[Senate Hearing 114-674]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 114-674

     GOVERNMENT REFORM: ENDING DUPLICATION AND HOLDING WASHINGTON 
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=======================================================================

                                 HEARING

                               BEFORE THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS


                             SECOND SESSION

                               __________

                             APRIL 27, 2016

                               __________

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                  Christopher R. Hixon, Staff Director
        Patrick J. Bailey Chief Counsel for Governmental Affairs
                    Daniel P. Lips, Policy Director
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
         Brian F. Papp, Jr., Minority Professional Staff Member
 Katherine C. Sybenga, Minority Chief Counsel for Governmental Affairs
                     Laura W. Kilbride, Chief Clerk
                   Benjamin C. Grazda, Hearing Clerk
                            
                            
                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Johnson..............................................     1
    Senator Carper...............................................     7
    Senator Lankford.............................................    10
Prepared statements:
    Senator Johnson..............................................    25
    Senator Carper...............................................    27

                                WITNESS
                       Wednesday, April 27, 2016

Hon. Eugene L. Dodaro, Comptroller General of the United States, 
  U.S. Government Accountability Office..........................     2
Hon. Tom Coburn, M.D., Former U.S. Senator from the State of 
  Oklahoma.......................................................     4

                     Alphabetical List of Witnesses

Coburn, M.D. Hon. Tom:
    Testimony....................................................     4
    Prepared statement...........................................    67
Dodaro, Hon. Eugene L.:
    Testimony....................................................     2
    Prepared statement...........................................    29

                                APPENDIX

Recommendations submitted by Mr. Dodaro..........................    66
Statement submitted by Consortium for Citizens with Disabilities 
  (CCD)..........................................................    71
Response to post-hearing questions for the Record:
    Mr. Dodaro...................................................    77

 
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                       WEDNESDAY, APRIL 27, 2016

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 11:04 a.m., in 
room 342, Dirksen Senate Office Building, Hon. Ron Johnson, 
Chairman of the Committee, presiding.
    Present: Senators Johnson, Portman, Lankford, Ayotte, 
Ernst, Carper, Tester, and Heitkamp.

             OPENING STATEMENT OF CHAIRMAN JOHNSON

    Chairman Johnson. Good morning. This hearing will come to 
order.
    It is nice to see the reunion of two good friends--two 
individuals who have working together, really done some, pretty 
extraordinary work with a pretty simple concept--a pretty 
simple idea. Let 
us get some information on the Federal Government. Coming 
from a manufacturing background, certainly, just using what is 
in my deoxyribonucleic acid (DNA): analyzing the root cause, 
trying to find areas of agreement, and striving for continuous 
improvement. And, from my standpoint, that is what this 
Duplication Report has been all about.
    The history of it is really quite interesting. I will let 
Dr. Coburn really tell the history of that. I do not want to 
steal either of your thunder. But, I think it has been 
remarkable. This simple concept that is just basic to 
business--having information measuring results--was pretty 
foreign to the Federal Government and, since implemented, it is 
having some dramatic results. And, of course, it was also 
carried out in a completely bipartisan fashion, which is what 
this Committee is all about.
    But, again, without stealing too much thunder, the 
Duplication Report has saved the Federal Government about $56 
billion over the last 5 years. If the programs that are 
currently being implemented continue, over the next 10 years, 
you are estimating it will save about $69 billion, 
additionally. Thirty-four of your recommendations have been 
partially implemented. Twenty percent have been unaddressed. 
So, if those are fully implemented and addressed, who knows how 
many additional billions of dollars can be saved.
    I mean, my hat is off to both of you gentlemen for really 
doing the hard work of conducting the oversight, developing the 
reports, and getting the information the government truly needs 
if we are going to really solve these problems.
    I will have some other things to say. I have an opening 
statement that I will ask to be entered for the record.\1\
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator Johnson appears in the 
Appendix on page 25.
---------------------------------------------------------------------------
    But, what I would rather do, because we are going to be 
broken up--this hearing will be suspended for votes at noon--I 
would rather just get into your testimony and then wait for 
Senator Carper to give his opening statement and ask questions.
    It is the tradition of this Committee to swear the 
witnesses in, so if you will both rise and raise your right 
hand.
    Do you swear the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Dr. Coburn. I do.
    Mr. Dodaro. I do.
    Chairman Johnson. Please be seated.
    I think we will switch the order of testimony here and we 
will start with Mr. Gene Dodaro, who has been the Comptroller 
General of the U.S. Government Accountability Office (GAO) 
since 2010. He has more than 40 years of experience at the 
agency, including as Acting Comptroller General, Chief 
Operating Officer (COO), and the head of the Accounting and 
Information Management Division. Mr. Dodaro.

  TESTIMONY OF THE HONORABLE EUGENE L. DODARO,\2\ COMPTROLLER 
 GENERAL OF THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY 
                             OFFICE

    Mr. Dodaro. Thank you very much, Mr. Chairman. Good morning 
to you and Senator Ayotte. I am very pleased to be here today 
to discuss GAO's most recent report on overlap, duplication, 
and fragmentation in the Federal Government and on additional 
opportunities to achieve other financial benefits.
---------------------------------------------------------------------------
    \2\ The prepared statement of Mr. Dodaro appears in the Appendix on 
page 29.
---------------------------------------------------------------------------
    I am especially pleased to be here today with Dr. Coburn. I 
want to publicly thank him for his vision and his intense 
interest in our work at the GAO.
    This is our sixth annual report. We have 92 new actions 
that we are suggesting in 37 different areas across the Federal 
Government. I think they can result in significant savings.
    Some examples include consolidating the Department of 
Defense's (DOD's) fragmented procurement of commercial 
satellite services, which could save tens of millions of 
dollars.
    Also, streamlining and automating the approximately nine 
different overlapping systems that the Internal Revenue Service 
(IRS) has to receive tips on noncompliance would result in 
additional revenues coming to the government and a more 
streamlined system for people to provide input.
    Another example is better managing and overseeing an effort 
at the Department of Homeland Security (DHS) to revamp their 
human resource management systems. Right now, there are over 
400 human resource systems and applications underway at DHS.
    By eliminating the potential for overlapping coverage 
between individuals moving between Medicaid and the exchanges, 
the risk of potential duplicative payments could be reduced.
    There are also other efforts that we suggest that could 
have tremendous cost savings. For example, reducing the 
overpayments in disability insurance and the improper waivers 
that occur could save billions of dollars.
    Also, equalizing certain Medicare payments could produce 
savings. Providers receive Medicare payments at a higher rate 
for certain services if patients received them at a hospital as 
opposed to at a doctor's office. We think that, if you could 
equalize those rates, billions could be saved.
    Also, by giving Federal civilian Agencies the opportunity 
to obtain excess personal property from DOD as well as excess 
ammunition, which currently goes, in some cases, to State and 
local governments, first, before Federal civilian Agencies. In 
addition, DOD spends a lot of money--$118 million last year--to 
dispose of excess ammunition, which could be provided to 
Federal civilian Agencies.
    Raising some of the fees at the National Park Service (NPS) 
would generate additional revenue. One fee in particular has 
not been raised for over 20 years and we need additional funds 
to provide service to our parks. That could result in millions 
of additional dollars.
    So, with these 92 recommendations, this year, we have a 
total of over 600. There had been 544 previous recommendations. 
Forty-one percent have been implemented, 34 percent have been 
partially implemented, and 20 percent have not been implemented 
at all. We think there are opportunities, as you mentioned, Mr. 
Chairman, for tens of billions of dollars in additional 
savings, if those recommendations are fully implemented.
    To provide a service to the Congress, this year, in 
Appendix 1 of my written statement, we have listed all of the 
61 areas that require Congress to act in order for our 
recommendations to take effect. In these cases, we have 
identified how much money--if we know--could be saved. We 
think, if Congress acted on these areas, it could result in 
significant savings and also improve operations in the 
government.
    We have also listed in our report and testimony all of 
those actions that still need to be implemented by the 
Executive Departments and Agencies.
    I would note that, so far, most of the larger savings have 
come from the Congress taking action. I would encourage you to 
look carefully at the recommendations in our Appendix. I think 
that they are very good, sound ways to save money and, 
therefore, help the Federal budget stay under the sequester 
limits. We have tried to identify smart cuts that will not have 
unintended negative consequences.
    Going forward in doing this work, I have one request of 
this Committee. Senators Sasse and Tester have introduced a 
bill that would give us access to the National Directory of New 
Hires (NDNH), which is a database maintained by the Department 
of Health and Human Services (HHS) that has up-to-date 
information on employment and wages. This information would 
help us to evaluate means-tested programs across the Federal 
Government. I am sure Dr. Coburn is very familiar with this. He 
has helped us, in the past, to gain some access. We believe we 
have the authority to access it, but HHS does not agree with 
us--and so, Congress clarifying this could save a lot of money. 
There are hundreds of billions of dollars every year that are 
spent on these means-tested programs and having this 
information would be extremely helpful.
    So, I look forward to responding to your questions at the 
appropriate time this morning. Again, I am very pleased to be 
here with Dr. Coburn and I am happy to participate in this 
hearing. I look forward to a good continued relationship with 
this Committee.
    Chairman Johnson. Thank you, General Dodaro.
    By the way, I just cosponsored that piece of legislation 
and I kind of want to wait to talk about a piece of legislation 
we are trying to put together--15 bills that might be a really 
good addition and then, have the 16th to actually get it 
passed.
    Our next witness is Dr. Coburn. It is great to see you 
here. It is great to see you in good health. Dr. Coburn is a 
former Senator from the State of Oklahoma, who served from 2005 
to 2014. Dr. Coburn's time in the Senate was marked by his 
leadership in the fight to reduce wasteful Washington spending 
as well as to increase accountability and transparency for the 
taxpayer. Dr. Coburn was the Ranking Member of this Committee 
for 2 years. Previously, he represented Oklahoma's Second 
Congressional District in the U.S. House of Representatives 
from 1995 to 2001. Dr. Coburn.

