GSA: Federal government could default on rent under House appropriations bill

A House appropriations bill that passed through committee on Wednesday would cause the federal government to default on its rental leases, according to the head of the General Services Administration.

GSA Administrator Dan Tangherlini said in a statement on Wednesday that the measure provides15 less than the government needs to pay for such costs. The GSA provides facilities to agencies, oftentimes entering into multi-year lease agreements with private landlords.

“Not paying our rent would create uncertainty in the real estate market across the country and it would do so at a time when the national economy is still recovering,” Tangherlini said.

The bill, approved by the House Appropriations committee by a vote of 27-21, would reduce GSA funding by $476 million compared to fiscal 2013. It falls $2.4 billion short of the GSA funding request in President Obama’s 2014 budget proposal.

(Andrew Harrer/Bloomberg) - GSA chief Dan Tangherlini.
(Andrew Harrer/Bloomberg) – GSA chief Dan Tangherlini.

“In order to make that work, we may have to default on leases; close facilities; or even, in some extreme cases, breach our contracts, which would result in lessors charging higher leases for federal agencies,” Tangherlini said.

Tangherlini added that GSA would have to forego planned investments in infrastructure, including upgrades the president budgeted for the San Ysidro, Calif. border crossing, as well as fire and life-safety renovations.

The overall bill covers funding for: the Treasury Department, the Executive Office of the President, the Judiciary, the District of Columbia, the Small Business Administration, GSA, and the Securities and Exchange Commission. It would slash spending for those agencies by 20 percent compared to fiscal 2013, including a 24-percent cut for the embattled Internal Revenue Service.

Republicans on the committee said the funding levels are appropriate. “We have provided critical funding to support small businesses and law enforcement while reducing funding for activities that are not essential to the operations of the federal government or that have a history of wasting taxpayer resources,” said Rep. Ander Crenshaw (R-Fla.) in a statement on Wednesday.

To connect with Josh Hicks, follow his Twitter feed, friend his Facebook page or e-mail josh.hicks@washpost.comFor more federal news, visit The Federal Eye, The Fed Page and Post Politics. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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Josh Hicks · July 17, 2013