Budget Office Questions White House Estimates on Surplus Government Property Sales Numbers

July 27, 2011

WASHINGTON- White House figures estimating $15 billion in savings from the sales of surplus federal property were called into question today by the non-partisan Congressional Budget Office (CBO) at a hearing of the House Oversight and Government Reform Committee led by Chairman Darrell Issa, R-Calif.

“There is broad agreement that the federal government should stop wasting money on properties it doesn’t need and that taxpayers should reap the benefits,” Issa said after the hearing. “For a monumental undertaking like this to work, the Administration must back up their claimed savings and partner with Congress and private and non-profit stakeholders to forge consensus,” Issa added.

At the hearing, CBO noted that in order to generate savings, new properties would have to be identified and their value would have to be higher than those currently listed. The White House has indicated to Oversight Committee staff that the 14,000 properties that have been analyzed by CBO were already identified as excess, and that there are additional as yet undisclosed properties which help them reach the $15 billion figure.

The White House declined to send a witness to the hearing, stating that they did not wish to testify alongside non-governmental witnesses. The executive director of the National Law Center on Homelessness and Poverty and a private sector facilities management expert who served in a previous administration testified at the hearing with CBO and a General Services Administration official.

Chairman Issa and the Committee also heard testimony from three members of Congress who have authored legislation to address the real property disposal process including committee members Rep. Jason Chaffetz, R-Utah, and Rep. Mike Quigley, D-Ill., andRep. Jeff Denham, R-Calif.

In testimony to the Committee, CBO analyst Theresa Gullo questioned the private market value of properties already identified as excess, and noted that a significant percentage are already being disposed of under current law. CBO further noted that:

• 1/3 of the excess properties listed are held by defense agencies and sale or disposal of defense facilities, and would not be covered by the plan;

• 45 percent of the listed properties are already in the process of being disposed under current law;

• 28 percent will probably be demolished;

• 20 percent have either already been disposed of, are no longer considered excess, or have been transferred to another federal agency;

• About 6 percent are slated to be conveyed for little or no cost to another public entity or transferred for economic development purposes; and

• Less than 1 percent (about 30) of the excess properties and structures are expected to be sold. Of those 30 properties, three are listed as federal office buildings. The largest of those is in Portland, Oregon. That building was sold at auction in 2010 for $2.5 million.

A complete list of hearing witnesses and testimony is available here.

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