[Senate Hearing 116-452]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 116-452

 THE GOVERNMENT ACCOUNTABILITY OFFICE'S ANNUAL REPORT ON THE NATION'S 
                             FISCAL HEALTH

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

                                HEARING

                               BEFORE THE

                        COMMITTEE ON THE BUDGET

                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             March 12, 2020

                               __________

           Printed for the use of the Committee on the Budget


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
44-021                     WASHINGTON : 2021                     
          
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                        COMMITTEE ON THE BUDGET

                   MICHAEL B. ENZI, Wyoming, Chairman
CHARLES E. GRASSLEY, Iowa            BERNARD SANDERS, Vermont
MIKE CRAPO, Idaho                    PATTY MURRAY, Washington
LINDSEY O. GRAHAM, South Carolina    RON WYDEN, Oregon
PATRICK TOOMEY, Pennsylvania         DEBBIE STABENOW, Michigan
RON JOHNSON, Wisconsin               SHELDON WHITEHOUSE, Rhode Island
DAVID A. PERDUE, Georgia             MARK R. WARNER, Virginia
MIKE BRAUN, Indiana                  JEFF MERKLEY, Oregon
RICK SCOTT, Florida                  TIM KAINE, Virginia
JOHN KENNEDY, Louisiana              CHRIS VAN HOLLEN, Maryland
KEVIN CRAMER, North Dakota           KAMALA D. HARRIS, California
                 Doug Dziak, Republican Staff Director
                Warren Gunnels, Minority Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              

                        THURSDAY, MARCH 12, 2020

                                                                   Page

                    STATEMENTS BY COMMITTEE MEMBERS

Chairman Michael B. Enzi.........................................     1

                                WITNESS

Dodero, Hon. Gene L., Comptroller General of the United States, 
  U.S. Government Accountability Office (GAO)....................     4
    Prepared Statement of Mr. Gene L. Dodero.....................     6
    Questions and Answers (Post-Hearing) from:
        Senator Charles E. Grassley..............................    63
        Senator Sheldon Whitehouse...............................    70
        Senator Chris Van Hollen.................................    75

 
 THE GOVERNMENT ACCOUNTABILITY OFFICE'S ANNUAL REPORT ON THE NATION'S 
                             FISCAL HEALTH

                              ----------                             


                        THURSDAY, MARCH 12, 2020

                                       U.S. Senate,
                                   Committee on the Budget,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:33 a.m., in 
Room SD-608, Dirksen Senate Office Building, Hon. Michael B. 
Enzi, Chairman of the Committee, presiding.
    Present: Senators Enzi, Grassley, Braun, and Van Hollen.
    Staff Present: Doug Dziak, Republican Staff Director; and 
Mike Jones, Minority Acting Staff Director.

         OPENING STATEMENT OF CHAIRMAN MICHAEL B. ENZI

    Chairman Enzi. I will call to order this hearing of the 
Senate Budget Committee, the hearing on the Government 
Accountability Office's Annual Report on the Nation's Fiscal 
Health.
    Today the Budget Committee will hear from Congress' 
nonpartisan watchdog on the Nation's fiscal health and the 
importance of confronting our critical fiscal challenges. I 
welcome back Mr. Dodaro, who is our most usual and best 
witness, providing information throughout the year that is 
extremely helpful to heading off some of the future crises that 
are going to happen if we do not pay attention.
    This hearing will kick off a series of hearings and 
discussions that I hope will help to inform bipartisan 
solutions to the problems we face this year and help build the 
foundation for next year's budget cycle.
    The next few years should be significant for the Budget 
Committee. The Committee has been working hard to enact reforms 
that improve transparency and accountability in the budget 
process and help put us on a more sustainable fiscal path. Last 
year Senator Whitehouse and I introduced the Bipartisan 
Congressional Budget Reform Act. I want to emphasize that word 
``bipartisan'' because it is the first time any reform bill has 
gotten out of this Committee in a bipartisan way since 1990. 
When we are successful at turning this bill into a law, the 
next Congress would process the first budget cycle covered by 
its reforms. Next year will also mark the first budget cycle in 
10 years not constrained by the Budget Control Act's 
discretionary spending caps and sequester.
    In the months ahead, we will begin to lay the groundwork 
for a return to more regular budgeting through a series of 
discussions focused on the major fiscal issues on our country's 
horizon. With that in mind, we are meeting today for an update 
on the most pressing threats to our Nation's fiscal stability.
    I am pleased to welcome back to the Committee Gene Dodaro, 
the Comptroller General of the United States and the head of 
the U.S. Government Accountability Office. Today GAO is issuing 
its fourth annual update on the Nation's fiscal health. For 
several years now, this report has warned that the Federal 
Government is on an unsustainable fiscal path.
    Unfortunately, the budget outlook has grown even more 
dismal since last year's report, thanks to legislation enacted 
in 2019. Last year GAO predicted that debt as a percentage of 
gross domestic product (GDP), which compares the size of our 
debt to the size of our economy, would surpass its historical 
high of 106 percent by 2038. Now GAO projects we will hit that 
grim milestone by 2034 if current laws do not change.
    The Congressional Budget Office's (CBO) recent budget 
outlook also shows the cost legislation enacted since last June 
has taken on our already unsustainable fiscal situation. Due to 
this legislation, namely, last year's spending agreement, which 
CBO attributes $1.7 million--trillion--I still have trouble 
with that word--trillion in spending increases over 10 years 
and the fiscal year 2020 appropriations package with riders 
that repealed the pay-fors for the Affordable Care Act, CBO now 
projects that debt as a percentage of GDP will soar to 174 
percent of GDP by 2049, a 30-percentage-point increase from 
last year's projection.
    CBO warns that failing to confront our rising debt will 
mean a future of slower economic growth, higher interest rates, 
and a greater risk of a fiscal crisis. As the deficit grows and 
we borrow even more money to fund the Government, the interest 
payments on the money we borrow will overtake all other 
spending. This should be a major red flag for everyone. Already 
the annual interest payments on our debt exceed what we spend 
on agriculture, transportation, and veterans' benefits and 
services all combined. By 2041, GAO projects our annual 
interest payments will be more than what we spend on Medicare. 
By 2044, interest payments will exceed what we spend on Social 
Security. By 2049, interest payments will exceed total 
discretionary spending.
    We can and do have spirited debates on what our spending 
priorities should be, but interest payments on our debt are not 
even debatable. We do not get to decide whether we want to 
spend that money on health care, defense, or retirement 
security. It is already committed. It is the most mandatory 
funding that we do. And if we stay on the path we are on today, 
that interest will become the largest category of Federal 
spending.
    I mentioned this Committee had advanced on a bipartisan 
vote the budget process reforms that Senator Whitehouse and I 
introduced and you all amended to make it an even better bill. 
Our bill takes several steps toward a more active, thoughtful, 
and functional budget process. This includes reorienting the 
budget resolution to a 2-year cycle and incorporating the debt 
limit into the budget process in a way that would minimize the 
threat of default.
    We are also calling for integrating into the budget 
resolution longer-term fiscal targets based on national debt as 
a percentage of the overall economy, a debt-to-GDP glide slope. 
This would emphasize our fiscal trajectory and help to get us 
on a more sustainable fiscal path.
    One thing we will certainly need as we confront the hard 
decisions ahead is reliable financial and performance data. 
Earlier this year, I introduced the CFO Vision Act with 
Senators Warner, Grassley, Johnson, Perdue, and Lankford. I 
expect the Comptroller General is familiar with this bill as it 
grew out of a hearing we had with him last October on the CFO 
Act. The reform it proposes would standardize CFO 
responsibilities to enhance strategic decision-making and 
strengthen Deputy CFO authority to ensure continuity when 
vacancies occur. It also calls for revised planning 
requirements and metrics to help address longstanding 
challenges like better linking cost and performance measures 
and modernizing outdated legacy systems.
    I should mention that at GAO's suggestion we have put in a 
request to Office of Management and Budget (OMB) to give us a 
list of all Federal programs. We have not gotten it yet. There 
seems to be some problem with the definition of what a Federal 
program is. I think I can help with that if they would just 
give us a printout of all of the payments that go to any 
entity. If an entity is getting money from us, it is one of our 
programs.
    This is my last year in the Senate. It is my sincere hope 
that we can take concrete steps toward a sustainable fiscal 
future before I leave. A return to sensible budgeting would be 
a good start. I hope that members today will pay attention to 
the urgent message from Congress' nonpartisan watchdog. Our 
current Federal fiscal situation is unsustainable, and we must 
act before it is too late.
    I want to thank Comptroller Dodaro for being here again and 
again and for all the delightful information that he shares 
with us. When we follow up on it, we get results. I look 
forward to his testimony.
    And I do not think we have a Ranking Member statement 
today. I think it might be in preparation for a debate that is 
coming up.
    Senator Grassley, do you want to make any comments?
    Senator Grassley. No. I will ask questions.
    Chairman Enzi. Okay. So we will move on to our witness this 
morning. As I mentioned, it is Gene Dodaro, the head of the 
Government Accountability Office and Comptroller General of the 
United States. Mr. Dodaro testifies frequently before Congress, 
and I am pleased to welcome him back to this Committee. He is 
the eighth Comptroller General of the United States. He was 
confirmed in December of 2010 after serving as Acting 
Comptroller General since March of 2008. Mr. Dodaro has been 
with the GAO for more than 40 years. He served 9 years as the 
Chief Operating Officer, the number two leadership position at 
the agency. Prior to that, he headed GAO's Accounting and 
Information Management Division, which specialized in financial 
management, computer technology, and budget issues.
    What a diverse background of information that has been 
extremely helpful and has been noted every time that you have 
testified. So, with that, Comptroller General, you can begin.

