As
fiscal year 1998 comes to a close, Congress and the President still
have considerable work to do to reach an agreement on most of the
13 annual appropriations bills. In light of this, on September 17,
1998, Congress passed a continuing resolution (CR) that allows the
federal government to continue to operate until October 9, 1998 (FY
1999), at FY 1998 spending levels.
Nevertheless, the President has threatened
to veto at least seven of the appropriations bills for the Departments of
Commerce, State, and Justice (H.R. 4276); the District of Columbia
(H.R. 4380); the Interior (H.R. 4193); Labor, Health and Human
Services, and Education (H.R. 4274); Treasury and Postal (H.R.
4104); Veterans Affairs and Housing and Urban Development (H.R.
4194); and Defense (H.R. 4103). His threats are raising concerns
and speculation about whether any impasse on these bills will
trigger a government shutdown.
A
review of President Clinton's veto threats for each bill suggests
that the Administration is willing to bring the federal government
to a standstill--and interrupt Social Security checks and Medicare
and veterans benefits, close national parks, and jeopardize
national security--for a negligible difference in discretionary
spending. As
Table 1 and Chart 1 illustrate, the
House proposes to spend $2.6 billion less than the President, which
in the end is a difference of about 1.0 percent relative to what
the President is requesting for FY 1999. In threatening to veto the
appropriations bill, the President is attempting to protect a
bloated and unaccountable federal bureaucracy and would be breaking
the balanced budget agreement he made with Congress last year.
Moreover, the additional spending he seeks will take money away
from accomplishing his own goal of setting aside the entire surplus
to strengthen Social Security.
PUTTING THE 1998 VETO THREATS IN
PERSPECTIVE
In
the 1997 balanced budget agreement, the President agreed to $259
billion in non-defense discretionary spending authority for fiscal
year 1999. Now, according to the Congressional Budget
Office, the President is
threatening to veto seven of the appropriations bills, bust budget
caps agreed to in 1997, and possibly close parts of the government
in order to spend $8.5 billion above what he agreed to for FY 1999
in the budget agreement.
A
review of recent reports of the U.S. General Accounting Office
(GAO) and the agencies' inspectors general (IGs)--the federal
government's own watchdogs--strongly suggests that the President is
willing to close the federal government down over his desire to
increase funding for programs that have long and troubled histories
of waste and mismanagement, and little or no accountability to the
public and taxpayers.
By
choosing to rein in the out-of-control spending of some of these
agencies and programs, Congress, particularly the U.S. House of
Representatives, is trying to impress upon federal bureaucrats that
they must do a much better job of being accountable for how they
spend tax dollars. The evidence is mounting that greater leadership
and discipline are needed to address federal agencies' spending
habits. But the President is making a difficult job even more
difficult.
For
example, the debut of federal agencies' five-year strategic plans
and FY 1999 annual performance plans required by the Government
Performance and Results Act
was embarrassing. The GAO and others have characterized the plans
as a torrent of questionable missions, goals, objectives, faulty
performance measures, and clear evidence of waste and
duplication.
A
balanced budget is not a license to waste tax dollars even if the
budget stays balanced. Rather than engage in political posturing,
President Clinton should concentrate on the far more important task
of leading the federal government and demanding that his executive
branch agencies be less wasteful and more accountable to the
public. A closer look at GAO and IG reports regarding agencies and
programs in six of the seven appropriations
bills targeted for vetoes by the President demonstrates that many
do not deserve more money when these same government audits show
they waste much, accomplish little, or do more harm than good.
Taking such bold steps will do far more to reform and save Social
Security, Medicare, and other important programs.
APPROPRIATIONS
BILL H.R. 4276: DEPARTMENTS OF COMMERCE, JUSTICE, STATE, THE
JUDICIARY, AND RELATED AGENCIES
What Would Get Caught in a Veto-Induced Government
Shutdown: U.S. Marshals Service; Federal Prison System
Operation and Maintenance; Federal Bureau of Investigation (FBI);
Immigration and Naturalization Services (INS); the Federal
Judiciary (the Supreme Court, Court of Appeals, etc.); and
Diplomatic and Consular Affairs programs in the U.S. Department of
State.
The following examples highlight some
of the President's priorities.
Legal Services Corporation (LSC)
An Administration Objection:
"The Committee bill funds the Legal Services Corporation (LSC) at
$141 million, $142 million below the FY 1998 enacted level and $199
million below the President's request of $340 million. This funding
level is unacceptable. It represents a 65 percent cut...would
severely cripple the program...."
Fact: Despite LSC
spending of $200 million to $300 million per year, ostensibly to
provide legal assistance to the poor, only a small percentage of
poor people actually benefit from LSC services. Indeed, LSC devotes
far more of its public funding to engaging in political and
cause-advocacy activities, often at the expense of providing real
legal services to the poor. LSC is unaccountable to taxpayers. The
lawyers do not report their cases to anyone outside of their
office, and all client and case records are closed. For example:
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Western Massachusetts Legal Services
(WMLS) has published a brochure advising lottery winners that they
can stay on welfare through such devices as prepaying rent, buying
a special gift, or taking a vacation. WMLS filed a lawsuit to get a
man back on welfare after he admittedly spent the $75,000 he won in
a 1992 lottery on drugs and gambling.
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Legal Services agencies have sued to
block welfare reform in California, Michigan, Minnesota, New York,
and Wisconsin.
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The Legal Aid Society of New York went
to court in 1994 to challenge the New York Housing Authority's plan
to make it easier to evict drug dealers by cutting the eviction
process (which can take as long as three years) to three to four
months.
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In New Jersey, Somerset-Sussex Legal
Services is seeking to take a one-year-old boy away from his
adoptive parents because his natural father wants him back. The
natural father is unemployed, has a criminal record, and already
cannot support several other children.
Small Business Administration (SBA)
An Administration Objection:
"The Administration strongly objects.... [T]he Committee's funding
level for Salary and Expenses account regular operating expenses
represents a 27 percent reduction...and includes a requirement that
all reductions be taken from headquarters functions. Such funding
levels would require reducing staff by more than 1,200 staff years
through severe reductions in force."
Fact: The Small Business
Administration is hardly small. It currently has more than 4,500
employees and an annual operating budget of more than $716 million
in FY 1998. The SBA provides more than $13 billion in financial
assistance to over 100,000 small businesses across the United
States.
In its five-year strategic plan, SBA has
such lofty ambitions as to become a "leading edge financial
institution" in the 21st century, often putting it in direct
competition with the private sector.
The Administration is willing to give SBA more resources to expand
its mission, although it already is duplicative of a number of
other programs in other agencies, such as FEMA (the Federal
Emergency Management Agency) and the Commerce Department's Minority
Business Development Agency. Questionable new
SBA goals include trying to make more businesses recipients of SBA
dollars ("increase the share of federal procurement dollars going
to small businesses") rather than determining whether businesses
should receive these monies at all and whether small businesses
benefit in the long term.
For example, supporters of SBA loan
programs often argue that SBA loans are needed to help small
businesses compete against large businesses. However, SBA lending
most often occurs in sectors, such as retail and service, which pit
small businesses against small businesses.
In New Zealand, where legislators took a hard look at their small
business lending programs, they discovered that for every 100
businesses the government "helped," more than 105 businesses were
"hurt," often driven out of business.
The President has requested increasing
SBA's funding in FY 1999 to $724.4 million, a 10 percent increase
over FY 1998. However, the semiannual report of SBA's inspector
general for the period ending March 31, 1998, identified more than
$1 million in disallowed costs and approximately $12 million in
"unresolved audit recommendations."
The most recent IG report noted, for example, that an audit of FY
1994 loan liquidations found the SBA should have recovered more
than $28 million more in loan liquidations than it did. In another audit, the
IG found that the SBA made 260 errors in manually processed
payments that resulted in $96,000 in inappropriate payments. Given SBA's poor
showing in 1998, the House has voted to reduce its budget by 1.4
percent.
This year, Congress implemented some
sorely needed oversight of SBA lending programs. In early 1997, the
SBA informed Congress that it was subject to a funding shortfall
for its 7(a) lending program. After House Small Business Committee
Chairman James Talent (R-MO) asked GAO to look into SBA's credit
subsidy model, SBA told the committee that it could fund the 7(a)
program for the balance of the year. Soon thereafter, the GAO
reported to the House Small Business Committee that SBA had
"uncovered an error in the calculation of the subsidy rate for the
7(a) program resulting in an underestimation of resources by some
$2.5 billion."
Equal Employment Opportunity Commission
(EEOC)
An Administration Objection:
"The Administration strongly urges the House to fully fund the
President's request of $279 million for the Equal Employment
Opportunity Commission (EEOC), $18.5 million above the Committee
mark. The additional resources are essential to reduce the pending
backlog of complaints...."
Fact: The EEOC currently has
more than 3,000 employees and is funded at more than $242 million
for FY 1998. The debate on EEOC is just over how much to increase
its budget--by 15 percent ($37 million) as the President wants or
by 7 percent ($18.5 million) as the House has voted to do. The EEOC
is responsible for upholding the nation's civil rights laws,
including the Age Discrimination in Employment Act, the Civil
Rights Act of 1991, and the Americans with Disabilities Act. In his
book, The Excuse Factory: How Employment Law Is Paralyzing The
Workplace, Walter Olson of the Manhattan Institute cites a
number of examples of EEOC's abuse of power:
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"Document demands in cases initiated by
single employees often costs hundreds of thousands of dollars. `It
was devastating,' said the president of one small company about
subpoenas for decades' worth of personnel documents in an age bias
complaint (filed even though the average age of his employees was
over 50)."
