Hon. Mark Meadows 
[chairman of the Subcommittee on Government Operations 
presiding.
    Present from the Subcommittee on Government Operations: 
Representatives Meadows, Jordan, Walberg, Massie, Carter, 
Grothman, and Connolly.
    Present from the Subcommittee on Health Care, Benefits, and 
Administrative Rules: Representatives Jordan, Walberg, 
DesJarlais, Meadows, DeSantis, Walker, Hice, Carter, 
DeSaulnier, Boyle, and Lujan Grisham.
    Also Present: Representative Palmer.
    Mr. Meadows. The Subcommittee on Government Operations and 
the Subcommittee on Health Care, Benefits, and Administrative 
Rules will come to order.
    And, without objection, the chair is authorized to declare 
a recess at any time.
    Good afternoon. Thank you all for being here.
    And as we will call this to order, in recent years, an 
alarming trend has emerged, as we see the executive branch 
collecting various moneys for fees, fines, penalties, and 
settlements--the use of this money without providing Congress a 
clear accounting of how much money is being collected and what 
it's being spent on.
    For example, according to the President's fiscal year 2017 
budget proposal, $231.8 billion in user fee charges go directly 
to an agency which subsequently spent the fund without 
congressional action, and an additional $302.2 billion in user 
fees will be spent according to the legislation that 
established the charge. These are enormous sums of money that 
have the possibility of being spent without any true 
congressional oversight.
    This week, Chairman Chaffetz released a report which looked 
at the issue of government-collected fines and penalties, 
similar to--the user fees, fines, and penalties are not an 
insignificant sum of money. The 34 agencies in the survey 
reported over $83 billion being collected between 2010 and 
2015.
    More startling than the sum of money collected was the 
complete lack of transparency, a failure of uniform accounting 
systems, and a slow agency response time. Some heavy-hitters, 
such as the Department of Treasury, were unable to provide the 
committee with a complete response regarding its various 
bureaus and offices, which is completely unacceptable.
    I still have no idea how much the Internal Revenue Service 
collected with its fines and penalty authority, which we all 
know would be significant. Something that is deeply troubling 
is that, given the massive discretion that the IRS has to level 
the penalties against American taxpayers, this sum could be 
enormous.
    Without a complete picture of the funds flowing into the 
government, Congress is limited in their ability to appropriate 
funds accurately and prevent waste, fraud, abuse, and 
mismanagement. The power of the purse is one of the most 
important responsibilities bestowed upon Congress in the 
Constitution, and we must ensure that this power is not 
obstructed by Federal agencies.
    Now, while I recognize that Congress has allowed certain 
agencies to utilize collected funds to operate, rather than go 
through the appropriations process, under President Obama this 
has taken on a more meaningful role, as the executive branch 
has utilized these collected funds or settlements to the funds 
as administrative--as priorities.
    So, in my opinion, this executive branch discretion has 
gone too far. We have lost the transparency needed to 
understand what is being collected and allocated. And, in light 
of these concerns, today's hearing is meant to examine the use 
of the fees, the fines, the penalties, and settlements by 
Federal agencies to engage in activities that have not been 
specifically appropriated or authorized by Congress.
    We want to hear from our panel of witnesses about the 
appropriate legislative solutions to this concern and 
specifically hear feedback on the legislative options such as 
H.R. 5499, the Agency Accountability Act of 2016, which was 
proposed by my colleague, the gentleman from Alabama, Mr. 
Palmer.
    This is an important topic, that we need to know what the 
Federal Government is truly spending and what they are 
collecting, in order to reduce the deficit to get the 
Americans' fiscal house in order.
    I want to thank our panel of witnesses for being here 
today.
    And I will recognize the gentleman from Virginia, my good 
friend, the ranking member of the Subcommittee on Government 
Operations, Mr. Connolly, for his opening statement.
    Mr. Connolly. I thank my good friend from North Carolina. 
And I welcome our witnesses today.
    Today's hearing will examine one of Congress' most 
important constitutional powers. Article I, section 9 of the 
Constitution grants Congress the power of the purse--sole 
authority over the direction of public funds. The American 
people entrust Congress to wield that power in their best 
interests.
    Over the course of history, Congress has at times 
appropriately delegated these powers to certain government 
agencies, and it's not done so carelessly or without 
parameters. When Congress has authorized agencies to collect 
fees, fines, penalties, or settlements, it's also placed 
limitations on those agencies and exercised oversight over 
their use of collected funds.
    Agency collection of fees is not a new concept. It was not 
invented by Barack Obama. The example of Customs comes to mind 
as one such authority that has existed since the beginning of 
the Republic. Agencies have retained import duty collections 
since the first United States Congress in 1789.
    The practice of agency retention of collections continued 
into the 20th century with land grazing fees, an authority 
which has remained with the Bureau of Land Management for range 
improvement programs since the early 1900s when Teddy Roosevelt 
was in the Presidency.
    Today,similar dedicated collections of funds available 
without further congressional action can be found in programs 
supporting the Department of Justice's Crime Victims Fund, the 
National Park Service fees, the Environmental Protection Agency 
Superfund settlements, the Tennessee Valley Authority 
collections, the Federal Protective Service fees, and the 
Federal Aviation Administration Franchise Fund customer fees, 
to name but a few.
    In all cases, Congress allows agencies to retain 
collections and self-sustain certain programs in order to make 
government more efficient. Today's proposed legislative 
solution, H.R. 5499, the Agency Accountability Act, which has 
been referred to this committee, in my opinion, is the anthesis 
of efficiency.
    From my reading of the bill, it seems that it would require 
every single collection currently retained at agencies instead 
to be deposited into the general fund and obligated by the 
Committee on Appropriations. Every victim compensation award 
and every whistleblower reward would require the Committee on 
Appropriations to act.
    How many times in recent history has Congress failed to 
pass appropriations bills and instead passed an omnibus 
appropriations bill or a continuing resolution because Congress 
could not reach an agreement on critical government funding? 
We're about to do it again within the next week.
    H.R. 5499 will have unintended consequences, many of which 
would be detrimental to the very good government mechanisms 
we're committed to on this committee on a bipartisan basis.
    One essential good governance mechanism to which this 
legislation would render serious harm is the protection of 
whistleblowers, a cause championed by this committee. Much of 
government fraud detection relies upon whistleblowers. We'll 
hear from an expert today on how whistleblower funds sustained 
via agency collections are crucial to protecting and 
incentivizing those willing to shed light on fraud, waste, and 
abuse in our government, a mission that goes to the very core 
of this committee's mission.
    We will hear that whistleblowers are only willing to risk 
their careers and blow the whistle if there is some protection 
in the form of an award. That's why Congress authorized 
agencies to issue those awards to whistleblowers--to guarantee 
that one of the incentives for whistleblowers to come forward 
is never in doubt and never tied up in uncertain appropriations 
processes. The effects of this bill would be to gut the 
guarantees to whistleblowers and the services they provide. 
That alone is reason enough to question H.R. 5499.
    I believe the sponsors of that bill intend to increase 
transparency. I don't doubt their motivation. That's a laudable 
goal. But H.R. 5499 is more than that; it's a sweepingly broad 
and radical proposal that I believe would seriously impair the 
ability of government to function.
    Thank you, Mr. Chairman.
    Mr. Meadows. I thank the gentleman.
    The chair welcomes the participation of our colleague, the 
Representative Mr. Palmer from Alabama. He's actually the 
sponsor of H.R. 5499, the Agency Accountability Act of 2016, 
which we look forward to discussing today.
    I ask unanimous consent that Mr. Palmer be allowed to fully 
participate in today's hearing.
    And, without objection, so ordered.
    The chair now recognizes the ranking member of the 
Subcommittee on Health Care, Benefits, and Administrative 
Rules, Mr. Boyle, for his opening statement.
    Mr. Boyle. Well, thank you, Mr. Chairman.
    And welcome to our witnesses. I look forward to hearing 
from you today.
    As my esteemed colleague Mr. Connolly has stated, the 
ability of agencies to retain collections is not new. Congress 
has authorized agencies since the Nation's very beginning, and 
it has become a mechanism by which we ensure that the necessary 
work done by our Federal Government is financially self-
sustained.
    Congress alone makes the decision to authorize certain 
programs to retain and spend funds. Congress has made that 
decision many times--everything from the National Park Service 
user fees to antitrust settlements at the DOJ, from 
whistleblower protections of pollution on ships to consumer 
protection funds at the newly created--I guess it's not so 
newly created--CFPB.
    H.R. 5499, the Agency Accountability Act, was referred to 
this committee, and the chairman has called this hearing to 
consider the bill. This bill would put an end to that practice 
and prevent Congress from authorizing agencies to retain 
collections of user fees, fines, and settlements in the future. 
It is a solution in search of a problem.
    It is also radical. This bill states, and I quote, 
``Notwithstanding any other provision of law, an agency that 
receives a fee, fine, penalty, or proceeds from a settlement 
shall deposit such amount in the general fund of the 
Treasury.'' Quote, ``Notwithstanding any other provision of the 
law,'' unquote, is as broad and sweeping a term as can be used 
in the law. In this case, it means ``notwithstanding the 
history of our country.''
    H.R. 5499 would damage mechanisms Congress has created to 
promote good governance. As my colleague Mr. Connolly stated, 
whistleblowers are crucial to government accountability. The 
bravery of whistleblowers to do the right thing and shine the 
light on fraud, waste, and abuse helps our government in its 
important efforts to increase transparency. H.R. 5499 would 
have the effect of disincentivizing whistleblowers from coming 
forward with helpful information.
    Make no mistake about it, this bill is reckless. It will 
cost taxpayers more money, because it will discourage 
whistleblowers from coming forward to expose fraud. If 
transparency is a goal of this bill, then I support that goal, 
but there are better paths forward that would do none of the 
harm this heavy-handed bill would cause.
    Now, with that, Mr. Chairman and to Ranking Member 
Connolly, I'm happy to yield the rest of my time.
    Mr. Meadows. I thank the gentleman for his remarks.
    I will hold the record open for 5 legislative days for any 
member who would like to submit a written statement.
    We'll now recognize our panel of witnesses.
    I'm pleased to welcome Ms. Heather Krause, Acting Director 
of Strategic Issues at the U.S. Government Accountability 
Office.
    Welcome.
    Ms. Krause will be accompanied by Edda Emmanuelli Perez, 
Managing Associate General Counsel at the Office of General--
U.S. Accountability Office. Her expertise on this issue will be 
important for the subject matter of this hearing, so she will 
be sworn in as well.
    Mr. Kevin Kosar, senior fellow and governance project 
director at R Street Institute.
    Welcome.
    Mr. Hudson Hollister, executive director of the Data 
Coalition.
    Welcome. It's good to see you again.
    And Mr. Stephen M. Kohn, executive director of the National 
Whistleblower Center.
