the portion of that has shifted from low-quality plans to high-quality plans. the fact that we are now seeing a downward trend, it is really exciting to see the strategy, that seems to be working. we are seeing we are adding. we can set in place payment innovation that really changes

behavior and causes providers to provide higher quality care and total cost of care. [inaudible] health care costs are down, but i think something else that is going within the medicare program that we are seeing, fundamentally different patterns and controlling hospital remissions, why we have this tremendous variation and cost around the country they thank

you for the opportunity to speak today. it is great to be here. >> we return to sheila burke, who is on the faculty at harvard university, a big chunk of her working life was right here in the senate vote as chief of staff to senator bob dole, both majority and minority. and the chief minister and officer in this body. i think it is worth noting with today's discussion that she has a degree in nursing and worked as a nurse in her career. so she has been closely involved in health care issues for very long time. we are very pleased to have you with us. >> thank you very much. it would be frightening to put me back in award. [laughter] no fear there.

[laughter] thank you very much, ed. thank you for inviting me to be with you this morning. it is an interesting set of questions. what i would like to do is to go a little bit deeper under the challenges. jonathan did a terrific job of touching on some of that was. certainly, juliette cubanski davis a terrific structure of the program. notwithstanding its desire not to talk politics, the reality is that medicare is very much caught up in the discussions of the day. it has been tremendously successful in providing coverage to the elderly in this country and the disabled. certainly the 50 million people in 2012 that were covered by the program. it has achieved a great many terrific outcomes, some that were reflected in the job at kaiser has done.

the program has been in variation, as jonathan pointed out, in terms of the differences around the country and the utilization of services, and we have word for many years about the quality of the care that was actually being received, and whether it was at the level that we expected it to be. while this is nonetheless a continuing increase, the trust fund has been financed through payroll taxes, that is for part a. it is appropriate, as was pointed out, and part b is funded by general revenues that mashed essentially the amount that is paid in premiums and the increase in the program costs are not simply what occurs to

the trust fund, but also an impact on the rest of the budget. and it has been pointed out by many that there is a declining resource availability for other expenditures that are as important to us as medicare in terms of the program, things like the fda, nih, a whole variety of programs underfunded and discretionary in nature. partly as a result of payment changes that jonathan pointed out, they were incorporated in the aca and the general throwdown in the use of services, which we believed was a result of the recession in part, and the fact that people did not frequent the spending, medicare is expected go at 3.9% annually from 2012 until 2021. as i will show you in a moment, the growth and the enrollment will continue to place great pressure on the program. again, there are continuing

questions with respect quality, as jonathan pointed out. and the question as to whether in fact we are getting the services that we want to get for the most viable in our country on this country. we know that aging will put a burden on the program. this is a terrific slide. this is in your packets. the ama has been doing a series for jama that have been really terrific. they described a very competent of programs and straightforward ways and i encourage you to utilize it in talking with your own constituents. the program's rate of growth is slower than we see on the private side. an important note and a result of effort over the last two years in terms of restructuring the program. but in fact, while it is all-time low, population, which is expected to reach 81 million

by 2030, is going to continue to put enormous pressure on the program as we go forward. even if the per capita spending continues to her mean low. here's a terrific depiction of the challenges that we face. we want to make sure that our payments are fair. access to beneficiaries is secure, some of the payment changes that have been described by jonathan and juliette cubanski, it encourages us to think about how we structure this come at a better use of services, how we encourage efficient delivery of services. again, we want to make sure that however it is that we decide to pay, whether it is for physician services, hospital services, outpatient drugs or any of the other things that medicare currently pays for, that they are in fact sufficient to encourage those to participate in the program and posturings and premiums have consumed a larger and larger share of the

annual social security benefits for the elderly received time. but almost 26% on average in 2010. recent changes have focused on higher hinges many are not all playing golf in palm beach. they are dependent upon social security. it is an issue that we have focused on for many years, and that is what is the right and appropriate amount of cost sharing.

this issue has come into play, obviously with changes to present his services to encourage utilization. questions have arisen with respect to the share of the deductible and coinsurance and physician services on hospital services and others. again, we would like to make sure that the burden is an appropriate one. it is not excessive, but encourages appropriate use of care. finally, we worry about the long-term sustainability of the program and its impact on the budget. which as we think about the deficit issues, one of the particular challenges, of course, is that health care coverage, while important to people of all ages, it is particularly important for the elderly and the disabled, as we see evidence in the utilization. every year, three quarters of those who are on medicare who depend on the medicare program, they have at least one physician's visit and one in five visit a hospital.

he was shown some of those numbers in terms of utilization. in 2013, the average per capita medicare beneficiary would exceed expenditures of $12,000. most use medicare services infrequently, but the majority of the spending is on a relatively small number of beneficiaries here. one of the challenges that we face and looking at the program is essentially have to focus on that population. had to essentially look at those who are in the greatest use of services and the most costly services and some of the discussion around the dual eligible, there are about 9 million of them and they tend to have a high use of services. one of the questions is, are we doing the best job that we can to coordinate for this population? are we encouraging appropriate

use between the two programs? it is a focus of the element of the aca. how best to target these individuals and how best to address those particular concerns and those particular costs. as is evidenced here, we continue to worry about the trust funds, the aging of baby boomers like me. not only increases those eligible for the program, it reduces the number of those paying into the program.

there is a host of strategy is long-term and short-term, we have begun to hear them in the budget discussions. kaiser has put out a terrific compendium of possible proposals the cbo has on this routinely, and others have done it as well. but they tend to fall into these categories. there are relatively high cost sharing and deductibles. no limits on out-of-pocket costs and large gaps in coverage. long-term care does comes to mind. it is inflationary, with a basic

fee for service where you pay more and do more. all of the initiatives that jonathan suggests, it is really to rethink how to get coordination with care and efficiency of delivery. the program was created in 1965. the date was chosen was 65 years old. questions have arisen as to whether that is still appropriate with the wind and mortality and essentially people staying in the workforce. the work of cost sharing. cautionary notes, about whether it disturbs assets or limits access, but the question as to whether we should rethink the way we incentivize behavior on the part of beneficiaries. how we pay the plan, medicare advantage plans, further questions going forward about how to incentivize quality. and in the basic structure of

the program, we have heard the redesigned premium support that some have suggested, restructuring the benefit so it doesn't have the old blue cross blue shield model of being separate, creating coordinated benefits that are managed across the full continuum of care. the time will come again, as it has come that we will look at medicare in the context of the budget, but hopefully with provisions that make sense coming forward. >> thank you very much, sheila. i like to ask a question. i thought i heard you say at one point on the slide describing medicare beneficiaries and spending, the average cost was $12,000? $9000? >> it is projected to go to 12,000 on average for beneficiaries. >> thank you. we have lots of questions that we can ask, but we want to make sure that we cover the questions that you would like to get

asked. as i said, there are microphones that you can use to ask your question vocally, in which case we would ask you to keep it fairly concise. tricia, would you like to start us off with a question or two? were i can? >> share. this is a question for you. there is a lot of concern during this debate about the affordable care act and medicare advantage. whether and whom it would decline a lot. we have seen implement rise a lot. more people gravitating towards the medicare advantage plan. >> i think overall we have seen

a much different response. the notion was going without the added services that these plans provide. and the opposite has happened. we are paying less on average to health plans. we are seeing the same degree of access of plans and beneficiaries choosing plans at a faster rate than the traditional fee-for-service program. in 2011, cns predicted that we would have predicted growth and we would be spot on with that prediction. we predicted 10% growth in 2013. we are seeing very positive signs so far that that prediction proved true. so i think we are coming into a time that is much different in the past. the past back in the '90s when congress dealt with the

tremendous destruction for beneficiaries. it's a different time, it's a different experience. and we have brought plan payments down dramatically. for the affordable care act. but we are seeing no signs of this changing. posturing and benefit levels -- it has grown at a much faster rate than the overall growth of the programs. but we are optimistic of the program's future. that is one of the reasons why we felt that it was so important for us to deal deal with four-star plans are priced our plans. if we want to deliver these reforms, we have to focus not just on the traditional fee-for-service program, but the program that is growing the fastest. that's why it's so important to us to have the five-star bonus

system and more plans to achieve higher quality levels. more beneficiaries are choosing cheaper services. >> thank you so much for holding this panel. it has been really helpful. this question, a couple of questions, actually. for part d, i'm wondering if plans will be subject to the plan ratio in the next upcoming year. and then the topic, i know that luminary rates will be released shortly, i'm wondering if you could go into detail about how the aca is rebasing our cuts for the projected year. finally, if you wouldn't mind talking about when the numbers will be released. >> these are questions that i i cannot answer yet. we are on track with rates, proposed payment rates, for

