[Senate Hearing 115-185]
[From the U.S. Government Publishing Office]
LEGISLATIVE BRANCH APPROPRIATIONS FOR FISCAL YEAR 2018
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WEDNESDAY, JUNE 21, 2017
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 3:05 p.m., in room SD-124, Dirksen
Senate Office Building, Hon. James Lankford (chairman)
presiding.
Present: Senators Lankford, Kennedy, Rubio, Murphy, and Van
Hollen.
CONGRESSIONAL BUDGET OFFICE
STATEMENT OF DR. KEITH HALL, DIRECTOR
OPENING STATEMENT OF SENATOR JAMES LANKFORD
Senator Lankford. Good afternoon, everybody. The
subcommittee will come to order.
I would like to welcome everyone to our second fiscal year
2018 budget hearing for the agencies under the jurisdiction of
the Legislative Branch Appropriations Subcommittee. Today, we
have with us the director of Congressional Budget Office--CBO,
as we affectionately call it around here--Dr. Keith Hall; and
the head of the Government Accountability Office, Comptroller
General Gene Dodaro. I appreciate the willingness of both of
you to appear before the subcommittee, and I look forward to
your testimony.
We obviously received your written statements as well, and
they are extensive.
Total Congressional Budget Office request for fiscal year
2018 is $49.9 million, an increase of $3.4 million above the
fiscal year 2017 enacted level. This funding request supports
the current full-time equivalent level of 237 and an additional
four analysts devoted to the areas of healthcare policy,
dynamic scoring requirements, and appropriations. It also
includes funding required to move CBO's data center.
The total GAO request for fiscal year 2018 is $590.7
million, an increase of $46.2 million above fiscal year 2017
enacted level. This funding request supports an increase in
FTEs from 3,000 to 3,100, which will continue to progress
towards GAO's multi-year plan to rebuild its staff capacity to
an optimal level of 3,250.
Each of your agencies provide vital support services to us
as legislators. As the nonpartisan watchdog and the
scorekeepers of legislation, your agencies provide reports,
analysis, and information that can have very far-reaching
policy implications. That analysis requires highly trained
staff, a need which is reflected in both of your budget
proposals.
Personnel expenses account for more than 80 percent of your
budgets, which creates a unique challenge in a year where
available resources must be stretched among multiple
priorities, and increases will be difficult to accommodate.
Given this challenge, I do look forward to our discussion
today, during which I hope to gain a better understanding of
your agencies' priorities and the ongoing work you do.
Now, I would like to turn to ranking member and friend,
Senator Chris Murphy, for his opening remarks.
STATEMENT OF SENATOR CHRISTOPHER MURPHY
Senator Murphy. Thank you very much, Mr. Chairman.
Thank you both for being here today.
Let me just note that both of our thoughts are obviously
with our colleague and those others who were shot and
terrorized on a baseball field not far from here. Ironically,
we were set that day to hold a hearing on the Capitol Police's
budget and the Capitol Security budget, and that hearing now
will be even more important. I appreciate the chairman's
commitment to moving forward with that.
I am glad to have your testimony here today. I share the
chairman's interest. I will just note that GAO has been an
indispensable partner to those of us who think it is our
mission to be very careful with the dollars that our taxpayers
send to Washington. Since 2006, GAO has helped provide $63
billion in benefits for the Government. That is a rate of
return that investors in my State would love, $112 in savings
for every dollar invested in GAO, so it is a pretty good use of
our taxpayer dollars to put it into your operations to keep
spending honest.
I am really glad to have Dr. Hall here today. I got to
visit with him yesterday at GAO. And, Mr. Chairman, I think it
is a really--excuse me, at CBO. It is really important to have
CBO here today. I will just express my deep concern about the
actions of the majority party in the House and the Senate with
respect to the continued relevance and independence of the
Congressional Budget Office. We do not just rely on CBO; our
constituents rely on CBO. The only way that we are able to have
a real meaningful debate in this country about the impact of
legislation that affects people's lives is because of the
nonpartisan analysis that CBO provides us.
The House healthcare bill, which was rammed through with
almost no public debate, with no time for any legislator to
read that piece of legislation, was done so without a CBO
score, and so hundreds of Members of Congress voted on a piece
of legislation that reorders one-fifth of the American economy,
that as we eventually found out, strips healthcare from up to
23 million Americans without a nonpartisan analysis.
And for those of us who believe in CBO, I think there is a
deliberate campaign to try to reduce its relevance because why
have CBO if you are not going to ask it to give its opinion on
a piece of legislation that is that big and that sweeping ahead
of the vote.
Similarly, we are headed towards a potential debate and
vote on a piece of legislation next week that is equally
sweeping that none of us have seen, that theoretically CBO is
working on today but may release their analysis with only a
handful of hours or days prior to the vote. That is if the
Senate majority decides to wait for their analysis before the
vote.
In addition, leading up to CBO's analysis of the House
bill, there were some very sharp attacks on CBO from Members of
Congress, attacks that, you know, got a little bit too personal
at times. We should be investing in CBO's relevance by
demanding that on major pieces of the legislation we see a CBO
score before we vote, and we should refrain from compromising
CBO's nonpartisanship and independence by trying to frame them
in a political context. So, I think it is a really important
moment for both of you to be here and particularly Dr. Hall,
and I look forward to their testimony.
Senator Lankford. Thank you. I look forward to the
testimony as well.
A quick side note on that, as you know, the Senate rules do
not allow us to even take up a reconciliation bill without a
CBO score, so there will most certainly be a score. It is my
understanding the scoring will be available sometime before
Monday. If you want to provide an update today on the process
or timing for that, we would be happy to receive that.
Now we are ready to receive your testimony, and we
obviously have the written testimony already from both of you.
Thank you for preparing that. Each of you have an opening
statement time of approximately 5 minutes. If you fudge on that
a few seconds, I think we will be okay one way or the other.
Mr. Hall, or I should say Dr. Hall, since you earned it, we
are glad to receive your statement.
SUMMARY STATEMENT OF DR. KEITH HALL
Dr. Hall. Sure. Great. Chairman Lankford, Ranking Member
Murphy, and Members of the subcommittee, thank you for the
opportunity to present the Congressional Budget Office's budget
request for fiscal year 2018.
CBO was established in 1974, and its mission is an
important one: to provide nonpartisan budgetary and economic
analysis that is timely and carefully thought out in order to
support the work of this subcommittee, and the Congress as a
whole, as you address the critical issues facing the Nation.
That mission is one that we all take very seriously. To
fulfill its mission, CBO does a variety of things: We analyze
trends and recent developments related to Federal spending and
revenues; we prepare projections of budgetary and economic
outcomes for the coming decade and reports describing them; we
estimate the cost of legislative proposals; we examine the
effects of the President's budgetary proposals and numerous
alternative policy choices for the budget and the economy; we
conduct policy studies of government activities that have
significant budgetary and economic impact; and we provide
testimony on a broad range of budget and economic issues.
In 2016, for example, CBO produced multiple budget
projections and economic forecasts, several hundred formal cost
estimates and mandate statements, thousands of informal
estimates, aimed at helping committees and Members to craft
legislation, and more than 100 ``scorekeeping'' tabulations for
appropriation acts. In addition, the agency released several
dozen analytic reports and working papers.
In carrying out its mission of serving the Congress during
2017 and 2018, CBO will focus on meeting three goals: We will
continue to provide the Congress with budget and economic
information that is objective, insightful, and timely; we will
continue to present and explain the methodology and results of
CBO's analyses clearly, and pursuing opportunities to enhance
the transparency of the agency's work; and we will continue to
improve CBO's internal operations.
CBO is asking for appropriations of $49.9 million for
fiscal year 2018. That amount represents an increase of $3.4
million, or 7.4 percent, from the $46.5 million provided to CBO
for 2017. There are three reasons for requesting an increase.
First, we must move our data center. CBO will need to spend
$1.1 million in 2018 because of an unusual expense. Our primary
data center currently resides in the House of Representatives'
data center on the sixth floor of the Ford House Office
Building. Because House Information Resources has decided to
repurpose that facility, CBO must remove its IT equipment by
the end of the next March. The Congress's offsite Alternative
Computing Facility, which is currently CBO's backup data
center, will become the agency's primary data center, and the
agency will establish a new backup center at a different
location.
Second, the other costs of maintaining existing operations
will be higher next year, requiring an additional $1.5 million.
That amount includes $1.1 million for increases in personnel
expenses, which would result from a small increase in
employees' average salary and a rise in the cost of benefits.
The remaining amount would be used to fund nonpersonnel
expenses, mainly the upgrade of several cybersecurity systems.
And third, CBO proposes to expand its analytical capacity,
requiring about $800,000. That amount includes $500,000 for
salary and benefits for four new FTEs. The additional FTEs
would be devoted to healthcare analysis, scorekeeping for
appropriation bills, and analyzing the economic effects of
Federal tax and spending policies--work that would include the
dynamic analysis of certain legislation, which is required by a
recent budget resolution.
Of course, interest in legislative proposals related to
healthcare remains very great. As you know, the Congress is
actively considering major legislation that would repeal,
modify, or replace many provisions of the Affordable Care Act,
and such activity has already significantly boosted CBO's
workload.
In addition to responding to that and other immediate
legislative concerns, we are engaged in longer-term projects,
analyzing various aspects of the healthcare system and
enhancing our analytical capacity to assess the effects of
legislation on that system and on the Federal budget.
We are also anticipating a larger workload associated with
appropriations--as analysts have been asked more often to work
simultaneously on combinations of continuing resolutions,
individual appropriation bills, omnibus appropriation bills,
and supplemental appropriation bills. And we expect to further
develop our capacity to conduct dynamic analysis in the coming
year.
In addition to those four new FTEs, CBO seeks additional
resources--about $300,000--for creating additional on-site
capacity to use sensitive data securely to meet the growing
congressional demand for certain analyses.
In closing, I would like to thank the Committee for its
long-standing support of CBO. That support has allowed CBO to
provide budgetary and economic analysis that is timely,
thoughtful, and nonpartisan as the Congress addresses issues of
critical importance. Thank you.
[The statement follows:]
Prepared Statement of Dr. Keith Hall
(See the full report ``Testimony, CBO's Appropriation Request for
Fiscal Year 2018'' in the appendix at the end of the hearing.)
Chairman Lankford, Ranking Member Murphy, and Members of the
subcommittee, thank you for the opportunity to present the
Congressional Budget Office's budget request. CBO is asking for
appropriations of $49.9 million for fiscal year 2018. That amount
represents an increase of $3.4 million, or 7.4 percent, from the $46.5
million provided to CBO for 2017. Of the total amount, nearly 90
percent would be used for personnel costs.
reasons for the requested increase in funding
There are three reasons for requesting an increase. CBO must move
its data center; the other costs of maintaining existing operations
will be higher next year; and the agency proposes to expand its
analytical capacity.
Moving the Data Center
CBO will need to spend $1.1 million in 2018 because of an unusual
expense. The agency's primary data center currently resides in the
House of Representatives' data center on the sixth floor of the Ford
House Office Building. Because House Information Resources has decided
to repurpose that facility, CBO must remove its information technology
(IT) equipment by March 2018. The Congress's off-site Alternate
Computing Facility, which is currently CBO's backup data center, will
become the agency's primary data center, and the agency will establish
a new backup center at a different location.
The move is projected to result in a onetime expenditure of $1.1
million (and in recurring lease and maintenance costs in later years).
About $0.2 million of the onetime cost will be incurred in fiscal year
2017, delaying other important IT projects. In 2018, a cost of $0.9
million will be incurred for moving the data center, as will a cost of
$0.2 million for the delayed projects. If CBO does not receive funding
for the relocation, the agency will be forced to pay for it by cutting
back on the size of its staff and providing less information and
analysis to the Congress.
Maintaining Other Existing Operations
CBO requests an increase of $1.5 million to fund existing
operations in 2018. That amount includes $1.1 million for increases in
personnel expenses, which would result from a small increase in
employees' average salary and a rise in the cost of benefits. An
additional $0.4 million would be used to fund nonpersonnel expenses,
mainly the upgrade of several cybersecurity systems that are vital to
the agency's mission but nearing the end of their life cycle and the
renewal of long-term maintenance support for other major cybersecurity
systems. As with the previous item, if funding is not provided, CBO
will need to shrink its staff and provide less information and analysis
to the Congress.
Expanding Analytical Capacity
CBO proposes to add four new analysts in 2018 and to create
additional on-site capacity to use sensitive data securely. The total
cost of those additions would be $0.8 million.
Adding four full-time-equivalent positions (FTEs) would cost $0.5
million for salary and benefits. The additional FTEs would be devoted
to healthcare analysis, scorekeeping for appropriation bills, and
analyzing the economic effects of Federal tax and spending policies
(work that would include the dynamic analysis of certain legislation,
which is required by a recent budget resolution). Congressional
interest remains high in modifying or replacing the Affordable Care Act
and changing Medicare or Medicaid. CBO is also anticipating a larger
workload associated with appropriations and is aiming to respond to
requests for information more quickly. And CBO expects to further
develop its capacity to conduct dynamic analysis in the coming year.
About $0.3 million would fund expansions of on-site capacity to
securely use sensitive data, such as data from the Internal Revenue
Service, the Social Security Administration, and other agencies. That
capacity would help CBO meet growing demand from the Congress for
analysis that draws on such data to understand changes in earnings,
marriage, mortality, and other factors affecting benefits, tax
revenues, and other parts of the Federal budget. The additional
resources would make access to such data speedier and more consistent,
increasing the quality and timeliness of CBO's work.
cbo's budget request and its consequences for staffing and output
In fiscal year 2018, CBO will continue its mission of providing
objective, insightful, timely, and clearly presented budgetary and
economic information to the Congress. The $49.9 million in funding that
CBO requests would be used for personnel costs (that is, salaries and
benefits), IT, and other costs, such as training.
Funding Request for Personnel Costs and Consequences for Staffing
CBO requests $44.3 million for salary and benefits, which equals 89
percent of its funding request. Those funds would support 241 FTEs. The
requested amount represents an increase of $1.6 million, or 4 percent.
Of the total requested amount:
--$33.0 million would cover salaries for personnel--an increase of
$1.4 million, or 5 percent, from the amount that will be spent
in fiscal year 2017. The increase would cover $0.4 million in
pay for four additional analysts, as well as performance-based
salary increases for current staff and an across-the-board
increase of 2.4 percent for employees earning less than
$100,000 (if such an increase is authorized for executive
branch agencies).
--$11.4 million would fund benefits for personnel--an increase of
$0.2 million, or 2 percent, from the amount projected to be
spent in 2017. The increase would cover a boost in the cost of
Federal benefits, as well as benefits for the four additional
analysts.
Funding Request for Nonpersonnel Costs
CBO requests $5.6 million for costs other than personnel, which
equals 11 percent of its funding request. Those funds would cover
current IT operations--such as software and hardware maintenance,
software development, commercial data purchases, communications, and
equipment purchases--and would pay for travel, training, interagency
agreements, facilities support, printing and editorial support, expert
consultants, financial management auditing support, and subscriptions
to library services. The requested amount represents an increase of
$1.8 million, or 47 percent.
Of the increase, $1.1 million would fund two non-recurring IT
costs:
--Required relocation of CBO's data center ($908,500) and
--IT cybersecurity projects that are expected to be delayed because
of the 2017 costs of that relocation ($200,000).
An additional $0.7 million of the increase would allow CBO to fund:
--The upgrade of several cybersecurity systems that are vital to the
agency's mission and the renewal of long-term maintenance
support for other major cybersecurity systems ($385,000, a
small portion of which results from price increases for current
IT contracts) and
--The costs of creating additional on-site capacity to use sensitive
data securely ($315,000).
Consequences for Output
The requested amount of funding would allow CBO to provide the
following estimates and other analyses to the Congress:
--More than 600 formal cost estimates, most of which will include not
only estimates of Federal costs but also assessments of the
cost of mandates imposed on State, local, and Tribal
governments or the private sector;
--Thousands of preliminary, informal cost estimates, the demand for
which is very high as committees seek a clear picture of the
budgetary impact of proposals and variants of proposals before
they formally consider legislation;
--More than 100 scorekeeping tabulations, including account-level
detail for individual appropriation acts at all stages of the
legislative process, as well as summary tables showing the
status of discretionary appropriations (by appropriations
subcommittee) and running totals on a year-to-date basis;
--About 60 analytic reports and papers--generally required by law or
prepared in response to requests from the Chairmen and Ranking
Members of key committees--about the outlook for the budget and
the economy, major issues affecting that outlook under current
law, the budgetary effects of policy proposals that could
change the outlook, and a broad range of related budget and
economic topics in such areas as defense policy,
infrastructure, and energy policy;
--Numerous files of data documenting detailed 10-year baseline budget
projections, 10-year economic projections, long-term budget
projections (spanning 30 years), and other information
underlying analytic reports--all of them posted on CBO's
website; and
--Descriptions of policy options that would reduce budget deficits
and publications that increase the transparency of CBO's work
and communicate about that work graphically.
