Chairman Black Opening Statement: GAO Hearing on the Failures of Fiscal Management

Remarks as prepared for delivery: 

Good morning, and thank you everyone for being here.

As I’m sure everyone is aware, we will be introducing the Fiscal Year 2018 budget later this spring and the challenges we face are enormous. 

Deficits are set to start rising again, many government programs are in dire need of reform, and our economy is being held back by the policies of the previous administration. While these problems are daunting, we were elected by our constituents to make the hard decisions and confront these challenges head on. And that’s exactly what we plan to do at the House Budget Committee.

That is also why today’s hearing – Failures of Fiscal Management – is so important and so timely. We need to better understand how the federal government is failing to effectively manage taxpayer dollars and how that’s affecting our long-term fiscal solvency.   

I am happy to welcome our witness today, The Honorable Gene L. Dodaro. He’s the Comptroller General of the United States and the director of the Government Accountability Office. The GAO possesses a wealth of information about the government’s fiscal condition and the operation of its programs. 

Three areas we plan to examine today are: the disturbing rise in improper payments by government agencies; the programs GAO considers as “high risk” for waste, fraud, abuse, and mismanagement; and the government’s long-term fiscal outlook, which – as all of you are aware – is not good. 

Mr. Dodaro, thank you for taking time out of your busy schedule to be here today. The committee is looking forward to hearing your testimony. 

But before we build solutions, we need to understand the core of the problem, and Mr. Dodaro’s testimony will be vital.

First are the improper payments made by the federal government.  

Improper payments are defined as any government payment that was made in an incorrect amount, to the wrong individual or entity, or for the wrong reason. For example, an improper payment would be an unemployment check going to a person who has already returned to work.

According to GAO, improper payments surged to $144 billion in 2016 – that’s a 35 percent increase from the $107 billion in 2012. This is a problem that’s government-wide, including 112 programs across 22 agencies.

Even worse, those numbers probably underestimate the extent of the problem since 18 government programs deemed susceptible to improper payments did not even submit error estimates last year. $144 billion is the minimum of the problem, not the max. 

Second, we want to examine the government’s ‘High-Risk’ programs. Every two years, GAO publishes an updated list of programs that it considers especially vulnerable to waste, fraud, abuse, and mismanagement. 

This year, GAO identified 34 programs that matched this description. The programs that demand further review are Medicare, Medicaid, federal disability programs, Pension Benefit Guaranty Corporation insurance programs, the National Flood Insurance Program, and veterans’ health care.

Third, we want to focus on our long-term fiscal outlook. In January, GAO released a report examining government spending, revenues, deficits and debt. The conclusions are all-too-familiar: our fiscal path is unsustainable and if we fail to get control of debt and deficits, we’re putting our country at risk of a fiscal and economic crisis. 

GAO’s simulation shows our debt-to-GDP ratio would pass its all-time historical high of 106 percent in the next 15-25 years and that Social Security Disability Insurance, the Medicare Hospital Insurance trust fund, and the Social Security Old-Age and Survivors trust funds will be depleted and therefore forced to pay out reduced benefits. A failure to solve these problems means seniors who have worked their whole lives and those truly in need of help can no longer count on these vital safety nets.

Improper payments, high-risk programs, and our growing debt all pose enormous challenges and we need to take real, tangible steps to reduce the amount of money that’s being wasted to help get our fiscal house in order.

Mr. Dodaro, thank you again for being here. I know you and your staff have worked very hard to prepare for this hearing and thank you for taking your job as a government watchdog seriously. I look forward to hearing your testimony and your recommendations of how we can all be better stewards of taxpayer dollars.

Thank you, and with that, I yield to the Ranking Member, Mr. Yarmuth.