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Mercer

As if things weren't bad enough: ‘Unprecedented’ Government Spending Spree Picks Up Speed

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The federal government could spend close to half its appropriated budget in the final fiscal quarter, which ends Sept. 30

 

 

Article completely stolen from here: https://www.nextgov.com/cio-briefing/2018/09/unprecedented-government-spending-spree-picks-speed/151347/

 

The federal government is primed to spend as much as $300 billion in the final quarter of fiscal 2018 as agencies rush to obligate money appropriated by Congress before Sept. 30 or return it to the Treasury Department.

The spending spree is the product of the omnibus budget agreement signed six months late in March coupled with funding increases of $80 billion for defense and $63 billion for civilian agencies. The shortened time frame left procurement officials scrambling to find ways to spend the money.

 

Through August, defense and civilian agencies obligated some $300 billion in contracts. But to spend all the money appropriated to them by Congress, they may have to obligate well over $200 billion more in the final quarter of fiscal 2018, which ends in two weeks.

“It is not impossible for this to happen, but it is unprecedented for that high of a percentage to be obligated to contracts for a fiscal quarter,” David Berteau, president of the Professional Services Council, told Nextgov. “You’d have to spend almost 50 percent of the yearly total in three months.”

 

And yet the federal government may do just that. According to analysts at The Pulse, agencies have obligated $36 billion more toward contracts since July 1, based on data from the Federal Procurement Data System. FPDS data is imperfect and typically delayed—sometimes for weeks or months—but it does suggest significant spending nonetheless.

 

A Government Business Council survey conducted through Sept. 6 of more than 400 federal government decision-makers found that 52 percent were either “very confident” or “extremely confident” their agencies would spend the rest of their fiscal 2018 budget. The Government Business Council is the research arm of Government Executive Media Group, Nextgov’s parent company.

 

Here’s how the numbers break down.

 

Through the first three quarters of fiscal 2017, civilian agencies spent $117 billion on contracts, slightly more than the $114.8 billion civilian agencies spent through three quarters of this fiscal year. Civilian agencies spent almost $64 billion in the final quarter of 2017, or 35 percent of the $181 billion total contracting spend for the fiscal year. After spending cautiously in the first half of fiscal 2018, civilian agencies received another $63 billion in congressional funding to obligate.

 

Prorating the fiscal 2017 spending totals, Berteau said civilian agencies would have to spend close to $220 billion on contracts to exhaust what they were budgeted, which equates to more than $100 billion in the fourth quarter of fiscal 2018.

The Defense Department spent $331 billion on contracts in fiscal 2017 and was budgeted an additional $80 billion in fiscal 2018 on top of what it spent last year.

 

According to analysts at The Pulse, as of early August, the Defense Department had only obligated $177 billion in contracts of a projected $574 billion in discretionary spending for fiscal 2018. That leaves a lot of money on the table. Last year with less money and operating under spending caps, the Defense Department still spent $111 billion on contract obligations in the final quarter of fiscal 2017.

 

No longer under any such constraints, the Pentagon is likely to spend significantly more in the final fiscal quarter of 2018 than the $111 billion it spent in the fourth quarter of 2017.

 

Forecasting exactly how much the government will spend on contracts is not an exact science. Some appropriations to agencies have nuanced rules or are multi-year money, meaning it doesn’t have to be spent right away. Some agencies may opt to return money to the U.S. Treasury rather than spend it, though this is not a common occurrence.


One certainty, though, is that agencies haven’t spent every dime appropriated to them yet. In early September, the General Services Administration said in a monthly newsletter that $120 billion in common spending remained to be obligated. The Treasury Department’s Fiscal Service Data Lab, which analyzes government spending data, says agencies typically obligate 6 percent to 8 percent of their contract spending in the final week of the fiscal year. Given this fiscal year’s unusual trajectory, the final two weeks could be even more frenzied than normal.

 

Where Is the Money Going?

 

More than 80 percent of the decision-makers surveyed by Government Business Council said they expected to spend their remaining budget dollars on existing contract vehicles.

About one-third of decision-makers surveyed found “lack of personnel” the largest impediment to spending their remaining budgets, followed by “internal gridlock” and “lack of sufficient time.”

 

The most common near-term purchases reported by the surveyed decision-makers were professional services (34 percent), human capital products (29 percent), office management products (28 percent) and information technology (26 percent).

The most common professional services purchases reported were consulting, education and technical and engineering services, while the most common tech spending involves software, hardware and telecommunications services.

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In my opinion, this will end up being a final nail in the coffin in the United States post WWII boom. The baby boomers, who benefited the most from the monopoly we had on manufacturing after the rest of the world was recovering from being bombed into oblivion, are basically leaving their kids/grandkids deep in debt.

 

After almost a century of the United States subscribing to Keynesian economic policy, our GDP to debt ratio is close to where it should be after we borrowed our way through a world war. The only problem is we haven't invested any of that in infrastructure the public can use to become more productive.

 

I'm predicting a continuation of the artificially delayed recession of 2008. I'm guessing we've probably got a year to get our shit together, at best we've got till Q1 2020 before things take a really bad turn..

 

 

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$80 B increase to defense spending?  Good lord.  It boggles my mind how much America spends on its military.

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1 hour ago, metronome said:

$80 B increase to defense spending?  Good lord.  It boggles my mind how much America spends on its military.

Manipulating global affairs isn’t cheap man. LOL

 

 

  • LOL! 3

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they need to spend it so they don't lose their budget cap...they'll get less next year if they dont

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2 hours ago, misteraven said:

Manipulating global affairs isn’t cheap man. LOL

 

 

This is the gist of it.

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6 hours ago, glorydays said:

they need to spend it so they don't lose their budget cap...they'll get less next year if they dont

Why not subsidize education or health care?

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3 minutes ago, metronome said:

Why not subsidize education or health care?

the money was allotted to defense years ago and I mean back in Obama's first term

 

so moving that money from defense to another department would be damn near impossible

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Just now, metronome said:

Gotcha.  But maybe, going forward ... ?

in today's congress? filled with republicans who get donations from defense contractors and other military affiliated businesses even janitorial services

 

if Obama approved a 100 billion dollar defense budget over 10 years, I can only imagine what republicans are willing to spend

  • Truth 1

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Your guys system is so broken by lobby groups and corporate donations.  Ours isn't much better but at least our donations are capped so that legislation can't be bought quite as easily.

 

  • LOL! 1

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Just now, metronome said:

Your guys system is so broken by lobby groups and corporate donations.  Ours isn't much better but at least our donations are capped so that legislation can't be bought quite as easily.

 

sometimes the donations aren't direct to the politician...sometimes the corporations "back" a project that the politician wants done or finished

  • Truth 1

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Good point.  I don't know how much noise it's making but it looks like it's getting harder and harder to vote as well.

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17 minutes ago, metronome said:

Good point.  I don't know how much noise it's making but it looks like it's getting harder and harder to vote as well.

the way that US republicans see it....there are millions and millions of undocumented migrants voting the shit out of democrats

 

so they do their damndest to keep minorities from voting

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