Despite high productivity by a dedicated staff, CBO expects that
the anticipated volume of estimates and other analyses will fall
considerably short of the number of congressional requests. The demands
on the agency remain intense. For example, the workload associated with
the analysis of appropriations has risen; the Congress remains acutely
interested in analyses of the Affordable Care Act and numerous
proposals for further changes in Federal healthcare programs; and the
now-required dynamic analyses of how certain legislative proposals
would affect the economy and how those economic effects would, in turn,
affect the Federal budget require complex modeling. Other issues arise
frequently and create a heavy demand for analysis: Over the past year,
for example, CBO analyzed legislation related to the privatization of
the air traffic control system, sentencing reform, trade facilitation
and the enforcement of certain trade laws, child nutrition programs,
child welfare programs, and Puerto Rico's debt crisis. Analyzing the
possibilities and proposals has strained the agency's resources in many
areas. CBO regularly consults with committees and Congressional
leadership to ensure that its resources are focused on the work that is
of highest priority to the Congress.
In closing, I would like to thank the Committee for its long-
standing support of CBO. That support has allowed CBO to provide
budgetary and economic analysis that is timely, thoughtful, and
nonpartisan as the Congress addresses issues of critical importance.
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This testimony summarizes information in CBO's budget request for
fiscal year 2018, which was written by Leigh Angres, Theresa Gullo,
Deborah Kilroe, Cierra Liles, Terry Owens, Stephanie Ruiz, and Mark
Smith, with guidance from Joseph E. Evans, Jr.
The testimony was reviewed by Mark Hadley, Jeffrey Kling, and
Robert Sunshine. Benjamin Plotinsky edited the testimony, and Jorge
Salazar prepared it for publication. An electronic version is available
on CBO's website at www.cbo.gov/publication/52785.
Keith Hall
Director
June 2017
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Senator Lankford. Thank you. Mr. Dodaro.
GOVERNMENT ACCOUNTABILITY OFFICE
STATEMENT OF HON. GENE DODARO, COMPTROLLER GENERAL
2018 BUDGET REQUEST OPENING
Mr. Dodaro. Thank you very much, Mr. Chairman.
Good afternoon to you, Ranking Member Senator Murphy,
Senator Van Hollen. I appreciate the opportunity to discuss
GAO's budget request for fiscal year 2018.
We appreciate the subcommittee's support of GAO. We believe
that we have returned that confidence that you have established
in us with a handsome return on your investment.
As Senator Murphy mentioned, last year, we returned $112 in
financial benefits for every dollar invested in GAO. The
Consolidated Appropriations Act for 2017 contains dozens of
references to GAO's work for agencies to implement our
recommendations. The Act also require agencies to report on the
progress they have made in our past recommendations that
Congress has directed them to implement and it actually reduced
spending in a number of areas that reference our work.
OVERLAP AND DUPLICATION
The work that we have done on overlap, duplication,
fragmentation, cost-savings, and revenue enhancements in the
Federal Government has yielded $136 billion in financial
benefits. GAO's work has helped the Congress avoid
sequestration since 2013 and the last 4 years by implementing a
number of recommendations that make smart budget cuts with
minimal effects on people or programs, as opposed to the
across-the-board cuts called for by the sequester. The last
Bipartisan Budget Act included over $30 billion in savings as a
result of GAO's work.
HIGH RISK
Our high-risk work series, identifies the most difficult
problems facing the Federal Government from a management
perspective. Over the last decade, there has been over $240
billion saved as a result of our high-risk work. High-risk work
also provides the types of recommendations that GAO makes to
strengthen public safety and security, and improve vital
programs and operations. This includes everything from the
Veterans Administration healthcare, Medicare, Medicaid,
cybersecurity issues, oversight and safety of medical products
and food safety, as well as the assessing and controlling toxic
chemicals. Our work also has nonfinancial benefits that are
significant in terms of strengthening government operations for
the benefit of the American people.
Our request for fiscal year 2018 enables us to continue to
do this work. As referenced, Mr. Chairman, in your opening
statement, we would like 100 additional full-time equivalent
positions. I believe that will enable us to address a growing
problem of billions of dollars in improper payments in the
Federal Government. Last year, these payments exceeded $140
billion. That is an understatement. Additionally GAO will
address the yawning tax gap, a difference of about $400 billion
on an annual basis between taxes owed and taxes that are
collected by the Federal Government.
SCIENCE AND TECHNOLOGY
GAO has also been asked to do more work in science and
technology areas, particularly since the Congress no longer has
the Office of Technology Assessment to provide those services.
We have been doing that more and more. There are rapidly
evolving issues in that area, diagnostic techniques for
emerging diseases, security concerns from the internet of
things beyond the information system security concerns that
already exist, dealing with nuclear waste cleanup technologies
that could help the Government do more to clean up hazardous
materials at a cheaper cost.
GAO INFRASTRUCTURE TECHNOLOGY
And then also, we need to make some investments in our IT
infrastructure. It is aging. In fact, the average equipment
that we have, is about 7 years beyond the useful life. We need
to replace it over time. We plan to merge our telephone and our
computer operations. That will save money over time by using
Voice over Internet Protocols.
We made a prudent budget request. GAO is a solid investment
for the Congress with great returns. I know that you will give
careful consideration to our request. I understand the
limitations very well. As an auditor of the Federal
Government's financial statements, I know the challenges you
are confronting. We have made our request in good faith. It
will be a good return on that investment, and I look forward to
answering your questions.
[The statement follows:]
Prepared Statement of Hon. Gene L. Dodaro
(See the full report GAO-17-604T, ``Testimony Before the Subcommittee
on the Legislative Branch, Committee on Appropriations, U.S. Senate''
in the appendix at the end of the hearing.)
Chairman Lankford, Ranking Member Murphy, and Members of the
subcommittee:
On behalf of the U.S. Government Accountability Office (GAO), thank
you for the opportunity to discuss our fiscal year 2018 budget request.
I also appreciate the confidence this subcommittee has shown in GAO by
supporting our efforts to serve Congress and improve government
performance, accountability, and transparency.
Since 2014, Congress has provided funding that has resulted in
GAO's work achieving $192.5 billion in financial benefits and 3,808
other improvements in government programs and operations. GAO also
provided 357 testimonies to dozens of Congressional Committees over
this time period. Even with this record of success, much work remains
to be done to improve government performance and accountability and
help Congress address its highest priorities. Our fiscal year 2018
budget submission was formulated keeping in mind the constrained budget
environment in which the government operates.
GAO's fiscal year 2018 budget requests $618.2 million in
appropriated funds to enable GAO to bolster our staff capacity to
better serve the Congress. With a return of $112 for every dollar
invested in GAO in fiscal year 2016, GAO is an exceptional investment.
Last fiscal year alone, our work generated over $63 billion in
financial benefits and 1,234 program and operational improvements
across government.
Our fiscal year 2018 budget request is focused on maintaining
sufficient staff so that GAO will be better positioned to help Congress
meet its oversight responsibilities. The funding requested will also
enable us to make critical information technology investments that
improve our productivity and work product.
fiscal year 2018 budget request
In fiscal year 2016 GAO's work resulted in a return of $112 for
every dollar invested in GAO, generating over $63 billion in financial
benefits to the Federal Government. Implementation of GAO's
recommendations led to 1,234 program and operational improvements
across the Federal Government including many important contributions to
enacted budget, appropriations and authorization legislation. GAO
reports contained more than 2,000 recommendations across a vast array
of areas to foster government efficiency, effectiveness, and
responsiveness on high priority challenges facing Congress and the
Nation.
Congress used GAO's work to improve agency operations and generate
billions in savings. These will result in improved program efficiencies
and services through implementation of GAO's recommendations, including
such areas as DoD acquisitions and financial management, services to
veterans, management of IT systems, and fraud detection.
GAO also continues to draw attention to issues facing Congress and
the Nation by producing regular updates based on our bodies of work. In
February 2017 we issued our biennial high risk report updating Congress
on progress made on the 32 areas identified in 2015 and added 3 new
areas: (1) Improving Federal Programs that Serve Tribes and their
Members; (2) the 2020 Decennial Census; and (3) U.S. Government
Environmental Liabilities. In April we issued our seventh annual report
on fragmentation, overlap and duplication among Federal programs and
opportunities to reduce government operations costs or enhance
revenues. It identified 79 new actions that Congress and executive
branch agencies can take to improve government efficiency and
effectiveness. Progress in addressing the 645 actions identified in the
six previous years resulted in roughly $136 billion in financial
benefits.
GAO is requesting a fiscal year 2018 appropriation of $618.2
million to continue to address congressional priorities, and fulfill
our mission. This will support a staffing level of 3,100 full-time
equivalents (FTE). We expect to offset our funding needs with $27.5
million in reimbursements from program and financial audits, as well as
rental income, resulting in a net appropriation request of $590.7
million.
In planning fiscal year 2018 resources, GAO recognized several key
areas that merit increased attention as additional staffing is made
available. Focus in these areas will provide long term benefits to the
Nation. They include identifying strategies and actions agencies can
take to reduce a growing amount, now over $140 billion annually, of
improper government payments; finding ways to close the yawning tax gap
of over $400 billion dollars annually between taxes owed to the
government and total taxes paid; and helping the Congress determine
policy implications of increasingly complex and rapidly evolving
development of science and technology.
priority areas for resource enhancement at gao
While GAO always responds to the oversight and legislative
priorities of the Congress, in fiscal year 2018 we would also propose
to focus additional resources on certain areas as staffing is made
available, including:
Growing Amounts of Improper Payments.--Payments that should not
have been made or that were made in an incorrect amount are a growing
government-wide issue. Since fiscal year 2003, when certain agencies
were required by statute to begin reporting improper payments,
cumulative improper payment estimates have totaled over $1.2 trillion.
The improper payments annual estimate in fiscal year 2016, attributable
to 112 programs across 22 agencies, was over $144 billion, up from
almost $137 billion in fiscal year 2015 and almost $125 billion in
fiscal year 2014.
Three large programs, Medicare, Medicaid, and the Earned Income Tax
Credit, account for over 78 percent of the fiscal year 2016 government-
wide improper payment estimate. Federal spending for Medicare and
Medicaid is expected to increase significantly, so it is especially
critical to take appropriate measures to reduce improper payments in
these programs.
In fiscal year 2016, 14 Federal programs had improper payment
estimates greater than $1 billion. Eleven programs had payment error
rates that exceeded 10 percent. To address the issue of improper
payments, agencies should first identify the root causes of improper
payments and then implement internal controls aimed at both prevention
and detection.
The government's ability to understand the scope of the issue is
hindered by incomplete, unreliable, or under stated estimates; risk
assessments that may not be accurate; and noncompliance with criteria
listed in Federal law. For example, 18 Federal programs determined to
be at risk for improper payments did not report estimates of improper
payments in fiscal year 2016.
In addition, DoD lacks quality assurance procedures to ensure the
completeness and accuracy of its estimates. Further, various Inspectors
General reported deficiencies related to compliance with the criteria
listed in the Improper Payments Elimination and Recovery Act of 2010
for fiscal year 2015 at their respective Federal entities.
Our work identifies a number of strategies and specific actions
agencies can take to reduce improper payments, which could yield
significant savings and help better ensure that taxpayer funds are
adequately safeguarded.
Yawning Tax Gap.--According to the 2016 Financial Report, the
estimated size of the annual gross tax gap between taxes owed to the
government and total taxes paid on time is $458 billion. The tax gap
arises when taxpayers, whether intentionally or inadvertently, fail to
(1) accurately report tax liabilities on tax returns (underreporting);
(2) pay taxes due from filed returns (underpayment); or (3) file a
required tax return altogether or on time (nonfiling). Underreporting
accounted for 84 percent of the tax gap across tax years 2008 to 2010.
This resulted in an annual net tax gap of $406 billion. Given the
size of the tax gap, increased attention to this area would yield
significant financial benefits and help improve the government's fiscal
position.
Addressing the tax gap requires strategies on multiple fronts. Key
factors that contribute to the tax gap include limited third party
reporting and tax code complexity. For example, the extent to which
individual taxpayers accurately report their income is correlated with
the extent to which the income is reported to them and the IRS by third
parties.
Our work identifies a number of strategies and specific actions
Congress and agencies can take to reduce the tax gap, including
simplifying the tax code. Additional resources would enable us to
expand our work in finding ways to further close the tax gap, thus
improving the government's financial position.
Science and Technology.--Science and technology developments
influence almost every aspect of the American experience; they present
great opportunities to improve the quality of life, the performance of
the economy and the government, and the relationship of the government
to its population. While information technology is a major
technological force of this era, linking individuals, organizations,
and economies around the world, other kinds of scientific and
technological advances are also creating significant changes.
The increased development and use of new technologies challenge the
government's and the Congress's ability to evaluate their potential and
assess their program and policy implications in areas such as security,
safety, privacy, and equity.
In fiscal year 2016 we reported on Zika virus as an emerging
infectious disease, the continued need for effective oversight of high-
containment laboratories, the status of bio forensic capabilities in
the law enforcement and homeland security communities, the emergence of
data analytics and its overall impact on society and the economy, and
how municipalities can use technology to improve the efficiency of
their water distribution systems and tap nontraditional sources to
address water scarcity, among others.
GAO has already issued two best practice guides, addressing capital
acquisitions in the areas of lifecycle cost estimates and project
scheduling. These best practice products are designed to assist Federal
managers in addressing major projects, and they also serve as a means
by which GAO can evaluate such projects. Adding to these initial
efforts, GAO's science and technology group issued a third best
practice guide, this one addressing technology readiness assessment.
We expect this most recent work will be a means by which program
managers can identify technologies and manage their risks throughout
the development of technology-dependent projects. Given the persistent
and growing demand for this technical work, GAO strives to continue to
build our staff capacity in this growing area.
Additional resources would enable us to expand our work including
the completion of key strategic technology reports on the Internet of
Things, sustainable chemistry, rapid point-of-care medical diagnostics
for detecting infectious diseases (e.g., Ebola), artificial
intelligence systems, electromagnetic pulse threat mitigation
technologies, oversight of biosafety labs, nuclear waste immobilization
technologies, and emerging infectious diseases.
Based on interest expressed by various Committees of jurisdiction,
potential future science and technology work could focus on antibiotic-
resistant bacteria, freshwater conservation technologies for the
agricultural sector, block chain technologies (financial technology),
unmanned aerial systems, high-frequency trading technologies, and
regenerative medicine, among others.
information technology improvements
In fiscal year 2017, GAO requested funding to continue investments
to enhance our management information systems, IT infrastructure and
security, as well as our telecommunications capabilities. Fiscal year
2018 funding will seek to continue these efforts as well as make
additional improvements in these areas. For fiscal year 2018 GAO is
requesting funding needed to continue our efforts to improve and
modernize GAO's technology infrastructure and services.
Over the past few years GAO has undertaken the Engagement
Management System (EMS) and New Blue initiatives to better leverage
technology. These new systems will enhance our core business processes
and enable GAO products to be created and distributed in the most
efficient manner using currently supported technology.
GAO developed and deployed EMS to help manage the work throughout
the agency. This new system has been rolled out across the agency and
has allowed us to retire multiple legacy applications. New Blue will
enable the end-to-end processing of GAO products from drafting through
issuance to the Congress and posting on GAO's website. New Blue will
allow GAO to keep pace with the evolving methods of demand and
consumption of information from our clients and stakeholders by
supporting multiple formats and product types. Both EMS and New Blue
have been planned and are being executed to ensure the quality and
reliability of GAO products continues to be met at the highest levels
allowing greater efficiency and flexibility in best supporting
Congressional needs.
With funding requested for 2018, GAO will be able to meet key
demands for technology upgrades, including:
--GAO needs funding to upgrade its data center and the infrastructure
that supports GAO operations. GAO's data center requires 24/7
operational availability to adequately support staff located in
headquarters and GAO's 11 field locations throughout the United
States. GAO needs to improve data management operations and
security to ensure adequate support and meet ongoing needs. As
such, in fiscal year 2018, we will assess options to upgrade
the equipment supporting the center to provide a modern
computing environment, which could reduce costs and enhance
security, capacity, and availability. We expect to initiate
replacement of the equipment and support beginning in fiscal
year 2018.