STATEMENT OF THE HONORABLE GENE L. DODARO, COMPTROLLER GENERAL, 
U.S. GOVERNMENT ACCOUNTABILITY OFFICE; ACCOMPANIED BY THOMAS H. 
                   ARMSTRONG, GENERAL COUNSEL

    Mr. Dodaro. Thank you very much, Mr. Chairman, Senator 
Grassley, Senator Braun. It is a pleasure to be here today to 
discuss our latest report on the fiscal health of the Federal 
Government.
    As we convene this discussion today, our country is 
confronting a pandemic that is threatening the health, safety, 
and economic well-being of our citizens, our businesses, and 
our economy. And I make that point because it is relevant to 
our message today of why it is important to put the Federal 
Government on a more long-term, sustainable fiscal path. The 
Federal Government needs to have the budgetary flexibility to 
marshal resources to deal with emergency situations.
    I am concerned, as our report notes, that our debt-to-GDP 
ratio as of the end of last fiscal year was 79 percent. That is 
the highest it has been since World War II when the United 
States hit the historic high of 106 percent of debt-to-GDP 
ratio. And that also contrasts with the debt-to-GDP ratio since 
1946 of only 46 percent. The United States is very heavily 
leveraged in debt at a time when the country is going to be 
facing a steady annual deficit of $1 trillion a year for as far 
as the eye can see. This will mean that the debt-to-GDP ratio, 
absent any fiscal policy changes, will hit the historic high of 
over 106 percent of GDP within 11 to 14 years. The timeframe 
depends on whether the estimates used is made by GAO, CBO, or 
the financial report of the Federal Government issued by 
Treasury and OMB, but they all result in the same conclusion.
    More importantly, debt will continue to grow to 200, 300, 
400, 500 percent of GDP. This is why we believe the current 
path is unsustainable.
    The Social Security program is already at $1 trillion. 
Medicare and Medicaid are expected to hit $1 trillion each by 
2026 if State money for Medicaid is included. And the interest 
on the debt will hit $1 trillion by 2032. Right now, the total 
Federal budget is $4.5 trillion. Those four programs or 
activities alone will be $4 trillion relatively soon. That will 
crowd out a lot of other opportunities for spending in vital 
areas, ranging from defense to the whole panoply of 
discretionary programs important to the country.
    The Federal Government needs a plan to deal with this. I 
recognize the need to deal with short-term national priorities 
and to make sure there is strong economic growth. But there is 
also a need for a plan to put the country on a better path.
    I was very pleased, Mr. Chairman, to see the bipartisan 
bill that was passed out of this Committee that would set the 
debt-to-GDP targets and would also deal with another 
troublesome area that I pointed out in the past, which is to 
have a different approach to setting the debt limit. The 
current debt limit approach does not control the debt. It is 
dangerous because it can disrupt Treasury securities market if 
it is not raised in time, and increase interest costs to the 
Federal Government. There needs to be a different approach. 
Your approach that is included in the bill is a good approach. 
It is one of the options that we suggested tying it to the 
budget resolution.
    In addition to these fiscal policy decisions that need to 
be made, there are still many opportunities to save additional 
money. We have pointed out in our report that this year the 
amount of improper payments across the Federal Government 
jumped from $151 billion to $175 billion, largely driven by an 
increase in Medicaid improper payments. And I think that number 
will go up higher, and I am happy to talk about that later.
    There are also opportunities to address overlap, 
duplication, and fragmentation in the Federal Government. So 
far actions on our recommendations have saved $262 billion, and 
we have outstanding recommendations that could save tens of 
billions of dollars more. So there is a lot that could be done 
to deal with this issue.
    I again, in closing, applaud the Committee for taking 
action in this regard, both on the bipartisan budget reform 
bill as well as the CFO legislation. I would be happy to 
respond to questions, Mr. Chairman. Thank you very much.
    [The prepared statement of Mr. Dodaro follows;]

