White House backs off higher credit card limit

The Office of Management and Budget issued new guidance yesterday that effectively returns the government purchase card limit to $2,500, ending hurricane relief measures that allowed some individuals -- with agency authorization and review -- to spend up to $250,000.

The higher limit, authorized in the Hurricane Katrina relief bill passed Sept. 8, had applied only to expenditures directly related to hurricane recovery. However, the need for the emergency measure has passed, according to OMB’s latest guidance.

Some members of Congress and outside watchdog groups had objected to raising the limit, fearing it would open the door to abuse.

“Lifting the government purchase card limit to $250,000 was ludicrous given that the cards were already the target of numerous fraud investigations by the FBI, inspectors general and the Government Accountability Office,” said Danielle Brian, executive director of the Project on Government Oversight, who applauded the reversal.

Clay Johnson, OMB's deputy director for management, said several regulations were streamlined immediately after Katrina hit the Gulf Coast to allow for quick delivery of aid. Now that the immediate crisis has passed, "we are asking that agencies operate under pre-hurricane levels unless they can justify to us that there are exceptional circumstances," he said in a prepared statement.

Legislation to formally repeal the higher limit is pending.