    Thank you for your work.
    Welcome to you all.
    And pursuant to committee rules, all witnesses will be 
sworn in before they testify. So if you would please rise and 
raise your right hand.
    Do you solemnly swear or affirm that the testimony you're 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    All right. Thank you. Please be seated.
    And let the record reflect that all witnesses answered in 
the affirmative.
    In order to allow enough time for discussion, we would 
appreciate it if you would limit your oral testimony to 5 
minutes. However, your entire written statement will be made 
part of the record.
    Ms. Krause, you are now recognized for 5 minutes.

                       WITNESS STATEMENTS

                  STATEMENT OF HEATHER KRAUSE

    Ms. Krause. Thank you, Mr. Chairman.
    Chairmen Meadows and Jordan, Ranking Members Connolly and 
Boyle, and members of the subcommittees, thank you for the 
opportunity to discuss our work on Federal fees, fines, 
penalties, and settlements.
    Congress exercises its constitutional power of the purse by 
appropriating funds and prescribing conditions for their use. 
As you know, Congress provides agencies with budget authority 
to make financial obligations for specified purposes. Budget 
authority may be provided through appropriations acts or 
through other laws that constitute permanent appropriations.
    In addition to tax revenues, the Federal Government 
receives funds from a variety of sources, including fees, 
fines, penalties, and settlements. These collections involve 
billions of dollars annually and fund many programs, including 
those integral to our Nation's security, the security of our 
financial systems, and the protection of natural resources.
    The design and structure of the statutory authorities for 
these collections varies widely. My statement today focuses on 
four types of statutory authorities that establish how agencies 
can use their fee, fine, and penalty collections and the 
varying degrees of agency flexibility and congressional 
control.
    These types of are: one, collections deposited to the 
Treasury as miscellaneous receipts; two, collections dedicated 
to a related program and available subject to a further 
appropriation; three, collections dedicated to a related 
program and available without further congressional action; 
and, four, collections available based on a combination of 
these authorities.
    First, Congress has specified that certain fees, fines, and 
penalties be deposited to the Treasury as miscellaneous 
receipts. These funds are not dedicated to the agency or 
program under which they are collected and are used for general 
support of Federal Government activities. For example, $2.7 
billion in civil monetary penalties collected from financial 
institutions for certain enforcement actions were deposited to 
the Treasury as miscellaneous receipts from 2009 to 2015.
    Second, Congress has specified that some collections be 
dedicated to a related program but cannot be used by an agency 
without further appropriation. For example, cargo importers pay 
merchandise processing fees to Customs and Border Protection. 
These fees are deposited in the Customs user fee account and 
are only available to CBP through annual appropriations.
    Third, Congress has authorized some agencies to collect and 
use their fees, funds, and penalties without additional 
congressional action. This is considered permanent funding 
authority. Agencies with this authority have varying degrees of 
autonomy, depending on the extent to which the statute limits 
when, how much, and for what purpose funds may be used.
    For example, USDA's Animal and Plant Health Inspection 
Service is authorized to set and collect user fees to cover the 
cost of Agriculture Quarantine Inspection services. These 
collections are available without fiscal year limitations and 
may be used for inspection-related purpose without further 
appropriation.
    Even if an agency has a permanent authority to use 
collections, Congress can still place limitations on the funds 
in any given year. For example, in recent fiscal years, annual 
appropriations acts limited the amount of fines and penalties 
from the Crime Victims Fund that could be used to fund victims 
assistance programs and other activities.
    Last, in some cases, Congress has provided agencies with a 
combination of different authorities. For example, each year, 
the Drug Enforcement Administration deposits the first $15 
million in fees that it collects from drug manufacturers and 
other registrants to the Treasury as miscellaneous receipts. 
Fees collected beyond that amount are available to the agency 
and used to recover the full cost of DEA's Diversion Control 
program.
    These different design options involve different tradeoffs 
on agency flexibility versus congressional control. For 
example, Congress gains more oversight opportunities when it 
requires collections to be annually appropriated. Conversely, 
if Congress grants an agency authority to use collections 
without further congressional action, the agency may be able to 
respond more quickly to customers or changing conditions.
    This concludes my statement. My colleague Edda Emmanuelli 
Perez and I would look forward to answering any questions.
    [Prepared statement of Ms. Krause follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Meadows. Thank you, Ms. Krause. You said her name much 
better than I did, so I appreciate that.
    Mr. Kosar, you are recognized for 5 minutes.

                    STATEMENT OF KEVIN KOSAR

    Mr. Kosar. I thank the chairman and ranking member and the 
rest of the committee and its staff for having me here. My name 
is Kevin Kosar. I'm a senior fellow at R Street Institute, a 
think tank here in Washington, D.C. And previous to that, I 
spent 11 years at the Congressional Research Service.
    In my current position, I co-direct the Legislative Branch 
Capacity Working Group, a nonpartisan gathering of scholars and 
congressional experts who aim, as we like to put it, to make 
Congress great again. We meet each month here on the Hill to 
discuss aspects of congressional capacity, produce research on 
it, and we do all this in the hopes that Congress will empower 
itself to carry out its constitutional duties and do what the 
public expects of it.
    So I'm obviously delighted to be here today, because the 
power of the purse is a fundamental legislative authority. It's 
a power that aims to limit executive power, encourage agency 
accountability to elected officials, and to curb corruption. 
And it is a power, unfortunately, that Congress has delegated 
away, in many instances.
    I was asked to testify on the subject of Federal agencies 
and their self-funding activities, and it's a large and 
obviously complex topic, to say the least. The President's 
budget reports the government collected $516 billion from the 
public this past year in the form of fees, user charges, and 
the like, which is a significant portion of the government's 
total revenues.
    Now, the principle that the collection expenditure of the 
funds should flow through Congress is longstanding. It is in 
our Constitution. All authority for collecting moneys from the 
public and expending it are explicated in Article I, which 
established the legislative branch. One will find no 
authorities over spending or collecting money in Article II. 
Instead, the President is to ensure that the executive branch 
take care that the law be faithfully executed.
    The principle of congressional control over spending is 
also expressed in Miscellaneous Receipts Act, first enacted in 
1849. It obliged executive agents who collect funds from the 
public to promptly deposit the moneys in the Treasury, 
whereafter Congress may reappropriate the funds or not and also 
may direct to what the funds will be appropriated.
    While the principle is age-old and clear, congressional 
practice has frequently veered from it. As I note in my written 
testimony, the very first Congress passed a law that allowed 
customs officers and collectors in our young Nation's ports to 
pay themselves from the moneys they collected on the ships that 
arrived at the ports.
    Over the past 200-plus years, Congress repeatedly has 
enacted exceptions to the principle that all funds should flow 
into the Treasury, and the rationales have been many and 
varied. Here are just a few of them:
    One rationale is that allowing the agency to expend some 
portion of its fees is logistically more sensible and that it 
creates incentives for higher productivity. Such was the case 
with the aforementioned 1789 customs act. Customs officials 
were actually compensated based on the number of ships they 
inspected, and it was at a rate that was written into the law.
    In the second instance, Congress' rationale has been that 
an agency should be a self-funding commercial enterprise and 
its activities should not be borne by the taxpayers as a whole. 
And, therefore, if it's to operate in a financially self-
sustaining manner, it needs to have broad discretion over the 
spending of its receipts and immediate access to their use. We 
see this with the Postal Service.
    A third rationale one finds is a political one. And this 
one is much more complicated, in that we often will have a 
majority in Congress who wants to insulate agency spending from 
congressional influence by the minority because the minority 
may disagree with what the agency is going to do with the 
spending.
    The Consumer Financial Protection Bureau may well be an 
example of this line of thinking, wherein it is able to derive 
revenues through the Federal Reserve, but then it also has this 
fund, through which it can use these moneys for very, very 
broad purposes put in the statute. It is largely insulated, 
therefore, from appropriations.
    Now, assuredly, these aren't all the reasons Congress has 
created exceptions to the principle but just a few.
    To anyone but experts in this room and appropriators, the 
government's practices for collecting funds from the public are 
bewildering, but I think the basic takeaway is fairly obvious: 
The progressive delegating away of the power of the purse, by 
definition, diminishes legislative authority. By how much I am 
not sure, and I think that would be something that would be 
interesting to discuss. It seems a difficult thing to quantify.
    It is heartening, therefore, to see Congress discussing 
this topic and discussing H.R. 5499. And I'm hopeful that 
fruits of these discussions are that Congress can reclaim some 
of its powers of the purse.
    Thank you.
    [Prepared statement of Mr. Kosar follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Meadows. Thank you, Mr. Kosar.
    Mr. Hollister, you're recognized for 5 minutes.

                 STATEMENT OF HUDSON HOLLISTER

    Mr. Hollister. Chairman Meadows, Ranking Member Connolly, 
Chairman Jordan, Ranking Member Boyle, thank you for inviting 
me to testify today.
    In 1802, President Thomas Jefferson wrote to Albert 
Gallatin, the fourth Secretary of the Treasury, supporting 
Gallatin's plan to, quote, ``simplify our system of finance and 
bring it within the comprehension of every Member of 
Congress.'' President Jefferson believed that Federal spending 
information had become so complex and so fragmented that only 
the experts could understand it.
    But Jefferson had a solution. By expressing Federal 
spending as, quote, ``one consolidated mass'' he wrote, ``We 
might hope to see the finances of the Union as clear and 
intelligible as a merchant's books so that every Member of 
Congress and every man of any mind in the Union should be able 
to comprehend them and consequently to control them.''
    Two hundred and fourteen years later, we face the same 
problem, and we need the same solution. The Federal Government 
is the largest and most complex organization in human history, 
but by expressing all Federal spending information as one 
consolidated data set, we can use commercially available 
software to make it, quote, ``clear and intelligible'' so that 
Congress and the people can comprehend it and control it.
    The Federal spending information is complex and fragmented. 
Hundreds of agencies separately report their receipts and their 
account balances to Treasury, their budget information to the 
White House OMB, and their contracting details to the GSA. But 
2 years ago, this committee unanimously approved the Digital 
Accountability and Transparency Act, or DATA Act, which directs 
Treasury and OMB to create a single government-wide data 
structure for all Federal spending information.
    In May 2017, this May, when every agency begins to report 
standardized spending information using that structure, they 
will create a single electronic picture of all spending. In a 
few minutes, I'm going to show you what that picture should 
look like.
    I know this committee is particularly interested in 
nonappropriated receipts--fines, fees, penalties, settlements 
that agencies receive outside the appropriations process. So 
far, the DATA Act structure focuses on money going out, 
expenditures, not on money coming in, receipts. So that single 
picture, the single electronic picture, won't be able to 
provide full detail on how fines, fees, penalties, and 
settlements are spent.
