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S. Hrg. 109–965

WHAT YOU DON’T KNOW CAN HURT YOU:

S. 2590, THE FEDERAL FUNDING ACCOUNTABILITY

AND TRANSPARENCY ACT OF 2006

HEARING

BEFORE THE

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, AND INTERNATIONAL 

SECURITY SUBCOMMITTEE

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

JULY 18, 2006

Available via http://www.access.gpo.gov/congress/senate

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

MICHAEL L. ALEXANDER, Minority Staff Director 

TRINA DRIESSNACK TYRER, Chief Clerk 

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE 

TOM COBURN, Oklahoma, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

THOMAS CARPER, Delaware 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

KATY FRENCH, Staff Director 

SHEILA MURPHY, Minority Staff Director 

JOHN KILVINGTON, Minority Deputy Staff Director 

LIZ SCRANTON, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Coburn ................................................................................................. 1

Senator Collins (ex-officio) ............................................................................... 3

Senator Carper ................................................................................................. 4

WITNESSES 

TUESDAY, JULY 18, 2006

Hon. John McCain, a U.S. Senator from the State of Arizona ............................ 5

Hon. Barack Obama, a U.S. Senator from the State of Illinois ........................... 6

Gary D. Bass, Ph.D., Executive Director, OMB Watch ........................................ 14

Eric Brenner, Director, Maryland Governor’s Grants Office ............................... 16

Mark Tapscott, Editorial Page Editor, The Washington Examiner Proprietor ... 18

ALPHABETICAL LIST OF WITNESSES

Bass, Gary D., Ph.D.: 

Testimony .......................................................................................................... 14

Prepared statement .......................................................................................... 31

Brenner, Eric: 

Testimony .......................................................................................................... 16

Prepared statement .......................................................................................... 47

McCain, Hon. John: 

Testimony .......................................................................................................... 5

Prepared statement .......................................................................................... 27

Obama, Hon. Barack: 

Testimony .......................................................................................................... 6

Prepared statement .......................................................................................... 29

Tapscott, Mark: 

Testimony .......................................................................................................... 18

Prepared statement .......................................................................................... 50

APPENDIX 

Article submitted by Senator McCain from the Washington Post dated July 

18, 2006 ................................................................................................................. 56

National Taxpayers Union, prepared statement ................................................... 63

(1)

WHAT YOU DON’T KNOW CAN HURT YOU: 

S. 2590, THE FEDERAL FUNDING 

ACCOUNTABILITY AND TRANSPARENCY ACT 

OF 2006

TUESDAY, JULY 18, 2006

U.S. SENATE,

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT,

GOVERNMENT INFORMATION, AND INTERNATIONAL SECURITY, 

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:31 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Tom Coburn, Chairman of the Subcommittee, presiding. 

Present: Senators Coburn, Collins (ex-officio), and Carper. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. The Federal Financial Management, Government Information, and International Security Subcommittee of the 

Homeland Security and Governmental Affairs Committee will come 

to order. 

I would put in this note that we have three stacked votes at 3:45, 

so we are going to try to move through this to not delay anyone. 

Two-thousand-six marks the 40th anniversary of the Freedom of 

Information Act, also known as FOIA. The essence of FOIA is to 

give the average citizen access to nearly all government documents 

simply by asking for them, in the hope that with more information 

would come more accountability. But FOIA requires government 

staff to respond to requests for information, and as the government 

has grown through the years, the Act has proven woefully inadequate at providing citizens timely and complete information on 

their government. 

Today, the government continues to grow at a tremendous pace. We now spend nearly $3 trillion each year to keep it running. This 

includes $460 billion in grants and subgrants, $340 billion in contracts, and hundreds of billions of dollars more in loans, insurance, 

and direct payments. With this kind of spending, transparency is 

more important now than it was when FOIA was first passed. 

This is why I, along with Senators Obama, Carper, McCain, 

Sununu, and DeMint, have introduced a bill that we believe will 

go a long way towards equipping citizens with the information that 

they need. The Federal Funding Accountability and Transparency 

Act of 2006 (S. 2490) would require the Administration to operate 

2

a website—that anyone can access for free—disclosing every recipient of Federal grants, contracts, and loans. This would include how 

much money was given and for what purpose, extending to subcontractors and subgrantees. On the issue of tracking subawards, 

I believe it is vitally important to know where the tax dollars are 

ultimately spent. Oftentimes, grants and contracts are given to initial recipients, but the money ultimately goes to organizations farther down the line. I don’t think it is too much for the American 

people to ask that if they are going to supply the money, they 

should know where the money is ultimately spent. 

I like to think of this bill as ‘‘Google for Government Spending.’’ 

The concept behind the bill is really quite simple: Put information 

on government spending out there for all to see and greater accountability will follow. It will also change expectations of those receiving funds that they will know in advance that the information 

will be public. 

This is not a new concept by any means. It was espoused first 

by Thomas Jefferson, who in 1802 had this to say about the subject: ‘‘We might hope to see the finances of the Union as clear and 

intelligible as a merchant’s books, so that every member of Congress and every man of any mind in the Union should be able to 

comprehend them, to investigate abuses, and consequently to control them.’’

The Founding Fathers believed in transparency for government 

because even back when budgets were much smaller, the possibility of abuse, waste, and malfeasance was just as real. But with 

transparency comes accountability. Those who we envision using 

this information would be everyone from the man on the street to 

the watchdog organizations to media outlets to government auditors. The hope of our bill is to harness the power of an eager citizenry wanting to know where tax money is spent by arming them 

with information. 

No business or household could operate the way the Federal Government does. Every entrepreneur knows that transparent accounting and budgeting information is critical to keeping the business 

afloat and knowing the decisions that need to be made. I note that 

our government is not exactly afloat, and maybe the shroud of secrecy around how money is actually spent is partly to blame. 

Federal agencies have access to money and power often without 

the needed transparency or accountability, and so it is not a mystery why abuses occur. Without the level of transparency called for 

in the bill, the potential for waste and abuse is enormous. Consider 

the following examples of outrageous spending that we have uncovered:

• half a million dollars for a Teapot Museum in North Carolina; • half a million dollars in defense money for the Arctic Winter 

Games—that is money designed to defend this country; • half a million dollars for the Museum of Glass in Tacoma, 

Washington; 

• half a million dollars for the Fort Dupont Ice Arena in Washington, DC; 

• more than $2 million for the Appalachian Fruit Laboratory 

in West Virginia; and 

3

• $5 million for the St. Louis Zoo.

All at the time that we are running record deficits. It is fine that 

we have done that, but we should be held accountable for it. 

Each of these items was buried deep within a report not readily 

accessible to the public or even to Members of Congress who had 

to vote on them. The American public should know that its Members of Congress are spending their money on these things. 

Some have argued that the government already operates some 

databases and, therefore, this bill is unnecessary. Let’s talk about 

some of those. 

For example, the Federal Procurement Data Base, which tracks 

Federal contracts, does not provide details on what Federal contractors are doing with the money they get, nor is the system very 

easy to use. Or, again, the Federal Assistance Awards Data System, which tracks grants, loans, and other awards, while giving 

more details than FPDS, only provides quarterly data and is not 

searchable. Even the President’s annual budget to Congress, which 

gives the most comprehensive picture of what the Federal Government spends, is only an estimate. 

OMB does not collect this information. Congress does not collect 

this information. Nobody collects this information. The bottom line 

is there is no single source of information available to the taxpayers and Members of Congress and the auditors explaining 

where Federal money is spent and there should be. 

When I tell people about the bill, the response I usually get is, 

‘‘You mean, that doesn’t already exist?’’ Most people are astounded 

to hear that there is not a website available now disclosing everyone who gets Federal money. The idea is just so common sense that 

it is hard for anyone to oppose—that is, unless they have something to hide. 

As of today, the bill has been endorsed by over 100 organizations 

spanning the entire political spectrum and under normal circumstances would not be able to agree on much. Liberal and conservative organizations have come together around this idea of sunshine. If they can agree, so can Congress. 

I look forward to hearing from our witnesses today, and I want 

to thank them for what they have done for us thus far. 

I would next recognize the Chairman of our full Committee, Senator Collins. 

Senator CARPER. Madam Chairman, go right ahead, please. 

