Congressman Mario Diaz-Balart

Representing the 25th District of FLORIDA

Diaz-Balart on GSA Stimulus Funding: "The Potential for Waste is Huge"

Feb 11, 2009
Press Release

Washington, DC – The Economic Development, Public Buildings and Emergency Management Subcommittee held a hearing today on the economic recovery role of the General Services Administration (GSA), the civilian landlord of the federal government.

The current House and Senate stimulus packages both provide billions of dollars in funding to GSA, while providing for little effective oversight of how the funds will be spent.  The stimulus packages also focus more on energy efficiency rather than creating the most jobs. 

The following is the opening statement of U.S. Rep. Mario Diaz-Balart (R-FL), the Ranking Member of the Economic Development, Public Buildings and Emergency Management Subcommittee from today’s hearing:

(Link to video of Rep. Diaz-Balart’s statement)

“I thank Chairwoman Norton for holding this hearing today on GSA’s economic recovery role.

We must ensure effective oversight to avoid wasteful spending of taxpayer dollars.  We can not afford a TARP repeat.  In this case, Congress is proposing spending billions more and we have an obligation to ensure these funds will be used appropriately and not wasted.

Last month, the House passed the American Recovery and Reinvestment Act.  Yesterday, the Senate passed what is being called a ‘compromise.’

While the stated purpose of this legislation is to create jobs and promote economic recovery, there are real questions as to the whether the various proposals would, in reality, provide the taxpayers with the best return on their investment.

Specifically, we are focusing today on the General Services Administration.  The House-passed bill includes $7.7 billion for the Federal Building Fund.  The Senate is now proposing $5.5 billion.  In addition, there are billions more going directly to other agencies for their capital projects.

While the proposals provide additional funding to the Inspectors General and include some transparency provisions, I am still concerned that provisions that would provide for meaningful Congressional oversight of capital projects are not included in the legislation.

We know that at the Transportation and Infrastructure Committee hearing last month on the stimulus proposal, the GAO recommended three guiding principles for GSA projects:

(1) create well-defined goals based on identified areas of interest,

(2) incorporate performance and accountability into funding decisions, and

(3) employ the best tools and approaches to emphasize return on investment.

None of these practical suggestions to help avoid wasteful spending of taxpayer dollars has been incorporated into the legislation.  Instead, we have mechanisms that will only serve to highlight problems after money is already obligated or spent.

We know that the potential for waste is huge.  Federal real property has been on the GAO’s high risk list since 2003.  And, according to the GAO, long-standing problems in the federal real property area have multi-billion-dollar cost implications. 

Unfortunately, the proposals pending in Congress would appropriate billions of dollars with little accountability.  The funds for GSA will be going into the hands of GSA bureaucrats to spend however they see fit.

In fact, there seems to be little that would prevent the funds from being used for projects this committee intentionally rejected.

We can and should hold oversight hearings, like today’s hearing, but we know that GSA will be responding to competing interests.  And, given explicit language in the Senate proposal regarding courthouses, GSA could very well decide to spend $1 billion on a single project that this committee repeatedly refused to approve because of its wasteful nature. 

While such a project would be reported to the Appropriations committees and posted on the newly created Recovery.gov website, not even the standard checks and balances normally in place for such projects will apply.

The proposed bill not only ignores the prospectus process normally required for such projects, this committee is not even included in the reporting requirements mandated in the legislation. 

Another concern that I have relates to whether the proposal focuses enough on the actual creation of jobs, which is the stated purpose of the legislation.

For example, while energy efficiency is something that the federal government should strive for, it seems that energy efficiency and conservation is given greater consideration in the pending proposals than is job creation.

The House-passed bill gives priority to projects that will create the greatest impact on energy efficiency and conservation.  The Senate version goes even further to require that nearly half of the proposed funds are used to convert GSA facilities into High-Performance Green Buildings, as defined by the Energy Independence and Security Act. 

While creating efficient buildings is a noble goal that may have long-term benefits, it seems to trump consideration of the immediate need for job creation and stimulus.

If we are going to spend billions of taxpayer dollars to stimulate the economy and create jobs, we should have a bill that ensures such a stimulus effect is maximized.

One option, for example, is using acquisition as a stimulus. While the proposed bills do not explicitly mention acquisition of property as an option, they do allow for projects authorized under existing GSA authorities, which include acquisition.

Such authorities should be encouraged and I am pleased that GSA in its testimony says that it is exploring acquisition as an option.

There are many development projects that have either stalled or are at risk because of the economy.  This potentially creates an opportunity for the taxpayer to acquire needed property, at significant savings.

At the same time, such investments will help to stabilize economic development projects that local economies are relying upon to revitalize neighborhoods and create sustainable jobs.

However, I remain concerned. This legislation could be a good opportunity to put in place real solutions that may help address ongoing challenges related to real property management.  Instead, the proposed legislation seems to do little to address these concerns and, in fact, may lead to more wasteful spending.

We should not repeat the TARP mistake of writing a blank check.  There must be meaningful oversight and accountability.

I am drafting a resolution that will, at the very least, provide some direction to GSA on avoiding wasteful projects and spending.  The resolution would make clear that funds should not be spent on projects this committee has rejected, include this committee on any reporting requirements, and ensure that we know the number of jobs each project will generate. 

I would hope that this resolution could be a first step in providing some guidance to GSA and minimize the very real chance of wasteful spending.  I plan to introduce this resolution later today and I hope that other members of this committee join me in sponsoring it. 

While there are worthy and necessary projects in the pipeline that need to be funded and which may help to support needed jobs, we must ensure that such large commitments of taxpayer dollars are properly used and managed.  And, we must ensure that the priority is job creation.”