Posts Tagged ‘GAO’
April 4th, 2016 at 3:53 pm
Bipartisan House Request to GAO: Investigate FCC’s Set-Top Box Proposal
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We at CFIF recently highlighted a dangerous new regulatory proposal from the Obama Administration’s rogue Federal Communications Commission (FCC):  Its set-top box proposal that simultaneously embodies crony capitalism, regulatory overreach and technological sclerosis:

The latest manifestation is a new initiative from Obama’s overactive FCC to impose a one-size-fits-all mandate to make cable television set-top boxes artificially compatible with third-party entertainment devices.  In other words, even as cable companies themselves voluntarily move in the direction of abandoning traditional cable boxes and toward devices owned and maintained by individual customers as they so choose, the FCC wants to impose 1990s-style regulation on the industry.  That would essentially freeze in place the increasingly outdated model of set-top cable boxes even as it becomes increasingly anachronistic on its own.”

Fortunately, there’s good news to report.

Specifically, a bipartisan House Communications and Technology Subcommittee coalition led by Chairman Greg Walden (R – Oregon) and committee member Yvette Clarke (D – New York) sent a letter on Friday asking the nonpartisan federal Government Accountability Office (GAO) to investigate the FCC’s set-top box proposal.  For those unfamiliar with the GAO, it is popularly known as the “Congressional Watchdog,” and is more officially the agency that provides investigatory and auditing services to Congress of various institutions within the federal government.  The joint letter highlights their concerns and requests a formal GAO examination:

We are concerned that the agency’s efforts do not include a meaningful assessment of the effects on independent and diverse networks, whose business models may be greatly threatened and undermined by the FCC’s proposed rules.  The FCC must proceed with a better understanding of how their proposed rules could limit diversity and inclusion on our nations shared media platforms.  We are requesting that the U.S. Government Accountability Office examine the impact of the FCC’s proposal to change the rules regarding cable set top boxes on small, independent, and multicultural media programmers and content providers.”

This constitutes great news.

It shows a bipartisan Congressional concern over the broad array of potential damage that the FCC’s proposed set-top box regulation would inflict.  And Congress isn’t alone.  A diverse group of consumer groups, innovators, employers and businesses join in opposing the proposal, which offers optimism that it will be rightfully stopped before further damage occurs.

October 3rd, 2014 at 11:24 am
ObamaCare Nearing a Fannie and Freddie-Style Bailout of Insurance Companies?

Could ObamaCare’s “risk corridor” program become the health insurance industry’s equivalent of Fannie Mae and Freddie Mac – the federally funded entities that spent $180 billion bailing out banks who issued subprime mortgages?

Stephen Moore, the chief economist at the Heritage Foundation, thinks so.

“But insurance experts warn that [the risk corridor] program creates the same moral hazard problem for health insurance that we saw in the mortgage market with Fannie Mae and Freddie Mac,” Moore writes at Investor’s Business Daily. “The guarantee on bad mortgages encouraged bad mortgages. The guarantee against losses on ObamaCare enrollees encourages insurers to toss sound underwriting standards out the window. This didn’t turn out so well with Fannie and Freddie, which received a taxpayer-funded bailout of more than $180 billion after issuing subprime mortgages that should never have been written.”

Moore goes on to say that surveys of health insurance companies selling plans on ObamaCare exchanges say that the vast majority expect to receive a payment from the federal government to cover their losses. Estimates for the first year near $1 billion. And, since there is no cap to how much the feds will reimburse, there is no limit to how much money a company can lose and still expect a check from Uncle Sam.

Despite all this, the Obama administration is chugging ahead with plans to make payments under the risk corridor program without explicit congressional appropriations. Republicans are contesting President Barack Obama’s authority to do this – with an assist from a recent GAO legal opinion – but they should really train their fire on eliminating the risk corridor program as is. As with IRS tax credits, ObamaCare can’t survive without a convoluted shell game that hides the true cost of health care.

We’ll never get health care policy right until we can talk honestly about how it’s funded. Now would be a good time for the GOP to being that process.

October 1st, 2014 at 6:29 pm
GAO Says CMS Lacks Authority to Bail Out ObamaCare Insurers

It’s been a rough couple of weeks for power-hungry bureaucrats.

