[Senate Hearing 115-411]
[From the U.S. Government Publishing Office]


 
         LEGISLATIVE BRANCH APPROPRIATIONS FOR FISCAL YEAR 2019

                              ----------                              


                       WEDNESDAY, APRIL 25, 2018

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 3:30 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Steve Daines (Chairman) presiding.
    Present: Senators Daines, Murphy, and Van Hollen.

                      CONGRESSIONAL BUDGET OFFICE

STATEMENT OF HON. KEITH HALL, DIRECTOR


               opening statement of senator steve daines


    Senator Daines. Good afternoon.
    The subcommittee will come to order.
    I would like to welcome everyone to the first of our fiscal 
year 2019 budget hearings for the agencies under the 
jurisdiction of the Legislative Branch Appropriations 
Subcommittee.
    Today, we have with us the Director of the Congressional 
Budget Office, known as the CBO, Dr. Keith Hall; and the head 
of the Government Accountability Office, the GAO, Comptroller 
General Gene Dodaro.
    I very much appreciate the willingness of the witnesses to 
appear before the subcommittee today and look forward to their 
testimony.
    The total Congressional Budget Office request for fiscal 
year 2019 is $50.7 million; an increase of $0.8 million above 
the fiscal year 2018 enacted level.
    This funding request supports the current full-time 
equivalent level of 239, and an additional 10 FTE, eight of 
which would be devoted to the areas of transparency and 
responsiveness, and another two FTE would be added in the area 
of healthcare analysis.
    The total GAO request for fiscal year 2019 is $578.9 
million, which is level with the fiscal year 2018 enacted 
level. Though level funding, this request supports an increase 
in FTE from 3,020 to 3,100 by shifting investments from one-
time information technology (IT) and infrastructure projects 
being completed in fiscal year 2018 to personnel needs. This 
growth in FTE would continue progress toward GAO's multiyear 
plan to rebuild its staff capacity to an optimal level of 3,250 
FTE.
    I would like to thank you both for taking time last week to 
meet with me and discuss some of the issues facing your 
agencies. They were certainly valuable conversations. I enjoyed 
the back and forth dialogue and I hope to expand on some of the 
topics we discussed during today's hearing.
    I also look forward to gaining a full understanding of your 
agencies' needs and priorities for the coming year to better 
serve the Congress and our great Nation.
    And now, I would like to turn to my favorite Ranking 
Member, Senator Murphy, for any opening remarks he might like 
to make.


                statement of senator christopher murphy


    Senator Murphy. Thank you very much, Senator Daines.
    Really a pleasure to be joining you as Ranking Member on 
this subcommittee; we can build on some really great bipartisan 
work that both Senator Lankford and I were able to do. This is 
a fun subcommittee with people who are truly dedicated to 
helping us do our jobs, and we have two fine examples of that 
in front of us today.
    To both of you, looking forward to your testimony. I am 
glad that we were able to make progress on getting the GAO made 
whole after a large 10 percent cut in staff over the course of 
the sequester.
    Dr. Hall, thank you for continuing to bear up amidst all of 
the storms that get sent your way, as you provide analysis to 
Congress that tends to hold up over time, but always comes with 
a bit of controversy. We have to make sure, as a subcommittee, 
that we are protecting CBO and allowing you to do the 
nonpartisan, fact-based work that helps us do our jobs.
    So looking forward to both of your testimonies here today. 
Looking forward to working with the Chairman of the 
subcommittee.
    Thanks for being with us.
    Senator Daines. Now, I will ask the witnesses, beginning 
with Dr. Hall, to give a brief, opening statement of 
approximately 5 minutes. The written testimony of each witness 
will be printed in full in the hearing record.
    Dr. Hall.


                  summary statement of hon. keith hall


    Dr. Hall. Chairman Daines, and 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 $50.7 million for fiscal year 2019. That 
amount represents an increase of $800,000 or 1.6 percent from 
the $49.9 million provided to CBO in fiscal year 2018. Of the 
total amount, nearly 91 percent would be used for personnel 
costs.
    Increases of $2.6 million for three priorities--to pay for 
current staffing, to bolster responsiveness and transparency, 
and to expand analytical capacity--would be significantly 
offset by one-time savings of $1.8 million this year. With the 
requested funding, CBO would be able to add 13 new employees to 
augment its capabilities.
    To fund current staffing levels in 2019, CBO requests an 
increase of $1.2 million. That amount would be used for a small 
increase in employees' average salary and benefits to keep pace 
with inflation. If such funding is not provided, CBO will need 
to shrink its staff and consequently provide less information 
and analysis to the Congress in 2019.
    CBO proposes to hire 20 new staff members by 2021 to 
bolster its responsiveness and transparency. In 2019, the 
agency would hire 10 of those new employees at a total cost of 
$1 million, mainly for salary and benefits. The agency has 
shifted resources already to undertake such activities and has 
plans for further shifts, but many initiatives of great 
interest to the Congress could be undertaken only with more 
employees.
    With additional resources, CBO would be able to pursue 
three main strategies to produce cost estimates more quickly:
    First, the agency would hire more assistant analysts, who 
could move from one topic to another and provide support to 
more senior analysts when demand surged for analysis of a 
particular topic, such as healthcare, natural resources, or 
banking.
    Second, CBO would hire analysts to develop deeper expertise 
in certain topics, such as cyber security and higher education 
policy, so that the agency was better positioned to analyze new 
proposals in those areas.
    Third, the agency would hire analysts to expand its use of 
team approaches in which work on large and complicated 
proposals is shared.
    CBO is actively exploring ways to provide additional 
information about its modeling that would be useful to 
Congress. The agency has released new publications this year 
describing its processes for producing economic forecasts, 
budget baselines, and cost estimates. Key staff are making 
presentations to congressional staff about these processes. In 
the coming months, efforts to bolster transparency will include 
the following:
    Publishing detailed information about key aspects of CBO's 
updated model for simulating health insurance coverage, 
including computer code, and about how analysts use the model 
preparing estimates;
    Developing a version of CBO's model for projecting spending 
on discretionary programs to allow for replicating roughly 40 
percent of the agency's formal cost estimates;
    Releasing technical documentation and computer code 
explaining how key parts of CBO's long-term budget model work 
and how they contribute to the agency's analyses;
    Providing information online enables users to examine how a 
large variety of changes in baseline economic projections can 
affect projections of the Federal budget; and
    Posting on the agency's website a tool for examining the 
cost of different military force structures.
    Added resources would also allow CBO to produce other kinds 
of information that would aid transparency. For instance, CBO 
could provide more information about the basis for key 
parameters that underline the results of models. Additional 
funding would also help the agency turn its internal 
comparisons of projections and actual results--for the economy, 
revenues, spending, deficit, and debt--into public documents.
    CBO proposes to expand its analytical capacity primarily by 
adding three new healthcare analysts in 2019. The total cost 
would be $400,000. Congressional interest remains high in 
modifying or replacing the Affordable Care Act, and changing 
Medicare or Medicaid, and the new analysts would help the 
agency examine new approaches to do so.
    The increase for the three priorities are offset by $1.8 
million in savings resulting from being able to use fiscal year 
2018 funding to cover one-time costs for the migration of the 
agency's datacenter and contractors' supported of transparency 
efforts and to pay for some multiyear contracts to acquire data 
and to install new communication lines.
    The requested amount of funding would allow CBO to provide 
estimates and other analyses to the Congress such as:
    More than 600 formal cost estimates and thousands of 
preliminary, formal cost estimates;
    About 80 analytic reports and papers; and
    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.
    In closing, I would like to thank the Committee for its 
longstanding support of CBO. That support has allowed CBO to 
provide budget and economic analysis that is timely, 
thoughtful, and nonpartisan as the Congress addresses issues of 
critical importance.
    [The statement follows:]
                  Prepared Statement of Dr. Keith Hall
(See the full report ``Testimony, CBO's Appropriation Request for 
    Fiscal Year 2019'' in Appendix A at the end of the hearing.)

    Chairman Daines, 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 $50.7 million for fiscal year 2019. That amount 
represents an increase of $0.8 million, or 1.6 percent, from the $49.9 
million provided to CBO for 2018. Of the total amount, nearly 91 
percent would be used for personnel costs.
             reasons for the requested increase in funding
    Increases of $2.6 million for three priorities--to pay for current 
staffing, to bolster responsiveness and transparency, and to expand 
analytical capacity--would be significantly offset by onetime savings 
of $1.8 million this year. With the requested funding, CBO would be 
able to add 13 new employees to augment its capabilities.
Paying for Current Staffing
    CBO requests an increase of $1.2 million to fund current staffing 
levels in 2019. That amount would be used for a small increase in 
employees' average salary and benefits to keep pace with inflation. If 
such funding is not provided, CBO will need to shrink its staff and 
consequently provide less information and analysis to the Congress in 
2019.
Bolstering Responsiveness and Transparency
    CBO proposes to hire 20 new staff members by 2021 to bolster its 
responsiveness and transparency. In 2019, the agency would hire 10 of 
those new employees at a total cost of $1.0 million, mainly for salary 
and benefits. (The additional staff members would be hired partway 
through fiscal year 2019, so the addition in terms of full-time-
equivalent positions, or FTEs, would be 8 rather than 10.) The new 
staff would help CBO respond to requests for information more quickly 
when there is a surge in demand. They would also allow CBO to supply 
more information about its analysis and models without reducing the 
valuable services that it provides to the Congress at its current 
staffing level. The agency has shifted resources already to undertake 
such activities and has plans for further shifts, but many initiatives 
of great interest to the Congress could be undertaken only with more 
employees.

(The amount in CBO's original budget request for 2019, submitted before 
the recently established appropriation for 2018, was $0.8 million.)
Expanding Analytical Capacity
    CBO proposes to expand its analytical capacity primarily by adding 
three new healthcare analysts (a number equivalent to two FTEs) in 
2019. The total cost would be $0.4 million ($0.3 million in personnel 
costs and $0.1 million in nonpersonnel costs, mostly for interagency 
agreements). Congressional interest remains high in modifying or 
replacing the Affordable Care Act and changing Medicare or Medicaid, 
and the new analysts would help the agency examine new approaches to do 
so.

