Executive Sessionby Former Senator Tom Coburn
Posted on 2013-02-27
COBURN. I ask to speak as if in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Sequestration Mr. COBURN. I want to spend a few minutes this afternoon talking about what is going to happen on March 1, something we have known is going to happen for 18 months. Nobody really wanted it to happen this way, but I want to make the case if we give the administration the flexibility, we can easily swallow $85 billion a year in reductions.
I am going to go through a small set of oversight reports I have actually done in the last year or so talking [[Page S919]] about waste within the Federal Government.
We looked at the urban area security grants of the Department of Homeland Security. We looked at the Department of Defense, the programs that were in the Department of Defense which don't have anything to do with defense; that is $67 billion a year.
Let me say that again: $67 billion a year is spent in the Department of Defense which has nothing to do with defending the country.
We outlined the 100 most wasteful projects, we put that out in December of this year, a treasure map. We looked at the Market Access Program and what it is actually doing to some of the wealthiest agricultural businesses in this country. It is subsidizing their export of sales. Money for nothing, all of the money that we spent that hadn't actually accomplished anything. We did a report on that.
Next we did a report on the subsidies for the rich and famous because we do have a mixed-up Tax Code, and over $30 billion a year in benefits goes to a very small number of people in this country inappropriately through our tax cuts. The discussion and disagreements we are going to have on that will be about what do you do with that. Everybody agrees we probably ought to fix that. Do you fix it by just raising taxes or do you fix it by reforming the Tax Code and actually getting greater taxes coming into the Federal Government? The other point I wanted to make is there are a lot of things we may sequester that I have been talking about for years, which actually haven't gotten any traction, but I suspect right now will be getting some traction. The first one is the grant programs in the Department of Homeland Security.
In one area, the Urban Area Security Initiative, which is a component of the Homeland Security grants, we spend $170 million a year on one grant program. What we did when we looked at it is we found tremendous amounts of waste that have nothing to do with increasing the security in the communities where this money was spent.
Let me give you a few examples: domestic drones that have limited capability, can't fly over anything that is populated because they are not reliable enough. Also, underwater robots, snow cone machines, security upgrades for spring baseball training programs and stadiums, color printers, BearCat vehicles for communities of 20,000 people who will never have a need for that piece of equipment. Yet we spent it because the people making those pieces of equipment are so good at helping cities get grants whether they need them or not, they apply for them.
Columbus, OH, bought an underwater robot, $98,000. They don't have a facility, a true natural lake or other lake in which they could actually utilize this piece of equipment, but they bought it anyway.
Spring training in Arizona, $90,000 to install video surveillance at the Peoria Sports Conference Complex. The Seattle Mariners and San Diego Padres have their spring training there.
Here are Urban Area Security Initiative grants which are supposed to be spent on security. What we found is a large portion of the money across the country is not being spent on security; it is being used to augment aspects of what communities need.
This is a good way to trim $700 million through these grants. While I am at it, what we do know is the Department of Homeland Security, 6 months ago, had $8 billion in unobligated balances. Secretary Napolitano made a decision--and her basis was for stimulus, economic stimulus--she would take the requirements off of those grants and push that money out the door. They were only able to push $3 billion out the door, so there is still $5 billion sitting in Homeland Security in unobligated money from last year alone that hadn't been spent. This addresses many of the issues that we are talking about in terms of the sequestration.
The Department of Defense, in terms of the ``department of everything''--let me outline for you a minute. Not all this money could be saved because they are doing some things, but they have no business being at the Department of Defense, with $67.9 billion over 10 years in nondefense spending; nonmilitary research and development, $6 billion a year. And education, the average cost to educate a child on base in America--not our foreign bases, not where we actually need private schools--is over $51,000 per year per student.
We could consolidate that program, as we do at all but 16 bases, and over 10 years save $9 billion.
There are STEM programs, 103 different STEM--science, technology, engineering, and math--programs within the Pentagon alone. Consolidating those would save $1.7 billion over the next 10 years. These are programs not necessarily initiated by Congress either, I might say. They do have the flexibility on a lot of these programs to make those changes.
The Department of Defense tuition assistance program totally duplicates our veterans assistance program. So you can do in-service, have access to tuition while you are in-service and then have the identical access to tuition afterward, and you can claim them both.
So we have multiple duplications there. And there is nothing wrong with wanting to give an educational benefit to our troops, but we don't need to do it twice. That is a significant $5.4 billion.
