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WASTE IN GOVERNMENT: WHAT’S BEING DONE? 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JANUARY 9, 2014 

Serial No. 113–102 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

Vacancy 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

STEPHEN CASTOR, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on January 9, 2014 ........................................................................... 1 

WITNESSES 

The Hon. Tom Carper, a U.S. Senator from the State of Delaware 

Oral Statement ................................................................................................. 4 

Written Statement ............................................................................................ 8 

The Hon. Tom Coburn, a U.S. Senator from the State of Oklahoma 

Oral Statement ................................................................................................. 10 

Mr. Thomas A. Schatz, President, Citizens Against Government Waste 

Oral Statement ................................................................................................. 27 

Written Statement ............................................................................................ 29 

Mr. Chris Edwards, Director of Tax Policy Studies, CATO Institute 

Oral Statement ................................................................................................. 62 

Written Statement ............................................................................................ 64 

Mr. Brandon Arnold, Vice President of Government Affairs, National Taxpayers Union 

Oral Statement ................................................................................................. 72 

Written Statement ............................................................................................ 74 

Ms. Jaimie Woo, Tax and Budget Associate, U.S. Public Interest Research 

Group 

Oral Statement ................................................................................................. 79 

Written Statement ............................................................................................ 81 

APPENDIX 

Opening Statement by Ranking Member Cummings, Reps. Bentivolio and 

Cartwright ............................................................................................................ 114 

Staff Report submitted by Rep. Mica ..................................................................... 118 

2012 Congressional Ratings for the Council of Citizens Against Government 

Waste submitted for the record by Chairman Issa ........................................... 122 

Feb. 2013 publication ‘‘Prime Cuts Summary’’ submitted for the record by 

Chairman Issa ...................................................................................................... 129 

U.S. PIRG publication ‘‘Toward Common Ground 2013’’ submitted by Chairman Issa ................................................................................................................ 155 

Mr. Edwards responses to questions for the record from Rep. Collins ............... 174 

NTU responses to questions for the record by Rep. Speier .................................. 176 

U.S. PIRG responses to questions for the record by Rep. Collins and Rep. 

Speier .................................................................................................................... 180 

Citizens Against Govenment Waste responses to questions for the record 

by Rep. Speier and Collins .................................................................................. 186 

(1) 

WASTE IN GOVERNMENT: WHAT’S BEING DONE? 

Thursday, January 9, 2014 

HOUSE OF REPRESENTATIVES, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, WASHINGTON, D.C. 

The committee met, pursuant to call, at 9:35 a.m., in Room 2154, 

Rayburn House Office Building, Hon. Darrell E. Issa [chairman of 

the committee] presiding. 

Present: Representatives Issa, Mica, Turner, Duncan, McHenry, 

Jordan, Chaffetz, Walberg, Lankford, Amash, Gosar, Gowdy, 

Farenthold, Woodall, Collins, Meadows, Bentivolio, DeSantis, 

Cummings, Maloney, Norton, Tierney, Clay, Lynch, Connolly, 

Speier, Duckworth, Kelly, Davis, Cardenas and Grisham. 

Staff Present: Will L. Boyington, Press Assistant; Molly Boyl, 

Deputy General Counsel and Parliamentarian; Lawrence J. Brady, 

Staff Director; Katelyn E. Christ, Professional Staff Member; John 

Cuaderes, Deputy Staff Director; Adam P. Fromm, Director of 

Member Services and Committee Operations; Linda Good, Chief 

Clerk; Tyler Grimm, Senior Professional Staff Member; Frederick 

Hill, Deputy Staff Director for Communications and Strategy; 

Christopher Hixon, Chief Counsel for Oversight; Mark D. Marin, 

Deputy Staff Director for Oversight; Laura L. Rush, Deputy Chief 

Clerk; Sarah Vance, Assistant Clerk; Peter Warren, Legislative 

Policy Director; Rebecca Watkins, Communications Director; Jeff 

Wease, Chief Information Officer; Sang H. Yi, Professional Staff 

Member; Beverly Britton Fraser, Minority Counsel; Aryele Bradford, Minority Press Secretary; Jennifer Hoffman, Minority Communications Director; Adam Koshkin, Minority Research Assistant; 

Juan McCullum, Minority Clerk; Leah Perry, Minority Chief Oversight Counsel; Brian Quinn, Minority Counsel; Dave Rapallo, Minority Staff Director; and Daniel Roberts, Minority Staff Assistant/ 

Legislative Correspondent. 

Chairman ISSA. The committee will come to order. 

The Oversight Committee exists to secure two fundamental principles: First, Americans have a right to know that the money 

Washington takes from them is well spent; and, second, Americans 

deserve an efficient, effective government that works for them. Our 

solemn responsibility is to hold government accountable to taxpayers because taxpayers have a right to know what they get from 

their government. It is our job to work tirelessly in partnership 

with citizen watchdogs to deliver the facts to the American people 

and bring genuine reform to the Federal bureaucracy. 

Today’s hearing strikes at the heart of the committee’s mission: 

finding and rooting out waste in the Federal government. At the 

beginning of every session, Congress holds a hearing to learn from 

2 

experts about the status of wasteful spending and recommit ourselves to eliminating it. Much like the fiscal outlook in the past, 

the hearing today will be grim; grim both because of actual waste 

and because of organizational waste. 

President Obama has overseen the highest postwar deficits on 

record, and last year we had, in spite of tax increases that continue 

to pile up, a $680 billion deficit. The American people have a burden on top of their mortgage on their home of $140,000 per home. 

Real perspective is that this is unsustainable. If your home were 

going further in debt every year, you would ask, how long can I tolerate it? And yet in just a few years, your home will be a quarter 

of a million dollars in debt if we do not quickly reverse the waste 

and the unnecessary growth in government. 

This committee does not appropriate, nor do we tax. Our committee’s responsibility is to find within the authorized mission of the 

government the kind of waste and inefficiency that can be eliminated to deliver to the American people a better value. Reasonable 

estimates are a better value could save $200 billion of the stockholders’ hard-earned money. In other words, we could eliminate a 

third of the deficit simply by eliminating known and recognized 

waste. 

Our first panel today are our partners in the Senate, Senator 

Carper and Senator Coburn. No two people have been more willing 

to speak out against the organizational waste and misspending 

than these two Senators. Our second panel will be four individuals 

who represent organizations that are heavily contributed to the 

spending reform discussion. 

First, though, we will hear from our Senators. It is my great 

pleasure to welcome my colleagues, Dr. Coburn, who releases the 

Wastebook every year, and recently released this year’s chronicles, 

the kind of waste that can be eliminated, and chairman, Senator 

Carper, has been a good partner in this discussion. I look forward 

to their hearings. 

I will remind my colleagues that any questioning or any further 

comments after their opening statements will be at the discretion 

of the Senators, and I take pleasure in introducing the ranking 

member for his opening statement. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. I am very 

pleased that you called this hearing today. This is the bread and 

butter of what our committee does, and I hope today’s hearing will 

further this important discussion, which we have had regularly in 

similar hearings over the past few years. I thank all the witnesses 

for taking time out of their busy schedules to be here today with 

us and participate in this hearing. 

I am delighted that Ranking Member Coburn has joined us at 

our first hearing this year to help set the tone for rooting out government waste. Senator, I want to say to you I have seen your reports, and I agree with many issues you identify. Since this may 

be one of our last opportunities to work together before your retirement, I look forward to an effective and rewarding collaboration, 

and I thank you for not only your service to your constituents, but 

your service to our Nation. 

Mr. Chairman, I also appreciate that you agreed to my request 

to invite our good friend Chairman Carper to share his thoughts 

3 

and views with us as well. Chairman Carper has been tireless in 

his efforts to make Federal agencies work more effectively and efficiently. Senators Carper and Coburn have been at the forefront of 

legislation that has resulted in billions, and I repeat billions, of dollars in savings for the Federal Government. 

Today we have a unique opportunity. We have in the room the 

chairman and ranking member of the Senate Homeland Security 

and Governmental Affairs Committee. We also have the chairman 

and ranking member and additional members of the House Committee on Oversight and Government Reform. These are the two 

key committees that are responsible for reducing waste, fraud, and 

abuse in our government. 

I propose that we use some of our time today to set a bicameral 

agenda for the coming year. Although we have relatively little time 

remaining in this Congress, I propose that we try to identify some 

of the top reform proposals we might be able to achieve on a bipartisan basis. Let us begin with a process today to identify issues on 

which we have common ground and hopefully save taxpayers billions of dollars going forward. 

The Government Accountability Office’s annual high risk list and 

duplicative programs report give us a critical tool for focusing our 

oversight efforts. Inspector general recommendations are another 

key we can examine, and then, of course, we have proposals from 

groups like those here today. 

One agency that comes up repeatedly every single year in virtually every single report is the Department of Defense. This 

makes sense because it is the largest Federal agency with the biggest budget. The Department’s financial management as a whole 

continues to be designated as high risk because GAO determined 

that DOD has not been able to control costs, ensure basic financial 

accountability, measure performance, prepare auditable financial 

statements, and prevent and detect fraud, waste, and abuse. It 

would be a big step in the right direction if DOD could produce for 

the first time an auditable financial statement. 

DOD has also experienced significant problems with management and oversight of the $365 billion obligated for contracts last 

year alone. The Congressional Research Service reports that DOD 

acquisition programs have experienced poor performance against 

the backdrop of war in Afghanistan, spiraling contract costs, and 

decline in the size of defense acquisition workforce. 

DOD also leads the Federal Government with wasteful, duplicative IT investments, and I know this is something that our chairman is most interested in. In testimony before the committee last 

year, GAO warned that several DOD IT investments experienced 

significant performance problems and were, indeed, high risk. One 

specific example that GAO highlighted was a contract that the Air 

Force cancelled in December 2012 after spending $1 billion on expeditionary combat support system. Despite these and other examples of waste, some progress is being made that we should be proud 

of and build upon. 

Finally, President Obama made it a priority to reduce improper 

payments when he took office, and improper payments have been 

reduced from $125 billion in 2010 to $106 billion in 2013, but that 

is still not good enough. Chairman Carper and Ranking Member 

4 

Coburn have been active with legislation on this topic, and I hope 

Chairman Issa and I can partner with you going forward. 

There is also improvement in financial management within government agencies. For example, the Department of Homeland Security has obtained a clean audit of its financial statement for the 

first time in the agency’s 10-year history. This committee has been 

an integral part of improving financial management at DHS, and 

it is good to see positive results from our continued oversight. 

Moving forward, we have to continue this progress by conducting 

our oversight efforts in a sustained, dedicated, and bipartisan manner. It is not enough for us to convene hearings and hope for the 

best. We need to work cooperatively and diligently to find tangible 

solutions to minimize government waste and maximize efficiency. 

After all, ‘‘government reform’’ is part of the name of this committee. 

I anxiously look forward to the testimony, and I thank you, Mr. 

Chairman, for the courtesy. 

Chairman ISSA. I thank the ranking member, and I thank you 

particularly for alluding to FITARA, something that we have 

worked on on a bipartisan basis. 

All Members will have 7 days to submit their opening statements. 

And we now welcome our first panel of witnesses. Senator Carper and Senator Coburn, you need no introduction, and, more importantly, I will not belabor the time necessary to get to your important statements by suggesting one. 

Chairman Carper, you are recognized. 

WITNESS STATEMENTS 

STATEMENT OF THE HON. TOM CARPER, A UNITED STATES 

SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. Mr. Chairman, to you, to our friend, the ranking member Elijah, to many of our colleagues with whom Dr. 

Coburn and I have worked, including the fellow from Utah over 

here most recently on really surplus property, properties that we 

don’t need, excess properties, wasteful properties. I have a prepared statement. I would ask, if we could, that it might be included 

for the record, Mr. Chairman. 

Chairman ISSA. Without objection, both of your entire statements 

will be placed in the record. We are not running a clock on you, 

but it isn’t the Senate, so bear that in mind. 

Senator CARPER. Thank you. 

I would like to think that there are three—first of all, thank you 

for this hearing. Thank you for giving us a chance to participate. 

Last year when Dr. Coburn and I were renewing our positions as 

ranking member and chair of the Homeland Security and Governmental Affairs Committee, we invited both you and Representative 

Cummings to come and lead off our hearing on postal reform. I am 

encouraged to report today that I think Dr. Coburn and I, we have 

been working on bipartisan legislation, and I think we are very 

close to hammering out the last final details to enable us to move 

to a markup in our committee we hope this month, and to be able 

to report out a bipartisan bill, and to have—I think we are having 

5 

some discussions with you already on the direction we are going, 

but we wanted to have more. 

In terms of deficit reduction, part of what they are doing over at 

the Postal Service is rightsizing the enterprise, figuring out how to 

spend less money, get a better result for that, and we need to take 

that kind of lesson across the way in our government. 

I like to think there are three ways, three keys to deficit reduction. One of those is entitlement reform. The largest part of our 

spending is entitlement programs. They are important, but if we 

are going to make progress on deficit reduction, we can’t ignore 

them. 

What I suggest we do is three things. I think Dr. Coburn agrees 

with it; I think the President agrees with it. One, reform the programs so that they save money, so we save the programs for our 

children and grandchildren, and that we do so in a way that does 

not savage old people or poor people, those three things. 

The second thing to do for deficit reduction, I think we need 

some additional revenues. When we had balanced budgets for 4 

years between 1997 and 2000, revenues as a percentage of GDP 

was about 20 percent for 4 years. Spending as a percentage of GDP 

was about 20 percent for 4 years. We had 4 years of balanced budgets. And I think we need tax reform. I serve on the Finance Committee. We are trying to do that working with Dave Camp and 

Sandy Levin over here, but we need tax reform that, one, I think 

lowers corporate rates so that we are competitive with the rest of 

the world, but also generates some revenues for deficit reduction. 

The third thing we need to do is look at everything we do in government, everything we do in government, and ask this question: 

How do we get a better result for less money or the same amount 

of money in everything we do? It is almost like a culture change, 

from a culture of spendthrift towards a culture of thrift, and that 

is what Dr. Coburn and I do with our committee, and I know it is 

a lot of what you do. 

Most of you know Mike Enzi, Senator from Wyoming. Mike Enzi 

has what he calls the 80/20 rule, and his 80/20 rule has enabled 

him to work with Ted Kennedy when he was alive, and they were 

both leaders of the Health, Education, Labor & Pensions Committee, and they got a lot done. I asked Mike Enzi, I said, how do 

you get so much done? He says, Well, we subscribe to the 80/20 

rule. I said, What is that? He said the 80/20 rule is that we agree— 

Ted and I agree on 80 percent of the stuff; there is 20 percent of 

the issues we don’t agree on; and what we decide to do is focus on 

the 80 percent where we agree, and the 20 percent that we don’t, 

we set that aside for another day. And they make great progress 

as a team, Democrat and Republican. I think Dr. Coburn and I 

make pretty good progress, and I think you set a good example for 

us in some of the same regards. 

I want to take maybe just a couple minutes and focus on the 

third of the three pieces I talked about with respect to deficit reduction, and that is how do we get a better result for less money 

in everything we do. Representative Cummings mentioned improper payments. Dr. Coburn and I have gone back to that well 

again and again and again. We have introduced legislation, passed 

it in 2010 with your strong support, again enhanced it again in 

6 

2012. We introduced new legislation today so that—not today, but 

this year, last year, so that we don’t continue to waste money on 

benefits to people that are dead, and a lot of commonsense—a lot 

of commonsense stuff. 

Elijah is right. When we—in fact, when I was new in the Senate, 

George W. Bush said, we know we are spending a lot of money, 

wasting a lot of money in improper payments. Let us do something 

about it. We passed legislation that said let us start that we want 

agencies to keep track of improper payments and report that. That 

was 2000, I think. 2010, Dr. Coburn and I, with your help, support, 

we updated that so that not only would agencies be required to report—identify and report improper payments, but we wanted them 

to stop making them, and we wanted them to go out and try to recover monies that were improperly paid, and we said we want the 

managers of agencies to be evaluated in part on how well they are 

complying with this law. And as Representative Cummings says, 

improper payments have been dropping since then. 

We enhanced that bill last year. We have offered legislation in 

the Senate called the PRIME Act, which would enable us to do— 

to waste less money in Medicare and Medicaid. People say we can’t 

curb spending or curtail spending in those entitlements. Well, we 

can, and there is a lot of things we can do. We put it in the PRIME 

Act, it has been made part of the SGR legislation that is coming 

out—that has come out of the Finance Committee, and we hope it 

is something that you can embrace here in the House. It will enable us to save money in these programs, save the programs, and 

not savage old people or poor people. 

The other thing I want to mention, if I can, is that we have hundreds of thousands of properties that the Federal Government 

owns. Some of them are defense related; many are not. Some of the 

properties we own; a lot of them we lease. We waste huge amounts 

of money, billions of dollars every year, in maintaining these properties that we don’t fully use or don’t use at all, maintaining the 

properties, heating them, cooling them, securing them, and it is a 

real thicket to try to figure out how to deal with it. It involves not 

just the Congress, but it involves all kind of folks including homeless groups, including communities across the country. 

We have got to deal with this, and Dr. Coburn and I are committed to getting it done this year, and we welcome very much the 

opportunity to work with Republicans and Democrats on this committee. That is just one of the areas where we can get a better result for less money and save money that we are foolishly wasting. 

I would just say again, Enzi has got it right, that 80/20 rule. 

There is a lot to it. Let us focus on that 80 percent that we can 

agree on. We can’t do it by ourselves, obviously you can’t do it by 

yourselves, but if we can marry our fortunes together, work with 

OMB, especially with GAO, who gives us that great high risk list 

every 2 years with our—really that is a to-do list—we can get a lot 

done. And a lot of this stuff like improper payments, the administration actually agrees with us, and property reforms they agree 

with us, and we want to get something done, so let us just do it. 

Thank you, Mr. Chairman. 

Chairman ISSA. Thank you. 

[Prepared statement of Senator Carper follows:] 

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Chairman ISSA. They might remind us all that they agree with 

us on 5-day instead of 6-day delivery, too. We will get there. 

Dr. Coburn. 

STATEMENT OF THE HON. TOM COBURN, A UNITED STATES 

SENATOR FROM THE STATE OF OKLAHOMA 

Senator COBURN. Well, thanks for the opportunity to be here, 

and I thank every member of the committee that is here. 

You know, the problem isn’t that the Congress doesn’t get along. No, we have a $680 billion deficit we all agreed to last year. My 

take is we get along too well. We have Presidents that come and 

go and Congresses that come and go, but the wasteful spending 

continues. Why is that? Why does it happen? I mean, we force 

through in legislation to make the GAO show us where duplication 

is, and there has been one piece of legislation come out of Congress 

in 4 years—it didn’t even come out of Congress, it came out of the 

House— that consolidated one of the things the GAO said needed 

to be consolidated. It is called the SKILLS Act. It is the only thing 

that has happened in 4 years. 

So the problem isn’t that we don’t know what the problem is. The 

problem is that we don’t act on the problem, and it is hard. There 

is no question. If you talk to the members of the Labor and Workforce Committee, it is hard when they consolidated 36 programs 

into 6. That is not easy work. But that bill hasn’t even been taken 

up by the Senate or the Health Committee in the Senate. So the 

problem is us. 

Sequestration couldn’t even force Congress— sequestration didn’t 

even force Congress to cut, eliminate or consolidate any of the government’s hundreds of duplicative, outdated or ineffective programs, not one. The problem is us. We are not acting on the information that we have. We agreed to undo modest, automatic spending reductions without eliminating a single unnecessary program. 

