Recent GAO reports

From the Government Accountability Office (GAO):

STATE AND LOCAL FISCAL CHALLENGES: Rising Health Care Costs Drive Long-term and Immediate Pressures, GAO-09-210T (pdf, 16pp/356kB), Nov. 19, 2008

GAO's statement addresses three key points:
  • State and local governments' long-term fiscal challenges
  • Rapidly rising health care costs which drive long-term fiscal difficulties
  • Considerations involved in targeting supplemental funds to states through Medicaid during economic downturns:
    • delivering assistance as soon as needed
    • targeting assistance according to the extent of each state's downturn
    • temporarily increasing federal funding so that it turns off when states' economic circumstances improve
    • triggering so starting and ending points of assistance respond to indicators of economic distress

CONFIRMATION OF POLITICAL APPOINTEES: Eliciting Nominees' Views on Management Challenges within Agencies and across Government, GAO-09-194 (pdf, 155pp/1.13MB), Nov. 17, 2008

This report contains 35 appendixes, one for each of 28 major executive departments and agencies, and seven major government management areas. Each appendix lists key issues needing attention and a series of questions that Senate committees can use to assess nominees of the incoming administration in confirmation hearings.

Energy Efficiency: Potential Fuel Savings Generated by a National Speed Limit Would Be Influenced by Many Other Factors, GAO-09-153R (pdf, 10pp/304kB), Nov. 7, 2008

The report draws two conclusions:
  • Reducing a vehicle's speed can potentially increase its fuel economy, depending on the vehicle's characteristics. Factors that enhance fuel economy: engine efficiency (e.g., fuel injection), electronic and computer controls, more efficient transmissions, and hybrid technology. Factors that decrease fuel economy: increases in vehicle weight, performance, and accessory loads.
  • A reduced speed limit is only one of many factors that could affect total fuel use. Other factors include: drivers' compliance with a reduced speed limit, congestion in urban areas, road and weather conditions, driver behavior (driving less, buying fuel-efficient vehicles, aggressive driving), proper vehicle maintenance.

The Nation's Long-Term Fiscal Outlook: September 2008 Update, GAO-09-94R (pdf, 15pp/328kB), Nov. 6, 2008

GAO uses two fiscal simulations of what might happen to federal deficits and debt levels under varying assumptions. "Baseline Extended" follows the Congressional Budget Office's (CBO) September baseline estimates for 10 years and holds revenue and spending constant. The "Alternative" simulation is based on historical trends and recent policy preferences. GAO bases its simulations on Social Security and Medicare Trustees' projections and CBO's Medicaid projections. According to GAO, "Under either set of projections, the long-term outlook is unsustainable."

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Just in...vog

After March 12, 2008, when a new gas vent in Halemaumau crater significantly increased vog emissions, a House Special Committee on Vog Effects of the Hawaii Legislature was established. Hearings were held in the summer covering health and public safety, agriculture, and economic impacts. The Committee's report and supporting documents were recently received.

House Special Committee on Vog Effects Report (pdf, 20pp/784kB), Oct. 6, 2008
RA576.6 H32 2008

Supporting Documents to House Special Committee on Vog Effects Report dated October 6, 2008
RA576.6 H3 H33 2008

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Housing starts

Housing starts for 2009-2012 is the subject of a report from the Congressional Budget Office (CBO). Factors that determine housing starts include "the underlying demand for new housing units, especially the role of demographics; cyclical and financial conditions, such as unemployment rates and lending standards; and the number of excess vacant units."

CBO presents three possible scenarios:
  • Optimistic - housing starts already at their trough; rebound begins late this year, back to underlying levels by end of 2009
  • Cyclical downturn - housing starts remain below recent levels through 2009; construction recovers during 2010, rising to underlying rates in early 2011
  • Pessimistic - housing starts continue decline to end of 2009; slow rebound in construction, held back by vacant units and weak household formation; starts would not return to underlying rates until second half of 2012

The Outlook for Housing Starts, 2009 to 2012 (pdf, 36pp/180kB), Nov. 2008

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Still up in smoke

In the last 10 years, the states have spent just 3.2 percent of their total tobacco-generated revenue on tobacco prevention and cessation programs.

So finds the Campaign for Tobacco-Free Kids and reported in their newly released study. By 1998, all fifty states had reached settlement with the tobacco industry to recover healthcare costs related to smoking. The multi-state settlement, known as the Master Settlement Agreement (MSA) imposed not only restrictions on the marketing of tobacco but required "the tobacco companies to make annual payments to the states in perpetuity, with total payments estimated at $246 billion over the first 25 years." The Campaign's report states:
Ten years after the November 1998 state tobacco settlement, we find that most states have failed to keep their promise to use a significant portion of the settlement funds to reduce tobacco's terrible toll on America's children, families and communities.
Although receiving $203.5 billion in tobacco revenue, states only used $6.5 billion for tobacco prevention and cessation programs.