    However, this information already exists. It is already 
being reported to Treasury. It is maintained in the Central 
Accounting Reporting System at Treasury. And it could be 
reflected in the DATA Act structure. Congress can direct 
Treasury and OMB to expand the DATA Act to accommodate that 
information, and, in my view, Congress should.
    When I served as counsel to this committee, I worked on the 
first version of what became the DATA Act. I resigned from the 
staff in 2012 in order to start the Data Coalition and helped 
then-Chairman Issa and Ranking Member Cummings to get the DATA 
Act passed.
    The Data Coalition is a trade association of nearly 40 
companies whose commercially available software can inform 
decisions, illuminate fraud, and automate compliance--but only 
if we have consolidated and standardized data to work with. 
Starting in May 2017, if all goes well, commercially available 
software will use that single data set to portray an electronic 
picture of Federal spending.
    And I want to ask if we could have slide 7 displayed for 
just a minute. This will be very familiar to Chairman Meadows, 
who has demonstrated this himself.
    The DATA Act should allow us to navigate from the entire 
government all the way to specific agencies, specific 
appropriations. This picture you see is interactive. If you 
click on one of the agencies or you click on one of the items 
there, you can go down all the way to individual items. You can 
navigate from the entire HHS to a particular contract. This 
level of interactivity will be possible across the entire 
executive branch.
    Now, the reliability of this picture is going to depend on 
how well agencies comply with the DATA Act starting in May 
2017. They have to report high-quality data.
    As I mentioned, even after the DATA Act, there will be some 
limitations. The data structure that Treasury and OMB have 
created focuses on expenditures, not receipts. That means we 
won't easily be able to differentiate between appropriated and 
nonappropriated funding sources. It is possible for Congress to 
amend the DATA Act to direct Treasury and OMB to expand the 
data structure so that it does include receipts.
    I asked our Data Coalition members to come up with a 
prototype visualization that shows what an expanded electronic 
picture of Federal spending might look like. And I would like 
to ask for slide 14 to be displayed, please.
    Here we see a navigation that itemizes the Federal 
Government's nonappropriated receipts, and it allows us to zoom 
in on a particular agency, programs within that agency. This 
information comes from the information Treasuryis already 
collecting and maintaining, but if this information's 
incorporated into the DATA Act, this means we can see the 
connection between the receipts and the outlays. We can follow 
this all the way to the contracts and the expenditures.
    The coalition has prepared recommendations for the 
committee on how to amend the DATA Act to expand the data 
structure and ensure that receipts and payments are brought 
into the picture.
    By tracking all the complexity of Federal spending using a 
single government-wide data structure and by publishing all 
that information as one data set, we can realize President 
Jefferson's vision of, quote, ``one consolidated mass,'' quote, 
``clear and intelligible.'' This committee began that work by 
passing the DATA Act. By holding the executive branch 
accountable to follow the law and by expanding that law where 
necessary, the committee can finish it.
    Thank you.
    [Prepared statement of Mr. Hollister follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Meadows. Thank you, Mr. Hollister. And thank you for 
illuminating what we may be able to do in terms of giving 
greater transparency. We look forward to seeing the progress as 
we--I know the ranking member and I have been very in tune in a 
bipartisan way of following your work.
    Mr. Kohn, you are now recognized for 5 minutes.

                  STATEMENT OF STEPHEN M. KOHN

    Mr. Kohn. Thank you. Thank you, Chairmen, Ranking Members, 
members of the committee----
    Mr. Meadows. If you can pull that a little closer to you. 
Yeah.
    Mr. Kohn. Thank you Chairman, ranking members, members of 
the committee, for this opportunity to share with you the 
benefit of my 32 years of representing whistleblowers and how 
H.R. 5499 may impact on those cases.
    This committee has a long and distinguished bipartisan 
record of supporting whistleblowers, and I am confident that 
you will ensure that nothing will inadvertently harm the 
existing statutory structure that works extremely well, is 
transparent, and saves the taxpayers billions of dollars.
    To understand how this process works, we need to look at 
the current laws and why whistleblowing is so effective.
    The Founding Fathers were true visionaries. They understood 
the importance of using citizens as a bulwark for ensuring 
accountability. On July 30, 1778, the Continental Congress 
passed perhaps the world's first whistleblower law, encouraging 
every American and declaring it their duty to report crimes and 
misdemeanors to appropriate authorities.
    The very first Congress, starting in 1789, passed 18 
whistleblower reward laws. They didn't call them whistleblowers 
then; they called them informants. Eighteen. And that structure 
of those laws has been passed on, and the modern whistleblower 
laws that are most effective are modeled on what the Founding 
Fathers did.
    And let's see why it works. Slide 1, or my chart 1 in my 
testimony, shows how fraud is actually detected in real life. 
As in my testimony, these are statistically verifiable numbers. 
And you'll see to the far right, the tip, or the whistleblower, 
is the number-one source of all fraud. Without a program to 
encourage fraud detection by tipsters or whistleblowers, crime 
will pay.
    Slide 2, which is, again, statistically verifiable, shows 
the real life of what happens at the job. And it shows that 
only 2 percent of the witnesses to fraud and misconduct 
actually report that fraud outside their agency--2 percent. And 
that's to anyone, not going to the proper law enforcement 
authority.
    If you want to have an effective accountability system, you 
need to figure out how to make that 2 percent real and 
effective. And guess what? The model used by the Founding 
Fathers works.
    And if we can go to the next slide, which is chart 5 in my 
testimony.
    When Chuck Grassley passed the False Claims Act in 1986 and 
reinstated these models used by the Founding Fathers, which 
permits a reward to the whistleblower paid immediately from the 
collected proceeds, not through an appropriations process--they 
get the reward based on the fruits of their original 
information, the sacrifice they go through, the risks they 
take--look what happened. These are the Department of Justice 
figures to the penny. The ability to detect fraud skyrocketed. 
The ability to hold fraudsters accountable skyrocketed. Look 
how it went from a handful of millions before you activated the 
whistleblower to billions and billions every year.
    The final chart shows that--the next slide shows that, 
today, 70 percent of all fraud detection coming in is coming 
from the whistleblower.
    The legislation being proposed does not take the reality of 
whistleblowing into consideration, but I know this committee 
will act and make sure it is protected.
    I also want to state that there is an appropriate oversight 
for these funds, and whistleblowers are dependent upon them. 
And I look forward to working with the committee to have better 
oversight.
    Thank you.
    [Prepared statement of Mr. Kohn follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Meadows. Thank you, Mr. Kohn. I can assure you that 
whistleblowers are a vital part of what we do, from an 
oversight standpoint. There is not a month that goes by that I 
don't get a call on my private cell phone from some 
whistleblower somewhere suggesting that we look at something.
    And so, with that, let me make sure I understand. So if we 
were to exempt out the whistleblower provision in this and make 
sure that it's not included in Mr. Palmer's piece of 
legislation, you wouldn't have an issue with this legislation. 
Is that correct?
    Mr. Kohn. Well, I'm only here--I'm only really an expert on 
the whistleblower part.
    Mr. Meadows. So if we exempted it, you wouldn't have an 
issue. Is that correct?
    Mr. Kohn. Exactly. As National Whistleblower Center, that's 
our concern.
    Mr. Meadows. Okay. Well, I think we look forward to hearing 
from others on that, but I believe that a friendly amendment 
that would protect our whistleblowers would be in order. And I 
know I've talked to the gentleman from Alabama about that very 
subject, and he seems very willing to accommodate.
    The chair recognizes the gentleman from Michigan, the vice 
chair of the Subcommittee on Government Operations, Mr. 
Walberg.
    Mr. Walberg. Thank you, Mr. Chairman.
    And thank you to the panel for being here today.
    In my other life, other committee work, chairing the 
Subcommittee on Workforce Protections, we look at regulatory 
issues and the high cost of regulations that go on. So this 
discussion today focuses very clearly on additional costs 
resulting from regulation.
    Mr. Kosar, last year, I believe it was, you authored an 
article on increasing Federal regulations and how Congress 
should reassert their authority in the regulatory process.
    I recently introduced a series of regulatory reform 
measures which focus specifically on harmful labor regulations. 
When you see the costs last year, approaching almost $2 
trillion of regulatory costs to business alone--that's it--not 
including collections and everything that goes on, it's an 
important thing to consider.
    One of the measures that I introduced, H.R. 6325, the 
Workforce Regulatory Review Act, creates an independent 
regulatory review commission tasked with removing a third of 
all the regulatory obligations created by Department of Labor 
alone.
    So let me ask you, Mr. Kosar, do you have any thoughts on 
proposals to establish commissions tasked with reviewing and 
eliminating regulations?
    Mr. Kosar. Thank you for the question. I have not reviewed 
your piece of legislation, regrettably, but I will say, as a 
general proposition, yeah, I favor commissions to take a look 
at these things.
    I mean, when you consider the size of the corpus of 
regulations, no human being could fully appreciate or 
understand what's in there. And it just seems self-evident that 
there is some value in having a group dedicated to looking at 
it and going through and saying, this is anachronistic, or, 
guess what, this regulation didn't actually work out and we 
should consider getting rid of it.
    Mr. Walberg. Any other ideas beyond a commission like that 
that you might have that could more effectively monitor the 
output of new regulations and the costs that are inherent in 
those regulations?
    Mr. Kosar. Well, I think two leading proposals, the ones 
that have certainly gotten a lot of discussion, are some 
mechanism similar to a REINS Act, wherein, you know, you would 
look at a whole ball of these things and figure out which ones 
are problematic or undesirable for whatever reason and then 
have a fast-track-type authority to run them through. That's a 
commission version or the REINS Act, which has the tripwire 
where a regulation of a certain size, with a certain quantity 
of cost, cannot actually take effect until Congress 
affirmatively acts upon it. So that would be another way to go. 
And then regulatory budgeting.
    Mr. Walberg. Yeah. Certainly familiar with that and 
supportive of it.
    Your written testimony mentions that the complexities for 
collection of fees and settlements had increased as government 
has grown. Could you elaborate further on this point?
    Mr. Kosar. You know, that line is self-evident but is one 
of those things that came out as I have this past week stuck my 
nose back in the President's fiscal year 2017 budget. It's 
unbelievably complex.
    And there's a basic principal-agent relationship between 
legislative branch and executive branch. As the persons who 
authorize the taking of money from the public, the legislators 
want to keep an eye to make sure that the money is being well-
spent. When that amount grows to $4 trillion or some such 
number, it's really hard to keep track of all those dollars, 
especially if you're not doing the appropriating.
    Mr. Walberg. So your method of simplifying the complexities 
of collecting fees and settlements specifically is what?
    Mr. Kosar. Well----
    Mr. Walberg. Review that for us.