2014. that will come out in the next couple days. we will have more to say when it is public. we also have the opportunity to comment, the same is true for durable medical equipment. but what i can say generally is that both in the context of durable medical equipment, we moved to a new pricing structure and we have seen phenomenal results with the program. the same is true with the payment changes that included the affordable care act their health care plan. and i think some had predicted a different response. i think both of these programs, the changes to the m.a. program, the durable equipment, that we can reduce payments without compromising access to quality

of care. providing much greater value to our beneficiaries. i will have more to say when the time is appropriate. >> can i just ask you to explain to some of the new people in the room, some of us that may have forgotten the medical loss ratio and what it really is? >> sure. in broad terms, it has to do with a portion of the premium paid by beneficiaries and a sizable portion, 85% or more had to be paid you to pay beneficiaries and benefits. the affordable care act authorize this new requirement starting in 2014. it will put in place all of

that. >> okay. this one is for sheila, but it could be for anyone. could you explain to us why or how medicare will run out of funds by 2024 people continue to pay their medicare payroll taxes that they are supposed to? would increase prevented from going bankrupt? >> well, that's an interesting question. the issue is the decline in the number of people that have contributed. the baby boomers that are retiring, the number of workers to retirees has declined. as a result, the income to the trust fund declines over time as the number of people drawing on the trust fund becomes larger in number. the increase in the payroll tax is one that is often considered

in the context of the program. it might well continue to be. there are questions as to the nature of the payroll tax and its impact on the population, whether you target it on largely higher income individuals or whether you spread across the entire payroll base. so again, it is certainly a source of revenue. it will certainly make a difference. >> here is one for juliette cubanski. what would you say about the cost and benefits of raising the age of eligibility? anyone else can chime in. >> well, you can watch the alliance from december of last year on raising the age of eligibility if you want lots of details. basically one of the main

concerns of raising the eligibility age prior to the passage of a portable care act is that you would create a large population of people who would have no access to health insurance. many people, when they turn 65, they rely upon medicare for their health insurance coverage because they no longer have coverage to employer-sponsored coverage. and private insurances are expensive as an option. passage of the affordable care act, this created new channels for insurance coverage for nonelderly people and through the state-based exchanges, it is likely that if medicare's eligibility age was raised to 67, many people would have access to coverage through these exchanges were marketplaces, as they are now called. expanded medicaid coverage, a big concern. another concern is the cost to many people would also be higher than if they were to remain on

medicare. it would also be higher costs to employers and states and another is higher cost overall. on the plus side, the medicare c is the money, the federal government says the money. but there is the different costs associated with the subsidies would extend coverage and the medicaid expansion. so it's not exactly a win-win situation according to the analysis that the kaiser family foundation has conducted. >> i do endorse her briefing that we did in december. a lot of different materials and a webcast that you can watch. we have several related questions and maybe john can take the first crack at it. it has to do with medicare advantage plans. they ask generally how does star rating system works.

that is related to a question that was not asked here, but was passed by the senate office, which ask how come a lot of money went to three-star plans this time around. we could relate that to this question. they are related. explain how it is scheduled to take effect. i understand that only about 4% may have taken effect now. do you anticipate that some of the problems that you have referred to and perhaps lesser benefits could show up in this again. >> i will try my best to answer every question. before the affordable care act, on average, the program paid health plans, about 40% more on

average than the cost the same beneficiaries and traditional fee-for-service programs. there was no repayment on average of about 14% compared to the cost for the same beneficiaries that provide the services with the traditional program. that so-called overpayment is facedown by the portable care act. today we are paying close to 7% more on average. half of that overpayment is close to 100% on average. it is to bring the overall average payments, there is the one to be differences across the country, very close to the average cost for the traditional of fee-for-service program costs. prior to that law being passed, 14% overpayment, 7% today on track to facedown to 100%. the law also authorizes bonus

payments for those plants that produce higher-quality star ratings than the average plans. it has been going on for a long time. collected roughly 50 to 60 various measures, the gopher through processes come to common to have to do with everything with plan performance to moving towards quality of care outcomes. collecting all of these measures and transferring those to a star program, we really want the goals of the program to achieve the right things. we are built upon this program to kind of create a more gradual scale. there have been some criticisms

in regards to the data that we see today. the data in overall improvement gives us great confidence that this program is working. we have seen while making the measures much harder, prior to the affordable care act. now 37%, more than a third, or beneficiaries in four or five-star plans. when i talk to health plan executives who thought, why are they making this transformation? it was created to incentivize quality improvement. that is one of the goals of the program. we are seeing fundamental shifts in how the market now is being created where plans were paid 14% on average overpayment.

coming down, strong incentives to include, this is a sign that we can reduce payments on average. we can create high standards. we can see beneficiaries respond with 10% growth last year. projected and on track, through 2013. comparisons are very helpful to explain how the programs were put forth. >> while you were responding, had another question on a card that is related in might be helpful to people. can you talk about how you decide what the criteria are? ..

we have shifted the criteria to emphasize less about the process and how fast the plan answers the customer service to the outcome measures and the beneficiary satisfaction measures so in the last couple of years we have shifted the standard more to emphasize quality of care measures and beneficiary satisfaction measures but we are making judgments on what it means to be

a four-star, five-star plan and our judgment is that the criteria is high. most plans don't achieve it that we are trying to create the incentive structure to achieve it i believe this model now we are seeing a fundamentally different arc it for beneficiaries and plants responding to. >> is okay, sheila or maybe juliette could you speak more to the consolidation of medicare part a impart b and having one singular coinsurance has as been quoted in simpson-bowles and more recently by senator hatch and representative can tour? >> this gets back to the fundamental question of the structure the program which was originally based on it blue cross lou shield model where physician services were separate from the institutional hospital services and the question that has arisen is whether or not that model in fact remains

current today or whether we have to create a model where there is a single deductible and coinsurance to encourage more coordination across the full array of services that are provided to a medicare beneficiary. some of the initial cost estimates suggest that there will be a higher cost to a number of medicare beneficiaries because of the current utilization of services where there is a greater frequency of utilization of physician services as compared to hospital services and so one of the questions that simpson-bowles raises and that we are trying to understand is what the impact of that change might be. it's really an attempt to create a more coordinated consolidated service so the benefit is structured in a way where there are more incentives to coordinate among the different site of service but again the question will be with the impact will be on the beneficiaries and whether it's in fact it would result in higher cost-sharing for larger number of individuals.

see that's great because we do have a lot of questions and they are all really good questions. it's competitive bidding something that should be considered for other areas like hospitals, doctors, laps and other things that medicare pays for? and then it says where episode cost and quality is the focus of -- >> are those for me? we have seen tremendous success right now with their competitive bidding program, durable medical supplies from wheelchairs to diabetes test strips and routine supplies the beneficiaries purchase and we have seen phenomenal savings from this program that benefit the taxpayers but also the beneficiaries but also this new program has not compromised

quality of care and we think in some respects it is raise the bar for quality of care. i think, the question on whether or not services, other spending categories can be wrought into the competitive bidding models. we have signs that the competition helps to lower overall cost. part d plans for example are paid off and maybe they are competitive bidding model in the part b cost while much lower in particular the part b and if it was authorize back in 2003 so there are positive signs that this model can produce greater savings and greater access in quality to the beneficiaries. the bundled payment models that we announced last week all have elements that hospitals are participating offer savings to the program. this is the savings target so we

are starting to use competitive principles more and more through demonstration authorities and other means to test different ways to pay providers. you really have to think about different competitive models depending on the payment category, the mix of providers but so far we have seen promising signs that the competitive knitting models can produce greater value and potentially greater quality of care to our beneficiaries. >> tricia qunai, and? i want to talk specifically about the bundling issue which i don't really think in the context of competitive bidding but i think this is true of the work certainly that the department is doing but also the bipartisan center and others and that is the purpose really to look at ongoing to try to reduce the silo-based payment system that we have today that really requires little in the way of coordination across the

continuum of care. in particular at least some of us are quite concerned about the handoff that occurs in the environment where essentially there is no particular incentive for the acute care to really track what occurs when someone approaches you. there have been less attention to mission strategist and whether or not we are seeing really kind of a disincentive to do so that it's really that much broader question which is how do you encourage the full array of providers to take care of her particular patient began to coordinate much more closely in terms of the utilization of services and subhandling is really i think at some of us think about an attempt to try and look at those incentives and to try and do a better job of helping patients manage throughout that full array of services so that from a pre-adme episode to a postacute management over time that there

is more attention given to those handoffs and more coordination in terms of the sharing of information so the patient isn't having to reestablish the dataset every time they see a different or bite or whether they go from an acute care hospital to home health service or to an intermediate care facility. we really want to try and look at the full array of services and create an incentive for someone to take ownership of that arrangement. and ownership of that management for that particular patient and that particular condition. >> to sheila or john, we have a follow-up question here that looks at the initiative that was announced last week. there were several different models that the administration proposed and the questioner is wondering whether you are worried that putting particular bundles together is going to sort of hinder innovation as a

way to put the model bundled together the way some private-sector providers do. >> we put forward for different our goals for bundled payments starting with the hospital episode of care. we tried to on the balance between standardization versus flexibility to and sent providers to come in with a proposal about how to think about different ways. at the same time we have to be able to assess what worked, what didn't work and going back to the slider showed the five different cities with the same prg. there is tremendous variation in total cost of care primarily around hospitals readmissions and as she lists a postacute care. we are really tried to figure out what is the best way for hospitals to work with acute care providers to reduce readmissions and to make sure that there is a much more balanced distribution of spending in the postacute care

spending channels that we have. so we set sort of a set number of drgs and the ones that hospitals can choose to participate in. hospitals have the choice to choose which drgs they want to take and we have different models. some articles combined by position hospital and some combine the hospital in the acute. we are really trying to figure out what works and what doesn't work and one hypothesis is different bottles will work differently in different parts of the country given how dramatically different health care provider mix is and the difference across the country and the cost and the quality of care. we have tried to balance to foster creativity but also having standardization so we can assess what works and what doesn't and we can build better policy on it.

