Gov't Decreases Hurricane Credit Limits

The Bush administration said Monday it would restrict the amount of purchases federal employees can charge on their government-issued credit cards for hurricane-related expenses, saying the new $250,000 purchase limit was too high.

The Office of Management and Budget (search) issued new guidelines that effectively reduced the purchase limit from $250,000 to $2,500 — or $15,000 in an emergency — following criticism from lawmakers and independent auditors about the potential for abuse.

Some cards in the past were used to pay for prostitutes, gambling activity, even breast implants, government audits have shown.

"To further strengthen the protections that we have put in place to guard against fraud and abuse, we are asking that agencies operate under pre-hurricane levels unless they can justify to us that there are exceptional circumstances," said Clay Johnson III, OMB's deputy director for management.

At the Bush administration's request, Congress increased the purchase power to $250,000 as part of a massive Hurricane Katrina (search) recovery bill approved last week. The aim was to make it easier to speed aid to victims.

But it immediately drew criticism from watchdog groups and lawmakers who said the language was improperly slipped into the bill. Since then, several inspectors generals have said they would closely examine the government purchases given such cards' history of abuse.

The OMB said Monday the higher limit was necessary to buy emergency supplies after the disaster, but with the worst of the dangers past, there no longer was a need to have the much higher purchase limit.