Guest opinion: Lack of business experience runs rampant in Washington D.C.
The Department of Labor’s own Office of Inspector General recently reported that $77 billion of the $413 billion unemployment insurance payments made by the Department of Labor in 2021 were made improperly. This amount represents 18% of all their unemployment insurance payments.
These incorrect payments do not include another $865 million of “unknown payments” — allocations to recipients who were not identified. And these Department of Labor mistakes do not include $100 billion illegally obtained from the Paycheck Protection Fund, (PPP) and managed by the Small Business Administration. These and other incorrect allocations were reported as part of the 2019 Payment Integrity Act that requires federal departments and agencies to report to the Office of Management and Budget (OMB) any or all of the improper payments in government benefit programs.
Few can deny the humanitarian intentions behind the potpourri of benefits to individuals, organizations, and companies during the pandemic. Many of the programs helped families during the economic storm caused by the pandemic. However, the undisputable fact remains, that significant amounts of taxpayer dollars were wasted on ineligible people, businesses, and institutions.
The “opportunities” for dishonest activities were more plentiful during the pandemic. Consequently, the poor management of government programs has become more visible to the public. However, the problem of mismanagement of government programs is a perennial one. These departments and agencies are simply too large and desperate to be managed by those with extraordinarily little business experience.
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As an example, while the Department of Labor is one of the smallest of the 15 Federal Departments, its annual operational budget is $14.6 billion, and it employs 16,922 people. The management of an organization of this size is a monumental task even when the workflow is constant. And when large government financial allocations occur quickly, as was the case with pandemic relief funds, weak management structures inevitably cause missteps to occur. It is at these times that organizations most need directors with managerial and business experience. However, as measured by both training and experience, the managerial expertise of individualsos in charge of major federal government programs today seem not to be equal to the task. The current administration has few senior leaders with business experience. The average business experience of Biden appointees is 2.4 years according to a recent study conducted by Stephen Moore, a member of the Editorial Board of the Wall Street Journal and White House correspondent Jon Decker who examined the backgrounds of sixty-eight of the current top executive branch officers.
Some may contend that actual business experience is an anathema to the philosophy and policies of the current administration. However, no matter what your political views, few can find fault with well-managed organizations which many departments seem not to be. It does not take an MBA from an Ivy League university to know that there will be people and institutions, which will skirt the rules when “free” and rapidly dispersed government funds become available. However, there were few plans for minimizing fraud within these programs even though the pandemic inspired allocations to the Department of Labor, the Small Business Administration and other agencies was well known ahead of time.
Because these departments have failed in their management responsibilities it now becomes Congress’ role to fulfill its oversight duties. Congress must make sure that those responsible for fraudulent activities which resulted in billions of dollars stolen from the American taxpayers are found and prosecuted. And Congress should act quickly given the fact that unemployment claims may be once again on the rise. But Congress and administration managers seem to be pre-occupied with other matters they deem more important. Perhaps we need department heads and other bureaucrats who have more business experience and management skills commensurate with the gravity of their positions.
Michael A. MacDowell is President Emeritus of Misericordia University and a Trustee of the Calvin K. Kazanjian Economics Foundation.
This article originally appeared on Fort Myers News-Press: Lack of business experience runs rampant in Washington D.C.
