November 14, 2001

November 14, 2001 | News Releases on Federal Budget

Time to Close the "Grab Bag" of Federal Funding

WASHINGTON, Nov. 14, 2001-Politicians and special-interest groups continue to use the attacks of Sept. 11 as an excuse to lobby for taxpayer dollars, says a new paper from The Heritage Foundation.

Half of a $40 billion federal rescue package has been dedicated to disaster relief, says Ronald Utt, a senior analyst at Heritage and former privatization "czar" under President Reagan. But the other half, as well as the stimulus package now being debated by Congress, have become objects of what he calls "a shameless bidding war among those trying to profit from tragedy."

As Rep. Jim Moran, D-Va., put it: "It's an open grab bag, so let's grab."

Virginia politicians have wasted no time and are requesting millions for transportation infrastructure spending unrelated to damage from the terrorist assault. A state transportation official wants some of the money to start construction on a light rail line that would connect the Virginia suburb of Falls Church with Dulles Airport. This project has been debated in the area for years, and local leaders have long had trouble lining up the necessary funds. "So now they are claiming it will serve as an evacuation route in an emergency," Utt says.

The grab is hardly limited to the Old Dominion. Washington Mayor Anthony Williams asked for $150 million in federal aid for lost tourism and other money, then upped his request to $900 million under pressure from the city council. Councilwoman Carol Schwartz, a Republican, told the mayor he should be "asking for billions with a B. I would run and grab as much as you can legitimately get."

Trains remain an obsession among those eyeing the federal budget prize, says Utt. New York Gov. George Pataki, a Republican, seeks $54 billion that would fund, among other things, a high-speed rail line between Schenectady and New York City. Sen. Harry Reid, D-Nev., wants $12 billion for Amtrak, including $1 billion to start "magnetic levitation" rail service between Las Vegas and Los Angeles. Sen. Ernest Hollings, D-S.C., would like $4.4 billion in up-front cash subsidies and $42 billion in federal loans for Amtrak. Others have jumped in, Utt says. The Associated General Contractors joined state highway officials to urge $5 billion in additional spending on roads. The National Education Association asked for $20 billion for school construction. The bus industry wants $1.5 billion, and travel agents have requested $4 billion.

Farmers are seeking $74 billion more in subsidies than they would have received under existing law, even though their income will reach all-time highs this year, Utt says. "To imply urgency, they even changed the name of their bill from the Agriculture Act of 2001 to the Farm Security Act of 2001," he adds.

A notable exception, he says, is the hotel industry's trade association, which declined to request federal funds. "The country's needs as a whole greatly outweigh the needs of any specific industry," a spokesman said. "Right now, the country needs patriots, not profiteers."

Adds Utt: "Hear, hear."

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