Foundation projects that the omnibus appropriations bill (HR 2673)
that is currently in the Senate will set the stage for
discretionary spending to increase by 9 percent in 2004, rather
than the 3 percent figure commonly cited by Members of
increases of 13 percent and 12 percent during the previous two
years, 2004 would mark the third consecutive year of massive
discretionary spending growth (see chart below).
between the two numbers can be explained by the difference between
budget authority and outlays. Budget authority refers to the amount
of money Congress and the President release to federal agencies to
spend; an amount that can be easily manipulated. Outlays are the
amount actually spent in a given year- and the amount taxpayers
While discretionary budget authority is projected to
increase 3 percent (from $849 billion to $873 billion) upon
completion of the 2004 omnibus spending bill, outlays will likely
rise by 9 percent (from $824 billion to $900 billion), according to
Heritage Foundation calculations based on Congressional Budget
Office data. [2
Congress held down 2004 budget authority
growth by using the simple accounting gimmick of assigning new
spending to the 2003 fiscal year instead of the 2004 fiscal year.
Not only did this artificially reduce the 2004 totals, it also
artificially increased the 2003 totals - thus shrinking the
spending gap between the two years, and creating the illusion of
limited spending growth. Here are three examples:
In March 2003,
the midpoint of the 2003 fiscal year, lawmakers enacted a $79.2
billion supplemental spending bill for the war in Iraq. This turned
out to be much more money than was actually needed for the 2003
fiscal year, and consequently much of the outlays will be spent in
2004. Yet all of the budget authority was assigned to 2003.
year's appropriations debate, Congress reclassified $2.2 billion of
2004 education spending into the 2003 spending totals. This
reversed last year's decision, when lawmakers interested in keeping
the 2003 budget numbers artificially low had reclassified this
amount into the 2004 spending totals.
rescinded $1.8 billion in unspent post-9/11 emergency funds and
redirected it into new 2004 spending priorities. Up until now, this
budget authority had not been needed, and was not going to be used.
Rather than sparing taxpayers its cost, Congress instead took back
the money to add to 2004 outlays.
$20,000 per Household
By assigning much of the budget authority back to 2003,
lawmakers allowed the 2004 budget to appear comparatively flat,
even though actual outlays will grow significantly. Note that these
projections assume no additional supplemental spending bills for
the 2004 fiscal year. If history repeats itself, another spring
supplemental spending bill will add $30 billion in 2004 outlays and
push the year's discretionary spending hike up towards 13
slight-of-hand is merely a continuation of past abuses, going well
beyond discretionary spending. Mandatory spending is set to grow
beyond its 2003 record of 11 percent of the Gross Domestic Product,
and will accelerate even faster upon implementation of the Medicare
drug benefit. As economic growth pushes interest rates back up, the
$55 billion decrease in net interest costs since 2001 will likely
reverse itself. The 2004 omnibus spending bill includes thousands
of pork projects, ranging from the Please Touch Museum in
Philadelphia, to the Rock and Roll Hall of Fame in Cleveland, to
construction of a single traffic light in Briarcliff Manor, New
federal spending in 2003 topped $20,000 per household for the first
time since World War II, and is set to grow another $1,000 per
household in 2004.
It is time for
President Bush and Congress to stop playing budget bookkeeping
games and take a stand against runaway spending by rewriting the
omnibus appropriations bill.
Brian M. Riedl is
Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas
A. Roe Institute for Economic Policy Studies at The Heritage
Highways and mass
transit funding also create a discrepancy between budget authority
and outlays. This spending is classified as mandatory budget
authority and discretionary outlays. So in this analysis of
discretionary spending, they appear only in outlays.
 The Congressional
Budget Office currently estimates 2003 discretionary outlays at
$824 billion (this is different from the commonly-cited $847
billion total, which CBO says is an outdated estimate). The 2004
estimate of $900 billion comes from the CBO's Current Status of
Discretionary Appropriations, as of December 5, 2003, located at http://www.cbo.gov/showdoc.cfm?index=2049&sequence=0.
See Brian M. Riedl,
"Another Omnibus Spending Bill Loaded with Pork," Heritage
Foundation Webmemo No. 377, December 2, 2003, at http://www.heritage.org/Research/Budget/wm377.cfm.
See Brian M. Riedl,
"$20,000 per Household: The Highest Level of Federal Spending Since
World War II" Heritage Foundation Backgrounder No. 1710,
December 3, 2003 at http://www.heritage.org/Research/Budget/BG1710.cfm.