Game-Changing DATA Act Clears the House

Last night, the House passed with nearly unanimous bipartisan support a bill to shine a much brighter light on how the government spends taxpayer dollars.

This game-changing legislation, the Digital Accountability and Transparency Act (DATA Act, H.R. 2061), sponsored by House Oversight and Government Reform Chairman Darrell Issa (R-Calif.) and cosponsored by Ranking Member Elijah Cummings (D-Md.), would vastly improve the tracking of and accountability for how taxpayer dollars are spent. The House approved the measure 388-1.

The DATA Act would fix many of the holes in USAspending.gov, the current spending website, making it into a reliable system. USAspending.gov was created by landmark legislation advanced by Senator Tom Coburn (R- Okla.), then-Senator Barak Obama (D-Ill.), and Senators Tom Carper (D-Del.) and John McCain (R-Ariz.) in 2006 and 2008. However, in the years since it came online, the pressing need for upgrades in policies for its accuracy and effectiveness have been well documented.

The DATA Act gives USAspending.gov that much-needed upgrade and expands proven spending accountability policies. The bill provides government-wide data standardization, unique identifiers for contractors and grantees, and the combination of data coming in from separate reporting streams. When the information is more complete and reliable, ordinary citizens will be empowered to identify and prevent waste, fraud, and abuse related to federal spending.

The bill also extends the successful accountability platform created by the American Recovery and Reinvestment Act (ARRA or Recovery Act). The bill extends the life of the Recovery Accountability and Transparency Board by five years, allowing it to continue its excellent work rooting out waste, fraud, and abuse, and expands that work to cover all federal spending. The legislation also expands the Recovery Operations Center, which would be responsible for proactively reviewing and analyzing data for possible fraudulent activity. The accountability program from the Recovery Act proved extremely effective at minimizing waste and fraud in the Recovery Act spending and ought to be applied to all federal spending.

President Obama’s Open Data Policy directs agencies to standardize and publish all public data. The DATA Act mandates exactly that for five crucial types of spending reports: federal financial, payments, budget actions, grants, and contracts. We’re hopeful that the President will endorse the bill now that every House Democrat but one has cast a vote for it.

Unfortunately, while the current Senate version of the DATA Act (S. 994) has many reforms in common with this House-passed measure, it does not include the all-important accountability platform. Senators Mark Warner (D-Va.) and Rob Portman (R-Ohio) had included it in the bill they introduced earlier this year, but the Senate Homeland Security and Governmental Affairs Committee recently dropped it because of concerns from certain Members about cost. We think there are many reasons the accountability platform is a good investment and will quickly pay for itself. It would be a shame for the successful anti-waste and anti-fraud methods from the Recovery Act spending to be lost. It’s also unclear if the current Senate bill will produce checkbook-level disclosure, which is important for comparing planned and actual spending.

POGO applauds the House and the bipartisan champions of the DATA Act. We urge Congress to make the best reforms from both versions into law.

Other key reforms in the House-passed DATA Act include:

Linking transaction-level obligations (such as the signing of contracts and grants) with the checks that are actually cut. USAspending.gov will also include information on the nature of budget obligations (such as personnel compensation or contracts). The Department of the Treasury will be responsible for improving USAspending.gov and collaborating with the Office of Management and Budget, the General Services Administration, and the heads of other agencies to develop data standards.

Launching a three-year pilot program to study the effects of such reporting on a smaller scale, instead of requiring recipient reporting across the board. If consolidated reporting proves its ability to increase financial transparency and reduce the compliance burden on federal awardees (and we think it will), a stronger case will be made for universal recipient reporting in the coming years.