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Daniel C.
Republican IN

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  • Wasteful Spending

    by Senator Daniel Coats

    Posted on 2015-12-10

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    COATS. Mr. President, this is the 29th time I have been on the floor over this current session to address what is called, ``Waste of the Week.'' Twenty-nine weeks of this year, I have been on the Senate floor talking about examples of how the Federal Government wastes taxpayers' money through waste, fraud, and abuse. I have laid out specific examples.

    Some changes have been made in programs as a result of the publicity it has received not just from me but from the accounting offices that are doing the checking and the inspectors general who are doing the checking.

    Sometimes I wonder if anybody is listening, but I am very encouraged by the fact that a number of us now, including the Presiding Officer, are talking about this issue. I hope every Member in this body, all 100 of us, start thinking about ways in which we can make our Federal Government more efficient and effective and stop wasting through fraud and abuse, stop wasting taxpayer dollars. I don't want to keep doing this, but I am going to keep doing this until there is a majority and hopefully a unanimous clarion call saying: Let's clean up this government. Let's go after this waste, fraud, and abuse.

    In terms of examples, we have now totaled well over $100 billion. We are coming up with much higher numbers as we come down to the floor every week. The Presiding Officer just issued a book, which I think every Member of this body ought to read, collecting other examples of waste, fraud, and abuse.

    All of this is really in honor of a former Member, Senator Tom Coburn of Oklahoma, who really led the charge on this issue. I regret that Tom is not still a Member of the Senate. He had a way of digging out this information that was commendable. He would come to the floor and make a persuasive case through the illustration of various forms of abuse of the taxpayers' dollars.

    A number of my colleagues are picking up the clarion call. As I said, we need all 100 of us to come to the conclusion that we don't have to stand here and say we are doing everything we possibly can to manage the people's money when we know that is not true, when we know that inspectors general of virtually every agency in the government have come up with reports that simply say ``Why in the world are you doing this in the first place?'' or ``Look at this amount of fraud.'' One-hundred billion dollars or more is just a drop in the budget, so we are going to continue to expose this waste. Today I had hoped this 29th waste of the week would be the last one of this calendar year, but it looks as if we might be here 1 more week, so we will get the 30th in next week if necessary.

    Recently, the inspector general for the Department of Housing and Urban Development conducted a series of audits on HUD's multibillion- dollar portfolio. The results that have been printed are deeply troubling. After reviewing HUD's books, the inspector general found that the agency's finances are missing records, contain inaccurate information, and have even violated Federal laws. He acknowledged that HUD's accounting has lacked appropriate oversight for a long time. This has been going on for a long time.

    Let me quote from his report: Multiple deficiencies existed in HUD's internal controls over financial reporting, resulting in misstatements on financial statements, noncompliance laws and regulations. We have reported on HUD's administrative control of funds in our audit reports and management reports since fiscal year 2005. HUD continued to not have a fully implemented and complete administrative control of funds system that provided oversight of both obligations and disbursements.

    This was exposed in 2005. Ten years later, they are still having the problem. They still haven't cleaned up their act.

    This is just one agency. Maybe this is the worst agency--I don't know--in terms of being irresponsible and how they spend money, but I doubt it. I suspect that this statement could have been made by a number of our agencies.

    [[Page S8568]] I wish to highlight a couple of specific examples from the inspector general's audits.

    One audit examined HUD's Government National Mortgage Administration, commonly known as Ginnie Mae. Ginnie Mae buys mortgages from banks and institutions, bundles those mortgages together, and then sells portions of those bundles to investors. These mortgage-backed securities are fully backed by U.S. Government guarantees.

    The IG's audit bluntly noted that HUD's financial records are so bad that it was not even possible to audit the entirety of Ginnie Mae's $25.2 billion portfolio. In other words, the recordkeeping for the transactions that took place under HUD was in such disarray, so bad, they couldn't even provide an audit that correctly addressed the problem. From what the IG could review, it found Ginnie Mae's finances contained nine material weaknesses, eight significant deficiencies in internal controls, and six instances of noncompliance with applicable laws and regulations. After reviewing Ginnie Mae's 2015 finances, the inspector general found over $1 billion in abuse and inefficiencies.