Not one. We added $60 billion back in spending over the next 2 

years, but we didn’t eliminate any of the waste. 

If you can’t find waste in any part of the Federal budget, whether it is healthcare programs, defense spending, which is ripe with 

waste, or even the Tax Code, it is only one reason: You haven’t 

looked. You have not looked. 

The government has grown so massive that there is only one department in the entire Federal Government that actually knows all 

of its programs. That is the Department of Education. They put out 

a list every year. They are the only one. There has been attempts 

to try to force that through the Senate. There is a bill in the House 

to try to make sure every department at least has a list of their 

programs. You haven’t moved it; we haven’t moved it. Before you 

can fix anything, you have got to know what is there. You have to 

look at it. We haven’t looked. 

The Pentagon can’t pass a simple audit. They were mandated to 

pass an audit the first time in 1984. We have a bill Audit the Pentagon, an act that has real teeth in it if the Pentagon doesn’t perform. When the NDAA came through, they took the teeth out, but 

put the audit in. Well, we have been telling them to do an audit 

for 30 years. Do you think they are going to do an audit without 

any teeth, without any threat, without any consequences of not 

11 

doing it? And yet it was pulled out. So we are not going to do it 

until we get serious about doing it. 

If you think about it, even in sequestration, you don’t have to 

agree with everything that I listed in the Wastebook. I could have 

put 300 there and $60 billion worth of wasteful spending, but the 

one thing you can’t disagree with is that when we are borrowing 

$680 billion a year from our kids, are these things that we listed 

in the Wastebook a priority for the Government of the United 

States? And they are not. And the reason they happen is because 

there is not good oversight by the committees of authority. That is 

why they happen. It is not meant to embarrass. It is meant to say 

what are we doing? Why are we not looking? Why are we not working to solve the problems? 

Representative Cummings, you mentioned a contract with the 

Air Force. In 2010 we notified the Air Force that they should cancel 

that program. That is when they were only a couple hundred million dollars into it. Consequence. What are the consequences of 

cancelling that program? They paid a close-out fee, but here is the 

consequences that didn’t happen: Whoever was managing that contract or who let that contract in the first place didn’t get fired, and 

the contractor wasn’t sued by the Federal Government for nonperformance. So the same thing is going to continue to happen 

until we start demanding accountability, and that accountability 

has to start with us first. We can’t ask the Air Force to be accountable if we are not accountable. 

The Wastebook details 100 projects, $30 billion. You can pick 

with it on whether or not it is accurate and whether or not it is 

right, so take—throw 50 percent of it away, $15 billion. The question is, is in a time when we are borrowing from our future, should 

we be spending that money now? And I would contend that we 

shouldn’t. And so if we are, why is it happening? And it is happening because we are not doing our jobs, and I am talking collectively, the Senate and the House, the committees. 

If you think about the GAO reports that have come out over the 

last 3 years, another one will come this March, what has happened 

based on the information that they have given us? One bill out of 

the House. Nothing out of the Senate. The President, to his credit, 

has taken a lot of that and put it in his budgets, saying these are 

right things to do, we should do it. We haven’t acted on it, he 

hasn’t acted on it because he can’t, because we won’t do it. 

You know, I would close just by giving you just a little rundown 

of what is out there. Most people don’t realize. We have 679 renewable energy programs from 23 different agencies costing $15 billion 

a year. Can anybody logically explain why we would need 679 programs for renewable energy? Nobody can. Each one of those, each 

one of those 679 has an overhead, has a management team, has associated costs with it. We have 253 different Department of Justice 

crime prevention programs, $41⁄2 billion. Why do we have that 

many? Why can’t we consolidate those? 

Finally, I will end, and I have got a list, I will be happy to supply 

it to all your Members, a summary of what the GAO has given us 

so far in terms of duplicative programs. I met with Congressman 

Collins before this, says, how do you do it? It is hard work. You 

have to win over the heart of the committee chairman of jurisdicVerDate Aug 31 2005 10:57 May 01, 2014 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 C:\DOCS\87646.TXT APRIL
12 

tion and say, won’t you do oversight on this? Won’t you look at it? 

Won’t you try to consolidate it? And if that doesn’t work, what you 

have to do is embarrass the Members of Congress into doing their 

job. 

I am embarrassed that we as Members of Congress have allowed 

this list with the multitude of programs that are on there, with the 

duplicity that is in it, that we haven’t fixed it. And we don’t have 

an excuse. We are guilty of not doing our jobs, and the way to turn 

that around is to start doing it. And I understand this committee 

has jurisdiction to look at it, but you can’t change it unless the 

committees of jurisdiction act. And so what we need to all be is ambassadors to the separate committees that they will, in fact, do the 

hard work, do the oversight, streamline, eliminate, combine, and 

consolidate so that, in fact, we can actually get some savings to 

spend on things that may be much more important. And what I 

feel is we are not meeting the charge, we are not meeting our oath, 

because we fail to do the very, very hard work of having the committee hearings, pulling the people in, and saying, what is the 

problem? How do we address the problem? 

And most agencies, by the way, don’t know they are a problem, 

either, because nobody in the agency knows all the programs. And 

so it starts with us, and my message would be, we need to redouble 

our efforts on both sides of the aisle, both sides of the Capitol, to 

say that we are going to be good stewards. And it is not that the 

program ideas are bad, but when you have 679, there is no way 

you can justify that to anybody. 

And so I would leave you with that. The first thing you ought 

to do is consolidate 679 renewable energy programs into maybe two 

or three and get rid of the overhead, and if you did that throughout 

the Federal Government on all these programs, we could actually 

get to a balanced budget without raising taxes, without making 

hard choices in things that really hurt people, and could actually 

do our jobs. 

Thank you, and I am happy to answer any questions you might 

have. 

Chairman ISSA. Thank you. 

Chairman ISSA. And if it is all right with the two Senators for 

a few minutes, we will go through informal questions. I am not 

going to yield 5 minutes back and forth, I know you don’t have the 

time for it, and I am not going to recognize myself except to say 

that, Dr. Coburn, your Wastebook will be inserted into our record 

today as essentially the collateral material for your opening statement, without objection. 

To view Dr. Coburn’s ‘‘Wastebook,’’ please visit: 

[www.coburn.senate.gov/public/index. cfm?a=Files.Serve&File— 

id=Occ34c92-6901-425d-a131-d3151d7216ef]. 

Chairman ISSA. Mr. Chaffetz, I understand you had a brief comment? 

Mr. CHAFFETZ. Yes. I thank the chairman, and I thank both gentlemen here, both the Senators, for their passion. It is inspirational 

to me what you are doing, and knowing there are people that truly 

care. 

I particularly wanted to highlight my interaction with Senator 

Carper. We had a bill here in the House, H.R. 328, that last term 

13 

we passed unanimously, passed unanimously in this body, and 

passed unanimously out of the House, to deal with real property 

disposal. And working together to get that done with Senator Carper, there is something like, GAO estimates, nearly 78,000 properties that are either not utilized or underutilized. Additionally, the 

GAO estimates that we spend about $1.5 billion per year to operate 

and maintain these properties that we don’t need. 

My State of Utah, we have got an operating budget of $12- to $13 

billion, everything we do for the entire year, and yet the Federal 

Government has got 78,000 excess Federal properties, spend $1.5 

billion. 

We have got to solve that. That is the low-hanging fruit. And it 

does have to happen in a bipartisan, bicameral way, and I just 

wanted to thank Senator Carper in particular for his working 

across the aisle in a bicameral way, and I am optimistic that we 

can actually help solve this. 

Senator CARPER. Mr. Chairman, just a brief comment if I could. 

Chairman ISSA. Of course, Senator. 

Senator CARPER. It is a real pleasure for us to work— both of us 

to work with you. The first things Tom Coburn and I ever did together when he was new in the Senate, he was chairman of the Republicans in the majority, he was chairman of the Federal Financial Management Subcommittee of what is now Department of 

Homeland Security and Governmental Affairs, we went to Chicago 

together, and we visited an old postal facility. It was empty, huge 

facility. It has been empty forever. It is still empty. There are tens 

of thousands of buildings like that, and we can do something about 

it. 

We are determined to get that legislation through; it is out of our 

committee. We are determined to get the kind of legislation that 

we have coauthored together and get it done. 

I wanted to just take a moment, it is in my prepared statement, 

Mr. Chairman, but you have done great work on what we call the 

DATA Act, try to focus on disclosure and try to focus on data 

standards for some of the spending that we do. Dr. Coburn and I 

have worked to get that legislation. Mark Warner, Mark Warner 

has been the lead, as you know, in the Senate. But we have reported the legislation out of committee, and my hope is that we can 

get that done. That is one of the 80 percent of the things that we 

agree on, and, frankly, so does the administration. 

Chairman ISSA. Thank you. 

I will now go to the ranking member for a short comment. 

Mr. CUMMINGS. Just one quick question. You know, first of all, 

thank you both for your testimony. One of the things I have 

learned after being on the Earth for 62 years is that a lot of times 

people don’t do things because they can’t do everything that they 

want to do, so they end up doing nothing. Maybe they don’t have 

time, they find excuses, whatever. 

I guess where I am going with this is what do you all see? You 

talk about low-hanging fruit, Senator. I mean, what can we reasonably do, and particularly in light of Senator Coburn’s comments, to 

get some things done? It may not be everything, but at least get 

some things done so at this time next year we will say, well, we 

14 

were able to chip away at this. I mean, what— I mean, what are 

the—and then—— 

Senator COBURN. It is not hard. It is not hard. 

Mr. CUMMINGS. Yeah, okay. 

Senator COBURN. You get rid of a $680 billion deficit $1 billion at a time. You have got $5.6 billion being collected by people who 

are on disability for unemployment insurance. You have got $100 

million going in unemployment insurance to people who have net 

incomes greater than a million dollars a year. Those aren’t hard 

things to do. I mean, if you are disabled, the very fact that you are 

disabled, you are not working, that is one of the requirements other 

than the short period of time that you might be in a trial period, 

so it doesn’t make sense. 

You know, the low-hanging fruit, it is all over, but it requires 

work. It means we have to move it through the process, but unless 

you start at a billion dollars at a pop or $100 million to get to a 

billion, you are never going to get there, and what has happened 

is nobody has started. 

The whole reason I passed the legislation forcing the GAO to outline all this duplication was I thought it would embarrass us into 

acting. Boy was I wrong. It hasn’t embarrassed us at all because 

we haven’t acted. We haven’t done anything except what came out 

of the class—I mean, the SKILLS Act. 

So you do it by a billion at a time, and once you start doing it, 

what you find out is, you know, it really feels good to be an efficient steward of the taxpayers’ money, and it doesn’t have to be— 

these aren’t necessarily controversial issues. These don’t have to be 

partisan issues. Do you really think we would disagree in eliminating these 679 green programs? You know, couldn’t we all agree 

that we want the green programs, but couldn’t we do it with 10 or 

15 instead of 679? I mean, those aren’t controversial issues. The 

fact is just nobody has the initiative to go and do it. We are not 

seeing initiative by Members of Congress to say, I am taking this 

on, I am taking this on, let us get it done. 

And every year we don’t do it, every year we don’t reform contracting at the Pentagon, every year the Pentagon can’t meet an 

audit means that they have no idea. Realize, the Constitution requires them to give us a report of how they spend their money, and 

they can’t, and yet we don’t want to put any teeth on the Pentagon 

to force them to do that, that is too hard? We need to embarrass 

our colleagues that are protecting the Pentagon from becoming responsible. 

Mr. CUMMINGS. Thank you, Mr. Chairman. 

Senator CARPER. If I could just give a quick response, if I could. 

Chairman ISSA. Of course, Senator. 

Senator CARPER. When Dr. Coburn and I were the chairs and the 

ranking member on a subcommittee of Homeland Security and 

Governmental Affairs, Federal Financial Management, it took me 

a while, but I finally realized, as much as we wanted to do something about some of these wasteful spending issues, if it was just 

our subcommittee working on it, we weren’t going to get much 

done, but maybe if we partnered with the full committee, we could 

get something done. And so we started working with Joe 

Lieberman and Susan Collins, and we realized maybe if we work 

15 

with the House on a bunch of this legislation, a lot of the things 

that we are talking about here, we could increase the leverage of 

a little subcommittee. 

Then we said, you know, over at GAO every 2 years they come 

up with their high risk list. It is really a to-do list for us for ways 

to reduce wasteful spending, inefficient spending. So we started 

meeting with Gene Dodaro, partnering with his folks at GAO, and 

that was helpful. 

We got ourselves a new—the President nominated a wonderful 

woman last year, Sylvia Mathews Burwell, to be OMB Director, 

and they put together good management teams that includes a gal 

named Beth Cobert, and who is now the Deputy for Management. 

They have a management initiative, agenda for the administration. 

So why don’t we partner with them as well? 

You have got other people that are going to follow Dr. Coburn 

and I to the witness table, Citizens Against Government Waste, 

National Taxpayers Union, who really care about this, are passionate about how do we eliminate wasteful spending. And the key 

is to find that 80 percent of stuff that we agree on, all of us, and 

then we increase the leverage of a subcommittee or a committee 

and get real things done and make the kind of progress. 

The stuff that we put in the legislation that Dr. Coburn and I 

authored with input from you, help from many of you and a bunch 

of folks, but the PRIME Act, which is the next step, we think, in 

wasteful spending, put it in the SGR reform legislation, the doc fix 

legislation. Most of it is there. It is great stuff. It is great stuff. It 

doesn’t savage old people or poor people. It helps save those programs, Medicare and Medicaid. It saves them. It saves money. 

Chairman ISSA. Thank you. 

Mr. Duncan, I understand you had a quick question. 

Mr. DUNCAN. Well, I just wanted to express my appreciation to 

both Senator Carper and Senator Coburn. Both of them were great 

Members of the House, and they are doing great work in the Senate. 

It is sad that every week, sometimes almost every day, we read 

terrible examples of waste. I read recently about the military building a $36 million headquarters in Afghanistan that nobody wants, 

and there is nobody there to use it, it is just going to be a brand 

new, empty building. I remember USA Today writing about the billion-dollar air marshal program where they are spending $250 million per arrest, and they have had more air marshals arrested than 

arrests by air marshals. So many examples. 

And before Congressman Chaffetz got here, Senator Carper and 

I did another property disposal bill years ago. These are properties 

that the Federal Government doesn’t even want, and I know Senator Carper’s been working on that for years. And we passed it 

here in the House, and I don’t know, we need to keep trying. But 

Governor Rendell, when he was mayor of Philadelphia, he was having problems with some government unions, and he said before the 

Ways and Means Committee, he said the problem with government 

is, he said, there is no incentive for people to save money, so much 

of it is squandered. There is no incentive for people to work hard, 

so many do not. That is the problem. We need to give more incentives or rewards. 

16 

We have heard, all of us have heard, about how agencies spend 

60 percent of their budget the first 11 months, and then scramble 

around to spend the last 40 percent in the last month. We need to 

give more incentives to government employees when they save 

some money. 

But I appreciate the work that both of you have done and are 

continuing to do. Thank you. 

Chairman ISSA. Thank you. 

Mrs. Maloney. 

Mrs. MALONEY. Thank you for calling this hearing, you and the 

ranking member, and I welcome our Senators and former colleagues in the House and congratulate you on your work. 

Senator Carper, your oversight on the census was very helpful, 

and I appreciated working with you. 

Dr. Coburn, I think your report is terrific. I am just glancing 

through it. I would like to hear a little bit of a history of it. When 

did you start it? Have you ever been successful in getting anything 

out of government that you have identified in the Wasteful report? 

And why can’t we—I understand you are marking up an appropriations bill this week in the Senate, and Senate rules allow you to 

connect things to it. Why can’t you connect a wasteful spending in 

a bipartisan way to this bill that is moving? Take some action. 

And I would like both of you to respond. I was astonished at the 

reports I have been reading through. I think Ms. Woo had this report on a plane that even the Pentagon doesn’t want, the F–35 

Joint Strike Fighter. The DOD Chief Acquisitions Under Secretary 

called it an acquisition malpractice. It is going to cost a trillion to 

maintain it, and they have already—the cost is now $400 billion, 

and they are saying it can’t fly at night, can’t land on aircraft, isn’t 

useful in today’s type of military operations that are more like the 

Navy SEALs than big planes that can’t find a place to land and 

can’t fly at night, and can’t land on a—how would you get this out 

of the budget? How do you get something that even the Pentagon 

says they don’t want out of the budget? 

So I am addressing the question to both of you, but, Dr. Coburn, 

could you start first with your history of this study that I am glancing at that I think is excellent, but have you gotten anything out 

of the budget that you have identified as extremely wasteful? And 

how do we get this F–35 that even the Pentagon is saying is wasteful, can’t do what we want, is not responding to the type of military 

that we have in America today, which is more of a single swift 

strike, like the Osama bin Laden-type operation. 

Senator COBURN. Well, addressing the F–35, if you look at the 

history of that, when you are building planes, before you finish 

your design, you are going to have cost overruns. So it goes back 

to what I said earlier: Unless you do procurement reform within 

the Pentagon and actually have some adults in the room when you 

are buying something—— 

Mrs. MALONEY. Well, excuse me. Let me ask you one question. 

How would you do that? Everyone has cost overruns. You can’t outlaw cost overruns. You can document who is doing it, but—— 

Senator COBURN. Well, only the government has those kind of 

cost overruns. In the private sector you have a contract, and if you 

have a fixed-price contract, and if you have a cost overrun, it is on 

17 

the provider, it is not on the buyer. So, you know, what we have 

done is create a culture where you do cost-plus on development; 

that is why the Nunn-McCurdy laws were put in. 

I would dispute some of the—parts of the F–35 are very applicable to what the military wants. There are some questionable areas 

of it, and there is no question it is way too expensive, I agree with 

you. 

We started the Wastebook about 4 years ago, again with the 

whole purpose to try to embarrass some of the agencies into thinking about some of the decisions they make. Just remember, Homeland Security, for example, you have billions and billions of dollars’ 

worth of grants every year, but they don’t follow them up, they 

don’t see if they were met. 

There is only one agency in the Federal Government that is effective at grant writing, and it is the Department of Library and Museum Sciences, and let me tell you what they do. It is well known 

throughout the country that if you mess with them, and you are 

not compliant with your grant, and you spend the money other 

than, you are never going to get another grant. In other words, 

they create the proper expectation that when you deal with them, 

you are going to do what you said you are going to do, you are 

going to meet the requirements of the grant, and you are going to 

ascertain. 

You know, do you realize most of the grant programs we have 

people get grants for the same thing from two or three different 

agencies, and none of them even know it? Agencies don’t have any 

idea. 

So we need grant reform. We need a mandate on how you write 

a grant, what the requirements are, what the consequences are. 

Homeland Security has no idea where their grant money is going, 

or how effective it is, and whether or not it is risk based. Where 

is the risk? Is the money going there? So it is lost. And we have 

thrown money at things, and we haven’t done the oversight. I 

mean, when was the last time a committee of Congress said, we 

are going to do an oversight on the Department of Justice crime 

prevention grants, how well are they working, what are their 

metrics, what are they accomplishing? That is how we found out 

on job training. We actually did. 

I went to Oklahoma and looked at every Federal job training program in the State, every one of them. We have—in a city of 17,000 

with an unemployment rate of less than 5 percent, we have 13 Federal job training programs working. Now, it is great about employing people in job training. They don’t need a job training program. 

The other thing we found is the State-run job training programs 

are actually effective at giving somebody a skill. Most of the Federal job training programs are highly ineffective at giving somebody a skill to make a lifetime wage. And so when was the last 

time we had an oversight hearing on that? 