Recently, the General Accountability Office (GAO) issued a report faulting the Centers for Medicare and Medicaid Services (CMS) for being unable to produce itemized spending documents, and thus not complying with federal audit guidelines.

This week, the non-partisan government watchdog agency issued a legal opinion saying CMS does not have the authority to bail out ObamaCare-aligned insurance companies, unless Congress agrees.

GAO’s non-binding but influential legal opinion was generated by a request from congressional Republicans concerned about a CMS announcement that it would use money appropriated for other activities to fund ObamaCare’s “risk corridor” program.

Risk corridors refer to a scheme within ObamaCare to compensate insurance companies who lose more than a specified amount of money covering high-cost patients. Initially, funds are redistributed from highly profitable companies. But if the losses exceed a certain threshold, federal taxpayers step in via CMS, the primary agency implementing ObamaCare.

With all of ObamaCare’s pricey mandates – most importantly “guaranteed issue,” which requires insurers to enroll customers with preexisting conditions – there is concern that significant losses among participating companies could put taxpayers on the hook to bailout several firms in the health insurance industry.

It’s worth noting that GAO released its legal opinion on the same day Federal District Judge Ronald A. White struck down a similar bureaucratic power grab by the Internal Revenue Service. While the timing is unconnected, the central issue is not. In both cases agencies within the Obama administration are attempting an end run around the plain meaning of a statute in order to make the president’s legacy program appear to work better than it is.

The rule of law is more important than avoiding bad press for a poorly written bill. Bravo to the GAO and Judge White for having the courage to hold the executive branch accountable.

July 24th, 2014 at 2:20 pm
ObamaCare’s Eligibility Verification System Open to Abuse

The Government Accountability Office set up a sting operation to test whether ObamaCare’s eligibility verification system is open to abuse.

GAO discovered a resounding Yes.

“Fake applicants were able to get subsidized insurance coverage in 11 of 18 attempts,” reports National Journal.

Investigators had the most success when using ObamaCare’s online and telephone enrollment systems. These improper enrollments resulted in subsidies totaling $30,000 annually.

The findings of the sting operation bode ill for the controversial health reform law. The failure to correctly match applicants to subsidies indicates that ObamaCare’s expensive digital architecture is failing in one of its most basic tasks.

And the failure could be costly.

Assuming most ObamaCare applicants are not attempting to defraud taxpayers – but rather are just trying to comply with the law’s individual mandate – incorrectly receiving financial help this year could result in a heavier tax bill next year. That’s because the IRS is tasked with settling accounts on ObamaCare subsidies, with taxpayers required to pay back any subsidies they weren’t eligible for when calculating their income tax liability.

So far, the IRS hasn’t rewritten ObamaCare to cushion the blow from bad drafting – like it did when it made subsidies available to citizens in states without a state-based exchange.

Apparently, that kind of face-saving deference is only extended to government-growing ideologues; not every day Americans just trying to play by the rules.

August 2nd, 2013 at 11:48 am
‘Vital’ Agriculture Programs Pay Millions to the Dead
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If you followed the recent debate in Congress over the farm bill, you know that the associated programs were often sold as vital to preserving a way of life in rural America. To cut one red cent anywhere would be to betray the nation’s farmers. So we were told, anyway.

Well, it turns out that there are at least a few beneficiaries who will probably be able to get by without the federal handout. From James Grieff at Bloomberg View:

It’s bad enough that the U.S. government showers billions of dollars a year in subsidies and handouts on the nation’s farmers, a group that as a whole is much better off than most Americans. Now the Government Accountability Office says in a new report that many of the recipients of that federal largess aren’t even alive.

The agency determined that thousands of dead farmers have received as much as $36 million in payments for crop insurance, disaster aid and conservation programs. The report doesn’t say how dead farmers received the checks or who went to the banks to cash them — but never mind, since that wasn’t the GAO’s assignment.

These are the same people, keep in mind, who think that government can make health care less expensive than the private sector. Count me skeptical. In fact, I’m guessing that experiment will play out like an exaggerated version of the scenario above: with more money wasted and a higher body count.