--GAO is looking to make strategic investments into cloud-based
solutions to maximize efficiency, improve the security of our
data and our ability to best combat cyber threats to our
infrastructure, and position us to leverage technology
opportunities in the future.
--Funding is also being sought to retire our aging telephone and
video teleconferencing infrastructures and replace them with a
state of the art communications platform. Given that
collaboration is so vital to our mission, we are looking to
invest in new technologies that will improve how our staff
works and communicates when doing our work across geographic
locations.
--Another key priority in fiscal year 2018 is our effort to replace
our aging document management solution with a modern content
management solution. A new solution will improve our
capabilities to store and re-use the information and content we
produce in support of core Agency work processes and products.
A modern content management solution will enable GAO to more
effectively and efficiently serve Congress and the American
Public by providing new workflow management capabilities.
Cumulatively these technology improvements will help the GAO
workforce deliver its analysis to the Congress in the most robust and
modern manner and consistent with currently supported technology
standards. We are consistently looking to improve our technology
platforms to take advantage of technology advances that best enable GAO
to deliver value to our clients while seeking cost saving
opportunities. We sincerely appreciate the Committee's support to date
and look forward to your support in fiscal year 2018 and beyond.
gao's current environment
GAO operated at the Continuing Resolution (CR) level through the
beginning of May. This had a significant impact on human resource and
operations. We deferred or reduced staffing and curtailed spending on
technology investments that are critical to our efforts to modernize
GAO's infrastructure and business processes.
The fiscal year 2017 funding provided in the Omnibus will afford us
an opportunity to address many of the staffing and operations
challenges presented during the Continuing Resolution period.
The fiscal year 2018 budget request would enable GAO to bolster its
staff capacity to 3,100 FTEs through a targeted recruitment program to
help address succession planning and fill critical skill gaps. This
funding level will also help ensure that GAO is able to recruit and
retain a talented and diverse workforce as well as make progress
towards an optimal staffing level of 3,250 FTEs.
We expect to offset our funding needs with $27.5 million in
reimbursements from program and financial audits and rental income,
resulting in a net appropriation request of $590.7 million.
assisting congress in shaping legislation
GAO continues to be recognized for its non-partisan, objective,
fact-based, and professional analyses across the full breadth and scope
of the Federal Government's responsibilities and the extensive
interests of Congress. In fiscal year 2016, and to date in fiscal year
2017, Congress used GAO's work as the basis for a wide range of
significant legislative decisions.
The Consolidated Appropriations Act, 2017.--In many cases requires
an agency to take action based on GAO findings and recommendations. For
example, the act requires:
--Census to address shortcomings in its cost estimate, identified by
GAO, for the 2020 Census;
--Federal agencies to resolve duplication in programs identified by
GAO, by identifying substantive challenges, legal barriers, and
by making legislative recommendations;
--IRS to develop a customer service plan with specific goals,
strategies and, resources; GAO recommended that IRS assess gaps
between desired and actual customer service performance;
--GSA to improve its ability to account for Federal property and its
value; the management of Federal real property has been on
GAO's high risk list since 2015;
--Labor to finalize and implement regulations related to the
Workforce Innovation and Opportunity Act; GAO found that
limited guidance and regulations slowed the act's
implementation; and
--Defense to
--produce information clarifying the content, scope, and phasing of
developments, and capabilities of Joint Strike Fighter
components; GAO found current management of follow-on
development potentially posed greater costs and schedule
risk;
--report on the cost, schedule, and obligations of the Defense
Healthcare Systems Modernization program.
The act also cited GAO work on deficiencies in agencies'
information technology systems and directed agencies to implement those
recommendations. Among those agencies included were the Farm Service
Agency, the IRS, Housing and Urban Development, and the Federal
Emergency Management Agency.
The Act also directed agencies to implement other GAO
recommendations. For example, the act directs:
--Customs and Border Patrol to document the time unaccompanied
children spend in custody, the care afforded them, and to
develop a way to register, track and analyze complaints for
trends.
In other cases, the Act required an agency to report on its
progress implementing a GAO recommendation. For example, the act
requires progress reports on the following:
--the State Department's efforts to utilize cost containment, risk
assessment, and strategic planning for oversees facilities,
such as embassies; and establish performance goals for programs
meant to reduce global poverty and to collaborate with similar
U.S. programs; and
--Interior's actions to ensure the Bureau of Indian Education schools
and facilities have effective management controls and comply
with Federal laws and regulations.
Finally, the act included reductions to budget requests, including
to the Department of Defense's (DoD) fiscal year 2017 appropriations
based on GAO work. For example, GAO found that DoD had overstated its
fiscal year 2017 O&M budget request for fuel, resulting in $1.1 billion
in reductions.
The Fiscal Year 2017 Military Construction and Veterans Affairs,
and Related Agencies Appropriations Act.--Requires Veteran Affairs (VA)
to clarify access and wait times for mental health serves and how it
manages appointments for these services. GAO found that the Veterans
Health Administration calculations of veteran mental health wait times
may not have always reflected the overall amount of time a veteran
waited for care.
The Bipartisan Budget Act of 2015.--The Congress used GAO's work to
contribute to an agreement on spending caps in fiscal years 2016 and
2017 by identifying $30 billion in offsets or revenue enhancements,
including (1) making new provider-based off-campus hospital outpatient
departments ineligible for inpatient reimbursements, saving $9.3
billion; (2) streamlining and simplifying audit procedures for certain
partnerships, increasing tax revenue by an estimated $9.3 billion; and
(3) requiring agencies to increase civil monetary penalties annually
reflecting the consumer price index, generating $1.3 billion.
The National Defense Authorization Act for Fiscal Year 2017.--
Undertakes significant reform of military acquisition policy.
Specifically, the Act requires DoD to improve reporting about the
volume and types of defense services acquired, control costs, enhance
access to supply chains, and take steps to reduce acquisition risks and
encourage the development of new prototypes.
--These changes reflect GAO's body of work on military acquisition
that concluded, among other things, that senior DoD leadership
needed to be better positioned to make informed decisions about
acquisition. Changing approaches to acquisition could result in
significant savings. In addition, access to innovative
technology could be improved.
--In addition to reforming acquisition, the Act requires DoD to
report on rebuilding military readiness, specifically
comprehensive readiness goals, implementation strategies,
progress metrics, and related costs and other best practices.
These requirements reflect GAO's finding that the lack of a
comprehensive plan put DoD's readiness rebuilding efforts at
risk.
--The Act did not fund the request for $15,260,000 in funding to
create a repository for defense nuclear waste, based on GAO's
finding that DOE's cost estimates for its repository plan
excluded billions of dollars in likely costs.
--Separately, the Act directs Federal agencies to use paid
administrative leave more judiciously, so leave does not exceed
reasonable amounts. GAO had reported that Federal agencies had
inconsistent policies for the use and reporting of paid
administrative leave and that 263 Federal employees had used 1
to 3 years of leave during a 3 year period.
The Fraud Reduction and Data Analytics Act of 2015.--Requires the
Office of Management and Budget (OMB) to establish guidelines based on
GAO's 2015 Framework for Managing Fraud Risks in Federal Programs to
help prevent and respond to fraud and improper payments in Federal
programs.
The Framework identifies leading practices to help managers combat
fraud and preserve integrity in government agencies and programs. The
act should help agencies reduce their vulnerability to fraud by
encouraging them to identify risks and vulnerabilities; implement
financial and administrative controls; and by requiring transparency
through reporting on these efforts.
The Frank R. Lautenberg Chemical Safety for the 21st Century Act.--
GAO has had ``Transforming EPA's Process for Assessing and Controlling
Toxic Chemicals'' on our high-risk list since 2009 because EPA had not
developed sufficient chemical assessment information to limit exposure
to many chemicals that may pose substantial health risks. This act
provides EPA with greater authority to address chemical risks.
Program Management Improvement Accountability Act.--The act seeks
to improve program and project management in Federal agencies. Among
other things, the act requires the Deputy Director of the Office of
Management and Budget (OMB) to adopt and oversee implementation of
government-wide standards, policies, and guidelines for program and
project management in executive agencies.
The act elevates agencies' attention to GAO's high risk list by
requiring the Deputy Director to address programs on our High-Risk List
through portfolio reviews; creating an interagency forum to review
programs on the High-Risk List and make recommendations to the Deputy
Director or designee; and having GAO review the effectiveness of key
efforts under the act.
The No Veterans Crisis Line Call Should Go Unanswered Act.--
Requires Veterans Affairs to ensure that each telephone call, text
message, or other communication that their crisis line receives is
answered in a timely manner by a person. GAO found that VA did not meet
its call response time goals for the Veterans Crisis Line and that some
test text messages did not receive responses.
financial benefits to the federal government from gao's work
GAO's findings and recommendations produce measurable financial
benefits for the Federal Government. Examples include financial
benefits resulting from changes in business operations and activities,
the restructuring of Federal programs, or modifications to
entitlements, taxes, or user fees.
In fiscal year 2016, we exceeded our target of $50.0 billion in
financial benefits by $13.4 billion, reaching $63.4 billion in benefits
for the government. This is a return of about $112 for every dollar
invested in us. Key financial benefits arising from our work included:
--reducing improper payments in the Medicare Advantage Program (about
$21.4 billion);
--increasing the use of strategic sourcing by the VA to reduce
procurement costs (about $3.6 billion); and
--improving cost estimates for the DoD's Bulk Fuel Operation and
Maintenance budget (about $2.3 billion).
program benefits
Many other benefits resulting from our work cannot be measured in
dollars, but lead to program and operational improvements. In fiscal
year 2016, agencies and Congress implemented 1,234 of these other
benefits. For example, our work on public safety and security:
--prompted DOT to enhance its oversight of roadside safety hardware
(e.g., guardrails), including a new process to verify third-
party crash-test results;
--led the Consumer Financial Protection Bureau (CFPB) to issue a
comprehensive data privacy protection plan and develop
procedures to mitigate privacy risks and remove personally
identifiable information from the consumer data that it
collects;
--induced the Army to complete a mission risk assessment on planned
support unit force reductions, and assess options to minimize
such risks;
--prompted the Federal Bureau of Investigation to (1) conduct audits
to ensure that staff who submit face image searches comply with
privacy laws and (2) undertake an operational review of its
face recognition technology to see if it is meeting law
enforcement user needs; and
--led the Department of State to enhance its management of
transportation-related security risks to better protect U.S.
diplomatic personnel and their families when posted overseas.
Similarly, our work related to vulnerable populations:
--addressed protection of children including: identifying (1) safety
and health issues at Indian school facilities and the need for
better Federal coordination to assist K-12 schools with
emergency preparedness, (2) the need for better use of data to
help agencies identify disparities in K-12 education, and (3)
the importance of further assisting States to keep foster
children in family based care;
--prompted the Federal Trade Commission and CFPB to issue consumer
advisories to reduce the exploitation of vulnerable people
regarding pension advances;
--prompted VA to improve the accuracy of the data collected on
veteran suicides across its medical centers to better inform
suicide prevention efforts; and
--led the Department of Education to enhance assistance for homeless
youth in planning for college, navigating the admissions
process, and applying for Federal student aid.
testimonies and digital media
In fiscal year 2016 senior GAO officials testified 119 times before
69 separate committees or subcommittees on issues that touched
virtually all major Federal agencies.
We also engaged key stakeholders on social and digital media. Our
testimonies, reports, and legal decisions appeared in nearly 40,000
twitter feeds. Watch Blog, which provides context about our work, has
been viewed more than 165,000 times. Figure 1 shows examples of topics
we testified on in fiscal year 2016, by strategic goal.
FIGURE 1: SELECTED GAO FISCAL YEAR 2016 TESTIMONIES
_______________________________________________________________________
Goal 1: Address Current and Emerging Challenges to the Well-Being and
Financial Security of the American People
_______________________________________________________________________
Addressing Improper Payments in the Supplemental Nutrition Assistance
Program
Improving Oversight of the Small Business Administration's HUB Zone
Program
Timely Handling of Veterans' Health Care Claims
Controls for Preventing Human Trafficking
Reforming Regulation of Scientific Research
Ensuring Safety and Health at Indian Schools
Managing Federal Agencies' Vehicle Fleets
Safeguarding Transport of Spent Nuclear Fuel
U.S. Postal Service Management Challenges
Overseeing the Nuclear Security Enterprise
Commercial Space Industry Developments and FAA Challenges
Improving Medicaid's Allocation to States
Managing and Leasing Federal Real Property
_______________________________________________________________________
Goal 2: Respond to Changing Security Threats and the Challenges of
Global Interdependence
_______________________________________________________________________
Addressing NASA's Management Challenges for Major Acquisition Projects
Meeting Pilot Workforce Needs for Unmanned Aerial Systems
Addressing Acquisition Shortfalls with the Ford Class Aircraft Carrier
Reducing Migration of Unaccompanied Children from Central America
Oversight of Humanitarian Aid to Syria
Future Access and Capabilities Challenges for Trusted Defense
Microelectronics
Addressing Southwest Border Security
Improving DoD's Whistleblower Protections
Implementing SEC's Conflict Minerals Rule
Combatting Nuclear Smuggling
Addressing IT Security and Identity Theft
Providing Data on Proposed Assistance to Palau
Enhancing National BioSurveillance Capacity
_______________________________________________________________________
Goal 3: Help Transform the Federal Government to Address National
Challenges
_______________________________________________________________________
DATA Act Implementation Challenges
Observations on the Zika Virus Outbreak
Improving Enrollment Controls for Medicare Providers and Suppliers
Reducing Fragmentation, Overlap, and Duplication in Federal Programs
Addressing Cyber-based Risks to Federal Systems
Modernizing Federal IT Systems
Improving Integration of VA and DoD Electronic Health Records
Improving IRS's Efforts to Protect Taxpayer data and Combat Identity
Theft Refund Fraud
Oversight at High Containment Laboratories
Addressing Numerous IT Challenges at the VA
Addressing Government-Wide Improper Payments and the Tax Gap
Improving Oversight of DHS' Human Resources IT
Recruiting and Retaining Millennial Employees in the Federal Workforce
Improving Management of IT for the 2020 Census
Improving Federal Financial Management
----------
Source: GAO GAO-17-1SP
high-risk program update
Every 2 years GAO publishes our high-risk list that highlights
Federal programs and operations that are especially vulnerable to
waste, fraud, abuse and mismanagement, or that need transformative
change.
GAO's 2017 edition reported that many of the 32 high-risk areas on
the 2015 list have shown solid progress (Enclosure I). Twenty-three
high-risk areas, or two-thirds, have met or partially met all five
criteria for removal from the High-Risk List; 15 of these areas fully
met at least one criterion. Progress in high risk areas over the past
decade resulted in financial benefits totaling approximately $240
billion, or an average of $24 billion per year.
Progress has been possible through the concerted efforts of
Congress and leadership and staff in agencies. For example, Congress
enacted over a dozen laws since GAO's last report in February 2015 to
help address high-risk issues.
GAO removed one high-risk area on managing terrorism related
information, because significant progress had been made to strengthen
how intelligence on terrorism, homeland security, and law enforcement
is shared among Federal, State, local, Tribal, international, and
private sector partners.
Sufficient progress was made to remove segments of two areas
related to supply chain management at DoD and gaps in geostationary
weather satellite data.
Two high-risk areas expanded: DoD's polar-orbiting weather
satellites and the Department of the Interior's restructuring of
offshore oil and gas oversight. Several other areas need substantive
attention including VA healthcare, DoD financial management, ensuring
the security of Federal information systems and cyber critical
infrastructure, resolving the Federal role in housing finance, and
improving the management of IT acquisitions and operations.
GAO added three areas to the High-Risk List, bringing the 2017
total to 34:
--Management of Federal Programs That Serve Tribes and Their
Members.--GAO has reported that Federal agencies, including the
Department of the Interior's Bureaus of Indian Education and
Indian Affairs and the Department of Health and Human Services'
Indian Health Service, have ineffectively administered Indian
education and healthcare programs and inefficiently developed
Indian energy resources. Thirty-nine of 41 GAO recommendations
on this issue remain unimplemented.
--The 2020 Decennial Census.--The cost of the census has been
escalating over the last several decennials; the 2010 Census
was the costliest U.S. Census in history at about $12.3
billion, about 31 percent more than the 2000 Census. The U.S.