  TESTIMONY OF THE HONORABLE TOM COBURN, M.D.,\1\ FORMER U.S. 
               SENATOR FROM THE STATE OF OKLAHOMA

    Dr. Coburn. Well, thank you, Mr. Chairman--and for Ranking 
Member Carper, I will recognize him when he comes.
---------------------------------------------------------------------------
    \1\ The prepared statement of Dr. Coburn appears in the Appendix on 
page 67.
---------------------------------------------------------------------------
    It is a real honor and a privilege to sit next to Gene 
Dodaro. When you see Gene Dodaro, you need to remember all of 
the people behind him, because we have these great 
investigators--these great people who work for GAO that are out 
there to help us do what we need to do. And, you cannot mention 
GAO without mentioning the Inspectors General (IGs), because 
they also are out there to help us do that.
    And, I think it is great that you are having this hearing. 
I would just like to tell you a little of my background. This 
last year, in 2015, I spent my time in 21 different States. I 
was in Ohio last week, by the way. And, America does not trust 
you anymore--that is the truth--because they do not see the 
actions coming out of Congress that should be coming out. And, 
that does not mean 
that they are right all of the time, but you have lost their 
confidence--and that is not one party--that is both parties.
    And so, when you have hundreds of billions of dollars that 
could be saved and are not being saved--and they know it--they 
actually read your reports, Gene. They actually get online, and 
then, they use social media to pass them around.
    The important thing is to restore the confidence in the 
country, in terms of what you are doing, why you are doing it, 
and how you are doing it. And, I found this Committee to be one 
of the best Committees in Congress. That is why I stayed here 
my entire time. When I first came, the Republicans were in the 
Majority and I sat on the Subcommittee on Federal Financial 
Management (FFM). This Committee has a broader jurisdiction 
than any Committee in the Senate. You have the capability to 
change things and to make a real difference. And, historically, 
this Committee has been a bipartisan Committee. It has been one 
where we have worked together for the best interest and the 
long-term interest of the country.
    I will just give you a reminder that, right now, the 
unfunded liabilities of this country, with its debt, are $142 
trillion. That is one million dollars per family--or that is 
one million dollars per taxpayer--either way that you break it 
down. Nobody knows what a trillion is, but, when you are 
telling a young family with two small kids that, ``By the way, 
here is the debt burden that is coming to you over the next 25 
years,'' you had better be prepared for it.
    The other point that I would make to you is that the 
standard of living in this country--although increased--the 
median family income is exactly the same as it was in 1988--and 
there are reasons for that. And, the reasons for it are too 
much government, too intrusive a government, and too many 
questions by government.
    I wanted to read for you all something that was written a 
long time ago, but, I think, it is very apropos to where we are 

today--and it is not mine. I am copying this. I am going to 
quote it. But, it is a quote by Alexis de Tocqueville. It is 
from his ``Democracy in America.'' Some of you may have read it 
and some of you may not have. But, it tells me where we are, 
today, in our country. And, having been in 21 States last year 
and 15, already, this year, what I am hearing--I am hearing 
what Tocqueville described back in the late 1700s--early 1800s.
    ``I think, then, that the species of oppression by which 
democratic nations are menaced is unlike anything ever that 
before existed in the world [. . .] The supreme power then 
extends its arm over the whole community. It covers the surface 
of society with a network of small, complicated rules, minute 
and uniform, through which the most original minds and the most 
energetic characters cannot penetrate, to rise above the crowd. 
The will of man is not shattered, but softened, bent, and 
guided. Men are seldom forced by it to act, but they are 
constantly restrained from acting. Such a power does not 
destroy, but it prevents existence. It does not tyrannize, but 
it compresses, enervates, extinguishes, and stupefies a people 
until each nation is reduced to nothing better than a flock of 
timid and industrious animals, of which the government is the 
shepherd.''
    That, to me--in my experience--that is my opinion--is where 
we are, today, in our country. I think that is why you see the 
kind of Presidential race that we are seeing.
    And so, the question is: where is the smart government? 
And, if there is going to be smart government, this Committee 
is going to have to be the one that leads on this. This is the 
Committee that has the authority to do that. This is the 
Committee that has the bipartisan relationships that can do 
that.
    So, what I would suggest to you is that there is tons to be 

done--even in an election year--that can make a great 
difference. The history with Gene came after my bipartisan work 
with then Senator Barack Obama, Senator Tom Carper, and several 
others on the Federal Funding Accountability and Transparency 
Act of 2006 (FFATA).
    And, just to show you how the American people get this, 
there is a little application out there right now that, in 
another 3 years, will show every dollar spent by every State, 
by every county, and by the Federal Government--and you can go 
to it in an app. It is called ``Open the Books.'' And, I can 
tell my farmer friends how much money they got from the 
Department of Agriculture (USDA) last year and it drives them 
nuts.
    But, transparency is great for our country--and that is 
what we need. And, we need the transparency. America is 
interested in what is going on with our country. Americans are 
not just sitting back. They want us to proceed to continue to 
perform and deliver freedom and liberty. And, they see that 
liberty at risk. They also see the rule of law at risk. They 
see more of ``ruler of rulers'' coming out of Washington than 
rule of law.
    I think the thing that happened was, we started looking at 
duplication within my own staff on this Committee--and what we 
found was we really could not do it. So, we went to GAO and 
they really did not want to do it, initially. So, we passed an 
amendment, in 2010, on the debt limit increase, which mandated 
that GAO would do this--and they have done a fine job every 
year.
    What has not happened--even though Gene gives the Congress 
some credit--there are multiple recommendations in there that 
will save billions and billions and billions of dollars every 
year that you have not acted on--that this Committee could act 
on. And so, he is very kind to say that the Congress is better 
than the Executive Branch, but there is still $400 billion that 
should not be being spent by the Federal Government every year, 
when you include duplication, waste, and fraud. And, most of 
that falls under the jurisdiction of this Committee.
    So, to have a 4-year plan, where we could knock $100 
billion a year out of the Federal Government, would go a long 
way toward solving our problems. If you look at the 
Congressional Budget Office's (CBO's) projections and the 
Office of Management and Budget's (OMB's) projections, you are 
going to be back at trillion-dollar deficit levels very soon, 
right? And, you are adding about $6.5 trillion a year in 
unfunded liabilities. So, these are real problems that you all 
have the capability to address and I came here to encourage you 
to do that.
    I would also tell you that there is another movement afoot 
in the country and that is to force you to do it--and that is 
being done through a Convention of States--and two have passed 
this last week. We are at ten. And, it will not be long until 
we meet the 34-State requirement--and we will have a Convention 
of States and then we will make recommendations to the States--
one on a balanced budget amendment using Generally Accepted 
Accounting Principles (GAAP), with very little wiggle room, 
which will force you to do it. It will give Congress the 
backbone to do what they should be doing in the first place. 
And, also there will be limitations in scope on jurisdiction.
    And, you are going to see that coming forward. That now has 
1,700,000 activists following it every day--involved in it--
there are 650,000 actually working at State capitols around 
this country--and we will see a change in our country as that 
gets closer. And, one of two things will happen. We will either 
have a Convention of States or you all will change this. But, 
one of those two things is going to happen. And, the American 
people want it to happen, because they actually sense that 
things are out of control in our country.
    This Committee has been a great Committee. You have done 
more work--great work--than many of the other Committees. You 
have the ability to do more and greater things. And, my charge 
to you would be to look at where the opportunities are and to 
throw the politics aside.
    Here is what I have discovered. All of this waste, all of 
this duplication, and all of this fraud has a constituency--and 
so, a lot of people do not want to take a vote to eliminate it, 
because it will offend a group of voters or a group of 
contributors. I think you ought to offend them all and I think 
you ought to do what is right.
    I will close by paraphrasing very quickly--and this is a 
paraphrase, it is not exactly what he said. But, this is the 
way he said it in a way that I can understand it. Martin Luther 
King said the following: Vanity asks the question, ``Is it 
popular? '' Cowardice asks the question, ``Is it expedient? '' 
But, conscience asks the question, ``Is it right? ''
    You all have the ability to do the right thing and the best 
thing for our country. My hope is that you will do it. Thank 
you.
    Chairman Johnson. Thank you, Dr. Coburn. And, again, we 
know you both well, so it is going to be Tom and Gene from here 
on out--at least from my Chair.
    Senator Carper, would you like to make a statement or 
should we----