Alternative energy. We have a Department of Energy. Their whole goal is to work on alternative energy and renewable energy and efficiency within energy. The Department of Defense is spending $700 million a year on research in alternative energy that totally duplicates everything we are doing everywhere else. So there is $700 million we should not be spending at the Pentagon for something that is already being done somewhere else.
We also know we have a benefit for our military families called the PX and commissaries. But when we go out and price products, what we find is you can actually buy at retail stores at a lower price than you can at the commissary. For the cost of running all those organizations, we could give every troop an additional $1,000 a year and save $5 billion over the next 10 years. We could give them $1,000 more, and they would be able to buy at lower prices from a commercial vendor versus a commissary.
Overhead support and supply services. Over 300,000 military members are performing civilian-type jobs. In other words, these are Army, Marine, Navy, and Air Force personnel trained as warfighters, and we have them doing nonmilitary jobs at the Pentagon. We could put civilian employment in place and have these military people available to be warfighters and save $37 billion over the next 10 years just in the differential in what our total costs are for the two different types of employees.
So when we talk about a sequester taking $85 billion, I have just cited over $85 billion over 10 years just by looking at a few programs. So we hear the number, and we think about the Federal Government being twice the size it was 11 years ago and that we are 27 percent higher in terms of discretionary spending in nondefense and that even if the sequester goes through, as it is now planned for the military, the military expenditures will actually still be greater next year than what they are this year. So it is important that we talk honestly with the American people about where we are on these projects.
Let me just for a second talk about a report called the ``Waste Book.'' We put it out every year. We gave 100 examples of the most egregious ways tax dollars were wasted last year.
Examples include $450,000 for an unused airport in my State and $325,000 for robotic squirrels. This was a grant issued to study what we already know about robotic squirrels and their interactions with rattlesnakes. I can't see that as a priority for us. At a time when we are running $1.2 trillion deficits, we don't need to be spending money on that type of research.
We spend $91 million a year giving--you won't believe this one-- charitable status to the NFL, the PGA, and several other sports entities. So on the profits they make, the PGA defers taxes coming to the Federal Government in terms of $91 million a year. Now, I don't know of a pro sports team that isn't in the business of being profitable, yet the organizations they send a lot of this money through we are allowing to hide that money through the Tax Code. That is $91 million a year. Why are we doing that? Another example: $27 million was spent by the State Department on pottery classes in Morocco. The whole [[Page S920]] project was an abject failure, but the real question is, Why are we spending $27 million on pottery classes in Morocco? Could we spend $27 million and have a better effect for the Moroccan people than a failed pottery class program? The answer is, certainly.
The size of the State Department is twice the size it was 5 years ago--twice the size in terms of total expenditures.
The other thing we talked about is the subsidy for the rich and famous in terms of what is out there. On average, we found $30 billion a year that millionaires--people who make at least $1 million a year-- enjoy in benefits from tax giveaways and Federal grant programs. That is $30 billion a year. That is $300 billion. That is over one-third of what we are talking about on the sequestration. Yet we have done nothing on that.
This has been out for a year, by the way. Here are some more examples. We have $74 million spent on unemployment checks that went to millionaires last year. That is right, $74 million went out to people who made $1 million, but we still paid them unemployment. We spent $316 million on people who are making more than $1 million a year farming. We sent them $316 million worth of subsidies and $89 million for preservation of their ranches and their estates. These are people making an adjusted gross income above $1 million a year. We sent them $9 billion in retirement checks, we sent them $75.6 million in energy tax credits for their homes, we sent them $7.5 million for costs and damages due to emergencies, and we also gave them a writeoff on their gambling losses in excess of $3 billion.
The other thing I found very unusual as we looked at this is that people making an adjusted gross income in excess of $1 million were given $16 million in government-backed education loans. That is right, $16 million in government-backed education loans.
One of the other areas we did a study on was the Market Access Program. We have all heard of Sunkist and Welch's and Blue Diamond. In 2012 we paid them $6 million from the taxpayers to help them sell their products overseas. These are hundred-million-dollar corporations, minimally. They are billion-dollar corporations. We don't do that for the rest of all the corporations in this country, but because they happen to be associated with an agriculture program, we decided to subsidize the overseas products of the very well-to-do corporations. That may be a laudable goal, but at a time of tight priorities, it is not a laudable goal. Over $2 billion has been spent on this program, which has indirectly subsidized their advertising costs. So $2 billion has gone to very profitable agricultural companies that, if we were to look at their 10-Ks, their SEC reports, they are doing just fine. They don't need the Federal taxpayer to do this.