(In CBO's original budget request, the amount for ``Expanding 
Analytical Capacity'' was $0.6 million, but a portion of the 
requirement has been funded from the 2018 appropriation. So CBO has 
redirected $0.2 million from the originally proposed amount to address 
the priority ``Bolstering Responsiveness and Transparency.'')
Applying Offsetting Savings
    The increases for the three priorities are offset by $1.8 million 
in savings resulting from being able to use fiscal year 2018 funding to 
cover onetime costs for the migration of the agency's data center and 
contractors' support of transparency efforts and to pay for some 
multiyear contracts to acquire data and to install new communication 
lines.
   cbo's budget request and its consequences for staffing and output
    In fiscal year 2019, CBO will continue its mission of providing 
objective, insightful, timely, and clearly presented budgetary and 
economic information to the Congress. To fulfill that mission, the 
requested funding of $50.7 million would be used for personnel costs 
(that is, salaries and benefits) and nonpersonnel costs for IT 
(information technology) and other items, such as training, as follows:
Funding Request for Personnel Costs and Consequences for Staffing
    CBO requests $45.9 million for salary and benefits, which equals 91 
percent of its funding request. Those funds would support 249 FTEs. The 
requested amount represents an increase of $2.5 million, or 6 percent. 
The total requested amount would break out this way:
  --$34 million would cover salaries for personnel--an increase of $1.8 
        million, or 6 percent, from the amount that will be spent in 
        fiscal year 2018. The increase would include $0.9 million in 
        pay for 13 new staff members, 10 of them to bolster CBO's 
        responsiveness and transparency and 3 to expand analytical 
        capacity. (The addition in terms of FTEs would be 10.) The 
        increase would also cover performance-based salary increases 
        for current staff and an across-the-board increase of 2.6 
        percent for employees earning less than $100,000.
  --$11.9 million would fund benefits for personnel--an increase of 
        $0.7 million, or 6 percent, from the amount projected to be 
        spent in 2018. The increase would cover an increase in the cost 
        of Federal benefits, as well as benefits for the 13 new staff 
        members.
Funding Request for Nonpersonnel Costs
    CBO requests $4.9 million for nonpersonnel costs, which equals 
about 10 percent of its funding request. Those funds would cover 
current IT operations--such as software and hardware maintenance, 
software development, purchases of commercial data, 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 a net decrease of 
$1.7 million, or 26 percent, but would allow CBO to fund support costs 
for the 13 new staff members, covering travel, training, furniture, and 
IT for them ($65,000).
Consequences for Output
    The requested amount of funding would allow CBO to provide 
estimates and other analyses to the Congress in roughly these 
quantities:
  --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 80 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, Social Security, and housing;
  --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, 
        as well as publications that increase the transparency of CBO's 
        work and communicate 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 been heavy, and the Congress remains 
acutely interested in analyses of proposals affecting health insurance. 
Other issues arise frequently and create a heavy demand for analysis; 
for example, over the past year, CBO analyzed legislation related to 
immigration, veterans' health, water rights, opioid abuse, education, 
and nutrition. 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.
      how additional funding could improve cbo's responsiveness, 
                 transparency, and analytical capacity
    In response to proposals that CBO provide information more quickly 
and transparently than is possible with its current staffing--while 
continuing to meet its goal of providing objective, insightful, high-
quality information--the agency proposes to dedicate additional 
resources to doing so. As explained, CBO proposes to hire 13 new 
employees in 2019, and it proposes bringing on a total of 20 new 
employees over the next 3 years--or more quickly, if the Congress 
chooses to appropriate the necessary funding more quickly than CBO is 
asking. Some proposals related to CBO's speed and transparency would 
require even more resources than the agency is requesting.
Responsiveness
    Last year marked the highest number of formal cost estimates in a 
decade: 740. Over 70 percent of those estimates were published within 
30 days of markup, and over 40 percent of those estimates were 
published within 2 weeks. The overall average for completing a cost 
estimate was 25 calendar days after markup.
    In 2017, CBO enhanced its tracking system for cost estimates, 
including focusing more on identifying why some cost estimates take 
longer to complete. (Fewer than 10 percent of estimates took longer 
than 60 days to complete in 2017.) The reasons vary. In many cases, the 
legislation or the required analysis is particularly complex. In some 
cases, legislative language is not in final form when received, or CBO 
is waiting for data from agencies or relevant stakeholders. In any 
case, CBO's goal is to improve the turnaround time when it can, and 
identifying those roadblocks is one of the first steps toward that 
goal. The agency aims to use the expanded tracking system to improve on 
its performance in terms of timeliness, which already ensures that 
almost all reported bills receive a cost estimate before final 
consideration on the floor of either chamber.
    With additional resources, CBO would be able to pursue three main 
strategies to produce cost estimates more quickly. First, the agency 
would hire more assistant analysts, who could move from one topic to 
another and provide support to more senior analysts when demand surged 
for analysis of a particular topic, such as healthcare, natural 
resources, or banking. Second, CBO would hire analysts to develop 
deeper expertise in certain topics, such as cybersecurity and higher 
education policy, so that the agency was better positioned to analyze 
new proposals in those areas. Third, the agency would hire analysts to 
expand its use of team approaches, in which work on large and 
complicated proposals is shared.
    CBO's proposed expansion of its analytical capacity would also 
bolster the agency's responsiveness in the long term by creating a 
stronger base on which to build when starting new analyses.
Transparency
    CBO is actively exploring ways to provide additional information 
about its modeling that would be useful to the Congress. The agency has 
released new publications this year describing its processes for 
producing economic forecasts, budget baselines, and cost estimates.\1\ 
Key staff are making presentations to Congressional staff about those 
processes.\2\ In the coming months, efforts to bolster transparency 
will include the following:
  --Exploring ways to make more supporting documentation of the methods 
        used in baseline projections and cost estimates publicly 
        available;
  --Publishing detailed information about key aspects of CBO's updated 
        model for simulating health insurance coverage--including 
        computer code--and about how analysts use the model in 
        preparing estimates;
  --Developing a version of CBO's model for projecting spending on 
        discretionary programs to allow for replicating roughly 40 
        percent of the agency's formal cost estimates;
  --Releasing technical documentation and computer code explaining how 
        key parts of CBO's long-term budget model work and how they 
        contribute to the agency's analyses; \3\
  --Providing information online that enables users to examine how a 
        large variety of changes in baseline economic projections can 
        affect projections of the Federal budget;
  --Publishing revised estimates of how certain changes to laws 
        governing medical malpractice would affect medical spending, 
        explaining the reasons behind revisions to the methodology 
        used, documenting the model used to project how those changes 
        to laws would affect medical costs, and making computer code 
        for that model available;
  --Posting on the agency's website a tool for examining the costs of 
        different military force structures; and
  --Providing computer code that generates results discussed in a 
        working paper about CBO's model of the economy's maximum 
        sustainable output.\4\
    In many cases, CBO produces cost estimates and baseline projections 
through complex processes that integrate information from numerous 
models and other analytical tools. Additional resources would allow CBO 
to explain more about those processes in presentations, slide decks, 
working papers, and reports.\5\ Such explanations would show how 
computer programs used in CBO's modeling fit into the broader scope of 
the agency's analysis, which consists mainly of identifying how 
proposed legislation would affect the budget; assessing which types of 
effects would be substantial enough to quantify; and integrating 
different types of research, on the basis of historical data, to 
project people's and institutions' responses to legislative changes. 
The processes differ from estimate to estimate so that CBO can make the 
best use of different types of research. The complexity of CBO's 
analysis and the different analytical tools that are often brought to 
bear make documentation time-consuming and resource-intensive.
    Added resources would also allow CBO to produce other kinds of 
information that would aid transparency. For instance, CBO could 
provide more information about the basis for key parameters that 
underlie the results of models.\6\ Additional funding would also help 
the agency turn its internal comparisons of projections and actual 
results--for the economy, revenues, spending, deficits, and debt--into 
public documents.\7\
    Input from outside experts and extensive external review will 
remain an important component of transparency:
  --CBO will continue to solicit external professional review of its 
        work so that the agency's analyses reflect both the consensus 
        and diversity of views of experts from around the country. For 
        example, in updating its simulation model of health insurance 
        coverage, CBO will get systematic feedback from the research 
        community by making presentations about different aspects of 
        the model as they are developed.
  --The agency's cost estimates will often draw on consultation with 
        outside experts.
  --CBO's Panel of Economic Advisers will meet twice a year to provide 
        input on the agency's latest economic forecast and other 
        issues, and CBO's Panel of Health Advisers will meet to discuss 
        key issues affecting the agency's baseline projections and 
        analyses of proposals and to examine new research in healthcare 
        and healthcare financing.
  --CBO will also regularly consult with those distinguished experts on 
        its panels and other experts for guidance on the agency's work 
        on a broad range of topics.
Analytical Capacity
    Interest in legislative proposals related to healthcare--on the 
part of committees of jurisdiction, the Congressional leadership, and 
the budget committees--remains very great. The enactment of the 
Affordable Care Act in 2010 was followed by strong Congressional 
interest in analysis of that legislation and possible modifications to 
it, as well as in potential changes to Medicare or Medicaid. Recently, 
the Congress has devoted substantial time to discussing proposals to 
repeal and replace the Affordable Care Act. Those developments boosted 
CBO's workload, and the agency anticipates that the Congress will 
request much more analysis of such proposals, related executive 
actions, and other potential changes. Adding healthcare analysts would 
help the agency keep up with those interests and developments and 
produce a greater range and volume of analysis.
    In addition to responding to those immediate concerns, CBO is 
engaged in longer-term projects, analyzing various aspects of the 
healthcare system and enhancing the agency's future analytical capacity 
to assess the effects of legislation on that system and on the Federal 
budget. Additional staff would enable CBO to make more rapid progress 
on the important effort of updating its simulation model of health 
insurance coverage without constraining its work on current legislative 
proposals.
    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.
--------
    This testimony summarizes information in CBO's budget request for 
fiscal year 2018, which was prepared by Mark Smith, with contributions 
from Leigh Angres, Joseph E. Evans, Jr., Deborah Kilroe, Jeffrey Kling, 
Cierra Liles, Terry Owens, Benjamin Plotinsky, and Stephanie Ruiz.
    Mark Hadley and Robert Sunshine reviewed the testimony, John Skeen 
edited it, and Jorge Salazar prepared it for publication. It is 
available on CBO's website at www.cbo.gov/publication/53763.
---------------------------------------------------------------------------
    \1\ See Robert W. Arnold, How CBO Produces Its 10-Year Economic 
Forecast, Working Paper 2018-02 (Congressional Budget Office, February 
2018), www.cbo.gov/publication/53537; and Congressional Budget Office, 
How CBO Prepares Baseline Budget Projections (February 2018), 
www.cbo.gov/publication/53532, How CBO Prepares Cost Estimates 
(February 2018), www.cbo.gov/publication/53519, and How CBO and JCT 
Analyze Major Proposals That Would Affect Health Insurance Coverage 
(February 2018), www.cbo.gov/publication/53571.
    \2\ For example, see Jessica Banthin, Deputy Assistant Director, 
Health, Retirement, and Long-Term Analysis Division, Congressional 
Budget Office, ``An Overview of CBO's Estimates of Federal Subsidies 
for Health Insurance for People Under Age 65: 2017 to 2027'' 
(presentation at a Congressional Research Service seminar, Washington, 
D.C., January 10, 2018), www.cbo.gov/publication/53447; and Sarah Masi, 
Analyst, Budget Analysis Division, Congressional Budget Office, 
``Estimating the Costs of Proposals Affecting Health Insurance 
Coverage'' (presentation at a Congressional Research Service seminar, 
Washington, D.C., January 10, 2018), www.cbo.gov/publication/53448.
    \3\ For the first of those explanations providing a general 
description of that model, see Congressional Budget Office, An Overview 
of CBOLT: The Congressional Budget Office Long-Term Model (April 2018), 
www.cbo.gov/publication/53667.
    \4\ See Robert Shackleton, Estimating and Projecting Potential 
Output Using CBO's Forecasting Growth Model, Working Paper 2018-03 
(Congressional Budget Office, February 2018), www.cbo.gov/publication/
53558.
    \5\ For several recent examples, see Joshua Montes, CBO's 
Projection of Labor Force Participation Rates, Working Paper 2018-04 
(Congressional Budget Office, March 2018), www.cbo.gov/publication/
53616; Congressional Budget Office, ``Modeling the Subsidy Rate for 
Federal Single-Family Mortgage Insurance Programs'' (January 2018), 
www.cbo.gov/publication/53402; and 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.
    \6\ For example, see Congressional Budget Office, ``Key Methods 
That CBO Used to Estimate the Macroeconomic Effects of the 2017 Tax 
Act'' (supplemental material for The Budget and Economic Outlook: 2018 
to 2028, April 2018), https://go.usa.gov/xQcZD.
    \7\ For examples of such comparisons, see Congressional Budget 
Office, CBO's Record of Projecting Subsidies for Health Insurance Under 
the Affordable Care Act: 2014 to 2016 (December 2017), www.cbo.gov/
publication/53094, An Evaluation of CBO's Past Outlay Projections 
(November 2017), www.cbo.gov/publication/53328, CBO's Economic 
Forecasting Record: 2017 Update (October 2017), www.cbo.gov/
publication/53090, and CBO's Revenue Forecasting Record (November 
2015), www.cbo.gov/publication/50831.

    Senator Daines. Thank you, Mr. Hall.
    Mr. Dodaro.
                              ----------                              


                    GOVERNMENT ACCOUNTABILITY OFFICE

STATEMENT OF HON. GENE DODARO
    Mr. Dodaro. Good afternoon, Senator Daines, Ranking Member 
Senator Murphy.
    I appreciate the opportunity to be here.
    First, I want to thank this subcommittee for the support 
that was given for the fiscal year 2018 appropriation. This 
will enable us to meet the critical needs of the Congress and 
to make strategic investments, as you alluded to, Mr. Chairman, 
in your comments, in information technology (IT) and 
infrastructure within GAO.
    This will modernize our communication, data management, 
production capabilities, and save us operating costs that are 
recurring in the future. It will also enable us to prepare the 
GAO building to receive additional tenants, which will bring in 
additional revenue.
    Because of the ability to save on operating costs and 
accelerate our IT investments, we will free up money that will 
enable us, even with a flat budget from 2018 to 2019, to 
increase the number of people at GAO in order to provide more 
services to the Congress.
    The additional staffing will get us to the 3,100 FTE level, 
which is toward our goal of 3,250 FTE. But at 3,100 we will be 
able to meet the most critical needs across the Congress that 
we support.

                        PRIORITY STAFFING AREAS

    With additional staff, there are four priorities for which 
I would like to increase staffing.
    First is the cyber security area. This involves both the 
Federal Government's information systems, as well as critical 
infrastructure protection in the private sector--the 
electricity grid, financial markets, et cetera--in terms of the 
Federal Government working with the private sector in order to 
increase security preparedness in those areas.
    Also critical are protecting personally identifiable 
information and preparing to deal with a number of issues that 
are evolving with the Internet of Things.
    For example, autonomous vehicles and the movement in air 
traffic control systems to a satellite-based control system 
from a radar-based system. While this will improve air traffic, 
it also introduces potential security concerns that have not 
existed.
    GAO would increase work in science and technology matters. 
This would include bolstering our efforts to focus on 
technology assessments on a wide range of issues. We are doing 
one now, for example, looking at the technologies to protect 
the grid. We are also working on freshwater technologies, given 
the fact that 40 of the 50 States expect water shortages over 
the next decade.
    Also there are a lot of the science and technology aspects 
addressed in our audit work. For example, we are looking at the 
new Columbia-class nuclear submarine.
    In the energy area and in defense, we are looking at 
investments to modernize the nuclear arsenal, including 
lifecycle extensions and interoperable warheads. We are also 
looking at a number of science and technology issues associated 
with healthcare.
    We just completed a study, for example, on new technologies 
that could more quickly diagnose infectious diseases, which 
would enable the Government to respond better.
    While we do technology assessments, we also do a wide range 
of technology and science issues as part of our normal work 
throughout GAO as well.
    Our third staffing priority is the big investment that the 
Congress is making in the Defense Department. I want to 
increase our oversight to make sure that that investment pays 
dividends and deals with the major challenges at the Defense 
Department. The Department is undergoing their first DoD-wide 
financial audit and I want to step up our oversight effort to 
help that effort be successful over a long period of time. The 
Department of Defense is the only major department in the 
Federal Government that has not been able to pass the test of 
an independent audit.
    Lastly, I would like to apply more resources in the 
healthcare area. This is the fastest growing part of the 
Federal budget, except for interest on the debt. There is more 
that we can do to help reduce unnecessary spending in the areas 
of Medicare and Medicaid. We also have VA healthcare on our 
high risk list and we need to do more work to put them in a 
better position to serve our veterans with timely, high quality 
care.

                        GAO IS A GOOD INVESTMENT

    We believe we are a good investment. Last year, we returned 
$128 for every $1 invested in GAO, with financial benefits of 
over $73 billion. Our high risk program over the last decade 
has had financial benefits of $240 billion.
    Tomorrow I will be testifying on our latest update on the 
overlap duplication and fragmentation work that Congress has 
required us to do. (www.gao.gov/products/GAO-18-371SP)
    So far Congress has implemented over 50 percent of our 
recommendations. These had financial benefits of $136 billion. 
I will be updating that tomorrow as these numbers have gone up 
given recent events.
    I thank you for the opportunity to discuss our proposal. I 
know that you will give it careful consideration. I appreciate 
that very much and I would be happy to answer any questions.
    [The statement follows:]
               Prepared Statement of Hon. Gene L. Dodaro

(See  the full report GAO-18-426T, ``Testimony Before the Subcommittee 
 on the Legislative Branch, Committee on Appropriations, U.S. Senate'' 
               in Appendix B at the end of the hearing.)

