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Government Contracts – What We Pay For

August 25, 2013

There is one area of government that gets scant attention from the media when budget talks are taking place – government contracts which concern work being done for the government by outside civilian and/or military contractors. Some issues arise in discussion of these contracts which would be important to keep in mind when considering other programs and how to best use our tax dollars to serve the American people.

Recently, there has been much discussion of the use of private companies to perform important functions in our intelligence community. Edward Snowden has been in the news non-stop for weeks for his role in whistleblowing/leaking classified government documents to the press. He worked not as a government employee, but as an employee of a firm contracted to do work for the NSA. His six-figure salary may not have been paid by government check, but the money for it certainly originated from federal tax dollars.How many other high-paid employees are currently doing work for the government which never gets mentioned when discussing sequester cuts and budget shortfalls?

Much work overseas, particularly in Iraq and Afghanistan during the wars there and afterwards in Iraq, has been paid for by the federal government to private contractors. Construction and security have been two major areas where such expertise has been used abroad. Concerns have been raised in the past about how these functions have been carried out by the private entities, as opposed to, for instance, the military. The way in which such contracts are made and fulfilled should concern Congress just as much as the similar amounts that they discuss when considering cuts to food stamps or other social programs, but we hear little or anything about them in the mainstream media. Food stamp, welfare and housing assistance recipients are constantly being accused, rightly or wrongly, of using their benefits wastefully or obtaining them fraudulently, while millions of dollars is spent in Iraq or Afghanistan in bribes or cannot be accounted for at all.

Defense contractors are an integral part of what Eisenhower not-so-lovingly called the military-industrial complex. Billions are spent and misspent each year in the acquisition of military craft, equipment and weapons systems that may or may not meet specifications called for in terms of performance, necessity or cost. Cost overruns are rampant, especially for some systems which those for whom they are intended may no longer even wish to receive. Occasionally, a scandal will seep out in the press and some will call for investigations of possible malfeasance, but the outcry never comes close to approaching the rhetorical vehemence spewed out concerning the multitudes of alleged welfare queens and lazy, drug-crazed food stamp recipients.

While corporate executives at some of these contract companies may be feeding exceptionally well at the public trough, and some of their employees may be doing the same when compared to the average federal public servant, many of their workers at the other end of the economic spectrum are not so fortunate. Many have criticized Walmart, McDonald’s and other extremely profitable corporations for failing to share profits by paying their workers a living wage and leaving the federal taxpayer to make up the difference in the form of food stamps and other programs that allow them to make ends meet. , Many of these contractors also employ people for compensation that falls far short of being living wages. In fact, the number of people whose jobs are financed by the federal government who are being paid less than $12 per hour exceeds two million people – more than Walmart and McDonald’s combined.

Politics is involved in much of this. Defense contractors are major employers in many key Congressional districts. Questioning how money is spent by or for the Pentagon or the intelligence community often leaves one open to accusations of being soft on defense, or runs into a brick wall of secrecy and classified information. Much of this budget is even in and of itself  classified and deemed untouchable as non-discretionary in all budget discussions. Costly weapons systems continue to be funded whether they are worth their cost or not, at the ultimate expense of the most vulnerable members of our society. The nitpicking scrutiny faced by the portions of the federal budget allotted to the social safety net never reaches discussions of the defense and intelligence budgets.

Contractors can defend their low-paying jobs by saying, truthfully, that their compensation practices fall within legal minimum wage requirements that are not subject to further scrutiny under current contracts and laws. Just like Walmart or McDonald’s, they can pay their workers less than they need to survive to keep down costs (always a key consideration when spending taxpayers’ money, right?). This is not an acceptable excuse for them, anymore than it is for those who are exploiting labor in the private sector. In fact, it is even more important for the federal government to make sure that work being done for the people using their tax dollars is not helping to contribute to overall societal poverty by underpaying those doing the work.

The media and Congress have become experts at deflecting our attention to many of the main issues when it comes to budget expenditures and taxation. Most of the money being spent and raised is not even open to discussion in Congress. Before this whole issue of Snowden blew up, how many – even those who are members of Congress – realized how much of our money was being spent paying private citizens to protect and defend our interests at home and abroad? How are private contractors held accountable compared to federal employees and members of the military for example? They represent the US in foreign lands every bit as much as the military does, regardless of the fact they are not in uniform. How many still do not realize how much of the work that our tax dollars fund is being done by people who have no union representation or bargaining rights, poverty wages and few or no benefits?

The way in which contracts are made between the federal government and private contractors, as well as the terms under which they are carried out, deserves much more scrutiny in the future. Bad labor practices by private contractors working for the government are no more acceptable than they are for those who are not. Money spent in the intelligence and military sectors must be as accountable as it is in others. Giving huge sums of free cash to Karsai so he can bribe warlords for their support in Afghanistan is certainly no wiser an expenditure than the relatively small waste some in Congress use in examples of abuse in regard to food stamps, for example. Politicians who don’t bat an eye when it comes to spending billions on missiles, drones, etc., to blow up foreign infrastructure then billions more to fix it again. They  then refuse to spend anywhere near as much on infrastructure here, let alone allow people who worked their whole lives to escape poverty in retirement by funding Social Security or Medicare adequately. This is not how government should work.

The budget nonsense will no doubt continue unabated in September as the fiscal year draws to a close. The President has stated categorically that his priority is to build the economy by building the middle class. Fixing the problems involving wages for workers under federal contracts would go a long way in alleviating some of the problems faced by the lower paid among us. Raising revenues by raising taxes among those segments of our society who have benefitted most from it – both individually and as corporations – will allow us to more adequately meet the needs of all our people in the future, and result in more fair and equitable treatment at all levels of the socio-economic scale. Maintaining the degree of inequality and privilege which has come to the advanced stage we find ourselves in now is no longer desirable to the vast majority of Americans, if it ever was.

 

Suggested Further Readings:

Contractors Raked in $385 Billion on Overseas Bases in 12 Years

How President Obama Could Move Millions Into the Middle Class

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2 Comments
  1. Reblogged this on digger666.

    Like

  2. Great post. That figure about the federally funded jobs not getting a living wage is astonishing.
    Related: http://vfpcorvallis.wordpress.com/2013/04/05/how-much-do-iwork-for-pentagon/

    Like

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