Revenue & Spending
New Senate Bill Would Advance Spending Transparency
The latest offering from the Senate on federal spending transparency is far less ambitious that its House counterpart, but if enacted, it would be a big win for transparency and accountability. There would still be some areas of spending transparency to be addressed in future legislation, but if the Senate's version of the Digital Accountability and Transparency Act (DATA Act) becomes law, the public will have a clearer picture of federal spending and new tools for accountability.
A Brief History of the DATA Act
Chairman of the House Oversight and Government Reform Committee Darrell Issa (R-CA) introduced the DATA Act in the House in June 2011. At the same time, Sen. Mark Warner (D-VA) introduced an identical bill in the Senate. The House's DATA Act is a wide-ranging bill that would establish a new, independent agency to oversee spending transparency, overhaul federal computer systems, create new data standards, and enhance recipient reporting. A slightly different version was passed by the House in April 2012 by voice vote with strong bipartisan support.
Recognizing the need for improved federal spending transparency, the Senate's Homeland Security and Governmental Affairs Committee held a hearing in July on the state of transparency. (You can read OMB Watch's summary of the hearing here). At the hearing, Warner appeared as a witness and said that his opinion on the DATA Act has "evolved." The result of that evolution and the adoption of feedback from colleagues and advocates in the transparency community have resulted in the version of the DATA Act that Warner introduced on Sept. 21 along with Republican co-sponsor Rob Portman (OH). This new version is slimmer than the House's, but it would still accomplish much for transparency and accountability.
What's in the New DATA Act?
Payment data from the Treasury Department
Unlike the current data on USAspending.gov, which displays only what federal agencies report they have promised to pay contractors and grant recipients, Treasury payment data would show users information on the money that actually went out the door. Both the House and the new Senate versions of the DATA Act would require the online posting of this information. This is an essential element of federal spending transparency and will provide a critical data quality check between agency obligation information and recipient reports. The DATA Act will put the nation's checkbook online.
An expansion of USAspending.gov to include spending data beyond contracts, grants, and loans
The DATA Act will expand USAspending.gov so that users will be able to analyze not just the $2 trillion paid to contract and grant awardees (and aggregate amounts paid to Social Security recipients), but the additional $1 trillion spent by federal agencies on facilities, salaries, and other expenses used to carry out the hundreds of programs run by the federal government. The previous version of the DATA Act would replace USAspending.gov with a new website, but the new version will build on the existing site that has been online since 2008. Data on budget authority, outlays, and obligations for every agency, component of an agency, appropriations account, and program will be included on the USAspending.gov website, bringing users closer to a true one-stop shop for federal spending information.
A spending transparency and accountability board
The centerpiece of the House-passed version of the DATA Act is the creation of an independent board to succeed the Recovery Accountability and Transparency Board that was successful in implementing the transparency provisions of the Recovery Act. That independent board would have its powers extended to all of federal spending while also taking control of USAspending.gov from the Office of Management and Budget (OMB), have subpoena power, be charged with the creation of common data elements and standards, and have a limited ability to promulgate requirements to agencies.
The new Senate version scales this board back quite a bit. Still called the Federal Accountability Spending and Transparency Board (FAST Board), it would be smaller and not independent. Intended to replace President Obama's Government Accountability and Transparency Board (GAT Board), it would "provide strategic direction" for federal spending transparency, monitor the creation of data standards and the publication of spending data, as well as look for ways to reduce waste, fraud, and abuse.
The creation of data standards
Currently, federal spending data formats and elements vary with each agency, making it difficult to mix and match data for central reporting. The Senate's DATA Act would charge the Treasury with establishing government-wide financial data standards, as well as create common data elements such as award identifiers. The bill calls for the standards to allow systems in different agencies to talk to each other, which will significantly improve the ability of websites like USAspending.gov to display federal spending data in more user-friendly ways.
This is also a major piece of the House version of the DATA Act. The Senate version contains similar language that would require spending data be created so that it can interact with multiple systems and use non-proprietary, platform-independent formats.
Act implementation and data quality reporting
Data quality problems have plagued USAspending.gov for years, and with this in mind, the authors of the Senate DATA Act have added provisions that work to ensure that agencies produce high-quality data. It requires the inspector general for each agency to report annually to Congress and the public on the accuracy, timeliness, and completeness of the spending data reported by agencies. The Government Accountability Office (GAO) would be responsible for reviewing these reports and create a ranking of the agencies based on the quality of their reported data.This new version of the DATA Act also holds agencies accountable in compliance with the implementation of the act. To do this, it will require the FAST Board to report annually to Congress and the public on the progress agencies are making in implementing the DATA Act. It will also require the director of OMB to report every 90 days on the cost of, progress achieved toward, and status of each milestone required in the implementation of the act.
How the DATA Act Can Be Strengthened
The DATA Act would accomplish a lot, but it would also leave important information on how federal funds are spent in the dark. Congress and the Obama administration would still have to address the problems with the existing corporate identification system, DUNS, which is an expensive and proprietary system. They would also have to extend federal funds recipient reporting to all tiers of sub-recipients; currently, we can see only two links in that chain: prime recipients and the first tier of sub-recipients.
Also not currently available to the public and Congress is the text of the contracts and agreements that the government makes with private entities, which would allow Congress and the public to know exactly what the government is supposed to be getting for what. And lastly, making detailed performance information available to Congress and the public is the first step in tying budget decisions to program improvement. The DATA Act is silent on performance information, but the technical infrastructure that would be built to meet the bill's requirements could facilitate a move toward relating program performance data to spending data.
The current battle over the federal budget and the looming, so-called "fiscal cliff" illustrate the need for the DATA Act. The first round of cuts under the Budget Control Act (BCA), set to go into effect in January 2013, has posed a very important question: "How will the hundreds of federal programs be impacted by $110 billion in across-the-board cuts called for in the BCA?" Progress in spending transparency like the kind envisioned in the DATA Act is aimed at allowing the public to be able to answer questions like these. Congress and the public have the right to examine the nation's checkbook, and having access to standardized, fine-grained spending data will allow us to hold officials accountable for budgetary decisions.