OMB Rescinds Katrina-Related Increase in Card Limits

By Renae Merle
Washington Post Staff Writer
Tuesday, October 4, 2005

The Office of Management and Budget yesterday reversed a month-old rule that increased the amount federal employees could charge to government credit cards to $250,000 for services related to Hurricane Katrina relief, saying the higher limit was no longer needed.

Congress increased the limit from $2,500 in normal circumstances and $15,000 in emergencies in the aftermath of the hurricane. But some Democrats and watchdog groups worried that the cards would be abused and that the work should be awarded competitively.

The move strengthens protections against "fraud and abuse," Clay Johnson III, OMB's deputy director of management, said in a statement. Purchases above that level will be approved by Johnson in "exceptional circumstances," the statement said.

OMB spokesman Alex Conants said the Defense Department used the higher limits on a "very limited basis" but to "the best of my knowledge," the Homeland Security Department did not use the higher limits at all.

"It's the right move. Without it, Congress would have forced that decision," said Sen. Byron L. Dorgan (D-N.D.), a critic of the increase. If they had not reversed the limit, "it would have set the taxpayers up for a substantial amount of waste, fraud and abuse," he said.

By restoring the lower threshold, the administration avoids potentially embarrassing cases of petty corruption, said Christopher R. Yukins, associate professor of government contract law at George Washington University.

The Homeland Security Department's inspector general's office said yesterday that investigators planned to look at the elevated limits closely.

Staff writer Griff Witte contributed to this report.

© 2005 The Washington Post Company