One year later, the conversation in Washington over how to oversee a new, nearly $2 trillion relief package administered by the Biden administration is decidedly more muted. The latest legislation, called the American Rescue Plan, created no new oversight bodies, although it appropriated more than $200 million in new funding for existing ones.
To date, more than $5 trillion in government spending has been appropriated to respond to the pandemic and ensuing economic calamity. Yet, over the past year, oversight from three separate watchdog entities has been either undermined by partisan disagreements, slowed by bureaucratic hurdles or constrained by funding, according to interviews with those tasked with carrying out oversight, outside experts and advocates. One of the watchdogs created by the Cares Act has yet to receive a chair, hampering its work. Another watchdog faces budget constraints with just three dozen full-time staff so far.
Democrats say they spent much of the last year battling the obstructionism of the Trump administration and a GOP-controlled Senate with little interest in holding Trump accountable. Republicans say now that a Democratic president is in the White House, Democrats in Congress appear to have less desire to conduct rigorous oversight of the executive branch.
“The temperature has cooled on oversight, which is regrettable since it’s needed as much now,” said Bart Naylor, a policy advocate at Public Citizen, a nonprofit, progressive-leaning consumer rights group. “We do have a huge amount of money flowing out of Washington and it needs to find its way to working people and not to the C-suite.”
Compared with the last time the United States faced a catastrophic recession, in the aftermath of the 2008 financial crisis, the contrasts are stark. By April 2009, five months into his tenure, the special inspector general investigating the bank bailouts, Neil Barofsky, had already testified six times before Congress. Barofsky’s equivalent for this stimulus effort, Special Inspector General for Pandemic Recovery Brian Miller, has not testified before Congress since taking office in June. His spokeswoman said he has received no requests from Congress to do so.
The congressional panel set up in 2008 to oversee $700 billion in government spending to strengthen the financial sector held 15 hearings in its first year, including sessions outside of Washington to highlight the importance of their work to Americans in Nevada, Michigan, Pennsylvania and Georgia. Its current analogue, a congressional panel created to oversee the U.S. Treasury’s actions in the midst of the coronavirus, never received a chair and has held three Washington-based hearings.
The dangers of the pandemic itself have undoubtedly played a role in dampening accountability measures, by limiting the ability of members of Congress and other overseers to meet in person to collaborate, while also slowing down hiring.
The different causes of the two crises also contributed to the differences in accountability: one, a diffuse economic shutdown brought on by a public health crisis, the other, a specific set of financial institutions engaging in irresponsible behavior.
Yet open-government advocates say there is a risk that Democrats in Congress, who hold the majority in both chambers, may take their focus off policing of government relief spending now that there is a Democratic administration in power.
Two months into the Biden era and more than a year after the pandemic began, the House subcommittee created by the Cares Act to undertake coronavirus oversight has continued to focus on the Trump administration’s failed pandemic response, while heaping praise on President Biden’s team. The panel held 10 hearings between June and October, then no more until March.
In March, Rep. Steve Scalise (La.), the highest-ranking Republican on the subcommittee, criticized Democrats for the five-month hiatus “during some of the most impactful months of the pandemic.” The committee chair, Rep. James E. Clyburn (D-S.C.), replied that the pause in hearings was due to Republicans’ refusal to name members to the panel.
“At the end of the day, one of Congress’s jobs is to check the power of the executive branch, and that’s an important responsibility whether the president is of the same party that controls the House of Representatives,” said Molly Reynolds, a senior fellow in governance studies at the Brookings Institution.
Russell Anello, deputy staff director for the House Oversight select subcommittee on the coronavirus crisis, said the subcommittee has been active despite the delay in hearings, including by releasing documents resulting from committee probes. “We’re continuing to do vigorous oversight,” he said.
A spokesperson for the select subcommittee also said they “will not hesitate to investigate” the Biden administration, and that the body has already pressed the administration on worker protections and small-business loan fraud.
Congress also tasked a different panel, the Congressional Oversight Commission, modeled on a similar watchdog created during the financial crisis, with overseeing $500 billion appropriated to the Treasury Department and Federal Reserve. Its predecessor, launched in 2008, gave its chair, Elizabeth Warren, then a little-known university professor, a high-profile national stage.
Those Great Recession-era hearings produced widely shared clips of Warren questioning Treasury Secretary Tim Geithner, and the panel was credited by some observers with forcing changes to Treasury policy that saved taxpayers $1 billion. That panel published 15 of its 30 reports during its first year while holding 15 hearings.
Its Cares Act equivalent has published 11 reports so far detailing the scope and impact of that relief, particularly that of Fed emergency lending facilities, while holding three hearings. It also drew attention to a $700 million loan by the Treasury Department to a troubled trucking company backed by a private equity company with ties to the Trump administration.
But the panel never received the leadership it was supposed to, because House Speaker Nancy Pelosi (D-Calif.) and then-Senate Majority Leader Mitch McConnell (R-Ky.) failed to agree on and appoint a chair for the commission, which has two Democratic and two Republican appointees. One leading contender, former Joint Chiefs of Staff chairman Joseph F. Dunford Jr., eventually took himself out of the running.
“When you have a body that is created to perform oversight and then no chair is appointed for months and months, it certainly doesn’t send a signal that this is an important body and that oversight matters,” said Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington, a nonprofit focusing on ethics in government.
