Budgetary sleight of hand
Budgetary sleight of hand
One hundred and nine days after he first requested additional money to fund overseas military operations, President Bush finally signed the $120 billion emergency supplemental measure.
Part of the disagreement over the war spending stemmed from Congress including about $21 billion in extra spending, for such items as hurricane recovery, agriculture disaster relief and a children's health insurance program. But this claim is like a magician's patter to distract his audience from the sleight of hand as he pulls a coin out of thin air: Supplemental spending, "emergency" spending in particular, seems to be Mr. Bush's tool of choice for evading annual budget limits and increasing spending across the board.
Take for example, the funding for the wars in Afghanistan and Iraq. The Congressional Budget Office, says since September 11, 2001, the government has appropriated roughly $503 billion for the global war on terror -- about $352 billion went to the war in Iraq. The president requested this spending under an "emergency" label or designation.
In theory, supplemental, emergency appropriations provide additional funding during a fiscal year for programs and activities considered too urgent to wait until the next year's budget. The Budget Enforcement Act of 1990 gives emergency bills special exemptions from rules designed to restrain spending. Emergency requests lack the detail used to justify the annual federal budget requests, making accountability more difficult. And supplemental funding is left out of deficit projections that accompany the annual budget.
Although there are no official limits on the amount or type of spending that can be designated an emergency requirement, historically there has been an understanding that emergencies are sudden, urgent, unforeseen, temporary conditions that pose a threat to life, property or national security. The president's budget even describes his intention to enact into law a definition of an emergency requirement that will ensure that these standards are met before an event is exempted from regular budget rules.
How then can spending on the war be considered an emergency? While the 2007 and 2008 costs of the war may be necessary and not permanent, they are by no means sudden, urgent or unforeseen. The war in Afghanistan started in October 2002 and the war in Iraq commenced in March 2003.
Except for a sharp spike in 1991 to fund the first Gulf war, supplemental appropriations remained at roughly 1 percent of new discretionary spending during the bellicosity of the 1990s. Supplemental appropriations provided the initial funding for conflicts such as military operations in Southwest Asia, Bosnia, and Kosovo but later funding came through the regular channel of ordinary appropriations bills.
In 1998, as the federal budget began running surpluses and politicians looked for ways to spend the extra money, supplemental spending started rising. But in those days, the U.S. still enjoyed the benefits of a divided government. After 2002, Republicans conveniently allowed the expiration of the few budget rules meant to constrain spending.
Supplemental appropriations designated as emergency spending no longer count against the annual budget limits set by Congress and do not trigger automatic cuts if they push outlays above the caps. In fiscal 2006, supplemental appropriations represented 18 percent of new discretionary spending and, adjusted for inflation, reached an all-time high of $143 billion, up from $7 billion in fiscal 1998, when supplementals accounted for 0.9 percent of new discretionary spending.
According to a document from the Senate Committee on Budget, many items requested by the president in the current bill are not emergencies. For instance, the committee writes, "An increase ($1.7 billion) for anything called a permanent change in military force structure should be funded in the regular, annual defense budget, not in an 'emergency' supplemental." The bill also requests up to $4.2 billion for items that are not even for the war in Iraq and Afghanistan, such as $500 million for six electronic warfare planes -- neither the insurgents in Iraq nor al Qaeda have an air force or radars -- and $400 million for two development aircraft that will not see service until 2013.
Unfortunately, Democrats seem as pleased with the illusion of fiscal responsibility as did Republicans. Total funding in the bill's final version is about $4 billion less than in the version Mr. Bush vetoed, yet Democrats still managed to add $17 billion to Mr. Bush's request, 85 percent of it for nondefense activities, such as $3 billion for crop and livestock disaster aid, $1.4 billion for the Army Corps of Engineers, $871 million for emergency road repairs and $450 million for Rural Schools extension programs.
They also used the supplemental to increase the minimum wage over two years to $7.25 an hour and to provide $4.8 billion in tax breaks to businesses through 2017, offset by several revenue-raising provisions.
As members of Congress and President Bush gear up to negotiate
the new fiscal 2008 supplemental bill, which is scheduled to be
well above $145 billion, they should stop dabbling in illusion and
stop abusing the supplemental process. As any magician can tell
you, money doesn't actually materialize from thin air.