Fiscal Stewardship

Bernanke Endorsed by Senate Banking Committee, Supports Limited Fed Audit

In late December, in a bipartisan vote, the Senate Banking Committee approved Federal Reserve Chairman Ben Bernanke's nomination to a second term as Federal Reserve chairman. The vote wasn't in any doubt, although the closeness of the margin, 16 to 7, does indicate the contentiousness of Bernanke's nomination. The nomination now heads to the Senate floor, where, barring some unforeseen calamity, he will be nominated to another four year term in January. His nomination should be helped by a recent letter Bernanke wrote responding to written questions from two committee members, in which Bernanke hesitantly endorsed limited audits of the Federal Reserve.

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Articles & Analysis

More Action Is Needed to Improve Recovery Act Data Quality

The Recovery Act may be a great step forward for spending transparency, but it is also exposing the problems of obtaining quality recipient reporting. Two new government reports show that recent revisions and additions to Office of Management and Budget (OMB) rules on recipient reporting are not necessarily "magic bullets" for addressing reporting errors. The reports also make clear that ensuring that recipients have a clear understanding of existing guidance is a crucial aspect of any data quality improvement effort.

Commentary: Security Contracting and the Dilemma of Defining an Inherently Governmental Function

Later in March, the Obama administration plans to release new guidance to federal agencies on which jobs the government can and cannot outsource to the private sector. The federal government's latest effort to better define what qualifies as an inherently governmental function should theoretically have significant consequences for reconstruction efforts in Iraq and Afghanistan, specifically regarding security contracting. However, change is unlikely.

President Obama's Progressive Tax Initiatives

When President Obama rolled out his Fiscal Year 2011 budget in early February, many focused attention on the potential negative effects of the administration's proposed three-year freeze on non-security discretionary spending. Moreover, the possible effects of the president’s hawkish rhetoric toward the federal budget deficit dismayed those in the progressive community who are concerned with social equity. However, a detailed examination of the tax section of the president's budget reveals several progressive proposals designed to aid in the fight against poverty and bolster the middle class.

FDA Announces New Approach to Inspections of Imported Products

On Feb. 4, the Food and Drug Administration (FDA) announced a new approach to regulating imported products – including food and medical devices – to enhance the agency's ability to respond to the increased globalization of commerce. The new risk-based approach to inspections and product tracking will be in place nationally in 2010.

Commentary: Celebrating One of the Recovery Act's Legacies: Transparency

Feb. 17 marked the one-year anniversary of the American Recovery and Reinvestment Act, commonly called the Recovery Act. Both political parties celebrated the occasion with partisan attacks. Democrats heralded the act as having saved the nation's economy, while Republicans savaged it for being an expensive government program with little to show by way of jobs. While the two parties can argue over how effective the act actually has been, both can agree on one thing: the lasting legacy of the Recovery Act’s transparency provisions.

For Regulatory Agencies, Intrigue in an Otherwise Bleak Budget

President Barack Obama's proposed budgetary spending freeze would have varying impacts on the regulatory agencies responsible for protecting public health and welfare. Oversight of industry and solving new and neglected problems may dwindle as environmental and consumer safety regulators are forced to operate in a constrained fiscal environment.

An OMB Watch Statement on President Obama's Fiscal Year 2011 Budget Request

WASHINGTON, Feb. 2, 2010—President Obama has sent his budget request for fiscal year 2011 to Congress. Far from bringing change, it at best tinkers with federal priorities while perpetuating the wrong budget agenda.

The End of TARP to Be Met with Controversy

The Troubled Asset Relief Program (TARP) began with a single, basic idea: prevent imminent economic collapse. With that premise, then-Treasury Secretary Henry Paulson convinced Congress and President Bush to authorize $700 billion of emergency spending to undertake actions to avert such disaster. Now, with economic catastrophe averted but with the nation's economy still struggling, a new report turns policymakers' focus to the end of TARP.

Commentary: Deficit Commissions Unlikely to Produce Results

On Jan. 26, the Senate rejected an amendment sponsored by Sens. Kent Conrad (D-ND) and Judd Gregg (R-NH) that would have created a bipartisan deficit commission. Due to the complex nature of the proposal, there is a low probability that such a commission would succeed in its goal to slow the growth of the national debt. Despite the improbability of success, there is much speculation that the president will now create a similar deficit commission through executive order.

The Recovery Act Spending That Wasn't There

Recovery Act recipient reporting has received a great deal of attention in the media, and while some of this coverage has been critical (reporting on non-existent congressional districts or ZIP codes, unreliable job creation numbers, etc.), many news articles portray comprehensive oversight of the act because of transparency requirements in the law. However, approximately two-thirds of the spending in the Recovery Act bypasses these requirements, leading to a dearth of information about how the money is being spent. As time passes and Recovery Act spending continues, this lack of data is becoming more apparent, as highlighted by a recent Internal Revenue Service (IRS) report showing that millions of dollars in Recovery Act tax breaks are vulnerable to tax fraud.