[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
THE 2021 GAO HIGH-RISK LIST:
BLUEPRINT FOR A SAFER, STRONGER,
MORE EFFECTIVE AMERICA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
OVERSIGHT AND REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
MARCH 2, 2021
__________
Serial No. 117-6
__________
Printed for the use of the Committee on Oversight and Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov,
oversight.house.gov or
docs.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
43-756 PDF WASHINGTON : 2021
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COMMITTEE ON OVERSIGHT AND REFORM
CAROLYN B. MALONEY, New York, Chairwoman
Eleanor Holmes Norton, District of James Comer, Kentucky, Ranking
Columbia Minority Member
Stephen F. Lynch, Massachusetts Jim Jordan, Ohio
Jim Cooper, Tennessee Paul A. Gosar, Arizona
Gerald E. Connolly, Virginia Virginia Foxx, North Carolina
Raja Krishnamoorthi, Illinois Jody B. Hice, Georgia
Jamie Raskin, Maryland Glenn Grothman, Wisconsin
Ro Khanna, California Michael Cloud, Texas
Kweisi Mfume, Maryland Bob Gibbs, Ohio
Alexandria Ocasio-Cortez, New York Clay Higgins, Louisiana
Rashida Tlaib, Michigan Ralph Norman, South Carolina
Katie Porter, California Pete Sessions, Texas
Cori Bush, Missouri Fred Keller, Pennsylvania
Danny K. Davis, Illinois Andy Biggs, Arizona
Debbie Wasserman Schultz, Florida Andrew Clyde, Georgia
Peter Welch, Vermont Nancy Mace, South Carolina
Henry C. ``Hank'' Johnson, Jr., Scott Franklin, Florida
Georgia Jake LaTurner, Kansas
John P. Sarbanes, Maryland Pat Fallon, Texas
Jackie Speier, California Yvette Herrell, New Mexico
Robin L. Kelly, Illinois Byron Donalds, Florida
Brenda L. Lawrence, Michigan
Mark DeSaulnier, California
Jimmy Gomez, California
Ayanna Pressley, Massachusetts
Vacancy
David Rapallo, Staff Director
Emily Burns, Policy Director
Elisa LaNier, Chief Clerk
Contact Number: 202-225-5051
Mark Marin, Minority Staff Director
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C O N T E N T S
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Page
Hearing held on March 2, 2021.................................... 1
Witness
The Honorable Gene L. Dodaro, Comptroller General of the United
States, Government Accountability Office
Oral Statement............................................... 5
Opening statements and the prepared statement for the witness are
available in the U.S. House of Representatives Repository at:
docs.house.gov.
INDEX OF DOCUMENTS
----------
* Letter, Kansas Congressional Delegation; submitted by Rep.
LaTurner.
* Report, Kansas Report on Unemployment Claims and Fraud;
submitted by Rep. LaTurner.
* Letter, IRS Enforcement Letter from 88 Groups to the Biden
Administration and Congress; submitted by Rep. Ocasio-Cortez.
* ``Who's Afraid of the IRS? Not Facebook,'' article, Pro
Publica; submitted by Rep. Ocasio-Cortez.
* Questions for the Record: to Mr. Dodaro; submitted by Rep.
LaTurner.
Documents entered into the record during this hearing and
Questions for the Record (QFR's) are available at:
docs.house.gov.
THE 2021 GAO HIGH-RISK LIST:
BLUEPRINT FOR A SAFER, STRONGER,
MORE EFFECTIVE AMERICA
----------
Tuesday, March 2, 2021
House of Representatives,
Committee on Oversight and Reform,
Washington, D.C.
The committee met, pursuant to notice, at 10:39 a.m., in
room 2154, Rayburn House Office Building, Hon. Carolyn B.
[chairwoman of the committee] presiding.
Present: Representatives Norton, Lynch, Cooper, Connolly,
Krishnamoorthi, Raskin, Khanna, Ocasio-Cortez, Tlaib, Porter,
Bush, Davis, Welch, Johnson, Speier, Kelly, DeSaulnier, Gomez,
Pressley, Comer, Jordan, Gosar, Foxx, Hice, Grothman, Cloud,
Gibbs, Higgins, Keller, Sessions, Biggs, Donalds, Herrell,
LaTurner, Fallon, Clyde, and Franklin.
Chairwoman Maloney. Welcome, everybody, to today's hybrid
hearing. Pursuant to House Rules, some members will appear in
person, and others will appear remotely via Webex. Since some
members are appearing in person, let me first remind everyone
that pursuant to the latest guidance from the House attending
physician, all individuals attending this hearing in person
must wear a face mask. Members who are not wearing a face mask
will not be recognized.
Let me also make a few reminders for those members
appearing in person. You will only see members and witnesses
appearing remotely on the monitor in front of you when they are
speaking in what is known in Webex as ``active speaker'' or
``stage view.'' A timer is visible in the room directly in
front of you.
For members appearing remotely, I know you are all familiar
with Webex by now, but let me remind everyone of a few points.
First, you will be able to see each other speaking during
the hearing whether they are in person or remote as long as you
have your Webex set to active speaker or stage view. If you
have any questions about this, please contact staff
immediately.
Second, we have a timer that should be visible on your
screen when you are in the active speaker with thumbnail.
Members who wish to pin the timer to their screens should
contact committee staff for assistance.
Third, the House Rules require that we see you. So, please
have your cameras turned on at all times.
Fourth, members appearing remotely who are not recognized
should remain muted to minimize background noise and feedback.
Fifth, I will recognize members verbally, but members
retain the right to seek recognition verbally. In regular
order, members will be recognized in seniority order for
questions.
Last, if you want to be recognized outside of regular
order, you may identify that in several ways. You may use the
chat function to send a request, you may send an email to the
majority staff, or you may unmute your mic to seek recognition.
Obviously, we do not want people talking over each other.
So, my preference is that members use the chat function or
email to facilitate formal verbal recognition. Committee staff
will ensure that I am made aware of the request, and I will
recognize you.
We will begin the hearing in just a moment when they tell
me they are ready to begin the live stream.
[Pause.]
Chairwoman Maloney. The committee will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
I now recognize myself for an opening statement.
The U.S. Government is one of the most complex and
consequential organizations on Earth. Responsible for serving a
population of more than 330 million people and adding a new
person at a rate of every 52 seconds, the Federal Government
has a mission that is staggering in both breadth and depth.
Every two years, the Government Accountability Office
releases a blueprint for how to better meet this mission. The
GAO High-Risk List identifies the areas of Federal operations
most in need of improvement and transformation, complete with
hundreds of ratings and specific recommendations for how to
achieve progress. This year's report is titled ``Dedicated
Leadership Needed to Address Limited Progress in Most High-Risk
Areas,'' a message that cuts right to the heart of the
challenge we face.
Over the past four years, the objective metrics of the
High-Risk List shows that the Federal Government improved less
and regressed more than before the President took office. Of
the 35 areas that were included on the list, 20 were stagnant,
five regressed, and two new areas were added. The country now
strives to recover from an unprecedented pandemic that has
killed more than 500,000 Americans and reduced the average life
expectancy by one full year, a toll that falls particularly
hard on minority populations.
Fourteen million Americans lost their jobs in the first
three months of the pandemic, more than in two years of the
Great Recession. Ten million are still unemployed, and that
number doesn't even include the millions of Americans who have
given up looking for jobs.
As this silent war rages on in homes and hospitals, another
silent battle is being fought in our IT networks by cyber
attackers intent on stealing our intellectual property and
undermining our national security. The SolarWinds breach that
came to light last December as well as escalating targeted
cyber attacks that have drained millions of dollars from
struggling hospitals are just two examples of the threats that
we know about.
The economic toll of the pandemic also cuts across multiple
high-risk areas, draining, draining our ability to react and
straining our resources and inflicting damage on financial
regulatory systems that remain dangerously fragmented after the
last financial crisis.
Our frontline healthcare and essential workers are
traumatized and exhausted, suffering devastation that will
redefine a generation. They will not forget that the Federal
Government told them they were on their own when the ICUs
filled up and the personal protective equipment was nowhere to
be found. They will not forget the Federal Government put more
lives at risk by contradicting basic scientific facts. They
will not forget that the Federal Government used outdated IT
systems that delayed their economic stimulus checks.
I know our Federal Government is better than that. As one
of our colleagues reminded me a few weeks ago, our Federal
Government put a man on the Moon. So, setting up a functioning
system for distributing pandemic relief payments quickly and
accurately should be entirely attainable.
It is attainable, as are the other recommendations in
today's high-risk report, but it will take dedicated leadership
to get there and not just by one person. No one person can
rebuild the broken roads, prevent the next flood, or stop the
next deadly virus from ravaging our cities and towns. No one
person can remove the lead from the water, cover payroll costs
for pandemic-starved small businesses, or save the 136
Americans who will die of opioid overdoses today.
No one person can do all these things, but when we all work
together as effectively as possible, we can make progress. That
is the work of Government and the work of today's report.
The committee is honored to welcome Gene Dodaro, the
Comptroller General of the United States and the head of the
Government Accountability Office. The diligent and thorough
work undertaken by Mr. Dodaro and his staff of dedicated
professionals complements the mission of this committee, and we
are grateful for it.
The need for an effective, efficient, functional, and
responsible Federal Government has never been greater. Congress
and the executive branch must work together strategically on
high-risk areas so Federal agencies are in the best position
possible to restore the health, security, and prosperity of the
Nation.
Comptroller General, thank you for being here today, and I
look forward to a wide-ranging discussion.
Before I recognize the ranking member, I want to make one
announcement. Mr. Dodaro is testifying in the Senate this
afternoon at 2:30 p.m., which means we will have to end our
hearing at 1:30 p.m.
With that, I now recognize the distinguished ranking
member, Mr. Comer, for an opening statement.
Mr. Comer. Thank you, Madam Chair, for holding this very
important hybrid, bipartisan hearing.
And thank you, Comptroller General Dodaro, for your
appearance here today. I know you are going to have a very long
day.
Today's hearing is exactly what this committee was designed
to do, explore areas where there are high risks of fraud,
waste, abuse, and mismanagement of Government resources.
Congress needs to know what steps we can take to make the high-
risk programs more efficient and less susceptible to misuse.
Taxpayers expect the Government to work for them, but far
too often, the complexity of the Federal bureaucracy leads to
risks of inefficiencies and mismanaged resources. I am glad the
hearing today will shine a light on Federal programs that are
especially susceptible to such risks, as well as identify
solutions to ensure that the Government is working for the
American people.
GAO's High-Risk List has informed congressional oversight
and decisionmaking since its inception in the 1990's. To be
included on the list, the GAO considers several factors, in
particular whether the area presents a risk of at least $1
billion loss, involves public health, safety, national
security, economic growth, or citizens' rights.
The 36 separate areas identified in the 2021 High-Risk List
are selected by GAO as having both qualitative and quantitative
risks that present an elevated likelihood of fraud, waste, and
abuse. Once on the list, the program must demonstrate a
commitment to progress in five criteria, which GAO clearly
outlines.
Today's hearing should help us better understand these
recommendations so this committee can use the tools to ensure
these programs are better managed. The GAO estimates the High-
Risk List, combined with targeted congressional oversight, is
responsible for a financial benefit to the Federal Government
of $575 billion over the last 15 years and approximately $225
billion since its last high-risk update in 2019. That is over
half a trillion dollars saved for the U.S. taxpayers over the
last 15 years.
But there remains serious work to be done in addressing
many of the deficiencies identified on the 2021 High-Risk List.
In fact, I see this report as a blueprint for congressional
action needed to make our Government work more efficiently for
the American people, while managing resources and utilizing our
tax dollars in the way that the law intends. Because despite
progress made in multiple high-risk areas since 2019, the news
is not all good. Only one area met all five criteria for
removal from this year's High-Risk List, while two new areas
were added to the list. Some areas regressed, while others did
not improve in any of the five criteria.
There is still a significant amount of work to be done, and
I have said many times that this committee should be guided by
its mission to root out waste, fraud, and abuse wherever it may
be found. I am glad to see the committee finally addressing
these issues.
Since October, committee Republicans have shined a light on
a $35 million contract to a get out the vote effort in
California that appears to violate Federal law. Meanwhile, the
Election Assistance Commissioner Inspector General has taken no
action. That is exactly why it is important for this committee
to focus on preventing mismanagement and frivolous spending
like we are here today. That is our job on this committee.
I look forward to hearing from our witness today about ways
Congress can enhance its oversight and improve the areas
identified on the High-Risk List to ensure that our Government
works on behalf of the American people.
Again, I thank the chairwoman for holding this important
hearing, and I yield back the balance of my time.
Chairwoman Maloney. Thank you. The gentleman yields back.
I would now like to introduce our witness. Today, we will
hear from the Honorable Gene Dodaro, who is the Comptroller
General of the United States.
The witness will be unmuted so we can swear him in. Please
raise your right hand.
Do you swear or affirm that the testimony you are about to
give is the truth, the whole truth, and nothing but the truth,
so help you God?
[Response.]
Chairwoman Maloney. Let the record show that the witness
answered in the affirmative.
Thank you. Without objection, your written statement will
be part of the record.
With that, Comptroller Dodaro, you are now recognized for
your testimony.
STATEMENT OF HON. GENE L. DODARO, COMPTROLLER GENERAL OF THE
UNITED STATES, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Dodaro. Thank you very much, Chairwoman Maloney,
Ranking Member Comer, members of the committee. I'm very
pleased to have this opportunity to talk about GAO's latest
high-risk update today.
There have been some bright spots and improvement. However,
our overall conclusion is that there has been limited progress
in the majority of the high-risk areas. Twenty, as you
mentioned, Chairwoman Maloney, have remained the same with
their ratings. Five have regressed.
Now on the positive side, seven areas made improvements in
their ratings. One to the point, as Ranking Member Comer
mentioned, of coming off the list. That's the defense support
infrastructure area. They reduced their warehouse, office
space, properties; reduced their leasing costs, as we
recommended; taken action to get intergovernmental agreements
in place to reduce their costs of operating their bases. And so
we feel comfortable.
Now when we take something off the list, that doesn't mean
it's out of sight. So, we keep an eye on the area to make sure
that it is, in fact, fixed.
And now on the other side of the equation, we're adding two
new areas to the High-Risk List. The first is the Federal
Government's efforts to prevent, respond to, and recover from
drug abuse. Unfortunately, from 2002 to 2019, 800,000 Americans
have lost their lives to drug overdose. The latest period from
May 1919 to 1920--May 1920 has the highest recorded number of
deaths already, on a preliminary basis, of 80,000 people.
This area needs greater Federal leadership, attention,
coordination, and a complete national strategy that's executed
properly, monitored, and refined going forward to combat this--
another public health crisis that we're facing in addition to
the pandemic.
Second, we're adding SBA's Emergency Loan Program. Now
these loan programs have been a tremendous help to small
businesses across the United States during the pandemic, and I
want to emphasize that this designation does not detract from
the good that these programs have done. However, we think, when
you're spending close to $1 trillion, you also need good
accountability and transparency. And by those standards, these
programs have not met that goal.
There is need for greater oversight and management for
program integrity to minimize fraud and to provide better
accountability to the taxpayer. SBA was unable to get an
opinion from its financial auditors this past year because they
couldn't substantiate loan balances and other issues.
Now there are a number of existing high-risk areas that I
want to call your attention to. First is the cybersecurity of
our Nation. I first designated this a high-risk area across the
entire Federal Government in 1997. We added critical
infrastructure protection in 2003. The Federal Government is
still not operating, in my opinion, at a pace commensurate with
the evolving serious threats that are presented in this area.
So, we've put forth a number of recommendations.
Second is the Federal workforce. There are critical skill
gaps. Twenty-two of the high-risk areas are on there in part
because of skill gap in the programs. And the Federal
Government is, in my view, not well postured as it needs to be
to meet 21st century challenges.
This committee is very familiar with the high-risk issues
in the U.S. Postal Service and Census. So, I won't go into
those in much detail.
Limiting the Federal Government's fiscal exposure by
managing climate risk is a very important issue. The Government
is an insurer of flood insurance, crop insurance. It is the
biggest property owner in the United States and land owner. It
needs to limit disaster aid that's now over $1 trillion--or a
half trillion dollars since Katrina took place by building
better resilience in up front.
So, the bottom line here is that only 12 of the high-risk
areas have had leadership met as part of the criteria. So, we
need much greater leadership on the part of the agencies, OMB,
and continued oversight and engagement from the Congress. GAO
is ready to do its part to help.
Thank you very much. I'd be happy to answer questions.
Chairwoman Maloney. Thank you. I recognize myself for five
minutes for questions.
Last Friday, our committee had a hearing on the SolarWinds
breach and received really frightening testimony about how a
suspected Russian state actor infiltrated the networks of at
least nine Federal agencies and over 100 private sector
companies, stealing their intellectual property, their plans,
their research. Definitely a national security risk.
Our attackers wreaked silent, invisible damage on our
internal Federal networks for months undetected and would have
remained undetected for who knows how long if not for the
discovery by the cybersecurity firm FireEye. The vulnerability
of Federal and private sector systems, including critical
infrastructure of the Nation's energy, transportation,
communications, and financial sector, is absolutely staggering.
So, Mr. Dodaro, in the high-risk area of ensuring the
cybersecurity of the Nation, how many of GAO's recommendations
currently stand open to secure cybersecurity?
You need your mic on.
Mr. Dodaro. Since 2010, we've made 3,300 recommendations.
Seven hundred fifty remain open at this point in time.
Chairwoman Maloney. And how many would you describe as
priority recommendations?
