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Thursday, September 04, 2008

Transparency Act Legacy Spreads to the States

Ellen Miller blogs today over at the Sunlight Foundation about the legacy of the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act). The Transparency Act mandated that all federal spending be easily accessible and searchable in the Internet. After the law passed in 2006, the federal government launched USASpending.gov in 2007, which was built on the software platform that powers OMB Watch's FedSpending.org.

Ellen reports the legacy of this federal law is being felt at the state level, all over the country:

Since 2007, 11 states (Hawaii, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Oklahoma, South Carolina, Texas, Utah and Washington) have established, via legislation or executive order, free and searchable Web sites that give access to state spending. And 24 other states are working on it, with more than half introducing spending transparency bills this year. B2G Exchange blog wrote in May that transparency Web sites were the "hottest new trend" in state government.

The original cosponsors of the Transparency Act bill - Barack Obama (D-IL) and Tom Coburn (R-OK) - as well as the hundreds of advocacy groups and transparency organizations, blogs, and regular citizens who helped push this legislation to enactment should be very proud of this legacy. Let's hope it continues to spread.



Posted by Adam Hughes, 02:09:23 PM



Thursday, August 28, 2008

A Bridge for Sale: Contracting Problems Continue

I came in this morning to find my inbox (well, it was actually my Google RSS Reader, but saying inbox sounds better) deluged with more stories about contractor malfesence. A quick rundown for our BudgetBlog readers:

The Wall Street Journal reports that MVM Inc., one of the largests security contractors used by the U.S. intelligence community, has lost a huge CIA contract - worth up to $1 billion over five years. Apparently they were not providing enough armed security guards, which is strange because that was, you know, what they were contracted to do.

Robert O'Harrow Jr. writing at Government Inc. shares some fascinating facts about the use of contractors in the U.S. intelligence community, including the fact we are paying over $3 billion more each year on average for private contractors to carry out intelligence work than if we just hired more government workers. Shocker! (O'Harrow also highlighted a new Government Accountability Office report on August 15 that detailed the 400 percent (yes, I said 400 percent) markup on a contract to provide the next generation of radios for the Defense Department.)

And the darling of the contracting community KBR Inc., was back in the news today in the Washington Post, again not for a good reason. A Washington law firm has filled suit in a federal court in California alleging that KBR and one of its Jordanian subcontractors were trafficing Nepali workers. From the Post article:

Agnieszka Fryszman, a partner at Cohen, Milstein, Hausfeld & Toll, said 13 Nepali men, between the ages of 18 and 27, were recruited in Nepal to work as kitchen staff in hotels and restaurants in Amman, Jordan. But once the men arrived in Jordan, their passports were seized and they were told they were being sent to a military facility in Iraq, Fryszman said.

As the men were driven in cars to Iraq, they were stopped by insurgents. Twelve were kidnapped and later executed, Fryszman said. The thirteenth man survived and worked in a warehouse in Iraq for 15 months before returning to Nepal.

My favorite part of that article is right at the end when a KBR spokeswoman says, "The company in no way condones or tolerates unethical or illegal behavior." Sure. And I've got a bridge to sell you.

Update:
The folks over at TPMMuckraker dove into the specifics of the lawsuit brought against KBR today and have posted more details.



Posted by Adam Hughes, 11:45:06 AM



Monday, August 25, 2008

The Search Engine That Couldn't

If it weren't for its direct impact on national security, we could all enjoy a hardy guffaw at the $500 million mess that is supposed to tie the nation's intelligence data together. The anti-terror intelligence database, known as Terrorist Identities Datamart Environment (TIDE), is the subject of recent House Science and Technology Committee's Investigations and Oversight Subcommittee report. The report found that "Railhead," the $500 million project that was supposed to tie together the intelligence data of the nation's 16 separate intelligence agencies. Instead:

The Railhead program may actually degrade the ability to provide intelligence data for use in the consolidated terrorist watch list at the FBI's Terrorist Screening Center. It may cripple NCTC's [National Counterterroism Center] ability to share critical intelligence among U.S. government agencies. It will also potentially jeopardize the ability to provide vital search functions by counterterrorism analysts.

