For the federal government, September is the real holiday: with the federal fiscal year ending, it’s spending mayhem. Adam Andrzejewski of Open the Books joins us to explain just how much spending occurs at the end and what can be done. Read the interview, pasted below, or listen on the podcast:
We also cover these stories:
- President Donald Trump gives a speech on religious liberty at the U.N.
- “There is no international right to an abortion,” says HHS Secretary Alex Azar at the U.N.
- Climate change protesters block traffic in Washington, D.C.
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Rachel del Guidice: We’re joined on The Daily Signal Podcast today by Adam Andrzejewski. He’s the founder and CEO of Open the Books, an organization that tracks spending at each level—local, state, and federal. Adam, thank you so much for being with us today.
Adam Andrzejewski: Rachel, great to be on the program. I’m very happy to to shine a white hot spotlight on what’s going on this week in Washington, D.C.
del Guidice: Well, can you start off by telling us a little bit more about what Open the Books does and its mission to track all the spending that happens in the government?
Andrzejewski: Our mission, Rachel, is very simple. It could be summarized in a very straightforward phrase and that phrase is, “Every dime online in real time.” And to that end, our organization at OpenTheBooks.com has built the nation’s largest private sector database of public sector expenditures and that’s comprised of nearly all federal spending since the year 2001, 49 out of 50 state check books.
We’re getting ready to sue the state of California to open the books for the first time ever in the Golden State. They’re our lone holdout on state checkbooks.
And across the country last year, I’m really proud to say, we compiled for the first time in the history of the country virtually every single public employee’s salary and pension record from virtually every single level of government across the whole country. It was 22 million public employees salaries and everybody listening to the podcast, you can see all of this on our website at OpenTheBooks.com
del Guidice: Wow, you guys are busy. I have to ask, Sept. 30 marks the end of the fiscal year, and many government agencies tend to go on spending sprees at the close of the fiscal year. Why is that?
Andrzejewski: There’s a reason why the last week of the fiscal year is called “Christmas in September” for federal contractors. It’s the largest extravaganza of taxpayer abuse going on right now in the history of our country. This is a period where the agencies are spending down their budgets this year, so they’ll get an appropriation from Congress that’s the same or larger next year, it’s called “use it or lose it” spending.
It’s a spending binge and some agencies, Rachel, are going to spend $1 out of every $5 in contracting on the year and they’ll spend it this week and the final week of the year.
del Guidice: Wow. Can anything be done about these spending sprees? Is there any legislation you’re looking at or any other avenues where you’re seeing as helpful ways to curtail this?
Andrzejewski: The answer to that is yes. And there’s about three or four things that could be done immediately, and some of these things quite possibly could be done by executive action.
Last year, our organization, our auditors launched an oversight report on the final month, September of 2018 last year. What we found was nearly a $100 billion of federal contracting went out the door in the last month. And incredibly in the last week of the year, there was $53 billion.
Now, this led to U.S. Sen. Joni Ernst from Iowa [championing] the cause of stopping this outrageous abuse of taxpayers. So she wrote a bill, it’s called the Year-End Fiscal Responsibility Act and it’s Senate Bill 1238.
This week, today, as a matter of fact, on Tuesday, she’s taking the floor of the United States Senate to talk about our oversight report, to talk about the executive agency’s spending binge and her legislation designed to stop the practice on a go-forward basis.
del Guidice: Well, we’ll definitely be monitoring that. What are some types of last-minute spending sprees that your organization has uncovered as this fiscal year comes to a close?
Andrzejewski: For instance, last year, the federal agency spent a half billion dollars in the month of September buying vehicles. It’s an incredible amount of money. And Rachel, this is happening right now as we speak. We just pulled the numbers from the first two weeks of September of this year and already $60 million was spent by the federal agencies on passenger motor vehicles. So it’s going on again.
Actually, … we’ve got an inquiry into [the Department of State], asking for the reason why in the first two weeks of this year they’ve already spent $33 million buying cars.
del Guidice: Whoa, that’s crazy. I was speaking with Sen. Ernst the other day and … I believe what she was highlighting was the Department of Defense and mentioning how they’ll use last-minute funds to buy things like lobster and video games and candy, things that aren’t necessarily needed for the work that they do.
Andrzejewski: Well, in our oversight report last year, we found that the Pentagon spent $4.6 million buying lobster tail and snow crab. This made national news. It was big news, it ran on all the platforms. It was a nonpartisan story, it ran on Fox News, it ran on CNN, it ran on the New York Post and it ran in …The Arizona Republic.
