'It's Not Near Enough': Andy Biggs Decries Deficit Spending Increases, Urges Larger Spending Cuts

6 months ago

During a House Oversight Committee hearing last week, Rep. Andy Biggs (R-AZ) spoke about deficit spending and the need to cut federal expenditures.

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Transcript

00:00Thank you, Mr. Chairman. Thank you for holding this hearing, Mr. Dodaro. It is good to see

00:08you again. Thanks for being here. I appreciate your work and your testimony today and your

00:13report that you provided to us.

00:16One of the open topic areas discussed in your written testimony is the need for the Department

00:20of Education to obtain data to verify income information for borrowers reporting zero income

00:26when applying for income-driven repayment plans for federal student loans. Did you make

00:32any specific recommendations? Please tell us about the potential for implementation

00:37of those recommendations.

00:38Yes. Thank you for that. That is an important question. When we first looked at this issue,

00:44we found that over 95,000 plans, that was over 10 percent of the whole plans, reported

00:51zero income. And education was taking the self-certification of the people and not verifying

00:59it in any way. So we thought you need to verify that to make sure. We saw what self-certification

01:04did during the pandemic, and it didn't work out so well. And so that is not a good technique.

01:11And so we recommended they do something. Now, Congress has given them now the authority

01:17to use tax data. But the applicant for the income-driven repayment program has to allow

01:24the IRS, their data to be accessed by the IRS and reported to the Education Department.

01:33And in the efforts to take applications for further plans, because some people change

01:41their plans or apply for new ones, about 70 percent, a little over 70 percent of the people

01:47allowed education to access their tax data. The other ones didn't.

01:52So the question is, how is education now going to use other information, which could be commercial

01:58sources or it could be the new hire database that is collected by HHS that collects current

02:05wage data. It is used for child enforcement purposes. But that is what we used when we

02:10checked that database against the education database.

02:17Education hasn't made a decision yet about what they are going to do to verify those

02:22that do not have the IRS compliance. So I am very concerned. They need to make sure

02:28they have something in place to do this.

02:30Do they have a deadline before they need to come up with how they are going to actually

02:37implement for the other 30 percent?

02:39I will check on whether they have a deadline or not. But they should have one before they

02:44start the program again. But they missed a lot of deadlines. We are looking now at the

02:49free application for student loan aid, the FASTA program, all the problems they had,

02:54what happened there, and we are trying to get all the data out of them.

02:59This income-driven repayment program, if they implement the recommendations successfully,

03:04CBOs or joint command taxation or CBOs, I forget which one, have estimated it could

03:09save $2 billion. So it is very important.

03:12$2 billion over time?

03:14Yes, over time.

03:15Okay.

03:16Yes. And so we will follow up with them. And I will let you know on the time frame. If

03:20they don't have one, I will recommend they establish one, obviously.

03:24Very good. And you anticipated one of my questions was what kind of savings do you anticipate?

03:29So since GAO has been conducting an annual duplication report in 2011, your agency has

03:35made over 2,000 recommendations to Federal agencies and to Congress on how to reduce

03:39or eliminate duplication and overlap in Federal programs. And the execution of those recommendations

03:44has resulted in $667.5 billion in savings. I commend you for that. But I would just say

03:52it is not near enough. Why do I say that? Because from 2011 to where we sit today, our

03:57deficit has grown excuse me, our national debt has grown by $25 trillion. And we maintain

04:02a consistent structural deficit in excess of $2 trillion.

04:08And so we need you to find these programs and weed them out and help us turn our woeful

04:16budget system around. The rest of it belongs to us. We have got to take care of it. And

04:21that is across both parties. It is not one party or another. Both parties are to blame

04:26there.

04:27So I want to turn to the report more broadly. You identified 112 recommendations and matters

04:31in 42 topic areas in the 2024 duplication report. What are the common themes and threads

04:38among programs with opportunities for cost savings and revenue enhancement?

04:42Yeah. Some of the most common areas is in the overlap and duplication fragmentation,

04:51and not following best practices for collaboration. And I mentioned earlier in the Chairman's

04:58questioning, I think Congress should legislate those eight criteria so that agencies that

05:04have interagency councils can work on it.

05:08In the other areas in cost savings and revenue enhancements, there are a number of recommendations

05:12at IRS to better focus their enforcement efforts. And in that area also, we have recommendations

05:20to the Congress. Like, for example, in the past, we recommended that the Congress accelerate

05:25the date for W-2s to be provided to IRS. Before, employees had to get them in January, by the

05:33end of January. But IRS didn't get them in Social Security until April. So a lot of people

05:37were filing fake tax returns, and there was a lot of identity theft going on. So Congress

05:43expedited the reporting of the wage data now. It saved $7 billion from fraudulent tax

05:51payments.

05:52We have other recommendations to the Congress. To your point, one of the big cost drivers

05:56in the Federal debt is health care. We've got recommendations, if you equalize the payments

06:03for Medicare for people going to doctor's offices affiliated with hospitals, to what

06:08you do in the private practice. Right now we pay the hospitals more, affiliated with

06:14the hospitals. You can save $141 billion over 10 years in Medicare.

06:19We've got other recommendations to save hundreds of millions in Medicaid. I think the Medicaid

06:25program needs a lot more oversight and attention. Both of these programs, Medicare and Medicaid

06:31last year, reported collectively over $100 billion in improper payments. And so we've

06:37got recommendations to address those issues.

06:40So we're trying to target our recommendations to some of the major spending areas in the

06:46government, particularly the health care area, and to deal with the tax gap issue by

06:51better we have a lot of revenue that should be coming into the government. The latest

06:57estimate extrapolated for 2014 to 2016 was $428 billion a year. But IRS estimates that

07:08the current tax gap between taxes owed and taxes collected is over $600 billion.

07:14We also have a lot of money going out the door that shouldn't go out the door in improper

07:20payments and fraud. We estimated that or the government agencies reported over $236 billion

07:28in improper payments for 2023. And that's not everything. There's a lot of programs

07:35that aren't reporting payments.

07:36I find this fascinating, but my time is way expired. So, Mr. Dodaro, good to see you again.

07:44Thanks for your testimony.

07:45Thank you.

07:46I'll yield back, Mr. Chairman. Thanks for your indulgence.

07:47The gentleman yields back his time. Thank you very much.

'It's Not Near Enough': Andy Biggs Decries Deficit Spending Increases, Urges Larger Spending Cuts

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