December 28th, 2012 at 12:16 pm
“America Works” Better With Less Welfare

Peter Cove writes in City Journal about the success of America Works, his for-profit company that specializes in getting jobs for long-term welfare recipients:

In the past 27 years, America Works has placed more than 250,000 poor people, with an average of five to six years on the rolls, in private-sector jobs, with an average starting wage of $10 per hour plus benefits. In our New York program, to take one example, more than half of these new workers were still on the job after 180 days. The employers that we have worked with include prestigious companies, such as Time Warner, Cablevision, Aramark, J. C. Penney, and American Building Maintenance Industries. Most of these employers keep coming back, asking for more of our referrals.

In his article, Cove recounts his transformation from welfare-state-liberal to work-first reformer.  The theme throughout is that long job training programs are colossal wastes of time and money compared to the America Works model:

…clients with shaky self-confidence are best served by early success in getting a job, not by long periods of preparation. Our weeklong training sessions are narrowly focused on the attributes and skills needed to land an entry-level job. Our trainers work with clients on the basics, such as maintaining a businesslike personal appearance, speaking properly, preparing a résumé, and showing up on time. Clients quickly learn that success depends on self-discipline and their own motivation and effort.

According to a report by U.S. Senator Tom Coburn (R-OK), as of February 2011, “Nine federal agencies spent approximately $18 billion annually to administer 47 separate employment and job training programs.”  Unfortunately, the Government Accountability Office says that “little is known about the effectiveness of most programs.”

Which do you prefer?  A for-profit company with 27 years of experience getting people into jobs they keep, or 47 cross-cutting initiatives that can’t prove whether or not they are effective?

May 16th, 2012 at 12:48 pm
Forget Obama’s Energy Scarcity — More Oil in Three U.S. States than Rest of the World Combined
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President Obama’s views on energy have always been defined by a sense of false scarcity. This is the man, after all, who told Oregon voters in 2008, “We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times.”; who constantly invokes the fact that “the U.S. has only 2 percent of the world’s oil supplies” (an utterly misleading statistic that would be irrelevant even if it were literally true); who admitted to wanting the price of coal “to necessarily skyrocket”; and who hired an Energy Secretary who longs to see American gasoline prices reach the stratospheric levels of Europe.

Testifying before the House Science Subcommittee on Energy and Environment last week, Anu Mittal, Director of Natural Resources and Environment at the Government Accountability Office delivered some stunning news about the amount of oil shale available in the Mountain West.

Here’s how CNSNews reports the story:

“USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions,” Mittal testified.

“The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered,” Mittal told the subcommittee. “At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves.”

Read that again. If less than half of this oil shale is recoverable, it still represents an amount equal to that available in the rest of the world. By extrapolation, that means that as future extraction methods become more technologically sophisticated (and more economical) we could be talking about a grand haul equal to more than double current global reserves. And that’s only in Colorado, Utah, and Wyoming — not in the other 47 states.

There are huge policy implications here because of the simple fact that most of this shale occurs on federal lands. That means that getting this material out of the ground will require a proactive effort from government. The current President — who likes to boast about record oil production without noting that the vast majority of it is coming from private land — is not the person to kick start this new era of energy abundance. One more reason to send him packing in November.

May 4th, 2011 at 5:48 pm
Obama Dept. of Education Advances Its Toxic “Gainful Employment Rule”
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There’s new political malfeasance from the Obama Administration.  Its Department of Education has sent the destructive so-called “Gainful Employment Rule,” which unfairly persecutes and effectively eliminates private college competition in higher education, over to the Office of Management and Budget for final review.

In addition to its harmful effects, the Rule is also riddled with corruption, from allegations of insider trading to defective Government Accountability Office reports.  The Education Department’s handling of this issue has been simply appalling.  Even more outrageous is the fact that the Department has not made the most recent version of the Rule – the one that was just sent to OMB for final review – available to the public.

In February, we applauded the House of Representatives when it passed a bipartisan amendment to H.R. 1 that stated that “no funds may be used to ‘implement, administer or enforce’ the U.S. Department of Education’s proposed Gainful Employment rule, nor may the Department ‘promulgate or enforce any new regulation or rule’ that would have the same effect as the Gainful Employment rule.  Unfortunately, however, that amendment was not included in the final budget.  But the battle to preserve student choice and market freedom in higher education is far from over.

