NCPA - National Center for Policy Analysis

Federal Budget: "Use It or Lose It"

October 7, 2013

Last week, while Congress fought over next year's budget, federal workers were immersed in a separate frantic drama. They were trying to spend the rest of 2012's budget before it was too late, says the Washington Post.

  • In one week, the Department of Veterans Affairs bought $562,000 worth of artwork.
  • In a single day, the Agriculture Department spent $144,000 ontonercartridges.
  • And, in a singlepurchase, the Coast Guard spent $178,000 on "Cubicle Furniture Rehab."

The reason for their haste is a system set up by Congress that, in many cases, requires agencies to spend all their allotted funds by Sept. 30. If they don't, the money becomes worthless to them on Oct. 1. And -- even worse -- if they fail to spend the money now, Congress could dock their funding in future years. The incentive, as always, is to spend.

"Use it or lose it" season is not marked on any official government calendars. But in Washington, it is as real as Christmas. And as lucrative.

  • In 2012, for instance, the government spent $45 billion on contracts in the last week of September, according to calculations by the fiscal-conservative groupPublic Notice.
  • That was more than any other week -- 9percent of the year's contract spending money, spent in 2percent of the year.

Much of it is spent smartly, on projects that had already gone through an extensive review. But not all of it.

  • In 2010, for instance, the Internal Revenue Service had millions left over in an account to hire new personnel. The money would expire at year's end. Its solution was not a smart one.
  • The IRS spent the money on a lavish conference that included a Star Trek parody video starring IRS managers filmed on a Star Trek set that the IRS paid to build.

Source: David A. Fahrenthold, "As Congress Fights Over the Budget, Agencies Go On Their 'Use It or Lose It' Shopping Sprees," Washington Post, September 28, 2013.


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