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Executive Summary #1224es on Federal Budget

October 7, 1998

October 7, 1998 | Executive Summary on Federal Budget

Executive Summary: The One Percent Showdown: Clinton's Veto Threats in Perspective

As fiscal year 1998 comes to a close, Congress and the President have considerable work to do to reach an agreement on most of the 13 annual appropriations bills. In light of this, on September 17, 1998, Congress passed a continuing resolution (CR) that allows the federal government to continue to operate until October 9, 1998 (FY 1999), at FY 1998 spending levels.

Nevertheless, before September 1, the President had threatened to veto at least seven of the appropriations bills; specifically, the bills authorizing the Departments of Commerce, State, and Justice (H.R. 4276); the District of Columbia (H.R. 4380); the Interior (H.R. 4193); Labor, Health and Human Services, and Education (H.R. 4274); Treasury and Postal (H.R. 4104); Veterans Affairs and Housing and Urban Development (H.R. 4194); and Defense (H.R. 4103). More recently, he also has threatened to veto the Foreign Operations appropriations bill (H.R. 4569). His threats are raising concerns and speculation about whether any impasse on these bills will trigger a government shutdown.

A closer look at President Clinton's veto threats for each bill suggests that the Administration is willing to bring the federal government to a standstill--and interrupt Social Security checks and Medicare and veterans' benefits, close national parks, and jeopardize national security--for a negligible difference in discretionary spending. As Table 1 illustrates, the House proposes to spend $2.6 billion less than the President, which in the end is a difference of about 1.0 percent relative to what the President is requesting for FY 1999. In threatening to veto these appropriations bills, the President is both attempting to protect a bloated and unaccountable federal bureaucracy and breaking the balanced budget agreement he made with Congress last year. Moreover, the additional spending he requests will take money away from achieving his own goal of setting aside the entire surplus to strengthen Social Security.

In the 1997 balanced budget agreement, the President agreed to $259 billion in non-defense discretionary spending authority for fiscal year (FY) 1999. Now, according to the Congressional Budget Office, the President is threatening to veto appropriations bills, bust budget caps agreed to for FY 1999 in the budget agreement, and close parts of the government in order to spend $8.5 billion above what was agreed to last year. Even worse, a review of recent reports from the federal government's own watchdogs--the U.S. General Accounting Office (GAO) and the agencies' own inspectors general (IGs)--strongly suggests that the President is willing to close down the government over the issue of increased funding for programs that have long and troubled histories of waste, mismanagement, and little or no accountability to the public and taxpayers.

Congress, on the other hand, is trying to rein in the uncontrolled spending of some agencies and programs. In doing so, the U.S. House of Representatives in particular hopes to impress on federal bureaucrats that they must do a much better job of being held accountable to both Congress and the American public for how they spend taxpayer dollars. The evidence is mounting that greater leadership and discipline are needed to address federal agencies' spending habits. But the President is making a difficult job even more difficult.

For example, the debut of federal agencies' five-year strategic plans and FY 1999 annual performance plans as required by the Government Performance and Results Act was embarrassing. The GAO and others have characterized the plans as a torrent of questionable missions, goals, objectives, faulty performance measures, and clear evidence of waste and duplication.

A balanced budget is not a license to waste tax dollars even if the budget stays balanced. The GAO and IG reports evaluating agencies and programs in six of the seven appropriations bills targeted for vetoes by the President demonstrate that many do not deserve more money at the same time audits show they waste much, accomplish little, or may actually do more harm than good. Rather than engage in political posturing, the President should concentrate on the far more important and challenging task of leading the federal government. He should demand that his executive branch agencies be less wasteful and more accountable. Taking such bold steps would do far more to reform and save Social Security, Medicare, and other important programs.

Angela Antonelli is former Director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

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