    Mr. Kosar. The first thing that I find vexing is the 
separation, the kind of conceptual separation, that's been 
around since at least 1967 between government receipts and then 
the offsetting receipts and collections, and how is an 
offsetting collection different from an offsetting receipt. 
And, in fact, Congress has often written into statute 
exceptions to these rules, so something that should be a 
receipt is instead a collection or something like that.
    Maybe in an effort to be too precise, we got too complex. 
You know, if you have smart people in this town who are looking 
at the Federal budget and having a hard time understanding it, 
I don't quite know how the rest of the country can understand 
it.
    So I know some folks who are working at a Brookings budget 
group, and one of the ideas that's being frequently brought up 
is we need to simplify budget concepts, we need to rethink, 
because we're relying on stuff that was ginned up a long time 
ago.
    Mr. Walberg. Thank you.
    Mr. Chairman, I yield back.
    Mr. Meadows. I thank the gentleman.
    The chair recognizes Mr. Connolly for his questions.
    Mr. Connolly. Thank you, Mr. Chairman.
    Mr. Kosar, I want to make sure I understood your testimony. 
Is it your testimony that Congress has been too whimsical or 
careless over the years in devolving these powers to agencies 
and ought to re-arrogate them back to itself through the 
appropriations process?
    Mr. Kosar. I would suggest that the various incidents where 
the authority has been delegated away should be reviewed. Do 
the rationales that originally propelled the delegation still 
make sense, or have they become anachronistic, or has it just 
not worked out?
    Mr. Connolly. Fair enough.
    It is not your contention, however, that you or R Street 
Institute have looked at in depth the other impacts, the 
negative impacts, on agencies that currently engage in that 
practice legally through the delegation of authority by the 
Congress. For example, you haven't looked at the potential 
impact of doing that in the Department of Justice's Crime 
Victims Fund.
    Mr. Kosar. Oh, no. No, we have not done an assessment, and 
we certainly----
    Mr. Connolly. Right.
    Mr. Kosar. --haven't looked at each program and tried to--
--
    Mr. Connolly. Or what it might do to the Superfund clean-up 
process.
    Mr. Kosar. Correct.
    Mr. Connolly. Or Tennessee Valley Authority collections and 
what it uses those for.
    Mr. Kosar. Uh-huh.
    Mr. Connolly. Right?
    Mr. Kosar. You're right.
    Mr. Connolly. And likewise the Federal Protective Service 
program through the use of its fees.
    Mr. Kosar. Correct.
    Mr. Connolly. Or the Federal Aviation Administration 
Franchise Fund customer fees.
    Mr. Kosar. No, sir, we haven't looked into those.
    Mr. Connolly. Right. Okay. I just want to make sure. It's 
one thing to say: Yeah, we looked at it, maybe some of these 
authorities are too broad. But that's not the same as 
testifying: I've looked in depth at the impact and it's 
negligible, or it's tolerable. We don't know, sitting here.
    So we can--not that you are, because you've just clarified 
your testimony. But one needs to be careful, in terms of 
impacts. And my view is, before we do any of this, we have to 
understand what the impacts would be. Because over well over 
200 years of history, this has a lot of entanglements and 
commitments, and the disruption could be profound to the 
operations of government, which is my contention. That doesn't 
mean don't do some of it. It might not even mean don't do all 
of it. But we've got to know a lot more than we know right now.
    Ms. Krause, I want to make sure I understand what you're 
testifying to. GAO looked at this why?
    Ms. Krause. This is really based on--we have a body of work 
that's looked at fees, fines, and penalties, often individual 
ones. But we also have a body of fee work that's looked at 
design principles to consider when you're establishing fees. It 
also applies to fines and penalties. So things to consider in 
structuring these, especially related to congressional control.
    As I mentioned in my oral statement, one of those decisions 
is related to what triggers the use--the congressional trigger 
of use of funds, so whether it requires further appropriation 
after it has been collected or whether an agency is allowed to 
use it through----
    Mr. Connolly. But it's not your testimony this practice 
should end.
    Ms. Krause. We don't take a position, no.
    Mr. Connolly. And nor do you contend in this study, like my 
questioning of Mr. Kosar, that you've looked in depth at the 
potential impacts of curtailing or conditioning or revoking 
these authorities that we've delegated.
    Ms. Krause. No.
    Mr. Connolly. No.
    Ms. Krause. We have not.
    Mr. Connolly. Thank you.
    And, Mr. Kohn, your testimony is that if we had a carve-out 
for whistleblowers you'd be fine?
    Mr. Kohn. Well, as I say, I don't have a position on the 
entire bill----
    Mr. Connolly. Right.
    Mr. Kohn. --but it absolutely needs a carve-out for 
whistleblowers.
    Mr. Connolly. Right. But I'm bigger than whistleblowers, 
though I share your concern, as you heard my opening statement. 
I think that's an unintended consequence, but my concern is 
there could be lots of other unintended consequences, and we 
haven't looked at them.
    So to act with haste on a bill that I think is well-
intentioned and that makes a good point about the kind of 
willy-nilly delegation of authority that has crept up over the 
years--that is worthy of examination, and I share my friend 
from Alabama's commitment to doing that. I think this bill 
raises a very important subject we ought to reexamine.
    But revoking those authorities or putting them on ice, 
whether it's whistleblower or any of the other fees I listed--
there are plenty of others we could talk about--I think would 
be very disruptive.
    And I just want to be clear. You're not saying, give me a 
carve-out and you've got my acquiescence and all the rest? 
You're only addressing your own issue, which is whistleblowers. 
And your testimony is limited to the fact that this would have 
an unintended but devastating impact on whistleblowers and 
contravene the intent of the Whistleblower Protection Act. 
That's your testimony. Is that correct?
    Mr. Kohn. Yes, that's correct.
    Mr. Connolly. I thank you.
    Thank you, Mr. Chairman.
    Mr. Meadows. The chair recognizes the chairman of the full 
committee on Health Care and Administrative Rules, Mr. Jordan, 
the gentleman from Ohio, for a series of questions.
    Mr. Jordan. Thank you, Mr. Chairman. Thank you for having 
this hearing.
    And, Mr. Palmer, thank you for bringing a good piece of 
legislation forward.
    Thank you to our witnesses.
    And, Mr. Kohn, I agree with you. There's nothing wrong with 
an amendment that would carve out the whistleblowers, much like 
Mr. Palmer's legislation already exempts the Patent Office and 
the Postal Service. But I want to try to get a handle on the 
overall picture here.
    So, as I understand it, there are three major categories--
there's fees, there's fines and penalties, and then there's 
settlements--money that the people's representatives don't get 
a direct say on what happens with that money when it comes to 
the Federal Government.
    So, Director Krause, what is the total number--let's just 
go in that order. Fees. What is the amount of fees collected in 
fiscal year 2017 by the Federal Government and all the various 
agencies?
    Ms. Krause. Unfortunately, that number is unknown. When we 
have looked at issues particularly related to fees, government-
wide sources don't necessarily track back to the specific legal 
authorities related to the----
    Mr. Jordan. Here's what the President said. The White House 
said it was $534 billion. Are you familiar with that number?
    Ms. Krause. I am not familiar with that number.
    Mr. Jordan. This is from their budget. For 2017, the table 
shows that total offsetting collections and offsetting receipts 
from the public are estimated to be $534 billion.
    Do you accept that number?
    Ms. Krause. I would have to take a look at it closer to 
understand it.
    Mr. Jordan. Is the White House right or wrong?
    Ms. Krause. I don't--unfortunately, I don't----
    Mr. Jordan. Is it in the ballpark?
    Ms. Krause. Like I said, when we have--so we have work 
ongoing----
    Mr. Jordan. For the sake of argument, let's accept what the 
White House said. It's their budget. They are the head of the 
executive branch. They're saying it's--that's a lot of money.
    Do you know how much we spend in discretionary spending 
each year? Or last year, do you know how much we spent in 
discretionary last year?
    Ms. Krause. I don't know that number off----
    Mr. Jordan. One-point-two trillion. So we have a number 
that's collected in just fees, just one-third of the three 
areas, that's almost half of what we spend annually in 
discretionary spending. That's a pretty big number. That $534 
billion is approaching what we spend on national defense each 
year.
    And, again, the people's representatives in the United 
States Congress don't have a direct say on how that money is 
spent once it's collected, right?
    Let's move on to fines and penalties. Do you know how much 
we collect annually in fines and penalties?
    Ms. Krause. I do not know that based on the data sources 
that are available.
    Mr. Jordan. Yeah, that's stuff we need to know. But the 
study the committee did over a 5-year period determined that 
number was $83 billion over a 5-year period. So, again, we're 
talking billions of dollars.
    Now, what's interesting in what the committee found out is 
Treasury couldn't give us any numbers. Specifically, Treasury 
and the IRS couldn't give us the numbers. This is the IRS. They 
collect a few fines and penalties, my guess is, some amount. So 
then you have this $83 billion figure that excludes the 
Internal Revenue Service and any numbers coming from Treasury.
    And then, finally, you have the third category, 
settlements. Which now we know ``settlements'' is a nice way of 
saying, for some people--particularly when you think about the 
Justice Department--``settlements'' is another word for a 
shakedown. Certain companies have reached a settlement with the 
Justice Department, and then they tell this particular company: 
It's not just about penalizing you or compensating the real 
victims. We want you to give money to some nonprofit that we 
deem as appropriate, and we're going to call it a donation. 
Interesting use of the word ``donation.''
    So, when you add all these together, could you even hazard 
a guess, how much money in fees, fines and penalties, and 
settlements the Federal Government collects in 1 year?
    Ms. Krause. As I mentioned, when we've looked at this, 
there isn't a government-wide source that would allow us to 
give a reliable total on the amount.
    Mr. Jordan. So who can give us that number?
    I mean, this is what Mr. Palmer's legislation gets to the 
heart of. We can't even get someone in the Federal Government 
to tell us what that total number--we know fees, based on what 
the White House told us, is roughly equivalent to what we spend 
on national defense each year. It's roughly equivalent to half 
of all discretionary spending we did in 2017. We know it's a 
big number just in the fees category alone. But we'd like to 
know what it is, fees, fines and penalties, and settlements, 
what that number totals up to.
    So who can give us that number?
    Ms. Krause. That is something--we have ongoing work looking 
at what we call backdoor spending authority, and it is to do an 
inventory of the accounts that are out there, the budget 
accounts that are out there, for funding that supports outside 
of the----
    Mr. Jordan. Does anyone else on the panel know?
    I mean, I would think Office of Management and Budget 
should be able to give us that number. I would think someone at 
the Treasury Department, the department in charge of the 
Nation's money and how we--I would think someone there could 
give us that number.
    Why can't we get that number in an important hearing on an 
important piece of legislation that Mr. Palmer has brought 
forward?
