GAO: Guardrails Needed for Long-Term Fiscal Policy

Blog Post
Wednesday, January 20, 2021

On the latest Facing the Future, I was joined by Concord Coalition Executive Director, Bob Bixby, and Gene Dodaro, the Comptroller General of the United States and head of the Government Accountability Office. We discussed the roles of the Comptroller General, the history of the GAO, some of GAO’s reports and tools relative to fiscal policy, as well as the importance of finding common ground in policymaking as the new Congress begins and Biden Administration takes office.

[Note: Portions of this week's Facing the Future can be seen in the video clip posted below.]

Dodaro was appointed in 2010 by then-President Obama from a list produced by a bipartisan, bicameral group of Congressional lawmakers. He was confirmed by the U.S. Senate to serve a 15-year term as Comptroller General and head of the nonpartisan GAO, which is also celebrating 100 years of oversight and analysis.

The mission of GAO is to ensure that we support the Congress in carrying out its Constitutional responsibilities, Dodaro explained, and improve the performance and ensure the accountability of the federal government for the benefit of the American people. 

“A number of people have called us the taxpayers best friend,” he added. 

“Most of our work is a shared agenda between what GAO believes is important and what Congress believes is important,” Dodaro said. “About 75 percent of the requests we get from Congress are already contemplated by our strategic plan and incorporated into our type of skills that we have developed to handle those requests; then there will be outside activities like COVID-19.” 

Like other agencies, GAO issues long-term budget outlooks and fiscal-health reports. 

“The bottom line is, whether you’re talking about GAO’s long-term outlook, CBO’s long-term outlook, or the statements produced by Treasury and OMB on fiscal sustainability, all have come to the conclusion that the long-term fiscal outlook of the federal government is unsustainable,” he said. 

“While, in the short term, we need to do everything possible to deal with the public health goals that we have for COVID-19, to help our people, to help our public health system, and to also deal with the economic repercussions of COVID-19 and other factors, once we’re on a more stable basis, and we’re achieving our public health goals, and we’re more stable from an economic growth standpoint, we need to quickly pivot to developing a plan to deal with our long-term fiscal situation,” Dodaro added. 

He said such a plan needs to be flexible, but there at least needs to be a plan. “Right now, there are no guardrails,” Dodaro said. 

“We must attend to these issues so that we always have a government that can respond to future emergencies, that can make wise investments in infrastructure and other areas,” he said. “So, this is very important and, I think, central to the effective governing of our country by better managing our long-term finances.” 

One mechanism that is often perceived as capable of arresting the growth of the national debt is the federal debt limit, but Dodaro explained why that perception is far from the truth. 

“The debt limit does nothing to control the debt,” he said. “All it does is authorize Treasury to pay the bills that Congress and the President have already appropriated and signed into law; it’s an after-the-fact measure.” 

Dodaro added that some of the dangers of policymakers not creating a plan with fiscal guardrails include the repercussions of not correcting or waiting too long to fix the financing for key government trust funds (like the Highway Trust Fund, Medicare, Social Security and more), reduced standards of living, a large debt burden being shifted to future generations, and costs associated with relying on the expectation that low interest rates on debt-service will persist long term. 

Regarding COVID-19 relief legislation, GAO is responsible for reviewing the use of the trillions of dollars appropriated by Congress to make sure it is spent properly and effectively. 

“We’re doing real-time auditing to ensure accountability over those funds and whether they’re achieving their objectives,” Dodaro said. “We’ve made 31 recommendations so far for improvements … a lot of our recommendations haven’t been fully implemented yet.” 

“There’s no reason you can’t help people, but also have good accountability and transparency,” he added. “We’re on the case.” 

 

Bixby joined the program to stress the importance of bipartisanship and finding common ground in policymaking as a new Congress begins and the Biden Administration takes office. 

He expressed hope that recent bipartisan efforts on COVID-19 relief legislation will build moving forward as policymakers work to address short-term and long-term challenges. 

“The challenges do present opportunities,” Bixby said. “President Biden is going to have a very difficult path to thread because the Congress is very close … in order to get anything done, there’s going to have to be some bipartisan support.” 

A benefit of pursuing and passing bipartisan legislation, Bixby said, is having something that will have broader public support, be more permanent, and create more buy-in from both major political parties. 

He named three policy areas in need of bipartisan reform, which he would prioritize once we are through the pandemic: health care costs, immigration, and Social Security sustainability. 

“People of good faith on both sides can acknowledge that we’ve got a problem in all three areas, and there ought to be bipartisan solutions in all three areas,” Bixby added. 

Hear more on Facing the Future. I host the program each week on WKXL, NHTalkRadio.com (N.H.), and it is also available via podcast. Join me and my guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.