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The Annual Federal Spending Frenzy Is a Terrible Year-End Tradition

What do you do if you wind up with a little extra money in your household budget at the end of the year?

Perhaps you pay down your credit card debt or save it for an earlier retirement. Maybe you replace old appliances or go on a much-needed but unplanned vacation. One thing is clear: Because you're spending your own cash, you make sure to get as much out of it as possible.

You might expect our tax dollars to be treated the same way. You would be mistaken. The end of the fiscal yearSeptember 30triggers a spending frenzy in Washington, where the driving order isn't "do something worthwhile" but rather "make sure nothing is left." Because agencies can't carry over any part of their operating budgets into the next fiscal year, politicians and bureaucrats spend to the last dime, knowing that leftover resources will be returned to the Department of the Treasury. They also worry Congress will reward frugal agencies with cuts to their future allotments.

As a result, every October, newspapers brim with shocking stories about wasteful and possibly corrupt spending behaviors. Think military vehicles driving in circles to drain the last pennies of their gas allowances, or hundreds of thousands of dollars for booze and party favors.

These aren't just anecdotes. Empirical evidence confirms the sharp spike in end-of-year consumption. Jason Fichtner, my colleague at the Mercatus Center, has shown that a remarkably large percentage of federal contract spending occurs near the end of the fiscal calendar. Contracting expenditures represent only 11 percent of the overall budget, but due to their more robust transparency requirements they are the only ones we can easily track.

For executive branch departments, Fichtner shows that on average, 16.3 percent of contract expenditures happen in September. This is twice as much as the 8.3 percent of the annual budget you would expect to be spent in a given month if the money were split evenly across the year. The State Department and the Department of Housing and Urban Development are even worse, consistently spending a third of their total contracting budgets in September.

This happens regardless of administration, party control of Congress, or type of budget resolution. And it is not new. Back in 1978, the Government Accountability Office sounded the alarm with a report finding that agencies on average spent 21 percent of their budgets in the final two months of the fiscal year.

How much money are we talking about? In 2017, federal agencies excluding the Department of Defense spent $11.1 billion in the final week of September. Despite Trump's big promises to find cost savings, the Office of the President alone spent $21.8 million on furniture, electrical hardware, supplies, and flooringfour times as much as Barack Obama spent during the same period a year earlier.

OpenBooks.com's Adam Andrzejewski provides some juicy examples of what certainly looks like reckless end-of-year spending in Forbes, such as $7.3 million by nonmilitary agencies on guns, ammo, and related equipment (including $306,617 by the Department of Agriculture on wares from Glock Inc. and $1.5 million by the Department of Health and Human Services). The government also apparently had a sudden furniture shortage requiring $83.4 million in expenditures, not counting the $23 million on office supplies and equipment. Some $18.6 million went to public relations, $11.7 million to market research and public opinion, and $5.5 million to communicationsjust in the last week of September.

But does a spike in and of itself mean the funds were wasted? There is substantial evidence suggesting that the rush to spend leads to less efficient acquisition outcomes than at other points in the fiscal year. A well-known 2010 study of federal information technology (I.T.) expenditures, for instance, shows a correlation between lower-quality I.T. projects and end-of-year spending.

In the private sector, entrepreneurs brag about managing to achieve their goals at lower costs than planned. That means more money will be left over for customers, shareholders, and workers. In government, no incentives exist for doing more with less.

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  • Fist of Etiquette||

    Contracting expenditures represent only 11 percent of the overall budget...

    Expenditures never contract, only expand. And is the Department of Agriculture buying a shitload of guns more American or less American?

  • ||

    Contracting expenditures is used to describe money spent on hiring contractors (as in people or companies who sign contracts to supply goods or services) not contracting in the sense of shrinking or reducing.

  • Fist of Etiquette||

    Oh, Isaac. Isaac, Isaac, Isaac.

  • Telcontar the Wanderer||

    Let the record show that when the chips were down, I had your six. I represented.

  • Telcontar the Wanderer||

    Just in case he doesn't come back and check the thread:

    WHOOOSH.

  • Telcontar the Wanderer||

    Dammit.

  • Fist of Etiquette||

    In your attempt to salvage my reputation, your failure to refresh means you have BECLOWNED YOURSELF.

  • Telcontar the Wanderer||

    So this is how House Etiquette treats its friends. Very well... The next time the beacons are lit in the mountains, do not be surprised when no riders answer your call.

  • gaoxiaen||

    Just imagine. When I did supply in the Navy, I had to do this quarterly. But I enjoyed it, buying gifts for everyone in deck department. No one cared, as long as I spent the money.

  • BambiB||

    I had "budget officer" as an additional duty. I worked at a SLBM warning site in Tampa that had to go on generator power any time a thunderstorm was within 10 miles because any loss of power meant HOURS to cool down the preamps. But weather varies. Sometimes we'd burn lots of diesel. Other years, not so much. Whatever was left over in the budget had to be spent. I remember the first year my commander ordered me to "spend all the money" and I went to base supply to find they had nothing we needed - and wound up buying 100 years supply of pencils, mops, brooms... I was a "hero" for spending the budget down to $5.08. And it sucked.

