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The Late Edition: February 26, 2013
Posted By:  - 02/26/13

Today’s Taxpayer News!

NTU sheds light on the so-called “Marketplace Fairness Act”, in this letter by the New Hampshire Liberty Party co-founder and co-chairman,

Darryl W. Perry. Before Its News has the full letter.

How will sequestration affect our ability to defend ourselves as a nation? The Cato Institute has published a very informative graphic

demonstrating just how modest a reduction in spending the sequester calls for.


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As Sequester Nears, Cutting F-35 Is a Great Place to Start
Posted By: Nan Swift - 02/26/13

Just in time for Friday’s sequester deadline, the F-35 fighter jet is back in the news to remind us that yes, Virginia, there is room to pare back the Pentagon budget. Last week’s grounding of the entire fleet, due to a cracked engine blade, was the second time in two months that flight operations have been suspended and was well-timed with a major Time Magazine article lambasting “the most expensive weapon ever built.”  While NTU has long voiced concerns over several aspects of the extremely costly and extremely troubled aircraft, it’s about time others start to take notice of how the Pentagon is wasting taxpayer funds on this  boondoggle.

Born out of the Joint Strike Fighter program in the late nineties, Time explains that over the past decade the F-35’s price tag has doubled to $396 billion, the program has been beset with one delay after another, and still:

Its pilots' helmets are plagued with problems, it hasn't yet dropped or fired weapons, and the software it requires to go to war remains on the drawing board.

The article goes on to describe how taxpayer funds have been abused and wasted at almost every step of the way:

It opted to build three versions of a single plane averaging $160 million each (challenge No. 1), agreed that the planes should be able to perform multiple missions (challenge No. 2), then started rolling them off the assembly line while the blueprints were still in flux--more than a decade before critical developmental testing was finished (challenge No. 3). The military has already spent $373 million to fix planes already bought; the ultimate repair bill for imperfect planes has been estimated at close to $8 billion.

Back in 2002, Edward Aldridge, then the Pentagon's top weapons buyer, said the F-35 was ‘setting new standards for technological advances’ and ‘rewriting the books on acquisition and business practices.’ His successor voiced a different opinion last year. ‘This will make a headline if I say it, but I'm going to say it anyway,’ Frank Kendall said. ‘Putting the F-35 into production years before the first test flight was acquisition malpractice. It should not have been done.’

The Pentagon and its allies say the need for the F-35 was so dire that the plane had to be built as it was being designed. (More than a decade into its development, blueprints are changing about 10 times a day, seven days a week.)

It would be easy to think that after so many years and so much money taxpayers will have a truly cutting-edge weapon at the end of the day. Unfortunately, that couldn’t be further from the truth:

Aviation Week & Space Technology magazine, the bible of the aerospace industry and a traditional supporter, published an editorial last fall that declared the program ‘already a failure’ on cost and schedule and said ‘the jury is still out’ on its capabilities.

J. Michael Gilmore, Christie's successor as the Pentagon's top weapons tester, reported in January that all three versions will be slower and less maneuverable than projected. Weight-saving efforts have made the plane 25% more vulnerable to fire. Only one of three F-35s flown by the U.S. military, he added, was ready to fly between March and October.

Read the whole thing here.

The increasing costs of the F-35 are even starting to give our allies second thoughts regarding their planned purchases of the jet. Recently, Canada announced it was reviewing plans to buy 65 F-35s – both due to the cost and potential refueling problems with the aircraft itself. Australia and Great Britain are also reconsidering their orders, while Italy has gone ahead with cuts.

So how did taxpayers get stuck with this high-tech albatross that is seven years behind schedule and 70 percent over initial cost estimates? sums this up:

It is also the defense project too big to kill. The F-35 funnels business to a global network of contractors that includes Northrop Grumman Corp. (NOC) and Kongsberg Gruppen ASA of Norway. It counts 1,300 suppliers in 45 states supporting 133,000 jobs -- and more in nine other countries, according to Lockheed. The F-35 is an example of how large weapons programs can plow ahead amid questions about their strategic necessity and their failure to arrive on time and on budget.

