CBO not sold on federal excess property sales


The Congressional Budget Office isn't buying into the cost savings touted in a White House plan to sell off excess government properties. According to a June 17 letter (.pdf) from CBO Director Douglas Elmendorf, the plan could actually cost the government money.

"CBO concluded that the proposal would increase direct spending by $60 million over the 2012-2021 period," wrote Elmendorf. Implementing the proposal, which includes the creation of a "Civilian Property Realignment Board" would cost $420 million over the 2012-2016 period, anticipates CBO. It also notes that preparing properties for sale or transfer could have unintended costs.

The CBO report was filed at the request of Rep. Darrell Issa, (R-Calif.), chairman of the House Oversight and Government Reform Committee. The White House plan first came to light in the fiscal 2012 budget proposal. The Obama administration estimates the plan would garner $15 billion in additional gross receipts from 2013 to 2017 and would allow agencies to retain up to 40 percent of sale proceeds, according to the report.

"Other federal agencies that manage real property can already retain and spend 100 percent of excess property sale proceeds under current law. Thus, the President's proposal would offer no incentive to increase the pace of sales for those agencies," notes CBO.

The report also said estimating the value of current federal properties is difficult. Twelve thousand properties have been designated by the Obama administration as "excess" but "about one-third of the excess properties listed are held by defense agencies and sale or disposal of defense facilities would not be a responsibility of the proposed CPRB," finds CBO.

According to a May 4 memo (.pdf) from Office of Management and Budget Director Jacob Lew, the White house plan to reduce federal real estate aims to "cut bureaucratic red tape, resolve longstanding competing stakeholder interests, and help address the financial challenges that hinder efforts to realign and consolidate Federal real property."

It also "brings private-sector discipline to the management of Federal real estate and applies tactics proven successful by the Defense Department's Base Realignment and Closure Commission," explained Jeffrey Zients, federal chief performance officer in a March 2 blog post on WhiteHouse.gov.

For more:
- download the CBO letter (.pdf)
- go to the White House excess federal properties map
- read the White House blog post 
- download the OMB memo (.pdf)

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