Census Bureau plans to implement several innovations including
IT systems for the 2020 Census. Successfully implementing these
innovations, along with other challenges, would minimize risks
to the Census Bureau's ability to conduct a cost-effective
census. Since 2014, GAO has made 30 recommendations related to
this area; however, only 6 have been fully implemented.
--U.S. Government's Environmental Liabilities.--In fiscal year 2016
this liability was estimated at $447 billion (up from $212
billion in 1997). The Department of Energy is responsible for
83 percent of these liabilities and DoD for 14 percent.
Agencies spend billions each year on environmental cleanup
efforts, but the estimated environmental liability continues to
rise. Since 1994, GAO has made at least 28 recommendations
related to this area; 13 are unimplemented.
Details on each high-risk area can be found at http://www.gao.gov/
highrisk/overview.
opportunities to reduce fragmentation, overlap, and duplication
Since 2011, we have reported on Federal programs, agencies,
offices, and initiatives that have duplicative goals or activities as
well as opportunities to achieve greater efficiency and effectiveness
that result in cost savings or enhanced revenue collection.
GAO's 2017 annual report, our seventh, identifies 79 new actions
that Congress and executive branch agencies can take to improve the
efficiency and effectiveness of government in 29 new areas. Of these,
GAO identified 15 areas in which there is evidence of fragmentation,
overlap, or duplication.
For example, GAO found that the Army and Air Force need to improve
the management of their virtual training programs to avoid
fragmentation and better acquire and integrate virtual devices into
training to potentially save tens of millions of dollars.
GAO also identified 14 areas to reduce the cost of government
operations or enhance revenues. For example, GAO found that the
Department of Energy could potentially save tens of billions of dollars
by improving its analysis of options for storing defense and commercial
high-level nuclear waste and fuel.
Congress and executive branch agencies have made progress in
addressing the 645 actions that GAO identified from 2011 to 2016.
Congressional and executive branch efforts to address these actions
over the past 6 years have resulted in roughly $136 billion in
financial benefits, of which $75 billion has accrued and at least an
additional $61 billion in estimated benefits is projected to accrue in
future years.
To manage our congressional workload, we continue to take steps to
ensure our work supports the highest congressional legislative and
oversight priorities while focusing on areas with the greatest
potential for results, such as cost savings and improved government
performance.
managing workload by focusing resources on congressional priorities
We actively coordinate with congressional committees in advance of
new statutory mandates \1\ by identifying mandates in real time as
bills are introduced, participating in ongoing discussions with
congressional staff, and collaborating to ensure that the work is
properly scoped and consistent with the committees' highest priorities.
---------------------------------------------------------------------------
\1\ Congressional mandates include requirements directed by
statutes, congressional resolutions, conference reports, and committee
reports.
---------------------------------------------------------------------------
In fiscal year 2016, we devoted 97 percent of our engagement
resources to work requested or mandated by the Congress. The remaining
3 percent was initiated under the Comptroller General's authority.
Chairs and Ranking Members of committees and subcommittees are
regularly consulted for feedback on our performance. Their priorities
ensure we maximize the return on your investment in us.
We continue to collaborate with the Congress to revise or repeal
mandated reporting requirements which have, over time, lost relevance
or usefulness. For example, we worked with the armed services
committees to have three mandates repealed or revised in the 2017
National Defense Authorization Act (Public Law 114-328). In addition,
in December, 2016, Congress passed the GAO Mandates Revision Act of
2016, which revised or repealed eight statutory reporting requirements
(Public Law 114-301).
gao's strategic plan
GAO's Strategic Plan provides a comprehensive roadmap for how our
audit work will support the most important priorities of Congress and
the American people. ``Serving the Congress and the Nation 2014-2019
(GAO-14-1SP)'' describes our goals and strategies for supporting
Congress and the Nation.
The Strategic Plan Framework (Enclosure II) summarizes the global
trends affecting government and society, as well as the strategic goals
and objectives that guide our work. We will issue the next update to
our strategic plan in 2018.
To effectively assist the Congress, we perform not only oversight
and insight work, but also foresight work to identify and explore the
emerging issues that present both opportunities and significant risks
for our Nation. Building further foresight capabilities, including the
ability to understand evolving trends and plan in a dynamic external
environment, is an essential component to our support of Congress.
internal improvements
The hard work and dedication of our professional, diverse,
multidisciplinary staff positioned GAO to achieve a 94 percent on-time
delivery of our products in 2016. Our fiscal year 2016 performance
continues to indicate that we provide staff with the necessary support
to produce high-quality work.
We met our annual target for retention rate without retirements and
exceeded our annual targets for the remaining six people measures,
staff development, and staff utilization, effective leadership by
supervisors, organizational climate, new hire rate, and retention rate
with retirements.
In fiscal year 2016, we continued efforts to support and maximize
our value by enabling quality, timely service to the Congress and being
a leading practices Federal agency. We made progress addressing our
four internal management challenges, human capital management,
engagement efficiency, information security, and telework.
We remain an employer of choice in the public sector. The
Partnership for Public Service announced that we are one of the top
places to work in the Federal Government. We improved our scores in
2016, rising to second place among mid-size agencies. We are ranked
first for diversity and inclusion. Our ranking is a result of the
dedicated efforts of the entire GAO team and our leaders' commitment to
make our organization a great place to work.
We value our high-performing workforce. Management remains
committed to work with our unions (IFPTE, Local 1921), the Employee
Advisory Council, and the Diversity Advisory Council to make GAO a
preferred place to work. We continue to monitor and address critical
human capital management challenges, including the pending retirements
of key subject matter experts, senior executives, and other key
leaders. By the end of fiscal year 2017, 41 percent of our senior
executives and more than 25 percent of our supervisory analysts will be
eligible to retire.
center for audit excellence
Public Law 113-235 authorized GAO to establish a Center for Audit
Excellence (Center) to provide fee-based training, technical assistance
and other products and services to domestic and international
accountability organizations to promote good governance and enhance
their capacity.
During fiscal year 2016, the Center's first year of operation, the
Center provided fee-based training classes and audit-related technical
assistance services to 10 Federal, State, local and non-profit
organizations. The Center helped to enhance the capacity of these
organizations by providing training on topics such as internal control,
performance auditing, audit planning, report writing, and statistical
sampling and analysis. Also, in April 2016, the Center entered into a
Memorandum of Agreement with the U.S. Agency for International
Development (USAID) that provides a broad framework for collaborative
efforts to strengthen the capacity of accountability organizations in
developing countries that receive U.S. foreign assistance.
During fiscal year 2017, the Center has experienced increased
demand for training and technical assistance services from both
domestic and international accountability organizations. The Center has
signed agreements and/or provided training classes to nine Federal,
State, and local government organizations thus far this fiscal year,
including a package of five one-week training classes valued at
$157,000 for one organization. Agreements with other domestic
organizations are also under negotiation. Internationally, the Center
is executing an agreement with the country of Georgia's Supreme Audit
Office for $95,000 in training and technical assistance services to
enhance the office's capability to conduct information technology
audits. Finally, the Center is in the process of negotiating agreements
with USAID and other donors to provide technical assistance services to
other Supreme Audit Institutions.
concluding remarks
We value the opportunity to provide Congress and the nation with
timely, insightful analysis on the challenges facing the country. Our
fiscal year 2018 budget requests the resources to ensure that we can
continue to address the highest priorities of the Congress.
Our request will allow us to continue building our staffing level
and provide our employees with the appropriate resources and support
needed to effectively serve the Congress. This funding level will also
allow us to continue efforts to promote operational efficiency and
address long-deferred investments and maintenance. We will also
continue to explore opportunities to generate revenue to help offset
our costs.
I appreciate, as always, your careful consideration of our budget
and your continued support. I look forward to discussing our fiscal
year 2018 budget with you.
[Enclosures I and II follow:]
ENCLOSURE I: GAO'S 2017 HIGH RISK LIST
GAO'S HIGH-RISK AS OF SEPTEMBER 30, 2016
------------------------------------------------------------------------
High Risk Area Year Designated
------------------------------------------------------------------------
Strengthening the Foundation for Efficiency and Effectiveness
------------------------------------------------------------------------
Improving Federal Programs that Serve Tribes and 2017
their Members (new) \a\........................
2020 Decennial Census (new)..................... 2017
U.S. Government Environmental Liabilities (new) 2017
\a\............................................
Improving the Management of IT Acquisitions and 2015
Operations.....................................
Limiting the Federal Government's Fiscal 2013
Exposure by Better Managing Climate Change Risk
Management of Federal Oil and Gas Resources..... 2011
Modernizing the U.S. Financial Regulatory System 2009
and the Federal Role in Housing Finance \a\....
Restructuring the U.S. Postal Service to Achieve 2006
Sustainable Financial Viability \a\............
Funding the Nations Surface Transportation 2007
System \a\.....................................
Managing Federal Real Property.................. 2003
Strategic Human Capital Management \a\.......... 2001
------------------------------------------------------------------------
Transforming Defense Department Program Management
------------------------------------------------------------------------
DoD Approach to Business Transformation......... 2005
DoD Support Infrastructure Management \a\....... 1997
DoD Business Systems Modernization.............. 1995
DoD Financial Management........................ 1995
DoD Supply Chain Management..................... 1990
DoD Weapon Systems Acquisitions................. 1990
------------------------------------------------------------------------
Ensuring Public Safety and Security
------------------------------------------------------------------------
Mitigating Gaps in Weather Satellite Data....... 2013
Protecting Public Health through Enhanced 2009
Oversight of Medical Products..................
Transforming EPA's Processes for Assessing and 2009
Controlling Toxic Chemicals....................
Ensuring the Effective Protection of 2007
Technologies Critical to U.S. Nations Security
Interests \a\..................................
Improving Federal Oversight of Food Safety...... 2007
Strengthening Department of Homeland Security 2003
Management Functions \a\.......................
Ensuring the Security of Federal Information 1997
Systems and Cyber Critical Infrastructure and
Protecting the Privacy of Personally
Identifiable Information.......................
------------------------------------------------------------------------
Managing Federal Contracting More Effectively
------------------------------------------------------------------------
DoD Contract Management \a\..................... 1992
DOE's Contract Management for the National 1990
Nuclear Security Administration and the Office
of Environmental Management....................
NASA Acquisition Management..................... 1990
------------------------------------------------------------------------
Assessing the Efficiency and Effectiveness of Tax Law Administration
------------------------------------------------------------------------
Enforcement of Tax Laws \a\..................... 1990
------------------------------------------------------------------------
Modernizing and Safeguarding Insurance and Benefit Programs
------------------------------------------------------------------------
Managing Risks and Improving VA Health Care \a\. 2015
National Flood Insurance Program................ 2006
Improving and Modernizing Federal Disability 2003
Programs.......................................
Pension Benefit Guaranty Corporation Insurance 2003
Programs \a\...................................
Medicaid Program \a\............................ 2003
Medicare Program \a\............................ 1990
------------------------------------------------------------------------
\a\ Legislation is likely to be necessary to effectively address this
high risk area
Source: GAO GAO 17-317
ENCLOSURE II: GAO'S STRATEGIC PLAN FRAMEWORK
(See Enclosure II in the full report GAO-17-604T, ``Testimony Before
the Subcommittee on the Legislative Branch, Committee on
Appropriations, U.S. Senate'' in the appendix at the end of the
hearing.)
Senator Lankford. Thank both of you for your testimony.
Senator Murphy and I are going to defer our questions to the
end, and recognize Senator Van Hollen.
Senator Van Hollen. Thank you. Thank you, Mr. Chairman and
Ranking Member Murphy. I am grateful for the opportunity.
Thank both of you for your testimony today. Most
importantly, thank you and your teams for the good work you do
on behalf of our constituents, the American people and
taxpayers.
METRO ENGAGEMENT
Mr. Dodaro, I just have a couple questions. One is a
regional issue regarding the Washington Metro system, which
carries hundreds of thousands of Federal employees to work
every day, and I appreciate your oversight work on SafeTrack.
As I am sure you are aware, Members of the regional
delegation here, Senator Warner, Senator Cardin, Senator Kaine
and others have requested that GAO look into some additional
challenges with a view to making recommendations as to how we
move forward with this multijurisdictional metro system that is
the Nation's subway.
My question to you is, number one, have you had a chance to
review that request, and do you have any sense of when your
analysis might be ready?
Mr. Dodaro. We have reviewed the request. We have accepted
the request. The work of our staff is underway and--we will
have to give you a date later. I am not prepared to give a date
right now.
Senator Van Hollen. Got it.
Mr. Dodaro. It is important work. We will finish it as soon
as we can.
Senator Van Hollen. I appreciate that.
OVERSEAS CONTINGENCY ACCOUNT
Next question relates to budget issues and OCO. For those
of us who have been working on budget issues over time, there
are issues of sequestration and then there are issues of what
the overall defense spending will be and nondefense. And then
within defense and some nondefense categories we have the
overseas contingency----
Mr. Dodaro. Right.
Senator Van Hollen [continuing]. Accounts. And as I think
both parties have recognized, over time, these accounts have
been used in some cases for more of a slush fund to pay for
things that are not necessarily contingencies but may be
enduring costs. I know that in January GAO recommended that
both DoD and OMB work together to revise the criteria for
determining what meets the requirements of being considered
overseas contingency account expenditures.
So, my question is do you know where those agencies are? I
believe that they were waiting for a new administration to
pursue your recommendation. What is the status of that? What is
this new administration thinking in that regard?
Mr. Dodaro. Yes. I have a meeting next month with Secretary
Mattis over at the Department of Defense (DoD), and I plan to
follow up. I met once with Director Mulvaney, and I did not
address this issue with him at that time. I had a long list of
other things to talk to him about. I will follow up with him. I
do not know offhand, Senator Van Hollen. It is something that I
will follow up with both of them on.
Senator Van Hollen. I hope you will. OMB Director Mulvaney
and I do not agree on everything, but we actually had a
bipartisan amendment in the House of Representatives, which
passed at least 1 year, to end the abuse of OCO because all of
us I think should agree that, at least from an accounting
perspective, we should be honest and transparent with the
American people, so I really hope you will----
Mr. Dodaro. Yes.
Senator Van Hollen [continuing]. Pursue that because I am
sure this is an issue that will arise in the context of the
upcoming budget negotiations and the appropriations.
Mr. Dodaro. Yes. I will do two things. One, I will provide
an answer for the record based upon checking with our staff,
and then I will follow up with both of those individuals.
[The information follows:]
response for the record on status of recommendations for overseas
contingency operations: omb and dod should revise the criteria for
determining eligible costs and identify the costs likely to endure long
term (gao-17-68)
GAO made the following recommendations for executive action in this
January, 2017 report.
1. To provide additional information for congressional decision
makers regarding DoD's budget, the Secretary of Defense should direct
the Under Secretary of Defense (Comptroller), in consultation with the
OMB, to reevaluate and revise the criteria for determining what can be
included in DoD's OCO budget requests to reflect current OCO-related
activities and relevant budget policy directing in which budget
requests OCO funds may be included.
2. To assist decision makers in formulating DoD's future budgets,
the Secretary of Defense should direct the Under Secretary of Defense
(Comptroller) to develop a complete and reliable estimate of DoD's
enduring OCO costs and to report these costs in concert with the
department's future budget requests, and to use the estimate as a
foundation for any future efforts to transition enduring costs to DoD's
base budget.
The Department of Defense (DoD) and Office of Management and Budget
(OMB) have not taken action on our recommendations. In DoD's response
to a draft of our report, DoD concurred with our first recommendation
and stated it planned to propose updated criteria to OMB to reflect
current and evolving threats and reflect any changes in overseas
contingency operations policy under the new administration. As of June
2017, neither OMB nor DoD has publically released updated criteria, and
DoD has not made any updates to Volume 12, Chapter 23 of its Financial
Management Regulation that governs contingency operations to reflect
the criteria.
According to an official at DoD, at this time, there are no updates
to the criteria for determining what can be included in DoD's overseas
contingency operations budget request nor are there efforts underway
between DoD and OMB to update the criteria. In addition, DoD's fiscal
year 2018 budget request continued to include activities that our
report identified as not being specifically addressed in the OMB
criteria, including operations in Syria, the European Reassurance
Initiative, and security cooperation funds (formerly the known as the
Counterterrorism Partnership Fund).
Regarding our second recommendation, the department has not, as
yet, responded, and DoD's fiscal year 2018 budget request, issued in
May 2017, did not include an estimate of its enduring overseas
contingency operations costs as we had recommended. In its response to
our draft report, DoD partially concurred with our second
recommendation and commented that developing reliable estimates is an
important first step in any future effort to transition these costs to
the base budget.
