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Goa rips pentagon atrocious iraq financial management { July 15 2005 } Original Source Link: (May no longer be active)
http://www.boston.com/news/nation/washington/articles/2005/07/15/gao_investigator_rips_pentagon_on_iraq_war_finances/http://www.boston.com/news/nation/washington/articles/2005/07/15/gao_investigator_rips_pentagon_on_iraq_war_finances/
GAO investigator rips Pentagon on Iraq war finances
Full accounting lacking, he says
By Susan Milligan, Globe Staff | July 15, 2005
WASHINGTON -- The federal government's chief investigator yesterday blasted the Pentagon for its ''atrocious financial management," saying the Defense Department was not able to give federal oversight officials a full accounting of the $1 billion being spent each week on the war in Iraq.
''If the Department of Defense were a business, they'd be out of business," David Walker, comptroller general of the Government Accountability Office, said at a breakfast with reporters yesterday. ''They have absolutely atrocious financial management."
The GAO has been examining the Pentagon's Iraq expenses, and ''we're having extreme difficulty in getting the Department of Defense to provide a full accounting of what they're spending" there, Walker said. ''I can't understand how we're spending $1 billion a week."
Walker said the money the government is spending on homeland security and the wars in Iraq and Afghanistan had little to do with what he called a looming budget crisis. But the Pentagon, whose work is monitored by the GAO, is not accounting for the money it is spending and is ''not doing an adequate job" of defining whether the money that is being spent is accomplishing what the government wants, he said.
The Pentagon did not respond to a request for comment.
The Defense Department has come under fire for overpaying for reconstruction in Iraq. A recent internal Pentagon audit flagged $1.4 million in questionable expenses submitted by Halliburton Co. for services the company is providing in Iraq.
Walker said ''an increasing percentage of money is going for security" in Iraq, but it was not clear whether the money was being put to its best use there.
In a blunt, hourlong indictment of the country's overall fiscal policy, Walker also delivered a gloomy forecast of the country's long-term finances, describing a future of interminable debt due to the high cost of paying for the retirement and healthcare of the nation's aging population. Unless Congress and the White House institute some kind of healthcare reform, Walker said, the nation will run out of money to take care of the elderly.
Walker made his prediction a day after the Bush administration released new budget figures indicating that the federal budget deficit now stands at $333 billion -- $94 billion less than was predicted earlier this year and dramatically lower than last year's $412 billion deficit. The Office of Management and Budget, which writes the administration's budget, said the numbers indicate that President Bush is on the way to meet his pledge of halving the federal deficit before he leaves the White House.
Bush wants to overhaul Social Security, pushing the idea of private investment accounts to replace guaranteed public benefits for willing participants. The idea has tepid support in public opinion polls and is foundering on Capitol Hill.
Walker, whose independent agency technically works for the US Congress to oversee federal spending, did not single out either the Bush administration or Congress in his blistering assessment. But he blamed Medicare, especially the prescription drug benefit that Congress added, for most of it.
The Medicare prescription drug benefit passed in 2003 by Congress and signed by Bush will present a particularly heavy burden, he said. The benefit does not kick in until next year, but it is expected to immediately add tens of billions of dollars in federal outlays.
''America suffers from a serious case of myopia, both in the public sector and the private sector," he said. ''We're going nowhere fast. That's not heartening."
The Treasury would need $8.1 trillion right now -- more than three times the current federal budget -- merely to pay for the anticipated costs of providing prescription drugs to seniors over the next 75 years, Walker said.
''We face a dangerous [fiscal] tsunami, which unlike most tsunamis we see, will not recede," Walker said.
Scott Milburn, a spokesman for the Office of Management and Budget, said the administration agreed with Walker that entitlement spending -- budget items such as Social Security and Medicare, in which the benefits are guaranteed by law -- should be reformed to rein in costs.
OMB director Joshua B. Bolten said the budget faced ''a serious structural problem" that will inflate the long-term deficit. ''And nothing we do on the taxing or spending side can really alter the trajectory of that. We need to fundamentally reform our entitlement programs to make sure they're sustainable in the future," Bolten said in releasing the agency's midterm fiscal report.
Budget watchdog groups celebrated the Bush administration's lower-than-expected deficit projections for next year, but said the country is still living well beyond its means and needs to plan for the future. The United States, once the world's biggest creditor nation, is now its biggest debtor, Walker said.
''We've made the deficit a horse race story, where it's like: 'What's it today? What's it tomorrow?' You absolutely lose total perspective on what is the state of America's finances," said Keith Ashdown, vice president of policy for Taxpayers for Common Sense, a Washington-based organization that tracks federal spending and deficits.
The prescription drug plan was originally presented as costing $400 billion over 10 years, but that estimate was increased to $540 billion less than two months after the bill was signed into law.
Fiscal conservatives nearly doomed the package, arguing that it was too expensive and would present an even larger financial burden in later years. But under heavy pressure from GOP leaders, a few Republicans switched their votes in favor of the bill.
Representative C.W. ''Butch" Otter, an Idaho Republican who switched his vote the night of the Medicare prescription drug debate in 2003, said yesterday that he regretted voting for the package.
''Never allow some last-minute information to have an influence on a major piece of legislation," Otter said, referring to what he had learned from the experience. ''They were trying to lock us in."
Otter and other fiscal conservatives said Congress and the White House should not approve more entitlements unless lawmakers come up with a way to pay for it.
Representative Darrell Issa, Republican of California, said the government would need to impose means-testing for benefits and limit the health services it will fund for seniors -- particularly as life expectancies lengthen.
''Ultimately, there will be rationing," Issa said. ''The rationing will be based on the ability to pay."
© Copyright 2005 The New York Times Company
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