Vice President Biden Hosts "Campaign to Cut Waste" Cabinet Meeting

Vice President Biden: Hello, folks, how are you?
I apologize.
And I can't even blame it on the President.
You heard his helicopter take off, so I --
(laughter)
Thank you all very, very much for being here.
And I particularly thank the Cabinet members who are up to
their ears in a lot of work, and I'm sorry to keep you waiting.
I know you're equally busy as I am.
You know, when the President and I ran for office,
we made a basic fundamental commitment for real,
and that was this we want our government to work better.
Because as long as there's waste and fraud in government and
serious waste and fraud, people lose confidence in the ability
of their government to do their job for them,
deal with their taxpayers' dollars.
And when taxpayers' money is wasted in a fraudulent behavior,
it robs the taxpayers not only of their money,
but undercuts the ability to us to serve the people we're
elected to serve.
And so we decided, and you all decided with us,
the reason in part why you were each chosen for the Cabinet spot
you were chosen for, that we'd be committed to transparency and
accountability and the responsibility we had for
husbanding those tax dollars.
And we brought that philosophy, the Recovery Act.
You're all probably, look, here comes Joe again,
how many times have we sat around this table on the
Recovery Act.
But I think -- I don't think -- I know you did an incredible job
in making sure that the taxpayers' dollars were
spent as advertised.
When we all sat down, a number of you gave me a lot of ideas
early on in the Recovery Act trying to drag this economy
out of the hole, the cliff it was about to fall over.
And you got some great ideas.
Some of you are former governors, were military
people, business people.
And we came up with a new way of doing business, literally.
We went and got the toughest inspector general in the entire
United States government.
We got a guy named Earl Devaney, and we asked Earl to put
together a group of nine other inspectors general,
we asked him to go out and survey what was going on in
all of your agencies.
Particularly, by the way, in the FBI, the CIA,
the defense agencies.
What tools were they using?
What new modern tools and devices were available to
them in order to detect when things weren't going right?
And so we ended up putting together -- we -- we had Earl
Devaney put together the Recovery Operations Center.
I would recommend to any of the press here,
if you hadn't had a chance to go see that center,
it is -- it is top line.
It is using all the modern technology we have to be able
to detect fraud in many cases before it actually happens.
And when it curse, to find folks and actually put them in jail.
And the studies of that board and the operations center and
our husbanding and you're husbanding that money for
the American taxpayers shows that that program,
which was predicted to have gigantic amounts of waste and
fraud, had less than 1/10 of 1% of the money
was spent fraudulently.
And we've gone after those people.
And so this is the kind of accountability we have to, and,
again, this wasn't my idea, a number of you came to me
and said why don't we institutionalize this
kind of accountability government wide, permanently.
And so what we're doing today is,
we're going to talk about a few of the things that are going on
in your departments, but how we're going to -- we're
beginning and we have been institutionalizing the same kind
of methods and holding ourselves equally accountable for every
taxpayer dollar that's spent.
In the area of Medicaid, for example,
the Department of Health and Human Services is launching a
new program to cut waste in Medicaid.
Well, you know, let me give you a couple examples.
You know, what happens out there,
and we've done this in terms of Medicare,
folks are double billing for a lot of things,
costing taxpayers tens of millions of dollars.
For example, you know, they're authorized -- an elderly person
is authorized to have a wheelchair.
Well, the motorized wheelchair comes along with battery
chargers, cushions, wheels, et cetera.
That's the package.
But guess what's happening?
Medicare is being billed first for the wheelchair and then they
get another bill for the wheels, and they get another bill for
the battery charger, et cetera.
And the battery charger for them,
that's a couple hundred bucks; the wheels are 100 bucks apiece.
And so this money adds up to a whole lot of money.
And so as Kathleen will -- the Secretary will talk about this
in a minute, they instituted a way to better focus on and
account for the money going out for these kinds of things.
And as a consequence of that, there was,
last year we saved 600 and -- you saved $670 million.
But here's how we did it.
We went to private enterprise and we said, look,
you all folks are setting up accounting mechanisms to go out
and check where this -- my money went.
If you find the fraud, you recover the money;
you get a piece of the money.
Even after they got paid for getting a piece of the money,
it was $760 million back in the Medicare account.