                Prepared Statement of Mr. Gene L. Dodaro

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    Chairman Enzi. Thank you, and thank you for the document 
you provided with a lot more information than that.
    I will turn to Senator Grassley for questions.
    Senator Grassley. I will take you up on that, and then I 
can go over to the Agriculture Committee.
    Mr. Dodaro, your written testimony says the Pension Benefit 
Guaranty Corporation's multiemployer Pension Trust Fund is 
projected to be depleted by 2025. I am aware of that, and we 
are working on legislation to try to help that out along with 
other aspects of multiemployer. So after 2025, if nothing is 
done, PBGC premiums will not be enough to pay benefits to the 
insolvent plans. And so Senator Alexander and I with 
jurisdiction over some of this are trying to work on that. 
There are other proposals as well, and I think everyone 
recognizes that the longer we wait, the worse the problem 
becomes.
    I wonder if you could comment on the need for action to 
shore up the multiemployer pension system and whether you think 
that it would be prudent to continue to delay action.
    Mr. Dodaro. Senator Grassley, I think that is one of the 
most urgent issues facing the Congress. I have been concerned 
about the multiemployer plan for a number of years. I wrote a 
special message to the Congress about this back in 2014. 
Congress took some action at that time, but it was not 
sufficient enough to deal with the longer-term problem.
    If Congress does not act, there are about 11 million people 
that are insured in the multiemployer pension plan, and once it 
goes insolvent, the only benefits the Government will be able 
to pay is about $2,000 a year, if that, to these people for a 
pension. Hardly adequate. The Government will fail these 
individuals if it does not act. I encourage you to continue 
your efforts, and your colleagues, to act on this issue.
    Also, the single-employer program, while it is in a current 
surplus situation, has tremendous exposure over the long term 
as well, there are about $155 billion of potential losses to 
that program as well. But the multiemployer plan is the most 
urgent, and I would encourage swift action on the part of the 
Congress to allay concerns by these Americans that would be 
affected.
    Senator Grassley. I want to go to entitlements. Your 
agency, CBO, and others have been telling us for a long time 
about Social Security and health care entitlements and our net 
interest issues on the debt are unsustainable. And in order to 
address that, we have to reduce deficits and debt. Social 
Security's Trust Fund will be exhausted by 2034, and we will be 
paying a heck of a lot less in Social Security benefits if we 
do not do something about that.
    So I want to get to health care spending. I have a bill 
with Senator Wyden to reduce drug prices, save taxpayers money, 
and reduce health care costs generally. We cannot allow overall 
health care spending and subsidies to grow faster than the 
economy grows. If we are serious about reducing our debt, my 
question to you is: Don't we have to control the growth in 
Federal spending on health care and entitlements?
    Mr. Dodaro. Absolutely, Congress needs to do that. The 
fastest-growing costs in the Federal Government are health care 
costs and interest on the debt. The health care costs, as you 
point out, Senator, are growing faster than the economy and are 
projected to continue to do so in the future. So there have to 
be some changes.
    By 2026, there will only be enough money in the Medicare 
Hospital Trust Fund to pay 89 cents on the dollar of benefits. 
That is right around the corner. That would affect millions of 
Americans that rely on the Medicare Hospital Trust Fund and put 
enormous pressure on the Federal Government.
    The suggestions that you make are good ones. We have other 
open recommendations in addition to bringing down drug costs. 
For example, your payment by the Federal Government under 
Medicare for doctor visits depends on where you go, what place 
you get it. If you go to a doctor's office that is affiliated 
with a hospital, Medicare pays more money than if you visited 
that same doctor in a private practice. If those payments were 
equalized, the Federal Government would save billions of 
dollars in that area.
    We have a number of open recommendations. I will provide 
them to this Committee for the record and provide them to your 
staff as well. But you absolutely have to control health care 
costs. That is the most complicated part of this whole 
equation. If you do not control health care costs, you really 
do not have much of a prayer of reducing the Federal 
Government's deficit and debt issues.

