Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - January 31, 2008)

By Mr. CARPER (for himself and Mrs. McCaskill):

S. 2583. A bill to amend the Improper Payments Information Act of 2002 (31 U.S.C. 3321 note) in order to prevent the loss of billions in taxpayer dollars; to the Committee on Homeland Security and Governmental Affairs.

Mr. CARPER. Mr. President, I rise today to introduce the Improper Payments Elimination and Recovery Act of 2008.

At first glance, a bill with a name like that might not seem too exciting. But I can assure my colleagues that it addresses a serious, largely unknown problem that is a real threat to our fiscal well being.

Each year, agencies are required to look at all of their programs and activities and determine which are susceptible to significant improper payments. For those that are deemed at risk, agencies must produce estimated error rates that are included in their year-end financial statements. They must also come up with action plans for reducing their errors.

In fiscal year 2007, agencies are estimated to have made nearly $55 billion in improper payments. That is an astounding number, Mr. President.

We spend so much time around here throwing around numbers like $55 billion that they begin to lose their meaning. So I want to take a minute or so to put that number in perspective.

I was surprised to learn that $55 billion is more than the total budget for the Department of Homeland Security. It is also twice as much as we're projected to spend to protect the vehicles our soldiers are using in Iraq against roadside bombs.

To illustrate further the amount of money we are talking about, $55 billion is just a little bit less than the total GDP of Vietnam. It is a little bit more than the GDPs of Croatia and Slovakia. Most astoundingly, $55 billion equals the combined GDPs of 44 of the smaller countries in the world.

So our Federal Government is likely wasting more money than the total populations of many countries produce in a given year.

But $55 billion is not even a real number. It is likely just the tip of the iceberg. It includes no error estimates for massive programs like TANF, SCHIP, and the Medicare Prescription Drug Program. So I expect that we will see more than $55 billion in improper payments next year and the year after.

My colleagues and I on the Homeland Security and Governmental Affairs Committee's Subcommittee on Federal Financial Management have held six hearings focused on this issue now, including one this afternoon. What we have learned is that, in some cases, agencies are just not taking their responsibility to deal with and address their problems with improper payments and the management weaknesses that can cause them. The bill I am bringing forward today addresses just about all of the failures and deficiencies we've learned about through our oversight.

My bill starts by improving transparency. OMB right now has set the reporting threshold for improper payments too low, meaning millions of errors go unreported--and potentially unaddressed--each year. I want to lower the reporting threshold so that Congress and the general public have a better picture of the problem we face.

My bill would also help to prevent improper payments from happening in the first place by requiring that agencies come up with stronger corrective action plans and aggressive error reduction targets. It would also implement a recent recommendation from GAO that called on OMB to develop a process whereby agencies would receive regular audited opinions on the financial controls used to prevent improper payments before they happen.

My bill would also force agencies to be more aggressive in recovering improper payments they make. Some agencies--and most private sector firms--regularly go over their books to identify payment errors and get back overpayments made to contractors and others they do business with. We haven't done that enough in the Federal Government. Even as the agencies are reporting more and more improper payments, the amount recovered remains miniscule. I want to change this by requiring that all agencies with outlays of $1 million or more perform recovery audits on all of their programs and activities if doing so is cost effective.

Finally--and perhaps most importantly--my bill would hold agencies accountable. Today, as I mentioned, some agencies do not appear to be taking improper payments very seriously. I want to force agencies to hold top managers accountable for their progress--or lack of progress--in doing something to take better care of the tax dollars we entrust them with.

I look forward to working with my colleagues to get these important reforms enacted. I am sure we can all agree that allowing this level of waste to continue unchecked is reckless and unacceptable.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

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