The Federal Government has No Plan to Fix Its Fiscal Mess
In testimony before a Senate Finance subcommittee, U.S. Comptroller General Gene L. Dodaro said the federal government was on an unsustainable fiscal path before the coronavirus and had no plan to fix it.
The virus has made that already bleak picture even worse:
GDP will contract by 3.8 percent in fiscal year 2020. CBO also expects revenues to be sharply lower in 2020 than in 2019. In September 2020, CBO estimated that revenues for fiscal year 2020 will be about $3.3 trillion, or $167 billion less than in fiscal year 2019.
But the GAO says there are ways to avoid calamity – if the political class decides to take the necessary action. One relatively easy fix that could save hundreds of billions of dollars: getting rid of costly program overlap and duplication:
Federal agencies also have the potential to achieve billions in financial benefits by continuing to address duplication, overlap, and fragmentation. Actions taken by the executive branch and Congress on these issues have resulted in roughly $429 billion financial benefits since fiscal year 2010. As of March 2020, about 57 percent of the actions we have identified to address duplication, overlap, and fragmentation were fully addressed, about 22 percent were partially addressed, and about 12 percent were not addressed.
Cleaning up the nation’s balance sheet will take time and political will. But blundering forward with no plan for keeping expenses in check will inevitably result in a fiscal disaster.