[Congressional Record Volume 145, Number 158 (Wednesday, November 10, 1999)]
[Extensions of Remarks]
[Pages E2319-E2326]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E2319]]



SPECIAL ORDER OF MR. SCHAFFER, OMITTED FROM THE CONGRESSIONAL RECORD OF 
                       TUESDAY, NOVEMBER 9, 1999

                                 ______
                                 

 FINDING ONE CENT ON THE DOLLAR WORTH OF SAVINGS IN FEDERAL GOVERNMENT 
                                SPENDING

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Colorado (Mr. Schaffer) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. SCHAFFER. Mr. Speaker, tonight I want to spend this special order 
hour talking about two primary topics, one closely related to the 
second. That first topic is trying to eliminate waste, fraud, and abuse 
in the Federal Government and in Federal spending.
  I want to start out, Mr. Speaker, by alerting Members to a brief 
history lesson on where congressional overspending has gone over the 
last 30 years. In fact, going back to 1970, Members can see the line 
below the baseline here is the amount of money that the Congress has 
spent, money that it did not have. This is deficit quantity spending.
  Back in 1970, we began a dangerous habit and trend going down here in 
1976. Here we were at almost $100 billion in deficits. We continued to 
drop and drop, spending more and more without regard to the cash that 
was on hand for the Federal government. We can see here in 1982 and 
1986 the height of Democrat control of Congress was when we were on a 
virtually spending spree here in Washington.
  Then when deficits got at about their worst, down in this area, that 
is about the point in time that the American people changed their mind. 
This is when the Republican revolution took place. Americans were fed 
up with a Congress that year after year after year, from 1970 right on 
up to the 1992-1993 fiscal years, had spent more money than it had on 
hand, in fact, borrowing from my children and the children of every 
other American in order to appease the spending appetite and habits of 
Washington.
  That ended at about this point here. We can see the line beginning to 
go up when a new idea, a new party was put in charge with majority 
status in Congress. Members can see when we took over that the deficit 
spending began to ease, that we began to start moving toward a goal of 
spending the dollars that we actually had on hand to run the legitimate 
purposes of the Federal government.
  Back there in 1994 when Republicans took over the Congress, they 
promised in a great Contract with America that we would balance the 
budget by the year 2002. Well, we underpromised and overdelivered, 
because right here in 1998 was the first year in 30 years that the 
expenditures came above the line here of our baseline spending. In 
other words, we began to start saving money.
  This little purple section here represents a cash surplus that we 
began to accumulate here in Washington, D.C. It is this surplus that 
has allowed us to do a number of things. One, it has allowed us to stop 
borrowing the money. I would remind my colleagues, when we start 
borrowing money, spending more money than the Congress actually has to 
spend, we borrow it from somewhere, and the fund of preference for 
many, many years has been the social security system.
  In fact, this Congress and the White House has raided the social 
security trust fund, the social security system, to the tune of about 
$638 billion over a little bit shorter of a time frame. This goes back 
to 1984.
  Once again, we can take a look at where we were when we came here, 
and President Clinton continued, and this was the year of the tax 
increase, and the year that the Congress spent quite a lot of money, at 
the President's insistence.
  Again, in 1998, this Congress got serious about stopping the raid on 
social security. Members can see the dramatic decrease. This is not the 
final column of the graph here, this is an actual decrease in the 
propensity of Congress to borrow from the social security system. This 
is an effort to stop the raid on social security. Members can see that 
that does end right here, this year, in 1999, the first year we stopped 
raiding the social security system in order to pay for government.
  That is a trend we want to see continue. In fact, we want to see this 
line continue to go down further and build greater surpluses, including 
the social security fund. In order to accomplish that, we have to 
exercise some fiscal discipline right now, this year, in Congress. That 
is the debate that is taking place presently between the White House 
and the Congress.
  Here is one of the suggestions we came up with as a Republican 
majority to avoid raiding social security, as the President has 
proposed to do. We have proposed that of the increase in spending that 
we have budgeted for this year, that we just tighten our belt a little 
bit. For every dollar in Federal spending, we are asking the Federal 
government to come up, the Federal bureaucrats and the Federal 
agencies, to come up with one cent in savings, in efficiency savings, 
in order to help rescue the social security fund and to stop borrowing 
from the social security system.
  We want to stop that raid. We think that out of every dollar that is 
spent in Washington, we can find that one cent in savings and continue 
to run the legitimate programs and the legitimate services that are 
needed and necessary under our Federal system, and do it in a way that 
allows us to save social security at the same time. That is what that 
one penny on the dollar represents.
  When we suggested this idea, folks over at the White House almost had 
a heart attack. They said, one penny on the dollar? We cannot possibly 
come up with one penny on the dollar in savings, because that would 
cripple the Federal government, finding this one cent in savings.
  Therein, Mr. Speaker, lies the difference between the Republican 
majority in Washington and the liberal Democrat leadership that we find 
down at the White House. We believe that the government can do what 
every American family does every day, work a little harder to find that 
one cent savings, to just simply start realizing that we can be more 
efficient and more effective with a whole assortment of Federal 
programs to find that one cent.
  Again, it was a little frustrating but not surprising here in 
Washington to hear the various Cabinet secretaries say, we cannot find 
that one penny on the dollar. All of the Federal departments are so 
efficient, so lean, so effective, so accountable with their dollars 
that we cannot possibly find the savings necessary to save social 
security.
  So we, as Members of Congress, decided that we would take it upon 
ourselves to help. That is the point of today's special order. I 
appreciate Members going through that brief history with me about how 
it is we came to the position we are in. It is a very relevant and 
important position to consider, because at this very moment the impasse 
in passing a budget hinges on the difference of opinion between this 
Congress and that White House to find that one penny, and do it in a 
way that honors and respects not only the taxpayers of America but the 
children of America, who rely on a sound and credibly run government, 
and certainly the seniors, the current retirees who rely on social 
security.
  There are a number of great examples. One of our colleagues who I 
have been told was planning on joining us here issued a report out of 
his committee, and that report lists, assuming I can put my fingers on 
it, lists just agency by agency the savings that can be found.
  Here are some good examples. Here is the gentleman from California 
(Mr. Horn) who has arrived. In his report he

