Has the Shutdown Negated Obama's Anti-Waste Effort?

By Charles S. Clark

October 11, 2013

Estimated costs of the government shutdown vary widely. The Congressional Research Service says the 26-day pair of shutdowns in 1995-96 cost the government about $2.1 billion, in today’s dollars. Former Congressional Budget Office Director Douglas Holtz-Eakin recently predicted a $3 billion price tag if the duration of the 2013 version ends up being comparable. That's about the amount government pushes out daily in discretionary spending.

An analysis by the Colorado-based research company IHS Inc., with ABC News, on Oct. 1 put the price of lost productivity from the furloughs of 800,000 federal workers (average salary $110,000), at $300 million per day, or $1.6 billion per week.

But the highest estimate was cited this week by Sen. Richard Burr, R-N.C., as he sought to minimize the likely damage from a default in the government’s debt service. “You’ve had the federal government out of work for close to two weeks; that’s about $24 billion a month,” he told The New York Times. “Every month, you have enough saved in salaries alone that you’re covering three-fifths, four-fifths of the total debt service, about $35 billion a month. That’s manageable for some time.”

However, if federal employees are paid retroactively (as the House voted unanimously to do last Saturday), Burr's salary savings become a cost of paying people for not working. A back-of-the-envelope calculation using Burr’s numbers shows that as of Friday, the 10th day of the shutdown, the cost to the government so far would be a third of $24 billion.

Coincidentally, that figure of $8 billion is precisely the amount that the Office of Management and Budget set out to save by the end of fiscal 2013  through the Obama administration’s Campaign to Cut Waste, led by Vice President Biden since June 2011. (And  it succeeded, OMB said last year.)

Just a year ago, acting budget Director Jeffrey Zients attributed progress on the Campaign to Cut Waste to “smart management.”

Is he now back to square one?


By Charles S. Clark

October 11, 2013

http://www.govexec.com/management/2013/10/has-shutdown-negated-obamas-anti-waste-effort/71846/