At a time when our country has fallen behind in the rate of college graduates, we need competition in higher education now more than ever if we want to survive in an increasingly competitive world economy.  The Rule is clearly not close to being ready for final review, and the Department of Education must  reconsider its implications.  Most particularly, its harmful impact on less wealthy and working students who rely on career colleges and ultimately on our economy.

January 3rd, 2011 at 5:22 pm
“Collegegate” Update: Incoming Congress Demanding Answers in Letter to GAO
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CFIF has been monitoring the developing scandal surrounding the Obama Administration’s assault against for-profit colleges, and we’re pleased to report the new Congress is already taking action to get to the bottom of it.

First came allegations of insider trading within Obama’s Department of Education.  As detailed in a letter by Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina), Education Department officials “may have leaked the proposed regulations to parties supporting the Administration’s position and investors who stand to benefit from the failure of the proprietary school sector.”  Then, the Government Accountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer involving undercover “students” sent to capture information on for-profit colleges.  That GAO report had been cited as vital evidence for the Education Department and a Senate committee as they prepare to promulgate the Gainful Employment rule, and even the Washington Post (whose parent company owns one of the largest for-profit schools) ran an article exposing that defective report.  The GAO’s numerous revisions are all clearly slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  By the GAO’s own estimate, only 1 percent of reports are corrected, and the statistical likelihood that all of its flaws skewed in the same direction (against for-profit colleges) was 1 in 65,536.  Tellingly, the stock value of for-profit colleges reportedly fell 14%, or $4.2 billion, following the GAO report.

Now, incoming Oversight and Government Reform Committee Chairman Darrell Issa (R – California) along with Democrats Alcee Hastings (D – Florida) and Carolyn McCarthy (D – New York) and fellow Republicans John Kline (R – Minnesota), Brett Guthrie (R – Kentucky) and Glenn Thompson (R – Pennsylvania) have written the GAO demanding answers to the following “number of troubling questions” by today’s date:

1.  Has GAO’s Office of the General Counsel (‘OGC’) examined or investigated the facts surrounding the need to revise the August 4, 2010 report?  Please explain.

2.  Has OGC reexamined the report’s conclusions to ensure that they accurately reflect the analysis contained in the report?

3.  Has OGC verified the allegations that the methodology GAO used in the report is flawed and biased?  Please explain what was found.

4.  What are GAO’s procedures for revising a previously issued report?  Please provide specific steps.  Were these procedures followed in this instance?

5.  Why is there no announcement from the release of the modified report on GAO’s web site?”

This constitutes a promising start by the new Congress, including its suggestion of possible disciplinary action.  Stay tuned…

December 17th, 2010 at 2:45 pm
1 in 65,536: Likelihood that Defective GAO Report Attacking For-Profit Career Colleges Occurred Unintentionally
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It was embarrassing enough when the Government Accountability Office (GAO)  recently withdrew its defective “undercover study” issued last summer as part of the Obama Education Department’s campaign against for-profit colleges.  Readers will recall how the GAO sent undercover “students” to several schools to capture information as evidence for the Education Department and a Senate committee.  This was all part of their larger effort to justify the proposed “Gainful Employment” rule targeting for-profit career colleges that provide critical training and education to struggling Americans.  Worse, this came on the heels of a letter from Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) seeking investigation into allegations of insider trading within the Education Department relating to its campaign to cripple career colleges.

Now comes a report providing greater detail on just how malignant that the defective GAO “undercover” report was.  According to Frederick Hess and Andrew Kelly, fully 16 of the report’s 28 findings required revision.  Tellingly, every single one of those “findings” skewed the same direction – casting for-profit career colleges negatively.  The statistical likelihood of all 16 randomly tilting the same way, according to Mr. Hess and Mr. Kelly, is 1 in 65,536.

That doesn’t suggest extreme coincidence.  It suggests intentional malfeasance.