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. I would just like to say welcome. I had a 
chance to visit a little bit with Dr. Coburn before the 
Committee started. I apologize for being late. As you know, I 
had an emergency caucus meeting and I needed to be there.
    I just want to say that two of my favorite people on the 
planet are here--and they are two of the smartest, wisest 
people that I know. And, it is just great to see you and to see 
you well. And, Gene, we are just grateful for your leadership 
and all that you do to help us do our jobs better. Thank you.
    Chairman Johnson. So, Tom, let me start by asking some 
questions, just in terms of the duplication report, which, from 
my standpoint, started a process. I am from the manufacturing 
sector. In order to have a good product, you have to have a 
good process. And, we can describe that in greater detail, but 
I want to go back to what you were talking about, in terms of 
forcing change--about a constitutional amendment that will 
force the change. I mean, that is a process that we have to put 
in place before Congress is going to act. Try and kind of speak 
to that point a little bit, if you will.
    Dr. Coburn. Well, I guess that one of the things the 
American people are asking--quite frankly, is that, if you have 
an oath, why do we have to have a constitutional amendment in 
order for Congress to do what is best for the country? And, 
they have decided that Congress cannot do what is best for the 
country, so they are going to do it, themselves, under the 
authority of the Constitution.
    In other words, the Constitution, actually, is the powerful 
tool with which to solve the problems of our country. It is big 
enough to solve the problems. And, the partisanship and the 
politics kind of move away when we start asking, ``Why do we 
want a balanced budget? Is there a reason? '' In other words, 
is it impossible to look at mandatory spending today--
discretionary spending today--and what our needs are for the 
country and get to a balanced budget? And, the answer is: 
absolutely not. It is absolutely not, if you actually go in and 
look at where things are.
    In my mind, the question is--and my advice to the Committee 
is to look at the roles that the Federal Government has taken 
over that would be better and more efficiently done at the 
State level, because you will find you can get the same results 
for a whole lot less money and have all sorts of different, 
better results than when the Federal Government does it.
    Now, I know I am an advocate for small government and I can 
understand that that can be pooh-poohed up here, but when 
you just test it, look at how things work, and look around the 
States--this is obviously true.
    Chairman Johnson. A big part of the problem--and you know 
this--is that two-thirds of the Federal budget is on automatic 
pilot. It is in law. If you qualify for benefits, you get them. 
We keep expanding the eligibility. And so, unless you are able 
to pass another law--and that is what has been impossible to do 
here--to actually rein in--first of all, put everything on the 
budget--put it in an appropriation process, so that every year, 
you have to actually vote on all of the appropriations. That is 
not happening today----
    Dr. Coburn. Well, I think there are two answers----
    Chairman Johnson [continuing]. And, it is part of the 
reason you need some kind of process constraint to force those 
laws to be changed.
    Dr. Coburn. Well, for example, as a Social Security 
recipient, I get an increase when there is a certain amount of 
inflation. Where are the tax dollars to pay for that? So, what 
ought to happen is that, if we are going to continue to have 
the kind of benefits that we have and we are not going to 
change the programs, we at least ought to provide the revenue 
source to pay for them.
    The second thing is--and Gene mentioned this in his talk--
in terms of disability. There is no doubt in my mind--I am a 
hundred percent sure--that one out of every three people 
collecting disability in this country is not disabled. And yet, 
when they make an error, they forgive the money rather than 
asking for it back. Or, a Congressman goes over and jawbones 
because he controls the Social Security Administration's 
(SSA's) budget and says, ``No, you will keep them on it until 
you prove they are not eligible.''
    But, that just shows you the state that oversight is in, 
because that started, in this Committee, with Senator Carl 
Levin and myself doing an oversight investigation. The three 
key actors in that have now been indicted by a Federal grand 
jury and, I presume, will go to jail and spend a long time 
there.
    The question is: did we learn anything from that? Did we 
change Social Security management? No. So, you have done the 
oversight, but, if you do not act on the information gathered 
during the oversight investigation, then you have not 
accomplished anything.
    Chairman Johnson. And, that is my point. We are going to 
have to put the processes in place to force action. Otherwise, 
we do not act.
    Gene, you talked about some of these things having been 
implemented. Give us the best example of an implementation of 
your recommendation and how it occurred, so we can learn from 
that example of best practice.
    Mr. Dodaro. In the first year of this report, we identified 
the fact that there was duplication between the ethanol tax 
credit that was in place and the Renewable Fuel Standard (RFS) 
program. We said the ethanol tax credit was duplicative and 
Congress let that expire. That was a big change. People had 
been advocating that for a long time.
    For another example, after the attacks on September 11, 
2001 (9/11), the airlines and the traveling public were 
supposed to pay for the increased security, but Congress capped 
the aviation security fees. We had an open recommendation for 
several years that Congress allow the fees to increase, so that 
customers, rather 
than taxpayers--and rather than having Congress borrow the 
money--would bear the cost. Congress passed that increase and 
about $128 billion was saved, over 10 years.
    Congress also saved almost $5 billion per year by 
eliminating direct payments to farmers.
    But, I would just say, in terms of the fiscal condition, we 