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"In the EEOC's famous failed twelve
year lawsuit against Sears, Roebuck, the retailer spent an
estimated $20 million and at one point employed 250 full-time
workers merely to respond to document demands."
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"After an employee at a Diners' Club
Denver credit card facility complained of the company's failure to
promote her, the EEOC demanded the names of all employees promoted
over the past eight years, all managers who ruled on promotions,
and everyone who had so much as recommended that anyone be
promoted--by this point the original complainant had settled her
case; the commission was simply surging forward on its own
momentum."
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In 1990, with the Justice Department's
encouragement, Exxon established a policy barring employees with
histories of drug or alcohol abuse from 1,500 safety-sensitive
jobs. The EEOC is now suing Exxon for discrimination under the
Americans with Disabilities Act.
Clearly, the EEOC's ability to reduce its
pending backlog of complaints would be greatly enhanced if it
concentrated existing resources on handling serious cases of abuse
rather than on extending its reach or filing frivolous
complaints.
U.S. Department of Commerce
In FY 1998, Congress gave the Department
of Commerce a 10 percent budget increase over FY 1997, raising its
budget to $4.2 billion and its staff level to include 35,000
full-time employees. In return, the Department submitted to
Congress a five-year strategic plan under the Results Act that
ranked dead last among 24 agency plans graded by Congress. Its
annual performance plan ranked 18th out of 24 plans graded. Yet, in FY 1999, the
Commerce Department and the President are asking Congress to reward
the Department's dismal performance with a 16.7 percent budget
hike.
In 1992, GAO reported that, according to
its own inspector general, the Commerce Department had evolved into
"a loose collection of more than 100 programs delivering services
to about 1,000 customer bases."
Six years later, nothing has changed. Indeed, a 1997 GAO report to
Congress pointed out that the Department shares "responsibility for
major budget functions with 14 other departments and
agencies."
Commerce's unacceptable strategic plan and
successive negative reports from GAO and its own Office of
Inspector General suggest that continuing to fund this agency will
waste more taxpayer money. The IG's semiannual report for the
period ending March 31, 1998, notes that at least $55 million in
Commerce funds "could be put to better use." The IG questioned more
than $12 million in spending and uncovered over $2.5 million in
unsupported costs.
An Administration Objection: "It is critical
that the Congress provide full-year funding for the Decennial
Census without any restrictions on the use of statistical
sampling."
Fact: The threat of a
presidential veto over census sampling is directly at odds with a
recent federal court decision. On August 24, 1998, the federal
court unanimously struck down the President's proposal to use
sampling in the 2000 census. The three-judge panel ruled that using
sampling "to determine the population for purposes of apportioning
representatives in Congress among the states violates the Census
Act." On September 10, 1998,
the U.S. Supreme Court agreed to resolve the dispute. Its decision
is not expected until spring 1999. The Census Bureau has indicated
that it needs a decision by March 1999 or it will be too late to
implement sampling accurately in the next census.
The "actual Enumeration" required by the
U.S. Constitution, not statistical sampling, is the basis for
apportioning representation in Congress among the states. Sampling would make a
hard distributive count of the U.S. population impossible. If
sampling does a better job of locating missing households in one
state than in another, the distribution of House seats and federal
spending could be made less fair. More important, the opportunity
for partisan manipulation of the numbers will become a political
reality.
National Oceanic and Atmospheric
Administration (NOAA)
An Administration Objection: "The
Administration objects to inadequate funding for Administration
priorities within the National Oceanic and Atmospheric
Administration (NOAA), including: the Clean Water Initiative to
protect coastal communities; the GLOBE program...and activities to
implement the Endangered Species Act and Magnuson-Stevens Act.
Reductions to the Climate and Global Change Program would slow
research.... In addition, by not fully funding the request for the
National Weather Service, the Committee threatens vital
services."
Fact: NOAA currently has
more than 11,000 employees and has a budget of more than $2 billion
in FY 1998. In FY 1999, NOAA is ready and willing to undertake
duplicative, new, and wasteful ventures to justify its continued
existence, and with the Administration's planning and blessing. The
President has asked for advanced appropriations of $2.8
billion--doubling NOAA's appropriations for FY 1999--"for
procurement, acquisition, and construction" for fiscal years 2000
through 2011. Most of this money is targeted for the modernization
of weather services. However, such a rush to appropriate funds
should consider the following:
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The IG reported that in March 1998, the
Secretary of Commerce certified to Congress that the Advanced
Weather Interactive Processing System (AWIPS) would be completed
within the $550 million cap before FY 1998 funds would be spent.
According to the IG, "the program was to deliver all of the
capabilities needed to replace existing, outdated information
processing systems and reducing staffing at NWS field offices to
target levels. Because of cost and schedule overruns, however, the
advanced forecast preparation capabilities cannot be delivered
within the [budget] cap, resulting in a smaller-than-planned
reduction in staffing."
The GAO has included the Weather Service modernization efforts in
its list of high-risk government programs.
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The IG "identified several
opportunities for the NMFS (National Marine Fisheries Service) to
streamline its field structure that could result in savings of
approximately $6 million over two years.... [P]rojected savings
over five years would be more than $25 million."
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The IG also revealed that NOAA's
weather service is guilty of wasting existing resources. The IG's
report for the period ending September 30, 1997, cited $79.3
million in financial mismanagement regarding excess funding for
weather satellites.
NOAA is a prime candidate for being taken
out of the hands of Washington.
So it is not surprising to find that NOAA, in its Results Act
strategic plan, is interested in addressing "societal questions
that the U.S. and world face in air quality, ozone depletion,
greenhouse warming, and climate change," and aims "to provide both
the science needed for policy decisions and the information on
emerging scientific issues that have policy relevance." The Administration
requests new funding for NOAA to set out on this mission, which
duplicates similar activities underway at the Environmental
Protection Agency, the Departments of the Interior and Energy, and
dozens of other agencies and programs. More specifically, the
implementation of the Endangered Species Act is largely the
responsibility of the Department of the Interior; there are
currently more than 100 federal water programs that cut across 9
agencies; and there are 17
federal agencies with more than 140 performance measures tied to
climate change-related activities.
National Institute for Standards and
Technology (NIST)
An Administration Objection: "The
Administration is concerned that the Committee's exclusion of the
requested advanced appropriation for the Advanced Measurement
Laboratory would increase costs and delay completion by at least a
year. We are also very disappointed by the reductions in the
Advanced Technology Program.... [T]he allowance would support only
$43 million in new awards.... Any amendment to either eliminate
ATP funding or eliminate funding for new awards would be
unacceptable."
Facts: NIST is currently
funded at $678 million in FY 1998; the President wants to increase
spending by $152.2 million in FY 1999. The difference between the
President's request and what the House wants to fund largely
reflects the lack of willingness on the part of the House to fund
advanced appropriations of $115 million for the construction of
research facilities. Congress's hesitation is not surprising.
According to the Commerce Department's IG, NIST's Capital
Improvements Facilities Plan to renovate buildings in Gaithersburg,
Maryland, includes nearly $220 million in expenses that have not
been adequately justified. Moreover, the President also
defends corporate welfare programs that benefit a few powerful
special interests. For example, the Advanced Technology Program
(ATP) already spends $200 million per year funding commercial
research and development (R&D) projects. Many of the largest
beneficiaries of this spending, either as individual recipients or
as partners in joint ventures, are some of America's largest
corporations. According to an MSNBC study of data provided by the
ATP, these corporations and their grants include IBM ($111,279,738)
and General Motors ($82,134,245). An April 1998 GAO report revealed
that 40 percent of the recipients received funding for projects
that would have continued without funding, and many of those that
did not receive funding financed their projects using only private
funds.
The ATP has long been a particular target for elimination by
Members of Congress.
Statistical Initiatives
An Administration
Objection: "The Administration is concerned about
inadequate funding for high priority statistical
initiatives...."
Fact: Despite spending
more on statistics than almost any other country, the United States
lags in the quality of statistics produced. In 1991, a major survey
of professional statisticians found that of the world's ten major
industrial economies, the U.S. ranked seventh in the quality of its
statistics.
The federal statistics system currently
consists of 73 programs scattered throughout the 14 Cabinet
departments and various independent agencies. The GAO estimates
that these agencies received a total of $2.5 billion in FY 1996 to
perform their statistical functions. The Office of Management and
Budget (OMB) lists 11 agencies that form the core of the
government's statistical infrastructure: the National Agricultural
Statistical Service, Economic Research Service, Bureau of Economic
Analysis, Bureau of the Census, National Center for Educational
Statistics, Energy Information Administration, National Center for
Health Statistics, Bureau of Justice Statistics, Bureau of Labor
Statistics, Bureau of Transportation Statistics, and Internal
Revenue Service Statistics of Income Division.
