Lawmaker: Higher purchase card spending limit 'inevitable'

Legislation that would double or triple the $2,500 purchase card ceiling is on the horizon, according to House Government Reform Committee Chairman Tom Davis, R-Va.

The $2,500 cap has "been in effect for a few years, and $2,500 can't buy what it used to," Davis said in a speech at a Washington conference hosted by VISA U.S.A. Inc. "I think it's inevitable … at some point we'll double it or triple it."

Currently the Homeland Security Department's limit, known as the micropurchase threshold, is $7,500, with a $2,000 limit for construction-related purchases.

Davis said he won't try to raise the limit now because Senate Finance Chairman Charles Grassley, R-Iowa, would "try to come in and undo the whole thing."

Grassley and several other lawmakers have sponsored legislation intended to stem purchase card abuse, including requiring credit checks for cardholders, and asking agency inspector generals to routinely audit card programs.

Davis said measures to strengthen charge card programs, used for the procurement of routine items and for travel expenses, are unnecessary and contradict the purpose of the program, which is to make purchasing more efficient. The General Service Administration charge card program, SmartPay, contracts with five banks, and savings estimates total more than $1.6 billion annually in administrative expenses.

"Unfortunately, sometimes people misuse charge cards. It happens in my house, and it happens in government," Davis said. "You got enough cards out there that someone's going to misuse it…we are willing to trade off a few bad transactions for overall savings."

Government charge cards have helped trim administrative costs in purchasing inexpensive goods and services, but they also have been abused by federal workers who have used them for everything from designer briefcases to prostitutes to photos of Elvis Presley purchased at Graceland.

Senate Governmental Affairs Chairwoman Susan Collins, R-Maine, introduced the 2005 Purchase Card Waste Elimination Act in February intending to encourage agencies to increase efforts to educate employees on how to use the charge cards and find discounts for government buyers.

In March, the Office Management and Budget issued new guidance intended to centralize government charge card policies and establish minimum standards including requirements for background credit checks for cardholders

Davis did not address Collins' legislation or the new OMB guidance, but said additional regulations are unnecessary. Defenders of the programs, such as Davis, believe that increasing regulations would be akin to spending $1,000 for the purpose of saving $1.

"We can't get so caught up in procedures that we lose the point of the program," Davis said.

The lawmaker also addressed the recent loss of government worker personnel data by the Bank of America and said that he does not believe that new legislation is appropriate right now.

"We need to become more careful with the credit card information," Davis said.