Testimony of Senator Tom Carper Before the House Committee on Oversight and Government Reform

WASHINGTON – Today, Senate Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-Del.) testified before the House Committee on Oversight and Government Reform at a hearing, titled “Waste in Government: What’s Being Done”.

Chairman Carper’s testimony, as prepared for delivery, follows:

“Let me begin by thanking Chairman Issa, Ranking Member Cummings and all of the panel members for the opportunity to testify this morning on the important topic of wasteful and inefficient practices by government agencies. 

“Clearly, those of us in Congress as well as our counterparts in the administration must do more to tackle government waste and fraud.  However, I would like to describe some current initiatives that have shown promise, and also some areas where we can partner with the executive branch to make further progress in strengthening the integrity and efficiency of the federal government.

“As everyone in this room knows, we’ve faced record budget deficits in recent years.  Our national debt stands at about $17.3 trillion, well over double what it was ten years ago. The last time the debt was this high was at the end of World War II. That level of debt was not sustainable then, and it is not sustainable today.  While our fiscal situation is improving, we clearly have plenty of work to do on this front.

“In order to be effective in reducing our national debt, we need a bi-partisan approach. We will need to make tough decisions with respect to both spending and revenues – and also with respect to entitlements.  We also need to take a tough and honest look at how we can better manage the resources taxpayers entrust to the federal government, and demand that we find ways to get better results for less money. In short, we need to sharpen our pencils and stop making the kind of expensive, avoidable mistakes that lead to wasteful spending, and makes our agencies and programs vulnerable to fraud and abuse.

“One area in particular where I have focused my efforts is the issue of improper payments. As this panel is well aware, federal agencies have had estimated improper payments at levels of more than a $100 billion dollars annually during the past several years.  These payments come from over 70 programs at more than 20 agencies and include programs like Medicare and Medicaid, the Department of Defense; and the Federal Emergency Management Agency, to name just a few.

“An improper payment occurs when an agency pays a vendor for something it didn’t receive or, maybe, even pays them twice.  It can occur when a recipient has died and is no longer eligible for payment, or when a vendor owes the government money and legally should not be getting a payment until this debt is repaid.  And, of course, sometimes people or companies receive payments that are actually fraudulent.

“Clearly this level of payment inaccuracy, particularly as the federal government struggles with our massive debt and deficit, is unacceptable.  However, we should also note progress, and give agencies credit where credit is due.  The federal improper payments numbers are declining each year. 

“For fiscal year 2010, the level of improper payments was a record $121 billion.  For fiscal year 2012, it was $108 billion.  The latest number, for fiscal year 2013, is $106 billion.  This is still too high, but I am encouraged that we’re seeing these small, but significant drops in the levels of improper payments.

“Fortunately, we can do something about this problem, and if truth be known, we very often have already figured out how to fix these problems. 

“In 2010, Congress passed and President Obama signed into law the Improper Payments Elimination and Recovery Act, which I co-authored with Dr. Coburn, and others.  The law aims to make agencies and agency leadership far more accountable for the expensive mistakes they make and represents a bipartisan and bicameral success in preventing waste and fraud.

And then in 2012, Congress enacted an additional law on how to further curb improper payments, called the Improper Payments Elimination and Recovery Improvement Act

“Among other steps, it established in law the “Do Not Pay” Program. This effort, which was initiated by President Obama through executive action, involves screening federal fund recipients against a list of those ineligible to receive those funds, before we cut a check.  For example, before an agency could award a contract to a company, the agency would have to cross check against the “Do Not Pay” database, which will include a central, comprehensive database of companies and entities that are no longer allowed to do work with the Federal government because of a fraud conviction or for some other reason.

“A wide variety of new ideas have been put forward on how to further curb improper payments, some of which I have put into legislation. 

“Last year, Dr. Coburn and I teamed up to introduce legislation to curb waste and fraud in Medicare and Medicaid.  The bipartisan and bicameral legislation – “Preventing and Reducing Improper Medicare and Medicaid Expenditures Act” or PRIME Act - would take a series of common sense steps to identify and prevent waste and fraud.  It drills down into specific waste and fraud challenges within health care, such as physician identify theft, the need for improved fraud data sharing between the federal government and state agencies, and quicker identification of improper payments to medical providers.  The House companion bill is led by Congressmen Peter Roskam and John Carney. In December the Senate Finance Committee included major portions of the PRIME Act in its bill, the ‘S-G-R Repeal and Medicare Beneficiary Access Improvement Act of 2013.’

“Then there is the problem of agencies making payments to people who are actually deceased.   For example, the Office of Personnel Management Inspector General reported just two years ago that $601 million in improper payments were made to federal retirees found to have died over the previous five years.  However, such payments to dead people were not unique to this one program.  A couple of years ago, one of my home state newspapers reported that, 28 years after a Delaware woman had died, one of her relatives was still fraudulently collecting and cashing her Social Security checks. 

“Improving the collection, verification, and use by federal agencies of data on individuals who have died will help curb hundreds of millions, if not billions, of dollars in improper payments.  Again, I have teamed up with Dr. Coburn on legislation to fix this frustrating problem, and there is companion legislation introduced here in the House.

“Dr. Coburn and I also recently moved the Digital Accountability and Transparency Act or DATA Act out of Committee. I know this is a bill that is very familiar to members of this panel and I want to congratulate you all on getting the bill passed through the House on a near unanimous vote.  As you know, this important piece of legislation seeks to improve transparency of federal spending and establish data standards for such spending.  The DATA Act builds off the original laws requiring budget transparency and takes much-needed steps to improve this situation and I am working closely with Senators Warner, Portman and my ranking member Dr. Coburn to get a bill through the Senate.

“The Administration also deserves credit for many good initiatives.  Just this week, the Centers for Medicare and Medicaid Services announced an initiative to curb the fraudulent diversion of prescription drugs from the Medicare program. The announcement follows a hearing my committee held in June to highlight the need for stronger oversight of the Medicare prescription drug program.   For years, Medicare has lost millions of dollars due to fraudulent prescriptions for painkillers and other drugs. This fraudulent activity is not only a financial drain on a vital federal program, but it is also harmful to those struggling with prescription drug abuse. The Administration’s initiative will help provide the tools and authority needed to actively combat this type of waste and fraud while protecting Medicare beneficiaries and strengthening the Medicare program.

“We have also seen some improvements in financial management by agencies.  Most notably, the Department of Homeland Security last year passed for the first time a financial audit with a clean opinion.  This is an important accomplishment.  However, the Department of Defense has not managed to obtain this critical accountability step, so we still have a lot more work ahead for a major part of our spending.

“I’d like to highlight one additional area where I believe our government could achieve real savings by eliminating waste. There is a general consensus that the federal government has to get smarter about the way it manages buildings and land.   GAO has for nearly a decade continuously placed real property management on its high risk list due to long-standing problems with excess and underutilized property; deteriorating and aging facilities; unreliable property data; and a heavy reliance on costly leasing instead of ownership to meet new needs. In July, I, along with Dr. Coburn and a number of our committee colleagues, introduced a bill that would encourage agencies to use new methods of managing their property. 

“Of course, these are just a few ideas that Congress and the Administration are pursuing.  But we need to do more.  We must use every tool available to put our fiscal house back in order and give the American people the government they expect and deserve.  It is the right thing to do on behalf of the taxpayers of this country who entrust us with their hard-earned money.  By working together on a series of common sense initiatives, we can make important steps in earning their trust once again.”