… We’ve looked here in September already that the DOD is purchasing again lobster tail and snow crab. Now we still have two weeks left, they could definitely come in with a big order.
del Guidice: Wow. Well, in July, right before the August recess, things were busy in Congress. Congress passed the spending deal that combined a temporary suspension of the debt limit through July 31, 2021, and Congress raised the spending caps in the Budget Control Act for fiscal years 2020 and 2021, which essentially means that the federal government would have no limit on how much it can borrow. How does this hurt the complicated situation that we already find ourselves in?
Andrzejewski: Well, I think you raise all the right questions here and that is Congress has thrown even more money at the federal agencies this year for the end-of-year spending binge.
What we have found is that the procurement departments at these major agencies, they’ve staffed up in anticipation of having to blow these contracts out the door before the fiscal year closes.
We find evidence that the agencies are now even open on the weekends this year. They’ve scheduled work days of 12- and 13-hour days. Last year, the fiscal year actually ended on the weekend. This year, Sept. 30 is actually during the week, so they’re not going to be closed. They’re going to be open, they’re going to be working longer hours with more staffers and more money to spend.
They’ve even eliminated the limits. They’ve raised the limits on the credit cards, so they can use their credit cards now for up to $10,000 per transaction, rather than $3,500. So the limits have come off, the money is flowing, it is definitely Christmas in September for federal contractors.
del Guidice: … You mentioned all the work [Sen. Joni Ernst has] championed on this, and we have some articles on our website, DailySignal.com, where people can follow some of the legislation that she’s pushing. But I believe she’s called this a “war on waste.”
Why would you say that this is something that should be a nonpartisan issue? Something that not just, you know, Republicans should be pushing because they tend to be the party of fiscal responsibility, but why should this be an issue that both Democrats and Republicans can get behind?
Andrzejewski: When we launched this report back in March this year, we launched it on a C-SPAN program, “Washington Journal.” And I was on there for the half hour and I took 23 calls … and they were marked between Republicans and Democrats and independents. And all 23 callers were with us.
You know, an honest Democrat wants to cut waste, fraud, corruption, and abuse because that harms the efficiency of public money going to solve problems. Republicans want to cut the waste and save taxpayer dollars. So for different reasons, both parties should be on board.
This is one of the most egregious abuses every single year of the United States taxpayer and it needs to stop.
del Guidice: In your own research tracking this federal spending, where would you say is the most waste?
Andrzejewski: I think the most waste is going to be in the largest agencies, which just stands to reason. So I think the most waste is over at the Pentagon.
You know, the Pentagon buried an oversight report a couple of years ago in 2015 and they found that there was $125 billion a year in bureaucratic waste and there’s probably even more than that.
Look, the Grace Report back in the 1980s under President Reagan said, “One out of every three federal dollars spent is wasted.” It’s either taxpayer abuse or spent on duplicative services. And Rachel, I don’t think anyone believes that the budget is more honed today than what it was 30 years ago. I think we’ve had a couple of decades of spending on steroids.
del Guidice: Are there any particular reforms, looking at the Pentagon and how there is so much waste there, that you would suggest that would be particularly helpful for that particular situation?
Andrzejewski: We’ve advocated in USA Today and The Wall Street Journal three times, double-facing pages. We went in with an open letter to President Donald Trump, urging him to embrace the transparency revolution, urging him to declare, as commander in chief, war on federal waste. And the accompanying page detailed out 100 outrageous examples of waste.
One of easiest ones, and, again, it’s nonpartisan, we advocate putting in basic in-house financial accounting controls. Incredibly, since 2004, the 20 largest federal agencies admit to $1.4 trillion worth of improper payments. We’ve done oversight on that, Rachel, and what we found was even last year there was $1 billion of federal payments paid to dead people.
These were improper payments paid to people that had already filed a federal death certificate, but payments continued to flow, like Social Security payments and pension payments and Medicaid and Medicare payments.
So there’s just a lot of work to do, just on the basics. I mean, think about this: The Department of Education, they admit last year to $6 billion of improperly paid Pell Grants and student loans, it’s 8% of all Pell Grants that are improperly paid and 4% of all student loans.
Even the Small Business Administration lent $1 billion last year that they say they should not have lent.
Basic in-house financial accounting controls are missing and they’re even missing at the IRS. The IRS is one of the most egregious offenders of improper payments. Yes, the Internal Revenue Service, they administer the earned income tax credit and every year they admit to $18 billion, one out of every $4 in that program, is improperly paid out.
del Guidice: We have our work cut out for us, you’re definitely right on that. In your own research, especially looking at state spending, what are the states that are some of the worst offenders for “use it or lose it” spending.