Mrs. MALONEY. Well, I hope we have some oversight hearings on 

that. 

Senator COBURN. Yeah. 

Mrs. MALONEY. But in your report, have you implemented any 

of the suggestions? 

18 

Senator COBURN. Sure, we have done some things. We got a lot 

of squawk back, you know. We actually don’t think that political 

science grants to study Congress right now are a priority. So I put 

that in a piece of legislation. They are squawking like crazy, the 

people who like to earn their money for doing studies of Congress, 

political science. Actually couldn’t that wait until we are actually 

in a little better financial condition? 

It is about perspective. And what would you do if it was your 

money rather than somebody else’s money? And that is the real 

problem. We don’t treat it like it is our money, and we should be. 

Chairman ISSA. Thank you. 

Senator CARPER. Mr. Chairman? 

Chairman ISSA. Let’s go to the gentleman from Oklahoma. 

Senator CARPER. Mr. Chairman? 

Chairman ISSA. Yes, sir? 

Senator CARPER. One minute, if I could, in response to Congresswoman Maloney’s comments. 

You are all probably wondering what am I doing with these 

water bottles and this cup? This is an aircraft. It looks like a water 

bottle, but this is an aircraft. This is a C–5 aircraft, one of the largest airplanes in the world. We started building them in the late 

1960s into really about the early 1980s. They carry a huge amount 

of cargo, troops, personnel and all. This is a C–17. It is a great airplane. It carries about half as much as a C–5, flies about half as 

far without refueling. This is a C–17. 

About 12, 13 years ago the Department of Defense and the Pentagon and President Bush said, we need C–17s, but what we really 

need are C–5s that have been modernized, have engines that don’t 

need to be changed out every thousand flight hours, have hydraulic 

systems that work, avionic systems that will enable us to fly into 

the 21st century. They called for modernizing C–5s. 

Chairman ISSA. The B models. 

Senator CARPER. The Bs. Some As, but mostly the Bs. 

And what we started doing about 8 years ago was modernizing 

two Bs, C–5Bs, and one C–5A. As it turned out, for the price of 

buying one new C–17, we could modernize two or three of these babies. They fly twice as far, carry twice as much. We are now getting—in Dover Air Force Base we have C–17s. We also have C–5s. 

We traded our Bs for C–5Ns. One of those aircraft a year ago set 

42 world records for carrying cargo, flying literally from here to 

Turkey nonstop, no refueling. We can fly them over the North Pole 

to Afghanistan. 

For three of these, modernized, they will last another 30 or 40 

years, cost as much as one of these. We have plenty of C–17s. We 

don’t need to lease aircraft from the Russians, a huge aircraft from 

the Russians. We need to modernize what we have. That is what 

we are doing. We are saving money, better result for less money. 

A lot of times we beat ourselves up in the administration, and 

we should, because of the wasteful spending that we do. This is an 

example of something that would make sense. It actually does save 

money and gives us a better result in terms of our airlift capability. 

The work that we are doing on improper payments, we are down, 

as Elijah said, from about $125 billion in improper payments a couple of years ago down to $106 billion. We are going to keep moving 

19 

that in the same direction. The work that Dr. Coburn and I are 

doing especially in the PRIME Act will help us further in that regard. 

Chairman ISSA. We are going to go into a lightning round very, 

very quickly, because I am getting more questions, not less. So I 

am going to ask everyone to stay within a minute. 

Mr. Lankford, you were next to ask. 

Mr. LANKFORD. Thank you, Mr. Chairman, and, Senators, thank 

you for being here as well. 

Senator Carper, you made the comment about the 80/20 rule. I 

have found that to be somewhat of a problem as we try to function 

going between the House and the Senate, even within the House 

or the Senate, because in my short time being here, most of the 

bills that come up are messaging bills rather than actual bills to 

fix a problem. They come with 80 percent of things that we agree 

on, and we decide to stick on 20 percent of things that are pure 

politics that we know will kill the bill. So a good idea gets, quote/ 

unquote, voted on, but we know it goes nowhere. And that happens 

both directions, both parties are doing it. 

My question for you is, how do we move past that? How do we 

begin to deal with the actual issues and resolve the 80 percent of 

things that we do agree on that we can identify as waste and say, 

why can’t we at least get an amendment on this in the Senate, why 

can’t we vote it out of the House without adding a poison pill to 

it and to be able to get that moving? 

The comment that I want—I want you to be able to answer that. 

The comment I want to make as well is Dr. Coburn had mentioned 

identifying different programs. That is actually my bill, the taxpayer rights. That is something this committee has passed, passed 

with bipartisan support, and we are trying to get that to the floor, 

and it is one of those aspects I would like to see move through the 

Senate as well. It does something very simple. It forces every agency to identify every program that they have, what the cost is for 

administration for that program, how many people are served with 

that program, how many staff that they have for that program, the 

statutory authorization for that program, and a strange thing in 

government life, and that is the metrics, how do you evaluate this 

program? Because I have seen a tremendous number of programs 

that have no evaluation. The evaluation is how many people they 

serve rather than the effectiveness of actually what they do. 

And so I am hoping with the broad support that it had in this 

committee, it can pass with broad support in the House, and we 

would love to be able to have your help in the Senate to be able 

to get that through the Senate. That is a reasonable next step after 

the GAO reports. So your response on just that 80/20 and how we 

would be able to move some things with the politics of the day. 

Senator CARPER. Dr. Coburn and I had breakfast this morning 

with Jeh Johnson, who is our new Secretary of Homeland Security. 

Dr. Coburn mentioned at our breakfast, he said the Founders, the 

people who wrote our Constitution, had in mind a system that was 

hard to get stuff done. They didn’t make it easy. Part of the job 

of the Senate is to slow it down, but it doesn’t mean stop it. 

I am going to go back to what I said before. What we have to 

do is just figure out how to use the leverage of a subcommittee, or 

20 

a committee, or two committees working together, working with 

GAO, with OMB, with all these good government groups, and to 

pull in the same direction, work with the administration. And especially—we have got a team at OMB. They want to work, they want 

to do this stuff. The challenge for us is to figure out who the people 

are and to figure out how to work together, these different entities, 

and we can do that. 

We have got a couple of great examples. We can set an example. 

Your committee, our committee, we can set an example of bipartisan cooperation on something we all agree on. People don’t want 

us to waste their money. If I had a dollar for every time somebody 

said to me in the last year, I don’t mind paying a little more in 

taxes; I don’t want you to waste my money. That is what they say. 

I don’t mind paying a little more in taxes; I don’t want you to 

waste my money. I don’t want to waste my money or theirs, and 

there is so much we can do in a common agenda here. Let us do 

it. And we are doing it. 

Chairman ISSA. Okay. As we go to Mr. Tierney, I am going to 

make a commitment and a pledge here consistent with Mr. 

Lankford. Mr. Coburn, Dr. Coburn, take anything out of your 

Wastebook that falls within our mutual jurisdiction. If you will 

make a vote on it with your chairman, I will make sure our committee brings the same bill and votes it out to the full House. And 

let us start trying to figure out whether it is $100 million, which 

would be a billion over 10 years, or a billion that would be $10 billion over 10 years. You pick something out of the book or something that is not in the book, and if the two of you are prepared 

to hold a committee vote on it, I will guarantee you a vote here on 

the same bill, and hopefully if we can suggest ones to you, we can 

come to the same agreement. And I will begin today scheduling 

that every week, if we have a bill that we agree on, no matter how 

small, if it falls within our jurisdiction, either completely or partially, I will guarantee you a vote in this committee on it. So hopefully that will give you an opportunity to go through the book and 

see if we can’t find it, and whether it is FEHBP, the District of Columbia, you name it, let us find something and do something every 

week if necessary. 

Mr. CUMMINGS. Mr. Chairman. 

Chairman ISSA. Of course. 

Mr. CUMMINGS. Very briefly. Mr. Chairman, I am very glad to 

hear you say what you just said, because, you know, there is an 

old song that says you have got me going in circles, and, you know, 

you can go in circles and never get off the merry-go-round. 

Chairman ISSA. And doesn’t it go, I am dizzy? 

Mr. CUMMINGS. I am not taking it that far, just a circle. 

But my point is that, you know, I think it is good that, you know, 

we have got the four of us here right now, and what you just said 

is so very, very important. And it just goes back to what both of 

the Senators have said, that, you know, we have got to—we have 

got to move forward. And I appreciate your comment, and I am 

going to work with you. We will. 

Chairman ISSA. Mr. Tierney. 

Mr. TIERNEY. Thank you very much. 

21 

Just a comment that about a year and a half, 2 years ago, we 

did a bill identifying 250 tax expenditures and recommended just 

28 of them be eliminated as low-hanging fruit, which was over $60 

billion a year, and then suggested GAO take a look at the others 

and recommend which ones should be kept, which ones should be 

changed, which ones should be eliminated, and we haven’t yet got 

any bipartisan support on that, but I don’t think that is a bad way 

to go, at least a bad way to start. 

The other part we look at is the Defense. I mean, it is shameful, 

I think we can all agree, that the Defense Department’s inability 

to even put financial statements together that can be used as a 

basis for audits. So do you have any ideas or comments, recommendations on what teeth to put into some sort of legislation 

that would tell the Department of Defense that unless they produce 

financial statements that are auditable, and then conduct an audit, 

something will happen, what might that be? 

Second, if you read the Stimson report of last year on the mili- tary, I think it recommends savings between $200 billion and $800 

billion over the course of 10 years. But one of the recommendations 

in one of the subsidiary opinions that were written were that 

maybe rather than fight over the particulars of what is going to get 

cut in the Pentagon, we don’t do a sequestration type of cut, but 

we say to the Pentagon, your budget is going to be reduced by X 

amount of dollars; you find out where you are going to save it, or 

you save it in these particular areas and report back to us how you 

have done it. Do you have any comments on those types of recommendations? 

Senator COBURN. Yeah. I was a member of the Bowles-Simpson 

Commission and actually voted for it, and most of those ideas came 

out of the work that we did in terms of the Pentagon. 

The Audit the Pentagon Act has teeth in it. The Pentagon is the 

only agency that pays their bills themselves. All the rest of them— 

all the rest of the bills of the Federal Government are paid by the 

Treasury, and the teeth that we put in Audit the Pentagon is if you 

can’t get an audited Pentagon statement by 2017, we will have the 

Treasury start paying your bills, which means—and, by the way, 

a lot of the bills the Pentagon pay aren’t due, and a lot of the bills 

that should be paid by the Pentagon aren’t paid. It is a mess. And 

when you go to look at anything, there is all this fake accounting 

to be able to justify to make a payment. So the teeth where it was 

is to move the payment from the Pentagon. 

More importantly, you cannot manage what you cannot measure. 

The Pentagon can’t measure hardly anything. And so the whole 

drive to get an audit of the Pentagon is not to get an audit of the 

Pentagon, it is to get them to the place where they can get management numbers that they can actually make decisions on. And the 

reason you have 20 percent waste in the Pentagon at a minimum 

is because they have no idea what they are doing because their 

numbers aren’t any good. 

So it is a fixable problem, but remember, we had that in the 

NDAA, and when they incorporated it, they took all the teeth out. 

So you think we are going to get an audit in 2017? No. Because 

there is no consequences if there is no audit. And so we are going 

to continue the same practice. 

22 

Mr. TIERNEY. Thank you. 

Chairman ISSA. Thank you. 

Mr. Mica. 

Mr. MICA. I think this is a great way to kick off the new year. 

I congratulate you, Mr. Chairman and the Members of the Senate, 

with the responsibility for doing this. 

Listening to it, it is kind of interesting to hear the efforts of 

folks, Mr. Duncan, others, for example, disposal of public buildings 

or vacancies and hearing you talk about your early efforts, and we 

have all passed legislation, I passed some with Mr. Denham on 

that subject. 

But I come to the conclusion you can only eat an elephant a bite 

at a time, so you really have to focus. We haul folks down to an 

empty building; I think the first hearing I did as the chair of 

Transportation was in the vacant Post Office Building two blocks 

from the White House. That was in February 2 years ago. Then we 

went back a year later because they hadn’t done anything and 

hauled the bureaucrats down there into the empty building. The 

first time it was 32 degrees outside, 38 degrees inside. That tends 

to get their attention, but it still takes time. That is a success. 

We have had successes, but you have to target. We have had a 

lot of failures. Amtrak, we are going to celebrate a billion dollars 

this year in a dozen years in food service losses for which we 

passed a law that you cannot spend money and lose money. TSA— 

Tom, you were here when we created it—started out with 16,500. 

We have 15,000 administrators and 66,000 employees, totally out 

of control. HIDTA, another example, set up to target some high-intensity drug traffic areas. Some of those are still going on, and it 

is a game that is being played. 

So we get constant oversight. I think they just released, we did 

1600 hearings in the House. You have got to just keep going after 

the bastards until you are successful. I don’t know anything else 

you can do. 

Chairman ISSA. Senator Carper? 

Senator CARPER. Mr. Chairman, I spent a lot of years in my life 

as a naval flight officer, Active and Reserve Duty. When we were 

trying to do something hard in the Navy, we used to say it is like 

turning an aircraft carrier. It takes a long time, but if you keep at 

it, you can turn them. We used to do—if you were doing something 

even harder, it is like changing an aircraft engine when the aircraft is in flight, and that is really hard. 

Last night I was invited to speak to a bunch of University of 

Delaware students who are down here for part of a semester. They 

are interns. They are doing internships on the cost of government 

here on Capitol Hill and outside of Capitol Hill. I asked all of them, 

I said, did you all know what you wanted to do with your life when 

you were 6 years old? Everybody there raised their hands. I said 

how many of you know what you want to do now? They are like 

21, 22, 23 years old. Only just a few of them raised their hand. 

I said, I don’t care what you want to do, if you will keep in mind 

four rules. If you do these four rules in your life, you will be successful. Number one, figure out the right thing to do and just do 

it, and that is really for us as well, to figure out the right thing 

to do. People all—we don’t want to waste money. This is something 

23 

we can agree on; this is the 80 percent we can agree on. There is 

plenty of targets to go after. 

Number two is treat other people the way we want to be treated. 

That applies especially to these entitlement programs. I want to 

save money in the programs. I want to save these programs for our 

kids and grandchildren. I want to make sure we don’t savage old 

people or poor people. We have got to treat these folks, the beneficiaries, the way we would want to be treated. 

Senator CARPER. The third is to really focus on excellence in everything we do. If it isn’t perfect, make it better. 

And the last thing is just don’t give up turning that aircraft carrier, changing that aircraft engine. Just don’t give up. We know we 

are right. Just don’t give up. We are right on a lot of this stuff. We 

just can’t give up. I am not going to. I know this guy is not going 

to. And I sense the same spirit here today. 

Chairman ISSA. Mr. Jordan. 

Mr. JORDAN. Thank you, Mr. Chairman. 

Senators, picking up the chairman’s comments and ranking 

member, have you two looked at the annual savings, wasteful 

spending that you see that you agree on, and have you done that 

analysis that you both agree this is wasteful? If you have done that 

analysis, what is that number? And if we have done that, it seems 

to me that is the starting point. 

So have you two done that, looked at Mr. Coburn’s book, whatever you have identified, we agree on these several programs total 

so many dollars, let’s start there, have you done that? 

Senator COBURN. We have not done that jointly. Our analysis of 

the recommendations just of GAO is at a minimum, if you just followed their recommendations to eliminate duplication, you would 

save $150 to $200 billion dollars a years. That is my office’s analysis of what the savings are. Just eliminate duplication. That has 

nothing do with the $80 billion of fraud in Medicare and Medicaid. 

Mr. JORDAN. Right, right. 

Senator COBURN. You know, it has nothing to do with the cost 

overruns in IT in the Federal Government, which are $42 billion 

a year, 50 percent everything we spend in IT. 

Mr. JORDAN. I mean, there is all kinds of redundancy. I mean, 

there are 77 different means tested social welfare programs. 

Senator COBURN. Yeah. 

Mr. JORDAN. If you had a handful, maybe you would actually 

help poor people get to a better. So I get all that. But to get something moving, to get off the dime, it seems that you two, the guys 

testifying, if you two can say, we agree with this, there is our starting point, let’s get that legislation in front of the chairman, who 

said he is willing to do that, the ranking member said he is willing 

to do that, and now we have got someplace to start and we start 

to, as Mr. Mica said, eat that elephant one bite at a time. 

Senator CARPER. Let me just say, one of the smart things I think 

we do is we have a good dialogue with GAO, with the head, Gene 

Dodaro, our Comptroller General. 

And also we, not every hearing, but so many hearings every 

month, we have GAO present at the hearing. They put out this 

High Risk List, as you know, every other year, beginning of the 

Congress, and point out any number of ways we can save money. 

24 

On that High Risk List for years has been improper payments. And 

when we first started collecting improper payments and saying 

what are they, it was, what, $30 billion was reported, $40 billion. 

Finally it peaked out at about $125 billion, I think 4 years ago, 

$125 billion. 

And we have authored, co-authored with your support and involvement, one after the other after the other legislation going 

after improper payments. We are down from about 125 billion, to 

about 120, to 114, 108, to 106. And we have a whole lot more room 

to improve. 

Another area, the property stuff that we talked about, the Postal 

Service, to make sure the Postal Service is in a position to repay 

the $15 billion that they have borrowed from the Federal Government. 

There is a lot that GAO brings to us, and it is a common agenda, 

and that is what we work, that is our to do list. 

Mr. JORDAN. I appreciate it. I mean, that is all great. But we 

have got to move quickly here. What I am asking is, can you two 

guys get together and come up with a bill? Get us a bill. 

Senator CARPER. Actually, we have. If you look at the PRIME 

Act, it is part of the SGR legislation I talked about. That is our bill. 

That is our bill. 

Mr. JORDAN. Mr. Coburn is on that bill? 

Senator CARPER. Oh, yeah. We do lot of bipartisan bills. 

Mr. JORDAN. All right. Thank you, Mr. Chairman. 

Senator CARPER. And we will continue to do those as well. 

Chairman ISSA. Last but definitely not least, the gentleman from 

Missouri, Mr. Clay. 

Mr. CLAY. Thank you, Mr. Chairman. 

Thank you, Senators, for being here today. Could you quickly tell 

us what you think the challenges are of the Federal Government 

when it comes to the purchasing and procurement of information 

technology? Is it that the Federal Government doesn’t have the expertise to actually purchase it? When you look at agencies like 

DOD and HHS and all of the others, do we have the expertise in 

those agencies to know what we are purchasing, to be able to identify the products that we should be securing from vendors? And 

just how do we approach that, Senator? 

Senator COBURN. The answer is this is difficult. This is not just 

difficult in government. I have a son-in-law that works for one of 

the large firms that does this, and his report is GE, big companies 

have the same difficulty. The difference is, is they have stops. 

Mr. CLAY. Yeah. 

Senator COBURN. They have stop losses. We don’t have any. We 

spend $82 billion a year on IT, and at least 50 percent of it is wasted every year. And the problem is we don’t know what we want 

when we go to buy it. And we are gamed a lot. 

The second problem, as I mentioned with the Air Force contract, 

there are no consequences for nonperformance on the contractors 

and there are no consequences to the procurers within the government as a penalty of losing their job or losing their position if in 

fact they screw up. So it is about accountability. 

It is a difficult area. My estimate is the private sector wastes 25 

percent of the money they spend on IT. That is my estimate. We 

25 

waste 50 percent. So we can certainly get better. But it is a difficult area. 

And we need to be able to compete. One of the bills that Senator 

Carper and I have is to elevate the salary scales that Homeland 

Security can utilize to bring the proper people in, in terms of IT. 

