July 25, 1990

July 25, 1990 | Backgrounder on Federal Budget

While Talking About a Deficit Crisis Congress Proposes Billions inNew Spending


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780 July25,1990 i WHILE T&G ABOUT A DEFICIT CRISIS CONGRESSPROPbSES BILLIONS IN NEW SPENDING INTRODUCTION The Bush Ad4nistration and congressional leaders invo lved in the cur rentbudget deficit reduction summit claim that the deficit is such a crisis that American taxpaykrs must give even more of their money to help pay Uncle Sams bills. Somd taxpayers may assume that before policy makers decided on a tax hike, the) did everything possible to cut wasteful spending, to elimi nate pork barrel projects and to shut down programs that serve no overriding national interest. I 1 Such an assumption would be wrong.

Neither Congress nor the Bush White House has tried seri ously to cut spending. Quite the contrary. At this very moment, while they wring their hands about a budget deficit crisis, policy makers are proposing to spend more money on existing programs and to launch costly new programs. They are pushing federal sp ending to record high levels. As Washington veterans of the budget process could have predicted, the convening of the budget summit and Bushs brokdn no-new-taxes promise have opened the floodgates for this spending spree.

Congresss Ba? Faith. George Bush b etrayed his campaign pledge of no new taxes reportedly as a good-faith measure to convince congressional lead ers of his sincere /desire to reach an agreement in the budget summit. In the four weeks since then, the liberal-dominated House of Representativ e s has responded to Buihs gesture by passing six appropriations bills totalling 182.3 billion. This is $18.75 billion over 1990 appropriations levels, a 11.47 percent increase.1 previous years CONGRESSIONAL BET~AYAL I 1 The Gramm-Rudman-Hollings defikt tar g et for FY 1991 is $64 billion plus a $10 billion margin for error 2 Table 1 Appropriations Bills I I CONGRESS REFUSES TO TRIM INCREASES When some lahakers attempted to slow the proposed increase in spend ing, Congress igdored them. By substantial majoriti e s, the House of Repre sentatives soundly defeated a series of amendments that would have rolled back proposed spending increases at various levels. Defeated were amend ments to the Energy and Water Appropriations bill as well the Housing and Urban Develop m ent-Veterans Administration (HUD-VA) Appropriations bill offered by Representative Bill Frenzel, the Minnesota Republican, that would have nullified the proposed increases and returned spending to infla tion-adjusted 1990 levels. The HUD-VA bill, just pas sed by the House, con tains $12.6 billion in new spending.

Congress also has been averse to amendments that would roll back the ap propriated increases by much smaller amounts. Representative William Dan nemeyer, the California Republican, for instance, un successfully offered amendments for p percent across-the-board reductions in appropriations for the Energy and Water bill, Commerce and Justice bill, and the HUD-Veter ans Administratiyn bill. And of the five attempts by RepresentativeTimothy Penny, the M i nnesota Democrat, simply to reduce appropriated levels 2 per cent across-the-bbd all but one, which amended the TreasuryPost Office bill, were defeatqd. Even had these amendments passed, however, spending would have incre'ased over fiscal 1990 levels (Tab le 2 I 3 I Table 2 billions I I

1. Representative Frenzel introduced two amendments. One would have cut Energy and Water appropriations by 10.53 percent across the board. The other would have cut HUD/VA appropriations by 14.5 peicent across the board, exc ept for VA medical behefits 2. A 5 percent across-the-board cut 3 A 2 percent across-the-board cut, except for VA medical benefits and HUD Section 8 housing BIG SPENDERS AT THE !WHITE HOUSE I Bush cannot blame Congress solely for the alleged need for new taxes. His Administration ais0 has been seeking higher federal spending.Table 3 shows a sample of higher spending requested for current programs.

The Bush Addhistration is seeking spending authorization for new pro gram as well. Table 4 offers a sample of these requests.