Andrzejewski: We haven’t done “use it or lose it” analysis in the states, only at the federal level. But I can tell you the state where we’re headquartered, where OpenTheBooks.com is headquartered, is in Illinois, and Illinois is the Super Bowl of corruption.
… We got our start here honing our oversight models and we’ve got a phrase for the waste in Illinois: “It’s all legal in Illinois.” These are legalized money laundering schemes. And in Illinois, one of the biggest schemes that we face as a state, and it’s actually bankrupting our state, is the level of public employee salary and pensions.
In Illinois, incredibly, there’s nearly 100,000 public employees on salaries or pension payouts in retirement that exceed six figures a year, that exceed $100,000 a year. … We’ve got 600 pension plans and Moody’s estimates the longterm unfunded liability of those plans is a quarter-trillion dollars and there’s only 13 million people in the state.
That means for every man, woman, and child in the state of Illinois, there’s $20,000 of unfunded liability. A family of four, your share of the Illinois pension crisis is $80,000. Rachel, that’s never being paid back, and those programs, those pension plans, they’re going to go bust.
del Guidice: Going back to what you all are doing on the federal level, researching the “use it or lose it” spending, … how does “use it or lose it” impact taxpayers in particular?
Andrzejewski: Look, we’ve got $1 trillion of where the spending exceeds the revenue, $1 trillion of budget deficit in a $22 trillion national debt. So when we look at “use it or lose it” spending from last year, we found a half-million dollars to redecorate in the federal agencies.
You know, the Department of Defense spent $10,000 on a club leather chair. We found $300,000 spent on booze at the Department of Defense and the State Department purchasing beer, wine, and whiskey. We found $1 billion to load the gun lockers.
Everybody can probably support the Pentagon purchasing guns and bonds. But where it gets a little dicey is when you have your non-military, non-law enforcement agencies like the Office of Personnel Management, the Small Business Administration, the EPA, Health and Human Services, the IRS, and Veterans Affairs purchasing hundreds of thousands of dollars worth of guns and ammunition.
And we see that again in this year’s numbers: $17,000 went to purchase bullets for the equivalent over at the VA, for their police force of AR-15s. We found out last year $10 million was spent on workout equipment and recreation equipment, including $12,000 on a foosball table. We found a half-million dollars spent on self promotion, PR, public opinion research and communication and advertising in the final month of the fiscal year. And of course, we had that $300 million spent on vehicles.
del Guidice: That’s incredible. It’s like you wouldn’t believe it unless you actually saw the research to back it up, and that’s why what you’re doing is definitely so important.
Final question, looking ahead—especially at the younger generation, people around my age who are maybe in their first job getting started and are really mesmerized by issues like climate change and others—why is this issue, the issue of federal debt and spending, so very important and something that we should be tracking and caring about?
Andrzejewski: Well, Rachel, it’s unfair to your generation that my generation gets to spend and borrow and bond your generation for all of our bills. It’s grossly unfair. And I think that that’s just another reason.
This is a moral issue at the end of the day. The waste and excessive spending of hard-earned taxpayer money at—to our auditors at OpenTheBooks.com and the nearly 300 people that subscribe to our messages, this is Issue No. 1.
We believe—as our honorary Chairman Dr. Tom Coburn, the legendary former U.S. senator from Oklahoma, also believes, as does the former chairman of the Joint Chiefs of Staff under Barack Obama, Adm. [Michael] Mullen—that the No. 1 security issue facing the country is our national debt. We’ve got to stop spending and stop wasting taxpayer money.
del Guidice: Well, Adam, we appreciate you so much being on the podcast today. Where can listeners follow your work?
Andrzejewski: Just come to OpenTheBooks.com and … and become a subscriber or download our free app for Apple and Android, it’s very innovative. It’s called Open the Books—free in the Apple Store and the Google Play Store.
What you have on that is … 22 million public employees salaries, at every level across the entire country, right in your own ZIP code, in your own neighborhood. Finally, you can look up and you can see who, by name, works for which government agency, school district, municipality, and how much they make.
del Guidice: We’ve been speaking with Adam Andrzejewski, he’s the founder and CEO of OpenTheBooks.com.
Adam, thank you so much for being with us.
Andrzejewski: Great to be on the program. Rachel, thank you very much for your interest in our work.