One of the greatest problems I’ve seen in our government and even in some businesses is that they believe that they have to spend every penny allocated to them. The thinking behind this is that if they don’t spend all of their money by the end of the fiscal year that they won’t get as much money in the next fiscal year. It’s the spend it or lose concept.
Years ago, my dad worked as a foreman for a utility. He was responsible for the canals in the eastern half of the Phoenix metropolitan area. Every winter, they would have ‘dry up’ where they empty a canal and replace or repair specified sections of it. The standard procedure usually covered about half a mile of canal on a couple of canals at the same time. Dad realized that he could have his crews cover a mile of each canal in the same amount of time and that his procedure was actually stronger and longer lasting than the old way. The first year he put his plan into operation, he replaced twice as much of the canal lining than before and saved the company just over $1 million. Instead of getting an ‘atta boy’ he got the worse butt reaming of his 23 year career with the company. Why? Because saving that much money meant that they may not get as much in the next year’s budget. He was told to make sure he spent every penny that was allocated for the canals.
The same holds true with the federal government and that is a philosophy that has helped create our massive debt and the unwillingness to cut spending. September 30 was the end of the fiscal year for the federal government. Knowing that the nation is in serious financial condition and that a shutdown was looming on the horizon, numerous departments still acted on the spend it or lose it mentality.
According to a report by the Washington Post, here are some of the examples of the spend it or lose it mentality that just took place:
- Department of Veterans Affairs – $562,000 for artwork in one week.
- Department of Agriculture – $144,000 for toner cartridges in one day.
- Coast Guard – $178,000 for cubicle furniture rehab.
In 2012, the federal government awarded $45 billion in contracts during the last week of the fiscal year, far more than any other week of the year. Nine percent of the total contracts were awarded in two percent of the year and just before the deadline.
The much loved IRS is another example of the spend it or lose it mentality. It was reported that in 2010, they had millions of dollars left in an account designated for hiring new employees. Just prior to the end of the fiscal year, they spent the money on a very extravagant conference. For the conference, the IRS paid to have a Star Trek set built and then a number of the managers filmed their own Star Trek parody on that set.
Sen. Tom Coburn (R-OK) addressed the problem of end of year spending, saying:
“The way we budget [money] sets it up, because instead of being praised for not spending all your money, you get cut for not spending all your money. And so we’ve got a perverse incentive in there. But, nobody’s talking about it but me and you.”
As long as this mentality pervades Washington, spending to the hilt will continue and the deficit never will be reduced. This is probably why Democrats fight against any kind of spending cuts and only want to keep raising taxes on everybody and everything. The more taxes, the less money people have to spend. The less money people have to spend, the more reliant on the government they become. The more reliant on the government they become, the closer we get to a socialist government!