>> to jonathan's point, think one of the areas of complexity is the data that we have understood and gather across the sites of care so that the information can be given to all. i spent a fair amount of time in my career in the senate worried about rural areas particularly in the midwest. kansas comes to mind and if you think about the discharge patterns from regional centers to essentially long-term care facilities that may be quite different and aren't necessarily in their vertically integrated institution but rather someone is essentially coming to kansas city and get shipped to back to the big first. just understanding where people go in understanding how you might coordinate those services is not a simple process. i think one of the issues that the department has appropriately

tried to understand is where do those bundles make sense and with whom and how. again rural areas in particular need pretty your attention these areas but it's true for binaries as well where people may be discharged in a number of different locations which may or may not have a relationship with the institution where someone was cared for her. i think it is again to the benefit of the beneficiary to understand those patterns and to try and help manage that but it's not a simple process and i think the department is really struggling to understand what do we know and how much data do we have and helping providers involves? there could be any number of people but i think it's the directive that a lot of us would like to see things move. >> here is a question. general revenue seems to be a significant source of revenue

for part b in part t. is that done on purpose or was that by design? why did that happen? >> juliette is the historian in the group but i will, just briefly. the program when it began in 1965 was in fact a process of accommodation for the individuals were involved. there was great importance placed on the separation of b from a a and the voluntary nature of b was physician services and i was a combination of the ama that was opposed to the commish of the pro--gram at the time in the desire to make sure that essentially no one was compelled to participate in the federal program and that the relationship between the beneficiary and the physician would remain a voluntary relationship. and so the introduction of premiums and the introduction of general revenues which at that time the time were designed to be 50/50 but then essentially in years where the premium exceeded the rate of increase so you

would have essentially had a reduction in your social security check to pay your premium, there was an effort by congress to essentially put a limit on what the size of that premium would be to essentially 25% and we have increased that very slowly over time. but at the heart of it was this desire to make a voluntary program and similarly the same principles were applied in the creation of hard t and that is to have a voluntary choice on the part of beneficiaries and a voluntary choice to participate and play a role in the financing of the program and not the trust funded a payroll tax. >> i would ask that -- we talked about part a trust fund solvency in the back of part b indymac or finance with the general revenue and premiums means we don't talk about the solvency of the part b in part a trust fund because the

funding for part b indymac is set annually so premiums go up in the general revenue contributions go up every year to match whatever the projected expenditures are for the coming year for those programs. for part a the issue of course is the question -- questioner mentioned earlier is payroll taxes, whatever payroll taxes coming in that is whatever monies available to pay for benefits that are being provided. the concern with the solvency of the part a trust fund coming in 20204 and later years is that the income of be sufficient to match the expenditures going out. so part a trust fund doesn't go bankrupt if there is no more money left to pay for benefits. it's just that the funds coming into part a isn't sufficient to fully pay for the benefits it will be delivered that year. >> a question came in on an events program.

once know how widespread an issue is medicare fraud and we might add and what is there more to be done beyond what is being done now? >> and maybe chat on top of that who in the government is doing what about medicare fraud and fraud busting? >> let me go back to the slide i showed about the map of geographic variation. we see tremendous variation for all the different services and we drill into that variation. sometimes it's driven by a handful of fighters in one part of the country who are driving utilization that far exceeds the average. i think generally there is no one pattern, there is no one cause or reason to fraud the program. we know it exists and there are tremendous resources and programs that are being implemented to try and address

it. there are three really key agencies right now that focus on fraud. there is cms whose job is to set payment policy and set programs to stop fraud before it happens and we are investing a lot in data resources and data analysis to find patterns of spending so we can address spending patterns that appear to be fraudulent and payment policy edits more investigation. the other agency is health and human services inspector general's office that has a tremendous resource and agents who investigate fraud providers and then take action to stop the behavior that is fraudulent. we also work closely with the department of justice that is really the prosecutorial arm investigating the fraud. really it's a three-part entity

cms primary role is to stop fraud before it happens. and the dog to investigate a those that are committing fraud. there is no one measure that gives the overall sense to fraud or working to develop that measure but we know that it is spread in many parts of the country and it tends to move around as more resources are applied that we have put in place a proposing framework in the affordable care act to assess monitor and to respond to fraud throughout the country. >> i've got across question that refers back to some of the slides that were displayed showing projections in the future. how much of that cost increase is due to the demographics and

boomers turning 65 every year -- to every day, and how much is due to the projection in increases in health care costs underlying the entire health care system? >> the last projection that i saw suggested that the age increase in the number of elderly accounted for about 60% and the costs, the increasing cost accounted for about 40%. >> i think in the last couple of years, the cost curve, per capita costs have been virtually flat and the cost growth like now is driven by more medicare beneficiaries coming to the program. i think that is what is driving the cost today and in the future and i think sheila is right that general cost is driven by demographics but in last couple of years virtually all of the cost growth is driven by

demographics. >> i think the congressional budget office report on medicare spending growth is showing the lowest rate bad anytime in your 2000 which is pretty astonishing. i have a question which is, sometimes i hear the people on medicare have a hard time finding a doctor who will see them. is that true and is the national survey trade -- say that is true? say that is true? what has the events? >> we track very carefully physician participation data and the beneficiary access data. the overall trend is very positive and physicians choose to participate in its voluntary to choose to participate but i think somewhere in the neighborhood of 94% of all physicians participate within the medicare program. i think on average beneficiaries report good access to finding a position. i think we have some parts of the country with data that shows

concern particularly for primary care physicians but overall it's an isolated parts of the country. but overall, very strong physician participation in the program and overall the average beneficiaries report being able to find physicians quick way. >> john, has the department looked at what might happen when some portion of 30 million new beneficiaries qualify for coverage under the affordable care act over the next two years in terms of its impact on medicare and the fisheries being able to see their primary care providers? >> i think there has been lots of work done and is going it's going on right now to build a workforce to respond both to the demographic changes in the medicare program but also more beneficiaries will be covered by the new health insurance programs.

so i think we have to be mindful that we have a workforce that is sufficient. a lot of the payment innovations really emphasize primary care has been the center part of the acl model that we have with the bundled payment going into effect. this is an effort to build a much stronger workforce and primary care workforce to respond to the greater need. we have other parts of the department focusing on ways to promote more nurse practitioners and other health care professionals to take a more central role in the delivery of health care and being tested through our center for innovation. so many of our payment activities help support a stronger workforce both in the medicare demographic changes but also the larger change going on

to extend coverage to all americans. >> i had one additional comments on john's point. one of the fundamental questions for medicare historic way but four is now generally is the question of workforce and the utilization of non-providers in particular. there are initiatives in the ada and other work going on that wakefield and others are looking at in terms of how if one encourages the role that nurse practitioners and physician's assistance and community care workers essentially can play. medicare's reimbursement rules in the past that discourage the utilization of those providers in many instances except in the unique circumstances. rural lake some things of that nature but the whole question which is essentially more state initiative and --

[inaudible] is one of the questions being raised and as we look at the new payment systems how essentially we rethink the creation of teams and the role of non-physician providers with those teams. >> a very factual question that has to do with juliette laying out where people get done if it send when and the question in washington about whether one can receive medicare even if they delay receiving social security benefits? >> a quick answer to your question. >> it is a little bit more complicated now because with people delaying social security retirement it probably makes sense to tell people to go to their social security office if they want to be sure they get on

medicare because the two programs are not perfectly aligned at 65 as these to be so to avoid the lich in medicare coverage it would be a great idea for people who are approaching 65 to head down to their social security office to be sure if they are still working that they can get medicare. >> we have some other questions that came in that they are a little bit off the track. we are going to try to cover the basics and we don't want to burden everybody. i was about to give you a -- that this gentleman is taking way arcs are time. >> i'm just going to -- >> you want to do by yourself? >> kevin broder. a real basic question because we have heard talk about what if we increase the age to 67 and we talk about a lot of ways to reduce costs.

if i could put it in a real basic way, if one's life started on january 1 and it ended on december 31, if by the month of december that individual was really receiving medicare benefits, how much do we actually pay the average over the course of that lifetime with $10,000 a year? how much is spent on new year's eve? so in other words, what health care marathon typically is most expensive than that last month and how much are we spending almost beneficiaries in the very end of life question and are we about that? thanks. >> this study i saw said 25% medicare spending is for people in the last year of life. are we ready to talk about this? i think a lot of people in the health care delivery system to

talk about it and i think people in the medical world talk about it and i think in the policy world it's very difficult to talk about it because these are very personal decisions between families and their physicians and their health care providers. i think we saw what happened when congress tried to do something fairly simple in the aca with respect to these discussions with doctors. yes it's an important issue and yes it's a big statistic and yes it accounts for a large share of spending, but how to deal with it is the tricky question and sometimes it's talked about in the policy world but maybe more comfortably in the world with families that are docked terse. -- families and their doctors. >> tricia mentioned that this was a tremor that we traditionally do at this time on the new congress. i want to emphasize that it's the first of a number of them

that we are going to do in cooperation with kaiser family foundation. we have scheduled a medicaid kramer, an abc session for march 1 and we will roll out subsequent primers on the affordable care act and on health care costs in general. you heard pieces of that in this conversation as well and we want to thank the foundation and the folks from the foundation present on our panel for their active involvement in all of this work. one last plea for you to listen to this gentleman's question. >> i have heard recently that the u.s. has fallen to the bottom as far as longevity is concerned yet we are paying a lot more than other people.