Mr. Dodaro. There's about 67 priority recommendations
remaining open. But I would underscore that all 750 can
introduce vulnerabilities if not attended to.
Chairwoman Maloney. This is unbelievably unacceptable.
Which of these recommendations would have been most important
in preventing or responding to the SolarWinds attack?
Mr. Dodaro. There were two in particular. One dealing with
the information technology supply chain. There are best
practices that could be put in place to address that issue. We
warned about it before, but we took an in-depth look. None of
the 23 agencies that we looked at met all the best practice
criteria. So, we made 145 recommendations across Government to
better manage IT supply chain issues, which was a key weakness
exploited during the SolarWinds attack.
Second is to--and I'm pleased that Congress has acted on
this recommendation, which is to place a statutory cyber
coordinator in the White House that can coordinate activities
across Government to support the Department of Homeland
Security, to support OMB, and the agencies in the bridge to
civilian and military components, along with the National
Security Council. So, this is--this is an important area. So
far, that position has not yet been filled, however.
Chairwoman Maloney. Now if your recommendations had been in
place, do you think it would have prevented this cyber attack?
Mr. Dodaro. Well, it certainly would have led to an earlier
discovery of the attack. It's hard to say that, you know, you
can't have zero assurance. But we would have been better
postured to detect the attack ourselves, to take quicker
action, in my opinion.
Chairwoman Maloney. In response to your statement, if you
turn to page 168 of the report, which states--and I quote--
about the need to coordinate with a cybersecurity professional,
``In light of the elimination of the White House Cybersecurity
Coordinator position in May 2018, it had remained unclear what
official within the executive branch is to ultimately be
responsible for coordinating the execution of the
implementation plan and holding Federal agencies accountable
for the plan's nearly 200 activities moving forward.''
So, Mr. Dodaro, GAO's assessment that the Trump
administration's decision to eliminate the White House
Cybersecurity Coordinator position, do you believe that that
made the Nation more vulnerable to cyber attack?
Mr. Dodaro. Well, I'm very pleased that the Congress
created the position in statute, and I think having the
position filled will help reduce the Government's
vulnerability, if effectively implemented and the proper
leadership provided across Government.
Chairwoman Maloney. OK, and I think that the report later
discusses the attack and stresses that this national cyber
director needs to be filled. We support that. We passed it
legislatively. It was removed by the White House, and it has to
be put forward, a national cyber strategy needing a national
director focused on all of your recommendations.
I want to really point on something that came out of the
hearing, and that was the need to share information. And I know
that there has been legislation in calling for the sharing of
information between the public and private sector on cyber
attacks. There has been great resistance. Many people don't
want to share that information. They don't want people to know
that they had a breach, but this information has to be shared.
And I want to know what your assessment would be if we
required--we have, what, $1.5 trillion a year in Federal
contracts that go out. That if you receive a Federal contract,
then you must share that information with Government and the
private sector so that we can better address attacks to our
cybersecurity. Would you support that type of legislation
requiring as part of a Federal contract, if you are receiving
Federal money for research and you are breached, then you have
to share that breach with the Federal Government and colleagues
in the private sector to better combat it?
Mr. Dodaro. That type of provision would be very helpful,
Chairwoman Maloney. I appreciate that.
You know, 80 percent of the computing assets in this
country are in private sector hands. So, we can't effectively
combat this issue without sharing between the private sector
and the Government sector. Now there's reluctance to do that
for liability reasons, for business reasons, but we have to do
it in a confidential manner, where we can have and share this
information both from the companies being affected, but also
from the Government standpoint about threats that they're aware
of that they should warn the private sector about because they
have unique resources in Government that the private sector
doesn't have.
But so far, we're not at that point of having enough
fluidity in the sharing of this information to have an
integrated, coordinated effort to protect our Nation. And I'm
hopeful that the Cybersecurity Coordinator can help--once
that's filled, help build trust and build mechanisms to more
effectively share this information.
Chairwoman Maloney. Another thing that came out of that
hearing was how vast the amount of information they could
receive from the nine Federal agencies and some of the most
important businesses in our country, leading businesses and
leading agencies and technology that is vital for the survival
of our country. Yet they got into one system and was able to go
and climb into systems throughout the Government.
And it seems to me we should study how you firewall it.
Maybe the Government should not be connected to a system
connected to the private sector. In the breaches that I have
seen, most of them come in through the private sector and into
Government through a connecting system. And I would like some
research in that area of how we would firewall off defense,
energy, areas that are critical to the infrastructure of our
country.
I want to thank you. I have been on this committee many
years, and one of my favorite hearings is this one, when you
focus on the needs of what we need to do to make our country
stronger and more responsive to the people that we serve.
With that, I now recognize the gentleman from Arizona, Mr.
Gosar. You are now recognized, Mr. Gosar.
Mr. Hice. Madam Chairwoman? Madam Chairwoman?
Chairwoman Maloney. Yes.
Mr. Hice. Are we all going to be able to get nine minutes
of questioning?
Chairwoman Maloney. Yes, you can. Mr. Comer has it or
whoever he designates it to. This is one of the most important
hearings that we have in our committee. It points out what
needs to be done to protect our people and to make our country
stronger, and I am going to be extremely lenient on the
questions because we have the head here to give us direction,
and we need to hear his comments and the questions.
So, I am going to be very liberal on questioning because we
need to get these answers. But I have been told to call on Mr.
Gosar. Is that correct?
Mr. Comer. Yes, yes.
Chairwoman Maloney. And I will allow him eight minutes if
he wants, or whatever. Mr. Gosar, you are now recognized.
Mr. Gosar. Thank you, Chairwoman.
And I totally agree with you. This is one of the most
important hearings that we have in this committee.
We are here to talk about the GAO's 2021 High-Risk List,
which highlights major agency assets that have been either
lost, stolen, damaged, wasted, or underutilized. There are a
lot of programs you can dive into on this report, but there is
something I want to focus on first.
Mr. Dodaro, what if we were to tell you there is a massive
Government program out there that is ripe` with abuse? This
program undercuts Americans seeking work in the STEM field by
allowing businesses to hire foreign workers at a discounted
rate. This programs allows these discounts by ensuring these
foreign workers don't have to contribute to FICA, which is the
Social Security and Medicare taxes.
This program also allows those same individuals the ability
to withdraw from Social Security and Medicare even though they
don't contribute. As I am sure you are aware, this is extremely
problematic since Social Security will be insolvent by 2035 and
Medicare by 2026. Oh, no, I take that back. Now that we have
new actuarials, Medicare is insolvent by 2024.
This program was also not approved by Congress and actually
doesn't have a cap. Currently, no one knows how many
individuals are on this program. Do you know of the program I
am talking about? Because it didn't make it into your report.
Mr. Dodaro. I think you're talking about the--there's a
visa investor program where people can come in and invest?
Mr. Gosar. No. The program is called the Optional Practical
Training Program, also known as the OPT. This program was
created by a rogue Department of Homeland Security in 2008 and
has lasting impacts. Not only is this program reprioritizing
Americans last in regards to Social Security and Medicare, two
programs they have been paying in their whole lives, but also
those graduating in the STEM field.
Imagine being a young person nowadays going to college.
Media, society, and even Members of Congress tell youngsters
the importance of getting a degree in STEM. They go on to say
how there is a massive shortage, so there is a great window for
you to build a great career.
You spend years completing your degree, and then you hit
the job market just to be told that since you are an American,
there are no--they have no interest in hiring you because they
can hire a foreign worker for less with the same credentials,
and then less money is charged them. Is it really a mystery
that the Bureau of Labor Statistics found that for every two
students graduating with a U.S. STEM degree, only one is
employed in STEM? And that 32 percent of computer science
graduates not employed in information technology attributed
their situation to a lack of available jobs.
Mr. Dodaro, I suggest GAO adds this program to its list of
high-risk programs because, in my opinion and in the opinion of
many others, this is a program that needs to be highlighted and
addressed as abusive and ultimately bad for Americans.
Shifting gears slightly, Mr. Dodaro, I am hoping that you
can shed some light on the deficiencies related to the
Pentagon's financial management. As you are aware, Pentagon
bookkeeping is notoriously abysmal. In fact, DOD bookkeeping is
so abysmal that areas within the DOD have been in the high-risk
report since 1995.
These failures are evident and materialize every year when
DOD inevitably fails in its annual audit. On November 16, 2020,
the Pentagon announced for the third straight year, it failed
its financial review. The DOD estimates that it will not be
able to pass an audit before 2027, or 37 years after it was
required to do so by law.
According to your report, the DOD uses their reporting
tools to produce reports for high-level decisionmaking and
reporting based on real-time data contained in its centralized
data base. This tool enables DOD to produce reports on the
status of audit findings and its efforts to address audit
priority areas and material weaknesses.
Your report also goes on to say that ``The data base
information may be inaccurate, unreliable, and incomplete for
management decisionmaking'' and that ``Without complete and
reliable information on DOD's audit remediation efforts,
internal and external stakeholders may not have quality
information to effectively monitor and measure DOD's
progress.''
Yet every year, Congress fails to hold DOD accountable for
these deficiencies during the appropriations process. We
continue to distribute duties and responsibilities to various
existing positions with less and less authority. While we must
compete with our adversaries, we cannot ignore these
deficiencies. In fact, I would argue that these deficiencies
hinder our efforts to maintain a strategic advantage over our
adversaries.
So, Mr. Dodaro, why is the Pentagon estimating that it will
not be able to pass an audit before 2027?
Mr. Dodaro. One of the reasons, Congressman Gosar, is that
for many years, I'd say almost 20, 25 years, DOD did not have a
very good process in place and take this requirement for a
financial audit very seriously, and Congress waived the
requirement for them for a number of years in order to get
their systems in place, which never happened.
So, the past three or four years have been the best I've
seen, and I've been monitoring this the whole 30-year period,
where DOD is finally serious about having a financial audit
done. They've corrected 25, 26 percent of all the weaknesses
that have been identified.
So, basically, the reason is they got a very late start.
Their systems are antiquated. They need to make sure that they
have more financial management personnel that are qualified and
trained. That's one of the 22 areas on the list because of the
need for closing skill gaps. And they need to fix these
problems and to consolidate and modernize their financial
systems.
My hope is, if this progress is sustained, that they will
get there ultimately because this is the one area in the
Federal Government of the 24 largest departments and agencies
that have never been able to pass the test of an independent
audit, and it's needed.
The other thing I would point out is they're already
beginning to realize millions of dollars of savings as a result
of doing the financial audit by identifying property and
equipment that was not on their books that they can then use
rather than reorder new equipment. So, it's already having very
good benefits, and I think that will help sustain the progress.
But you're right to point it out, and I think I would
encourage Congress to keep monitoring the progress there very
carefully.
Mr. Gosar. Is some of the issues in regards to this audit
sole-sourcing contracts?
Mr. Dodaro. I don't know. I will get you an answer for the
record there. I believe there were competitive--competed. But
I'm not sure and--but I will find out and get an answer to you.
Mr. Gosar. Thank you. Then also in that contract base, is
it of question, the calibration in regard to Davis Bacon wages?
Mr. Dodaro. I don't believe that applies to the financial
audit, no.
Mr. Gosar. But it does to DOD regards to fair and
compensate contracting, does it not?
Mr. Dodaro. Well, it does in regard to construction
projects and other things, but I'm not sure it applies to
professional services. But I'll get you--again, I'll get you a
more definitive answer on that.
Mr. Gosar. OK. One last question. What can we do, as
Congress, in the Fiscal Year 2022 NDAA to accelerate the
timeline for a successful Pentagon-wide audit? What can we do
to put the carrot and the stick so that we actually get that
compliance?
I mean, 25 percent is pretty pathetic. And thank you for at
least getting that. But I mean, we can't fully understand the
ramifications unless we have the full information. So, what can
we do to make your job better?
Mr. Dodaro. I think you can continue to ask DOD for their
plan to modernize their systems to get at the underlying cause
for the problems and to make sure that Congress gives them
funding to bring in all the qualified people that they need in
order to fix these problems. That would--that's the key to
expediting progress. That's how it's happened across the rest
of the Federal Government.
Mr. Gosar. Isn't it the purpose of the Antideficiency Act
to do exactly that, that Congress appropriate their funds for
the specific purpose and that DOD has to spend those funds
accordingly to that purpose?
Mr. Dodaro. Yes. But the Antideficiency Fund makes sure
that the agencies don't spend more than what Congress gave them
to. I mean, so it's basically the Empowerment Control Act is
the one that makes sure that they spend it for the purposes
that the Congress intended it to do.
Now you asked me what Congress could do to help, and I--and
of something that they could place in the NDAA, and I think it
is requirements for them to provide good plans for improving
their systems and to encourage them to have all the qualified
people they need would be good steps for Congress to take.
Mr. Gosar. Thank you. I yield back, Chairwoman.
Chairwoman Maloney. The gentleman yields back. The
gentlewoman from the District of Columbia, Ms. Norton, is
recognized. Ms. Norton?
Ms. Norton. Thank you, Madam Chair. Can you hear me well?
Chairwoman Maloney. Yes, we can.
Ms. Norton. I appreciate this hearing. I believe we have
this hearing annually, and this High-Risk List keeps appearing
before us.
I must tell you, Madam Chair, that before being elected to
Congress, I was a tenured professor of law. I recognize failure
when I see it. So, I would like to discuss changing our
approach in at least some ways.
As I looked at this list and I considered my own
responsibilities and the committees on which I serve, I thought
one way to go with this is to look for win-win opportunities
when it comes to high-risk areas. And so I looked for such
areas where you have the same investment because that is going
to be an issue. Money is always an issue. And the same, time
and resources.
And the reason I am looking at a win-win is because of my
service on the Transportation and Infrastructure Committee, and
we have just gotten a bill in the reconciliation package. And
it is, of course, one of the high-risk areas that I think
presents us with an opportunity for a win-win.
So, my question for Mr. Dodaro is, first as I understand
it, I believe you have just testified in response to a question
from one of my colleagues that 80 percent of the--of this issue
is in private hands. Is that not the case?
Mr. Dodaro. Yes. So, in talking about computing, the
computing assets, yes.
Ms. Norton. So, progress in this area hinges really on
congressional action, the action we take. We in the Congress
takes. Is that correct?
Mr. Dodaro. That's part of the issue, but the executive
branch needs to execute as well and to gain the cooperation of
the private sector, particularly for critical infrastructure
protection.
Ms. Norton. That is where I want to go, to critical
infrastructure protection, because the President, President
Biden, has before us a Build Back Better agenda that would
invest $2 trillion to improve the Nation's infrastructure and
surface transportation system. That is of special interest to
me because of the committee on which I serve. I also know that
the American Society of Civil Engineers reports that 1 out of
every 5 miles of highway pavement in the U.S. is in poor
condition.
So, then I looked at infrastructure itself because of my
interest in that area. That The Build Back Better plan would
electrify various forms of surface transportation. I think we
are already beginning to see electric cars or electric
transportation, surface transportation, here in my own
district, in the District of Columbia.
It would electrify various forms of surface transportation,
and that would include, of course, the kind of surface
transportation that is used every day, like commuter trains and
school buses, transit buses, ferries, passenger vehicles. All
of that is on the horizon, while allocating flexible Federal
investments to enable municipalities to install high-rail
networks and improve existing transit.
So, looking forward, Mr. Dodaro, would infrastructure
improvements create jobs and cut emissions as a prudent
investment to address multiple high-risk areas all at one time?
Mr. Dodaro. I think it's very important that we, as a
country, invest in our infrastructure. The surface
transportation infrastructure area has been on our High-Risk
List for over 13 years. We need to have the type of financing
and support available for improving surface transportation. In
the cyber area, we've made recommendations that there need to
be more investment in the electricity grid and other areas to
build in better resilience to those areas.
So, there's a wide range of needs in the infrastructure
area. It would directly address some of the areas on the High-
Risk List and, I think, you know would be most appropriate.
Ms. Norton. Thank you very much.
And there you have it, Madam Chairman--Madam Chair, a win-
win matter for us to consider, rather than coming back every
year to repeat our failures.
I yield back.
Chairwoman Maloney. I agree. The gentleman from Georgia,
Mr. Hice, is recognized for five minutes.
Mr. Hice. Thank you, Madam Chair.
And thank you, Mr. Dodaro, for being here with us again
today.
Isn't it true that there are several programs that have
been on the list ever since the High-Risk List was implemented
back in 1990, I believe?
Mr. Dodaro. Yes. There are 5 charter members remaining of
the 14 that were on the list at that point. They're some of the
biggest programs in the Government--weapon systems acquisition,
Medicare, for example.
Mr. Hice. Right. And not only are those founding members,
as you say, but we have a lot of other veteran members that
have been on since the late 1990's or early 2000's as well.
Is there any kind of repercussion, such as withholding
certain amounts of funds, money that they can receive or any
other type of repercussion for agencies or agency organizations
that remain on the High-Risk List year after year after year?
Mr. Dodaro. Nothing other than what Congress may impose on
individual areas. For example, the DOD infrastructure support
area we've taken off the list this time, Congress required
regular hearings where they had DOD come up. They had GAO
continue to investigate in it. And Congress stayed on them with
requirements in the National Defense Authorization Act until it
was improved.
So, congressional oversight and actions. In some cases in
the past, there's been funds withheld for modernization efforts
until they develop proper plans and institutions. There's no
sort of generic----
Mr. Hice. I get that, and you are spot on. There is no
question the role of Government oversight. But I am wondering
from a legislative perspective to ensure--if there is
ramifications? Everyone works off incentives. Our free markets
work off incentives, and where there are incentives to improve,
people tend to improve. But if there are no incentives to do
so, then people, organizations--in this case, organizational
groups stay on the High-Risk List year after year after year.
