Repeal of Micropurchase Authority

REPEAL OF MICROPURCHASE AUTHORITY

Mr. GRASSLEY. Mr. President, I rise today to speak regarding the repeal of expanded Federal Government micro-purchase limits, as well as to speak regarding recent regulatory action taken by the Office of Management and Budget on this matter.

We are all deeply concerned with the recent events surrounding Hurricane Katrina and the massive rebuilding and reconstruction efforts ongoing in the gulf coast.

While we all agree that help is needed, many have argued how best to provide this help. The second supplemental emergency appropriation for Hurricane Katrina included a number of provisions to help provide for rebuilding and reconstruction--including nearly $61 billion.

This money will help rebuild the gulf coast, yet there were some provisions in that second supplemental that leave the rebuilding effort vulnerable to fraud, waste, and abuse of taxpayer dollars.

One such provision was the repeal of the limitations on micropurchase spending authority. Micropurchases represent delegated buying authority for Federal agencies and were designed to save money by providing flexible spending. Micropurchases are usually small--averaging $600--and are most often made through Government credit cards.

By law these Government credit card micropurchases were originally capped at $2,500 per purchase. This limit was raised following 9/11 for emergency purposes only, to $15,000 domestically and $25,000 abroad.

The second Hurricane Katrina supplemental raised this emergency rate from $15,000 to $250,000, per purchase. This change represents a nearly 1600 percent increase. Imagine a Government bureaucrat being able to walk into a store, purchase an item for $250,000 without prior approval, and say, ``Put it on the taxpayer's tab.''

History has proven that these Government credit cards are prone to fraud, waste and abuse of taxpayer funds. I began looking into this issue several years ago. Working with the Government Accountability Office, GAO, and the various inspectors general over the years, I have uncovered hundreds of millions of dollars lost to fraud, waste, and abuse due to inadequate controls on Government credit cards.

This history of abuse prompted my immediate attention and intervention with OMB regarding the increased threshold. Through negotiations during the critical early hours following the passage of the micropurchase increase, OMB agreed to issue guidance which provided a temporary limit on who could utilize the new limits. This guidance helped to prevent undocumented spending and potential abuse; however, it only served as a temporary stop-gap measure.

On September 15, I introduced legislation on this topic. The bill introduced, S. 1716--the Emergency Health Care Relief Act of 2005--contained a provision that would roll back the increased micropurchase thresholds to a responsible level while maintaining flexibility for those providing relief in the impacted Gulf States. I included this provision in the bill I introduced because of my experience in fighting fraud, waste, and abuse that has occurred as a result of Government credit cards.

Unfortunately, S. 1716 has been held up in this body for too long, preventing legislation from fixing this potential giveaway and delaying health care to those most desperately in need.

I was pleased to hear that Senators DORGAN and WYDEN have voiced their concerns by recently introducing legislation on this matter. I am also pleased that legislation which was introduced by Senators COLLINS and LIEBERMAN on this matter was recently reported out of Committee in a favorable voice vote. Both of these bills represent what I believe is the sense of Congress, that this increased limit must be reduced statutorily.

On October 3, OMB revised its guidance for micropurchases, reducing the increased limits from $250,000 to $2,500, the same correction sought in the different legislation introduced by Senators COLLINS and LIEBERMAN and the subsequent legislation by Senators DORGAN and WYDEN. I applaud OMB for stepping forward and taking corrective action; however, I remain concerned that this limit could be changed by OMB at any time as the increased limit still remains in the law.

Fortunately, OMB has listened to my recommendations and recognized the need to rescind this provision and is now supporting efforts to provide a legislative fix. I have learned from OMB that all agencies within the Government have agreed that the higher limit is unnecessary and also support reducing the increased limit.

The micropurchase threshold increase needs to be repealed permanently by Congress and not merely corrected through regulatory guidance. As this body continues to hold up action on S. 1716, the best option for quick and decisive action to reduce this increased credit limit is to support the legislation introduced by Senators COLLINS and LIEBERMAN which was recently voted out by the Committee on Homeland Security and Government Affairs.

S. 1716 remains an important piece of legislation providing health care for those who have been affected by the tragedy in the Gulf States. By no means should my support of this legislation be seen as reducing the need to pass S. 1716 however; it just makes sense for this body to move quickly in closing this potential loophole for fraud, waste, and abuse.

I urge all my colleagues to join me in supporting quick passage of both S. 1716 and the legislation offered by Senators COLLINS and LIEBERMAN, to help prevent relief dollars from being lost to fraud, waste, and abuse and provide the much needed health care to the region devastated by Hurricane Katrina.

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