By Adam Andrzejewski
Before Congress considers raising the debt limit again, they should take a look at Senator Joni Ernst’s (R-IA) trillion-dollar savings proposal.
At the end of every fiscal year, federal agencies waste billions of taxpayer dollars spending the last of what they’ve been given by Congress. They don’t need to spend this money, but they’re afraid that if they don’t use their entire budget, Congress will give them less money next year.
It’s called “use-it-or-lose-it year-end spending,” and it happens every year.
Since 2019, Senator Ernst, long a fighter of DC’s wasteful spending culture, has proposed capping agency discretionary spending for the last two months at the same rate as what the agency spent during the first ten months.
It’s a simple, yet powerful limitation on the wasteful and excessive “billion-dollar, binge-buying bureaucrats” in the agencies. If the proposal had been implemented this year, at least $1 trillion in taxpayer money could have been saved.
Sen. Ernst argues that agencies shouldn’t be waiting until the end of the year to throw money out the door in a rush to use-it-or-lose-it. They should spend taxpayer dollars wisely and appropriately, and if they don’t need everything Congress has given them, they should receive less money next year.
As of July 31, 2021, the 12 largest federal agencies, with a reported $12 trillion in combined total resources for fiscal year 2021, had sent out (“outlayed”) only $7.4 trillion. Therefore, the agencies were still sitting on a combined $4.6 trillion with only two months left in the fiscal year.
While all the different types of spending can be complicated from an accounting perspective, Senator Ernst’s proposal keeps it simple:
“(b) Requirements For Executive Agency Spending At The End Of A Fiscal Year.—
1. IN GENERAL.—Except as provided in paragraph (3), the amount of discretionary appropriations obligated by an Executive agency during each month of a covered period may not exceed the average monthly amount of discretionary appropriations obligated by the Executive agency during the 10-month period immediately preceding the covered period. …
(3) EXCEPTION.—This section shall not apply with respect to any discretionary appropriations obligated by an Executive agency for national security-related activities.”
Here are some real-time examples of just how much taxpayer money could potentially be saved:
U.S. Department of Health and Human Services (HHS) spent $1.8 trillion over the first 10 months of fiscal year 2021 – an average of $180 billion per month. If capped to a 10-month spending limit, the agency could “only” spend $360 billion more over the final two months of the fiscal year, August and September ($180 billion x 2).
Congress appropriated HHS a total of $2.8 trillion in fiscal year 2021. However, the agency still had $1 trillion left in its coffers to spend in the final two months of the fiscal year (source: July 31, USASpending.gov).
Senator Ernst’s proposal would save taxpayers $640 billion at HHS alone.
Department of Education (ED) spent $140.9 billion over the first ten months of the fiscal year for an average monthly spend-out rate of $14.1 billion. The agency had $405.3 billion available in FY21 “resources,” according to USASpending.gov. Capping those final two months at $14.1 billion each—$28.2 billion total over August and September— would force ED to spend “only” $169.1 billion for the year.
Instead, ED is likely to push out the door a whopping $264.4 billion in just the last two months of this year ($405.3 billion total available minus the $140.9 billion it had already spent through July).
Senator Ernst’s proposal would save taxpayers $236 billion at ED alone.
If already enacted, Ernst’s proposal would compel the Transportation Department (DOT) to return approximately $100 billion in savings, and the Department of Homeland Security (DHS) to return approximately $88.5 billion in savings for fiscal year 2021.
These four federal agencies (HHS, ED, DOT, and DHS) could have generated over $1 trillion in taxpayer savings under Ernst’s proposal.
Senator Ernst’s proposal requires federal agencies to have a better, more fiscally prudent plan to spend congressionally appropriated funds throughout the year. Rather than rushing to spend money at the end of the fiscal year and wasting tax dollars in the process, they would be forced to spend more conscientiously.
The proposal deserves further review by Congress and should be seriously considered before the politicians vote to raise the debt limit, once again, allowing them and the agencies to spend like drunken sailors.