The U.S. government's collection of
social, economic, and scientific statistics is extremely
decentralized. Duplication and a lack of coordination of effort
have led both to higher costs and to the gathering of statistics
that are less reliable or accessible than those that could be
gathered under a coordinated system. Because there are at least 73
statistical agencies within the federal government, ad hoc programs
have become monuments to obsolete priorities and empire-building
policies. For example, 29 agencies currently are engaged in
statistical activity within the Department of Health and Human
Services, five are responsible for collecting legal and justice
statistics, and at least six are responsible for collecting labor
statistics. This duplication results both in massively increased
overhead costs and in the production of contradictory and
inconsistent data.
U.S. Department of Justice
An Administration
Objection: The Administration is "disappointed" with a
number of efforts to hold down spending levels for a series of
Department of Justice programs related to juvenile justice, at-risk
youth, and drug intervention.
Fact: The Department of
Justice currently has a budget of $17.8 billion in FY 1998. Its
budget request for FY 1999 represents an increase of more than $747
million over FY 1998 funding, but the findings of recent GAO and IG
reports indicate that this money may be wasted:
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In its FY 1997 audit financial
statement, the department's IG concluded the Justice Department had
more than $21.6 million that "could have been put to better use";
more than $14.4 million in questioned costs; and more than $4.2
million in "unsupported" costs.
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The Bureau of Prisons, U.S. Marshals,
and Immigration and Naturalization Service enter agreements with
state and local jails to provide prison facilities and services for
federal prisoners. The audits of six of these agreements resulted
in $4,121,020 in questioned costs and $2,860,124 in funds that
could be put to better use.
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Many of the Department's drugs and
at-risk youth programs duplicate other programs. Today, the more
than $16 billion a year spent on fighting illegal drug use is
scattered across 70 different departments and agencies. And the At-Risk
Children's Grant Program is duplicative of other programs that also
are wasteful failures. For example, in the Community Oriented
Policing Services program alone, more than 40 audits were conducted
in just one six-month period, which concluded that $8.3 million of
the costs are questionable and more than $10.8 million in funds
"could be put to better use."
The GAO's observations on the Department
of Justice's annual Results Act performance plan for FY 1999 found
that the plan did not fully describe how resources will produce
expected results or provide confidence in the credibility of the
agency's information.
Immigration and Naturalization Service
(INS)
An Administration Objection: "[T]he Committee's
$2.567 billion mark, $156 million below the President's request, is
insufficient to support a comprehensive, bipartisan border
management and enforcement strategy...and [the President's request]
includes $36 million more than the Committee's level for Border
Patrol, detention, and office construction."
Fact: As the Department of Justice's IG notes, "The INS's
mission is to administer and enforce the Nation's immigration laws.
It determines the admissibility of persons seeking entry...patrols
the border [and] inspects persons seeking entry...." Considering the
10 percent increase in the President's FY 1999 budget request, the
INS must have performed its job admirably. However, the facts speak
differently. Results of the Department of Justice Management
Division's audit and review of persons improperly granted
citizenship in 1996 showed that 91 percent of the 1.05 million
cases in which citizenship was granted contained at least one
processing error; the average case contained 2.2 processing errors;
920,733 cases had insufficient documentation to support a proper
decision; and 38,845 cases were presumptively ineligible to receive
naturalization.
An Administration Objection: "[W]e are
concerned about the Committee's reduction of $26 million for the
Department's operating requirements...."
Fact: The State Department currently has 15,000 employees
and a budget of $14 billion in fiscal year 1998. For FY 1999, the
President has requested a 13 percent increase over its FY 1998
level, an increase of more than $693 million. The House has voted
to give the Department a $320 million (8 percent) increase. These
increases come even though, in a series of most recent audits
between October 1997 and March 1998, the Department's IG uncovered
$781,000 in questioned costs and $5,546,000 in funds that could be
spent more efficiently.
A review of the State Department's
five-year strategic plan gives Congress reason to hesitate in
giving this department more money. Most notably, according to the
GAO, the Department's strategic and immediate plans for this
funding increase are unclear. The GAO reported that the
Department's annual performance plan "does not describe how its
program activities are linked to its performance goals and
objectives."
The State Department's mission and goals
appear to creep into areas that might not be considered appropriate
activities for that department, yet demand more people and
resources. For example, the Department's global and strategic
interests include "secure a sustainable global environment in order
to protect the United States and its citizens from the effects of
international environmental degradation; and stabilize world
population growth." Its measures of success in these
areas are not what it can do to improve the environment or help the
populations of different nations. Instead, the measures are how
much money goes into family planning to keep down the birth rates
in other nations and the extent to which environmental treaties and
protocols are ratified, regardless of whether or not such treaties
actually produce any environmental benefits.
While the President contends the House
refuses to give him the additional $300 million he seeks, Congress
might ask the President why he is unable to establish funding
priorities such that the critical functions he says will
suffer--national security, maintenance of U.S. Missions, and
nuclear nonproliferation work --are given a higher priority
within the State Department than some newly found missions, such as
environmental protection, a responsibility already handled within a
half dozen or more federal agencies.
Federal Communications Commission
(FCC)
An Administration
Objection: "The Administration is very concerned about the
lack of funding for any of the requested increases for the Federal
Communications Commission (FCC).... [T]he Administration
understands that an amendment may be offered that would prevent the
Federal Communications Commission from enforcing collections for
the e-rate program to connect schools and libraries to the
Internet...."
Fact: The Schools and
Libraries Corporation (SLC), the newest bureaucracy and entitlement
program in Washington, was created in May of 1997 by the Federal
Communications Commission in an effort to ensure that America's
classrooms and education institutions were "wired" for the
Information Age. While no one in Congress or the general public is
opposed to such a worthy goal, the creation of the SLC as a means
to this end raises several concerns:
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The GAO noted that the SLC was
unconstitutionally created by the FCC, because it is illegal for
unelected officials in a regulatory bureaucracy unilaterally to
establish new institutions or corporations without congressional
approval. Unfortunately, this legality did not stop the FCC from
doing just that when it created the SLC last year.
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The administrative costs of the new
bureaucracy are growing rapidly. In the fall of 1997, operating
expenses of the SLC were approximately $1.9 million. One year
later, operating expenses were $18.8 million. There are more than
450 people employed full-time for the SLC after just one
year.
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The SLC is being funded by a new hidden
tax on consumer telephone bills, more commonly referred to as the
"Gore tax," since Vice President Al Gore is largely responsible for
building support for this effort. The FCC attempted to strong-arm
telephone companies into hiding these taxes on ratepayer bills.
Telephone companies have wisely resisted this pressure and itemize
the costs associated with the SLC's new "Gore tax" as a line item
on each bill.
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In July 1998, the GAO expressed
concerns about procedures and program integrity that needed to be
resolved before significant funds are committed by the SLC.
The Administration has never been held
accountable for a massive new tax-and-spend program. According to
the Statistical Abstract of the United States, in the 1984-1985
period, there was roughly one computer for every 63 school
children. By the 1996-1997 period, there was one computer for every
seven school children. This amazing spread of computer technologies
to the classroom is the equivalent of a tenfold increase in the
number of computers in the classroom over a 12-year period, or
roughly a 1,000 percent increase from 1984 to 1996.
The SLC represents yet another example of
unnecessary federal intrusion into the realm of education, which
traditionally has been the responsibility of state and local
officials. Indeed, there is no reason to doubt that state and local
policymakers are better suited to identifying technology problems
at their schools and educational facilities and creating and
administering programs to handle such parochial issues.
APPROPRIATIONS BILL H.R. 4380: THE
DISTRICT OF COLUMBIA (D.C.)
What Would Get Caught in a Veto-Induced Government
Shutdown: D.C. police; U.S. park police; education
funding; public works and other general government services.
The following examples highlight some
of the President's priorities.
An Administration
Objection: "The Administration is deeply concerned about
inadequate funding for the D.C. economic development
initiative...."
Fact: The President and Congress have a small
disagreement on federal funding for the District of Columbia. The
disagreement, however, is about how much to decrease funding for
D.C. in FY 1999--$46.8 million or $47.2 million, a difference of
only about $400,000. The President's stated objections to the
appropriation funding clearly are less about money than about
hot-button elements of the bill that would allow the use of private
school vouchers, prohibit adoptions by couples that are not married
or related by blood, and prohibit funding for needle exchange
programs.
A 1997 GAO report found that out of nine
cities, the District of Columbia spends more per capita on its
residents than any other.
The report also shows that the District has the highest per capita
totals of revenues raised by city governments and direct federal
funding. In FY 1998, the
District received almost $500 million in federal funding. Its
poverty rate in 1989 was 16.9 percent compared with a national
average of 12.8 percent; its unemployment rate in 1997 was 7.9
percent versus a national average of 4.9 percent; and its murder
rate was still one of the nation's highest in 1996 at 73.1 per
100,000 people. An interesting aspect
of pleas for increased funding is that the District's population
has decreased steadily since the 1950s; it lost approximately 46
percent of its population between 1950 to 1996.
A 1997 Washington Post article
stated that, "If the city spent the federal grants it receives each
year, required competitive bids on contracts, immediately
renegotiated dozens of expired leases and collected its taxes,
records indicate the District government could have an additional
$307 million to spend each year."
