U.S. Rep. Steve Chabot (R-Westwood) introduced legislation Thursday to eliminate the Denali Commission, a duplicative regional agency whose primary purpose is distributing federal funds to state and local entities in Alaska. Chabot’s legislation, H.R. 3589, the Eliminate the Commission to Nowhere Act, has been referred to the House Transportation and Infrastructure Committee.
The Denali Commission is one of seven regional commissions that help direct federal funds to state and local projects. However, unlike the other commissions, the Denali Commission serves only one state – Alaska. This has led some – including the Office of the Inspector General (OIG) for the Denali Commission – to question the need for the Commission, since the federal funds handled by the Commission could easily be distributed directly to the State of Alaska and other local entities. After all, state and local governments are more knowledgeable and better equipped than the federal government to address the needs of local communities.
In its October 2013 semiannual report to Congress, the OIG argued that the Denali Commission is little more than a glorified, and unnecessary, federal “middleman.” In the report, the Inspector General detailed several Denali Commission funding situations to illustrate that the Commission adds little, or no, value to the appropriations process. For example, the Denali Commission helps communities build powerhouses and tank farms by accepting federal funds from the USDA’s Rural Utilities Service and then transferring those funds “to a state agency and a large utility cooperative.” As the OIG notes, “these recipients are far more technically sophisticated” than the Denali Commission and “both are capable of directly dealing” with the federal government “without Denali as the middleman.” The same pattern is repeated in the Denali Commission’s efforts to build medical clinics, provide workforce training and help construct access roads. In each case, the Commission receives federal funds and transfers those funds to an entity more sophisticated and better suited to carry out the project than the Commission itself.
Consequently, the OIG has advocated the elimination of the Denali Commission as a federal agency and its transition to a local government or private entity. In the October 2013 report, the OIG referred to the Denali Commission as an “experiment” that has “run its course” and argued that federal funds appropriated to the Commission could be “put to better use.”
Such critical opinions about the Denali Commission are not limited to the OIG. In fact, there is a growing consensus throughout the federal government that the Denali Commission is not necessary. In its 2004 assessment of the Denali Commission, the Office of Management and Budget (OMB) for then-President Bush wrote that the Commission’s “activities are duplicative of other federal programs that address the same needs and provide the same types of assistance.” In recommending in 2009 that several of the Commission’s appropriations be rescinded, President Obama’s OMB referred to several Denali Commission programs as “duplicative,” “redundant,” and “unnecessary” and stated that there was “no evidence” that the Denali Commission’s job training programs “improve employment outcomes for participants.”
Additionally, the Government Accountability Office (GAO) and the Congressional Budget Office (CBO) have raised concerns about the need for the Denali Commission as well as other regional commissions. Similar to OMB, the GAO found the Denali Commission’s activities to be duplicative of other federal programs. The CBO examined the effectiveness of the Denali Commission, and other regional commissions, in achieving their stated purposes of creating jobs and improving education and health care in the areas they serve. The CBO was unable to assess whether the Denali Commission achieved any success in these areas, in large part due to the overlap between the Commission’s activities and those of other federal programs and agencies.
Moreover, federal funding for the Denali Commission was targeted for elimination by President Obama’s Fiscal Commission in 2010 (see Item 20 at http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/Illustrative_List_11.10.2010.pdf.)
“The Denali Commission performs a primarily ceremonial, pass-through function,” said Chabot. “As various federal auditors have noted, the Commission adds no value to the appropriations process and can provide no factual evidence that it actually achieves its stated goals. It really is a Commission to Nowhere. And, yet, since its inception in 1998, the Commission has received nearly $1 billion in federal funds to redistribute throughout Alaska. If we are really serious about eliminating wasteful spending and addressing our staggering national debt, then an obvious first step is terminating wasteful, duplicative federal programs like the Denali Commission.”