One of the first things companies cut when faced with budget imbalances is travel. Yet, despite record federal deficits in recent years, government expenditures for travel have grown by leaps and bounds. For example, in FY 2001, federal agencies spent approximately $9 billion on travel for mission-related business around the world. In FY 2006, that figure reached just over $14 billion — an increase of 56.1 percent.

Federal Travel Budget (in billions)¹

Annual Growth Rates

Some of the recent increases may be due to rising oil prices and the demands of the wars in Iraq and Afghanistan. But even taking those factors into account, year in and year out, agencies spend more on travel than they project, and the size of the rate of increase experienced in recent years is consistent to those prior to 9/11, indicating this is a structural rather than temporary problem.

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Furthermore, the fact that travel spending is rising at such a rapid pace would seem to be counterintuitive, considering that the last decade has witnessed remarkable improvements in telecommunications technology (including video conferencing, web-casting, etc.) that should have decreased the need for face-to-face meetings and onsite visits.

Part of the problem is a lack of oversight on the part of the Bush Administration, which has not been vigilant in ensuring rules regarding travel expenditures are followed. For example, according to a General Accounting Office (GAO) report from earlier this year, government employees spend at least $147 million on first and business class tickets annually, in violation of government rules that require workers to fly coach. But much of the reason for these large increases is due to the lack of any real mechanism to limit the annual growth in travel spending.

Proposal

The federal government should create a hard cap on travel expenditures by civilian employees (travel by military personnel would be exempt) and cut the expected rate of growth in half. To ensure that emergency travel needs are met, agencies should be required to hold a percentage of their travel budget (10 to 20 percent) in reserve until the last month of each fiscal year. This cap could be put into place by a Presidential Executive Order and enforced by the Office of Management and Budget (OMB)

By holding the expected rate of growth in half, the federal government could save $12.68 billion over the next ten years.

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¹ Daniel Pulliam & Lauren Taylor, Government Executive Magazine
http://www.govexec.com/features/0806-15/0806-15s6.htm
http://www.govexec.com/dailyfed/0807/082907p1.htm
http://www.govexec.com/top200/03top/top03s7s2.htm
http://www.govexec.com/features/0804-15/0804-15s5s2.htm

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