    Chairman Daines, Ranking Member Murphy, and Members of the 
subcommittee, thank you for the opportunity to discuss our fiscal year 
2019 budget request. I very much appreciate the confidence this 
subcommittee has shown in supporting our efforts to serve the Congress 
and improve government performance, accountability, and transparency.
    Since 2014, this Committee has provided funding that has resulted 
in our work achieving over $265 billion in financial benefits and more 
than 5,000 other improvements in Federal programs and government 
operations. Last fiscal year alone, our work generated almost $74 
billion in financial benefits and 1,280 program and operational 
improvements across government. This resulted in a return of $128 for 
every dollar invested in GAO. GAO's work was also incorporated into 
appropriation and authorization legislation passed over the past year, 
including requirements for Federal agencies to implement GAO's 
recommendations.
    I also thank the Committee for its support for our fiscal year 2018 
appropriation. We have revised both our fiscal year 2018 operating plan 
and our fiscal year 2019 request to reflect the new appropriation 
level, including the disaster assistance supplemental funds we 
received. In fiscal year 2018, we will begin hiring additional staff, 
achieving a full-time equivalent (FTE) level of 3,020 and positioning 
us to reach 3,100 FTE in fiscal year 2019. The funding level will also 
allow us to invest in information technology and building facility 
projects that will improve efficiency and reduce long-term operating 
costs.
    Our fiscal year 2019 request is at the same funding level as fiscal 
year 2018. With these resources, we will achieve a staffing level of 
3,100 FTE, allowing us to better serve Congress as it addresses many 
critical domestic and international challenges and fulfills its 
oversight responsibilities, as well as enable GAO to continue making 
important contributions to improving government performance and 
accountability.
                        fiscal year 2019 request
    GAO is requesting budget authority of $614.8 million for fiscal 
year 2019. This will fund the necessary activities to continue to meet 
the highest priority needs of the Congress. The funding will allow us 
to cover mandatory pay and inflationary cost increases, and achieve 
increases in our on-board staff. The request includes an appropriation 
of $578.9 million and $35.9 million in offsetting receipts and 
reimbursements from program and financial audits, rental income, 
training fees, bid protest fees, and funds provided to GAO for mandated 
work.
    The Congressional Budget Justification (CBJ) submitted in January 
presented a fiscal year 2018 direct appropriation of $540.8 million 
plus $33.0 million in offsets reflecting the continuing resolution 
level. To avoid exceeding this level and out of uncertainty about the 
final appropriation, we developed a prudent hiring plan that would have 
resulted in 2,900 full time equivalents (FTE) in fiscal year 2018.
    With the 2-year budget agreement and funding enacted for fiscal 
year 2018, including $10 million in 2-year funding for information 
technology and building infrastructure projects, we revised both our 
fiscal year 2018 operating plan and our fiscal year 2019 budget 
request. The information technology investments lower our operational 
costs in the long run and the investments in infrastructure will allow 
us to bring in a new tenant and increase our rental revenue. This will 
allow GAO to put more funds into human capital in the future. We now 
plan to accelerate hiring for the rest of this fiscal year. The revised 
plan will put us in a position to achieve 3,100 FTE in fiscal year 2019 
without an increase over the fiscal year 2018 appropriation level, 
moving GAO closer to its optimal staffing level of 3,250 FTE. The chart 
below provides a summary by program for the revised fiscal year 2019 
request.

                         TABLE 1: FISCAL YEAR 2017-2019 SUMMARY OF RESOURCES BY PROGRAM
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                Fiscal Year 2017     Fiscal Year 2018     Fiscal Year 2019    Net Change Fiscal
                                     Actual             Estimated             Request           Year 2018/2019
           Program           -----------------------------------------------------------------------------------
                                FTE      Amount      FTE      Amount      FTE      Amount      FTE      Amount
----------------------------------------------------------------------------------------------------------------
Human capital...............   2,994    $470,926    3,020    $489,396    3,100    $516,097       80     $26,701
                                                                                               2.6%        5.5%
----------------------------------------------------------------------------------------------------------------
Engagement support..........             $10,452              $12,750              $12,750                   $0
                                                                                                           0.0%
----------------------------------------------------------------------------------------------------------------
Infrastructure operations...             $90,091             $112,171              $85,470             ($26,701)
                                                                                                           (24%)
----------------------------------------------------------------------------------------------------------------
Center for Audit Excellence.                $545                 $500                 $500                   $0
                                                                                                           0.0%
----------------------------------------------------------------------------------------------------------------
Total budget authority......   2,994    $572,014    3,020    $614,817    3,100    $614,817       80          $0
                                                                                               2.6%        0.0%
----------------------------------------------------------------------------------------------------------------
Offsets \a\.................            ($28,163)            ($35,900)            ($35,900)                  $0
                                                                                                           0.0%
----------------------------------------------------------------------------------------------------------------
Appropriation...............            $543,851             $578,917             $578,917                   $0
                                                                                                           0.0%
----------------------------------------------------------------------------------------------------------------
Source: GAO.  GAO-18-448T
\a\ Includes offsetting receipts and reimbursements from program and financial audits, rental income, training
  fees, bid protest fees, and funds provided to GAO for mandated work and funds from the disaster supplemental.

