[Congressional Record Volume 148, Number 145 (Tuesday, November 12, 2002)]
[House]
[Pages H8085-H8086]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               IMPROPER PAYMENTS INFORMATION ACT OF 2002

  Mr. HORN. Mr. Speaker, I move to suspend the rules and concur in the 
Senate amendment to the bill (H.R. 4878) to provide for estimates and 
reports of improper payments by Federal agencies.
  The Clerk read as follows:

       Senate amendment:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Improper Payments 
     Information Act of 2002''.

     SEC. 2. ESTIMATES OF IMPROPER PAYMENTS AND REPORTS ON ACTIONS 
                   TO REDUCE THEM.

       (a) Identification of Susceptible Programs and 
     Activities.--The head of each agency shall, in accordance 
     with guidance prescribed by the Director of the Office of 
     Management and Budget, annually review all programs and 
     activities that it administers and identify all such programs 
     and activities that may be susceptible to significant 
     improper payments.
       (b) Estimation of Improper Payment.--With respect to each 
     program and activity identified under subsection (a), the 
     head of the agency concerned shall--
       (1) estimate the annual amount of improper payments; and
       (2) submit those estimates to Congress before March 31 of 
     the following applicable year, with all agencies using the 
     same method of reporting, as determined by the Director of 
     the Office of Management and Budget.
       (c) Reports on Actions To Reduce Improper Payments.--With 
     respect to any program or activity of an agency with 
     estimated improper payments under subsection (b) that exceed 
     $10,000,000, the head of the agency shall provide with the 
     estimate under subsection (b) a report on what actions the 
     agency is taking to reduce the improper payments, including--
       (1) a discussion of the causes of the improper payments 
     identified, actions taken to correct those causes, and 
     results of the actions taken to address those causes;
       (2) a statement of whether the agency has the information 
     systems and other infrastructure it needs in order to reduce 
     improper payments to minimal cost-effective levels;
       (3) if the agency does not have such systems and 
     infrastructure, a description of the resources the agency has 
     requested in its budget submission to obtain the necessary 
     information systems and infrastructure; and
       (4) a description of the steps the agency has taken to 
     ensure that agency managers (including the agency head) are 
     held accountable for reducing improper payments.
       (d) Definitions.--For the purposes of this section:
       (1) Agency.--The term ``agency'' means an executive agency, 
     as that term is defined in section 102 of title 31, United 
     States Code.
       (2) Improper payment.--The term ``improper payment''--
       (A) means any payment that should not have been made or 
     that was made in an incorrect amount (including overpayments 
     and underpayments) under statutory, contractual, 
     administrative, or other legally applicable requirements; and
       (B) includes any payment to an ineligible recipient, any 
     payment for an ineligible service, any duplicate payment, 
     payments for services not received, and any payment that does 
     not account for credit for applicable discounts.
       (3) Payment.--The term ``payment'' means any payment 
     (including a commitment for future payment, such as a loan 
     guarantee) that is--
       (A) made by a Federal agency, a Federal contractor, or a 
     governmental or other organization administering a Federal 
     program or activity; and
       (B) derived from Federal funds or other Federal resources 
     or that will be reimbursed from Federal funds or other 
     Federal resources.
       (e) Application.--This section--
       (1) applies with respect to the administration of programs, 
     and improper payments under programs, in fiscal years after 
     fiscal year 2002; and
       (2) requires the inclusion of estimates under subsection 
     (b)(2) only in annual budget submissions for fiscal years 
     after fiscal year 2003.
       (f) Guidance by the Office of Management and Budget.--Not 
     later than 6 months after the date of enactment of this Act, 
     the Director of the Office of Management and Budget shall 
     prescribe guidance to implement the requirements of this 
     section.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Horn) and the gentlewoman from Illinois (Ms. 
Schakowsky) each will control 20 minutes.
  The Chair recognizes the gentleman from California (Mr. Horn).


                             General Leave

  Mr. HORN. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on H.R. 4878.

[[Page H8086]]