[[Page E2320]]

suggested that we could find savings in the Department of Agriculture. 
He cited examples in the Department of Defense.
  The Department of Defense spent nearly $40 billion on programs for 15 
overseas telecommunications systems that cannot be fully used because 
the Department failed to obtain proper certifications and approvals 
from the host nations. That is according to a 1999 Inspector General 
report.
  We found savings in the Department of Education, $3.3 in loan 
guarantees for defaulted student loans, according to one General 
Accounting Office audit. There is more. We will talk about more of that 
today. He found savings in the Energy Department, in the Health and 
Human Services Department administration, and so on and so forth.
  It is not hard to find savings, to find that one penny, if you are 
devoted to rolling up your sleeves and doing the hard work of finding 
the money. It is an important proposition, I suggest, for this Congress 
and for the White House. Rather than fighting over the relative merit 
of saving one penny out of a dollar to save social security, we ought 
to be joining in partnership and rolling up our sleeves together and 
getting down in the trenches at the Department of Education, in the 
Department of Defense, over at the Department of Energy, over in health 
and human services, and working together cooperatively to find all the 
efficiencies and savings that we possibly can to build a credible 
government for the future security of our children and for our Nation.
  Mr. Speaker, I yield to the gentleman from California (Mr. Horn), who 
has led the House through this investigation of where these funds may 
be found and pointed not only me but other colleagues in the direction 
that we ought to look in order to find some of these savings.
  Mr. HORN. Mr. Speaker, I thank the gentleman for yielding to me.
  We have a lot of work to do, and a lot of work has been done by 
Appropriations subcommittees, authorization committees, and the group 
which I chair is the Subcommittee on Government Management, 
Information, and Technology, which has jurisdiction across the 
executive branch. That responsibility includes ``the overall economy, 
efficiency and management of government operations and activities, 
including Federal procurement.'' [Rule X, clause 1(g)(6).]
  Let me provide some background on this, because a lot of people do 
not know it. Twenty years ago Congress established Inspectors General 
in every cabinet department and independent agency. In 1993, 
Republicans and Democrats worked on a bipartisan basis. All of these 
laws I am about to mention are bipartisan. Both parties worked 
together. Congress sought good management. Despite those attempts, the 
executive branch does not really have good management.
  We had the Results and Performance Act in 1994 and we said, ``look, 
we have to start measuring these programs. We sought to find what kind 
of results were these agencies having? Are they accomplishing the goals 
Congress established when we authorized the program, not to mention the 
appropriations which Congress annually provides.''
  We also had a look at not only how they do their programs, but also 
could they give us a balance sheet. And we said to the executive branch 
that they have five years before they have to give us that balance 
sheet. Well, the fifth year was up in 1998, and what we see here [shows 
chart] is the analysis we gave of the various balance sheets. In 1999, 
we thought the executive branch was a pretty sad situation. It is still 
pretty sad.
  There were only two agencies of the 24 major agencies and departments 
that could give us a decent balance sheet. The first was NASA, the 
National Aeronautics and Space Administration. Dr. Daniel Goldin is an 
outstanding administrator and a great visionary. That is a rare 
combination. The President has cut his budget several times, but 
despite that he gets first-rate people and they met all the targets 
that we had put out there.
  Next best was the National Science Foundation. Those were the two 
A's. Now we got to the B's, three B's: General Services Administration. 
That was recommended by the Hoover Commission under President Truman to 
consolidate all purchases of the executive branch to get various 
economies. Next, B-minus, was the Labor Department. They had two yeses 
on the three categories.
  Let me say what the categories were. Was the financial information 
reliable? Yes or no? They either made it or they did not make it, and 
that was a judgment of auditors from the General Accounting Office 
[GAO]. The GAO is a major asset to Congress. Under the Harding 
administration, Congress recognized that there was a need to focus on 
management and accountability. In the Budget and Accounting Act of 
1922, Congress put all the auditors accountants together in what is 
known as the General Accounting Office, That office is part of the 
legislative branch. It provide us with the tools to conduct oversight 
not just in accounting, but with the Reorganization Act of 1946, 
Congress also gave programmatic review authority.
  However, as long as Speaker Rayburn was alive and Clarence Cannon was 
head of the House Committee on Appropriations, they refused to let the 
General Accounting Office do anything in terms of program measurement 
review. ``Just stick to accounting,'' they said. Reality is that we 
need both. Thus, when we looked at the balance sheets from the 
departments and agencies, we examined then by asking a few basic 
questions. The first question was: ``Did the agency have a qualified 
opinion or not?''
  The second question was effective internal controls, ``Did the agency 
have them or not? Their Inspector Generals, which was the group I 
mentioned that started 20 years ago, do excellent work in noting what 
kind of things go wrong within a particular agency.
  The third question was ``Are they in compliance with the laws and 
regulations''? That would mean the laws of Congress, the executive 
orders of the President, and the regulations issued by the agency head. 
The answer is either yes or no. As I say, only two agencies met the 
three ``yes'' tests: NASA and the NSF. We are now in the B-minuses, 
they had two yeses, and that was GSA, Labor and the Social Security 
Administration. In the 1960s when I was on the Senate staff, most of us 
would say that the Social Security Administration was the best run 
administration in Washington, regardless which party is in power in the 
presidency. In brief Social Security gets the work done with about 43 
million checks a month here and 50 million there.
  Now, the C's start with the Department of Energy. They had a 
qualified accounting opinion. They did not have effective internal 
controls and they did have some compliance with the laws.
  Next is FEMA, the Federal Emergency Management Agency has been a very 
well run agency with James Lee Witt as Director. Most of the old timers 
here have said that Witt is the first person that ever knew what he was 
doing over there. Mr. Witt came from Arkansas with the current 
administration. I think most Members that have dealt with him know that 
he is right there on the spot and he and his staff want to be helpful.
  But on this point, accounting, can they give us a balance sheet? FEMA 
had one yes, two noes with the three criteria I mentioned.
  Next is the D-plus range. That includes Housing and Urban Development 
and the Nuclear Regulatory Commission. Health and Human Services, is 
also in the D-minus range. There is also a D-minus for the Treasury. 
The Agency for International Development and the Department of Veterans 
Affairs are next.
  Mr. HOEKSTRA. Mr. Speaker, would the gentleman yield? Could the 
gentleman just repeat what the Treasury Department got?
  Mr. HORN. The Treasury, I am just getting to it.
  Mr. HOEKSTRA. The gentleman went by it rather quickly and it was just 
like this is the agency that is kind of the watchdog agency for how all 
the other agencies spend their money and they got a----
  Mr. HORN. Mr. Speaker, the gentleman is right on that, and we can get 
into that because we have had numerous hearings on the Financial 
Management Service, a key agency that services other agency such as the 
Social Security Administration. But in terms of where Treasury was on 
this balance sheet, they received a qualified opinion. They did not 
meet any of our three