The California wine industry, which had domestic sales of $18 billion in 2009--it is higher than that now--got $7 million, and the American cotton industry received $20 million and received another $4.7 million from a separate USDA market access program.
Finally, I wish to talk for a minute about more than $70 billion in Federal funds that has been left unspent years after it has been appropriated. We have $70 billion sitting out there in accounts that has been obligated but not spent, now older than 5 years old, which means it is never going to be spent. So that money is sitting in a bank account somewhere that we could pull back, if we had effective management, because people didn't use the money in a grant, they didn't use the money in a program, and yet we have failed to do that. So we are borrowing an extra $70 billion every year to fund the government when we have $70 billion out there in accounts that should revert back to the Treasury.
At the end of this year the Federal Government had $2 trillion in unexpended funds. This is according to OMB, not the Congressional Budget Office. The Office of Management and Budget says that two-thirds of this money was obligated, but a third of it wasn't obligated. So you have $650 billion in unobligated balances sitting in the Federal Government accounts that we are not shuffling around to direct to the things that are most important.
Let me finish, but first I would like to make one other point. I got a letter this week from the mayor of a medium-sized town in my State. It is from the mayor of McAlester, OK. I am going to enter this letter into the Record because in this letter we see a demonstration of the kind of leadership that is needed when there is a financial problem in front of you.
Let me read this.
The City of McAlester is currently working hard to rebalance our budget after a sudden downturn in our revenues over the past two months. As you know, municipalities in Oklahoma are required by statute to maintain a balanced budget.
In other words, it is a law in Oklahoma that you have to have a balanced budget. So what has he done? Continuing to read: The first step we took was to implement a hiring freeze.
So they reassigned workers. And with a revenue shortfall projected at $1.2 million, they took every other expense account category, including supplies, repairs and maintenance, fuel, utilities, travel and training, consulting services and legal services, and reduced their budgets. In other words, they responded.
The mayor continued in his letter: None of these cuts are without pain. But all will be accomplished while maintaining essential city services.
Now, for McAlester, a $1.2 million budget cut is a bigger hit than we are talking about with sequestration. If the mayor of a community of 25,000 people can make the adjustments to serve his constituency without decreasing services, why can't we? Mr. President, I ask unanimous consent to have printed in the Record the letter to which I just referred.
There being no objection, the material was ordered to be printed in the Record, as follows: McAlester, OK, February 26, 2013.
Hon. Tom Coburn, M.D., Russell Senate Office Building, U.S. Senate, Washington, DC.
Dear Dr. Coburn: The City of McAlester is currently working hard to rebalance our budget after a sudden downturn in our revenues over the past two months. As you know, municipalities in Oklahoma are required by statute to maintain a balanced budget. With sales tax receipts abruptly falling by ten percent compared to the prior year, we have had to act quickly to reduce costs.
The first step we took was to implement an immediate hiring freeze. The budgeted positions that are currently open include two street maintenance workers, a full-time and a part-time administrative assistant, a water plant operator, a police officer, an animal control officer, a firefighter, an accounting manager, a meter reader and a planning director. We will reallocate work among other employees wherever we can. If we determine that an unfilled position will affect the safe operation of the community, only then will the position be filled.
With a revenue shortfall projected at $1.2 million, we are also making budget reductions In virtually every other expense category including supplies, repairs and maintenance, fuel, utilities, travel and training, consulting services, legal services, etc. Of course, we have also zeroed out any contingency amounts we had included in the budget for the unexpected. However, we have been careful to retain budget items for long-term infrastructure projects as we consider it unwise to risk damaging our city's future.
None of these cuts are without pain. But all will be accomplished while maintaining essential city services. By reducing our spending in these areas, we anticipate we can finish the fiscal year without having to dip into emergency fund balances.
Prompted by what we see as an economic situation likely to continue into the next fiscal year and potentially beyond, we are also taking this opportunity to thoroughly review our local government cost structure. The goal is to organize in a way that is more efficient and more effective. By stretching each revenue dollar to the max and by prioritizing our needs and wants, we hope to narrow or eliminate the gap between what citizens expect from their government and what they are willing and able to pay for.