OPENING STATEMENT OF SENATOR COLLINS 

Senator COLLINS. OK. I know, Mr. Chairman, that you are eager 

to hear from our witnesses, so I am going to just make a few comments. 

First, I want to applaud your leadership, Senator Carper, Senator McCain, and Senator Obama, for introducing this bill. It is astounding in this age of the Internet that we do not already have 

an easily accessible, searchable web-based site that the taxpayer 

can go to to see how our money is being spent. And I think your 

proposal will increase accountability. As you have often said, transparency is the first principle of accountability. If people have no 

idea how their tax dollars are being spent, then it is very difficult 

4

for them to hold us all accountable. So I think this is an excellent 

concept. 

I have been working very closely with you to refine the bill, and 

I want to give you my personal commitment to moving this bill out 

of Committee as soon as possible. 

Thank you for your leadership. 

Senator COBURN. Thank you, Madam Chairman. Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. I have a statement I would like to give. I want 

to refrain from doing so until we have heard from our two witnesses. 

Mr. Chairman, you quoted our third President, and just sitting 

here, Senator Collins, I just thought, we heard a quote from our 

third President. It is possible in this first panel we may have a future President, maybe two future Presidents, to tell us why this is 

such a good piece of legislation. 

I have heard Senator McCain say that in the United States, everybody is assumed to be running for President unless—what is it? 

You are indicted? 

Senator MCCAIN. Unless you are under indictment or detoxification, you automatically consider yourself a candidate for President. 

Senator CARPER. I consider that Senator Obama throwing his hat 

in the ring as well. [Laughter.] 

I am going to hold off. One thing I would say—you quoted Thomas Jefferson. One of the things that—I think it was Jefferson who 

said, ‘‘If the people know the truth, they will not make a mistake.’’ 

And I really think this is what it is about, trying to make sure that 

the folks around this country know the truth, and if they do, they 

and hopefully we will not make a mistake. 

And with that having been said, maybe I can give the rest of my 

statement once we have heard from our witnesses. But to our colleagues, Senator McCain and Senator Obama, it is great to see you 

sitting side by side, and it is good to hear from you. 

Thank you. 

Senator COBURN. Let me first recognize Senator McCain. He is 

known by his reputation as being one of the lone voices in the Senate championing the cause of fiscal restraint and his crusade 

against earmarks. His support of this bill is vital, and he recognizes its importance to us as a Nation to control spending that otherwise is out of control. 

I have had the great pleasure of working with Senator Obama 

on many issues in a bipartisan fashion to make government spending more transparent, more accountable, and, therefore, doing the 

proper job of oversight which we are entrusted with. I am delighted 

to be working together with him on this bill, and I thank both of 

our Senators for being here, and I would recognize Senator McCain 

first, and then following that, Senator Obama. 

5

1The prepared statement of Senator McCain appears in the Appendix on page 27. 

2The article referred to appears in the Appendix on page 56. 

TESTIMONY OF HON. JOHN McCAIN,1 A U.S. SENATOR FROM 

THE STATE OF ARIZONA 

Senator MCCAIN. Thank you very much, Mr. Chairman, and I 

want to thank you, Senator Obama, Senator Carper, and Chairman 

Collins for your involvement in all these issues, and including this 

specific one. 

Mr. Chairman, I am going to make my remarks brief because 

some of it would be repetitious from what you and Senator Collins 

already said, so I would ask that my complete statement be made 

part of the record. 

Senator COBURN. Without objection. 

Senator MCCAIN. I will summarize by saying, as you mentioned, 

Mr. Chairman, this bill would create a searchable database, available to the public at no cost, that lists each entity receiving Federal 

funding. It would show the amount of Federal funds the entity received in each of the last 10 fiscal years, an itemized breakdown 

of each transaction, the location of the entity, and a ‘‘unique identifier’’ for the entity and its parent entity. They would be very important, all of those provisions, Mr. Chairman. 

I think critics of this bill have suggested that the requirements 

are too burdensome and that it would be too costly and take too 

much work to collect and post this data. I do not buy that argument, Mr. Chairman. In fact, if you looked at—and I know you 

did—the front page of this morning’s Washington Post—and if you 

don’t mind, I would just quote briefly from it: ‘‘On a clear, cold 

morning in February 2003, Nico de Boer heard what sounded like 

a clap of thunder and stepped outside his hillside home for a look. 

High above the tree line, the 40-year-old dairy farmer saw a trail 

of smoke curling across the sky—all that remained of the space 

shuttle Columbia. 

‘‘Weeks later, de Boer was startled to learn that he was one of 

hundreds of East Texas ranchers entitled to up to $40,000 in disaster compensation from the Federal Government, even though the 

nearest debris landed 10 to 20 miles from his cattle. 

‘‘The money came from the U.S. Department of Agriculture as 

part of the Livestock Compensation Program, originally intended 

as a limited helping hand for dairy farmers and ranchers hurt by 

drought.’’ By drought. ‘‘Hurriedly drafted by the Bush Administration in 2002 and expanded by Congress the following year, the relief plan rapidly became an expensive part of the government’s 

sprawling system of entitlements for farmers, which topped $25 billion last year.’’

Mr. Chairman, the important point—and I would ask that this 

entire article be made part of the record.2

Senator COBURN. Without objection. 

Senator MCCAIN. But the interesting thing is sometimes you and I are derided because we talk about $75,000 for the Cowgirls Hall 

of Fame, $50,000 for this. Mr. Chairman, this was $1.2 billion that 

were given to cattle ranchers even if the debris from the space 

shuttle landed 20 miles away from the place where their cattle 

were kept. 

6

1The prepared statement of Senator Obama appears in the Appendix on page 29. 

Now, how did we find out about it? Because there were some enterprising reporters who dug it up, who found it out. I did not know 

about it. I doubt if any of us here knew about such a program. And 

so why don’t we have a way that people, average citizens, would 

know about the program? That is the question about these incredible excesses. The only way I think, Mr. Chairman, as Senator Collins mentioned, the first step is transparency. And I believe that 

your proposal needs to be enacted. It needs to be enacted quickly. 

As you know, Mr. Chairman, in 1994, there were 4,126 earmarks. In 2005, there were 15,877. The list goes on. 

Finally, Mr. Chairman, a recent editorial in the Tennessean stated, ‘‘Congress needs to open up and shed light on its business in 

many ways. With an accessible database of grants and contracts, 

the public may see spending it despises, and it may see spending 

that it approves of, down to the last penny. The only reason to oppose compiling the information for public use is if the government 

has something to hide.’’

I thank you, Mr. Chairman, and I want to again thank the bipartisanship that is associated with this bill, including Senator Carper 

and Senator Obama. I thank you, Mr. Chairman. 

Senator COBURN. Thank you, Senator McCain. Senator Obama. 

TESTIMONY OF HON. BARACK OBAMA,1 A U.S. SENATOR FROM 

THE STATE OF ILLINOIS 

Senator OBAMA. Thank you very much, Mr. Chairman, Senator 

Carper, and Senator Collins. It is a great privilege to be testifying 

with Senator McCain, who has worked so tirelessly in shedding 

light on some of the problems that we have seen here. 

I want to personally thank Senator Coburn, who I think has, 

since he and I entered the Senate at the same time, been a constant thorn in the side of those who want to waste our money. It 

has been a pleasure to work with him consistently. 

Senator Collins has done terrific work on the Governmental Affairs Committee, and so I am really appreciative that you have 

taken an interest in this bill, and I think your support makes all 

the difference. 

And, Senator Carper, thank you for your outstanding work on it 

as well. 

This year, the Federal Government will spend about $2.7 trillion. 

The overwhelming share of this spending will go to fulfill America’s 

commitments and to support our public priorities. So not all money 

in the Federal Government is waste. A lot of it is good spending. 

We have a whole bunch of seniors who are going to be getting their 

Social Security checks on time, as they should. We depend on government spending to ensure our national defense, our homeland security, to safeguard our environment, to help our children receive 

a quality education, provide an adequate safety net for our seniors 

and the poor. So I strongly believe that much of the money that 

we spend here is well spent. 