[[Page E2321]]

criteria. Thus, the Treasury has a D-minus. So was the Veterans 
Administration.
  And then we get to the F, the dunce cap category, which starts with 
the Agency for International Development, Agriculture, the Department 
of Defense, Justice, and the Office of Personnel Management
  Now, their balance sheets probably came in later, but they did not 
meet the statutory limit that was set back in 1994. At that time I was 
on the Committee on Government Operations [now Government Reform]. We 
knew that there would be two agencies that would never make it. One was 
the Department of Defense and the other was the Internal Revenue 
Service.
  Well, Mr. Speaker, we were surprised that the Internal Revenue 
Service did make it and they are an agency within Treasury. But 
Treasury has a lot of other problems. Hopefully, they are coming out of 
that now.
  This chart provides an overview based on that particular law. 
Congress has passed the so-called Cohen-Clinger Act, which was designed 
to liberalize the purchasing of Federal goods and services. And we also 
have the statute requiring the chief financial officer. That officer is 
to report directly to the head of the agency.
  We also required a chief information officer to be responsible for 
all computing and communications together under one person who would 
report directly to the Cabinet Secretary or the operating Deputy 
Secretary of the department.
  We voted for these laws because we felt that they would result in 
better management. These actions are somewhat like the city manager 
movement that started in the 1920s. The cities were a mess in this 
country. A political mayor would get into office and he put all of his 
relatives on the city payrolls. In Cincinnati, Ohio, the city manager 
movement started. Non-political professionals were hired to do the job. 
As was said ``Garbage is not Republican or Democratic, we just have to 
get the garbage off the streets and out of people's backyards.''
  This is the approach that we have taken. I run a very bipartisan 
subcommittee. The ranking Democrats since 1995 have been very 
cooperative and helpful in working on these management improvements. 
Congress can enact them, but the executive branch still limps along and 
does not face up to a lot of these management issues.
  An example, this was a Hoover Commission recommendation during the 
Truman administration. It was a good one, every department should have 
an Assistant Secretary for Management. That person would be a 
professional. We agree with that. So when we passed two more laws that 
required agencies to establish a chief financial officer and, later, a 
chief information officer, guess what some of the agencies did. They 
just added the two to an already overloaded Assistant Secretary for 
Management. That is nonsense. That was not what Congress intended.
  Mr. Speaker, in Washington, we need people who are willing to work in 
this town about 12 hour days and 6 to 7 days a week when they are an 
executive whether a political appointee or a senior civil servant. 
Those are the same hours we work on Capitol Hill. It takes that energy 
to get the job done, and the executive branch does not get the work 
done because the responsibility has been put under one person who 
cannot do one job well, let alone have two or three major jobs. That 
formula is made for failure. That is why the Treasury has had problems.
  Mr. SCHAFFER. Mr. Speaker, will the gentleman yield? The gentleman 
mentioned earlier that one of the key components and one of the newer 
components is the performance audit mechanism that we have in place 
now. This is not just a matter of auditing funds for the financial 
management and cash flow management of these various funds. We are also 
now looking through the Inspector General at the actual performance of 
agencies. How these individuals measure up when compared to the 
expectations of the country and the directives that come down from the 
chief executive, the President in this case, and whether they comply by 
the law in order to execute the duties that are put to them.
  This is an important provision as well, because it is Congress that 
establishes policy for the country, not the President. Congress passes 
the law. And these performance audits in my view seem to be a critical 
element not just in making sure that we manage the funds right, but 
that these programs are being run in a way that more closely 
approximates the objectives of this Congress and thereby the American 
people.
  Mr. Speaker, I would yield to the gentleman on that performance 
component of these audits.
  Mr. HORN. Mr. Speaker, the gentleman is absolutely correct. This is 
what I feel the most about, and I have had hearings on the Australian 
and New Zealand Governments. We have taken a team to look at what they 
have done. Those are two of the most reform governments in the world.
  It is interesting. They copied Prime Minister Thatcher, a 
conservative who made changes in the United Kingdom's government. But 
these were both socialist governments in New Zealand and Australia. 
After their election, they looked around at the fiscal situation and 
said, ``Wait a minute, we do not know how good these programs are, and 
it looks as we project our expenditures down the line, we are going to 
be in deep deficits.'' That is exactly what we have been in in the 
United States.
  Mr. Speaker, that was why in 1994, on a bipartisan basis, we put this 
performance and results law on the books. This is the tough one to do. 
Anybody can go out and develop a balance sheet if they have done their 
job right fiscally, but measurement creates a real problem. The only 
government in this country that has a decent measurement system is the 
State of Oregon. Minnesota is headed in that direction and so is South 
Carolina. We called them all in and said give us some advice on this.
  As I said, we can use public opinion polls. We want to see that the 
clientele is getting satisfaction out of whatever program it is. One 
way would be polling. One way would be to also survey manpower 
retraining, to go out and find did these people really get a job? Are 
they still in a job 6 months later? How about 1 year later? Maybe we 
are not doing the job, even though we think we have some great programs 
and the people running it are well-meaning.
  Mr. SCHAFFER. Mr. Speaker, if I could ask one more question, and that 
is let us take this down to the bottom line and that is from a partisan 
perspective this is frankly one of the criticisms Republicans get. That 
we bring charts and graphs to the floor of the House that deal with the 
accounting mechanisms and the detailed minutia of the finances of 
government and we talk about applying a business sense to government 
and these are important things and people believe that we care about 
this. But to the person on the street, they just want to know that 
these agencies are being run well.
  This can be for some people kind of boring, and also for our own 
colleagues. They do not want to spend the time going through the detail 
and the monotony and the numbers of governing. But the reason we are so 
dedicated and committed to these kinds of audits and the professional 
management of a huge $1.6 trillion Federal Government is that this 
matters for real people.
  Mr. Speaker, I am wondering if the gentleman could turn this to a 
discussion of why this matters. Who should care about the efficiency 
and effectiveness of our financial management, as well as the 
performance of all of these people running around Washington, D.C., 
with somebody else's money?
  Mr. HORN. Well, number one the gentleman has just put his finger on 
it and that is the average taxpayer ought to care because they are 
paying taxes. We are appropriating them. First, we are authorizing 
them. The gentleman from Pennsylvania (Chairman Goodling) is here. He 
has done a fine job in terms of education and the workplace. And we 
need to focus in. And frankly, we need the help, and not enough 
authorizing committees have taken a stand and really spent the time 
which must be spent.
  This takes a lot of time. Our oversight subcommittee had 80 hearings 
in the last Congress. I think that is more than any full committee has 
had in Congress. That is because we try to dig into these things. Now, 
we have limited ourselves in staff. If we had kept the number of staff 
positions our friends, the Democrats, had for 40 years, we could have 
been able to do a lot more