  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. HORN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, each year the Federal Government wastes countless 
billions of dollars on improper payments. I say ``countless billions'' 
because we do not know the magnitude of the problem. Incredible as it 
might seem, Federal agencies are not required by law to calculate how 
much money they spend improperly.
  What we do know is that improper payments are a very serious problem 
in the Federal Government, based on the few voluntary estimates that 
some agencies submit for a handful of programs. The General Accounting 
Office, headed by the Comptroller General of the United States, who is 
very impartial and utilizes a nonpartisan, neutral approach, they 
looked at them and he says that there is $20 billion in improper 
payments annually. The Office of Management and Budget recently updated 
the annual figure to about $33 billion of improper payments.
  Staggering as these amounts are, they likely represent only the tip 
of a very enormous iceberg.
  For example, the Department of Health and Human Services reported 
making improper payments of more than $12 billion in its Medicare fee-
for-service program last year, but the Department does not even attempt 
to estimate improper payments made in the Medicaid program.
  The obvious first step toward reducing this outrageous waste of 
taxpayers' money is to understand the extent of the problem. We must 
find out which programs are at risk and the causes of those risks. Only 
then can we develop cost-effective solutions.
  Mr. Speaker, H.R. 4878, the ``Improper Payments Information Act of 
2002,'' takes this important first step. The bill requires Federal 
agencies to estimate the improper payments made in their programs. The 
bill also requires agencies to tell Congress and the American taxpayers 
what steps they are going to take to reduce those improper payments.
  The Subcommittee on Government Efficiency, Financial Management, and 
Intergovernmental Relations, which I chair, has held numerous hearings 
over the years on various aspects of improper payments. These hearings 
have demonstrated the overwhelming need for H.R. 4878.
  The administration strongly supports this legislation, H.R. 4878, and 
the bill has achieved broad bipartisan support in Congress. Our 
subcommittee's ranking member, the gentlewoman from Illinois (Ms. 
Schakowsky), is a cosponsor of this legislation. So is our chairman of 
the full Committee on Government Reform, the gentleman from Indiana 
(Mr. Burton), and also my colleague, the gentleman from California (Mr. 
Ose).
  On July 9, the House passed H.R. 4878 by voice vote under suspension 
of the rules. On October 15, the Senate passed an amended version of 
this bill by unanimous consent.
  The Senate then added the amendments which tightened up the bill in 
several ways. They imposed an annual March 31 deadline for agencies to 
report their estimated improper payments to Congress. The amendments 
also require that the reports include the root causes of the improper 
payments and the results of any action agencies have taken to correct 
the problem. In addition, the Senate amendments require the Office of 
Management and Budget to provide guidelines to implement the bill 
within 6 months of its enactment.
  In one respect, the Senate amendments are less stringent than the 
House bill, than the original bill. The amended bill requires agencies 
to report on their actions to reduce improper payments for any program 
in which the annual improper payments are estimated at $10 million or 
more.
  The House-approved bill had a lower threshold. However, I believe the 
Senate's amended threshold is excellent and reasonable.
  Mr. Speaker, I would point out that the bill's threshold is simply 
the minimum requirement for reporting at less than the $10 million 
amount. It does not or should not prevent agencies from voluntarily 
reporting on significant improper payments, even if they do not rise to 
the bill's minimum requirement.
  Mr. Speaker, I urge my colleagues to concur with the Senate 
amendments and send this bill to the President.
  Mr. Speaker, I would like to thank the people on the staff on our 
side, Bonnie Heald, the Staff Director of the subcommittee; Henry Wray, 
Senior Counsel who did most of the work; Dan Daly, Counsel; and we 
thank a lot Hank Savage, Assistant Counsel from the Office of 
Legislative Counsel.
  Mr. Speaker, I reserve the balance of my time.
  Ms. SCHAKOWSKY. Mr. Speaker, I yield myself such time as I may 
consume.
  I am pleased to again be on the floor with the gentleman from 
California (Mr. Horn) to move this bill on improper payments. We worked 
together to move this bill through the House last July and we are here 
today to accept the changes made by the Senate.
  The Senate has asked that the reports on improper payments be limited 
to agencies where the aggregate amount is $10 million or more, rather 
than the $1 million in the original House bill. In addition, the Senate 
has clarified the timing of the reports coming to Congress. I concur 
with these changes.
  There was one change proposed by the Senate following advice from the 
General Accounting Office that I found perplexing. The GAO proposed 
that agencies could avoid reporting on improper payments if the agency 
concluded that the cost of estimating the level of improper payments 
was not ``cost beneficial.'' In other words, if an agency does not know 
how many improper payments it is making, it can somehow conclude that 
it is not worth knowing how many improper payments it is making. I was 
concerned that the provision simply created another loophole for 
agencies to avoid addressing this problem, and I am pleased that the 
Senate chose not to include this provision.
  Finally, Mr. Speaker, I would like to reiterate a point I made last 
July. In programs that provide payments directly to the poor, improper 
payments often result from the complexities of the program rules or 
from errors in administering the program. These kinds of errors should 
not become another burden on the poor. I hope these agencies will take 
the opportunity created by this bill to find ways to avoid these kinds 
of errors and, if they occur, to consider the impact on the needy 
recipient and assure that any negative impact is minimized.
  I thank the gentleman from California (Mr. Horn) for his hard work on 
this bill and for working in such a collegial manner throughout the 
process of passing this legislation. I would also like to end in the 
gentleman's tradition by thanking the professional democratic staff 
David McMillan for his work on the bill.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HORN. Mr. Speaker, I have no other requests for time, and I yield 
back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Horn) that the House suspend the rules 
and concur in the Senate amendment to the bill, H.R. 4878.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the Senate amendment was 
concurred in.
  A motion to reconsider was laid on the table.

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