But as Senator McCain pointed out, if even a small percentage 

of Federal spending is wasteful or lost to fraud or abuse, we should 

be concerned. Unfortunately, based on what I have seen in my relVerDate 0ct 09 2002 13:29 Sep 06, 2007 Jkt 029512 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\DOCS\29512.TXT SAFFAIRS PsN: PAT
7

atively short time in the Senate, we are not talking about a small 

percentage of waste, fraud, and abuse. It is unacceptable, particularly at a time when this country’s most vulnerable citizens need 

to see government at its best, at a time when we are running up 

the credit card for our children and our grandchildren, to be wasting money. But I think all of us have seen evidence just from reading the papers every day that waste is taking place. 

It is embarrassing to hear about the government paying 15 times 

more than the market price for plastic tarps to cover damaged roofs 

in New Orleans, or paying five times too much for debris removal 

or contracting with vendors for ice or transportation services who 

do not have the relevant equipment or experience. 

How can we expect the American people to have confidence in us 

when they hear about overcharging and overpayment, when they 

hear about pork-barrel projects like the ‘‘Bridge to Nowhere,’’ when 

they hear about money being wasted on frivolous expenses? How 

can we expect them to have confidence when the Administration 

and Congress seem unwilling or unable to hold people accountable? 

Now, remarkably, as Chairman Coburn and I have discovered, it 

is often not possible to get good information about Federal grants 

and contracts, even when you are a U.S. Senator. There are several 

different databases of Federal spending information, and some who 

have opposed or expressed doubts about this legislation have suggested that it would be duplicative of existing databases. But the 

fact is that all these databases work differently. They are all incomplete. There is no way to see the full picture of government 

spending, and they are extraordinarily hard to access, even for professionals whose job it is to monitor Federal spending. It is certainly difficult for the average citizen. And the lack of transparency 

over the use of Federal resources is, to my mind, and I know to the 

minds of Senator McCain and all of you, unacceptable. 

If we, as Senators, cannot get this information, we can be sure 

that the American people know even less. And the fact of the matter is that the taxpayers have a right to know how the Federal 

Government is managing its fiscal resources. We have the right to 

insist upon answers to reasonable questions about where and how 

our tax dollars are used. 

Let me just make a few more points. This is not a partisan issue, 

as reflected by the sponsorship of this bill. Every single dollar that 

is wasted is a dollar that cannot be used for reducing the deficit, 

investing in health and education, or eliminating child poverty. So 

I think it is important for us to realize that whatever our priorities, 

whether Republicans or Democrats, those priorities are compromised and shortchanged when Federal funds are not prudently 

managed. It also should not matter whether you think that government ought to spend more money or less money. We can all agree 

that we should spend money efficiently and transparently. Democrats and Republicans can all agree that wasteful spending is unacceptable, whether it is by FEMA or HUD or DOD or any other Federal agency, and one of the pleasures that I have had in working 

with Senator Coburn and Senator McCain, observing the work they 

do on the floor, is that sometimes it is our own favorite agencies 

that need to be taken to task. And I think that is important. 

8

So the first step in solving this problem has already been mentioned. It is shining a little light on the issue. And to me, at least, 

this should be a no-brainer. If government spending cannot withstand public scrutiny, then the money should not be spent. If a government agency is not willing to be held accountable for the grants 

or contracts it awards, then that agency should not have control 

over Federal resources. 

Now, it is important to emphasize, because I have heard this argument as well, and I am trying to anticipate a few, because I 

know our time is short, that transparency by itself is not enough, 

but it is necessary. It may not be sufficient, but it is an important 

place to start. Transparency would not have stopped FEMA from 

spending $880 million on temporary housing trailers that are now 

sinking and rusting away in Arkansas. Transparency by itself 

would not have prevented Federal relief monies from being used to 

perform sex change operations or to take Caribbean vacations. But 

transparency is a prerequisite to oversight and financial control. 

And my sense is that once agencies get a sense that somebody is 

watching them and the taxpayers are watching them, they start 

asking some tougher questions before money is spent. 

So, in closing, Mr. Chairman, I just want to thank you for your 

extraordinary leadership on this issue. I think that anybody who 

doubts that this is a sensible proposition should take a look at the 

enormous spectrum of support that this bill has generated. I rarely 

have seen so many editorials from such diverse outlets and such 

diverse organizations as on this issue. So I think it is time for this 

bill to pass the Senate. I applaud the Subcommittee for holding 

this hearing. Again, I thank you very much, Madam Chairman, 

and the Subcommittee, as a whole, for helping hopefully to shepherd this bill through. 

Senator COBURN. Thank you, Senator Obama. 

I just want to ask both of you, some of the critics of this bill have 

claims that the Federal Government has no business collecting information on subcontractors and subawardees. Do you believe it is 

important for the government to track Federal spending down to 

the point of actual use? For example, most grant money actually 

just goes to the State, but the State subgrants the money to other 

organizations. What is your feeling on that? 

Senator MCCAIN. Well, Mr. Chairman, if I could just respond 

briefly, it is the taxpayers’ dollars. I think we should track the taxpayers’ dollars to its ultimate end. I know you know there are burgeoning scandals associated with a lobbyist and a group and a 

member and a committee, and one of the things that we have seen 

is that entities now feel, particularly small towns and cities across 

America feel, that they must hire a lobbyist who is well connected 

in order to get money for projects that they feel they need. 

I am not saying they should not do that. But I am saying that 

we should know where the money went and the entity that got the 

money, all of it. 

Senator COBURN. Senator Obama. 

Senator OBAMA. Well, I think Senator McCain summarizes it appropriately. Look, if the city of Chicago receives a CDBG grant and 

it is going to be using those Federal dollars to fund a wide range 

of organizations, then it should be fairly simple for the city of ChiVerDate 0ct 09 2002 13:29 Sep 06, 2007 Jkt 029512 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\29512.TXT SAFFAIRS PsN: PAT
9

cago to gather up the information about how this money is going 

to be spent and report it back to this website so that all Federal 

taxpayers can know, folks in Maine can see, whether this money 

is being well spent in Chicago. And if we cannot defend how that 

money is being spent in Chicago, then the people of Maine or Delaware or Oklahoma have a right to say this is a bad use of Federal 

dollars. 

I think those objections particularly make no sense to me given 

that, as it is, anybody who is applying for Federal grants is already 

providing this information to somebody. And simply making sure 

that it is transmitted to OMB I don’t think is going to be a tremendous burden on their part. 

Senator COBURN. If they are not already supplying that information or don’t know the information, they should be. 

Senator OBAMA. Absolutely. I mean, I don’t know who is getting 

Federal money no questions asked. If they are, then we should 

probably stop that practice. 

Senator COBURN. We have quite a bit of that. We are going to 

be outlining that in this Subcommittee. 

A couple of the concessions that we have made as this bill has 

worked through: We have proposed a pilot program for subaward 

reporting so we can streamline that to make it easy; we have added 

a study on how best to implement a governmentwide program to 

collect and report subaward data; we have added provisions to minimize the burdens to grantees and contractors of reporting 

subaward data; and, we have delayed the requirement of subaward 

reporting from 2007 to 2009. 

So we have answered all the questions that the subgrantees and 

subawardees and subcontractors have had with this bill by providing the mechanism where sunshine can flow and it will be easily 

accomplished. 

One of my thoughts when we came up with this bill was that we 

need help doing oversight. We can have 300 million Americans 

helping us do oversight. And the real question for Congress, in declining revenues and increasing obligations that we have already 

committed to, is how do we make the priorities? How do we put 

what is first, what is second, what is third? 

What are your thoughts on how this bill, if enacted and when enacted, will help us do those priorities? Senator McCain. 

Senator MCCAIN. Well, Mr. Chairman, I just think that it is the 

heart and soul of what government should be all about. The more 

our constituents and our citizens know about how we do business, 

the greater their trust will be in us. And as I am sure you know 

from recent polls, not a lot of Americans have a very high opinion 

of us, and I think this is one of the reasons, because they do not 

know what we do with their tax dollars. 

I would like to make one additional point, Mr. Chairman. Maybe 

10 years ago this would have been a very onerous task to set up 

this kind of a database and have everyone have access to it. I am 

not a computer expert, but smart people have told me that this is 

a relatively easy operation and one that is not too difficult nor expensive. 

