2001 Laws Cost Taxpayers $733 Billion

There's a Republican in the White House, the U.S. House is still run by the GOP and the country is in a recession, but that didn't stop Congress and the president last year from passing 136 laws that will cost taxpayers $733 billion – more money than ever before.

The two most expensive bills signed into law were the National Defense Authorization Act, which calls for $276 million in mandatory spending over five years, and the education law known as the "No Child Left Behind Act," which will cost taxpayers $135 billion over the next five years.

The House Republican Study Committee (RSC) has totaled the costs of all the legislation passed during the first half of the 107th Congress, the first time it has ever undertaken such a task, according to RSC executive director Neil Bradley.

"One of the goals that we set out in doing this, this year, was to begin compiling figures every year, so we can begin to compare whether we are spending or proposing to spend more of the taxpayers' money or less," said Bradley.

Another expensive item is the "Railroad Retirement Act," which will cost taxpayers almost $14 billion over five years.

The study was broken down into three major categories: mandatory spending, authorizations and appropriations.

"Mandatory spending is the spending that is re-occurring, that once Congress begins it, it doesn't end until Congress affirmatively chooses to do something about it. This is spending that will continue for now until Congress decides to change those programs," Bradley said.

The study found that the appropriations bills approach $733 billion in 2001, a historic high, according to Bradley. About $45 billion is a direct result of the Sept. 11 terrorist attacks, he said, but the total is "well in excess of the levels we prescribed back in 1997 when we had a Balanced Budget Act."

"President Bush had proposed fairly substantial increases in education spending, and Congress, in particular the Senate, led by Senator Kennedy, proposed even further increases.

"Ultimately, most of those increases were included in the final bill that was signed into law," said Bradley.

Bradley also predicts, after looking at President Bush's proposed budget for the coming fiscal year, that appropriations will climb even higher.

"There are a lot of proposals to increase mandatory spending on things like prescription drugs. Also, the farm bill, which would increase the mandatory spending line. But it remains to be seen what sort of authorizations [Congress] will take up this year," said Bradley.

"Certainly, we will do another defense authorization bill, and our members believe and with good reason that that will be more than the previous year," he added.

Congress last year also passed the "African Elephant Conservation Act" and the "Rhino and Tiger Conservation Act," two items that will cost $15 million combined.

Bradley said bills such as those are "passed generally on Tuesday afternoons before members really get back into town. They usually pass under the suspension calendar, which means there are no amendments or constrained time for debate and very little discussion or fanfare."

Congress also passed 22 bills during the first session that renamed post offices and other federal property.

Pete Sepp, vice president of National Taxpayers Union, said the study showed "just how massive our federal government has become" and should "give people pause."

"The other dirty secret is, of course, that the federal government spends more than twice that amount [$733 billion] every year anyway. It means that a lot of federal spending goes on without a great deal of pause to evaluate it."

Sepp added that "there are so many programs on automatic pilot that get authorized once and sometimes every five or ten years. And they just continue on without even a peep."

HUD LOSING $1 MILLION PER DAY
Mr. WAXMAN. I hope she'll give me the answers to my questions, because those charges are pretty damning.

Now, I want to examine this HUD issue in comparison to the private sector. You would think that based on the criticisms that HUD was performing leagues below private firms that dispose of foreclosed property. But I don't know that that's the case at all.

Are you familiar with an industry benchmarking and best practices report by Andersen Consulting in March 1997?

Ms. COOPER. I'm not. No, we are not.

Mr. WAXMAN. Well, one critical success factor considered by the Andersen firm was HUD's ability to maximize return on sales. I don't know if you're aware that sales revenue for private industry averaged 96 to 105 percent or more of value. HUD's single family property disposition performance was comparable at 98 percent.

Another critical success factor recognized by Andersen Consulting was minimizing the cost of sale. Chairman Burton apparently believes that HUD is losing $1 million a day. But Andersen thinks HUD is doing as well as the private sector.

Are you aware that the industry standard for cost of sale was 12 to 18 percent of market value and that HUD's costs averaged 17 percent?

Ms. COOPER. I was aware that HUD's costs—no, that HUD's loss per property based on its acquisition costs, had increased from $28,202 in fiscal year 1996 to $31,728 in fiscal year 1998. I was aware of that. I'm not sure I was aware of the statistics that you——

Mr. WAXMAN. You weren't aware of the Andersen Consulting report?

Ms. COOPER. No

..Mr. WAXMAN. Can you imagine anybody in your field not having heard of the Andersen study?

Mr. APGAR. It was pretty widely discussed, it was a very important study for us, and it was a key to our restructuring our FHA operations.

..Mr. WAXMAN. Thank you very much, Mr. Kucinich, for yielding to me.

The Arthur Andersen Consulting firm is not a fly by night operation, it's a very highly regarded organization, isn't that accurate?

Mr. APGAR. Yes, they do very good work for us and many other Government agencies.

Mr. WAXMAN. In fact, the new head of the General Accounting Office was a partner at Arthur Andersen. That was, I think, one of the reasons that many people thought he would do a good job. He had the credentials for assuming the GAO position.

Mr. APGAR. That's true. They have good knowledge of Government practice, it makes an ideal person to move into Government service.

The Department of Housing and Urban Development's (HUD's) Real Estate Assessment Center (REAC) partnered with Andersen (previously Arthur Andersen) to develop the successful Single Family Appraisal Quality Assessment Subsystem (SASS)

ILLINOIS HOUSING DEVELOPMENT AUTHORITY - Arthur Andersen LLP were our special assistant auditors for this audit
Arthur Andersen & Co. emerges from its home office in "Chicago"

Arthur Andersen announces senior management services leadership appointments - February 20, 2001
"Also within the global management services group reporting to de Sarrau is Andrew Pincus, who recently joined the firm as general counsel. Pincus, based in Washington D.C., is the former general counsel to the U.S. Department of Commerce and was senior policy adviser to former U.S. Commerce Secretary William M. Daley on electronic commerce, telecommunications and trade policy.

It is almost as though the profligate "Boss Tweed" of New
York´s Tammany Hall had been resurrected on the federal level.
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$$$$ DIRTY DOLLAR S$$$$

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Hello Donald, I think they already have.

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Assassinated on November 22, 1963

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