    In other end-of-year madness, my NCOIC reported after I'd left the unit that HQ had to send a supplementary disbursement for $60K for extra diesel. Instead, they sent authorization for $60 million. Well, it's just zeros, you see, and only three of them. The draft was fully negotiable and he jokingly told me he thought about just taking the money and running. At least, I think he was joking. Took HQ about two weeks to discover their error IIRC.

    Point is, the money isn't "real". It's just something they have to get rid of at the end of the year. Pilots take planes up and fly them in circles to burn fuel just to waste the money. Happens all throughout the government... and it's evil.

  • Sanjuro Tsubaki||

    True dat.

  • MarkLastname||

    Werd.

  • Jerryskids||

    (including $306,617 by the Department of Agriculture on wares from Glock Inc. and $1.5 million by the Department of Health and Human Services)

    I've been warning for years - the executive branch agencies have staged a coup, they no longer need any buy-in from their "bosses" to do whatever the hell they want. SCOTUS has given them the Chevron deference, multi-million dollar civil settlements give them their own slush funds independent of Congress' purse-string control, now they have their own armed enforcers independent of the DoJ. The CFPB with its explicit independence from any oversight or control by the three Constitutional branches of government should have had people rioting in the streets but half the population is cheering the destruction of the constitutional republic and the rise of the imperial executive and Trump usurping the throne of their God-King is merely a momentary set-back to their schemes.

  • Gaear Grimsrud||

    Well said.

  • C. S. P. Schofield||

    All of whch would worry me a good deal more if there was any evidence that the employees of these agencies spent any real time shooting.mthey may have guns, but against a population that shoots,for fun, they are at a serious disadvantage. I'm nit saying we shuldn't worry. I AM saying we shouldn't panic.

    Face it, these agencies are infested with the kind of Progressive/Liberal who thinks that a firearm is a magic want of mind control. It would never occur to them that if they point one at someone, he might not do what he's told. They probably think that silencers make a submachine gun quiet, or that the proper way to threaten someone with a gun is to touch them with the muzzle.

    Send a bunch of them from, say, the department of agriculture out to strong arm somefarmer, and the farmer is going to have some so-so fertilizer and several nice guns.

  • Jerryskids||

    It's not the little farmers they're going after. It's the corporate farmers like ADM and Con-Agra and the negotiated settlement doesn't even make big headlines aside from the Evuul KKKorporations! sites - nobody mentions that the settlements include A) no admission of wrongdoing by the corporation (Really? Then why are you paying the 'fine' if it's nothing more than extortion?) and B) hefty qui tam checks for the third parties pushing the suits: Greenpeace, WWF, Friends of the Earth, etc. Bringing guns into the boardroom just increases the incentive to settle on the government's terms. Which is the watermelon's terms.

  • BambiB||

    I've been on the range when police state functionaries come out to practice for "qualifying". I recall one distinctly who set up a large pizza box with a target on it at 10 yards - and missed about half the time. Not the target - the whole pizza box. Meanwhile, I was punching 3" groups at 25 yards.

    In a shootout - who wins?

    I know for a fact that there have been single years when I've put more lead down range than most LEOs do in an entire lifetime.

    And I'm skeptical about the government.

  • Palin's Buttplug||

    The CFPB is part of the independent Federal Reserve. So those riots you speak of are about 104 years past due.

  • Jerryskids||

    I stand corrected - nobody's ever had a beef with the Federal Reserve.

  • Cunty Over Party||

    "Slavery has been in America for over 200 years, so calls to ban it are over 200 years past due."

    -- PB ancestor in 1850

  • Sifrit||

    I just wish he'd finally give up on the sockpuppet account, he's not even trying anymore.

  • Palin's Buttplug||

    You don't know what an independent branch of the federal government means, do you?

  • Francisco d'Anconia||

    There was a time when, on every 30 Sep, we had a jet in the traffic pattern doing touch-and-gos with the sole intent of zeroing out our flying hours to the tenth. To their credit, they quit doing that, allowing units to exchange hours with other units that need them.

    The end of year spending continues unabated, however. Because...government.

  • Cunty Over Party||

    OT: One of the 4 black thugs who tortured a disabled white kid got off with just probation and community service.

    Despite the guilty plea, Cook County Circuit Judge William Hooks released Covington without jail time. Telling Covington, "Do not mess this up," Judge Hooks imposed 200 hours of community service and banned Covington from using social media and having contact with her co-defendants for four years.

    The judge did not assign jail time because, he said, "I'm not sure if I did that you'd be coming out any better."

    Hooks insisted that his sentence would give Covington the chance to put her life on a productive path.

    I didn't know the sole purpose of prison sentences was self-improvement! I guess that guy in Florida who got 15 years for leaving bacon in a mosque must be benefitting like hell from that long stay.

    Can you imagine what would have happened if the races were reversed in the Chicago case? "Sentencing disparity" my ass.

  • ||

    OT: WEIGEL!

  • Aloysious||

    Weigel is the gift that keeps giving.

  • jcalton||

    "every October, newspapers brim with shocking stories about wasteful and possibly corrupt spending behaviors."

