The
$2.8 billion supplemental appropriations bill now before Congress
should be paid for with offsets to current spending, not by dipping
into the first budget surplus in nearly 30 years. Financing the
bill through offsets would send a clear message to Americans:
Congress is committed to reining in federal spending, sticking to
principle, and preserving the surplus to reduce the country's
burden of debt and taxes. Failure to find offsets would send an
equally clear message: Congress cannot be trusted to keep its word
to control spending.
The Need for
Resolve
The
$2.8 billion in supplemental appropriations is needed to pay for
the costs of stationing U.S. troops in Bosnia, the military buildup
in the Persian Gulf, and helping victims of recent natural
disasters. Compared with the $1.6 trillion federal budget for this
year, the emergency package is quite small. Paying for it would
require a cut of just 0.5 percent in discretionary spending, or
less than 1 percent of all non-defense discretionary spending. The
$2.8 billion supplemental appropriations bill represents less than
0.15 percent of the entire federal budget. It is precisely because
the supplemental requires such a small offset that Congress must
show its resolve to find savings.
The
chairman of the House Budget Committee, John Kasich (R-OH), has
suggested two options: (1) Offset the supplemental appropriation
with cuts in defense spending and a small across-the-board cut to
non-defense discretionary spending, or (2) pay for it entirely
through an across-the-board cut to non-defense discretionary
spending. Defense spending, however, already has been scaled back
to dangerous levels. But with non-defense discretionary spending
projected at $289 billion for fiscal year 1998, a reduction of less
than 1 percent would offset the $2.8 billion in supplemental
appropriations.
Although agencies now are halfway through
the fiscal year, and many commitments have been made, there are
many ways in which to shave current spending and postpone some
expenditures until next year to come up with the reductions. Travel
budgets, hiring goals, and consultant fees could be trimmed, for
example, and capital expenditures could be delayed a few months.
Such a minor exercise in belt tightening is a commonplace
occurrence for families and businesses. With an across-the-board
pruning of this kind, agencies would review current spending and
find the best way in which to achieve the necessary savings. A
government manager unable to delay or eliminate less than 1 percent
in expenses should seek other, less challenging work.
An
across-the-board cut of 1 percent in non-defense discretionary
spending is not the only option, however. Congress also could save
$2.8 billion from low-priority or wasteful programs, leaving other,
higher-priority programs intact.
There
are plenty of programs that could be cut back or eliminated. Here
is a list of candidate programs, along with their budgets in the
fiscal year 1998 budget:
Corporate
Welfare
-
Overseas Private Investment
Corporation
($92 million)
-
Export-Import Bank ($683 million)
-
National Institute of Standards and
Technology ($622 million)
-
Small Business Administration ($622
million)
-
Highway Demonstration Projects ($9
billion over six years)
Wasteful
and Unnecessary Programs
-
Low-Income Home Energy Assistance
Program (LIHEAP) ($1.1 billion)
According to the Congressional Budget Office (CBO):
LIHEAP was created in response to the rapid
increases in the price of energy used in the home in the late 1970s
and early 1980s. Since 1981, however, inflation in fuel prices has
lagged far behind general inflation: fuel prices are up about 25
percent since 1981 in comparison with an overall inflation rate of
70 percent. That fact might now warrant either eliminating or
reducing LIHEAP.
- Power Marketing Administrations
($246 million)
According to the CBO:
Many of the original concerns that gave
rise to the current federal role have greatly diminished.
Privatization may offer the best opportunity for enhancing the
efficiency of power markets and producing budgetary
savings.
- Economic Development Administration (EDA)
($361 million)
According to the CBO:
Because of the competitive nature of EDA
grants, local governments do not incorporate that type of aid into
their budget plans; hence, eliminating future EDA funding would not
impose unexpected hardships on
communities.
Fiscal
Responsibility
On
March 24, 1998, the House Appropriations Committee passed a
proposal that would offset the cost of the supplemental
appropriations with funds from the Department of Housing and Urban
Development's Section 8 Housing Program, the Airport Grant-in-Aid
program, AmeriCorps, and bilingual education. Congress as a whole
should honor this commitment to fiscal responsibility by the
Appropriations Committee.
Lawmakers worked diligently last year to
balance the federal budget; projections now indicate a surplus
because Americans are paying more in tax revenue than anticipated.
President Bill Clinton has said this surplus should be used to help
save the Social Security system. Some leaders in Congress agree
with the President, while others would prefer to return the surplus
to the American people. If, however, Members of Congress decide to
raid the surplus to pay for this supplemental instead of making
prudent economies in other discretionary programs, taxpayers
reasonably can conclude that Congress's commitment to fiscal
integrity counts for very little.
--Geoffrey Freeman is a former Research
Assistant at The Heritage Foundation.