Only a few years ago, taxpayers were asked to bail out private institutions because they were “too big to fail.” Now, even as we face record debt and politicians crisscross the nation wringing their hands over a mere 2.4 percent pullback in total expenditures that they are certain will doom us all, taxpayers are being  forced to continue footing the bill for “too big to kill.”

Buying into the sunken-cost fallacy – throwing good money after bad – is not a path to sound policy, or  a strong defense for that matter. Billions of dollars have been wasted that could have been allocated to other successful military programs, to modernization, or even to finally auditing the Pentagon (a small investment of taxpayer money that could yield big returns).

Sadly, it looks like the F-35 will continue to be with us for now:

But thanks to $4.8 billion in Pentagon contracts for 31 planes pushed out the door barely 100 hours before the original Jan. 2 sequestration deadline, much of the program will continue on autopilot.

But it does help make the point that as the “dreaded” sequester looms Pentagon spending should be on the table, because there’s plenty of room for savings.  The Cato Institute has an excellent graphic here that helps to put the sequester in perspective, explaining that the coming cuts will only take us back to 2006 defense spending levels, which is still more than $100 billion over what we were spending during the Cold War. And while the sequester does call for some immediate short-term cuts in spending, military expenditures are projected to continue rising, albeit not as quickly, as we go forward.

That fact, more than the small chunk of spending restraint taxpayers get from the sequester, should strike fear in your wallet. The sequester is an important first step, but without other tough decisions and serious reforms, we still have an out-of-control spending situation on our hands. At the end of the day, as NTU Taxpayers’ Friend Award winner Congressman Justin Amash (R-MI) stated, “We’re bankrupting our country, and it’s going to put us in danger.”


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NTU and Foundation Poll Youth Conference for Their Important Issues
Posted By: Dan Barrett - 02/21/13

Staff from the National Taxpayers Union and NTU's research and education arm, NTU Foundation, participated in the 2013 International Students for Liberty Conference (ISFLC) with one question for attendees: What policies will you fight for? Over the course of the weekend, students and young adults responded by voting for one of six issues that we thought Americans of all ages could at least agree needs addressing. Many attendees were interested in the mission of NTU and NTUF and asked us many, often challenging questions. I recall one conversation about the economic and realistic reasoning behind whether or not to establish a federal Balanced Budget Amendment. Some even took up the cause of lower taxes and less government by becoming members of NTU or saying that they would enjoy the opportunity to intern with us over the summer. If you’re interested, check out our Internship page. We accept interns year-round and there’s a lot of government to roll back. Still others were looking to show their support for NTU and Foundation in other ways:

Blogger and Vlogger Julie Borowski stopped by for a bumper sticker and a picture

We asked people to cast a vote for their number one issue that needs reform right now. Our six fishbowls highlighted some of the issues we thought the ISFLC participants would identify with the most. The issues were: a Balanced Budget Amendment, cutting the Pentagon budget, ending the Federal Reserve, less spending, real tax reform, and right to work. One lucky entry would be drawn to be interviewed on NTU's Speaking of Taxpayers podcast. The Results were interesting:

Issues Voted on by Participants at
the 2013 International Students for Liberty Conference
Percentage of Overall Votes
Balanced Budget Amendment
Cut the Pentagon Budget
End the Fed
Less Overall Spending
Real Tax Reform
Right to Work
Note: Not necessarily representative of all ISFLC participants

We also found that these six issues were just the tip of the iceberg. On a separate board, students pinned other ideas on where NTU and Foundation can help out taxpayers, including stopping sin taxes, ending corporate welfare, and fighting for bacon (yes, we had some serious bacon fans at ISFLC). All of this proved that young people are just as interested in the important fiscal issues as any other age group.

Thanks to everyone who came by our booth and let their voices be heard and congratulations to Annie Setten who will be interviewed next Friday!

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Troop Withdrawal Proposals
Posted By: Michael Tasselmyer - 02/13/13

During a night that generally lacked specific policy proposals, President Obama used a portion of his State of the Union address on Tuesday to outline his plan to bring more American troops home from Afghanistan:

"Already, we have brought home 33,000 of our brave servicemen and women. This spring, our forces will move into a support role, while Afghan security forces take the lead. Tonight, I can announce that over the next year, another 34,000 American troops will come home from Afghanistan. This drawdown will continue. And by the end of next year, our war in Afghanistan will be over.

