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Ralph Nader > In the Public Interest > Axing GAO Diminishes Government’s Accountability

The slash and burn approach of the 104th Congress has produced a long list of foolish, counter productive and, often, dangerous cuts in the federal budget.

But, few top the irresponsibility of the budget cutters who have applied a blunt meat axe to the General Accounting Office (GAO), the only full-time non-partisan watchdog over waste and abuse in government programs.

When the appropriations process is finished this year, the 104th Congress will have reduced the money for GAO by 25 percent from the fiscal year 1995 levels. This will leave GAO with 3,500 employees, down more than a third from 1992 levels and the lowest staff level since before World War II.

What kind of nonsense is this from a Republican Congress that has told the American public ad nauseam about the need to identify poorly run programs and to weed out waste and abuse in the federal government.

If the Congress is truly serious about objective evaluations of taxpayer-supported programs and the efficiency of the federal bureaucracy, the GAO should be strengthened, not weakened.

The 104th Congress sounds like a city council that promises to fight crime and, then, announces that it is eliminating a third of the police department to save money.

The Congress has always had a bitter-sweet relationship with GAO. The agency is an arm of the legislative branch, but many times through the years, GAO evaluations have gored pet projects of powerful members. Big defense contractors have been less than thrilled when GAO auditors questioned the value of multi-billion dollar weapons systems.

For example, just a few weeks ago, the GAO released a study which questioned the overblown claims of the Pentagon and arms merchants about the effectiveness of high-technology weapons used in the Persian Gulf War. GAO said statements of military officers and arms makers about the weapons were “overstated, misleading, inconsistent with the best available data, or unverifiable.”

Those blunt conclusions were the product of the GAO’s program evaluation division which will be dismantled under the budget cuts. And this may not be regarded as bad news for those members of Congress who regularly carry the Pentagon’s water.

While military weapons swallow massive amounts of tax money annually, the greater danger in the downsizing of GAO may lie in the loss of an effective watchdog over regulators who have responsibility over financial institutions operating with two trillion dollars of taxpayer-backed deposit insurance funds.

In the 1980s, the General Accounting Office was often alone in contesting the rosy scenarios that Federal Home Loan Bank Board Chairman Danny Wall fed Congress and the American public about the condition of the savings and loan industry and the insurance funds.

GAO stuck by its evaluations even though the Executive and Legislative branches were in a total state of denial about the impending disaster.

In the cleanup of the savings and loan failures and in fashioning reform legislation for both S&L and bank regulation, GAO was a daily advisor to the House and Senate Banking Committees. Many regulatory improvements including requirements for independent audits and an early warning system of financial troubles can be traced to GAO’s recommendations.

The importance of GAO in monitoring the financial regulatory agencies is magnified by the reality that these agencies and their bank constituents operate under procedures and policies that maximize secrecy. Examination reports (and anything the agencies decide is related to the reports) are hidden from the Congress and the public.

Like the defense industries, the banking industry is not happy that GAO can provide an independent judgment on what is needed for effective regulation. The industry prefers to deal with its friends in Congress without the analysis from GAO.

A few years ago, for example, the bank trade associations circulated so-called independent studies supporting the industry’s call for deregulation and elimination of many consumer and community protections. GAO examined the studies and concluded that the methodology was flawed and conclusions suspect. Such debunking of expensive industry propaganda doesn’t build support for GAO among the banking industry’s friends in high places on Capitol Hill.

Unfortunately, Comptroller General Charles Bowsher — the GAO’s chief — must retire in September when his 15-year term expires. He has been a highly respected leader of GAO with a reputation for calling the shots fairly and accurately without regard for whose ox might be wounded.

With elections looming, it is unlikely that the Republican Congress will take action on any nominee that President Clinton sends up when Bowsher departs. This means that the agency will be missing key leadership for an extended period. This fact — combined with the budget and personnel cuts ¬≠endangers the effectiveness of GAO and greatly diminishes accountability in government.

The media — which has made good use of GAO investigative reports has, for the most part, watched silently while Congress dismantled one of the few available sources of objective information about the operations of the federal government. Shame on an industry that bleats constantly about the need for a free flow of information.

Likewise, members of Congress — who have used GAO’s resources to support legislative and oversight efforts — have done little to defend GAO or to fight the cuts.

The taxpayers will pay a heavy price for the downsizing of the government’s watchdog. How a member of Congress voted on the GAO appropriations in Committee and on the floor of the two Houses should be highlighted on every good government voting guide that is published this fall.

Voters should ask their Senators and representatives why they didn’t speak up for GAO — and for an effective watchdog for the taxpayers. It ought to be a key issue in judging the 104th Congress.