        meeting the priority needs of committees across congress
    The resources we received for fiscal year 2018, and request for 
fiscal year 2019, will allow GAO to continue to respond to Congress on 
a wide variety of issues covering the full breadth of the Federal 
Government's responsibilities. In addition, with increased staffing we 
will: (1) expand our focus on critical cybersecurity issues and the 
threats to the Nation's critical infrastructure; (2) continue our focus 
on a range of rapidly evolving science and technology issues; (3) 
bolster our reviews of the increased investment in Department of 
Defense programs; and (4) assess the challenges associated with growing 
Federal healthcare costs. In fiscal year 2018, we plan to utilize 3,020 
FTE, an increase of 120 over the level included in the CBJ. In fiscal 
year 2019, we plan to utilize 3,100 FTE, an increase of 80 over the 
revised fiscal year 2018 operating plan.
    The fiscal year 2018 operating plan and fiscal year 2019 budget 
request reflect the utilization of the disaster supplemental. Currently 
GAO has eight audits under way and another 15 planned to start over the 
next 18 months. These audits involve multiple mission teams and range 
from reviews of Puerto Rico and U.S. Virgin Islands economic and 
disaster recovery plans; fraud risk management in Florida and Texas 
disaster assistance programs; and the Federal response to the 2017 
Western wildfires. Currently, we plan to use $8 million of the disaster 
supplemental in fiscal year 2018 and fiscal year 2019 (approximately $2 
million and $6 million, respectively).
Cyber-Based Threats to the Nation's Systems and Critical Infrastructure
    The cyberattacks suffered by the Office of Personnel Management, 
Equifax, and other large organizations in recent years highlight the 
criticality of more effective cybersecurity. Threats from State and 
non-State actors are growing in sophistication and scope and can have a 
serious, or even potentially catastrophic, impact on Federal systems, 
the Nation's critical infrastructure, and the privacy and safety of the 
general public.
    As Congress turns to GAO for insightful analysis and advice to 
address these rapidly evolving threats, recruiting top-tier cyber 
talent to augment our current audit workforce is critical. GAO plans to 
recruit talent from leading cybersecurity-related undergraduate and 
graduate institutions, including those participating in the CyberCorps 
Scholarship for Service program. This would augment our existing cadre 
of experts who can assess the nature and extent of cyber risks, both 
present and future, as well as evaluate the government's complex and 
multi-faceted attempts to address them.
    In particular we plan to continue our focus on ensuring the 
security of Federal information systems and cyber critical 
infrastructure,\1\ two key components of our cyber High Risk area. Over 
the next 2 years, our planned efforts include assessing government-wide 
initiatives to implement continuous diagnostics and monitoring 
capabilities, establish effective risk management processes at Federal 
agencies, and work with the private sector responsible for critical 
infrastructure.
---------------------------------------------------------------------------
    \1\ Critical infrastructure includes systems and assets so vital to 
the United States that incapacitating or destroying them would have a 
debilitating effect on national security. These critical 
infrastructures are grouped by the following 16 industries or 
``sectors'': chemical; commercial facilities; communications; critical 
manufacturing; dams; defense industrial base; emergency services; 
energy; financial services; food and agriculture; government 
facilities; healthcare and public health; information technology (IT); 
nuclear reactors, materials, and waste; transportation systems; and 
water and wastewater systems.
---------------------------------------------------------------------------
    Other planned activities include evaluating key agency capabilities 
for responding to security incidents and data breaches, as well as 
assessing their security postures through detailed vulnerability 
assessments and penetration testing of agency network defenses. For 
example, the Explanatory Statement accompanying the 2018 Omnibus 
Appropriations Act required GAO to evaluate information security at the 
Office of Personnel Management and the Securities and Exchange 
Commission, both of which have had recent major data breaches.
    Regarding the protection of cyber critical infrastructure, we plan 
to focus on the cybersecurity of specific sectors, such as the 
electricity grid, and oil and gas pipeline subsectors, and evaluate the 
effectiveness of the public-private partnership model as a framework 
for protecting the Nation's critical assets from cyber threats.
Impact of Scientific and Technological Advances
    Rapid advances in science and technology play an important role in 
our society as they can impact economic growth as well as the social 
and environmental well-being of the United States. Although such 
advances will remain central to the prevailing issues of our day, 
including economic competitiveness, improved medical care and the 
prevention of disease, and information security, the ability of the 
United States to lead these advances is increasingly challenged.
    Given the persistent and growing demand for this technical work, 
GAO strives to continue to build our staff capacity in this growing 
area. We now have developed best practice guides related to capital 
project cost estimating, project scheduling, and assessing technology 
readiness, and will apply these guides in assessing multi-billion 
dollar Federal projects at agencies including the Departments of 
Defense, Homeland Security, Energy, and the National Aeronautics and 
Space Administration.
    We plan to expand and accelerate our work including potential 
technology readiness assessment evaluations of complex technical 
acquisitions such as the Columbia class Navy nuclear submarine, the 
Joint Strike Fighter, the James Webb Space Telescope, DHS border 
protection technologies, and Uranium Processing Facility. Strategic 
technology reports on artificial intelligence systems, freshwater 
technologies in agriculture, sustainable chemistry, and antibiotic-
resistant bacteria will be completed or initiated by fiscal year 2019. 
Based on interest expressed by various Committees of jurisdiction, 
potential future work would focus on block-chain technologies, 
artificial intelligence in healthcare, autonomous vehicles, and 
personalized medicine.
Assisting Congress in Overseeing and Transforming the Department of 
        Defense
    The Department of Defense (DoD) faces significant challenges in 
responding to a complex and rapidly evolving national security 
environment. Considerable resources are entrusted to it to do so, about 
48 percent (more than $671 billion) of discretionary appropriations for 
fiscal year 2018. This represents a nearly 10 percent increase over the 
fiscal year 2017 enacted level of almost $612 billion. The President's 
budget for fiscal year 2019 further proposes to increase this to more 
than $686 billion. Concurrently, DoD is working to sustain and advance 
its military superiority while it undergoes one of the most significant 
organizational realignments since the Goldwater-Nichols Act of 1986.\2\
---------------------------------------------------------------------------
    \2\ Public Law 99-433.
---------------------------------------------------------------------------
    Congress has directed GAO to review a broad range of DoD's 
activities. Since 2006, GAO has made over 3,000 recommendations to DoD 
designed to strengthen the department's programs and operations, and 
this work has resulted in over $63 billion in financial benefits since 
fiscal year 2015. To inform the new Congress and administration, GAO 
highlighted much of this work last year in a special report identifying 
five key challenges facing DoD--rebalancing and rebuilding forces, 
mitigating cyber risks and expanding cyber capabilities, controlling 
costs and managing finances, strategically managing human capital, and 
achieving greater efficiencies in business operations--as well as the 
factors that have impacted the department's progress in these areas.
    GAO will continue to allocate significant resources to review a 
broad range of DoD's activities. For example, the latest National 
Defense Authorization Act contains provisions for GAO to continue to 
support congressional oversight of DoD's efforts to balance current 
operational deployments with training and equipping forces capable of 
fulfilling the full spectrum of military operations, such as through 
assessments of the department's efforts to rebuild readiness and 
modernize for the future. We will further review the plans, 
organization and capabilities of the department's cyber operations; the 
safety and effectiveness of the U.S. strategic nuclear force; and DoD's 
investments in science and technology, which provide innovations to 
enhance the superiority of weapon systems now and in the future. We 
will assess the extent to which the Defense Contract Audit Agency and 
Defense Contract Management Agency are effectively and efficiently 
overseeing contractors' primary business systems, such as accounting 
and property management.
    We will also continue to assess the department's strategies and 
incentives for recruiting, retaining, and developing a workforce that 
accounts for nearly 50 percent of the department's budget, as well as 
contracting approaches DoD uses to buy the billions in goods and 
services needed to carry out its missions. Further, as DoD implements 
key organizational changes mandated by the Congress, we expect 
Congressional interest in the department's progress and associated 
impacts. These changes include the creation of a Chief Management 
Officer position and implementation of cross-functional teams to drive 
organizational change, as well as the creation of the offices of the 
Under Secretary for Research and Engineering and Under Secretary for 
Acquisition and Sustainment. We will also continue to assess DoD's 
progress in following Congressional direction to recommend a new 
organizational and management structure for its national security space 
components.
    GAO will continue to focus on DoD issues through its work to update 
the biennial High Risk report for 2019. Seven DoD areas are included in 
our High Risk report, including financial management, weapon systems 
acquisitions, business systems modernization, and support 
infrastructure management, as well as designations in 11 additional 
areas, such as the government-wide personnel security clearance 
process, added to the High Risk list earlier this year, in which DoD 
shares responsibility with other Federal agencies. GAO's annual work to 
review fragmentation, overlap and duplication in the Federal Government 
will report on DoD's efforts to achieve efficiencies, such as across 
its defense agencies and field activities, as well as efforts to 
achieve efficiencies in the management of its over 500 installations 
worldwide.
    GAO's annual ``Quick Look'' reports, assessing the cost, schedule, 
and performance of about 80 major defense acquisition programs, help 
support the Congress in overseeing the department's $1.5 trillion in 
planned spending on these systems. One particular focus in the coming 
year is on the costs, schedule, and technical capabilities of the 
Columbia class nuclear submarine program, one of DoD's largest 
acquisitions.
    Finally, DoD's financial management challenges remain a High Risk 
area that continues to negatively affect DoD's ability to manage the 
department and make sound decisions on mission and operations. For 
example, DoD's financial management problems have contributed to (1) 
inconsistent and sometimes unreliable reports to Congress on weapon 
system operating and support costs and (2) an impaired ability to make 
cost-effective choices, such as deciding whether to outsource specific 
activities or how to improve efficiency through technology.
    DoD's financial weaknesses are one of three major impediments 
preventing a GAO opinion on the consolidated financial statements of 
the Federal Government. With DoD's reported discretionary spending 
making up nearly half of the Federal Government's reported 
discretionary spending, and its reported assets representing more than 
70 percent of the Federal Government's reported physical assets, 
monitoring DoD's efforts to achieve auditability represents a major GAO 
responsibility. To fulfill that responsibility, we will, in 
coordination with the DoD Office of Inspector General, actively monitor 
(1) the financial audits of the military services and other defense 
organizations, and (2) DoD's progress in implementing corrective 
actions for identified deficiencies, which currently number over 1,000. 
With DoD's start of mandated full financial statement audits in fiscal 
year 2018, this effort will require increased levels of GAO staffing 
and resources.
Assisting Congress in Health Care Challenges
    Growth in Federal spending for major healthcare programs, estimated 
at $1 trillion in fiscal year 2017, has exceeded the growth of GDP 
historically and is projected to grow faster than the economy.
    These healthcare programs include Medicare, Medicaid, and the 
Children's Health Insurance Program, along with Federal subsidies for 
health insurance purchased through the marketplaces established by the 
ACA and related spending. These Federal commitments to healthcare 
programs are a key driver of the Nation's fiscal spending. Growth in 
Federal spending on healthcare is driven both by increasing enrollment, 
in part due to the aging of the population, and healthcare spending per 
person.
    The Federal Government faces challenges to effectively and 
efficiently managing healthcare programs, including Medicare, Medicaid, 
and programs that serve American Indians, veterans, and military 
service members. Specifically, the demands to meet Americans' health 
needs are growing in volume and complexity while oversight is becoming 
more challenging. Understanding these complexities and offering fact-
based recommendations to address them requires advanced policy and 
analytical expertise.
    Our healthcare policy expertise is frequently sought out by 
Congress on a range of healthcare issues. In 2017, we issued products 
for 32 different Committees and Subcommittees that examined access to 
and quality of care, drug availability and pricing, program 
expenditures and integrity, the protection of public health, and 
healthcare markets.
    We have made recommendations in these audit products to improve the 
efficiency and effectiveness of Federal healthcare spending, and 
documented almost $2 billion in savings in 2017 alone by agencies 
taking action on our recommendations.
    GAO will continue to focus on healthcare issues through its work to 
update the biennial High Risk report. With our 2017 High-Risk Update, 
we designated the Indian Health Service (IHS) as high risk. This area 
joins four other Federal healthcare programs on the High Risk list, 
Medicare, Medicaid, the Food and Drug Administration, and VA Health 
Care.
    Finally, GAO will continue to devote resources for our healthcare 
work on the most pressing public health-related issues of today. For 
example, we have a growing body of work examining the Federal 
Government's response to the ongoing opioid epidemic, which killed more 
than 42,000 Americans in 2016. However, more work is needed on the 
Federal Government's efforts to prevent opioid and other illicit drug 
use. We will also continue to examine the pricing and utilization of 
healthcare services-key drivers of public and private healthcare 
spending and costs. Managing Federal healthcare spending, and holding 
entities accountable for the outcomes of such spending, will be 
critical to restoring the Nation to a fiscally sustainable long term 
path.
         gao information technology and building infrastructure
    The resources we received for fiscal year 2018, and request for 
fiscal year 2019, will allow GAO to make strategic investments in 
information technology (IT), and GAO's facilities infrastructure. GAO 
greatly appreciates the 2-year designation of $10 million in 
Infrastructure Operations spending provided for in the fiscal year 2018 
budget. This funding flexibility will enable GAO to make sound capital 
investments in new technology and address important funding 
requirements in support of our building facilities that will increase 
efficiency, lower operating costs, and allow us to increase our rental 
revenue.
Information Technology
    At present, GAO operates in a computing environment that is rapidly 
aging. We have made headway over the past few years to improve our 
infrastructure by implementing a virtual desktop infrastructure and 
consolidating 11 remote field office data centers into a single primary 
data center at Headquarters. Additionally, we replaced older server 
technology for data storage with newer, faster, more efficient 
technology that strengthens the agency's security and reduces costs.
    With the funding provided by Congress, we will be able to build on 
these past improvements and make additional critical investments that 
will further improve our effectiveness and efficiency and provide long 
term cost savings.
    Modernizing our current communications system is an important 
project that is enabled by this funding. Our current technology is near 
its end of life and a significant capital expense would have been 
required to upgrade this old technology. Over the next 2 years, GAO 
will now upgrade to communications technologies that will greatly 
enhance GAO's capabilities and replace aging technology. GAO will be 
able to take advantage of key features incorporated into new tools that 
would not be possible with legacy systems.
    For example, we will replace our obsolete video and 
teleconferencing equipment that is no longer supported and is proving 
to be extremely challenging to maintain and utilize effectively. We 
will upgrade our software to take advantage of integrated collaborative 
technologies, such as instant messaging, desktop sharing, and video 
conferencing. These technologies, VoIP services, in an integrated 
platform using digital voice services are less expensive to maintain 
saving GAO significant annual maintenance costs and recurring capital 
expenses. In summary, this improvement to our system will make it 
easier for our staff to work together more effectively, and is less 
expensive to operate.
    Furthermore, this investment in GAO will enable us to begin the 
migration from our current document management system that is over 30 
years old, to modern technology that provides greater capabilities. Our 
current document management system is used daily by all GAO staff and 
houses all of GAO's audit documents, as well as information obtained 
from agencies, and data analysis that forms the basis of GAO's 
products. The current system is slow and difficult to use, yet critical 
to our success. By upgrading the system, we will stabilize this 
important software platform and improve the user experience resulting 
in greater efficiencies.
    This modernization effort will be built upon the success of 
previous work we have done to improve our infrastructure and develop 
tools that make our efforts to produce work more efficient. We will 
continue to upgrade key systems that directly support the products and 
services we provide to the Congress. We have successfully implemented a 
new Engagement Management System (EMS) that helps us manage our work 
more efficiently and we have a prototype of the New Blue system that 
will both greatly improve how we create and share GAO content with our 
clients.
    New Blue is an enterprise-wide effort which will allow GAO to 
easily publish web-based products in HTML format instead of the static 
PDF format in a way that reduces manual activities for analysts and 
publishing staff. It will enable analysts to perform different 
functions concurrently and eliminate the need for separate copies for 
drafting, referencing, and each review. It will also streamline 
publishing and enable consistent and flexible distribution via multiple 
channels with responsive design that will allow our reports to be read 
on any device.
    An enormous amount of effort has gone into upgrading and securing 
our information technology systems and with this new flexibility and 
funding in fiscal year 2018 and fiscal year 2019 we are going to make 
substantial headway toward completing our modernization efforts.
Facilities and Security
    While most of GAO's staff is located at its Headquarters in 
Washington, DC, we maintain a presence in strategic locations 
throughout the country and this remains a priority. GAO is 
consolidating space within its Headquarters building to ensure 
efficient utilization. With respect to our building investments, GAO is 
currently undergoing moves, as commercial leases expire, to secure 
Federal office spaces in Oakland, California, Chicago, Illinois, Los 
Angeles, California, and Huntsville, Alabama. By moving into Federal 
controlled space we are providing increased physical security for our 
employees and locally stored data.
    We appreciate the support of the committee for providing us with 
the authority to transfer funding to the U.S. Army to build GAO a new 
building on the grounds of the Redstone Arsenal Army Base to house 
GAO's existing Huntsville staff. This new building will be a one-time 
expense, with no rent and minimal maintenance costs going forward 
saving GAO what it would have paid in rent. We expect completion of the 
new building in the next year. Additionally, with the 2-year funding, 
we will make investments in our Headquarters building by consolidating 
and upgrading space enabling us to lease empty space to new tenants.
             assisting the 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.
    Since our last budget request, Congress has passed a number of laws 
that reflect GAO findings and recommendations. For example:
  --The National Defense Reauthorization Act of 2018 (NDAA) included 
        several directives based on GAO findings and recommendations 
        concerning defense-related and other issues. Specifically
    --Improving defense-related efforts in key areas such as budget 
            guidelines; cost savings; leadership of business 
            operations; military readiness goals and implementation 
            strategies; potential vulnerabilities in military aircraft; 
            risks to military installations from climate change; and 
            sustainability for the F-35 combat aircraft.
    --Requiring additional reporting requirements to help keep the 
            Columbia-class submarine program on track, raising the cost 
            cap for the Ford-class carrier program, and directing 
            changes to DoD's space leadership structure. In addition, 
            the reauthorization includes funding reductions warranted 
            by GAO findings.
    --Requiring annual reports on the time required to conduct 
            investigations, adjudicate cases, and grant security 
            clearances. This reflects a matter GAO raised for 
            Congress's consideration in 2017, namely that such 
            reporting should be reinstated given the need to continue 
            efforts to reform the personnel security clearance process 
            government-wide, an area that GAO placed on the high-risk 
            list in January 2018.
    --Changing the Small Business Administration's Historically 
            Underutilized Business Zone Program that provides Federal 
            contracting preferences for eligible small businesses. In 
            making these changes, Congress relied on our analysis of 
            the use of unemployment rates in making business zone 
            designations to better target counties with depressed 
            economic conditions.
  --The No Veterans Crisis Line Call Should Go Unanswered Act directs 
        the Department of Veterans Affairs (VA) to develop a quality 
        assurance document for carrying out the toll-free Veterans 
        Crisis Line requires VA to develop a plan to ensure that each 
        telephone call, text message, and other communications received 
        is answered in a timely manner. These requirements reflect 
        GAO's recommendations related to ensuring that veterans who 
        called the crisis line had their calls answered in a timely 
        manner.
  --The FITARA Enhancement Act of 2017 extended until 2020 the deadline 
        for Federal agencies to optimize their data centers, reflecting 
        the GAO recommendation that they be given more time to do so. 
        In line with previous GAO findings, that act also made 
        permanent the requirement that agencies evaluate, manage, and 
        publicly report on the risk of their major information 
        technology investments.
  --GAO's reports and testimonies are also reflected in the 2018 
        Omnibus Appropriations Act, including:
    --Using GAO work to direct agencies to implement GAO 
            recommendations. For example, the act directed
      -- the Department of Homeland Security to develop robust 
            performance metrics for all deployed border security; begin 
            the collection of performance data to evaluate the 
            individual and collective contribution of specific 
            technologies; and assess progress in fully deploying 
            planned technologies and determine when mission benefits 
            from such deployments have been fully realized, citing a 
            GAO testimony; and
      -- the Secretary of the Department of the Interior to take 
            several steps to improve Indian education, including 
            implementing GAO recommendations and restructuring Indian 
            Affairs to better support management control and 
            accountability for the Bureau of Indian Education system.
    --Requiring agencies to report on how they plan to implement GAO 
            recommendations or what corrective action plans they plan 
            to take. For example:
      -- having the entity responsible for managing cybersecurity 
            across the Federal Government and critical infrastructure, 
            the National Cybersecurity and Communications Integration 
            Center (NCCIC), report on plans to implement GAO 
            recommendations to determine if it is carrying out its 
            statutory functions, such as sharing information about 
            cyber threats, in the way it should: making the information 
            timely, relevant and actionable, and to establish 
            performance metrics for them;
      -- having the Bureau of Indian Affairs report on progress to 
            implement recommendations on data to improve road 
            management and inform student attendance strategies, citing 
            a GAO 2017 report;
      -- having the Indian Health Service report on how it will address 
            GAO recommendations on setting and monitoring agency wide 
            standards for patient wait time and IT issues related to 
            this monitoring, citing a GAO 2016 report;
      -- having the Department of Defense (DoD) report on efforts to 
            align the structure, statutory parameters and regulatory 
            guidance across all Federal prescription drug buying 
            programs to increase buying power and reduce costs, citing 
            a GAO recommendation to the same effect; and
      -- having the Bureau of Indian Affairs report on barriers to 
            developing strategies to properly manage oversight of 
            energy resources, citing a GAO 2017 report.
    --Finally, providing funding to enable activities aligned with GAO 
            recommendations. For example, the act appropriated funds 
            to:
      -- the Department of Homeland Security to conduct regular 
            assessments of advanced protective technologies related to 
            cybersecurity, citing a 2016 GAO report; the Department of 
            Health and Human Services for grants for clinical training 
            of sexual assault nurse examiners to administer medical 
            forensic examinations and treatments to victims of sexual 
            assault, citing a GAO 2016 report; and the Veterans Health 
            Administration for research into overmedication of veterans 
            that led to veterans' deaths, suicides, and mental health 
            disorders, among other things, citing multiple GAO reports.
                     financial and program benefits
Financial Benefits
    In fiscal year 2017, we documented $73.9 billion in financial 
benefits for the government--a return of about $128 for every dollar 
invested in us. Examples of our work that contributed to these benefits 
included (1) improving the Department of Defense's (DoD) processes for 
acquiring weapon systems ($36.0 billion); (2) auctioning of the 
broadcast television spectrum by the Federal Communications Commission 
($7.3 billion); and (3) reducing the amount TRICARE pays for compounded 
drugs ($1.9 billion).
Other Benefits
    Many other benefits resulting from our work cannot be measured in 
dollars but lead to program and operational improvements. In fiscal 
year 2017, we recorded 1,280 of these other benefits. For example, our 
work on public safety and security:
  --led the Nuclear Regulatory Commission to tighten its controls on 
        licensing for possession of radioactive materials when, in one 
        of our tests, investigators secured agreements to buy devices 
        that, together, contained a dangerous quantity of material;
  --led FEMA to better prepare for its future disaster response 
        activities by developing (1) a plan to finance equipment for 
        its urban search and rescue task forces, and (2) a process to 
        apply lessons learned from its incident management assistance 
        teams; and
  --led the Food and Drug Administration to issue a final rule 
        requiring drug companies to report data on the sale and 
        distribution of antibiotics for use in food animals.