Ranking all states, the study found no state to be funding tobacco prevention programs at levels recommended by the U.S. Centers for Disease Control and Prevention (CDC). Only nine states fund tobacco prevention at even half the CDC’s recommended amount. Hawaii is ranked 4, funding $11.3 million for FY2009, 74.3% of the CD's recommendation of $15.2 million.
While states cut funding for tobacco prevention, tobacco companies dramatically increased marketing expenditures. From 1998 to 2005, tobacco marketing nearly doubled from $6.9 billion to $13.4 billion, according to the most recent data from the Federal Trade Commission.
A Decade of Broken Promises: The 1998 State Tobacco Settlement Ten Years Later - Campaign for Tobacco-Free Kids
Full Report (pdf, 142pp/740kB)
Executive Summary & Key Findings (pdf, 6pp/56kB)
State Rankings (pdf, 2pp/40kB)

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Defined benefit plans

Two papers on the state of public and private defined benefit plans in the current financial crisis were published by the Center for Retirement Research at Boston College. The briefs explore the loss of approximately $1 trillion each in public and private defined benefit equities between Oct. 9, 2007 and Oct. 9, 2008, and the different impacts on participants and plan sponsors in each sector.

The Financial Crisis and Private Defined Benefit Plans
      Report (pdf, 8pp/188kB)

The Financial Crisis and State/Local Defined Benefit Plans
      Report (pdf, 9pp/212kB)



Measuring benefits

The RAND Corporation issued a report, by Lynn A. Karoly, on measuring the benefits in benefit-cost analysis (BCA) of social programs. It discusses the use of economic value ("shadow prices" or monetization) in evaluating such programs. Its key findings:
  • Many important benefits that accrue from effective social programs are rarely, if ever, monetized
  • Shadow prices for outcomes valued in BCAs of social programs do not consistently capture the full range of societal benefits or costs
  • Even when there is a well-established literature for valuing outcomes, the use of shadow prices is not consistent across studies of social programs
  • Program benefits that extend into the future may be monetized, but uncertainty associated with future projects needs to be recognized
The study's focus is on programs in the following categories: (1) early childhood intervention programs, (2) education (K-12) intervention programs, (3) youth development programs, and (4) employment and welfare programs.

Valuing Benefits in Benefit-Cost Studies of Social Programs, Nov. 7, 2008
      Report (pdf, 133pp/1.28MB)
      Summary (pdf, 9pp, 151kB)




The Congressional Research Service (CRS) issued a paper on the role of the International Monetary Fund (IMF) in the global financial crisis. CRS sees the IMF mitigating the crisis in two ways: (1) immediate crisis management, and (2) increased surveillance of the global economy. For the first, the IMF activated its Emergency Financing Mechanism (EFM) to expedite loans and has available the Exogenous Shocks Facility (ESF) to assist low-income countries facing events outside their control. CRS says that the "deepening interconnectedness of the international economy" calls for greater cooperation between the IMF and international financial regulatory bodies.

The Global Financial Crisis: The Role of the International Monetary Fund (IMF), RS22976 (pdf, 6pp/76kB), Oct. 27, 2008, from Open CRS

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Recent GAO reports

From the Government Accountability Office (GAO):

CHECK 21 ACT: Most Consumers Have Accepted and Banks Are Progressing Toward Full Adoption of Check Truncation, GAO-09-8 (pdf, 66pp/1.38MB), Oct. 28, 2008

The Check Clearing for the 21st Century Act of 2003 (Check 21) was intended to streamline check collection by promoting electronic check processing and authorizing substitute checks--paper copies of the front and back of original checks--for banks that do not accept checks electronically. Check 21 required GAO to assess the following regarding check truncation: (1) gains in economic efficiency and benefits and costs to the Federal Reserve and financial institutions, (2) consumer acceptance, and (3) benefits and costs to bank consumers. GAO found no overall gains in efficiency by the Federal Reserve or a sample of banks but future efficiencies are expected; most bank consumers have accepted changes to their checking accounts and have realized benefits and costs relating to faster processing and access to account information.

GREEN AFFORDABLE HOUSING: HUD Has Made Progress in Promoting Green Building, but Expanding Efforts Could Help Reduce Energy Costs and Benefit Tenants, GAO-09-46 (pdf, 68pp/1.42MB), Oct. 7, 2008

The Dept. of Housing and Urban Development (HUD) spends about $5 billion annually on energy costs for public housing. For this report, GAO was asked to review (1) HUD's efforts to promote energy efficiency in its programs, (2) potential costs and benefits of green building in its affordable housing programs, and (3) lessons learned elsewhere that HUD could use for green building. GAO recommends that HUD require energy-efficient products and appliances in public housing, update the building code for manufactured housing, develop a utility benchmarking tool for multifamily properties, and provide nonenergy green building incentive points in some grant programs.

HEALTHY MARRIAGE AND RESPONSIBLE FATHERHOOD INITIATIVE: Further Progress Is Needed in Developing a Risk-Based Monitoring Approach to Help HHS Improve Program Oversight, GAO-08-1002 (pdf, 55pp/6.96MB), Sept. 26, 2008, released Oct. 27, 2008

The Deficit Reduction Act of 2005 appropriated $150 million in grants for Healthy Marriage and Responsible Fatherhood programs from 2006 through 2010. Both programs serve low-income and minority groups but Healthy Marriage programs target teenagers with marriage and relationship activities while Responsible Fatherhood programs provide parenting skills primarily to incarcerated parents. This report reviews oversight of the grants made by the Dept. of Health and Human Services (HHS) for these programs.

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