Poorly written contracts that are awarded without the bidding
process cost the city approximately $30 million to $40 million per
year. In fact, 59 percent of contracts in 1995 were awarded in the
absence of competitive bidding.
The failure of the District government to sell its stock of
unclaimed property results in an estimated $15 million loss. The
city has $16.5 million in overdue water bills that have not been
collected.
In a recent study of education systems in
20 U.S. cities, the District of Columbia ranked first in spending
per pupil in 1993 and 1994, with a level of $9,187 per student.
This amount was more than the per capita funding of Los Angeles and
New Orleans combined. The District also ranked second in class
size. Only St. Louis had a lower teacher-to-pupil ratio in
1995. However, reality does
not reflect this fact. Of the 12 cities with available data, the
District ranked last with a 20.9 percent high school dropout rate
in 1993-1994.
In a 1996 report issued by the D.C.
Financial Control Board, it was noted that the "longer students
stay in the District's public school system, the less likely they
are to succeed." Yet President Clinton
vetoed the D.C. Student Opportunity Scholarship Act of 1998. The
Act would have offered $3,200 vouchers to D.C. students for use in
any school of their choice. The results of a May 1998 Washington
Post poll of District residents contradicted Clinton's stance. This
poll found that 65 percent of African-Americans with incomes under
$50,000 favor the use of federal funds to send children to private
or religious schools. In addition, overall support for the voucher
program was 56 percent.
APPROPRIATIONS BILL H.R. 4193:
U.S. DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES
What Would Get Caught in a
Veto-Induced Government Shutdown: All national parks and
other land and resource management activities around the
nation.
The following examples highlight some
of the President's priorities.
Departments of Agriculture and
Interior
An Administration Objection: "[R]educe by
more than half the $270 million request for the Land and Water
Conservation Fund...this drastic reduction in funding would prevent
the Administration from making significant land acquisitions...deny
most of the requested $128 million increase for Interior and Forest
Service to implement the Clean Water Action Plan...fail to provide
the requested $15 million for the Disaster Information
Network...deny $29 million of the $36 million increase requested
for the Endangered Species funding, including landowner incentive
grants...make significant reductions to the Forest Service's
Wildlife and Fisheries Management, Rangeland Management, and
Watershed Improvement Programs...eliminate the Forest Service's
Stewardship Incentive Program and significantly reduce its Forest
Legacy Program."
U.S. Department of Agriculture (USDA)
Fact: In financial terms,
the USDA is one of the biggest and most troubled of the federal
agencies, with responsibilities that range from nutrition programs
for women and children to forestry and soil and water conservation
programs. In FY 1998, it has 109,000 employees and an annual budget
of more than $80 billion,
yet the agency's inspector general was unable to express an opinion
on its financial statements for the year because of system-wide
weaknesses in the Department's financial accounting system. Among
the problems that have been cited by the IG for the first half of
1998:
-
Management officials agreed to recover
$27.4 million and to put an additional $84.5 million to better use
based on 112 audits and evaluation reports between October 1, 1997,
and March 31, 1998. In addition, IG investigations produced about
$38.3 million in "recoveries, fines, restitutions, administrative
penalties, claims established and cost avoidance."
-
Almost seven years after passage of the
National Forest Foundation Act and over $4.1 million in federal
funds, private financial support for the foundation declined and
reliance on funding from the FS (Forest Service) for administrative
costs increased.
-
A "payroll and personnel system...that
processed 2,288 `special salary payments,' totaling nearly $1.2
million during 1996, did not have sufficient controls to preclude
or detect errors and irregularities."
-
"Conservation Reserve Program (CRP)
producers receive annual payments from the FSA [Farm Services
Agency] to take highly erodible cropland out of production.... [W]e
identified approximately 2,900 offers nationwide with annual rental
payments totaling about $13 million that were at risk of incorrect
acceptance in CRP."
U.S. Department of the Interior
The Department of the Interior currently has
more than 67,000 employees and a budget of more than $10 billion in
FY 1998. The effect of the
Department's strategic and annual performance plan submissions to
Congress--such as its 3,500-page annual performance plan--is to
ensure that the public has no way of determining whether the
Administration's demands for additional resources are needed. In
its review of the Department's annual performance plan for FY 1999,
the GAO states: "Interior's plan does not provide a clear picture
of intended performance across the agency, it is not clear about
how the agency's strategies and resources will help it achieve the
plan's performance goals, and provides limited confidence that the
information the agency will use to assess performance will be
accurate, complete and credible."
The President's demand for additional
resources is made without any acknowledgment of the current levels
of waste within the Department's programs.
For example, the Department's own inspector general questions more
than $17.7 million in costs and has determined that more than $19
million of funds could be put to better use. A review of some of
Interior's programs that were highlighted by the President strongly
suggests that congressional efforts to hold down--rather than
increase--spending and demand accountability for federal tax
dollars are reasonable.
Water Quality. Estimates
indicate that taxpayers and the private sector have spent over $500
billion on water pollution control since the enactment of the
Federal Water Pollution Control Act of 1972. A June 1996 GAO report
counted more than 72 federal programs that support water quality
protection either directly or indirectly.
According to the GAO, at least $4.6 billion and 10,680 full-time
equivalent employees were dedicated to these assistance efforts,
cutting across departments and agencies.
Despite this expenditure, there is still no adequate national
database of water quality to evaluate the overall impact of the
investment. Absent such information, it will remain difficult for
Congress and the public to assess the claims of the Administration
of a need for such things as its Clean Water Action Plan.
The Administration has proposed its new
American Heritage Rivers Initiative to provide resources to local
communities to protect their rivers. However, a new Heritage
Foundation study shows that there are more than 100 programs across
nine different federal agencies that already are tasked with
protecting the nation's rivers.
Endangered Species. The
intent of the 1973 Endangered Species Act was to conserve and
protect species threatened with extinction. Species would be taken
off the list when they recovered. Over the past 25 years, the
Department of the Interior spent billions of dollars in the name of
saving such species. What has this money accomplished? Since
Congress passed the Endangered Species Act, 1,139 animals and
plants have been listed as endangered or threatened; almost all
activity under the ESA to date has been to list species rather than
help them recover. But of those, only 60 have been delisted or
removed. A more careful examination of the facts, however, shows
that of the 60 species delisted, 12 are extinct, 24 had been listed
due to erroneous data, 9 exist solely on federal lands and
therefore are federally protected without the ESA, 3 were decimated
by the pesticide DDT but recovered after the DDT ban in 1972, and
the remaining 12 are conserved by state agencies or private
organizations. Although Congress has
tried to reform the ESA this year, the President has chosen to
increase funding significantly--by a requested 50 percent--for an
ineffective program rather than work with Congress to reform
it.
Indian Affairs. The track record of the Bureau
of Indian Affairs (BIA) in managing tribal accounts has been less
than exemplary. In FY 1998, BIA was
funded at more than $1.7 billion. Numerous studies by the GAO and
the Interior Department's IG found many BIA programs to be both
deeply flawed and inefficient. In 1974, Congress passed the Indian
Self-Determination Act, which authorizes tribal governments to
operate federal programs under contract, grants, or compact
agreements. Tribes assume the responsibility for the delivery of
services. In FY 1995, over $1 billion, or 45.5 percent of BIA
appropriations, was allocated in self-determination contracts or
grants to tribes. The President objects to House language placing a
one-year moratorium on new or expanded self-determination and
self-governance compacts.
What is not mentioned is the reason for doing so. The House
explains this is needed to force Interior to get its contract
support costs under control so that other tribal programs would not
be adversely affected.
Federal Land and Resource Management. The Administration has
a number of objections to congressional actions related to federal
land and resource management, including the Columbia Basin
Ecomanagement System; some acreage in Florida; an easement in
Chugach National Forest in Alaska; and the transfer of authority
over land from one federal agency to another. The federal government
currently owns roughly 700 million acres of land throughout the
United States. In the West, the federal government owns as much as
60 percent of the land. Federal lands are generally maintained by
four federal agencies: Interior's Bureau of Land Management (BLM),
Fish and Wildlife Service (FWS), and National Park Service (NPS),
and the Department of Agriculture's U.S. Forest Service (USFS).
Together, these four agencies have budgets for FY 1998 of about $6
billion. The GAO recently noted, "Our work over time has shown that
the responsibilities of these four agencies have become similar
over time."
Unfortunately, federal stewardship of
public lands has been both poor and inefficient, and each of these
agencies has been subject to criticism from the GAO and others. For
example, in 1993, Interior's IG concluded that the Fish and
Wildlife Service was supporting private environmental groups
illegally by purchasing land from them at greatly inflated
prices. And in 1995, the GAO
noted that the Forest Service does not even have the ability to
monitor the soundness of its financial information systems.
In a May 1998 report, the GAO told
Congress that the Park Service's maintenance backlog has increased
over the past ten years from $1.9 billion in 1987 to $6.1 billion
in 1997. But, as GAO also notes, much of this backlog is for
construction projects, such as housing. The Interior IG reported
that NPS employee housing programs were not run in a cost-effective
manner: "On a per house basis, the average costs of the
single-family homes were $390,000 at Grand Canyon and $584,000 at
Yosemite National Park. In contrast, single-family housing costs in
the private sector ranged from an estimated $102,000 to $250,000
near Yosemite National Park and from an estimated $115,000 to
$232,000 near Grand Canyon National Park."
