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Post: DC Enclaves Reap Rewards of Contracting Boom

By Michelle Smith   |   Wednesday, 17 Aug 2011 12:38 PM

When Americans were enraged about the compensation on Wall Street, most probably couldn't fathom that federal dollars were bankrolling deals just as sweet around Washington, D.C. The Washington Post reports that area residents now enjoy the highest median household income of any metropolitan area in the country.

To assume that the Washington area consists of a labor force motivated by the security of government jobs and benefits is to be ill informed. This is a place where people are using federal money to get rich. And, they aren’t doing so by becoming overpaid government workers; their road to wealth is government contracts.

According to the Washington Post, only 12 percent of workers are federal employees. Yet, this year more than $80 billion will be spent on federal contracts in this region, says Stephen Fuller, director of the Center for Regional Analysis at George Mason University.

Even more alarming is how those funds are divvied up. The same federal government that made global headlines squabbling over money and debt pays contractors with security clearances an average salary of $98,221, or 18 percent more than those doing similar jobs in the government, the Washington Post reports, citing a survey by ClearanceJobs.com.

An individual holding one of the contract positions justified this by highlighting the requirements of people like him. “That's how it is when you pass your life over to someone the way that we do," the individual told Moneynews.com.

"When all of your major decisions are affected by your job and you must always be on call, when every time you want to travel out of the country, you need to clear it with somebody — and even who you can and cannot marry is dependent on the job, there's a cost.”

Government spending on federal contracts exploded during the Bush administration and came at a steep cost to federal taxpayers, according to the Committee on Oversight and Government Reform, which says under that administration nearly 40 cents of every discretionary dollar went to contracts with private companies.

Making this situation even harder for Americans to digest, the report conducted by the Committee on Oversight and Government reform identified 118 federal contracts worth $745.5 billion that were found to include significant waste, fraud, abuse, or mismanagement.

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