Paul Slams ‘Perverse’ Incentives For Year-End Spending

Kathryn Watson on September 30, 2015

Sen. Rand Paul on Wednesday slammed federal officials’ practice of rushing to spend leftover budget dollars in September so they don’t risk losing the money.

The Kentucky Republican said Wednesday that “perverse” incentives for “use it or lose it” spending by federal agencies at the end of the federal government’s fiscal year should be eliminated. Paul’s comment came during a hearing of the Senate Committee on Homeland Security and Governmental Affairs Committee’s subcommittee on federal spending oversight and emergency management.

Paul, who became chairman of the subcommittee in January 2015, told the hearing that when he assumed the position, he found printer ink cartridges his office couldn’t use stacked to the ceiling.

“This practice will not continue under my chairmanship,” said Paul, who is seeking both a second term in the Senate and the Republican presidential nomination in 2016. He said he is returning to the U.S. Treasury almost half a million dollars from his personal office budget this year.

Paul and Sen. Mark Warner, D-Va., introduced a bill in May providing bonuses of up to 10 percent of savings that result from federal agency heads returning unspent funds to the treasury. Their proposed “Bonuses for Cost-Cutters Act” is stuck in the Senate Committee on Homeland Security and Governmental Affairs.

“As you can imagine, every appropriator from both parties is opposed to my bill,” Paul said.

“It is a serious, hugely important problem,” former State Department official Dean Sinclair told the subcommittee that year-end spending is “an unseen problem, and the reason I say that is people who have this mindset that they have to get rid of that money throughout the year are making bad decisions about that money.”

Jason Fichtner, a senior fellow at George Mason University’s Mercatus Center, said the State Department spent nearly 40 percent of its overall budget in September in both 2012 and 2013, including $1 million on a piece of granite artwork in September 2013, and $5 million for a Vermont glassblower to create sculptures for American embassies around the world. Fichtner authored a report on year-end spending last year using data last year.

The Department of Health and Human Services and the Department of Interior spent more than one-fifth of their budgets in September the last two years.

“Year-end spending surges have become the norm,” Fichtner said.

Follow Kathryn on Twitter.

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