if we veered away from that mindset that we have adopted in this country and looked at other measures such as prevention, alternatives and educating people and things like modified foods and food long-term danger they present? >> i don't know who wants to take this. questions often come up about improving prevention over the course of a lifetime and of medicare and there has been a lot a lot of interest in math that and there've been a lot of improvements lately. one of the unfortunate realities of living in this town and working with the congressional budget office is the scorekeeper is sometimes those initiatives, the people believe they will save money, the congressional dutch office actually scores an increase in spending depending

on what the preventive services because they don't really have a lifetime view or they may not have the evidence to say that it does save money. that said, there have been improvements. >> right now in the medicare program it's informing how we are paying for care so we are changing the incentive structure to be only about paying for a service when the beneficiary needs that service and taking a more holistic approach, looking at the total quality of care measured over the span of the year for example, looking at the total cost of care over the 30-day or a 90 day. period which provides much longer incentives for care providers who focus on prevention, focus on wellness and focus on primary care. we believe that these payment changes and structures that we are going to see the ship that you're talking about toward prevention and towards wellness and to provide every service with beneficiary needs when he

or she needs it and at the same time we want to make sure that the health care system is oriented towards focusing on prevention and wellness and keeping beneficiaries as healthy as long as possible which is in the best interest of the fishers but also in the best interest of the program. >> whether or not it saves large amounts of money, there's a cbo exercise that you described in a briefing last year in which they modeled a theoretical 50% increase in the federal cigarette tax, the tobacco tax and in making those calculations out to 50 years they did a fair amount of sophisticated assumptions about things like drawing social security benefits for longer period of time. they were costing the government more money, and the panel a cbo pointed out that in the end regardless of a particular --

the mortality rate remains 1.0 so you may be keeping people alive long enough to get another thing that you will have to pay to try to -- so we are looking forward to the sophisticated cost analysis. but not necessarily as a full justification for rolling out better prevention and benefits for people on medicare and otherwise. i didn't mean to sound off their there i go. there he goes again to quote the gentleman from the film. [laughter] thank you for sticking with us and asking some incredibly great questions. if you will fill out the blue evaluation form before you leave and make a note of the medicaid kramer on march 1 on your calendars and i ask you to join me in thanking the family foundation for its co-sponsor and our dedicated and very

insightful panel is further explanations of some tough questions. having observed steady improvemeimproveme nt in the opportunities and well-being of our citizens, i can report to you -- once again in keeping with time-honored tradition i have come to report in report in the state of the union and i'm pleased to report that america is much improved. and there is good reason to believe that improvement will continue.

>> my duty tonight is to report on the state of the union. not the state of our government but our american -- and in the words of our founders to form a more perfect union. the state of the union is strong as we gather tonight, our nation is at war, our economy is in recession and the civilized world faces unprecedented dangers. yet the state of our union has never been stronger. >> it is because of our people's better future is hopeful, our journey goes forward and the state of our union is strong. >> to say president obama delivers the sears address live on c-span with their preview program starting at 8:00 p.m. eastern and the president at 9:00 followed by the gop response interaction.

the state of the union tuesday night on c-span, c-span radio and c-span.org. >> almanacs "washington journal" we will preview present upon the state of the union address with reporters anita kumar with mcclatchy newspapers and jonathan strong from roll call.

>> i think we hold a brown as this amazing feat that we accomplished ,-com,-com ma that we roll back segregation and that may look at what happened afterwards. we see how incredibly difficult it was. divisive in some ways but also that you have this very incremental progress after that that was very frustrating to people and so is seen as a great victory but i think also it's important as a student research to look at what we didn't accomplish yet and so when i was looking at desegregation and how it was finally implemented 20 years later after brown actually was handed down, 20 years later he started buzzing but the way these programs were set up still maintained white privileged.

next house hearing on reducing waste and federal government spending. the government oversight committee heard from several watchdog groups on their recommendations to reduce spending by identifying fraud, abuse and redundancy in federal programs. this is two hours and 20 minutes. >> the committee will come to order. the oversight committee exists under two fundamentfundament al principles. first americans have a right to know that the money washington takes takes from them is well spent and second americans to

serve an efficient and effective government that works for them. our duty on the oversight and government reform committee is to protect these rights, a solemn responsibresponsib ility to hold government accountable to taxpayers. as taxpayers have a right to know what they get from their government. it's our job to work tirelessly in partnership with citizen watchdogs to deliver the facts the american people and bring reform to the federal practice see. today, we continue that mission. for months we have been getting gauge international discussion about how government takes and spends money from hard-working taxpayers. as this debate is unfolded a lot of attention centers on which taxerpayer should be paying more so that government can keep spending more. the question hasn't been asked enough, although it has been asked, whether or not washington should be taking more. i come from a business background and the only way you can make more is to deliver a

better product. you need to be transparent and unique or you need your services to be delivered efficiently. understanding we are not questioning that services need to be delivered here today but rather ensuring the delivery of services done in the most cost effective possible way. perhaps it is for political purposes on occasion and perhaps it's simply because it saved waste of government looks like you're attacking the underlying program. we are not an authorization committee for the most part. we did not authorize most major spending programs. so i believe he can be an honest broker. we will and no programs but we will work and are working in our hearing today at finding places to find out if in fact these financial realities need to be fixed and that they are clearly

roe can. ignoring the problem is no longer an option. we are running out of time because when government doesn't function properly, americans will lose access to important government services. in any other enterprise, producing a nearly a 1 trillion-dollar deficit in the foreseeable future every year would in fact be shut down. last of the government reported a total of 108 ilion improper payments would have taken us down by one tenth of our problem. in 2011 the inspector general community identified potential savings produced from governmengovernmen t reform totaling another $100 billion. the general accountability office has published report after report at identifying dozens of agencies that do duplicate and the overlapping cost-efficient projects that hard-working americans make tens

of billions of dollars a year for. we need and have a blueprint to change that. what we need is the political will from both parties and the president to do so and we have never had a better reason. ultimately committees on tax increases or simply cutting programs to spend less money. we are the committee that needs to be part of a fix that is a win-win, a win for the taxpayer because he doesn't have to pay more, a win for the service recipient because in fact services can be delivered for less. that is our challenge and it's what we are here today to talk about. i don't believe it falls anywhere from the far left to the far right of the ideological spectrum to reform government. just the opposite. i believe it is in the interest of all of us to matter where you

are in the spectrum to spend less doing what we agreed or disagreed to do so that in fact the american people have a smaller burden than they do today. i believe today's hearing will take us a long way in that direction. we have a distinguished panel here to tell us about it and with that i would like to recognize the ranking member for his opening statement. thank you very much mr. chairman for holding this hearing. it is very encouraging that the first to committee hearings have been bipartisan and focused on the cordial this committee. if you have done an exemplary job leading up to this hearing and making the planning of this hearing a bipartisan effort. the title of this hearing goes right to the heart of the issues we are examining today. the title is government spendint address the billions of dollars wasted every year?

way in congress talk all the time about cutting waste and making government more efficient it's time to go from talking to acting. i was looking forward to hearing from the witness witnesses testifying today about concrete actions by congress can take to save taxpayers money. the department of defense is responsible for -- through its contracts. dod obligated $365 billion for contract this year in 2012 in the department has had significant problems with contracts management and oversight. congressional research service recently reported that dod acquisition programs have experience quote poor performance against the backdrop of war in afghanistan spiraling contract costs and the declining size of the defense workforce"

meant. in testimonies before this committee last month, a witness from the government accountability's office said that several dod i.t. investments poe experience significant performance problems and were indeed high-risk end of quote. one of the specific examples that the chairman pointed out, in that period with the contracts that the air force canceled last december after having spent $1 billion. the expeditionary combat forces work plagued by delays and cost overruns. representatives speier in a letter to us in december mr. chairman and i agree that it makes sense for the committee to adopt her proposals to investigate this contract further. another example is the $750 billion in overpayments by

dod to the contractor that provides food supplies to the united states troops in afghanistan. this is an issue that has been highlighted by the ranking member of the national security subcommittee john tierney and the subcommittee's chairman. ranking member tierney has also been a leader in exposing problems with dod's f-35 strike fighter, the largest weapon procurement program in its history which has had substantial cost overruns and schedule delays. production of the joint strike fighter program has been delayed by six years and the cost per unit has doubled. we are better than that. we can do much much better. another area of significance extending his crop insurance. i ask unanimous consent to enter into the record a "new york times" article from january 15,

2013 titled and i quote record taxpayer cost seen for profits in the works. see without objection, so ordered. >> according to this article the government pays $1.3 billion, $1.3 billion each year to 15 insurance companies. the article states that i quote government documents show that taxpayers have paid nearly $7 billion so far to subsidize premiums in 2012. the documents also show that taxpayers could pay another $7 billion to underwrite losses by the insurance companies for other causative quote. these are just a few examples of government waste. there are many many more. i hope the committee will conduct vigorous oversight and its source is so wasteful spending and assure the facts to address the real problems.

as i said many times and as i say here today taxpayers want to make sure that their tax dollars are spent effectively and efficiently and mr. chairman we are committed to work with you in a bipartisan way to not only to come up with meaningful solutions to try to address it and with that mr. chairman i yield back. >> i think the gentleman and we will. we now recognize our distinguished panel of witnesses mr. tom schatz is president of citizens against government waste. brian alexandealexande r is the president of taxpayers for common sense. the honorable dan blair's presidency of the national academy of public administration and mr. john kamensky is a senior fellow at the ibm center for business and

governmengovernmen t and ladies and gentlemen pursuant to the committee rules which you please rise to take the oath and be sworn? and raise your right hand. do you solemnly swear or from the testimony you're about to give will be the truth, the whole truth and nothing but the truth? let the record indicate all witnesses answered in the affirmative. before i recognize mr. schatz i want to thank you all for being here. often we talk about individuals coming before us as witnesses. ultimately you are all partners in the process of understanding in exposing waste in the government so i'm particularly pleased to start off this oversight panel for this oversight hearing with this panel. with that you are all experienced and you know the five minutes in the red, green, black and blue and the whole bit so i know you will finish up pretty close to that five minutes and that -- with that i recognize mr. schatz.