[[Page E2322]]

of this work. But we live with what we have to live with. I think we 
have done a very good job.
  The General Accounting Office has been first rate. I have outlined a 
series of hearings now that I want to do in the first 6 months of next 
year. I try to give GAO 6 months to put a team together which will go 
into the agencies and examine what is really going on. At the hearing I 
will hold, GAO will be my principal witness.
  Mr. SCHAFFER. Mr. Speaker, I would like to point out in graphic 
detail the reason these kinds of financial considerations are so 
important. Why the business details of running government really 
matter. Because what we see in the purple below the baseline here is 
the Federal deficit for the 30 years that the Democrats were in control 
of this Congress. Year after year after year these folks did not pay 
attention to these details and what happened is they ended up spending 
far more money than the American taxpayer sent to Washington. It looks 
like a geographic chart of the bottom of the ocean.
  Mr. HORN. We could say it is the bear looking into the glassy lake 
which acts as a mirror and seeing a mountain down there.
  Mr. SCHAFFER. It sure is. And the proof that these kinds of details 
matter to real people starts here. This is as bad as it got and this is 
the year that the American people said enough is enough. We are sending 
new people to Washington. We are sending people to Washington who know 
how to run the government like a business. These principles are the 
ones that we began to apply here and we can see that there are a number 
of causes for this reduction in deficit spending up to the point where 
we are starting to accumulate surpluses.
  But this is among them, because not only did we start talking about 
managing the taxpayers' money better through government management, we 
also talked about some of the policy decisions that we make, asking 
questions like, do we really need to spend all that money on all those 
programs? We found we can eliminate quite a few of them, and the 
American people do not miss them. They do not notice the difference.
  We are now beginning to focus on a government that is more efficient 
that supports a more robust economy. That combination of a leaner, more 
effective, more legitimate governing structure in Washington, combined 
with a strong economy, is allowing this combination, this partnership 
of a Republican vision in Congress, plus the economic ingenuity of the 
American people, to really pull ourselves up out of this lake and move 
us into the path of prosperity where we can start talking now about 
saving Social Security in legitimate terms, providing world class 
education for our children, providing for a national defense that is 
second to none, and providing safety and security for all of our 
families.
  Mr. HORN. Mr. Speaker, we really need to commend Congress, and that 
is what we are doing, but since the gentleman from Pennsylvania 
(Chairman Goodling) is here, he has done a lot of it in education, that 
is, give flexibility to the people that have to implement these 
programs. Generally, in the case of education as well as a lot of 
others, one goes through the State system, the counties, and finally 
the school districts. If one does not give them flexibility, we are in 
trouble.
  But one will find, every time we try to merge some of these programs 
and give the local people where the action is these particular dollars, 
one can then sort of figure out where one would like to use it. The 
first thing we hear is we cannot do that. I mean, they have a little 
niche they are protecting in the school district, and this is nonsense.
  I think the most successful revenue scheme we ever had was revenue 
sharing. President Nixon was a big backer of that. Mel Laird had 
thought of it when he was a Member from Wisconsin. Wilbur Mills finally 
let it go when he wanted to run for President.
  But what happened, for 10 years, we gave counties and cities a 
certain allotment based on population, whatever formula. They are in a 
position to know what their needs are. We are not, and neither are the 
executives sitting downtown a few blocks from us.
  Under President Reagan, regretfully, and the Democratic Congress had 
always wanted to kill it, and the lobbyists wanted to kill it, but the 
fact is they regretfully gave in on it. They never should have. They 
should have vetoed the attempt to cut it off. Because then one has got 
city council members that are elected that know what the needs of that 
city are. That is a contribution we have made.
  Now that we are putting more and more money in education, which 
nobody would have ever thought we would provide this much money to K 
through 12 education, and it just seems to me that we run into the same 
thing here that people yell and scream when one thing is merged with 
the other. Well, it should be. It should be the people at the 
grassroots, the superintendent, the advisors to the superintendent, the 
teachers.
  I think when we passed last year in this House that one puts 100 
percent, 95 percent, really, into the classroom, that is a real 
revolution in this town. It obviously scares the living daylights out 
of lobbyists and the Department of Education.
  Mr. SCHAFFER. Mr. Speaker, this education shift that we have pushed 
for since taking over the Congress as a Republican Party is an 
encouraging one for governors and for State legislators and for school 
superintendents, school board members, principals, and so on. They like 
the idea that we are giving their dollars back to them, Federal dollars 
back to the State level, and giving them the flexibility and holding 
them accountable for the expenditures of those funds.
  But just out of curiosity, because I want to ask one more question 
about the Department of Education as it relates to the chart, and it is 
an important question because the debate we have right now over 
education with the White House is about this question of flexibility. 
We want to give more flexibility in this budget to States to spend 
dollars on classrooms and the way Governors and legislators and 
superintendents, school board members, and so on see fit. The White 
House, on the other hand, wants to consolidate education authority here 
in Washington, D.C.
  The gentleman from California (Mr. Horn) mentioned those people 
running around Washington, the bureaucrats who are in charge of these 
agencies who the President would entrust the greater proportion of 
decision making in education, what kind of grade did they get in the 
Department of Education when it came to the gentleman's audit?
  Mr. HORN. Mr. Speaker, it is really an F, because all of this group 
failed to respond. It is ironic that agencies demand forms from 
everybody else. Yet, when Congress demands it, it needs to appropriate 
the money for the agency. My colleagues will remember, it was, did you 
have reliable information on the finance side? That was up to the 
auditors to advise us on that. Effective internal controls, the 
auditors, again, could write us an opinion on this and did. Or they 
just did not file. Compliance with laws and regulations, both our staff 
and GAO, do that primarily.
  So what we have here is now just for fiscal year 1998. They have not 
closed and sent it to us for fiscal year 1999 because it has not closed 
yet. It will on September 30th. So we look forward next spring to 
examine the balance sheets and ask the authorizing committees and the 
subcommittees on appropriations to take a careful look and call in the 
people.
  The discussion cannot be only at the staff level. Those discussions 
must be at the Member level. We are the ones at the grassroots, with 
all due respect to our staff and I have a first rate one. We are the 
ones that should be eyeball to eyeball across the table with our 
executive counterparts and say, ``Okay, let us take a look at it. How 
are you measuring these programs?''
  Mr. SCHAFFER. Mr. Speaker, we learned just within the last few days 
that, on the 18th of November, next week, the Department of Education 
will be certifying their numbers or complying with the audit 
requirements for the Department of Education for 1998.
  The report they are preparing to send up to Congress is one that 
suggests and says that the 1998 books in the Department of Education 
are not auditable. They are not auditable. This is an important graphic 
and picture to show that, for an agency that manages approximately $120 
billion in assets, when we include the loan portfolio as well as the 
direct appropriation of $35 billion

