Economy & Budget

Broken budget process costs taxpayers billions of dollars

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President Trump’s opening budget blueprint, announced Monday, may be new, but the federal budget process is not, and it works about as well as a car with sugar in the gas tank.

Congress has failed to agree on a budget in six of the last seven fiscal years, and 1997 was the last time all 12 annual spending bills were passed on schedule. Such circumstances are virtually nonexistent in the private sector, and will bewilder those serving in the Trump administration who are new to government.

Even as the president is talking about the 2018 budget, agencies are operating under a temporary spending resolution for 2017 that expires at the end of April, leaving them in a state of limbo until Congress acts.

{mosads}The stage is set for another difficult year, and, for every day of budget gridlock, the efficiency and effectiveness of government suffers. This is bad news for the American people, who deserve a government that spends their money wisely. But even in this dysfunctional environment, some common sense reforms can be adopted to improve congressional and agency performance and save taxpayers billions of dollars.


Create budget certainty.

Not knowing how much money will be appropriated for the year, or when it will be available, has made it difficult for agencies to plan and rationally allocate resources and personnel. This has led to diminished public services, a huge waste of taxpayer dollars, more expensive private-sector contracts and delays of programs, projects and the delivery of grants to states and localities.

The Partnership for Public Service recently asked federal employees what would most improve their ability to do their jobs. The most frequent response was tied between “predictable budgets” and “stronger leaders and managers.” Congress should adopt reforms that enforce budget deadlines and longer financial horizons, like biennial budgeting, to give agencies the budget certainty they need to run efficiently.

Reduce improper payments.

The Government Accountability Office (GAO) reported in November that agencies exceeded $144 billion in improper payments in 2016, up from $137 billion in 2015. Getting a handle on this growing problem could save billions of dollars a year.

A recent research report by the not-for-profit MITRE Corp recommended creating a government-wide leadership group to set standards, including a risk-management framework to help agencies better understand vulnerabilities and improve detection and prevention techniques. 

Reform federal acquisition.

The federal government is the world’s largest buyer of goods and services, spending more than $470 billion last year alone. The government, however, does not leverage its immense buying power, with agencies holding duplicative and inefficient contracts instead of acting as a single enterprise when making purchases.

In 2015, for example, the Office of Management and Budget found agencies paid between $450 and $1300 for laptops with the same configuration, a price difference of almost 300 percent. A comprehensive buying approach must be adopted to lower costs, and federal acquisition personnel must have the best market data possible to make smart decisions.

Congress and the administration also need to reduce the complexities of federal acquisition regulations. Several years ago, the GAO studied the purchasing practices of several major companies and found they saved 4 to 15 percent over prior years through enterprise-wide approaches to buying. The GAO said applying just a 4 percent savings rate to federal purchases in 2012 would have equated to $12 billion in savings.

Invest in technology modernization instead of legacy systems.

More than 70 percent of the government’s $89 billion annual information technology (IT) budget is used to maintain legacy computer systems. This includes a 1970s Pentagon system that relies on 8-inch floppy discs to coordinate the operations of our nuclear forces. We are wasting billions of dollars keeping old systems operational instead of investing in new technology.

Creating a government IT modernization fund or finding other ways to devote more resources to replace — not patch — federal computer systems will save enormous sums of money over time and bring the government into the 21st century.

Use the federal workforce as a strategic asset.

In a fiscally-constrained budget environment, we need high-performing employees and even better managers. Investing in a smart, dedicated, well-trained and equipped workforce is essential for turning ideas into results — especially when every dollar matters and throwing money at the problem is not an option.

The new administration is about to experience Washington at its worst — a broken budget process that inflicts damage on the operation of government. An early test for the president’s team will be whether they can take a private sector understanding of how budgets drive impact and work with Congress to improve the federal budgeting and spending processes.

Adopting key management reforms can save taxpayers enormous sums of money. The opportunities are real and the potential for lasting impact is great.  


Max Stier is president and chief executive of the Partnership for Public Service, a non-profit organization that strives for more effective government. 

The views expressed by contributors are their own and not the views of The Hill. 

Tags Deficit reduction in the United States Donald Trump Economic policy Military budget of the United States Presidency of Barack Obama United States United States federal budget
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