When I write and talk about getting better data about the federal government, its activities, and spending, I mostly have in mind strengthening public oversight by bringing computers to bear on the problem. You don't have to know much about transparency, organizational management, or computing to understand that having a machine-readable government organization chart is an important start.
There should be a list, that computers can process, showing what agencies, bureaus, programs, and projects exist in the federal government and how they are related. Then budgets, bills in Congress, spending programs and actual outlays, regulations, guidance documents, and much more could be automatically tied to the federal organizational units affected and involved.
But it's not only public oversight that would benefit from such a list.
Mike Riggs at Reason magazine has found that the Office of Management and Budget's sequestration report issued last September listed a cut to the National Drug Intelligence Center's budget even though the NDIC went out of business last June.
The first line item on page 121 of the OMB's September 2012 report says that under sequestration the National Drug Intelligence Center would lose $2 million of its $20 million budget. While that's slightly more than 8.2 percent (rounding error or scare tactic?), the bigger problem is that the National Drug Intelligence Center shuttered its doors on June 15, 2012--three months before the OMB issued its report to Congress.
That's embarrassing for the administration, as it should be. Riggs asks, "Might there be other errors in the OMB's report?"
Getting organized is not just about public oversight. Another reason to have a machine-readable federal government organization chart is to improve internal management and controls. This kind of mistake should be nearly impossible. People at OMB should be able to download the list of government entities at any time, day or night, and be sure that it is the correct listing that uniquely identifies and distinguishes all the organizational units of the federal government at that moment. We should be able to download it, too.
Unfortunately, OMB controller Danny Werfel has been riding the brake on transparency. He and the Obama administration as a whole should be stepping on the gas. In early February, the Sunlight Foundation found that more than $1.5 trillion in federal spending for fiscal year 2011 was misreported on USASpending.gov.
Cato has just released a new video, titled “The Truth about Sequestration,” that tells the real story about sequestration, the automatic budget cuts required by the Budget Control Act. Many in Congress claim to abhor their creation, including many of those who voted for it, yet the members and the president haven’t done much to prevent it. Perhaps they shouldn’t do anything and let the cuts happen. In our video, my colleagues Ben Friedman and Dan Mitchell join me in explaining that, whatever its shortcomings as legislation (and there are many, as discussed below) sequestration may be the only viable way to reduce the Pentagon’s budget.
However, there’s little likelihood that sequestration will significantly reduce the defense budget long term. That’s because sequestration cuts the defense budget only in the first year. Every year after that, defense spending will increase. Spending levels will indeed be lower than the Pentagon last year expected them to be. But only in Washington is that considered a cut. So, under sequestration, instead of spending $5.7 trillion on defense over the next decade, as the FY2013 budget suggests, the government will spend about $5.2 trillion.
That $500 billion difference may not actually materialize. Congress has a few options to mitigate the effects of the initial $55 billion slice off the budget. They could reprogram funds after the sequester, change the definition of “programs, projects and activities” (the budget level at which the cuts are implemented), or take advantage of the flexibility within operations and maintenance (O&M) funds. In fact, because the Office of Management and Budget has declared that war spending is eligible to be sequestered, the total cuts to O&M can be spread out across a bigger pot of money. Beyond all that, sequestration does not affect outlays or funds already obligated, which means it will not affect existing contracts. So, the real story is that should sequestration actually happen, Congress and the Pentagon will have much more flexibility than they’re willing to admit.
Our video also highlights the fact that we spend far more on the military than is necessary. Since the end of the Cold War, policymakers and pundits have coalesced around the idea that the United States is the “indispensable nation” responsible for protecting everyone from everything. Under the misapprehension that threats anywhere in the world are necessarily threatening to the United States, we have taken on the responsibility of policing the entire planet. This increases the chances that the United States will become involved in conflicts that do not engage vital U.S. interests, or that we do not fully understand, or can easily remedy. This strategic hypochondria (H/T Ted Galen Carpenter) also burden American taxpayers with additional costs that could and should be borne by others. The video includes a nifty graphic showing the expansion of NATO. We have added a host of weak or fragile countries in the Middle East and Southwest Asia (including, still, Iraq and Afghanistan), and now we are doubling down with assurances to Asian nations that we will constrain China (and implying that they need not do so).