And we can do the exact same thing with Medicaid,
the same thing with Medicaid.
And it's estimated that over five years,
we can save the taxpayer $2.1 billion.
Now, that's not just saving the money.
It means that we have Medicare and Medicaid for a reason.
People need the help.
And when somebody essentially steals over $670 million from
it, it's not only taxpayers' money that's wasted;
it's some poor son of a gun who isn't getting the kind of care
and help they should get.
And so Secretary Sebelius is going to have more to say about
this in a moment, in case she's forgotten more about it than I
know, but the truth of the matter is we can do better
and we are doing better.
And unemployment insurance, and you're going to hear from
Secretary Solis about this a little bit, you know,
you all know, because it's the reason why we're all
engaged in government.
There's a people hurting, man.
They're hurting very, very badly.
There's people going to bed, that went to bed last night
staring at the ceiling wondering whether or not they're going to
have the money to stay in that house a month from now,
whether they're going to have to pick up the phone and call their
daughter at the state university and say, honey, I'm sorry,
you can't go back, I lost my job.
Or they've lost their job and there's no help,
there's no unemployment insurance.
Well, what's happened is we've done an extensive study,
which we're going to -- that Hilda will talk about,
and we found out that -- well, we already knew,
but we've identified more clearly,
an awful lot of money being wasted -- jack will speak to
this, as well -- an awful lot of money being wasted,
billions of dollars.
But one of the things we found out is the states,
and they're going to talk about this,
the states are the ones who actually tell us who's the
one that should get the unemployment check.
The states are way behind the curve.
They're not bad, they're trying their best,
but they're way behind the curve.
They don't have the technology needed to follow this,
they don't -- so what's happening.
Unemployment checks are going to people in prison.
Unemployment checks are going to graveyards.
You know, the old joke about people -- the grave
-- headstones vote.
Well, guess what?
Headstones are now collecting unemployment
insurance in some places.
And it's a gigantic waste.
There are people who are already on unemployment,
are continuing to get unemployment,
even after they've gotten a job before they've been paid.
So you get a job and your first paycheck doesn't come for two
weeks or a month.
Well, because the states don't have the mechanisms available,
they're continuing to pay that unemployment insurance with
somebody already started work.
Well, that adds up to a lot of money.
And so what we're doing here is by come up with 100 -- and Jack
will talk a little about this -- $192 million in
grants to the states.
And, you know, we're going to -- the press,
you'll get all of this.
But what we're finding is, there's $192 million in awards
to states to invest in new technologies,
like the ability to compare unemployment claims against
death records, prison records and importantly hiring records.
Now you say, well, why don't we do it?
Well, states don't have that technology, a lot of them now.
And when we found out, second, we're going to put this online
map you are going to see so that everyone can see which states
are doing well and which states are not doing well.
We want the country to be able to hold us and the states and
every government official accountable.
And we're identifying six states,
six states with very high error rates.
And by the way, this is not contrary to the governors.
The governors are asking us for this help.
Some of these governors said they need the help and they're
looking for us to help them provide that help,
because they want to clean this up, too.
So as I said, Secretary Solis is going to give you more about
these efforts in a minute or so.
And thirdly, I've asked every Cabinet agency to undertake a
total review of additional savings that can be identified.
Because, again, we're all committed
to accountability here.
It's the same thing we did in the Recovery Act.
So this is not -- what we learned,
and I learned it from the cabinet members,
what we learned is when you put one person in charge in your
agency, they're accountable, they're accountable for the
ideas, they're accountable for the dollars.
As my father would say, there's nothing like focusing attention
other than holding you accountable.
And so Secretary and Cabinet Secretaries have a thousand
things to do every morning when they get up.
There should be someone in their operation who have one thing,
one thing in mind, going and trying to root out waste,
fraud and abuse.
Homeland Security.
Governor -- I keep calling Janet "Governor,"
because she was a great governor.
She's also a great Secretary.
By the way, you all did a great job over this last weekend.
I want to -- and I know the incredible amount of work and
coordination with your foreign counterparts and your local
counterparts, you did.
Anyway, you did a great job.
But here's the deal.
Homeland Security, and Janet has already found a way to save a
billion dollars, is pretty straightforward.