are on an unsustainable fiscal path. Every part of the Federal 
budget--mandatory spending and discretionary spending--needs to 
be looked at--as well as the revenue side of government and tax 
expenditures.
    We also have a very ineffective way to control our debt. 
The debt ceiling, as it is designed right now, is totally an 
after the fact consideration. We have already authorized all of 
the spending. Raising the debt ceiling just authorizes the 
Department of the Treasury to borrow to cover the spending that 
was already authorized. I have recommended we change that by 
linking decisions about spending and revenue to decisions about 
the debt limit when they are made. Congress ought to have some 
reasonable limit as a percent of the Gross Domestic Product 
(GDP). Unless we do that, you are going to have problems, 
especially if the interest rates continue to climb. If that 
happens, the service costs on that debt are going to skyrocket. 
The only thing that has been saving us so far are the low 
interest rates on borrowing an incredible amount of money.
    Chairman Johnson. So, the lesson I am learning from the 
examples you threw out there is, first of all, you have to 
highlight it and get the public to be aware of it in order to 
really force the politicians--the elected officials--to 
actually act on it, because, if you do not shine the light of 
day on it, nobody is going to know and this place is just going 
to continue on automatic pilot.
    Let me, in my last moments here, talk a little bit about 
one piece of legislation we are trying to put together and that 
Majority 
Leader McConnell is completely supportive of. It is actually 15 
bills--maybe 16 bills--that have broad bipartisan support, are, 
generally, based on GAO's recommendations, and are things that 
have been passed through our Committee, unanimously, in a 
bipartisan fashion. I mean, I could list off the cosponsors, 
but just about--I know every Senator on this Committee has 
supported these. I know a lot of Members of the Senate have 
supported these pieces of legislation. So, hopefully, we can 
get bipartisan support. We have not been able to pass these 
through unanimous consent (UC). Somebody would object. This is 
something that could actually get floor time, so I am certainly 
hoping that Senator Carper will be supportive of this.
    We have not given it a name yet. We do not have the right 
acronym. But, it is really a group of 15--maybe 16--pieces of 
legislation that implement the recommendations of GAO. It is 
good government. It is moving. It is continuous improvement. It 
is not a ``be all, end all.'' It is not going to solve the 
entire problem. But, just like with the Duplication Report, you 
start here and you start making progress. And, again, that is 
just kind of my manufacturing background at work. I will work 
toward continuous improvement. If you do it over enough years, 
pretty soon, you can look back and go, ``Hey, we made some real 
progress.''
    With that, Senator Carper.
    Senator Carper. Let me pass right now. I have delayed this 
hearing long enough. Let me pass. I will ask some questions 
later. Thank you.
    Chairman Johnson. Senator Lankford.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. Thank you, Mr. Chairman.
    Dr. Coburn and Gene, thank you for being here and thank you 
for all of the work. And, thank you for the legacy that you 
left, Dr. Coburn. I have the opportunity to walk in a long 
shadow and I am glad to be able to walk through that as well.
    For Gene, what you have done as well as the work and your 
team has been remarkable, to say the least--and you have been 
able to pull a lot of things together.
    You and I spoke last year about the possibility of taking 
the lists as they exist--rather than having a large list--and 
breaking them out, in terms of what is Congressional, what are 
Administrative responsibilities, and so that it can be clearly 
identified as to who has what. You have done that this year and 
I appreciate that, as well, because that does allow us to be 
able to say, ``This is our list. This is our `to-do list'.'' It 
moves from a big list to a big list that is, specifically, one 
with our name on it--and so, that is very helpful in the 
process, as well, to help to identify those things.
    Dr. Coburn, I would have to tell you that I get asked often 
about the work that you did while you were here and while you 
sat on this dais. And, people will say to me, ``You did a lot 
of things, said a lot of things, and made a lot of speeches. 
What really changed? '' I, typically, take them back to this--
to the work on duplication and this specific report--to be able 
to identify, ``Here are the things that really made a 
difference--and it is a difference in the billions of 
dollars.'' Not only the Administration can see it, the people 
can see it. And, Congress can choose to act on it or choose to 
be exposed when they do not. It does make a tremendous 
difference in the days ahead and I hope we can continue that.
    While you were on the Senate side, I was on the House side. 
We were both working on a bill called the Taxpayers Right-to-
Know Act. That has moved significantly. It moved through the 
House while I was there. It stalled here in the Senate. It has 
now moved completely through the House again--413 to 0 this 
time. We have a version that we have worked through here, in a 
bipartisan way, and it is being held up by a single member. We 
feel like that is at the behest of OMB.
    It was interesting, Gene, when you brought up a lot of your 
questions--in your statements to OMB--on why they have not 
reacted to some of the transparency, they referred over and 
over again to the idea that they anticipate the Taxpayers Right 
to Know Act to pass. And, when it passes, then they will 
actually take on these things--but they are not going to do 
them until it passes.
    We also believe that OMB is helping the charge to not move 
it here, for whatever reason. Part of that may be the program 
thresholds. Currently, the program threshold is one million 
dollars. For every program that is greater than one million 
dollars, we have to have a list.
    Gene, when you and I, in 2013, had an interchange about 
this same issue, trying to identify--based on the Digital 
Accountability and Transparency Act of 2014 (DATA Act) and 
other things that are out there--what information we do have 
and what information we do not have. We determined, at that 
time, even in our conversation, a number of things we do not 
have. We do not have a list of every program, how much is spent 
on a particular program, if a program is evaluated at all, what 
was the evaluation of that program, or how many full-time 
employees are dedicated to a particular program--just a simple, 
straightforward list that every business in America has. Every 
one of them has some kind of tracking on that. We do not have 
that in the Federal Government.
    So, we go to GAO to do this large-scale report, when that 
information should be something that every watchdog group is 
able to have out on a list and also should be on an app that is 
publicly available, so you can clearly see it. But, right now, 
that cannot be done, because we do not have that.
    So, let me just come to a question on that. The $1 million 
threshold, compared to a $10 million threshold, what does that 
do for program transparency and uncovering the number of 
programs that may be duplicative that you cannot see?
    Mr. Dodaro. I think the one million dollar threshold is a 
reasonable request by Congress. There could still be some 
implementation problems, largely because OMB has not defined 
programs. That requirement has been in place for a long time 
under the Government Performance and Results Act (GPRA) 
Modernization Act. They punted that to the DATA Act. They are 
supposed to do it under the DATA Act. That is not being done.
    So, I think there is a lot of confusion right now, because 
there is not a definition of program. I think there are more 
than one thousand programs in the Catalog of Federal Domestic 
Assistance (CFDA) that have budgets that are between $1 million 
and $10 million. You need to have that visibility added into 
those programs. You need to have that transparency. Federal 
Agencies and OMB may have some difficulties in implementation, 
but I think you have to move in that direction if you really 
want to have a clear, transparent, and accountable government.
    Senator Lankford. So, you are basically not going to see a 
thousand programs--or more--unless you have that definitional 
change.
    Mr. Dodaro. There is a good possibility of that, yes.
    Senator Lankford. OK. Let me ask you about the NDNH.
    Well, actually, let me pause before we do that. Dr. Coburn, 
do you have any comments you want to make on the Taxpayers 
Right to Know Act? You worked very hard on this for the Senate 
for a long time.
    Dr. Coburn. I would just say that if, in fact, OMB is the 
hold-up with it, it is the same thing we heard on the DATA 
Act--that it is too hard to implement.
    Senator Lankford. Right.
    Dr. Coburn. It costs too much money. Well, what they found 
out was that it was a little hard to implement, but it did not 
cost nearly as much money. They bought a program from a 
nonprofit, Sunlight Foundation, and implemented it--and the 
same thing could happen on this. It is not hard.
    People--if they are not being held accountable, they do not 
want to be held accountable--and transparency is what holds 
them accountable. So, the Taxpayers Right to Know Act is just 
as essential as any other thing we have done, in terms of 
transparency, so the American people can know.
    So, what you are really doing is fighting a dark force that 
does not want the American people to know what is going on up 
here. And, the American people are saying, ``Hey, we kind of 
get it. We kind of get it.'' And, that is why your approval 
rating is low and that is why you are seeing the politics of 
