School for Scandal

The muddle concerns the “reports problem.” Since the beginning of the Republic, Congress has required the executive branch to supply reports on administrative actions, implementation of laws, and national problems, in modern times, the number of required reports has increased dramatically. Since preparing all these reports is costly, it makes sense to try to limit them. By 1980, a limit was obviously necessary: the number of reports had grown from 600 in 1963 to over 1,400. (These figures refer only to reports required on a repeated basis. In addition, there are 500 to 1,500 specific, one-time reports required in a typical year.)

So Congress got busy, passing the Congressional Reports Elimination Act of 1980 and the Congressional Reports Elimination Act of 1982. After all this legislative activity, how many reports were required in 19857 The answer is 2,800, twice as many as in 1980. Don’t laugh yet, Congress wasn’t done. In 1986 it passed another Congressional Reports Elimination Act. After much huffing and puffing, this act managed to eliminate a grand total of 25 reports. Meanwhile, the number of recurring reporting requirements continued to climb—to over 3,000 in 1990 (costing taxpayers an estimated $350 million per year).

What accounts for the strange failure of Congress to accomplish its announced intentions? The answer is that when the legislators actually look at the reports that are suggested for elimination, they realize that they need them. They provide information about the far-flung activities of the federal government. How can Congress regulate farming, mining, stockbroking, trucking, medicine, and so on unless it gets reports on the problems in these areas, and finds out about the flaws in its policies? So the reports have to stay.

The problem, of course, is that Congressmen can’t possibly digest and respond to all these reports. At this point, thoughtful members of Congress would conclude that they ought to restrict the scope of government to activities they could responsibly manage. Unfortunately, our lawmakers won’t admit they are over-extended. In asking for more reports than they can read, Congressmen have proven they are way out of their depth, but haven’t the sense to move to shallower water.

A close look at how reporting requirements begin illustrates the Congressional illogic. In a desperate effort to prevent further waste and corruption in the S&L bailout, Congress has mandated the production of several dozen reports from the Treasury Department, the Attorney General, and from an alphabet soup of agencies most people have never heard of: NCUA, SAIF, RFC, OCC, RTC, GAO, FHFB, FDIC, CSC, and OTS. Congressmen need these reports to master the subject in depth and exercise responsible oversight. But are they likely to digest and act on these reports? It’s a factual question, because we’ve been here before.

In the mid-1970s, a major scandal broke at the Department of Housing and Urban Development. Over 500 people were indicted in connection with a number of fraudulent practices. Congressmen, embarrassed that they hadn’t been minding the store, moved to prevent future scandals by requiring the Inspector General of HUD to make semiannual reports to Congress about “problems and deficiencies.”

The Inspector General filed his reports. As early as 1981, they told of overcharging, fraud, and unsound loans, and pointed out how the programs needed to be changed to prevent these abuses. But congressmen didn’t pay any attention. After all, there were thousands of other reports to read. Finally, in 1989, the HUD scandal broke in the media, and the nation learned that billions of dollars had been wasted. This time, 600 people were indicted.

Explaining why his oversight committee hadn’t looked into the HUD mess sooner, one senator said, “When you’re working with a trillion-dollar budget, with 100 different agencies and Cabinets, [we] can’t overview each of these agencies.” Obviously. Then, one asks, why not try fewer agencies? Unfortunately, the humility needed to accept this logic is in short supply in Washington. Congressmen will go on attempting to regulate what they can’t possibly understand, and the rest of us will go on paying for the costs of theft mismanagement.