Would there be wisdom in having some sort of incentive
program or ramifications for these agencies to get off the
list?
Mr. Dodaro. Whatever incentives could be craft--crafted
would be helpful.
Mr. Hice. OK.
Mr. Dodaro. But in crafting of them, they'd have to be
careful because some of them provide essential services to
people, and you wouldn't want to interfere with Medicare
payments, you know, for people in need of healthcare----
Mr. Hice. Sure.
Mr. Dodaro [Continuing]. Inappropriately. But there--so
you'd have to tailor the incentives, and you know, it'd be
better if there were positive incentives, but if there are
incentives that--or the things you want to put in as penalty
type of things, that has to be carefully crafted.
Mr. Hice. Right. And that is a point well taken.
But at the end of the day, I mean, don't we have to ask
ourselves what is the effectiveness of having a High-Risk List
if there is no incentive for agencies to get off it? I mean,
what are we ultimately accomplishing? Just it is almost like
this has become the norm for certain agencies just to be on
there every year.
Mr. Dodaro. Well, as pointed out earlier, in the last 15
years, the financial benefits have been over $575 billion. So,
we've saved--you know, there's been a lot of progress in saving
some of them money.
Mr. Hice. For those agencies that have responded.
Mr. Dodaro. Well, even--even some that are on the list. I
mean, some of the biggest savings, for example, have come in
the weapon systems area, where they've reduced the cost growth.
Mr. Hice. Right.
Mr. Dodaro. And in the Medicaid program by making some of
the demonstration projects now budget--they're supposed to be
budget neutral, budget neutral or not. So, that's been $10
billion.
So, a lot of the financial benefits come from programs that
are still on the list that are making incremental progress.
They don't come from----
Mr. Hice. OK, I get you. But we still have a long ways to
go, obviously, when looking at all this?
Mr. Dodaro. Oh, no, clearly. Yes.
Mr. Hice. I am going to try to stay within my five minutes.
So, let me just ask you this one other question that has really
been on my mind. Is there any relationship between IT
modernization and these agencies that stay on the High-Risk
List? In other words, those that year after year after year are
on this list, are they also primarily the ones who are failing
to modernize their IT?
Mr. Dodaro. There are clearly cases of that. It's not
universal. One primary case would be the Veterans
Administration, both in healthcare, acquisition management, and
other areas. The DOD financial management area, we just talked
about. So, there clearly is an interrelationship between a lack
of ability to modernize. There's a relationship in the high-
risk areas. These legacy systems are a millstone around the
neck of the Federal Government from a security standpoint.
Mr. Hice. Right.
Mr. Dodaro. And many of them are 40, 50 years old, and they
were never developed with security concerns in place. So,
there's interrelationship between IT and the cyber areas.
Mr. Hice. That may be one area we could look.
Mr. Dodaro. That's definitely a fruitful area to pursue,
Congressman.
Mr. Hice. OK. All right. Thank you very much.
I yield back.
Chairwoman Maloney. The gentleman yields back. The
gentleman from Massachusetts, Mr. Lynch, is recognized. Mr.
Lynch?
Mr. Lynch. Thank you, Madam Chair and to the ranking
member.
Welcome back, Gene. Good to see you. Thank you for your
great work and for the work of your team.
As the chair has said, this hearing is one of the most
valuable I think for Congress to focus on this High-Risk List,
and you have really been very helpful in getting us to focus
when we have got so many issues that are out there that need to
be addressed.
Now DOD in 2020 was slated to spend about $1.8 trillion in
taxpayer money to acquire about 106 different weapon systems.
And what really concerned me deeply is that the level of
vulnerability we have, because these weapon systems are so, so
complex, and we could talk about, you know, our satellite
system, the hypersonic weapon systems, the F-35, you know, the
Aegis Destroyer systems. All of it is heavily dependent on
software, on cybersecurity in order to optimize the value to
the warfighter.
So, what I am concerned about, and this is especially
relevant after the SolarWinds hack, you mentioned in your
report--and I will quote from the Director of Operational Test
and Evaluation. He said that nearly every warfighting and
business capability is now software-defined. Simply put, the
systems, whether it is the missile system or ships or the F-35,
all of that is dependent and doesn't work if the software
doesn't work. And we are likely to upgrade a system by
installing new software than by replacing hardware.
However, in your report--and I am thankful for it--your
most recent high-risk report, the Director also reported that
the Department ``lacked testing personnel with deep
cybersecurity expertise.'' The Director also stated that,
``Without substantial improvements to cybersecurity test and
evaluation, especially in the workforce, DOD risks lowering the
overall force readiness and lethality'' of our weapon systems.
So, can you talk about that aspect of your report? Because
I think, look, the costs are completely out of control, and the
schedules, we are falling years and years behind on some of
these complex systems. And even the asymmetry of the threat
environment out there, you know, a handful of good hackers can
keep thousands of our people on the defensive end busy just
trying to protect against that small group. So, if you could
talk about that aspect of your report, I would appreciate it.
Thank you.
Mr. Dodaro. Yes. A few years ago, we started looking at the
focus the DOD had on cybersecurity and developing new weapon
systems, and they really weren't focused on it very well. When
they did look into it, it showed extraordinary vulnerabilities.
And so we became concerned. So, we've looked more at it. We
made some recommendations, and they're gradually improving.
But they're not to the point of where they need to be in
the development of new weapon systems going forward. So, we're
watching that very carefully. It's very concerning, and this is
true of many critical functions. Not only the DOD, but in the
private sector and elsewhere, because most things now, our
industrial control systems, everything is software dependent or
connected to the Internet that would have problems. So, this is
problems that we see as well in the GPS systems.
Mr. Lynch. Is this a pipeline problem where we are not
developing the personnel to do this work, or is it the private
sector is siphoning away all the good talent with better
salaries and things like that so that from a personnel
standpoint we are having a difficult time competing?
Mr. Dodaro. Yes. Well, there's definitely that element to
it, and I'll ask Nick Marinos, our cybersecurity expert who
looked at the workforce issues. But I think you have multiple
facets of it. You definitely don't have enough people to
provide services to both the private sector and the Government.
So, we need to increase the pipeline. There's no question about
that.
Mr. Lynch. Yes.
Mr. Dodaro. And a number of universities now are starting
to have cybersecurity programs. University of Maryland has one.
I've met with the professors there. We were actually in the
classrooms giving case examples in how you could--and we're
pulling people in from the Government. So, and I work with
Virginia Tech and some other places.
So, we've got to increase the pipeline. We'll never be
competitive in the Government for services from the private
sector in this arena. So, we use contractors a lot, which is
fine, and we're going to have to use contractors to help. But
the Government has got to have an ability to oversee the
contractors effectively and to have the patience and the
discipline necessary to make sure that these areas are attended
to before they rush into production.
That's the biggest problem we've seen is where they want--
the technology is not mature enough, including cybersecurity,
but other parts of maturity in the technology before we want to
rush it into production. So, that's an area where, you know,
congressional intention is important, but we have to increase
the size of the workforce in the United States. And whatever
can be done in that area I think is terribly important.
Mr. Lynch. Well, I thank you for your service and your
assistance in this matter.
And Madam Chair, I yield back. Thank you.
Chairwoman Maloney. The gentleman yields back. The
gentleman from Ohio, Mr. Gibbs? You are now recognized, Mr.
Gibbs.
Mr. Gibbs. Thank you, Madam Chair.
And thank you for being here today.
Let us talk a little about the Post Office. The Postal
Service has lost $87 billion over the past 14 fiscal years,
including $9.2 billion in Fiscal Year 2020. Is that correct?
Mr. Dodaro. That sounds about right.
Mr. Gibbs. And they expect to lose about $9.7 billion in
Fiscal Year 2021. Given the serious financial disaster looming
at the Postal Service--and also their service has, you know,
just gone to pot--wouldn't you agree that congressional action
is urgently needed to bring reform and that mere half measures
and band-aids would be unacceptable?
Mr. Dodaro. Absolutely. I have testimoneys dating back
several years that have Congress needs to urgently act on the
Postal Service. So, I'd certainly believe it now. I've believed
it for a while.
Mr. Gibbs. If Congress addresses the prefunding of Medicare
integration, would that be enough to permanently fix the Postal
Service financial situation, or would it just make the balance
sheet look better at the time?
Mr. Dodaro. It would--it wouldn't fix the underlying
business model problem, no. It would help alleviate some of the
current fiscal stress, but not fix the fundamental----
Mr. Gibbs. So, we also have to implement operational and
structural reforms?
Mr. Dodaro. Yes. Yes, you need structural reforms.
Mr. Gibbs. Does your agency suggest any structural reforms
or----
Mr. Dodaro. Yes. Yes.
Mr. Gibbs. Can you specify?
Mr. Dodaro. Well, we think--I mean, the fundamental issue
here is you have a business model that's completely broken.
It's been disrupted by technology, and that's been accelerated
by the pandemic. And it accelerated during the global financial
crisis where first-class mail is dropping, which is where they
had a competitive advantage, you know? They were basically a
monopoly from that standpoint.
And the Congress has expected them to operate like a
business, but the model is broken. So, there has to be a
determination here because nobody wants to give up some of the
services that the Postal Service is providing--six-day
delivery, universal coverage, rural area coverage, and other
areas. And our recommendation, there needs to be an agreement
within the Congress about what services do you really want, and
does the model where you have a Postal Service that's supposed
to operate like a private sector really the model that you
want? Or do you want something like that, but there's a--
there's a commitment by the Congress to provide additional
funding there, too, to have a floor of service required.
So, you need to figure out what services you want to
provide, how you want to pay for them, and then structure a
governance structure and an organization that fits that on a
sustainable basis going forward.
Mr. Gibbs. Last week, Postmaster General DeJoy testified,
and of course, he is working on reforms. And one thing I
questioned--I was concerned about is in their reforms and their
projections going out I think it was 10 years, they are
projecting more volume. And what would you think, are they
going to actually have more volume?
Obviously, the economy grows and everything else, but we
are seeing what is happening in the private sector, the Amazons
of the world. Do you think it is prudent for them to base their
projections on a significantly increased volume that they will
be handling, or is that something they should not be doing?
Mr. Dodaro. Yes. Well, I haven't--we haven't looked at
their projections lately. I'd be happy to do so. But I mean, my
offhand reaction to that is that you don't want to be overly
optimistic because in the package area, they have competition.
And the competition has been moving out, and they rely on the
post office particularly in rural areas, where it's not cost
effective. But where it's cost effective, those companies are
moving in that area and are having services--Amazon and
others--delivering their own packages and things.
Mr. Gibbs. I totally agree with you. There is competition
in the packages. That is obvious. But I would also argue that
the competition might even be even greater in the first-class
postage because of the use of online, Internet. I told him last
week that I refuse to mail a check in the mail anymore because
I don't have confidence in the system.
And so I think they are going to have more first class is,
you know----
Mr. Dodaro. Well, I think you're going to--you have a
generation now, as the generations age, they're not using mail.
I mean, even my children don't even check their mail that
often, you know, because they're using text and they're using
other things.
Mr. Gibbs. I certainly agree, and I made that point. I'm a
baby boomer, and I look at the millennials and the Generation
Zs. If I am doing this as a baby boomer trying to not use the
mail because I don't have confidence anymore, that is why my
argument about their increased volume and everything else, I
think that they are maybe singing in the wind.
But anyways, appreciate your comments. Thank you.
Mr. Dodaro. Sure.
Mr. Gibbs. I yield back.
Chairwoman Maloney. The gentleman yields back. The
gentleman from Tennessee, Mr. Cooper, is recognized. Mr.
Cooper, you are now recognized.
Mr. Cooper. Thank you, Madam Chair.
Congratulations, Gene, on another superb biennial report.
I would like to focus my comments on how we can help you
humanize that report because, unfortunately, with over 300
pages, when so much of it is mind-bogglingly complex, the media
and our constituents back home will miss the fact that your
report really is a feast for those of us who hate waste, fraud,
and abuse.
So, I want to offer three suggestions as ways we might be
able to keep this report in the news longer and help the news
focus more on the details. Because a detail in your report is
still oftentimes a multibillion dollar, if not a trillion
dollar, matter.
No. 1, I would like to suggest that as great as your report
is, it is almost too much to swallow all at once. When you were
talking about $6.6 trillion in annual outlays from the
Government, that is to say even a small corner of the report
can be an incredibly large and important area. I don't know if
there is a way that maybe we could parcel this out over some
time period so that we have weekly scandal that we could look
into or weekly waste, fraud, and abuse thing that we could
attack.
No. 2, I noticed in your report that you really don't even
look at anything smaller than $1 billion in money at risk. And
that is entirely appropriate for your report, but it seems to
me that we might be able to farm out some of these areas that
are smaller than $1 billion but still very much worth pursuing
so that we could get, I don't know, maybe agency IGs to be held
responsible for the items under $1 billion. Because for the
folks back home, cutting things off at anything smaller than $1
billion as essentially budget dust, that is hard to explain
back home.
My third point is this, and one of the previous questioners
was getting at it. As good as congressional oversight can be,
and I am glad that the DOD infrastructure has made some
improvements, I was heartened to see, for example, that the
U.S. Army in the National Capital Region in the last 10 years
has reduced its leasing requirements from 3.9 million square
feet to only 1 million square feet. That is saving us like half
a Pentagon just right there, and that is just because we
tightened up a little bit of the management for one of the
military services.
But I am worried that we need some sort of mechanism like
maybe freezing the budget of an agency that doesn't respond to
your request. Because when you mentioned the five charter
members that have been on your report since the beginning, that
is pretty embarrassing that we haven't been able to graduate
those charter members into reformed entities that have taken to
heart your recommendations and like the Pentagon should have
done, what, 20, 30 years ago, actually pass an audit.
So, these are just three areas I think where we can work
more effectively together so that we can make your report even
more effective than it already is because the savings you have
already achieved are monumental and wonderful, but there is so
much more that we can do together. So, I just would like your
comments on my three comments.
Thanks.
Mr. Dodaro. Yes. First, with regard to the focus of the
report being broad, we only do this once every two years. And
what's been done in the past that I found effective is a series
of hearings that then delve into individual areas in more depth
over a period of time. Because what we're trying to do when we
do this at the beginning of each new Congress is to help set
the oversight agenda for the Congress for the entire two-year
period.
And so, you know, that's still possible to take each of
these areas and have more hearings on them. Other committees
have these hearings, the authorizing committees, the
appropriation committees as well. This committee could pick a
subset of issues, focus on them in more in-depth work. I've got
plenty of experts in GAO who can come and testify, get down to
the real nitty-gritty details in those areas.
Second, on the billion dollar cut, that's just for the
high-risk areas. We look at a lot of programs and activities
that are below $1 billion in GAO and issue regular reports on
that. We issue 600 or more reports every year on all facets of
the Government.
Also, it can be less than $1 billion if it has public
health and safety risk or national security risk or other
areas. And so the dollar threshold is only one of very many
factors that we consider in designating them in the other
areas.
The last area that you mentioned I think is important, but
that's really a policy followed by the Congress, and I think it
has to be tailored to each individual area that's on the list
to make sure that the incentives work in a proper way, and we
don't actually cause people to game the systems, and not fix
the problem, get around the penalties or incentives that are in
place. That's been the case in the past, and I think the best
thing--what I'm going to try to do, Congressman Cooper--and I
appreciate your comments on the report--is I regularly meet
with the heads of the agencies once they're confirmed to try to
get them to focus on these areas.
Where I've been successful in that regard, and OMB has been
engaged. Really, OMB hasn't been engaged over the past few
years in this area because some of these require resource
investments to fix as well as other areas. Where OMB is engaged
and the Congress is engaged on a continual basis, those are the
ingredients for success and things can come off the list.
And one of the reasons some of these areas are on the list,
like Medicare, is the entitlement programs are on basically
automatic pilot unless there is a change in the requirements.
They don't go through--a lot of these programs don't go through
the annual appropriation process. So, there could be other ways
of getting at some of these programs.
So, I'd be happy to work with the Congress on implementing
all of your suggestions, more focused attention on individual
areas, crafting incentives to try to provide positive
improvement at a quicker pace over time, focusing in on smaller
areas that may not have the dollars but have, you know, an
outsized impact on the public and their health and safety.
Mr. Cooper. Thanks, Gene.
Madam Chair, I yield back. Thanks.
Chairwoman Maloney. The gentleman yields back. The
gentlewoman from North Carolina, Mrs. Foxx, is recognized for
five minutes or as much time as she may consume.
Ms. Foxx. Thank you, Madam Chairman, and thank you very
much for having this hearing.
And Mr. Dodaro, we really appreciate you. And I want to
followup on one comment that our colleague Mr. Cooper brought
up, and that is I think it is troubling to me and to the
American people that we don't put groups on the High-Risk List
until the exposure for loss is at least $1 billion. You know,
that is a big number for us, but I am glad to hear what you had
to say about we all know--I think most of us know that you are
looking at things that have exposure to less than that when you
are asked to do that.
And I certainly appreciate the work that you have done on
looking at programs that come under the jurisdiction of the
Education and Labor Committee, and you all have done a great
job on that. So, I really appreciate what the GAO does. I think
we all have to remember that we are talking about hard-working
taxpayer dollars all the time, and I appreciate it.
A new addition to the High-Risk List this year is national
efforts to prevent, respond to, and recover from drug abuse.