America today. And, everybody is responsible for that. That is 
not partisan. That is just due to the fact that there is not a 
commitment to reconciliation and working together to get things 
done.
    Senator Lankford. Right. Gene, talk to me about the NDNH. 
Why is that needed? You mentioned that earlier in your opening 
testimony. It is something that all of us support here. Why is 
that needed?
    Mr. Dodaro. There are a lot of Federal programs where 
benefits are based on means testing of income. The NDNH, which 
was initially created to help with child support enforcement, 
is the authoritative database on new employment and has the 
most up-to-date wage information. And so, that information 
could be compared against benefit decisions to test for 
possible improper payments. In a lot of means tested programs, 
people self-report their income. And so, Agencies do not always 
have a means of checking, through third-party information, 
whether what is being self-reported is right and whether it is 
up to date.
    So, this database is essential. It is easy to use--once GAO 
has access to it--but OMB, initially, objected to our use. So, 
we went to the States that report the data and had to get it 
from them. That is a very time consuming and labor intensive 
process--and the information quickly becomes out of date. We 
believe we have the authority to obtain and use the data, but 
Congress needs to clarify that. This will help us to do this 
work on overlap, duplication, and fragmentation in a much more 
efficient and effective way.
    Senator Lankford. OK, thank you. Gentlemen, again, thank 
you for being here and for the ongoing work.
    I yield back my time.
    Chairman Johnson. Senator Lankford, first of all, I agree 
that you have some big shoes to fill, but you are doing a 
pretty good job. You are doing an excellent job as the Chairman 
of the Subcommittee on Regulatory Affairs and Federal 
Management (RAFM), working in a very bipartisan fashion with 
Senator Heitkamp. I truly appreciate that.
    And, your Taxpayers Right to Know Act is part of this 
package and was introduced, first, in 2011. Let me just list 
the cosponsors right now. It is: Lankford, McCaskill, Johnson, 
Ayotte, Heitkamp, Enzi, McCain, Portman, Peters, Paul, and 
Fischer. That is what we are trying to put together here--and I 
truly appreciate your participation in that. Senator Carper.
    Senator Carper. Thank you. Thank you so much.
    Several times, we have heard it mentioned that the American 
people have a pretty good idea of what needs to be done--and we 
need to remember that. Jefferson used to say, ``If the people 
know the truth, they will not make a mistake.''
    And, when you think about the way we spend money in the 
Federal Government--not everybody knows this--but I think it 
was in a pie chart. About half of the money that we spend, 
through the Federal Government, is from programs like--they are 
entitlements--things that people are entitled to--you folks 
know this--Social Security, Medicare, Medicaid, and veterans 
benefits--some of the veterans benefits--things that people are 
entitled to by virtue of their age, their service, or their 
health. This accounts for about 50 percent--and it is growing, 
not shrinking.
    Another 5 or 10 percent is the interest on the national 
debt. If interest rates ever go up, heaven help us, because 
that one has not been growing that much, given the size of our 
debt. But, 5 to 10 percent is the interest on the national 
debt.
    The other 40 percent, as you know, is discretionary 
spending. That is where we actually appropriate, in our dozen 
or so appropriations bills, which we are actually taking up on 
the floor today, tomorrow, and in the weeks to come. When--and 
that 40 percent--most of that is defense. The majority of it is 
defense, but the rest of it is the whole rest of the Federal 
Government.
    The idea--to assume that we can get where we need to go, in 
a fiscally responsible way, by ignoring, really, any of those 
pieces--I think we make a mistake.
    Dr. Coburn was one of the members of the National 
Commission on Fiscal Responsibility and Reform (NCFRR), or the 
Bowles-Simpson Commission, which came together with a plan 
about a half-dozen years ago. It was convened, by President 
Obama, to put us on the right track--and it involved 
everything. It involved revenues. It involved entitlements. I 
thought the way they did entitlements was--I call it consistent 
with Matthew 25: ``the least of these.'' It says we have a 
moral obligation to the least of these: when I was hungry, when 
I was naked, and when I was thirsty--what did you do? And, I 
think we have a moral obligation to the least of these in our 
society. But, we have a fiscal imperative--since we have a 
large budget deficit--to meet that moral obligation in a 
fiscally sustainable way.
    Dr. Coburn and I used to use GAO's ``High-Risk List'' 
almost as our ``to-do list,'' when we were working together on 
this Committee. One of the things that befuddled me is that we 
worked very hard on improper payments--and we passed 
legislation that initially said, ``Agencies, you have to figure 
out what your improper payments are.'' Well, they were not 
doing that, so they did it. OK. And, we said, ``Second, you 
have to stop making improper payments.'' And, OK. And, next, 
``You have to report that. And, you also have to promote 
people, and consider in promotion whether the supervisors of an 
Agency--the heads of Agencies are doing anything about improper 
payments.'' It is huge. It is, like, over $100 billion a year. 
And, some of the reports on improper payments have come out. 
Medicare, to my amazement, jumped by $15 billion.
    So, I would just say--let me just start there. To the 
Comptroller General, do you have any idea why that happened, 
despite our best efforts? That is a lot of money.
    Mr. Dodaro. Yes. Since Congress required Aagencies to 
report improper payment estimates in 2003, the cumulative 
number of improper payments that has been reported is over one 
trillion dollars--and, this last year, it was $136 trillion. 
The reason that----
    Senator Carper. Billion. One hundred-and-thirty-six billion 
dollars.
    Mr. Dodaro. Billion. I am sorry. Thank you. The reason it 
jumped, in Medicaid, from my understanding, is that the States 
have not yet put in all of the systems necessary to check 
eligibility under the Affordable Care Act (ACA)--and so, they 
need to do that.
    The one thing I would point out, Senator Carper, with 
Medicaid--that concerns me even more than these estimates--is 
the managed care portion of Medicaid. None of these improper 
payment estimates are covering the managed care portion of 
Medicaid, which is the fastest growing portion in States. All 
that the States are checking is whether they are paying the 
contractors properly--not whether the contractors are actually 
making the payments properly. That is going to change under a 
new rule, based on a recommendation we made to the Medicaid 
area.
    I believe the improper payments, both in Medicare and 
Medicaid, account for over 50 percent of the improper payments 
for those agencies that estimate improper payments. They are 
two of the fastest growing programs in the Federal Government--
estimated by CBO to grow at a rate of 6 to 8 percent over the 
next 2 years. Unless the agencies get on top of this situation, 
in my opinion, it could quite likely get worse before it gets 
better. There are a number of recommendations we have made. 
They need to implement them. And, they need to change the 
culture to one of making sure we prevent these payments from 
occurring in the first place.
    Senator Carper. What was the name of the guy that used to 
say, ``So-and-so, why do you rob banks? '' And, he would say, 
``That is because that is where the money is.'' Who was that 
guy? Does anybody remember?
    Mr. Dodaro. Willie Sutton.
    Senator Carper. Willie Sutton. ``Willie Sutton, why do you 
rob banks? '' He says, ``Well, that is where the money is.'' 
Well, there is a lot of money in improper payments that are 
outside of Medicaid and Medicare, but there is a huge amount of 
money there and we just need to continue to focus on that.
    I just want to say that some people think of entitlement 
reform as a way to save money. I think that what we need to do 
is save the programs for our kids and grandchildren. We do need 
to save some money--and we need to do so in a way that does not 
savage the least of these. Those are the three guidelines that 
I would give.
    Dr. Coburn, you served on the Bowles-Simpson Commission, 
where you guys came up with, I thought, an excellent game plan. 
I want to applaud your courage--political courage--for 
supporting it and for being very vocal about it.
    One of my great disappointments was that our friend--mutual 
friend--President Obama--because he created the Bowles-Simpson 
Commission--when you all came out with your report, he did not 
embrace it. And, I talked to him any number of times, 
privately, about it and he would say, ``I do not want to 
negotiate against myself. I need someone to negotiate with on 
the Republican side.'' Some people said, several years later, 
that he and Speaker of the House John Boehner, as you may 
recall, did negotiate--not once, but twice--to try to get a 
Bowles-Simpson-like agreement. And, my understanding is that, 
when the Speaker went back to his caucus and said, ``Well, what 
do you all think? '' they said, ``If you do this, you may not 
be Speaker much longer.'' So, there was finally an effort--
belated--but there was an effort to do it.
    I think, if the President had run with this when you guys 
said, ``This is what we recommend,'' we would not be having 
this hearing today. That would have been a huge game changer.
    Let me just ask--without something like that--a Bowles-
Simpson-like structure with the recommendations--comprehensive 