They sat down like a business would and said, okay,
you know that ad on TV about, you know,
Charlie's jumping on a plane to go speak with a customer,
and the accounting guy comes in and says, wait a minute,
you can teleconference with that customer.
You can save a lot of money and a lot of sweat.
Well, what they've done over at DHS is they've cut down on
travel, they use teleconferencing,
they've cut down on -- sounds strange -- the subscriptions of
magazines and newspapers, doesn't sound like much.
But all this stuff really adds up.
They're cutting cell -- the unused cell phones that are
on a shelf, they're taking them off, decommissioning them.
And these and other things like this,
they've saved a billion dollars.
But another way they've saved a billion dollars is they go out
and they're buying in bulk.
Instead of going out and buying all this computer programming,
they're buying it in bulk.
You know, you know, Sam's club does it, you know.
I mean, but all kidding aside, this adds up to real dollars.
And now Janet -- the Secretary is going to have more to say
about this.
But, again, I'll give you another example.
I can't resist, I'm stealing your thunder here,
but this one just makes so much sense.
You know, DHS buys almost 20 million gallons of
gasoline a year.
Now, a lot of that's for their vehicles along the border.
At, now, roughly $3.60 a gallon.
Now, they're not talking about joining with the
Department of Defense.
The Department of Defense and DHS decide to negotiate to buy
in bulk, which they're doing, they can buy that gasoline at
roughly 2.97 a gallon.
That's a lot -- that's a lot of money.
That's a 20% savings.
Now, you say, well why didn't we do that before?
Well, we didn't have Janet Napolitano before, you know.
I mean, all kidding aside, this is -- this is a way we can just
be more accountable to the taxpayers.
And for example we're also working with -- these ideas
aren't unique to Democrats or this administration or,
you know, Senator Coburn, Senator Coburn is an old
friend and a staunch critic, but we're working with him.
Senator Coburn's come up with a number of ideas about how we can
eliminate waste in doing everything from eliminating
brochures and newsletters and so on and so forth.
I'll give you one example.
When we're doing the Recovery Act,
remember we were doing Lake Ontario,
and we were doing some work on that.
And I got a call from somebody up in Syracuse where I went to
law school and said, you know, the corps is going to spend 100
-- I think it was 100 -- don't hold me to the exact number --
I think it was 110,000 bucks sending out brochures in the
area to tell people what they're doing.
And I said, whoa, whoa, post it, you know.
We've got a thing called the Internet, you know.
We've got a change, you know, you don't have to
spend that money.
Now, it only saved 110, but that's a lot of money.
Well, doing that system wide, we can save an awful lot of money.
And so this is something, as I said,
we did in the Recovery Act, and now to go -- the guy's forgotten
more about all this than any of us know, he's Jack Lew.
And I know, Jack, you and I are supposed to
be somewhere at 11:30.
But what I'd like to do is turn it over to Jack,
because OMB is the engine behind all of this.
And then after Jack, I think the order in which we're going to go
is I'm going to turn it to Secretary Sebelius and then
Secretary Solis and then Secretary Napolitano and then --
and then we're going to ask the press to leave so we can have
some real discussion about how each of us can do what we're
doing a little bit better.
Because the one thing we learned last time, guys,
we learn from one another.
I mean, the ideas that came out of Energy help Commerce,
Commerce helped -- and so that's where what we want to spend some
time doing.
We're deadly earnest about making this a government wide
-- government wide -- permanent program to account for the
taxpayers' dollars.
With that, Jack, the floor is yours.
Secretary Lew: Thank you, very much, Mr. Vice President,
for that very kind introduction.
And thank you for the leadership that you've shown in taking this
issue, which is central to whether we can perform at peak
efficiency for the American people and making sure that the
whole government focuses on it, the whole Administration
focuses on it.
As I think you and everyone here knows,
this is the kind of stuff that OMB thinks about all the time.
It's not always that we have a Vice President to share in that
leadership and burden, and we greatly appreciate it.
We've been working hard at OMB for the last three years to try
and help the Vice President and the President implement
this program.
And we've made real progress.
If you look at contract spending,
it's shrunk for the first time in 13 years.
We've reduced the amount we spend on contracts.