Over the past few years, Congress has authorized billions of
funding through legislation such as Comprehensive Addiction and
Recovery Act, CARA, and SUPPORT for Patients and Communities
Act. Would you say that the billions in resources provided
these and related legislation is vulnerable to waste, fraud,
and abuse?
Mr. Dodaro. I'd have to go back and take a look at that.
But which legislation again, Congresswoman?
Ms. Foxx. CARA Act and SUPPORT for Patients and Communities
Act. We have some real concerns on this, and I wonder if you
looked at how--has GAO looked at where the billions of funding
Congress has passed to fight the opioid crisis has actually
been spent? Has anyone asked about that?
Mr. Dodaro. Yes, let me ask Ms. Clowers. She's on the line.
Nikki, do you--are you familiar with these programs?
Ms. Clowers. I am. And Representative, we are actually--we
have ongoing work right now looking at the uses of the opioid
funding. As you noted, billions have been allocated, and we are
in the process of studying how those moneys have been used.
Ms. Foxx. Yes, and I think in particular because this money
has been put out in grants to the states and local government,
we need to expect and demand accountability, like have there
been fewer overdoses? Are more lives being saved?
So, I think too often we never get accountability for these
funds, and the emphasis, it seems to me, should always be
there. However, what we are hearing is increasing rates of drug
overdoses in the 12-month period ending May 2020. So, we have
no way of knowing, as far as I know, again what the impact has
been on these grants and maybe what the impact has been from
COVID.
I think there needs to be some emphasis there, too. So, I
hope you all will be looking at that.
Mr. Dodaro. We will. We will. Go ahead Nikki.
Ms. Clowers. Yes, ma'am. I am sorry. Yes, ma'am. It is a
really good point, both in terms of the grants to the state and
local governments, but also it is across the Federal
Government, too. There is about a dozen Federal agencies that
are involved. And so finding--having that transparency and
visibility is important, and we will bring that to you because,
as you said, the overdose deaths have increased by May 2020.
But then also projections in terms of the impact on COVID that
deaths have increased, overdose deaths have increased to about
83,000 during the period of last year, which is very
concerning.
Ms. Foxx. And I think, to go back to what you said earlier,
Mr. Dodaro, that we need to have some feedback from you all on
what needs to be done to tighten up these programs a little
bit.
I have one more question. As we all know, the Post Office
is repeatedly on GAO's High-Risk List. The Postal Service is
not making required payments to fund the postal retiree health
and pension benefits, and we had a hearing last week with the
Postmaster General. So, what congressional action do you
believe is necessary to address this issue? It is very timely
that you are here to be able to talk about that in conjunction
with the hearing last week.
Mr. Dodaro. Yes. Well, I think, in the short term, the
Postal Service needs some, you know fiscal help and release.
And I know there's been discussions about not requiring pre-
funding anymore. My only caution there is if Congress decides
to go that way that according to our calculations, the fund
would only be enough for the next 10 years to pay for the
retiree healthcare costs, and then there would be a payment of
our estimate is $7 billion a year that our Postal Service would
have to come up with to pay on you go basis.
So, there may be a compromise between not paying at all and
paying a more modest amount into the fund so you don't have all
of a sudden, you know, a $7 billion bill hits you on a year
down the road. So, we don't want to kick the can down the road
and have it explode in our face later, and I think so there'd
be caution on that front.
I know there's some discussion about using Medicare program
that has some options, but there are problems with the
Medicare. The Medicare hospital trust fund is estimated by
2024, which isn't that far away, to only have 83 cents to pay
on the dollar. So, we're shifting part of the problem there,
where we already have a problem.
So, that would help create some room for the Postal
Service, but they need fundamental reform, as I mentioned
earlier in my comments to the gentleman, Congressman from Ohio.
And I think Congress needs to come to grips with that. They're
not--you can't deal with this with just giving them temporary
relief and hoping that it's going to go away. It's not going to
go away. There needs to be more fundamental reform, and you got
to figure out what the Federal Government wants to contribute
over time and the model because I'm not sure they could be
self-sustaining over a long period of time.
Ms. Foxx. Right.
Mr. Dodaro. I know they're trying to, and I wish them well.
But the dynamics are not in their favor long term.
Ms. Foxx. Well, when we were in the midst of talking about
these pension reforms, I asked staff to check with me. Only 22
percent of the people in the private sector in this country are
covered by pensions. It just seems very unfair to me to ask the
taxpayers, who have no pensions themselves, to be paying for
the pensions of other people who are working for the Government
or in a quasi-government agency.
Thank you, Madam Chairman. I appreciate it very much. I
yield back.
Chairwoman Maloney. I thank the gentlelady for her
question, and I ask a point of personal clarification.
On the Medicare integration portion, it is my understanding
that the postal people paid into it. They paid into it, and
they aren't claiming it. And Congress has said they can't claim
it. Certain people can't claim it.
What we were talking about is just allowing the postal
workers to have the same benefit that every person has, that if
you pay into Medicare, you are entitled to get your payment
out. Right now, in our research, the Postal Service had paid
$35 billion into the Medicare program that their workers were
not pulling out because they had paid it. So, maybe a study on
that that clarifies exactly how much have they paid in, and why
are they not allowed to get Medicare like anyone else in the
country who pays into it.
I now call upon Mr. Connolly. You are now recognized for
five minutes.
Mr. Connolly. Thank you, Madam Chairwoman.
And welcome, Mr. Dodaro. It is great to see you again. And
I do think that this piece of work by GAO is maybe one of the
most critical pieces of work Congress gets on a routine basis.
It is an illuminating document. It is a guidepost to what we
need to be doing in Congress, frankly, to make Government work
better and certainly, I think, a flashing red light for many
executive agency heads to understand that they have got
problems they have got to deal with. And so thank you.
I would just note, the gentlelady from North Carolina just
talked about the unfairness of some pensions being helped by
tax dollars. I don't think anyone is talking about the postal
pension program or the healthcare benefits being bailed out by
tax dollars. I mean, these are dollars paid into those programs
by hard-working postal workers. And we came up in 2006 with
this onerous prepayment requirement--again, with postal
workers' money, not somebody else's money--that has
unnecessarily burdened the Postal Service with a debt overhang
that is unique to it. And since Congress created that problem,
we need to fix it, and that is what we are trying to do with
postal reform.
Mr. Dodaro, could you talk a little bit about one of the
high-risk items you identified a number of years ago that we
picked up on and did act on in passing FITARA, which you
endorsed and followed through on oversight with twice a year
hearings--we are now about to schedule the 12th such hearing--
was IT modernization of the Federal Government, a lot of legacy
systems, lack of investment, and so forth.
Where are we on that as a high-risk item today?
Mr. Dodaro. Well, the passage of FITARA by the Congress and
the continued focus of the FITARA scorecards and the attention
of, Congressman Connolly, you and other members of this
committee have helped make progress. It saved billions of
dollars in data center consolidations. It's also drawn a
spotlight on the software inventory issue, which is now taken
out of the scorecard process because so much progress has been
made in that area.
However, there is remaining work to be done. The many
agency CIOs still don't have the full range of responsibilities
that are needed to make them a key player at the table,
oversight over the IT budgets, sway in some of the decisions
that are made. That's still a problem area that needs attention
in that area.
There is still not fast enough pace on modernization of the
legacy systems. The Technology Modernization Fund was thought
to be had more funds in it that could help in that regard, and
that hasn't--that hasn't been necessarily forthcoming in terms
of that expectation.
So, you really need to reform those legacy systems faster
for security purposes, for service purposes, and a wide range
of other areas.
Mr. Connolly. So, if I can interrupt you--if I can
interrupt you, Mr. Dodaro, on that point. And that is why the
new President recommended $10 billion, $9 billion of which
would go to the Technology Modernization Fund precisely to
serve as sort of seed capital and the catalyst to retire those
legacy systems, some of which are 40 and 50 years old and
getting pretty creaky. Is that correct?
Mr. Dodaro. That's my understanding. I'd ask Nick Marinos,
our IT specialist to comment on that. Nick?
Mr. Marinos. Yes that's correct, Congressman Connolly. So,
ultimately, the benefit of having the Tech Modernization Fund
gain some additional appropriations would be to give it wider
reach. So, at the moment, there's only about a dozen projects
that have been approved. But the benefit of TMF would
ultimately be to give the Director of OMB the ability to more
rapidly associate where there are areas that need the funding
and then agencies to also go through a much faster approval
process versus what would normally take probably a couple years
for procurement within their agencies to actually work.
Mr. Connolly. And Nick and Mr. Dodaro, just to show the
direct correlation with COVID-19 relief funding, clearly IT
plays an integral role in delivering the benefits we are voting
for. Is that not correct?
For example, we asked the SBA back in the spring to
increase its lending 30-fold in one month. So, we went from a
$20 billion a year loan portfolio for SBA for small businesses
for a year, $20 billion, to $600 billion in one month. And its
IT system, eTrans, could not handle the volume, the demand, and
the program changes for eligibility and review that Congress
mandated in the Federal law.
We saw a similar pattern in the 60 different IT systems at
IRS that got overwhelmed with family payments, child support
payments, as well as doing its job with respect to tax returns.
And of course, at the state level, it has been a nightmare,
frankly, because of IT systems being old and legacy laden in
terms of unemployment insurance benefits.
But could you comment just a little bit about that, how the
pandemic, how TMF is so necessary as part of the COVID-19
response because we have seen the creakiness and the fractures
in IT systems that are directly related to the missions for
which we need them, we depend on?
Mr. Dodaro. No, that's absolutely right. I mean, basically,
there was serious strain on those systems to just conduct
normal operations. And what we did was we layered on top of
that, you know, trillions of dollars to be spent in a quick
period of time, and therefore, it took already-stressed systems
to the breaking point, to the brink.
And so you need some help and relief in those areas. And
the state unemployment systems are 40 years old in some cases.
Mr. Connolly. Yes, yes.
Mr. Dodaro. And this is the first time as a country we've
had unemployment across so many sectors at the same time. Not
even during the global financial crisis did we have as many
sectors of the economy affected as we've had with the pandemic.
And so that's a classic glaring example. SBA is another example
where they've been unable to provide the services that are
needed in a short period of time.
The Technology Modernization Fund, as Nick alluded to,
provides a faster vehicle for getting systems in place than
going through the regular process. That was one of its virtues.
And so those things can help, particularly in a pandemic.
You know, we have the tendency to think . You know, if you
just--we just throw money at something, it's going to solve it.
But in order to do it efficiently and effectively, you need IT,
and you need the people skills in order to do it properly with
proper accountability and transparency and efficiency.
Mr. Connolly. Well, I know you are going to the Senate
today, and I hope you will take that message to our colleagues
in the Senate, who thought that the TMF, the Technology
Management Fund, was unrelated to COVID and at one point zeroed
it out, to the horror of the chairwoman and myself and my
ranking member Mr. Hice and I think Mr. Comer as well.
So, thank you for that testimony, and thank you, Madam
Chairwoman, for the indulgence.
Chairwoman Maloney. Thank you. The gentleman yields back.
The gentleman from Texas, Mr. Cloud, is recognized. Mr. Cloud?
Mr. Cloud. Thank you, Madam Chairwoman.
Thank you, Mr. Dodaro, for being here.
As has been said a number of times, I can't think of a more
important committee hearing for us to have. I look forward to
this each time, and appreciate you coming here and presenting
the findings of your report and thank the chairwoman's latitude
in giving us room to really address this.
You know, I would say the one thing I wish is that we have
more of these, and that believe your report came out Friday, or
at least that is when our offices--they were distributed to our
offices, and so it would be wonderful to have even more time to
dig into these issues and get down to the details of it.
Because as you mentioned a number of times, congressional
action is so important, and we want to make sure we get that
right and get the details right. And so I appreciate you being
here.
You know, Last time when you met here, I think we were $22
trillion in debt. We are just about--I checked out the U.S.
debt clock this morning--about to hit $28 trillion, and that is
before the $1.9 trillion bill that is working its way through
Congress right now.
And it has also been mentioned when you talk back home
about to even begin to make the list, you have to be potential
wasting $1 billion. It has been said years ago I think that you
spend millions and millions, soon it adds up to real money. We
are to the point where it is you spend billions and billions,
sooner or later it adds up to real money. But that is where we
are.
I would note, is debt or interest considered in your
report?
Mr. Dodaro. Yes, I have a special report that I issue every
year on the fiscal health of the Federal Government. That will
be coming out in the next month or so. And you know, I
basically said in that report that our Government is on a long-
term unsustainable fiscal path.
I've called for reforms to how we set the debt ceiling,
which really doesn't control the debt, and it causes problems
when it's not raised in time. Because all the debt ceiling does
is authorize Treasury to borrow the money to pay for the bills
Congress has already appropriated and the President signed into
law. And there can be disruptions in the Treasury market and
increasing cost.
But we need to do everything as a country now to deal with
the COVID-19 healthcare crisis and to deal with our economy and
get it back in a robust manner. But as soon as that happens,
we've got to quickly turn our attention to having a plan, which
I've called for now for four straight years, to deal with our
long-term problems.
There are problems. Our Highway Trust Fund is insolvent
this year. Congress has been supporting it with other funds.
It's not self-sustaining, the way it was initially intended.
There's a gap there of about $195 billion over the next few
years.
I mentioned Medicare. By 2024, only have 83 cents to pay on
the dollar for the hospital trust fund. And Social Security by
2031 will only have enough money to pay 75 cents on the dollar.
Mr. Cloud. It seems to me, you know, this being a report on
waste, fraud, and abuse, and the potential thereof, that every
dollar we spend on interest is wasted. It doesn't go into any
sort of programs, and of course, interest is about to outpace
military spending even, and that is totally crowding out any
sort of discretionary funds that we have.
Do you know how many Federal programs exist? This is a--
this is a number I have been trying to get for a long--do we
have a hard number?
Mr. Dodaro. No. There is not a hard number, and I've been--
--
Mr. Cloud. Are agencies----
Mr. Dodaro [Continuing]. Recommending this for years.
Actually, Congress passed a law that required OMB to develop an
inventory of programs.
Mr. Cloud. Right.
Mr. Dodaro. That law is now about 10 years old, and we
still don't have an inventory of Federal programs. Now there's
a Taxpayers Right-To-Know Act that passed recently----
Mr. Cloud. Right.
Mr. Dodaro [Continuing]. That would require them to do
this. We've given them some advice on how it could be done.
They've tried it before, but it hasn't worked. They let each
agency come up with their own list. And so we need a program
inventory.
Mr. Cloud. And our office has presented legislation that
would implement a Federal sunset commission, for example, that
would review these. But the first step is counting and figuring
out how many programs and agencies we have for review.
Mr. Dodaro. Right.
Mr. Cloud. And it seems like that it is a difficult----
Mr. Dodaro. We've done that in some areas, but it takes a
lot of work. And as soon as you have it, it's outdated.
Mr. Cloud. Yes. I want us to talk a little bit more on
something that Mr. Hice talked about earlier, and that is just
the general how do we incentivize performance? For example, in
business, you have built-in incentive for efficiency and
performance and getting those metrics and advancing those
metrics. In a bureaucracy, it seems like everything is against
that.
You know, everything--there is no incentive and, actually,
a disincentive for, if you know if you do something efficiently
your budget gets cut, and if you do something poorly, then we
come back to Congress and say we need more money to do it. And
then just there has been sometimes, unfortunately, a sense in a
bureaucracy that the administration, whichever administration
it is, is temporary, the bureaucracy is permanent. We will just
kind of wait this out, live this out.
How do we shift that? What are some recommendations you
would have for us in being able to deal with nonperformance and
be able to return, whatever your view, right or left, on the
issue of just being able to return value to the taxpayer?
Mr. Dodaro. Yes, right now, the incentives are reversed.
When a program is created in the Federal Government, you have
to take extraordinary measures to stop that program from
continued funding. There's an assumption that it should be
continued funding.
And so if GAO comes up with an idea or the IGs or somebody
else, the onus is on us to say you shouldn't fund it at that
level. The onus ought to be on the agencies to say that the
program is effective, we've evaluated it, it's meeting its
objective, and here's when we're done.
Most of these programs, not only do we not know the number,
we don't know whether they're effective or not because they've
never done program evaluation. Now Congress passed legislation
recently to go to evidence-based decisionmaking about programs.
And so it's very important that these program evaluations be
done to see if they're operating effectively.
So, Congress needs to change the--flip the script and
require a clear record of positive performance to continue
funding at the same level and not assuming that it will
continue.
Mr. Cloud. Sounds like a good case for a sunset commission
to me, among other--I have a whole slew of other questions on
specifics of the different programs, but thank you for the
indulgence on the time. And hopefully, we will be able to have
more hearings on the specifics of this list going forward to
address these.
Thank you so much, Madam Chair.
Mr. Dodaro. Thank you.
Chairwoman Maloney. Well, all questions can be put into the
record to get answered later, too.
Mr. Cloud. Right. Well, I will do that, but the discussion
now.
Chairwoman Maloney. The gentleman from Maryland, Mr.
Raskin, is recognized for five minutes. Mr. Raskin?
Mr. Raskin. Thank you, Madam Chair, and thank you for this
excellent hearing.
I want to talk about climate change, which is not only a
civilizational emergency, but it is also a fiscal catastrophe.
America has incurred $1.24 trillion in economic damages since
2005 through various climate disasters and calamities. We have
seen millions of acres of forest in California lost to
wildfire, record drought across the country, record flooding
across the country, especially in coastal cities, a dramatic
rise in sea level, millions of climate refugees from around the
world, record velocity hurricanes, and so on.
You call, Mr. Mihm, for a National Climate Strategic Plan.
