Foundation

Frequent High-Risk Federal Programs Should Focus Need for Budget Reforms

by Demian Brady / /

The Government Accountability Office (GAO) released a biennial update to its high-risk list of federal programs. Since 1990 the watchdog agency has identified government operations that have “greater vulnerabilities to fraud, waste, abuse, and mismanagement or the need for transformation to address economy, efficiency, or effectiveness challenges.” 

On the plus side, GAO notes one area concerning the sharing of terrorist-related intelligence across multiple agencies was removed since the last report, and that progress has been made in a number of other areas as agencies have implemented some of GAO’s recommendations and pursuant to legislation enacted by Congress.

However, problems persist, as two previous risk areas were expanded, three new risks were added: 

  • The management of federal programs that serve tribes and their members. In particular, GAO cited long-standing concerns about the administration of health and education programs.

  • The government’s environmental liabilities (mainly through the Department of Defense (DOD) and the Department of Energy) have risen from $212 billion in 1997 to $447 billion last year.

  • The upcoming nationwide decennial census in 2020 was added due to concerns about escalating costs throughout the last few decades significant IT challenges.

There are also several programs that are repeat offenders: 22 of the 34 high-risk areas have been on the list for at least 10 years. Six have been on the list since its inception in 1990, including:

  • DOD’s weapon systems acquisition and supply chain management, as well as NASA’s acquisition programs were listed due to concerns over cost, schedule, and risk management levels.

  • Enforcement of tax laws (which comes as no surprise given the sheer level of complexity in the Tax Code). NTUF reported that, last year, taxpayers spent over 6 billion hours digging through receipts and filling out forms. In total, compliance with the Tax Code cost the economy over $234 billion.

  • Medicare remains on the high-risk list due to its size and scope. Last year the program spent nearly $700 billion (which represented 17.8 percent of the entire federal budget) providing benefits to over 57 million people. Improper payments through the program cost $60 billion.

The fact that these problems persist is indicative of the size and complexity of a federal bureaucracy that spent $3.9 trillion last year. A spreadsheet published by the Office of Management and Budget recorded outlays in 2016 through 1,048 discretionary programs and accounts, as well as 956 mandatory programs and accounts. Part of that spending includes a veritable army of oversight entities. In addition to GAO, there are 77 Inspectors General that keep an eye on their respective agencies, plus the dozens of Congressional committees and subcommittees, and the Office of Management and Budget (which under different presidential administrations has sought to grade and rank the success of federal programs).

The great social historian Jacques Barzun wrote about the gradual development of the welfare state over successive generations, and that at a certain point, “good intentions exceed the power to fulfill them.” NTUF has repeatedly pointed out the rising tide of federal spending and debt, and the looming insolvency of the federal government’s major entitlement programs. Significant reform is needed across the board in federal programs, but especially regarding entitlement programs because, otherwise, the budget cannot be balanced.


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