However, DoD stated that until there is relief from the budgetary
caps established by the Budget Control Act of 2011, DoD would need
overseas contingency operations funds to finance counterterrorism
operations, such as Operation Freedom Sentinel and Operation Inherent
Resolve. DoD also offered no plans to take action to address this
recommendation in its response to our draft report.
PENTAGON AUDIT
Senator Van Hollen. Thank you. My last question for you,
Mr. Dodaro, is that the Pentagon waste and the fact that DoD
has still not passed an audit, we discussed this briefly----
Mr. Dodaro. Right.
Senator Van Hollen [continuing]. During the Budget
Committee hearing. Just to quote from the GAO's report that the
Pentagon's inability to manage its finances affects its, quote,
``ability to control costs, ensure basic accountability,
anticipate future costs, measure performance, prevent and
detect fraud, waste, and abuse, and address pressing management
issues and prepare auditable financial statements.''
Now, the DoD Inspector General--well, we had set out a
deadline of September 30 of this year for DoD to pass the
audits. Do you have any current assessment of whether they are
going to be able to do that?
Mr. Dodaro. Well, DoD has been expanding the scope of the
audits. The last couple years they have just been trying to
audit 1 year of budget execution data and they have not been
able to pass those audits. They have expanded the scope of the
audits, which is a good thing because they need to learn more
about what they need to do to be able to pass an audit. The
Department has said they do not expect to pass the audits, but
it is important for them to continue to prepare the data and
systems to conduct the audit.
The audits that were done for 2015 and 2016 had over 700
recommendations for improvement. We have made recommendations
and DoD need to better monitor the corrective actions and fix
some of these underlying problems, that would put themselves in
a better position to ultimately be able to pass an audit.
Senator Van Hollen. Right.
Mr. Dodaro. This is one of the things I want to talk to the
Secretary about. It's important for them to get their people in
those positions and focused on----
Senator Van Hollen. Right.
Mr. Dodaro [continuing]. Those issues, so I am on that
case.
Senator Van Hollen. I know, but this has been a story----
Mr. Dodaro. Yes.
Senator Van Hollen [continuing]. That goes on----
Mr. Dodaro. Yes.
Senator Van Hollen [continuing]. Year after year after
year, and I think we all appreciate your work at GAO to try to
make sure we identify Medicare fraud or Medicaid fraud or EITC
fraud. None of us want to see taxpayer dollars wasted. But with
DoD, they seem to go on with impunity, and so we look forward
to that conversation.
COPY OF HEALTHCARE REFORM BILL
So, my last question is really for Dr. Hall, and it is, you
know, more of a statement of sympathy than a question, but I do
want to associate myself with the remarks of Senator Murphy
with respect to the way this process on so-called healthcare
reform has rolled out here in the United States Senate. We have
not had a single hearing on a bill, that apparently is going to
be sprung on the American public as early as tomorrow.
My question to you is do you have a copy of that bill? And
when do you expect to be able to issue a CBO analysis of that
bill?
Dr. Hall. Well, as you are probably aware, we do a lot of
work on draft legislation in a confidential mode where we will
look at pieces of it, we will look at drafts, and give feedback
and et cetera. And when we are in that mode, we will not talk
about what we have got, even what we are working on. I can tell
you we are working on a number of things on a number of topics,
so I really cannot tell you at this point.
Senator Van Hollen. Well, apparently, the Republican leader
is not able to tell the public or even Senator or his members.
But let me ask you this. Based on your review of the earlier
iterations of this legislation like the original House bill and
the second House bill, what is the expected turnaround time
from when you actually get a final product to when you think
you are going to be able to provide an analysis? Because that
will determine potentially the amount of time the American
public has to look at the nonpartisan analysis of facts before
we enter into a debate on this legislation.
Dr. Hall. Well, the answer is it depends. It depends on how
early we have seen drafts and how much work we have been able
to do, and they are almost always on things--there are almost
always little iterations and changes. So, you know, on
something like that we could spend a fair amount of time on it
before it is made public, in which case it will not be so long
to get something out. It actually just--it just sort of
depends.
I will say, though, when we are in this confidential mode,
we are very concerned about the level playing field. So once
some legislation is in final full form and it becomes public,
then any estimate we finished becomes public, as soon as we
finish it or as soon as the bill is made public. So, we will
make it public as soon as we can once it is sort of full and
finally released to the public and we have finished our work.
Senator Van Hollen. Okay. Well, just when you do that, I
look forward to sitting down with you and your team to go over
your findings.
Dr. Hall. Okay. We are happy to do that.
Senator Van Hollen. Thank you.
Senator Lankford. Let me just bounce several questions off
of you, and we will do a couple of rounds of questions and try
to keep them in smaller bites so we can run through some
things.
2017 GAO STAFF
Mr. Dodaro, the omnibus funding allocated additional funds
for GAO to support additional staffing requests and to be able
to make some changes. How is it going currently implementing
those at this point, with a shortened fiscal year to be able to
accomplish that? What is the status?
Mr. Dodaro. Since we received the funds last month, we have
expedited our hiring plans. We plan to hire about 211 people
that would get us to the 3,000 FTE mark that we talked with you
and your staff about. We have hired about 160 of those already,
and we are working on the remaining hiring. We expect to be in
good shape. We expect to have over 3,000 people at the start of
next fiscal year, so we would be in a position, if we receive
the additional funds in 2018, to reach the 3,100 mark.
Exactly where we end up this year will depend on how
quickly those people get on board in the next couple months
before the end of the fiscal year. We are being aggressive. We
are out looking for the people that we need.
Senator Lankford. What is your typical time to hire as far
as number of days typically to add an additional employee?
Mr. Dodaro. I do not know off the top of my head----
Senator Lankford. That could possibly be the first time I
have ever asked you a question you did not know the answer to.
Mr. Dodaro. Well----
Senator Lankford. And I have asked you a lot.
Mr. Dodaro. Well, it depends. Most of our hiring is done by
hiring summer interns back that had been there in the previous
summer. In those cases, we actually make them job offers before
they leave. Last year we did not make those offers because we
did not know our appropriation for the year. We have contracted
and made offers to them now. If we have to post an announcement
and evaluate new applicants, then it takes a little longer.
Senator Lankford. Which, by the way, you just made several
hundred Federal agencies jealous by saying you are able to hire
summer interns onto your full-time staff because, of the 120
hiring authorities they have, they struggle with that one,
which for most Americans is the most obvious of all the hiring
authorities that should be in place that most agencies do not
have. That is a different conversation for a different day.
Mr. Dodaro. Right.
Senator Lankford. Hopefully, we can get that done. Senator
Heitkamp and I are working on getting that hiring authority.
FISCAL YEAR 2018 REQUEST
You have asked for an increase of $11.9 million. Give me a
quick return on investment on that on why that would be
beneficial. And not to embarrass you, you have asked for 100
additional people. The person to your right asked for four. So,
tell me the return on investment on that to the Federal
taxpayer.
Mr. Dodaro. Yes. On a percentage basis----
Senator Lankford. Yes.
Mr. Dodaro [continuing]. It is about the same----
Senator Lankford. I understand.
Mr. Dodaro [continuing]. Senator. I point that out----
Senator Lankford. Yes.
IMPROPER PAYMENTS
Mr. Dodaro [continuing]. I think there would be a good
return on investment in the following areas. I am very
concerned about the growth in improper payments in the Federal
Government. Since reporting started by the agencies in 2003,
over $1.2 trillion has been reported by the agencies as
improper payments during that period of time. I think we have
money going out the door that should not, and we have revenue
that should be coming in that is not. The Congress struggles
every year to stay under the discretionary caps and find tens
of billions of dollars in savings. We have a situation where
the government agencies have eliminated $144 billion in
improper payments last year alone and $400 billion missing from
revenue that should be collected.
We have made contributions in these areas. I am confident
that we could make additional contributions in this area----
Senator Lankford. Yes, your opening statement implied that
would be the priority of people that you would add. Is that
true?
Mr. Dodaro. That is true. It would be improper payments,
tax gap, and also I mentioned the science and technology area.
That is where we would add additional resources.
Senator Lankford. Okay.
Mr. Dodaro. Yes, I am particularly concerned about the
improper payments; that the number is understated. That is
particularly true for the managed care portion of Medicaid,
which is now growing to about 40 percent of the Medicaid
expenditures. I have been working with the State auditors. I
have a dozen State auditors now that want to do more work
because it is such a significant portion of the State budget.
We are trying to work with some of the committees in Congress
to get some support to the State auditors. I think that will
have a good return on investment as well. We are working on
multiple fronts here.
GAO WORK PRODUCTS
Senator Lankford. Okay. Terrific. I understand about 97
percent of the different work products that you create are
congressionally requested, and about 3 percent are at your
discretion. Help me understand some of the priorities that you
see in the future and some of your leadership discretion----
Mr. Dodaro. Right.
DEBT CEILING
Senator Lankford [continuing]. And say this is not
requested but it should be and we need to take a look at it.
Mr. Dodaro. Right, right. Well, some good areas where it
has been used in the past, include our work on the debt
ceiling. Nobody asked us to do this work on the debt ceiling.
We did work and found that impasses over the debt ceiling
distorted and had a negative impact on the Treasury market.
Treasury securities are regarded throughout the world as safe.
However, we found that investors were avoiding Treasury
securities that would become due when the extraordinary actions
expired. In addition, we found that the Federal Government was
paying additional interest costs because of that. After the
last impasse period in 2013 it paid between $38 and $70 million
in additional interest based on our estimates. The current debt
limit affects liquidity in the secondary market for Treasury
securities, increase interest costs and, because it is an
after-the-fact measure, the current debt limit approach does
not do anything to control the debt.
Senator Lankford. Right.
Mr. Dodaro [continuing]. I have made suggestions on how
that could be changed.
HOUSING FINANCE MARKET
I am very concerned about the housing finance market. We
have used some of that authority to look at options for
ultimate resolution for Fannie Mae and Freddie Mac. Since they
have been in Federal conservatorship since 2008-09 timeframe,
we need to resolve that. The Federal Government has absorbed
all the risk. Two-thirds of the mortgages for single-family
homes are either directly or indirectly supported by the
Federal Government. If there is a downturn in that area, all
that risk is with these organizations. The private mortgage
market has not really returned to where it was before the
recession hit.
FEDERAL GOVERNMENT FISCAL POSITION
We have used it in doing long-range projections of the
Federal Government's fiscal position. We issued a special
report this past January that explains that the Federal
Government is on a long-term unsustainable fiscal path, and
calls for the Congress to develop a plan, recognizing you need
to make a lot of short-term investments. We also need a long-
term plan to deal with this problem.
Our simulations and that of CBO show the same trend, as
well as OMB and Treasury and the financial report of the
Federal Government all show in the next 15 to 25 years, absent
any fiscal policy changes, you will have more debt held by the
public as a percent of gross domestic product. This will go
over the historic average, which is 106 percent in World War
II, which means we will owe more than our entire economy is
producing. It goes up beyond that to 200 percent and above.
This is all going to happen when the disability portion of
the Social Security Trust Fund also will have only 87 cents on
the dollar to pay benefits by 2023. The Hospital Insurance
Fund, Medicare by 2028 will only have 89 cents on the dollar.
Social Security--The Old Age, survivors fund--by 2035 will only
have 77 cents on the dollar to pay benefits. And in the midst
of that, I think there is a good possibility that the multi-
employer plan of PBGC could be insolvent as well.
We have very difficult issues to address. Those are the
type of things. I use them for big-ticket things. We always let
the committees know that we are working on on things that we
decide to do under our own authority.
CYBERSECURITY
Many things that we start under our own authority are then
mandated by the Congress going forward. You know, for example,
we put cybersecurity on the high-risk list--the first time we
ever designated anything high-risk across the Federal
Government in 1997--so this was 20 years ago we warned about
the problems at the Federal level. Now we are inundated with
requests from Congress to look at various cybersecurity areas
over time. So, I use it judiciously----
Senator Lankford. Right.
Mr. Dodaro [continuing]. But in very important areas. There
are no fishing expeditions here.
Senator Lankford. Yes. No, I did not anticipate they were
but----
Mr. Dodaro. Yes.
Senator Lankford [continuing]. Trying to get a feel for
some of the----
Mr. Dodaro. Yes.
Senator Lankford [continuing]. Type of projects you are
looking for in the future on that.
CHILD SECURITY AND RETIREMENT SECURITY
Mr. Dodaro. Yes. Yes, there are two other ones now I
mention. One is on child well-being. I am very concerned that
there is no focus on children collectively across the Federal
Government. Also no focus on retirement security. I am
concerned about the overall picture in retirement security in
our country with the baby boom generation retiring. I have
talked about the Social Security issues. PBGC is also on our
high-risk list, and they are about $74 billion right now in
liabilities that exceed their assets. The private sector is
offering fewer pension plans. If they do, they are defined
contribution versus defined benefit. State and local
governments are struggling with underfunding in some of their
pension systems in some of the big States.
The shift is more to individuals to save for their own
retirement rather than through employers and the government
programs. Most people in those cases do not have any money
saved. About 40 percent of Americans do not have any money
saved for retirement on their own. Those that have some savings
are relatively modest.
I want to bring this to Congress' attention in a broad
picture and basically say we need a national strategy to deal
with some of these issues. Those are a couple other examples of
what we are using right now on our authority that will come to
the Congress in reports this year.
Senator Lankford. Great. Thank you.
CBO'S INTEREST IN A LEVEL PLAYING FIELD
Senator Murphy.
Senator Murphy. Thank you, Mr. Chairman.
Dr. Hall, I want to continue on your answer to Senator Van
Hollen. You talked about your interest in a level playing
field, and so it suggests that there are, you know, some
values-based decisions that you make with respect to the
release of your scores.
My fear is that the way in which Congress is interacting
with CBO is changing radically, so here is the list of CBO
publications related to healthcare legislation that were
released in 2009 and 2010. And it is a very long list. CBO
started sending out reports in early 2009, and then began
releasing estimates of the committee products once committees
began their work so that, you know, by the fall of 2009, there
were complete CBO reports that Members could look at as the
basis for considering legislation on the Floor.
What is happening here is very different. Republicans are
not going through the committee process. There is no bill being
produced by committee. They are negotiating the product in
secret and then having confidential conversations with CBO. So,
to the extent that you are interested, and these are your
words, in a level playing field, what do you do about the fact
that this relationship of confidentiality can be taken
advantage of to effectively hold the CBO score until the last
possible minute, giving Members of the minority party a very
small amount of time to look at that legislation? This policy
of waiting to release it until it was made public made a lot
more sense back when committees functioned and you had a CBO
score on the committee bill. Does your view of maintaining a
level playing field change given the fact that you may no
longer ever do a committee-based score on a major piece of
legislation?
Dr. Hall. Well, you know, we work confidentially basically
because Congress finds it valuable for us to work
confidentially. They can give us informal estimates and get
some idea of what we think about them. I think it probably
helps make better products. It is done all the time on a lot of
different pieces of legislation. But I understand the issue,
that during this time period, it is kept confident. And we do
that because we are asked to.
And I think it is sort of above my pay grade to recommend a
change in that. I do think it would probably change the nature
of a lot of the work. You know, the healthcare stuff is one
particular case, but we do this on a lot of different things.
And we do the confidential work for the minority side as well
for committees, so one would have to sort of think about that.
But we do do our best, like I say, when legislation becomes
public. That's when we will no longer do the confidential work,
and any work we do on that piece of legislation will be public.
That is sort of the--I think it is sort of the--certainly the
best that we can do in striking a balance.
CBO'S ASSUMPTIONS ABOUT FUTURE IMPLEMENTATION OF AHCA
Senator Murphy. Yes, I do not think we can ask you to make
that change in policy unilaterally. I have raised it in the
context of this hearing because, you know, I just think that
you are being used by the Republican majority for political
purposes, and I think it compromises your independence and it
will encourage Democrats, when they are in the majority, to
similarly use you, use that confidentiality to hold the CBO
score until the last minute. That is at the basis of my worry
about the way in which Republicans are acting today.
Let me ask you a question about your House score. In the
House--opponents of the Affordable Care Act have a favorite
phrase, ``death spiral.'' They say that the Affordable Care Act
is in a death spiral and that we have to rescue it from this
death spiral. And I do not read your summary of the House
healthcare bill as predicting that. You score out what would
happen to the number of people without insurance in this
country over a 10-year period of time with the House healthcare
bill and without it.