In other words, we have to be able to compete with the private sector. And so we need to do that, and we probably need to do that 

in a lot of areas in government in terms of IT, because that is an 

area where we can’t compete. So to get the quality people to make 

those decisions, we have to raise the level of salaries we are willing 

to do that. We have a bipartisan bill to do that. 

Mr. CLAY. And we also have a responsibility, too, as far as oversight over these agencies, and maybe stop the train from leaving 

the station. 

Senator COBURN. Well, I would just give you one other point. Too 

often government tries to buy something off the shelf and make the 

off-the-shelf product fit their system rather than buy something off 

the shelf and make their system fit the off-the-shelf. And that is 

a big, especially with the Army, it has been a big waste of money 

in terms of their IT, because they are trying to change—things that 

we know work perfectly everywhere else it is used doesn’t work in 

the Army because they are actually undermining the integrity of 

what they bought. 

We have a meeting that we have to be—— 

Chairman ISSA. I want to thank the Senators for—— 

Senator CARPER. One minute, if I may, on this point. States are 

laboratories of democracy. We have 50 of them. How can we learn 

from our States? 

I am a recovering governor. We used to do a poor job in terms 

of IT management. One of the things that is wrong, and Tom has 

alluded to it, is we would hire people to work in our IT shop, train 

them, they become skillful, and they get hired away for more 

money either in other governments or most likely the private sector. And the same is true here. We need to be able to attract and 

retain the people once they are trained. We need to have a set of 

incentives that do that, a compensation system that does that. 

The second thing, old Rolling Stones song, can’t always get what 

you want, but if you try sometimes you can get what you need. We 

have a hard time in agencies figuring out not just what we want, 

but what we actually need, what we actually need, to know for sure 

this is what we need in a particular agency and to stick with that, 

not to change it, not to keep changing it. We need folks in those 

agencies who can manage these projects, that can manage it, and 

not be managed by the folks that are providing the IT system. 

And the last thing, we have to, like, stick with it, just got to stick 

with it from start to finish. Those are some of the things that 

would help us. 

Mr. CLAY. Senator Carper took license with Mick Jagger’s lyrics. 

Thank you. 

Chairman ISSA. Well, you know, there is probably a song that 

goes, all good things must end, but I am not going to quote it. 

Senator, Chairman, Tom, my friend, you have been extraordinarily generous with your time and questions, and I appreciate 

that. Just to recap, I think we have agreed that there is a lot more 

26 

we need to do. And I did mean it that, and Elijah mentioned it as 

I was offering it, we will, in fact, move what you move if you two 

can agree to it, because that is the beginning of chipping away at 

a billion dollars at a time. 

Lastly, I think we have talked around FITARA all day. It sounds 

like you have some ideas of some items, either as a companion bill 

or to include with it, that we need to do. The President has come 

out talking about needing to hire better people to prevent something like HealthCare.gov from happening again. We believe that 

FITARA is part of an organizational change, but we are certainly 

receptive that with that organizational change, with budget responsibility for chief information officers and the like, we may have to 

look at how we recruit and retain those people who have those 

large budgets and huge responsibility. So I look forward to this 

being the start of a great year together. 

I flew in those old C–5s. They had a reputation for landing more 

often than taking off easily. I appreciate the work you have done 

to try to modernize a portion of that fleet. I refueled a lot of times 

with those in the air, because you felt better if you refueled in the 

air, because you knew you were still flying. You have made a difference, and I think the C–5 as a portion of the fleet certainly is 

an area you have had leadership on, and I appreciate your mentioning it to a very old soldier. 

And with that, we will take a very short recess and reset. And 

thanks again, Tom. 

Senator CARPER. Thank you. Thank you all. Thank you, sir. 

[Recess.] 

Chairman ISSA. If you would all please take your seats. 

Mr. MICA. Mr. Chairman? 

Chairman ISSA. The committee will come to order. 

What is the purpose of the gentlemen seeking recognition. 

Mr. MICA. I ask unanimous consent to insert in the record at this 

point a copy of a report that my staff and I completed during the 

recess that shows that we saved somewhere about in the neighborhood of a $0.5 billion as a result of the committee’s work. I’m looking at conference spending, wasteful conference spending, nearly 

$0.5 billion dollars. It’s very significant. Maybe you saw some reports about GSA savings, but we estimate, again, based on the 

hearings that we did and expanding that government-wide—— 

Chairman ISSA. The entire report will be placed in the record, 

without objection. 

Mr. MICA. Thank you. 

Chairman ISSA. We now go to our second panel of witnesses, who 

patiently sat through that short no-question period with the Senators. Mr. Thomas A. Schatz is president of Citizens Against Government Waste. Mr. Chris Edwards is director of Tax Policy Studies at the Cato Institute. Mr. Brandon Arnold is vice president of 

government affairs at the National Taxpayers Union. And Ms. 

Jaimie Woo is tax and budget associate with the U.S. Public Interest Research Group. 

I want to thank you all for being here. You are the main attraction, notwithstanding the previous period. And I think for all of us, 

the helpfulness is you know you have partners on the Senate side 

who are equally interested in what you have to say. 

27 

Pursuant to the committee rules, I would ask that you please all 

rise to take the oath. Raise your right hands. Do you solemnly 

swear or affirm the testimony you are about to give will be the 

truth, the whole truth and nothing but the truth? Please be seated. 

Let the record indicate that all witnesses answered in the affirmative. 

This will be a little shorter perhaps in some ways, but like the 

first round your entire statements will be placed in the record 

without objection, and we would ask that you stay as close to the 

5-minute guideline as possible. 

And with that, Mr. Schatz, you’re recognized. 

STATEMENT OF THOMAS A. SCHATZ 

Mr. SCHATZ. Thank you very much, Mr. Chairman, and thank 

you for the opportunity to testify here today. My name is Thomas 

Schatz. I’m president of Citizens Against Government Waste, a 

nonprofit, nonpartisan organization with more than 1.3 million 

members and supporters nationwide. 

It is no secret that wasteful spending pervades the Federal Government and every agency could perform its functions more effectively and efficiently. Recommendations to eliminate waste, fraud, 

abuse, and mismanagement are regularly provided by the Government Accountability Office, Congressional Budget Office, congressional committees, the President’s budget, and groups like Citizens 

Against Government Waste and others at the table today. 

For example, since 1993, Citizens Against Government Waste 

has released ‘‘Prime Cuts,’’ a compilation of this year’s recommendations, 557, that would save taxpayers $580.6 billion in the 

first year and $1.8 trillion over 5 years. 

Despite the best intentions of Presidents and legislators to address wasteful spending and improve government efficiency, the 

size and scope of government continues to grow. One of the main 

impediments to reducing the mismanagement of the taxpayers’ 

money is Congress’ tendency to create a program to solve a problem rather than spending the time to determine whether or not an 

existing program can address the same subject matter. In fact, 

until the beginning of 113th Congress, there was no formal requirement that committees even specify whether a reported bill that establishes or reauthorizes a Federal program duplicates another 

Federal program. 

The rules of the House were amended to require both this information reported in each bill and provide committee chairmen with 

the authority to request a GAO review of any legislation referred 

to their committee to determine if there was duplication. This 

should help improve transparency, but it’s not a requirement that 

Congress not approve a new program, it’s simply to list that they 

might have a duplication in this legislation. Proposals by Senator 

Coburn to change the rules of the Senate in a similar manner have 

twice failed to receive the necessary 67 votes. 

In addition to preventing more duplication, Congress should immediately act to consolidate or eliminate the program identified in 

GAO’s three annual reports, which Senator Coburn has estimated 

cost taxpayers about $295 billion annually. One prominent example 

of that duplication and waste is the 209 science, technology, engiVerDate Aug 31 2005 10:57 May 01, 2014 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 C:\DOCS\87646.TXT APRIL
28 

neering, and math programs, costing $3.1 billion spread across 13 

agencies in fiscal year 2010. More than a third of these programs 

were first funded between fiscal years 2005 and 2010. Yet the U.S. 

does not have enough workers in the STEM fields, U.S. students 

remain behind students in other nations in math and science education, and the new programs created by Congress were a major 

factor in creating such a complex and inefficient system that has 

failed to achieve the intended objectives. 

There are other high priorities for CAGW in addition to the foregoing recommendations, such as the Army’s Distributed Common 

Ground System, the Medium Extended Air Defense System, stolen 

identity refund fraud, also known as tax refund fraud, and mismanagement of information technology. 

The causes of wasteful IT spending include inadequate guidance 

and program management, unclear goals, and last-minute project 

modification. As a result, systems are often subject to significant 

delays, fail to meet agency needs, fail to launch at all, or launch 

without being fully tested. In other words, for observers of Federal 

IT expenditures, it was no surprise when HealthCare.gov did not 

launch as planned on October 1st, 2013. 

On the positive side, the government is starting to save money 

through the increased use of cloud computing. Even more money 

could be saved through the use of software asset management 

tools, which would prevent the misuse of existing software licenses 

and the purchase of unnecessary software. 

In regard to government-wide procurement, we have supported 

FITARA. We urge Congress to act on it this year. I was pleased to 

see it mentioned this morning. And we will continue to support 

these efforts, because it is the first major procurement reform bill 

since the Clinger-Cohen Act of 1996. 

Unfortunately, in some cases where eliminating waste and inefficiency has been accomplished success has been stymied or at least 

questioned, particularly through the suspension by the Centers for 

Medicare and Medicaid Services of some of the recovery audits that 

have helped correct more than $4.2 billion in improper Medicare 

payments. 

Regardless of whether the government is in surplus or deficit, 

there is no excuse for mismanaging the taxpayers’ money. The 

American people would be well served if every day elected Representatives and Senators came to work thinking first and foremost 

about how they could better manage the taxpayers’ money and 

solve problems effectively with the resources that are already allocated to the Treasury in existing programs. In other words, each 

Representative and Senator should ask questions first and spend 

money much later, if at all. 

Thank you for the opportunity to testify. I look forward to answering any questions. 

Chairman ISSA. Thank you. 

[Prepared statement of Mr. Schatz follows:] 

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Chairman ISSA. And at this time I’m going to ask unanimous 

consent that the 2012 Congressional Ratings for the Council of 

Citizens Against Government Waste be placed in the record, and 

the February 2013 publication of ‘‘Prime Cuts Summary’’ be placed 

in the record. Without objection, so ordered. 

Chairman ISSA. We now go to Mr. Edwards. 

STATEMENT OF CHRIS EDWARDS 

Mr. EDWARDS. Thank you very much, Chairman Issa and Ranking Member Cummings. I’m Chris Edwards, editor of 

DownsizingGovernment.org at the Cato Institute. 

The Federal Government faces a dismal fiscal future with rising 

spending and debt. If you look at the CBO long-range projection, 

long-range baseline, that looks bad enough, but for reasons I go 

through in my written testimony, our fiscal future is much worse 

than the CBO baseline shows. The upshot to me is that we need 

to look at every Federal agency and cut and terminate waste and 

low priority programs. 

What is waste? Well, it’s government spending where the cost is 

higher than the benefits created for citizens, and in my view, it’s 

also Federal activities that the Federal Government does a poor job 

at that could be much better carried out by State, local governments, and the private sector. 

As I think Congressman Duncan mentioned, there are stories in 

the media of GAO reports every week about waste in the Federal 

Government. My research for DownsizingGovernment.org shows 

there was waste and cost overruns and fraud and abuse all the way 

back to the beginning of the Republic. The 19th century is full of 

examples of wasteful spending. So what I take out of that is that 

there’s a basic structural problem with the Federal Government 

and how it operates. Waste is endemic and chronic. 

There’s a lot of reasons for that. The Federal Government today 

has become just so huge that Federal auditors and oversight committees just can’t keep track of all the spending. There are 2,200 

separate subsidy and benefit programs in the Federal Government 

today. They are all susceptible to fraud, waste, and abuse. Unlike 

the private sector, poorly performing Federal agencies never go 

bankrupt, they’re not subject to takeover bids, there is no built-in 

mechanism to provide for efficiency in the Federal Government like 

there is in the private sector. Federal managers face no profit incentive, giving them little reason to proactively reduce waste and 

fraud. 

The only real solution, then, from my point of view is that we 

need to downsize the Federal Government. How do we do that? 

One thing we need to do is we need to revive federalism. We spend 

$560 billion a year on Federal aid to the States. In my extensive 

research, the aid system is rife with waste and inefficiency. Senator 

Coburn’s Wastebook had many, many examples, and many of the 

examples were aid to State programs. 

So why is that? There’s really bad incentives built into the Federal aid system. State and local governments simply do not spend 

Federal money as frugally and efficiently as they spend Federal 

money. Coburn’s report, for example, goes into a gold-plated million-dollar bus stop in Arlington, Virginia, near where I live. 80 

63 

percent of the money for that bus stop came from higher levels of 

government, so Arlington County has no incentive to spend the 

money efficiently. And that happens throughout the Federal aid 

system. 

I think the three layers of government in the United States 

should be sort of like a tidy layer cake, with each layer funding its 

own programs. The citizens would know who’s responsible for those 

programs. The aid system makes American government sort of like 

a giant, confused marble cake. Citizens have no idea who’s responsible for various programs like bus stops that go over cost. So I 

think cutting aid programs would be a great way to reduce waste. 

My other recommendations I go into, privatization. Private sector 

companies have built-in incentives to minimize waste. Many governments around the world have figured that out. There has been 

a privatization revolution that has gone on around the world in recent decades. Over $2 trillion of electric utilities and railroads and 

airports and post offices have been privatized all around the world. 

That revolution has bypassed the Federal Government in the 

United States for some reason. 

Many things the Federal Government does today have been 

privatized in other countries. As this committee may know, Germany, the Netherlands and Britain have privatized their post offices. Now Canada and Britain have privatized their air traffic control systems. Most European countries use private airport screening, as I think Congressman Mica is certainly familiar with. Passenger rail has been privatized in Britain. 

If you look at a system like air traffic control, our system is really falling behind. It’s got massive cost overruns, it can’t handle 

technology. We’re running our air traffic control, which is a hightech business, we’re running it like a bureaucracy. It makes no 

sense. The solution here is privatization like Britain and Canada 

have done. The Canadian system, set up as a nonprofit corporation, 

nonsubsidized, works extremely well. It’s one of the safest systems 

in the world. It is a leader in IT. That’s where the United States 

needs to go with air traffic control. 

Similarly, with the Postal Service, as I’m sure you’re familiar 

with, Mr. Chairman, the Royal Mail, a 500-year-old government 

company was privatized a few months ago in Britain, raised $3 billion for the federal government. The British Government did that 

for the same reasons that we’ve got problems with our USPS: declining mail volume, the need for greater efficiency in the modern 

economy. So if Britain has done it, I see no reason why this country 

can’t privatize its postal system. 

So in sum, I think reviving federalism and pursuing privatization 

would go a long way to cutting waste in the Federal Government. 

Thank you very much. 

Chairman ISSA. Thank you. 

[Prepared statement of Mr. Edwards follows:] 

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Chairman ISSA. Mr. Arnold. 

STATEMENT OF BRANDON ARNOLD 

Mr. ARNOLD. Yes. My name’s Brandon Arnold. I’m the vice president of government affairs for the National Taxpayers Union. And 

thank you to the committee and the chairman and ranking member 

for having me today. 

I’d like first of all to say Senator Coburn’s done a phenomenal 

job with his Wastebook, as have CAGW with their ‘‘Prime Cuts,’’ 

and Chris Edwards and the Cato Institute with 

DownsizingGovernment.org. 

At NTU, we approached our guide to reducing wasteful spending 

slightly differently. We actually partnered with a group, United 

States Public Interest Research Group, and Jaimie is immediately 

to my left here, to find areas of the Federal budget, mostly wasteful 

in nature, inefficient, unnecessary programs that both the left and 

the right could agree upon. And we published this report, ‘‘Toward 

Common Ground: Bridging the Political Divide with Deficit Reduction Recommendations for Congress,’’ just last month. It contains 

65 specific recommendations, again, that the left and the right can 

agree upon, and that would save well over $500 billion over a 10- 

year window. 

Now, let’s be honest. If I’m writing this report singly, by myself, 

I would include a heck of a lot more, but, you know, when you’re 

cooperating, there’s a lot of talk about bipartisan cooperation here, 

we are very pleased to work with U.S. PIRG and find stuff that we 

both agreed upon. I won’t—I don’t have time to—go through all 65 

recommendations in this brief period here, but the report is included in its entirety in the binder there, and I hope you guys 

will—— 

Chairman ISSA. Without objection, the entire binder will be 

placed in the record. 

Mr. ARNOLD. Thank you. I hope you will look at it, share it with 

your staffs, share it with your colleagues, and use it as best you 

can. 

Let me just to touch on a couple quick highlights, if I may. Included in that $500 billion figure is up to $152 billion in savings 

from eliminating wasteful subsidies to agribusiness and other corporations. This includes things like cutting $2 billion by eliminating the Market Access Program, which pays for large corporations to market their products overseas; reducing funding by a billion dollars for the EDA, the Economic Development Administration. 

Also, there’s $197.2 billion in savings from ending low priority or 

unnecessary military programs. Included in that $197 billion figure 

is reducing by $1.9 billion expenditures on military bands. There’s 

as much as $42.3 billion from improvements to program execution 

and government operations. That includes $140 million in savings 

from eliminating duplicative catfish inspection program, which has 

been cited numerous times by many groups on the left, right, by 

many outlets of media as being an absolutely wasteful, duplicative 

program that’s duplicated at the FDA, as well as at NOAA. 

There’s also $131.6 billion in savings from reform to entitlement 

programs, often a tricky area to root out waste and fraud, but we 

73 

found $1.8 billion by stopping improper Medicare payments to noncovered chiropractic services and $7.6 billion from aligning Medicare lab fees with those in the private sector. 

So of those 65 recommendations, I’m pleased to say that one has 

been enacted into law already in the budget deal that Congress 

passed last month. There was a $50 million savings that came from 

the Ultra-Deepwater Natural Gas and Petroleum Research program. It’s a little bit of a mouthful there. Pleased to see that that 

was included in the budget deal. And again, that will save $50 million. So that’s one down and 64 to go. There’s a lot of work to be 

done. 

The second half of my testimony, and I know Jaimie’s going to 

get a little bit more into the report in just a moment, the second 

half of my testimony I try to touch on a few legislative changes, 

more process-based changes that Congress could enact to reduce 

and eliminate waste and fraud. I’ll touch on those just very, very 

quickly, and obviously they’re there in my written testimony. 

But strengthening whistlerblower protections. We took a step forward in 2012 with S. 743, which I know was supported by the 

chairman and ranking member, to increase whistleblower protections for Federal employees. We took a step back, unfortunately, 

with the Conyers court decision in 2013 that’ll exempt many Federal employees from whistleblower protection. So there’s work to be 

done there. 

Ending the use-it-or-lose-it spending sprees that occur at the end 

of the fiscal year. I believe Congressman Duncan alluded to those 

in his earlier remarks. Reestablishing the ‘‘Byrd Committee,’’ sometimes called the anti-appropriations committee. Creating a sunset 

commission or committee to require the periodic review of programs that are no longer needed. Auditing the Pentagon. This has 

been mentioned several times today already. Limiting spending. 

Just reducing spending, keeping spending caps in place, requiring 

agencies and departments to prioritize their programs when you 

start to trim away at their budgets can be very effective in reducing waste. 

Touching on entitlement programs, critically important. My organization strongly supports the PRIME Act, which Senators Carper 

and Coburn spoke of earlier. And certainly involving the executive 

branch. The legislative branch can’t do it alone. The executive 

branch needs to be part of the solution as well. 

