The 111th Congress changed the way Washington works to save taxpayers billions and restore responsibility. Congressional Republicans threaten to take us back to the failed Bush policies that created record deficits and the worst economic crisis since the Great Depression and nearly doubled the national debt. In the Bush years, waste and fraud in federal spending spiraled out of control - with no-bid, cost-plus contracts going to politically-connected companies, such as Halliburton.
Democrats in Congress will continue to take America in a New Direction, restoring fiscal accountability and discipline, standing up for U.S. taxpayers by cracking down on waste and fraud by government contractors, working to create American jobs and a strong new foundation for our economy, and protecting Main Street and the middle class.
- The House passed the bipartisan IMPROVE Acquisition Act (H.R. 5013) to clean up defense acquisition spending for services and non-weapon systems, saving taxpayers an estimated $27 billion a year - after cracking down on Pentagon waste and cost overruns and no-bid contracts for weapon systems last year.
- We also passed the bipartisan Improper Payments Elimination and Recovery Act (H.R. 3393) to reduce waste, fraud and abuse of U.S. taxpayer dollars stemming from inadequate oversight at federal agencies -- going after improper payments that cost taxpayers an estimated $98 billion in FY 2009.
- The Speaker sent a letter to House Committee Chairmen urging them to redouble their efforts in conducting oversight of all federal spending and government operations to help achieve deficit reduction and long-term fiscal responsibility - which have already resulted in more than 150 hearings to identify areas to achieve savings for taxpayers.
This builds on a fiscal record by the 110th & 111th Congresses in which:
- We restored the pay-as-you-go budget principle - giving it the force of law - which Congressional Republicans allowed to lapse in 2002, nearly doubling the national debt and tripling the debt held by foreign countries.
- We enacted the largest deficit reduction legislation in almost two decades through historic health care reform ($1.3 trillion over 20 years) -- instead of spending trillions of taxpayer dollars on the Bush tax cuts for the wealthy, two wars, and the Medicare prescription drug plan without paying for them.
- We passed a fiscally responsible budget that slashes in half the $1.3 trillion Bush deficit, with key initiatives cutting waste and fraud and collecting unpaid taxes.
- We enacted critical reforms going after waste, fraud and abuse in areas beyond the Pentagon - such as cracking down on waste, fraud and abuse in Medicare and Medicaid in the new health care reform law and ending wasteful subsidies to banks through the federal guaranteed student loan programs.
Cutting the Deficit
- In 2007 and 2008, before the Bush economic meltdown, Democrats in the House passed a budget resolution that would bring the budget into surplus by 2012 - for the first time since President Bush took office.
- In 2009, the Democratic-led Congress adopted a budget that slashed the deficit in half.
- The FY 2010 appropriation bills were $7 billion less than the President's request.
- Congress enacted historic health insurance reform - cutting the deficit by $143 billion over 10 years and $1.3 trillion over 20 years--the largest deficit reduction in almost two decades. The legislation also includes student aid provisions to expand educational opportunities that reduce the federal deficit by ending wasteful subsidies to banks through the federal guaranteed student loan programs.
- The President has established the National Commission on Fiscal Responsibility and Reform to build bipartisan consensus around solutions to tackle our long-ignored fiscal challenges. This commission is needed because, for eight years, instead of preparing for the retirement of the baby boomers, the Bush Administration did the opposite - spending trillions of dollars on two wars, the Medicare Rx drug plan, and tax cuts for the wealthy without paying for them.
- The House has passed a series of additional initiatives that will create jobs and strengthen our economy without adding to the deficit, including:
- a comprehensive clean energy bill to create up to 1.7 million jobs (with the Recovery Act); reduce dependence on foreign oil; reduce climate change pollution; and keep energy costs low for Americans without adding to the deficit.
- common-sense Wall Street reform to help prevent another financial crisis.
Pay-As-You-Go Budget Discipline
- With the backing of President Obama, Congress has enacted a statutory PAYGO law; this is a critical step for budget discipline.
- Simply put: Under PAYGO, Congress can only spend a dollar if it saves a dollar. It forces tough choices -- requiring Congress to offset new policies that either reduce revenues or expand entitlement spending; and if the offsets are not enacted, to face across-the-board cuts in certain mandatory programs.
- The PAYGO law helped President Clinton turn over an historic 10-year projected budget surplus of $5.6 trillion to President Bush--who quickly turned it into record deficits.
- The first thing the Democratic-led Congress did in January 2007 was reimpose PAYGO budget rules that Republicans had let lapse - placing them in the House and Senate rules.
- If PAYGO rules had been followed over the eight years of the Bush Administration, the projected deficit would be trillions of dollars lower over the next decade.
Cutting Waste, Fraud, Abuse, and Obsolescence
- For the first six years of the Bush Administration, there was virtually no oversight by the Republican-led Congress, despite numerous cases of fraud and abuse and the waste of hard-earned taxpayer dollars by executive agencies - ranging from Iraq reconstruction to responding to Katrina.