    Mr. Hollister, it looks like you want to offer a----
    Mr. Hollister. I sure do. Mr. Jordan, my understanding is 
that the Treasury Department's fiscal service has that 
information, it's maintained by the Central Accounting 
Repository Service, and that, on the other hand----
    Mr. Jordan. Well, Mr. Hollister, why won't they give that 
information to this nice lady over here, Director Krause, so 
that she could come here today and give it to Mr. Meadows in 
this committee?
    Mr. Hollister. If I understand right, there are some 
organizational problems that exist between Treasury's leg. 
affairs office and their fiscal service.
    Mr. Jordan. What does mean?
    Mr. Hollister. That means that sometimes the fiscal service 
and the leg. affairs office don't get along.
    Mr. Jordan. Does that mean they're just not going to--well, 
you know, Mr. Meadows is a nice guy, but we're not going to 
give him the information? Is that what they're saying?
    Mr. Hollister. Well, what it does mean is that the 
information that's in the President's budget that you cited and 
the information that's in the monthly Treasury statement that 
comes out every month that has at least a line item for 
miscellaneous receipts, that's coming from somewhere. It's 
coming from the system that Treasury maintains.
    Mr. Jordan. Yeah. Well, we'd like that information so that 
we can actually get moving on Mr. Palmer's legislation with the 
appropriate amendments, like Mr. Kohn has offered. But this is 
exactly why the gentleman from Alabama is on the right track 
with an important piece of legislation.
    With that, I yield back, Mr. Chairman.
    Mr. Meadows. I thank the gentleman.
    The chair recognizes Mr. Boyle for 5 minutes.
    Mr. Boyle. Thank you, Mr. Chair.
    And I wanted to narrow in specifically on this 
whistleblower portion of it, because beyond just the two pieces 
of legislation that we're talking about today, I think it's 
actually important for reasons far beyond that and for all the 
members who are here to better understand this.
    Because just in--I was interested in reading all of your 
testimony, particularly the charts, but the exponential growth 
has been staggering in the amount of money collected--we're 
talking about from the early 1990s, roughly 1990-1991, until 
today. So, over 25 years, by my back-of-the-envelope math, a 
nine times increase in the amount of revenue.
    I'm curious what specific rewards or programs within the 
umbrella of whistleblowing would you say has been most 
effective in cutting out waste, fraud, and abuse and, of 
course, generating revenue?
    Mr. Kohn. Thank you.
    And that growth is triggered by empowering the insiders, 
who are critical for fraud. Fraud is designed to be hidden.
    Mr. Boyle. Right.
    Mr. Kohn. You need the insider.
    The False Claims Act is really the model, because it has 
been around for 30 years and you can test it. And the 
Department of Justice, unlike, apparently, in other programs, 
to the penny figures out how much the whistleblowers are 
bringing in and how much the government is finding on its own. 
Because they have to--if the whistleblower brings it in, they 
have to give the reward.
    Mr. Boyle. Right.
    Mr. Kohn. So these numbers are literally to the cent. And 
it's just incredible, the growth.
    Other programs that are more modern, they don't have the 
track record, but the SEC is reporting incredible findings. The 
Chair is talking about blueprints and unbelievably high-quality 
information. Why? Think about it. If your reward is based on 
the truthfulness of your information, the accuracy of your 
information, and the quality of your information, you're going 
to be weeding out, you're going to get the best sources, it's 
going to help the government, it's going to get the big fish. 
SEC is seeing that, although they're still relatively new.
    In offshore illegal accounts, illegal Swiss banking, one 
whistleblower, Bradley Birkenfeld, literally broke the bank--
$780 million fine to UBS. They had 18,000 illegal U.S. 
accounts. And that triggered a voluntary program of 50,000 
Americans, millionaires and billionaires, coming back and 
paying fines. I totaled it up to about $13 billion--triggered 
by a whistleblower because the people didn't want to get 
caught.
    If you empower the insider, the positive results are truly 
remarkable.
    Mr. Boyle. Another way of thinking about this is 
essentially we've created a market where the insider now can 
bring this information forward, and there's essentially a 
market for this information that previously did not exist at 
all.
    I'm--you wanted to add to that?
    Mr. Kohn. Absolutely true. The University of Chicago, their 
school of economics--you know, these are no liberals--you know, 
these guys looked at it and concluded that without rewards 
there's no incentive. And, in fact, they couldn't even 
understand why anyone would blow the whistle.
    But with those rewards--and they've studied every major 
fraud case in a period of time; it was an incredible study--
they said they worked, they worked remarkably well, they're not 
frivolous, and they recommended expanding the use of that 
process.
    You're talking about, to just put it bluntly, the goose 
that lays the golden egg. And I'm just saying, don't kill it.
    Mr. Boyle. So let's take the next step then. If it were 
killed, either purposely or inadvertently, through this or any 
other legislation, what specifically would be the 
ramifications?
    Mr. Kohn. I will tell you, I will have a $500 hammer I can 
sell you. It's as simple as that.
    When you look at the state of Federal procurement before 
Senator Grassley fixed it, if you look at that state, it was so 
bad. Yet I have the opportunity to talk to people within 
business, and they tell me the impact, far from just the 
recoveries--the increasing compliance programs; the fear of 
detection making people do the right thing; and guess what, 
making honesty pay, making the markets more fair, where people 
who are cheating can get caught so the honest businesses aren't 
at a disadvantage.
    The benefits are literally overwhelming. Every regulating 
agency that has looked at this has turned around and said, 
whoa, this is great.
    Mr. Boyle. I thank you.
    Mr. Chairman, I see my time has expired, so thank you.
    Mr. Kohn. Thank you.
    Mr. Meadows. I thank the gentleman.
    The chair recognizes the gentleman from Florida, Mr. 
DeSantis, for 5 minutes.
    Mr. DeSantis. Thank you, Mr. Chairman.
    Mr. Kosar, what is the reason why the Founding Fathers put 
the power of the purse with the Congress?
    Mr. Kosar. Well, they had had plenty of experience of abuse 
at the hands of the crown. And I think there was just more 
philosophical agreement that, if money was to be taken, it 
should only be taken by elected officials who are, therefore, 
accountable and could be taken out of office if they take more 
than they should.
    Mr. DeSantis. So you have an executive--and they believed 
in separation of powers. So you have an executive branch. If 
the executive branch is acting in a way that's contrary to 
either the interests or the rights of the public, then those 
elected representatives in the legislature would be able to 
remedy that by simply refusing to provide funds going forward, 
correct?
    Mr. Kosar. The wealth and property of individuals would be 
better protected under a scheme by which only those who are 
able to be recalled through election or put out of office are 
able to extract it, yes.
    Mr. DeSantis. And I think the problem with what we've 
pointed out here--and I commend the chairman for doing this--
is, when you have the agencies that are effectively on 
autopilot with fees and whatnot--and we saw this with the 
dispute about illegal immigration, when the President, even 
though he had said 20 times, you know, you can't do this, was 
then effectively issuing legal status unilaterally to certain 
people who were in the country illegally. The Congress said, 
wait a minute, you can't do that. But it turned out--we said, 
we're not going to fund it. Well, it turned out we didn't even 
need to take an affirmative act to fund it. They already had 
the fees through the USCIS, and it was just on and on they went 
without any need for congressional appropriation or 
authorization.
    And the problem with that is that that takes the default--
the default should always be, if we just simply decide not to 
act, then the offending conduct stops. It should require 
Congress to take an affirmative act to appropriate funds for a 
given activity.
    And the way we've gone, we're insulating the Congress--
well, we're insulating the agencies from accountability from 
the Congress, but, more importantly, from the American people, 
because they don't have a direct way to hold the agencies 
accountable.
    And I think that what frustrates me is that it's not like 
Congress had this power taken from us. Congress has given away 
the power and has offered to do this over the years.
    Mr. DeSantis. So let me ask you this. Well, this could be 
for anyone that wants to jump in. In terms of transparency, 
some agencies are not transparent at all, some are very 
transparent. What agency would you say is the most transparent? 
Examples?
    Mr. Hollister. Mr. DeSantis, I would point to--we were 
doing a lot of work on the overall spending and the 
transparency of expenditures as is going to be required 
beginning this May under the DATA Act, and I would point to the 
Small Business Administration, for instance. They have been 
able to take all of their spending information, they've been 
able to conform it to the new data structure, and they're now 
able to navigate seamlessly from their appropriation all the 
way down to each grant they issue and put all of that in a map 
in one click.
    Mr. DeSantis. Anyone else? Go ahead.
    Mr. Kohn. Sure. Under the False Claims Act, those 
settlements are all made public, they're subject to court 
approval. Every dime given to the whistleblower is accounted 
for in a public document. It's been around for 30 years, and I 
don't know of any time that a Member of Congress or even the 
public has said the way the whistleblower was awarded was 
somehow bad, except for a whistleblower claiming they should 
have gotten more, but--so there is transparency in the False 
Claims Act.
    Mr. DeSantis. Let me ask about examples of Congress 
relieving agencies from the appropriation process, as I 
mentioned. When did this start? Ms. Krause, is that--I think 
you had mentioned it.
    Ms. Krause. Sorry. I was looking back to my colleague.
    Ms. Perez. Actually, there--excuse me. There have actually 
been examples going back----
    Mr. Meadows. We'll get you a chair. Okay.
    Ms. Perez. Oh, thank you. Sorry about that.
    There have been examples going back to, as was mentioned 
earlier, the Customs officials early on in the republic. There 
have also been a number of authorities just in this past 100 
years where agencies are collecting fees, and Congress has 
either provided limitations on how they can use them or made 
them available without further appropriation.
    Mr. DeSantis. And that process has become more conspicuous 
over the last hundred years? Is that fair to say?
    Ms. Perez. Yes, that would be fair to say.
    Mr. DeSantis. Okay. Well, look, I think that my friend from 
Alabama has a good bill. I think at some point, if we want to 
be anything more than a debating society, we're going to have 
to start reclawing some of this authority. You know what? It 
requires Congress to do more work. You actually have to 
legislate more, you've got to make more decisions. Some people 
don't like going on the record as much, but that's just the 
reality. And it's easier to kind of say that just let 
everything run on autopilot. And I think some of the fees, it's 
not all bad the way it's done. Sometimes it is within law, but 
other times it's simply government on autopilot, and that is 
not, I think, what the Constitution envisions, and I think it's 
up to us to start to claw this back.
    So I yield back.
    Mr. Meadows. I thank the gentleman.
    The chair recognizes the gentleman from Georgia, Mr. Hice, 
for 5 minutes.
    Mr. Hice. Thank you, Mr. Chairman.
    Ms. Krause, I just want to make sure. You stated that the 
GAO does not know how much is collected through the fees and 
fines and all that sort of thing. Is that correct?
    Ms. Krause. There are data out there about individual ones. 
It has not been aggregated into a total. It's a very involved, 
complex process in terms of understanding the underlying 
specific legal authorities associated with those funds.