You call for prioritizing national climate resiliency projects,
and you also call for a new pilot program for community climate
migration. I wonder if you would explain to us what that means?
Mr. Dodaro. Yes, I'm going to ask Mr. Gaffigan, who's our
expert in that area, to respond to that question, Congressman.
Mr. Raskin. Sure.
Mr. Dodaro. Mark?
Mr. Gaffigan. Thank you, Congressman. Thank you,
Congressman Raskin, for the question.
Yes. When we talk about the migration program, there are
communities throughout the country that are particularly
vulnerable to climate change. Communities in Alaska, we did a
recent report, looked at communities in Alaska. Maryland, the
Eastern Shore and your home state, as well as other parts of
the country. And there is a need to prioritize the help that we
can provide these communities and not leave them alone as they
address these challenges.
Mr. Raskin. In 2015, the GAO recommended that the Federal
Government come up with a plan to provide information to state,
local, county decisionmakers, as well as private sector
decisionmakers, to educate people about the dangers of climate
change and also to promote climate resiliency. I am wondering
whether that happened, why we need it, and also whether you
think that such cooperation and information sharing between the
Federal level and state and county and local level would better
prepare us for things like the Texas power grid disaster that
we saw last month because of extreme weather in Texas that
disrupted the lives of millions of people?
Mr. Dodaro. Yes, let me just say, Mark, and I'll turn it
over to you. Congress passed an important bill that began to
move in this direction back in the 2018 Disaster Reform
Recovery Act that required the agency, FEMA, to create a grant
program with funding for disasters to allow resilience, to be
building in resilience up front.
For years, the Federal Government standard when there was a
disaster is build back the same as it was before, not better.
And this would help agencies--or state and local levels and
others to build more resilience in up front. It's been proven
that, you know, a dollar spent up there can save $9, $10 later
on by building resilience in up front.
Mr. Raskin. OK. And so that is really my question now, when
you are calling for prioritizing national government resiliency
projects, coordination between the Federal level and the state
and local level for community climate migration and so on, I
mean, would all of that help us to prepare for things like the
catastrophe that just took place in Texas where----
Mr. Dodaro. Yes, yes.
Mr. Raskin [Continuing]. People's lives were disrupted?
Mr. Dodaro. Yes, absolutely. Absolutely. Mark, you want to
explain a little bit better?
Mr. Gaffigan. Sure. I mean the, the information, you asked
about information, Congressman Raskin, and that has been some
worked on since 2015, but we have been kind of disappointed
that there hasn't been this national strategy that could pull
together that kind of information. We have done some work on
building resilience that sort of points to three areas the
Federal Government can help.
One is providing incentives. The other is information, but
also integration. Because not only does this need to be a whole
of government approach and all levels of government, including
tribes, but it also needs to be a whole society situation where
we address this, bringing in----
Mr. Raskin. Yes, let me pursue that for one second, Mr.
Gaffigan, because I think that the COVID-19 crisis, I hope if
it has taught us nothing else, it is that an invisible and
silent threat can shut down the country and can traumatize and
kill lots of our people. Climate change is in the same
category, isn't it? And don't we need to mobilize the whole
society to confront this danger?
Mr. Dodaro. Absolutely, yes. Yes.
Mr. Raskin. And my time is up. So, I will yield back.
Mr. Dodaro. I would just say, Congressman, in closing that
we put that on our list in 2013. We think it's important to
deal with this to limit the fiscal exposure of the Federal
Government, and the Government--Federal Government can provide
leadership, but just like on the drug misuse area, you need to
have national leadership, but you've got to have all segments
of the society involved to help.
You know, building codes and structures are set at the
local level. So, if you don't have them involved, the Federal
Government is going to be limited in what it's going to be able
to do.
Mr. Raskin. Thank you very much. I yield back, Madam Chair.
Chairwoman Maloney. The gentleman yields back. The
gentleman from Louisiana, Mr. Higgins, is now recognized. Mr.
Higgins?
Mr. Higgins. Thank you, Madam Chairwoman. I thank you,
ma'am and Ranking Member Comer, for holding today's hearing
regarding the GAO High-Risk List for 2021. Ensuring oversight
of Federal programs and American treasure should be a priority
mission of this committee. Transparency and supervision of
these programs, while time-consuming, is crucial.
Over the last 15 years, oversight of the High-Risk List has
saved over $575 billion. While large programs are created with
trillion dollar budgets, this has increased exposure, shall we
say, to bad actors, Government malfeasance, and unforeseen
consequences. This is almost predictable when we are dealing
with this much money. So, so this is an incredibly important
function, and our oversight should be 100 percent bipartisan.
And I am sensing that now.
And I would like to thank my friend Representative Raskin
for bringing up climate change, and I invite him to Louisiana,
where we have a very old saying that if you don't like the
weather in Louisiana, stick around because it will change.
Perhaps my constitutionalist friend can visit, and we will have
an interesting townhall in my district regarding----
Mr. Raskin. I am going to take you up on that, Mr. Higgins.
I would love to join you. Love to.
Mr. Higgins. Yes, sir. Always the gentleman you are, good
sir.
Madam Chairwoman, critical programs such as the Census,
Postal Service, cybersecurity, the SBA programs, PPP and EIDL,
they should remain the focus for the GAO and Members of
Congress and this committee. But I would like to focus my time
and give our Comptroller General an opportunity to respond to
some questions I have regarding specifically cybersecurity as
it relates to Government contracts and national security.
So, Comptroller General, thank you for being here, and I
would like you to give us your insight regarding what GAO is
doing, at what level does vetting take place and your own
inspections dive deep into cybersecurity-contracted entities
that deal with protecting us against intellectual property
theft, malware, and cyber espionage?
And I give you a lengthy time to respond here, sir, because
it is very important. I would like to know. The committee would
like to know. America's interest is certainly much more heavily
focused now on cybersecurity, as we should be. So, give us the
GAO perspective there, please, sir. Intellectual property
theft, malware, and cyber espionage.
Mr. Dodaro. Yes. Well, we raised this issue recently on
intellectual property, most recently with the pandemic in terms
of protecting information regarding vaccines development and
distribution. We had pointed out a lot of problems at HHS, at
CDC, the National Institutes of Health and others, and urged
them to correct the problems that they have in place to protect
the intellectual property around that area.
The Government has a responsibility for all its contractors
to make sure that they have proper safeguards in place in order
to make sure that the business they're doing with the
Government and access to the Government systems are protected.
DOD has just started a computer or cyber maturity model
accreditation to make sure the contractor systems are up to
speed. That's in its incipient stages. It needs to be developed
further.
I'd ask our expert in the cyber area, Nick Marinos, to add,
Congressman, because you're asking a very good question, and
it's very important. Nick?
Mr. Marinos. Yes, Congressman Higgins, I think you raise a
really important point. The reliance that the Federal
Government has on contractors to process Government information
is the only way that we get business done in many ways. And so
it requires Federal agencies to realize that that is their
responsibility, that they have to have the capabilities in-
house to be able to confirm that those contractors and also
vendors--so it could be the software that is being utilized--
that they have ways to verify the cybersecurity of those
products and services.
And unfortunately, as this committee last Friday showed
through its hearing on SolarWinds, you know, our--we are behind
the eight ball on this, and we continue to be, which is why
cybersecurity has remained on the High-Risk List for over 20
years now. The benefits to having some kind of a certification
process are quite significant because it would allow agencies
to have a level playing field, kind of understand, you know,
which contractors have sort of been vetted to sort of clear
those security requirements.
But on the other side, this is also a workforce issue.
Government agencies not only need to have cyber expertise
within their security operations center and within their
technical capabilities, but also within their procurement
offices. We need to have oversight of those contractors come
from individuals that are both savvy in understanding how to
administer contracts and also how to ensure that the
contractors are adhering to things like security requirements
as well.
Mr. Dodaro. But we're going to be taking, Congressman, a
closer look at this area because the concern I have is that the
agencies haven't been able to fix the systems properly that
they have responsibility for, let alone oversee the
contractors. So, I think you got a potential double
vulnerability here that needs to be more deeply investigated.
Mr. Higgins. Thank you, sir. I very much appreciate your
very thorough response.
And Madam Chair, I look forward to further discussions on
this issue, and I yield. Thank you, Madam.
Chairwoman Maloney. The gentleman yields back. The
gentlelady from California, Ms. Speier, is recognized.
Ms. Speier. Thank you, Madam Chair.
I concur with all of my colleagues that this is one of the
most important hearings we have every two years.
Mr. Dodaro, once again, you are a jewel to the Federal
service, and I thank you for the almost a generation that you
have been at GAO.
I would like to start off by suggesting something. I want
to associate myself in particular with members on both sides of
the aisle, but also specifically the gentleman, my good friend
from the state of Tennessee, Mr. Cooper. I think that there are
ways of highlighting your work that would be very effective,
and I would like to make one recommendation, Madam Chair.
There is always low-hanging fruit, and it may not be over
$1 billion. What if we were to create--and Mr. Dodaro, this is
where you would come in--a bushel of low-hanging fruit. And I
just looked it up, and a bushel is 32 quarts. So, if we
identified 32 programs or fixes that we should make, that could
be real money, and I would like to recommend that, Madam Chair,
as something that we could do.
As we talk about the SBA, in your report you made reference
to the fact that there is not a review of loans that are under
$2 million. Do you think that number should be lowered and we
should demand that Treasury look at smaller loans?
Mr. Dodaro. Yes, I think there should be. Not each
individual loan. What Treasury said is that they want to look
at every loan over $2 million. Our view was that SBA needed to
have some plan on a sampling basis or some risk analysis to go
in and look at the other loans as well, not each and every one
of them.
And they do have a plan to look at loans under $150,000,
which is many of the loans are at that level, before they give
forgiveness for the loan. And so, but we've just gotten their
plan. We haven't looked at it yet. But it's based upon a risk
analysis and then a sampling of the loans, from what I
understand.
Dan Garcia-Diaz here is our expert in that area. Dan, do
you have a comment on that, please? I think you're on mute,
Dan. Your mic is not working? OK, I'll speak on behalf of Mr.
Garcia-Diaz. And so, you know, we're going to be----
Ms. Speier. I think his microphone is working now.
Mr. Garcia-Diaz. My mic is working now, yes.
Mr. Dodaro. OK, go ahead.
Mr. Garcia-Diaz. Yes. So, there is now plans for both
automated reviews and manual reviews of the different--at
different loan levels, and so we are assessing those plans
right now. But as the Comptroller General pointed out, we don't
expect a full review of all the loans, but rather to devise a
process for selecting loans and particularly flagging loans
that may have some questionable characteristics that might
further warrant review by SBA.
Mr. Dodaro. Yes, I think it's important as far as----
Ms. Speier. Could I ask a followup question? Has the SBA
detailed a clear plan on how to recover funds deemed were
fraudulently obtained?
Mr. Dodaro. Not that we've seen yet. And, I don't believe
so. But my concern here is that this program has been very
poorly managed, and we just recently got their oversight that
we called for last June. Now I can understand in March, you
know, getting the money out quickly, but you needed to have an
oversight plan in place soon thereafter.
And one of--there's been a lot of fraud in this area, both
the PPP program and the Economic Injury Disaster Loan program.
And one of the reasons I think it's important to look at loans
that are all sizes is that a lot of people committing fraud
purposely stay at a low level and try to, you know, just hit
several different times to stay under the radar screen. And you
have instances of people creating fake businesses that don't
even exist that are getting the money.
And so there have been over 140 different indictments so
far. About 40-some people have already pleaded guilty. There
are hundreds of investigations still ongoing. So, there needs
to be some money.
Now they did recover, from what I understand, about $450
million in the Economic Injury Disaster Loan program. So, the
IGs and the Justice Department are working together in this
area as well. So, we're going to be looking at it more
carefully once we get their plans and can evaluate.
Ms. Speier. Well, as they are starting to ask for
forgiveness, it is really important that we identify the fraud.
So, I hope that is part of your effort. And my understanding is
only about a third of the companies that were in the Fortune
500 list or had the ability to receive capital elsewhere
actually returned the money. So, two-thirds of them did not.
It would be helpful to me in particular, and probably to
other members of the committee, if we identified those two-
thirds of the companies that did not and create some kind of
shaming around it. I know my time has expired, but I think this
is so ripe for our continuing review this year, Madam Chair,
that we do that.
I just want to ask two final questions. You pointed out
that--do you agree that gutting the Naval Audit Service and
having less oversight of these critical programs would be
moving in the wrong direction? It is my understanding that they
have actually reduced the number of persons serving in that
capacity.
Mr. Dodaro. I'm not familiar with that situation, but I'd
be happy to take a look at it. I have been concerned about some
of the Inspector General functions across Government having
their independence undermined in a number of cases, and I'll be
happy to look into that situation and give you my assessment of
it.
Ms. Speier. Comptroller General, I would agree with you. In
fact, I think many of the Inspector Generals associated with
the military services do not have the skills at all to provide
that function. We saw that most recently at Fort Hood, where
the force IG went down and said everything was great. And then
an independent committee was sent down, and it did a serious
review and found that there was gross dereliction of duty.
So, I would encourage you to help us define how we should
maybe change Inspector Generals into civilians within each of
the services because I don't think they are necessarily serving
the American people and may be just protecting the various
services.
And finally, let me just ask you, if you haven't, to look
at the contracts for housing at bases around the country and,
in fact, around the world. I think these contracts go on for
decades. There is not accountability.
At recent visits to military bases, I have found serious
problems with lead, asbestos, mold in many of these housing
settings where our servicemembers and their families are
living, and it is the equivalent of tenement living, and I
think it is shameful. So, I hope that you will take some time
to look at that.
Madam Chair, thank you for the accommodation. I yield back.
Chairwoman Maloney. The gentlelady yields back. The
gentleman from Pennsylvania, Mr. Keller, you are now
recognized.
Mr. Keller. Thank you, Madam Chair.
This is an important hearing for us to understand which
programs and agencies need reform to improve their
effectiveness and reduce waste, fraud, and abuse in the best
interest of the American taxpayer. Pennsylvania's 12th
congressional District is home to two Federal prisons, USP
Lewisburg and FCC Allenwood, both of which have been negatively
impacted by the Bureau of Prisons inmate transfer policies and
lack of transparency with the American people.
We saw this firsthand with the BOP when they refused to
halt transfers and movement of the roughly 150,000 inmates it
is charged with securing during the early stages of COVID-19,
putting corrections officers and inmates at risk of infection
and causing further community spread. We owe it to our
outstanding corrections officers, the inmates they secure, and
the surrounding communities to work with the BOP to improve its
operations.
Mr. Dodaro, in the last five years, the GAO has made 19
recommendations related to the BOP, of which 16 have yet to be
addressed. The recommendations are largely centered on
rectifying the BOP's failure to manage its staff appropriately
and improve mental health, their failure to plan for new inmate
wellness programs that reduce recidivism, and failure to
monitor and evaluate programs which have led to wasting
taxpayer dollars. Can you say more about your ongoing and
planned work related to the prison system?
Mr. Dodaro. Yes. As you point out rightly, we've been
concerned about this. We've made a number of recommendations.
My team just recently met with the head of the Bureau of
Prisons service, and he announced he's going to create a task
force within BOP to look at the high-risk issues that we're
identifying and to begin to address the root causes of the
problem. So, I was very pleased with his initial response to
our designation that we are considering putting it on the High-
Risk List.
Our work now is focused on the FIRST STEP Act, where
Congress required a number of reforms to be put in place, and
we want to see if those reforms are being implemented properly,
and that will be the critical determinant as to whether we
officially add them to the High-Risk List or not.
Mr. Keller. So, you don't know whether or not they will be
added to the list in the upcoming two years? But I guess it
would be dependent on their performance?
Mr. Dodaro. Yes, yes.
Mr. Keller. OK.
Mr. Dodaro. And we designate, Congressman, people onto the
list out of the two-year cycle. So, if we finish our work and
we think that they should be added, we'll add them out of
cycle.
Mr. Keller. Just for the benefit of the people that might
be watching today's hearing, can you explain a little bit about
what the High-Risk List is and how an agency or a program gets
added to it?
Mr. Dodaro. Sure. The High-Risk List was created in 1990 as
a result of some fraud, waste, and abuse issues that had
surfaced at the HUD, the Housing and Urban Development
Department. There were some procurement scandals at DOD at that
time. And Congress came to the GAO, and they said, well, can't
you identify what these risks are before they get to be crisis
proportion?
And so we developed a list to identify areas in need of
fraud, waste, abuse, and mismanagement, and we started with 14
areas. Over time, we've also added areas of--areas that are in
need of broad-based transformation. In other words, there's
been circumstances that have changed that they need to make a
transformation and to develop.
For a good example is on oversight of medical products
where most of our drugs now or ingredients in the drugs are
made by foreign manufacturers, and FDA was set up for domestic
production. So, that's an area of needed transformation, and so
that helped the Congress spur that area.
We consider a number of factors, whether it has
implications for public health, safety, the economy, national
security, and whether there's a lot of taxpayer dollars at
risk. Those are the factors to get on the list.
Then to get off, you have to show leadership commitment.
You have to have the capacity, an action plan, monitor your
efforts, and actually demonstrate some success in lowering the
risk or fixing the problem to get off.
Mr. Keller. OK. Thank you. I appreciate that. We owe it to
our outstanding corrections officers, the inmates they secure,
and the surrounding communities to work on the BOP to improve
their operations.
