Government is wasteful enough that sequestration is acceptable, witnesses say

A House hearing exploring ways to curb waste and duplication in government on Tuesday showcased an apparent consensus that there may be little harm in allowing the roughly 8 percent across-the-board agency spending cuts scheduled to kick in March 1 to actually take effect.

Four expert witnesses from nonprofits speaking to the House Oversight and Government Reform Committee sketched out hundreds of concrete proposals for cancelling programs and streamlining management.

But coming at a time when Congress and the White House continue to spar over whether a new budget deal can be struck to head off sequestration, the recommendations offered were presented as long-term and not as a solution to the immediate fiscal stalemate.

“We are facing the prospect of sequestration, which will probably go into effect,” said Rep. John Mica, R-Fla., who chaired part of the hearing. “Maybe Congress could redirect the cuts to go beyond the big defense cuts. But a lot of people will be running around with their hair on fire.”

Thomas Schatz, president of Citizens Against Government Waste, agreed that “any organization can cut 10-15 percent” without much harm, which is within the range of sequestration.

Rep. Gerry Connolly, D-Va., noted that the ongoing problem of improper government payments amounts to $125 billion annually, a potential savings larger than the annual sequestration.

The hearing on waste was called by panel chairman Rep. Darrell Issa, R-Calif., just as Congress is preparing to receive updates from the Government Accountability Office on high-risk and duplicative federal programs. “In the business world, the only way you can decide if you should spend money on a service is to conduct an honest and transparent performance review of what and how that service delivers,” Issa said. “While no one is questioning the necessity of government services, it is our duty to ensure that those services are being delivered in the most cost-effective and efficient way possible.” This is an issue, he said, that goes beyond political ideology.

Invoking last year’s scandal over extravagant spending on training conferences at the General Services Administration, Issa questioned whether direct supervisors are able to ferret out wasteful decisions made by their subordinates. He asked, “Is it time we seriously looked at the Inspectors General Act, so that we’re not just making suggestions or telling people, but take an active enforcement role in insisting that changes occur.”

Rep. Elijah Cummings, D-Md., the panel’s ranking member, praised the bipartisan tone of the exercise. He mentioned delays and cost overruns in the Pentagon’s Joint Strike Fighter, $750 million in overpayments to food suppliers for troops in Afghanistan, and $1.3 billion in federal crop insurance payments to 15 private companies as examples of waste. “We in Congress talk all the time about cutting waste and making the government more efficient. It’s time to go from talking to acting.”

Citizens Against Government Waste’s “Prime Cuts” study contains 691 recommendations that Schatz said would save $391 billion in the first year and more than $1.8 trillion over five years.

“The key is to get rid of programs that don’t work,” perhaps by creating a new sunset commission, he said. “Congress tends to create a program to solve a problem,” but has resisted proposals to have the Congressional Research Service determine first whether such a program already exists. (Rep. Jerry Lankford, R-Okla., pointed out that recent House rules changes now require such a determination.)

“There are 56 financial literacy programs across 20 agencies,” Schatz said. “A government that can’t balance its books has no business teaching others financial literacy.”

Ryan Alexander, president of Taxpayers for Common Sense, offered highlights from her group’s study titled “Sliding Past Sequestration,” adding that she would support proposals to give inspectors general and the GAO more authority in enforcing cuts. She would cut defense by eliminating an aircraft carrier, bringing troops home from Europe, and raising co-payments for retirees who use the TRICARE health insurance system even though a new employer’s policy would cover them. “Within defense, we could look at service contracting reductions without affecting core functioning” and better plan spending on the Army Corps of Engineers, Alexander added. She also mentioned rationalizing spending on disaster relief and curbing tax expenditures, such as limiting the home mortgage deduction to one home.

Dan Blair, president of the National Academy of Public Administration, said, “In an enterprise as large as the federal government, a certain amount of overlap and fragmentation is unavoidable. And some programs may appear duplicative, but, on closer examination, are best administered separately because of their unique characteristics.”

To determine whether a program is truly duplicative, he recommended joint public-private sector techniques relying on “evidence-based decision making.” One example he gave is called Pay for Success, in which private funders put up the money for experimental reforms, and the government pays them only if the goal is achieved. His group also recommended that Congress hold confirmation hearings and vote on nominees in a more timely manner, and that congressional leadership “make a public commitment to use performance information as it carries out legislative responsibilities.”

John Kamensky, senior fellow at the IBM Center for the Business of Government, offered seven commercial strategies that his group says could contribute up to $1 trillion in reduced government costs. They included consolidating information technology strategy; cross-agency integration of processes such as strategic sourcing; using advanced business audits and analytics to reduce improper payments; and expanding electronic self-service tools for government business processes. These processes are “being addressed by the administration,” Kamensky added, though he’d recommend a small support team to implement them, operating out of the Office of Management and Budget.

Kamensky cautioned that the key to efficiency is not always “plus or minus dollars, but in changing the way government does business. It might require some investment up-front."  Blair added that if the government doesn’t offer “proper training and skill sets for the right people, you’re throwing good money after bad. And under sequestration, training is one of the first budget lines that would go.”

Schatz argued that “there are no consequences for wasting money -- no one goes to jail -- so there needs to be at least an incentive for performing your job at a certain level, and a disincentive for performing the job incorrectly. Congress and the president don’t have that power to hire and fire.”