[[Page E2323]]

annually, for an agency of that size to be unable to tell us how they 
spend their money is inexcusable.
  Yet, that is the answer they will give on the 18th when they send 
that report up to the Congress and to the General Accounting Office, 
that the books at the Department of Education are not auditable.
  The chairman from the Committee on Education and the Workforce is 
here for that point. Mr. Speaker, I yield to the gentleman from 
Pennsylvania (Mr. Goodling).
  Mr. GOODLING. Mr. Speaker, this is why I wanted to stop the direct 
lending programs before it gets started, because who can imagine a 
department in Washington, D.C. and this Federal Government running the 
largest bank in the world. I mean, it was so obvious that they could 
not do that.
  Of course what happened, as my colleagues know in committee, we had 
to bail them out last year. They could not even consolidate loans. They 
were behind $80,000. Young people leaving college, getting a car, 
getting a job, getting that home, consolidating their loans are very, 
very important.
  What did we have to do? We had to say to the private sector, you will 
have to come in and bail them out. You know how to do it. That is what 
the whole debate is on right now. That is one of the reasons we are 
still here, because, of course, Mr. Speaker, in his comments yesterday, 
the President said that, in just one year, schools across America have 
actually hired over 29,000 new highly trained teachers thanks to our 
class size reduction initiative.
  Well, I would like them to show us where they are. We are having so 
many conflicting reports. Some have said 21,000. Some have said 23,000. 
The greater city schools just put out a study, and they said that they 
got 3,500 teachers hired in the 40th largest district in the country, 
which is where most of these funds go is where most of the poverty is.
  So our debate is not over whether one reduces class size or whether 
one does not. No, as a parent, as an educator, I know that is 
important. I did that as a superintendent 30 years ago, thanks to a 
school board that thought that that was important. That is not the 
debate at all.
  The debate is over quality and flexibility, because we can get 
ourselves into some more of these debts. If, after we go through this 
exercise, we end up having this kind of report appear in the newspaper, 
this report yesterday in the Daily News, New York, ``Not Fit To Teach 
Your Kid; In some city schools, 50 percent of teachers are 
uncertified.''
  Well, we know at least however many teachers they hired in this last 
year under this new program, we know that at least 10 percent were not 
certified. We have no idea how many are not qualified, but we know 10 
percent are not certified.
  Mr. HORN. Mr. Speaker, would the gentleman from Pennsylvania agree 
that the sadness of this administration, very frankly, is that they 
read too many public opinion polls, and they do not lead, and they do 
not provide leadership. That is part of the problem here? They mostly 
engage in public relations everyday. But what has happened? In other 
words, here they are criticizing our attempt to let the local people 
who know what the problems are to use the funds that the Federal 
Government is going to appropriate to them. Obviously, some funds can 
go for new teachers. Some funds can go for teacher professionalism and 
training. There is a dire need for computing capacity. That is 
certainly needed as we go into this digital world.
  But in my State, we have thousands of illegal immigrant children. 
Where are we going to put them? What roof are we going to put over 
them. In the northeastern States, they do not have all the sunshine we 
do. They face a major problem. Will students have snow coming through 
the roofs that are not there?
  So superintendents will say, ``Look, maybe I want a mix of this. I 
have to have that new elementary school. We have 5,000 children that 
are going to sign up for it.'' That is the kind of numbers we are 
talking in Long Beach, California and Los Angeles.
  Mr. GOODLING. Mr. Speaker, which is exactly why our committee 
reported out in a bipartisan way, they passed the Teacher Empowerment 
Act, saying please do not just go out and hire teachers to reduce class 
size if you cannot find quality. Please do not go out and hire teachers 
if you do not have any space to put them in. Let the local district 
determine what is most important in order to raise the academic 
achievement of all children. That is what the debate should be about. 
The debate is not about class size. It is about flexibility. It is 
about quality.
  The Secretary had a report today, and it was kind of interesting 
because he challenged us. He said, ask these people that got all these 
teachers to reduce class size what they think about it. They 
highlighted Jackson, Mississippi as one of them. So we called Jackson, 
Mississippi. The superintendent said, ``Oh, of course I am for class 
size reduction.'' She also said, ``I loved the money. I appreciated the 
money.'' But she said, ``If I had some flexibility, I rather would have 
used a larger portion of these funds for technology and professional 
development.'' Then she went on to say, ``All of this with the goal of 
improving student achievement.'' Now, this superintendent knows what is 
most important.
  So we called a few more. We called Greencastle, Pennsylvania. They 
got $39,600. They are not going to hire too many teachers with that 
$39,600.
  Mr. HORN. Mr. Speaker, they are lucky to get one.
  Mr. GOODLING. Mr. Speaker, what did he say. He said he would purchase 
software programs to provide remedial math and reading assistance to 
students in early grades if he could have used that money in that 
manner.
  Then we called the Erie school district. They got $796,000. They said 
they would have used it in three different areas. First of all, they 
have a program, after school hours direct assistance for students who 
call in who are having homework problems. They would have used some of 
it for that purpose. They would have purchased more advanced technology 
and software to help students improve their academic performance. They 
would have used it for teacher training, for their research-based 
education programs, particularly as it relates to incorporating 
standards into classroom curriculum and lesson plans.
  Then we called West Allegheny, $44,900. They said they would have 
used it to create an integrated approach for curriculum instruction, 
focusing on early intervention programs. In essence, they would use the 
money to develop instructional approaches specifically targeted to at-
risk young children helping those students make the critical transition 
from prekindergarten at the present to kindergarten to first grade.
  Yes, we did just what the Secretary said. This is what they came back 
with. They said give us the flexibility. Yes, we like the money. Yes, 
we want to reduce class size. But there are so many important things.
  Mr. HORN. Mr. Speaker, the model on this, as my colleagues know, is 
what the President wanted, and I supported him on that request and 
developed same language for the COPS program. The real problem is where 
is the second, third, and fourth year money to help, because it is very 
hard for that locality to provide it. So it is here again, and that is 
exactly what is going on here.
  Mr. GOODLING. Mr. Speaker, when we talk about the appropriators 
appropriating $1.2 billion for this program, $1.2 billion gets 6,000 
teachers. One says, well how come? Well, because, first of all, they 
have to pay for however many they got this year because they remain on 
that payroll. We do not know whether it is 5 years or 7 for everybody. 
From this year on, it is 7 years. So for the $1.2 billion, we only get 
the 6,000 teachers. Again, there are anywhere between 15,000 and 17,000 
public school districts. There are more than 100,000 school buildings 
within those public school systems.
  So my colleagues can see, when we talk about 100,000 teachers, there 
has got to be quality, and there has to be flexibility. That is what 
the argument is. It has nothing to do with class size.
  Mr. HORN. Mr. Speaker, maybe Congress ought to pass a law that says 
cabinet officers of departments that have administrative problems 
should have had some administrative experience. The gentleman from 
Pennsylvania has had it. I have had it.
  Mr. GOODLING. Mr. Speaker, that would be a good idea.

