Uncle Sam does so many things so poorly, but this is one where I think he's got it right.
The hotel portion of the per diem is a location-based max: you are reimbursed what you spent, up to that amount. You're welcome to spend more out of pocket, but you can't keep the difference if you spend less.
The meals portion of the per diem is also location-based, but it's a flat payment; whether you eat peanut butter from the jar or go to a Michelin-starred restaurant, you get whatever the local rate is. The only time it gets messed with is if a meal is separately paid
by Uncle Sam, e.g. if a conference fee included lunch, you don't get to keep the lunch part of that day's per diem. Free hotel breakfast and airline meals don't count.
There's a reason so many cheapskate civil servants love Residence Inns--free semi-edible breakfast, some dinner-ish food a couple nights a week and a fridge to fill with beer and other dinner supplies means it's easy to spend $15 a day on food and keep the rest if you're so inclined.
I was never that cheap, but I liked making my own dinner for another reason--it makes it easier not to get fat(ter)
