Making Government Work

Budget & Tax, National Security, | Weekly Wastebasket

Jan 23, 2009 | 4 min read | Print Article

In his inaugural address, President Barack Obama made clear his vision for government. Midway through his speech, he said that it is “ not whether our government is too big or too small, but whether it works.”

The President also made it clear that if a program is failing or not working, it should end.

Over the last two decades, generally coinciding with the start of each new Congress, the Government Accountability Office (GAO) has written a report that should help the new administration strive to meet this laudable goal. The most recent study chronicles about 30 government programs that are at high risk for waste, fraud, or abuse.

The GAO report on high risk government programs can serve as a road map for the Obama Administration. The objective of rooting out waste, fraud, abuse, and inefficiencies in government, as well as identifying at-risk agencies and programs, will require hard work. Here are some examples from the high-risk list that are a good place to start:

Defense Weapons Purchases: This decade, the military has significantly increased the number of major defense acquisition programs. On average, the cost overruns of the 95 weapons currently under development or in production have increased by $295 billion over initial estimates. And most of these programs are experiencing a 21-month delay in delivering the weapons systems. DOD must then request more funding to cover the overruns, making less money available for other priorities.

Enforcement of Tax Laws: The amount of taxes that taxpayers should have paid but failed to was last estimated to be $345 billion . That is with about an 84 percent compliance rate—a rate that has changed little in 3 decades. After late payments and Internal Revenue Service (IRS) enforcement actions are accounted for, the so called tax gap narrows to $290 billion. And recently IRS began contracting out some of its collections to private companies, which, according to Treasury’s taxpayer advocate, has actually cost taxpayers money.

Another concern is U.S companies using off-shore tax havens. GAO’s recent work showed that many U.S. multinational corporations are shifting profits to low or no-tax jurisdictions. The lost tax revenue is about $56.4 billion.

Congress Kicks the Can on Spending Decisions

IRS enforcement of the tax laws is vital. It is a key way to enhance taxpayer confidence that everyone is paying their fair share.

Reforming Department of Energy Contracting: The Department of Energy relies more on private contractors than any other government agency. Nearly 90 percent of the agency’s annual budget is spent on contracts. Twelve large Energy Department construction projects exceeded original cost estimates, with cost increases on these projects ranging from $79 million to $7.9 billion, and experienced sizable time delays.

When President Obama said that “us who manage the public's dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government,” he was essentially saying that cutting wasteful programs is necessary for the public to regain faith in its elected officials.

Sure, there are many government programs that work and there are some that fail. The GAO High Risk report recommendations are a good place to begin reining in waste and cutting fat. When government is planning on spending enormous amounts federal cash on a stimulus, it is even more critical that the wasteful programs are eliminated, and the inefficient ones reformed. This would be an important first step in regaining public trust.