And based upon what you laid out there as far as the risk
to taxpayers and all the items, in view of what has happened
since this Congress began, the $1.9 trillion, only 9 percent of
which is going to actually public health safety. The other 91
percent is going to Speaker Pelosi's payoffs, one of them being
a subway in Silicon Valley for $140 million and also $12
billion going to foreign governments rather than helping the
American people.
In addition to that, we are talking about H.R. 1, which is
going to take taxpayer dollars and use them to fund elections
so that more people, more American people will be watching more
election commercials and so forth at election time. Do you have
any plans on putting Congress on that list to see what reforms
could be done?
Mr. Dodaro. There are limits to our authority.
Mr. Keller. That is unfortunate.
Mr. DeSaulnier.[Presiding.] The gentleman's time has
expired. I will now recognize the gentlelady from Illinois for
five minutes. Ms. Kelly?
Ms. Kelly. Thank the Chair.
Mr. Dodaro, I would like to thank you for all the work your
agency is doing to evaluate our response to the coronavirus
pandemic. This vital work is helping policymakers at all levels
of government understand the challenges we face and inform our
efforts to address them.
In that vein, I would like to ask you about a topic that
many of my Democratic colleagues and I have noted must play a
critical role in informing our pandemic response data. I am not
talking about the scientific data that support the
implementation of public health measures, like mask wearing and
social distancing, but also the data that helps us to
understand the people and places hardest hit by COVID-19.
Your report today references an earlier GAO report from
January 2021, which notes that data collection by state and
local entities, as well as HHS, is ``critical to inform a
robust national response.'' Can you briefly explain why good
data is so vital to Federal, state, and local decisionmaking?
Mr. Dodaro. Well, first, this pandemic has laid bare some
of the frailties of our highly decentralized public health
system and the need for better data in order to respond to the
public health outbreaks.
First, you need to find out, you know, there wasn't clear
and complete data on testing. So, you need to know how many
people were being tested and where. Where there were outbreaks.
So, how to target assistance to those outbreaks. The
disproportionate effect that it was having on people of color
and what exactly was happening in those areas.
I'll ask Ms. Clowers to elaborate a little bit further, but
this is an area where we've quickly noted--and this is a real
concern going forward. We need to invest in more public health
surveillance, operations, in order to be efficient and
effective about our responses. Nikki?
Ms. Clowers. Yes, sir. Congresswoman, as the Comptroller
was saying, the system is fragmented, and so the data is
collected by different actors at the Federal level, as well as
state and local. And because of that, they are often using
different definitions of the data.
So, even when there are efforts to collect data from
different sources, you roll it up, it is incomplete, it is
inconsistent because we haven't used the same standards. And so
we have made recommendations to the Government to address this.
Because to your point, it is critical that we have better data
so we can spot problems and take the corrective action needed.
Without the data, we can't make those mid-course corrections.
And to the point the Comptroller General made as well,
COVID has laid bare the disparities in health outcomes that we
are seeing. And again, we need better data on that. For
example, right now, in terms of vaccine, vaccines rates, about
50 percent of all of that data is missing race and ethnicity
information. We need better data on that so we can better
target populations to make sure that they are having the right
access to care and to the vaccines.
Ms. Kelly. Your report also notes the need for HHS to have
strong, clear coordination with states, territorial, and tribal
governments and the public as we work to distribute and
administer the vaccines. You reference the agencies'
responsibility for managing a national evidence-based campaign
to increase awareness of the safety and efficacy of the
vaccines, particularly in communities with low vaccination
rates. Why is this initiative so important, and what can HHS do
to make sure it is as successful as possible?
Mr. Dodaro. Nikki, please?
Ms. Clowers. Yes. A critical piece is involving the state
and local officials. They play a key role in any type of the
public health measures that we are taking, but also,
importantly, the vaccination efforts. And that is why we
recommended in September 2020 that the Federal Government
needed to develop a distribution strategy which included
outlining the communication with and obtaining input from state
and local governments and ensuring that populations are
reached.
You know, it is the local governments that understand their
communities, their citizens, and can help ensure that we reach
those populations in getting the vaccine out, getting the word
out about the vaccine and the benefits of having--of taking the
vaccine.
Ms. Kelly. It does seem like a more comprehensive data
collection would aid our efforts to understand systemic racial
disparities in the United States and actually advance reforms
to achieve health equity.
With that, thank you so much to the witnesses and your
patience, and I yield back.
Mr. DeSaulnier. I now recognize the gentleman from Arizona,
Congressman Biggs.
Mr. Biggs. Thank you very much, Mr. Chairman.
This is at least the third hearing I have participated in
since coming to Congress related to the GAO's High-Risk List,
and each year, I see many of the same agencies and programs in
the report. For example, I served on the House Science, Space,
and Technology Committee my first two terms. So, I am very
familiar with the Environmental Protection Agency's Integrated
Risk Information System, or IRIS, which receives very brief
mention on pages 31 and 32 of the report.
The IRIS program was meant to be a clearinghouse of sorts
within EPA for consolidating data and reporting on chemical
toxicity. The problem, though, is that many of the program
offices within EPA, for example, the Office of Chemical Safety
and Pollution Prevention and the Office of Water, have already
been doing their own research and integrating their findings
with other departments. So, in other words, IRIS is an
unnecessarily duplicative super-structure.
When I chaired the SST Environment Subcommittee, I
advocated for eliminating IRIS and returning more work to the
EPA program offices. For those who are curious, I have also
introduced a bill to achieve this result, H.R. 62, the
Improving Science in Chemical Assessments Act.
Going back to the IRIS references in the GAO's High-Risk
List, the report accurately identifies a major problem with
IRIS stating that the program did not issue a completed
chemical assessment between August 2018 and December 2020. The
report then goes on to suggest that the failure of IRIS was
rooted in larger faults with EPA because the agency did not
indicate, and I am quoting here, ``did not indicate how it was
monitoring its assessment nomination process to ensure it was
generating quality information about chemical assessment
needs.''
Further, the report suggests EPA ``lacked implementation
steps and resource information in its strategic plan and
metrics to determine progress in the IRIS program.''
Maybe if EPA were better at monitoring its assessment
protocols, we would have a better IRIS. That is possible, I
suppose. But again, I posed a much simpler and more cost-
effective solution of eliminating IRIS altogether, and that
speaks to a larger issue I have with the GAO High-Risk List.
It doesn't seem to offer many recommendations to fully
eliminate some problematic programs, even though that course
may, indeed, be the best option in some cases. Or maybe, quite
frankly, in many cases.
Mr. Dodaro, is there a reluctance on your agency's part to
make recommendations for the full elimination of consistently
problematic programs, such as the IRIS program?
Mr. Dodaro. Not if we have the evidence necessary to
support that. We've not looked at the IRIS program in the
context of what you're mentioning, and let me ask Mr. Gaffigan
if he has a view on that matter.
Mr. Gaffigan. Yes, thank you for your question, Congressman
Biggs.
You know, there are many ways the assessments can be done.
The current process, as it is set up, allows for a nomination
process, it did at one point, and for these assessments to be
done. Our main point is the assessments aren't being done. And
whether it is done in the program offices or at IRIS, there is
a need to commit the resources to it.
And so, you know, that is an option going forward. The
bottom line now is the assessments are not getting done.
Whether it is done by an IRIS program or another alternative,
as you suggest, those are all viable ways to do it. It is just
not getting done right now.
Mr. Biggs. Thank you. I appreciate the answer to the
question. And rather than droning on further about the IRIS
program and its need, I would suggest that as we look forward,
we might--I would appreciate recommendations such as in the
IRIS program, which has been so problematic and so duplicative,
maybe--maybe viewing it from your perspective of whether that
program should actually be eliminated or go forward.
And so I would ask for that request. And then I would just
say that the IRIS program has been bugging me, actually, as you
can tell, for about four years now because it is duplicative. I
think it needs to go away. I think we can accomplish this more
efficiently. And if resources need to be redrawn there, we can
do that.
And I appreciate your comments, Mr. Dodaro and also Mr.
Gaffigan. And with that, Mr. Chairman, I will yield back.
Mr. DeSaulnier. Thank you, Congressman. I now recognize the
gentlelady from Michigan, Ms. Tlaib, for five minutes.
Ms. Tlaib. Thank you so much.
I think it is important to say to my colleagues across the
aisle, you know, the problem isn't IRIS. The problem is
Republican refusal to believe in science and take climate
change seriously. It is no coincidence that the EPA failed to
do its job under the Trump administration.
As you all know, I represent a zip code that is the most
polluted zip code in the state of Michigan. So, climate change
is here, and its impacts are becoming more and more devastating
with each passing year.
So, we must stop weighing whether or not we will act on
climate change by how much money it will cost our Government
and big corporations and start measuring the substantial
expense of this country's inaction on climate change on
communities across the country, especially our black, brown,
and low-income communities.
And we must also focus on detrimental health impacts
resulting from our reliance on fossil fuels. The child with
asthma who is forced to miss school because their house is
surrounded by corporate polluters, and this is a real fact that
happens in my community. A third of a class will raise their
hand and say they have asthma.
The family who has uprooted everything because of constant
flooding. That is happening in my community in the Dearborn
Heights neighborhood. Or the neighborhood block that has been
completely devastated by respiratory diseases and cancer
because of dirty air.
So, Mr. Dodaro, the Environmental Protection Agency's
Integrated Risk Information, the IRIS system is supposed to
assess the health hazard of chemicals in the environment to
inform all of us so that we can make much more informed
decisions on our environment policies and regulations to keep
our communities safe. However, the GAO report states that, and
I quote, ``EPA's agency-wide strategic plan for fiscal years
2018 through 2022 does not mention the IRIS program at all.''
So, I am wondering, and furthermore, I know the report also
notes the astonishing fact that the IRIS program had not
completed a single, not one, chemical risk assessment between
August 2018 and December 2020. So, Mr. Dodaro, is it fair to
say that these assessments can literally be life or death for
communities like mine because they identify chemicals and
pollutants that pose potential fatal adverse health effects?
Mr. Dodaro. Yes. Basically, the Government can't take
informed action without a thorough assessment, now whether it
comes from IRIS or somewhere else. But I would note, we rated
the EPA area as an area that regressed because they were
proposing, the administration had been proposing to cut the
IRIS budget, but Congress kept reinstating----
Ms. Tlaib. By 34 percent. Isn't that correct?
Mr. Dodaro. That's correct. But Congress reinstated the
funding, and so that's the reason we didn't rate them down in
leadership. What we rated down is monitoring and an execution
area.
Mark, do you have any other thoughts you want to mention?
Mr. Gaffigan. No, I think that is true. And again, we would
just like to see the assessments done because they are
important to everyone's health. And you know, how we do that,
that can be discussed, and there are good options.
The other thing I would mention, Congresswoman Tlaib, is
the issue of environmental justice. We did a report in 2019
that pointed out the interagency working group. There are 16
agencies working on environmental justice issues, and many of
them had done some individual plans, but we found that the
plans were not updated. There was a lack of performance
measures around the issue of environmental justice affecting
particularly communities of color, and that is a huge need
going forward.
Ms. Tlaib. Yes. I really would urge my colleagues, and this
is sincere, come visit my district. I have given a number of
tours, what I call the ``toxic tour.'' Come breathe the air.
You can smell it in the neighborhoods I represent. Meet your
fellow Americans that don't have access to running water in the
richest country on Earth.
Come and tell us to the face of, again, your fellow
Americans and that they are trying to raise their children that
it is too costly to protect the climate, that it is too costly
to address climate or environmental toxins and to really combat
corporate greed that is so interconnected to a lot of these
decisions that were made by the Trump administration, including
missing deadlines and so forth.
Because that is exactly what our Government says again and
again and again to residents like mine through these failures
is that it is OK that they aren't breathing clean air. It is OK
that their lives are shortened because we are doing nothing on
these issues.
So, I really thank all of you for your report. I know there
was a number of things I wanted to ask in regards to missing
deadlines and some of the lack of prioritizing these issues,
but again, I really appreciate and appreciate the chairwoman's
intention in making this a critical issue to address. So, I
really appreciate that.
Thank you, and I yield.
Mr. DeSaulnier. Thank you. And the chair now recognizes the
gentleman from Kansas, Mr. LaTurner, for five minutes.
Mr. LaTurner. Thank you, Mr. Chairman. I want to thank you
for holding this important hearing to help the committee to
really focus on its primary mission to investigate, locate, and
root out all fraud, waste, and abuse from the Federal
Government, an enormous task already, with expected F.Y. 2021
budget outlays nearly $6 trillion, but one that has been
greatly complicated over the past 12 months with soon to be $2
trillion in new spending for COVID-related and mostly unrelated
spending.
I want to applaud the Comptroller General for his 300-page
report detailing just how much Congress is failing in this
central mission of making sure that every hard-earned taxpayer
dollar is being spent in a responsible and worthwhile manner.
But this is far from a partisan issue. Both sides have failed
in cleaning up this mess. We know that during the past 15 years
alone, this effort by GAO has saved nearly $575 billion,
including $225 billion just these past two years.
I am afraid to even consider what percentage of the total
Federal budget is lost to waste, fraud, and abuse. I can only
imagine. Now, more than ever, with new programs created by the
CARES Act, including the roughly $350 billion Provider Relief
Fund and the nearly $750 billion Paycheck Protection Program,
it is critical that Congress and in particular this committee
work together to ensure these new moneys are going to people
who have legally demonstrated they are qualified to receive the
funding.
But that is not all. I especially want to touch upon the
growing unemployment claims fraud scandal that has impacted our
Nation and, frankly, robbed my home state of Kansas. Last year,
Congress authorized the expenditure of hundreds of billions of
dollars for both the Federal pandemic unemployment compensation
program and the pandemic unemployment assistance program for
self-employed workers.
This dramatic increase in funding has overwhelmed state
systems, including Kansas, that were wholly unprepared and
failed to respond to the wave of fraudulent claims after
several red flags were present and obvious. In Kansas, we lost
an estimated $600 million in false claims, according to a
legislative post audit report released last month. That is 24
percent of claims. This is money we are all likely to never get
back. Nationwide, the U.S. Department of Labor believes the
figure is roughly $63 billion during this last year.
Madam Chairwoman, I would like to submit the Kansas state
audit report and a Kansas delegation letter to Governor Kelly
for the record.
Mr. DeSaulnier. Without objection.
Mr. LaTurner. Thank you.
While I understand these are state-run programs, it
involves billions of Federal taxpayer dollars with language
requiring certain integrity measures that are put in place. So,
I would appreciate your perspective on this subject.
It is my understanding that the GAO threshold to make the
High-Risk List is $1 billion. Help me understand why the
various Federal pandemic unemployment system programs, with an
estimated fraud level of $63 billion for 2020, didn't make your
list.
Mr. Dodaro. Well, we considered that, and they're going to
continue to look at that issue. We haven't had a chance to look
in depth at it at this point in time, but we will consider it
as we move forward.
Mr. LaTurner. Could you talk about the process of
consideration and what facts you are bringing to bear in making
that decision?
Mr. Dodaro. Yes. Well, we have work underway looking at the
system, at what needs to be done in order to fix it. In a lot
of cases, one of the factors that we consider in putting
something on the High-Risk List is that GAO has some
recommendations for how to address that issue. Now given that
most of these unemployment systems are state by state
determined in terms of the criteria for looking at them and
also the factors, so there could be different reasons in each
state. So, we're going to have to look very carefully at this
and decide whether we have, after we looked at it carefully,
have appropriate recommendations to make so that we could point
to what needs to be done that gets the agencies off the High-
Risk List.
It's not enough to just say there's a big problem, but we
have to have something that we bring to bear in order to say
how it should be fixed. And in this case, the fixes are state-
centric, and so we need to really inform ourselves on how to go
about this. We typically don't have--make recommendations to
individual states to fix their systems.
Mr. LaTurner. Could you give me--my time is running out.
Could you give me a timeframe, and are you willing to come back
to this committee and report any findings? A timeframe for the
decision?
Mr. Dodaro. Yes. Well, I'd have to get back to you on the
timeframe. I'm not sure exactly where that work stands right
now, but we'd be happy to come back and talk about it, though.
I'll provide a timeframe for the record.
Mr. LaTurner. Thank you for your time, and thank you, Mr.
Chairman.
Mr. DeSaulnier. I thank the gentleman. And I will recognize
myself at this time. Just want to add my congratulations to a
job well done, as every year, to you and your staff. Really
terrific work.
On the comments from my friend across the aisle from Texas,
we would like to work with you and him on the issues of
incentivizing good performance and performance-based budgeting.
When I was on the executive board of the National Conference of
state Legislatures, we did a lot of work with your colleagues,
or they did, to try to get those best practices. And I will say
that very successful program here in my district years ago when
I was a county supervisor, we were actually able to target at-
risk kids by Census track over time.
But the funding and the incentives were given us by
foundations, and it put us in a position to save quite a bit of
money now 20, 25 years later to look at what we did and really
become a national model. So, I would love to work with you on
that. Incentivizing good performance and reinvesting those cost
savings are of great interest to me.
Specifically, I would like to talk to you about your report
on the Office of National Drug Control Policy. We know opioids,
and this committee has done a lot of work in this area, and
thank the chairwoman for bringing Purdue Pharma and the
Sacklers here for a memorable hearing just recently. But the
costs of drug abuse in this country, $600 billion, according to
NIH, and treatment is--helps us $12, for every $1 spent saves
us $12.
So, Mr. Dodaro, you recognized this before the pandemic,
but you held off the release of your recommendations, as I
understand it. Can you talk a little bit about that and the
context, as your staff has said, in this terrific book that I
just finished, ``Diseases of Despair,'' about the continued
increase in diseases of despair--suicide, alcoholism, and drug
abuse--and not just the human suffering, but the cost to state,
local government.