>> is of my folks this money be submitted for the periods by without objection. >> my name is thomas schatz i'm the president of citizens against against government waste and nonprofit organization with more than 1 million numbers of supporters this way. it's no secret that governmengovernmen t waste is present throughout every agency and all functions that perform more effectively and efficiently recommendation to eliminate waste brought abuse and mismanagement of regular guided by gao cbo and the president's budget and congressional committee. outside of congress think-tanks advocacy groups and private sector companies also provide information on government expenditures. since 1993 g. h. w. has reduced prime cuts a compendium of recommendations emanate from both the public and private sources and the most recent edition identified 60091 recommendations that would save taxpayers $391.9 billion in the first year in $1.8 billion over five years. over the years there have really

only been two large comprehensive studies of government spending, the hoover commission of present german and the grace commission under president reagan. the hoover commission inspires states to establish civil -- similar entities and in california which has operated since 1962. however there is no similar permanent entity of the federal level. any evaluation of government program should determine whether not the expenditures are complying with statutory requirements and have the programs could and should function in today's world. in addition to thinking about how programs relate to current needs there should also be a mechanism in place to prevent the establishment of new programs when current programs already survey particularly if. andy an underlying reason for them at at least at least to mismanage is congress's tendency to create a program to solve the problem. unfortunately the house or senate has adopted rules changes that would require committee

reports to contain an analysis by crs and whether not the bill creates a new federal program that would duplicate a or overwrite any existing program. the reporting committee would also be lucrative slen why the creation of this program would be necessary if a similar program party existed. on the other hand congress could act in a time to terminate or consolidate duplicate of an overlapping programs and particular findings that were produced by gao went to annual reports published in 2011 and 2012. for example in 2012 gao recommended consolidating federal offices and cutting improper payments by medicare and medicaid. the 2012 report cited 209 science, technology and engineeriengineeri ng and math programs costing $3.1 billion spread across 13 agencies in the year 2010. more than one third of those programs were adopted and funded

between fiscal years 2005 and 2010 if the united states still does not have enough future workers in the stonefield and u.s. students are still behind in math and science compared to other highly technological nations. gao found 47 program tonight agencies that cost $18 billion in 2009. nine. only five of that impact study completed since 2004 to determine whether or not participants secured her job as a result of program rather than a separate cost. finally there are more than 50 programs across 20 agencies to promote financial literacy. there is no reliable data on the total cost of those programs and a government that itself is going broke is no business trying to teach the american people how to balance their check. my written testimony contained several specific proposals to cut wasteful spending and improve efficiency placing the 1 dollar bill on the 1 dollar coin eliminating and reducing

identity best to there is increasing use of recovery order contractors and reducing or eliminating farm subsidies protect her the sugar program is proposed this delicious asian program. we commend the efforts by this committee to address wasteful spending. the agency should increasing the use of cloud services in the same time reducing unnecessary i.t. software licensing. finally we urge the committee to adopt structural reforms of the u.s. postal service while avoiding the taxpayer bailout. while programs can be consolidated reforms are terminated by congress said at a time such actions have been few and far between. in addition to taking action on specific programs to cut spending congress should establish a commission to provide recommendations to reorganize federal agencies as well as the sunset commission. i appreciate their testified before the committee today and would be glad to answer any questions. >> thank you so much mr. schatz

for your testimony and we will withhold questions until we have heard from all of the witnesses. we appreciate your testimony. let me know recognize ryan alexander president of taxpayers for common cause. well, and you are recognized. >> thank you. thanks for inviting me to testify this afternoon. i'm president of taxpayers for common sense of nonprofit watchdog. i said before this committee two years ago testifying in the gao duplicative program reports. i want to recognize one positive change, the way some of falling metrics of -- so there's some good news but there is much work to be done. almost every piece of legislative the wantage and 12 congress to the fiscal cliff deal highlighted the need to reduce waste without reducing waste. the department defenses the world largest bureaucracy in extremely vulnerable to waste and duplication. tricare is more than doubled in

last decade last decade and an fytotal will exceed more than 50 million unchanged preemies. we can modernize the program maintain the premise of health care coverage for the men and women who have served our country. significant savings can be found throughout physician contractor form. the pentagon as the government's as the government's largest buyer and many contractors rely on the government for their business. we are concerned that the tube .0 version of dod's that are buying power turns away from the fixed-price contract. congress is not one-size-fits-all but losing billions of dollars should be sufficient incentive to control costs. the national nuclear security administration's nuclear weapons laboratories and production plants are operated by private corporations. these government-owned contracts have in some cases increased with inflated overhead cost security breaches and construction cost overruns. on the positive side lawmakers appear ready to uphold the cmr project at los alamos laboratory. acquisition is a major challenge

across federal agencies as evidenced by the failures of future combat systems deep water deep water and others. a common thread is the use of lead system integrators. for the governor i saw contractor to get signed it made its neat. i've never yet found a contractocontracto r who was not watch would leave the government when the bag. public lands are taxpayer should reserve ofheo and ensured return for taxpayers. securing a fair return for the hundreds of newly proposed wind and solar projects on federal lands as vital and taxpayers allows companies to pay royalties based on domestic prices. finally the general mining lop 1872 collects no realty from hard rock mining on federal land. taxpayers cannot continue to give the gold away. the title xvii loan guaranty program jeopardizes billions of dollars in contracted both. solyndra's the fault brought the program under increased scrutiny but the $8.3 billion loan

guarantee for the southern company carries potential losses. and if that's in duplicative agriculture policy wastelands of dollars. the highly subsidized crop insurance program which cost taxpayers a record $14 billion to buy 12 must be winged an effort to create a shallow loss program for risk management objectives. consolidated programs and performance measurements and map 21 have failed to address the underlying issue of demand for transportation projects exceeding revenue generate to cover the cost. congress has passed more than $50 billion to back the highway trust fund. flights between rural communities costing up to $1000 or play should be eliminated except in alaska saving a billion dollars. many communities committee and transportation links through service with little or no subsidy. tens of billions of dollars are lost to waste and fraud in medicare may kate and class your

senators carper and -- citing fraud representative -- [inaudible] wornie to be done that this is fair. one in trillion in federal revenues sending the texas and the lax oversight. some include ending defraud on foreign endings and converting tax credit limiting to one home mortgage totaling $500,000. the army corps of engineers eats apart a a part of station system with criteria from congress. privatizaprivatiza tion came in the form of project by project funding and annual pro-creations annual pro-creations. the sand a supplemental regular energy water perforations have funded with an update and spirit out congress needs to increase the strength of direction. they like to point out the motto should be we may take twice as long but we cost twice as much.

superstorm sandy brought problems running our pressure disasters. the current ad hoc approach creates an opportunity for waste fraud and abuse. worse and has the money puts people in infrastructure back eventually. the number of declarations have increased due to an increase of mage or weather events but also because of our nations -- not because our programs are responding to disasters that could respond to them. we have encourage development in an unsustainable manner. furthermore research indicates every dollar spent on mitigation saves for more former dollars in recovery. we should be helping people prepare in a way that protects taxpayers and reduces future risks and costs. thank you for the opportunity to testify today. my written testimony will be submitted them at greater detail and we will be happy to work with the community of to ensure that are taxed payer dollars are

spent wisely. >> thank you for your testimony and we will include your entire testimony and additional comments for the record. i will now recognize and welcome dan blair. mr. blair is president of the national academy of public administration. welcome and you are recognized. >> thank you. it's good to see mr. cummings and i appreciate this opportunity to testify today and i think the committee members prayer i am damned their presidency of the national academy of public administration. the academy is a nationally recognized nonpartisan not-for-profit chartered by congress to to address and advise all levels of government on pressing issues of public administration. we are comprised of almost 750 fellows for selected by her membership for their significant contributions in the field of public administration. i ask consent that my entire written statement by except for the record and i'm pleased to summarize.

>> without objection. speier hearing today is timely and helps key of many management issues for congress and administration should tackle to solve some of the most pressing problems in government. the government has become increasingly complex and actions on the federal level resume that the state and local level. ..

private investors provide funding to help achieve a specific result in the government only pays if the goal is achieved. using a third-party approach allows us to partner with nonprofit entities that have demonstrated their ability to produce high returns on investments.

it also maximizes flexibility and allows the government to piggyback on already existing infrastructures and networks. importantly, the risk is mourned by the third party for producing the results. another example of evidence-based decision-making involves a washington state motto. this model provides the state administrators the tools to identify which programs are working and worthy of continued funding. this allows cuts and funding to be targeted to those programs, which are not working. apart from identifying ways of identifying government investment, challenges remain for agencies to identify waste and fraud and abuse. these tools include greater use of data and analytics to strengthen controls and facilitate improved mechanisms for preventing and detecting improper payments. my written statement identifies additional opportunities to streamline programs across the federal government, as was

noted, the 2012 and 2011 reports on duplication overlaps identify areas that many can review. this overlap is often an unintended consequence of a proliferation of government programs. it is due to the consolidation of programs within the department. another way is to virtual reorganization and the establishment of interagency councils, broader structural reorganizations complicate this in practice. in conclusion, congress and the executive branch have an opportunity to work together to reduce waste, fraud and abuse, and invest in effective base programs inside the federal government. it addresses issues in nine critical government management areas. key areas include the nomination

policy, civil service reform, managing public and private partnerships, rationalize the government system and achieve transparency. thank you for the opportunity to testify this afternoon. i'm pleased to answer any questions that you have. >> thank you. we will withhold questions since you are the next-to-last witness. our next witness is with the business of government. we thank you, sir. >> thank you. we appreciate your testimony. >> mr. john kamensky. >> the ibm center connects

public-sector research with practice by the sponsoring independent research and academia and the nonprofit sector. two years ago, the ibm center produced a report summarized here identifying seven leading commercial strategies that could contribute up to $1 trillion in reduced costs of federal operations over a 10 year. not. while improving performance. i would like to share these with you. why do we think this magnitude of savings is possible? cross government activities, such as personal processing, contracting, supply-chain management, historically averaging about 30% of total operating costs, compared with about 15% from the private sector. while the precise numbers may not compare well, they do suggest changing the way it mission support functions are operated to reflect leading

