Transparency in government, a high level goal of the Obama administration, needs to start at the beginning.  With billions of dollars being spent on economic recovery, we need a clean way to track legislation and the spending it generates. XML technologies can provide such a solution.

A curious thing happens to a bill in Congress as it journeys through committees and gets signed into law.  The bill is marked up in XML.  Since early 2003, bills introduced into the House of Representatives have been coded in an XML specification called LegalXML that is especially formatted to capture legislative documents.  The Senate, however, remains locked in text and HTML and thus the bills that emerge from conference committees lose the XML markup.

Why does the XML markup matter? According to OASIS, the OASIS technical committee for legislative documents, citations, and messaging, LegalXML seeks to:

“…harmonize current DTD's and further develop open XML standards for the markup of legislative documents and a system of simple citation capability for non-legislative documents (e.g. newspaper articles). The primary goal is to allow the public to more easily participate in the democratic process by creating a more open, accessible, easier to parse, research and reference legislative documents.”

The goal of this OASIS technical committee is a good first step.  Imagine the informational power contained in an appropriation bill if every section of the legislation was also tagged in a commonly accepted markup language such as XBRL.  With the financial implications of a bill correctly tagged in the official document, references to actual spending could be created with ease.

Why XBRL Is key

The key to the conversation around XBRL is the consistent format and well developed financial taxonomies that are well suited to capture financial data.  Combining the financial ability of XBRL with the ability to capture legislation inherent in LegalXML provides a powerful tool for holding government accountable for spending programs such as TARP.

As Mark Bolgiano, XBRL US President and CEO explained in recent testimony before the House of Representatives, “requirements for transparency in TARP funds reporting and oversight can be met using an existing standard [XBRL] that brings a consistent format to data on financial condition, risk, value, and compensation information regardless of sources.”

There is power in correctly tagging content in government applications. As Jonathan Jarvis, a leading-edge software designer recently observed,

“Imagine if all U.S. Government information was tagged in a format similar to XBRL, allowing it to be sorted, organized, and mashed up. Imagine if this information was fed out through a series of application programming interfaces (API). These APIs could be taken by analysts, journalists, designers, or anyone who is interested and visually synthesized into graphics, diagrams, videos, interactive applications, performances, etc. In a sense, if the U.S. Government encouraged such practices by making the information friendly and useful, they could "crowd-source" their responsible transparency --or, responsible governmental transparency "of the people, by the people, for the people."

The power of crowd sourcing, or taking the input of many well informed people and facilitating the re-combination of information in unique and useful ways is an exciting application of XML technologies.  The key to making this work is having accurate content from original documents that are authenticable, auditable, and referencable back to the source data. The content needs to be well managed. All of this information and links need to be readily accessible over the web.

Going back to the TARP spending/tracking problem, recent reports coming from the Treasury Department indicate that the American taxpayer is reaping “profits” from the money lent to banks under the program.  Some people have questioned this assertion and have called for additional information:

"Dividends are definitely income, but they're not necessarily profit," said Alex Pollock, a resident fellow at the American Enterprise Institute in Washington. From Pollock’s perspective, it's impossible to assess the profitability of TARP without a robust and systematic accounting of the program's costs, including interest expense and overhead.

The drum-beat of differing policy perspectives goes on.

Why combining LegalXML and XBRL is the right solution

There is a way forward, to add more facts to the policy debates. Suppose the House and  Senate agreed on a common XML markup format for legislation and financial reporting. Combining the XBRL formatted dollar impact of an appropriation with LegalXML coding will permit:

Verification of what funding is actually available

Clarity on spending authorizations for individual provisions of the law and the proposed bills that preceded them

The ability to create an accurate audit trail of funding decisions

The ability to slice and dice the results by region, state, campaign contributions

Mashing up appropriation provisions with other political data like co-sponsorship, campaign contributions, allocations of funding by state, payback of TARP  money, etc.

Summary

Combining the existing legislative markup system, LegalXML, with XBRL could provide another valuable tool for open, accessible government tracking.  LegalXML’s proven ability to assist the legislative process in Congress should be teamed with XBRL’s strength in providing a commonly accepted method of tracking the financial implications of federal spending. The end result is an ability to mark up an entire business process, in this case tracing the decision making around appropriations.