So, COVID has made a very difficult problem worse. Could
you talk a little bit about that and then maybe specific
comments about the previous administration, in my view, really
poor performance, and the metrics we need to improve the
National Drug Control Office?
Mr. Dodaro. Yes. First, we did designate our intention to
add it formally to the High-Risk List in March 2020, but we did
not withhold our recommendations. I mean, we made specific
recommendations at that point about what needed to be done to
make the strategy, the national strategy meet all the statutory
requirements. We felt it was appropriate to not distract from
the efforts to focus on the pandemic at that point in time. So,
we didn't withhold the recommendations, just the formal
designation to add it to the High-Risk List.
The pandemic, you know, complicated. We did realize, even
back last March, that the pandemic was likely going to
exacerbate some of the underlying problems that lead to drug
abuse in the first place, which are unemployment, isolation,
depression, and other things that were happening potentially to
people who were vulnerable to those type of issues during the
pandemic or a lockdown period of time. And indeed, some of the
early data that's available from CDC show an increase in the
March, April, May timeframe that I referred to earlier, during
the--the preliminary data on the amount of COVID deaths due to
overdoses. Not COVID deaths, due to--deaths due to overdoses at
that point in time.
Now some of the things that need to be done that are
missing is the law calls for a five-year resource plan for each
area that's required. That hasn't been done yet, and these
problems are not going to get solved looking at it only a year-
by-year basis. You need to have a long-term plan.
The treatment area, there's only--there's 30 percent of the
counties in the United States that don't have access to
substance abuse disorder treatment for people so that there's a
huge problem there as well. There needs to be more
coordination. We pointed out where some of the agencies are
pursuing plans, but it's not clear how their plans contribute
to the national strategy, and there needs to be more evaluation
of what's working and what's not working and more engagement
and coordination with the private sector, state and local
governments, healthcare providers, law enforcement, and others
because this is a multifaceted problem.
Mr. DeSaulnier. I really appreciate it and look forward to
continuing the conversation. I do want to mention legislation
that was passed last session that was spearheaded by our former
chair Elijah Cummings to help facilitate with the coordination.
I hope we can work on that, make that successful with this
administration.
Thanks again so much.
I would now like to recognize the gentleman from Wisconsin,
Mr. Grothman, for five minutes.
Mr. Grothman. Yes, I would like to talk about the drug
abuse programs myself again. I wish it was true that you could
spend $1 and save $12. I always wonder if those studies are
right on point, you know, that you can spend $1 and save $12.
But in any event, over time, seems to me we have spent more
and more money on drug abuse, at least it seems to me that we
brag about the amount we are spending. Nevertheless, we still
are around 80,000 lives lost a year, which is really tragic.
And I would think, given all the money we are plowing into
this, that we would begin to make some progress.
We all have--or at least I have reasons why I think we are
not doing a very good job here. But given that we keep throwing
more dollars at it, are there any programs in the drug abuse
field that we feel have failed and have eliminated or cut back
on? Given that we hit records every year in the number of
people who die, or at least recently we do, I would assume some
of these programs are failing.
Mr. Dodaro. Well, one of the areas we point out is a lack
of evaluations in some of these programs. Let me ask Ms.
Clowers, who's director of our healthcare area, if she wants to
add anything.
Ms. Clowers. I would add two points. In terms of the ONDCP
strategy that has been put out, this is an area where we have
pointed out the strategy needs to be improved, that they do
need performance measures for efforts that are ongoing so we
can assess whether programs are making progress or making a
difference.
The second point I would mention is that we do have ongoing
work looking at the different grants that are being provided to
states to help combat the opioid epidemic, and we will be
looking to examine what we are getting with those funds.
Mr. Grothman. Yes, I mean, it frustrates me because this is
an issue that I care deeply about. And of course, because
everybody cares for it, you keep voting for more and more. But
when you--and I assume there is a lot more money being spent
today than, say, six or seven years ago, but it seems the
number of people who die just keeps going up. And part of it
could be the COVID, but in any event, when you plow this much
money into a program or programs with a promise that we are
going to fight this overdose stuff and it keeps going up, is
anybody ever weeding out the bad programs so we have money left
for the good program? And you are telling me that doesn't
happen?
Mr. Dodaro. Not as rigorously as it should. That's one of
the reasons we elevated it to the High-Risk List is to make
sure that there is more focus on this and there is more
evaluation of these programs, so we can tell what works and
what doesn't work and make adjustments to those.
Mr. Grothman. Yes. And as far as you know, there are no
programs that categorically are wiped out for being no good, or
when we send out the grants, we are not going to send it to
these programs. It is just kind of up, up, up all the time?
Mr. Dodaro. Well, I'll go back and take a look at that and
see if there's anything that we've done along those lines, and
I'll provide an answer for the record.
Mr. Grothman. Yes. We have had several programs on the
High-Risk List since the 1990's, which is concerning. You know,
when we identify a problem, you would like to think in 30
years, we would begin to address it.
One of those are improper payments to Medicare, and that
can be wildly expensive, of course, because doctor bills are
wildly expensive. But it is still on the program 30 years
later. Can you tell us why it is apparently not addressed or
not addressed enough to keep it off the list?
Mr. Dodaro. Actually, the improper payments are coming down
in the Medicare area. So, I've been pleased that there's been
some progress in that area.
It's also on the list because of the restructuring and the
move from paying people for the quantity of services to get the
quality of healthcare in there as well. So, there are some
reforms that need to be made. We've made some recommendations
to the Congress to give authority for recovery auditors to look
at things prepayment. We've also suggested that CMS more use
prior authorization before they make payments and to expand--
they've done this for pilot programs that have been successful.
Where they've saved money, prevented improper payments, and
it's not affected the ability of people to get services, that
they expand that more often.
Actually, the bigger problem now is Medicaid improper
payment. Medicaid improper payments for last year over $85
billion, compared to $42 billion in Medicare. So, Medicare is
coming down. It can come down further with implementation of
our recommendations. Medicare is dramatically increasing--
Medicaid, rather, excuse me.
Mr. Grothman. They are similar programs. Why is Medicaid
such a bigger problem than Medicare?
Mr. Dodaro. Well, you have a lot of different state
programs and rules. Each state has their own different Medicaid
program. Medicare, you have more uniformity across the program,
and it's run by the Federal Government versus a partnership
with the individual state programs. We've expanded Medicaid
quite a bit in the Affordable Care Act and also with the recent
pandemic. And so the programs are changing quite a bit.
One of the reasons it's going up so fast now is that some
of the states aren't doing enough to enroll providers and make
sure that the providers that are enrolling are eligible to
provide services under the program. So, and the managed care
portion of Medicaid, which started out as a small program, is
now about half of the spending, and there is still not enough
scrutiny, in my opinion, over the managed care portion of
Medicaid.
Mr. Grothman. Thank you.
Chairwoman Maloney. [Presiding.] Thank you. The gentlelady
from California is recognized. Representative Porter?
Ms. Porter. Thank you very much, Madam Chair.
Mr. Dodaro, is it correct that the Federal Government fails
to collect taxes that it is owed to the tune of about $400
billion a year?
Mr. Dodaro. That's correct. That's the gross amount. The
IRS is--go ahead, please.
Ms. Porter. That is the gross amount. And we call this--
this is often referred to as the ``tax gap,'' but it seems to
me it is really more like a canyon in terms of the amount of
money. So, this is one of the charts from your report, and it
shows the gap right here between the blue, which is what is
owed, and the green, which is what is collected. And we collect
about 11 percent of what--of this missing amount.
So, what your report shows is that of the $458 billion that
is this tax gap, after the IRS engages in enforcement, they
only collect this blue portion, and all of this red portion--
and that is a lot of zeroes there--$406 billion goes
uncollected. Based on the GAO studies over the years, has this
amount, this tax gap, gotten smaller? Are we tackling this
problem year after year and working on it?
Mr. Dodaro. We're not as successful as a government at IRS
that I'd like to see. The problem is not getting better. It's
stayed actually about the same over the period of time. There
are some recommendations----
Ms. Porter. So, on average, every year, we fail to collect
$406 billion?
Mr. Dodaro. Well, they think they'll collect some. The net
tax gap or what they definitely don't think they collect is
$381 billion, but you're--it's in the ballpark. So, yes, that's
true--that's true.
Ms. Porter. For a person like me, $381 billion, $400
billion, it is all just a lot of zeroes that is not being paid.
I have a question for you. In your GAO high-risk report, you
say that this is relating to staffing problems. So, has IRS
been increasing its staffing so that we can collect what we are
owed as taxpayers?
Mr. Dodaro. Staffing has only been going recently up. It's
been declining over time, and I think they're not back up to
the 2010 levels yet. Let me ask Mr. Mihm to give you an
example. But the problem is not just staffing. There are some
other things that could be done. Chris?
Ms. Porter. What are those other things?
Mr. Dodaro. I think Congress should regulate, authorize IRS
to regulate the paid tax preparers, No. 1. Some of the studies
that we've looked at using their data, in some cases taxpayers'
accuracy is more accurate than people that use paid tax
preparers, particularly in the earned income tax credit area.
Second, there ought to be more information returns prepared
so that the IRS could match data. For example, for real estate,
people that fix up their real eState property, to report that,
as well as businesses, corporations that have services. They
can report that data. The IRS could cross-check it to the
providers to see what they're reporting.
Ms. Porter. So, Mr. Dodaro----
Mr. Dodaro. There's also--yes.
Ms. Porter [Continuing]. I just have a sort of basic
question. Who benefits from failing to collect taxes that are
owed?
Mr. Dodaro. Only the people that owe them that are not
paying them.
Ms. Porter. So tax cheats, tax underpayers, delinquents,
that is who is benefiting. Who is being hurt by this failure to
collect between $381 billion and $406 billion on average a
year? Who is being hurt?
Mr. Dodaro. Well, the Americans are getting hurt. The
people that are----
Ms. Porter. Americans are getting hurt.
Mr. Dodaro. The people that are paying their taxes and the
other people that aren't paying taxes because they're too
young, but we're borrowing money to pay for things that they're
going to have to pay for in their generations ahead. So,
everybody is getting hurt by it.
Ms. Porter. OK. So, everybody is getting hurt at the
expense of tax cheats or tax frauds who are getting helped.
Mr. Dodaro, what is the GAO's motto?
Mr. Dodaro. Our motto?
Ms. Porter. Mm-hmm.
Mr. Dodaro. Accountability, integrity, and reliability is
our core values.
Ms. Porter. OK. On your recent reports, you have this
slogan, ``A century of nonpartisan fact-based work.'' Does this
ring a bell?
Mr. Dodaro. It does. This is our 100----
Ms. Porter. A century of nonpartisan fact-based work. I
wish that Congress could have that as its motto for even one
day, much less a century. Does the GAO sell T-shirts with that
motto, ``A century of nonpartisan fact-based work,'' because I
would totally buy one of these T-shirts. I would buy them for
all my family and give the money to the IRS to enforce against
collecting taxes from people who are cheating the rest of us.
With that, I yield back.
Chairwoman Maloney. The gentlewoman yields back. I now
recognize the gentlewoman from New Mexico, Ms. Herrell.
Ms. Herrell. Thank you, Madam Chair.
And thank you so much, Mr. Dodaro, for being here. It is
incredible, and I kind of want to echo what my colleague have
said. It is just almost too much for one committee hearing
because there is so much information. So, I just appreciate all
of your comments, and if I am redundant, I apologize. I ran to
vote.
But something one of my colleagues was saying earlier,
there are so many programs, and you had mentioned earlier that
it is sometimes hard to know exactly how many there are. But
are there programs that have been funded or happening for years
and years where maybe we need to take, think about maybe a
different approach? Think about things outside the box?
Maybe like Einstein says if you keep doing the same thing
over and over and you still get the same results, perhaps it is
time to change your thought process. And I am wondering, are
there things that you see that maybe Congress could be doing
very differently to help either have more accountability or
more success so that we don't see this number of programs on
this High-Risk List? Does that make sense?
Mr. Dodaro. Yes, yes. Yes, well, we have, as I mentioned,
just in the tax area, recommendations for Congress to act, to
give IRS the authority to do this. We have a number of
recommendations for Congress to act on that we think can be
helpful in helping resolve these areas.
I mentioned that we talked about the Postal Service before.
There is actually 14 of the high-risk areas that the solution
to solving that involves congressional action. Surface
transportation, Postal Service, for example. So, we've
highlight where Congress needs to act that could act on those
areas.
Now with regard to the programs I mentioned earlier, I
think Congress ought to insist on having program evaluations
that demonstrate the success of the program before continuing
to fund it often at increased levels. So that, I think, would
be a game changer that I think would get the attention of a
number of advocates of those programs to really do, you know,
investigations and evaluations.
Ms. Herrell. And I agree with that. And just looking at it
from the lens of our constituents, it is different. They are
not in the halls of Congress. They don't hear the conversations
and even understand always some of the dialog that is taking
place.
And so I can--just to kind of simple it down, I can tell
you what they will ask me in my district. It will be things
such as how are we sending money to foreign countries or maybe
for aid or for different programs, sometimes to not even
countries that are our allies, when we can see that we have
possible trouble heading our way with the Highway Trust Fund,
like you mentioned, or Social Security or Medicaid, you know,
or even updating the computer systems in the IRS.
And I am just asking is this solely resting on the
shoulders of Congress to do a better job in allocations, or is
this something that these departmental programs can come
forward with where we can work collectively? But do you see
where I am going with this? People don't understand how we are
sending so much money overseas in some cases, but yet not
taking care of, say, our infrastructure, the IT, and other
things that really have a direct impact on some of these
programs.
Mr. Dodaro. Well, you have two dimensions here. You have
the President, on behalf of the administration, recommending
funding for these programs. But the ultimate decision lies with
Congress as to whether they're going to fund the programs or
not.
Ms. Herrell. Right.
Mr. Dodaro. That's not, you know, a prerogative of my
organization. Our job is to advise the Congress and so that
they can make informed decisions. But those ultimate decisions
about the policy priorities of the Government rest in Congress'
hands.
Ms. Herrell. Right. And I am just going to shift gears just
a little bit because I come from a border state, and just can
you discuss the work of GAO as it relates to drug trafficking
across our border and areas of improvement your agency found
the Government needs to make to intercept drugs and improve
border security? Because I know that has just been issue we
have been seeing for decades, but just your thoughts on that.
Mr. Dodaro. Oh, yes. We've done a lot of work in that area
and have recommendations. I'd be happy to provide those for the
record.
Ms. Herrell. Great, great. Because it just--what concerns
me is, obviously, we have this crisis, the drug overdose, all
over the country. And certainly, we see it in New Mexico, and
we understand that a lot of drugs, illicit drugs are coming
through those southern borders, and other ports everywhere. But
I am thinking that opening the borders might compound this if
it feels like we are starting to see some improvement on that.
But I can see that Congress has a lot of work to do, and
again, I really appreciate your comments today.
And Madam Chair, I wish we had more----
Mr. Dodaro. I think the issue there, we need to focus on
the border and the interdiction of drugs. But we really need to
work on bringing the demand down. As long as there is demand
for the product, the product is going to find its way here.
Ms. Herrell. Right.
Mr. Dodaro. And that's something that we've never been
successful on in the Government as long as I've been here, and
I've been here a long time. And that's one of the reasons I
decided to try elevate it to the High-Risk List to get some
greater attention on the education and prevention front of this
thing as well as the interdiction and, of course, treatment
programs, but we haven't quite found the magic formula to
balance the dimensions to make any progress in this area.
Ms. Herrell. Right. That makes sense, and it does. And I
appreciate those comments.
And Madam Chair, thank you for the additional time, and we
have our work to do for sure. So, thank you, Madam Chair.
Chairwoman Maloney. Thank you. The gentlelady yields back.
The gentleman from Georgia, Mr. Johnson, is now recognized. Mr.
Johnson?
Mr. Johnson. Thank you, Madam Chair.
And Mr. Dodaro, thank you for being here today, and I agree
fully with you, and I would go further to say that the war on
drugs has been an abysmal failure in this country. But I want
to ask you about the FDA. The coronavirus pandemic has put
immense pressure on all facets of our healthcare system,
including the U.S. Food and Drug Administration, which has been
working, by the way, nonstop to facilitate the approval of
COVID vaccines and drug therapies. This work has been further
complicated by drug shortages and inept leadership from the
previous administration.
Drug shortages are not only a serious threat to Americans'
health and safety, they are also incredibly expensive. In 2019,
a survey found that drug shortages cost hospitals $360 million
annually in labor costs alone. Of the 6,000 healthcare
facilities surveyed, more than half faced at least 20 shortages
during the six-month study.
Today's report highlights the important role the FDA plays
in addressing drug shortages and why their role is particularly
important during a global pandemic. Has the problem, sir, of
drug shortages been more severe or become more severe because
of the COVID-19 pandemic?
Mr. Dodaro. I want to ask Nikki Clowers, the head of our
healthcare team, to answer that question. Nikki?
Ms. Clowers. Yes, I think what the pandemic has done is
shown the vulnerabilities that we have in our drug supply
chain. As many--as you probably know, most of our generic drugs
are manufactured overseas. And so whenever there is a crisis or
other disruption in the supply chain, that can affect the
availability of drugs and lead to drug shortages.
We have made recommendations to FDA to help them better
manage drug shortages. It is certainly not only an FDA
responsibility. It is a shared responsibility, and the private
sector is involved. But we think there is more that FDA could
do in terms of using data and trying to forecast where there is
different drug shortages.
