Hurricane Recovery: OMB Pulls Back on Credit Card Purchases The Office of Management and Budget has lowered the limits on government credit card purchases to pre-Katrina levels. Congress authorized the use of credit cards for purchases up to $250,000, compared to the usual limit of $15,000 for emergency procurements, but several members of Congress complained that the higher threshold left the government vulnerable to fraud and abuse. In a statement Oct. 3, OMB Deputy Director Clay Johnson said: “In the first days after the hurricane, several regulations were streamlined to remove barriers to the quick delivery of needed, life-saving aid. As the recovery has advanced, we do not envision that agencies will need to utilize the higher thresholds.” Any credit card purchase above $15,000 will require OMB approval, Johnson said. The Bush administration is supporting a move in Congress to repeal the higher threshold. The Washington Post reported that less than 10% of the first wave of recovery contracts went to local businesses in Louisiana, Mississippi and Alabama, the states hit by Katrina. Some members of Congress from the area are protesting the awards of sole-source or limited-bid contracts to large national corporations. “There is just more of the good-old-boy system, taking care of its political allies,” Rep. Bennie Thompson (D-MS) told The New York Times. The Department of Homeland Security’s inspector general, Richard Skinner, told a House subcommittee that he has assigned 60 investigators to monitor hurricane-recovery contracts. He said his office will need more money for the oversight. Sens. Tom Coburn (R-OK) and Barak Obama (D-IL) have called for the appointment of a chief financial officer to oversee relief spending. Several members of Congress have complained that DHS is not providing enough details about its spending. “We are simply getting spreadsheets which show total numbers by rough category, such as human services or field operations,” Rep. David Obey (WI), ranking Democrat on the House Appropriations Committee, told National Public Radio in a Sept. 28 interview. “That tells us virtually nothing about where the money is going. It tells us nothing about their contracts, it tells us nothing about how they’re awarded. We are really just getting peppered with noninformation.” The Senate has passed legislation that would set a goal of awarding 30% of prime contracts for Katrina recovery to small businesses, with a 40% goal for subcontracts. The amendment to the emergency appropriations bill was sponsored by Senate Small Business Committee Chair Olympia Snowe (R-ME). It would also increase the maximum size of SBA’s security bond guarantee to $10 million, from $2 million, to allow small firms to bid on more projects. In addition, the amendment would authorize bridge loans to homeowners and businesses in the hurricane zone to tide them over while they wait for approval of SBA disaster loans and make other changes in SBA loan programs to make them more useful to companies that were damaged by Katrina. The bill has not yet passed the House.