               ADDITIONAL INFORMATION SUBMITTED 
                     BY MR. DODARO FOLLOWS
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Senator Grassley. Thank you.
    Mr. Chairman, thank you for your courtesy.
    Chairman Enzi. Thank you, and we will let you go to the 
Agriculture meeting. I think you just came from Judiciary.
    Senator Braun.
    Senator Braun. Thank you, Mr. Chairman.
    So I have been here a little over a year, and probably the 
first Committee meeting that vividly stuck in my mind is when 
you were here roughly a year ago. And, of course, you said 
basically everything then that you are telling us now, and I 
guess what amazes me most about this place is how we seem to 
shrug it off like it is never going to have impact in the 
present.
    Health care costs undoubtedly are the driver. I took it on 
in my own company 13 years ago, and there are solutions. Mostly 
the reason we are not making any headway on health care costs 
is I have never seen an industry more dug in and stubborn in 
wanting to maintain the status quo. When you have 80 U.S. 
Senators that come up with some idea of how to fix your 
business, that is like the 2-by-4 across the head, and nobody 
is paying any attention, from pharma to hospitals, the whole 
gamut, practitioners as well.
    Then you have got the health insurance industry, which is 
kind of like the Darth Vader out there that keeps everything 
behind closed doors, does not embrace any of the elements of 
most free markets, which would be no barriers to entry, full 
transparency, robust competition, and an engaged consumer. We 
have none of that.
    So Chairman Grassley, probably of any of the committees, 
has been most aggressive, and this is all mild stuff we have 
been trying to get done. In Health, Education, Labor, and 
Pensions--I am on that Committee--we still have not settled 
surprise medical bills. That has got to be the easiest, lowest-
hanging fruit you could ever imagine to pick to solve an issue. 
I have not talked to anyone that likes surprise billing. Well, 
you have got the doctors arguing with the insurance companies 
on how to fix that.
    Sadly, I do not think we are going to do much. The guy that 
has been most aggressive and instrumental has been the 
President, and whenever he tries to do things like advancing 
Pharmacy Benefits Manage (PBM) discounts directly to the 
pharmacy or the individual, it hits the court system the next 
day, or when you try to push a transparency bill.
    I used the opportunity then and I do it now and I do it 
often because this microphone is probably the biggest asset we 
have as a Senator since we get nothing done in general.
    Health care could be solved, and the onus is on the Chief 
Executive Officers (CEO) that run this increasingly 
concentrated industry to embrace some of this stuff. I do not 
know whether we can legislate quickly enough t case that the 
system is broken is 100 percent correct. Do we go to a one-
payer system to fix it? Or do we do what could be done, what I 
did in my own company, take the best of what we have got, 
shrink it, by the industry embracing what all other free 
enterprisers do? I do not know.
    I am going to ask you this question, and then I am sure it 
looks like we have got room for more questions, sadly. This 
should be the most-well-attended Committee here, and it is 
dealing with a subject that nobody wants to get into the weeds 
about.
    What do you see looking into the future? Because we know 
all the information. You do not need to have much more than a 
Finance 101 degree to know how in peril we are. What is the 
event or few events that happen down the trail that put this 
whole place into a higher alert, which would mean solving it by 
a crisis? What do you see the most likely thing or two 
occurring?
    Mr. Dodaro. Our report and testimony has a timeline of some 
significant events that will occur that will force Congress to 
act. I have already discussed one of those with Senator 
Grassley here with his question on the multiemployer pension 
plan, and 2025, which is right around the corner. There will be 
devastating effect on the people that were supposed to be 
protected by that program if Congress fails to act.
    A year after that, the Medicare Hospital Insurance Trust 
Fund, as I mentioned, will only be able to cover 89 cents every 
dollar of hospital-related Medicare cost. Congress will have to 
act at that point. The Medicare beneficiaries are not going to 
be able to step up to cover these costs without causing 
calamity with their own personal finances. And the United 
States has an aging population, thus there are more and more 
people being covered under the Medicare program. The Social 
Security Old-Age and Survivors Insurance Trust Fund by 2034, 
which is not much further, would only have enough to pay 77 
cents on the dollar of scheduled benefits.
    I do not think Congress or the American public would accept 
a 23-percent cut in Social Security benefits for a lot of 
people whose sole reliance of income is the Social Security 
system. As I testified before the Senate Aging Committee, 
people are not saving much on their own. Some people with high 
incomes are doing well, but a lot of people are not. And so 
there is not a savings. The Federal Reserve----
    Senator Braun. Social Security was what percentage of 
benefits once you crash it in 2034?
    Mr. Dodaro. Social Security will only be able to pay 77 
percent.
    Senator Braun. Okay.
    Mr. Dodaro. That is for the Old-Age and Survivors Insurance 
Trust Fund. The Disability Insurance Trust Fund is different. 
But the Old-Age and Survivors Insurance Trust Fund, is, the 
main one that people rely on for income, tens of millions of 
Americans rely on that system.
    There are inflection points that will force Congress to 
act. The message that I have been trying to convey is the 
longer you wait, the more draconian the changes are going to 
have to be. Congress will not be able to phase them in over 
time.
    With Social Security, there are a lot of proposals and some 
bills that have been introduced in the Congress to solve it. I 
will not say it is easy to solve, but compared to health care, 
I think it is more solvable. But the sooner Congress acts, the 
sooner you allow people to adjust their own circumstances.
    The fourth issue I would bring up that will cause action 
will be the rise in interest rate costs. Even at the current 
low interest rates the cost on federal has gone up $113 billion 
in 2 years, from 2017 to 2019. So it is up to $376 billion 
right now, up from 263, so even in a low interest rate 
environment costs are growing. And 61 percent of the federal 
debt we have, debt held by the public, which is almost $17 
trillion, will have to be refinanced over the next several 
years. The Federal Government is not only financing $1 trillion 
of new debt every year; it has to refinance old debt.
    Interest rates are still low, but that may not always be 
the case. The flight to safety helps Treasury securities, but 
on the other hand, 40 percent of our debt is held by foreign 
interests, China and Japan primarily, but a lot of other 
countries. I do not know if the United States will continue to 
be able to rely on that as a source. The more that the Federal 
Government takes up of deficit financing, the less investment 
there is for the private sector investment. So it will have a 
dampening effect on economic growth over time.
    These things are almost like a cancer that you have that 
you cannot see and it is eating away at the Federal 
Government's ability to maintain long-term stability and 
strength in economy and have the flexibility to deal with 
things like natural disasters or, the pandemic that the United 
States is dealing with right now that is going to cost a lot 
more money and potentially damage the revenue stream to the 
Federal Government. It will be a double whammy. Costs will go 
up and revenues will go down.
    And so, there has to be more fiscal room to deal with these 
issues in the future and to deal with these major entitlement 
programs. And so that is the scenario I see.
    There will be other unforeseen events like the current one 
that are going to come up as well. But if there is a spike in 
interest rates, the United States is going to be in a bad 
situation.
    Senator Braun. Thank you.
    Chairman Enzi. Thank you for your questions, and I 
appreciate you mentioning the surprise medical bills. I always 
try to make a distinction there. The surprise medical bills are 
when people receive a bill that is much bigger than their 
insurance company is going to cover. But one that would solve a 
lot of problems for people is prompt billing, and I have a bill 
that originally would have required the hospitals to give you a 
list of services you got as you leave the hospital, no amounts, 
just so you can check and see if that is what you really got. 
And then within 30 days fill in the amounts and you can check 
them off so you can see whether they are paid or not. They told 
me that 30 days was not sufficient, that it ought to be 45, 