We also recently made----
Mr. Johnson. OK. Well, let me stop you right there and move
on.
In 2019, the FDA's drug shortages task force put out a
report to mitigate--on how to mitigate drug strategies. How
useful were those recommendations in confronting the drug
shortage challenges posed by the pandemic under the previous
administration?
Ms. Clowers. They were useful in that providing steps that
both FDA could take as well as the private sector in terms of
risk management and better contracting.
Mr. Johnson. Was the FDA able to take those steps that were
recommended under the previous----
Ms. Clowers. They are taking----
Mr. Johnson [Continuing]. Under the previous
administration?
Ms. Clowers. They are in the process of implementing those
recommendations, and I can report back to you as we get more
information about the status.
Mr. Johnson. OK. Well, I know that you don't want to
comment about the previous administration. But the FDA was not
equipped to predict drug shortages caused by former President
Trump, who incessantly tweeted unproven assertions that certain
drugs were effective in treating COVID-19. Trump threatened the
health of hundreds of millions by spreading false information
about treatments for COVID-19 and creating mass demand for
drugs that patients with lupus or rheumatoid arthritis relied
upon.
And his assertions led to widespread shortages of those
medications across the country, and he didn't stop there,
though. He went further, contacting the FDA and bullying the
Administrator into issuing an emergency order allowing the use
of those drugs to treat COVID-19, when, in fact, there was no
evidence that those drugs were efficacious. These drugs were
more than just ineffective, they could have potentially caused
dangerous side effects depending on the patient.
Mr. Dodaro, do you think or do you believe--or let me ask
you this. How did Trump's actions constitute a direct public
health threat?
Mr. Dodaro. Well, I mean--there--you know, I mean, my
belief is in science, and I think that the scientists should
speak out on these issues and that there needs to be
authoritative scientific underpinning of decisions we've heard.
Mr. Johnson. And let me ask you this question. In your
opinion, do actions taken by the FDA Administrator, pursuant to
President Trump's order, merit further investigation.
Mr. Dodaro. We are actually looking at the political
influence on FDA and CDC, and we'll be reporting our results to
the Congress.
Mr. Johnson. Thank you, and I yield back. Thank you, Madam
Chair.
Chairwoman Maloney. The gentleman yields back. The
gentlelady from the great state of New York, Ms. Ocasio-Cortez,
is now recognized.
Ms. Ocasio-Cortez. Thank you very much, Chairwoman Maloney.
And thank you, Mr. Dodaro, for coming in front of us today
and offering your expertise in some of these issues, emerging
issues that we should be keeping an eye out for.
Now you are the Comptroller General of the United States.
Correct?
Mr. Dodaro. That's correct.
Ms. Ocasio-Cortez. And you know, for some of my
constituents in community watching at home, that means, among
your many other responsibilities, you kind of keep an eye on
the books for the United States. Would that be fair to say in a
broader sense?
Mr. Dodaro. Yes. Books and programs, all Federal activity.
Ms. Ocasio-Cortez. Wonderful. Thank you.
So, before I begin, Madam Chairwoman, I would like to ask
for unanimous consent to submit a Pro Publica article on
Facebook on enforcing tax law and a letter from 88 national
organizations urging President Biden and Congress to invest in
fair enforcement of the tax law to the record.
Chairwoman Maloney. Without objection.
Ms. Ocasio-Cortez. Thank you. Thank you very much.
So, Mr. Dodaro, let us talk about taxes. If I was the CEO
presently of a large international corporation that was founded
here in the United States and wanted to manipulate my taxes and
park the profits somewhere else, do you think I would be able
to get away with that in our current system?
Mr. Dodaro. Well, there's a lot of potential loopholes in
the current system that can be exploited.
Ms. Ocasio-Cortez. Thank you. And you know, actually,
according to this Pro Publica article, it seems that some
records have been unearthed, and Sheryl Sandberg wrote in
April, an April 2008 email that ``My experience is that by not
having a European center and running everything through the
U.S., it is costly in terms of taxes.''
And Facebook's head of tax actually replied to Sandberg in
these records that the company needed to find a ``low-tax
jurisdiction to park profits.'' And it found that jurisdiction
in Ireland, where its tax rate is near zero.
Now why would Facebook, do you think, want to do that?
Mr. Dodaro. Well, there's different tax advantages. I'm
going to have--Mr. Mihm is our expert in the tax area. I'm
going to ask him to help comment.
Ms. Ocasio-Cortez. Sure, of course.
Mr. Dodaro. Because we've looked at some offshoring kind of
issues. Chris?
Mr. Mihm. Thank you, sir. And yes, ma'am. We have looked at
offshoring and, as you are suggesting, that there are various
tax advantages to where major corporations claim that their
businesses are taking place. And they are fully aware of those
tax advantages, and they use those to their advantage to
minimize the amount of taxes that they have to pay.
So, that is an important consideration in business
decisions. Yes, ma'am.
Ms. Ocasio-Cortez. Thank you so much, and I appreciate that
answer. You know, and I would actually kind of contest this
term ``tax advantage,'' because it may be an advantage to an
individual corporation, but we currently have an enormous tax
gap in the United States. Would you say that that is correct,
Mr. Dodaro?
Mr. Dodaro. That's correct.
Ms. Ocasio-Cortez. And so weakened tax enforcement actually
rigs this economy against workers. It seems as though we are
starting to see a pattern where the IRS is starting to go a
little bit more after lower-income people that target the EITC,
and this is kind of referenced due to the lack of resources
that the IRS currently has. Would that be fair to say?
Mr. Dodaro. Well, the amount of enforcement efforts and
auditing of the tax returns has been going down as a
percentage. I'm not sure what the current mix is.
Ms. Ocasio-Cortez. Yes, and so it seems like companies like
Facebook have kept billions of dollars in tax breaks through
tactics like offshore tax evasion. But working families are
struggling to pay rent, put food on the table, and stay alive.
And in fact, we are constantly told that we cannot afford
tuition-free public colleges, expansion of healthcare in the
United States because we can't afford it.
The official estimates peg the national tax gap at $381
billion per year, but the former Commissioner Charles Rossotti
estimates that it is now closer to $600 billion.
Mr. Dodaro, does any other item on the GAO's High-Risk List
come anywhere close to having a $600 billion impact on the
Federal budget?
Mr. Dodaro. Not any one single item alone.
Ms. Ocasio-Cortez. So, this seems to be one of the largest
areas of having a negative impact on our Federal budget. It is
tax evasion and other sorts of----
Mr. Dodaro. Yes. Yes, there are two others that have
potential large areas. One is healthcare, improper payments in
healthcare, which are over $100 billion a year. And the defense
weapon systems, where there is a portfolio of $1.8 trillion.
Ms. Ocasio-Cortez. All right. Thank you very much.
Appreciate it.
Mr. Dodaro. Madam Chair, Madam Chair, would it be possible
for me to have five minutes before we continue?
Chairwoman Maloney. Certainly. We will recess for five
minutes.
[Recess.]
Chairwoman Maloney. We're now in session. The gentleman
from Texas, Mr. Fallon, is recognized for five minutes.
Mr. Fallon. Madam Chair, thank you very much.
Comptroller General Dodaro, thank you for taking the time.
It has been a fascinating committee hearing. And thank you for
the important work that you are doing and the service you are
providing to our country and our taxpayers.
I have got a couple of questions. Medicare has been on the
High-Risk List for over 30 years, and I am not surprised
because when I was in the Texas legislature, it was one of the
things that I learned about was the fraud that we saw just at
our level in the state and in Texas. And it was, according to
our Inspector General, in the hundreds of millions of dollars
provable and potentially and probably in the low billions.
And again, that is just Texas. So, I shudder to think what
the actual costs are when you look at 50 states.
So, my first question is, do you share my concern about the
massive potential and actual fraud that could exist within the
Medicaid program, Medicare program and the process? And if you
do, do you have any idea of possibly a ballpark figure of what
that realistic potential fraud could be across the country?
Mr. Dodaro. Yes. Well, I share your concern about it
clearly, both for Medicare and Medicaid, all right, in those
two areas. I do not have a figure for you. It's hard to
calculate. There are figures on improper payments that are
made. These are payments that should not have been made or made
in the wrong amounts.
Now they would include--Now any fraud would be an improper
payment by definition, but not all improper payments are fraud
because you have to prove an intent and criminality. Last year,
the amount of improper payments in Medicare and Medicaid
combined were over $100 billion, all right? But again, that's
not all fraud, but it's indicative of an issue.
And I believe that the amount of improper payments
estimated for Medicaid is an underestimate. The numbers are
big.
Mr. Fallon. I would also like to share with the committee
and the other members that when I asked our Inspector General a
very innocent question, what I thought which was, when someone
is audited, in this case, Medicaid, what percentage of those
physicians or the offices that are giving the medical care had
their billing lowered the next month? And it was 100 percent,
all of them, which is alarming, obviously, for clear reasons.
But the Medicare program has been on the list, as I
mentioned earlier, year after year for three decades. What
suggestions, if any, would you have today that we could
implement to finally hold the Medicare program accountable and,
as a result, of course, reduce this massive taxpayer theft and
reform Medicare and Medicaid so that they can actually earn
their way off the list?
Mr. Dodaro. Well, there's a couple of things. One is we
think they should expand the prior authorization. They tested
prior authorizations. This provides greater assurance that you
are spending the money for a legitimate purpose to a legitimate
provider for a legitimate medical reason before you spend the
money. You don't have to worry about trying to get it back
later.
It's been proven in pilot projects, but it hasn't been
expanded because it will save money and it won't affect the
services' timeliness or the services to the individual if done
properly.
Second, it's been shown that recovery auditors who actually
audit some of these things after the fact can audit prepayment
in some of these areas. That will reduce that issue as well.
So, those are two recommendations off the bat.
The other reason Medicare is on the High-Risk List is that
it's undergoing a transformation right now to sort of pay
people for not quantity of services, but the quality of
services, and that transformation is underway and not anywhere
near complete. But let me ask Ms. Clowers if she has any other
recommendations. She's our healthcare head.
Mr. Fallon. Yes, thank you. Thank you.
Mr. Dodaro. Nikki?
Ms. Clowers. Yes. One more recommendation in the Medicare
area would be for CMS to do more work on their risk adjustment
scores. That is when we see coding differences between fee-for-
service, for example, versus then the payments that are made
under managed care or the Medicare Advantage. We want to make
sure that those coding differences are taken into account so we
are not overpaying for the services provided. We have a
recommendation in that area.
And then on the Medicaid front, the Comptroller General has
also mentioned this a little bit earlier. But in the managed
care area, there is not a sufficient medical review of the
payments and services that are made, and we think that area
needs a great deal of attention as the care that is being
provided through managed care now accounts for almost half of
all Medicaid spending.
Mr. Fallon. Thank you, Madam Chair. Thank you, Madam Chair.
I yield back.
Chairwoman Maloney. The gentleman yields back. The
gentlelady from Missouri, Ms. Bush, is recognized for five
minutes. Ms. Bush, you are now recognized.
Ms. Bush. Thank you, Madam Chair.
St. Louis and I thank you for convening this hearing today,
and thank you to Mr. Dodaro for being here.
I will ask today for the thousands of people who urgently
need a voice in this room, the environmental violence of the
Departments of Energy and Defense has emblazoned my community
with extremely hazardous radioactive waste. Nothing could fully
capture what it was like for people to find out that their--
that nearly everyone from their high school was sick with rare
cancers or dead. That is real life for people along Coldwater
Creek in St. Louis.
The Department of Energy knew that Coldwater Creek was
dangerously contaminated in the 1960's. Mr. Dodaro, based on
what you know about DOE environmental liabilities, would you
guess that the creek is cleaned up today?
Mr. Dodaro. Well, there hasn't been as much progress as I
think there needs to be made, and the cost to the Government to
clean up keeps going up, despite spending billions of dollars,
because they don't really have a risk-based approach to
addressing those issues.
Ms. Bush. OK well yes. You are right. Yes, it is certainly
not.
The CDC has estimated that as many as 350,000 people in
North County, my community, have been exposed to radioactive
waste. The creek runs through the Florissant area and several
other towns in my district. We are not talking about a distant
problem. I am in the room, actually. I lived by this creek, and
the basement of my townhouse would flood with potentially
radioactive water all the time. My son's room was in that
basement.
Mr. Dodaro, based on what you know about these two
departments, would you take over the lease at that townhouse,
or would you take your kids to the nearby playground?
Mr. Dodaro. Based on the circumstances that you're
explaining, I don't think so.
Ms. Bush. Well, and I am a nurse. I would never let you do
it. One day, I opened my door, and there were butterflies,
dozens, lying on the ground with their wings opened, like
nothing I had ever seen. I realized something must be very,
very wrong, but we had no idea what was happening.
Most people still don't know what is happening even right
now. The Army Corps of Engineers is slowly conducting a cleanup
in St. Louis under the FUSRAP program. They have estimated that
some black and brown communities won't be cleaned up for 20
years.
Eyewitness accounts state that the Corps and contractors
like those mentioned in the report have been seen picking
random houses on a street to test soil without even notifying
neighbors who are growing gardens. There are still no signs, no
signs at the creek warning people of the dangers.
Mr. Dodaro, would you say that the DOE has enough money to
post some type of warning signs along the creek that is giving
people rare cancers or at least what we believe to be causing
it?
Mr. Dodaro. I'll ask--I'll ask Mr. Gaffigan to answer
further, but DOE has one of the largest budgets in the
Government. So, I would think they could afford a sign, but
Mark?
Mr. Gaffigan. I would only add the reason we put this on
the list is because we think this is just the tip of the
iceberg. We think there are a lot more places like Coldwater
Creek around the country that need to be identified, and we
need to figure out to what degree we are going to clean them
up.
Ms. Bush. Thank you. Thank you.
The Department of Energy is a ``responsible party'' for
Coldwater Creek. We have heard that the DOE set aside the
maximum amount of money, but then deemed it was not all needed.
My constituents and I, we want to know where does the
supposedly unneeded money go? Mr. Dodaro?
Mr. Dodaro. I'm going to ask Mr. Gaffigan on that one.
Ms. Bush. OK.
Mr. Gaffigan. Well, we have been critical that DOE has not
taken a risk-based approach to this, you know, identifying all
the sites throughout the country and treating it in sort of a
risk-based approach. And the fact that communities are feeling
left out is not a good sign.
Ms. Bush. No, it is not. Thank you.
I have one final question. Mr. Dodaro, if you were me,
representing hundreds of thousands of people with potential or
confirmed toxic exposure, what would you do to massively
expedite DOE?
Mr. Dodaro. I mean, I think Congress is empowered to get
answers from DOE about what their plans are and what they're
intended to do. So, if I was a Member of Congress, I'd insist
that they provide answers to the questions to satisfy you about
what their plans are and what the timeframes are for
implementing those plans.
Ms. Bush. Thank you, Mr. Dodaro. I will be following up
with further questions, a lot of questions.
And I yield back.
Chairwoman Maloney. The gentlelady yields back. And the
gentleman from Kentucky, Mr. Comer, is now recognized.
Mr. Comer. Thank you, Madam Chair.
And Mr. Dodaro, thank you for your time. I know you have to
leave, and you have been with us all day and a press conference
before that. I just wanted to ask a real brief question.
Has the COVID-19 pandemic led to an increase in drug abuse,
and that is what contributed to the addition of a new area on
the GAO list and that area being the national efforts to
prevent, respond to, and recover from drug misuse?
Mr. Dodaro. I want to be clear on this. We were going to
add that area before the pandemic, and we announced our
intention to do that March 2020. So, it wasn't a result of the
pandemic that we added the drug misuse area, but the pandemic
has complicated that issue.
Mr. Comer. Isn't it true the number of drug overdoses has
increased during the pandemic from March to May of--March 2019
to May 2020?
Mr. Dodaro. That's true. That's true.
Mr. Comer. Or March 2020 to May 2021, yes?
Mr. Dodaro. Yes, right. Right. But if you look at it, we
have a chart in our report, Congressman, that shows the rate of
drug increases were going sort of like this. It was, you know,
on a trajectory. It dropped slightly in 2018, but it bounced
back in 2019 to go increase again.
So, it was on a very disturbing trend pattern before the
pandemic, and it's apparently likely to get worse once all the
final data is in going forward.
Mr. Comer. So, what do you think the Federal Government's
response needs to be to this spike in drug abuse?
Mr. Dodaro. Well, I think we need to double down on our
efforts. We need to have a comprehensive national strategy. We
need to engage--there are 12 different agencies in the Federal
Government that are considered part of this implementation
effort. We need to engage the states, localities, and the
private sector in this area because it affects businesses. It
affects all parts of our economy.
So, we need to really make a concerted effort over time
with the proper resources and investment in order to arrest
this disturbing trend.
Mr. Comer. Well, I would add to that, in my opinion, that I
believe taking steps to reopen the economy and getting people
back to work certainly would seem to help the situation as
well.
But thank you again for being here. I know we have extended
this meeting beyond the time that we set forth, but I do
appreciate your service.
And Madam Chair, I yield back.
Chairwoman Maloney. The gentleman yields back. And in
closing, I want to thank the Comptroller for his testimony, his
service, his report, his press conference earlier today, and I
know he is testifying shortly before the Senate on the report
also.
I also want to commend my colleagues for participating in
this important conversation, and without objection, all members
have five legislative days within which to submit additional
written questions for the witness--to the chair, which will be
forwarded to the witness for his response. I ask our witnesses
to please respond as promptly as you are able to.
And this hearing is adjourned.
[Whereupon, at 1:51 p.m., the committee was adjourned.]
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