Beyond 2014, America's commitment to a unified and sovereign Afghanistan will endure, but the nature of our commitment will change. We are negotiating an agreement with the Afghan government that focuses on two missions: training and equipping Afghan forces so that the country does not again slip into chaos, and counter-terrorism efforts that allow us to pursue the remnants of al Qaeda and their affiliates."

The President's comments reflect his previous plans to remove most, if not all, combat forces from Afghanistan by the end of 2014. There remain about 66,000 U.S. troops in the region today, and public support for ending American presence there is high. What is less certain are the budgetary impacts that could stem from the President's proposals last night.

In a 2012 Capitol Hill hearing, Department of Defense Under Secretary Robert Hale told lawmakers that it costs about $850,000 per soldier per year to station one U.S. troop in Afghanistan. That figure suggests a potential $28.9 billion annual cost associated with keeping abroad the 34,000 troops that President Obama wants to withdraw.

Note that any savings incurred from bringing troops home wouldn't necessarily be equal to the entire cost of keeping them abroad. Although it is more expensive to station military forces overseas, there are still costs associated with maintaining a combat force here at home. The extent of these savings would be affected significantly by how Congress decides to act regarding impending sequestration cuts.

Of course, the fluid nature of overseas military operations also makes it difficult to arrive at a definite cost or savings estimate for such proposals. The President's budget for fiscal year 2013 requested $96.7 billion for "Overseas Contingency Operations." Beyond that, it called for $44.2 billion per year for fiscal years 2014-2022.

Ostensibly, some of this funding would go towards "training and equipping Afghan forces," as they assume responsibility for the country's security and American forces enter a non-combat support role. However, any budgetary changes associated with the President's long-term transition proposals will be contingent on the agreement that he is able to reach with Afghanistan's leadership, and how involved the U.S. military will be in its support.

We hope to see a detailed budget proposal from the President in order to assess more completely how this accelerated withdrawal strategy will affect federal spending.

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Costs to Consider: Immigration Reform
Posted By: Michael Tasselmyer - 01/31/13

The 113th Congress is less than a month into its first session, but lawmakers have already spent significant time debating the next move in immigration reform. A commission of 8 Senators recently announced a proposal for legislation that would provide new pathways to legal citizenship for immigrants living illegally in the U.S. now, in exchange for additional border security and enforcement measures.

During the 2012 election season, NTUF used its BillTally research to analyze some Senate candidates’ campaign proposals regarding border security. There are generally three ways lawmakers address border security, and their costs vary:

  • Additional law enforcement: CBO estimated in 2007 that additional border patrol personnel would cost between $120,000 and $180,000 per agent. That range in today’s dollars is about $133,000 to $199,000.
  • Border fencing: A 2009 GAO report found that pedestrian fencing along the Southwest border cost nearly $6.5 million per mile, and $1.8 million per mile for vehicle fencing. Those figures included property acquisition and materials costs.
  • Drones and "virtual" fences: The most recent Selected Acquisition Report from the Department of Defense suggests that MQ-9 drones used by Customs and Border Protection run about $31 million per drone, including ground control equipment. Construction of the SBInet virtual fence was cancelled by DHS after $1 billion had been spent on 53 miles of fence.

As the range in cost estimates shows, comprehensive immigration reform is a complex policy issue that can affect a number of different budgetary functions. For more on BillTally, visit

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House Prepares to Dodge the Sequester
Posted By: Nan Swift - 12/20/12

This afternoon, the House of Representatives plans to take up H.R. 6684, the Spending Reduction Act of 2012. According to the House Speaker’s website, the bill:

… replaces the president’s defense ‘sequester’ with common-sense spending cuts and reforms, and reduces the deficit by approximately $200 billion more than the original sequester. The bill focuses on stopping waste, fraud, and abuse in federal programs, eliminating government slush funds (including an ObamaCare slush fund), and reducing waste and duplication in government bureaucracies.

Cutting spending, especially doing so over and above the baseline of the $109 billion in spending restraint called for in the Budget Control Act (BCA), is both laudable and urgently needed.  At the same time, rushing a bill through as part of the Fiscal Cliff package only to avoid the pending $54.7 billion defense sequester is disingenuous , demonstrating a lack of political will to make the tough calls we need to get our fiscal house in order.