then they moved it to 60. And I agreed that we could do it in 
60. With computers, they ought to be able to give you the 
amounts as you leave the hospital except for those that are 
outside of their list of providers. But they want 90 days now. 
If businesses had that same kind of a billing process, they 
would all be out of business. So thanks for bringing that up. 
And, again, I appreciate all of the great answers that you 
give.
    Your report points out that our growing debt-to-GDP ratio 
means a current Federal fiscal path is unsustainable. As you 
mentioned in your testimony, the budget process reform bill 
this Committee reported to the Senate last November uses debt-
to-GDP target as a metric in measuring how well Congress is 
adhering to the fiscal blueprint.
    Could you discuss the benefits of establishing a shared 
fiscal target, particularly the debt-to-GDP target?
    Mr. Dodaro. Yes. First, the debt-to-GDP ratio is a well-
recognized international standard of a country's ability to 
repay their debt, and a lot of other countries use it as fiscal 
targets in combination with fiscal rules and operating 
procedures.
    I think it is terribly important--Mr. Chairman, in your 
opening remarks, you mentioned that 2021 is the last year that 
the Budget Control Act mandates caps on discretionary spending. 
Once that goes away, there really are no guardrails, there are 
no guidelines, there is no Federal policy as to how much debt 
to take on as a country. And without a debt-to-GDP ratio, there 
is no plan, and I think it would mean that the deficit and debt 
situations will grow unchecked. And I think that that is a 
really dangerous, dangerous path.
    I think having a target, having a glide path, as you 
outline in your plans, where you can check it along the way, 
having some operational rules on controlling expenditures over 
a period of time is important. And there has to be some effort 
to deal with mandatory spending and the entitlement programs. 
Congress have to look at the revenue side of Government, and 
this was the weakness, in my opinion, of the Budget Control 
Act, that it only focused on discretionary spending, which was 
not the main driver of the deficit and debt situation. And, 
that is where long-term investments are made, too, in 
infrastructure and other areas. It brought in different 
dimensions but it did not solve the long-term problem, nor does 
it really provide the proper framework for investment decisions 
that need to be made by the Federal Government.
    Having the debt-to-GDP and some fiscal rules to accompany 
it is a good approach.
    Chairman Enzi. I appreciate those comments, and 
particularly your mentioning revenue and spending, there has 
got to be something done in both those categories.
    Senator Van Hollen.
    Senator Van Hollen. Thank you, Mr. Chairman. Welcome, Mr. 
Comptroller.
    I wanted to ask you a couple questions about strengthening 
the Impoundment Control Act. In the bill that passed out of the 
Committee, the Bipartisan Congressional Budget Reform Act, we 
had a bipartisan amendment that I proposed that was adopted to 
do that. As you know, Congress currently faces a very real 
problem with our budget process, and that is the process for 
ensuring that when Congress appropriates funds, they are 
actually spent as Congress directed. And the Impoundment 
Control act creates the process by which a President can notify 
Congress if he is deferring funding temporarily, which is 
allowed only in limited circumstances, or the President can 
propose rescissions for funding that he believes or she 
believes are no longer needed.
    One of the provisions in the amendment that was adopted by 
the Committee would require the Office of Management and 
Budget, OMB, to publicly disclose their apportionments. So in 
order to prevent agencies from overspending their 
appropriations, Federal law gives OMB apportionment power to 
control when appropriated funds are released to agencies.
    So my question is: If OMB publicly disclosed their 
apportionment actions in real time, would that provide 
information to you at GAO that could help you enforce the 
Impoundment Control Act?
    Mr. Dodaro. I think additional disclosures would be helpful 
in that regard. I would ask Mr. Chairman, with your permission, 
for two things.
    One, yesterday Tom Armstrong, who is accompanying me here 
to the hearing, testified before the House Budget Committee and 
outlined all the suggestions we have for strengthening the 
Impoundment Control Act. So I would ask that his testimony be 
entered into the record of today's hearing, with your 
permission. And, also, I would like Tom to elaborate on my 
answer, if that is okay.
    Chairman Enzi. Not only with permission but with 
appreciation.
    [The testimony of Mr. Armstrong follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Van Hollen. Thank you, Mr. Chairman. And maybe what 
we could do is, instead of my going through each of these 
questions, if it is okay with you, Mr. Dodaro, the General 
Counsel could just quickly tick off those key elements that you 
mentioned the other day, because we are working on bipartisan 
legislation now to try and make sure that we strengthen the 
ability to enforce the Impoundment Control Act.
    Mr. Armstrong. I am very happy to. Good morning, everyone.
    I do think that requiring OMB to publicly post the 
apportionment schedules and the reapportionments, because 
during the course of a fiscal year, they engage in 
reapportioning activities as well. I think something else that 
they could do would be as they apportion funds, they could send 
the apportionment schedules to this Committee, to House Budget 
Committee, to the Appropriations Committees, and to the 
committees with oversight of the programs that are funded by 
that appropriation in that apportionment schedule.
    Another thing that would help us carry out our 
responsibilities under the act is if the act is amended to 
require OMB to provide more detailed information when the 
President submits a special message proposing a rescission or 
proposing a deferral. That helps us hit the ground more quickly 
and move on these things more quickly.
    A couple other things that we would suggest: We had a 
situation a few years ago where there was a proposal that the 
administration could propose rescissions during the last 45 
days of the fiscal year of funds that would expire by operation 
of law at the end of the fiscal year. And we issued a decision 
saying that there was no authority to do that. If you make that 
clear in the act, I think that that would be helpful.
    The consequence would be, if a President were to engage in 
that kind of activity, that a President then would effectively 
rescind money that Congress has appropriated but without any 
action by Congress. The reason I ask that you might think about 
legislating that is there has been some back-and-forth between 
my office and OMB and OMB advising General Counsels of 
executive agencies that they can disregard GAO's decisions. So 
you can reinforce the decision. You can make it clear 
legislatively.
    And a final thing that we would recommend--and I do not 
mean this to sound too draconian, but the Anti-Deficiency Act 
has penalties for violations of the act. You might consider 
penalties for violating the Impoundment Control Act as well 
like the penalties in the Anti-Deficiency Act. When I say that, 
I am not trying to pound on civil servants. I, like the 
Comptroller General, have been a civil servant for more than 40 
years. I am suggesting that those penalties do get attention, 
and they do act as a deterrent. And I will tell you that in my 
office we provide a lot of appropriations law training to 
executive agencies and executive officials. And when we talk 
about the Anti-Deficiency Act, one thing that somebody always 
says in the class is, ``I do not look good in an orange 
jumpsuit.'' They want to make sure that they are in compliance 
with the law. And collateral to imposing penalties I think 
would be to expand the officials of the executive branch who 
have a statutory right to come to GAO for a decision. Right now 
heads of agencies and agency components have that right. But if 
you make it available to budget officials, to program 
officials, to contracting officers, I think you will get more 
attention to it.
    Senator Van Hollen. Thank you. I appreciate that. I will 
have some questions for the record about also your ability to 
expedite any lawsuits that you might bring in the event that 
you identify a violation of the Impoundment Control Act.
    Mr. Dodaro. Well, that would be very helpful because there 
is the 25-day period, impedes our ability to act quickly.
    Also, if you could make clear in the amendments that when 
there is a GAO request for the agency's legal basis for 
withholding the money, they expeditiously give us a response. 
We have had some cases where we have not gotten a response in a 
timely manner or not a response at all. And I think that that 
is detrimental to our ability to help Congress enforce its 