The lack of a chair has made decision-making among the four members more complicated and dependent on bipartisan consensus. A former Democratic-appointed member, Bharat Ramamurti, left late last year to serve in the Biden administration and has yet to be replaced. Another member, former Democratic congresswoman Donna Shalala of Florida, lost her reelection bid but remains on the committee.
“We need a chair and we need another Democratic representative on the Senate side,” Shalala said in an interview. “The commission itself is continuing its work. But we need a bigger analytical capacity and we need … centralized staff.”
An aide to Sen. Patrick J. Toomey (R-Pa.), who sits on the commission, said a major obstacle to naming a chair was the difficulty in finding people who did not have perceived or potential conflicts of interest in their financial holdings or would have been able to make the necessary divestitures.
“You’ve got to find somebody who Nancy Pelosi and Mitch McConnell both agree on, but also someone who will say yes,” said Rep. French Hill (R-Ark.), who also sits on the commission. But he said the lack of a chair did not hamper the commission’s work, because it did not prevent the members from hiring the staff members they needed.
The Toomey aide, who spoke on the condition of anonymity to describe internal dynamics, also emphasized that even without a chair, the commission fulfilled its required role under the Cares Act by producing monthly reports and holding hearings. And he disputed the comparison with the panel’s financial-crisis-era predecessor.
“One was $700 billion dollars, the other was a handful of … lending facilities that never actually met the scale that was initially allocated,” he said, referring to Federal Reserve credit lines created under the Cares Act, which made relatively few loans and were wound down by the Trump administration late last year.
In an interview on March 19, commission member Shalala said she had been assured by House staffers that Pelosi was close to agreeing on a chair with Senate Majority Leader Charles E. Schumer (D-N.Y.). Spokesmen for Schumer and Pelosi did not respond to requests for comment.
Shalala and Hill both defended the work of the commission as having provided robust analysis and questioning of the lending programs.
The programs under the scope of the commission have largely wound down, though the panel could still conduct retrospective oversight delving into unexamined details, such as the presence of foreign investors benefiting from Fed loans or the use of the programs to purchase securities backed by private student loans.
The Fed ultimately adopted some of the commission’s recommendations, such as lowering the minimum loan size in the Main Street Lending Program, meant to support small and medium businesses and nonprofits, and changing fee structures to encourage banks to make loans to smaller borrowers. But the Fed’s changes came in late October, just a few weeks before the program ended.
The commission said in an emailed statement that it “remains operational and is committed to executing its responsibilities and completing reports regarding outstanding loan obligations, per its statutory mandate. However, with the closure of the Fed’s Cares Act lending facilities, there is no new lending or related activity happening, limiting the need for additional public hearings at this time.”
The panel struggled at times to get forthright answers from the Trump administration, including on a Treasury program that made loans to companies deemed critical to national security. Former Pentagon official Ellen Lord declined to testify publicly at a commission hearing in December, and the commission ultimately found the Pentagon provided “a very weak case” for how a trucking company, YRC, qualified for a $700 million loan.
Indeed, lack of cooperation from Trump’s executive branch was a continuing problem for investigators. A January Government Accountability Office report looking at past stimulus spending targeted the Trump administration’s decision to send thousands of ventilators abroad, at a cost of $200 million. The GAO noted that the White House did not respond to questions, even though it had coordinated U.S. policy on the donations.
A separate Cares Act oversight body, the Special Inspector General for Pandemic Recovery, shares much in common with the 2008 Special Inspector General for the Troubled Asset Relief Program, which was charged with overseeing $700 billion in government aid, and eventually built a team of 140 full-time employees. Its work led to 389 criminal convictions, including dozens of bankers and scammers.
By comparison, the pandemic inspector general is also charged with overseeing at least $700 billion in funding provided in the Cares Act. Yet the office had hired 34 full-time employees by the end of January, it said in its most recent report, and plans to hire 66 employees by September.
The inspector general’s first report detailed challenges in hiring staff members and procuring basic equipment. Additionally, the pandemic inspector general’s office has also been constrained by its budget — $25 million in the Cares Act — half of what the TARP inspector general received, said Sarah Breen, a spokeswoman for the pandemic inspector general’s office. The agency is “striving to get into the annual budget cycle,” she added.
Though the Cares Act provided hundreds of millions of dollars for oversight, much of that went to inspectors general at individual agencies and the GAO, which serves as Congress’s watchdog over the federal government.
The pandemic inspector general’s office has also publicly questioned whether it has jurisdiction over the Paycheck Protection Program, although members of Congress have individually suggested the inspector general’s remit is broad.
Breen said the office has asked Congress to clarify whether it intended to grant the special inspector general jurisdiction over the PPP and that it plans to state a definitive position on the question in a later report.
But even as the pandemic inspector general struggles to account for past spending, it has no jurisdiction over the nearly $2 trillion dollars that Congress just passed in March as a part of the latest pandemic stimulus effort.
For its part, the Biden administration has tapped Gene Sperling, a former top White House economic official in the Clinton and Obama administrations, to oversee Biden’s coronavirus relief spending package. Sperling’s role will be focused on making sure aid gets out to states and individuals quickly and communicating with local officials. A spokesman for the Biden White House did not respond to a request for comment.