President Trump and many lawmakers in both parties have promised to attack waste and substantially improve government efficiency. The Government Accountability Office (GAO) has just handed them a long list of opportunities to do so in its latest “High Risk List.”
With a large and growing federal debt, elected officials should vigorously pursue these opportunities to reduce unnecessary spending and collect hundreds of billions of dollars in unpaid taxes. In addition, Congress and the president should heed the GAO’s renewed warnings about the long-term fiscal challenges facing important but costly entitlement programs.
The High Risk List, which GAO updates at the start of each new Congress, spotlights 34 government activities or areas that the agency considers “vulnerable to waste, fraud, abuse and mismanagement or needing broad-based transformation.”
GAO, a nonpartisan investigative arm of Congress, reports that the government made “considerable progress” on problems highlighted in the 2015 list. The agency removed one area from the High Risk List: the sharing and managing of information related to terrorism, which U.S. Comptroller General Gene Dodaro called “a particularly critical issue.”
But GAO added three new areas for concern: the “ineffective management” of programs serving Indian tribes, the government’s “soaring liabilities” associated with environmental cleanups, and the rising cost of the decennial census.
The agency said it also expanded two other areas on the list “because of emerging concerns about offshore oil and gas oversight and the Department of Defense’s (DOD) role in mitigating gaps in weather satellite data.”
Medicare and Medicaid, which under current law are among the key drivers of projected federal deficits for the coming years, remain on the GAO’s list for a variety of reasons.
“We designated Medicare as a high-risk program in 1990 due to its size, complexity, and susceptibility to mismanagement and improper payments,” GAO says. “Addressing Medicare’s short-term and long-term challenges is vitally important . . . The aging of the population, coupled with the growth in per capita health care costs, will magnify these challenges over time.”
Consequently, the agency adds, “continued close attention will be necessary to ensure that Medicare is sustainable for generations to come.”
As for Medicaid, GAO says its “size, growth and diversity” present oversight challenges and that there have long been concerns about oversight adequacy. GAO notes that substantial variation in how the states implement Medicare programs complicates such oversight.
The High Risk List has more than half a dozen defense-related areas, including weapons acquisition and “long-standing, uncorrected deficiencies with DOD’s financial management systems.” Such deficiencies are particularly troubling when Defense officials, the president and many lawmakers are pressing for substantial additional funding for the military.
Another significant item on the High Risk List is enforcement of the tax laws. GAO credits the Internal Revenue Service for efforts to improve taxpayer compliance and reduce the “tax gap” between what is owed to the government and what is actually paid.
“However,” GAO adds that “IRS’s capacity to implement new initiatives, carry out ongoing enforcement and taxpayer service programs, and combat identity theft refund fraud under an uncertain budgetary environment remains a challenge.”
GAO notes that the estimated net tax gap for 2008-2010 is $406 billion. Collecting even half of such an amount could mean a significant reduction in federal borrowing.
Other items on GAO’s list range from transportation funding and Veterans Affairs health care to improving oversight of food safety and restructuring the U.S. Postal Service to achieve “sustainable financial viability.”
Dodaro, who heads the GAO, says he is “encouraged by the headway so many agencies and programs have made” in getting off of the High Risk List. He also praises Congress for passing more than a dozen laws to correct problems that were identified on the 2015 list. Over the last decade, Dodaro says, progress on High Risk issues has resulted in about $240 billion in financial benefits.
Clearly, however, much more remains to be done.
It should be noted that simply attacking waste, fraud and abuse is not a panacea for the structural problems in the federal budget that will add trillions to the national debt in the coming decade.
So while Congress and the Trump administration should review every problem area on the High Risk List, they should pay particular attention to the big-ticket items like Medicare, Medicaid, the tax gap, and long-standing financial management troubles at the Pentagon.
