Government spending in the 4th Quarter

August 10, 2018

Most people set as a goal in life trying to spend less money than they have.  Many don’t set aside nearly as much as they’d like, but rational people at least consider it a win if they get to the end of the month with more leftover paycheck than bills.  This is just one of many ways in which government is not like rational people. 

2018 is only two-thirds over, but federal government’s fiscal year ends on September 30.  That means government agencies that have yet to spend their budgets for the year are now going on steroid-injected spending sprees and handing out cash to contractors like there’s no tomorrow, just to try to get rid of all the money allocated to them.  The reason: if they spend less than they said they needed, Congress might give them less next year (fat chance, since in Washington, if you reduce an agency’s budget increase from 12% to only 10%, Democrats accuse you of making “draconian cuts.”)  They have to spend it all by the end of the fiscal year so they can tell Congress they ran out of money just in the nick of time and desperately need more next year. 

 

Unfortunately for these agencies, some have really been slacking off in the tax money squandering department this year.  As the linked article from NextGov.com reports, agencies were concerned about Congress’ failure to pass a budget agreement so they spent less than usual on contracts in the first half of the year.  While spending has ramped up recently, only two of the ten largest federal agencies have spent 70% of their discretionary budgets by the start of the fourth quarter. HHS has spent only 23% of its projected $65 billion budget, the DHS has spent 27% of its $44 billion budget, and the VA has spent only $15 billion of its projected $88 billion budget.  I would call that “winning,” except if the VA has money that needs to be spent on veterans, then spend it already.  And I have to quote this next part verbatim:


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“That’s problematic because over the past five years, agencies have averaged about 32 percent of their spending in the fourth quarter, meaning the vast majority of agencies are way behind.”

 

Only in Washington would it be considered “problematic” to be spending less money than you expected.  But of course, only in Washington is all the money that’s spent other people’s money. 

 

https://www.nextgov.com/cio-briefing/2018/08/get-ready-massive-government-spending-spree/150360/

 

I’m not calling for full zero baseline budgeting, where every budget starts at zero each year and all expenditures have to be justified.  That’s great in theory, but it creates a ton of paperwork and wasted time.  But we need some sort of reform to stop rewarding ever-rising federal spending. Ronald Reagan taught us that if you want more of something, subsidize it.  Right now, we’re subsidizing federal agencies spending as much money as humanly possible so they can ask for even more next year.  What we mostly have to show for it are trillion-dollar deficits and a $21 trillion-plus national debt. 

 

How about subsidizing thrift?  Maybe offer agency managers and employers bonuses based on a percentage of their budget that they didn’t spend by year’s end?  Perhaps that would bring down deficits and stop late summer in Washington from resembling a madcap game show for contractors called “Who Wants To Be A Billionaire?”   

 

Incidentally, if you’d like to see what all that frantic federal spending looks like when you put it in digital form, click on this link:

http://www.usdebtclock.org

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Comments 1-7 of 7

  • Dan Barberree

    08/11/2018 12:38 PM

    How about offering a one time budget amnesty package to underspent departments to complete their budgets fully by putting their excess unspent budget money back into Medicare from which $700B was stolen.

  • CDR Marcia Standifer, USPHS, Ret.

    08/11/2018 11:13 AM

    Hi, Governor - Good to see that government spending CAN be controlled (even if by fear of no budget coming from Congress - I do the same with my retirement pay, in the rare event that my gov’t paycheck comes in late - it did once.)
    I also agree that if the VA has the budget to spend on veterans’ needs, they should not hold it back (a form of resistance to Trump’s attempt to enhance veterans care?).

    What I do not agree with is your suggestion that bonuses should be used as an incentive: Is that not EXACTLY why schedulers were told to hold off on veterans’ appointments, so that the upper management could receive bonuses for money saved??
    Managers and CEOs are being paid well to DO THEIR JOBS, and saving money is a worthy goal, but not to the detriment of those citizens who are being served by those agencies. Can’t agree with you on that!

  • James Lawler

    08/11/2018 11:03 AM

    Why can’t some of these unspent billions be redirected to built the border walls. These fund have already been allocated but unspent. This way “THE WALL” cost wouldn’t be costing additional fund?

  • Susanne Heron

    08/11/2018 09:23 AM

    Municipal budgeting on steroids! My sister worked for several cities here in Illinois as Treasurer, and her biggest battle was with the councils to make sure of funding responsibility for pensions and not spending money over budget. My brother in law's favorite story was a local high school that spent ten thousand dollars on basketballs to use up their excess money and ensure they would get full funding for the next year. This was 20 years ago. No wonder Illinois is circling the drain. If this type of municipal budgeting is rampant in every small village, imagine how much waste there is in Chicago, and Washington DC. Utter urrespon adddible madness.

  • Elaine humphrey

    08/11/2018 07:37 AM

    Who do we write to about this crazy spending? Lots of information on that debt clock. Will try to find an explanation of the different modules. Thanks Governor!

  • David Jones

    08/10/2018 07:06 PM

    Mike, You are right about "budget cuts." One of the smartest men I ever knew, my uncle (and Godfather), worked for the Federal Gov't. He ran an "environmental center" in the Midwest. He told me their budget was being "cut by 50%." After inquiry, he said, "we were supposed to get a 6% increase, and only got 3%."

    While he was super-smart, he had been in gov't 30 years. He had swallowed the Kool-Aid, and his thought-process was "corrupted" by the Federal Government Culture (aka The Swamp.)

  • Jim Hunt

    08/10/2018 06:29 PM

    Governor, You are correct. As a government small business services contrator we are having trouble answering the flood of requirements this past two months. The congress needs to pass a budget so agencies have their funding prior to the start of the fiscal year (what a novel idea). We should do away with continuing resolutions. Rewarding agencies for spending less than appropriated is not a new idea but the boys on the hill aren’t interested in saving the tax payers money.