Best regards, Steve Harrison, Mayor, City of McAlester.
Mr. COBURN. The final point I would make is the following: A little more than 3 years ago we passed an amendment that I offered that forced the Government Accountability Office--the government's accounting office--and the Comptroller General to identify every program in the Federal Government, and not only to identify it but to outline where we have duplications and overlaps. And they have done a wonderful job. We are going to get the last third of that report about a month from today, April 1, but what do we know so far? We know we have [[Page S921]] about $370 billion in the first two-thirds of this where they say there is massive duplication. There is $370 billion worth of expenditures a year.
I have talked with the President, and he disagrees with me on this, but when you think about it, we have 47 separate job training programs, of which all but three overlap. They are highly ineffective in total. So why don't we have two or three? We spend almost $19 billion on those programs. We could spend $9 billion, cut it down to three programs, put metrics on it, and make sure it is working. The reason I know it is not working is I looked at every job training program in my own State, and the ones that are most successful are the ones that are totally State run without any Federal Government interference. The ones that are federally run--and some are good, I will give you that, but most are not--most are not successful in efficiently and effectively giving somebody a life skill and getting them into employment.
We have 253 different, duplicative Department of Justice grant programs spending $2 billion a year. If you are needing a grant, you might apply to DOJ in one of these 253 areas and then you might apply again over here in another area for the same thing. And the fact is that the Government Accounting Office says: We don't know if people are double- and triple-dipping. As a matter of fact, what did we find? We have people getting the same amount of money from different grant programs from the same grant application. So what we have is a tremendous problem.
We just discovered in the State of Oklahoma that we have a housing administrator for a city that has no houses. There are 3,700 housing administrators in the United States--probably closer to 4,000 because we are still counting. Some of those have very big responsibilities. I don't mean to diminish them at all. But couldn't we consolidate those, especially in areas such as rural Oklahoma and the other rural States so we spread that overhead and have fewer housing administrators? We have 56 financial literacy programs. Think about that for a minute, 56 different programs for the Federal Government to create a program to make you financially literate.
First of all, there is a problem with that because we are not financially literate, borrowing $1.2 trillion a year. No. 2, we don't know what the words efficiency and effectiveness mean in the Federal Government--or, at least, have limited knowledge of that. And, finally, why do we have that many financial literacy programs? There is no sane answer to that question.
As I outlined in some of the others, 160 housing assistance programs, $170 million a year. We have 53 programs across 4 agencies to help entrepreneurs. The Federal Government is helping entrepreneurs? Our entrepreneurial spirit is not very active and not very successful in terms of what we are doing within the government, and yet we spend $2.6 billion on it.
We have 15 different separate unmanned aerial aircraft programs within the Federal Government. We are going to spend $37 billion on that. Why do we have 15? Maybe two or three, because we have different requirements, but 15? So we have the massive amount of duplication that is going on within the Federal Government which implies massive amounts of duplicative administrative and overhead costs. I would bet that one-third of what is happening in the sequester, if you consolidated programs--didn't eliminate any, just consolidated the management--you could save one- third of what the sequester is just from the administrative overhead associated with those.
So when you hear discussions about we shouldn't be doing the sequester, that the sequester is going to be painful--and it is; I don't deny that. But it doesn't have to be. All it takes is a small drop of common sense, both in Congress and the executive branch, to work our way through these problems.
My hope is the President will work with us on giving him flexibility in terms of managing this.
Remember, $85 billion really isn't 85. It is only going to be about 44. That is what we are talking about. It is disproportionately heavy on the defense. I have a lot of colleagues on my side who disagree with me on the waste that is in the Pentagon, but I have seen it, I have looked at it, and I have had a lot of people inside the military call and talk to me about the waste that is there. We now have an admiral for every ship we have in the Navy. Nobody else has that anywhere else in the world, and with that comes an average of 200 other employees per admiral.
The question is, Can we do this? Should we do it? And can we do it in a way that is best for the American people? We are going to cut this money one way or the other. It is not because a Republican wants to cut it or because the President wants to cut it or because a Democrat wants to cut it. We are going to cut it because the math in our future is going to force us to cut it. I know people don't think discretionary programs are much of the problem with what we are spending money on, but I would surmise that well over 15 percent of everything we do in discretionary spending--including the Pentagon--is not effective or efficient.
Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Blumenthal). The Senator from West Virginia.