A Fresh Perspective on Government Waste

U.S. government spending cuts have seized national attention as the impact of leaner budgets is felt across the American economy.

Amid the screaming and gnashing of teeth over the looming cuts is the inconvenient reality that government — and the Pentagon more than any other agency — is bloated and now might be an opportune time to put it on a crash diet.

The prospect of $1.2 trillion brutally excised from federal agencies’ future budgets — as a result of the 2011 deficit-reduction deal that Congress passed — has many lawmakers in a panic. Even deficit hawks who attack federal spending as a matter of religion are recognizing that it is important to differentiate between wasteful expenditures and worthy programs.

“Too often the distinction between needed services and wasteful government gets blurred perhaps for political purposes,” said Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee.

During a recent committee hearing, it dawned on members that if Congress truly had the political will to identify real inefficiencies and pointless programs across government, the savings would more than offset the $1.2 trillion “sequester.”

The Government Accountability Office has published dozens of reports identifying agencies that fund duplicate and overlapping projects. Congress must fix that, Issa said. “And we’ve never had a better reason.” Ignoring the problem is no longer an option, he said. “We are running out of time.”

Proposals for how to “smartly” pare government waste have emanated from countless blue-ribbon panels, think tanks and watchdog groups in Washington. And they typically are ignored.

The prospect of across-the-board cuts, however, is giving much of Capitol Hill pause.
“Here we have an opportunity with sequestration coming up,” said Rep. John Mica, R-Fla. “If it goes into effect, there are going to be a lot of people who are going to run around with their hair on fire.”

Several witnesses at the House oversight hearing offered a list of what they consider low-hanging fruit that collectively would save more than a trillion dollars over a decade — about equivalent to the sequester. Suggestions included everything from improper Medicare and Medicaid payments to overpriced weapons systems, subsidies to wealthy corporations and farmers, redundant information-technology programs, disaster insurance abuse, unneeded nuclear weapons facilities and military bases and war contracting fraud. The list goes on.

Tom Schatz, president of Citizens Against Government Waste, said lawmakers should acknowledge their direct role in enabling excessive spending. “Indeed, an underlying reason for government waste and mismanagement is Congress’ tendency to create a program to solve a problem,” said Schatz. Neither House nor Senate rules, he said, require committees to study whether a proposed bill that creates a new federal program would duplicate or overlap any existing initiative.

The world’s largest bureaucracy, the Defense Department, is “extremely vulnerable to waste and duplication,” said Ryan Alexander, president of Taxpayers for Common Sense. Significant savings could be extracted from Tricare and weapons programs, she said.

By better managing mundane tasks such as personnel processing, contracting and supply chain management, the government could shed billions of dollars in costs, said John Kamensky, a senior fellow at the IBM Center for the Business of Government. The government spends twice what the private sector does on comparable activities, he said.

Reducing overhead and administrative costs, consolidating data centers, eliminating redundant networks and standardizing applications could lead to savings of about 20 to 30 percent, said Kamensky.

Issa’s committee recently identified nearly $20 billion in annual “waste” in the federal government’s $80 billion information-technology budget. Again, Schatz noted, “without an evaluation of which of those programs are effective, Congress just keeps adding new programs.”

The government annually procures about $550 billion in goods and services. These are purchased through independent processes and agencies. Large corporations, by contrast, consolidate their business operations to gain efficiency, he said.

The Pentagon is a particularly tough target for lean government advocates. Every American believes the nation should have a strong national defense, and that consensus is “exactly what has allowed the waste that exists at the Pentagon to thrive and grow,” Alexander said.

Stephen Miles, a legislative liaison for the advocacy group Win Without War, said the current political theater over federal spending and the open display of congressional dysfunction are making many Americans hungry for a new direction. “We should have a national security policy that keeps America safe, and not one driven by a budget,” Miles told National Defense. The United States has yet to have a debate on what spending choices need to be made to keep the nation safe, he said.

Jack Mayer, a former Pentagon official and now executive vice president of Booz Allen Hamilton, said the Pentagon could be compelled to downsize simply by taking the money away. But a smarter approach would be to completely rethink its missions and go back to basics, Mayer said at a Brookings Institution forum. “People talk about government and what government should be doing. We should have the same discussion about defense.”

But it does not appear Capitol Hill is ready to have that conversation, although Pentagon spending is under much tighter scrutiny. The Air Force recently drew lawmakers’ ire when it was disclosed that it had spent hundreds of millions of dollars on an “expeditionary combat support system” that ultimately was terminated. 

“Unfortunately, it’s not the first time,” said Schatz. “And we hope it’s one of the last times.” It is not unusual for defense projects to go over budget, he noted. “There are really no consequences for spending more money and hope the program works eventually. That’s one of the reasons why they keep going,” he said. “It’s Congress that doesn’t put its foot down and say, ‘No.’”

Mica conceded that point. “It’s interesting to have you all suggest these potential areas in which we can cut and save. … It’s very difficult, much more difficult on our side.”

Both sides of the aisle know what the problems are, agreed Rep. Jackie Speier, D-Calif. “We just never effectuate the changes that need to take place. So we, as a Congress, have got to take some blame for what is going on.”

Topics: Business Trends, Defense Department, DOD Budget, DOD Policy