recommendations--we can do the piecemeal stuff--and we will, 
but do we need the overreaching structure that a Bowles-Simpson 
approach provides--that provides the balance?
    Dr. Coburn. Well, the Bowles-Simpson approach was that we 
all jumped off of the bridge together----
    Senator Carper. Yes.
    Dr. Coburn [continuing]. And, actually solved the problem. 
But, you can do it unilaterally. There are a couple of 
problems. We keep making the same mistake. If we create a new 
program or if we enhance a program, we do not create a revenue 
stream to pay for it--and the Republicans are guilty of that 
with Medicare Part D and Democrats are guilty of that too. 
Everybody that voted for the last omnibus--you stole the money 
from Social Security to re-up Social Security Disability 
Insurance (SSDI), which was totally out of money. And, what 
fixed Social Security Disability Insurance? Nothing. So, what 
is going to happen? You are going to do the same thing--except 
the next time you go to Social Security, there is not going to 
be any money in it to take.
    So, what has happened is that you have delayed fixing the 
real problem. You have done a patchwork fix, so you do not have 
to deal with the real problem. And, it is hard work. I am not 
saying it is not. But, some major changes in Social Security 
Disability Insurance would be amazingly helpful for the 
disabled community and would get rid of the fraud. And, you 
would extend the life of the Disability Insurance Trust Fund by 
20 years. But, not doing that--it is expedient to take the 
money from Social Security and to not fix Social Security 
Disability Insurance.
    So, I would just say, these are the kinds of examples of 
what we continue to do because it is convenient and expedient--
but we do not actually fix the real problem. And, that is the 
Senate Finance Committee's jurisdiction, I think. That is not 
this Committee's jurisdiction. But, anyhow, it needs to be 
fixed.
    And, the other thing is the rule--if you are going to start 
a new program--and we may need to--we are our brother's 
keeper--we need to have a tax revenue stream that pays for it 
rather than--and then, we do not increase benefits without 
increasing the revenues to pay for them.
    Senator Carper. OK. Mr. Chairman, I know I am over my time. 
Could I just ask for one more minute and then I will stop?
    We are not very good at paying for things that we know we 
need. A good example is our approach to roads, highways, and 
bridges. We have a history of saying that businesses and the 
people who use our roads, highways, and bridges should pay for 
them--and instead of doing that this last time, we have, 
literally, pilfered money from the Federal Reserve. We take oil 
out of the Strategic Petroleum Reserve (SPR) that we paid $80 
or $90 a barrel for and we say we are going to sell it for half 
of that and use that. There was an effort to raise 
Transportation Security Administration (TSA) fees and, instead 
of putting that money toward aviation security--to actually use 
it for roads, highways, and bridges--we beat that back. There 
was an increase in U.S. Customs fees. Instead of providing for 
better border security, we were going to use that for roads, 
highways, and bridges. It is shameful. I think it is shameful.
    But, on a positive note, we took a program--the Earned 
Income Tax Credit (EITC), which Ronald Reagan said was the best 
anti-poverty program ever--but we knew that it was flawed. We 
knew that it was flawed and that it needed to be cleaned up. 
And, when we put it in that big package that Dr. Coburn 
referred to, from last year, we actually made program integrity 
changes--and they were still trying to do that for the U.S. 
Postal Service (USPS) with respect to Workers' Compensation, 
which is another thing that needs to be done.
    So, I think we just have to stay with this stuff. And, you 
are right, this Committee--as much as anybody else--has the 
obligation--and, frankly, the history of working together--that 
shows we can get stuff done.
    The three Cs--I like to talk about the three Cs. 
Communicate and compromise, those are the secrets for a vibrant 
democracy. Add a third C--that would be collaboration--and that 
is really in our DNA in this Committee--and we just can never 
lose that.
    It is just great to see you both. And, thank you so much 
for being here. God bless you. And, I want to second the motion 
of the Chairman of the Committee about James Lankford. He is a 
worthy successor--a very worthy successor.
    Dr. Coburn. I agree.
    Chairman Johnson. Also, by the way, they are big boots he 
is filling--not shoes. [Laughter.]
    So, let me be one of the two accountants in the room here 
and talk a little bit about some of the numbers, because, the 
fact of the matter is, we have actually reduced the national 
debt by more than 80 percent of what the Bowles-Simpson 
Commission's recommendations would have done. It is not the way 
the Bowles-Simpson Commission really laid it out, but, in the 
Budget Control Act of 2011, we had about $2.1 trillion of 
spending restraint. In the American Taxpayer Relief Act of 2012 
(ATRA), we had about $700 billion of revenue raised. So, that 
is about $3.8 trillion. That reduced the national debt by about 
81 percent of what it would have been reduced to under the 
Bowles-Simpson Commission's Plan. We did zero mandatory 
spending, whatsoever.
    But, it, unfortunately, barely made a dent, because, 
according to the Congressional Budget Office, the projected 
deficit, over the next 30 years, which is a concept I kind of 
came up with in working with the White House right after 
President Obama got reelected--the total deficit, over the next 
30 years, which really is the definition of the problem--the 
demographic bubble--all of the ``Baby Boomer'' generation 
retiring--all of these promises made--and we have no way to pay 
for them--is $103 trillion.
    Dr. Coburn. More.
    Chairman Johnson. One hundred-and-three trillion dollars. 
This is with what we have already done, reduced the national 
debt by 80-some percent of what the Bowles-Simpson Commission's 
recommendation would have done--$10 trillion the first decade, 
$28 trillion in the second, and $65 trillion in the third.
    Now, here is the problem. I was in the White House. 
President Obama joined us for the second half of a 2-hour 
meeting. And, I slid my 30-year deficit chart under his nose 
and I said, ``Mr. President, I have given my PowerPoint 
presentation to 17,000 Wisconsinites in audiences about this 
large. But, you are the President. You have the bully pulpit. 
Please use it. Tell the American public the truth. Show them 
the depth of the problem, so that, collectively, we can take 
the first step to solving any problem.''
    Do you know what he said to me? He said, ``Ron, we cannot 
show the American public numbers this big. If we do, they will 
become scared and give up hope.'' He said, ``Besides, Ron, we 
cannot do all of the work. We have to leave some work for 
future Presidents and future Congresses.'' So, it is that 
denying of the reality, that lack of willingness to tell the 
American people the truth, and that lack of transparency that 
is preventing us from really addressing these very serious 
problems.
    I have two quotes. We talked about Thomas Jefferson. Let me 
paraphrase, instead of giving quotes, because I do not have the 
quotes in front of me. Thomas Jefferson said that a Nation that 
expects to be free and ignorant living in a state of 
civilization expects what never was and what never will be. 
And, he also said that a government big enough to give you 
everything you want is big enough to take away everything you 
have. And, those are the realities that we are dealing with.
    Gene, I want to talk to you a little bit about fraud. We 
talked about waste, which is really kind of the category I put 
the duplicated programs in--just waste. If we are doing the 
same things in different agencies, not doing them well, and not 
measuring the results, that is waste. Let us talk about fraud.
    The Earned Income Tax Credit--we have excellent Inspectors 
General doing reports, which show that 23.8 percent is the most 
recent figure of fraud with the Earned Income Tax Credit. We do 
not have very good information on fraud in other programs. I 
know people estimate. I have gotten in trouble kind of 
estimating it. We need that information.
    Can you just kind of talk a little bit about what GAO and 
what the Inspectors General can do to really ferret out fraud 
in--you pick the program.
    Mr. Dodaro. Well, first, one of the things that we found 
lacking was attention to the fraud issue and the building of it 
into the program management. So, we created a fraud risk-
management framework--or fraud-prevention framework--that 
Agencies should use to focus on what the risks of fraud are, 
what they can do about it, and how they can measure it. It is a 
similar concept to improper payments. Before we started doing 
financial audits in the Federal Government, nobody was 
measuring improper payments. So, Congressional Agencies need to 
focus on this the same way we did with the improper payments. 
Congress passing legislation on the improper payments problem 
was key. GAO first worked with the IGs and we were the first 
ones to estimate improper payments in the Agencies.
    I am pleased to see that our fraud-risk framework--it is 
part of the legislative package that you are talking about 
passing. So, I would encourage you to pass that to put that 
framework in place at the Agencies.
    Then, we need to work with the Agencies to have better 
controls in place. We looked at health care fraud cases where 
convictions were made by the courts. And, we found, in 40 
percent of the cases, it was people billing for services that 
were never provided.
    We see that as a frequent aspect of improper payments--poor 
documentation. I am concerned that Agencies do not take these 