Ironically, by including the sequester mechanism in the BCA back in 2011, Congress hoped that when faced with the horror of automatic spending reductions, they would collectively be forced to make exactly those hard decisions. However, the savings outlined in H.R. 6684 are again called “common sense solutions to help end waste, fraud & abuse of taxpayer money” in a write up from May found here.

This begs the question, if these are common sense solutions, why haven’t these savings already been realized? With our deficit topping $16 trillion, Congress should be making every effort to increase accountability and eliminate waste at every opportunity, not simply when it’s useful to avoid cutting pet projects and facing down the defense industry.

While the additional savings from H.R. 6684 will help slow our growing debt, that doesn’t mean that the savings to be found in cutting spending in other areas such as entitlements and in this case, defense, should be left on the table.

As NTU has pointed out again and again, there are billions in savings to be had by going after under performing, unnecessary, and wasteful defense programs.  NTU has written about these reforms here, here, and here.

Last year NTU teamed up with the U.S. Public Interest Group (U.S. PIRG) to find over $1 TRILLION in savings that the right and left of center groups could easily agree on. The list included, “$428.8 billion in savings from ending low-priority or unnecessary military programs.” Surely, programs that such strange bedfellows can agree should be headed for the chopping block makes them every bit as much “common sense” savings as those included in H.R. 6684.

More recently, Senator Coburn (R-OK) released his “Department of Everything” study that found:

The recommendations outlined in Department of Everything could save as much as $67.9 billion or more over ten years without cutting any Army brigade combat teams, Navy combat ships, or Air Force fighter squadrons.

Just as the “Spending Reduction Act of 2012” takes aim at real waste that should be immediately eliminated, Sen. Coburn found the Department of Defense equally ripe for serious reform. Among the many wasteful practices, duplicative programs, and unnecessary spending the Senator discovered:

… the Navy recently funded research examining what the behavior of fish can teach us about democracy while also developing an app to alert iPhone users when the best time is to take a coffee break. The Air Force Office of Scientific Research funded a study last year examining how to make it easier to produce silk from wild cocoons in Africa and South America.9 Both the Navy and the Air Force funded a study that concluded people in New York use different jargon on Twitter than those living in California.

The entire report is well worth a read, especially by our Representatives in the House this afternoon. When legislators go to vote on H.R. 6684, they should know that voting to eliminate yet another ObamaCare slush fund, preventing fraudulent use of the child refundable tax credit, and cutting SNAP waste are all going to help the bottom line.

But those billions can only be the beginning, especially when our debt reaches well into the trillions. There are real and immediate savings to be had by taking a closer look at how our defense dollars are spent. As taxpayers and our economy approach a critical turning point, it demonstrates a lack of leadership and seriousness about our fiscal reality for Congress to continue avoiding the tough decisions they were elected to make.


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The Cost of Fighting Currency Manipulation
Posted By: Michael Tasselmyer - 11/02/12

In its analysis of multiple Senate races as well as the 2012 Presidential campaign, NTUF has noted several candidates making reference to currency manipulation in some countries - particularly China - and the need to "crack down" on our trading partners' monetary practices. The position has found its way into the agendas of:

Currency Manipulation

The alleged issue is that some countries artificially lower the value of their currency. This increases the cost of U.S. exports to those countries, and decreases the cost for the U.S. to import those countries' goods. Policymakers have proposed various regulations in response, hoping to make U.S. exports more competitive on the international market.

The topic can be a confusing one to examine from a taxpayer's perspective not only because of the complexity of international trade, but also because these types of policies can significantly affect revenues in addition to outlays.

However, there are some regulatory and administrative costs associated with these policies that we can examine. Let's take a look at how the campaign proposals might translate into actual dollar figures.

What Has Been Proposed

The basis that NTUF used for its analysis of the above candidates' "currency crackdown" proposals was Senate Bill 1607, the Currency Exchange Rate Oversight Reform Act of 2007, which lawmakers introduced in the 110th Congress. That bill would have directed the Treasury to:

  • identify currencies that were "fundamentally misaligned" with equilibrium exchange rates; and
  • change international monetary policy accordingly to penalize them should they not address the problem. The penalties would be coordinated with the World Trade Organization and the International Monetary Fund.

