Pentagon Doesn’t Know What Happened to $1.3 Billion in Afghanistan
The Pentagon isn’t able to tell federal auditors what happened to more than $1.3 billion in funds intended for construction projects in Afghanistan.
The money was dispersed through a program established to speed up the rebuilding process in Afghanistan by giving money directly to military officers to build roads, bridges, dams and other projects to avoid the lengthy bureaucratic procurement process.
But in the rush to spend and build, much of the money paid out by the Commander’s Emergency Response Program (CERP) between 2004 and 2014 has gone unaccounted for, according to auditors who spent the last year trying to find it.
Related: 7 Threats to U.S. Rebuilding Efforts in Afghanistan
A new report released Friday by the Special Inspector General for Afghanistan Reconstruction says the Defense Department could only provide its office with documentation for $890 million, or roughly 40 percent, of the total $2.2 billion in funds.
The auditors blamed the Pentagon’s financial and project management process for not sufficiently tracking spending, saying DoD’s system doesn’t contain enough data or comprehensive information relating to the actual costs of the projects.
The auditors took the information the Pentagon did provide and divided it up into categories like education, health care, water and sanitation. Aside from transportation, the item that had the most expenses was labeled “unknown.”
U.S. Central Command responded to the inspector general’s findings, or lack thereof, by saying that some of the unaccounted for CERP funds had been shifted to other military needs. “Although the report is technically accurate, it did not discuss the counterinsurgency strategies in relationship to CERP,” the Central Command said.
In total, the U.S. has doled out about $3.7 billion through CERP funds, with $2.2 billion coming from the Defense Department.
This is just the latest report from SIGAR highlighting the Pentagon’s problems keeping track of the enormous amount of money flowing into Afghanistan. Earlier reporting suggested the U.S. has lost some $100 billion in the reconstruction efforts.
Why Craft Brewers Are Crying in Their Beer
It may be small beer compared to the problems faced by unemployed federal workers and the growing cost for the overall economy, but the ongoing government shutdown is putting a serious crimp in the craft brewing industry. Small-batch brewers tend to produce new products on a regular basis, The Wall Street Journal’s Ruth Simon says, but each new formulation and product label needs to be approved by the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau, which is currently closed. So it looks like you’ll have to wait a while to try the new version of Hemperor HPA from Colorado’s New Belgium Brewing, a hoppy brew that will include hemp seeds once the shutdown is over.
Number of the Day: $30 Billion
The amount spent on medical marketing reached $30 billion in 2016, up from $18 billion in 1997, according to a new analysis published in the Journal of the American Medical Association and highlighted by the Associated Press. The number of advertisements for prescription drugs appearing on television, newspapers, websites and elsewhere totaled 5 million in one year, accounting for $6 billion in marketing spending. Direct-to-consumer marketing grew the fastest, rising from $2 billion, or 12 percent of total marketing, to nearly $10 billion, or a third of spending. “Marketing drives more treatments, more testing” that patients don’t always need, Dr. Steven Woloshin, a Dartmouth College health policy expert and co-author of the study, told the AP.
70% of Registered Voters Want a Compromise to End the Shutdown
An overwhelming majority of registered voters say they want the president and Congress to “compromise to avoid prolonging the government shutdown” in a new The Hill-HarrisX poll. Seven in ten respondents said they preferred the parties reach some sort of deal to end the standoff, while 30 percent said it was more important to stick to principles, even if it means keeping parts of the government shutdown. Voters who “strongly approve” of Trump (a slim 21 percent of respondents) favored him sticking to his principles over the wall by a narrow 54 percent-46 percent margin. Voters who “somewhat approve” of the president favored a compromise solution by a 70-30 margin. Among Republicans overall, 61 percent said they wanted a compromise.
The survey of 1,000 registered voters was conducted January 5 and 6 and has a margin of error of 3.1 percentage points.
Share Buybacks Soar to Record $1 Trillion
Although there may be plenty of things in the GOP tax bill to complain about, critics can’t say it didn’t work – at least as far as stock buybacks go. TrimTabs Investment Research said Monday that U.S. companies have now announced $1 trillion in share buybacks in 2018, surpassing the record of $781 billion set in 2015. "It's no coincidence," said TrimTabs' David Santschi. "A lot of the buybacks are because of the tax law. Companies have more cash to pump up the stock price."
Chart of the Day: Deficits Rising
Budget deficits normally rise during recessions and fall when the economy is growing, but that’s not the case today. Deficits are rising sharply despite robust economic growth, increasing from $666 billion in 2017 to an estimated $970 billion in 2019, with $1 trillion annual deficits expected for years after that.
As the deficit hawks at the Committee for a Responsible Federal Budget point out in a blog post Thursday, “the deficit has never been this high when the economy was this strong … And never in modern U.S. history have deficits been so high outside of a war or recession (or their aftermath).” The chart above shows just how unusual the current deficit path is when measured as a percentage of GDP.