Even worse, the National Park Service,
with all the money it has received over the years, still has no
system in place for determining its maintenance backlog. GAO
estimates for the cost of the backlog in 1997 had to be based on
1993 information collected by the NPS.
In addition, budget estimates frequently are based on data more
than four years old, and the GAO found that differences in
estimates range between $3 million and $21 million for specific
projects because of faulty information on maintenance needs. Nevertheless, the
President appears ready to shut down national parks (however
inefficiently managed) over an additional $97 million (6 percent)
in funding versus the House's efforts to hold down the National
Park Service's budget for poor performance by cutting a mere 3
percent.
U.S. Department of Energy (DOE)
An Administration
Objection: "The Administration strongly objects to the
House's severe reduction to the Department of Energy's Energy
Conservation Program.... [T]hese cuts would eliminate all of the
Administration's requested increase in Energy Conservation...[and]
eliminate all of the funding for the Energy Information
Administration."
Fact: Given the Energy
Department's poor performance record, Congress increased its budget
by only $13 million (from $16,547,147,000 to $16,560,608,000)
between FY 1997 and FY 1998, holding its total budget to about
$16.5 billion.
The available evidence--including DOE's
poorly graded strategic and performance plans under the Results
Act, as well as relevant GAO and IG reports--clearly indicates that
Congress has been on the right track in holding down DOE's budget.
Recent reports suggest that DOE has done little to improve its
problems and that Congress would only be wasting more tax dollars
by continuing to fund the agency.
For the period between October 1, 1997,
and March 31, 1998, DOE's inspector general reported conducting
more than 47 audit and inspection reports, recommended that more
than $356 million in funds be put to better use, and reported on
management's commitment to take corrective actions affecting more
than $289 million. An example of the most
recent IG report's findings: Audits of five procurement offices
resulted in findings that the Department "had not received final
deliverables on 718 inactive grants valued at $232 million." The IG found that this
occurred because the Department "did not effectively implement
existing procedures or establish other monitoring procedures that
ensured grantees fulfilled their grant obligations."
In 1995, GAO official Victor Rezendes
warned that "DOE suffers from significant management problems,
ranging from poor environmental management of the nuclear weapons
complex to major internal inefficiencies rooted in poor oversight
of contractors, inadequate information systems, and work force
weaknesses." These management
problems and the inefficiencies that flow from them are primarily a
result of DOE's continual efforts to realign itself and justify its
own existence. Although the Department has reorganized many times
over the years to correct these deficiencies, its efforts have
failed. DOE's Results Act strategic and annual performance plans
have not demonstrated any improvements that would allay these
fundamental concerns.
Energy Conservation and
Research. The President is proposing a 32 percent increase
(from $611 million to $808.5 million in FY 1999) for energy
conservation and research targeted toward improving energy
efficiency in various sectors of the economy, such as
transportation, industry, private and public buildings, and
utilities. The House approved a more modest increase of $18 million
(3 percent).
Remarkably, despite evidence that many DOE
energy R&D programs have failed to produce appreciable
results, the Administration
wants Congress to appropriate even more money for such efforts,
especially its Climate Change Technology Initiative. According to
the GAO, DOE is seeking to increase its energy R&D budget from
$729 million in FY 1998 to $1.06 billion in FY 1999. The $331
million increase would go to climate change-related programs
(although the Administration contends that it is not to implement
the unratified Kyoto Protocol)--in addition to the $729 million
from FY 1998 that is being "recoded as CCTI" and that would
"support and expand existing R&D programs in energy efficiency
and renewable energy as well as other programs related to climate
change."
The GAO has reported that as federal
funding for energy R&D increases, industry support
decreases. Industry will invest
in technologies for which it sees a market and a benefit. DOE's
track record demonstrates that it is far less likely than the
private sector to invest in winning new technologies. Furthermore,
the federal government, after decades of failure, is clearly less
capable of picking technology winners than industry has been. If
Congress asked these basic questions about DOE's energy R&D
programs, it most likely would conclude that many are unnecessary
and wasteful, and that they duplicate other programs.
Energy Information Administration (EIA). The
EIA is a quasi-independent agency within the Energy Department that
collects and disseminates data on petroleum, natural gas, coal,
nuclear power, electricity, alternate fuel sources, and energy
consumption. EIA's FY 1998 budget is $66.8 million, and the
Administration is requesting a 5.5 percent increase for FY 1999,
which would bring the agency's budget to $70.5 million. All of the
activities and functions performed by the EIA are also carried out
by private firms, newsletters, trade magazines, and industry
associations. The utility-funded Edison Electric Institute, for
example, publishes its own statistical yearbook of the electric
utility industry, and many of its statistics originate with the
EIA. Based on the marketability of the information it provides, the
EIA should be privatized and all federal funding eliminated.
APPROPRIATIONS BILL H.R. 4104: U.S. DEPARTMENT OF THE
TREASURY AND GENERAL GOVERNMENT
What Would Get Caught in a Veto-Induced Government Shutdown:
White House, Secret Service, Customs Service; Internal Revenue
Service; and the Bureau of Alcohol, Tobacco, and Firearms.
The following examples highlight some of the President's
priorities.
U.S. Department of the Treasury
The Administration has made the Y2K
computer conversion issue the most significant reason for bringing
the Department of the Treasury's programs and other programs in
this appropriations bill to a halt. The Department of the Treasury
currently has a budget of $11.4 billion in FY 1998.
Year 2000
Computer Conversion and the Internal Revenue Service (IRS)
An Administration Objection: In the FY 1999
budget, the President has requested more than $1 billion for Y2K
computer conversion; "if resources for Y2K are struck from the
bill, IRS would be significantly underfunded."
Fact: Today, federal
agencies spend more than $25 billion per year on information
technology and investments.
In reality, it is more troubling that in the President's FY 1999
budget request and many of the annual performance plans linking
federal spending to real results, such as fixing the Y2K problem,
there was absolutely no mention of how they planned to address this
issue. Congress's message to the Administration should be that
"your inability to plan should not be the American people's
emergency." It would be unwise for Congress to throw $1 billion at
federal agencies when they have been asked for well over a year for
their plans on how specifically to address their Y2K problems and
the need for certain resources.
Most notably, on September 3, 1998, Joel
C. Willemssen, Director of the Civil Agencies Information Systems
at the GAO, testified before the House Government Reform and
Oversight Committee's Subcommittee on Government Management,
Information, and Technology. At that hearing, GAO reiterated
recommendations that it had made to the President's Council on Year
2000 Conversion in April 1998 that were not yet being addressed.
These recommendations included (1) establishing government-wide
priorities in fixing systems; (2) addressing the inadequate
business and contingency planning across the government; (3)
tasking the White House's Office of Management and Budget to verify
independently the accuracy of agency reports; and (4) defining
testing responsibilities.
According to the GAO, the government's 24
major departments and agencies are making slow progress in fixing
their systems. "Our [GAO] reviews have shown that many agencies had
not adequately acted to establish priorities, solidify data
exchange requirements, or develop contingency plans." In May 1997, the OMB
reported that about 21 percent of mission critical systems (or
1,598 of 7,649) for these departments and agencies were Year 2000
compliant. A year later, these departments and agencies reported
that 2,914 of the 7,336 mission critical systems in current
inventories, or about 40 percent, were compliant.
The IRS has one of the worst track records
when it comes to computer systems modernization. In its report to
Congress on IRS's FY 1999 budget submission, the GAO notes that
"the Administration is requesting $323 million for IRS' Information
Technology Investments Account.... [B]ecause $246.5 million of the
request has not been justified on the basis of analytical data or
derived using a verifiable estimating method, GAO believes that
Congress should consider reducing the administration's request by
that amount." This amount is small
considering that today the IRS's budget is almost $8 billion and it
has more than 102,000 full-time employees. Taking such steps would
seem prudent since GAO has noted for several years the management
and technical weaknesses in the IRS's $4 billion multi-year tax
modernization project.
Other
Programs
The President also seeks some additional
funding for the Customs Service, the Office of National Drug
Control Policy (ONDCP), and other programs. Generally, the
differences in funding amounts are minor relative to current budget
for these programs. As noted earlier, the federal government
currently has appropriated more than $16 billion, scattered across
70 different departments and agencies, to fight illegal drug use.
It would seem that ONDCP's financial problems might be addressed
more effectively by a thorough examination of the waste and
duplication that already exists in these drug programs rather than
by demanding more money and claiming that the war against drugs
will suffer without it.
Only the IRS collects more revenue for the
federal Treasury than the U.S. Customs Service. The Customs Service
has an annual budget of more than $1.6 billion. Treasury's IG found
in a recent audit of an airport and seaport at one of the busiest
ports of entry on the West Coast that Customs port management had
not developed a comprehensive action plan to address the airport.
For example, the action plan did not address either high-risk
flights arriving during certain times of the day or potential
internal conspiracies involving carrier, airport, and warehouse
employees. The Treasury IG also
issued an opinion on Customs' fiscal year 1996 financial statements
and reported that Customs had significant internal control
weaknesses, and the financial management systems may not be able to
provide reliable information in a timely manner. The GAO also has
identified Customs' financial management and its handling of seized
assets as high-risk programs.
