Linda Bilmes- Public Finance detective

From Democracy Now;

LINDA BILMES: That’s right. And last year, after I published a paper on the cost to veterans, the then-Assistant Secretary for Health at the Pentagon phoned me and phoned my dean and said, “Where did you get these numbers?” And I said, “I got them from your website, which we now have access to.” And he said, “Oh, that can’t be.” And I said, “Well, look at your website.” And he said, “Well, fax me my own website.” So I literally faxed him his own website. And then he said, “Oh.” But—

AMY GOODMAN: Who was this?

LINDA BILMES: This was the Assistant Secretary of Health at the DOD, Winkenwerder, who left, was retired around the time that Gates came in. A number of people from that department were retired. He—

JOSEPH STIGLITZ: Then they took down those websites.

LINDA BILMES: Yeah, but then, I mean—yeah, then they took down the websites, and there were websites at the Department of Veterans Affairs that were keyed into those websites, and then they directed the Department of Veterans Affairs to change the Veterans’ websites. And we only found out about this, because hundreds—hundreds—of veterans from all over the country started emailing me and calling me and saying, “Have you seen what’s going on?” So, I mean, we were in the situation where we were academics doing this research, veterans from all over the country watching these websites were coming to tell us this information.

But this kind of trickery has extended both to the budget and to the numbers in the war. And we see it right now in the President’s proposal for the FY09 veterans’ budget, where ostensibly the budget is being increased by $5 billion, but in fact, if you look at the fine print, they’re hoping to recoup over $3 billion by increasing the co-pays and all the fees on the veterans who need to use the services. And so, if you actually netted out, it’s only a $2 billion increase, which is less, when you consider the cost-of-living adjustment, than they had last year.

JUAN GONZALEZ: And you also detail in your book the same kind of flimflam going on with the soldiers who are recruited into the military, a bonus pay that they get that then, if they happen to be injured too soon when they get on the battlefield, they then have to pay back?

JOSEPH STIGLITZ: Yeah. I found that just absolutely astounding. You know, you’re doing this research, and you find things that—I say, “Linda, are you sure? This can’t be!” But they said—you know, the view is, they signed a contract to serve for three years. The fact that they get blown up after one month means they haven’t fulfilled their contract.
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JOSEPH STIGLITZ: Exactly, like, I mean, one of the things—you know, they check out helmets and other equipment, because they want them to be responsible. But they get—then they lose their helmet in an explosion. You know, they’re shipped out, they’re disabled, they’re in concussion. Somebody in the military will send them a bill for their helmet.

LINDA BILMES: It was the GAO study on that, which is unbelievable, about veterans being—hundreds and hundreds of veterans being chased around the country for small amounts of money that they allegedly owe, mostly related to pieces of equipment that they lost during serious injuries...

LINDA BILMES: This raises one of the other real problems with the war, which is how it has been financed. The administration has—and this is the first war that has ever been financed in this way—has financed the entire war with these so-called emergency supplementals. Now, emergency supplementals circumvent the normal budget process and the normal budget caps, and they’re intended for situations like Hurricane Katrina, where you want to get the money so quickly to the area that you don’t have time to actually scrutinize the money in detail. But we’ve had now five years, twenty-five emergency supplementals. Now, what does this mean? This means that the budget folks of both parties in the Congress and in the Congressional Budget Office and other places don’t have time to actually look at, well, for this particular task, how much does it cost to get it done? So it’s absolutely inevitable that you would have profiteering, corruption, cost overruns for these huge contracts, which are let with virtually no scrutiny whatsoever...

JOSEPH STIGLITZ: Well, there are actually a whole set of reforms. We divided them into two categories: one, in terms of how we treat our veterans; the other one is how we approach the budgetary process, the information process. So, for instance, one of the recommendations is, you know, if you’re going to go fight a war that lasts for more than a year, you can’t use emergency appropriations. If you’re using emergency to statement things aren’t going the way you planned, you ought to give a statement to Congress: why were we wrong? Where did we go wrong in our plans?

Secondly, we think it’s absolutely imperative that Americans have the information to know what this is costing them. It doesn’t determine whether you make—how you—you know, whether you go to war or not, but it’s a critical piece of information, and it has to be comprehensive, It has to be based on not only the cost today, but the cost in the future, the cost to the veterans, disability, the costs hidden in all of the other departments. Social Security Disability payments are going to be going up by tens of billions of dollars. So you want a comprehensive budgetary cost. But you also want to know what are the costs to the rest of the economy, because there’s an incentive to push costs from the budget to the rest of society. If the VA doesn’t have enough money, people are going to wind up, if they can afford it, buying some of this themselves. Because you save money on body armor, families that could have went out and bought the body armor. The cost to our society is the same. In fact, the cost to society is worse, forcing it onto individuals, because some of them couldn’t afford it.