So let’s say it costs maybe a couple hundred thousand dollars to 

set this up. Compare that with the knowledge of some of the ways 

10

that this money is spent so that it will be a caution to people who 

want appropriate money that is not for useful purposes because 

they will know that their constituents will know and not appreciate 

the way their tax dollars are being spent. I will bet you that it justifies whatever expense is associated with it in the first 5 minutes. 

Senator COBURN. Senator Obama. 

Senator OBAMA. I concur. Look, not only do I think that it is a 

basic principle of self-government, as articulated by Thomas Jefferson, that taxpayers should know where their money is going; frankly, I also think this will help us Senators because I think even 

given the vigilance of some of the Senators who are here in this 

room, there is a lot of stuff that slips by that we do not know 

about. None of us have the time, even with our staffs, as able as 

they are, to track down every dollar of spending. And, I think we 

are all constantly surprised at what shows up after we have voted 

for a bill. This website will empower citizens and organizations. It 

is one of the wonderful democratizing aspects of the Internet that 

we can empower a lot of people to do what maybe a few individuals 

would have difficulty doing. 

Senator COBURN. Senator Collins. 

Chairman COLLINS. Thank you, Mr. Chairman. 

I think that Senator McCain hit on an issue that is very important, and that is the lack of public trust in government. And certainly the kinds of wasteful spending projects that have been discussed today contribute to that lack of trust. 

I think there is an upside also from this website, and that is in 

some cases people may be pleased to see what money is going for. 

I wonder if our witnesses might comment on that as well. I see this 

as helping to give the public more information on what their taxpayer dollars are used for, and also helping us to sort out the proper role of government at the Federal level, what kinds of projects 

and programs should the Federal Government be paying for as opposed to the State or local level, or perhaps projects that should not 

have any government involvement at all. 

So I would like to ask our two witnesses to comment on that 

issue, too. Senator McCain. 

Senator MCCAIN. I certainly agree, Madam Chairman, and I 

would also like to point out that eventually, perhaps, you could 

have this listing of what the money was spent for and all the entities and subentities, but also you could have a link to the department of government that is responsible for this money, and they 

could have a website explaining exactly what that program does. 

I think it could be a tremendous educational factor for our constituents, so they would know not only the name of what that program is, but link up with the various agencies of government who 

would give them a full and complete explanation. 

Chairman COLLINS. Senator Obama. 

Senator OBAMA. Well, I think you are right, Senator Collins. To 

the extent that people know where dollars are going that can actually serve a useful purpose. For example, I serve on the Senate 

Foreign Relations Committee. If you were to poll the average person, they might think that 25 percent of the Federal budget is 

going to foreign aid. And when you let them know that actually it 

11

is less than 1 percent, then they have a better perspective in terms 

of why we might want to provide assistance to other countries. 

Now, they then may take a look at where some of the foreign aid 

is going to and question whether it is appropriate or not. The point, 

though, is that it can create better understanding, a more robust 

conversation within our democracy. 

I will be honest with you. One of the things that I have always 

found to be helpful in my own office—and this was true when I was 

a State legislator—is the more transparency there is, sometimes 

that helps me fend off constituents who want questionable projects 

from me. And when I explain to them that we are going to have 

to defend this and that I have to explain why this would be a higher priority than something else, it helps me do my job better. 

Chairman COLLINS. Thank you. 

Senator MCCAIN. It is always easy to explain to Dr. Coburn, I 

have found. 

Senator COBURN. Senator Carper. 

Senator CARPER. Sitting here this afternoon listening to the testimony and the responses from our colleagues, I am reminded of an 

older reporter, now deceased, who used to write for the News Journal paper in our State. We only have one statewide newspaper 

called the News Journal. He was a crusty old reporter who became 

a columnist. His name was Ralph Moyed. He died about 5 years 

ago. We used to say when I was a Congressman and then governor 

that when we are faced with an issue about whether or not to go 

forward and do something or not and it is sort of a close call, we 

would always say, ‘‘Imagine a front-page article in the News Journal written by Ralph Moyed above the fold about this particular 

issue.’’ And we would say, ‘‘Well, maybe we should not do that.’’ 

[Laughter.] 

Or we would say, ‘‘Well, maybe we should.’’

In a way, I think of the legislation that we have all cosponsored, 

and Senator Coburn has authored, is a little bit like having a 

whole lot of Ralph Moyeds alive and well, looking over our shoulder, and ready to blow the whistle, and then whether people want 

to pay attention or not, that is up to them. 

I don’t know that there is any silver bullet out there in the fight 

that I think we all share, and that is a fight to try to restore some 

fiscal sanity in this Nation of ours, at least for our Federal Government. But the thought occurs to me that most of what we are talking about is domestic discretionary spending. And if you actually 

look at the budget deficit we have, I think, for the last year, we 

could eliminate entirely domestic discretionary spending, and I 

think we would probably still have a budget deficit. So while it is 

part of the answer, getting rid of the wasteful spending in domestic 

discretionary, it is not the whole answer. 

One of the things that Senator Coburn and I have been working 

on is trying to figure out where improper payments are occurring, 

and we have learned that there was roughly $50 billion or so, 

maybe more, in improper payments last year. Mostly overpayments—that does not include the Department of Defense. And 

among the things that we have learned is that financial controls 

at the Department of Defense are so haphazard at best that we do 

not know really what their improper payments are. 

12

I would just ask both of you, in addition to taking a step like 

this, which I think we all agree is important, what might be some 

other steps that we should take to rein in the deficits that we all 

abhor and want to curtail. 

Senator MCCAIN. Senator Carper, I think about that all the time. 

I think that the package of reforms that has recently been proposed 

by Senator Gregg and cosponsored by many Members of the Senate 

is probably a good idea. It is a package of budgetary controls ranging from the line-item veto to various other provisions that would 

enforce budgetary discipline. 

Senator CARPER. Does that include two-way PAYGO discipline? 

Senator MCCAIN. I think it does, but——

Senator CARPER. I think it is one-way. 

Senator MCCAIN. Is it one-way? Do you know, Senator Collins? 

Chairman COLLINS. Yes, it is one-way. It exempts taxes. 

Senator MCCAIN. I think it should be two-way myself, but anyway, I do think that at least it is a good framework of a package 

of reforms. But I think the other aspect of this, as you mentioned, 

this may be a small part of the budget we are talking about, but 

we all know that when we have to fix Social Security and Medicare, we are going to have to ask the American people for some sacrifice in order to fix these systems. How can you do that if we are 

spending their tax dollars in the most profligate and obscene fashion, as we did for people who had cows 10 miles from where the 

Columbia crashed? 

So that is why I think we hear so much from our constituents, 

because they just do not get it. I am sure you have the same experience that I do when I mention the Bridge to Nowhere. Everybody 

knows—they may not know the name of their Senator, but they 

know the Bridge to Nowhere, and they are offended by it. And so 

I think one of the reasons why we need to focus on this is so that 

we can go to the American people with clean hands. 

Finally, could I mention, Senator Carper, I think that this issue 

of Defense Department financial controls is really something that 

we have to get on. As you know, the largest part of the budget is 

defense appropriations, appropriately so. But it and procurement 

are totally out of control, and it has to be one of our highest priorities. 

Senator CARPER. Thank you. Senator Obama. 

Senator OBAMA. I would echo what Senator McCain says. I think 

all of us are aware that at some point, in order to get our deficit 

under control, there are going to be revenue issues that we have 

to bring up, and there are going to be spending issues, and we are 

going to have to talk about entitlements. We are going to have to 

control costs. And it is very difficult to have that conversation, particularly at a time when Americans are feeling squeezed and more 

vulnerable, if they think that the money is being wasted. 

Now, once the waste has been identified and some confidence has 

been restored that we know where the money is going, then I think 

the American people are responsive to calls to sacrifice. They want 

to do the responsible thing for their children and their grandchildren. But right now the levels of cynicism are so high that it 

is very difficult to have these meaningful conversations. And so, my 

hope is that this would be a first step. 

13

One other aspect that I would add to this—and I think this dovetails into some of the legislation that has been proposed to shed 

light on what is happening with earmarks and so forth—is that we 

do not have what I think most Americans would consider a budget 

or a budget process. I mean, it is this sort of loose, haphazard stew 

in which it seems like sometimes the purpose is to make things obscure. And it is very hard from my perspective to step back and see 

if we are spending each dollar in accordance with our priorities 

since we cannot do everything. 