[...]

In fact, the new Railhead systems that NCTC hopes will replace the current TIDE~database by early next year may not provide critical search, access, sharing and other vital functions the current system does currently provide.

The issues that have put the system at risk are myriad, but the report describes two that totally dumfound me.

1) The new system's technology is incompatible with what the rest of federal government uses (indeed, with what most of the world's businesses use). Rather than use a technology known as a "database," the contractor hired to build the new system wants to use something not dissimilar from masses of Microsoft Word documents.

2) The system can't perform basic data searches using combinations of text. An analyst can, for instance, search for data containing the word "anthrax," but she wouldn't be able to search for data containing the words "anthrax" or "plague." In other words, this $500 million clunker is already technologically behind most free internet search engines, like Google.

The subcommittee are also incredulous, and wonder, as they directly ask in the report, if the contractor's close personal relationship with the government's project manager has anything to do with this cockamamie approach to fulfilling one of the key recommendations of the 9/11 Commission.

Wall Street Journal: Flaws Found In Watch List For Terrorists



Posted by Craig Jennings, 06:24:44 PM



Taxing and Spending

Brad DeLong has a great post on the tradeoffs we face in bringing the long-term budget into balance.

Note that [raising revenue] is not optional. As the late Milton Friedman liked to put it: to spend is to tax. If the government buys things, it must get the money to buy them from somewhere. It can get the money from three places. It can tax. It can borrow--but then the borrowing has to be repaid with interest, and the more is borrowed the higher the interest and the worse the value the taxpayers ultimately get for their money when they are taxed to repay the borrowing. Or it can print the money and so inflate the currency--but that too is a tax, and an especially unfair, painful, and destructive one, as lots and lots of people victimized by inflation find their wealth doesn't buy what it used to and what they expected.

As economists estimate, the long-term budget faces in a very significant fiscal gap that must be closed, and, as Brad plainly states, whoever tells you that increasing revenue is not necessary is selling you something.

(h/t Matthew Yglesias)

Image by Flickr user DennisSylvesterHurd used under a Creative Commons license



Posted by Craig Jennings, 01:36:42 PM



A Billion Here, A Billion There

Last week I wrote on the BudgetBlog about a new Taxpayers for Common Sense (TCS) analysis detailing the status of earmark in the FY 2009 House and Senate appropriations bills to date. I wrote at the end of the post that cutting earmarks does not save "any" money, which as it turns out, isn't exactly true.

Steve Ellis from TCS wrote a helpful email I'm republishing here with his permission. Steve helps to clarify where/when savings are possible from cuts in earmarks.

Hey Adam,

Hope you are well. Thanks for the plug of our interim earmark report on your blog. Not to be too niggling, but I wanted to make a friendly suggestion - your kicker comment about cutting earmarks doesn't save "any" money is not accurate. The FactCheck story you link to says it would save "little." Of course that depends on how you define little.

Our analysis found $18.3 billion congressional earmarks last year, and as we and others have indicated, in many cases these are just divvying up a spending pie that already exists. But not always. Large and small amounts of money are added to earmark pots and if the earmarks were eliminated that funding would go away. Particularly in defense you can see plus ups across [Research Development Test & Evaluation] — and that bill contained $7.9 billion worth of congressional earmarks last year.

And none of this gets to the indirect cost — money going to wasteful projects, less money going to worthy or critical projects, delaying completion and increasing costs, etc. And that doesn't touch the corruption aspects, opportunity costs, failed oversight, bad products (the most clear-cut example of bad products is the Rep. Wu (D-OR) earmark that got synthetic shirts for Marines that melted to their bodies in the heat when their armored vehicle was attacked).

Anyway, I just wanted to highlight that cutting earmarks can save money, it just isn't as simple as 1 to 1, but it's not 1 to 0 either.

