Obama sees $40 billion annual savings in spending reforms

Daylife/Reuters Pictures

President Barack Obama says the U.S. government was paying too much for things it did not need and has ordered a crackdown on spending he declared was “plagued by massive cost overruns and outright fraud.”

Obama said wasteful spending was a problem across the whole government but he zeroed in on the defense industry after earlier citing a project to build a new presidential helicopter fleet as an example of the procurement process “gone amok.”

“The days of giving defense contractors a blank check are over,” Obama told reporters. He ordered a reform of the way the government did business, a move he said would save taxpayers $40 billion a year and help cut the budget deficit.

“Far too often spending is plagued by massive cost overruns, outright fraud and the absence of oversight and accountability,” Obama said. “We are spending money on things we don’t need and we are paying more than we need to pay and that is completely unacceptable.”

We will end unnecessary no-bid and cost-plus contracts that run up a bill that is paid by the American people,” Obama said. Critics say cost-plus contracts invite abuse because they allow companies to charge the government costs plus a fixed profit no matter how poor their performance.

“I reject the false choice between securing this nation and wasting billions of taxpayers’ dollars,” he said.

I’ve had personal experience with a couple aspects of this crap. Cost-plus? You betcha. I worked on one weapons system that had the cost doubled. Why not? We had a guaranteed 6% profit on top of whatever the corporation reported as cost. That doubled the total profits.

The same was true back in the day working on nuclear power generation of electricity. GE and Westinghouse and all their grazing buddies could figure out how to make an outhouse cost a million bucks. Run it past Congress and the last thing they wanted to do was take the cost of doing business apart to sift out the lies. Where would they go to be paid as lobbyists after they left Congress?

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