    Mr. Hice. Well, in the first place, it seems like that 
would be information that not only you should have, but you 
would want to have. But secondly, this bill would correct that 
problem as well, if we're able to move forward on it.
    And, Mr. Hollister, right along the same line, I want to 
just--for clarification, I want to make sure that you stated, 
you testified a while ago that the Treasury can provide an 
accurate number for the fees, fines, and settlements. Is that 
correct?
    Mr. Hollister. Mr. Hice, yes. My understanding is the 
Treasury can. The information that the Treasury receives from 
agencies is often in the form of summaries. So Treasury might 
give you amounts, but Treasury might not be able to walk that 
back all the way to the specific complexities of the legal 
authority under which each bunch was collected. Treasury, 
however, could give us, from the central accounting reporting 
system, could give us aggregations. And my testimony was that 
Congress could direct Treasury to include that in the overall 
spending structure.
    Mr. Hice. Okay. Mr. Chairman, I think it'd be wise for us 
to request that number from the Treasury just to have an idea 
of what we're dealing with here.
    Mr. Kosar, let me ask you, regarding the fines and fees, 
penalties, settlements, all this sort of stuff, do you have any 
idea how much that has increased over recent years?
    Mr. Kosar. No, I do not.
    Mr. Hice. Who would have that information for us? Does 
anyone chart the increase of fees, fines, and settlements?
    Mr. Kosar. I would think OMB would have a number to use, 
and then presumably we could get some better data from 
Treasury.
    Mr. Hice. I would also like for us to get that information, 
if we can.
    And let's just, for the sake of being in here, is it fair, 
do you think, to make the assumption that fees and penalties, 
fines, have increased over the years? Is that a fair 
assumption?
    Mr. Kosar. I would say so. And I would say so probably as a 
proportion of the budget it has increased.
    Mr. Hice. Right. I would say so as well, because we're now 
watching some agencies actually live off of those things. And 
so with the assumption that is more than likely accurate that 
the fines, penalties, fees have increased, how does that, 
number one, enable these agencies to operate independently? But 
also, how does that impact Congress's role?
    Mr. Hollister. Well, Mr. Hice, it reminds me of Thomas 
Jefferson's letter to the Treasury secretary complaining that 
the spending, even at that time in 1802, the Federal 
Government's operations had gone beyond the comprehension of 
Congress. The complexity at that point had already grown to the 
point where Congress couldn't comprehend it.
    And in this case we see--because Congress has over the last 
200 years delegated authority in very complex ways to agencies, 
we have a great deal of difficulty in getting that 
comprehension. I think we could help--we could start to regain 
it by consistently tracking that information and asking for 
that information to be put into the whole picture, integrated 
into the whole picture.
    Mr. Hice. Well, I would absolutely agree. And it seems to 
me, with the complexity that you mention, the more complex this 
whole scenario is, the more difficult it is to have oversight 
over it. And it gets out of hand rapidly, it seems. And that--
you know, this whole thing--and I'll just pick up on what Mr. 
DeSantis said. You know, this ultimately comes down to a 
constitutional issue. And fair enough, Congress over the 
decades has yielded some authority to these agencies, but we 
are on the verge of a genuine constitutional crisis now where 
those who are representatives are not having oversight and 
accountability, because those who are unelected in very 
powerful agencies are now able to operate independent from 
Congress and do multiple things, and they're not even elected 
by the people. And all of this creates a potential enormous 
constitutional crisis. Would you agree with that? Mr. Kosar?
    Mr. Kosar. I would say it creates basic questions of 
legitimacy and concerns along that line. And it also leads, I 
think, to the perspective that, you know, where does the real 
power lie, which branch? Eyes more and more turn to the 
executive branch. I mean, each time in an authorization, say, 
you allow an agency to collect fees for a particular purpose 
and spend it for a particular purpose, okay, you're directing 
the congressional spending, but because it's put into an 
authorization statute, if that agency misuses the money or has 
too much of it, well, you're going to have to pass another law 
to get that back. And as we know in this environment, passing 
legislation is very difficult. So the more that that is kind of 
toggled in one direction, the more toggles you've got to pull 
back if things don't work out right.
    Mr. Hice. Well, I thank the panelists.
    And I thank my colleague from Alabama for this bill, Mr. 
Chairman. I appreciate your indulgence. I yield back.
    Mr. Meadows. The gentleman from Tennessee, Mr. DesJarlais, 
is recognized for 5 minutes.
    Mr. DesJarlais. I thank you, Mr. Chairman. And thank you, 
Mr. Palmer, for bringing forth this legislation.
    Ms. Krause, if you would, your 2015 report illustrates the 
DOJ sidestepping Congress and providing deposits from Federal 
fines and penalties to be immediately used to fund agency 
programs, correct?
    Ms. Krause. Yes. That's our report.
    Mr. DesJarlais. Do you feel Mr. Palmer's legislation 
adequately addresses this issue?
    Ms. Krause. The recommendations that we made in that report 
dealt a lot with the obligated balances, so the balances the 
agency holds that--to manage the programs and the fees that 
come in. I'm not familiar--or I wouldn't know how that applies 
in the bill context.
    Mr. DesJarlais. Okay. So we already know the DOJ has taken 
advantage of using their fines to fund initiatives within their 
agencies. Do you know what percent of their budget that 
represents?
    Ms. Krause. I believe in that report we talked about it 
being 15 percent of the budget in 2013.
    Mr. DesJarlais. Do you have a list of other government 
agencies that have also circumvented Congress and used fines, 
fees, and penalties without congressional authorization?
    Ms. Krause. We have individual reports that we've--we have 
in terms of those that have authority where they've been 
granted authority to use funds without further appropriations. 
We don't have a comprehensive list. We have examples of that--
--
    Mr. DesJarlais. Can you name a couple?
    Ms. Krause. What----
    Mr. DesJarlais. Can you name a couple?
    Ms. Krause. Yeah. Sure. Some of those that include, I think 
we mentioned the National Park Service, the recreation fees, 
that the National Park Service is allowed to use those for 
repair and maintenance. You also have the USDA agriculture 
quarantine fees. Those are examples of fees that they do not 
require any further appropriation beyond their current 
authority.
    Mr. DesJarlais. Is MHS one?
    Ms. Krause. MHS being?
    Mr. DesJarlais. Mining.
    Mr. Meadows. Mining Health and Safety.
    Ms. Krause. I believe that is, yes.
    Mr. DesJarlais. Who determines the amount of the fine 
that's levied?
    Ms. Perez. So that depends on the statutory authority. In 
some instances, Congress will set the percentage or the amount 
of the fee. In other situations, Congress has by statute 
designated that the agency will follow a particular process for 
determining a fee. And so agencies use a variety of factors for 
that.
    Mr. DesJarlais. Okay. Mr. Jordan had mentioned the term 
``shakedown'' in the process of these fines being levied and 
then sometimes negotiated. Who's authorized to negotiate, let's 
say, a fine that's levied of $1 million and scares the heck out 
of businesses, and really there's never any intention of 
collecting $1 million, but that gets their attention? Who 
negotiates the actual fee or fine that's paid?
    Ms. Perez. That also will depend on the statutory authority 
of the agency that is either imposing a fine or following the 
process to assess a fine. So in those situations, you know, 
depending on that statute, the agency will be able to, you 
know, make decisions about how much of a fine they need to 
seek.
    Mr. DesJarlais. Do you think that's fair and effective, to 
purposely mislead or levy a fine in instances to companies that 
obviously can't afford to pay that? I've seen it happen in 
nursing homes, I've seen it happen in mines, it happens in the 
Department of Justice. That's a problem America has with 
overregulation in the Federal Government, is they feel like 
they're simply at their mercy. And I think the process of 
coming in and determining a fine--the EPA does this all the 
time, that you have people that clearcut some timber and it 
happens to go beyond an acre, and they come in with a huge fine 
that they know they can't pay. And then when they negotiate it 
down to something still unreasonable, they are somehow expected 
to feel good about it. Do you think that's a fair process?
    Ms. Perez. We actually haven't done the work to be able to 
determine of any specific case where that happens.
    Mr. DesJarlais. Well, can you tell me if any of these fines 
and fees are used within the agency? We know they're used to 
fund some of their own initiatives. Do the employees that go 
out and levy these fines that start the shakedown, if you will, 
do they ever get bonused by the very fines that they levy?
    Ms. Perez. We're not aware of those situations.
    Mr. DesJarlais. Can you say that there's not? Because this 
was a question I posed in a previous hearing and we didn't get 
an answer, even though there was evidence that this was 
occurring. So you've never heard of that?
    Ms. Perez. We're not--I'm not aware of any particular 
situation, sir.
    Mr. DesJarlais. Okay. So even though the DOJ has used this 
to fund their own initiatives, you don't have any evidence that 
the people who work for the DOJ benefit from these fines?
    Ms. Perez. No. We don't--we don't have any particular cases 
in mind. We have received a request for a legal opinion from 
Chairman Chaffetz of the committee to look at some supplemental 
agreements that are made with respect to the EPA, and so that's 
a project we're working on.
    Mr. DesJarlais. Okay. But, again, you can't tell me 
specifically who comes up with the amount of the fine and who's 
able to negotiate the actual settlement?
    Ms. Perez. No, not in a general sense. Again, that would 
depend on the very specific statute and program and how that 
would be authorized.
    Mr. DesJarlais. Do you feel that's something that needs to 
be addressed? Or Ms. Krause?
    Ms. Perez. I mean, certainly GAO is always--you know, we're 
definitely in favor of, you know, looking into, you know, 
particular programs and the authorities and how agencies use 
them.
    Mr. DesJarlais. Okay. I thank you for your time.
    Yield back.
    Mr. Meadows. I thank the gentleman.
    Let me verify one thing. You said it's according to 
statute. A lot of these fines are not dictated by statute, I 
mean, in terms of what they are to fine. Is that correct?
    Ms. Perez. Right. And that's why what we were saying is 
that depending on how the statute authorizes the agency to 
either impose a fine or assess a fine, then we would need to 
look at a specific situation to see what authority the agency 
had in that case.
    Mr. Meadows. So it just depends on that agency's statute?
    Ms. Perez. Yes, that's correct, sir.
    Mr. Meadows. Do you not see that there would be a problem 
with lack of equality there?
    Ms. Perez. You know, certainly that would be something to 
look into in terms of how an agency carries out those 
functions, carries out their statutory authorities. We just 
don't have any examples to be able to give you a specific 
example of one where there might be such a problem.
    Mr. Meadows. I'm going to yield to the ranking member for 
just a--very brief, and then we'll come to Mr. Grothman.