practices. the government's cost of operating the infrastructure is high when compared to the private sector. in addition, according to gao come only about one third of the government i.t. investment in fiscal year 2011 was spent on direct mission related i.t., such as air traffic control systems or benefit determination systems. by reducing i.t. overhead it could lead to savings of 20 to 30%. strategy two is to streamline them to be more efficient and

effective. it is a purchased largely through independent procurement process and independent agencies. in contrast, large corporations have transformed their procurement. for example, starting in 2005, omb lost a strategic sourcing initiative to the purchasing scale of the federal government. progress to date has resulted in sales, but the savings have been less than one half of 1% of the government's procurement spending. in contrast, private sector companies reported savings of 10% or more. gao last year concluded if the government could achieve a 10% savings level, that could be savings of up to about $50 trillion. strategy three. apply advanced business analytics to reduce improper payments. the administration is moving

aggressively to reduce improper payments with strong congressional support. however, gao says that war can be done and industry experience could suggest that this is a valid conclusion. industry experts believe that expanding the use of advanced business analytics could increase improper payments of about 40%. this could potentially generate $200 billion over the next decade. strategy for number four is reduce the government's footprint. most government agencies have services that rely on largely manual, paper-based business processes. the government could both reduce costs and improve experiences by moving as many touch points to electronic platforms as possible, and we think it is due to the footprint of field operations. other countries have done this by creating a one-stop approach to social services. for example, service canada is a

agency that delivers 70 services on behalf of other agencies online, in person, on the phone. this has allowed the canadian government to reduce field officers, costs, and improve service delivery the same time. in conclusion, mr. chairman, it is important to exercise the leadership of government is key to implementation. the seven strategies are addressed by the administration. this is led by the directv director and the subset of departmental secretaries. a small central supporting out of the presence managing counsel, not unlike the recovery of the implementation team to ensure action. each of the seven areas could be created to work under the direction of a departmental deputy secretary.

i would like to conclude and agree and thank you for the opportunity to speak before you, and i would be pleased to answer any questions. >> i would like to thank all of our panelists for their contributions today it is interesting to have you suggest these potential areas in which we could cut and save and be on that side of the aisle, sometimes from practical positions. it is much more difficult on our side we will then turn to other members for questions. first of all, facing the prospect of sequestration, of coming down the road, i think that my guess right now is that i think after the holidays, it is going to go into effect.

and that will impact dramatically defense is the biggest cut. this is an opportunity to save some money it may be another commission that would be necessary. but it is still coming back to congress. i think the cuts could go beyond, somebody described other potential areas of savings. maybe we could go down and get your take on what you would do. again with sequestration looming.

>> thank you, sequestration, as it doesn't affect certainly we have been critical of defense spending, we have talked about eliminating the joint strike fighter, yes, you can find specific examples. but across-the-board cuts, they eliminate both wasteful spending and what might be essential spending at the same time. >> my understanding of sequestration is that it is across-the-board. >> it would probably go into effect. then what will happen is that congress would say -- [talking over each other] >> maybe they will wake up and say we can do it the right way.

>> yes. you have a couple of minutes here to give me -- maybe we could impose something. something that goes beyond the big gouge for defense. defense contracting is out of control. i.t. across-the-board, solutions that can take billions of dollars. here we have an opportunity with sequestration coming. they're going to be a lot of people that run around with their hair on fire. but we have an opportunity to redirect that. how would you do that? >> i would look at everything. >> everything is on the table. >> it is probably not an agency that couldn't have some trimming efficiency. >> any cuts between 10 and 15%

-- [talking over each other] >> within the range we are talking about. >> 1.2 trillion last year in reductions, people could just adopt all of our recommendations -- >> okay, should we look at those? >> i would just point out, and it was submitted as part of the record, i think a couple points to point out is that i do think we will contract service contracts. [inaudible] >> this is an opportunity to look at a better way. >> okay, we put in those things. [talking over each other] [talking over each other]

>> in regards to a little bit of discretion here, on the 20th extension, when i said that this cannot go on -- this madness -- because that cost millions of dollars as an extension, just cutting out airline tickets of a thousand dollars or more. we close down the faa partially for two weeks.

[talking over each other] [talking over each other] >> i think this overlap will give you an idea of areas in which efficiency can be achieved. i think the republican rules, we put in what is a duplicate of an addition to constitutionality. >> thank you, mr. chairman. sequestration does not allow trade-offs. [talking over each other] [talking over each other] >> plus or minus dollars will not solve the challenge.

in order to be having much more energy-efficient operations, sometimes it requires an investment up front for a longer-term savings. if you look only at how do we cut dollars next month. sequestration will do that. but it may not actually improve operations very well. >> it brings to mind the words of waste and fraud and abuse. i would like to ask about the

specific example that he pointed to, in part in my jurisdiction and in another committee. it was your discussion of improper payments. mr. mica is aware of this. he is on the committee that had jurisdiction over a great many of the recovery act funds. my particular subcommittee, which i chair, it had jurisdiction over more than $5 billion of those funds. bush were to go to each and every state, district of columbia, and every territory. the funds -- we had to deliver the funds quickly. i am intrigued by your

discussion of the administration's recovery board. it recovers improper payments. and it shows the value of a concerted effort, potentially up front. they are dealing with upwards of 25 agencies. we have nothing in place in these agencies beforehand. so my question -- how did this effort prevent these overpayments? through this special board, i don't know if this board still

exists, already think we could apply this to other circumstances, because there are many instances in which you are distributing funds for many agencies through the states. i am wondering about the speed of this money went out. >> the congress and part of the legislation -- it actually turned infrequent reporting internally within the agencies. all of the spending data was shared through this recovery operations center that the chair of the board set up. that way they are able to look at data from a number of

different agencies at the same time and look for patterns that were suspicious. for example, when you notice funds from three or four different recovery act programs going to a yacht in the harbor of miami, which is one of the examples that you gave, it is an ability to talk about where things were being spent and moving in quickly. >> the recovery act is still going on, money was all out. other circumstances within the government today in the usual course of business were you thinking something similar in

regards to bureaucracy? >> it was taking place at the end of this fiscal year, there is a government accountability transparency board that was developed by president obama, which is looking at ways of taking some of the lessons from the recovery board and extending them administratively and legislatively. agencies have something like this for payments that they make. they make like 1 billion payments and transactions a year. but it is oftentimes when you are able to prepare funding across agencies that you are able to detect patterns that are sort of anomalies. something equivalent to that maybe one of the lessons that comes out of the recovery act of the legislation. >> the chairman has shown an

interest in institutionalizing some of that lessons learned. thank you very much. >> i think the gentleman from oklahoma, mr. langford. >> yes, sir. going back to president obama speech, identifying some of these as inadequate. i would agree that we have some federal programs that we need to be able to identify and work with. we need to identify those programs. let's deal with that. but i do have a series of questions. i noticed in your testimony committee referred to a senate action to try to put into the senate rules a duplication requirement. that is something i personally worked on. to be able to identify duplicate programs before they go into effect.

in the middle of all that testimony, you also mentioned the process of the audit. there are billions of dollars that have been recovered. we do have some issues on that. they are pulling about 30% of the files from these hospitals and doctors offices for just a normal doctor's visit, identifying those, not paying those for any length of time. it becomes a hostile exchange labor for 30% of the cash will gets pulled. they're honest positions, they can go back as far as they wanted to. as of september of last year, if

they want to go back to 10 years ago and say we are going to pull this file and check it as well -- how do you strike a good balance on this? >> i think anyone who ask questions about payments, they will have questions about whether or not they were legitimate and to be concerned about how they are conducting their business. it comes to about $20 billion. >> a lot of those are paperwork. they go back and check them, they are not really fraud.

>> it could require more paperwork in some cases, everything can always be improved it spread across the country, clearly they are going to be dealing with issues. we think the process works well. >> i completely agree. we have to be able to do that, but we have to allow a greater

relationship. those that are doing a good job, we want to maintain that we have a good process and in the anomalies that come up -- can we correct them? >> that is also a function of incompatible accounting systems, that has been abysmal for years. i think it is still true.

>> yes, sir? >> there is a database that has been created by the administration called the do not pay less. it is an integration of seven or eight different databases from different agencies to ensure that someone who has been disbarred by one agency will be given a contract in another agency. >> okay. >> thank you. i yield back. >> the gentleman from virginia. esther, you. >> thank you, mr. chairman. welcome to our panel. when we look at something like improper payments, one of the subcommittees looked at improper payments in something like $125 billion per year. maybe 50 of that percentage is

fraud. we are talking about getting it wrong in terms of who is eligible and not eligible. we are going to get our arms around $125 billion per year, that's not cutting any strategic investments, it's just managing more efficiently. what would we have to do. >> i think you need to better engage stakeholders. also keep in mind improper payments are not just overpayments or underpayments as well. so you need to keep in mind that as the government goes about doing its business and putting out money, it may need to keep an accurate check as to why and how it is paid for. one of the ways you can look at this is what is going on in states and localities as well. one of the things that we have been involved with at the national academy is what is called a collaborative one in which we brought in stakeholders from state and local nonprofits, cities, in order to apply best

practices, including how to identify proper payments and what more can be done to improve the administration of these programs. >> i was hoping that mr. blair would include in his answer technology. maybe you could address that. >> thank you very much. >> we close our eyes, has anyone told you that you look exactly like kerry read? >> that as a compliment from the side of the aisle. [laughter] >> there are concrete examples of this happening. for example, ibm has worked with the department of taxation and finance and develop applications . the optimizer software uses a combination of data analytics and models that increase the efficiency field agents so that

they know which audits to go follow. in 2010, there was an overall increase of better targeting, which returns go check out. the average age decreased by about 10%. so we have a quicker turnaround periods of use of analytics and figuring out where the risks are, where the potential returns are help place the agents where they need to be. the u.s. and irs recently created an office of compliance analytics, and they were able to identify last year during the tax season where taxpayers were making mistakes. they were able to send out notices to those people saying here's what you need to do to change it. and you managed to prevent over $100 million of money going out improperly over the course of the year.