I see I’m just about out of time, so I will end my remarks there. 

Thank you. 

Chairman ISSA. Thank you. 

[Prepared statement of Mr. Arnold follows:] 

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Chairman ISSA. And since you get sort of a twofer, Ms. Woo, if 

you’ll continue. 

STATEMENT OF JAIMIE WOO 

Ms. WOO. Good morning. Chairman Issa and Ranking Member 

Cummings, members of the committee, thank you for inviting me 

to testify today on behalf of the U.S. Public Interest Research 

Group. My name is Jaimie Woo, and I’m the Federal tax and budget associate for U.S. PIRG. U.S. PIRG is a federation of 27 Statebased consumer advocacy groups. We are a nonprofit, nonpartisan 

organization that advocates improvements in fiscal policy, to stop 

special interest giveaways, increase budget transparency and accountability, eliminate waste, ensure subsidies or tax breaks serve 

the public, and make taxes fairer. 

As Congress works to pass a budget for the next year, U.S. PIRG 

and the National Taxpayers Union, as Brandon had mentioned, 

have come together to offer a set of deficit reduction recommendations worth more than $0.5 trillion dollars. This has appeal from 

across the political spectrum. Our December 2013 joint report, ‘‘Toward Common Ground: Bridging the Political Divide with Deficit 

Reduction Recommendations for Congress,’’ of which I am a coauthor, details 65 specific spending cuts over 10 years. 

NTU and U.S. PIRG do not often agree on policy approaches to 

solving our Nation’s problems, however, we are united in the belief 

that we spend far too much money on ineffective programs that do 

not serve the best interests of the people. In this report, we identified the low-hanging fruit of waste and inefficiency in the Federal 

budget that both Republican and Democratic lawmakers should 

recognize as unproductive uses of taxpayer dollars. 

U.S. PIRG’s approach to spending cuts is guided by four basic 

principles. Number one, oppose subsidies that provide incentives to 

companies that do harm to the public interest or do more harm 

than good. An example is funding for biomass research and development. Large-scale agricultural production of corn or other crops 

used for biomass often involve massive amounts of fertilizer, water, 

and land that drastically change the landscape of our country, accelerate problems caused by deforestation, and compete with food 

production, raising food prices globally. 

Number two, oppose subsidies to mature, profitable industries 

that don’t need the incentive. These companies are going to engage 

in activity regardless of taxpayer support. For example, Congress 

should eliminate the crop insurance program, which directly subsidizes insurance premiums to large agribusinesses on coverage 

they should and could purchase on their own. 

Number three, support reforms to make the government more efficient. According to the Office of Management and Budget, the 

Federal Government owns tens of thousands of unused or underutilized buildings or structures, as Senator Carper had mentioned earlier. The public should not have to pick up the tab for maintaining 

buildings that are not used. Reducing inventory would save nearly 

$15 billion over 10 years. 

Number four, oppose programs where there is authoritative consensus to do so. So this means when there is a strong independent 

agreement across the political spectrum that a program is wasteful, 

80 

or an agency and department receiving the funding has argued 

against it. So, for example, the Army, Pentagon, and White House 

have all said that the Army no longer needs additional Global 

Hawk drones. 

Our report’s recommendations are specific, targeted, and name 

individual programs for reductions or elimination. Each recommendation is also backed up by authoritative sources, such as 

the Congressional Budget Office and the Government Accountability Office. We are long past the time for general references and 

rhetorical calls for attacking nameless, faceless programs that contain waste, fraud, and abuse. 

And this is the precise reason that U.S. PIRG did not support the 

recent across-the-board cuts. Such policies fail to differentiate between true public priorities and where there is genuine waste or 

inefficiencies in the system. Our organization has argued in favor 

of programs to aid access to higher education and measures to ensure the safety of our Nation’s food supply. Across-the-board cuts 

equate those programs with the wasteful spending we highlighted 

in our report. 

While not in the report, we also urge committee members to review special interest carve outs through tax expenditures and loopholes. These expenditures have the same bottom line effect on our 

Nation’s deficit as direct line item spending. Regardless of whether 

spending takes place through the Tax Code or through the appropriations process, ordinary taxpayers and small businesses wind up 

picking up the tab for that missing revenue in the form of cuts to 

worthwhile programs, higher taxes, or more debt. 

We recognize that many of the items on our list challenge longstanding subsidies to narrow yet powerful special interests. Despite 

the fact that these expenditures serve little or no continuing public 

service and the public would likely support their elimination, there 

will no doubt be intense lobbying efforts to preserve these handouts. We strongly urge you to resist those efforts and take the first 

important steps toward addressing our Federal budgeting problems 

and ensuring that any public expenditure is for the public interest. 

Thank you, and I’d be happy to answer any questions. 

Chairman ISSA. Thank you. 

[Prepared statement of Ms. Woo follows:] 

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Chairman ISSA. I’ll now recognize myself for a short round of 

questioning. 

Mr. Edwards, as you know, I’m a fan of your organization, but 

let me get into a question on the post office since that’s within the 

jurisdiction of this committee. Privatization of the post office, do 

you imagine that anybody would take the post office even for free 

today? 

Mr. EDWARDS. Well, as I mentioned, you know, Britain did an 

IPO for their post office. They sold 52 percent of the ownership. 

Chairman ISSA. I understand that. The post office is currently 

losing 16.2 or so billion dollars without paying a cent in tax, if you 

look at the deferrals, et cetera, in other words if you account for 

it the way you would a public company. On $60 billion of gross revenue, that’s not a win. 

So very briefly, time’s limited, but very briefly, isn’t it true that 

we would have to do a dramatic reorganization, exactly the one 

that has been stalled for years, before the post office would in fact 

be privatizable? 

Mr. EDWARDS. You could do it either way. In Britain under 

Thatcher they made major changes to companies before they sold 

them off. But the way an entrepreneur would think about it is you 

can take government assets, you can make them a lot more efficient. So the post offices in Germany, Britain, and Austria, they became a lot more efficient after privatization and they went from 

deficits to surpluses. So just because the government can’t make 

money doesn’t mean entrepreneurs can’t. 

Chairman ISSA. Look, on a bipartisan basis we’ve been trying to 

get the post office fixed, and I just want to make sure that I use 

this opportunity to make one thing, I think, clear, but I want to 

use you, if you agree. We would have to throw $100 billion or more 

into the deficits that exist against an existing current and retired 

workforce if we were to transfer it to the public sector as it is 

today. And even if it has the ability to make a profit, let’s just say 

it has the ability to make a $5 billion profit, you give it a 10 cap, 

that’s $50 billion, no one is going to absorb our current obligations 

to our legacy employees based on that, are they? 

Mr. EDWARDS. That may well be true, but the British Government took over the unfunded liabilities of the Royal Mail’s pensions 

before they privatized. 

Chairman ISSA. Okay. So even looking at the British system, we 

would have to take that tens of billions or hundreds of billions of 

dollars of legacy liability. So the American people have a very expensive decision even if we were to, as I said, give away the post 

office. 

Mr. EDWARDS. I think that’s probably true, but what you’re looking for is economic growth and efficiency, which benefits the overall 

economy. To my mind, that’s kind of a small and narrow issue. If 

you can have a more efficient mail system for decades in the future, it’s worth taking a hit now. 

Chairman ISSA. I completely agree with your last statement, and 

that’s why we’re trying to reform the post office and then let a future group look at a at least breakeven post office for whether 

there’s opportunities to be a little bit more private than they currently are. 

86 

Mr. Arnold, I’m not trying to be the adversary, you guys are my 

heroes, but I served for 10 years in the military, off and on Active 

Duty and then in the Reserves. When we look at the savings of 

DOD, wouldn’t we be better off transferring $65 billion to $69 billion of noncore military activities out of the Department of Defense 

as a first step rather than looking at the millions of dollars that 

are spent in total on, for example, my Marine bands? I might note 

that there are Medal of Honor recipients who were Marine band 

people in Korea. Marine bands also are infantry trained and they 

fight. 

Mr. ARNOLD. Well, I think the expenditures that we list with regard to Marine bands, they’re not booting these individuals out of 

the military, but at the same time we’re spending a tremendous 

amount on a service, a portion of the military that I think is probably not directly related to national security, which should be the 

primary function of the Defense Department. And I think that was 

the kind of framework that we’re operating with when we’re looking at the Defense Department holistically, is what is necessary for 

national security and what can we trim away, given the fact that 

we’re running $600, $700 billion dollar annual deficits. 

Chairman ISSA. Well, I appreciate that, although we pay for the 

cost of the Medal of Honor when it’s awarded. It’s part of the esprit 

de corps, it’s part of what the military is. 

I want to make cuts in the military, I really do, but I want to 

make the cuts that leave us with a military that’s effective. And 

I often see those kinds of cuts and I push back pretty hard, as you 

can imagine, because I believe that we can trim. But I can tell you 

this: the Department of Defense Pentagon building is completely 

filled and has overflow annexes. The military is a fraction of the 

size it was in World War II, when we didn’t have computers, and 

yet not a single office is empty in the Pentagon. And so I would 

hope that the committees of jurisdiction would look and ask the 

question of, why are there more civilians working for the Department of Defense than there are uniformed personnel? Why is there 

not an empty room at the Pentagon when, in fact, the military has 

been reduced in size? So that’s a little bit of maybe my pushback. 

I do appreciate a lot of the other areas that you propose, and I 

recognize that I’ve already run over my time on just two subjects. 

Mr. Cummings. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. 

Mr. Schatz. 

Mr. SCHATZ. Yes? 

Mr. CUMMINGS. This is your report. Is that right? 

Mr. SCHATZ. Yes. 

Mr. CUMMINGS. And I was just looking here about, and it’s, you 

know, about page 36, I guess it is, and it talks about eliminating 

the Legal Services Corporation. And there are so many people who 

do not have access to legal services. Can you talk about that briefly? 

Mr. SCHATZ. Yes, sir. 

Mr. CUMMINGS. Yeah. 

Mr. SCHATZ. As a retired attorney, I know that attorneys do provide pro bono services, they are essentially required to. And cerVerDate Aug 31 2005 10:57 May 01, 2014 Jkt 000000 PO 00000 Frm 00090 Fmt 6633 Sfmt 6633 C:\DOCS\87646.TXT APRIL
87 

tainly on the form to renew your license it says, are you providing 

pro bono services? 

We think a lot of the services that are provided through the 

Legal Services Corporation could be provided through the private 

sector, through nonprofits, and not necessarily by the Federal Government. Of course before 1974 there was no Legal Services Corporation. I don’t know that there’s any evidence that the representation was better or worse prior to that time. 

Mr. CUMMINGS. You know, I just think that our society is getting 

to a point where there are folks—and as a lawyer who practiced 

many years, I saw a lot of people come into court, and they were 

had a decided disadvantage. And although we have a legal system, 

a Constitution, legal rights, if people don’t have counsel they are 

kind of out of luck. 

And I understand what you’re saying. A lot of people say leave 

it to the pro bono. And as you probably know, in Maryland you 

really have to do quite a bit of pro bono. But even that, I don’t 

think, captures so many people, the people that I see in—well, I 

used to see in courts. 

And this is a very interesting document. I want to really go 

through it. How did you all come up with these items? 

Mr. SCHATZ. Citizens Against Government Waste has been producing ‘‘Prime Cuts’’ since 1993. We use sources, in those days certainly a lot of old Grace Commission recommendations, some of 

which are unfortunately still not implemented. CAGW grew out of 

the Grace Commission. We also look at the Congressional Budget 

Office produces its report every year, GAO reports, the president’s 

budget, budgets put out by members of Congress, such as the Republican Study Committee and others. It always ties back to something. 

Mr. CUMMINGS. Sure. 

Mr. SCHATZ. And the database shows you where it came from. 

Mr. CUMMINGS. Well, Ms. Woo, you know, the establishment of 

the Do Not Pay List is one of the most recent tools that resulted 

from Chairman Carper and Ranking Member Coburn’s recent legislation on improper payments. The list permits all agencies to link 

databases, such as the General Service Administration’s excluded 

parties list system, to check the eligibility of a payee to receive government funds. 

What else would your organization propose to help decrease the 

level of improper payments? You can imagine when the American 

public hears about improper payments and then see a situation 

where we’re trying to come up with $6.4 billion to give their neighbors, their relatives, and friends an opportunity to get unemployment and survive, and we are losing money through improper payments, billions. That’s something that’s very alarming. And I’m just 

wondering, what would you propose? 

Ms. WOO. Thank you, Mr. Cummings. In terms of the entitlement reforms that we have listed, including the improper payments 

for noncovered chiropractic services that Mr. Arnold had mentioned, that is an area that I could actually follow up with you on 

in terms of getting back to our healthcare advocates and our 

healthcare team, and then I could provide you a better answer at 

a later time. 

88 

Mr. CUMMINGS. All right. Do you any of you all have an answer 

to that question, the improper payment issue? 

Well, let’s go on to DOD. You know, when you look at DOD and 

you look at the situation where they can’t even provide an audit, 

I mean, come on. Is it too big to control? And what do you all recommend with regard to DOD? Chairman Issa made some suggestions, and basically it’s just transferring certain funds out of there. 

They have all kinds of funds there for things like medical research 

and things of that nature. But, I mean, did you all have any other 

suggestions on that? 

Mr. SCHATZ. Well, it helps to know what an agency is spending, 

what a department is spending. 

Mr. CUMMINGS. Yeah. He said—I think Coburn said it. 

Mr. SCHATZ. Right. 

Mr. CUMMINGS. If you can’t measure it—— 

Mr. SCHATZ. Audit, right. 

Mr. CUMMINGS. —you got a problem. 

Mr. SCHATZ. Right. We agree with you. I mean, Citizens Against Government Waste helped expose the $436 hammer and the $640 

toilet seat, which we don’t see as much of anymore, but I think 

things like FITARA and other reforms on procurement will help reduce wasteful spending throughout the government, including 

DOD. That’s an important step to take. 

Mr. EDWARDS. I would say two general things about the Pentagon. You’re right, it’s hugely wasteful. I like spending caps combined with executive branch flexibility. I like the current spending 

caps. I’m disappointed with the recent budget deal. I think, you 

know, the Pentagon, if we gave them more flexibility to make these 

decisions to cut weapon systems and the like that they don’t want 

and they don’t need and we put tight caps on them, they would 

themselves find more efficiency. 

I also think one of the problems with the Federal Government 

again is because it is so huge, many Members spend their time on 

lots of little activities that, frankly, should be in the realm of State 

and local government. I think if we trim some of the extraneous 

functions of the Federal Government, more Members of Congress 

would focus more on some of the core functions, like Pentagon 

waste. 

Mr. CUMMINGS. Thank you. I see my time has run out. 

Mr. CONNOLLY. Mr. Chairman. Mr. Chairman. 

Mr. MICA. [presiding] Yes. 

Mr. CONNOLLY. Could I just ask Mr. Schatz. 

Mr. MICA. Yes. 

Mr. CONNOLLY. I couldn’t quite hear Mr. Schatz. Did I understand Mr. Schatz to say FITARA, FITARA would save some 

money? 

Mr. SCHATZ. FITARA would help. 

Mr. CONNOLLY. Very wise insight, Mr. Schatz. Thank you very 

much. 

Mr. SCHATZ. I never know if something’s going to be good or bad 

when I get up here. 

Mr. MICA. Thank you, Mr. Connolly and Mr. Cummings. I guess 

I’ll recognize myself next, having assumed the chair for Mr. Issa 

here. 

89 

One of the things that’s frustrating to me is—and these are great 

groups. You know, you’ve got Citizens Against Government Waste, 

Cato, National Taxpayers Union, and Ms. Woo, all of you working 

sort of in the same vein. But sometimes the voices are a little bit 

like Congress, they’re not unified. Is there an attempt to come together with any of these groups? Do you all come out with a common policy? I mean, we have the groups here and then there are 

many others out there that are looking at saving taxpayer dollars. 

Is there some association and do you meet and do you decide on 

some priorities? 

Mr. Schatz. 

Mr. SCHATZ. Yes, Mr. Mica. Sometimes there’s too many emails. 

I mean, we really, certainly with NTU in particular, we work very 

closely. It’s kind of a joke around the office, if NTU has signed it, 

we’ll sign it as well, and it’s really true. And I think over the years 

there has been a lot more coordination. For example, the alternate 

engine for the Joint Strike Fighter we first identified as an earmark back in 2006. Over time, other groups joined with us. 

Mr. MICA. But do you also have a joint policy on—— 

Mr. SCHATZ. It’s more coalition letters—— 

Mr. MICA. Because I think that would be helpful. 

Mr. SCHATZ. Well, we need it to be successful, because there are 

so many people that want to spend money, we have to work together. 

Mr. MICA. As I said earlier, you know, you just have to be persistent in this business and then hit a good lick. A good example, 

and I should have submitted this earlier, I did put this in the 

record, but this is the oversight on conference spending report that 

I alluded to. And while I gave credit to the committee, because we 

did follow up, it wasn’t just GSA. And I have to give probably the 

most credit to the guy in the hot tub, the GSA guy in the hot tub. 

I mean, he made it go viral. 

I remember we did a hearing on the subject. Nobody attended, 

no one paid any attention until that guy became viral. But from 

that, we did IRS, we did VA, we did DOD. This is about $0.5 billion 

a year in reduced spending on conferences, so these are a success. 

My point, too, is that I don’t see a lot of these groups joining in. 

It’s not that you want to become cozy with Congress, but when we 

are on a roll, it does help. The public buildings, I mean, the history 

of public buildings and all the different bills and people who have 

attempted—I remember we were in the minority—it’s great to be 

in the minority, but not for too long. I’m sorry, Mr. Cummings. I 

just bring that up. But when you’re there, you can do productive 

things, and we produced a report, ‘‘The Federal Government Must 

Stop Sitting on Its Assets,’’ and we outlined all the public buildings, Amtrak, I mean, just incredible assets that the Federal Government has. But the problem is you don’t get unified support from 

out there with some of these groups to go after these targeted 

things. 

So while you heard a lot of how we need to coordinate with the 

Senate and pick priorities, I think it would be good for your groups 

to coalesce and get behind some of these items. It would, again, enhance our efforts. And then when we do things, like Coburn talked 

about consolidating programs, the transportation bill consolidated 

90 

between 20 and 30 programs. Now the bureaucrats, the little bastards are running around trying to justify their existence. We 

eliminated or consolidated, but nobody is focusing on the bureaucrats who are trying to justify their existence. They have nothing 

to do, because you eliminate the program, but they come up. Now 

the rules, dear God, they’ve come out with rules to justify their existence. 

Anyone want to comment on this new administer by regulation? 

It’s a new phenomena. Mr. Schatz, Mr. Edwards, Mr. Arnold, Ms. 

Woo? 

Mr. SCHATZ. Mr. Mica, we’d be happy to come up on a regular 

basis and meet with your staff and the staff of any other committee 

that’s interested in consolidating any program. 

Mr. MICA. No. We have already done this. 

Mr. SCHATZ. Well, we haven’t done enough, because we still have 

them. 

Mr. MICA. This is a new phenomena. It’s a new phenomena. It’s 

rule by edict, fiat, regulation. And, again, we don’t have a focus on 

what’s going on there. There is some oversight. The administration’s been kind of clever, too, now, in ruling by fiat and executive 

order to pack the District Court of Appeals. That’s been the only 

recourse. You could pass a bill from the House and there’s nothing 

done in the Senate, and the edict and the executive order prevails. 

Are you all paying any attention to that? 