    Similarly, our work related to vulnerable populations:

  --led the Department of Health and Human Services (HHS) to issue a 
        strategy addressing the use of opioids such as heroin and 
        prescription pain medications during pregnancy, which can lead 
        to newborns having a condition called Neonatal Abstinence 
        Syndrome;
  --led the Veterans Administration to improve its oversight and 
        process for providing veterans newly enrolled in its healthcare 
        system with timely access to primary care appointments; and
  --led several agencies, including the Departments of Homeland 
        Security, the Interior, and State, to better protect contractor 
        employees against reprisal, when they identify fraud, waste, 
        abuse, or mismanagement.

    Furthermore, our work in the area of agency operations:

  --led DoD to establish categories for prioritizing its more than 
        83,000 missing persons cases from military conflicts since 
        World War II, based on the feasibility of recovery;
  --prompted the Social Security Administration to not provide 
        increases in monthly disability insurance benefit payments 
        until it had determined if individuals' earnings required 
        changes in benefits--preventing overpayments to about 4,300 
        beneficiaries in 2016;
  --prompted DoD to strengthen its oversight of equipment provided to 
        Iraq's security forces by developing new procedures for 
        recording equipment transfer dates and making other planned 
        changes to improve accountability; and
  --led OMB and the Department of the Treasury to improve 
        implementation of the Digital Accountability and Transparency 
        Act of 2014 (Public Law 113-101) by clarifying requirements, 
        using implementation plans, and documenting procedures.
                      building bodies of knowledge
    Through the products we issued in fiscal year 2017, we continued to 
build on bodies of work to address our three broad strategic goals for 
serving the Congress and the Nation to (1) address current and emerging 
challenges to the well-being and financial security of the American 
people, (2) help respond to changing security threats and global 
interdependence, and (3) help transform the Federal Government to 
address national challenges. Examples include:
Protection of Children
    We reported on the (1) Federal support for pediatric trauma care 
centers--used to treat children with potentially life-threatening or 
disabling injuries; (2) Federal support for states to oversee the use 
of psychotropic medications for children in foster care; and (3) 
Federal coordination on early learning and childcare.
Veterans
    We reported on the need to improve (1) management of veterans' 
healthcare, (2) protections for veterans against financial 
exploitation; and (3) the Department of Veterans Affairs' use of vacant 
and underutilized property to house homeless veterans.
Healthcare
    We reported on the (1) actions needed to prevent illegal drug use, 
such as opioids; (2) Federal efforts to position the physician 
workforce to meet current and future demands; and (3) need to harmonize 
Federal and State rules to better protect Medicaid beneficiaries 
receiving personal care services.
Science and Technology
    We reported on (1) the Internet of Things, smart technologies and 
devices that sense information and communicate it to the Internet or 
other networks--offering new benefits and potential risks to IT, 
privacy, and safety; and (2) medical device technologies designed to 
rapidly diagnose infectious diseases.
Military Readiness
    We reported in fiscal year 2017 and prior years on the: (1) 
considerable readiness challenges facing the Military Departments; (2) 
need for better strategies, goals and metrics for guiding the 
departments' readiness rebuilding efforts, and more oversight of these 
efforts by the Office of the Secretary of Defense; and (3) Navy's 
training, manning and infrastructure challenges that have contributed 
its readiness crisis.
High Risk Areas
    We issued the biennial update of our high-risk report to focus 
attention on government operations that are highly vulnerable to fraud, 
waste, abuse and mismanagement or need transformation. It offers 
solutions to 35 high-risk problems, including four new areas, Federal 
Indian education, health, and energy programs; Federal environmental 
liabilities; government-wide personnel security clearance processes; 
and the 2020 Census (see Enclosure I). For example, we reported on the 
enormous challenge that a complete count of the Nation's population is 
for the Bureau of Census as it seeks to control the cost of the census 
while it implements several new innovations and manages the processes 
of acquiring and developing new and modified information technology 
(IT) systems supporting them. Over the past 4 years, we have made 33 
recommendations specific to the Bureau regarding the 2020 Census. As of 
October 2017, the Bureau had fully implemented 10 of the 
recommendations, and was at varying stages of implementing the 
remaining recommendations.
    In 2017, our High Risk work contributed to 154 reports, 43 
testimonies, $42.2 billion in financial benefits, and 519 other 
benefits. In the last decade this work has led to about $240 billion in 
financial benefits.
Fragmentation, Overlap, and Duplication
    Our seventh annual report identified 79 new actions across 29 new 
areas that could reduce fragmentation, overlap, and duplication, or 
provide other cost savings and revenue enhancement opportunities across 
the Federal Government. Actions taken by the Congress and executive 
branch agencies to address the 645 actions government-wide we 
identified from 2011 to 2016, have led to about $136 billion in 
financial benefits--$75 billion to date, with $61 billion more 
expected.
Testimonies
    In fiscal year 2017, senior GAO Officials testified 99 times before 
45 separate committees or subcommittees on issues that touched all 
major Federal agencies. The following, listed by our three strategic 
goals, are examples of topics GAO addressed in testimony:

           TABLE 2: SELECTED GAO FISCAL YEAR 2017 TESTIMONIES

_______________________________________________________________________
Goal 1: Address Current and Emerging Challenges to the Well-Being and 
        Financial Security of the American People
_______________________________________________________________________

Controlling Medicaid's Improper Payments
Restoring US Postal Service's Fiscal Sustainability
Addressing Serious Weaknesses in Federal Programs Serving Indian Tribes
Improving the Small Business Administration's Disaster Loan Assistance
Providing Health Insurance Under the Patient Protection and Affordable 
Care Act
Ensuring the Privacy and Accuracy of Face Recognition Technology
Strengthening Oversight of the Low Income Housing Tax Credit
Using Lessons Learned from SafeTrack to Improve Future Rehabilitation 
Projects
Early Observations on Implementation of the Every Student Succeeds Act
Improving Federal Management of Indian Energy Resources
Addressing Department of Energy's Management Challenges

_______________________________________________________________________
Goal 2: Respond to Changing Security Threats and the Challenges of 
        Global Interdependence
_______________________________________________________________________

Observations on the Use of Force Management Levels in Afghanistan, 
Iraq, Syria
Observations on Implementation of Federal Immigration Laws--Northern 
Mariana Islands
Addressing Challenges to DoD's Delivery of Critical Space Capabilities
Enhancing Controls Over DoD's Excess Property
Observations on Challenges Facing Navy Readiness
Improving DHS's Border Security: Addressing Threats Posed by High-Risk 
Travelers and Strengthening Visa Security
Increasing DoD's Accountability Over Equipment Provided to Iraq's 
Security Forces
Improving the Response to Zika Virus Outbreaks
Strengthening US Cybersecurity Capabilities
Addressing Critical Acquisition Decisions for the Littoral Combat Ship 
and Frigate

_______________________________________________________________________
Goal 3: Help Transform the Federal Government to Address National 
        Challenges
_______________________________________________________________________

Address DATA Act Implementation Challenges
Improving Anti-Fraud Efforts for Social Security Administration 
Disability Benefits
Improving IG Oversight of the Architect of the Capital Operations
Protecting Older Adults from abuse by Guardians
Addressing Improper Payment Estimates and Ongoing Efforts to Reduce 
Them
Reducing Fragmentation, Overlap and Duplication in Federal Programs
Improving Implementation of IT Reform Law Critical to Effective 
Management
Addressing Cybersecurity Workforce Challenges
Reducing Collection, Use and Display of Social Security Numbers
Using Leading Human Capital Practices to Improve Agency Performance
Assessing Progress on Preparations for the 2020 Census
Addressing Implementation Challenges with IRS' New Wage Verification 
Process
Improving Government Efficiency and Effectiveness to Reduce Federal 
Costs
Improving VA's Management of IT
----------
Source: GAO.  GAO-18-448T
                  focusing on congressional priorities
Serving Our Clients
    In fiscal year 2017, we received 739 requests for work from 92 
percent of the standing committees of the Congress--supporting a broad 
range of congressional interests. We issued 658 reports and made 1,414 
new recommendations. Our senior executives were asked to testify before 
45 separate committees or subcommittees on topics including the 
Nation's fiscal health; Navy readiness; preventing high-risk travelers 
from boarding U.S. bound flights; and improving the response to Zika 
virus outbreaks. Our testimonies continued to underscore the importance 
of implementing GAO's recommendations to strengthen the government's 
performance and yield financial benefits.
Outreach Efforts
    I continued my regular meetings with the Chairs and Ranking Members 
of congressional committees to obtain their views on GAO's work, 
including their priorities, and to discuss opportunities and challenges 
facing our Nation.
    I also sent letters to the heads of most Federal departments to 
acknowledge the actions taken to date to implement our prior 
recommendations and to draw their attention to priority recommendations 
still requiring their attention. These letters were also sent to the 
congressional committees of jurisdiction to inform their oversight.
    We continue to collaborate with the Congress to revise or repeal 
mandated reporting requirements to align our work with current 
congressional priorities and maximize our staff resources. For example, 
S. 2400, the GAO Audit Mandates Revision Act of 2018, would shift many 
low-risk financial audits to public accounting firms so GAO can audit 
Treasury's General Fund. The fund, which has never been audited before, 
covers every Federal entity that receives appropriated funds.
                         internal improvements
Supporting Our People
    The hard work and dedication of our diverse and professional 
multidisciplinary staff positioned GAO to achieve a 96 percent on-time 
delivery of our products in fiscal year 2017. Our performance this year 
also indicates that staff received the support needed to produce high-
quality work. GAO also continued its distinction as a best place to 
work in the Federal Government, ranking second among mid-size Federal 
agencies and first for supporting diversity by the Partnership for 
Public Service.
Managing Our Internal Operations
    In fiscal year 2017, we continued efforts to maximize our value by 
enabling quality, timely service to the Congress and being a leading 
practices Federal agency. We made progress addressing our three 
internal management challenges--human capital management, engagement 
efficiency, and information security. To enhance engagement efficiency, 
we fully transitioned to an updated engagement management process and 
new management system.
    We also undergo an annual independent financial statement audit. 
For fiscal year 2017, our financial statements received an unmodified 
``clean'' opinion once again. This unmodified opinion along with our 
effective internal controls, demonstrate our sound stewardship of the 
taxpayers' dollars entrusted to us. Our independent auditors found that 
GAO maintained, in all material aspects, effective internal control 
over financial reporting, and our financial management systems 
substantially complied with the applicable requirements of the Federal 
Financial Management Improvement Act of 1996.
    In addition, independent organizations perform a peer review of 
GAO's system of quality control for work done under generally accepted 
government auditing standards to determine whether it is suitably 
designed and operating effectively. The peer review includes a review 
of audit documentation, tests of functional areas, and staff 
interviews. Our most recent external peer review, conducted by a team 
of international auditors, resulted in a clean opinion on the 
effectiveness and appropriateness of our quality assurance framework. 
We also demonstrated that our detailed performance and financial 
information is complete and reliable and meets our high standards for 
accuracy and transparency.
                               legal work
    In fiscal year 2017, our Office of General Counsel created an 
electronic bid protest filing system, handled about 2,600 bid protests, 
issued over 500 bid protest and other decisions, including 
appropriations law decisions, and issued the third chapter of the 
fourth edition of ``Principles of Federal Appropriations Law''. This is 
the primary resource for appropriations law guidance in the Federal 
community.
                           strategic planning
    I am pleased to announce that GAO has issued our 2018-2023 
Strategic Plan for Serving the Congress and the Nation (See Enclosure 
II). As the United States confronts a series of new and long-standing 
challenges, GAO will rely on this latest strategic plan to guide our 
efforts to help make government more accountable, efficient, and 
effective and, ultimately, help improve the safety, security, and well-
being of the American people.
    Our plan outlines a number of important drivers and trends that 
will shape GAO's work in the coming years, in areas such as national 
security and defense, healthcare, and new developments in science and 
technology. GAO's new plan consists of three components:
  --Goals and Objectives (GAO-18-1SP),
  --Key Efforts (GAO-18-395SP), and
  --Trends Affecting Government and Society (GAO-18-396SP).

