The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Washington's 2016 Year-End Spending Spree

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


As federal fiscal years wind down, a frustrating ritual takes place throughout departments and agencies:  a spending surge on frivolous items in order to avoid budget cuts in the next fiscal year.  The final month of fiscal year 2016 is no exception.

These spending sprees are the result of baseline budgeting, under which an agency’s budget’s starting point is derived from the previous year’s spending.  This flawed strategy almost always ensures that budgets expand and more taxpayer dollars are spent every year.  Federal agencies have long ago discovered they can work the system by spiking their rate of spending in the month of September – the last month of the fiscal year – to ensure a higher funding level and avoid the perception that they can function with less taxpayer money.  The practice is known as “spend it or lose it.”

A September 2016 Mercatus Center report found that from FY 2003-2015, “federal agencies spent almost a quarter of their annual obligated contract funds in August and September.”  Mercatus’s previous study on year-end spending in September 2014 found that the State Department spent 37.8 percent of its entire annual budget in the month of September.  On average, the Department of Health and Human Services burned through more than a quarter of its budget in the final month.  A 2010 Harvard Study found that from 2004-2009, spending in the final week at the Department of Defense was four times higher than the average weekly spending throughout the rest of the year.

To make matters worse, these unused funds are not spent on critical priorities, but instead are frittered away in a clearly wasteful manner.  The National Taxpayers Union Foundation has compiled a long list of wasteful year-end spending:  On September 6, 2016, the U.S. Army spent $30,900 for an expandable paintball arena, $30,630 for a “Basketball Boot & Shoot Hoop,” $29,103 on an inflatable football toss, and $14,306 for T-shirt cannons.  On September 7, 2016, the Army spent $25,301.64 on cornhole sets.  On September 12, 2016, the Department of Transportation spent $20,000 on a new grand piano.  Also on September 12, the Department of the Interior spent $162,800 on bronze sculpture for the Itjen Courtyard in Skagway, Alaska, with a population of just 1,057.  The Department of Labor burned $5,560.49 on Sony TVs on September 20, 2016.  Anyone can take a gander at USASpending.gov for an even more expansive look at this problem.

On October 6, 2016 Adam Andrzejewski, founder of OpenTheBooks.com, said, “The fiscal year-end at the federal government doesn't just have the appearance of being a big party. It, in fact, is a big party.”  Thankfully, many options exist for taxpayers to shut down these wasteful festivities. 

On September 15, 2016, the House Committee on Oversight and Government Reform approved H.R. 2532, the Bonuses for Cost-Cutters Act of 2016.  The bill “would authorize agencies to pay bonuses to employees who identify unnecessary expenditures from amounts provided for agencies’ salaries and expenses,” particularly at the end of the fiscal year.  Sen. Mark Warner (D-Va.), a co-sponsor of the S. 1378, the Senate version of the bill, said:  “Our bipartisan proposal encourages federal agencies to return unused funds instead of rushing to spend-down their appropriations at the end of every fiscal year.”  The cost-cutters bill would direct 90 percent of surplus funds to paying down the budget deficit. 

Other options include allowing agencies to rollover a certain percentage of funding into the next year, and incentivizing managers who save taxpayer dollars by mandating that those officials be given higher performance ratings in fiscal responsibility on annual evaluations. 

A more comprehensive solution would be for Congress to adopt zero-based budgeting, which would force each agency to justify every expenditure from zero, rather than just based on the previous year’s budget.  Carol Gurvitz, a former financial analyst at the Congressional Research Service, extolled the many virtues of zero-based budgeting:  “Activities, methods of performance and levels of effort are evaluated on the basis of their contribution towards achieving the desired objectives of the organization.”  This approach would be a desperately-needed breath of fresh air for the budget process.

As Washington’s wasteful fiscal year-end habit is poised to continue into the next presidency, it is time for these spending sprees to end.  The good news is there is no shortage of solutions available to fix the problem.

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