Without it, you come to the conclusion that at the end of a
10-year-period of time there will be 28 million people without
insurance, which is a slightly higher number than today, but
with the House healthcare bill, 51 million people will be
without insurance.
And I want to ask you about the 51 number. I want to ask
you about the 28. What assumptions are you making about the
future of the implementation of the Affordable Healthcare Act
to come to the conclusion that, by and large, the number of
people with insurance will be stable over a 10-year period of
time? Are you assuming that the administration is going to
actively implement that act, and has the conduct of the
administration over the course of the first, you know, 4 months
of 2017 changed your opinion as to what the number of people
with insurance will look like at the end of that 10-year period
of time?
Dr. Hall. Yes, we have not changed our view on
implementation, and we hesitate to do that unless there are
specific actions that will likely impact implementation, if
anything, that we can see, and then we will take that into
account on our baseline. So, as you say, our view of the
Affordable Care Act, we assume a certain level of
implementation going forward.
One of the more difficult parts about that, of course, is
the Medicaid side of things. And here, we are predicting what
State governments are going to do. And so a big part of the ACA
going forward and the AHCA would involve how many States decide
to expand Medicaid or not going forward, so that is not really
an issue of--less an issue, I guess of implementation by the
administration, more of how we are projecting that States will
behave going forward. And that is a difficult thing, but that
is a big part of the uncertainty I think for us going forward
in this number.
IMPACT OF A FLAT BUDGET ON GAO
Senator Murphy. Just one question for you, Mr. Dodaro. What
happens to you in a flat-funded budget? Are you able to
maintain your existing staff levels in a flat-funded budget?
Mr. Dodaro. No. There is no way we will be able to do that.
In a flat-funding scenario, we would lose about 200 people by
the end of the year. We would be at our lowest staff levels
since the 1930s if that happened. We had been hovering around
that staffing level since the sequestration occurred. During
that period we lost 15 percent of our staff. Thanks to this
subcommittee, for the last few years we have regained some of
that and been able to rebuild. Any flat-funding scenario would
send us back down to that scenario and affect our ability to
provide service to the Congress.
Senator Murphy. And who do you----
Mr. Dodaro. It would have pretty dramatic effects.
Senator Murphy. Who do you lose--you know, who are those
200 that you would lose?
Mr. Dodaro. Well, that is about what our attrition is every
year.
Senator Murphy. Yes.
Mr. Dodaro [continuing]. So that would be normal attrition
with zero replacement.
Senator Murphy. Right.
Mr. Dodaro. I have often likened us to being a college
football coach where the seniors leave and there are no
freshman or sophomores coming in. You just tell the juniors to
work harder, and it is a problem. It would have very serious,
negative consequences on us to be in a flat-funding scenario.
It would ill serve the Congress.
Senator Murphy. All right. Thank you. Thank you, Mr.
Chairman.
Senator Lankford. Can I ask a follow-up question on that as
well, why with flat funding you would lose 200 people? Help
provide additional clarity to that. Why if the funding stayed
static, why a loss of 200 people?
Mr. Dodaro. Salary increases for the staff. Based on the
cost of living adjustment increased this year and next raises
staff costs so it costs more to keep the same level of staffing
on board because of that increase in salary costs.
Senator Lankford. Even when you have seniors that are
leaving and you are hiring freshman, which are cheaper than
seniors?
Mr. Dodaro. Yes.
Senator Lankford. Yes.
Mr. Dodaro. We would not hire during that period of time to
replace attrition. Not all of the 200 people that leave are at
senior levels--I was using it as an analogy----
Senator Lankford. Sure. I understand.
Mr. Dodaro [continuing]. Of replacement scenario.
Senator Lankford. I was trying to get the----
Mr. Dodaro. Maybe I should have used the chemistry----
Senator Lankford. Yes, I am just trying to get the
details----
Mr. Dodaro [continuing]. Analysis. Part of the 200 people
that leave will be junior people, too. About 40 percent of the
people will be people retiring are at more senior levels. The
other 60 percent are people at junior levels that move on, take
other positions, have changes in family----
Senator Lankford. Okay.
Mr. Dodaro [continuing]. Circumstances.
ESTABLISHMENT OF SENIOR-LEVEL POSITIONS
Senator Lankford. Great. Thank you.
Dr. Hall, let me ask you this question, same question I
asked Mr. Dodaro earlier about the omnibus funding, and that is
we included some language to establish senior-level positions
to allow the agency to try to retain folks. Has that been
implemented? How is that going? Has that been helpful so far?
Dr. Hall. Well----
Senator Lankford. I know it is early.
Dr. Hall. Yes, well, first of all, thank you for providing
the authority.
Senator Lankford. Yes.
Dr. Hall. I think that will be very helpful to us. It
really impacts our most senior-level people. We have only about
10 people, and those folks, compared to their executive branch
counterparts, were literally about $15,000 per year difference,
falling behind, so that is going to make a difference. I think
we are going to not fully implement, and probably in 2018 we
will start trying to implement that. But it will not have a big
impact I think on our spending because it is only a few people,
but our retention will make a really big difference because we
have lost a number of senior managers, and most of them have
gone to higher-paying jobs.
CBO'S TRANSPARENCY
Senator Lankford. Last year at this same hearing you had
mentioned some of your goals for the next year and things that
the agency could improve on. One of the things that you
mentioned last year the agency can improve upon was
transparency. How is that going? Tell me how the agency has
improved transparency in the last year.
Dr. Hall. Sure. We have worked on transparency in almost
everything that we do to be honest, and a lot of it starts with
our legislative cost estimates. We are spending a little extra
time. It is always this rush where we are getting things done
as quickly as we can but then explaining what we have done very
carefully. We have improved our efforts on that. The recent ACA
estimate I thought was a good example of that because that is
really a fairly long document where we tried very hard to
explain things.
We made extra effort to get in to see Members and explain
things when people ask. You know, every time we produced an
estimate or anything, if anybody has any questions or any
problems with it, we are happy to go in and talk about what we
have done.
We have produced a number of extra products, supplementary
products explaining things. One of the things, for example, was
where we have done a dynamic scoring of the ACA a couple years
ago, and what is the GDP effect. You know, we had some
estimates in that of an ACA repeal, and then later, we produced
this little supplementary report where we talked about how we
estimated the labor supply effects of the ACA, and explained
that in some detail.
That was an effort in transparency, a number of things like
that. We are trying very hard. We are talking about putting up
some of our--more of our documentation of our models. We
literally have probably hundreds of models that we use. And it
is very hard to put the models themselves up but documentation
we are putting up quite a bit, so it is a lot of little things
that we are doing to increase transparency, and as always, we
are open to ideas.
Senator Lankford. Yes. So, help provide some clarity. As
you mentioned, it's hard to be able to put the models up
themselves----
Dr. Hall. Right.
Senator Lankford [continuing]. That we can get a chance to
see basically the calculator that you put together. Why would
that be?
Dr. Hall. Well, some of them are very, very complicated,
and it takes a lot of work to prepare things to put into the
model. And the models--what the analogy is like, the human
aspect of almost everything we do is really great, even with a
model involved. One of the things that we are trying to do and
what we can do is, for example, updating the healthcare stuff.
We are updating the healthcare model. We will try to document
that as we go along. And we will see about trying to make it
available. It is hard to do because it is hard for people to
understand it. It takes a lot of time to support it.
Senator Lankford. Right. And it does, and that is part of
the challenge is that every time a decision is made on
something that requires a model, every economist pokes their
head up at the same time and says what were the assumptions in
that model----
Dr. Hall. Right.
Senator Lankford [continuing]. Who made the model? Did they
take this and this and this into account?
Dr. Hall. Right.
Senator Lankford. Typically, the answer from Congress is we
do not know. We do not know what assumptions, we do not know
what other alternatives were considered. We do not know how it
was ran based on what other products were not there. That is
part of the difficulty because we will have--any given piece of
legislation, there may be five different models out there, one
of them being CBO, and we do not see all the assumptions on it.
That would help us just to be able to look at it.
Obviously, we ask you and require of you to be a neutral
arbitrator, but seeing the model helps us to be able to know,
to tell us the assumptions that were there in that.
Dr. Hall. We are certainly trying to address that with the
documentation. We are making the assumptions clear and
providing enough detail that somebody else could actually sort
of reproduce what we have done. That is sort of the goal.
Senator Lankford. Yes, that would be great, that basic
science to be able to come back and reproduce it and somebody
else would be able to look at it and run the same numbers in
the same type of model and get the same results.
Dr. Hall. Yes.
Senator Lankford. Otherwise, you get four economists
together and you get 4.785 different results as you run through
it.
Dr. Hall. Yes.
Senator Lankford. Let me recognize Senator Kennedy.
COMPARING ACA PROJECTION TO ACTUAL
Senator Kennedy. Thank you, Mr. Chairman. I apologize,
gentlemen, for being late. I was in another committee.
Dr. Hall, let me preface my remarks by saying I am a big
fan of your agency. I have followed you through the years, and
I know you and your colleagues are in good faith and none of us
are clairvoyant. Have you ever--let me get more specific.
Looking back to when we passed the Affordable Care Act,
Congress did, how much did CBO predict it would cost, and now
with, what, 7 years' worth of experience, how much has it cost?
Dr. Hall. Yes, you know, I do not have the numbers right in
front of me, but I will say we have tried very hard to keep up
with the actual data once it came in. You can remember a few
years ago----
Senator Kennedy. I understand but----
Dr. Hall [continuing]. It was----
Senator Kennedy. But ballpark, how close were you?
Dr. Hall. On the spending, I do not think we were too far
off on the spending side of things, and I think we were pretty
close on the number of uninsured as well. The part that we
struggled most with was with something like the number of
people on exchanges versus number of people on Medicaid. That
shifting between those two groups turned out to be difficult.
Not as many people did the exchanges. More people did Medicaid.
Senator Kennedy. Do you recall, did you make a prediction
or an estimate--not a prediction I guess is the wrong term--did
you make an estimate at the time about the cost and the number
of people that would join Medicaid?
Dr. Hall. Yes, we did, but I do not--I am sorry, I do not
have it in my memory right now.
Senator Kennedy. Sure. Do you know how close you turned out
to be?
Dr. Hall. I do not offhand.
Senator Kennedy. Have you gone back and looked?
Dr. Hall. Yes, we have gone back and looked, and we have
done some work on that. I would be happy to follow up----
Senator Kennedy. Could you----
Dr. Hall [continuing]. On that.
Senator Kennedy. Could you get me that information from----
Dr. Hall. Sure.
Senator Kennedy [continuing]. Medicaid and for your
estimates on the Affordable Care Act----
Dr. Hall. Yes.
Senator Kennedy [continuing]. And now that we have, what, 7
years' worth of experience, the reality.
Dr. Hall. Okay. And let me just say we will do what we can.
It is a little difficult because so many other things change at
the same time. It is hard to know, but we will tell you what we
know. We will tell you what we know about how well we did on
the estimate.
Senator Kennedy. Well, what I am looking for is something
pretty simple.
Dr. Hall. Okay.
Senator Kennedy. Here is what we said would happen; here is
what happened.
Dr. Hall. Okay. We can do that.
[Clerk's Note: See the answer to Senator Kennedy's question
above in the ``Additional Committee Questions'' at the end of
the hearing.]
Senator Kennedy. Okay. When President Bush passed his
prescription drug plan, did CBO do an estimate of the cost
then?
Dr. Hall. Yes.
Senator Kennedy. Okay. Now, we have a lot of experience
with the prescription drug plan.
Dr. Hall. Right.
Senator Kennedy. What did you estimate it would cost, and
what has it cost? Do you have that data?
Dr. Hall. Yes, I do not know right off the top of my head.
I am happy to follow up, though. I am sorry I do not have those
numbers.
[Clerk's Note: See the answer to Senator Kennedy's question
above in the ``Additional Committee Questions'' at the end of
the hearing.]
Senator Kennedy. That is okay. That is all right. Do you
customarily, as a practice at CBO, continually look back and
say, okay, we predicted this, it turned out this, this is what
we got right, this is what we got wrong, here is how we can
learn from this and do better in the future?
Dr. Hall. Yes, we--once a year, we go through all the
accounts and see how the cost of programs and how many people
are taking up, and we adjust that on our baseline. So once a
year, we actually adjust all those numbers.
We do not do a full analysis of individual pieces of
legislation because it is so hard, but one of the things that
we are actually doing right now, every year, we have been
looking back at all of our economic forecasts and looking at
our record; how do we do compared to other people on our
economic forecast? And a little over a year ago we did that
with revenues, and right now, we are looking at expenditures.
How have we done in forecast----
Senator Kennedy. Okay.
Dr. Hall [continuing]. Spending compared to the actual
outcomes, so we are going to have a big-picture view of that
actually sometime this year I think. That will give you a big
picture about how well we do. And it is exactly for the reason
that you are talking about. We want to try to be better at what
we do.
Senator Kennedy. Okay. Well, do not misunderstand my
questions. I am a big fan.
Dr. Hall. Sure.
Senator Kennedy. I realize that when you give folks a
number they like, you are the best thing there is, and when you
give them a number they do not like, it is you do not know what
you are doing. And I understand that. That is human nature.
But I do think it is a good idea to look back and say,
okay, this is where we were then and this is where we are now.
And if you could get it for me for the prescription drug
program, for the Medicaid expansion, and for the Affordable
Care Act in general.
Dr. Hall. Okay.
Senator Kennedy. I do not really have any questions of the
general. I wanted to thank him for his good work. I am a big
fan. I had my staff do a little research. You have a return on
investment of $112 return for every $1 in taxpayer money you
spend. I will take a dozen of those. That is pretty
extraordinary.
I really want to thank you for the hard work you have done
in so many areas but particularly improper payments. And I just
wanted to--I am fully supportive of your efforts. I know you
are not the most popular person in America at times, too, but
you have to have folks--the metrics are important. The focus in
government today is too much on how much money we are spending
as opposed to what are the metrics, what are we getting for the
money.
Anyway, I probably went over. I am sorry, Mr. Chairman.
But thank you both for your service.
Mr. Dodaro. Thank you very much.
CBO MODELS AND ALTERNATIVE PROJECTION/ASSUMPTION
Senator Lankford. Thank you, Senator Kennedy. Thank you.
Let me run a couple other questions past you and see if
there are others that have additional questions as well.
Just to be able to finish up, Dr. Hall, on the modeling
aspect of it. During the budget hearing last year as well, you
were also asked specifically about the healthcare model, said
you were rebuilding it, and when it was rebuilt, you would make
that publicly available. That is still one of those things that
would be very helpful to get, that rebuilt product and whatever
you are revising in that 2016 to 2017 time, and then some ideas
of why you felt like it needed to be rebuilt. I want to be able
to get better information.
CBO has been very good about putting out--and it is a
fairly recent addition--alternative futures basically.
Dr. Hall. Right.
Senator Lankford. Here is an alternative projection in
baseline. You have been tasked to look at what is, but CBO has
been very good at saying I know what is, but I also know what
Congress will probably do. The greatest example of that was
things like the SGR, the ``doc fix'' for years. CBO would look
at that and say Congress has fixed that every year, they come
up with a new way to fix that every year, we can put that in
the baseline or we can assume they are going to do what they
have done the last 15 years. And you have made some of those
assumptions. How is the progress going on some of those things
to be able to look at it and to provide different opinions?
So, again, in your modeling to be able to look at it and
say this is what is, but I would assume in the conversation
around the table in the closed room there is also some frequent
statements that say we all know this is what is really going to
happen. This is what we have as a legislative mandate right
now, what is in front of us. This is what is really going to
happen.
Dr. Hall. Sure.
Senator Lankford. Is that going to continue to progress in
other ways to provide to Congress new models? It is basically
two opinions of what was happening in the room. I am not trying
to double your work, but that opinion is already there; we just
do not get that second one.
Dr. Hall. Okay. Yes. We will take a look. I am not sure
what we have planned. To be honest, our biggest alternative
path that we talked about we do not do anymore because it has
sort of come true.
Senator Lankford. Right.
Dr. Hall. So we will have to think about if there is
another one. One that we are going to work on carefully is, you
know, we are asked to assume, for example, that things like the
trust funds are fully paid out even though the law says they
cannot pay out, so we are going to work on that alternative
assumption of, well, what if they are not?
Senator Lankford. Right.
Dr. Hall. And that will be one of our alternate
assumptions. And we would be happy to think about some others.
Senator Lankford. Again, that is helpful information to
Congress----
Dr. Hall. Right.
Senator Lankford [continuing]. As we work through the
process to be able to see what is forecasted and what actually
is. Both those things side by side give us the information I
think that we need.