This kind of effort can hopefully build on other reform efforts to 

get an overview of the budget. It may help the Administration to 

start thinking about how we can change our practices at the administrative level in order to have a better overview of spending. 

And I think it will help put pressure on Congress as a whole to defend or change those practices. As you know, I am a big supporter 

of PAYGO as an example of a way to at least stop the bleeding, 

but I think that this ends up being just one more brick in that 

structure of accountability that I hope we are going to be building 

over the next several years. 

Senator CARPER. Mr. Chairman, as our colleagues prepare to go 

back to work, I just want to express my thanks for their being here 

and for the leadership that they provide. I would just add maybe 

one concluding thought. 

I think Senator Obama made a very telling point here. As we get 

serious in the months and years ahead about reining in these budget deficits, it is going to call for some difficult decisions with respect to revenue and with respect to spending, both on the discretionary side and on the entitlement side. 

One of the other things is that a lot of people in our country are 

surprised to find out that there is a tax gap of over $300 billion 

in revenues that are owed. In some cases, the IRS has a pretty 

good idea who owes the revenues, but they are not being collected. 

And for us to be able to convince the American people to join us 

in making some of the tough decisions, they want to make sure 

that we are doing a better job in controlling discretionary spending. 

They want to make sure that we are getting a handle on what is 

going on at the Department of Defense, which we desperately need 

to do. I think they want to make sure that the folks who actually 

owe taxes are paying their fair share before anybody else is asked 

to pay any more. 

Again, our thanks to each of you. 

Senator COBURN. I want to thank the Senators for testifying. 

If the next panel will please come forward. Just to clarify the 

record, only 18 of the 32 agencies of the Federal Government reported improper payments. Of the 18 that reported, they documented $38 billion in overpayments in only 57 programs out of the 

100 programs. The biggest problem is lack of compliance of the 

agencies with the improper payments law. 

I would also note that it is estimated that there is a $30 to $35 

billion improper payment in Medicaid, and their improper payments are not being tracked. 

I want to welcome our second panel: Gary Bass is the Executive 

Director of OMB Watch. He has been with OMB Watch since he 

founded the organization in 1983 to serve as a watchdog for FedVerDate 0ct 09 2002 13:29 Sep 06, 2007 Jkt 029512 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 C:\DOCS\29512.TXT SAFFAIRS PsN: PAT
14

1The prepared statement of Mr. Bass appears in the Appendix on page 31. 

eral policies on issues of transparency, openness, and good government. Prior to his work at OMB Watch, Dr. Bass was President of 

the Human Services Information Center and received his doctorate 

in psychology and education from the University of Michigan. 

Next is Eric Brenner, Director, Maryland Governor’s Grants Office, the office of Governor Bob Ehrlich. Mr. Brenner became Director of the Maryland Governor’s Grants Office in February 2004. He 

worked with four governors in three States for both Republicans 

and Democrats. He even worked for the Governor of Illinois during 

Senator Obama’s tenure in the Illinois State Senate. He has a degree from Harvard John F. Kennedy School of Government. 

And, finally, Mark Tapscott, Editorial Page Editor of the Washington Examiner. In February of this year, he was named editor of 

the Editorial Page at the Washington Examiner. Prior to taking 

this position, he was Director of the Center for the Media and Public Policy at the Heritage Foundation. He has worked as a journalist for more than 20 years and will discuss with us today the 

effects our bill will have on the world of journalism. 

I would like to thank each of you for being here. Dr. Bass, you 

are recognized first. 

TESTIMONY OF GARY D. BASS, PH.D.1 EXECUTIVE DIRECTOR, 

OMB WATCH 

Mr. BASS. Thank you, Mr. Chairman. I would ask to have my 

written statement put in the record. 

Senator COBURN. Without objection, all of your written statements will be placed in the record. 

Mr. BASS. Let me begin by making very clear that with absolutely clear and unambiguous language, OMB Watch supports S. 

2590. It is the right bill to do, as we heard from the last panel. The 

timing is right. This is a good thing to do. It would be great to 

move this bill quickly through markup and then directly to the 

Senate floor and try and get something done, hopefully with unanimous consent, and have this behind us and then work on the implementation. 

I also want to thank you and other Subcommittee staff for working with OMB Watch to improve the bill as we have moved along. 

I think this has been a very cooperative and constructive process, 

and I thank you for that. 

At the same time, I think that I am going to advocate as much 

as I can for improvements in the bill as we move along. But I want 

to make very clear that we support the bill as it was even introduced, even before you have added some changes. We want this bill 

to pass, and we want it to pass soon. And our objective is to 

strengthen it if we can, but we want it done. So I want to be very 

clear about that. 

I also want to note that we support this bill, as the two Senators 

who spoke on the last panel did, for reasons of the most importance 

to this country. This is about democracy. This is about openness. 

It is not just simply a right-left coalition. This is a coalition that 

cares about openness and accountability and encourages a 

strengthened democracy. And as you have said, Senator Coburn, all 

15

along, strengthened accountability leads to a stronger democracy. 

And we believe that. We believe that fundamentally. 

At the same time as we believe this is a theoretical or philosophical view, we are also very frustrated. You cannot get the information. It is just not able to be obtained. And so something 

needs to be done immediately to get this information in the hands 

of the public. And I construe ‘‘public’’ in the broadest sense. It is 

Congress. It is policymakers at the State and local level. It is the 

news media. It is the citizenry. This is going to be used by a number of people in many different ways. 

Now, having said all this, I want to raise four areas where I 

would hope we give some concentration, as the bill is already enacted, we get more and better implementation. And I want to point 

out four areas. 

One is the challenge is going to be getting this data up in a userfriendly, searchable format. I know, because OMB Watch is now in 

the throes of trying to put up the two key databases—and we will 

do acronyms, since you have already mentioned it—FAADS and 

FPDS. Contracts and the data that deals with grants, loans, insurance, subsidies, we are trying to put it all available through an online service by October 1. And so we are wrestling with this issue 

of how to do it. 

I would encourage that we create some kind of citizens panel, require some kind of data testing from OMB so that we ensure that 

we are getting it in the way that it can be used. 

The second concern I have is the data quality. All the conversation in the last panel was about obtaining information that is so 

critically important, I would encourage in the bill we start to ask 

OMB to make recommendations how to improve the data quality. 

The third area is to make sure we are getting all the data we 

need. The issue is, as Senator McCain talked about—a Livestock 

Compensation Program—we need to be sure we are going to get all 

of that data. The way the bill might be structured, we need to look 

at it carefully to make sure we are not going to exclude certain key 

elements like farm subsidies or flood insurance, because they go to 

individuals. 

And the fourth point I would make, which you have already addressed, Senator Coburn, and that is make sure it is implemented. 

And the thorniest issue will be this issue of subrecipient. I think 

we are strongly supportive——

Senator CARPER. Say that again? Make sure it is what? 

Mr. BASS. Subrecipient reporting, subgrants, subcontracts. And I 

think the Chairman has identified some improvements already 

talked about, and I think those go a long distance in getting us 

there. The real issue is to touch base with the players who are 

going to have to implement this and to make sure it can be done 

in a way that makes sense. We just need to make sure this can be 

done. I want to emphasize we are supportive of subrecipient reporting. 

Let me conclude with a notion that this bill is a building block. 

It is not the be-all and end-all in transparency. A number of things 

the last panel talked about, like earmarks, mismanagement, are 

not going to be obtained by just simply legislation that calls for 

greater disclosure of Federal spending. Similarly, there are many 

16

1The prepared statement of Mr. Brenner appears in the Appendix on page 47. 

other important issues like tax expenditures. These are all things 

that need to be done, and they should be added after this bill is 

passed. And I am hoping that you, Mr. Chairman, and you, Senator 

Carper, will lead in the efforts to enhance transparency once we 

move beyond this. 

So I am very excited about this bill, and I thank you for letting 

us testify today. 

Senator COBURN. Thank you, Dr. Bass. Mr. Brenner. 

TESTIMONY OF ERIC BRENNER,1 DIRECTOR, MARYLAND 

GOVERNOR’S GRANTS OFFICE 

Mr. BRENNER. Thank you, Mr. Chairman and Senator Carper. As 

you heard, my name is Eric Brenner, Director of the Maryland 

Governor’s Grants Office, created less than 3 years ago by Governor Ehrlich and Lieutenant Governor Steele, and in a short period of time, we have been recognized by the National Governors 

Association as a ‘‘best practice,’’ and we just won a Special Achievement award from the National Grants Management Association. 

