Report shows procurement spending on the rise

The federal government increased its procurement spending by 7.3 percent in fiscal 2000, one of the largest increases in all spending categories, according to new statistics from the Census Bureau. The Defense Department accounted for $134 billion, more than 60 percent, of the $223 billion in procurement dollars spent in fiscal 2000, the Census report said. According to Gerard Keffer, the Census Bureau's federal programs branch chief, Defense Department procurement awards fell from 1985 to 1990, then began to increase gradually each year thereafter. "The [procurement award] numbers in that period more than doubled, as did the retirement and disability category during that time," Keffer said. "Other direct payments, which includes things like Medicare, food stamps and housing assistance, more than tripled." In addition to procurement spending, Census Bureau statistics show that the largest spending increases in fiscal 2000 were for mandatory spending, which includes Social Security, Medicare, veterans' pensions, rehabilitation services, House and Senate members' pay, judges' pay and the payment of interest on the public debt. The government spent more than $1.6 trillion in mandatory payments in fiscal 2000, much more than the amount provided for discretionary spending, the funds that Congress provides through the appropriations process. The discretionary budget authority cap for fiscal 2000 was almost $578 billion, but that figure included $18 billion in one-time expenses, such as the 2000 census. Collectively, Social Security, Medicare and Medicaid accounted for nearly 50 percent of fiscal 2000 spending, with Social Security spending alone totaling $444 billion. Medicare spending increased by 3.4 percent. One area that did not see a dramatic increase during the past few years was salaries and wages for federal employees, Keffer said. In 1985, the federal government spent $115 billion on wages and salaries; it spent $185 billion in 2000. "That's like a 60 percent increase during a time when other things were doubling and tripling," Keffer said. "Why salaries and wages seem to be increasing slowly is an increase in procurement… . More things are being purchased and outsourced rather than done in-house. It remains to be seen, but I would expect that trend to accelerate," he said.