    Mr. Connolly. Two quick observations. I come from local 
government. It is the practice of local government throughout 
the United States to levy fines, for example, on restaurants or 
food handling establishments when they find nonhygienic 
conditions: Rat droppings, cockroaches, or unsanitary 
conditions in the kitchen. Maybe some people want to call that 
a shakedown. I can tell you where I live, my public thinks 
that's a measure of public safety and protection to make sure 
that food is sanitary and healthy----
    Mr. Jordan. Mr. Chairman?
    Mr. Connolly. --not disease prone.
    Mr. Meadows. The gentleman from Ohio. I can see where this 
is going.
    Mr. Jordan. We----
    Mr. Meadows. Go ahead.
    Mr. Jordan. Yeah. If it's going to the--if the fine is 
going to the local government, but what--that's not what's 
happening at DOJ. There is a settlement and then DOJ tells the 
party who has supposedly done something wrong, you need to give 
the money to this nonprofit organization, which just so happens 
to have political leanings of--well, may have political 
leanings. That's the problem. And they call it a donation. When 
you're forced to do it, it's not really a donation. I think 
it's a shakedown, the term I used before.
    Mr. Meadows. All right. We're going to go to the gentleman 
from Wisconsin, Mr. Grothman, for 5 minutes.
    Mr. Grothman. Okay. This is a question for any one of you. 
Next year's budget--obviously, it'd be nice if we had more 
detail here. It kind of surprises me the amount of funds that 
are going around that we don't even know the amount that's 
being spent. Can you make suggestions how--and I guess it would 
be Donald Trump's first budget--how in his submission to 
Congress, we can begin to see more clearly how funds are 
collected and spent or requirements we should put on that 
budget request?
    Mr. Hollister. Yes, sir. I'd recommend that Congress insist 
that the budget be expressed not just as a document, but also 
electronically, that it conform to the electronic structure 
that this committee has spent a great deal of time and effort 
mandating under the DATA Act of 2014 so that the budget can be 
electronically compared to the records from the previous year.
    Mr. Grothman. Okay. Mr. Kosar, in your testimony, you 
mentioned that the government collected $516 billion from the 
public last year, right?
    Mr. Kosar. Correct.
    Mr. Grothman. To what degree do these--may be outside the 
normal collections is included in that amount?
    Mr. Kosar. I honestly don't know, because I find the 
categories that are used so confounding. And what we find in 
the President's budget is aggregate numbers in many cases. 
You'll have a line specifying a particular agency if it has a 
particularly large number, but then, you know, smaller amounts 
collected by agencies for other activities get rolled into one 
big ball. And so I would say it would be very nice if we had a 
better breakout and it was connected to the set of authorities.
    Mr. Grothman. Do you think we should do something 
statutorily to mandate a more clear delineation of where the 
funds are coming from?
    Mr. Kosar. I would favor that.
    Mr. Grothman. Okay. That's good.
    Mr. Hollister. Mr. Grothman, if I may, I would also add 
that there's a--the connection between the receipts and how 
they're ultimately spent is crucial. That's one thing that 
we're missing today. We don't have any kind of system--even 
though Treasury has a system back behind there that does track 
what agencies are doing, we don't have a system that shows--
that connects those receipts from nonappropriated sources to 
their ultimate expenditure. We know that that is 
technologically possible. We believe Congress should mandate 
that.
    Mr. Grothman. Well, I hope it's technologically possible. 
In other words, when they have money coming in, even though 
some of that money is dedicated to a given purpose, that's not 
necessarily apparent from their budget?
    Mr. Hollister. It won't be apparent from the system the way 
the system's structured today.
    Mr. Grothman. You know, it never ceases to amaze me how 
screwed up the Federal Government is. I tell everybody back 
home, I was a state legislator for 20 years, Washington is so 
much more screwed up than Madison, Wisconsin, you can't believe 
it, and one of them is how little information we get.
    We'll ask all of you again, are there agencies with funding 
streams outside the appropriation process? And I guess this 
kind of goes to you. Which agencies in particular do you think 
could give us more transparent budgets?
    Mr. Hollister. Well, anecdotally, sir, we do know that some 
of the agencies that have independent research facilities, 
Defense Department in particular, but Energy Department 
certainly, there are often difficulties in comparing the 
budgets of those independent but federally funded research 
centers with wrapping them up and rolling them up to the 
overall budget of the agency.
    Mr. Grothman. Okay. Well, I'll see if we can do something.
    One other comment. One of the Congressmen asked, I think 
maybe rhetorically, why they gave the power of the purse to 
Congress. And I guess I'll say the reason you want things in 
two different places is I think our forefathers were 
antithetical to the government growing at all. I mean, that's 
why, you know, the senators were supposed to be appointed by 
the--you know, why there were so many checks and balances. I 
think that's obviously why. It should be very, very difficult 
for the government to spend any money or hire any new people, 
and the more things are spread out, the more difficult that 
will be.
    But we'll yield my remaining minute----
    Mr. Jordan. Will the gentleman yield?
    Mr. Grothman. --to Congressman Jordan.
    Mr. Jordan. I appreciate it.
    I would just--I'm just struck because no one seems to be 
able to give us an amount. We had a colleague ask, has it been 
increasing, the fees, the fines, the penalties, the 
settlements? Has that number been going up? We don't--the 
answer is, from our panel, we don't know. When asked the total 
amount in fees, fines, penalties, and settlements, the answer 
is, we don't know.
    Maybe the best way to get the information is to pass Mr. 
Palmer's legislation. Right? Because then we would know, 
because they got to all send it to the general fund, and we'll 
know what the amount--and with the appropriate amendments, Mr. 
Kohn, but we pass this bill, now we'll now. Right? Because now 
it'll be--that's the whole--that makes the point why Mr. 
Palmer's legislation is so darn good, because we'll know and 
then we'll know year to year if that number's going up or down.
    This is why this is such a common sense thing and so 
constitutional. And as Mr. Hollister said, States are doing 
this, they're transparent. In Ohio, we know what's happening 
with fees and fines and penalties and settlements. It's just 
the Federal Government we don't know. All the more reason to 
pass the legislation, then we'll know.
    I yield back.
    Mr. Meadows. I thank the gentleman.
    The gentleman's time from Wisconsin has expired.
    The gentleman from Alabama is recognized for 5 minutes.
    Mr. Palmer. Thank you, Mr. Chairman. And I want to thank 
all my colleagues for attending this hearing, and for the 
witnesses.
    And, Mr. Kohn, I want you to rest assured. I've read your 
testimony, and I actually called my chief of staff and told him 
that we needed to make sure that whistleblowers are compensated 
and that that's protected. So you can rest assured that we'll 
take care of that with a friendly amendment.
    I would like to ask Ms. Krause this question: Article I, 
section 9, clause 7, says, ``No money shall be drawn from the 
Treasury, but in consequence of appropriations made by law; and 
a regular statement and account of the receipts and 
expenditures of all public money shall be published from time 
to time.''
    Are fees collected by the Federal Government public money? 
That's not a hard question.
    Ms. Krause. No. I was going to turn it to my counsel.
    Mr. Palmer. Okay.
    Ms. Perez. Yes, sir. The fees that are collected by 
agencies under the authority of Congress are considered to be 
appropriated funds.
    Mr. Palmer. No. The question is are they public money?
    Ms. Perez. Yes, sir. They're considered to be public.
    Mr. Palmer. Okay. They belong to the public, not to any 
individual, not to any agency director. They belong to the 
public. Is that correct?
    Ms. Perez. Right. Appropriated funds----
    Mr. Palmer. How about fines?
    Ms. Perez. --is synonymous to public money, yes.
    Mr. Palmer. Fines? That would--would you answer in the 
affirmative on fines, that's public money?
    Ms. Perez. Yes. Unless Congress----
    Mr. Palmer. How about settlements?
    Ms. Perez. Unless Congress has specifically designated that 
they not be considered public or appropriated, they would be 
considered appropriated, yes.
    Mr. Palmer. Okay. And, I mean, settlements, revenues from 
the sale of government assets. That would be considered public 
money, wouldn't it?
    Ms. Perez. Any time Congress has designated sources of 
funding and said that----
    Mr. Palmer. Okay.
    Ms. Perez. --agencies can use them, those are considered--
--
    Mr. Palmer. All right.
    Ms. Perez. --public money, yes, sir.
    Mr. Palmer. Thank you.
    I just want to make the point that H.R. 5499 is not a 
radical proposal. It is consistent with the Constitution. It's 
a constitutional proposal. And as my colleagues on both sides 
of the aisle have acknowledged, it's the duty of Congress to 
direct spending and not the agencies. And H.R. 5499 is not only 
consistent with that principle and that constitutional 
requirement, it advances it. It advances that responsibility.
    All my bill does is--all H.R. 5499 says is that all fines, 
fees, settlements, all unappropriated revenues shall go to the 
Treasury identified with the agency where they originated 
subject to being appropriated by Congress. It doesn't in any 
way diminish the fact that an agency might have access to those 
fees, but what it does is it puts the responsibility back where 
it belongs. It restores oversight to Congress over the 
agencies, but more fundamentally, it restores accountability of 
Congress back to the people. And that's one of the main things 
that we've avoided over the years by delegating spending to 
agencies, whether it's through spending fees, fines, 
settlements. But we also are required by the Constitution to 
give a statement and account of all receipts and expenditures 
of all public money.
    And with all due respect to my--to the GAO and my 
colleagues, my friends there, and I have--I really like what 
the GAO does, you can't answer that question. You've been asked 
repeatedly and you can't give an answer to that.
    So I'm just--what H.R. 5499 does is it would require 
Congress to review the unappropriated spending, it would give 
us the accurate number of how much we're actually collecting. 
And it may be that some agencies would be authorized or 
reauthorized on spending some of these fees. I don't dispute 
the use that some of these fees are necessary, but the use of 
the funds should also be proper. And if Congress is not 
appropriating and not exercising oversight, whether or not it's 
necessary, it's not proper.
    So I just think on too many occasions, you know, agencies 
have circumvented the will of Congress and Congress has 
shielded itself from being held accountable by the public by 
allowing this to continue. And I think H.R. 5499 would hold the 
agencies accountable, but more fundamentally, it would make 
Congress accountable to the people.
    And I just think that the fact that we fail to pass 
appropriations bills does not diminish the fact that Congress 
is not exercising the oversight and the appropriation authority 
required by the Constitution, and that's what we're trying to 
reestablish here. Congress needs to be held accountable for the 
way the agencies operate. We need to exercise due diligence in 
our oversight. And if Congress can give the authority, it can 
take it away. But I believe H.R. 5499 is a reasonable step 
toward restoring constitutional oversight of our agencies and 
Congress being held accountable by the people.
    And I appreciate again your indulgence, Mr. Chairman, and 
for the committee holding this hearing, and I appreciate the 
witnesses' testimony. I yield back.
    Mr. Meadows. I thank the gentleman, and thank the gentleman 
for his interest in this important topic.