    This 3-part format enables the trends and key efforts to be updated 
periodically to reflect rapidly changing external forces and shifts in 
priorities. By periodically reviewing our plan, GAO will remain agile 
and responsive to the areas of greatest national concern and usefulness 
to the Congress and the public. Prior to issuance a draft was shared 
for comment by Congress, employees and external stakeholders.
                      center for audit excellence
    The Congress authorized GAO to establish a Center for Audit 
Excellence (the Center) in 2014 to provide training and technical 
assistance to enhance the capacity of domestic and international 
accountability organizations. Although GAO contributes to a number of 
efforts that promote good governance and enhance accountability 
community capacity, the Center is unique in its ability to tackle 
complex training and capacity building projects because it can offer a 
wide range of services at locations throughout the world. The Center is 
authorized to charge fees for its services to facilitate recovery of 
its costs.
    Since the Center's opening in October 2015, the Center has provided 
training or technical assistance services to nearly two dozen Federal, 
State, local, and international organizations. The Center expanded its 
volume of work significantly between fiscal year 2016 and fiscal year 
2017, collecting $41 thousand in fees in fiscal year 2016, its first 
year of operation, and $345 thousand in fiscal year 2017. The Center 
also signed a Memorandum of Understanding with the U.S. Agency for 
International Development, a key partner to the Center in promoting 
accountability among developing nations.
    During fiscal year 2017, the Center enhanced the capacity of 15 
domestic and international accountability organizations. Domestically, 
the Center provided high quality training to promote greater 
understanding of Government Auditing Standards (the Yellow Book), 
internal control, performance auditing, report writing and other topics 
to five State and local audit offices, three Federal audit 
organizations, and four other domestic audit organizations. Based on 
formal and informal feedback, the organizations and the vast majority 
of training participants found the training to be greatly useful. 
Moreover, several audit organizations have returned to the Center 
repeatedly for training and technical assistance to help their staff 
build capacity in applying auditing concepts and tools introduced in 
Center training classes.
    The Center also expanded its work and achieved positive impact in 
working with international accountability organizations in fiscal year 
2017. The Center provided training and technical assistance to a 
Supreme Audit Institution in Eastern Europe that enhanced its capacity 
to conduct information technology audits. The Center also worked with 
the Millennium Challenge Corporation to develop and start a project 
that is helping to enhance the capacity of a Supreme Audit Institution 
in Central America. Most recently, the Center worked with the U.S. 
Agency for International Development to finalize an agreement for the 
Center to assess and identify ways to build the capacity of a Supreme 
Audit Institution and internal audit organization in an African 
country.
    The Center continues to implement its Business Plan and look for 
additional ways to build on the successes achieved and find additional 
ways to further strengthen the capacity of accountability partners to 
help enhance the oversight of U.S. Federal funds used domestically and 
across the globe. For example, during fiscal year 2018, the Center 
plans to expand its international work further by leveraging its 
Memorandum of Understanding with USAID and building on outreach and 
partnerships with other organizations such as the World Bank.
                           concluding remarks
    We value the opportunity to provide Congress and the Nation with 
timely, insightful analysis on the challenges facing the country. I 
would like to thank the Committee again for its support of GAO and the 
fiscal year 2018 budget. Our fiscal year 2019 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 serve the Congress effectively. This funding level will also 
allow us to continue efforts to promote operational efficiency and 
address long-deferred information technology 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 GAO's budget 
and your continued support.

                 ENCLOSURE I: GAO'S 2018 HIGH RISK LIST

------------------------------------------------------------------------
                   High Risk Area                       Year Designated
------------------------------------------------------------------------
Strengthening the Foundation for Efficiency and Effectiveness
------------------------------------------------------------------------
    Improving Federal Programs that Serve Tribes and               2017
     their Members (new)............................
    2020 Decennial Census (new).....................               2017
    U.S. Government Environmental Liabilities (new).               2017
    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 US Financial Regulatory System                 2009
     and the Federal Role in Housing Finance........
    Restructuring the US Postal Service to Achieve                 2006
     Sustainable Financial Viability................
    Funding the Nations Surface Transportation                     2007
     System.........................................
    Managing Federal Real Property..................               2003
    Strategic Human Capital Management..............               2001
------------------------------------------------------------------------
Transforming Defense Department Program Management
------------------------------------------------------------------------
    DoD Approach to Business Transformation.........               2005
    DoD Support Infrastructure Management...........               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
------------------------------------------------------------------------
    Government-wide Personnel Security Clearance                   2018
     Processes (new)................................
    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 US Nations Security
     Interests......................................
    Improving Federal Oversight of Food Safety......               2007
    Strengthening Department of Homeland Security                  2003
     Management Functions...........................
    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.........................               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.........................               1990
------------------------------------------------------------------------
Modernizing and Safeguarding Insurance and Benefit Programs
------------------------------------------------------------------------
    Managing Risks and Improving VA Health Care.....               2015
    National Flood Insurance Program................               2006
    Improving and Modernizing Federal Disability                   2003
     Programs.......................................
    Pension Benefit Guaranty Corporation Insurance                 2003
     Programs.......................................
    Medicaid Program................................               2003
    Medicare Program................................               1990
------------------------------------------------------------------------
Source: GAO.  GAO-18-448T

              ENCLOSURE II: GAO'S STRATEGIC PLAN FRAMEWORK


    Senator Daines. Thank you, Mr. Dodaro.
    I think what we are going to do is Senator Murphy and I 
will start with CBO. We will have a few questions back and 
forth here, and then we will come over to GAO here next after 
that.

                 EFFORTS TO ENHANCE CBO'S TRANSPARENCY

    Dr. Hall, the Congressional Budget Office has been 
criticized for not providing enough detail to explain its 
findings in budget estimates and scoring of legislation.
    You have already begun efforts to provide greater 
transparency, and I thank you for that. A large part of your 
requested increase would fund additional staff to tackle or 
address that issue.
    Could you describe in further detail what you are doing to 
enhance transparency and how the additional staff requested 
would add to that work?
    Dr. Hall. Part of what we have done is we have shifted some 
staff into transparency roles. We have shifted some positions, 
so we need to do a little backfilling, but it has given us a 
chance to start in on the transparency improvement.
    Trying to increase our documentation of things has been 
really important. We have done a couple of things where we have 
documented processes, how we go about a cost estimate, how we 
go about doing a budget project, that sort of thing.
    We have also been trying to increase the detail in our cost 
estimates and other things. We have done that. I think we have 
made, actually, pretty good progress through that.
    Then we have a large number of things, which I almost 
consider pilots because there are so many ways to be 
transparent. We are going to try increasing transparency in a 
number of things.
    For example, there has been a lot of interest in our 
healthcare estimates. And so, we are producing a new healthcare 
model, the major model and in doing that, we are going to be as 
transparent as we can.
    While we are actually developing the model, we are going to 
have a couple of seminars to discuss aspects of the modeling 
and get feedback. We are going to document it fully.
    When we write the code, we are going to write the code in 
mind, and we are going to then make some of the code publicly 
available, and put it up on our website. So this is sort of the 
maximum of transparency, I think, that we can produce on the 
healthcare modeling.
    We just have a number of things, our long-term budget model 
where we are going to revamp some of that. So when we do that, 
we are going to make documentation available and put some of 
that code up.
    There are just so many things that actually we are trying. 
We are trying to put a model that shows all the discretionary 
spending and let you have some interaction on how discretionary 
spending can go up or down. That is actually about 40 percent 
of our cost estimate, so it will give you a chance for staff to 
get a feel of the responsiveness of things.

             PROVIDING RANGES BASED ON CERTAIN ASSUMPTIONS

    Senator Daines. Dr. Hall, I appreciate the time we got to 
spend last week and it is a flashback to the days I used to 
have to forecast in my business as a line manager.
    I had to provide forecasts and estimates. I think we talked 
about one of the truisms of forecasts is the forecast is always 
wrong. And the further out the forecast, the more wrong it is. 
It is the nature of forecasts. It is dynamic. There are a lot 
of variables that go into it.
    We discussed the idea of providing additional details in 
the forecast and estimates that would show how different 
variables might affect outcomes.
    I think that is one of the challenges we face when we do a 
forecast with the CBO, we lock down these variables and say, 
``It is a number,'' or arguably a range looking at sensitivity 
to perhaps help guide better decision making. I think of 
variables like interest rates, productivity, and GDP growth.
    Do you have some sense of what additional resources you 
would need in order to implement that change of providing 
ranges based on certain assumptions versus just a number?
    Dr. Hall. Well, actually on that one, we had plans on doing 
that with our current resources.
    We, in fact, are working on an interactive tool, online 
tool where you will be able to do things like change interest 
rates and see what the budgetary impact would be if we have 
higher interest rates or lower interest rates, productivity, et 
cetera. That is actually one I am excited about because it 
really will give you an idea when we do a budget forecast just 
how sensitive the forecast is to some of these variables.
    I do not want to say we are overdue for this, but we are 
looking very much forward to getting this done and then seeing 
if we can provide more detail in the future.
    Senator Daines. That is good news.
    What is your sense, Dr. Hall, on the time where you might 
have that more interactive kind of model in playing with 
variables here to see the sensitivity as such?
    Dr. Hall. Yes, I think right now we are looking at it being 
sometime in June.
    Senator Daines. Okay.
    Dr. Hall. I wish it was faster, but the real trick for us 
is that the tax code changed so much that we have a lot of work 
to do to work out how the tax code interacts with some of the 
economic budget numbers. So our plan is for June on that and I 
think we will be able to meet that.
    Senator Daines. Great. Thanks, Dr. Hall.
    Senator Murphy.

           RELOCATION EXPENSES (STAFF RECRUITMENT OBSTACLES)

    Senator Murphy. Thank you very much.
    Dr. Hall one of your requests here is reimbursement 
authority to allow for relocation expenses. I thought that just 
might be an interesting jumping off point to ask a question 
about staff recruitment and what kind of barriers you are 
finding today, especially given the fact that the salary cap 
has not changed in, now, a decade.
    What kind of obstacles, if any, are you finding in trying 
to attract the people that you need?
    Dr. Hall. Sure. Well, we always have issues in competing 
with nongovernment entities especially for the type of people 
that we hire. Eighty percent of our people have advanced 
degrees of one type or another. So that is a pretty competitive 
area.
    The relocation fee is actually helping us compete even with 
just the executive branch because they are able to pay 
relocation fees, that sort of thing.
    We still do okay. I think we do all right. We struggle in 
some areas like financial analysis where the private sector 
salaries are just unthinkable for us.
    We have the authority to hire some senior positions in 2017 
and I think that is going to be very helpful. We did not create 
any in 2017, but this year, we have created a few. So now, we 
will be able to actually, with our senior positions, compete 
with the executive branch. So that will help.
    But for the most part, we rely on people who are excited 
about public service and public policy analysis. The CBO, in 
that respect, is sort of right on the frontlines. So that is a 
real advantage to us.

                         TAX CUT BILL ESTIMATE

    Senator Murphy. I wanted to just drilldown into two 
specific policy areas while I have you.
    The first is regarding the estimates that you provided to 
Congress around the tax cut bill that was passed within this 
Congress. Obviously, there is a dispute here. CBO has said it 
is going to add about $1.9 trillion to the deficit over the 
first 10 years. Secretary Mnuchin has said that he thinks it 
will all actually reduce the deficit because of increase 
economic growth.
    When will we start getting data from CBO to help us 
understand which side of the argument is right? At what point 
are we going to start to understand which way deficits are 
heading and whether what you have given us is on-point or needs 
to be revised?
    Dr. Hall. Well, sure, that is a good question because a lot 
of the effect, we think, of the tax bill is going to be a 
short-term stimulus. So we should see pretty strong economic 
growth, we think, over the next year or two.
    The challenge there is that we think there is no longer any 
slack in the economy, so that is going to put growth above 
slack. At some point, then, it is going to require higher 
inflation and higher interest rates from the Federal Reserve. 
So we think it is going to put us into a mini-cycle.
    And so, that is certainly a different view, I think, of 
things. We see the potential GDP over the next 10 years being 
at about 1.8, 1.9 percent. And we think we are going to start a 
full employment economy. We are going to wind up there in about 
10 years.
    I think that will be one of the big telling things, I think 
is, in fact, if we see this sort of heating up and whether 
interest rates rise significantly going forward. Then, I think, 
that is the effect of the stimulus that we have been talking 
about.
    Senator Murphy. And then in terms of revenue projections 
into the Government, when do we start to understand the 
accuracy of your projections on revenue?
    Dr. Hall. I suppose it is the same thing.
    Senator Murphy. Yes.
    Dr. Hall. If we are going to have stronger growth, we are 
going to have stronger revenue. That is not really going to 
reveal much about what we have done to the potential of the 
economy, if you know what I mean. Because I think that is the 
main difference in our view of this is whether this boost is 
temporary or whether it has actually permanently raised the 
growth in the economy.

             IMPACT OF MOVING DEFENSE SUPPLY CHAIN OVERSEAS

    Senator Murphy. And then lastly, I just wanted to shift to 
another topic. A lot of your energy is involved in doing cost 
estimates for the biggest portion of discretionary spending in 
the Government, that being the Department of Defense.
    One of the things that I have actually talked to Mr. Dodaro 
about a lot is the impact of buy America laws and the impact of 
moving more of our defense supply chain overseas.
    The short-term impact of more of our defense supply chain 
moving overseas is that you can purchase cheaper goods for the 
Department of Defense, but the impact then finds its way into 
other parts of the budget, as you start to lose jobs, lose 
factories here. We find that having costs in other parts of the 
budget whether it be increased outlays for social insurance 
programs or lower taxes into the Government.
    This is a discussion we have a lot in a State like 
Connecticut that does a decent amount of events purchasing. We 
think we are cutting off our nose to spite our face as the 
supply chain moves overseas.
    But as you calculate some of the costs of the supply chain 
moving overseas, is there any way to inform Congress or the 
executive branch about the other spill off costs in other parts 
of the budget, if you continue to have that domestic supply 
chain atrophy?
    Dr. Hall. Yes, I can certainly talk with our Department of 
Defense analysts to see if they think there is enough 
information there for us to look at that. That is the sort of 
thing that we will do analytical reports on, the budgetary 
impact of that sort of thing.
    I would be happy to follow up, and talk to our folks, and 
follow up with you to let you know what we see as possible.
    Senator Murphy. Great. Thank you, Dr. Hall.
    Senator Daines. Thank you, Senator Murphy.
    Before we get to Senator Van Hollen, it is good to have you 
here, by the way.
    Senator Van Hollen. Thank you.