If you look at I.T. projects, an area where there's been
tremendous cost overruns, we found $3 billion in
cost reductions.
Working together with everyone in this room,
our partners in the agencies.
And if you look at improper payments, errors in payments,
we've helped agencies to avoid $4 billion in improper payments
and we've tripled our recoveries of improper payments.
An important priority that we've set, again,
working with the departments, is to dispose of unused federal
real estate in a way that will bring back to the American
people the value of properties that frankly cost us money just
to keep them open when we're not using them.
And we are committed to working aggressively to achieve the
President's goal of at least $3 billion of savings from that.
Since the President issued his executive order launching the
campaign to cut waste, and since you've taken over the leadership
of it, Mr. Vice President, we've been working closely with the
chief financial officers across the government,
with the Deputy Secretaries, to make sure that in each
department, in addition to the Secretaries owning this issue,
that there is a structure underneath that's coordinated.
This is a very challenging budgetary environment.
I don't think I need to tell anyone in this room that we
are going to be in a situation where every dollar we spend is
going to have to be very carefully scrutinized.
It's always important for us to achieve these kinds of savings
because that's the right way for us to exercise prudent
stewardship over public resources.
But in this environment, it will have to do with whether or not
we have the resources to perform our core missions.
So it takes on an even higher level of urgency.
The President has made this a top priority of his.
It's a top priority of ours at OMB.
And with your leadership, Mr. Vice President,
I think we're making real progress in this area.
We'll continue to work with the team in this room and all of the
people who support you and we're committed to delivering on the
promise of having a government that meets the President's and
your standard of operating at peak efficiency.
And with that, I am proud to turn it over
to Secretary Sebelius.
Secretary Sebelius: Well, thank you, Jack, and Mr. Vice President.
I do appreciate your leadership and your focus on this,
because as you say, having some accountability, I think,
is important.
And having a leader like yourself direct us all to pay
attention is also incredibly important.
I just wanted to tell you about a couple of things,
as you mentioned, in the Department of Health and
Human Services.
We are really focused on critical health programs.
Not only to save dollars but to make sure that the one out of
every three Americans who relies on Medicare or Medicaid have
those resources for health services and not for fraud
and waste.
We are releasing a final rule for the Medicaid recovery audit
program, audit contractor program today,
which is modeled after, as you say,
the successful Medicare recovery audit contractor program,
which has already started to save money, 670 million in 2011,
which is 800% over where we were in 2010.
So while those numbers are building.
The good news about the Medicaid program is that also it adds to
the state coffers.
This money is shared both with the federal government
and with states.
The President clearly directed the Attorney General and me to
have an enhanced focus on fraud and abuse and created a new
effort to crack down on Medicare fraud.
There are a lot of new tools in the Affordable Care Act.
Probably one of the strongest antifraud bills ever passed in
the history of the Medicare program in 45 years,
and earlier this month, the Attorney General and
I announced our largest single takedown ever,
91 defendants accused of stealing more than
$320 from Medicare.
That's never happened before and we have now seven strike forces
on the ground in hot spots around the country,
thanks to the tools.
We also, for the first time, have a leader in the department
who is at CMS, in charge of program integrity,
who's building a series of models,
including tougher screening procedures for providers before
they can start billing, investigators have new data
tools, we have a new systems and they're using finally what the
private sector has used for years,
sort of building models that let us track errant billing
procedures and identify them before the money goes
out the door.
So I can report, Mr. Vice President,
that there's never been a worse time to try and steal
from Medicare and Medicaid.
We're taking these directions very seriously.
And we are going to keep working.
We are pleased to have two leaders on your new government
accountability and transparency board from HHS.
And have a department wide program integrity
council in place.
So we're trying to make sure that the dollars directed to
be spent for health care services are, indeed,
spent in that fashion, and go after folks who would try and
defraud that system and steal those precious dollars.
So I am pleased to report that we'll continue to work
on these efforts.
And I want to turn over to my good friend and partner,
Secretary Solis, who's working on behalf of working Americans
each and every day.
Secretary Solis.
Secretary Solis: Thank you, Secretary Sebelius, and also congratulations,
Vice President Biden, for your ongoing effort to help root out
fraud and abuse in the government.
