Here we go again!
Earlier this year, both House and Senate leadership promised to
restrain federal spending. But the appropriation committees must
not have received the memo, and the appropriators are poised to
unleash a series of spending increases. Using the time-honored
methods of appropriations gimmickry, Congress seems to think that
it can slip these items by budget watchdogs, unnoticed.
The Year of Fiscal
But this was
supposed to be the year of fiscal responsibility. Over the last
three years, discretionary spending rose by 39 percent. Part of
this was due to ramped-up spending on homeland security in the wake
of September 11, but much of this spending paid for unrelated
To turn the tide
against continued spending growth, the President's budget this year
held non-homeland security, non-defense spending to a near freeze.
Then the House passed a budget resolution that came in $2 billion
under the President's proposal. Senate leadership agreed to be
guided by the House's figure.
appropriation bills seem to conform to their budgetary targets,
closer examination reveals an array of gimmicks that the
appropriations committees are using to disguise spending
The first gimmick
is to declare that routine spending is actually emergency spending.
Emergency spending does not count towards budget resolution caps.
Senate appropriation bills contain billions in this kind of
"emergency" spending. One subcommittee affixed the "emergency"
label to $1.2 billion of the $30 billion budget for Veterans'
Administration hospitals just to make the books balance. In that
same bill, $800 million for NASA exploration is also designated as
"emergency." Space exploration may be a grand vision, but it is
hardly a national priority and certainly not an emergency.
Designated Emergencies (in millions)
|VA-HUD: VA Medical Emergency
|VA-HUD: NASA Emergency
|Treasury: Postal Service Emergency
|Foreign Ops: AIDS Emergency
|Foreign Ops: Sudan Emergency
|Agriculture: WIC Emergency
The list of emergencies goes on and on: It includes the nutrition
program for women, infants, and children (WIC), the U.S.
contribution to the Global Fund to Fight AIDS, and aid to Sudan.
The fact that the bulk of these programs is funded normally proves
that the "emergency" label is no more than an accounting gimmick
used to circumvent spending limits.
Federal Help for Rainy (and Dry)
As if this were
not enough, Congress has also circumvented budget controls to fund
disaster relief for hurricane- and drought-stricken parts of the
country. The federal government had already allocated $2 billion in
relief, but more than $8 billion more is now zipping through
Congress. Provisions in these bills include $72.5 million for
"disaster relief" at various military facilities, $21.3 million for
clean-up at national wildlife refuges, and an additional $126
million for NASA (which, according to appropriators, seems to be in
a perpetual state of "emergency").
Disaster Supplementals (in millions)
|1st Hurricane Supplemental
|2nd Hurricane Supplemental
|3rd Hurricane Supplemental
|Homeland: Argiculture Drought
The $3 billion drought relief legislation sets a bad federal
bailout precedent. All
, including the business of
involve an assessment of risk. When
risks are too high, businesses buy insurance in highly developed
and specialized markets.
The federal government should not
be the backstop of risks gone bad, and
it should not encourage businesses to take on irresponsible risks
or to skimp on coverage
. If farmers receive federal
subsidies when their expected crop yields drops, what other
industries suffering predictable, insurable misfortunes will be
Governments are terribly inefficient when they
displace functioning private industries, and the insurance industry
is no exception. Insurance is an especially dangerous area for
government intervention because there is no end to the risks that
the public would choose to avoid if it could. Would record
companies seek recompense if Britney Spears' new album doesn't meet
sales forecasts? Oops, there we go
Other elements of
these appropriation bills show the lengths to which legislators
will go to break spending caps. A mechanism built into the
Labor-HHS appropriation bill would create false savings in order to
increase spending. The ploy is to shift the dates that Supplemental
Security Income checks will be mailed out in so that there will
only be 11 monthly payments in FY 2005, creating the illusion of
$3.2 billion in one-time "savings." By "cutting" mandatory
spending, the appropriators made room to add $3.2 billion in
discretionary spending without exceeding their budget allocation.
After the spotlight moves to the next fiscal year, Congress will
likely undo this slight-of-hand and surpass its budget caps.
budget boundaries, the VA-HUD contains a non-germane rider that
would extend the Milk Income Loss Compensation (MILC) program. This
program subsidizes dairy farmers in the Northeast and Midwest and
was set to expire at the end of this fiscal year. But an amendment
sponsored by Sen. Herbert Kohl (D-Wisc.) would extend the program
for two years. No funny math this time. The VA-HUD appropriation
now surpasses its spending cap by $2.4 billion and guarantees $2.4
billion of out-year funding for FY 2006.
Other Items (in millions)
|Labor-HHS: SSI Pay-Date Shift
|VA-HUD: MILC Extension
|Homeland: Phantom Customs Fees
Some in Congress
attempt to live by their commitments to fiscal restraint. Notably,
the Republican Study Committee (RSC), as fiscally conservative as
they come, has had some success moving disaster relief funding out
of the standard appropriations bills, onto which they would have
been tacked, and into separate, stand-alone legislation. The RSC
now seeks, sensibly, spending trade-offs to pay for this relief.
Likewise, Senator Don Nickels, Chairman of the Senate Budget
Committee, is pressing the appropriations committees to live within
their limits. After all, budgets are about setting priorities; if
disaster relief is to be a priority, Congress should find a way to
pay for it in its budget.
But despite the
fiscal backbone of these few, many more in Congress are content to
ignore the spending limits that they've set themselves. True,
appropriators generally understand that they cannot surpass their
budget allocations overtly, but still they rely on unseemly
gimmicks. Congress should say "no" to these shenanigans instead of
is a Research Assistant in, and Alison Acosta Fraser is the
Director of, the Thomas A. Roe Institute for Economic Policy
Studies at The Heritage Foundation.