The bill as introduced would apply to the currencies of countries with whom the United States has "major" trade relationships. Clearly, China would be included amongst those countries: in 2011, the U.S. Department of Commerce reported $103.9 billion in exports to China, and imports of $399.3 billion.

What It Could Cost

The CBO's report on S. 1607 estimated that the bill would cost about $4 million per year to implement; over the course of 5 years, that would amount to $20 million. Part of the cost would be a result of the extra workload imposed on the Treasury: tracking exchange rates and identifying whether or not certain countries may be manipulating them.

Additionally, the legislation would require the formation of an entirely new federal agency, the Advisory Committee on International Exchange Rate Policy. The Committee would advise the Treasury on how to penalize countries found to be manipulating the value of their currencies. These penalties would depend on Congressional approval and would be proposed after consulting with the WTO and IMF.

Be sure to take a look at NTUF's candidate studies for more on how this issue fits in to the rest of the candidates' proposed spending agendas.

NTUF does not endorse any candidate or position mentioned.

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VA Senate Race: Border Security Costs Uncertain
Posted By: Michael Tasselmyer - 10/30/12

A popular theme throughout this election season has been the security of our nation’s borders. In Virginia's U.S. Senate race, former Senator George Allen has stated that "...our first priority needs to be securing our borders." His challenger, former Governor Tim Kaine, has said that "...we must have a strong and secure border."

Unfortunately, both candidates in Virginia have been vague regarding how they intend to achieve this goal. For the sake of attaining a general grasp of how they might affect our wallets, we can take a look at the budgetary effects of some common border security measures policymakers have proposed during such discussions. Note: NTUF does not endorse any position or candidate.

Additional Law Enforcement

One way to presumably "secure the border" is to simply put more law enforcement officials there. In the 110th Congress, the House introduced H.R. 4088, the Secure America through Verification and Enforcement (SAVE) Act of 2007. It was reintroduced in the 112th Congress as H.R. 2000. Part of the original bill called for an additional 5,000 full-time border patrol agents. The Congressional Budget Office estimated those additional personnel demands would cost $2.276 billion over five years, or $455 million annually. Adjusted for inflation, that annual amount would be closer to $508 million today.

Also in 2007, CBO reported that it costs between $120,000-180,000 per year for each additional border patrol agent, including the cost of salaries, benefits, training, equipment, and support.

It's unclear to what extent Kaine or Allen would support these measures, if at all.

Border Fencing

Another way to secure the border is to, quite literally, draw a line in the sand and build a fence around it. A 2009 report from the GAO stated the target length for the border fence was 661 miles. According to a February 2012 Customs and Border Protection update, 651 miles of fence had been constructed. The cost of additional fencing would depend on the materials used, and whether Kaine or Allen would expand the fence to reach the initial target of 661 miles or extend it up to the entire 1,993-mile border.

According to the GAO report, fencing completed by October 2008 cost an average of $3.9 million per mile for pedestrian fencing and $1.0 million per mile for vehicle fencing. The report also notes, "However, once contracts were awarded, the average per mile costs had increased to $6.5 million per mile for pedestrian fencing and $1.8 million per mile for vehicle fencing … the per mile costs increased over time due to various factors, such as property acquisition costs incurred for these miles that were not a factor for many of the previous miles and costs for labor and materials increased."

Drones & "Virtual" Fences

Developments in unmanned aircraft technology have lead to their increasing application in patrolling and safeguarding. As of August 2012, U.S. Customs and Border Protection was operating seven MQ-9 Reaper (formerly, Predator B) surveillance drones; five were in the Southwest region. According to the Department of Defense's latest Selected Acquisition Report (from December 2011), 404 MQ-9 drones would cost $11.54 billion in 2008 dollars (including ground control and maintenance equipment), which comes to an individual cost of almost $31 million per drone after adjusting for inflation. Depending on how extensively candidates would modify existing drone patrol resources, the associated costs or savings could be substantial.

Worth noting is a May 2012 report from the DHS Office of Inspector General that suggests a lack of human and financial resources has hampered the use of already existing CBP drones.