Dr. Hall. Okay.
Senator Lankford. I would also say in what opinions come
out, do not feel an obligation to I guess water it down to the
lowest common denominator Congress can handle. There were split
decisions in this as we discussed it, here is one option--here
is the general piece. Here is one option, here is another one,
what it could be, and be able to give us different varieties of
it and to be able to lay that out.
Dr. Hall. Okay.
Senator Lankford. We are fine to be able to see that. More
data in its rawest form is helpful to us rather than its
refined lowest-common-denominator-type form. Does that make
sense?
Dr. Hall. Sure.
Senator Lankford. So that is extremely helpful to us.
I would also be interested to be able to get from CBO, as
you do the scoring, the things that everyone around your table
and every economist there knows good and well is not true. For
instance, my favorite budget gimmick, the changes in mandatory
programs. Everyone knows that is not real, but yet the law
allows it. And in the scoring, that scores. It is really 8, 9,
$10 billion more in deficit spending, but on paper, it is not
more deficit spending. In real life, it is.
There are things that your economists see that I want you
to know we would be welcome to be able to receive back, whether
that is a note, a footnote to say this is accomplished by
changes in mandatory programs, which is allowed by law, but it
will increase deficit spending by this same amount. That gives
us information.
Dr. Hall. Right.
Senator Lankford. So do not pull back from giving us
accurate information for the sake of saying we have to play the
Washington game on things. You see that in multiple areas, I am
confident. I just noted one of those to you in the changes in
mandatory programs that, again, other CBO directors that I have
talked to have all said the law says, so we have to do it that
way, but everyone at the table knows it is not right. Does that
make sense?
Dr. Hall. Sure.
TELEWORK
Senator Lankford. So even a notation to be able to help
explain it for what it really is would be helpful to get good
clarity for everyone that is getting a chance to go through
that document.
One other quick question for Mr. Dodaro as you go through
this, and that is telework. I know it is something that you
have explored before and have looked at not only at GAO but in
other agencies and entities. I would be interested to be able
to know in the future, as you are looking at telework, on how
it can be evaluated for metrics. Is the taxpayer getting its
maximum benefit? How do you evaluate supervision in that? What
basic metrics can be put into place or areas where there are no
metrics. There is telework, but we do not know if it is helpful
or not helpful.
Again, it may be great for morale for employees. Is it
great for the taxpayer as well to be able to have that as a
good fit? And I do not have a preconceived notion----
Mr. Dodaro. Right.
Senator Lankford [continuing]. To say this does not work,
but that is one of those many areas that, as multiple agencies
look at both the cost----
Mr. Dodaro. Right.
Senator Lankford [continuing]. Of office space and also the
value of work, and we have multiple agencies that have a large
backup right now and backlog of work that needs to be done, but
yet they have a high percentage of telework folks as well, to
say is there a correlation between those or is that just
coincidental----
Mr. Dodaro. Yes.
Senator Lankford [continuing]. Does it make sense?
Mr. Dodaro. There are some clear areas where there should
be metrics, cost is one of them in terms of the office space,
also transit benefits. There are other measures of cost. Each
agency will have to have different metrics in terms of the
work, the quality of the work, as well as the productivity of
staff.
Senator Lankford. Right.
Mr. Dodaro [continuing]. And the out-put. We will be
looking at those issues. We are doing that within our own
agency----
Senator Lankford. Right. And we had talked about that
before.
Mr. Dodaro [continuing]. As well and it is very important.
I agree with you. I think it has big benefits from the
employees' standpoint. I think it has good benefits from the
Government's standpoint if it is managed----
Senator Lankford. If----
Mr. Dodaro [continuing]. If it is managed properly----
Senator Lankford. If----
Mr. Dodaro [continuing]. And if you have good metrics.
There are conditions on that part of it.
Senator Lankford. I have had some conversations with some
Federal managers that have said they have very strong high
walls that they cannot supervise on telework days and it has
made it very difficult to be able to get good metrics. And when
I ask supervisors of different agencies how is it going, how is
that working, their answer is ``We do not know.'' That is a
problem----
Mr. Dodaro. Yes.
Senator Lankford [continuing]. When we have literally
thousands of people that are teleworking, and we do not know if
it is working or not. In some agencies, it may be working
exceptionally, but just the last several months, IBM, after
years of doing telework----
Mr. Dodaro. Right.
Senator Lankford [continuing]. Decided this is not working
and they are pulling people back in----
Mr. Dodaro. Right.
Senator Lankford [continuing]. And trying to determine
that. So, there are some trends going the other way based on
effectiveness.
Mr. Dodaro. I am dispatching some people in GAO to talk to
IBM and Aetna. You have had Yahoo and others. I want to see
what the lessons learned, where did it go off the rails. What
could be applied to better manage it if we are going to
continue in that----
Senator Lankford. That is great.
Mr. Dodaro [continuing]. Area.
Senator Lankford. Senator Murphy.
Senator Murphy. Thank you, Mr. Chairman.
I think Senator Kennedy's point about constant reevaluation
is an important one, but just to rise to the defense of CBO's
ability to score on healthcare, here is the bottom line that
you were referencing on the ACA score. Initially, CBO said that
by 2016, 92 percent of Americans would have insurance, going up
from 83 percent. CBO revised that after the Supreme Court
decision where it was held that States did not have to accept
the Medicaid allowance expansion, revised that number down to
89 percent of Americans having insurance by 2016. That is the
number today, 89 percent of Americans have insurance today.
But, to your point, inside that, there were and are
differences. There was a belief that there would be a lot more
people on the exchanges. There are not as many people on the
exchanges as CBO estimated for two reasons: One, many fewer
employers dropped coverage than CBO estimated, thus more people
stay on their employer coverage; and second, Medicaid expansion
actually insured more people, about 4 million more people.
As to cost, you know, ballpark at $130 billion was the
estimate I think by 2016. The number is about $110 billion, so
it is a little bit less, but it is, you know, not well outside
of the estimate, so I think it is an important point that we
should constantly go back and reevaluate, but those numbers are
pretty solid.
POSTPONEMENT OF BIG CHANGES IN MEDICAID
I just have one last question for you, Dr. Hall. Again, in
the theoretical world where you are working to score a
Republican healthcare proposal that we are going to be voting
on in 7 days, one of the points of discussion is a postponement
of some very big changes in Medicaid such that the losses you
estimated in Medicaid coverage in the House bill would not
occur until later in the 10-year window. And, you know, I have
no idea what that postponement is. Some people say it will be a
3-year postponement; some people suggested it will be a 7-year
postponement.
But to the extent that the Medicaid--the reduction in
people enrolled in Medicaid happens outside the 10-year window,
will you opine on that subject? Let us say they start the
Medicaid changes in year 9, which means that year 10 will not
look that bad, but years 11 through 20 will look pretty
catastrophic. Would something like that be included in an
estimate theoretically?
Dr. Hall. Yes, theoretically. If we know there is going to
be a chance outside the window and we have some notion of how
big it will be, we will talk about it.
Senator Murphy. Okay. Thank you.
Senator Lankford. Senator Kennedy.
Senator Kennedy. I just wanted to mention one other thing
to the general that I forgot. I read you and your staff's
analysis comparing public sector Federal Government employee
salaries and benefits to private sector, and it was excellent.
I mean, you broke it down. You explained your model. You
controlled for a lot of different factors. It was a very
reasoned, rational approach, and I wanted to thank you for
that, too. I forgot about it. And I hope you will do that
periodically. I learned a lot. As I recall, we are underpaying
if you will at the higher-level positions and overpaying at the
lower level, and a lot of--to the extent that we are
overpaying, that is not meant to be pejorative, but we are
paying more for the comparable job. It is in retirement
benefits it sounds to me like.
Mr. Dodaro. I appreciate your comments, but a point of
clarity. I believe that was a CBO report. You know, people mix
us up all the time. Sometimes it is for my benefit, sometimes--
--
Senator Kennedy. Well, then I----
Mr. Dodaro [continuing]. It is not to my benefit----
Senator Kennedy [continuing]. Direct that to Dr. Hall.
Mr. Dodaro [continuing]. But----
Senator Kennedy. It was an excellent report----
[Laughter.]
Senator Kennedy [continuing]. And you are an honest
American because you could have taken full credit. [Laughter.]
Mr. Dodaro. No, I was not going to do that.
Dr. Hall. I was quietly feeling good about it.
Senator Kennedy. Well, then, let me tell you, Dr. Hall, it
was excellent.
Dr. Hall. Well, thank you.
Senator Kennedy. I learned a lot, and it was very fair. You
adjusted for all the different circumstances.
Dr. Hall. Thank you.
Senator Lankford. Okay. The two of you look so much alike
that it is----
[Laughter.]
CENTER FOR AUDIT EXCELLENCE
Senator Lankford [continuing]. Just get you confused all
the time.
Let me ask one quick question and see if there are any
closing comments on this. Gene, the Center for Excellence was
supposed to be self-funded with revenue.
Mr. Dodaro. Right.
Senator Lankford. That was the theory initially when it
began. How is it going so far? You are a couple years into it
or a year-and-a-half or so into it. Is the----
Mr. Dodaro. Right.
Senator Lankford [continuing]. Revenue coming in as you
expected to be able to cover expenses?
Mr. Dodaro. Yes. The business plan that we called for that
was approved by the committees was self-funding after a 5-year
period of time. We are in our second year of funding now.
Receipts are in excess of the first year. It is looking pretty
good, and I hope to get to the self funding point. We have a
number of commitments underway. We are negotiating. We have a
standing memorandum of understanding now with USAID so they can
access our services to provide training to auditors,
particularly where the United States is providing foreign
assistance, to have those auditors provide greater coverage and
flexibility.
We are providing assistance to the country of Georgia
through a World Bank arrangement right now to improve their
information technology auditing. A number of State and local
governments and local entities are also using our services. We
will provide a report to the subcommittee. We had to work
through getting arrangements in place. We brought in revenue
the first year. This year, I think we are about triple the
first year----
Senator Lankford. Okay.
Mr. Dodaro [continuing]. In revenue.
Senator Lankford. So you are on track?
Mr. Dodaro. We are on track.
Senator Lankford. Okay.
Mr. Dodaro. I will know for sure the third and fourth year.
If we are not going to be self-sustaining, then we will have to
come to a different conclusion. I never meant it to be
subsidized to any significant amount. It is yielding a lot of
benefits.
Senator Lankford. Sure. Yes. At some point, I guess 5, 10
years out, we will be able to audit every country in the world
except our own Pentagon. [Laughter.]
Mr. Dodaro. I kid the people at GAO sometimes. You know, we
changed our name from the General Accounting Office to the
Government Accountability Office. Maybe we could be the global.
Senator Lankford. Yes, the Global Accountability Office.
Mr. Dodaro. Just kidding. [Laughter.]
Senator Lankford. Any other quick comments from anyone?
Thank you both for being here. Dr. Hall, this is not to
leave Gene out in any way, but you have got a very busy
schedule right now and a lot of pressure on you as well. I
appreciate you taking the time to both prepare to be here and
to be here, and with all that is happening in your schedule, we
do appreciate it very much.
ADDITIONAL COMMITTEE QUESTIONS
This does conclude the Legislative Branch Appropriations
Subcommittee hearing regarding 2018 funding for the Government
Accountability Office, and the Congressional Budget Office. The
hearing record will remain open for 7 days, allowing Members to
submit statements or questions for the record, which should be
sent to the subcommittee by the close of business on Wednesday,
June 28th, 2017.
[The following questions were not asked at the hearing, but
were submitted to the Departments for response subsequent to
the hearing:]
Questions Submitted to Dr. Keith Hall
Questions Submitted by Senator John Kennedy
Question. How do the original CBO cost estimates compare with the
actual budgetary effects of the Medicaid expansion under the Affordable
Care Act (ACA) and of the ACA in general?
Answer. In CBO's original cost estimate, which was released in
March 2010, the agency projected that spending in 2016 on people made
eligible for Medicaid because of the ACA would equal $68 billion. The
amount that was actually spent, CBO now estimates, was $65 billion.
However, in the March 2010 projection, CBO had anticipated that all
States would adopt the ACA's expansion of eligibility for Medicaid. In
June 2012, the Supreme Court ruled that that expansion was optional for
States. CBO's projection in July 2012, which incorporated that ruling,
was $38 billion for 2016--about 60 percent of the currently estimated
amount of $65 billion.
It is difficult to identify the budgetary effects of the ACA in
general, because the budgetary effects of many provisions are embedded
in the spending for preexisting programs--Medicare, for example--and in
broad categories of Federal tax revenues. But the effects of health
insurance subsidies can be more readily identified. In March 2010, CBO
and the staff of the Joint Committee on Taxation projected the cost to
the Federal Government of premium tax credits and cost-sharing
subsidies for health insurance purchased through the health insurance
marketplaces established under the ACA. The projected cost was $77
billion for fiscal year 2016. That projection proved roughly twice as
large as the estimated actual amount, about $36 billion, primarily
because the agencies overestimated the number of people who would
enroll in the marketplaces.\1\
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\1\ For discussion of the reasons for changes in those estimates
since the enactment of the ACA, see Congressional Budget Office,
Federal Subsidies for Health Insurance Coverage for People Under Age
65: 2016 to 2026 (March 2016), p. 23, www.cbo.gov/publication/51385.
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Question. How does the original CBO cost estimate compare with the
actual budgetary effect of Medicare's prescription drug insurance
program?
Answer. In CBO's original cost estimate, which was released in
November 2003, the agency projected that spending in 2013 for the
prescription drug benefit known as Part D would equal $99 billion. That
projection proved about twice as high as the actual amount spent in
2013, $50 billion. A combination of broader trends in the prescription
drug market and lower-than-expected enrollment in Part D contributed to
that difference.\2\ (This answer focuses on 2013 because CBO's original
cost estimate covered the period through 2013.)
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\2\ For discussion of why the Part D program cost less than
anticipated, see Congressional Budget Office, Competition and the Cost
of Medicare's Prescription Drug Program (July 2014), pp. 5-12,
www.cbo.gov/publication/45552.
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______
Questions Submitted by Senator Marco Rubio
Question. In your testimony, you note that the CBO's requested four
new analysts for 2018 would work on the ``dynamic analysis of certain
legislation.'' How can CBO's dynamic analysis be improved?
Answer. Examining the effects of Federal policy on the economy is
called dynamic analysis. In CBO's view, those effects differ in the
short term and the long term. In the short term, policy affects the
economy primarily by changing the overall demand for goods and
services. In the long term, policy affects the economy primarily by
changing the incentives to work, save, and invest; by altering the
amount of funds available for private investment; and by affecting
private-sector productivity.
CBO conducts dynamic analysis with various kinds of macroeconomic
models, depending on the policy proposal being examined. The agency
considers the latest findings from economics and business research in
developing those models, so they reflect the latest thinking among
experts in the field. CBO also conducts original research to estimate
the economic and budgetary effects of policies for which there are few
or no estimates available from other sources.
CBO has proposed adding four new analysts in fiscal year 2018. Of
those, one would conduct dynamic analysis. (Of the others, two would
analyze healthcare and one would analyze appropriations.) The new
analyst would also give CBO more capacity to conduct projects to
improve the models. Such projects include the following:
--Research and model development to allow CBO to conduct dynamic
analysis of a broader set of policies and to reduce the time
needed to respond to Congressional requests;
--Better integration of estimates from different macroeconomic
models;
--A more comprehensive analysis of how different kinds of policies
affect the economy in the longer term;
--A more detailed specification of how changes in the economy affect
the Federal budget;
--A more detailed characterization of the sources of uncertainty
underlying CBO's estimates, including uncertainty stemming from
the models as well as from broader economic, demographic, and
policy considerations;
--A more detailed analysis of the effects of Federal investment (that
is, spending on infrastructure, education, and research and
development) on private-sector productivity; and
--A modification of CBO's overlapping-generations model to better
estimate the effects of changes to social security and Federal
health insurance programs on the U.S. economy.\3\
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\3\ An overlapping-generations model focuses on the working,
saving, and retirement decisions of households over their life cycles.
Because that model explicitly incorporates households' response to
changes to future policy and includes households of different ages and
in different socioeconomic groups, it is particularly helpful for
analyzing changes to Social Security and Medicare programs.
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In addition, CBO is currently working on more comprehensive
documentation of its models for dynamic analysis. Better documentation
will make the agency's methods more accessible to the Congress, outside
experts, and the interested public.
Question. One issue that I am interested in exploring is new ways
of dynamic scoring for the child tax credit and paid family leave, both
policies with tremendous economic impact not easily identified in
scoring models.