For years critics of high government spending have pointed to the need to cut or eliminate programs. Yet as Congress looks for ways to increase taxes, it refuses to address the 424 billion in government waste reported by the Grace Commissi on six years ago or the more than $150 billion in program waste, fraud, andfinancial mismanagement found earlier this year by Congresss own qeneral Accounting Office (GAO). Moreover, nowhere is there evidence tpat members of Congress attempted to enact th e roughly $60 billion in program saving measures recommended this year by the Congres sional Budget Office or the 130 billion in program savings recommended by analysts at The Heritage Foundation I Table 3 Bush Administration Proposals for Spending Increas e s National Endowment for the fits National Endowment for the Humanities Smithsonian Institution Institute for Museum Services i National Gallery of Art Historical Preservation Fund 4 I 175 million 165 million 308 million 24 million 49 million 34 million 4 million 8 million 41 million 1 million 7 million 1.4 million Magnetic Levitation Techologj Airport Grants Global Change Research Environmental Protection Agency Operating Budget Goverment Research and Development I i Manned Missions to the Moonland Mars T a ble 4 Bush Administration New Authorization Requests 10 million 1.5 million 1 billion 230million 4.5 billion a ing entitlements 5 I 3) Has the program failed, fulfilled its mission, outlived its usefulness, or simply become irrelevant If so, then these pr o grams should be abolished Too often Congress continues to fund a program even when Congresss own research groups determine that a program is a failure. If a program has out lived its usefulness or even fulfilled its mission Congress finds new activities f o r the program io do. Congress hates to abolish programs 4) IS Congress engaging in central planning or attempting to set national priorities that should be left to communities or individuals? Example: the more than $1 million appropriated in this yearsTra nsportation bill to estab lish a national bigcle program and to encourage safe bicycle riding. Certainly most local park districts already conduct classes for children in bicycle safety.

Before Congress makes another move toward higher levels of spending i t owes it to Ameriban taxpayers to take a critical look at its spending habits If Congress simply answers the four questions outlined here it will go a long way toward streahlining federal spending and freeing up sufficient funds to solve todays problems t he decision to commute by bicycle or car is an individual one. Moreover I CONCLUSION Congress has sent a clear message to American taxpayers that it wants more money for new spending, not for serious deficit reduction. After passing just the first six of t he required 13 appropriations bills, Congress is exceeding last years spending levels by nearly 12 percent. If this pace continues for the remaining seven appropriations bills, the controllable portion of the fed eral budget will bralloon by at least $75 billion over fiscal 1990 levels.

Congress also is sending a clear message to Bush by enacting these in creases in additidn to the more than $11 billion in entitlement program ex pansions it has approved. This message is: Spending cuts have been taken off t he table at the budget summit. Congress will accept nothing less than higher taxes. If Bush needs additional evidence of Congresss intentions, he need but look the fact that Congress refused nine of the ten opportunities it had to simply roll back the pro posed increases in the appropriations bills.

Congressional action leads to only one conclusion: The only way to reduce the deficit is for Congress to reject new spending and to trim some existing programs. New tkes will not reduce the deficit. As Congress demonstrates al most every week,!new revenues will be used for new spending I Scott A. Hodge Grover M. Herman Fellow in Federal Budgetary Affairs Heritage Foundation research interns John Gurney, Angela J. Hulsey Geoffrey Manne, and Matt Rawlinson assiste d in the preparation of this study 6 APPENDIX THE FIRST SIX 1991 APPROPRIATIONS BILLS DEPARTMENTS bF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY AND RELATED AGENCIES As this appropriations bill is not yet complete, it is difficult to compare to previous sp ending levels. Nearly $9 billion in authorized program spending remaining to be appropriated by the House Appropriations Committee. But if the spending ldvels for Commerce Department technology programs re cently appropria\{ ed by the House are any guide, spe nding for the finished ap propriations bill yill outpace last years levels. For fiscal 1991, the House ap proved $290 million in spending for these programs and 468 million in fiscal year 1992.The fikall991 spending level marks an 82 percent increase over the $159 million &pent this year.

Congress and the budget summiteers should give serious consideration to terminating or reforming the following spending programs within this bill this list is far from complete i I I Department of Commerce Programs for dh ich funds have not yet been authorized: The Economic De velopment Admihistration, the Export Administration, the International Trade Administration, the U.S. Travel and Tourism Administration, the Mi nority Business Development Agency, and the Technology Administration.

