Autumn Binge

Spend, spend, spend!

As summer blends into fall, the bureaucrats in federal agencies are often faced with a problem that few taxpayers will ever have to wrestle with: an overabundance of cash and a pressing need to spend it as quickly as possible. Usually the officials meet the challenge, pumping out money like ticker tape at a parade, and if some of this last-minute spending goes for wasteful, even harebrained projects -- well, it's a tradition in town.

The reason for this Washington rite of fall is that if an agency does not spend its full appropriation by Sept. 30, the end of the fiscal year, the money remaining is returned to the Treasury. That could give Congress the idea that the agency's appropriation was too large in the first place and lead to a reduction the following year. Says former Treasury Secretary Michael Blumenthal: "More money is wasted in the Federal Government in the last two months of the budget year than in the previous ten months."

During the 1976 presidential campaign, Jimmy Carter singled out the end-of-year spending orgy as one that he, as a sound manager, would stop. So much for good intentions. During the past fiscal year, monthly spending commitments by Government ranged between $39.5 billion and $51.2 billion a month until September, when it leaped to $86.8 billion. For example, Government spending (leaving aside the military) to acquire land and buildings jumped from $307 million in August 1978 to $1 billion in September.

Much of the last-minute spending is for research and consulting contracts, even though a lot of the work could be done more cheaply by the agencies themselves. As the witching hour approaches, Government bureaus also pour out money in grants. The Department of Housing and Urban Development gave about $5 billion in grants in August 1978; the figure in September was $20 billion.

This year the offensive against the September surge is particularly strong. Budget Director James McIntyre last month fired off to all agencies the most detailed memo yet on "controlling year-end buying," even including guidelines for buying furniture. At the next Cabinet meeting, probably this week, McIntyre, with the President's blessing, will warn that departments that shovel out money late this year will risk having their budgets reduced next year.

More important, Virginia Congressman Herbert Harris held hearings last week on his bill, cheered on the Hill, that would limit agencies to spending no more than 20% of their annual budgets in the last two months of the year. Such a restriction was imposed on the Department of Defense years ago.

Still, eliminating the ritual will be difficult even with the best of will. Two years ago, former HEW Secretary Joseph Califano put out a tough warning against an eleventh-hour spree. Later studies showed that 77% of Califano's printing budget for his own Office of the Secretary was spent in, yes, September.

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