                    GDP OF 1.9 PERCENT AND INFLATION

    Senator Daines. Just a follow up question, and this really 
gets back to where the transparency and showing assumptions 
would be helpful for all of us.
    Just looking at the GDP forecast of, let us say, 1.9 
percent in the out years, were you assuming that inflation 
would be up and therefore interest rates had to be rising with 
a GDP of 1.9 percent or did I misunderstand that?
    Dr. Hall. Yes, well, what we see is GDP is getting above 
the potential, which is above 1.9 for a couple years.
    Senator Daines. Yes.
    Dr. Hall. And then this rise in interest rates and possible 
inflation will actually slow growth to below 1.8 percent, we 
think, for a couple years. And then finally settle back in at 
its potential by the end of the 10 year period at about 1.8, 
1.9.
    So we actually have it above and then we have it below. 
That is part of why it is hard to tell quickly whether we are 
going to settle at something higher or lower.
    Senator Daines. Yes, thank you. And that is where I think 
this, as we get to June, being able to place some sensitivity 
analysis with different assumptions, because it can yield very 
different outcomes and it is all going to be based on which 
assumption is going to be the most accurate one.
    Dr. Hall. Sure.
    Senator Daines. Okay, thank you.
    Senator Van Hollen.
    Senator Van Hollen. Thank you. First of all, Mr. Chairman, 
I look forward to working with you and the Ranking Member.
    Welcome to both of you. Dr. Hall, thank you for the good 
work you and your team do at the Congressional Budget Office. I 
serve on the Senate Budget Committee and I appreciate your 
presentations and working with our staff to clarify some of the 
issues in recent testimony.
    I look forward to supporting your budget requests because I 
think that the work the CBO does is very important. Sometimes 
we disagree with an analysis, sometimes we agree. But the 
reality is we need an independent scorekeeper and referee. So 
thank you.
    Mr. Dodaro, thank you for your work at GAO and I have a 
couple of questions related to some areas you have been 
involved in, in the past, with respect to oversight; you, the 
GAO.
    And one has to do with the FBI headquarters building 
because the GAO, as you know, has done at least one very 
extensive report on the FBI building proposals. In fact, back 
during the 2009 Omnibus Appropriations Act, the Congress 
directed the GAO to examine the FBI's headquarter facilities.
    In response, you examined the extent to which the facility 
supported the FBI's security, space, and building requirements. 
And you looked at the different security requirements that were 
required at a building like the FBI headquarters.
    You recommended, and I quote, ``That the FBI should 
document decisions about and track its implementations of all 
security recommendations for the Hoover Building and the FBI's 
headquarter annexes. GSA should reassess its decision to limit 
recapitalization investments in the Hoover Building since the 
FBI is likely to stay in it for several more years while its 
long term facility needs are being planned.'' And the FBI 
agreed with those recommendations.
    After many years where the FBI and the GSA were looking at 
new sites for the FBI headquarters in both Maryland and 
Virginia, they very abruptly and without much explanation, said 
they are going to actually stay at the current location and 
modernize there.
    My question to you, since the GAO has looked into this, and 
without divulging sensitive information, do you think a new 
headquarters building at the current site can be built in a way 
that meets the ISC Level 5 security specifications?
    Mr. Dodaro. It would depend on the specific proposals that 
the FBI and GSA would make in order to address the issues that 
they identified previously.
    We have not done any work in this area since the report 
that you mentioned. We do have an outstanding request from 
Senator Grassley and Congressman Connolly to look at it, but we 
are waiting until the FBI and GSA make a decision.
    They have changed their approach, as you point out in your 
statement, and in the interim, Congressman Connolly has asked 
the GSA IG to look at what the basis was for the change in 
their decision to move from the swap proposal into staying at 
the current location.
    We have not done any work on their proposal yet. I do not 
have any insights into how they are planning to address those 
issues.
    Senator Van Hollen. Well, I look forward to working with 
the Chairman here as well as others on the Appropriations 
Committee to ask GAO to look into the new proposals because 
most of the Federal agencies that are able to meet that level 
of security requirement, have major set-backs like the CIA, 
like the NSA, and others. You just cannot have that kind of 
setback at that site.
    When the new proposals came down, all we got to back it up 
was a 22 page PowerPoint presentation. That was part of a $2.1 
billion project.
    In your experience is that sufficient back up for a Federal 
agency request of that magnitude?
    Mr. Dodaro. We have not looked at what would be the 
underpinning for the PowerPoint presentation. So I do not have 
any insight into what work they did that led to that 
discussion.
    We would typically get involved once there is a detailed 
prospectus put in place.
    Senator Van Hollen. Yes.
    Mr. Dodaro. Part of our recommendations previously were for 
GSA and the FBI to follow best practices in terms of capital 
planning and investment. So that will be what we would look for 
when we assess their proposal.
    Right now, we are trying to work with the requesters to 
decide when we should engage in looking at the new proposal, 
given the fact that the GSA IG is already looking at it.

                 ENFORCEMENT OF IMPOUNDMENT CONTROL ACT

    Senator Van Hollen. Got it. The final question, Mr. 
Chairman, relates to something else the GAO has been involved 
with over the years, and that is enforcement of the Anti-
Impoundment Act, the Impoundment Control Act.
    Mr. Dodaro. Yes.
    Senator Van Hollen. As you know, if the executive branch, 
regardless of party, refuses to release funds, it begins a 
clock ticking. I believe it is a 45-day period.
    Is that right?
    Mr. Dodaro. It is 45 days from the time the President would 
make a proposal; that is, send the rescission package to the 
Congress.
    Senator Van Hollen. Right, yes.
    Mr. Dodaro. What happens in terms of what GAO does from 
there, is that your question?
    Senator Van Hollen. My question is you are saying that 
would only be triggered in the event that they sent a proposal 
to the Congress.
    But I believe back in the day, the GAO actually brought a 
case during the Nixon administration when they claimed the 
authority to simply withhold funds.
    Is that not the case?
    Mr. Dodaro. Yes, these are two different things.
    One, under the Impoundment Control Act, we have a 
responsibility. If we notice, or something is brought to our 
attention, that money that is appropriated by the Congress has 
not been released by the administration, we investigate, and 
then report to the Congress.
    We did that recently at the Department of Energy. There is 
a loan program for $91 million that was supposed to be spent, 
but was not being released. We reported that this met the 
definition of a rescission. It should have been reported. The 
funds were then released.
    The second part of our responsibility is if the President 
does send the rescission package to the Congress, there is a 
45-day clock that starts if the President officially reports 
it. If the President withholds it and does not report it, we 
have to report it to the Congress if we discover and validate 
it.
    Senator Van Hollen. Okay.
    Mr. Dodaro. If they do report it, then the 45-day clock 
starts. Our responsibilities there are to advise the committees 
on what the probable effect would be of the rescission.
    Senator Van Hollen. Yes.
    Mr. Dodaro. We do that within 10 days based on already 
existing GAO work. If after the 46th day Congress has not 
approved the rescission package, then our responsibilities are 
to determine if the funds are then released by the President.
    Senator Van Hollen. Okay.
    Mr. Dodaro. If the money is still not released, based upon 
the work we would do at OMB and the agencies, then the 
Impoundment Control Act authorizes me to sue to release the 
funds through the U.S. District Court.
    Senator Van Hollen. So there are two areas I want to follow 
up that I would ask you to look into.
    One has to do with funds at the NLRB that are not being 
spent.
    Mr. Dodaro. Right.
    Senator Van Hollen. And the other, I was just in a 
subcommittee hearing with the Attorney General, Attorney 
General Sessions. There are Justice Department Byrne Grants 
that the Justice Department withheld and applied their own 
unilateral conditions. Just within the last week, the Seventh 
Circuit found that that was an inappropriate set of conditions.
    So those Byrne Grants are very important and I am going to 
want to follow up with you to find out when GAO can act to make 
sure that those funds are released.
    Mr. Dodaro. Yes, we will start to look at that right away.
    The NLRB situation we are aware of and already looking at. 
We will be prepared within the next few weeks to give you a 
decision on that.
    I was not aware of the Byrne Grants, but we can take a look 
at it right away.
    Our policy is as soon as something comes to our attention, 
we look at it.
    Senator Van Hollen. That is why I wanted to put it on your 
radar screen, the Byrne Grants.
    Mr. Dodaro. The radar is always on.
    Senator Van Hollen. Thank you.
    Mr. Dodaro. Message received.
    Senator Van Hollen. Thank you.
    All right, Mr. Chair.
    Senator Daines. Thank you, Senator Van Hollen.

                           INCREASED STAFFING

    Mr. Dodaro, your request for fiscal year 2019 is very 
unusual in that it was level with the funding provided in 
fiscal year 2018. That does not happen very often in 
Washington, DC, which I appreciate, by the way.
    Because of your investment in one-time IT and 
infrastructure costs this year, you could shift resources into 
fiscal year 2019 to address your personnel needs. It looks like 
you plan to hire an additional 80 FTE in fiscal year 2019 to 
get to a level of 3,020 in total FTE.
    The question is this, if you were given additional 
resources--and I ask this question of somebody who just 
testified and said, ``For every buck invested, you get $128 
buck back,''--would you be able to onboard additional staff 
above the planned 80 FTE for fiscal year 2019?
    Mr. Dodaro. Absolutely.
    Senator Daines. That is a pretty clear answer.
    Mr. Dodaro. I can elaborate.
    Senator Daines. Yes.
    Mr. Dodaro. I have been in this job for 10 years now and I 
have consistently said we need 3,250 FTEs. That is the optimum 
level for GAO within the current budgetary situation at the 
national level.
    I believe the Federal Government is on an unsustainable 
long-term fiscal path. I am trying to act consistent with that 
and have reasonable expectations for what can be funded.
    We can easily onboard additional people. We would use them 
in the same areas that I am planning to increase, that is, 
cyber security issues writ large. I think we are facing another 
evolution of security issues.
    We designated cyber security on the Federal Government's 
information systems as a government-wide high-risk area in 
1997. Nobody could say we did not warn people this was going to 
be a problem.
    In 2003, we designated critical infrastructure protection, 
and in 2015, protecting personally identifiable information.
    I would use the extra staff in cyber security, and expand 
our science and technology work. I see technology as the next 
big evolution of GAO's growth to adjust to meet the needs of 
the Congress. I would also increase our defense and healthcare 
work.
    Senator Daines. So this 3,250 number that you just 
mentioned, if we got to that point, how would that additional 
staff affect your output? What I am looking for here is looking 
at a return on investment.
    Mr. Dodaro. Right.
    Senator Daines. At some point, are there diminishing 
returns? Are you looking for a sweet spot? We are, I guess, in 
terms of getting maximum ROI based on our investment.
    Mr. Dodaro. Right. I think the way to do it is to start at 
the 3,250 FTE level.
    Our ROI is based on two factors. One is what do we identify 
that we recommend to the Congress and the executive branch?
    Number two is how did the Congress and the executive branch 
act on our recommendations? Our recommendations have no force 
of law. It is really up to the Congress.
    Senator Daines. Yes, do not check the ROI on Congress. I 
think that could be something embarrassing.
    Mr. Dodaro. It would be higher if Congress would act on all 
our recommendations.
    Senator Daines. I was going to ask you about that here. 
Save that answer. I want to probe that for a minute here.
    Mr. Dodaro. Right. To be honest with you, I do not know 
where we would hit the diminishing returns.
    Senator Daines. Yes.
    Mr. Dodaro. I think if we start at 3,250 FTE and we are 
still operating at the same level, then I could assess whether 
going further----
    Senator Daines. There is an old saying feed your strengths 
and starve your weaknesses. Right?
    Mr. Dodaro. Yes.

                      POTENTIAL HIRING CHALLENGES

    Senator Daines. You can see return on investment. So if you 
want to hit the 3,250 and we said, ``Let us go do that,'' what 
would be your barriers to hiring? Is it competitive salaries 
out there to get the best people to do these important jobs?
    Mr. Dodaro. We have some of the same kind of challenges 
that Keith mentioned.
    Senator Daines. Yes.
    Mr. Dodaro. We compete particularly for economists and 
science and technology people, but we really do not have a real 
serious problem in finding people. Our only limitation is the 
amount of funding that the Congress has given us.
    We can bring the people in. We can train them. People love 
our mission. We do work on almost every national issue. We make 
a difference in that our recommendations are acted upon.
    Our attrition rate is only at 6 percent. So people come. 
They stay. They like the work. They are energized by it. It is 
a continual learning environment.
    We really do not have any recruitment or retention problems 
at GAO. It is just a matter of having the money to bring in the 
necessary people.
    Senator Daines. You mentioned that your ROI is dependent on 
Congress acting on what you recommend. Billions of dollars of 
savings have been achieved as a result of your work. You 
mentioned that especially in the areas of your high risk report 
on ``Fragmentation, Overlap, and Duplication,'' of Federal 
programs.
    The question that gets back to what you alluded to, 
dependence on this institution, Congress, to implement what you 
tell us. Has Congress been aggressive enough to address these 
areas, and how can we do more to the follow up in getting it 
done?

                CONGRESS HELPS IMPLEMENT RECOMMENDATIONS

    Mr. Dodaro. Yes. First, the Congress has been very helpful 
and active in the high-risk program. In the last 2 years, they 
have passed 12 pieces of legislation to try to address the 
high-risk issues that we have identified.
     Overall, over three-quarters of our recommendations are 
implemented over a period of time.
     The $136 billion that I mentioned, savings for overlap, 
duplication, and fragmentation, has largely come through 
congressional actions to let the ethanol tax credit lapse, for 
example, and to eliminate the direct farm payment program that 
replicated other programs. It was only supposed to be a 
temporary program. Also Congress allowed for the sale from the 
strategic petroleum reserve to get additional revenue.

                 OVERLAP, DUPLICATION AND FRAGMENTATION

    Tomorrow, I will be testifying on our eighth annual report 
on overlap, duplication, and fragmentation. In that report will 
be an appendix that will list 58 open matters for congressional 
consideration that have not yet been acted upon.
    Senator Daines. So how much money are we leaving on the 
table?
    Mr. Dodaro. There are tens of billions of dollars. There 
are recommendations to the executive branch. I do not want to 
let them off the hook. It is both to the Congress and to the 
executive branch.
    I talked to the Deputy Director for Management at OMB, and 
they are going to be taking a look at our recommendations that 
are still open, as well as new ones.
    Senator Daines. So last question for the sake of this 
committee as well. I would like to see that list of 
recommendations that have not yet been implemented by Congress 
as well as the executive branch.
    Mr. Dodaro. Sure.
    Senator Daines. And frankly, any other recommendations you 
have because that is money we are leaving on the table here 
based on the hard work that you are doing.
    Mr. Dodaro. There are some big dollar savings.
    Senator Daines. Right.
    Mr. Dodaro. Particularly in Medicare and Medicaid.
    Senator Daines. Okay. Thank you.
    Senator Murphy.
    Senator Murphy. Thank you very much, Mr. Chairman.

