NCPA - National Center for Policy Analysis

Areas Where Spending Could Be Cut

October 15, 1996

A report from the Heritage Foundation chronicles a number of cases of wasteful spending by the federal government that could be eliminated to help finance a tax cut.

For example, the Department of Commerce's National Oceanic and Atmospheric Administration (NOAA) issued 5,000 to 6,000 Smart Cards to employees. As a result:

  • The NOAA exceeded its travel budget by 84 percent in 1994, says Commerce's Inspector General.
  • Numerous employees misused the government travel card with "excessive unpaid charges, use of the card for personal purchases, and questionable automatic teller advances."
  • Misuse included payments for meals at Washington-area restaurants and the purchase of liquor, jewelry, flowers, books, music, computer on-line service fees and automobile insurance.

More money was wasted on the mismanaged Housing Authority of New Orleans (HANO). In the last three years alone, the Department of Housing and Urban Development (HUD) spent $244 million to rescue the local agency.

  • As recently as 1994, HUD's Inspector General reported that a random sample of 150 of HANO's housing units found that all 150 failed to meet housing quality standards.
  • Typical problems included missing ceilings, holes in walls, loose and peeling paint and roach infestation.
  • A follow-up random survey in 1995, however, did find some improvement -- only 93 percent of the sampled units failed.

One reason for the agency's poor performance: while the maintenance backlog for the 15,000 units was estimated at 36,000 individual work orders, the work crews who serviced nine of the 10 projects shared one pickup. Even so, managers purchased 16 new Ford LTD Crown Victoria passenger vehicles for the central office staff in 1993.

Finally Amtrak receives federal subsidy of $750 million per year, equaling $47 per passenger, but announced in August 1996 that because of an expected $250 million deficit, it was dropping three train routes serving 42 cities, including Dallas, Texas. At the same time, it was starting up a costly new service between Boston, Mass., and Portland, Maine. But the route is already served by a private bus company that offers a two hour ride for $15 per trip, and Amtrak's $40 million service will take 30 minutes longer to make the trip.

Source: Ronald D. Utt, "How Government Wastes Your Money: Report No. 3," F.Y.I. No. 123, October 15, 1996, Heritage Foundation, 214 Massachusetts Avenue, NE, Washington, DC 20002, (202) 546-4400.


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