I want to take this opportunity to say that we also are very
committed at the Department of Labor to provide the best
systems in the unemployment insurance case.
And we have different tools that we're going to be utilizing.
And before you, you have some handouts that you can also take
a look at.
But I do want to say --
Vice President Biden: Do the press have these handouts?
Secretary Solis: I think everybody -- we also have these charts here.
Right.
Vice President Biden: Pretty impressive.
Secretary Solis: First of all, people need to understand that because of the
downturn in the economy, there's been a tremendous strain on our
UI system.
And I've seen it and heard it from our governors
across this country.
And due to that restraint, I believe you've seen an increase
in improper payments.
In fact, it's up to about 11.2% of uninsurance claims
that are improper.
And that adds up to about $17.5 billion in funding.
Needless to say, we know that these numbers are really high.
And while people used to use telephones before -- I'm sorry,
they're using telephones now and going online,
you used to have someone that you'd have to go into the local
office and actually have someone have face time with you.
That has been actually cut out of the system now for many,
many years.
And as a result, you see a lot of false statements that are
being detected now that we're picking up because
of technology.
So in one way, yes, it can help.
On the other hand, this is what has happened.
Unfortunately, some of our states haven't been able to
provide the necessary support services to make sure that we
can go after any improper payments.
And part of it is is because of the burden,
the burdened system right now and Vice President Biden,
you laid that out very clearly, that our systems are strained
at the state level.
And in fact, what has happened is many governors are using
their resources to help us expedite the processing of
getting these UI benefits out in some cases.
And what has happened as a result is that you lose
integrity in the program because you don't have then other staff
to go out and follow up and detect where these abuses are.
So three things that I think are major for us to point out when
what occurs in improper payments.
About 30% of these payments go to people who continue to
receive claims after they return to work.
So that's a big problem.
Another 30% are payments to people who fail to register with
the state employment service or meet their work requirements.
And that's because a lot of people are doing things online,
you don't have to necessarily go in.
But we do require people to continue to job search and
they're able to call that in.
But we need to have more assistance in making sure that
there's transparency and accountability.
Another 20% of the improper payments is due to inaccurate
information about the reasons for separation
from the last employer.
And that also is a systems problem.
We don't have a system set up where businesses can say, well;
these are the folks that are indeed on our payroll.
So we need to have better connectivity there.
So in June, we brought back together task forces to look
at some of the 11 high impact states to develop
a comprehensive strategic plan and to share the best practices
that we know are working.
So we've been working on this for now over almost a year to
try to help and provide assistance to the states.
Because we're finding that a lot of governors really do want to
do the right thing, Mr. Vice President,
except they lack direction and guidance on behalf of
the federal government.
So we want to do whatever we can.
So in the next few months, our target priorities for those
states that are really out of whack, so to speak, are Utah,
Georgia, Colorado, New Jersey and Ohio.
And what we intend to do there is to reduce the inaccurate
information about how workers became employed.
Those are some of the things we'll do.
We're also encouraging our state agencies to utilize what we call
the National Directory of New Hires to reduce improper claims.
Many of our states don't utilize these tools that are available
now so we're going to ask them to step up to the plate.
And today I'm excited to roll out our new online effort to
bring attention to this problem and the strategies that states
can and should utilize to lower their improper rates.
So if you were to click on visitors could go to www.dol,
this is the chart that you'd see and you'd be able to take a look
and all of you have a handout there showing you the most
egregious cases by our states here, that's listed here,
in terms of improper payment.
So that will give you an idea.
Anybody, press, constituents, and some of our elected
officials should be very interested in looking at this.
And it identifies each state's improper payment rate and the
total dollar amount lost to these payments over
the last three years.
If you click on and go to the next slide,
you'll see where states will give you an idea of what their
specific improper payments are.
And there's a category, the pie chart,
as well as where they stand in terms of their status,
if they are helping to meet their -- our criteria as we
monitor them.
And obviously what we want to see on the last slide
are more green dots.
The green dots mean that they're complying.
The ones that have check points, they're there,
but they're not quite there.
So we'll be doing this on a quarterly basis and be able to
give, I think, readily available feedback to the different states
and to the people that are involved in this.
So I think this is a good tool that can be used by everyone.
And it falls along the lines of transparency,
Mr. Vice President.