problems seriously. When Agencies have programs vulnerable to 
fraud and there is missing documentation--and they have asked 
for it four or five times before determining it is not there--
we believe it is important to further investigate.
    So, there needs to be more attention to it. You need a 
framework in place. Congress has that, now, in the proposed 
legislation based on our framework. If you pass that--put it in 
legislation, I think you will see a lot of changes.
    But, we need the Agencies' participation. The problem is 
too difficult for just GAO and the IGs to work on. So, we need 
Congress to hold their feet to the fire as well.
    Chairman Johnson. Can you talk, specifically, though--so, 
you have the Inspector General of the IRS, basically, doing a 
pretty good study showing--and giving us a macro number for the 
Earned Income Tax Credit, which is a powerful piece of 
information we can use to prompt reform. The problem is that 
these other instances of fraud are anecdotal.
    Mr. Dodaro. Yes.
    Chairman Johnson. And so, certainly, when I have used the 
anecdotes--I hear ``Well, yes, that is--but it is nowhere near 
20 percent or whatever.'' How do we turn those micro anecdotes 
into the macro numbers that really will drive action--that will 
actually force action--that will create the political will to 
force action here in Congress? Either you or Tom could answer 
that one--or if you have any thoughts on it.
    Dr. Coburn. Well, I would comment first on Medicare and 
Medicaid fraud. They are designed to be defrauded. I mean, 
think about it. You are fixing the wrong problem. What you have 
to do is change the design of the Medicare and Medicaid 
programs so that they are not susceptible to fraud. Otherwise, 
you are going to end up with a bureaucrat in every office in 
every medical facility. If you really want to get it right--
because the program is based on the integrity of doing the 
right thing--and now we are spending all of this money to try 
to find those who are not doing the right thing. So, you could 
spend more money trying to prevent spending wrong money than 
you would ever save. So, you end up spending more money.
    So, my first answer is that you always try to fix the real 
disease--not the symptoms. The fraud on Medicare is because of 
the way the system is set up. It is designed to be defrauded.
    Chairman Johnson. So, being a doctor, yourself--being a 
provider--describe the difference between private sector health 
care, in terms of the level of fraud and what controls are in 
place there as opposed to Medicare.
    Dr. Coburn. Really easy. Blue Cross Blue Shield (BCBS) 
knows everything about every patient I see. They know my 
practice patterns. They know my reimbursement patterns. They 
know when I see a patient. They have computer algorithms. They 
know what is going on. Medicare does not have that. They have 
no idea.
    So, Blue Cross Blue Shield and the rest of the insurance 
companies--every provider--they know what their parameters are 
and, when they see something pop out of the parameter, do you 
know what the first thing they say is? They say, ``We are not 
paying this. Send us information.'' And, no human touches that. 
That is a computer program that sends an e-mail to my office 
that says, ``We are not paying this because this does not smell 
right.''
    Chairman Johnson. So, these solutions exist.
    Dr. Coburn. Yes.
    Chairman Johnson. And, so many of these problems--I mean, 
this is just one example--using that as an example--these 
solutions exist in the private sector. They are just table 
stakes. In the private sector, this is how things operate. But, 
it has just been impossible to implement these things that 
already exist and have them implemented in the government. And, 
as a result, we are paying billions of dollars in fraudulent 
payments.
    Mr. Dodaro. What Dr. Coburn just mentioned is similar to 
one of our outstanding recommendations, based on this work. 
Physician profiling, which is what Dr. Coburn is talking 
about--and the Centers for Medicare and Medicaid Services (CMS) 
is beginning to have something in place. They have started down 
that path, but they need to do much more.
    So, our recommendation is to try to take some of the 
private sector best practices and have them implemented in the 
government setting. But, CMS is too slow to put them in place.
    Chairman Johnson. So, I am over my time, but I will just 
ask a rhetorical question. So, why does the head of HHS or 
Medicare not go to the private sector and say, ``Just implement 
this here? '' It drives me nuts. Senator Lankford.
    Dr. Coburn. Just as an aside, it was offered to them for 
free. They did not take it. Just to let you know that.
    Senator Lankford. I know we are about to be called for 
votes, so let me cut to the chase. I have several things I 
would love to be able to talk about--both with the Federal 
fleets, the management of that, and several recommendations you 
have on that--and quite a few other areas--on Social Security 
Disability Insurance, things that we have worked on together in 
the past and things that are very obvious.
    I was just as frustrated last October, when that budget 
piece passed that included an incredible punt on Social 
Security Disability Insurance. And, the frustration is that we 
never seem to fix anything here until we have a deadline. We 
finally had a deadline to do something and it was punted for 7 
years instead of actually faced. So, we will have to deal with 
that in the days ahead.
    The issue I want to be able to bring up and be able to 
drive home, though, deals with emergency spending and 
recisions. There is some conversation moving around Congress, 
right now, that there are some important things that are 
happening right now with Zika, with opioids, with the Flint, 
Michigan water crisis, and with other things--and the 
conversation involves people saying, ``These are emergencies. 
We need to break the caps. We need to have something uniquely 
different on this because it is very important.''
    Your report also details things like the Home Affordable 
Refinance Program (HARP) and multiple other areas where there 
are recisions and de-obligated balances--where there are 
billions of dollars that are still sitting there, basically, 
because they are obligated to programs that are not functioning 
anymore. Can you give me a little bit of detail about that?
    Mr. Dodaro. Yes. We have several recommendations that focus 
on suggested recisions. This is an area Dr. Coburn and I talked 
about early on. It is hard to identify specific recisions, but 
we have three examples of areas where there is money that could 
be rescinded--and I will provide those for the record.\1\ They 
are in our recommendations to Congress.
---------------------------------------------------------------------------
    \1\ The recommendations submitted by Mr. Dodaro appears in the 
Appendix on page 66.
---------------------------------------------------------------------------
    One is the Advanced Technology Vehicles Manufacturing 
(ATVM) Program. We think there is about $4 billion there. There 
are unobligated balances at the Department of Energy (DOE) and 
the Department of State (DOS) totaling several hundred million 
dollars. HARP as you mentioned--we think there is the potential 
there for $2 or $3 billion in recisions to take place. So, we 
have highlighted those in the report--and I would encourage 
Congress to act on them.
    Senator Lankford. OK, thank you. I will yield back my time, 
because we are getting close to voting time.
    Chairman Johnson. Senator Carper.
    Dr. Coburn. Can I just make one comment? In my 16 years of 
service up here, I have never heard of an Agency that said it 
had more than enough money. I mean, truly. And, that is not to 
be critical of the Agencies, because they are going to protect 
their turf. But, I would put forward to you that there is not 
an Agency in the Federal Government that you cannot find 10 
percent waste in--minimum. So, if you take the discretionary 
and the management side of the mandatory spending, you can 
find, easily, one hundred billion dollars a year in our budget 
that could be put toward health care for our seniors and 
veterans care for our veterans. You could, actually, do that if 
you had the willingness to actually do the hard work.
    And, what I found is that, on this Committee, we had a lot 
of people willing to do the hard work, but, in the rest of 
Congress, I did not find it. In other words, when you talked 
about it, there was kind of a blank stare. ``I do not want to 
listen to this, because I do not want to do that,'' and, I 
think that part of your job is to go out and sell everybody. We 
have ways to solve these problems. We know. We have actually 
done the oversight. Oversight is the most effective tool that 
we have, in Congress, to actually make changes that positively 
impact America.
    Senator Carper. When the President submitted his budget for 
2017, Gene, I think, he recommended a very small increase for 
GAO. I think under some of our cuts in recent years, the 
resources for GAO have been diminished--and it is only a couple 
of percentage points, but it is something, after having several 
years of freezes or cuts--and my hope is that we will do that.
    You have testified before, in this Committee, on the 
revenue side, as opposed to the spending side--and what we can 
do that would be smart, in terms of resources for the IRS and 
changes, in terms of, like, allowing folks who are, really, 
anywhere from incompetent to corrupt to continue to prepare tax 
forms and tax returns. Could you just talk about some of the 
things we might do--or ought to do--that actually would enable 
the IRS to do a better job, including the last piece that I 
talked about?
    Mr. Dodaro. Yes. We have had a recommendation that Congress 
give the IRS the authority to regulate paid tax preparers. We 
