Impact of Federal Credit Card Freezes

This article discusses the challenges federal workers are facing due to a freeze on federal credit cards, which manage over $30 billion in transactions annually. Key points include:

• The inability of federal workers to make necessary purchases.
• Workarounds like bartering between divisions.
• Specific impacts on different agencies such as the EPA and FDA.
• Details about the executive order affecting credit card usage.

Challenges Due to Credit Card Freeze

Many federal workers report difficulty in performing their jobs following a freeze on most federal credit cards. These cards manage around $30 billion yearly in purchases for essential supplies and services, including legal fees and fuel. Employees are not permitted to use personal credit cards for work-related expenses, as reported by Fortune.

Government Efficiency Changes

The Department of Government Efficiency (DGE), under Elon Musk's leadership, recently announced cutbacks on federal credit cards, including the reduction of spending limits to just $1. Consequently, employees are struggling to make routine purchases necessary for their roles.

Consequences of the Freeze

Reports indicate that some divisions are resorting to bartering to obtain needed supplies. For example:

• An EPA employee mentioned challenges in purchasing liquid nitrogen for environmental samples.
• Social Security employees have faced difficulties in creating UPS shipping labels.
• Treasury Department lawyers encountered restrictions to PACER, the electronic filing system. This access was later restored.
• FDA employees are experiencing delays in ordering essential lab supplies like pipette tips.

Expert Insights

Jessica Childress, a former DOJ lawyer, expressed concerns over the freeze's effects on government functions:

"It's going to put a complete halt on essential functions that the government has to complete..."

She stressed that federal workers rely on these cards to fulfill their duties effectively.

Executive Order on Credit Card Usage

On February 26, an executive order mandated that all agency-held credit cards be treated as frozen for 30 days, with exceptions for disaster relief and specific federal departments. The DGE indicated that approximately 24,000 cards have been deactivated. The General Services Administration (GSA) confirmed the implementation of a $1 limit on cardholder accounts as a risk mitigation measure.

The Bigger Picture

Despite the changes, the GSA previously celebrated the SmartPay program as a vital tool for government operations. The program has been instrumental in processing $30 billion in government transactions yearly and has returned $5.6 billion in cash back to agencies over its 25-year history.