This is the accessible text file for CG Presentation number GAO-09-
510CG entitled 'Challenges Facing The New Administration And The 111th 
Congress' which was released on March 16, 2009. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

Challenges Facing The New Administration And The 111th Congress: 

Before the JFMIP 2009: 
Federal Financial Management Conference: 
Washington, DC: 
March 12, 2009: 

By Gene L. Dodaro: 
Acting Comptroller General: 

GAO-09-510CG: 

Transition: Assisting The New Administration and The New Congress: 

Figure: Photographs of the White House and the U.S. Capitol buildings. 

[Refer to PDF for image] 

[End of figure] 

Figure: Screen shot of the home page of the GAO Website [hyperlink, 
http://www.gao.gov]. 

[Refer to PDF for image] 

Highlighted in the screen shot is the link to the 2009 Congressional 
and Presidential Transition page. 

[End of figure] 

Figure: Screen shot of the 2009 Congressional and Presidential 
Transition page of the GAO Website [hyperlink, 
http://www.gao.gov/transition_2009/]. 

[Refer to PDF for image] 

Links on the page include: 

* Urgent Issues. 

* Agency-by-Agency Issues. 

* Management Challenges Across the Government. 

* Major Cost-Saving Opportunities. 

* Upcoming Reports on Major Issues. 

* Long-Term Fiscal Outlook. 

* Working with GAO. 

[End of figure] 

Financial Markets and Economic Recovery: 

* Financial Regulatory System. 

* GAO Role in Financial Rescue. 

* Auditors of Bank Insurance Fund, FHFA, TARP and U.S. Government 
Financial Statements. 

* American Recovery and Reinvestment Act. 

Modernizing The U.S. Financial Regulatory System: 

Financial Regulation: A Framework for Crafting and Assessing Proposals 
to Modernize the Outdated U.S. Financial Regulatory System: 

* Explains the origins of the current financial regulatory system. 

* Describes market developments and changes that pose challenges to the 
current system. 

* Presents an evaluation framework that Congress and others can use to 
craft or evaluate potential regulatory reform efforts. 

(GAO-09-216, Jan. 8, 2009). 

Outdated Regulatory System: 

Risks Posed By: 

* Emergence of large, complex, and interconnected financial 
conglomerates; 

* Less-regulated entities are playing increasingly critical roles in 
the financial system; 

* New and complex products pose challenges to system stability and 
consumer protection. 

For Crafting or Assessing Regulatory Reform Proposals: GAO Framework: 9 Essential Characteristics: 

* Clearly defined regulatory goals in statute. 

* Appropriately comprehensive. 

* Systemwide focus. 

* Flexible and adaptable. 

* Efficient and effective. 

* Consistent consumer and investor protections. 

* Regulators provided with independence, prominence, authority, and 
accountability. 

* Consistent financial oversight. 

* Minimal taxpayer exposure. 

Financial Institutions and Markets: 

* Emergency Economic Stability Act of 2008 created TARP. 

* GAO given statutory oversight role. 

* GAO’s TARP reports recommendations follow 3 themes: 

- Monitoring the use of funds to meet the Act’s objectives. 

- Articulating a better communication strategy. 

- Ensuring effective Treasury management structure. 

American Recovery & Reinvestment Act: 

* Signed February 17, 2009. 

* Purpose: 

- preserve and create jobs and promote recovery; 

- assist those most impacted by the recession; 

- invest in science and health-care technology; 

- invest in infrastructure; 

- stabilize state and local government budgets; 

- Total cost, tax and spending: $787 billion, including: over $580 billion in additional spending (CBO estimate). 

Federal Auditor Responsibilities: 

* IGs: review federal program and agency implementation. 

* Recovery Transparency and Accountability Board. 

* GAO: range of responsibilities include: 

- conducting bimonthly reviews of selected state and localities use of funds; 

- commenting on the estimates of the number of jobs created and number of jobs retained; 

- reviewing areas such as trade adjustment assistance, new education incentive grants, and efforts to increase small business lending. 

Preparing for Our Responsibilities: 

* Selection of states and localities. 

* Outreach to IGs, state and local government auditors: 

- recent meetings of IGs and GAO staff; 

- teleconferences with State Auditors; 

- teleconference with Local Auditors. 

* Ongoing coordination. 

Other Urgent Issues: Timely Action Critical: 

* U.S. Efforts in Iraq, Afghanistan, and Pakistan. 