did an undercover investigation a while back. We sent teams out 
to 19 paid tax preparers and we worked out different scenarios 
of what the tax should be and ran it by the IRS. Only two of 
the 19 paid tax preparers gave us the right answers. And, some 
gave----
    Senator Carper. Say that again. How many out of 19?
    Mr. Dodaro. Two. Two of 19. Only 2 of 19. And, some of the 
ones that gave us answers were off by so much that it would 
have cost penalties and increased interest--both to themselves 
as well as to the taxpayers.
    We also looked at the IRS's records and the data that they 
had. And, we found that returns that were prepared by tax 
preparers had a 60 percent rate of errors in them compared to a 
50 percent rate of errors in the tax returns of people who 
prepared their own taxes. Over half of the returns with 
problems in the Earned Income Tax Credit were the result of 
paid tax preparers as well.
    Oregon has had a State program for a number of years that 
regulates preparers. Oregon taxpayers using preparers are more 
likely to get an accurate return--it is 72 percent more likely, 
in Oregon, than any other place in the country. So, some of the 
States have this. The IRS tried to do it. The court ruled they 
did not have the legal authority. And so, Congress needs to 
act, if you want the IRS to proceed.
    Simple math authority. For some errors, the IRS could use 
administrative records to fix the returns right away. They 
would not have to do an audit, which burdens the taxpayers and 
others. It is possible to do this with due process. We think 
that should be put in place.
    Allowing--or requiring--more electronic filing of 
information from employees to the IRS, specifically, to bring 
the threshold from 250 employees down to about 5 or 10, using 
electronic means--that would be an improvement.
    I would compliment Congress that they did act on our 
recommendation last year to move up the date for W-2 
information to be sent so the IRS has it now at the end of 
January, rather than in April. This will allow the IRS to match 
it with filed returns. This will help prevent identity theft 
refund fraud as well as improve the administration of the 
current tax system.
    Those are a few of the things that we have----
    Senator Carper. That is great. One of the things that Dr. 
Coburn and I worked on for some time was--no, I am not going to 
go there. That is going to take too long.
    Let me just conclude by saying--go ahead.
    Dr. Coburn. I just want to comment on it. Before I came to 
the Senate--and you were here, Tom--the Senate Finance 
Committee actually did a study that Senator Trent Lott authored 
on the IRS and professional preparers. And, what it showed was 
that, of the 10 regional branches of the IRS, where they went 
to them with this tax data, they got a different answer at 
every IRS location. So, that tells you something. Then, when 
they went to the formal tax preparers--and I am talking about 
the big firms, not the small ones--they got a different answer. 
So, the question is: who is right?
    So, again, it is about going back to fixing the real 
disease, instead of the symptoms. What we need is a simpler, 
fairer, and flatter tax code, so that everybody pays something, 
everybody knows when they pay it, they pay the right amount, 
and they are not in jeopardy. People worry to death about 
hearing from the IRS, thinking, ``Maybe my taxes were not 
right.'' So, this means fixing the real disease: changing the 
tax code.
    And, if you changed it properly, you could save 90,000 
Federal employees--90,000--who, by the way, make 77 percent 
more than the average American--77 percent. That is according 
to the U.S. Bureau of Economic Analysis (BEA). So, the average 
Federal employee is making 77 percent more--and then, when we 
are doing our taxes--trying to do it right at each place--if 
you send it to 10 different places, you get a different answer 
each place.
    Senator Carper. Yes. Let me conclude with this. One of the 
requests by John Koskinen, the Commissioner of the IRS, to us, 
the other day, was--you know what we did for DHS. They were 
having a hard time hiring and retaining their cyber warriors, 
so we made some modifications. We gave them some flexibility 
there, which they are beginning to use now.
    One of the things that the IRS has asked us for is to 
restore what they call streamlining compensation. It is like a 
million dollars a year, but they use it for information 
technology (IT). They hire IT people. They train them, they get 
to be good, and they get hired away. And, we have gone, I 
think, 3 years without restoring that. That was just an example 
of somewhere we can actually spend some money to save money.
    I will close with this thought. It is hard to believe when 
I tell younger people, but it was not all that long ago that we 
actually had a balanced Federal budget. We had not one, not 
two, not three, but, actually, four--if you will recall, the 
last 4 years of President Clinton's Administration and going 
into President Bush's Administration.
    And, if you look at the percentage of the GDP that we 
spent, it was about 20 percent in each of those 4 years. If you 
look at the percentage of the GDP that revenues accounted for, 
it was about 20 percent. And, today, I think we are spending 
about 22 to 23 percent of the GDP----
    Dr. Coburn. Twenty-four.
    Senator Carper [continuing]. Twenty-four. And, our revenues 
are 17 or 18 percent. And, clearly, we need to do something 
on--just like the Bowles-Simpson Commission. We need to do 
something on the spending side. It cannot just be all 
discretionary spending, or defense spending, or entitlement 
spending. There has to be a combination thereof. And, we need 
to do something on the revenue side as well.
    Dr. Coburn. If I could gently challenge you----
    Senator Carper. Please.
    Dr. Coburn [continuing]. On the 4-years of balanced 
budgets, under GAAP, you had one year--and it was $14 billion. 
That did not have anything to do with Congress. It had 
everything to do with the year 2000 (Y2K) and the additional 
forward purchasing. So, it was nice to say we had a balanced 
budget, but, on GAAP terms, you only had one year.
    Senator Carper. Yes. The other thing we had going in force 
then was a very strong economy----
    Dr. Coburn. Yes.
    Senator Carper [continuing]. And, one of the best ways we 
could strengthen the economy would be to show that we have the 
discipline here, the wherewithal, and the willingness to work 
together to do some of the things that we are talking about. 
And, the spirit that you really demonstrated here, Tom, for all 
of those years--and, frankly, the spirit that Gene and his 
troops have, as well, I think is still alive--and our job is to 
make sure that we do not let that flame die. Thank you.
    Chairman Johnson. Thank you, Senator Carper.
    By the way, we are also 15, 16, and 17 years further away 
from this ``Baby Boomer'' bubble with all of these 
entitlements, which has been pretty obvious and people just 
ignored it.
    By the way, Senator Coburn, I like your root cause analysis 
of the tax system. Rather than try and fix the symptom, which 
is a complex system, and rather than trying to figure out how 
to get people to prepare taxes properly in a complex system--
just simplify the system. Scrap it and set up something, I 
always say, elegantly simple. Two basic principles: Raise the 
revenue we need and do no economic harm. Stop trying to 
socially and economically engineer through the tax code. We do 
a terrible job. But, anyway, there is my pontificating, I 
guess.
    I want to thank both of you. I mean, you have laid the 
groundwork, through your efforts, for this Committee to 
actually take some action and enact that continuous 
improvement. And, by the way, we are getting some results. 
People do not realize that, but, using an approach that, 
certainly, Tom, you were, certainly, engaged in--trying to find 
areas of agreement that unify us--you can actually get results.
    We have passed 69 pieces of legislation through this 
Committee--most of them unanimously. Twenty-four bills now have 
been signed into law. There is another piece of legislation 
that is waiting on the President's desk. In some way, shape, or 
form we have gotten it to the President's desk--gotten the 
result. And, I really do hope that Senator Carper will join me 
on this piece of legislation that we would like to get on the 
floor, because nobody can--again, not one Senator can hold it 
up if we get it to the floor. Leader McConnell is committed to 
doing so. So, we can actually implement some of these great 
recommendations from GAO. So, I hope you join us on that.
    Senator Carper. Let me just say, if I could, Mr. Chairman, 
I think we have done good work. I am proud of what we have 
done, building on the record that Dr. Coburn helped to create. 
And, I am very much interested in the package that puts 
together a lot of the stuff that I helped to write or authored.
    The other thing I am really interested in doing, as you 
know, is taking up and legislating on USPS reform--and I want 
to get that done. We need to get that done. It is eminently 
fixable. Dr. Coburn and I tried very hard to fix it--and that 
is something we should do. But, I think we can do both and we 
need to.
    Chairman Johnson. And, we are working with you and the 
House of Representatives to try and accomplish something there.
    But, again, gentlemen, thank you for everything you have 
done for your country and for this Committee. Thank you for 
coming here today and for testifying. You are great Americans.
    And, with that, I think I have to read the magic words 
here. This hearing record will remain open for 15 days, until 
May 12 at 5 p.m., for the submission of statements and 
questions for the record.
    This hearing is adjourned.
    [Whereupon, at 12:14 p.m., the Committee was adjourned.]

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