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Waste Management

While the federal government dishes out voter-friendly tax cuts and goes on spending sprees abroad, the country's top accountant says we're racing toward a fiscal crisis. Who will bear the brunt? You. Meet your new best friends in Washington: the Government Accountability Office.


Trillions, plural. Trillions of dollars-between two and three, actually. That's how much Congress has spent annually since the Bush administration set up shop in the White House and started writing checks. Given how little we know about certain activities we aren't meant to know about, it's hard to get even the slightest grasp on how much of those trillions are flushed down our federal toilet, which is presumably outfitted with one of Reagan's fabled $640 toilet seats.If anyone can get a grip on it, though, it's the nation's top accountant, David Walker, 56, the GAO's comptroller general, whose job it is to audit, oversee, and report on every penny Congress spends. So incensed is he by the numbers that he's mobilized a national campaign to sound the alarm. In fact, he is the alarm."What we have here is a fiscal cancer," says Walker, referring to America's bloated national debt and deficit. Perched on a couch in his office, Walker-despite the urgency of his message-has the smooth tone of a man whose frankness buttresses his professional objectivity. "The question is, What are we going to do to treat it? Are we going to change our behavior? Are we going to engage in some meaningful treatments in order to create a more positive future and be the first republic to stand the test of time? Or are we just going to continue the status quo?"With the costs of Medicare and Social Security about to skyrocket in light of the coming era of Baby Boomer retirement, the question Walker raises is not whether we'll need to raise taxes and cut spending, but where and by how much. According to GAO estimates, at the current rate of spending, by 2040, the government will be able to do little more than pay interest on the federal debt; spending on entitlement programs-Social Security, Medicare, and Medicaid-will by then consume all federal government revenues. By 2051, the economy could be in ruins. It's a simple equation: The bigger the debt, the slower the economy grows; the slower the economy grows, the slower wages climb. Add reduced retirement benefits and higher payroll taxes, and the outlook is, in a word, bleak. "That is … going to affect [Americans] in a very real, pocketbook kind of way," Walker told the Senate Budget Committee in January."People are shocked when they hear the numbers. Absolutely shocked," says Walker, who is spending a good part of his time on the road explaining those numbers. Since September, 2005, he has been headlining the Fiscal Wake-Up Tour, the hottest ticket in public finance and fiscal responsibility on the face of the planet, engaging the public in a realistic dialogue about the United States's financial future, with the hope of fostering an understanding of the dire path we're on and what needs to be done to change course.As head of the GAO, Walker works in downtown D.C., in the office headquarters, a federal building largely indistinguishable from those surrounding it. A paragon of bureaucracy, it has chrome and wood-grain accents in the lobby, giving it a decidedly 1940s feel, a sense of a proud world war victor's monument to civil-service efficiency. Like every other building in the area, it was built so as not to eclipse the Washington Monument in height, sprawling horizontally rather than vertically. From where Walker is sitting, he says he can already see America speeding toward a national crisis."We're in the transparency, performance, and accountability business," he says of the GAO. "We're in the business to state the facts and speak the truth, and not just do oversight, but provide insight and foresight to try to help others to see the way forward." That means that the GAO's reports are open for partisan interpretation. A chief proponent of oversight, Representative Henry Waxman, Democrat of California, has used GAO reports to launch investigations into nearly every nook and cranny of the executive branch, including alleged improprieties by the Environmental Protection Agency (for its 2005 reversal of a statement that said an energy facility off the coast of California needed to meet clean-air standards) and the State Department (the allegedly false claim regarding Saddam Hussein's government's alleged purchase of uranium from Niger). Waxman is also looking into the White House's "loss" of emails that related to contacts with the Department of Justice regarding the recent firings of U.S. Attorneys.Today, Waxman is animated, talking with me in a room in the Capitol where lobbyists and politicians gather around chestnut tables to do business as the latter make their way to and from their voting duties on the adjacent House floor. "The work done by [the GAO] points us in the direction where our oversight is most needed," he says. "In addition to looking at waste, fraud, and abuse of taxpayer dollars, I think it's important for us to look at government agencies and whether they're serving the public purposes for which they were created, or whether they're becoming dominated by politics or becoming ineffective for other reasons.""When one party controls the Senate, the House, and the White House-and it really doesn't make any difference what party it is-that's generally not good for transparency, accountability, and fiscal responsibility," says Walker. But with Democrats taking control of both chambers of Congress after six years of Republican leadership and ever-surfacing misdeeds, oversight has quickly become a buzzword on Capitol Hill. The freshman Democratic senator Claire McCaskill, Missouri's former state auditor, told the Kansas City Star upon her election that the "GAO is going to love me as a senator" and vowed to have the "GAO's products permeate everything I do in my job." Senator Joe Lieberman, an Independent from Connecticut, at a GAO press conference in February, spoke of how a hearing on Hurricane Katrina recovery led him to see just how concerned the American people are with accountability: "None of the witnesses asked for more money. They all wanted to talk about how the money there is being spent."More recently, Congress has put additional pressure on the inspectors general-the internal auditors of executive agencies-to ramp up their efforts, especially in light of findings such as the Department of the Interior's discovery that its Minerals Management Service might end up forfeiting more than $7 billion in royalties from oil companies over the next five years due to errors in leases signed in the 1990s, despite having discovered those errors in 2000.\n\n\n
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The government is owned by the people, and the people should know what their government is doing.
