Center for American Progress

RELEASE: Budget Cuts that Work–New GAO Report Identifies Areas for Potential Savings
Press Release

RELEASE: Budget Cuts that Work–New GAO Report Identifies Areas for Potential Savings

By Donna Cooper, John Griffith | March 3, 2011

Washington, D.C.– It’s impossible to dispute that every dime of government waste should be cut from the federal government. There is no argument to the contrary from the right, left, or center. The GAO report released Tuesday offers a good starting place to look for waste. It identifies 82 areas where, with further review, the GAO believes savings can be accrued by ferreting out waste and unnecessary duplication. The logical next step is to identify the top 10 areas for potential savings and commence the hard work to determine which programs are effective, which have merit but need to be reformed, and which can be eliminated without undue harm on the citizens. That’s where the real bounty lies in this GAO tomb.

The federal deficit did not sneak up on us. Nevertheless, the House leadership’s approach to taming the deficit seems reactive and terribly unprepared and uninformed. Across the board cuts and cheap attacks on small domestic spending programs are not going to push the deficit below $1 trillion anytime soon.

It’s especially useful that this report boldly goes where the House Republican leadership refused to look. The GAO put tax expenditures, defense spending, and Medicare on the list of areas where savings can be found. These areas of the budget appear to be a no-mans zone, but as long as we fear treading in that territory, our chances of wrestling the deficit monster and winning are slim to none.

Over the last year the Center for American Progress put forward informed practical proposals to cut federal costs in some of the very areas where this reports suggests further evaluation is necessary. Our proposals include:

  • Reform of Tri-Care, the overly generous healthcare insurance program for military retirees
  • Consolidation of the administration of federal programs that provide food and nutrition to struggling households
  • Integration of the major entities responsible for competitiveness functions of the federal government
  • Merging of all federal data centers that collect and analyze key data about our population and the economy
  • Revision of federal contracting and procurement practices to reduce unnecessary purchases and bring down the prices of items procured by federal agencies

These CAP proposals don’t cut the deficit by a trillion dollars, but each of them offers practical approaches to improve the effectiveness of government and realize savings at the same time.

Policy area

GAO findings

CAP proposal

Food assistance

USDA should broaden its efforts to simplify, streamline, or better align eligibility procedures and criteria across 18 domestic food and nutrition assistance programs.

USDA should combine its 15 nutrition assistance programs into one streamlined, seamless entitlement program available to all families at 185 percent of the poverty line or below.

Military health Care

DOD should curtail rising costs for the Military Health Services by establishing a central command authority and single entity accountable for minimizing costs and achieving efficiencies.

Save up to $15 billion a year by restructuring the Tricare program to reinstitute a fair cost-sharing balance between military retirees and taxpayers, limit double coverage, and reduce overuse of services.

Economic development

Agencies need to collect accurate and complete data on program outcomes and use the information to assess the effectiveness of the 80 economic development programs across four agencies.

Develop a cohesive, long-term economic competitiveness policy by facilitating different components of the government to work in concert toward the same goal, monitoring implementation of plans and measuring progress against established benchmarks.

Government contracting and procurement

DOD could achieve significant cost savings by employing best management practices at all phases of its weapon system acquisition process, including systems engineering, analyzing alternatives, managing changes in system requirements, and more prototyping early in programs development testing. DOD could save further by developing a department-wide strategy for tactical wheeled vehicles, including a cost-benefit analysis to avoid unplanned purchasing overlap.

Save between $25 billion and $54 billion a year on procurement by increasing competition for contracts, “strategic sourcing,” improving coordination with suppliers, and eliminating bureaucratic hurdles.

Tax expenditures

The federal government should develop and implement a framework for conducting performance reviews of its 173 tax expenditures, and develop guidance on incorporating them in agency strategic plans, performance reports, and the executive branch budget processes.

Spending programs delivered through tax expenditures should be subject to the same level of scrutiny as direct spending programs, and policymakers must treat tax expenditures as a form of spending and integrate them into the budget process.

Although some have suggested this report is a roadmap to savings, the GAO goes to great lengths to stress that they could not recommend which, if any, of the programs should be cut from the areas where they found duplication. U.S. Comptroller General Gene L. Dorado stressed that “A number of issues we have identified, particularly in the duplication area, span multiple organizations and therefore may require higher-level attention by the executive branch or enhanced congressional oversight.”

In response to this report, Congress and the administration must embark on a thoughtful programmatic review process. Their review should start first with the GAO recommendations that have the greatest potential to deliver substantial savings, which will most likely come from defense expenditures, Medicare, and tax expenditure areas of the budget.

CAP recently proposed a formal method for reviewing the effectiveness of existing government programs. The “Reviewing What Works” approach establishes a process that relies on program review by panels of experts and the use of carefully developed tools to aid and standardize their review. The Obama administration should identify the areas where the greatest savings lie and deploy the Reviewing What Works approach for each area. The administration should seek to determine the relative effectiveness, impact of duplication, and what—if any—savings can be reaped through reform.

The ballooning federal deficit presents us with a real opportunity to get our federal budget priorities in order. This GAO inventory of areas for potential savings should be used as a real tool in our arsenal in the battle to reduce the federal deficit before Congress takes simplistic actions that deal fatal blows to federal agencies and mission critical programs.

To read the full column, click here.

Donna Cooper is a Senior Fellow with the Economic Policy team and John Griffith is a Research Associate with the Doing What Works project at American Progress.