power of the purse.
    Senator Van Hollen. I appreciate that.
    Mr. Chairman, I hope to work with you and other members on 
this because we all have an interest, I think, regardless of 
party, in making sure that executives, Presidents, whoever they 
may be, you know, comply with the law with respect to 
appropriations. I think we have a shared interest in making 
sure that happens. So thank you.
    Chairman Enzi. I will look forward to the answers to your 
more technical questions, which I appreciate you putting in 
writing, because that will be more helpful to us, too.
    Senator Van Hollen. You are welcome.
    Chairman Enzi. I want to thank you for including that 
amendment. One of the reasons that it is imperative that we do 
the budget reform is at this point in the election cycle we 
have the same reasonableness that we had 4 years ago when we 
did not know who was going to be the President or who was going 
to be the majority. And so everybody was reasonable, and we had 
a series of about 12 bills that I thought could have passed by 
unanimous consent that could have solved a bunch of these 
problems. And now we have one bill that is not going to move by 
unanimous consent, I am sure, but hopefully is bipartisan 
enough that we can get it through. And it includes the 
specifications to make sure that the purse strings are in the 
control of Congress. So I appreciate your efforts on that and 
for joining us on the bipartisan part of that. I think that all 
of these things are absolutely essential for us to get done 
before the next election. Thank you.
    I will continue with some questions. I wanted to make it as 
expedited as possible for the members that showed up, and I 
appreciate Senator Grassley and Senator Braun for covering the 
trust fund aspect. We did not mention the Highway Trust Fund, 
which is going to be depleted in 2 more years, but talked about 
Medicare and Social Security and some of the other trust funds. 
It kind of fascinates me. When I came here, there was a trust 
fund for abandoned mine lands, and Wyoming had some of those 
abandoned mine lands and had been paying into it with the coal 
money for a long time, and we had never gotten any of the money 
to solve any of it. So when I got here, I said, ``So how do I 
get that money released?'' And they said, ``Well, you will have 
to put some money in the fund in order to take money out.'' I 
never heard of a trust fund like that. So we actually did get 
the money moving, but these trust funds do not have any money 
in them. That is one of the things that bothers me.
    Mr. Dodaro. Yes, the Highway Trust Fund we did talk about. 
That is very devastating to our ability as a Nation to deal 
with aging infrastructure issues and transportation 
requirements. CBO estimates we will need about $188 billion 
between now or when the funding expires through the Fixing 
America's Surface Transportation (FAST) Act to 2030 in order to 
maintain Federal spending over that period of time. So we keep 
a list of all the highest-risk areas across the Federal 
Government. We have had financing surface transportation on the 
High-Risk List since 2007. This is an issue that has to be 
solved, hopefully, in order to make sure we make the necessary 
investments that are critical to economic activity. It is not 
just the traveling public. It is important for commerce.
    Chairman Enzi. Yes. Getting goods and services around and 
getting tourists around is pretty critical, and that is all 
involved in that infrastructure. And I do remember that 
Simpson-Bowles said that it needed to be raised, that the gas 
tax needed to be--the user fee for gas needed to be raised a 
nickel a year for 5 years and then adjusted to the cost of 
inflation. And we did not pay any attention to that. I even 
tried one for just the cost of inflation. But that is why that 
trust fund is running out of money, I think technically is out 
of money.
    On the CFO Vision Act that you encouraged us to do and that 
we have put in--and I am pleased we are not finding any 
opposition to it yet, but we do not have it passed, and I 
appreciate the many Senators that are cosponsoring that now. 
But could you discuss the role that the agency CFOs play in 
ensuring that fiscal sustainability and any areas where 
updating the current law could help the agency managers?
    Mr. Dodaro. The CFOs are really at the epicenter of fiscal 
stewardship within the individual agencies and departments. 
Upgrading, modernizing the act will help in a number of 
respects. One is that it will give all CFOs the budget 
formulation responsibility as well as monitoring budget 
execution. This will put them more central in decision-making 
on how to save money and link, as you mentioned in your opening 
statements, costs and performance data. Right now not all CFOs 
are involved in that kind of decision-making and tradeoffs 
about investments or where money could be saved, how to get the 
same performance at lower cost. If they are not involved in the 
formulation of the budget submissions, they are really missing 
out on playing a key role in decision-making.
    Also, I think they could play a more significant role in 
the modernization with improper payments. The last time I was 
here, Senator Braun mentioned that it seems like we are growing 
improper payments rather than solving them, and they have 
certainly gone up. Since I was here last year, the annual 
estimate has increased $24 billion, and this is not a complete 
estimate. So this is a big problem. But the CFOs could be more 
involved in that.
    And then also, Mr. Chairman, as you pointed out, there are 
a lot of antiquated Federal systems where agencies cannot make 
timely decisions. And the CFO Act revisions that you have set 
forth would provide for more modern financial systems to help 
agencies make better decisions. So it will strengthen the CFOs' 
ability to help manage the costs of Government better, not just 
account for the money but manage the costs.
    To help in this regard, I have had conversations with a 
number of House leaders of the committees that would have 
jurisdiction over the CFO Act refinements to help lay the 
groundwork on the House side, to hopefully expedite getting 
this done this year.
    Chairman Enzi. I thank you for that and the suggestion that 
we needed better continuity and succession on those CFOs, too.
    You also brought us the necessity for having a Federal 
program inventory. We are continuing to push OMB to implement 
its requirement to publish an inventory of Federal programs, 
because we need that timely information. It seems that people 
would rather not know what our return on investment is from 
some of those programs. Who needs to do what in order for us to 
make progress on that Federal program inventory to start 
getting better linked cost and performance data? So far we are 
not having success.
    Mr. Dodaro. Yes. OMB is really the main actor here and 
needs to publish and make transparent what the approach should 
be for developing the program inventory. In the past they have 
let each agency decide on their own what is a program, and, 
therefore, you do not really have a consistent inventory across 
Government to identify overlap, duplication, and fragmentation. 
It takes us a lot of time and digging in order to recommend 
issues to the Congress in this area. It should be totally 
visible. And we have been pushing OMB to move. They have moved 
recently to try to do this. But they are the ones that need to 
act to develop the inventory, and they are at the locus of 
responsibility with the agencies in order to give them guidance 
so that it is consistent across Government.
    Many of the management reforms Congress has passed most 
recently, the Digital Accountability and Transparency Act 
required financial standards to be consistent across Government 
and to require publication of all Federal spending. As you 
pointed out in your opening statement, if you know where the 
spending is, you know where the programs are. And so they 
should use this information as a starting point. And we have 
also given them a taxonomy of how they can approach the 
development of the inventory that I think will be helpful for 
them to use. Continued pressure on OMB is key. I have sent a 
letter to the Director of OMB every year emphasizing the 
importance of moving in this area, and last year finally they 
started to show some signs of life in this area. I hope that 
they will follow through.
    Chairman Enzi. I heard two things that I think startle 
America. One is that we do not have a list of programs that we 
have, and the other one is that we do not vote on mandatory 
spending. Seventy-three percent of the budget, it is just out 
the door without anybody looking at it, apparently.
    Which brings me to another thing that you have been 
suggesting, which is the portfolio budgeting. A number of 
members of this Committee have recognized the need for this, 
and I always use the example of the housing programs, 160 
programs over 20 agencies with nobody in charge, nobody setting 
goals, and a bunch of the programs that have not been looked at 
