March 5, 1999 | Backgrounder on Federal Budget
It is just five months into fiscal year (FY) 1999, and President Bill Clinton already has presented Congress with three requests to supplement or add to the spending agreed to for this year. The President claims these requests, which total $1.36 billion,1 are needed to respond to unforeseen emergencies, such as the devastation of Hurricane Mitch, expenses related to the Wye River Middle East peace agreement, and assistance to earthquake victims in Colombia.
Most of the requested money, however, would not meet any taxpayer's definition of an emergency and serves merely to break the spending caps agreed to last year. Congress should insist that these items be folded into next year's budget and not treat them as supplementals this year. It is far too common for Washington to use supplemental bills to evade budget controls. According to the House Appropriations Committee, Congress, at the President's request, passed eight supplemental bills in 1995, seven in 1997, and one $21.4 billion net supplemental spending bill in 1998 that shattered the spending caps for FY 1999.
During his first two years, President Clinton asked for $25 billion for FY 1993 supplemental spending; Congress gave him $11.4 billion. The President requested $9.4 billion for FY 1994; Congress gave him $9.3 billion.
But during the 104th Congress, the President requested $8.7 billion for FY 1995, and Congress responded by using the supplemental budget process to cut $9.8 billion from total FY 1995 spending. During FY 1996, the President requested $1.4 billion in supplemental spending; Congress responded by cutting $1.5 billion from total FY 1996 spending.2
Then, after negotiating the Balanced Budget Agreement of 1997, lawmakers began to expect a future of budget surpluses. Congress succumbed to the temptation to use the supplemental to fund pet spending projects, and the President proved more than willing to help.
During FY 1997, congressional resolve began to falter as more and more Members of Congress jumped on the spending bandwagon. Although Congress trimmed the President's FY 1997 request for supplemental spending from $3.4 billion to $800 million, Members also managed to include self-indulgent extraneous projects, such as $5 million for Senate operations, $133,600 for heirs of a former Member of Congress, and $33.5 million for Congress's Botanical Gardens.3
During FY 1998, Congress did trim the President's supplemental requests from $4.7 billion to $3.4 billion, but it could have made deeper cuts had it not included such items as $7.5 million to repair the Capitol Dome, $270,300 for widows of Members of Congress, and $2 million to lease cranberry bogs adjacent to the Massachusetts Military Reservation.4
Historically, supplemental spending bills have been used as vehicles for pork-barrel spending disguised as "emergency" legislation. Since 1995, Congress has made major progress in reversing this trend; but it now appears ready to abandon all efforts to control runaway spending.
Consider the following examples of spending submitted by the President as emergency supplemental requests for FY 1999:5
$11 million in FY 1999 and $37 million in FY 2000 to replace a satellite for the Corporation for Public Broadcasting (CPB). The satellite failed in 1998. Although the need to replace it is urgent, Congress has no more business providing satellites for CPB than it has providing them for major networks like NBC, ABC, or CBS.
If Congress is willing to break the spending caps, the President obviously is more than ready to direct the process. Indeed, he seems to be betting that conflict-weary Members of Congress will move further away from the fiscal responsibility exhibited during FY 1994 and FY 1995 by including their pet projects while congratulating themselves when they trim the President's request, as they did in FY 1997 and FY 1998. But many of the his requests hardly can be called emergencies.
As Representative Clay Shaw (R-FL) recently observed, "It used to be called smoke and mirrors. Now it's called emergency spending."6 No matter what it is called, Washington's latest accounting trick is little more than an excuse to raid the budget surplus, which is estimated to be $79 billion in FY 1999.7
Using emergency supplemental requests to raid the budget surplus is not new. One-third of the 1998 budget surplus was squandered last October on specious "emergency" spending. At that time, President Clinton declared that he would not allow Congress to spend the budget surplus on tax cuts, insisting that he wanted to "set aside every penny"8 for Social Security. Despite this, Congress went along with the President and spent $21 billion of an estimated $71 billion budget surplus on such questionable emergencies as agricultural price supports. The redundancy of last fall's emergency supplemental is demonstrated by the fact that it was packaged along with eight other regular appropriations bills and passed as part of the FY 1999 Omnibus Appropriations Act.
The problem can be traced to the fact that emergency spending is not defined as part of the budget process. An emergency is to be defined by the President and Congress. Predictably and routinely, this method of funding is abused by officials and lawmakers who treat it as a private slush fund, showering programs and interest groups with tax dollars.
The need to resort to emergency supplemental appropriations is a tacit admission that Congress is failing to use the budget process properly during the normal cycle. Fiscal conservatives have been justifiably reluctant to endorse the establishment of long-term "rainy day" funds (a common practice within state budgets) given the proclivity of legislatures to raid these funds for pork-barrel projects.
Congressional leaders must incorporate firm guidelines into the budget process to ensure responsibility in the use of emergency funds. Any confrontation between the President and Congress on supplemental spending should focus on two goals: defining exactly what constitutes an emergency and establishing mandatory offsets (dollar-for-dollar reductions in other spending) for all bona fide emergency increases.
An emergency should meet three criteria. It must involve (1) an imminent threat to life, property, or national security; (2) an unanticipated situation; or (3) a temporary occurrence. Under these criteria for emergency supplemental requests, most of President Clinton's latest funding request should not be allowed. In addition, forcing lawmakers to pay for their emergency spending with painful spending cuts elsewhere in the budget should make it easier to discern how urgent the "emergency" really is.
Recognizing that some emergencies are legitimate and that even the most farsighted budget planners cannot anticipate all of them, it is neither possible nor wise to eliminate all use of supplementals. Therefore, Congress's steps to improve the use of emergency spending should include:
Allowing Members to highlight questionable supplemental spending by using points of order (and a supermajority to override any point of order) against individual line items within supplemental funding bills;
Requiring that the relevant executive branch Cabinet secretary and congressional committee(s) of jurisdiction specify, in a report to accompany the supplemental spending bill, why the required funding was not anticipated during the normal budget process and what spending will be cut to offset the requested spending.
If Members of Congress remind themselves why spending caps were instituted in the first place--to block wasteful spending and balance the budget--they will act decisively to prevent the use of emergency spending for ever more inappropriate reasons. The 105th Congress was willing to participate in last year's "emergency" raid on the budget surplus. The 106th Congress should take a firm stand against further efforts to waste the surplus, and "just say no" to inappropriate emergency spending requests.
Peter Sperry is a former Budget Policy Analyst and Gregg VanHelmond is a former Research Assistant in The Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
1. See letters from The Honorable William Jefferson Clinton, President of the United States to The Honorable Dennis Hastert, Speaker, U.S. House of Representatives, containing requests for Emergency FY 1999 Supplemental Appropriations, February 16, 1999, and February 19, 1999. See also Budget of the United States Government, Fiscal Year 2000 (Washington, D.C.: U.S. Government Printing Office, 1999), Appendix, pp. 1213-1226.