- Spending on no-bid contracts more than doubled under the Bush Administration - with more than $2.4 billion squandered on no-bid contracts for Halliburton in Iraq, with another $23 billion for other abuse-prone contracts.
- Under the Bush Administration, about 19 Katrina contracts worth nearly $9 billion were plagued by waste, fraud, abuse, or mismanagement, and only 30 percent of the more than $10 billion in Katrina contracts were awarded with full and open competition.
- A top priority of the New Direction Congress has been to enact measures to enhance accountability and beef up oversight to ensure taxpayers' money is not wasted on no-bid contracts for Halliburton and the like - with the Democratic-led 110th Congress enacting key laws cracking down on no-bid contracts and also conducting more than 1,400 oversight hearings in just two years. [Brookings Institution]
- Specifically, in 2007 and 2008, as part of the Defense Authorization bills, the New Direction Congress enacted key reforms to combat waste, fraud and abuse in government contracting at the Department of Defense and at other federal agencies where there have been billions of dollars in documented abuses of no-bid contracts and overpayments. These reforms:
- Clean up government contracting abuses and minimize no-bid and other non-competitive contracts to achieve savings for the U.S. taxpayer;
- Establish a centralized database with all contractor information in one place, so that government watchdogs have the information they need to crack down on fraudulent contractors; and
- Strengthen enforcement of efforts to close the revolving door between government procurement officials and private contractors.
- In 2008, Congress also enacted legislation closing a contractor fraud loophole that allowed U.S. contractors working overseas to escape fraud reporting requirements and strengthening the effectiveness and independence of Inspectors General -- the principal watchdogs within the federal government to prevent waste, fraud and abuse.
- In 2009, the House took a key step forward in ensuring that tax dollars are spent wisely by amending House Rules to require periodic hearings on waste, fraud and abuse through a proposal by Rep. Tanner.
- The Congressional budget adopted in 2009 contains key integrity initiatives to protect taxpayer money by rooting out waste, unnecessary spending, fraud and abuse, and investing in efforts to crack down on health care provider fraud.
- The new health care reform law includes tough provisions to prevent waste, fraud and abuse:
- creating a comprehensive Medicare and Medicaid Provider/Supplier Data Bank to conduct oversight of suspect utilization, prescribing patterns, and complex business arrangements that may conceal fraudulent activity and
- instituting better screening to catch and punish fraudulent providers, more stringent controls in areas with a high rate of fraud, such as home health services and durable medical equipment, and new penalties.
- In 2009, President Obama signed into law bipartisan reformsto crack down on Pentagon waste and cost overruns in weapons acquisition, which the GAO says have recently amounted to $296 billion just for the 96 largest weapons systems. The reforms dramatically beef up oversight of weapons acquisition, promoting greater use of competition, and curbing conflicts of interest.
- In April, the House passed the bipartisan IMPROVE Acquisition Act (H.R. 5013) to clean up defense acquisition spending, saving taxpayers an estimated $27 billion a year and expediting the process to get the necessary equipment to our troops. This expands upon the action taken last year by addressing the remaining 80 percent of defense acquisition spending - for services and other non-weapons items.
- The House also passed the bipartisan Improper Payments Elimination and Recovery Act (H.R. 3393), by Rep. Murphy to reduce the waste, fraud and abuse of U.S. taxpayer dollars resulting from the lack of proper oversight on the part of federal agencies. The bill takes steps to prevent improper payments and recover overpayments that cost U.S. taxpayers an estimated $98 billion in FY 2009.
- The Speaker sent a letter to House Committee Chairmen urging them to redouble their efforts in conducting oversight of all aspects of federal spending and government operations to help achieve deficit reduction and long-term fiscal responsibility. House committees have already conducted more than 150 oversight hearings to scrutinize our budget and hold federal agencies accountable, while promoting efficiency and reducing waste, fraud, and abuse in government spending.
Collecting Unpaid Taxes
- The budget steps up IRS enforcement to collect unpaid taxes from those who are not paying what they owe, which is estimated to total about $350 billion per year. Every $1 spent on IRS enforcement generates $7 in owed taxes collected.
The Bush/Republican Fiscal Legacy
- The Bush Administration had the worst fiscal record in American history.
- When President Bush took office, he inherited from President Clinton a projected 10-year budget surplus of $5.6 trillion. When President Obama was inaugurated, he inherited from President Bush a deficit of $1.3 trillion for FY 2009 alone and nearly $10 trillion more in deficits over the next 10 years:
- Congressional Republicans refused to pay for the new policies they were enacting. In 2002, Republicans allowed PAYGO to lapse in order to more easily spend trillions of taxpayer dollars on the Bush tax cuts for the wealthy, two wars and the new Medicare prescription drug plan.
- Under President Bush, the national debt nearly doubled - going from $5.7 trillion to $10.6 trillion. The amount of debt held by foreign countries tripled.