AMERICAN ISSUES PROJECT

Two months ago, while celebrating his first 100 days in the White House, President Obama portrayed himself as a fiscal leader when he urged his Cabinet to cut $100 million from their budgets. "We have an obligation to make sure that this government is as efficient as possible, and that every taxpayer dollar that is spent is being spent wisely," Obama said.

The rhetoric was an empty gesture even then, but this month, Obama confirmed just how little he cares about making the federal government budget-conscious and efficient. He fired an inspector general for doing exactly what Obama says he wants.

The White House dismissed Gerald Walpin, the IG who oversees the AmeriCorps community service program, after he exposed the misappropriation of funds from the program by Sacramento Mayor Kevin Johnson. The situation was bad enough that Walpin tried to stop Johnson from getting any more money.

A president committed to efficient government should have seen that as a good thing, especially in light of the fact that Obama, a former community organizer, wants to boost the budget for community service by 29 percent in fiscal 2010. Even Vice President Joe Biden has acknowledged that the more money the government spends, the more likely waste will occur.

But Johnson is one of Obama's political allies. Instead of giving Walpin a pat on the back, Obama pushed him out the door -- and worse, his administration smeared Walpin's good name.

Iowa Republican Charles Grassley, a consistent Senate advocate for IGs, defended Walpin in a letter to Obama earlier this month. Grassley said Walpin "has identified millions of dollars in AmeriCorps funds either wasted outright or spent in violation of established guidelines. In other words, it appears he has been doing his job."

But Obama apparently doesn't want IGs to do their job on his watch. Walpin's firing is just the most extreme example of his administration undermining the work of supposedly independent watchdogs.

Over the past few weeks, Grassley has fired off a series of IG-related letters. He wants the Treasury Department to explain its resistance to oversight of last year's financial bailout program by special IG Neil Barofsky. Grassley also has voiced concerns about the independence of IGs at the International Trade Commission and Amtrak.

All of those developments so early in Obama's tenure raise questions about just how free the government's watchdogs will be to target waste, fraud, and abuse during his administration. That's a shame because IGs provide a valuable, nonpartisan service to taxpayers.

Blogger Michelle Malkin revisited some of Walpin's work in a column last week. In addition to exposing Johnson's abuses, Walpin found grant violations in the Teaching Fellows Program, run out of the City University of New York. "Walpin's office questioned duplicate educational awards of more than $16 million and costs worth nearly $775,000," Malkin noted.

Given free reign to do his job without political interference, Walpin undoubtedly would save taxpayers even more money because that's what IGs do. The watchdogs achieve a combined $11.4 billion in potential savings in fiscal 2007, according to the latest annual report for the IG community. They also collected $5.1 billion in investigative recoveries.

That's a fairly typical return on investment. Potentials savings and investigative recoveries totaled $16.7 billion combined in fiscal 2006 and nearly $25 billion in fiscal 2005. The total for investigative recoveries alone was nearly $20.6 billion from fiscal 2001 through fiscal 2005.

Obama's call to save $100 million is chump change by comparison.

Inspectors general are particularly valuable when the federal government goes on a spending spree, as it did in the wake of Hurricanes Katrina, Rita and Wilma in 2005. The IG community has kept a close eye on all of that spending. A 2007 report to Congress indicated that the watchdogs had questioned $150 million in costs, identified $58 million in unsupported costs, and concluded that $264 million could be better spent.

IGs will become even more important to taxpayers if Obama succeeds in further enlarging the bureaucracy. Biden's acknowledgment that waste is inevitable as a result of the stimulus law also applies to the ongoing financial bailout, which has triggered at least 20 criminal probes, and it would hold true for Obama's proposed healthcare system as well.

The federal government needs aggressive and independent watchdogs to hold bureaucrats accountable for how they spend money. If Obama wants to be a fiscal leader, he needs to stop making empty gestures and protecting political allies like Kevin Johnson. He also needs to get out of the way of the watchdogs who serve as the best check against waste, fraud, and abuse.

"The president has said he wants more accountable government, and keeping good watchdogs on the job is fundamental to that goal," Grassley said. "Inspectors general need to be strengthened, not undermined."

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