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Policy: Environment & Energy

GAO recommends scrapping failed auto loan program Energy Department wants to revive

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Department of Energy officials could save taxpayers at least $4.2 billion by scrapping a loan program the government said last week it wants to revive, according to Government Accountability Office Comptroller General Gene Dodaro.

The Advanced Technology Vehicles Manufacturing program, the same loan program that lost $139 million on Fisker Automotive, is one of dozens the government could axe or fix to save billions, Dodaro told the House Committee on Oversight and Government Reform during testimony earlier this week on a new GAO report about duplicative federal programs.

The GAO highlighted 11 federal programs it said duplicate each other, as well as another 45 that could be scrapped or fixed to save significant amounts of money, like the ATVM program.

Automakers are staying clear of the program, which hasn't awarded a loan in three years. Vehicle manufacturers told GAO the costs of participating, including a "burdensome" review process, outweigh the benefits, and the DOE hasn't done anything to address those problems.

The program's reputation has also been "tarnished" by failures like Fisker, the report said.

"Unless the Department of Energy can demonstrate demand for new Advanced Technology Vehicles Manufacturing loans and viable applications, Congress may wish to consider rescinding all or part of the remaining $4.2 billion in credit subsidy appropriations," the report said.

Disability payments, unemployment benefits and HIV/AIDS programs are among the programs duplicating or overlapping with other programs, according to the report.

Preventing beneficiaries from cashing both disability insurance and unemployment benefits at the same time would save $1.2 billion over 10 years, according to the GAO.

It's not currently illegal to receive money from both programs, because the rules for eligibility are different, but doing so means the government pays twice for one lost job, the report said.

"Individuals may be eligible for benefit payments from both Disability Insurance and Unemployment Insurance due to differences in the eligibility requirements; however, in such cases, the federal government is replacing a portion of lost earnings not once, but twice," the report said.

"Congress should consider passing legislation to offset Disability Insurance benefit payments for any Unemployment Insurance benefit payments received in the same period."

Taxpayers are also footing the bill for a similar overlap between state-administered unemployment benefits and the Federal Employees' Compensation Act, which does the same thing at a federal level.

Better information sharing between state and federal agencies would help the Department of Labor catch duplicate payments, the report said.

Another prime example of duplication is the 10 different but overlapping grant initiatives the Department of Health and Human Services has targeted toward helping minorities with HIV/AIDS.

The numerous programs together give about $3 billion in grants, but the fragmentation of efforts makes the administrative process burdensome for grantees.

Consolidating the initiatives would make them more effective, the GAO said.

The General Services Administration could save long-term by buying buildings to replace expensive leases, the GAO said.

Federal real property has long been on the GAO's list of problem programs because of its high number of leases and the years-long process for getting rid of excess buildings that cost millions each year maintenance.

Other areas GAO recommended for significant savings:

— Contracting for defense health care professionals

— Defense satellite control operations

— Collecting unpaid taxes

— Federal autism research

— Veterans' and survivors' pension benefits

Although the GAO reports on wasteful and overlapping programs each year, federal agencies don't track their programs' performance and budgets well enough to estimate how much these fixes could save, according to a GAO spokesman.

This lack of information is another problem the GAO wants agencies to correct.

"The lack of reliable, detailed budget information makes it difficult to estimate the cost savings that could be achieved should Congress or agencies take certain actions to address identified fragmentation, overlap, and duplication," the report said.

"Absent this information, Congress and agencies cannot make fully informed decisions on how federal resources should be allocated and the potential budget trade-offs."

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