    If this had happened to any business in America other than the Federal Government, either the business would be bankrupt, the stockholders would have depleted its value, or the board of trustees would have fired its manager. They would have had to reorganize the entire--no way can you run a business this way. No way would it be possible to run it. This would happen only in the Federal Government because we can print money and we can keep it flowing into HUD and these other agencies. And for the 10 years since it was disclosed, they have continued the same practices that have gone on before that don't even allow us the ability to fully understand what they are even doing. They have been warned about it, and they have been talked to about it. They said they are going to clean it up, but it continues.

    Let me give another example. The IG also found waste and fraud and mismanagement involving HUD's taxpayer-subsidized housing benefits. The low-income housing program provides affordable housing for households with incomes less than 80 percent of the median income for the area. This program has helped many families put a roof over their head through the years. Unfortunately, because of a loophole in HUD's review policies, households that have too high an income and thus are not qualified to receive Federal support have been able to remain in the taxpayer-subsidized Federal housing program.

    The inspector general of HUD found that more than 25,000 over-income families were living in HUD taxpayer-subsidized housing in 2014 alone. So over 25,000 people who don't qualify for the program any longer because their income has improved are still living under the subsidized housing program, which is providing subsidies to them that they are no longer qualified to receive.

    One doesn't actually have to have a low income to participate in this taxpayer-subsidized low-income housing; they simply had to have a low income when they applied. But hopefully this helped them as they were having income problems and financial problems--those who are able to come out of the system and who receive a larger income and therefore no longer qualify retained the subsidies, and HUD never took action to basically determine that they no longer qualify for this. There were over 25,000 specific incidents.

    In a specific example in New York City, the program's income ceiling for a four-person household is just a little over $67,000. Yet a New York family was legally able to remain in public housing when their annual income was nearly $500,000. In fact, they owned real estate that produced over $790,000 in rental income within only 4 years. So people who had qualified for this had achieved tremendous financial success-- from what source, I am not exactly sure. They have moved from a program that said you have to have income below $67,000 to qualify. Their income was over $500,000, and yet they still retained their qualification.

    Let's look at a small town. In Oxford, NE, a single-person household earned over $65,000 annually and had assets of nearly $1.6 million--far higher than the city's income cap of $33,500. In other words, to be in the program you could not earn over $33,500. This individual was earning obviously extraordinarily more than that with a $1.6 million value of assets and yet still received subsidized housing.

    If this was a one-off, if this was a few people here and there taking advantage of the system and so forth--but we are talking tens of thousands of people on just this single program. Remember, the audit of HUD looked at a whole range of discrepancies. I am talking only about a couple of specific programs.

    It is not hard to agree that this waste of taxpayer dollars is something that can be addressed. I am encouraged that my colleagues are looking at this in a number of ways--and the more the better. We do this in respect and honor for what Senator Coburn started, and I am happy to be a part of that. I know the Presiding Officer is also.

    I will conclude by saying for just this one agency, I can give a lot more examples of reckless disregard for use of taxpayer money that have been documented by the inspector general and that have been provided to that agency, which has not been able to clean up its act since 2005. They have had 10 years to do it, and it still continues. The inspector general says it is such a mess, it is so disassembled, it is so poorly administered that it can't even come to a conclusion of how bad it is. It is impossible to fully audit the Department of Housing and Urban Development because of their financial ineptness and their financial incapability of keeping records on their very own programs.

    Today we are going to add a modest amount. This could be tens of billions. We took only a couple of examples here, and those examples total $1,174,000,000. That is not small change. Think about being about to send this back to the taxpayers who are working their hearts out and having taxes levied on them or think about how we can send this money to higher priorities--maybe to some things related to national security where we are scraping for funds to be able to provide the security this country needs. Whatever the reason, the waste continues to pile up. No one coming down to this floor can say ``We can't cut a penny more of spending'' without addressing this first.

    It appears that we will be down here for the 30th ``Waste of the Week'' next week, which I regret. But we have plenty of waste lined up to be talking about.

    Mr. President, I yield the floor.

    The PRESIDING OFFICER. The majority whip.


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