In addition to drones, the Department of Homeland Security has tried to implement other surveillance technology such as thermal imaging systems, motion detectors, and long-range cameras as part of a "virtual fence." Expansion of the SBInet system, as it was referred to at conception in 2006, was cancelled in January 2011 due to its high cost. When expansion stopped, over $1 billion had been spent on 53 of the 1,993 miles of land that make up the border. Costs to expand the virtual fence would depend on the nature of the technology used, and how extensive the expansion would be.

When it comes to how much they would spend on border security, neither candidate in Virginia has offered enough detail to draw any definitive conclusions. Nevertheless, taxpayers can expect the issue to present significant fiscal implications going forward.

Be sure to check out NTUF’s Virginia candidate studies for more:

Spending Analysis: George Allen

Spending Analysis: Tim Kaine

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In the Fight Over Defense Cuts, Taxpayers Are the Real Losers
Posted By: Nan Swift - 10/11/12

When it comes to defense, much of the rhetoric surrounding this issue, both in the Virginia senate race where defense contractors are a major source of employment for citizens of the state, and in the Presidential race, has focused on the potential effects of pending sequester cuts that will take $55 billion off the top of the current $562 baseline budget on January 3.

Unfortunately, by focusing solely on potential job losses (sincerely unfortunate though they would be), the larger more serious problem of the entrenched military-industrial complex, that a departing President Eisenhower so famously warned us about, and the enormous waste associated with the bloated Pentagon bureaucracy has been largely ignored.

For years, NTU has maintained a steady drum beat against costly, wasteful, and all too often unnecessary projects and programs. These include the risky and highly experimental IIB version of the Standard Missile-3, the costly Medium Extended Air Defense System, the superfluous F-35 joint strike fighter engine, the unreliable V-22 Osprey, and the similarly beleaguered F-35B aircraft  - just to name a few!

At a time of record spending and debt, with tough cuts looming just over the horizon, it can be hard to understand why programs with obvious, severe flaws that make little budgetary or strategic sense aren’t simply discontinued. This article from CNN, “Army to Congress: Thanks, but no Tanks,” articulates just how wasteful some defense spending can be, and just how hard it is to change:

CNN was allowed rare access to what amounts to a parking lot for more than 2,000 M-1 Abrams tanks. Here, about an hour's drive north of Reno, Nevada, the tanks have been collecting dust in the hot California desert because of a tiff between the Army and Congress.

The U.S. has more than enough combat tanks in the field to meet the nation's defense needs - so there's no sense in making repairs to these now, the Army's chief of staff Gen. Raymond T. Odierno told Congress earlier this year.

If the Pentagon holds off repairing, refurbishing or making new tanks for three years until new technologies are developed, the Army says it can save taxpayers as much as $3 billion.

But guess which group of civilians isn't inclined to agree with the generals on this point?


To be exact, 173 House members - Democrats and Republicans - sent a letter April 20 to Defense Secretary Leon Panetta, urging him to continue supporting their decision to produce more tanks.

That's right. Lawmakers who frequently and loudly proclaim that presidents should listen to generals when it comes to battlefield decisions are refusing to take its own advice.

You need to read the whole thing. The article goes on to describe the toxic combination of deep-seated special interests, campaign donations, and jobs that are spread out through as many congressional districts as possible for maximum influence. As former NTU staff member Andrew Moylan put it back in July:

The Defense Appropriations bill before the House this week spends $3.1 billion more than was even requested by military leaders. When you're outspending the wishes of budget-hungry bureaucrats, that's a serious problem.

It’s clear that despite the obvious problems and even more obvious opportunities to save money without negatively impacting our national security, there’s a serious lack of political will to enact the real reforms that are so urgently needed.

Sadly, when big government and big business collude in this manner it’s the taxpayers who end up on the hook for things like the 2,000 tanks gathering dust in the desert. And while it’s true that halting the pointless production of ever more unwanted tanks and other machines will mean a loss of jobs, what the candidates aren’t talking about it the increased prosperity that can flourish in other areas when funds aren’t so dramatically misallocated. Cutting spending means less borrowing and debt, decreasing the enormous drag on our economy. If taxpayers don’t have to shell out for a fighter jet engine we don’t need, that’s money that will still do enormous economic good, that has untold potential.



