This morning Deputy Assistant Director for Budget Analysis, Theresa Gullo, testified before the House Committee on Oversight and Government Reform on CBOs analysis of the Presidents proposal to expedite the disposal of unneeded federal civilian real property. Such property consists of buildings, structures, and lands owned by the federal government within and outside of the United States.
The President included such a proposal in his 2012 budget submission to the Congress in February, and the Administration recently transmitted similar draft legislation to the Congress in the form of the Civilian Property Realignment Act. Todays testimony focused on: (1) the analysis of that proposal, which was discussed in a letter that CBO sent to the Committee in June, and (2) how a process for disposing of unneeded federal property could be structured to increase proceeds to the federal government.
CBO Estimates That the Presidents Property Proposal Would Not Result in Significant Additional Sales Receipts
CBO concluded that the Presidents proposal was not likely to significantly increase receipts from sales of federal property because we expect that the number of properties sold would not be significantly higher than what would be sold under current law
CBO came to its conclusion based on a review of other efforts to dispose of federal property, finding that:
On Net, the Proposal Would Increase Federal Spending
CBO estimates, enacting the proposal would increase net direct spending by $60 million over the 20122021 period. Such increases would result because, although the legislation might induce some agencies to sell additional properties that may not be sold under current law, the proposal also would allow agencies to spend a portion of sale proceeds that will accrue to the federal government under current law and that otherwise could not be spent.
In addition, under the assumption that the necessary amounts would be appropriated, CBO estimates that discretionary spending to identify and prepare property for sale or transfer would total $420 million over the 20122016 period. Some savings might accrue in later years because the proposal could significantly increase the number of properties disposed of, although not necessarily by sale, thus reducing future costsand the necessary appropriationsto maintain them. Most of such savings would have to come from consolidating existing operations and disposing of buildings that are currently being used.
The Federal Government Could Take Steps to Increase the Proceeds from Property Sales
To be successful in substantially increasing the proceeds from disposing of federal properties, legislation would probably have to do one or more of the following: