Massive Waste, Fraud And Abuse Likely With Passage Of “Stimulus” Bill

09 Feb, 2009 by McQ

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The fear-mongering and panic inducing rhetoric used by the Obama administration and Congresional Democrats concerning the “stimulus” bill has set up another probable broken promise – this time on an unimaginably massive scale.

The Promise: The end of wasteful government spending and more accountability:

-Make Government Spending More Accountable and Efficient: Obama and Biden will ensure that federal contracts over $25,000 are competitively bid. Obama and Biden will also increase the efficiency of government programs through better use of technology, stronger management that demands accountability and by leveraging the government’s high-volume purchasing power to get lower prices.

– End Wasteful Government Spending: Obama and Biden will stop funding wasteful, obsolete federal government programs that make no financial sense. Obama and Biden have called for an end to subsidies for oil and gas companies that are enjoying record profits, as well as the elimination of subsidies to the private student loan industry which has repeatedly used unethical business practices. Obama and Biden will also tackle wasteful spending in the Medicare program.

The administration’s promise was transparency, bid competition, and new auditing resources and oversight boards.

The Reality: But this “stimulus” bill will most likely overwhelm any ability to properly monitor the spending anticipated. And, if such proper monitoring and regulating of spending is indeed required, it will drastically slow the spending process which is supposed to provide the stimulus.

The Obama administration’s economic stimulus plan could end up wasting billions of dollars by attempting to spend money faster than an overburdened government acquisition system can manage and oversee it, according to documents and interviews with contracting specialists.

The $827 billion stimulus legislation under debate in Congress includes provisions aimed at ensuring oversight of the massive infusion of contracts, state grants and other measures. At the urging of the administration, those provisions call for transparency, bid competition, and new auditing resources and oversight boards.

But under the terms of the stimulus proposals, a depleted contracting workforce would be asked to spend more money more rapidly than ever before, while also improving competition and oversight. Auditors would be asked to track surges in spending on projects ranging from bridge construction and schools to research of “green” energy and the development of electronic health records — a challenge made more difficult because many contracts would be awarded by state agencies.

The stimulus plan presents a stark choice: The government can spend unprecedented amounts of money quickly in an effort to jump-start the economy or it can move more deliberately to thwart the cost overruns common to federal contracts in recent years.

“You can’t have both,” said Eileen Norcross, a senior research fellow at George Mason University’s Mercatus Center who studied crisis spending in the aftermath of Hurricane Katrina. “There is no way to get around having to make a choice.”

So here’s the choice – remove the oversight, drop the transparancy, go with “no-bid” contracts and eschew the auditing process which will slow the spending to a trickle, or keep them in place and accept the molasses slow flow of supposed stimulus funds.

The probability is we’ll see the promise go by the boards. Why? Because of the insistence by both Congressional leaders and the administration that this bill be passed now, that it can’t wait and that it shouldn’t be debated (and by implication, shouldn’t be closely examined either).

“We don’t have the means to make sure we don’t blow through billions of dollars and give it to the wrong people,” said Keith Ashdown, chief investigator at the nonpartisan Taxpayers for Common Sense. “We’re on track to lose billions, if not tens of billions, to waste, fraud and abuse.”

Goodger said the federal contracting system has been extremely troubled in recent years. He emphasized the lack of trained employees to manage contracts, which he called a “human capital crisis.”

Stan Soloway, president of the Professional Services Council, a group that represents government contractors, does not oppose the stimulus package. But he said the government appears to lack the planning and the “infrastructure and architecture” upfront to manage the spending.

“Without it,” he said, “we’re going to have a repeat of what we’ve seen over and over and over, from major weapons systems to Katrina and Iraq.”

Hope and change.

[Crossposted at QandO]