Federal spending: Let the sunshine in

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In 2006, the Center for Effective Government (then OMB Watch) and other open-government advocates started pushing the White House to bring together all spending data from every federal agency and put it all on a searchable website. We were told it couldn’t be done. So we worked with then-Senator Barack Obama and Senator Tom Coburn (yes, it was a bipartisan initiative) to get legislation passed requiring spending transparency.
 
As the legislation was wending its way through Congress, the CBO estimated it would cost $15 million to create a federal spending data set. We hired a crack data programmer, produced a prototype for under $600,000 (www.fedspending.org), and licensed it to the federal government for our costs. USAspending.gov was up and running by 2007.
 
Problem solved? Not quite. The federal government is complicated, and it “obligates” money it sometimes doesn’t spend. USAspending.gov is a record of the intention to spend, not actual money spent. For that, we need Treasury data -- the checks actually paid out.
 
Moreover, many grants go to state governments that then pass the funds through to county or city departments or research organizations. And work public funds pay for is often carried out by nonprofit organizations or private companies. USAspending.gov doesn’t effectively track the flow of money down to nonprofits that deliver the services or firms that build the bridge. But of course that’s what we all want to know: Who is getting federal funds to do what? What Head Start program in my community will have to lay off teachers and send kids home because the grant it counted on was cut?  For that, we need “sub-recipient” information.
 
The federal government actually knows how to track funding that goes to subcontractors and sub-grantees. The $787 billion spent on stimulus projects in 2009-12 was tracked to subrecipients. Recovery.gov is the new prototype for transparency, but the rest of government has been slow to embrace its innovations and commitment to openness – even though the fraud rate under the program was less than 0.2 percent. (To put this in context, health care fraud represents three to ten percent of expenditures.)
 
A third problem with federal spending data is that not enough contract and grant information is included to allow people to understand exactly which activities the money funds. The information is in the contract, but not available for public scrutiny. Many states put contracts online; there is no reason the federal government cannot do the same. We suspect undue influence from defense contractors may be the reason. They fiercely fight efforts to reduce compensation taxpayers reimburse contractors for executives of companies that can currently charge the federal government up to $763,000 for executive salaries.


Relief could be on the horizon. The DATA Act, which passed the House in the last session of Congress and is expected to be reintroduced this session, would require agencies to submit better data, track that data to deeper levels of sub-recipients, and create an oversight board to keep improvements on track. The White House hasn’t weighed in, which is surprising given the president’s commitment to transparency.
 
State and local governments slashed services during the Great Recession. As sequestration takes hold and federal spending cuts deepen service reductions and kill jobs, the public should be able to see – without any ideological spin from the media or politicians – who is getting public funding and for what. If penny-wise and pound-foolish decisions about investments in our kids, infrastructure and economy are being made, someone should be held accountable.

McFate is president and CEO of the Center for Effective Government (formerly OMB Watch) , which is a member of OpenTheGovernment.org coalition.