September 9, 1999

September 9, 1999 | News Releases on Federal Budget

Congress Should Reject Budget Tricks Designed to Hide Spending, Analyst Says

WASHINGTON, SEPTEMBER 9, 1999-Passing the remaining 13 spending bills before the fiscal year ends on Sept. 30 may not be an impossible task, but Congress and the administration are ready to use a "full range of book-keeping tricks" to do so, leaving little of the projected budget surpluses for Social Security reform and tax cuts, a new paper from The Heritage Foundation says.

Indeed, lawmakers from both parties have already indicated their willingness to break the spending caps they agreed to in the 1997 Balanced Budget Act, writes Peter Sperry, Heritage's Grover M. Hermann fellow in federal budgetary affairs. "Washington insiders have a number of accounting gimmicks they use to mislead the public about the true level of federal spending," he says. These include:

  • Emergency Spending. Almost all of next year's $14 billion budget surplus will likely be consumed by two "emergency" spending bills Congress passed before the August recess: $7.6 billion in farm aid and $4.5 billion to fund the Census.

  • Off-Budget Programs. Taking a program "off budget" makes its funding levels "mandatory" and removes them from congressional debate. House members did this recently when they passed AIR-21, a transportation bill that would "open a floodgate of pork-barrel spending on aviation programs," Sperry writes.

  • Underfunded accounts. Lawmakers deliberately earmark lower-than-usual amounts for certain programs-such as the Federal Emergency Management Agency (FEMA)-then act surprised when actual spending is higher. Congress is already allocating suspiciously low amounts for FEMA to handle emergencies in the coming year.

Keeping within the 1997 spending limits may require a high degree of fiscal discipline, Sperry says, but Congress should not use the unforeseen budget surpluses as an excuse to break the caps and raise spending. Lawmakers should be "challenging the president to make a clear decision: Either keep the bargain he made or veto fiscally responsible spending bills that stay within the caps and protect the Social Security surplus," he writes.

In a related paper, Sperry lists a number of ways Congress can avoid "squandering a surplus that has not yet materialized." He identifies several of the most wasteful programs Congress will consider over the next three weeks:

  • The "Livable Communities" Agenda. Vice President Al Gore would head this $10 billion initiative to combat "urban sprawl," even though past federal efforts such as mass transit subsidies and High Occupancy Vehicle lanes "have been spectacularly unsuccessful in relieving traffic congestion or improving the quality of suburban life."

  • The Land Legacy Initiative. The White House wants to establish a $1.3 billion trust fund to increase federal and state land acquisitions, despite the fact that government land managers have a poor record of caring for lands they already oversee.

  • The Community Builders Program. This program, operated by the Department of Housing and Urban Development at an annual cost of more than $85 million, trains hundreds of "community builders" in cities nationwide. HUD's own inspector general has raised questions about the program's potential for waste and abuse.

Congress should also cut obsolete and redundant programs, Sperry says. As the General Accounting Office has shown, many government agencies are duplicating the work of other agencies. Overlapping programs should be consolidated or eliminated entirely. Others-such as the Rural Utilities Administration, a New Deal-era program designed to bring cheap electricity to rural areas-have long outlived their original purpose.

"Hard work, creativity, and entrepreneurial risk-taking by the American people have produced record levels of economic growth, and this in turn has filled the coffers of the federal government," Sperry concludes. "The wealth created by American taxpayers rightfully belongs to those who created it."

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