Beyond The $800 Hammer

COMMENTARY Budget and Spending

Beyond The $800 Hammer

Jun 6, 2001 3 min read

Former Distinguished Fellow

Michael is a former Distinguished Fellow at The Heritage Foundation.

If you're one of those folks who feels a bit guilty about getting a tax rebate -- one who harbors the curious notion that the money could be spent more wisely by your representative in Washington -- have I got a wake-up call for you.            

It comes in the form of a brand-new report on government waste, fraud and abuse from Sen. Fred Thompson, R-Tenn., chairman of the Government Affairs Committee. You don't have to read far before you're longing for the relatively austere days of $800 government hammers.

Examples abound: Three billion dollars missing from a government trust fund for American Indians. A hospital food service sharing a loading dock with a company that handles hazardous waste. One federal agency inspecting pizzas with meat on them while another inspects meatless pizzas. Prisoners getting food stamps and other benefits they don't need. The Internal Revenue Service giving a $15,000 refund to someone who owed $350,000 in back taxes. A Department of Energy employee being dead for almost a year before officials realized he still had secret documents signed out.

My favorite: A NASA probe built to explore Mars fails, costing millions. Why? One team designed part of the probe with English measurements (feet, inches, pounds); another used the metric system.

But the Thompson report is more than just a list of screw-ups, or fodder for late-night comics (though it does include its own "top 10" list). It also identifies the causes of government waste and offers these basic conclusions:

Show Me the Money (If You Can): The federal government as a whole can't pass a basic financial audit, including the IRS -- which audits thousands of Americans each year. The government did take a good first step last year when all its major agencies got their financial statements in on time. Usually it takes them months of costly overtime work to get their accounts in order. Still, "hardly any federal agency can actually use its financial systems for day-to-day management," the report says.

This begs two larger questions: Why are lawmakers willing to give more money each year to agencies that can't account for the funds they've already been given? More importantly, how likely is it that the agencies are carrying out their stated missions? They're hardly in a position to, say, offer job training, treat drug addicts or help "at-risk" youths if they can't pass an audit.

"Chaos" Theory In Practice: "Chaos" is how the report describes the government's organization after it looked at the Byzantine array of government programs, subsidies and tax breaks and how they interact with one another. In one case, the report notes that because dozens of our embassies don't have e-mail (many still rely on World War II-era cable systems), foreign governments bypass them and communicate directly with Washington. Makes you wonder what the hundreds of ambassadors and staff members we have stationed abroad are supposed to be doing.

The Department of Redundancy Department: Many government programs also overlap, the report says, breeding inefficiency better than two lonely rabbits. For example, the government funds more than 100 programs to help at-risk or delinquent youths. Most are fairly small, with individual budgets of about $10 million, but taken together they cost taxpayers some $4 billion a year. Why such a large number? According to the report, many programs are created in knee-jerk response to "real or perceived" needs. Consider the flood of gun-control legislation proposed within hours of a school shooting, and you get the idea.

But for all the jokes about "government efficiency" being an oxymoron, the report notes this mismanagement causes real trouble for Americans who depend on the government for everything from Social Security checks to landing at an airport safely with the help of a federal air-traffic controller.

Do You Know Where Your Data Is?: Like the rest of society, federal agencies rely heavily on computers to store information -- which wouldn't be a problem if, as the report notes, they weren't susceptible to hackers who know how to "break in" electronically and steal data. Investigators have found numerous weak spots, from the Social Security Administration to the Internal Revenue Service.

Thompson's report isn't an exercise in government-bashing. "A degree of public skepticism toward our government is a healthy thing," it notes. "Rampant cynicism is not." Lawmakers can dispel some of this cynicism if they're willing, for starters, to stop giving more money to agencies that flunk a simple audit. For more suggestions, they can call Sen. Thompson's office.


Michael Franc is vice president of government relations at The Heritage Foundation ( ), a Washington-based public policy research institute.

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