I'm still not convinced that the actual savings Steve is talking about is more than a couple of billion a year, which in a $3 trillion budget is really nothing to get too excited about (I know, a billion here, a billion there, and pretty soon we're talking about real money). But Steve makes a great point about the indirect costs. Not only is there a monetary opportunity cost to an inefficient system that funds the wrong projects and services, but it also undermines the trust the public has in our government to provide for the common good.



Posted by Adam Hughes, 12:00:25 PM



Friday, August 22, 2008

Gearing up for New Census Poverty Data

Today has been a slow day in an already slow month in fiscal policy in Washington, DC, but the Center on Budget and Policy Priorities (CBPP) issued a very helpful report leading up to the release of poverty, income, and health insurance data from the U.S. Census Bureau next Tuesday. The report is a guide to what to look for in the Census release and how to assess whether economic growth is reaching low- and middle-income families.

CBPP thinks these data could show some pretty unprecedented trends:

The 2007 figures may well show something unprecedented. For the first time on record, poverty and the median income of working-age households may be worse at the end of a multi-year economic expansion than they were at the bottom of the previous recession. That would be an unparalleled and troubling sign of the limits of recent economic growth.

WHAT TO WATCH FOR IN THE NEW CENSUS INCOME AND POVERTY NUMBERS



Posted by Adam Hughes, 04:55:04 PM



Thursday, August 21, 2008

Notes from the Economy: Unemployment Insurance Claims

The Department of Labor released its weekly unemployment insurance claims data this morning. Initial and continuing claims moved slightly downward, from 445,000 to 432,000 and from 3,379,000 to 3,362,000, respectively. The four-week moving average of initial claims, however, ticked up from 438,500 to 445,750.



Posted by Craig Jennings, 10:28:27 AM



Tuesday, August 19, 2008

The Best Laid Plans

Over on Capital Gains and Games (a favorite blog of the Budget Brigade), budget guru Stan Collender and Pete Davis muse, in a couple of posts, on the presidential candidates' budget plans. They emphasize the point that, as much as they may want to implement deficit-increasing tax and/or expenditure plans, the market may have other plans.

First, Collender reminds us that in the post-Reagan world, economic policy options were limited.

The bond market "vigilantes" -- the same people who forced the Clinton administration to propose and push for deficit reduction -- are starting to say that the moon, stars, and planets may line up again in 2009 to force the next president to do the same thing.

In a follow-up post, Davis explains how large, persistent deficits impact the economy. This may give the next president pause (Davis hopes) and put the kibosh on his plans.

High real interest rates choked off recovery from the 1980 recession until early 1983, and real growth turned down again in 1986, but stopped short of a recession. The first chart [shown] also shows the "neutral real rate" required to keep the economy at full production. With the credit crisis, it has moved negative, where it remains today. It will take us at least another year or two to come out of our economic "slowdown," and rising interest rates could easily choke that recovery off.


Posted by Craig Jennings, 11:29:36 AM



Earmarks Declining? Not So Fast...

Taxpayer for Common Sense, the scrappy nonprofit that is fast becoming the go-to resource for all things earmarks, released a new analysis earlier this week showing that earmark levels have dropped slightly in the FY 2009 appropriations bills compared to last year. From the TCS report:

During this election year, lawmakers are showing slight restraint in writing the earmarks in the FY 2009 spending bills, according to an analysis by Taxpayers for Common Sense (TCS) (click here for the new database). The House has increased the number and value of earmarks at about the same rate. The Senate has cut earmarks by 16% in the spending bills in terms of total dollars. The analysis is based on all the bills that have passed full committee and are awaiting action in both chambers.

The appropriations bills are not complete yet (far from it) and TCS warns that lots could change. In fact, they state the FY 2009 spending bills may end up with more earmarks because of how the bills are likely to be enacted:

The slight progress made on reducing the total costs of earmarks will be eliminated the longer we wait to pass the 2009 spending bills. The most likely scenario is a major omnibus spending bill during the first days of the 111th Congress. So any earmark reductions we are seeing in August are likely to be negated by an avalanche of earmarks that always accompanies major omnibus spending bills.