                         GAO EXTERNAL OUTREACH

    I guess I could ask this question to either one of you, but 
we are on you, Mr. Dodaro, so I will ask it to you.
    There is a lot of discussion about a general assault on the 
idea of objective truth these days and in this place, as close 
as we came to objective truth was reports from the CBO and, in 
particular, from the GAO who would deliver to us some pretty 
tough recommendations that generally, republicans and 
democrats, would stick to.
    Yet today, we have members of the administration saying 
nobody should ever listen to the CBO. We have a lot of other 
people who just seem intent on pushing their own spin.
    I would just be interested to hear from you as to whether 
you have seen any diminution, any influence of GAO reports or 
whether you have any worry about this constant questioning of 
whether there is any truth, any set of facts underlying the 
political spin from the left and the right?
    Mr. Dodaro. Yes, well, to the first part of your question, 
I have seen no diminution in the reaction to GAO reports.
    In addition to meeting with all the Chairs and Ranking 
Members of all the committees in the Congress that we do work 
for, I have also met with the heads of departments and agencies 
in most of the departments and agencies across the Federal 
Government. I send them a letter every year with open GAO 
recommendations that are prioritized for them, such as which 
ones I think have the biggest return on investment, or most 
affect public safety, or improve public safety.
    We have established a working relationship with the 
executive branch that is fairly good, with the major 
departments and agencies. I would say there are no big problems 
there.

                      ACCESS TO NEEDED INFORMATION

    In terms of the second part of your question about whether 
I am worried. I am an auditor. You pay me to worry about 
things, and you pay me to identify emerging issues so there is 
always that concern.
    I feel we have a good reputation. It is sound and people 
are being responsive to us. Now, we have continual problems, 
which we have had with all administrations, such as getting 
answers out of the White House, if our work touches on the 
White House.
    The intelligence community has been more cooperative than 
they have historically, but we still have some problems over 
there. We need support from the intelligence committees to do 
effective work.
    Sometimes in the law enforcement area, although we have not 
had anything recently, we had problems. And we have had some 
problems with every administration getting access to 
information and being responsive. I met with the heads of those 
departments and agencies and we worked it out with support from 
the Congress.
    And so, if I run into problems, I will come to the 
Congress, and ask for help and support in working them out. As 
for right now, I do not see any big change.
    Senator Murphy. You mentioned the inability of the 
Department of Defense to get an audit done.

                          DOD FINANCIAL AUDITS

    How does DoD's receptivity to your requests for information 
rank amongst agencies that you deal with?
    Mr. Dodaro. Yes, they have been very good. I met with 
Deputy Director Shanahan. I have met with all the service 
secretaries from Army, Air Force, and Navy. I am meeting this 
Friday with the new Chief Management Officer over there. I have 
met with the new Comptroller.
    I think they have the best approach that I have seen in 20 
years of trying to tackle this issue at DoD.

              DOD RECOMMENDATION IMPLEMENTATION CHALLENGES

    Now, that being said, DoD has a lower implementation rate 
on our recommendations than many other agencies, and I will be 
discussing that with them. They have over 1,000 open GAO 
recommendations. I have prioritized the top 76 and a lot of 
them get implemented through the Defense Authorization Bills 
over time.
    So Congress has been very supportive when we need 
congressional help there to implement some of those 
recommendations. I am hopeful they will have a better uptake.

                        HHS OPEN RECOMMENDATIONS

    The two areas are there at DoD and at CMS over at the 
Department of Health and Human Services. I met with Seema 
Verma. I met with Tom Price when he was secretary. I am trying 
to meet with the new secretary. We are meeting quarterly with 
them to discuss open recommendations at CMS.
    I am hopeful we will see a better response to our 
recommendations both at DoD and CMS.

                        DOD AND BUY AMERICA LAWS

    Senator Murphy. And I know, because we have talked about 
this issue of the effect of Buy America laws and compliance at 
DoD that it is an issue that you are interested as well.
    The Inspector Generals at the Department of Defense have 
issued some of their most damning reports with respect to Buy 
America compliance where they have, at least on multiple 
occasions, found noncompliance rates of 40 percent with respect 
to the existing Buy America laws, never mind any conversation 
we may have about tightening them up.
    I know this is something that you are pursuing as well. 
Correct?
    Mr. Dodaro. Yes, that is correct. We have work underway to 
look at the types of goods that are purchased that are subject 
to the Buy America Act, and what kind of training is provided 
so that people will know what their responsibilities are under 
the law. We expect that report to be issued later this year.

                GAO AUDIT PLAN FOR DISASTER SUPPLEMENTAL

    Senator Murphy. And then finally, the fiscal year 2018 
supplemental provided GAO with $14 million to conduct oversight 
of the $90 billion in disaster relief that we provided to 
Puerto Rico, and the Virgin Islands, and other areas affected 
by the 2018 hurricanes and wildfires.
    Can you just talk about your audit plan and when Congress 
can expect to see something?
    Mr. Dodaro. We issued our first report in February on the 
amount of contracts that had been let by 19 different Federal 
agencies at that point in time. Most of the money was let by 
FEMA and DoD, but other agencies will be engaged more as we get 
into recovery.
    We have 11 audits underway right now looking at things like 
the disaster recovery plans in Puerto Rico and the Virgin 
Islands. We have work underway looking at restoring the power 
grid in Puerto Rico. We have work underway looking at the 
response to the wildfires.
    We will have a comprehensive report on the Federal 
Government's initial response to these disasters coming out 
this summer, and then we will have detailed reports that will 
drill-in into individual areas.
    We have 12 other audits that are planned to be started over 
the next 18 months. We have a plan with 23 different audits.
    As the recovery proceeds, SBA will be in there. We are 
going to look at HUD. A lot of money went through the CDBG, the 
Community Development Block Grant program. DOT gets involved in 
those areas, the Red Cross, and DoD as well. So we will have a 
comprehensive look.
    We have done this work over the years with Hurricanes 
Katrina and Rita dating back to Hurricane Andrew in the early 
1990s in Florida. So we have expertise.
    We appreciate the additional money. That will help us. We 
have already planned to bring back some people that have had 
some expertise in that area and bolster our capabilities by 
hiring more people.
    Senator Murphy. One last follow up question.
    One unique aspect, though, of the Puerto Rico recovery is 
the existence of the oversight board, which was initially 
established to oversee the debt restructuring process for the 
island.
    Mr. Dodaro. Right.
    Senator Murphy. But now is rightly involved in the 
expenditure of these dollars.
    I just want to make sure that in your report, you are going 
to be looking at, and perhaps critiquing, whether or not there 
is efficiency added to the process, whether it be logistical or 
financial efficiency, by the oversight board's involvement. In 
some ways very detailed involvement, I would argue, over 
prescriptive involvement in the dispensing of these dollars.
    Mr. Dodaro. Yes, we will definitely look at that. We have 
looked at other oversight boards in the past, for example, when 
there was one set up for the DC government many years ago. So 
we will take a look at that.
    I also have the comptroller from Puerto Rico on an advisory 
committee that I have of State and local officials. We have a 
good relationship with her. We have a lot of contacts in Puerto 
Rico. We have already had teams onsite, so we will take a look 
at that issue.
    Of course, you have the confluence here of two very 
significant events. You had their economic travails early on 
and then the Hurricane. They are trying to solve multiple 
issues at the same time, we will be sensitive to that, but we 
will look at how they are doing and whether we think it makes 
sense.
    Senator Murphy. Well, thank you.
    Thank you, Mr. Chairman.
    Senator Daines. Thank you, Senator Murphy.
    This concludes the Legislative Branch Appropriations 
Subcommittee hearing regarding fiscal year 2019 funding for the 
Government Accountability Office and the Congressional Budget 
Office.

                     ADDITIONAL COMMITTEE QUESTIONS

    Thank you, Mr. Dodaro and Dr. Hall for your testimony.
    The hearing record will remain open for 7 days, allowing 
Members to submit statements and/or questions for the record, 
which should be sent by close of business Wednesday, May 2, 
2018.
    [The following questions were not asked at the hearing, but 
were submitted to the Agencies for response subsequent to the 
hearing:]
                  Question Submitted to Dr. Keith Hall
            Question Submitted by Senator Christopher Murphy
    Question. In regards to the Buy America Law, Senator Murphy would 
like to know if CBO would be able to inform the Congress of the impacts 
to the economy if we were to move the majority of our defense supply 
chain overseas. He's specifically concerned with the Department of 
Defense moving a number of their functions overseas.
    Answer. A change by the Department of Defense and its contractors 
to permit greater purchases of goods and services abroad would have 
various economic effects, depending on the period examined and the 
economic conditions. Such a change could also affect national security.
    In the short run, such a change could create significant 
disruptions. A drop in Federal defense spending on domestic goods and 
services, if it was abrupt or unexpected, would decrease domestic 
production, increase imports, and thus lower gross domestic product 
(GDP) in the short term. CBO estimates that for each one-dollar 
increase in net imports, the total decrease in GDP and income over 2 
years would be 50 cents.\1\
---------------------------------------------------------------------------
    \1\ In CBO's estimation, that would be the case in economic 
conditions in which the Federal Reserve was likely to try to offset the 
effects of changes in fiscal policies by altering interest rates. See 
Valerie A. Ramey and Sarah Zubairy, ``Government Spending Multipliers 
in Good Times and in Bad: Evidence from US Historical Data,'' Journal 
of Political Economy, vol. 126, no. 2 (March 2018), pp. 850-901, http:/
/dx.doi.org/10.1086/696277; Charles J. Whalen and Felix Reichling, The 
Fiscal Multiplier and Economic Policy Analysis in the United States, 
Working Paper 2015-02 (Congressional Budget Office, February 2015), 
www.cbo.gov/publication/49925; and Congressional Budget Office, How CBO 
Analyzes the Effects of Changes in Federal Fiscal Policies on the 
Economy (November 2014), www.cbo.gov/publication/49494.
---------------------------------------------------------------------------
    However, the effects of changes in defense spending on local 
economies vary with local economic conditions and other factors.\2\ The 
effects are greatest when unemployment in local economies is higher and 
when workers have narrowly targeted skill sets. Broadly speaking, not 
only can replacing domestic production with imports be costly for 
domestic workers who become unemployed when their occupations, 
businesses, or industries shrink; such workers tend to earn markedly 
less once they are reemployed.
---------------------------------------------------------------------------
    \2\ For example, see Edward G. Keating and others, The Economic 
Consequences of Investing in Shipbuilding: Case Studies in the United 
States and Sweden (RAND Corporation, 2015), www.rand.org/pubs/
research_reports/RR1036.html.
---------------------------------------------------------------------------
    Over time, if the Department of Defense was able to import goods 
and services at a lower cost than it could purchase them domestically 
and if spending on defense was correspondingly lower, Federal deficits 
would be smaller, and domestic resources could be reallocated to more 
efficient uses. Indeed, in the long term, international trade generally 
encourages a more efficient allocation of resources in the economy and 
raises the average productivity of businesses and industries in the 
United States.\3\ However, a small portion of defense spending--the 
part dedicated to basic and applied research--contributes to the U.S. 
economy's overall productivity, in CBO's view, so moving that spending 
abroad could partially offset those positive effects.\4\
---------------------------------------------------------------------------
    \3\ For a discussion of the ways in which trade affects the 
economy, see Congressional Budget Office, How Preferential Trade 
Agreements Affect the U.S. Economy (September 2016), www.cbo.gov/
publication/51924.
    \4\ For a discussion of the sources of Federal investment, see 
Congressional Budget Office, Federal Investment (December 2013), 
www.cbo.gov/publication/44974.
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    A separate concern is that reliance on international supply chains 
can jeopardize national security. If such supply chains were disrupted, 
developing domestic sources of defense goods and services might take 
time.
                                 ______
                                 
                Questions Submitted to Hon. Gene Dodaro
            Questions Submitted by Senator Chris Van Hollen
    Question. According to press reports, the executive branch may be 
withholding some of the funding that Congress has appropriated to the 
National Labor Relations Board (NLRB), which is the agency responsible 
for protecting the rights of workers in the private sector. At a 
hearing of the Senate Appropriations Subcommittee on the Legislative 
Branch on April 25, you indicated to me that the Government 
Accountability Office was looking into this potential impoundment of 
funding at NLRB, which could be in violation of the Impoundment Control 
Act. Is GAO still examining whether there is an impoundment taking 
place at NLRB, and if so, when do you expect to report to Congress on 
this question?
    Answer. Our work on the potential impoundment of funds at NLRB is 
ongoing. We expect to provide your staff with an update by the end of 
June 2018.
    Question. When can GAO make sure the Department of Justice Edward 
Byrne Memorial Justice Assistance Grants (Byrne JAG) are released?
    Answer. Our work on the potential impoundment of funds for Byrne 
Grants is ongoing. We expect to provide your staff with an update by 
the end of June 2018.

    Senator Daines. The next hearing of this subcommittee will 
be held on Tuesday, May 8 at 2:30 p.m., in Dirksen 124, when we 
will hear testimony from the Librarian of Congress and the 
Architect of the Capitol regarding their fiscal year 2019 
budget requests.

                          SUBCOMMITTEE RECESS

    Until then, the subcommittee stands adjourned.
    [Whereupon, at 4:24 p.m., Wednesday, April 25, 2018. The 
subcommittee was recessed, to reconvene at 2:30 p.m., Tuesday, 
May 8.]
                               APPENDIX A

                      Congressional Budget Office

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                               APPENDIX B

                    Government Accountability Office

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