* Defense Readiness, Spending, and Care for Service Members. 

* Protecting the Homeland and Preparing for Public Health Emergencies. 

* Improving U.S. Image Abroad. 

* Food Safety. 

* Transition to Digital TV. 

Figure: Screen shot of Agency-by-Agency page on GAO's 2009 
Congressional and Presidential Transition site [hyperlink, 
http://www.gao.gov/transition_2009/agency/]: 

[Refer to PDF for image] 

This page includes links to 29 agencies. 

[End of figure] 

Figure: Screen shot of the Department of Health and Human Services page 
on GAO's 2009 Congressional and Presidential Transition site 
[hyperlink, http://www.gao.gov/transition_2009/agency/hhs]: 

[Refer to PDF for image] 

This page is an example of a specific agency, HHS, and includes a 
listing of HHS programs as well as challenges facing the agency. 

[End of figure] 

Figure: Screen shot of the Management Challenges Across the Government 
page on GAO's 2009 Congressional and Presidential Transition site 
[hyperlink, http://www.gao.gov/transition_2009/challenges]: 

[Refer to PDF for image] 

This page includes links to the following challenges: 

Collaboration; 
Acquisition Management; 
Real Property Management and Security; 
Human Capital Management; 
Crosscutting Issues in Information Technology Management; 
Results Oriented Decision Making; 
Financial Management. 

[End of figure] 

Figure: Screen shot of the Major Cost-Saving Opportunities page on 
GAO's 2009 Congressional and Presidential Transition site [hyperlink, 
http://www.gao.gov/transition_2009/opportunities]: 

[Refer to PDF for image] 

This page includes links to the following opportunities: 

Tax Gap; 
National and Homeland Security; 
Natural Resources; 
Insurance and Benefits; 
Financial Management. 

[End of figure] 

2009 High-Risk List: 

30 items grouped into four categories: 

* Broad-Based Transformation Challenges (e.g., DOD, DHS, surface 
transportation, food safety oversight). 

* Federal Contracting. 

* Tax Law Administration. 

* Insurance and Benefit Programs (e.g., Medicare, Medicaid, PBGC, flood 
insurance). 

Latest High-Risk List Additions: 

* Modernizing the Outdated U.S. Financial Regulatory System. 

* Protecting Public Health through Enhanced Oversight of Medical 
Products. 

* Transforming EPA’s Processes for Assessing and Controlling Toxic 
Chemicals. 

Long-Term Challenges: 

* Today’s focus, understandably, is on: 

- Dealing with financial system stress; 

- Addressing the economic downturn. 

* But... Underlying issues still need to be addressed: 

- Long-term fiscal challenge. 

- Sustaining progress on federal financial management. 

Figure: Long-Term Fiscal Challenge: 

[Refer to PDF for image] 

This figure is a multiple line graph depicting the following data in 
percent of GDP: 

Year: 2005; 
Federal Surplus/Deficit[A]: -2.6%; 
Combined Surplus/Deficit: -3.1%. 		 

Year: 2010; 
Federal Surplus/Deficit[A]: -5.04%; 
Combined Surplus/Deficit: -7%. 

Year: 2015; 
Federal Surplus/Deficit[A]: -5.19%; 
Combined Surplus/Deficit: -6.9%. 

Year: 2020; 
Federal Surplus/Deficit[A]: -6.77%; 
Combined Surplus/Deficit: -8.7%. 

Year: 2025; 
Federal Surplus/Deficit[A]: -9.23%; 
Combined Surplus/Deficit: -11.5%. 

Year: 2030; 
Federal Surplus/Deficit[A]: -12.02%; 
Combined Surplus/Deficit: -14.8%. 

Year: 2035; 
Federal Surplus/Deficit[A]: -15.07%; 
Combined Surplus/Deficit: -18.4%. 

Year: 2040; 
Federal Surplus/Deficit[A]: -18.25%; 
Combined Surplus/Deficit: -22.1%. 

Year: 2045; 
Federal Surplus/Deficit[A]: -21.55%; 
Combined Surplus/Deficit: -25.9%. 

Year: 2050; 
Federal Surplus/Deficit[A]: -25.02%; 
Combined Surplus/Deficit: -30%. 

Source: GAO January 2009 analysis. 

[A] Federal surplus/deficit is from GAO’s Alternative Simulation using 
the Trustees’ assumptions. 

