Debt Ceiling Brinksmanship And The Necessity For Spending Reforms

By Adam Andrzejewski, author of Open the Books substack,

Testimony by: Adam Andrzejewski
CEO & founder, OpenTheBooks.com
United States Senate Committee On Small Business & Entrepreneurship
Tuesday, May 16, 2023

NOTE: The United States Senate Committee On Small Business & Entrepreneurship hearing was canceled. However, our prepared remarks are published here to educate the American people and inform the debate.

Mr. Chairman. Madame Ranking Member. Distinguished Committee Members & Guests.

Transparency is transformational. It revolutionizes public policy. We are a non-partisan, non-profit organization. Last year, we filed 55,000 FOIA requests. We successfully captured $8 trillion – nearly every dime spent by Federal, State and local governments.

We do this so the American people can follow the money and root out waste, fraud, corruption and taxpayer abuse. Here’s why that effort is important:

In 1997, my brother and I started a publishing business from scratch. Over 10 years it grew into a $20M company with 150 employees. However, in year three, we hit $1 million in sales – and ran out of cash. But for another dime’s worth of extra taxes, regulations, and fees, we would have gone out of business.

Twenty-three years later that company employs over 300 people across 23 states.

When you hike taxes or increase red tape, you crush small businesses – and the American Dream. 

All of us know the U.S. cannot default. So, The Big Question today is whether the debt ceiling will be raised – without instituting Meaningful Spending Reforms.

Giving Congress another blank check would be yet another mistake.

Here are The Three Keys To Understanding Federal Spending:

1. Government Is Distressingly Incompetent;

2. Insiders Routinely Rig The System And Then Game It; and

3. Criminals Have Gone Wild.

Did you know… 17 large federal agencies just admitted to $247 billion in Improper and Mistaken Payments. They paid the wrong person, the wrong amount, or under the wrong set of rules: That’s a quarter trillion dollars last year and distressing incompetence.

That misfeasance within the 17 largest federal agencies cost every man, woman, and child $818 last year. Therefore, it cost a family of four $3,200 – equivalent to two average mortgage payments!

You might not believe that Insiders Rig And Then Game The System, but consider just two quick examples:

1. Last week, we published an audit showing the top 20 U.S. non-profit hospitals racked up $124 billion in pandemic profits while pocketing $23 billion in congressional Covid-aid. Their net assets soared from $200 billion (2018) to $324 billion (2021).

2. Last December, we published an audit showing that BigLaw and Big Accounting firms took up to $10M each in forgiven PPP loans: In fact, 126 of the top 300 largest law firms and 236 of the largest 300 accounting firms pocketed $1.4 billion!

And The Criminals Have Gone Wild.

We have estimates that criminals, con-artists, and crime syndicates from around the world stole up to $400 billion – half of all unemployment aid. It’s the largest public fraud in American history.

So, we’ve just come through a period where nearly every federal program was either LEGALLY or ILLEGALLY looted.

THEREFORE, it ought to be a heavy lift to ask the hard-working American people to pay even more taxes; and then intimidate the American people by staffing up and arming up the tax collection agency.

YET, that’s what is happening.

In 2022, the Internal Revenue Service disclosed 85,000 employees. Now, Congress has allowed the Biden Administration to add 87,000 more employees – doubling the workforce.

Currently, there are 2,100 IRS Special Agents with arrest and firearm authority who must be willing to “use deadly force.”

In April, we published an audit showing, just since the pandemic, the IRS has purchased $10 million of guns, ammunition and military-style equipment for its special agents including nearly $1 million on AR-15 Smith & Wesson rifles and Beretta shotguns. These purchases add to the IRS existing gun locker of 4,500 weapons. 

The IRS is not going to war. So, just who is the enemy? Who is the IRS preparing to battle?

Summary: 

President Obama’s Chairman of the Joint Chiefs of Staff Admiral Michael Mullen stated “the most significant threat to national security is our debt.” We are losing that war.

Tax revenues are at an all-time high, but spending is even greater.

In 2001, our national debt was $5.8 trillion. Today it’s pushing $32 trillion. Bush, Obama, Trump, and Biden. 22 years. 6X increase.

Both parties.

Ultimately someone has to pay the bills. It’s us.

That’s why it’s time to cap spending.

We must end the incompetence, the gaming and the criminality that accompany the reckless use of other people’s money.

Thank you.

ADDITIONAL READING

$350 Billion Bailed Out States And Local Government In American Rescue Plan Act (ARPA) — Here Are The Details | By Adam Andrzejewski | Forbes | March 03, 2021

Los Angeles County, CA received $1.9 billion in ARPA funds. It’s so much money they pay their lifeguards up to $510,000! | By Adam Andrzejewski | OpenTheBooks.Substack.com | May 31, 2022

U.S. Sen. Tom Coburn’s Legacy — $552 Billion In Savings By Eliminating 1,299 Duplicative Federal Programs | Government Accountability Office (GOA) | May 11, 2022

Stop The Use It Or Lose It Year-end Spending Spree (Sen. Joni Ernst bill) | By Adam Andrzejewski | Forbes | October 30, 2021

End Improper Payments in the Largest Federal Programs — The 20 Largest Federal Agencies Admitted $2.3 Trillion In Improper Payments Since 2004 | By Adam Andrzejewski | Forbes | December 03, 2020