Let's End Washington's Use-It-or-Lose-It Spending Culture
In a few weeks, members of Congress will face voters who ought to be in a better mood. The economy is growing twice as fast as it did under the previous administration. Tax and regulatory reform are bringing capital back into the economy. Still, taxpayers feel uncertain and nervous.
One reason could be Congress’ failure to curtail spending. Polls taken before President Trump took office showed the public perceived that government wasted about half the money it collected. Congress and the administration can do a lot more to get our fiscal house in order.
One common-sense fix that has been neglected is confronting the irrational use-it-or-lose budget practices in Washington. In the private economy, any business that spends less on overhead than budgeted is rewarded. In government, the opposite is true. Agencies that spend less than they received are punished, in their view, with lower budgets. Rather than lock in these savings, agencies engage in end-of-the-fiscal-year spending sprees. If they don’t use it, they’ll lose it.
In the final seven days of fiscal year 2017, 67 federal agencies spent $50 billion to close out their budgets. It was a massive shop-until-you-drop, taxpayer-funded spending spree. Remember this money is not coming from your wallet, but the pockets of your children, as the federal debt exceeds $21 trillion.
Our auditors at OpenTheBooks.com found that roughly one out of every nine dollars in federal contracts disclosed by the executive and military agencies in FY2017 was spent during last week of the fiscal year – from Sept. 24-30. Eight departments – including the Defense, Health and Human Services, Veterans Affairs, Homeland Security, State, Justice, International Aid, and even the General Services Administration – each spent over $1 billion.
Agencies celebrated their stewardship with binges. For example, we found the State Department closed out its end-of-year booze budget by buying wine and whiskey gifts for dignitaries ($150,000). The U.S. Army bought fidget spinners ($6,600) and an arcade machine ($35,000) and snowboards and paddle boards ($62,000). Veterans Affairs spent $20,000 on shuffleboards.
The largest federal contractors cashed in for lucrative contracts. The top 10 recipients reaped $11 billion in the final seven days of last year, and included the familiar names of Lockheed Martin, Raytheon, Northrop Grumman, Booz Allen Hamilton, and Boeing.
We found the federal agencies embarked on a one-week arms race costing taxpayers $400 million. Purchases included bombs ($151 million), guns ($145 million), body armor ($45 million), bulk explosives ($30 million), and grenades ($5 million).
Federal agencies also became self-promotion machines with the purchase of $110 million in advertising and public relations contracts. While sick veterans still wait longer than 30 days to see a doctor, the VA spent millions on advertising and signage. Talk about misplaced priorities.
Next week, the final week of the fiscal year, federal agencies are again poised to spend out their budgets. Potentially, this year could be the biggest such spree ever.
But thankfully, a bipartisan group of U.S. senators -- Rand Paul (R-Ky.), Ron Johnson (R-Wis.), Claire McCaskill (D-Mo.), and Gary Peters (D-Mich.) -- are sounding the alarm.
Congress needs to crack down and stop this taxpayer abuse. A good start would be to get back to regular order and on-time budget appropriations – in other words, a normal legislative process. There’s no reason why Congress and its army of staff can’t go through the budget line by line, refer to a growing encyclopedia of oversight, cut waste, consolidate duplicative programs and set priorities.
While structural reform is ideal, the president doesn’t have to wait on a big reform moment. He could create one through a series of tweets. Here’s one: “Spending money instead of saving it. Sad!” The president could use the bully pulpit to make it known that his Cabinet officials and key agency staff will be rewarded rather than punished for living below their means.
If the swamp seems to be draining slowly, that’s because Congress hasn’t removed the plug. Changing the use-it-or-lose-it culture in Washington would go a long way toward generating big savings and winning the public’s trust.