So I believe that what our goal is to drive down that improper
payment percentage down below 10%.
So we'll be looking at this in a six-month period going back
and providing technical assistance as best we can,
and sharing best practices with other states and agencies
to make sure that we meet our goals.
The last thing I would say is that, Mr. Vice President,
we're going to do everything we can to try to work with our
partners in those different states that we know want to
do the right thing.
So with that, I will turn it over to Secretary Napolitano,
who will talk about her plans for Homeland Security.
Secretary Napolitano: Well, thank you, Secretary Solis, Secretary Sebelius,
Mr. Vice President.
I'm going to talk about the Department of Homeland
Security's efficiency review program that we started shortly
after coming into office.
And I get to speak, but I brought Amy Shlossman,
Maryann Roth, and Dan Grant with me,
and they've really been the driving forces behind it.
So I get to take credit for all the work they've done.
And what we did is we -- you know,
Department of Homeland Security, as some of you may know,
was created in the wake of 9/11.
It's 22 different agencies that were put under one umbrella a
few years ago.
And as you might imagine, there's all kinds of different
personnel practices, acquisition practices, training practices,
purchasing practices and the like.
So as part of knitting this department together as one DHS,
we began looking at efficiencies that we could achieve while
doing that.
And so we put together an efficiency review committee.
It is -- includes employees from around the department.
It's actually called the office now of efficiency review.
And it works on not only getting proposals from within the
department and looking at other outside business practices,
but also deciding I would ones are worthy to pursue.
We've pursued 36 different ER initiatives.
They have, as the Vice President said,
saved at least a billion dollars already.
And that doesn't include 800 million in cost avoidance we
identified for FY 12, and another 800 million in
acquisition reform costs that we've been able to avoid.
So you're talking very quickly about major dollars that also
increase efficiency and streamline the delivery of
government services to the people of our country.
Let me give you a few examples, just to give
some flavor to this.
As the Vice President mentioned, we now do annual audits of cell
phones and Blackberries.
And when we save $10 million by disconnecting the ones that
people don't use, you know, everybody wants the newest
thing, you know, the new Blackberry, whatever.
But we're actually looking to see who uses them.
And if you don't, you don't keep it.
We've saved 15 million by redeploying excess I.T.
equipment such as servers and computers instead of
buying new equipment.
So we moved things around to where they can still be used.
We've optimized our motor vehicle fleet and we've begun
the transition to hybrid vehicles leading to almost
$40 million in cost avoidances since 19 -- or since 2009.
And we stop programs that don't work and find lower,
better -- lower cost, better alternatives.
One of the ways we've done this is,
in addition to an office of efficiency review,
we created a department wide acquisition review board.
And what they do is make sure that good science and technology
standards and requirements and testing procedures are built
into the acquisition process, and they also work to make sure
that our large acquisitions are actually what the people who are
the operators need in order to operate.
We now bring all operational components in there.
We have stopped several major acquisition programs underway
because they weren't working -- they weren't going to work and
the decision was do you continue to put good money after bad or
you simply stop and move to other,
maybe off-the-shelf technologies or other things that we can buy
and get in the field more quickly.
That is the direction we are going.
So office of efficiency review, including employees in the
process, and then looking for and having really strict
procedures over the large acquisitions that we all
do for large departments, really makes a difference,
Mr. Vice President.
Vice President Biden: Well, you guys are making a difference.
And by the way, we could go down the line from,
we could go to Education, Agriculture, Interior.
And by the way, that's what we're going to do now when
you all leave.
This is going to be, as the President kids me that I have
had a lot more Cabinet meetings than he has.
That's because he put us all in charge of that Recovery Act,
and we probably met, I don't know, 15 times together or more,
probably more than that.
And we're going to do the same on this.
We're just going to do this on a regular basis and so we have
something to report to the boss, and to the American people.
But with that, what I'd like to do is thank the press for being
here, I mean that, because we want the public to know
what we're doing.
I appreciate you being here.
And over the next day and week and months,
we're going to be available for questions on this specific
subject and obviously anything else.
But what I'd like to do is ask the press to leave now so we can
do a little shop talk here and figure out exactly what our next
moves are going to be.
So thank you all for being here.
I truly appreciate it.