Mr. EDWARDS. I’ll give a general comment. The groups represented here are, frankly, pretty small, compared to the huge firepower and staffing power of the GAO and CBO. We have to—— 

Mr. MICA. But they just do reports and they have to be politically 

correct. You guys don’t have to. 

Mr. EDWARDS. I agree with you. So we have to pick and choose. 

For example, I’ve written extensively about TSA reform in the last 

half year. I know that’s something you’ve been very supportive of 

and a leader on. But, you know, it is difficult for outside groups, 

because most of the experts on Federal programs are in the executive branch and are staffers in Congress and are in the GAO. You 

know, outside groups, we need to pick and choose our battles, because our funding is limited. And so we’d love to work better more 

with you. 

Mr. MICA. Well, again, combined firepower, maybe some unified 

effort. 

I’m exceeded my time. Let me yield to the gentlelady from New 

York, Ms. Maloney. 

Mrs. MALONEY. Well, I want to thank all of the panelists for your 

excellent presentation and your hard work in a tremendously important area. 

The prior panel had a consensus that one of the most mismanaged agencies was the Pentagon, and they were united in their 

belief that the Treasury should be paying their books or paying 

their checks, writing their checks, as opposed to the Pentagon. 

They pointed out the Pentagon was the only agency in the entire 

government that themselves pays their checks. And I’d just like to 

go down the aisle. Do you believe that the Pentagon should be able 

to pay their checks or should they be just like every other agency 

and have Treasury pay them? Just a yes-or-no answer. Mr. Schatz? 

91 

Mr. SCHATZ. Yes. 

Mrs. MALONEY. Pardon me? 

Mr. SCHATZ. They should turn it over to another agency. 

Mrs. MALONEY. Yeah. Mr. Edwards? 

Mr. EDWARDS. Yeah, I agree with that. And I think one thing 

Congress can do, could give the Pentagon a fixed amount of cuts 

they want to see from efficiency, but then give the Pentagon flexibility to find those cuts and propose them to Congress. 

Mrs. MALONEY. Mr. Arnold. 

Mr. ARNOLD. Yes, I agree. 

Mrs. MALONEY. Ms. Woo. 

Ms. WOO. I will say that U.S. PIRG has worked with NTU on 

a number of different reports. We’ve written in conjunction about 

the common grounds. And we’ve also worked with Senator Coburn’s 

office to help write this report. 

On that matter, I would say that U.S. PIRG is not an expert on 

defense policy and defense spending and so forth, and so I will give 

a yes or a no answer on that, but we do take the authority and 

the authoritative consensus of various experts, you know, in the 

Pentagon in and the White House and so forth. 

Mrs. MALONEY. Well, Ms. Woo, you were very strong on the F– 

35 Joint Strike Fighter debacle, as you called it in your report, or 

NYPIRG did, and this is one of the key programs that NYPIRG 

and NTU, their joint recommendation is cutting it, the Joint Strike 

Fighter, which is the largest weapon system in history and largest 

contract in history for the Pentagon. And so far, the DOD has 

spent 12 years developing it, and by all consensus, their own consensus, it’s deeply flawed and has escalated with cost overruns to 

over $400 billion. Not only are the overruns now at $400 billion, 

they’re estimating that it costs a trillion dollars to maintain these 

planes. 

And the price tag is not the only frightening thing about this acquisition. DOD entered into the contract to purchase these planes 

while critical testing is ongoing, a practice called concurrency. So 

at the end of 2012 the DOD had procured 121 aircraft at a cost of 

$28 billion, but as of 2012 only 22 percent of the testing that they 

want to do has been completed. 

So I would say that this is an area we can work on. We shouldn’t 

be handing out contracts before you’ve tested them. And I’m going 

to put in a bill to that effect. And according to the Pentagon’s own 

Office of Operational Tests and Evaluation, in 2013 the plane has, 

‘‘no night capacity.’’ 

So my question, Ms. Woo, would you think that a fighter plane 

should be able to fly in the night? 

Ms. WOO. I do believe that. 

Mrs. MALONEY. Okay. And do you agree with DOD’s own statements from the chief of acquisition called it—and I quote, this is 

a quote from the chief of acquisition, I find it startling. He calls it, 

‘‘acquisition malpractice.’’ Now, would you agree with the head of 

the chief acquisition, Under Secretary Frank Kendall, would you 

agree that it’s acquisition malpractice which has happened? This is 

the DOD talking about their own procurement system. 

Ms. WOO. Yes. 

92 

Mrs. MALONEY. And does the acquisition—what I don’t understand, and we can get into a longer conversation on this is, you 

know, how does an acquisition of a fighter plane become such a debacle that the own acquisition officers are calling it a disaster? 

But my main question is what steps does DOD need to take in 

order to eliminate the wasteful and unnecessary F–35 program? 

And it’s noted in other reports, it may have been yours, Ms. Woo, 

or someone else’s, that it doesn’t even address the way that we are 

moving militarily. It can’t land on an aircraft. The Navy has these 

big boats that the planes land on; the Navy plane cannot land on 

their own aircraft. So how do you move it around? And we seem 

to be having these smaller strike forces as opposed to a huge plane 

that can’t fly at night and can’t land. 

So what are the steps that DOD would need to take to eliminate 

what by their own acquisition leadership Mr. Kendall is calling an 

acquisition disaster? What are the steps? Anyone? How do you get 

rid of a wasteful item in the budget? How would you do that? 

Mr. SCHATZ. Well, one of the recommendations we have in prime 

cuts is to reduce the cost growth in the major defense acquisition 

portfolio by 20 percent over 5 years. GAO has done a lot of work 

on this. It’s simply changing the way that procurement is achieved 

at DOD, and it’s been an ongoing problem for many, many years. 

So it’s a big operation. We’re happy to work with this committee 

and others to try to reform it in the future. 

Mrs. MALONEY. Any other comment? How do you get rid of a 

wasteful acquisition like this? How do you get rid of it? You’ve 

identified it. Now how do you get rid of it? 

Mr. ARNOLD. I don’t know that it’s fair to put the onus solely on 

DOD. I think it’s probably going to require congressional action as 

well, and you’re talking about these massive weapons systems, 

you’re talking about a lot of parochial interests that are involved. 

So it’s extraordinarily difficult, but I think Congress needs to run 

point. I mean, we have a significant number of weapons systems 

and other things being done by DOD that they say they do not 

need and they do not want, yet they are obligated by law to continue to contract and produce, to maintain. So Congress needs to 

step in at some point, and there’s a lot of options in our paper and 

the publications that Coburn and others have put out that Congress can introduce legislation and pass it and stop these things 

from taking place. 

Mr. MICA. I thank the gentlelady and the witness. 

Mr. Lankford. 

Mr. LANKFORD. Thank you, Mr. Chairman. 

Mr. Edwards, I want to ask you a question about incentivizing 

agencies and agency individuals. Right now the incentive for an 

agency is to add more staff, and to try to chase down more dollars, 

and to spend as much as you can at the end of the year. How do 

we split that incentive? 

You mentioned spending caps. Sequestration caps and other caps 

really hit at every single program. Some—there are some programs 

that run more efficiently than others, but a cap like sequestration 

hits all of them with equal amount of fury. 

If I hand to an agency the authority to say I need you to cut 7 

percent from your budget or 27 percent from your budget, there’s 

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very little oversight of which programs they’re going to cut. They’ll 

keep the ones they like the best, and they’ll cut the ones that probably I like the best. 

So talk through different options that you have seen for 

incentivizing agencies in reduction. 

Mr. EDWARDS. I mean, I think ultimately for reasons I go into 

in my testimony, I list 15 reasons why the public sector will never 

be anywhere near as efficient as the private sector. The profit motive in the private sector is hugely powerful. 

Mr. LANKFORD. It is. 

Mr. EDWARDS. And the government doesn’t have that. Government, there’s been lots of talk for pay for performance in the Federal Government for decades, but it never really happens, and I 

don’t think it can. The government has more rules because of basic 

structural reasons to prevent public corruption and because they 

have no clear motive like lowering costs and maximizing revenue. 

So I think the focus should be on fully eliminating programs and 

also capping spending, giving executive branch agencies more flexibility. I think executive branch agencies should and can do more 

to evaluate their own programs. Perhaps agencies should be required to do detailed analyses and rank order their most efficient 

or highest-priority programs to the lowest-priority programs, and 

make the information public so that Congress can see it and Congress can use it for decisionmaking. More information is always 

better. 

You know, one thing that I find really striking about the Federal 

agencies, you go to their Web sites, it’s all good news, it’s all essentially propaganda about all the great fabulous things they do, but 

I don’t think that’s fair to taxpayers. I think Federal agencies 

should be required to provide more balanced information about 

their programs, their failings, and what the low-priority activities 

they do are. And the ultimate decision is up to the Congress, but 

I think agencies can do more to provide information to Congress 

about where they fail. 

Mr. LANKFORD. Yeah, I would agree. The taxpayers’ right to 

know that Dr. Coburn had mentioned earlier, that’s my bill here 

in the House we’ve talked about this committee has passed. We 

had bipartisan input into that bill, and it has passed. I hope the 

full House will pass it on and we will send it over to the Senate. 

But just the basics of doing what every program is, how much 

we spend, how many people they serve, and the metrics, if there 

are any metrics, for the program would be a tremendous asset to 

Congress to make those decisions, because right now there’s no description of all those programs or a listing of the programs. So 

what Dr. Coburn mentioned earlier about the hundreds of duplicative programs, it’s very difficult to go through the tedious work of 

identifying all those programs because they all have different descriptions and different locations. 

Mr. EDWARDS. That’s right. 

Mr. LANKFORD. Mr. Schatz as well, I appreciate, you had mentioned earlier about the rule change in the House. I’m proud to say 

that was actually my rule change that went through on that one 

as well to try to identify some of the duplicative programs. 

94 

We have a long way to go on that, and you’re right, there’s not 

enough teeth to it, and I appreciate you bringing it back out because that is something that I hope in the years ahead we can continue to add more teeth to it so it’s more than just identifying and 

listing, yes, this is duplicative, but a prohibition to that as well. 

Are there other rule change things that you have seen that 

would be an asset in the days ahead to the functioning of the 

House? 

Mr. SCHATZ. I think your—it reminds me a little bit of the Improper Payments Act. The first one just identified the improper 

payments, then the next two really put some teeth into it. So I 

hope that the rule that has been adopted would improve over the 

years, because if you’re prohibited from enacting a duplicative and 

overlapping program, then that helps solve that problem to start. 

So I know rules change at the beginning of each Congress. I hope 

if there’s a change in leadership, that rule continues, because it’s 

really critical. It’s amazing it took this long to have a rule like that, 

because one would think any organization wouldn’t want to create 

a duplicative program. So we appreciate your leadership on that. 

We’re happy to come up with some other rules, but I was happy 

to see that that one was there, because, to be honest, when we 

started our research for the testimony, we weren’t—we didn’t even 

know it was there. 

So that’s something else that perhaps needs to be emphasized to 

the committees, that this is a rule, and they should be using it, because, again, if Citizens Against Government Waste didn’t know 

much about it, the rest of the public probably doesn’t know, either. 

So I encourage more information about what you’ve been doing. 

Mr. LANKFORD. Right. It’s new, and it’s a step process to be able 

to push on that. 

I have one quick question as well for Mr. Arnold and Ms. Woo. 

One of the items that you identified was requiring DOD and VA 

to jointly buy prescription drugs. This is something that I have 

tracked through as well. I have seen figures—you have a little over 

$4 billion in savings on that. I’ve seen figures as high as $7 billion 

in savings on that. I don’t know if you wanted to mention or add 

any other detail to it. 

The GAO report came out in early 2000 suggesting that DOD 

and VA jointly purchase prescription drugs. They did it for several 

years, had millions of dollars of savings until 2005, and then in 

2006 DOD changed its formulary, and they never really cooperated 

again since then. They’ve studied it, they’ve looked at it again, but 

I didn’t know if you had any additional detail on it. That’s one of 

those bipartisan areas to look at and say, why wouldn’t we try to 

combine the drug purchasing between DOD and VA? Any other 

comments that either of you have on that? 

Mr. ARNOLD. I think you articulated it pretty well actually. I 

don’t know if I have anything additional to add, but it’s something 

we strongly support. 

Mr. LANKFORD. Thank you. 

Ms. Woo? 

Ms. WOO. Just to kind of repeat what you were saying, that that 

collaboration had really declined over the past few years, and we’re 

really advocating for that to occur again. 

95 

Mr. LANKFORD. Okay, thank you. With that, I yield back. 

Mr. MICA. The gentlelady from Illinois Ms. Duckworth is recognized. 

Ms. DUCKWORTH. Thank you, Mr. Chairman, and thank you to 

all the witnesses for being here today to share your thoughts. 

Over the past couple weeks, we’ve been debating whether or not 

we can afford to extend unemployment insurance for a lifeline for 

millions of Americans, and in my home district of Illinois, thousands of families were talked about last year cuts to the food 

stamps program. Yet at the same time in this very committee we 

saw time and again the waste that happens in government, and it’s 

really infuriating to me to think that I have kids in my district who 

are going hungry, and yet there’s $900 million worth of unused 

Stryker parts sitting in a warehouse that the Army—that the military paid for but couldn’t use and continued to purchase. 

I would like to sort of talk a little bit more about the DOD and 

its process. You know, this past year, my first year in Congress, 

two things that happened that really sort of crystallized in my 

mind the waste that happens in DOD, especially in—under the Defense Logistics Agency. One was a hearing in this very committee 

on the Supreme Food contract, and that is this corporation, Supreme Food Services, that provide under a sole contract all the food 

in Afghanistan for the last decade, and, in fact, has now been found 

to have overcharged the DOD by $757 million for that food contract. They continue to get extensions to the contract in a noncompetitive award process. This is something that the DOD’s IG 

itself discovered and brought to light. And then I talked about the 

Stryker part also, again a result of a DOD IG investigation. 

Mr. Arnold, could you give me any suggestions that you might 

have as to how DOD can develop some sort of controls over the 

DLA? I know that, you know, we talked about the audit process, 

and I absolutely agree, we need to put some teeth into the process 

of forcing DOD to do the audits, but what about the DLA itself? 

I mean, if the DOD’s own internal IG is identifying these as problems, what is there that we can do? 

Mr. ARNOLD. Well, let me confess, first of all, I was a coauthor 

of the study, and I didn’t work quite as much on the defense aspects of it, so in terms of getting into the real technical details, I 

would have to defer to my colleague, Pete Sepp, who did a lot of 

work, or perhaps some folks at PIRG. So I don’t know that I have 

a really articulate answer for you, I apologize for that, but I would 

be happy to get back to you after the hearing. 

Ms. DUCKWORTH. No problem. 

Ms. Woo? 

Ms. WOO. In terms of the consolidations that we found that could 

occur in the Defense Department, and a lot of them include, and 

it’s listed in our report, consolidating foreign language contracts, 

uniform designs for the armed services or support services on joint 

bases, or consolidating management of retail bases. These are all 

of the smaller things that can add up to a lot of money in the end. 

In terms of the process of how that would go about, you know, 

as I mentioned before, U.S. PIRG, we’re not defense experts, and 

we don’t have anything to say about the process by which it would 

happen, but these are the things that need to be addressed, and 

96 

need to be consolidated, and need to be cut, especially because, you 

know, I think, as Senator Coburn had said, we have so many programs, over 600 programs, for other departments, and the same for 

the Defense Department. When there are multiple programs for designing uniforms, that needs to be addressed. 

Ms. DUCKWORTH. Well, the uniform thing is right after my heart. 

I’m actually the individual who got passed in this year’s NDAA the 

single camouflage pattern bill that will save the Army alone $82 

million by going back to a single camouflage pattern, which is what 

we had for most of my entire time in the military up until 2004 

when the Marines developed their own. 

Mr. Edwards, let’s switch gears a little bit and talk about Medicare. I recently had an event in my district where we talked— 

where we taught our seniors to look into Medicare fraud and waste, 

taught them to read their own Medicare statements. And one of the 

things that was quite shocking to me is that the regional Medicare 

representative who came to teach the course actually made the 

statement that they know that 10 percent of their payments are to 

fraudulent and wasteful claims, that they know and accept that 

they have that 10 percent waste, and that they’re working to fix 

it, but that comes out to about a billion dollars a week. 

It is stunning to me that that is acceptable. I don’t think that 

we would accept it in business, and we shouldn’t accept it in government. Can you talk a little bit about Medicare, just the waste 

portion of it; not just the fraud and abuse, because that we can 

deal with, but the waste? 

Ms. WOO. Yeah, absolutely. I think that’s appalling to me as 

well, the fact that they readily knowingly accept that 10 percent. 

I think you said 10 percent goes to fraudulent claims and improper 

payments. 

But, yeah, there are a lot of different—as listed in our report, 

there are several different entitlement reforms within the 

healthcare system that we have advocated for. One of them is better aligning Medicare payments to teaching hospitals, so Medicare—the Medicare Payment Advisory Commission, or MedPAC, 

has actually stated that the cost of teaching hospitals is much less 

than the amount of government funding that we’re providing them. 

So better aligning that would save over $10 billion in the next 10 

years. And then there’s plenty of other things: Bundling Medicare 

payments so that a single payment goes to a number of different 

individual episodes in a 3-month period, that would also advocate 

for a more effective use of time, more effective and efficient actual 

services. And so these are the types of things that we think that 

are really important within the healthcare system that we can and 

should change. 

Mr. MICA. Thank the gentlelady. And we’ll recognize now the 

gentleman from Michigan Mr. Walberg. 

Mr. WALBERG. I thank the chairman. 

And I just arrived back from meeting with Ed and Workforce 

Committee and was delighted to hear Senator Coburn talk about 

the SKILLS Act extensively as being one of our greatest accomplishments, even though it be limited, and I think it was, 

downsizing the numbers of redundant programs, 35 ineffective, duVerDate Aug 31 2005 10:57 May 01, 2014 Jkt 000000 PO 00000 Frm 00100 Fmt 6633 Sfmt 6633 C:\DOCS\87646.TXT APRIL
97 

plicative programs, including 27 identified in the 2011 Government 

Accountability Office. 

I guess I would like to ask any of you who would like to weigh 

in, the fact that this has unfortunately languished in the Senate, 

and, in fact, what they are even thinking about offering includes 

only one of our proposals in that SKILLS Act. Could you discuss 

further proposals to remove arbitrary roadblocks that will help get 

Americans back to work in the jobs that are currently in demand? 

And I know on my own Michigan Web site, the MIjobs.gov lists 

52,000 unfilled jobs right now, and most of those—and that’s—we 

know there are many more than that, but that’s on that one Web 

site, a State government Web site, and the majority of reasons why 

they’re not being filled is people don’t meet the certification requirements, the qualifications. They haven’t been trained for that. 

So if you could speak to that issue, what proposals would you 

have in mind to remove further arbitrary roadblocks to making 

people employable? Mr. Schatz, I’ll start with you, if you would 

care to answer. 

Mr. SCHATZ. Thank you, Mr. Walberg. 

Certainly creating progrowth policies here in Washington would 

be helpful, and certainly that does not entail creating new and duplicative programs, as Dr. Coburn noted. He examined the job 

training programs in Oklahoma. It turned out the State was far 

more efficient at creating jobs because the training that they were 

conducting was related to jobs, and that’s something that the government should be looking at as well. 

I know that in the House the SKILLS Act was supported strongly by Republicans, not supported as much by Democrats, some differences in how it should be done, but whether it’s through legislation, whether it’s through progrowth policies, tax reform, there are 

many other ways to help create jobs. The government needs to be 

more out of the way rather than trying to force its own view on 

how jobs should be created, because that’s not something that we 

ever found in the Constitution, yet Members seem to think creating 

jobs is one of their major functions. 