APPROPRIATIONS BILL H.R. 4193: U.S.
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT,
AND INDEPENDENT AGENCIES
What Would Get Caught in a
Veto-Induced Government Shutdown: Veterans benefits and
health care; public housing benefits and services.
The following examples highlight some
of the President's priorities.
U.S. Department of Housing and Urban
Development (HUD)
An Administration Objection:
"The Administration is concerned about the funding levels provided
for key programs of the Department of Housing and Urban
Development...."
Fact: The Department of Housing
and Urban Development was created in 1965 by consolidating several
existing federal housing agencies into one Cabinet-level department
and adding to existing federal housing responsibilities a new
federal role in encouraging urban development. Today, HUD has a
budget for FY 1998 of more than $22 billion and a limit on loan
guarantees of $258 billion in FY 1998.
To fulfill its housing assistance
function, HUD operates several means-tested programs, including
public housing, subsidized but privately owned projects, and
housing vouchers. Special programs are operated for the disabled,
the elderly, the homeless, and individuals with AIDS. In addition,
HUD operates a community development program that provides
project-specific block grants to promote economic development.
These grants total between $4 billion and $5 billion each year. HUD
also operates the user-funded mortgage insurance program through
the Federal Housing Administration.
By any measure, HUD has failed to fulfill
the goals established at its creation. Numerous efforts to
re-engineer its basic programs (usually in response to financial
and performance scandals) have failed to resolve its pervasive
problems of waste and abuse. Because HUD's inefficient and costly
assistance programs are discretionary programs rather than
entitlements, they have contributed to the long waiting lists of
eligible but unserved poor households. Those who are served are
often relegated to public housing units in deplorable condition and
in unsafe environments that serve to concentrate the poor in
racially segregated projects in the worst parts of a city.
As numerous reports by HUD's IG have
revealed, the management of these projects is often incompetent and
self-serving, siphoning off scarce resources--ostensibly dedicated
to the poor--for contracts with friends, new cars, and questionable
travel. According to a 1996 IG
report, for example, "As a result of HUD's continuing resource
management weaknesses, there is little assurance that HUD's $1
billion annual salaries and expense budget is efficiently and
effectively used to further HUD's mission and minimize program
risks. OIG audit work continues to find many critical program
functions are not being adequately performed.... "
The GAO further estimates that 22 percent
to 29 percent of the Section 8 projects, under which HUD insures
mortgages, would be in difficulty even if their mortgages were
totally forgiven. With financial problems of differing magnitude
confronting as many as 88 percent of the projects, this program
must be judged a terrible failure and one which will soon confront
the taxpayer with the near-term likelihood of a multibillion dollar
financial bailout of private investors and developers.
Things have not gotten better for HUD of
late. During its September 1997 reporting period, its IG identified
$8.3 million in cash recoveries and another $6.2 million in
commitments to recover funds. One grantee incurred more than $4.7
million of ineligible costs and $2.2 million of unsupported costs
in administering its Community Development Block Grant and Section
108 loan guarantee. In addition, an audit
of an Indian Housing Authority found it could not support $1.8
million in development costs.
In March 1998, the GAO reported to
Congress on HUD's FY 1999 budget request. The GAO concluded the
following:
-
"HUD's request for $4.7 billion to
renew Section 8 tenant-based assisted housing contracts for fiscal
year 1999 could be reduced by $439 million.... [I]n addition...HUD
may not need the $70 million it has requested for Section 8
moderate rehabilitation amendment funding."
-
"HUD's budget request for $1.3 billion
in Section 8 project-based amendment funding--funds needed to cover
shortfalls in long-term Section 8 contracts--substantially exceeds
the amounts that HUD's analyses indicate are needed."
-
"HUD's budget request for $100 million
for the Regional Connections Initiative (RCI), a new set-aside
within the Community Development Block Grant (CDBG) program to
address key regional issues, does not provide enough detail to
indicate whether this is a reasonable funding level for the
program."
Corporation for National and Community
Service (CNS)
An Administration Objection:
"The Administration strongly objects to the termination of the
Corporation for National and Community Service...."
Fact: Created in 1993,
the Corporation for National and Community Service is one of the
youngest agencies in the federal government. Spending some $570
million annually, it administers such programs as AmeriCorps,
VISTA, and the National Civilian Community Corps. Despite being
such a young agency, independent auditors "found that CNS' general
ledger system is outmoded and poorly designed." The auditors
informed the program's IG "that due to weaknesses in CNS' financial
systems, accounting records and management controls, the financial
statements were unauditable."
-
More recent problems with the program:
AmeriCorps failed to retain participants in its programs. The
dropout rate for paid volunteers is 39 percent.
-
AmeriCorps is failing to gain
significant private-sector resources for its programs. Officials at
the Corporation for National Service have boasted repeatedly that
the presence of government funding would help "leverage" private
contracts.
-
One AmeriCorps program, the Casa Verde
Builders Program, cost the taxpayers $2,448,053. Only 23 of the 64
individuals enrolled as Case Verde AmeriCorps members completed the
program; the cost to taxpayers: over $100,000 per participant.
Moreover, only four participants have used their educational
awards; the cost to taxpayers: more than $600,000 per award.
-
Another AmeriCorps program examined by
the GAO, the Educational Conservation Corps, cost taxpayers
$1,732,000. And the Appalachian Service Through Action and
Resources Program cost taxpayers $632,240.
Environmental Protection Agency (EPA)
An Administration Objection:
"The Administration has several major concerns with the Committee's
mark for the Environmental Protection Agency. In particular, the
Administration strongly objects to the $593 million, or 28 percent
reduction, to the President's budget request for Superfund, which
would delay cleanups at sites nationwide and needlessly jeopardize
public health.... The Administration strongly opposes the
Committee's $106 million reduction in EPA funding for the Climate
Change Technology Initiative... [T]he Administration strongly
opposes bill and report language relating to the Kyoto Protocol
that applies to EPA and the Council on Environmental
Quality...."
Fact: The Environmental Protection Agency
currently has a budget of almost $7.4 billion for FY 1998. The most
recent report by EPA's own inspector general found more than $264
million in questioned costs
for which no management decision was made by October 1, 1997.
Superfund
The GAO identified EPA's Superfund program as a
high-risk program, which means it is particularly vulnerable to
fraud, waste, and mismanagement. The Hazardous Substance Superfund,
which was created by the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA), is used to clean
up America's hazardous waste sites--many of which have been
abandoned. The Superfund program is financed primarily through
taxes on petroleum and certain chemicals and a corporate
environmental income tax that expired on January 1, 1996. Other
sources of funding include cleanup costs recovered from private
parties; interest, fines, and penalties paid by individuals and
entities that have violated the law; and general revenues. For FY
1998, Congress appropriated $1.4 billion for the Superfund program.
The President wants an additional $600 million for the program in
FY 1999 and argues that site cleanups will suffer absent this
additional funding.
Unfortunately, there is little to show for
the $30 billion that has been spent by the federal government over
the past 17 years. The cleanup process is
slow and tedious. On average, the typical Superfund site takes more
than 10 years to clean up at a price tag of $32 million--excluding
litigation and administrative costs. Consequently, only around 40
percent of the priority sites identified by the EPA have been
cleaned up. At the same time, the program has become a bureaucratic
nightmare, consuming more than 20 percent of the EPA's $7.4 billion
budget. Moreover, 47 percent of the Department of Justice's
enforcement actions for major environmental programs are dedicated
to the Superfund program. From 1995 to 1997, a total of 839,500
hours were billed to Superfund enforcement, according to the
Department of Justice. Without fundamental reforms, the costs will
only increase. A study conducted at
the University of Tennessee estimates that, under the present
system, cleaning up 3,000 Superfund sites will cost between $150
billion and $352 billion.
Despite the dismal record of the Superfund
program, the Clinton administration and EPA Administrator Carol
Browner defend it, claiming that administrative reforms have
effectively fine-tuned the program and hastened the pace of
cleanups. As Browner recently stated, "By any measure, we are
making a great deal of progress in our efforts to improve the
nation's hazardous waste cleanup program--to make it faster,
fairer, and more efficient--and to ensure that it does the best
possible job of protecting the health of our citizens and returning
land to communities for productive use."
But the GAO and EPA's IG think EPA has
done a poor job of managing Superfund's so-called trust fund. The
GAO lists Superfund as a high-risk program, subject to fraud,
waste, and abuse. And according to a 1996 report by the EPA's own
Inspector General:
[We] could not determine if the fiscal
1995 Superfund Trust Fund Financial Statements are fairly presented
primarily due to weaknesses in the areas of accounting for
property, accounting for the components of net position, recording
reimbursable Superfund oversight costs as assets, accounting for
grants funded from more than one appropriation and allocating
expenses to show the full cost of the fund in the financial
statements.
Superfund spending for contracted cleanup
work decreased by 3 percent between FY 1996 and FY 1997; however,
administrative and support spending increased by 3 percent during
the same time period. Some examples of
mismanagement of Superfund program monies cited in the most recent
IG report: EPA failed to demonstrate whether it could effectively
allocate the additional funds requested for site cleanups; funds invested in
Superfund cleanups result in relatively little increase in benefits
compared with other environmental programs;
and EPA spent an average of $651,700 to build each of ten
replacement houses. The appraised old houses averaged only
$147,000.