    The chair's going to recognize himself for a few questions, 
and then we'll be prepared to close with closing statements.
    So, Mr. Hollister, let me come back to you, because I think 
in your testimony, you indicated that the Department of 
Treasury actually has monthly statements where the total fines, 
fees, and settlements, I guess, as it relates to--it may not be 
able to be tracked back to the genesis of where it started, but 
there is a total number. Is that correct?
    Mr. Hollister. That's correct, sir. There is a total number 
and there are detailed tables. The trouble is it's a static 
document.
    Mr. Meadows. It's a what?
    Mr. Hollister. It's a static document. You can't----
    Mr. Meadows. Okay. A static document. And we know that your 
fine group is not static, right? One of the reasons why I get 
so excited about what you're doing is it adds a level of 
transparency where we'll be able to drill down and really start 
to look at it in a real meaningful way. Would you agree with 
that?
    Mr. Hollister. It ought to be interactive, sir.
    Mr. Meadows. So as we look at that, can you explain any 
reason why Treasury would not be able to give this committee, 
in response to a request that we made, the total amount of 
fines and penalties that they've collected? What would be a 
reasonable rationale for them not being able to give this to 
this committee?
    Mr. Hollister. My best suggestion, sir, would be that the 
Treasury Department tried to minimize the scope of the request, 
as leg affairs offices have been known to do--I've worked for 
the committee, I know how that works--and interpreted the 
request as a request for just the Treasury Department's own 
receipt of fines, fees, and settlements, which involves all 
sorts of----
    Mr. Meadows. So what you're saying is we have a failure to 
communicate?
    Mr. Hollister. Yes, sir.
    Mr. Meadows. So if we have a failure to communicate, I 
think it would be prudent for us to make sure that as a staff--
and they've already indicated they're going to reach out to 
Treasury to get this number, because as my colleague, the 
gentleman from Ohio, Mr. Jordan, mentioned, we're talking--it's 
starting to add up to real money here. We're talking about $600 
billion. Is that correct? Based on the testimony from the White 
House budget and the $83 billion that we got in a report, $600 
billion. Would you agree----
    How about this, Ms. Krause. Would you agree that $600 
billion is a large sum?
    Ms. Krause. That is a large sum.
    Mr. Meadows. All right. And being that the President-elect, 
Donald Trump, wants to spend $1 trillion on infrastructure, 
that gets us half the way there with fees, fines, and 
settlement, doesn't it? You don't have to answer that. I'll 
just leave it at that.
    But--and so as we go here, I guess I use the humorous 
example in one area that's not so humorous to me. So let me 
come back to GAO. MHS was mentioned earlier. And the reason why 
I drilled down on statute and what we can do with fines, fees, 
is because there is no guideline for MHS in terms of the fines 
that they may give and the scope of that. It depends on the 
individual inspector on what he would give.
    And what I was troubled with is--and I didn't know this 
because I was just a new Member of Congress going out to find 
out what was happening out there. And as I've recently found 
out, that actually there was an empty Coke can on a desk at a 
mining group, that they got a fine of well over $500 for having 
a Coke can sitting on their worktable. That happens in my 
office probably on a regular basis. So if MHS had come in and 
fined me, I would have had this unbelievable fine. And then I 
went up on the----
    Mr. Connolly. Wait a minute. Can we get the address of your 
office?
    Mr. Meadows. Yeah. Well, I'm sure it's in Rayburn, because 
you've got plenty of seniority.
    And so as we look at this, here's my concern. If we leave 
it up to a nonspecified, arbitrary fine and fee schedule, it's 
one thing to say, okay, a fee covers the cost of this 
particular thing and this is where we collect it and it goes, 
that's one issue. But the other is, the gentleman from Ohio 
pointed out, on the settlement and the fines, that's a number 
that could go up or down based on no particular criteria. Would 
you agree with that? How many of the agencies have a defined, 
if you do X, it's going--the fine is Y?
    Ms. Perez. I don't know the absolute number.
    Mr. Meadows. Does the EPA have that?
    Ms. Perez. I don't know specifically.
    Mr. Meadows. I know the answer, but, I mean, do they have, 
if you violate a particular rule, that it always--the fine is 
always a set amount? In your experience, would you say that 
there is--that you could make an analysis that is linear in 
terms of their fee and fine structure?
    Ms. Perez. I don't know that we could, sir.
    Mr. Meadows. Okay. So here's what I would ask of each one 
of you. We would ask each of you to report to this committee, 
if you can, three recommendations on what you would like to 
see. And if you would get back to this committee. And that 
might even include looking at the particular piece of 
legislation and problems that you may have with that 
legislation that may not fulfill the intended consequence.
    Mr. Kohn, I'm sure you can weigh in on that. There's a 
couple of others that the ranking member and I have talked 
about. But three recommendations that we have.
    Here is the other question that I would ask for you, is to 
prepare at least two questions that we can ask OMB, the IRS, 
and Department of Treasury when we have the follow-up hearing 
for them to be able to hopefully illuminate on some of these 
unanswered questions. Because you would think if any group 
would have a proper accounting of what's coming in and what's 
going out and where it's coming from, it would be OMB, 
Treasury, and the IRS. Would you all agree with that?
    Mr. Hollister. Yes, sir.
    Mr. Meadows. Most of you are nodding your head yes, and so 
let the record reflect that all witnesses answered in the 
affirmative.
    And so as we go with that, I just want to thank you. I'm 
going to recognize the gentleman from Virginia for his closing 
statement.
    Mr. Connolly. I thank the chair. And it's an intriguing 
hearing. And I thank our colleague from Alabama for really 
bringing before us, I think, a very legitimate issue, worthy of 
much further examination.
    I guess I'd make three points. One is, we talked about the 
Constitution and the role of Congress and the power of the 
purse. There has been no court ruling, that I'm aware of, in 
the history of the Republic that has challenged or questioned 
the constitutionality of Congress's right to delegate those 
authorities. So the fees and settlements and penalties in 
question so far apparently pass constitutional muster. So 
that's not the issue. The issue is, has it gone too far? Is it 
de facto creating a situation where we're not doing our job? 
And if so, what's the remedy?
    What we have not examined here today, which you've heard me 
pursue, is, okay, what are the downsides? What are the 
consequences? If you cut off the TVA's ability to collect fees, 
what does it do to the mission of the TVA and the people it 
serves? And is that minor, is it trivial, is it easily 
correctable, or is it something much more serious and 
significant that we have to contemplate, we have to take 
responsibility for?
    And, finally, I think we're putting a lot of faith in our 
own appropriations process. The fact of the matter is Congress 
is derelict in its duty, not so much by delegation of these 
fees and collections, but in our inability, frankly, to pass a 
normal appropriations process. And that's a bipartisan 
dereliction of duty. I worked in the Congress in the Reagan 
administration, and I can remember Ronald Reagan putting a big 
stack of papers, which was the omnibus funding bill that year, 
and talk about how shameful it was. That was over 30 years ago, 
and we do more of it and that stack of paper would be even 
bigger today.
    To assume that we're going to take on more responsibility 
by proving every whistleblower payment or every settlement 
agreement or every fee to be charged, to me is maybe something 
that constitutes a noble goal, but it is not something that's 
practical in this Congress or any future Congress, given our 
past record of performance in that regard.
    So I think there's a lot we have to think through before we 
act on this bill, but I do thank our colleague from Alabama for 
whetting our appetite and forcing us to deal with this subject, 
and I look forward to further investigation. And, Mr. Chairman, 
thank you for this hearing.
    Mr. Meadows. I thank the gentleman.
    The chair recognizes the gentleman from Ohio for his 
closing statement.
    Mr. Jordan. I thank the chairman.
    I just wanted to respond briefly to the ranking member, our 
good friend from Virginia. He talked about no court case has 
said Congress cannot delegate, that's accurate, but there was a 
court case in 1976, United States versus McCollum, which said 
the Supreme Court has repeatedly affirmed, quote, ``The 
established rule is that the expenditure of public funds is 
proper only when authorized by Congress, not that public funds 
may be expended unless prohibited by Congress.''
    So it's not a passive, it's an active role that Congress is 
supposed to play in this effort.
    Never forget what happens here. We have three categories: 
Fees, fines and penalties, and settlements. No one could tell 
us what the total amount is. But we do know that the fees, 
according to the White House, just that alone is $534 billion, 
roughly half of what we spent in discretionary spending last 
year. We know fines and penalties is $83 billion over 5 years, 
and that excludes Treasury and the IRS. So we know that's a 
substantial number. And we know settlements just at DOJ is in 
the millions and millions of dollars, what they've required 
companies to pay, and not only pay to the DOJ but to pay to 
some favorite nonprofits that the DOJ recommends that they give 
a, quote, donation to.
    So that's why what the chairman said just a few minutes ago 
is so important, that we get OMB in here, that we get Treasury 
in here, someone from the IRS, who can answer our questions. 
That's plain and simple.
    And it, again, underscores, as I said earlier, why Mr. 
Palmer's legislation--maybe it needs some amendments, I haven't 
seen many bills that come in front of Congress that don't need 
some changing--but why it's so important and so valuable.
    Maybe we also need the inspector general, Mr. Chairman, the 
inspector general from Justice Department to come in here and 
explain to us how this settlement game works when DOJ shakes 
down some companies. I'd like to know that too.
    So this is an important subject. I want to commend the 
chairman for having this hearing, and I particularly want to 
commend the gentleman from Alabama for bringing this 
legislation. This is something we need to pursue. We need to 
make sure this bill gets done, gets passed, becomes law, 
because, like I said, if no one else will give us the number, 
when we pass the bill, we'll get the number, and that will help 
the taxpayers.
    So with that, I yield back, Mr. Chairman.
    Mr. Meadows. I thank the gentleman.
    I want to mention, the ranking member and I just had a 
conversation, and so we will be sending a bipartisan letter to 
request that information of Treasury. And so hopefully we'll 
get a little bit more specificity on that particular item.
    And I want to close by saying this: One, thank you all for 
your interest in transparency, for your interest in this 
particular subject.
    Mr. Kohn, thank you for your support of whistleblowers, 
specifically. It is a critical nature. Your graphs were very 
illuminating, and certainly we don't want to go backwards 
there. And I can tell you that I for one am committed to make 
sure we don't go backwards on that issue. I believe Mr. Palmer 
agrees with me on that particular item as well.
    For my friends at GAO, the follow-up hearing that we will 
be having, I would ask that you just be prepared, because 
you're going to be part of that, because the fourth leg of that 
chair needs to be GAO and what we have and have not been able 
to acquire. And so as we look at that, I just want to thank all 
of you for your interest.
    And if there is no further business before the 
subcommittees, they stand adjourned.
    [Whereupon, at 3:46 p.m., the subcommittees were 
adjourned.]

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