The Grace Commission's Major Proposals To Control Federal Costs

Testimony was given concerning the results of a GAO analysis of the major proposals of the President's Private Sector Survey on Cost Control, known as the Grace Commission. GAO found that many of survey's savings estimates are considerably higher than can reasonably be expected. In addition, GAO is concerned that the survey characterized its proposals as actions needed to reduce waste, abuse, and inefficiency when much of its work and the identified savings potential more precisely concern policy and legislative readjustment. GAO was able to endorse 45 of the proposals on conceptual merit. Additional savings may be possible by adopting some or all of the proposals for which GAO had to qualify its support or had no basis upon which to offer an opinion. GAO agreed that improving weapon system procurement practices would result in both savings and better quality weapon systems. However, GAO believes that adopting biennial budgeting for weapon systems without other needed improvements would be disappointing. GAO also questioned a military retirement system proposal's effect on national defense operations. In the opinion of GAO, it is not appropriate to implement a proposal involving health care costs, and GAO has concerns regarding a proposal to change the appeals process for persons who have been denied social security disability benefits. It was noted that some of the proposals in the program management area have already been addressed. In addition, GAO questioned the equity of proposed retroactive cuts in retirement benefits and believes that they could be subject to question in the courts. Finally, GAO disagreed with the concept of taxing means-tested benefits and felt that the implementation of such programs would be difficult because many means-tested programs are jointly administered by Federal and State Governments. However, GAO supports a proposal to increase tax return audit staff.