[End of figure] 

Figure: Long-Term Fiscal Challenge Driven by Health Care Spending: 

[Refer to PDF for image] 

This figure is a stacked line graph depicting the following data in 
percent of GDP: 

Year: 2008; 
Social Security: 4.32%; 
Medicaid: 1.44%; 
Medicare: 3.24%; 
Total: 9.00%. 

Year: 2009; 
Social Security: 4.35%; 
Medicaid: 1.59%; 
Medicare: 3.28%; 
Total: 9.22%. 

Year: 2010; 
Social Security: 4.39%; 
Medicaid: 1.68%; 
Medicare: 3.32%; 
Total: 9.39%. 

Year: 2015; 
Social Security: 4.8%; 
Medicaid: 1.79%; 
Medicare: 3.71%; 
Total: 10.3%. 

Year: 2020; 
Social Security: 5.3%; 
Medicaid: 2.03%; 
Medicare: 4.45%; 
Total: 12.68%. 
	
Year: 2025; 
Social Security: 5.71%; 
Medicaid: 2.27%; 
Medicare: 5.35%; 
Total: 13.33%. 
	
Year: 2030; 
Social Security: 6%; 
Medicaid: 2.55%; 
Medicare: 6.26%; 
Total: 15.1%. 

Year: 2035; 
Social Security: 6.09%; 
Medicaid: 2.84%; 
Medicare: 7.00%; 
Total: 15.93%. 
	
Year: 2040; 
Social Security: 6.02%; 
Medicaid: 3.13%; 
Medicare: 7.58%; 
Total: 16.73%. 
	
Year: 2045; 
Social Security: 5.89%; 
Medicaid: 3.40%; 
Medicare: 8.01%; 
Total: 17.3%. 
	
Year: 2050; 
Social Security: 5.81%; 
Medicaid: 3.64%; 
Medicare: 8.40%; 
Total: 17.85%. 
	
Year: 2055; 
Social Security: 5.77%; 
Medicaid: 3.86%; 
Medicare: 8.78%; 
Total: 18.41%. 
	
Year: 2060; 
Social Security: 5.77%; 
Medicaid: 4.08%; 
Medicare: 9.21%; 
Total: 19.06%. 

Year: 2065; 
Social Security: 5.76%; 
Medicaid: 4.30%; 
Medicare: 9.63%; 
Total: 19.69%. 

Year: 2070; 
Social Security: 5.77%; 
Medicaid: 4.53%; 
Medicare: 10.03%; 
Total: 20.33%. 
	
Year: 2075; 
Social Security: 5.79%; 
Medicaid: 4.75%; 
Medicare: 10.38%; 
Total: 20.92%. 

Year: 2080; 
Social Security: 5.81%; 
Medicaid: 4.96%; 
Medicare: 10.69%; 
Total: 21.46%. 

Source: GAO analysis of data from the Office of the Chief Actuary, 
Social Security Administration, Office of the Actuary, Centers for 
Medicare and Medicaid Services, and the Congressional Budget Office. 

Note: Social Security and Medicare projections based on the 
intermediate assumptions of the 2008 Trustees’ Reports. Medicaid 
projections based on CBO’s January 2009 short-term Medicaid estimates 
and CBO’s December 2007 long-term Medicaid projections adjusted to 
reflect excess cost growth consistent with the 2008 Trustees 
intermediate assumptions. 

[End of figure] 

Federal Financial Management: Need to Continue Progress: 

* Significant improvements in federal financial management; but still a 
long way to go. 

* Important to ensure that information for decision-making is reliable. 

Federal Financial Management: Key Challenges: 

* Improve internal control—enhanced accountability and reduced improper 
payments. 

* Obtain clean opinion on U.S. government’s consolidated financial 
statements. 

* Improve extent and reliability of cost information for evaluating 
federal program operations. 

* Implement more effective federal financial management systems. 

* Improve federal grant accountability. 

* Streamline and enhance relevance and effectiveness of federal 
accountability requirements and practices. 

[End of section] 

On the Web: 

Web site: [hyperlink, http://www.gao.gov/cghome.htm] 

Contact: 

Chuck Young, Managing Director, Public Affairs: 
YoungC1@gao.gov: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: 

Copyright: 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. The published product may be 
reproduced and distributed in its entirety without further permission 
from GAO. However, because this work may contain copyrighted images or 
other material, permission from the copyright holder may be necessary 
if you wish to reproduce this material separately.