In Washington, Christmas doesn’t come in December, but September. As OpenTheBooks.com describes in a new report, “use-it-or-lose-it” spending – the federal government’s frantic rush to spend whatever is left in their accounts before the end of the fiscal year (Sept. 30) – is as bad as ever.
Here’s a quick overview of agency gifts to themselves: lobster tail and crab ($4.6 million), a Wexford Leather club chair ($9,241), china tableware ($53,004), alcohol ($308,994), golf carts ($673,471), musical equipment including pianos, tubas, and trombones ($1.7 million), iPhones and iPads ($7.7 million), and workout and recreation equipment ($9.8 million).
In the real world, any family or business that spends less than they budgeted for in any given year typically rolls that money over to the next year and calls it savings. Sure, families and business may celebrate their prudence by taking a vacation, making a special purchase, or offering a bonus.
The federal government, however, has different standards.
Instead of celebrating what they did not spend they panic about what they need to spend before the clock runs out. After all, if they spend less than they were allotted, than their program or office could be a prime target for a budget cut the next year. As the “use-it-or-lose-it” term implies, they rush to spend anything left on their accounts before they lose the chance to spend it on really important things. Like lobster.
This practice – and lack of common sense – is hardly new. In 2013, panicked bureaucrats at the Department of Agriculture spent $144,000 on toner cartridges in a single day near the end of the fiscal year. After all, there is no greater threat to the nation’s food supply than a toner cartridge drought.
In 2018, this trend continued. As the graphic illustrates, there was a major spike in spending during the last month of the fiscal year with a big spike during the last week. Historically, the average spend rate during the last week of the fiscal year is about five times the norm. In September, the federal government spent $97 billion on 509,828 contracts. This was more than twice the typical spend rate in any given month in 2018. Altogether, in fiscal year 2018 agencies spent $544.1 billion on contracts.
Politicians in both parties like to rail against the system, “the Establishment” or “the Swamp.” But enacting reforms that alter the structure and culture of Washington is something else entirely. Nowhere is this more evident than with persistence of the perverse “use-it-or-lose” spending incentives Congress has tolerated for years.
If President Trump is serious about draining the swamp he has to declare war on idiotic practices like “use-it-or-lose-it” this and do whatever is necessary to win. After all, the American people are not tired of winning on spending.
If the president uses the bully pulpit to elevate the issue he’ll give much needed support to senators in both parties, including Senators Rand Paul (R-KY) and Mark Warner (D-VA), who have already signaled their willingness to tackle the problem legislatively. Ending this practice is complex and technical but it is doable and a solvable problem. What’s been lacking is the political will to get it done.
One idea would be to give bonuses to federal employees who identify surplus funds. As Sen. Warner has said, “When we empower federal employees to identify surplus funds instead of encouraging the ‘use it or lose it’ mentality, we are better stewards of taxpayers’ dollars.” Exactly.
The president should work with members in both parties and do the tedious work necessary to drain the swamp. The American people are looking for results, not mere rhetoric. After all, nothing represents “the Swamp” more than talk and no action.