>> the chairman pointed out sequestration. one more question, the department of defense relies heavily on contractors. that concludes the lack of a number of trained contact oversight personnel, they are potentially paying more than necessary.

>> we need to make sure that they have the right skills and proper training -- if you don't have the proper training or skill sets -- it is just good money after bad. one of the things that sequestration and also across the board cuts do is put in jeopardy and negates any further efforts. -- especially over the last decade and people and the recruitment of those people -- we need to make sure that that goes well, especially across the board. >> thank you.

>> we have to start with accountability. that starts with the secretary heads, agency heads,. >> there is also -- you can label this to be politically correct. i don't care how we slice it and i said, it has to do with that. here, you just get rotating chairs. i think there is are we also have to have that accountability process.

>> of the practicing dennis, we have seen some of the problems within the medicaid programs and medicare programs. for mr. blair, they have a collaborative one that has improved hhs grants, medicare and medicaid. what were those improvements? >> those are due to the fact that you could bring state and local health care officials. and the types of people who are actually the beneficiary, they have better ways of accounting money and better ways of obtaining results. with the beauty of the form does as it brings together a multiple

it is an ongoing process. today we brought in more than 750 local people. there are 750 participants, which include local as well as state officials. the beauty is that not all wisdom resides here in washington, whether it's going back to the state and locals in order to look at these problems. not from a top-down solution, but from the bottom up. >> that's interesting. so you would do that on micro-targeting? would you have a bigger piece to put together? >> what we have done so far -- we have targeted a few pilot

projects. one was with the earned income tax credit, which was done for the department of the treasury. second one is health care through the washington state model. looking at what programs work and what will continue to be funded. >> a government grant is administered and that grant is not given to the third party until certain results are achieved by way of the program that you were going to reduce this by a certain percentage. and if is not achieved in the third party doesn't get paid, it shifts the risk to be third-party payers.

>> you're also dependent upon the patient dates to be compliant as well. >> the beauty is that it's done through a third-party such as a philosophic organization, a local investor, that what way you don't have the federal government at risk. most of these plans now, they just pass the check through. you hope for results. this way, money is not paid until results are achieved. >> but wouldn't you also want to have some risks because they

have skin in the game? >> i advocate that. >> you want skin on the game and all parties. in order for something like this to be successful. >> thank you very much. i yield back the. >> we now go towards the gentleman from pennsylvania, mr. cartwright. >> my questions are for you, mr. kamensky. what i like would like to ask you to do is elaborate on your testimony little bit. regarding the federal government reducing energies. in your comments, i hope you will include the department of defense. we freshmen in congress were treated to a crs seminar some weeks ago.

you heard here today the ranking member quoting crs and the devaluation of drgs overall efficiency as being poor performance. reducing greenhouse emissions, or venting pollution can you tell us more about the executive order that president obama issued at making government operations more sustainable. what you believe will be the short and long-term impacts of that executive order?

>> it sets the target of reducing greenhouse gas and increasing the reliance on alternative energy sources other than coal-based energy sources. one of the things including what could be done by action of the agencies. one of the things that he was suggesting is that trading of

energy. the other is to allow an investment fund so agencies can borrow money but have to pay it back once there is energy savings that have been incurred. private industry will come in, they will put something in place, they will get paid back out of the energy savings that come out of that program. >> have you think the administration has done in terms of implement and? >> that energy savings is a

cross agency priority goal. it said that it would reduce greenhouse gas emissions by 20% by 2020. indirect greenhouse gases by 13% from the 2008 basis. so they have the real measures. they are reporting every corner of progress against their goals in a report that the post of on the web. they are looking at the impact on 500,000 buildings that the federal government manages. in 2000 when he reduced emissions by 8.3% from the 2008 fiscal year basis.

>> what you see are the incentives? >> one is to create investment fund so it will result in long-term investments. >> okay, thank you, sir. mr. cartwright, i have enjoyed this exchange. it is a little bit more money than that. no one seems to be able to find a third, when you get past labor, which is so much that there is an something we can

find an outsource contracting. could you elaborate on that nuance? >> yes, i was shocked when i heard that number. it was from one of the panelists and it merits further investigation. >> i would ask that you try to get the details of that included in the record. i think that is an extremely important point and i am glad you made it. >> i now recognize myself. mr. alexander, you have the best title in washington. taxpayers for common sense. now, next week, we are going to have our annual high risk was coming out for 2013. it is no surprise to any view that list, medicare, medicaid, the post office has managed to get on that. most people that are on an.

>> it is a detailed question. i will make a little bit long. the expression about albert einstein, saying that if you keep doing the same thing over and over again, that's the definition of insanity. we keep doing it over and over again. is it time that we seriously look at the act and the power not just to tell people that there is huge waste, but take a more active role, an enforcement role and insisting those changes occur. isn't it essentially at the gal and ig that we recognize repeatedly hundreds of billions

through republican and democratic administration. we have seen them come back, saying that they are going to do it, then we see the exact same things the next year. >> i absolutely think that there needs to be better options in terms of enforcement. that is something that we support. i think there are some agencies were we would be particularly happy to see that happen. of course, we have talked at length about this. the army corps of engineers, that is their department due to the scale of what they manage in both revenue and programs. so we definitely would support efforts to give the gal more authority. >> if there are no consequences for wasting money, there will

will be money continue to be wasted. illuminating program, changing a program, or sending someone to jail. last time i remember that was the original tanker release fiasco. so i am not suggesting that there are people that should be incarcerated, but either there should be an incentive for performing your job at a certain level, there have been suggestions that agencies retain some of the money they get back if they recover it. and they should also have a disincentive for performing a job in correctly. congress does not have the power to hire and fire people. neither does the president. >> let me ask you a question here. currently, if you are and ig, you can talk about the barman,

but you're not able to do it. is that an example of something where it is a regular part of enforcing against contractors and perhaps other motions that could be brought, where the ig would have direct standing even when it was not criminal. for example, the scandal, all of you got to see them sitting here. you got to see the former administrator telling all of us to our amazement that the reason that the individual got his bonus was because he was entitled to it. that is an example. the question is should we change the dynamic so that somebody other than the next person up the chain has input into whether you deny somebody's ability to continue to do business with the government, or at least in the case of employees of the government, denies some of the

effective pay increases and their bonuses. we would probably have to change the civil service act to address this. >> currently by law, they are discretionary. but it doesn't appear that way when you look at the performance versus otherwise. what i notice as there are agencies that have small bonuses. agencies that have huge percentages of bonuses. i can't say that as the bonus goes up as a percentage, the agencies are the ones that you would be pleased with. >> i certainly think that increasing them to do something would be positive, but i also think it could have an effect on congress' ability to respond. you know, we always criticized criticize things that happen. but we try to find committee

lines and the ability to make a change. the question on bonuses -- i mean, for it bonus payments on contracts, those negotiations are different than they are for employees. but they are probably solvable. i've been. >> are there any other comments? >> i'm really curious. as you point out, bonuses are supposed to be awarded for exceptional achievement. seems to be an abusive system when it is viewed as an entitlement is part of an everyday salary. one of the questions that i would have about to barman, is there a way that we can use -- not after the fact, but before the fact. one of the largest scandals occurred, we are always looking

at them after that action has occurred. >> that is a great question for another hearing. we will be picking up where you left off. with that, i'm going to announce that we are going to go to the gentleman from wisconsin for five minutes. but we will then recess until immediately following the second vote. the gentleman is recognized. >> thank you, mr. chair. thank you to the panel. i had a chance to read your reports last night. they were very comprehensive. they were very thoughtful. some might say fearless in some of the areas that were pointed out to us. i used to cochair a committee that looked at efficiencies and savings. i served on governor scott walker's commission at the state level. so i really appreciate this conversation.

one of the concerns that i have, you know, being one of the new freshmen, there is a washington way of doing things. especially those of us in the midwest like to think that we have more common sense if the car is about to run out of oil. we don't let things run to a grinding halt and try to fix it later. sequestration is one of those issues that is coming up. we can always come back and try to fix something later, but it just doesn't necessarily make sense. ms. alexander, i appreciated reading your reports and i notice that you have a little bit of that midwestern commonsense. you have a line here that says specifically that sequestration is bad. the effective end to wasteful.

again, i have fears as i talk to constituents about what will happen the next few weeks rather than after the fact. i'm wondering if you could address for some of us some of the areas -- if we do the sequestration, we have a great job of covering some of these cuts. what are some of the areas that are effective? >> well, i appreciate that midwestern complements. coming from wisconsin and illinois, i agree. we have an agreed-upon need for a strong national defense. there are good programs within the pentagon.

that kind of conviction and consensus has been what has allowed. i think there is no way other than doing the very hard work of looking at things program by program, dollar by dollar, to say that a return on investment, we are getting something for it. we are in the business of naysayers a lot of the time. i'm quicker of what not to do them what to do. he really does have to look program by program. we just have to make sure that we look at things and say, okay,

we have both worked on the programs. >> if i could throw in one thing quickly. we did talk about these reports a few times. senator coburn and senator sessions talked about the $400 billion in annual wasting duplications. 209 of these stem programs. no one knows which one works. we are trying to improve something and get that achievement. get rid of the programs that don't work. >> i really thought we talked about this suggestion. without him i yield back my time. >> as promised, we will stand in

recess until immediately following the second vote. [inaudible conversations] [inaudible conversations] >> meeting will come to order. i am going to yield to the first person that walks in the room. you understand the vantage of being the chair. [laughter] we were talking about the ig empowerment. gao, which is part of this branch of government, from this

standpoint, recognizing that we have limitations in our branches and operations. is there a fundamental problem in that administration after administration doesn't have the continuity of government really go after some of the deep problems? congress doesn't take an active role in oversight. meaning that the gao is almost a controller, yet it has no authority. for the most part you saw in the discussion.

when we worry about institutional changes, major reform changes that you believe structurally would help us and our successors do a better job for the benefit of the executive branch. >> [inaudible] >> and creates more transparency and easier recognition of the problem. those are the examples of structural change, where you actually have a process that makes accountability easier.