Climate Change Technology Initiative
In its report on the Administration's FY
1999 Climate Change Technology Initiative, the GAO notes that the
"concept is to accelerate technology `more faster.'"
The GAO noted in a September 1998 report
reviewing a study by the Administration that serves as a linchpin
for its climate change policies that "the study's usefulness is
limited because it does not discuss the specific policies needed to
achieve its estimate of 394 million metric tons of carbon
reductions by 2010 and does not fully consider the costs to the
nation's economy of reaching this goal."
In addition, the GAO goes on to state that "the study's finding
that the widespread adoption of energy-efficient technologies can
be achieved with low or no net cost to the nation is heavily
dependent on the assumptions made.... [W]e found a disparity of
views on key assumptions that may have influenced the study's
results. Several of the groups questioned some of these assumptions
as being too optimistic, such as...the rate of adoption of new
technologies, or timing of technological breakthroughs."
Competitive energy resources consistently
provide lower prices than do protected sources. Past attempts by the
federal government to outguess the energy market have produced
expensive, well-known failures, such as the Synthetic Fuels
Corporation and the Clinch River Breeder Reactor. In the case of wind
power, as Robert Bradley points out in a recent Cato Institute
report on renewable energy research and development, "the federal
government's crash course in wind-related research and development
has been a bust to date, and further commitment may be doomed as
well." Bradley points out
that "the United States lavished nearly a half a billion dollars on
the aerospace industry from 1974 to 1992 [for wind power
R&D].... By the mid 1990s there were no major U.S.
manufacturers selling commercially proven wind turbines...."
Kyoto Protocol
The President espouses the theory that,
because of the buildup of greenhouse gas emissions, the Earth's
temperature is warming, and that this is causing new weather
patterns, lost species, the spread of infectious diseases, and
rising sea levels. Such alarmist rhetoric elicits support for
stricter environmental standards from environmental organizations.
Indeed, extreme environmental groups have profited by perpetuating
fears about global warming. For example, the Environmental Defense
Fund in 1997 received more than $8.7 million in grants from
foundations (in addition to the federal monies and other funding it
receives).
The Administration has expressed strong
objections to proposed House appropriations language that would
prohibit federal funding from being used to implement the Kyoto
Protocol, an international agreement on reducing greenhouse gas
emissions. The Kyoto Protocol was negotiated in Kyoto, Japan, in
December 1997. The United States agreed to reduce emissions to 7
percent below 1990 levels between 2008 and 2012. Developing
countries remain exempt from any requirements to reduce greenhouse
gas emissions. Before the United
States is bound by the agreement, however, the President must sign
it and the Senate must ratify it. At this time, neither has
occurred, and Congress has been concerned that absent these steps,
federal agencies will begin to spend significant resources to
implement it. As noted earlier, a recent study showed that more
than 17 federal agencies had developed more than 140 performance
measures related to climate change program goals. In addition, Congress
has expressed a number of reservations about the agreement that
make Senate ratification highly unlikely:
-
The Kyoto agreement clearly violates
the terms of Senate Resolution 98, which was passed by a vote of
95-0 in July 1997. It declares that the United States should not be
a signatory to any global climate change treaty that either omits
binding reductions for developing countries or results in serious
harm to the U.S. economy.
-
Considerable uncertainty exists about
the science of global warming. Global satellite and technology
data--the most reliable measurement of climate change--show that
over the past 18 years there actually has been a global cooling.
And 1997 was among the coolest years since satellite-based
measurements began in 1979.
-
The treaty will significantly harm the
U.S. economy. Estimates of energy price increases range from 50
percent to 200 percent in order to achieve the 30 percent to 40
percent reductions in energy usage needed to achieve the treaty's
targets.
-
The treaty will subject Americans,
businesses, and the states to the dictates of international
bureaucrats. The protocol will establish at least six new
bureaucracies to supervise the parties to the treaty, to monitor
and verify emissions reports, and to enforce treaty guidelines.
Congress appears to be within its
responsibilities to demand that the Administration explain its
rationale for seeking more than $6 billion in new funding and tax
credits in this year's budget when there is such uncertainty and
concern about the existence of a climate problem and the scope of
the proposed solution. The President claims there is a serious need
to fund Social Security, Medicare, and other programs. Massive new
investments on behalf of the uncertain science of global warming do
not appear to make much fiscal sense compared with these and other
professed priorities.
APPROPRIATIONS BILL H.R. 4274: U.S.
DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND
RELATED AGENCIES
What Would Get Caught in a Veto-Induced
Government Shutdown: Medicare and Medicaid benefits and
services through the Health Care Financing Administration; Social
Security benefits; research and disease control and prevention
activities at the Centers for Disease Control and the National
Institutes of Health.
The following examples highlight some of the
President's priorities.
An Administration
Objection: "[T]he bill does not adequately support the
Nation's effort to raise student achievement, make schools safe,
and improve the capabilities of teachers...strong concerns with the
inadequate funding levels provided for the following Labor
programs...has not provided adequate funding for several important
programs of the Department Health and Human Services."
Facts: Consider the
following facts for various agencies and programs:
U.S. Department
of Labor
Summer Youth Employment and Training Program
The Summer Youth Employment and Training Program, funded under
Title II-B of the Job Training Partnership Act (JTPA), provides
jobs and training during the summer months for economically
disadvantaged youth aged 14 to 21. For FY 1998, the Labor
Department is obligating $871 million to the states through block
grants. As the GAO points out, however, there already are 19
federal programs that focus directly on youth training and
employment. Together, these
programs spend $2.8 billion per year, and this does not include the
$1 billion spent on vocational education programs. Almost half of the
youth in the summer jobs program are 14 and 15 years old and are
paid essentially to go to summer school to learn what they should
have learned during the regular school year.
-
A report by then-Secretary of Labor
Robert B. Reich acknowledges that summer jobs programs do not
work. The report notes that
subsidized work experience has not been successful in improving the
employability of youths once the subsidized job has ended. The
graduation rates and grades of participants do not improve, and
young girls in the program are just as likely to become pregnant as
those that do not participate in the program.
-
A national controlled scientific study
of JTPA reported that youth programs had no statistically
significant effect on either the average earnings of young females
or their employment. Even worse, the
programs had a large negative effect on the earnings of young males
and no effect on their employment.
Occupational
Safety and Health Administration (OSHA)
Enforcement and Compliance Strategy. OSHA has
been enforcing safety and health standards for 27 years. There are
serious questions, however, as to whether it has improved worker
safety.
OSHA often pits the employer against the
inspector, a model that fosters distrust and suspicion and flies in
the face of true partnership efforts that are the key to worker
safety. The threat of large fines for non-compliance when millions
of safety-conscious employers do not know how to comply undermines
the enhancement of worker safety and protection. OSHA should work
with employers who are concerned about worker safety and health and
encourage them voluntarily to seek expert advice on how to comply
with OSHA's regulations. It also should provide adequate funding
for its compliance assistance programs.
To this end, Congress passed, and the
President signed on July 16, 1998, the OSHA Compliance Assistance
Act (P.L. 105-197). This law codifies OSHA's consultation program,
which provides states with funding to perform on-site
consultations, as well as other education and training activities.
Employers who voluntarily requested a consultation would be able to
work with the state to correct any hazards and safety violations;
only if they failed to correct hazards would enforcement
authorities be notified. Employers who corrected hazards identified
in the consultative visit would be exempt from subsequent "general
schedule" inspections for one year.
Since the 1970s, Congress has allotted
money for a small grant program--now codified by P.L.
105-197--under which state agencies provide these services to a
limited number of small businesses. But this program has been
chronically underfunded. In some states, employers requesting
consultation assistance must wait more than one year, and sometimes
two; this denies employees vital safety and health protections.
In addition, while overall funding for
compliance assistance has increased in the past few years, nearly
all of the increase has been kept in Washington. Among other
problems, this federalizing of compliance assistance means that
employers and employees in nearly half of the states do not receive
any benefit from the funding.
Funds for federal enforcement activities
should be redirected to consultation grants that go directly to
states. The House
Appropriations Committee's bill holds back a requested funding
increase for FY 1999 and sends an important message to OSHA by
shifting more of OSHA's funding away from enforcement programs and
into compliance activities.
U.S. Department of Education
Goals 2000
Enacted in 1994, the Goals 2000: Educate America Act is expected
to provide $491 million in FY 1998 to states and local districts.
Under the program as recently amended, states and local school
districts may apply to the U.S. Department of Education for funds
to apply to academic standards, model curricula, staff training,
student assessments, technology, or magnet and charter schools.
Goals 2000 funding, however, duplicates other federal programs or
pays the states to do what they already are doing. Moreover, states
are paying the federal government at least 13 percent of the
program money--$67 million of the $491 million in FY 1998--to
maintain this duplicative federal bureaucracy.
A 1994 survey by the Council of Chief State
School Officers, conducted after the passage of Goals 2000, found
that virtually all states had implemented or were formulating
curriculum content and pupil performance standards. There is
little evidence that any reforms currently taking place would not
have been implemented if Goals 2000 had not been enacted.
