U.S. bureaucracy wastes billions, watchdog says





NEW YORK (CNNMoney) -- The U.S. government could save tens of billions of dollars a year by streamlining a bloated federal bureaucracy, according to a report Tuesday from the Government Accountability Office.

In its first annual report on the subject, the GAO reviewed a wide range of federal programs, agencies, offices and initiatives to identify where the government is duplicating its goals or activities.

The report, requested by Congress last year, lists 34 areas where programs have overlapping objectives or provide similar services. It outlines 47 other areas where Congress could take steps to improve the efficiency of federal programs and agencies, according to the 345-page report.

The GAO did not say exactly how much the inefficiencies cost taxpayers each year, but the report states that "savings and revenues could result in tens of billions of dollars in annual savings, depending on the extent of actions taken."

Sen. Tom Coburn, the Oklahoma Republican who requested the report, estimates that the duplicative programs cost the government at least $100 billion annually.

"We are spending trillions of dollars every year and nobody knows what we are doing," Coburn said in a statement. "The executive branch doesn't know. The congressional branch doesn't know. Nobody knows."

The report comes as Senate Democrats and House Republicans work toward a deal on how much federal spending should be cut this fiscal year, which ends Sept. 30.

In addition, a bipartisan group of senators, including Coburn, is hoping to introduce a long-term debt reduction framework in the months ahead.

Among the duplications listed in the report, the GAO found 80 programs that provide services for "transportation-disadvantaged persons."

The GAO also identified 82 programs aimed at improving teacher quality spread across ten different federal agencies. "Proliferation of programs complicates federal efforts to invest dollars effectively," the report states flatly.

In addition, the report recommends better coordination among programs designed to help the homeless, provide job training and increase literacy.

The effectiveness of the government's many economic development efforts, including over 100 programs to improve surface transportation, were also questioned by the GAO.

The Obama administration has made investing in infrastructure a centerpiece of its economic stimulus plans. But programs involved in "surface transportation" lack clear goals and are not accountable for results, the GAO said.

The five agencies within the Department of Transportation administer over 100 separate programs for highways, transit, rail and safety functions. Those programs cost more than $58 billion annually, according to GAO.

To increase accountability and improve efficiency, the GAO says "a fundamental re-examination and reform of the nation's surface transportation policies is needed."

The report said addressing duplicative efforts by the Environmental Protection Agency and the Treasury Department to boost domestic ethanol production could save up to $5.7 billion annually.

The nation's "fragmented" food safety system is ineffective and should be consolidated, according to the GAO

In the defense arena, the GAO said up to $460 million could be saved if the Department of Defense enacts a broader restructuring of the military health care system.

The GAO said periodic reviews of the nation's tax code could close loopholes that cost the Treasury billions of dollars a year.

Among the more structural changes in the report, reducing some farm program payments could yield savings to up to $5 billion annually.

Improving management of federal oil and gas resources could result in savings of about $1.75 billion over 10 years, the report said. Selling property owned by agencies such as the Defense Department, General Services Administration and Department of Veterans Affairs could raise $3 billion.

The GAO also recommends that Congress address certain inefficiencies at the IRS, Department of Health and Human Services, and the Social Security Administration.