Magazine

Bloomberg View: A Tipping Point for Egypt; In Defense of the GAO


The Military Must Protect the People

Cracking the heads of peaceful demonstrators in a square that has come to signify legitimate protest in the Arab world seems a clear indication that the Supreme Council of the Egyptian Armed Forces is not much better than the government it replaced. The authoritarian behavior of the council has realigned politics in Egypt, putting large numbers of Islamist forces in the streets alongside secularists against now united, formerly rivalrous military and police forces.

In a speech on Nov. 7, U.S. Secretary of State Hillary Clinton warned of future unrest if “the most powerful political force in Egypt remains a roomful of unelected officials.” The U.S. and other Western powers should make a strong case to the generals that their best interest lies in avoiding that scenario. The unrest next time will be aimed, after all, at them.

The first thing Egypt needs is successful elections. The first round of voting for a new Parliament is supposed to take place on Nov. 28. Several political parties have suspended campaigning to protest the government’s crackdown. A delay, presumably on grounds of instability, would feed the generals’ arguments for monopolizing power. And it could well ignite genuine chaos.

To be sure, the election system designed by the supreme council is flawed. It’s ridiculously complicated. In a process that ends Mar. 11, 2012, there will be three rounds of voting for each of the two houses of Parliament, plus possible runoff elections. Some members will be chosen by proportional representation, others directly.

This is the imperfect system Egyptians have for now. To make it work, the military council should drop its refusal to allow only a few international experts to “witness” (not “observe”) the balloting and instead invite in hundreds, as the Tunisians did for their elections last month.

Looking further ahead, the generals should stop dithering about the date for a presidential election, and thus a deadline for the end of their rule. Instead of putting off the vote until 2013, which is the latest plan, the council should firmly commit to the original time frame of next April. The government should invest in educating the electorate about the parliamentary ballot process, no small task in a country with 34 percent illiteracy.

The generals don’t read editorials, but they can’t ignore the markets: The best chance to turn around Egypt’s struggling economy—the benchmark stock index is down 45 percent this year—is to give outside investors and trade partners confidence in the government’s path to democracy. The council will also pay attention to unambiguous messages from the U.S., which provides Egypt with more than $1.5 billion a year in military and economic aid. Egyptians need reasons to believe in their military again. Only the generals can provide them.

 

The Best $571 Million Congress Ever Spent

Oklahoma Senator Tom Coburn (R) has built his career on an aggressive, occasionally egregious insistence on federal spending cuts. As a member of the Senate’s Gang of Six, he grew impatient with the search for $4 trillion in deficit reduction over a decade and produced his own plan worth $9 trillion, including large cuts to Medicare, Medicaid, and the Pentagon.

So on Nov. 16—just as the national debt was surpassing $15 trillion—when Coburn demanded robust funding for a 3,350-employee government bureaucracy, it was worthy of note.

The Republican’s 29-page report is a rousing defense of the U.S. Government Accountability Office, which both House and Senate appropriators have targeted for at least a 6 percent budget cut next year. The GAO is a nonpartisan watchdog that, since its founding in 1921, has saved U.S. taxpayers exponentially more than its cumulative budgets have cost. In congressional testimony this year, Comptroller General Gene Dodaro, who leads the GAO, said that for every dollar spent on the agency last year, GAO produced $87 in financial benefits.

Accepting the comptroller general’s math requires no great leap of faith. Over the years, GAO investigators, auditors, and accountants have exposed countless boondoggles. In just one recent example, the GAO found problems with the U.S. Army’s Future Combat Systems Manned Ground Vehicle and encouraged the Defense Dept. to kill the program, saving $11 billion. A single 2011 GAO report—a single report!—identified hundreds of billions that could be saved by eliminating duplication in federal programs. That alone represents a rich return on the agency’s $571 million budget—or would if Congress were sufficiently functional to enact the changes.

In addition to issuing almost 1,000 reports a year to Congress, including recommendations on everything from Medicare savings to efficiencies in civil debt collection, the agency provides congressional committees with expert testimony. It also gets its hands dirty by burrowing within government agencies, reading the fine print on consulting contracts to ferret out waste, fraud, and abuse—regardless of which party is in power.

The GAO is not flawless. But over a long and distinguished history it has earned its stripes, and certainly its budget. Careful auditing and analysis of government programs cannot be done on the cheap. The GAO is already doing more with less; between 1992 and 2007, the size of the federal budget doubled while the GAO’s was cut more than 20 percent. Its staff not only is smaller than it was in 1992, it’s a fraction of the size it was during World War II. Cutting its budget further is no way to save money; in fact, it’s false economy.

To read Nathan Myhrvold on solar subsidies and Noah Feldman’s defense of lawyers, go to: Bloomberg.com/view.


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