Mr. WALBERG. As opposed to getting out of the way so that people who do know how to create jobs can do that, including our 

States. And I think that was one of the best points of the SKILLS 

Act; it did give the flexibility back and the opportunity back to the 

States to do. 

Mr. Edwards? 

Mr. EDWARDS. A broad comment on job training. I’ve looked in 

detail at the job training programs over the decades, and, you 

know, it is astounding. The Federal job training programs have 

never really worked very well. Back over half a century to John F. 

Kennedy, every decade or so we reorganize them and change them 

and try to fix them, but the GAO comes back every time and basically says, you can’t really show that these things work very well. 

I think the Federal Government ought to get out of the job training business. If you look at the data, it is the corporate sector, the 

business sector in the United States does a much more massive job 

training, on-the-job training, and the Federal Government’s $18 or 

so billion is a tiny drop in the bucket. It hasn’t really worked very 

well. I’d take the Federal Government out of that business. 

98 

In terms of progrowth policies, there’s a gigantic—it’s outside the 

jurisdiction of this committee, but there’s a gigantic reform that is 

on the plate here there should be bipartisan support for, and that’s 

corporate tax reform. We’ve got the highest corporate tax rate in 

the world. It absolutely makes no sense. You read in the newspaper 

every few weeks or every month or two about major corporations 

who are moving jobs elsewhere, often because of the corporate tax 

problem we’ve got. 

President Obama says he’s for corporate tax reform, Republicans 

are for it. Why we can’t do that I don’t understand. Our neighbor 

to the north, our largest trading partner, Canada, has a 15 percent 

corporate income tax; we’ve got a 35 percent rate. It makes no 

sense at all. That is a big thing we can do, because when businesses, they have a lower corporate rate, they invest more, they 

buy more machines, and when you buy more machines in investment, you need workers to run those machines. A corporate tax cut 

would be a huge jobs bill, in my view. 

Mr. WALBERG. Mr. Arnold. 

Mr. ARNOLD. I’ll just—I’ll concur with both Chris and Tom, but 

also add at the State level especially we see licensure laws that 

place real strong restrictions on the amount of job growth that can 

occur within a particular field of expertise. And we understand 

when those are created for surgeons, et cetera, but when those are 

created for things like interior decorators, they’re just protectionism on the part of some these trade associations that, again, 

limit the access of people seeking jobs to actually become employed. 

Mr. WALBERG. I’m out of time, but could Ms. Woo—— 

Mr. MICA. Go right ahead and respond. 

Ms. WOO. Just to add a quick note, in terms of job growth, I’m 

not going to say anything much just in terms of the confines of our 

report, but at the same time, you know, the Federal Government 

is spending billions each year subsidizing large agribusinesses, 

which really put small farmers, small businesses at competitive 

disadvantages. Tax loopholes and tax havens where companies are 

able to shift their profit offshore and use a zero percent tax rate 

or a very, very minimal tax rate really puts small businesses at 

competitive disadvantages and really hurts taxpayers in that they 

have to now pick up the tab through cuts to public programs or 

more debt or higher taxes, and that can really put a damper on job 

growth and put a damper on being able to find a job and being able 

to pick up, you know, your household in that kind of way. So, yeah, 

I end my statement there. 

Mr. MICA. Thank you, gentlemen. 

Recognize the gentleman from Illinois Mr. Davis. 

Mr. DAVIS. Thank you very much, Mr. Chairman. 

You know, I really think that all of the members of this committee agree that waste in government and unnecessary spending 

is unacceptable. It also appears to me that members will probably 

agree that this committee is well positioned to investigate and examine issues of waste and conduct legitimate oversight work that 

holds agencies accountable and help implement necessary reforms. 

Despite the various examples of waste identified during today’s 

hearing, there has been some progress in this administration that 

agencies and Congress should continue to build upon. President 

99 

Obama made it a priority to reduce improper payments when he 

took office, and we should be pleased to see that over the past 3 

years the Federal Government has avoided making $47 billion in 

improper payments and recaptured $4.4 billion in overpayments to 

contractors. 

Another initiative established by President Obama is the Securing Americans Value and Efficiency Award, or SAVE Award, which 

taps the knowledge and expertise of frontline Federal workers for 

recommendations to help improve government performance and ensure that taxpayer dollars are spent wisely. 

Mr. Arnold, in your testimony, you acknowledge and support the 

SAVE awards, correct? Why do you believe that the SAVE awards 

can be effective in identifying government waste? 

Mr. ARNOLD. Yes, I did include that, and I think that is something that President Obama deserves credit for. I believe he’s included about 80 recommendations, people from this program, into 

his budgets over the past several years. So, yeah, I mean, along the 

same lines as whistleblower protections, providing an incentive 

structure for Federal employees to report on the waste that they 

are seeing and to devise systematic reforms that will help to limit 

those things that are wasteful, it makes a lot of sense. You know, 

we can study budgets and GAO reports and CBO reports all day, 

but we don’t have that same on-the-ground experience that these 

Federal employees do, so we need to tap in to their expertise as 

well. 

Mr. DAVIS. Do you think that we will get from them more of an 

accurate accounting than other types of oversight might provide? 

Mr. ARNOLD. Whether it’s more accurate or not I don’t know, but 

it’s certainly a different perspective, and it’s a very valuable perspective. 

Mr. DAVIS. You know, I have always—since I guess being a kid, 

I’ve always been amazed at the amount of waste, inefficiency that 

was always pointed out in government, and I’ve also been amazed 

at the notion that the private sector automatically is going to be 

more efficient than any public sector activity, and I guess because 

of the profit motive. Given the profit motive, though, does that 

mean that the level of benefit is going to be greater to the public, 

or the benefit is going to be part of the profit that the private sector earns, and there might be a kind of balance in terms of public 

interest and what benefits the public? 

I think it’s just something to give thought to and consideration, 

but I certainly appreciate all of the areas of identification and suggestion that the government or the Federal Government is making 

some progress by no means suggests that we’re close to where we 

need to be in terms of ferreting out waste and inefficiency. 

So I thank all of you for your testimony, and I yield back. 

Mr. MICA. Thank the gentleman. 

The gentleman from Texas Mr. Farenthold. 

Mr. FARENTHOLD. Thank you very much, Mr. Mica. 

I had a couple of questions. The Wastebook points out that we’re potentially spending close to $700 million to promote 

HealthCare.gov, a Web site that doesn’t work. And I know that my 

colleague from Missouri, Billy Long, has a bill out that would require advertising purchased by the Federal Government to have a 

100 

disclaimer like we have on political ads, you know, this advertisement was paid for with tax dollars, and sometimes it’s difficult for 

the public to know. 

As somebody who worked in broadcasting, we ran PSAs, many 

of which came from government agencies, and we ran them for free 

in available commercial time, but in other cases you’ve got the Federal Government paying for advertising. I certainly see a need for 

maybe advertising for recruiting for our military, but driving people to a Web site that doesn’t work, or at least wasn’t working well 

when some of these ads were running, seems to be a problem. Have 

any of you all looked at government advertising expenditures as a 

source of waste? 

Mr. SCHATZ. We’ve looked a little more at sponsorships; for example, having agencies sponsor NASCAR, among others. So we’ve 

taken it from a little bit of a different direction. 

In terms of disclosure, it’s not something we’ve thought about, 

but I think taxpayers do deserve that kind of transparency because 

they should know how that money is being spent. 

Mr. FARENTHOLD. I do think Mr. Long’s bill would go a long way 

to at least raising public awareness of that. 

Mr. Edwards, you talked a lot about moving stuff to the private 

sector, and I’m a big supporter of that. I think the private sector, 

with a profit motive and unburdened by as many rules and regulations as exist within government organizations, is a good idea. But 

I come back to HealthCare.gov. That was outsourced to a private 

company and had huge, excessive cost overruns. We’ve talked a little bit about procurement reforms, but, you know, you can’t just 

turn it over to the private sector and not have some sort of oversight on the contracting. And could you talk a little bit about that? 

Mr. EDWARDS. I absolutely agree with that, and to go back to 

what Congressman Davis said, the private sector, it’s sort of a twopart partnership in the private sector. Companies want to earn 

profits, but what we want to do for public policy is we want to 

maximize competition in the private sector to peel away any excess 

profits. So companies want to earn profits, and other companies 

want to grab those profits, and that’s why the private system, private sector works. 

With Federal contracting, it is a problem, you know. We should 

absolutely minimize sole-source contracts. You know, the CGI Federal, I guess the prime contractor on Obamacare, I didn’t look into 

the details of that contract, but for Federal contracting we should 

try to maximize competition every way we can, maximize transparency, maximize the transparency of the competition. 

Mr. FARENTHOLD. But we’ve also had some hearings with respect 

to contracting reform where, for instance, in building contracts, in 

design/build contracts, you are going out, and rather than coming 

to three or four finalists to come up with a very detailed proposal 

after the initial request, you’re ending up with 10. So you’ve got 

huge costs associated with bidding for a government contract and 

the regulations associated with that that have to get built in. So 

if you’re only getting 1 of 10 contracts you’re spending hundreds of 

thousands of dollars bidding on, you’ve got to recover that cost 

somewhere else. 

101 

Mr. EDWARDS. Yeah, but I mean, the private sector, that’s the 

way the private sector works. When GE goes out and wants to 

buy—you know, spend the money on IT, they have, you know, people, you know, competing to contract. I’m a big—I think you’re referring to the PPP sort of infrastructure of partial privatization. I’m 

a big fan of it. I think it works well. You look at the Capital Beltway in Virginia, it came—the private sector put a billion dollars 

into that. It came in on time and on budget. So there may be some 

extra costs, but I think getting the private sector in, private management, and having contractors compete is the way to go. 

Mr. FARENTHOLD. All right. I think both you and Mr. Schatz 

talked a little bit about centralizing IT for the Federal Government. Are we risking creating another massive bureaucracy in a 

government that looks like it can’t compute its way out of a paper 

bag? Are we going to create a bigger problem, or are we going to 

solve something there? 

Mr. SCHATZ. I don’t think I mentioned the word ‘‘centralizing.’’ I 

think we did talk about giving agency CIOs more authority, because that is their job. That was part of FITARA, and I think it 

is important that they have more decisionmaking power. 

I will point out, however, that there were no CIOs until 1989, 

which begs the question why we didn’t have that prior to that. And 

we’ve had other legislation since then to improve management, and 

it requires continuous work, because, as you say, it is so large, and 

it is quite difficult. But competition is important, and I think that 

this legislation is also very important. 

Mr. FARENTHOLD. I see my 5 minutes went by a lot faster than 

I thought it would. 

Mr. MICA. Thank you. 

Recognize the gentlelady from California Ms. Speier. 

Ms. SPEIER. Thank you, Mr. Chairman. 

I want to thank each of you. I wonder to what extent you get a 

little fatigued, coming here every Congress, making recommendations to us. We seem very interested and engaged, and then what 

happens? 

Maybe you could help us by providing me, which I would be 

happy to provide to the full committee, a list of all the things that 

we have actually done as a result of the work you’ve provided to 

us. You’ve given us tangible, easy-to-effectuate recommendations, 

and I frankly think that very few of them have been embraced. 

Let me go to the one that both Mr. Arnold and Ms. Woo have 

agreed is something that the Republicans and Democrats can agree 

on, and that is spare parts and obsolete parts. This is a plumbing 

elbow. I bought it at the hardware store for $1.41. A defense contractor charged us, the taxpayers of this country, $80 for this. This 

is a package of washers, $1.22 at the local hardware store; defense 

contractor, $196.50. 

It’s outrageous. We have a Defense Logistics Agency, it’s our 

hardware store, it’s got parts that are going to be there for and can 

be used for the next 100 years, and what do these various departments do, these various operations within Defense do? They go out 

to a defense contractor to get the part. 

102 

So you’ve identified something, and I hope to God we do some- thing about this. This is real money. It’s $4 billion; is it not? Mr. 

Arnold, is it—— 

Mr. ARNOLD. Yeah. It’s $3.9 billion is the number that we cited 

in our report, and actually that was one of the more difficult numbers that we had to track down because there was just so many 

conflicting stories about how much is wasted at the Pentagon on 

spare parts. So we did end up citing a GAO report, but there are 

many other studies out there that actually would put that number 

much higher. 

Ms. SPEIER. I’m not going to ask you to speak to it today, but 

the GAO has just done a series of reports on physician self-referral, 

where in ancillary medical services, whether it’s an MRI, an IMRT, 

a laboratory is owned by them, they end up referring more of their 

patients to it, and the result is a savings of probably $10 billion 

or more over a 10-year period of time, probably closer to $20 billion 

over a 10-year period of time. I’m interested in whether or not you 

have looked at that issue. You can just respond to me separately 

on that. 

Mr. ARNOLD. Yeah, I think that may be addressed by Medicare 

bundling, which is something that we did include in our report. If 

you have a single payment going out to a provider—— 

Ms. SPEIER. It’s not a bundling issue, it’s a self-referral issue. 

Mr. ARNOLD. I’ll have to look at that then. 

Ms. SPEIER. Okay. Let me move on to crop subsidies. The GAO 

has indicated that we’ve seen a gross increase in crop subsidies. In 

2000–2006, it was about $3 billion each year; now it’s looking at 

$9 billion per year. The report argues that we could save more than 

$84 billion over 10 years by eliminating this program. 

What’s most stunning is that the GAO reported that the biggest 

recipient of the subsidy is a corporation; not the family farmer, but 

a corporation who received $2.2 million in premium subsidies. Seventy-five percent of these subsidies are going to 4 percent of, quote, 

‘‘farmers.’’ Now my question to you is who is in this, quote, ‘‘4 percent’’? Ms. Woo. 

Ms. WOO. Yes, that’s absolutely correct; 75 percent of the subsidies in the crop insurance program are only going to 4 percent 

of the recipients. I mean, that 4 percent—— 

Ms. SPEIER. But who? Give us some names. 

Ms. WOO. Oh, I actually don’t have that information. 

Mr. EDWARDS. Ted Turner, for example. 

Ms. SPEIER. Pardon me? 

Mr. EDWARDS. Ted Turner is an example. The Rockefellers have 

got it. Jon Bon Jovi, the rocker, has got farm subsidies. There’s a 

lot of famous—— 

Ms. SPEIER. Members of Congress? 

Mr. EDWARDS. Members of Congress, right. 

Ms. SPEIER. I mean, let’s just be fair, Mr. Edwards. I’m willing 

to go after anyone regardless of their political affiliation, but who 

are the 4 percent? Let’s get a list of who the 4 percent is. 

Mr. EDWARDS. You know, the think tank EWG.org does a very 

good job on identifying the particular farmers who are getting particularly the direct payments. The statistic that I think is remarkable is that the average farm household in the United States now 

103 

earns income 25 percent higher than the average household in the 

United States, so farm subsidies are a reverse Robin Hood program. We’re taking from average taxpaying families that we’re giving to higher-income people. I think it’s completely unfair. 

Ms. SPEIER. Now, 80 percent of the farmers, though, get about $5,000 on average, so we’re talking about a very small percentage 

that is getting the lion’s share of this money, and if we know who 

they are, and they’re corporations that shouldn’t be getting it, we 

shouldn’t be offering it. The GAO has recommended a cap of no more than $40,000 as a 

farm subsidy. Do you all support that? 

Mr. EDWARDS. Absolutely. One thing I would point out about 

farm subsidies that people who don’t look at it don’t really get, 

with the direct payments, it’s the landowners get the subsidy, it’s 

not even the tenant farmers. So that’s why people like the Rockefellers and Ted Turner, they own massive amounts of land. I think 

Ted Turner is the largest landowner in the country. He gets the 

subsidies, not the tenant farmers he hires. 

Mr. SCHATZ. Just quickly, as Congressman Mica mentioned earlier, cooperating with each other. The farm bill is an area where 

we have cooperated very well over the years, and we have a good 

right-left coalition on that issue. Unfortunately a lot of what we 

wanted didn’t get into the farm bill. 

Mr. MICA. Thank the gentlelady and the witnesses. 

The gentleman from Arizona Mr. Gosar is recognized. 

Mr. GOSAR. Well, thank you very much, and some of the previous 

comments have led right into my aspect. Competition is one aspect 

for efficiency, but also accuracy in writing contracts is another. 

Would you not agree, Mr. Schatz? 

Mr. SCHATZ. Yes, I do. 

Mr. GOSAR. Mr. Edwards? 

Mr. EDWARDS. Absolutely. 

Mr. GOSAR. Mr. Arnold? 

Mr. ARNOLD. Yes. 

Mr. GOSAR. Ms. Woo? 

Ms. WOO. Could you repeat that one more time? 

Mr. GOSAR. Yeah. Competition is one aspect to ensure fair competition, but also accuracy in contracts and calculations are another 

part of this; is it not? 

Ms. WOO. I would agree with that. 

Mr. GOSAR. Okay. So are you familiar with the prevailing wage? 

Mr. SCHATZ. Davis-Bacon, yes. 

Mr. GOSAR. How about you, Mr. Edwards? 

Mr. EDWARDS. Yes, absolutely. It should be repealed, in my opinion. 

Mr. GOSAR. Mr. Arnold? 

Mr. ARNOLD. Yes. 

Mr. GOSAR. Well, I mean, I’m of that mindset, too, but, you know, 

I was taken aback by the GAO account last year of the audit, and 

what it showed for us is that we’ve got a problem. So do you believe 

a fair wage for a fair job that’s fair to the taxpayer, Mr. Schatz? 

Mr. SCHATZ. Yes, I do. We’ve also supported repealing DavisBacon and the service contracts. 

Mr. GOSAR. Okay. How about you, Mr. Edwards? 

104 

Mr. EDWARDS. Absolutely. 

Mr. GOSAR. Mr. Arnold? 

Mr. ARNOLD. Yes. 

Mr. GOSAR. Well, it came to my attention, I agree with you, but, 

I mean, we can stairstep this, because I don’t see—there’s no benefit to it. Maybe at one time there was, but I don’t see much of an 

aspect now. But would you be surprised that 100 percent of the audited calculations for Davis-Bacon were fraudulent? 

Mr. SCHATZ. That doesn’t surprise me. I haven’t seen the report, 

but it wouldn’t surprise me. 

Mr. GOSAR. How about you, Mr. Edwards? 

Mr. EDWARDS. I guess it would not surprise me. 

Mr. GOSAR. How about you? 

Mr. ARNOLD. A hundred percent? 

Mr. GOSAR. Uh-huh. 

Mr. ARNOLD. It’s a little surprising. 

Mr. GOSAR. It is surprising, isn’t it? How about you? 

Ms. WOO. Yeah. 

Mr. GOSAR. I’ll be honest, I was prepared for maybe 50 percent 

or 60 percent. 

So we actually contract calculations for the prevailing wage, so 

the Department of Wages, which is crappy—yeah, you heard it 

from me, crappy—what if we were to exchange that and just say 

let’s give up on right now the prevailing wage, and let’s recalculate 

it so it’s properly done for a fair wage for a fair job to the taxpayer 

and move it to the Bureau of Statistics. Do you know how much 

money we would actually save in that calculation per year? Estimate between $15- and $25 billion a year. Would you be for that? 

Mr. SCHATZ. That would certainly be helpful. 