School-to-Work
Programs
Since the program was created in 1994, 43 states have received
School-to-Work implementation grants. In FY 1997 and FY 1998, $400
million was appropriated each year for these programs.
School-to-Work's authorization is scheduled to expire on October 1,
2001. Proponents claim that the program focuses on building school,
business, and community partnerships; academic and occupational
integration; the integration of school and work-based learning; and
connections to post-secondary education. However:
- Since FY 1994, the U.S. Department of Education has
granted the states money from other federal programs--$4.4 billion
in vocational education grants, $1.1 billion in professional
development grants, and $1.3 billion in program innovation
grants--to do the same things the School-to-Work program does.
-
Of the $200 million appropriated in FY
1998 for the Department of Education's responsibilities under the
School-to-Work Opportunities Act, less than one-half (about $93
million) actually is used in classrooms, according to the
Congressional Research Service.
-
A report on how states have implemented
School-to-Work programs already has concluded that efforts to raise
academic and vocational standards are peripheral to School-to-Work
priorities and that the links between school and worksite learning
are limited.
The $2.8 billion currently planned to be
spent on School-to-Work programs between 1994 and 2001 will
continue to have a negligible effect on teaching the basic skills
that employers require. In the first national evaluation of
school-to-work programs, Mathematica Policy Research, Inc., is
assessing the states' progress in creating these systems for the
U.S. Department of Education. It will measure, among other things,
the outcomes students achieve in high school and post-secondary
education and employment. (The study does not use a rigorous
control group evaluation methodology, however, and this raises
serious concerns about its ultimate usefulness. )
Eisenhower
Professional Development Program
The Eisenhower Professional Development Program, funded at
$335 million in FY 1998, provides grants to state and local
education agencies, state agencies for higher education,
institutions of higher education, and qualified nonprofit
organizations to support professional development in core academic
subjects.
While the Department of Education
currently funds several professional programs, it "does not have an
estimate of the amount expended for teacher professional
development under these programs."
It also does not keep records on funding provided for these
purposes by other agencies, such as the National Aeronautics and
Space Administration and the National Science Foundation. Despite this
duplication and the lack of any clear demonstration of need,
Congress has increased funding for the Eisenhower program steadily
since 1992.
The Department proposes using some of the
Eisenhower program's funding to support the National Board for
Professional Teaching Standards, which administers a voluntary
assessment and certification process based on national standards of
excellence developed by the National Commission on Teaching and
America's Future (NCTAF). The Department has requested that funding
for the Board's certification process be doubled to $5 million in
FY 1999, arguing that this increase is needed to reach NCTAF's goal
of certifying 105,000 teachers by 2006.
However, a recent appraisal of NCTAF's
goal by University of Missouri economists Dale Ballou and Michael
Podgursky raises important questions about who really stands to
benefit. Noting the close ties between teachers' unions and the
NCTAF, the authors point out that NCTAF has yet to prove whether
the achievement of this goal, other than simply generating a larger
number of teachers, actually will improve the quality of teaching
in a way that demonstrably benefits children and whether it can
accomplish this in a cost-effective way.
The House Appropriations Committee has
proposed reduced funding for this program. States should be allowed
to use funds for professional development as they deem appropriate.
For example, state and local education agencies should have the
freedom to use federal funds for scholarships to encourage teachers
to study core subjects at area universities and community
colleges.
Bilingual
Education
The House Appropriations Committee bill contains several
measures designed to improve the education of Limited
English-Proficient (LEP) students. Research and evaluation on
methods of second language instruction have been inconclusive at
best.
In 1997, the Department of Education and
several independent foundations evaluated the available research on
English language instruction. One of the reports concluded that
nearly $100 million and 30 years of research and evaluation had
yielded scant results in terms of classroom achievement. Not surprisingly, the
Department of Education's FY 1999 annual performance plan fails to
include the measurements it will use to determine what, if
anything, the program actually accomplishes.
The Department of Education has been
inattentive to the results of its own in-house research projects
and has failed to build on original research. For example, during a
1992 audit of Office of Bilingual Education research, a budget
analyst from the Department's Office of the Under Secretary
discovered that, of the 91 research evaluations or studies funded
with $47 million of Title VII appropriations from 1980 to 1991, 40
of the final reports had been discarded or lost. Of the remaining
51 studies available, just 29 were relevant to policy formation and
only 12 were described as "large-scale policy-relevant
studies."
U.S. Department of Health and Human
Services (HHS)
Low-Income Home Energy Assistance Program (LIHEAP)
LIHEAP provides federal funding to help pay home energy costs
(heating and cooling) for some low-income households. Funds are
distributed through annual block grants to states, the District of
Columbia, more than 100 eligible Indian tribes, two commonwealths,
and four territories. Up to 10 percent of the funds may be used to
pay planning and administrative costs.
The United States has spent over $27.1
billion on LIHEAP since the program began in 1982. As the
Congressional Budget Office points out:
LIHEAP was created in response to the
rapid increases in the price of energy used in the home in the late
1970s and early 1980s. Since 1981, however, inflation in fuel
prices has lagged far behind general inflation: fuel prices are up
about 25 percent since 1981 in comparison with an overall inflation
rate of 70 percent. That fact might now warrant either eliminating
or reducing LIHEAP.
The LIHEAP program is now obsolete. The
extreme conditions it was created to address no longer exist. In
addition, the states have been given more discretion over how they
use federal welfare money, and this enables them to address the
needs of low-income households more creatively. Continuing the
LIHEAP program would needlessly preserve a federal bureaucracy to
manage an obsolete program and drain resources that more
appropriately should be available to states, local communities, and
families. The House Appropriations Committee, therefore, has
proposed to terminate funding for LIHEAP in FY 1999.
Head
Start
Since 1965, the Head Start program has served more than 15
million children at a total cost of over $30 billion. The program's
general purpose is to provide comprehensive health, social,
educational, and mental health services to disadvantaged
students. According to the GAO,
however, the early childhood development program has continued to
operate without any valid, useful study of how well it
works.
The Administration has asked Congress to increase funding for the
program from $4.4 billion in FY 1998 to $4.7 billion in FY
1999. With these funds, the government anticipates serving an
additional 30,000 to 36,000 children, raising the total number of
children served annually to approximately 860,000.
Yet, in its five-year strategic plan
submitted to Congress on September 30, 1997, Head Start's parent
agency, HHS, was unable to describe precisely what the 30-year-old
program is supposed to accomplish.
Worse, the agency's FY 1999 annual performance plan makes no
mention of what American parents and taxpayers reasonably might
expect in return for the $4.7 billion the Administration is asking
them to give.
The House Appropriations Committee bill
proposes to fund a study by HHS, but this study--the Family and
Child Experience Survey (FACES)--has serious methodological
shortcomings. In June 1998, the GAO
testified before Congress that "we are not convinced that [HHS]
initiatives will provide definitive information on impact, that is,
on whether children and their families would have achieved these
gains without participating in Head Start."
Thus, Congress should require HHS to perform the following
much-needed analyses:
-
Evaluate the
differential effects of Head Start on participants' income as shown
by its Survey of Income and Program Participation (SIPP).
-
Use the National
Longitudinal Survey of Youth (NLSY)--which since 1988 has gathered
data on children who attended Head Start--to study a wide range of
outcomes, including cognitive, socio-emotional, behavioral, and
academic development, while controlling for such factors as family
background and the mother's IQ and level of education.
-
Employ the Survey of
Program Dynamics, a new longitudinal survey required by the 1996
welfare reform act, to conduct an additional study of Head
Start.
-
Mandate that the
Survey of Program Dynamics be linked with the NLSY at least once by
the use of a common performance test. This would enable greater
generalization of NLSY Head Start data.
After 30 years and more than $30 billion,
Congress would be wise to demand that HHS competently study and
effectively demonstrate that the Head Start program produces
results.
National Labor Relations Board (NLRB)
Jurisdictional
Thresholds. The House Appropriations Committee has
included a provision in the Labor-HHS-Education appropriations bill
that requires NLRB to adjust its jurisdictional thresholds for
inflation. The NLRB settles labor disputes between unions and
management. Most of its jurisdictional thresholds were set in 1959
and are based on the gross receipts of a business. Labor disputes
involving businesses below the threshold are subject to resolution
in state courts rather than by the NLRB. The threshold for
non-retail businesses is currently $50,000 to $310,000 in 1997
dollars.
With no adjustment for inflation,
businesses and the NLRB have been caught in "bracket creep." As
inflation has increased since 1959, the NLRB has acquired
jurisdiction over smaller and smaller businesses, needlessly
increasing both its own and businesses' workloads. Congress never
intended for businesses with as few as two employees to be covered
by the NLRB, but up to 20 percent of the NLRB's workload now
involves small businesses, and its budget has grown to $145
million.
The NLRB claims it cannot change its
jurisdiction without an act of Congress. The corrective language in
the appropriations bill does exactly that. By indexing jurisdiction
to the rate of inflation, the NLRB once again will be able to focus
on the larger businesses for which the law originally was written.
At the same time, the corrective language continues the NLRB's
current authority to adjudicate egregious cases below the
thresholds and does nothing to alter the right of workers to
organize or bargain collectively.
Angela Antonelli is the former Director
of the Thomas A. Roe Institute for Economic Policy Studies at The
Heritage Foundation.
Endnotes