[[Page E2324]]

  Mr. HORN. A number of this body have had that experience as a 
governor or mayor. We look downtown, they have never done anything, 
many of them. They are just there. Some are simply politicians without 
major administrative experience. And that is fine, I love politicians.
  So let me just read my first and last sentence and what I sent to my 
colleagues, Democrat and Republican today, with my fine excellent staff 
digging up all this from General Accounting Office reports and 
inspector generals. I said, ``Last week, President Clinton vetoed a 
bill that called for a 1 percent cut in discretionary spending 
throughout the Federal Government, saying the loss would place too 
great a burden on American families.'' So I end this with, ``The 
President's concern about American families is best served by insisting 
that the departments and agencies under his command run their financial 
affairs in a responsible businesslike manner.''
  Now, he is the chief executive of the government of the United 
States. Instead of taking trips every day, going almost everywhere, and 
still acting like he is running for an election, he ought to be really 
rolling up his sleeves, getting his people around the table, and 
saying, ``Look, folks, we only have about a year more, let us leave a 
legacy of which we can be proud of.'' That is what he should be doing. 
That is what an executive would do.
  Mr. GOODLING. And I would like him also to remember back, because, 
Mr. Speaker, in his book Putting People First, during the 1992 
campaign, the chapter on education says this, ``Grant expanded 
decision-making powers to the school level, empowering principals, 
teachers and parents with increased flexibility in educating our 
children.'' That is what he said back in his book as he ran for 
president in relationship to what a president should be bringing forth 
here in government.
  Mr. SCHAFFER. Mr. Speaker, just to point out, I read that same report 
and managed to have that highlighted and blown up here for Members of 
the House to be reminded of the President's position back when he was 
candidate Clinton. But now as President Clinton his opinion is quite 
different.
  Mr. GOODLING. I agree with that 100 percent. He also said as 
governor, when he was talking about flexibility and local control, and 
this is very interesting, ``There is a consensus emerging that we ought 
to focus on goals that measure performance rather than input. Instead 
of saying we ought to have small classes in the lower grades, we say, 
here is what children should know when they get out of grade school.'' 
That is the end of his quote, and I agree 100 percent with that also.
  But that is different than what we are confronted with now. And, 
again, I cannot emphasize enough that the argument has nothing to do 
with class size. The argument has to do with flexibility and quality.
  Mr. SCHAFFER. If I could point out, with respect to education, it is 
important to remember at this point in time in the debate between the 
Congress and the White House on this budget that there is no 
disagreement either fundamentally on the amount of money to be spent.
  Mr. GOODLING. In fact, we propose more.
  Mr. SCHAFFER. Our proposal is significantly more for education than 
what the White House had suggested. The debate, then, really does come 
down to this flexibility question.
  Mr. GOODLING. And quality.
  Mr. SCHAFFER. And we understand throughout the country that there are 
some districts where class size reduction is important, where they 
would like to use the money to hire more teachers. But that is not true 
in all districts throughout the country.
  And what happens is when we tell districts whether they need the new 
teachers or not that they must hire them with the money, what happens 
is districts just spend the cash, because that is what the law says 
they must do. They spend the cash on anybody, whether they need that 
teacher or not.
  And what happens is we end up with the headline, like the chairman is 
showing us right now, telling us that there are teachers in America now 
who are not fit to teach. And the reason is there is a huge pile of 
cash here in Washington, and the President sends it back to the States 
and says they cannot spend it on computers, if they want computers, and 
they cannot spend it on training if they need to do training, and they 
cannot spend it to fix the leaky roof, if the roof needs fixed; he says 
they must spend it on the teachers that he decides they must hire, 
whether they need them or not. And this is the headline we see when we 
spend money, the people's money, in such a reckless sort of way.
  We are trying to turn these headlines around into positive headlines 
by putting principals and superintendents in charge of the money, 
because they are the ones who know the teachers' names, they are the 
ones who know the names of the students and the families, they are the 
ones who know what schools need. The President, I assure my colleagues, 
does not have a clue what schools in my State need, and I am doing 
everything I can, which is why we are here at 11 p.m. at night eastern 
time, fighting for our children, because we believe that these children 
really do matter and they deserve our help.
  Mr. GOODLING. The tragedy here is that 25 percent of this 50 percent 
may be very, very capable individuals. And if they could take the money 
to properly prepare them, to teach the math and the science, to teach 
the reading, they could save them and they could have quality teachers 
in the classroom.
  But that is not what we say. We say, here, take the money and reduce 
class size. And when I said, but California tried that and they got all 
messed up, the response was, well, they tried to do it too quickly. 
Well, this city did not try to do it too quickly. This is over years 
and years and years. And so all we need to do is give the kind of 
flexibility and then demand quality and demand accountability, and they 
will do well.
  Mr. HORN. Well, I agree with the gentlemen, that is what we are 
trying to do to the executive branch in general of this Federal 
Government. It is sad, as I said earlier, that the President rules by 
polls instead of ruling by the instincts he had when he was governor 
and experienced these problems. They seem to have been forgotten.
  In the early 1980s, I met the President. He was not the President 
then, he was a governor. And I met him because the business of the 
Higher Education Forum was trying to put its finger on what is wrong 
with the whole job situation in America, and part of, we said, must be 
the K-12 problem. And we asked the staff to go get two experts that 
would talk on this subject who are dealing with it. And we had governor 
Cane of New Jersey and Governor Clinton of Arkansas.
  The membership of this was 40 of us were university presidents and 40 
were CEOs from the top 100 American corporations. And the TRW CEO was 
the one that went to President Reagan and said, look, we have to face 
up to the K-12 situation, and the President was very supportive of 
that. But what we have here is we have spent, what, $2 billion more 
this year than anybody would have expected in education? We have done 
the same thing in the National Institutes of Health under the gentleman 
from Illinois (Mr. Porter).
  And I was particularly pleased, as a former university president, 
where the Pell Grants are, that we have upped the maximum every year, 
and this is the first time that has ever happened in Congress. The 
Democrats did not do it, the Republicans did. And I know how important 
those grants are if young people in financial need are going to get a 
decent education.
  Now, one of the problems here is debt collection. The gentleman 
mentioned some of the accounting messes that are in the student loan 
program. The major bill I have put on the books since coming here was 
the debt collection bill. And when we did a test one time, we found out 
one person that was getting a Pell Grant classified as a millionaire on 
his income tax. And we could have a lot of little things like that that 
run one tape against the other and we can find it.
  But what is needed is to have accountability, as the gentleman said. 
These are not grants, these are loans. I am all for grants, if we had 
the money, but we do not have the money and we have to revolve that 
money coming back from the loan.
  Mr. GOODLING. And as the gentleman knows, when we reauthorized