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Pentagon's Bad Bookkeeping Helps GAO Scoop Ig Noble Prize
Posted By: Nan Swift - 09/24/12

Each year, the creative people at Improbable Research honor “achievements that first make people laugh, and then make them think” by awarding the Ig Nobel Prize in fields such as physics, fluid dynamics, peace,  and chemistry to name a few. While denizens of DC might not be familiar with the great work of Rouslan Krechetnikov and Hans Mayor, who finally unlocked the secret as to why coffee spills when walking, many will recognize the winner of this year’s prize in Literature: the U.S. Government General Accountability Office (GAO).

Founded in 1921 by the Budget and Accountability Act, it is the role of the GAO to investigate “how the federal government spends taxpayer dollars.” To this end it conducts audits, examines the performance of programs, and keeps an eye on our growing debt.  As the number crunchers in Congress it is surprising that they would be so honored for their work in literature.

The winning piece, published in May, is called “Actions Needed to Evaluate the Impact of Efforts to Estimate Costs of Reports and Studies.”  If that gripping title isn’t enough to make you pick up the report immediately for a quick read, the piece was summarized thusly for the Ig Noble Awards:

The US Government General Accountability Office, for issuing a report about reports about reports that recommends the preparation of a report about the report about reports about reports.

It would be easy to dismiss this as yet another reason why we can’t have nice things – because the government spends time and taxpayer money on reports about reports about reports. But a quick glance at the summary reveals a far more sobering side to the funny report. Everyone loves a good report about a report about a report, but the underlying story is about how poorly the Department of Defense (DOD) estimates costs by deviating from the accounting standards published by the GAO and using inconsistent practices that can miss the full scope of DOD costs. GAO points out that not only are costs going unaccounted for, but also DOD cost estimates are lacking when it comes to documentation and accuracy.

With defense spending at the center of sequestration discussions and serious belt tightening needed across the board to halt our out of control spending, it is disconcerting to find that this budgetary third rail can’t even begin to get its books in order.  It is unjustifiable that when defense spending consumes 25% of the federal budget of government spending, the DOD can’t say exactly where that money is going.

The Ig Nobel award points less to any dysfunction on the part of bureaucrats at GAO than it does to the extreme bookkeeping ineptitude at DOD that necessitated the report in the first place. In light of looming cuts and repeated failed attempts to root out waste at the Pentagon, Sens. Coburn (R-OK) and Manchin (D-WV) have introduced S. 3487, the Audit the Pentagon Act.

Writing in the Washington Examiner, Coburn explains:

Auditing the Pentagon is critically important not just because it is the law but also because our ignorance of how we spend defense dollars undermines our national security. When the Pentagon can't tell Congress -- or itself -- how it is spending money, high-priority defense programs face cuts along with low-priority programs, the exact situation in which we find ourselves today under sequestration. In short, this bill helps the Pentagon to help itself. For instance, the United States Marine Corps did a study in which the corps found that "for each $1 spent on financial improvement, an estimated $2.77 in value was created for the warfighter." A thorough financial audit, done correctly, will free up existing resources for national security.

DoD's inability to pass an audit has potentially wasted billions and undermined our readiness and morale. For example, as Sen. Manchin has noted, while DoD is considering laying off service members, the Pentagon overspent $8 billion -- almost half of NASA's budget -- on information technology programs that are failing in part because DoD's books are such a mess. This would be enough money for more than 15,000 active-duty troops.

Some of the more egregious wastes of taxpayer funds at DOD such as microbreweries and an iPhone app for monitoring caffeine intake are themselves deserving of Ig Nobel prizes. CBS reports:

Pentagon dollars also funded studies that concluded:

- Men are perceived as more muscular if they're holding a gun, instead of tools.

- New Yorkers and Californians use different regional slang on Twitter.

- The first prehistoric bird probably had black feathers.

- The same basketball teams will always dominate March Madness.

Though the Ig Nobel award ultimately lampoons the extremely serious lack of financial accountability at the Pentagon, on the bright side according to a summary of this year’s prize winners and ceremony, GAO did not send a representative to the ceremony last week at Harvard University, thus saving taxpayers money. Had it been the Pentagon receiving an award for any of their wasteful studies, it would no doubt have involved a full report on The Curse of the Bambino and a flyover.  

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