Deficits, Scandal, Costs, and Honesty
IN rather sizable dribs and drabs, the actual cost of the waste, abuse, fraud, mismanagement, and ``reality avoidance'' in federal government is leaking out. The latest is $4.2 billion to cover losses incurred by the Federal Housing Administration (FHA) in 1988. That's five times the original estimate of $858 million. Add it on top of the savings-and-loan bailout - at $256 billion the biggest fiscal rescue in history. Weighing in only slightly under that is $150 billion to clean 11 nuclear weapons plants. (That doesn't include $11 billion to $14 billion to clean up toxic waste at more than 5,000 military sites.)
Hold it - there's more. Comptroller Charles Bowsher says that audits of other federal programs may yield more unanticipated costs. This includes student-loan guarantees (already a $1 billion annual deficit) and the pension benefit program for federal employees, among others.
FHA's books were such a mess it took the General Accounting Office (GAO) from 1984 to 1987 to determine actual costs. Other agencies have similar problems. Somebody's going to have to dig deep. If not taxpayers - who?
What seems clear to Mr. Bowsher, and us, is that hands-off laissez-faire management does not work when it comes to public funds. As Bowsher put it bluntly, without better regulation and oversight, the private sector will ``rip off the public'' if it can. The HUD mess, defense procurement, recent skimming at the Food and Drug Administration, and other scandals bear this out. Neglect in this case isn't benign. You don't get either less or better government by ignoring it.
Which raises another budgetary issue that's gotten far too little attention - future federal costs we already know about but haven't yet faced. Most are long-term structural repairs and refurbishments. They are going to cost billions, but in the effort to bring the federal budget into line with Gramm-Rudman, they aren't being accounted for.
A little noticed 16-page GAO report prepared for the Bush transition team last year lists some of these costs: $48 billion between 1990 and 2015 for an Air Force satellite control system; $25 billion to update the government's long-distance phone service; $12 billion to $25 billion by the year 2000 to modernize air-traffic control systems; $2 billion to $4 billion on federal prisons; $2 billion for federal parks; $20 billion for public housing. And that's just for starters. ``Star wars'' anyone?
There needs to be a fuller accounting, and more honesty both by the president and Congress about what future budget costs are actually going to be. Borrowing against Social Security, short-term financing solutions, bookkeeping wizardry that hides real numbers by putting them ``off budget'' and ``backloads'' costs to different fiscal years - all delay and mask real accountability.
Greater internal controls are needed. So are annual audits, and clean books. The public also needs to be made more aware of future costs. We all may have to buckle in a little tighter.