At least legislators running for re-election can say with a straight face they are trying to reduce earmarks. I suppose that's better than them claiming that cutting earmarks saves any money. It doesn't



Posted by Adam Hughes, 11:13:11 AM



Monday, August 18, 2008

CHN Hosting Prep Webinar on Census Poverty Data Release

On Tuesday, August 19, the Coalition on Human Needs is once again hosting a webinar to help advocates and analysts prepare for the release of annual data from the Census Bureau about poverty, income, and health insurance in the U.S. The webinar will take place from 2:00 - 3:30 (EST) on the web, and feature Jared Bernstein of the Economic Policy Insitute, Douglas Hall, Acting Managing Director of Connecticut Voices for Children, Deborah Weinstein, Executive Director of the Coalition on Human Needs, and will be moderated by Ellen Teller, Director of Government Affairs, Food Research and Action Center.

If you are not familiar with CHN's webinar or the annual data release of poverty information from Census, here's a bit of information about what you can expect if you sign up and participate. The webinar will help you:

* to find and understand national numbers and the findings for your state when they're released on August 26
* to see accurate trends over time; whether your state fares better or worse than the national average
* to compare the new data (from 2007) with what we know about the economic woes of 2008, and
* how to talk about the new findings to help build the growing movement for a national commitment to dramatically reduce U.S. poverty.

To sign up to participate and for more information, see CHN's webinar webpage.



Posted by Adam Hughes, 04:28:28 PM



Friday, August 15, 2008

Bush Administration Backs Off SCHIP Restrictions

that is off the hook

The Bush administration announced yesterday that it will not enforce new requirements that would have made it more difficult for states to enroll children in the State Children's Health Insurance Program (SCHIP). USA Today reports that the administration will not be taking "compliance action" at this time on regulations that would have forced states to wait until children are uninsured for one year before being covered by SCHIP and also require states to enroll 95 percent of extremely low-income children in the state before expanding health care coverage to only somewhat low-income families:

The directive was aimed at 15 states that extended health insurance to children in families with incomes above 250% of the federal poverty level — $44,000 for a family of three.

Many governors and Democratic lawmakers criticized the administration's new guidelines as impossible to meet. They said the final result would be that more children would go without health coverage as states rein in their programs.

With the deadline fast approaching, the administration made clear that states were under no immediate threat of losing federal funding.

We commented at the end of July about how Democrats in Congress really dropped the ball in using the Congressional Review Act to impede the Bush administration's efforts to keep kids from having health care. Fortunately, at least for the time being, it looks like they are off the hook.



Posted by Adam Hughes, 11:49:47 AM



Thursday, August 14, 2008

Notes from the Economy: Prices, Earnings, Unemployment Claims
Notes from the Economy: Prices, Earnings, Unemployment Claims

The Bureau of Labor Statistics (BLS) released data for inflation and real earnings this morning, while the Labor Department reported on unemployment insurance claims for the past week.

Inflation: Consumer prices continue their steep advance as prices jumped 0.8 percent in July, pushing the annualized rate to 10.6 percent (yikes!). The jump in consumer prices was largely driven by food and energy, and when those items are subtracted inflation clocks in a high, but not scary, 3.5 percent.
BLS Release: Consumer Price Index: July 2008
Commentary: Dean Baker at CEPR

Real Earnings: Workers' pay took a hit in July as real average weekly earnings fell by 0.8 percent. The 0.3 percent increase in average hourly earnings couldn't keep up with the 0.3 decrease in aerage weekly hours and the 0.9 percent in prices.
BLS Release: Real Earnings in July 2008

Unemployment Insurance Claims: Last week, 450,000 workers claimed unemployment insurance for the first time -- 10,000 fewer than the previous week. The four-week moving average of initial jobless claims rose to 440,500, an increase of 19,500 from the previous week's revised average of 421,000. Workers who continue to collect unemployment insurance advanced to 3,417,000, an increase of 114,000 from the previous week.
Department of Labor Release: Unemployment Insurance Weekly Claims Report
Commentary: Andrew Samwick at Capital Gains and Games


Posted by Craig Jennings, 05:02:40 PM



Wednesday, August 13, 2008

Looking for Top Notch Interns!