>> one of these things is disclosing hidden costs. these are the costs that are buried into the programs. they are just accept it unless somebody asked a question about them. you cannot do that unless you can see them. ..

>> there was a hoover

commission mind standing it is a poster child, it is it in your opinion time to do that again to have continuity of reorganization and all levels and to do it through multiple administration's. >> i think it is time. one of the things you can look at looking within the departments and agencies but i would urge you to look at government as a corporate perspective, what are we

trying to do? built off said gao list and some of those are intentionally duplicative because you want to avoid program failure. >> is that the reason we do breast cancer research? >> and now you just funded to the postal service. >> they deliver six-- per week. [laughter] but one of the efforts we have been involved with takes a look at these programs what is the most effective way to deliver on these programs you don't need multiple agencies or departments with similar

programs and mandates to the constituency group. you can achieve savings while avoiding cutting national benefits. just like veterans' health care. do you need that to get down to the veteran? >> i just want you to know the question was is it time for a hoover commission again? the answer seems to be yes. >> i agree this is something that should be done with the predecessor to our work there was certain the reorganization and also

looking at a sunset commission where for every dollar spent on the sunset process they've abolished 78 agencies or an existing agencies, that is another way programs can be evaluated over time. >> this will be one on government spending and in your testimony you stated analogous to loans with a lender but there is a major difference with the startup company with no history of assets to protect taxpayers.

in my home state food georgia they are packed with companies a 25 billion of assets. the also have taxpayer money and provided some power for customers. having dealt with "this is it" not comparing apples and oranges with a loan guarantee? >> i don't think so but our organization opposed to the loan title guarantee program that it has been a conditional loan guarantee without real transparency and it is a lot of money. >> is a the word of hyperbole, comparing a

startup company with no history to one that is publicly regulated, we are okay with where we are at but do we not state that when we put it did with some indra? >> you did. in your testimony. >> and i will again i am sure but title 17 no guarantee program was created in expanded with different types of technology. we believed what taxpayers at risk because we think it doesn't adequately protect taxpayers. >> i get your point* but on a lot of transparency going on rather is protection, my

concern is you overgeneralize. i did agree for better consolidation and treatment but it struck me i'd when you have a favored industry was a lot of bad issues to say when we were 17 when we had nothing that i just want to state that for the record for i have a question for usa representative in georgia for the bill for the first time in history as a republican make good follow-through and lovely believed and we were able to do that. we discussed ways which taxpayer funds at reform. i know this is ben discussed

but the potential cost service or entire agencies? >> every program should be examined for how it would function in today's world which is what the hoover commission has been doing in addition to the sense that contest but in software agencies have hundreds of software assets better unnecessary or expensive and the gao issued a report july july 2011 noting 15 agencies did not list all software assets in their report which is expensive this is a necessary, should now be purchased the budget is 80 billion identifying almost 2 billion of waste with the modernization of

technology but not when not managed properly but the problem is listing the overlap but without the evaluation congress just keeps adding programs. >> let's put a bill out there and decide which is best if one proves better then they win but then it is the situation to get rid of the program. is something i will be looking at a greatly. >> please yield i will follow-up differently differently, regardless of the challenges of title 17

if the company has substantial skid in the game doesn't reduce the risk? was so ventura their other entities starting with their many with a loan or grant substituting federal money for what they had. is in the gentleman's question fittingly things they do with the private sector this given the game with the risk of failure if they will invest their money more wisely. >> not to gloss over operational differences when covered by a the appropriation, we have concerns if it is sufficient

we are very concerned of the subsidy calculation the zero is worse. i a degree. >> i appreciate the clarification. >> welcome to a committee that asks these types of questions a lot. >> is an honor to be in this committee particularly at a time when we try to responsibly balance the budget all having the most essential parts of services with the former state legislator with 30% less revenue to go through the budget to find areas to cut back on. i look at these issues and

everything used to be on the table for consideration and specifically during these challenging economic times, and oil and gas companies who have remained highly profitable, taxpayers that describe the record profits "in 2008 exxon posted the largest general corporate profits in u.s. history for a chevron became the second most profitable company in the united states , chevron and the cp together made a total of $150 billion. even with these profits they

continued to receive entitlements the omb estimates saving more than $43 billion over the next 10 years if these corporate entitlements were repealed. do you believe that wailing gas companies should be getting the tax breaks and if not how should congress deal with that? >> we have spent on the record for a long time as a financing mechanism with equal footing so that accounting is something recommended for all businesses and tax deduction

is something we support for all substitutes would be very happy to see congress repealed to the benefit of corn growers which is awesome but this is a difficult issue we work on energy subsidies as a starting point* that benefit industry is and people just don't agree with that statement. that is something he should look at how do we pick winners and losers? for industries that have been profitable for so

long, these are major industries. it is hard to understand why we continue to give tax preferences. >> can you give any specific recommendations the apartment of.interior can improve oversight to is provided to oil and gas companies? simic i can follow-up on the record with more details but certainly with the reorganization of the department of interior in terms to make sure we have better enforcement i think the leases need to be examined the will be happy

to give those recommendations from over the years and work with you on that. >> thank you very much this is my 25th year and when i first came our national debt was 2.8 trillion and i thought that was too much reducing spending even their natural 13 trillion and the most optimistic is 20 trillion or 22 trillion over the next four years it is just incomprehensible which is the problem.

having trouble with city unions he testified government does not work because it was not designed to there is no incentive for people to save money so much is squandered. i have always remember that people are spending money not coming out of their own pocket there is no incentive to save money or pressure like the private sector i'd like to ask witnesses to create more incentives for federal the employees to save money we have all heard stories have all agencies

use 60% of the budget the first 11 months the unscramble so they are not cut could we give federal employees bonuses if they save money within their particular agency or program? how long have you been here? >> 1986. we appreciate your voting record because most people vote for more spending. but the idea to have some kinda remuneration for individuals or agencies that go out that save money or collect money we probably need that incentive and

something we have always supported. >> mr. duncan, i have been in washington with the gao since 1977. i have seen a lot of changes over time. when i was given the opportunity to work with vice president gore this issue was raised.

so they put customers first, cut red tape to cut costs. that was given to about 1400 teams we said there were savings associated and asked budget officers to calculate what kind of savings were crowing -- accruing. it was about $50 billion not the ig report, a gao but the employees themselves. >> 50 billion? >> $50 billion. i think employees of given

the inspiration are more than willing to do something. i could deliver some of these awards in people said i worked 34 years and nobody has ever told the thank you. >> we have to do more because the debt problem gets worse because cities have to cut pensions three will not cut social security but print more money than the veterans pensions will not be able to buy anything. >> looking at it from the micro level of the federal compensation -- compensation system rewarding longevity nonperformance there are employee groups it ha that

oppose them but that is the single largest tool that you have. it was interesting i heard the expression several times with skin in the gaming and to give agencies skin in the game to reward them if they function well. i started 1985 on the predecessor to this committee and every year we brings the agency's out and nothing happens. we throw money to correct the problem but we need consequences but you have to hold people accountable. but to say they do this give

authority, you have to hold the individual lough unaccountable but to make sure they are accountable to congress. look at the budget process. it is in shambles for years no. >> my time is up but when i tell the newer members i have been here this long it boggles there mind but how fast the time passes. >> you can incentivize and also penalize.

gsa sets a benchmark for what agencies can spend at conferences $3,000 per attendee 6,000 per day 183 times the federal government went above the benchmark security 22 times then of course, gsa sets the benchmark with the shindig in las vegas. you can incentivize but we should penalize one simple piece of legislation is if you go above the benchmark next year the budget is cut by that amount that is an incentive if you do something wrong you should be penalized. we could do both as to look

to save some dollars with the debt that we face. you don't have to answer. i am rambling. >> called on nine messed up. then they will go to you. >> i will join you in an amendment unless we start as the committee requiring accountability nothing will happen and i am thrilled each if you are here today if lee implemented the recommendation of the testimony we will have done something for the american people we know the problem that we just not effectuate

the changes the gao constantly tell us where we should be making cuts in re-evaluation is. we have got to take some blame for what is going on and the committee is poised to do it in a bipartisan fashion, if we take the recommendations presented to, we will have done our work so i hope we can work together on that and count me in the efforts on your behalf anything truly troubling with your perspective, the fact the air force wasted $1 billion on the expeditionary combat supportion on the expeditionary combat support system and came to us a number of times, the

gao made recommendations and we kept allowing it to continue, ferment and only after cold air force said it is a working but riordan spent $1 billion and paid eight-point to billion dollars as a parting gift for terminating the contract? is that true? actually this is a typo it is eight-point to million dollars of termination fees. they screw up, we spend $1 billion of taxpayer money on the system doesn't work the airforce agrees that we pay them another eight-point to million dollars, does anyone have any perspective

why that went on for as long as it did without someone pulling the plug? >> unfortunately it is not the first time but hopefully it is the last time with context programs but elsewhere that go over budget and unfortunately there are no consequences for spending more money to help the program works eventually which is one of the reasons why they keep going for them to say we need more the congress does not put its foot down with it is their responsibility as a body to say they should just stop. let's do something dif