[[Page E2325]]

the Higher Education Act, we specifically placed in the Department of 
Education someone who knows something about student loans and told him 
that he was not involved in policy; that he is involved in the business 
of making sure that that system runs properly, so that we do not have 
the foul-up we had last year when we had to bail them out in their 
direct lending program.
  Mr. SCHAFFER. Well, the need to bail out the program under the 
Clinton administration is easy to understand when we just review the 
findings of the committee chaired by the gentleman from California (Mr. 
Horn). He found that in fiscal year 1997, the Federal Government spent 
more than $3.3 billion on loan guarantees for defaulted student loans, 
and that is according to the General Accounting Office audit.
  In addition, the Department had overpaid 102,000 students Pell 
Grants, totaling $109 million. The audit also found that 1,200 students 
falsely claimed veterans' status to increase their eligibility to the 
program. That cost taxpayers almost $2 million.
  So the necessity is very obvious here when it comes to managing these 
loan programs. And just squeezing that one penny out of the dollar in 
efficiency that we are looking for, we know where to find it, and we 
are on to a worthwhile strategy to try to accomplish that. But the 
Department of Education is probably the best place we could start 
looking, because, as I mentioned earlier, their financial books are not 
even auditable for 1998. And so that ought to send up a red flag and 
tell us that there is probably a little bit of waste, fraud, and abuse, 
just like the examples the chairman found, and we are going to go look 
for more.
  Mr. HORN. Well, good luck. We will be right behind you.
  Mr. SCHAFFER. Mr. Speaker, I would also like to add one more 
observation from a governor, the governor from California, Governor 
Gray Davis.
  Now, Governor Gray Davis is not one who agrees with us on a day-to-
day basis on a great many issues. He is a pretty classic Democrat, very 
liberal, and one who agrees typically with the President of the United 
States. But when he was on Meet the Press earlier this year, here is 
what he said about this notion of having the President tell him that he 
must spend his money, the State's money, on hiring new teachers. Here 
is what Governor Davis said from California.
  ``Secretary Riley,'' the Secretary of the Department of Education, 
``was telling me about the $1.2 billion that was appropriated to reduce 
class size to 18 in the first three grades. Now, in California, this is 
one of the few areas where we're ahead in public education. We're 
already down to 20 per class size in K-4. So that money, which is 
supposed to be earmarked to an area where we've already pretty much 
achieved the goal, would best serve reducing class size in math and 
English in the 10th grade.''
  But, of course, the Governor cannot spend the money on the tenth 
grade as he would like because the President will not let him.
  The Governor goes on. ``So if Washington says to the states, you must 
improve student performance and we'll give you the money, that will 
give all the governors the flexibility to get the job done.''
  Well, what the Governor pointed out in that last quote is the 
Republican plan. Our plan is to give the governors the flexibility. The 
Governor of California is at the other end of the country that way. He 
is about as far away from here as you can get. And the notion that the 
people here in Washington should tell the Governor way over there in 
California what is in the best interest of the Governor's students and 
his constituents is ludicrous.
  Mr. HORN. Governor Davis is pursuing an excellent policy, the same 
that was started by Governor Wilson, his Republican predecessor. And 
let me tell you, it has made a difference, particularly in reading. It 
started in the lowest grade and it moved up one grade each year. 
Teachers are much happier, and I have seen them with glee as they have 
the opportunities and time, that is what counts, to work with young 
people.
  Governor Wilson started that and that was a major breakthrough. And 
of course, it is State money, not Federal money, that basically 
supports American K-12 education.
  Mr. SCHAFFER. Mr. Speaker, I would like to ask the chairman of the 
Committee on Education to comment if he would just on the politics of 
this education because I think many parents who are sitting at home and 
thinking about their children waking up in the morning and going to 
school, they might be packing tomorrow's lunch right now and preparing 
it for their children, tucking them into bed, and making sure that they 
are prepared to go to school in the morning, those parents who think 
about these issues, they do not believe this, they just cannot 
understand why there are people here in Washington who want to 
consolidate all the education authority here in Washington to put the 
people in charge who earn an F on a financial and performance audits 
and do so at the expense of the classroom teachers who we trust.
  My colleague have been here a few years, a few more years than I 
have, and he as the chairman has been able to see inside the capital, 
the politics taking place, the lobbying taking place.
  What kind of special interests drives such a bizarre agenda that 
would suggest that these people here in Washington know better than my 
child's teacher out in Colorado?
  Mr. GOODLING. Mr. Speaker, one of the greatest problems I have always 
had since I have been here in Washington is that the people who lobby 
in Washington for different groups, they are totally out of touch with 
what is going on back in the local area.
  We got this letter on the Straight A's from the National School 
Boards Association. Unbelievable. I wrote back and I said, you do not 
express what my school board members are saying back in my district. 
But it is consolidation of power in Washington. And that is the 
argument here.
  The argument has nothing to do, as I said, with class size. It is 
flexibility and quality and not consolidating that power.
  Mr. SCHAFFER. Mr. Speaker, the Straight A's bill, for those of our 
colleagues who may not remember the actual debate, the Straight A's 
bill is a Republican initiative designed to cut the strings and red 
tape for States so that States, in a grand scale, can begin to spend 
Federal education dollars on the programs that a governor or State 
legislature may choose.
  Mr. GOODLING. Mr. Speaker, the greatest problem I had as a 
superintendent with Federal funds is that the auditor never came out to 
see whether you were accomplishing anything, whether children were 
improving at all, whether the academic standards were going up, or 
anything else. They only came out to see did the pennies go exactly 
where they in Washington said the pennies should go.
  So you would get all these little programs. You could not consolidate 
any of them. You could not commingle any of the funds. If you did, you 
were in real trouble. So you had all these little programs doing 
nothing, when you knew and your teachers knew and the parents knew that 
if you could consolidate some of those programs, you could really 
improve the academic achievement of children. You could not do it 
because that is not what the auditors were interested in.
  Mr. HORN. Well, would my colleague not say one of the problems is 
also the Washington professional staffs of some of these lobbies? In 
other words, if they can raise cane with their grass roots dues payers, 
they will have a job next year and they will have a bigger staff next 
year?
  That is part of the problem. They do not want to admit that we know 
something because we are in the grass roots. We walk in schools. Most 
of them do not go out and walk into schools and see what is happening.
  Mr. SCHAFFER. Mr. Speaker, those organizations are well represented 
here in Washington. There are hundreds, if not thousands, of lobbyists 
representing these organizations that are for the bureaucratic 
structure. They represent various vestiges of this grand education 
bureaucracy.
  And my colleague is absolutely right. The three of us here are a 
legitimate threat to those bureaucrats. We want to help them find a new 
line of work. We would prefer to see our teachers back home, our 
principals, and our superintendents have more authority to help educate 
our children. And we care about that.