The OMB Watch Fiscal Policy Program is looking for an intern for the fall of 2008. Yup, that's right. This is your chance to get in on the ground floor at one of the most dynamic nonprofit watchdog groups in Washington, DC. We're looking for energetic undergraduate or graduate students who have excellent writing, critical thinking, and communications skills, and who are dedicated to public policy and government accountability (see current intern Josh at right for example).

The internship is unpaid, but you'll have the chance to gain first hand experiences and take on significant responsibilities related to a number of different aspects of policy analysis in DC. Plus, you'll get a chance to write for the BudgetBlog - what could be better?

Interested? Learn more about the position and how to apply.



Posted by Adam Hughes, 05:56:02 PM



Tuesday, August 12, 2008

CBO Report Tallies Expenditures on Contracting in Iraq

In response a requrest from the Senate Budget Committee, CBO has a issued a report on contractors working in Iraq. From 2003 to 2007, the federal government awarded over $85 billion in contracts, and with a burn rate of $17-21 billion per year, it's likely that $100 has been doled out to private contractors since the start of the war.

The report is thorough analysis of on what and by whom that money is being spent. CBO sliced the data by:

  • Which federal agency is awarding contracts (The DoD has awarded $76 billion in contracts with the Army obligating 75 percent of that amount)
  • Location of where contract was performed ($63 billion in Iraq, $14 billion in Kuwait, and $8 billion in other countries in the Iraq theater*)
  • The types of products and services provided by contractors (about $25 for Professional, Administrative, and Management Support, $20 billion for Uncategorized or Miscellaneous, with the rest falling in some 97 other categories)

CBO's report also quantifies the extent to which contractor personnel are in theater. CBO estimates that there are some 190,000 people working for contractors in the Iraq theater, of which about 20 percent are U.S. citizens. In fact, the ratio of contract personnel to military is 1 to 1 -- a level some 3.9 times higher than the historical average.

Upon the release of the report Senate Budget Committee Chair Kent Conrad (D-ND) issued a press release summarizing the potential pitfalls of outsourcing on such a massive scale:

There are billions of taxpayer dollars being funneled to both American and foreign companies, often through no-bid contracts. Ongoing Pentagon audits have revealed that vast sums of this money have been misspent or improperly recorded. The American people deserve a better accounting from this Administration of who these contractors are, why they are being used instead of U.S. troops, how they are being monitored, and whether they represent a cost-effective use of American resources.

*A region in the Middle East including Iraq, Bahrain, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates



Posted by Craig Jennings, 01:51:51 PM



Monday, August 11, 2008

Red Light, Green Light, One, Two, Three

It's been a slow day here at the Budget Brigade, so I thought I'd bring your attention to the lastest round of quarterly "scores" agencies receive on the President's Management Agenda (PMA) scorecard. These scores measure the implementation of the PMA, or how well the major agencies are "executing the five government-wide management initiatives." Robert Brodsky from Government Executive Magazine has a rundown of the latest scores, which are not too good:

Many federal agencies have taken a step backward on the Bush administration's five major management initiatives, according to quarterly grades released on Thursday by the Office of Management and Budget.

There were 14 downgrades on the status section of OMB's management score card for the third quarter of 2008, which ended June 30. And there were only six instances in which grades improved.

The problems were limited to two areas of the President's Management Agenda: human capital and electronic government.

Clay Johnson, OMB's Deputy Director for Management, cautioned that the "scores" shouldn't be seen as "scores," but as opportunities for improvement.

"The score cards aren't about compliance or getting to a score -- it's about results that agencies are producing," Johnson said. "So, a dip in a score shouldn't always be viewed in the negative, but as a way to [make] progress and improve effectiveness."

Hmmmm...

P.S. For all you home-gamers out there, the administration's "competitive sourcing" initiative has been renamed to the new and improved Commercial Services Management initiative. Same waste of money, great new name.



Posted by Adam Hughes, 05:51:46 PM




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