There is a wealth of research surrounding the social and economic
benefits of the child tax credit: from reduced crime, increased
educational achievement, and labor force participation, to changes in
birth rates that affect the sustainability of pension and retirement
programs. How can we more accurately measure the returns to investment
in our children?
Has CBO considered expanding the scope of what research might be
acceptable to best capture the costs and benefits of child subsidies?
Answer. CBO has assessed the economic and budgetary effects of
changes to some Federal programs that provide benefits to families and
children. For instance, in undertaking its macroeconomic analysis of
the President's 2017 budget request, CBO assessed the economic and
budgetary effects of increasing spending for programs and activities
such as Head Start and primary and secondary education.\4\ Such
programs, because they provide supervision for children, make it easier
for parents to work and can therefore boost parents' earnings in the
short run. In the longer run, such programs can also boost earnings by
increasing the skills that children bring to the labor force when they
become adults. In its analysis, CBO found that most of the economic
effects of changes in spending for such programs that would occur
within the 10-year budget window would tend to be small and would
result from changes in the amount of labor supplied by parents. The
economic effects resulting from changes to children's subsequent
earnings would probably be larger, but they would occur later and are
more uncertain.
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\4\ Congressional Budget Office, A Macroeconomic Analysis of the
President's 2017 Budget (June 2016), www.cbo.gov/publication/51625. For
additional information, see Congressional Budget Office, ``How CBO
Analyzes the Economic Effects of Changes in Federal Subsidies for
Education and Job Training,'' CBO Blog (May 3, 2017), www.cbo.gov/
publication/52361.
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Expanding the child tax credit would probably affect people's
earnings and the Federal budget through similar channels. Measuring
those effects accurately would require understanding how the credit
affected parents' earnings in the short run and children's in the
longer run. Expanding the credit would probably increase the incentive
to work and earn for some parents (mainly lower-income ones, if under
the expansion they received a greater amount of money for each $100
that they earned, up to a maximum) while reducing that incentive for
other parents (mainly higher-income ones, if they received a greater
reduction in their credit for each $100 that they earned). Those
effects are largely offsetting, however, so expanding the credit
probably would not significantly affect parents' earnings in the short
run. There is some evidence that the credit improves children's
eventual college attendance and boosts their earnings when they become
young adults, but most of those effects do not occur within the 10-year
budget window.
CBO has studied many mechanisms through which Federal programs that
provide benefits to families and children could affect the economy,
such as the short-run effects on earnings and labor supply and the
long-run effects on education and earnings just mentioned. But there
are other ways in which such programs might affect well-being--for
instance, by affecting crime, health, or longevity, changes that could
have some fiscal impact. CBO may incorporate those effects into its
future analysis as more research is published.
Question. One of the important roles that CBO plays for the
legislative branch is that of referee: your scores and analysis shape
the congressional debate over policy. Due to this influence, the
behind-the-scenes assumptions that determine these scores matter a good
deal to Congress. And in a time of increasing diversity and
decentralization, a more open scoring process may produce better, more
accurate outcomes by increasing the number of inputs for a score.
What role does transparency play in CBO scoring?
Have you considered implementing open-source modeling, in which
outside analysts could test CBO's assumptions?
What kinds of congressional requirements for CBO would need to be
changed in order to ease a transition to a more open-sourced model?
Answer. CBO works hard to make its analyses of legislative
proposals transparent. To begin with, CBO's cost estimates go well
beyond simply presenting results; instead, the agency explains the
basis of its findings so that Members of Congress, their staff, and
outside analysts can understand the results and the methods used. CBO
has also increased public documentation of its modeling efforts--by
publishing more appendixes and background reports, providing details
about its analyses for nonexperts, and by publishing more working
papers with technical descriptions for experts.
The agency is actively exploring ways to provide additional
information about its modeling that would be most useful to the
Congress, such as furnishing further public documentation, presenting
the sensitivity of budgetary effects to changes in key parameters of
policy proposals, and writing accessible source code for computer
programs used in analyses. Those tasks require considerable resources;
to best allocate those resources, the agency is in the process of
assessing which tasks are the most valuable.
CBO will use such a multifaceted approach to enhancing the
transparency of its modeling because that modeling--and CBO's analysis
more broadly--is much more than the output of computer programs. It is
primarily the identification of the main mechanisms through which
proposed legislation would affect the budget; the assessment of which
mechanisms would probably have effects important enough to quantify;
and the integration of different types of research, on the basis of
data from the past, to project responses in individuals' and
institutions' behavior to changes in those mechanisms. That process
generally differs for each estimate so that CBO can make the best use
of different types of research to model the effects of a particular
legislative proposal. One example is the agency's analysis of potential
changes to premiums in Medicare Advantage. The effects of such a change
on people's decisions to enroll in a private plan through that
program--and thus on the Federal budget--would not simply be
proportional to the size of the change, so CBO's modeling differs
depending on whether proposed changes are small or large.
Because the overall demand for CBO's work is high and its resources
are constrained, the agency needs to balance requests to explain more
about finished analyses with requests for new analyses and with its
other responsibilities, such as regularly updating its baseline budget
and economic projections. Those demands and constraints, and not any
requirements written in law, are the main factors limiting public
documentation, reporting of the effects of changes in key parameters,
writing accessible computer code, and related activities.
The Role of Transparency. When CBO completes a budget or economic
projection, a cost estimate for a public piece of legislation, or
another type of analysis, it makes the results of that analysis
available to all Members of Congress, their staff, and the public.
CBO's analysts spend a great deal of time meeting with interested
Members of Congress and their staff to explain the details that
underlie cost estimates. In its blog, CBO also highlights answers to
questions that have frequently been raised by Members, sometimes
explaining what the limitations of its analyses are and how new data
and results from well-designed studies could help the agency better
predict the potential effects of legislative proposals.\5\
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\5\ For example, see Noelia Duchovny, Eamon Molloy, Lori Housman,
and Ellen Werble, ``Estimating the Effects of Federal Policies
Targeting Obesity: Challenges and Research Needs,'' CBO Blog (October
26, 2015), www.cbo.gov/publication/50877.
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Even though CBO devotes substantial time and energy to presenting
its work as clearly and nontechnically as possible, the pace of
Congressional action often requires the agency to produce analyses
quickly. So the amount of explanation that can be provided when an
estimate or analytic report is released is sometimes limited by the
time available.
Information About Models. CBO has made a variety of information
available so that outside analysts can examine the basis for its
estimates, and the agency intends to make more available in the future.
For example, in June, CBO published a paper describing the simulation
model that it uses to inform its baseline budget projections for the
Pension Benefit Guaranty Corporation's multiemployer program.\6\ The
paper explains the interest rates used, the way stock market returns
are simulated, the role of plan-specific parameters, how they are
calibrated by means of information from a plan's filings with the
Internal Revenue Service, and so on.
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\6\ See Wendy Kiska, Jason Levine, and Damien Moore, Modeling the
Costs of the Pension Benefit Guaranty Corporation's Multiemployer
Program, Working Paper 2017-04 (Congressional Budget Office, June
2017), www.cbo.gov/publication/52749.
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Another complex simulation model is the one that CBO uses to
estimate how rates of coverage and sources of health insurance would
change if various insurance options underwent alterations in
eligibility criteria and subsidies and thus net cost. CBO has described
the data underlying that model, which include information about the
income, employment, health status, and health insurance coverage of a
representative sample of individuals and families.\7\ The model also
incorporates information from the research literature about people's
and employers' responsiveness to price changes and about people's
responsiveness to changes in eligibility for public coverage. CBO's
publications explain how changes in coverage of different types depend
on the difference in price between those types. In addition, those
publications present the parameter values used to estimate the change
in the probability of choosing coverage of a particular type with
respect to a percentage change in price.\8\
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\7\ See Jared Maeda and susan Yeh Beyer, ``How Does CBO Define and
Estimate Health Insurance Coverage for People Under Age 65?'' CBO Blog
(December 20, 2016), www.cbo.gov/publication/52352.
\8\ For additional information, see Congressional Budget Office,
``Methods for Analyzing Health Insurance Coverage'' (accessed August 1,
2017), www.cbo.gov/topics/health-care/methods-
analyzing-health-insurance-coverage.
---------------------------------------------------------------------------
Most of CBO's cost estimates, however, do not involve simulation
models. In those cases, the agency generally describes the building
blocks of the estimate. In October 2016, for example, CBO estimated
that the Veterans First Act would, among other provisions, authorize
the Veterans Administration (VA) to place up to 900 veterans with
severe service-connected disabilities in Medical Foster Homes (MFHs).
Here is an excerpt from CBO's cost estimate:
CBO estimates that half of the veterans eligible for this
program (about 450 individuals) would become residents of MFHs
as a result of the bill's enactment. For those veterans, VA
would pay for their living expenses, as well as the costs for
Home Based Primary Care services. We estimate that those
veterans would receive healthcare that would cost $9,000 per
year more than they would receive under current law because
providing care in the individual homes is costlier than
providing healthcare at VA medical facilities. Including the
costs for living expenses at the MFHs of $39,000 per year, we
estimate total costs per new resident of $48,000 per year. As a
result, total costs for new MFH residents would be about $22
million a year, CBO estimates.\9\
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\9\ See Congressional Budget Office, cost estimate for S. 2921, the
Veterans First Act (October 24, 2016), page 17, www.cbo.gov/
publication/52133.
Outside analysts with a different estimate of one component, such
as the cost of care in the individual homes, can draw on that
explanation to make their own calculations.
How CBO Incorporates Feedback From Outside Analysts. CBO
continually seeks feedback about its analytical efforts in order to
ensure their effectiveness. For example, the agency has a Panel of
Economic Advisers and a Panel of Health Advisers, which consist of
experts with a wide variety of backgrounds and specialized knowledge
who are selected to represent a range of views. The first of those
panels meets twice a year to provide input about CBO's latest economic
forecast and other issues, and the second meets annually to discuss key
issues affecting the agency's projections and analyses and to examine
new research in healthcare and healthcare financing.\10\ CBO also
regularly consults with those experts and with others for guidance.
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\10\ For additional information about those meetings, see
Congressional Budget Office, ``Agendas From Prior Meetings of CBO's
Panels of Advisers'' (accessed August 1, 2017), www.cbo.gov/about/
processes/meeting-agendas.
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Furthermore, CBO's analysts regularly make presentations at
conferences and elsewhere to obtain feedback and to answer questions
about the agency's analytical methods. For example, CBO has devoted
significant effort to developing and enhancing analytical tools for
assessing the macroeconomic effects of fiscal policies and the feedback
of those effects into the budget. The agency has engaged in dialogue
about that effort at meetings of numerous professional associations and
at universities (in addition to obtaining input from its Panel of
Economic Advisers).\11\
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\11\ For links to CBO's presentations at those meetings and
universities, see Congressional Budget Office, ``Dynamic Analysis''
(accessed August 1, 2017), www.cbo.gov/taxonomy/term/1632/
latest?type=5.
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______
Question Submitted to Hon. Gene L. Dodaro
Question Submitted by Senator Marco Rubio
Question. Thank you for your work in 2016 that shed light on the
emergence of the Zika virus and the need for the public to have access
to information and resources on the disease.
GAO's research on funding to combat this terrible disease has been
essential in justifying congressional support to the CDC and FDA.
Given continued uncertainty surrounding the total number of
infections and full spectrum of outcomes, what efforts should we
prioritize to better understand, and thus better fight, the Zika virus?
Answer. Currently available Zika virus prevention methods include
various mosquito control methods, guidance on safe sex practices if a
person has or is suspected of having Zika virus or has traveled to an
area with high rates of local transmission, and guidance for travel to
areas affected by Zika virus. Although at present no vaccine has been
approved by the Food and Drug Administration (FDA) to prevent Zika
virus disease, several vaccines are in different development phases.
Because Zika virus disease cannot yet be prevented by drugs or
vaccines, mosquito control is critical in mitigating risks associated
with this disease.
We have previously described different types of mosquito control
methods used in the United States.\1\ The Federal Government has a
limited role in implementing mosquito control because mosquito control
efforts are implemented at the State and local levels. The Federal
Government faces a number of challenges in supporting these mosquito
control efforts.
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\1\ GAO, Emerging Infectious Diseases: Actions Needed to Address
the Challenges of Responding to Zika Virus Disease Outbreaks, GAO-17-
445 (Washington, DC: May 23, 2017); Emerging Infectious Diseases:
Preliminary Observations on the Zika virus outbreak, GAO-16-470T
(Washington, DC: March 2, 2017).
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In our May 2017 report, we identified four challenges to the
Federal Government's efforts to support mosquito control activities:
(1) the timing of the availability of funds and sustaining expertise,
(2) communication of data about mosquito distribution, (3) linking the
effects of mosquito control to disease outcomes, and (4) limited
information about mosquito control entities.
We identified several challenges in regards to epidemiology of Zika
virus that should be prioritized including determining the total number
of infections; the biological mechanisms, risks, reasons for geographic
differences, and full spectrum of outcomes associated with maternal-
fetal transmission; the presence and duration of the virus in different
bodily fluids; the role of prior Zika virus infections or exposure to
other related flaviviruses; and the full spectrum of outcomes of Zika
virus infection. In addition, Zika virus case counts obtained from the
national disease surveillance system underestimate the total number of
Zika virus infections over a specified time period.
The causes of this underestimate include: an infected person may
not seek medical care for a variety of reasons such as having only mild
or no symptoms, an infection may not be diagnosed because of
limitations in Zika virus diagnostic testing, and surveillance
reporting can be incomplete for a variety of reasons. CDC, the Counsel
of State and Territorial Epidemiologists (CSTE), and State and local
public health agencies faced several challenges in implementing
surveillance for Zika virus and its associated health outcomes. Efforts
that should be prioritized to better understand Zika virus surveillance
include establishing early case definitions, timely communication of
critical information, and interoperability between surveillance
databases. We identified key challenges to Zika virus epidemiological
research: study designs needed for establishing association and
causality challenged linking Zika virus and associated health outcomes,
and insufficient data and lack of developed models challenged
prediction of the spread of the virus. Efforts to overcome these
challenges should be prioritized.
Zika virus diagnostic tests varied in their ability to detect the
Zika virus and provide accurate results. In developing the diagnostic
tests, manufacturers faced challenges in several areas that should be
prioritized, including access to clinical samples and other authorized
diagnostic tests for comparison purposes. Users of the tests also
encountered challenges, including determining the most accurate test to
use, and obtaining equipment needed to conduct the tests. Some
manufacturers we interviewed raised concerns about the difficulty in
developing diagnostic tests that met the Food and Drug Administration's
(FDA) requirements for Emergency Use Authorization and some users
expressed concerns about selecting tests amongst those authorized.
We also determined that CDC and FDA did not follow some of their
guidance in communicating with users of diagnostic tests, including
providing clear information that would have enabled users to more
easily compare performance across different tests.
Our May 2017 report made several recommendations to the Department
of Health and Human Services (HHS) to ensure that information about
different diagnostic tests is more readily comparable and available,
establish a transparent process for CDC to provide diagnostic tests to
manufacturers in the final stages of diagnostic test authorization, and
provide additional details to better inform mosquito control experts
and the general public.\2\ Currently, these recommendations are still
open and the department stated it is in the process of addressing these
recommendations.
---------------------------------------------------------------------------
\2\ GAO, Emerging Infectious Diseases: Actions Needed to Address
the Challenges of Responding to Zika Virus Disease Outbreaks, GAO-17-
445 (Washington, DC: May 23, 2017).
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The Zika supplemental appropriation funds provided for in the Zika
Response and Preparedness Appropriations Act, 2016 (Public Law No. 114-
223, div. B) must be obligated by the end of the fiscal year 2017
(i.e., September 30, 2017). The Act also includes a provision that GAO
conduct oversight of the activities supported with funds appropriated
by the Act, which we have begun.
SUBCOMMITTE RECESS
The next hearing of this subcommittee will be held on
Thursday, June 29, at 10:15 a.m., Dirksen room 124. We will
hear testimony from Capitol Police and the Senate sergeant-at-
arms. It is the rescheduled meeting that Senator Murphy had
talked about before for their fiscal year 2018 budget request.
Immediately following that public hearing, which will be fairly
short, it will be followed by a closed session to evaluate
security needs for those same two agencies. Until then, this
committee stands adjourned.
[Whereupon, at 4:19 p.m., Wednesday, June 21, the
subcommittee was recessed, to reconvene at 10:15 a.m.,
Thursday, June 29.]
APPENDIX
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