National Oceanic and Atmospheric Administration Fishing Vessel and Gear Damage Fund 1,202,000 Fi Ahemans Contingency Fund 1,000,000 Zdbra Mussel Research 1,000,000 Stuttgart, Arkansas Fish Farm 2,850,000 National Telecommunication and Info.

Administration Giants for publicTV radio: $20,833,000 wp I L 7 3.4 percent Department of State Contributions to 52 International Organizations 787,605,000 Examp1es:International Jute Organization 69,000 i International Lead and Zinc Study group 36,000 Ini e rnational Office of Epizootics 62,000 Whrld Meteorological Organization 6.6 million International Sugar Organization 26 1,000 Fis!herman's Protective Fund 500,000 I I Related Agencies Total Spendind 1,901,419,000 I Bo'ard for International Broadcasting 19 2 ,586,000 Christopher Columbus Quincentenary Jubilee Cdmmission 214,000 Commission on Agricultural Workers 1,457,000 Co'mmission on the Bicentennial of the Co'nstitution 14,973,000 Feaeral Maritime Commission: $15,894,000 I I I Marine Mammal Commission 1,0 0 3,000 Small Business Administration 437,700,000 I 8 General Examples Santa Ana River Mainstem, CA 1961 cost 65,000,000 Total Federal Cost 908,000,000 1961 Cost 29,000,000 Tital Federal Cost 742,400,000 1961 Cost 75,000,000 Melvin Price rbck and Dam IL MO I I I I Melvin Price Lock and Dam, Second Lock, IL MO Total Federal Cost 230,000,000 Red River Waterway, Mississippi River to Shreveport LA 1991 Cost 61,636,000 Total Federal Cost 1,724,000,000 Construction 1,362,025,000 9 General Operation and Maintenance 1,457,488,000 Examp1es:Beaver Lake AR 14,718,000 I I I I I I Tepessee-Tombigbee Waterway, AL MS 18,000,000 McClellan-Kerr Arkansas River Navigation System, Ak $22,403,000 Ohio River Locks and Dams, ICY IN, OH, PA WV 41,060,000 Keweenan Waterway, MI 664,00 0 East River, NY 1,410,000 I I Bureau of Redamation General Investigations 12,926,000 Examp1es:Amdrican River Folsom South Optimization Study, CA $50,000 Uqper Gunnison-Uncompahgre Basin Project, CO 280,000 Jo7ephine Co. Water Management Improvement Study, OR: $200,000 Technical Assistance to States 1,350,000 Construction Program 649,697,000 I I I I I Examp1es:Colorado River Basin Project 201,966,000 I Ogden River Project, Utah: $1,954,000 Operation and Maintenance 2313 16,000 Ddpartment of Energy Supply, R e search and Ddvelopment Activities 2,703,272,000 Examp1es:Solak Energy Programs 130,430,000 Geothermal and Hydropower 23,600,000 Elkctric Energy Systems and Storage 41,253,000 Nuclear 1 Energy Programs 3 13,490,000 I I Biglogical and Environmental research 371,394,000 Magnetic Fusion 325,300,000 I i I 10 I Super Conducting Super Collider 317,866,000 (Total Estimated Cost of Uranium Enrichment Facilities 1,406,018,000 (Could be sold to the pri The Five Power Marketing Administrations 326,387,000 (Each could b e Appalachian Regional Codssion 150,000,000 Delaware River Basin Commission 681,000 Interstate Commission on the Potomac River Basin 200,000 Susquehana River Basin Commission 501,000 Tennessee Vadey Authority 135,000,000 (Could be sold to the private sec t he Program 5 billion to 8 billion vate sector for $11.8 billion sold to the privatk sector for over $1 billion I I I I I I tor for over $5 billion higher than 1990 levels, a 12.3 percent increase DEPARTMENT OF TRANSPORTATION AND RELATED AGENCIES Appropria t ions for the Department of Transportation and Related Agen cies will climb $217 billion in fiscal 1991 to a total of $30.9 billion, a 9.5 per cent increase This bill provides an excellent example of how the federal government sub sidizes gold-plat,ed loca l projects, fails to require those who use services to pay for what they, receive, and pays for projects which clearly are the responsi bility of local governments. Among the many spending items that should be terminated, Congress should consider the follo w ing I r 11 Coast Guard 12 1,000,000 Orange County, CA Monorail System 1,000,000 Long Island Rdilroad Intermodal Project 250,000 Amtrak $482,000,000 MAGLEV/High Speed Rail 12,000,000 Urban MassTransit Administration Local Construction Projects 440,000,000 W ashington, D!C. Metro: $108,000,000 Washington Metro Interest Payments 5 1,663,000 St. Lawrence Seaway Development Corp 10,500,000 Interstate Commerce Commission 45,844,000 1 I I Including, Los Angeles, I Jacksonville, Honolulu, and Atlanta I I I DEPARTME NTS bF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENTIAND INDEPENDENT AGENCIES The $83.58 billion appropriated in this bill represents a massive 17.25 per cent increase ovdr 1990 levels and a 40.72 percent increase over 1989 levels.