in years. So we are pretty sure that we are employing people to 
do that. We are just not sure that anything is happening out in 
the real world.
    So you touch on that in your report, and a good portion of 
the Nation's spending is devoted to the programs within the 
portfolio areas that are covered by more than one Budget 
Committee. I do remember when I first got here I found out--
Senator Kennedy and I were Chairman and Ranking Member, and we 
found that there were 119 preschool programs. And we started 
looking at them and found a whole bunch of duplication, and we 
were able to get that down to 45. But the reason we could not 
get it below 45 is they were not in our jurisdiction, which is 
the problem that we have with a lot of these things. But a good 
portion of the spending is devoted to programs in these multi-
areas, and our Committee's budget process directs GAO and CBO 
to review certain portfolios of spending on a periodic and 
repeating basis. Will this new structure help improve oversight 
and provide better stewardship of taxpayers' dollars?
    Mr. Dodaro. Absolutely. I think it is very important, the 
work that we do in overlap, duplication, and fragmentation. We 
will produce our tenth report in this area. As I mentioned in 
my opening statement, that has already saved $262 billion, and 
there are tens of billions of additional dollars that could be 
saved. Our High-Risk List is somewhat of the beginnings of a 
portfolio analysis. But you also would be able to look at not 
only Federal spending in a particular area, say housing or the 
STEM area--science, technology, engineering, and math--and look 
at tax expenditures in addition to Federal programs. There is 
$1.3 trillion of estimated tax expenditures that get no 
scrutiny every year. We do not know whether they are solving 
the problem, whether there is overlap or duplication between 
the Federal programs and activities.
    One example we highlighted in our first report on overlap 
and duplication was the ethanol tax credit, but there was also 
a renewable fuel standard. And while the tax credit might have 
been needed in the beginning to get started, once the standard 
was put in place, you did not need both. Congress let the tax 
expenditure expire. That saved almost $6 billion a year. But 
unless you look at spending, tax expenditures, contracts and 
grants in a portfolio fashion across the Federal Government, 
you are not able to frame the type of decisions that need to be 
made to streamline Government and make it more efficient and 
effective.
    So I am very supportive of the portfolio. We stand ready to 
implement that.
    Chairman Enzi. Thank you. And Senator Whitehouse 
particularly will thank you for mentioning tax expenditures, 
which gets into kind of a revenue situation, too.
    My final question--Senator Braun, did you have some 
additional questions?
    Senator Braun. When you are done.
    Chairman Enzi. My final question will be budgeting for 
emergencies if I did not ask you. It has been on everybody's 
mind lately. We just keep passing everything as an emergency 
proposition so that it does not go against any numbers, but it 
goes right to the debt, and we are doing that with coronavirus 
right now. It is providing millions of dollars in supplemental 
appropriations to respond to a crisis, and undoubtedly more 
will be on the way. While we cannot predict with exact 
certainty where and when these types will strike, I think the 
Congress could do a better job of budgeting for emergencies.
    How do you think the Federal Government can improve the way 
that it budgets for emergencies? Does the reality that the 
Federal Government needs to respond to these types of 
emergencies mean that we ought to find some way that we are not 
driving up the deficit as we do it with emergency spending?
    Mr. Dodaro. There are several opportunities to improve the 
budgeting and management of preparedness for natural disasters, 
pandemics, or unforeseen events. Number one is to provide 
funding for a quicker response. Congress, at the request of 
experts and others, established, for example, a public health 
fund. But the amount of money that was put in there has quickly 
evaporated and, thus, has to be replenished.
    If you could make a quicker response, the faster you can 
respond, the more you can bring down total cost of handling 
whatever disaster it is or pandemic or whatever, having an 
ongoing investment could enable a quick response so Congress 
does not have to do a supplemental. The agencies could move 
immediately.
    Second is in preparedness. The Federal Government has spent 
tens of billions of dollars to provide money through FEMA for 
local jurisdictions to improve their preparedness. FEMA still 
does not really have a way to determine whether people are 
prepared or not, and we have made a number of recommendations 
in that area that they try to come up with a better measure of 
preparedness. When making an investment the size that the 
Federal Government has made, we should know whether it is 
better prepared or not over a period of time. And so that is an 
issue.
    Third, I would suggest the way budgeting could be improved 
is to build more resilience in at the State and local level to 
provide Federal incentives for building codes and structures 
and investments in public health systems. There has been a lot 
of discussion recently about how many intensive care beds there 
are, how many ventilators, and how many other types of things 
that are needed. We have had a number of relevant 
recommendations.
    For example, in 2015, we recommended that the Department of 
Transportation develop a strategy for our airline industry in 
dealing with pandemics and communicable diseases. And so far 
the Department of Transportation has done nothing. Five years 
later, we are in the midst of a pandemic, and a lot of this 
happened because of the global transportation system, and 
people movement, and that is normal, but the Federal Government 
needs to have a better system. We have been urging that for a 
number of years, and I hope that this finally creates the 
incentive for it to be created in conjunction with HHS and the 
Department of Homeland Security. If the Federal Government is 
not prepared and is scrambling, and it does not make good 
decisions, the public will lose confidence in Government 
because it is not prepared.
    In summary, the Government needs to provide a means for a 
quick response, assess the return on investment for 
preparedness, have better planning to build resilience in up 
front, particularly at the State and local level, provide 
incentives, and better climate information so they could plan 
better. And then, lastly, I would say there is a need to sort 
out what emergencies the Federal Government should or should 
not participate in and whether or not there should be others, 
State and local governments or even the private sector, 
whatever, that should step in. We have had outstanding 
recommendations for years regarding the criteria for when the 
Federal Government decides to declare a national emergency 
which has never been fully adjusted. It is still based on a per 
capita income level that has not been adjusted for inflation 
since 1980. There has been some adjustment in later years, but 
not fully. And, we calculated if you just adjusted it for 
inflation, the Federal Government would have participated in 
about 40 percent fewer disasters because there could be more 
effort at the State and local government.
    Congress has required FEMA to come up with the new 
criteria. It should be available later this year if they adhere 
to their schedule. But this is very important, too, from a 
Federal Government standpoint with FEMA, because the more 
disasters they are involved in, the further they are stretched 
across their capabilities, and they do not really then have the 
workforce they need if there is a major disaster that only the 
Federal Government can help respond to.
    Those are my suggestions, Mr. Chairman, and I think there 
is plenty of room for improvement in budgeting for these 
issues.
    Chairman Enzi. A lot of great ideas.
    Senator Braun?
    Senator Braun. Thank you.
    Last year we talked about improper payments. We did get a 
bill across the finish line, Senate bill 375, Payment Integrity 
Information Act, which was motivated by what Senator Johnson 
and I heard last year and then Senators Carper and Peters 
joined in on it. So it does raise the profile and enables the 
various agencies to look harder for what ought to be obvious. 
So at least something happened based upon your drawing 
attention to it.
    Income. I do not know how closely you pay attention to the 
income side of it because, obviously, we have no political will 
here. Senator Van Hollen said that is the essence of why we 
keep doing what we are doing. That was last year in one of the 
Budget Committee meetings. I am interested in are we at the 
sweet spot of revenue generation in the sense that I know 
when--and I felt it was really going to drive the economy when 