Amid persistent unemployment and intense global competition, for-profit colleges provide important alternatives for education and job skills.  That is why CFIF has formally petitioned Chairman-Elect Darrell Issa (R – California) of the House Committee on Oversight and Government Reform  to investigate this matter.  It is also important that supporters and activists across the nation contact their Senators and Representatives to help stop the Obama Administration’s unjustifiable scheme.

December 11th, 2010 at 11:33 am
CFIF Asks Rep. Issa to Investigate Obama Administration Campaign Against For-Profit Colleges
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This week, CFIF formally petitioned House Committee on Oversight and Government Reform Chairman-Elect Darrell Issa (R – California) to investigate the Obama Education Department’s continuing campaign against for-profit colleges.

Career colleges have flourished because of their ability to nimbly respond to our evolving economy, offer an education focusing on hands-on occupational training, and excel at serving non-traditional students who often have children, are working, are typically older and are more diverse than their peers at traditional schools.  This is particularly important during the current period of job scarcity and worldwide economic competition.  The Obama Education Department, however, seeks to foist a proposed “Gainful Employment” rule that would declare academic programs ineligible for federal aid if some specified proportion of their graduates failed to meet an arbitrary income-to-loan payment ratio.

The natural consequence of such a rule:  vital for-profit career colleges would be eliminated.

The need for Congressional investigation became even more obvious this week.  The Government Accountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer in which it sent undercover “students” to several schools to capture information on recruiting policies, promises of post-graduation pay, federal and other funds for tuition and expenses, and more.  That GAO report had been cited as vital evidence for the Education Department and a Senate committee as they prepare to promulgate the Gainful Employment rule, and even the Washington Post (whose parent company owns one of the largest for-profit schools) ran an article exposing that defective report.  The GAO’s numerous revisions are all clearly slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  By the GAO’s own estimate, only 1 percent of reports are corrected, so an inquiry into the reasons behind this particular revision – with its original report clearly biased – is justified.

That news comes on the heels of allegations that Education Department officials communicated with short-sellers to inform them of their intentions, providing certain traders with inside information potentially allowing for illegal financial advantage.  The cooperation, however, was allegedly a two-way street.  According to media accounts, these same short-sellers may have concocted elaborate schemes to cast a negative light on career colleges, helping them rationalize the proposed rule.   These allegations are sufficiently serious that Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) have formally sought an investigation.

At a minimum, an alarming pattern has emerged that points to the Department of Education specifically working to inflict economic harm upon career colleges, while possibly collaborating in the shadows with the very short-sellers on Wall Street who would most likely benefit from such activity.

December 8th, 2010 at 4:56 pm
“Climategate” Part II? Obama’s GAO Admits Error in Targeting For-Profit Colleges
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Remember “Climategate,” which exposed the flawed and doctored data behind global warming alarmists’ partisan agenda?

We may have a new equivalent with the Obama Administration’s persecution of for-profit colleges.  A “Collegegate,” if you will.

CFIF has detailed the Education Department’s unjustified demonization of for-profit colleges, which provide working Americans the opportunity to improve their educations, obtain critical job skills and make themselves more marketable amid a tight employment market.  We also detailed how Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) have inquired into allegations that the Education Department “may have leaked the proposed regulations to parties supporting the Administration’s position and investors who stand to benefit from the failure of the proprietary school sector.”

Now, compounding the shamefulness of this federal persecution, the Government Accountability Office (GAO) has just admitted that its August 4, 2010 report alleging undercover recruiting violations was defective.  This is significant, because only 1% of GAO reports receive revisions, suggesting substantial error in this particular instance.  Predictably, the GAO says that it stands by it’s “central finding,” but so did the United Nations and other global warming activists following the Climategate disclosures.  The implications are serious enough that Senator Mike Enzi (R – Wyoming) has written GAO chief Gene Dodaro regarding “a number of troubling questions” that “undermine many of the allegations” that the GAO has leveled in its campaign against for-profit colleges.

So on top of a transparently partisan Obama Administration attack against career colleges and allegations of insider trading, we now have the federal government admitting that its supposed “sting” report was defective.  It’s time to get to the bottom of this debacle, which is already humiliating for the Obama Administration.  It appears as though it’s only about to get worse…