I think I can sort of cut to the chase pretty quickly here. We just 

came out with our third annual report. It lists every single Federal 

grant received by State agencies in Maryland. This past year, 499 

Federal grants went to all of our State agencies, approximately $7 

billion. We know from census data that the State of Maryland receives approximately $9 billion in Federal grants, so obviously $9 

billiion minus $7 billion, there is another $2 billion floating around 

that goes to universities, nonprofits, and local governments. 

As the legislators, governors, and mayors become increasingly familiar with the detail we can give them on the money that flows 

through us, there is a lot of interest in where the rest of the money 

going. And there is also a timing aspect. 

So the first year they were happy to have anything. The second 

year the interest picked up. And this latest report, the Federal fiscal year 2004 is the most recent data we have. The census produced this December 27, 2005. They came out with Federal fiscal 

year 2004 data. So it is almost a year and a half late. There are 

reasons why it took so long, but only 3 weeks later, my little office 

of three people was able to come up with State fiscal year 2006 and 

even estimates for 2007 data on Federal funds coming through 

State Government. And as I am working with legislators in front 

of the General Assembly, they ask me what is the deal here? Why 

can’t I get this information sooner? And Senator Obama hit on a 

real-life example from this past legislative session. There was a 

small nonprofit, and I am going to call it a YMCA. It was not, but 

it was something like that with national recognition in the county 

looking for funds. And the legislator said, Can you tell me if this 

little YMCA is getting any direct Federal grants? Because if they 

are, maybe we want to give them more money if the Feds trust 

them to manage the money well. Maybe that is a good thing. Or 

maybe we want to go to another group and give them money. Or 

maybe we want to stiff them and we do not want to give them anything, but we would love to help them find out what other YMCAs 

are getting funds out there. And you are telling me you cannot do 

17

this. OK. Once the session is done, go work with your friends in 

the Federal Government and see if you can move this stuff along 

a little bit faster, because it really is valuable. There are real live 

policy decisions that ride on things like this. 

This was not the first time I was told by legislators or a governor 

to go back and talk to the Federal folks to get more and better 

data. Back when I was working for the prior governor in Illinois 

and Senator Obama was in the General Assembly, I was charged 

with setting up an Illinois Federal clearinghouse, and at that time 

the main issue was access to grant notices. At the time I was 

charged with cobbling together a website that could pull in all new 

Federal grants notices so State agencies and nonprofits could see 

what the Feds were offering up. 

That was about 7 years ago, and at that time I said, Wait a 

minute, why are we doing this? Shouldn’t this all be in one place? 

And a couple years later of lobbying and cajoling and work from 

Congress, Grants.gov is now working beautifully and no State has 

to devote staff to identify what new Federal grants are available. 

It is out there on the website. Every day you flip on the machine 

in the morning, and you see what new grants are out there. It was 

a real big step forward. And yet even in Illinois, when we used to 

pull the data together, the timing issue would come up all the time. 

Why do we only know what we are getting through us? Why can’t 

we see what else is going on out there? 

I think Governor Ehrlich is flattered that other States are beginning to copy our grants office. There really are just five or six or 

seven like this out there, but there are new ones popping up all the 

time. 

I got a call from Delaware in the last 3 months. A woman named 

Maureen Querey, whom I had never met before, was charged with 

setting up this office. She is working with Joe Hickey, whom I 

know really well. He did the training when you were a governor, 

and he is supposed to help her do training programs on grants 

management. But first she has got to ask, ‘‘What are we getting? 

Help me pull the numbers together.’’ And that is going to eat up 

a lot of time. So as much as Governor Ehrlich loves the fact that 

people are copying our stuff, we would love to see every State have 

this information and free up my time so I can work more with nonprofits and local officials to better match resources with policy 

goals. 

The last question that was addressed a bit—this is the first time 

I have seen the revisions here, and I am speaking just for the Ehrlich-Steele Administration and one State. But I do work pretty 

closely with the State associations on this and the handful of other 

States that have grant offices. And there is a real concern that 

what is so close to a terrific idea can somehow get bogged down on 

the issue of the subgrantee reporting. And so many folks have 

wanted this for so long, and even senior officials at OMB sort of 

went out on a limb to push for this initially, and this was not popular with some of the Federal agencies. I think they realized a little push was a good thing. In our 499 grant programs, each one is 

managed differently in a different statute, and we do not have a 

statewide grants management system, nor does any State. Michigan, I think, will be the first to get there in a year or two, and to 

18

1The prepared statement of Mr. Tapscott appears in the Appendix on page 50. 

merge 25 different grants management systems into one to get this 

data is going to be difficult. 

So I would urge continued consultation with the bill’s sponsors 

in the House and OMB. There is a legitimate issue here, and I 

think speaking for the people on this panel and a lot of the State 

governments, the bill is terrific and we really want to support it 

and would hate to see someone who does not like the core concept 

of the bill use a little detail like ‘‘you mean you want every Medicaid recipient, the amount of the money they got’’—there are little 

ways you could pick at this if you wanted to bring it down, and a 

little bit of consultation I think can get over those rough spots. 

Senator COBURN. I assure you we are already seeing that. 

Senator COBURN. Mr. Tapscott. 

TESTIMONY OF MARK TAPSCOTT,1 EDITORIAL PAGE EDITOR, 

THE WASHINGTON EXAMINER PROPRIETOR 

Mr. TAPSCOTT. Thank you, Senator. I appreciate very much the 

opportunity to be here, and I just want to point out that, as one 

of your fellow Oklahomans, it is especially great to see you doing 

all of the things that you have been doing this past year on earmarks. 

I want to also say, particularly to my colleagues over on the 

press table, that normally I would be over there with them getting 

ready to ask you guys questions rather than sitting at this table, 

hopefully answering questions from you all. But this is on an issue 

that, like the Freedom of Information Act, I believe is fundamentally important, both as an American citizens and to my profession, 

my chosen profession. And I think what is going to be possible as 

a result of the passage of this bill is of sufficient importance that 

I have encouraged all of the professional journalism organizations 

to become very vocally in favor of this bill as well. 

I want to just address the basic question that I was asked to talk 

about, and that is, What effect would passage of this legislation 

have on journalism? And I think the closest analogy that I can 

think of is the effect of having campaign finance data widely available to journalists and to the general public. This began about 20 

years ago. 

As you all well know, there is really no such thing as an anonymous donor these days, and that is very much as a result of the 

fact that data on who is giving what to whom and which special 

interests are doing what with their money has become so widely 

and easily available. 

One of the effects of that in journalism, obviously, was that it enhanced the public interest in and the power of political reporting 

specifically. But even more important than that, it empowered investigative journalism about government in a way that had not 

been previously possible, except on an anecdotal basis. 

Senator McCain mentioned the fine piece of reporting by that 

other newspaper in town, the Washington Post. That was basically 

done as a result of inside sources and anecdotal reporting. It probably would have been done as a matter of course if this database 

was in existence. And ‘‘as a matter of course’’ is a good phrase for 

19

what I think would be an accurate description of what would happen to government reporting when this database becomes widely 

available. 

We get no comprehensive, systematic daily reporting on where 

tax dollars are going simply because, as has been documented in 

abundant detail, it is basically impossible to get much of the information and extraordinarily difficult to get the rest of it. We are in 

an era when most journalism organizations are cutting costs, unfortunately, cutting staff, editorial staff, unfortunately, and frankly 

there are just not enough people nor enough time to do the kind 

of rigorous investigative reporting that government deserves and 

the American people deserve. 

This would make a profound difference in that because it, frankly, would make it so much easier to get so much more of the data. 

And I think that you would see every basic major beat in a newsroom, from the cops beat where the junior reporters start, right up 

to the investigative staffs, incorporating as a matter of course data 

from this database. 

Speaking as a professional journalist of 20 years, that excites me. 

Speaking as a blogger, which I am also, I am even more excited 

about what the potential effect on the new media will be of this 

database. 

