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Dr. Coburn Says Billions Wasted Annually on Unused Federal Property

Location: Chicago, IL

Dr. Coburn Says Billions Wasted Annually on Unused Federal Property

At a hearing today held in Chicago, U.S. Senator Tom Coburn, M.D. (R-OK), Chairman of the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, said billions of dollars each year are wasted on unused federal property.

Senators Tom Carper (D-DE) and Barack Obama (D-IL) joined Dr. Coburn at the field hearing titled, "Big Ticket Waste: Are Empty Federal Buildings Emptying the Taxpayers' Wallets?"

"In a time of rising deficits, wars and natural disasters, it is unconscionable for the federal government to waste billions of dollars on unused property," Dr. Coburn said. At a minimum, the total cost of the federal government's unused real estate property assets worldwide is a staggering $15 billion or one-third the total amount of the state of Illinois' fiscal year 2006 budget ($43.57 billion).

The government's property holdings total $320 billion. Given a federal workforce of 4.1 million civilian and uniformed personnel, means the government is putting an $80,000 roof over every single federal employee's head. Put another way, the federal government owns more than 2.8 billion square feet of building space - meaning each federal employee is housed with almost 700 square feet of office space, while the private industry standard is 250 square feet.

"Taxpayers are losing billions of dollars each year as Congress continues to pay holding costs for vacant buildings instead of demanding they be sold or demolished. I applaud my colleague from Illinois, Senator Obama, as well as Senator Carper, for working with me across the aisle to solve a problem that any person of common sense should see as unacceptable," Dr. Coburn said.

Prior to the hearing, Dr. Coburn and Senators Carper and Obama toured the "poster child" for this problem: the former Main Post Office in Chicago which contains 2.5 million square feet of unused property. Holding costs for this facility exceed $2 million annually and it has been vacant since 1997.

"Wasted, unnecessary federal space isn't just a nuisance, or an eye-sore, or a wasted opportunity. It's actually robbing the country of what we should be getting for our money. But it's not just us being robbed," Dr Coburn said. "When you consider the unsustainable growth of programs like Social Security and Medicare, and the promises we won't be able to afford to keep for our children and grandchildren, then the waste is actually robbing future generations of their quality of life."

"Not all the blame, however, can be laid on the agencies," Dr. Coburn said. "The statutory hoops an agency must jump through in order to get rid of property make it almost impossible to dump a property and they create a slew of disincentives to do so."

For instance, once an agency decides it wants to get rid of a facility, it has to offer the building up, potentially at a loss for the taxpayers, to non-profit groups for public use. If it no entity purchases the building, then the agency has to make discounted offers to local and state governments. Then, and only then, can the agency sell the building at market rates. When it does so, the agency will appropriately have to put the money from the sale into the federal treasury rather than stuffing its own pockets.

"Under these conditions, it's easy to see why agencies procrastinate addressing the serious problem of wasted and unnecessary facilities. Taxpayers and their representatives in Congress must demand action," Dr. Coburn said. "Every American family understands when they sell their home, they will be able to use the profit to meet other needs or to invest in a different home. Americans should demand no less common sense in their government's financial management than they would in the management of their own households."

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