The Pentagon Fails Another Audit

The Pentagon Fails Another Audit

The Pentagon
By Yuval Rosenberg and Michael Rainey
Friday, November 18, 2022

Welcome to the weekend! Here’s what we’re watching while waiting for the soccer World Cup to start on Sunday and wondering how the controversial choice of Qatar as host nation will play out.

Another Year, Another Failed Pentagon Audit

The Department of Defense underwent its fifth annual financial audit this year, and for the fifth time in a row, it failed.

This year’s audit involved a team of 1,600 analysts who visited 220 sites in person and 750 sites virtually as they reviewed the Pentagon’s $3.5 trillion in assets and $3.7 trillion in liabilities. The overall audit was broken down into 27 units, of which nine received “clean” or passing grades, one received a modified grade, which can pass once an identified issue is resolved, and the rest received disclaimers due to a lack of complete data.

The cost of the audit was estimated to be $218 million.

Defense Department Comptroller Mike McCord said the results were similar to last year’s. “We failed to get an ‘A’,” he told reporters earlier this week. “The process is important for us to do, and it is making us get better. It is not making us get better as fast as we want.”

McCord said he expects to see steady improvement in the use of financial controls at the Pentagon, but there are still challenges ahead. “Valuing properties is probably the hardest thing for us to do,” he said. “I would say systems are probably the most important thing for us to do — reducing the number of systems, getting the right controls on systems. There are areas where I think that real progress is going to come in the next two years. But having it be across the board — it has to be across the board for these opinions to flip over — and that, I think, is going to be hard.”

McCord added that the war in Ukraine has served as an important reminder of the need to maintain accurate records. “We've not been in a conflict with a peer competitor, a kinetic conflict as the Ukrainians are with the Russians,” he said. “And, so we've not been in a position where we've got only a few days of some critical munition left. Right? But we are now supporting a partner who is and so when they appeal to us for help and say, I've got a weeks’ worth left of something … when can you get me more? I mean that's, to me, a really great example of why it matters to get this sort of thing right, of counting inventory, knowing where it is and knowing when it is.”

Dive into the fiscal year 2022 Defense Department audit here.

Hakeem Jeffries Announces Bid to Succeed Pelosi

Rep. Hakeem Jeffries (D-NY) made it official Friday, announcing his bid to succeed Nancy Pelosi (D-CA) as House Democratic leader. Jeffries, 52, would be the first Black leader of a congressional party caucus. Rep. Katherine Clark (D-MA), 59, announced a run for Democratic whip, the No. 2 spot in party leadership, while Rep. Pete Aguilar (D-CA) officially said he’s running for caucus chair, the No. 3 spot.

While a changing of the guard is underway for House Democrats, President Joe Biden will turn 80 on Sunday, becoming the first octogenarian to occupy the Oval Office — a milestone that’s likely to be greeted with little in the way of official celebration. “The White House has few plans to mark the landmark birthday in any major public way,” The Washington Post reports. “Any celebration will be eclipsed, by design or not, by the wedding festivities of Biden’s granddaughter Naomi at the White House on Saturday.”

Hawley: “No More Fiddling With Social Security in the Guise of ‘Entitlement Reform’”

As the GOP grapples with its weaker-than-expected midterm election performance and what message voters might have sent, Sen. Josh Hawley (R-MO) has been vocal about pushing a more populist agenda for the party.

Hawley, a controversial conservative who may be best known for raising his fist in solidarity with the pro-Trump crowd that gathered outside the Capitol before the January 6 insurrection, has been looking to rebrand Republicans. "The old party is dead. Time to bury it. Build something new," he tweeted on Saturday. He has also argued that the party must go beyond criticizing Democrats and need to “offer an actual agenda” — and his prescribed agenda differs in some crucial ways from those of other prominent Republicans.

Hawley expanded on those critiques in a Washington Post piece on Friday, writing that Republicans’ problem is more than just picking poor candidates or weak voter turnout operations. The GOP’s problem, Hawley says, “isn’t principally the tactics; the problem is the substance.” Hawley argues that the party must refashion itself into one that truly represents working people:

“For decades, Republican politicians have sung a familiar tune. On economics, they have cut taxes on the big corporations and talked about changing Social Security and Medicare — George W. Bush even tried to partially privatize Social Security back in 2005. In the name of ‘growth,’ these same Republicans have supported ruinous trade policies — such as admitting China to the World Trade Organization — that have collapsed American industry and driven down American wages. …
“Republicans will only secure the generational victories they crave when they come to terms with this reality: They must persuade a critical mass of working class voters that the GOP truly represents their interests and protects their culture. … We can start by stopping the bleeding. No more talk of grand bargains that turbocharge illegal immigration. No more liberalizing the United States’ trade agenda, making us more dependent on foreign adversaries. No more fiddling with Social Security in the guise of ‘entitlement reform.’”

Hawley advocates Trump-style tariffs as a path to boost domestic industry and manufacturing, and he calls for breaking up big tech companies and moving federal agencies such as the Departments of Energy, Interior and Agriculture to “middle America.” He pushes a tax credit for married parents with kids under age 13, among other legislative changes.

Why it matters: Some in the GOP — most notably, Hawley and Sen. Marco Rubio of Florida — have embraced a more populist economic agenda over the past couple of years, and the party reckoning brought on by the midterm election disappointment may open the door to a rethinking of some pillars of Republican policymaking. Or not. Republicans may debate such policy changes, but they could well wind up pouring more energy into investigating the Biden administration and trying to “Own the Libs.” Or they could decide that Trump and his MAGA movement were what really cost them more than anything else. The next two years will go a long way to determining the future of the party.

Quote of the Day

“It’s a totally nonfunctional majority. … If you’re down to one or two in the majority, each person now has the power of a senator, where every bill has to get basically – not pulled to something that can win or something that can get signed into law, but to the furthest right.”

— Rep. Adam Kinzinger, the Illinois Republican who served on the January 6 committee and who, not coincidentally, is retiring from Congress at the end of the year, in an interview with the Bulwark quoted in a New York Times article about the GOP winning control of the House.

With Republicans winning a narrow majority in the House, party leaders may struggle to bridge the divide between a relatively small number of moderates focused on taxes and the economy and a larger group of Trump-aligned extremists pushing for politically explosive investigations into the Biden administration. Rep. Kevin McCarthy (R-CA), the leading candidate to become the next speaker, is “probably the equivalent of the dog who caught the car,” Kinzinger said.

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