In short, a bloated defense budget has enabled these misguided policies, encourages free-riding by our “allies” and make us less safe abroad and less free at home. Though I would have much preferred a serious strategic debate before the current fiscal crisis, and indeed called for such a thing, sequestration should help us to refocus our national security priorities. In fact, the real story is that sequestration doesn’t restrict our choices, it enables us to make better ones.
Americans shouldn’t worry that sequestration will make our defense budget too small. We account for approximately 48 percent of the world’s military spending. We will retain a margin of superiority over any conceivable combination of rivals, including China, even if our share of military spending fell to 44 or 45 percent of the world’s total.
Sequestration was no one’s first choice, but keeping our reckless spending and strategic myopia on auto pilot is worse.
On Monday, I wrote about the rapidly growing movement to replace the Office of Management and Budget with a different coordinator for standardized publication of government spending data. Why? Because the OMB hasn't been standardizing and publishing data about government spending. That's why.
Yesterday, Kaitlin Lee posted a three-part indictment of the OMB on the Sunlight Foundation blog, called "OMB’s Commitment to Data Quality: Too Little, Too Late." Lee is deeply knowledgeable in this area and extraordinarily patient with the data problems the government throws at her. Credit what you read in her blog post.
(See also the Data Transparency Coalition's rebuttal of OMB controller Danny Werfel, who appears to be guiding the Obama administration toward opposition to spending data transparency.)
The drumbeat for better data is growing louder, it's pan-ideological, and it's non-partisan. Will the OMB preempt the DATA Act by moving forward with real data reforms, or will Congress preempt the OMB's role?
At a recent event on "lessons learned" from the Recovery Act, Earl Devaney, who served as chairman of the Recovery Accountability and Transparency Board, talked about the "crying need for data standardization in government." (35:00) Good data wouldn't only help expose waste, fraud, and abuse. It would help prevent waste, fraud, and abuse.
"There was so much sunlight on [Recovery Act] money," he said, "that the bad guys just sort of said to themselves, 'Well, we'll just continue to steal Medicare money...'." (38:25) That's entertaining stuff.
But the really interesting comments came from Danny Werfel, controller of the Office of Management and Budget. He criticized the DATA Act, which would create an independent commission to standardize federal spending data. (40:30) "Slammed" it, according to Federal Computer Week.
The OMB has effective and transparent processes in place to create rules for agencies to follow in obligating and spending funds, Werfel said, and it has a history of working with agencies to do so. A new commission would add "a new layer of regulation." Why would we not "leverage the existing instruments of government"?
Here's why: The OMB still has not produced a machine-readable organization chart for the federal government. There is still no authoritative and reliable set of identifiers computers can use to identify even the top two layers of the federal bureaucracy: agencies and bureaus.
If the OMB can't do this utterly basic stuff, if it can't come up with standard identifiers for the programs underneath agencies and bureaus, and if it can't create a uniform process for identifying and tracking awards and outlays of taxpayer dollars, there may not be as much there to "leverage" as we thought.
President Obama came into office promising great strides in transparency. By the end of his third year in office, he complied with his Sunlight Before Signing campaign promise just 52.4% of the time. President Obama's Office of Management and Budget publishes the government's top-level organization chart in a disorderly PDF document.
Why wouldn't the public go looking for a replacement?
At a recent Cato event on transparency, I emphasized that there is no federal government “organization chart" published in a way computers can use.
Here's what I mean:
Appendix C of the Office of Management and Budget's Circular A-11 is the White House's definitive public listing of agencies and bureaus, along with their OMB and Treasury codes---unique identifiers for the agencies and bureaus of the federal government.
First problem: It's a PDF document. To be computer-usable this should be represented in digital form as a lookup table.
But beyond that, it doesn't follow a coherent organization. There's an agency code ("200") called "Other Defense Civil Programs," for example. There's obviously no agency called "Other Defense Civil Programs." That's a catch-all description, not an agency.
With most agencies, the bureau codes refer to bureaus, such as the Bureau of Land Management (bureau code: "04") in the Department of the Interior (agency code: "010"), but with respect to the Department of Defense (agency code: "007"), the bureau codes become functional descriptions such as "Military Personnel" ("05"). There is no bureau in the Department of Defense called "Military Personnel."
Even the most basic organizational information is a hash, and it's published in PDF, unusable for computer-assisted oversight of the government!
