Here’s an easy way for the government to save about $7 billion a year: Tighten the cap on the lavish salaries paid to executives at government contractors.
The cap is currently at $760,000 per contract per executive per year. That’s almost 15 times greater than the average household income – meaning that the federal government is helping to worsen the same income inequality President Obama has decried.
These salaries are the subject of a new study by the progressive think tank Demos, which sorted through payment data to more than 49,000 defense contractor companies and more than 10,000 non-defense firms.
In some cases, the Pentagon cannot even monitor the work being done by these executives and their employees. Internal investigations have revealed countless abuses and incompetence by contractors, ranging from how national security background checks are conducted to an Environmental Protection Agency warehouse that became a makeshift gym.
Using numbers from the Government Accountability Office, Demos looked at the consequences of lowering the cap to the salary of Vice President Joe Biden -- $230,700. The New York-based think tank estimated that taxpayers would save $6.97 billion to $7.65 billion annually.
Almost all of that money would come out of the bank accounts and investment portfolios of 49,000 defense industry executives, according to the study released Tuesday.