Push for more federal data transparency gaining momentum on Capitol Hill

Jason Miller, executive editor, Federal News Radio

Jason Miller | April 17, 2015 5:30 pm

House lawmakers will take another crack at improving federal data transparency laws in the next few months.

Republican leaders are promising to get the Digital Accountability and Transparency (DATA) Act a vote on the House floor and are more optimistic than ever that the bill has the necessary support to become law.

House Majority leader Eric Cantor (R-Va.) said Tuesday at the Data Transparency 2013 conference sponsored by the Data Transparency Coalition, that there have been some improvements to the bill, and once the Congressional Budget Office scores the bill for how much it would cost to implement, the leadership will schedule it for a vote accordingly.

This is the second time the House will consider the DATA Act.

Rep. Darrell Issa (R-Calif.), chairman of Oversight and Government Reform Committee, introduced the revised DATA Act in May.

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Building on Recovery.gov

The bill would require agencies to standardize and make public online federal procurement, assistance and financial-management data.

The goal of the bill is to build on the transparency and success of the Recovery Act and Recovery.gov. To that end, the bill requires the Recovery Board to run a pilot program for recipients of federal funds to report back to the government how they spend the money as a way to improve the accuracy and to develop recommendations for reducing reporting requirements.

Sen. Mark Warner (D-Va.) also offered a companion bill.

Issa introduced a similar bill in 2011, which passed the House, but received little support in the Senate or from the White House.

Among the problems with the first bill, experts say, was the requirement to report data that agencies already were reporting, and the creation of a commission to oversee the transparency effort.

Issa stripped much of the controversial provisions out, and now there seems to be growing support for the bill, which is more like a follow-on to the Federal Funding Accountability and Transparency Act (FFATA) of 2006, which then Sen. Barack Obama (D-Ill.) and Sen. Tom Coburn (R-Okla.) sponsored.

Neither the George W. Bush nor the Obama administrations fully implemented the requirements of FFATA, and that has been one of the reasons for the push for the DATA Act.

Changing needs for the bill

Issa said leadership support from Cantor and a Senate companion bill are only minor reasons why the DATA Act has a better chance today than two years ago of becoming law.

“During the intervening two years, we experienced sequestration,” he said at the conference. “So now a bill on paper scores in the $100 million or less cost is suddenly a part of sequestration for a different reason: Organizing and structuring data will save countless hundreds of millions of dollars in the short run, and in the long run will save billions of dollars not including the benefits of access to information, not including the benefits of access to information, the possibility that in fact if more people know more in the bidding process, we will get more products for less, the fact that by definition the failures and inaccuracies when databases try to speak to each other would be eliminated. All of the things that we wrote the DATA Act for are less important in a sequestration world than the question of knowing your $81 billion worth of IT will not increase, but in fact go down.”

Another reason for optimism about the bill is growing support from the White House.

Issa said the fact that Vice President Joe Biden has said publicly he supports the DATA Act is a major change.

“I think that one of the challenges was getting the administration to fully understand what we were trying to achieve,” Issa said. “As you can imagine, Danny Werfel in his next job very quickly decided that it wasn’t such a bad idea and he should’ve been supportive. One of the challenges, and I think back to my back-and-forth when he was at OMB with Danny, he thought he could handle it himself. He came. He stayed. He left. It didn’t get handled. Sometimes that’s the best lesson. When you say, ‘We can do it,’ and then you look back and say, ‘I thought I could do it, but it didn’t happen,’ you begin to appreciate why legislative action can help.”

Danny Werfel is the former Office of Management and Budget controller and acting deputy director for management. He now is the acting IRS commissioner.

Werfel was the main administration voice expressing opposition against the initial DATA Act.

An email to OMB asking if the administration has a new position on the DATA Act was not returned.

Senate markup expected soon

In addition to the lack of White House support, the Senate in 2011 didn’t give the bill the light of day.

But this time around, the lead Senate committee is more supportive.

A Senate Homeland Security and Governmental Affairs Committee staff member said at the conference that Sen. Tom Carper (D-Del.), chairman of the committee, plans to mark up its version of the DATA Act at the next scheduled committee business meeting in October.

The committee planned to mark the bill up in July, but some members wanted to review the bill more closely. Sources say Coburn was concerned about the cost of the DATA Act.

While the House is getting its version of the bill scored by CBO, the Senate’s version will not be scored until it passes committee.

Issa continues to push for the DATA Act to become law for several reasons.

First, he said, it would open the door to many private-sector opportunities, and it would improve the oversight of federal spending, which in turn would increase the trust in government. In fact, Issa went out of his way to compliment the Recovery.gov website without offering any positive words for the Recovery Act itself.

But maybe a bigger reason for the DATA Act is a problem at the Securities and Exchange Commission.

Questions for the SEC

Issa wrote a letter to the SEC Tuesday asking why the agency receives electronic data from companies when they file their annual 10-K reports, but when they review that data, they print out the paper and scan back in the comments. Issa said the SEC should instead mine the data which is based on the Extensible Business Reporting Language (XBRL) standard.

“The fact is checking whether corporate America is delivering you data properly is a machine event,” Issa said. “It’s something we all know computers can do. They can look for the anomalies, the failures and cross check and see, in fact, if someone in corporate America did a typo and do it in fractions of a second. Today, public companies reports are flawed, not because they were submitted flawed, but because after they were submitted they became flawed, and those anomalies are not checked. Usually, they are not material, but they always the result of delays and add to the cost of a government agency that draws much of its funds outside of the direct taxpayer, but still taxes corporate America that makes one thing very clear, it lowers our efficiency and effectiveness.”

Issa said he’s had numerous conversations with the SEC, including with Chairwoman Mary Jo White, about the XBRL implementation.

He said the concern is large investment firms or hedge funds have an advantage without the SEC fully using all that the XBRL standard provides them. Issa said the large investor can game the system by having teams of people analyzing the data in the 10Ks versus the small investor who has to wait for the information to be put online.

Issa asked for answers to seven questions by Sept. 23.

An SEC spokeswoman didn’t want to comment on Issa’s letter or his criticisms.

Craig Lewis, the director and chief economist in the SEC’s division of economic risk analysis, spoke later in the day at the conference and while he didn’t address Issa’s criticisms of the XBRL implementation, but he said this was the first year companies submitted their data in the XBRL format, and it was the first time the SEC could take a meaningful look at the data and incorporate it into their processes.

Issa said his concerns with the SEC are exactly why legislation is needed.

He said OMB for all their efforts still struggles to move agencies quickly in the direction of change.

“The reality is among the 24 or so that are officially cabinet positions, they are all peers, and they all fight to see if the chief of staff will let them visit the President from time to time,” he said. “The fact is congressional law creates the mandate that changes that. If you have a law that you have to enforce OMB and other organizations within government, including Treasury, suddenly have the tooth to say, ‘It’s not my asking, it’s not my choice, it’s the law.'”

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