[[Page E2326]]

  These lobbyists roaming the halls right outside the doors here and 
over in the committee meetings, they harass you as you walk down the 
hallway trying to get you to keep all this authority and power in 
Washington so that they can manipulate it and they can derive their 
power from these rules and regulations.
  Well, the children really do not have lobbyists around here. All they 
have are us. I am proud to take up that challenge. I am proud to 
represent children in American schools today who deserve a good 
quality, first rate education. They deserve teachers who are not 
constrained by the rules of Washington but are able to have the full 
liberty to teach and where children have the freedom to learn.
  I have got four of these children myself. They are getting ready for 
bed right now out in Colorado, where it is 9:18; and they will be 
getting up shortly and heading off to school in a public school 
tomorrow. And I want those teachers to have the greatest amount of 
academic liberty. I do not want these people running around the 
hallways here to decide what is in the best interest of my children.
  That is what the Straight A's bill represented. It was a bill to help 
local schools do better. Those who oppose the Straight A's, those who 
were in favor of the President's plan also to define how these monies 
will be spent are really not in favor of children. And that is the 
difference of opinion that we are proud to stand on the side of 
children.
  Mr. HORN. Mr. Speaker, children do not pay dues. That is what it gets 
down to.
  Mr. Speaker, I include for the Record the following ``dear 
colleague'' letter:


                                         House of Representatives,


                               Committee on Government Reform,

                                 Washington, DC, November 9, 1999.
       Dear Colleague: Last week, President Clinton vetoed a bill 
     that called for a 1 percent cut in discretionary spending 
     throughout the Federal Government, saying the loss would 
     place too great a burden on American families. The one-penny-
     on-the-dollar budget cut would not have affected entitlement 
     programs, such as Social Security, Medicare or welfare 
     programs. Meanwhile, however, the ongoing financial waste in 
     the Government far exceeds the proposed 1 percent cut. The 
     following list is merely a sampling of the problems found 
     within the departments and agencies of the executive branch, 
     all of whom report to the President. Unless otherwise noted, 
     examples were received in testimony before the Subcommittee 
     on Government Management, Information, and Technology. Some 
     of the waste in Cabinet departments and agencies are:
       Agriculture--In FY 1997, the department erroneously issued 
     about $1 billion in food stamp overpayments, amounting to 
     approximately 5 percent of the entire food stamp program. 
     (GAO Report)
       Defense--The department spent nearly $40 billion on 
     programs for 15 overseas telecommunications systems that 
     cannot be fully used because the department failed to obtain 
     proper certifications and approvals from the host nations, 
     according to a 1999 inspector general audit. (DOD OIG Report)
       In September 1997, the Defense Department's inventory 
     contained $11 billion worth of unneeded equipment. (GAO 
     Report)
       Over the last three years, the Department of the Navy wrote 
     off $3 billion of inventory lost in transit. (GAO Report)
       During a five-year period, defense contractors voluntarily 
     returned $4.6 billion in overpayments the department failed 
     to detect. (GAO Report)
       The Defense Department spent an estimated $54 million on 
     newly developed indoor firing ranges that are not being used. 
     (DOD OIG Report)
       Education--In FY 1997, the Federal Government spent more 
     than $3.3 billion in loan guarantees for defaulted student 
     loans, according to a GAO audit. In addition, the department 
     had over-paid 102,000 students Pell grants totaling $109 
     million. The audit also found that 1,200 students falsely 
     claimed veteran status to increase their eligibility to the 
     program, costing taxpayers $1.9 million. (GAO Report)
       Energy--Between 1980 and 1996, the Department of Energy 
     spent more than $10 billion for 31 systems acquisition 
     projects that were terminated before completion. (GAO Report)
       Health and Human Services--The Health Care Financing 
     Administration erroneously spent $12.6 billion in 
     overpayments to health care providers in its Medicare fee-
     for-service program during FY 1998 (the most recent 
     available). HCFA has not yet assessed the potential problem 
     in its $33 billion Medicare Managed Care program or $98 
     billion Medicaid program.
       Housing and Urban Development--The department estimated 
     that it spent $857 million in 1998 in erroneous rent subsidy 
     payments in FY 1998, about 5 percent of the entire program 
     budget. (HUD OIG Report)
       A General Accounting Office report suggests HUD's FY 1999 
     budget request for $4.8 billion to renew and amend Section 8 
     tenant-based assisted housing contracts could have been 
     reduced by $489 million.
       Interior--The Bureau of Land Management spent an estimated 
     $411 million on its Automated Land and Mineral Record System 
     over a 15 year period, only to discover that the major 
     software component, the Initial Operating Capability (IOC), 
     failed to meet the bureau's business needs. The bureau 
     decided not to deploy IOC and is now analyzing whether it can 
     salvage any of the $67 million it spent on system software. 
     (GAO Report)
       Justice--The U.S. Marshals Service was unable to locate 
     2,775 pieces of property worth nearly $3.5 million, according 
     to a 1997 inspector general audit. In addition, the agency's 
     inventory contained nearly 5,070 items, valued at more than 
     $4 million, that were unused. (DOJ OIG Report)
       Labor--From 1995 to 1997, the department spend $1 billion 
     on its Job Corps program, only to later discover that 76 
     percent of its graduates had been laid off, fired or quit 
     their first jobs within 100 days of being hired. (DOL OIG 
     Report)
       Transportation--The Federal Aviation Administration spend 
     $4 billion on an air traffic modernization program that 
     didn't work, and was shut down before completion. The GAO 
     remains concerned about the agency's poor accounting, and 
     lack of control over assets and costs as the agency proceeds 
     with its new $42 billion Air Traffic Modernization program.
       Treasury--The IRS estimates it can collect only 11 percent 
     of $222 billion in delinquent taxes owed the Government.
       Veterans Affairs--An estimated $26.2 million a year in 
     overpayments could be prevented if the Veterans Benefit 
     Administration's policy (VBA) and procedures were revised and 
     cases were properly processed, according to the department's 
     inspector general. In 1995, the VBA waived $11.6 million in 
     beneficiary debts owed to the VA, even though there was no 
     evidence of records to support the actions. (GAO Report)
       Federal Deposit Insurance Corporation--Currently, the 
     States of California and Florida are holding as unclaimed 
     property about $3.3 million that belongs to the FDIC or its 
     receiverships. Similar problems were identified in 23 of the 
     24 states audited, for which no value was determined. (OIG 
     Report)
       Officer of Personnel Management--In the last three years, 
     the agency's inspector general issued 128 reports, 
     questioning $280.3 million in inappropriate charges to the 
     Federal Employees Health Benefits Program. (OPM OIG Report)
       Small Business Administration--The agency requested and 
     received a FY 1997 appropriation that included $50 million 
     more than it needed for its $7.8 billion loan guarantees for 
     the general business loan program. (GAO Report)
       Social Security Administration--During FY 1998, the 
     department erroneously spent $3.3 billion in Supplemental 
     Security Income overpayments. (GAO Report)
       These examples illustrate the fact that every department 
     and agency in the Federal Government can find savings if they 
     are willing to tighten their belt and undergo greater 
     management scrutiny and better use of taxpayer's funds. That 
     has been my goal since arriving in Washington. It is a goal 
     that I believe that we all share. The President's concern 
     about American families is best served by insisting that the 
     departments and agencies under his command run their 
     financial affairs in a responsible, business-like manner.
           Sincerely,

                                                 Stephen Horn,

     Chairman, Subcommittee on Government Management, Information, 
                                                   and Technology.

     

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