In fact, oversight has become so significant that Waxman decided to add the word to the official name of the committee he chairs. Now called the Committee on Oversight and Government Reform, it holds sweeping investigative power over matters of Congressional interest, and Waxman has put those powers-and the GAO-to use in a manner that would have been considered anathema to Congressional Republicans and the Bush administration during their halcyon "What checks and balances?" days-and for precisely that reason. "The administration should recognize that … they don't own the government," says Waxman. "The government is owned by the people, and the people should know what their government is doing."As the federal budget has ballooned in recent years, many of the recipients of government funds have retreated from the constraints of accountability. One particularly troubling area for both the GAO and the new Congress has been the escalating reliance on contractors to do the work of the government. In February, The New York Times reported that the total annual value of federal contracts doubled from $207 billion in 2000 to approximately $400 billion last year. Meanwhile, "contract actions," defined as both new contracts and payments on existing ones, have become increasingly easy to get: In 2001, 21 percent of government contracts were handed out without hearing other bids. In 2005, a shocking 52 percent were awarded without competition.At the same time as that report was published, the GAO released its biennial update on areas of the federal government at high risk of waste, fraud, and abuse. Not surprisingly, several agencies' contracting and procurement operations made the list, including those of the Department of Defense. In a follow-up report, the GAO revealed that a contract with a Kuwaiti company to provide food service to troops in Iraq for $3 a meal was inexplicably re-awarded to Halliburton, which was paid $5 a meal by the government and which then subcontracted the service back to the Kuwaiti company at the original rate. (The $2-a-meal profits were subsequently recovered from Haliburton.)"In Iraq, we're using contractors in new and unprecedented ways, in numbers that we've never seen before in our history," says Walker. "If we decide that it makes sense to contract for something, what are we doing to make sure that we're being very clear about what we're asking the contractors to do, so that we can hold them accountable for results? And what mechanisms do we have in place to provide adequate oversight to ensure that the taxpayers are going to get good value for their money?"The reconstruction efforts in Iraq have not only highlighted the challenges of keeping government contractors accountable-they have shown how difficult it can be to have meaningful inspection of a government that has displayed outright disdain for oversight. Just before the election last fall, Republicans slipped a provision into a defense spending bill that would eliminate the office of the Special Inspector General for Iraq Reconstruction by October, 2007. After a public outcry-and an election that spoke volumes about the public's mistrust of the government's management of the war and reconstruction-legislation was passed to keep the SIGIR office open at least through the fall of 2008. No wonder Republicans wanted that office shut down: In March, it released a scathing report on the government's failure to provide a strategy, structure, or even an understanding of potential problems faced in the reconstruction.The GAO has met similar resistance in its attempts to oversee the government's work in Iraq. Early this year, the State Department refused to grant the GAO's request for accommodations in the department's Green Zone facilities for three auditors at a time over a six-month period, stating that it lacked the resources to facilitate such a stay. On behalf of the GAO, a group of 21 Democratic senators sent a letter to Secretary of State Condoleezza Rice expressing their concern about the administrators of a war costing taxpayers $280 million a day, who can't seem to find the resources to put up three additional people.Iraq is, of course, not the only major area of concern for the GAO today, though it's certainly one of the biggest. As Walker's nationwide tour shows, there is one area that the GAO has been urging Congress itself to examine more closely: the nation's increasingly imbalanced long-term fiscal outlook."Where we're at right now, we're running large deficits in the short term, and people's efforts are to reduce or eliminate that," says the comptroller general. "But the real problem's not the short term: The real problem's the long range. We've gone from $20 trillion in liabilities and unfunded commitments in 2001 to $50 trillion in 2006, and those numbers are going up 2 to 4 trillion a year just due to the passage of time."\n\n\n
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If something doesn't change, Generation X and Generation Y, and ultimately their kids and grandkids, will have to pay off this [national debt]-with compounded interest. I don't think that's right, and I'm trying to make sure that we're doing something about it.
To Walker, the numbers are less important than the moral issues behind them. Such a mounting deficit could spell a financial disaster in the not-so-distant future: Spending on entitlement programs would be cut drastically, to the point where anyone under 30 today would be unlikely to receive much, if any, of what he or she is currently paying into those programs; taxes would skyrocket, threatening to completely eliminate the middle class in the United States; and if the United States were forced to default on its loans, interest rates would soar and economic growth would stagnate for at least a decade, leading to a long-term national depression.Beyond that, though, we can only speculate on what might happen. Will we be forced to pawn our national supply of bicycles to China? Will Canada create a wall along its border to prevent cheap Minnesotan labor from flooding into Manitoba? Will the hipster youth of tomorrow be forced to do their freelance graphic-design work from the discomfort of Wi-Fi-equipped boxcars? Hopefully, we'll never find out."If something doesn't change," Walker adds, "Generation X and Generation Y, and ultimately their kids and grandkids, will have to pay off this bill-with compounded interest. I don't think that's right, and I'm trying to make sure that we're doing something about it."
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