tax reform in December of 2017--first of all, I do not think 
big corporations really needed much help because they had a 
nominal of 35 with an effective rate of 18 percent. So they are 
already under the new nominal rate of 21 now. But Main Street 
USA, proprietorships, partnerships, LLCs, Sub-S's, we went from 
39.6 to 29.6, and I think that is almost solely the driver when 
it comes to how hot the economy is, oftentimes not mentioned. 
We are up 7 percent in revenues the first 5 months of the 
fiscal year, still spending more than that, and, of course, the 
GDP is maybe growing, too, to 2.5. So we really did something 
with the tax policy.
    Do you interact with the CBO and OMB about the revenue 
side? And the only place I would be aware that you could tax to 
generate more revenue, I do not think it would raise more than 
$100 to maybe $200 billion max, which does not get into the 
structural deficit, would be on high liquid incomes from either 
the investment side, probably mostly, as well as 1099 and, you 
know, W-2 folks that benefit from big paychecks. How can we 
make the case that at some point we have got to focus on 
spending, but I do think we are ever going to get to that 
unless we honestly look to see if there is some way to generate 
revenue without tanking the economy?
    Mr. Dodaro. There are several things. A lot of the tax 
policy issues, are the jurisdiction of the Joint Committee on 
Taxation, CBO, Treasury. We do not enter into that fray very 
often unless we are looking at a specific request from the 
committees. But where we do enter in is in tax administration 
and tax gap. I have mentioned this before. There are new 
estimates out now from Internal Revenue Service (IRS). There is 
$441 billion gross tax gap, annual tax gap, and net is about 
$381 billion. They expect to collect----
    Senator Braun. Do you want to define that, the tax gap?
    Mr. Dodaro. This is the gap between taxes owed and taxes 
paid, and there are several reasons----
    Senator Braun. A collections issue.
    Mr. Dodaro. Yes. The main reason is underreporting of 
income. Secondly is there is adequate reporting but they are 
not paying. And then the third category, the smallest 
category----
    Senator Braun. Isn't that all against the law?
    Mr. Dodaro. Yes, and they are not filing as well. So the 
tax gap has been on our High-Risk List for years.
    There are several things that we think Congress could do, 
and we have open recommendations here. And this would not raise 
taxes on anybody. This is just collecting what should be 
collected under----
    Senator Braun. And what is that figure again?
    Mr. Dodaro. The net tax gap is $381 billion annually.
    Senator Braun. So about 38 percent of our deficit.
    Mr. Dodaro. Yes. So it is a big number. If you consider 
that and $175 billion going out the door in improper payments 
that should not be going out the door--while this is not going 
to solve our problem long term, it will make adjustments to do 
so a lot easier. And one is to regulate paid tax preparers. We 
found that the paid tax preparer error rate is higher than when 
people prepare their own taxes in some areas, particularly in 
the earned income tax credit area.
    Second is to have more information reporting from third-
party sources. Where there are people that have their payroll 
taxes deducted or there is third-party reporting, the 
compliance rates are much better than they are when there is no 
third-party income reporting. We have outstanding 
recommendations in this area.
    Senator Braun. So that would be two things, if we just did 
it with some efficiency, you could bridge a lot of the deficit. 
What about getting back to the question of the sweet spot of 
taxation? Is that something you----
    Mr. Dodaro. No.
    Senator Braun. I know you do not--do you ever think about 
it outside of what your job is?
    Mr. Dodaro. I have plenty to think about for my job, I 
really have not thought about that.
    Senator Braun. Okay. So if we would just focus on--and if 
you take that $381 billion--that is a big figure.
    Mr. Dodaro. Yes.
    Senator Braun. Other than regulating or monitoring tax 
preparers, is there anything else?
    Mr. Dodaro. You can give IRS what is called ``math 
authority,'' where they have administrative records that show 
that when they get a return, and it does not match the data 
that they have, they could make an adjustment right then and 
there and not have to go through a detailed audit. And if the 
taxpayer thinks that it is not right, then they can enter into 
a discussion with the IRS.
    But I would say, too, on the expenditure side, though, just 
so you understand on the improper payments, there is 
legislation that has been introduced here, too. A big problem 
is we are paying people that are not eligible. In some cases we 
are paying people who are deceased. And one of the reasons is 
that the Social Security Administration will not share the 
total Death Master File with the Treasury Department. And so 
there is a piece of legislation--Senator Kennedy, who is on 
this Committee, we talked about this last year. That would help 
a lot.
    The other thing is on Medicaid. I think the Congress really 
needs to focus on this because the estimate this year jumped 
because they had not looked at beneficiary eligibility since 
the Affordable Care Act started to be implemented in 2014. For 
5 years, CMS did not review eligibility, when they reviewed the 
first 17 States it jumped up to $20 billion, and they are going 
to do the other States in thirds. So that number is going to 
continue to grow.
    Senator Braun. One final question. Do you interact with the 
CBO at all in terms of their forecasting to see if that makes 
sense or not? I know they forecasted $1.5 trillion over 10-year 
negative impact from the Tax Cut and Jobs Act of 2017. To me it 
does not look like that is happening, and if you look at this 
most recent information, do you ever get involved there to make 
sure that that information that is out there has some integrity 
to it?
    Mr. Dodaro. No. We leave that up to the Budget Committees.
    Senator Braun. Okay.
    Mr. Dodaro. Because I do not want to get into the business 
of competing forecasts with CBO.
    Senator Braun. Okay. Thank you.
    Chairman Enzi. And some additional information on that. We 
had problems with the Affordable Care Act getting information 
quickly enough to be able to do amendments because of a dynamic 
approach and trying to anticipate what the change would make 
from a financial standpoint. So when we did the Tax Cut and 
Jobs Act, we said imagine that it will have no effect 
whatsoever on the economy, even though we know that it would, 
and score everything that way. That is where the $1.5 trillion 
deficit comes from, recognizing from economists that there was 
going to be some effect on the economy, and we hope that it is 
$1.5 trillion. And I know that the money has been coming in in 
excess of what we had before. But we will have to go 10 years 
before we know whether we were correct--whether the economists 
were correct in their guesstimate on how much that would be.
    I want to thank you again for appearing here. I have a list 
of ideas that you passed out that we will see if we can get 
into reality. I have always been an advocate that if we could 
quit doing things comprehensively around here and take them one 
little problem at a time and do an understandable solution to 
that one step, we ought to be able to pass a lot of things out 
of here maybe by unanimous consent. Our problem is that we 
always want to tuck some other things in there that are very 
controversial and wedge them through along with something that 
is essential, and it leads to a lot of disasters. But I cannot 
thank you enough. You present one idea after another that is 
grounded in reality from your years of experience, and I am 
always amazed at the breadth of your knowledge. I have got 
pages of things here, and I know that neither you nor I want to 
be a prophet. We want to be a solution. And there is a lot of 
doom and gloom out there if we do not make some changes. So we 
need to be some problem solvers.
    I did not ask you about capital budgeting. I am still 
pressing for that and hoping that we do not wind up with a 
spending virus around here. It has to be a crisis before we 
will do anything about it, so maybe that will move it into a 
crisis stage.
    Again, thank you for being here, and that concludes our 
hearing. If anybody has written questions that they want to 
submit, they should do that by the close of business tomorrow. 
And we have always appreciated your rapid response and answers 
and the expertise that you bring to this. Thank you.
    Mr. Dodaro. Thank you.
    Chairman Enzi. The hearing is adjourned.
    [Whereupon, at 11:46 a.m., the Committee was adjourned.]

                 ADDITIONAL COMMITTEE QUESTIONS

    [The following submitted questions were not asked at the 
hearing but were answered by the witness subsequent to the 
hearing:]

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