One of my blogging colleagues, Ed Morrissey of Captain’s Quarters, has predicted that very soon after this database becomes 

available, he believes there will be 10,000 blogs coming into existence specifically for the purpose of exploring Federal spending with 

regard to their particular States or their particular congressional 

districts. I think, based on my own experience with the Porkbusters 

bloggers in the blogosphere, that Ed probably is underestimating 

the number of blogs that will come into being as a result of this. 

To summarize, I think that just as nobody who is in politics or 

journalism today can afford to ignore Opensecrets.org, the website 

where campaign finance data first was made available, we are very 

close to a time when the Federal spending database will also be of 

that much importance. And I am sure there will be at least one 

website called Spendingsecrets.org, and I hope I will have something to do with that. Thank you very much. 

Senator COBURN. Thank you. 

I want to ask each of you, the bill that came out of the House 

excluded contracts. I personally believe that is a fatal error in the 

bill, and I would like each of your comments on that. 

Mr. TAPSCOTT. I think having covered Federal contracting on a 

waste and fraud beat, it makes no sense to me at all to not include 

contracting data. As a journalist, of course, I want as much information as I can get. But the point of this database is to enhance 

the public’s ability to know where the Federal dollars are going. 

And in order to understand that, you have to have information 

about the contracts. 

Senator COBURN. Mr. Brenner. 

Mr. BRENNER. The State of Maryland gets about $20 billion in 

Federal procurement each year. We only get about $9 billion in 

grants. Most States it is the reverse. They get a lot more grant 

money than procurement and contracts. 

20

Two years ago, we did do a real brief document showing which 

counties it goes to, which companies, and there was incredible interest. We have an intern working hard this summer to try to recreate it. That is all he is doing. He is working really hard to pull 

this stuff together, and, again, it still will be old data. The need 

is great. And it is important to recognize that within the Federal 

Government, the grants world and the contract procurement world 

are really different. I am not sure how they grew up to be as different as they are. But when you are trying to do some of the 

things that you and the various sponsors have proposed, it really 

works very well right away on the contract side. The grant side 

might take a little more tweaking, but the value of the information 

is absolutely there. I have got an audience hungry for anything I 

can give them. 

Senator COBURN. And that is to make good decisions at the State 

level. You do not want the data just for the data. You want the 

data so that you can make a better decision at the State level. 

Mr. BRENNER. Right. Practical example with the base closure, 

the BRAC process, concluding the more we know where the Federal 

contract dollars are going, the better counties can prepare school 

systems, the better they can do roads, the better they can do job 

training with the welfare-to-work programs. There is a real need 

for this so we can efficiently use our money, and the longer we 

have to wait to get that information, the more we are set back. 

Senator COBURN. Dr. Bass. 

Mr. BASS. I concur with my colleagues. You must have all venues 

for expenditures. I would say down the road we also need to add 

in tax expenditures. But one thing to keep in mind is when we look 

at GAO and other audits that have occurred, the bulk of the patterns of mismanagement are all identified in the contract side. 

There have been no systemic patterns on the grant side, although 

I will say there have been some questions about allocations of 

funds under various forms of subsidies, particularly in light of Hurricane Katrina. And so I think it is an obvious piece to have both 

contracts and grants. 

Senator COBURN. With the recent revelations of congressional 

contracts and favors, that seems to make no sense that we would 

not want contracts to be—to have sunshine on the contracts since 

there is this potential conflict of interest between fundraising and 

contracts. You all would agree with that? 

Mr. BASS. Absolutely. If I could just add, Senator, I hate to use 

a term that I have used in other settings, but what the objective 

should be is a real accountability matrix to bring all these sources 

together. 

Senator COBURN. Right. I have worked in a lot of areas. Under 

grants, we have had flirting classes and clown demonstrations and 

all sorts of things. So I think they are both equally liable, although 

the vast majority of the dollars have been in the contract area. 

One final question, and then I will turn it over to Senator Carper. We have worked hard to try to make the U.N. accountable for 

our contributions in terms of both the Oil for Food scandal and all 

the other—we had a hearing here not long ago where they showed 

one-third of their expenditures were in waste, fraud, and abuse. It 

is pretty hard for this government to demand the U.N. be accountVerDate 0ct 09 2002 13:29 Sep 06, 2007 Jkt 029512 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\DOCS\29512.TXT SAFFAIRS PsN: PAT
21

able in how they spend their money when we are not. And so that 

is another reason for it. We cannot claim to want to know how our 

money is spent elsewhere if we don’t know how we are spending 

our money. So I would make that comment. 

Senator Carper. 

Senator CARPER. Thank you, Senator. And, gentlemen, thank you 

very much for joining us and for your testimony, and, frankly, for 

your interest and involvement in these issues for some time. 

Mr. Brenner, thank you for your comments about Joe Hickey. 

When I was privileged to be governor for 8 years, I worked with 

Joe. Joe was in charge, as you suggested, of training in our personnel area. He traveled more abroad in that role. Mr. Chairman, 

I don’t know how he parlayed that position into as much foreign 

travel as he made, but he made me look like a stay-at-home Mom 

or something, a stay-at-home Dad, with regards to his travel. We 

should have a hearing on him. I do not think he does that anymore, but——

Senator COBURN. Well, we will later. [Laughter.] 

Senator CARPER. He was also a lot of fun. He was fun and he 

was quite good in his job. I will tell him his name came up in vain 

here in this Subcommittee. 

Dr. Bass, I want to come back to you. You were making four 

points. The second I think involved data quality. The third was getting all the data we need. Would you just review those with me, 

with us again, please? 

Mr. BASS. The first one is a user-friendly site, and the problem——

Senator CARPER. Even go back before that, but these are four 

points you made with reference to? 

Mr. BASS. To strengthening as we move along to either implementation or in the final stages of marking up this bill, there are 

things that are—I should rephrase this to say you can always improve a bill, but we do not want tweaking and improvements to 

delay the passage of S. 2590. So the comments I am making are 

in the notion of a constructive element of how can we strengthen 

in minor ways this bill as it is moving forward to achieve unanimous consent. 

Senator CARPER. OK, good. Go ahead. Just run through those 

again, if you would. 

Mr. BASS. Yes. The four, very quickly, are: A user-friendly 

website, and one of my biggest concerns is this is very complex 

data, and as we have found in trying to put up the data, you have 

Federal shares, you have non-Federal shares, you have obligations 

versus what is actually spent. It is not easy to penetrate. The objective is we need to do it in a way that the public can really understand what our government is spending money on. 

It strikes me that one way to do that—and there may be many 

other ways, but some suggestions I had was create some kind of 

a citizens panel to watch how OMB is doing this and to give feedback to you on whether this is meeting the need. It might be temporary. It might be during the creation of it. Or it may be every 

3 years to assess it. A second would be to data test, to test with 

users before the site goes live with different kinds of users to make 

sure it is meeting the need. So that is sort of one. 

22

The second is the——

Senator CARPER. Well, would you say that is the most important 

of the four, or is there one that is more important than the other? 

Mr. BASS. Well, I think they are all equally important because, 

in order to have it in a user-friendly way, you want to make sure 

the quality of the data is good. If the data itself is not expressing 

the kinds of things that you two have said today you want, and the 

Senators before us talked about, then it lacks utility. 

I can tell you the data quality needs improvement, and I do 

think that the public disclosure, the bill itself in passage, will help 

to improve the quality of the data because, as Mr. Tapscott talks 

about, there are going to be a lot of reporters and others using this 

data. And so the government will have to clean up the data. 

Senator COBURN. Yes, that is a component of the bill. Public 

feedback is required in the bill, and a response to that is required 

as well. 

Mr. BASS. Indeed, and I think that is a critical element to retain. 

I do think maybe one notion in that response to the public comment, maybe we should ask OMB to comment in its annual report 

how they will proceed to improve the data quality year after year. 

That might be a sub-piece of their report. 

The third thing I talked about, which is really to the heart of 

what the two Senators in the last panel spoke to, is making sure 

we are getting all the data we expect we—what we say in the bill, 

we want to make sure what we are getting. An example: The Livestock Compensation Program that Senator McCain mentioned we 

may not get because it is going to individuals, or we may not get 

information about flood insurance that goes to, say, Hurricane 

Katrina victims where there are some allegations of abuse. So we 

need to find the balance here to ensure we are getting all the information we definitely want, without harming personal privacy. 