Programs within thi s bill too often duplicate private sector services, prevent the private sectoi from operating efficiently, or simply compensate for restric tive regulatory pdlicies at the local level. Congress should consider terminat ing the following brograrns: I Depar t ment of Veterans Affairs Construction, kajor Projects 575,456,000, an increase of $45,456,000 Examples:$7,000,000 new hospital at Detroit above budget estimate I 8,bOO,OOO for nursing home care unit at Lake City 3,kOO,OOO for a laundry and warehouse at Mo u ntain Hdme,TN 8,bOO,OOO for a clinical, outpatient, research parking and central air conditioning project at Ann Arbor, MI FC 800,000 for the advanced planning of a modernization project at Wilkes-Barre, PA 13 i 50,000 for travel expenses of individuals i n the above mentioned study by theTechnical Stddy Group on Cigarette and Little Cigar Safety i demonstration Construction GrantdState Revolving Funds 2,000,000,000 I I I National Aeronautics and Space Administration Research and lbevelopment $6,458,625,000 Including: Space Station 1705,000,000 I I I I i I Search for Extraterrestrial Life 6,100,000 National Aerospace Plane 1 14,000,000 Consumer Information Center 1,540,000 National Science Foundation 2,337,000,000 National Institute of Building Sciences 250, 0 00 I 15 FOREIGN o PER~TIO NS APPROPRIATIONS Fiscal 1991 apdropriations for Foreign Operations inched up by 1.69 per cent over 1990 levels, but were 10.46 percent higher than 1989 appropriated levels I I Even though last year saw discussions in both the Ad m inistration and Con gress about the failures of U.S. foreign aid, appropriations are up again for 1991.This is due in part to a desire to help the emerging Eastern European and Central American democracies.The U.S. agreed, for example, to contrib ute $70 m illion to a new development bank for Eastern Europe despite the failures of similar! institutions such as the World Bank and the Inter-Ameri can Development Bank I Multilateral Aid: $1.95 billion Examp1es:Int el- her ican Development Bank 78,000,000 InJFr - herican Investment Corporation 13,000,000 World Bank 50,000,000 International Development Association 1.06 bilhon Asian Development Fund 243,900,000 African Development Fund 105,452,000 Eukopean Development Bank 70,021,000 I I I I Bilateral Aid: 47.7 bill i on Examp1es:Agrhltural Aid 491,635,000 1 Pr&ate Sector, Energy, Selected Development Aid 152,223,000 I Sub-Saharan African Development Aid 800,000,000 Agency for International Development (AID Operating Expenses 435,000,000 Economic Support Fund 3.46 bill i on Anglo-Irish Accord 20,000,000 Miltilateral Assistance Initiative Philippines 160,000,000 Eastern Europe 418,675,000 I I I 16 I i 0ther:Export-Import Bank 785,000,000 Trade and Development Program 35,000,000 Overseas Private Investment Corporation Direc t Loan Limitation 40,000,000 Guaranteed Loan Limitation 250,000,000 17

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