    What newspapers?

  • Eidde||

    The Daily Mail with a hot-breaking story:

    "Festive Felines! Mischievous cats cause mayhem as they clamber up Christmas trees and attack their owners' precious ornaments

    "Cat owners around the world know the risk they are taking putting up a tree

    "Mischievous felines are drawn to the bright lights and sparkly baubles

    "For the pets it's just an extra toy to play with much to their owners' despair"

  • Telcontar the Wanderer||

    "such as $7.3 million by nonmilitary agencies on guns, ammo, and related equipment (including $306,617 by the Department of Agriculture on wares from Glock Inc. and $1.5 million by the Department of Health and Human Services)."

    One World Government in 5, 4, 3...

  • Eidde||

    If you're in New York this week, be sure to visit Jingle Hell's.

    "Ornaments mixed with flasks, pill bottles and headless Barbies hang from the ceiling, while the heads of all of Santa's reindeer — even Rudolph with his nose so bright — are mounted like hunting trophies on the wall....

    "But some locals don't like the bar, which was created to promote SYFY's new yuletide-themed show "HAPPY!""

  • The_Hoser||

    Is that you, Stefon?

  • Telcontar the Wanderer||

    "The government also apparently had a sudden furniture shortage requiring $83.4 million in expenditures"

    Ooh, I HATE when that happens.

  • Eidde||

    Hallmark Christmas movie drinking game

    "...Has someone lost their Christmas spirit? Take a drink. If they lost their Christmas spirit because their "love" broke up with them on Christmas, take a drink. If it's because their "love" died at Christmas, drink. If it's because a parent left when they were a kid — at Christmas — drink again...."

  • Telcontar the Wanderer||

    "Every time someone shouts something in a foreign accent before experiencing pain, uses an office appliance in a manner for which it was not designed, or plays/sings a Christmas song in a deliberately inappropriate setting, drink."

    /Die Hard version.

  • Telcontar the Wanderer||

    "Some $18.6 million went to public relations, $11.7 million to market research and public opinion, and $5.5 million to communications—just in the last week of September."

    Avoiding embarrassment in the eyes of the public clearly being a very high priority for them.

  • Eidde||

    Hey, your posts are on-topic, is that even allowed?

  • Telcontar the Wanderer||

    No, it is not.

    AND THAT'S WHY I DO IT.

    /rebel

  • Eidde||

    If you're in Canton, Ohio this Christmas, check out the Factory of Terror haunted house.

    "The home to all things haunted and three-time holder of the Guinness World Record for the largest haunted attraction in the world has rolled out the tinsel and decorations to get into the spirit of the holidays."

  • Eidde||

    Man's shocking confession - he realizes he's not feminist enough.

  • Sevo||

    Oh NO!!!!!

    "President Donald Trump drinks 12 cans of Diet Coke and watches as much as eight hours of TV per day, according to a new report in The New York Times."
    http://www.sfgate.com/technolo.....418635.php

    OK, the knife and fork fried chicken, that was tough. And the too-tight watchband? Well I guess we can just barely accept that.
    But THIS?! That's it. String him up!

  • Telcontar the Wanderer||

    "Already did!"

    -Rodina

  • SIV||

    Most libertarian Senator?

    While I'm kinda partial to the 14th as written the rest of them can go.

  • Telcontar the Wanderer||

    So, are you relying on the 14th to cover the 13th's job? Or are you just tired of having to pay the guys that muck out your paramours' coops?

  • Cunty Over Party||

    Marijuana legalisation and sentencing reform costing California dearly.

    California Is Running Out of Inmates to Fight Its Fires

  • Telcontar the Wanderer||

    "Hey Mexico, we would appreciate it if you could try harder to not send us your best... I'm talkin' murderers, I'm talking rapists... No, no, leave out the good people."

  • EscherEnigma||

    Makes me think about the Oklahoma chicken factories a few weeks (months?) back. Prisons aren't the only ones that economically benefit from large prison populations.

  • JoeBlow123||

    I have always found this ridiculous. I am pretty sure this happens because money is not a real thing for government people. They can either do something or they cannot, they price of said something is immaterial and opportunity costs do not exist. No Admiral or government executive has ever been promoted because he is a good manager of funds which is probably why these morons go on to green light boondoggles like the F-35 or FORD CVN.

    I'm pretty sure where I work we get new chairs every year. Totally worthless expenditure. We have also bought new shredders three years running, big expensive bad boys too. The amount of paper we waste, nice color prints, is fucking astounding. Just so some high ranking jackass can look at something and scribble on it instead of being bothered to open up the file on his computer. As this is the military, efficiency and innovation is frowned upon in favor of fellating the high ranking jackass in charge. I love the military, but fuck there are so many worthless pieces of shit. Thank God there are people around who can do the work of 3 people because without them the morons would run the joint.

  • EscherEnigma||

    I am pretty sure this happens because money is not a real thing for government people.
    It's pretty well-understood why this happens. Because congress incentivizes this kind of behavior in the name of "accountability" and "fiscal conservatism".

    So sure, it's absolutely ridiculous. But tragically, it's also entirely understandable.

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