The House appears committed to improving its publication practices. If the administration wants to advance the ball on transparency for its part, it will begin to publish coherent information---starting with basic information about the organization of the executive branch---in machine-readable form, using standardized identifiers. An edict from OMB to harmonize on identifiers down to the program level could be implemented in months, if not weeks.
My recent paper "Publication Practices for Transparent Government" talks about what to do. Our data model for budgeting, appropriating, and spending articulates how government agencies, bureaus, programs, and projects---and the relationships among them---should be represented.
Yesterday, the U.S. Department of Education sent proposed -- and highly controversial -- "gainful employment" regulations to the Office of Management and Budget for review, the first step in the process of officially publishing them. The regulations -- assuming they haven't changed drastically from previous proposed versions -- would limit the ability of students in vocational postsecondary programs to access federal financial aid if those programs produce debt burdens the regs deem too high, or salaries they deem too low. The exact details on what constitutes "too high" and "too low" should be revealed soon.
The big problem with this is that it is aimed at easily abused for-profit schools while leaving the rest of waste-drenched higher education untouched. But another problem, the very real risk of bureaucratic bungling, also looms large. Indeed, a story out just today from California notes that the state greatly overestimated how much it would save by cutting Cal Grant eligibility for students at schools that showed up on a recent U.S. Department of Education list of institutions with high three-year loan default rates. The problem: The Education Department had accidentally calculated three-year-and-three-month rates, significantly overstating defaults. In fairness to the Department, it did say the list was unofficial, so California officials also bear a lot of the blame; but it sure doesn't bode well that the Department would publish something so flawed.
There is a much more effective, and less dangerous, way to hold schools accountable than to have the federal government set blanket, hyper-politicized rules and try to enforce them. It is to have customers consume higher education using their own money rather than having Washington send tens-of-billions of inflation-fueling, extravagance-enabling dollars to students and schools every year. The problem is, that would just make it too hard to buy votes by falsely promising great education for all.
A recent paper by Veronique de Rugy examines how policymakers use various budgeting gimmicks to increase spending and obscure liabilities. One particularly abusive mechanism is the designation of supplemental spending as an “emergency.” The emergency designation makes it easier for policymakers to skirt budgetary rules, particularly “pay-as-you-go” (PAYGO) requirements.
The following chart from the paper shows how supplemental spending, most of which was designated as “emergency,” has taken off in the last decade:
As the chart notes, much of the increase is attributable to supplemental appropriations for the wars in Iraq and Afghanistan. The Bush administration was rightly criticized by analysts across the ideological spectrum for funding the wars outside of the standard budget process.
However, with the Democrats in control, the emergency designation is now being abusively applied to domestic spending. Congressional Research Service data obtained by the office of Senator Tom Coburn (R-Okla.) finds that emergency spending has increased deficits by almost $1 trillion since the 111th Congress was seated in January 2009.
The biggest chunk came with passage of the $862 billion “emergency” stimulus bill in February 2009. The Obama administration insisted that the emergency spending legislation was necessary to jump-start the economy and keep unemployment below 8 percent. Oops.
Congress has since passed additional multi-billion dollar “emergency” bills to extend supposedly simulative activities like unemployment benefits. The latest “emergency” extender bill that is bogged down in the Senate would add another $57 billion in debt.
What is Congress allowed to designate as emergency spending? Keith Hennessey, a former economic advisor to George W. Bush, offers the best definition: “it’s whatever you can get away with labeling as an emergency.”
However, Hennessey points out that there was originally a test with a fairly high bar created by the Office of Management and Budget in 1991 under the first President Bush. According to Hennessey, all five of these conditions had to be met:
- Necessary; (essential or vital, not merely useful or beneficial)
- Sudden; (coming into being quickly, not building up over time)
- Urgent; (requiring immediate action)
- Unforeseen; and
- Not permanent.
Hennessey says the definition was included in congressional budget resolutions during Bush II’s administration and that the president proposed codifying it in law. But that doesn’t seem to be the policy that the Bush II administration actually followed. With perhaps the exception of initial hostilities, there was nothing “unforeseen” about Bush’s “emergency” war spending in Iraq and Afghanistan. It seems that Bush’s inability to abide by his own proposal is another sad reminder that his fiscally reckless tenure helped pave the road to Obama.