And the last point I was making is really an issue about the subrecipient reporting. It needs to be done in a way—it should be 

done, and it should be done in a way that does not create an overwhelming difficulty to have it done. I tend to think of it——

Senator CARPER. I am sorry. Say that again? Make sure it is 

done in a way? 

Mr. BASS. That it does not create an impossibility to implement. 

Let me break it into maybe three components. One issue of this bill 

deals with contracts and subcontractor reporting, which I think can 

relatively easily be done. Contracts have for-profit motivate built 

in. You can require the contractor to notify about subcontractors 

and on down the line. 

A second kind of category of subreporting is a subgrant to a nongovernmental entity, like a nonprofit. In some of those cases, it 

may be relatively easy to do that. However, there are paperwork 

and other kinds of burdens imposed. And as you said, Senator 

Coburn, you want to do it in a way that ensures it does not create 

unnecessary burden. 

The third category is what Mr. Brenner was talking about, and 

that is, grants that go to State and local governments, which is the 

largest share of grants. And that is a little more difficult because 

it is not simply like the community development block grant that 

Senator Obama talked about. Many of the grants a commingled 

23

with State monies or local monies, and it is hard to pull that apart 

and identify what is which. 

Senator COBURN. Let me, if I may, I want to answer those. 

Senator CARPER. Sure. 

Senator COBURN. First of all, to be able to reply and to report 

on this is going to make every grantee and subgrantee and State 

and local government better. 

Mr. BASS. Right. 

Senator COBURN. Because if they don’t have a system to know 

where their money is going now, they are going to have to have one 

to report under this. And they should. Every grantee, every contract should know where they are spending their money. And if 

they do not, they are going to have to have a system to be able to 

do that, which should be a part of their grant application. That is 

number one. 

Number two, and I think it is relatively easy if we are sending 

12 percent of the money for some State program, then the answer 

in that is here is how the money was spent, of which 12 percent 

of the money was Federal. They do not have to break it out. They 

can say, Here is the program, you supplied this much money of the 

total, here is how we spent the money on the program. So it makes 

States better, so they are going to have to report. If they are going 

to take Federal funds, then they are going to have to say here is 

where the money went. They do not have to—there is no judgment 

on it, but what it does is it creates—this bill is going to create sunshine not just for the Federal Government, but for grantees and 

nonprofits and for States. It is going to help everybody do better, 

have better financial control, but it is going to help everybody in 

this country know where their tax dollars are going to be going. 

And I do not think that is hard to do. 

If you can get on Google today and punch anything in and find 

out all the things associated with it, it cannot be that hard for the 

Federal Government to do this in terms of the spending of the 

budget. It is not hard. And there are programs out there now that 

you can buy to give cross-references for names. I mean, this is not 

something that has to be reinvented. It has already been invented. 

And so it is not a difficult process to achieve. 

Mr. BASS. Well, I think your changes that you are proposing go 

a huge distance by creating both the study you have and a pilot 

to really test out the point you are making. And I think Mr. Brenner could probably speak better to the State questions than certainly I could. 

Mr. BRENNER. The fear that is out there that I think the OMB 

folks have probably expressed is that for this to be carried all the 

way through to the last dollars, the State governments will end up 

carrying a large share of the burden to track the dollars as they 

move through to counties, local governments, and other places. And 

this year was interesting because Grants.gov is in the process of 

making sure every Federal grant has to be done online electronically. That was a big deal, and they just sort of imposed that. And 

there have been some real struggles where you are sitting there 

and you hit the button and it does not go through, and just like 

that, you do not have someone to call. So there have been some 

rough spots. It is getting better, and it will be better next year. 

24

So the goal is——

Senator COBURN. It will be hard when it starts. This will not be 

easy when it starts. 

Mr. BRENNER. No. But, again, I know the National Association 

of State Auditors, Comptrollers, and Treasurers have some legitimate issues here. And yet for Maryland, Governor Ehrlich made 

this a second-term priority in looking at all the issues when we set 

it up. He knew this was going to be a big deal to merge all of these 

financial systems together. And yet it is a goal we have. So by moving to 2009, that is actually within the timeline we are looking to 

do it. Concern, again, will be the other States that have not even 

started to pull together just the basic ‘‘who is getting the money’’ 

piece. So there are legitimate issues, but to see this bill moving is 

very exciting. As everyone has said today, you would hate to see 

it pulled down over what I think are some fairly minor issues. 

Senator CARPER. Mr. Chairman, I have asked Dr. Bass to kind 

of review for us his four points that he thought would further 

strengthen the bill, and I just want to ask Mr. Brenner and Mr. 

Tapscott to react, if you will, to what he has laid out and what you 

think he has suggested that makes sense and where do you think 

that it maybe does not. 

Mr. TAPSCOTT. I have worked with Gary Bass on this project for 

a long time and was, in fact, working on this project alone before 

Gary and I began working on it. So I associate myself with his first 

three points. 

Senator CARPER. How about that fourth one? 

Mr. TAPSCOTT. On the fourth point, I want to point out, I have 

posted on this issue on my blog many times. Almost invariably 

when I post something on this, I will be contacted by a private sector computer person who says, ‘‘What is the big deal? We can do 

this. We do it every day in the banking industry.’’

So I am a little skeptical when I hear government people saying, 

‘‘Oh, we cannot do that,’’ because that is what I hear from people 

in government all the time. My guess is it is probably analogous 

to the situation that we had a decade ago in migrating from a previous generation of computer information technology to a more advanced generation. 

Senator CARPER. Mr. Brenner. 

Mr. BRENNER. I never met Gary Bass until today, and yet I 

spoke to him once and we e-mailed back and forth on the testimony. His written testimony, which is quite a bit longer, has a detailed section on the subgrantee reporting, which I think is, one, 

pretty accurate; and, two, if I was saying this, it would sound pretty self-serving as here is the State government guy who cannot deliver. But an organization with the integrity of OMB Watch I think 

should be taken pretty seriously on this. 

The other fear that is out there is the issue of unfunded mandates being pushed from the Federal Government onto the State 

government, and that is one way to take a large number of State 

people who really like this here and even seeing any potential risk 

in language that was not even intended is a chance to take what 

should be a 100-percent good-government proposal here and cause 

some trouble. 

25

Grants.gov, it was interesting to me how many years it took to 

get that going. Again, if I could glue little pieces of it together in 

State government with me working half-time—and yet it got done. 

It just took a while. This is a magnitude of complexity way beyond 

just putting out the new notices, and yet it should be out there, 

and we will be doing this in Maryland, especially if the governor 

gets re-elected. And yet it is going to be a lot of work, and everybody recognizes it. You are getting treasurers, you are getting 

comptrollers, you are getting fiscal people in multiple agencies 

working together, formula grants, block grants. Each grant is a different story, and we have got a few I could comply with in half an 

hour and call you and get you all the information run down here. 

But then as I walk through the whole list of 500, we would squeeze 

down to the last 10 or 15 that really are difficult, and it would not 

be from a lack of wanting to comply. 

Senator CARPER. All right. Gentlemen, thank you. 

Senator COBURN. You would agree, though, Mr. Brenner, that 

will cause better government in the State of Maryland. 

Mr. BRENNER. As Governor Ehrlich has said from the first day 

I was hired, he wants the data out there, whether it looks good or 

bad or something else. And the more information that is out there, 

the better for everybody. 

Senator COBURN. And all of you supported the House bill. Is that 

correct? 

You did not because it did not have—but it did have subgrant 

reporting right away, which we have changed. 

And the final point I want to make before I thank you for being 

here is OMB has not expressed any difficulties with this bill publicly. They support this bill. They have said so. And so with any 

change is problems, and change is difficult. Just ask my wife when 

she talks about me changing. So I know change is difficult. But the 

fact is it is going to be worth it. We are going to have better government. We are going to have better democracy. We are going to 

have more transparency to make us more accountable, and it is 

going to help us solve the problem that Senator Carper and I and 

everybody else in this room are concerned about: How do we get 

out of the financial pickle we are in? And the only way we do it 

is know the details of the financial pickle we have got. 

I want to thank each of you all for being here. The hearing is 

adjourned. 

[Whereupon, at 3:50 p.m., the Subcommittee was adjourned.] 

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