Mr. GOSAR. I mean, I’m a scientist, I’m a dentist, so beauty is 

in my detail, and I compare—I like facts, and the way we’re doing 

it right now, we have no facts to base it on. Some people are being 

overpaid, some people are being underpaid, and we don’t even have 

a calibration on which we can base our judgment on. So would you 

think that would be something that you could support, just getting 

accuracy back into the prevailing wage? 

Mr. SCHATZ. Well, it’s not just the prevailing wage, Congressman, it’s everything that Congress receives in terms of information, 

but that would be a good place to start. 

Mr. GOSAR. Oh, absolutely. 

How about you, Mr. Edwards? 

Mr. EDWARDS. Absolutely. And the losers are the citizens, because they get less highway maintenance, for example, because 

wages get inflated. So citizens would get more quality services and 

more investment that helps them without this particular law. 

Mr. GOSAR. I’m going to come back to you, because it’s a great 

question. 

How about you? 

Mr. ARNOLD. Yes. 

Mr. GOSAR. Yes. 

And Ms. Woo? 

Ms. WOO. I think that the amount of money that you would be 

getting out of that definitely helps the Federal Government in 

streamlining processes. In terms of what the wage is supposed to 

105 

be or how that’s supposed to be calculated, it’s not something that’s 

in the purview of U.S. PIRG expertise and our position. 

Mr. GOSAR. But that would be a good thing, getting back to 

facts? 

Ms. WOO. Getting back to facts, absolutely. 

Mr. GOSAR. So, I mean, coming back to you, Mr. Edwards, I 

mean, you’re exactly right. So, you know, the prevailing wage is an 

average of 22 percent additionally added to Federal contracts, just 

for Davis-Bacon. That means if you were to have better accuracy, 

you could get five bridges for the cost of four. Interesting application to our infrastructure problem. 

Mr. EDWARDS. Right. 

Mr. GOSAR. So I actually have a bill that actually just changes 

those six words. It’s H.R. 448, the Responsibility in Federal Contracting Act. We would like to see that. It is a down-to-earth, simple thing that I think everybody could agree with, okay? 

I have one more thing that I would like to ask you. What do you 

think the influence of having a sunset clause on every bill so that 

you see bills coming in front of Congress mandated to show their 

worth? What do you think about that application, Mr. Schatz? 

Mr. SCHATZ. We include that recommendation in our testimony. 

We support what Congressman Brady has been doing with his 

MAP Act, which he is reintroducing it, we have long testified in 

support of the Sunset Commission at the Federal level. 

Mr. EDWARDS. I’m very much in favor of that. As you may know, 

the State of Texas has long had a sunset law that’s worked very 

well, I understand, so I’m in favor of that federally. 

Mr. GOSAR. Arizona, too. 

Mr. Arnold. 

Mr. ARNOLD. I support that as well and actually included it in 

my testimony. 

Mr. GOSAR. Thank you. 

Ms. Woo. 

Ms. WOO. I’m not too familiar with that, so I can get back to you. 

Mr. GOSAR. I would like that. Basically it makes accountability 

a process of the law, that you answer a Fed three side 7 years 

down the road. 

But I would really love to see the calculations based on fact, and 

I think both sides of the aisle could benefit from that, so could our 

infrastructure, and so could our contracting, because those savings 

I was telling you about did not include Homeland Security, nor the 

DOD, because they had not been audited, and so the savings could 

be much more magnified just in a simple six words. 

I yield back. Thank you. 

Mr. MICA. Thank the gentleman. 

Recognize, waiting patiently, the gentleman from Massachusetts 

Mr. Lynch. 

Mr. LYNCH. Thank you, Mr. Chairman. And I do want to thank 

the panel for your good work and your willingness to come before 

the committee and help us. 

One of the strongest and most effective tools that we have on this 

committee and in Federal Government for making the government 

more efficient is the inspector general community. You know, we 

have 70 inspectors general across the government. I have to say, 

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because many of them testify before this committee and we worked 

with them over the years, I would say uniformly they do a great 

job, they really do. In each of the last—and part of the work that 

they do, much of it involves rooting out waste, fraud, and abuse in 

various government programs. 

And in each of the last 2 years, the chairman of this committee, 

and the ranking member of this committee, and our members have 

signed a letter to the inspector general community generally just 

asking them how many recommendations they have made within 

various departments, and how many of those recommendations 

have either been left open, which means they’ve been unaddressed, 

or are actually adopted. And the information that our committee 

has received in response to that request to the inspectors general 

is really staggering. There are nearly 17,000 open recommendations across the government with a potential savings of more than 

$67 billion. 

So this is where our inspector generals have gone out and looked 

at some of the things that you’ve talked about and some of the 

Members on both sides of the aisle have talked about. They’ve said, 

we’ve got to make these changes, and yet in 17,000 instances, the 

Department has basically refused, and there’s been no change. And 

fulfilling these unimplemented recommendations is really probably 

a good place to start for many of the things that we’re talking 

about here. I mean, do you agree on that? 

Mr. SCHATZ. We not only agree with that, but we’ve also noted 

that the funding for IGs has not been up to where it should be as 

well. We’ve written on that extensively over the last few years. So 

it is a good place to start. Between the IGs and GAO, literally hundreds of billions of dollars a year could be saved. 

Mr. LYNCH. Right. 

Mr. Edwards. 

Mr. EDWARDS. Generally the IGs, I agree with you entirely, they 

do a superb job. It’s the one area of Federal spending I would increase substantially. I think the IGs really do a great job. 

Mr. LYNCH. Thank you. 

Mr. ARNOLD. I agree as well. I think oftentimes the problem, IGs 

do a great job of pointing out this waste or these problems, but 

there’s not enough incentive structure for the managers at the Federal level to actually implement them. But certainly applaud the 

work of the inspectors general. 

Mr. LYNCH. Thank you. 

Ms. Woo. 

Ms. WOO. I would say I agree with more collaboration within the 

Federal Government to root out fraud and waste and abuse, and 

if that’s through the inspectors general, I would agree with that. 

Mr. LYNCH. Okay. When you think about what we’re doing right 

now with sequestration, which is, you know, indiscriminate, it’s 

across the board, we’re giving good programs a haircut as well as 

programs that should be completely eliminated, it would seem to 

me rather than doing this indiscriminate cutting to try to reduce 

the size of government and the amount of spending, we should 

probably target these programs that we all agree and the inspectors generals have identified as being completely wasteful. 

107 

One of the things that I’ve been working on with some of the 

Members on the other side is a lack of transparency in DOD contracting, and our inspectors general there have—even the special 

inspectors general and the more general ones have identified, you 

know, billions of dollars in savings, but we’ve had a very difficult 

time in getting transparency for the inspector general and also an 

ability to actually go in and make the changes. 

One of the ancillary issues is prescription drugs that the gentleman from Oklahoma earlier brought up, and while the VA and 

DOD each have the ability to negotiate drug prices, because of 

the—I don’t know how to describe it—just nonfunctioning nature of 

their system, you have the VA on some drugs paying 100 percent 

higher prices for the same drug as compared to Department of Defense, mostly, and that’s the area of brand-name drugs. So in many 

cases it’s 239 percent higher than what the DOD is spending. And 

then in other cases on generic drugs, you have the opposite situation where DOD is spending 200 percent what the VA is getting 

on their prices. 

If they were all paying the lowest price, there would be billions 

and billions of dollars in savings year to year, and what I’m hoping 

for is we also have 8 million Federal employees, and right now they 

don’t even have the ability to negotiate lower drug prices. So imagine if we were to add—first of all, get both the DOD and the VA 

down to the lowest reasonable price, and then add in the 8 million 

employees that are working for the Federal Government, and have 

them paying the same price, it would be tens of billions of dollars 

per year in terms of what our pharmaceutical costs would be across 

the government. It would be incredible. And in these days when 

we’re facing—well, maybe not tens of billions, but several billion 

dollars a year for prescription drugs that are being purchased by 

the Federal Government, and I’m just beside myself with the inability of the Federal Government to really get at this. 

There may have been a time—I don’t believe so, but there may 

have been a time where we could overlook things like this, but now 

that we’re facing sequestration, we’re trying to cut $1.2 trillion out 

of the budget, and you have unacceptable costs across the board 

like this, I just hope that you continue to work with us in terms 

of, you know, trying to get some of this stuff—the prescription drug 

prices issue is one that I’ve been working on a long time, and unfortunately there are probably 10 drug lobbyists for every Member 

of Congress, so it’s an uphill fight. But I think the fight is worth 

it, and it’s more attainable, I think, because of the good work that 

you all are doing and the people who support you are. So I thank 

you for that. 

Mr. MICA. I thank the gentleman, and his time has expired, and 

I would like to recognize Mr. Woodall, the gentleman from Georgia. 

Mr. WOODALL. Thank you very much, Mr. Chairman. I appreciate you all being here and letting me stand between you and 

lunch. I’ve gotten to work with most of you on some other projects 

in some other venues and really do appreciate all the work that 

you do. I put your work in the category of those things that the 

government could be doing instead of you doing it, though I suspect 

you do a better job at it, and you do it for less, which is why that’s 

valuable. 

108 

So I want to come back to something Mr. Edwards said in his 

testimony, because it’s been fascinating to listen to the back and 

the forth, and it really amplifies for me why the work that the two 

of you are doing together, why those collaborative efforts are so important. 

I heard Ms. Speier talk about waste and fraud and abuse in the 

Defense Department and how we ought to be able to agree to get 

that out, then Dr. Gosar said well, we’ve got this Davis-Bacon 

issue, and shouldn’t we be able to agree to get that out. 

Mr. Edwards, you kind of framed what we’re talking about. You 

had three categories, if I can paraphrase you, of spending. You had 

I think what you called silly projects, just those absolutely horrendous things that we can all agree have no place on the taxpayers’ 

dime or perhaps on anyone’s dime. You have those projects for 

which the benefit does not outweigh the cost, and then you have 

those projects that just perhaps the Federal Government shouldn’t 

be doing anyway. 

And I listened to Mr. Lynch; he’s talking about prescription 

drugs, and I know he’s absolutely right. When the Federal Government is picking up two-thirds of all the healthcare bills in America, 

if you use that monopoly power, you can absolutely drive down the 

cost of prescription drugs, though using the government’s monopoly 

power to manipulate the marketplace, I would argue, isn’t the role 

of government, and it would fall into that third category of things 

that the government shouldn’t be working on. 

Mr. Cummings was talking about the Legal Services Corporation 

and CAGW’s identifying of that, and I really appreciated your answer, because what you said was not folks who can’t afford legal 

services shouldn’t get legal services. What you said is there are 

other opportunities to get those legal services, and can’t we utilize 

those nongovernmental channels? 

Dr. Coburn, sitting in Mr. Arnold’s chair, was talking about the 

Army, and he said, golly, they have these software problems because they buy software and they try to mold it to the Army’s 

model instead of buying good off-the-shelf software and molding the 

Army’s model to that. The Legal Services Corporation is exactly 

that example. 

What has happened to the justice system in America that I cannot walk in to court as a citizen and avail myself of the protection? 

Should we be changing the government to adapt to a very complicated legal system, or should we be changing a complicated legal 

system to make it accessible to those of us as individuals? And I 

don’t know how we get started without the projects that folks come 

there collaboratively. 

But let me ask you, for example, you all have timber sales in 

your project, in your list. The U.S. Forest Service manages our 

timberlands. They’re not in the conservation business; they’re in 

the management business. One of your opportunities for savings is 

just, say, golly, the Forest Service is losing more money on their 

timber sales than they’re gaining in timber sales. Is that an example of something that should go away because that’s a bad use of 

government resources, or is that an example of something that still 

needs to be done? We need to manage Federal timberlands. Is the 

solution to get rid of our Federal lands, and that way we don’t have 

109 

to manage them, or is the solution to farm that out to the private 

sector? 

When we identify wasteful spending, we then have to do the ‘‘and 

so what’s next,’’ what do we do to fill that void if it creates one? 

In that example in particular, do you happen to have a ‘‘what’s 

next’’ vision? Ms. Woo? 

Ms. WOO. I think in that example your suggestion of moving that 

to the private industry is one that we support. Taxpayers shouldn’t 

be subsidizing for things that can be done by the private industry, 

especially when the government is very obviously losing money in 

this case. So I think that whereas taxpayers shouldn’t be subsidizing profit-making ventures for private companies in the timber 

industry, that would apply to this situation. 

Mr. WOODALL. Well, I think that becomes the question— market 

access program for our farmers is in there as well, you know—is 

providing markets overseas for our farmers, is that in the category 

of things that the government shouldn’t be doing, folks should fend 

for themselves, or is it in the category of things that we’re doing, 

but we’re not getting an extra dollar of benefit for our dollar of taxpayer burden, and so it’s just inefficient? Would you characterize 

the things in your book as things the government shouldn’t be involved in, or the things that perhaps we should be involved in but 

we’re just not doing well? 

Ms. WOO. I think it would be the first one in this case especially, 

and also really depending on the type of benefit that it’s providing. 

So I think it’s a little bit of combination of both. 

In this case the market access program is funding trade associations to have wine-tasting events in Europe, or to have a reality 

TV show in India to, you know, showcase different designs. I mean, 

does that really benefit the taxpayer who is paying the $20 million 

a year for that reality show? I don’t think so. 

So I do think that it is partially not the government’s responsibility to do that, but also there is no benefit that comes out of it 

for the average taxpayer. 

Mr. WOODALL. I hope you will all keep doing with the same fervor that you have always done what you continue to do. I see a real 

opportunity this year. I appreciate the chairman’s commitment to 

moving bills forward, and I hope we’ll take him up on it. 

Thank you, Mr. Chairman. 

Mr. MICA. Thank the gentleman. 

And now waiting most patiently, I believe the last member of our 

committee, the gentlelady from New Mexico, Ms. Lujan Grisham, 

you are recognized. 

Ms. LUJAN GRISHAM. Thank you, Mr. Chairman. 

I, too, want to thank the panel for being here today and for your 

work prior to your testimony today. I don’t think you’re hearing 

from any Member that we disagree that this is a fundamental responsibility of this committee, it’s a fundamental responsibility of 

Congress, it’s a fundamental responsibility of any administration, 

and as that trickles down into investments in the private sector or 

into other bodies of government, those are also those fundamental 

responsibilities. And I also agree that regardless of the climate, 

whether we have resources that we could do anything we desire, 

or in the climate that we have today where we know that we have 

110 

a fiscal crisis in this country that we have to address, that we 

should be mindful about making sure that we aren’t wasting any 

of our resources. And I hope that having this hearing and starting 

again that this committee will return to a partnership with you 

and others at looking at ways to make sure that we are not wasteful, and that we are getting the bang for the buck that we deserve 

and that our taxpayers and citizens deserve for their investments. 

And so we’re clear about that. 

And I know that you touched on this, Mr. Schatz, in your written 

testimony, that there isn’t anybody—I can’t imagine anyone—is 

going to disagree that paying $900 for a hammer is a good idea. 

And I know that my eyebrows raise and worse every time I look 

at healthcare spending and know that at anywhere, anywhere, I 

can buy a Band-Aid or an aspirin for 1/100th of the cost that I’m 

going to get it in a hospital or a clinic. So it doesn’t make any sense 

whatsoever, and there’s so many areas. 

I really want us to focus today in your report on that low-hanging fruit, because I think that many of these program issues are 

in the eyes of the beholder and create, I think, interesting debates 

that prevent us all too often from dealing with easy decisions and 

easy responsibilities by Congress and by the administration and 

listening to recommendations for you. 

I’ll give you an example. I mean, some may think that tax breaks 

for millionaires and billionaires are unnecessary. Others clearly 

feel that extending emergency unemployment insurance is wasteful. So we’re going to continue to debate those programs. 

I can give you another example based on some of the testimony 

today. I come from a State where we don’t have a sunset clause, 

but we’ve done sunset clauses on some legislation, and because of 

the political climate, that particular issue or program needs to be 

reauthorized doesn’t get reauthorized, and we spend wasteful 

money on a special session trying to get that addressed. 

So it depends on what’s happening. It’s a case-by-case basis, but 

we aren’t doing anything on that low-hanging fruit. So I need you 

to grade us on Congress—I’ve been here only a year. On adopting 

sensible, good government reforms outlined in your reports every 

year, how are we doing on picking up on that low hanging-fruit, A 

to F? 

Mr. SCHATZ. Not so well. 

Ms. LUJAN GRISHAM. Is that an F? 

Mr. SCHATZ. That would be an F. Although, as I’ve mentioned, 

the FITARA bill, which has come out of this committee, would be 

very, very helpful to improving procurements throughout the Federal Government. So that would be a positive step. Unfortunately, 

the Senate so far hasn’t agreed to that. 

Mr. EDWARDS. I think Congress is doing poorly on cutting waste. 

You know, one of the big problems, as you know, especially if 

you’ve only been here a year, is that the government is so vast that 

I think that there could be 80 percent agreement bipartisan on a 

lot of these issues, but Members simply don’t have time to dig in 

and look at them. And I think there could be a lot more agreement 

if we restructured the way Congress works somehow so that Members could actually focus on some of these issues, there could be 

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flexively don’t want to get involved in certain issues if they don’t 

understand them, and so I don’t know how to overcome that problem. But there could be more agreement if there’s more understanding. 

Mr. ARNOLD. Yeah, I would say Congress is doing pretty poorly 

as well. You know, the problem with eliminating waste, and I think 

this has kind of been touched on a little bit, is that no matter how 

wasteful, ridiculous, unnecessary, duplicative a program is, and we 

can all agree upon that here, there’s somebody that benefiting from 

it. And maybe on genuine terms, maybe on disingenuous terms, but 

somebody’s benefiting from it, and those people are going to fight 

tooth and nail to keep that program on the books, and it makes it 

a lot tougher for Congress. 

Ms. WOO. I agree with Mr. Arnold’s statement in that I do believe that Congress is doing quite poorly, and that’s also because 

of when Congress or when the Federal Government gives a tax 

break or when they subsidize a corporation or advertising abroad 

or such things as the Market Access Program, someone’s benefitting, and it’s typically these wealthy corporations. And as Ms. 

Speier had mentioned earlier, it’s also Members of Congress, it’s 

people who aren’t necessarily by benefiting helping the average 

taxpayer who has to shoulder that burden. 

Ms. LUJAN GRISHAM. With the chairman’s indulgence just quickly, because I’m over, I’m out of time, a couple more things. I agree 

and I appreciate that. And like all Members of Congress, I believe 

we’re all interested in getting the right work done. This committee, 

I think, has an incredibly important role. And it may be a consequence in working in one of the most partisan and unproductive 

eras of congressional history, but I’m confident that we can move 

these issues forward in a bipartisan way. I mean, we’ve got Chairman Issa and Congressman Connolly’s IT Acquisition Reform Act, 

and it passed this committee on a bipartisan basis. 

We need this committee to put forward a bipartisan, low-hanging 

fruit bill every year, maybe more than just one a year, and take 

the information that we have readily available to us, because we’re 

looking at it and we’re all agreeing on much of it, but we aren’t 

doing anything really about it. So this committee still finds those 

and you do, too, those $900 hammers. I look forward to many more 

hearings like this and finding real areas of cooperation. We can 

make a difference. Thank you very much for being here. 

Mr. MICA. Well, thank the gentlelady. And I thank all of the 

Members. I know Chairman Issa appreciates everyone’s cooperation. 

I have to thank our witnesses for their extensive, long testimony 

and participation today and for their work beyond this. So we look 

forward to working with you in this new year. And this is a great 

way to start off the new year, particularly for our Oversight Committee. 

So there being no further business before the Government Reform and Oversight Committee, this meeting is adjourned. Thank 

you. 

[Whereupon, at 12:38 p.m., the committee was adjourned.] 

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