Meet the New Dems, Same as the Old Dems

by Douglas Holtz-Eakin

When President Obama signed the Budget Control Act into law, Americans were promised that it would slow Congress’s appetite for spending. CBO estimated that the new spending caps would reduce appropriations by about $825 billion. In FY 2012, the cap was set at $1,043 billion, a modest reduction of $7 billion from total regular appropriations last year. When Congress completed the appropriations process this past week, the beleaguered U.S. taxpayer should have had every assurance that Congress would abide by the spirit of the Act and stay under the cap.

Alas, Senate Democrats preferred the letter of that law and exploited the rules to end up spending more than was spent last year. Shockingly enough, President Obama signed without blinking.

The House of Representatives passed the last spending measure in three parts: H.R 2055, the Omnibus; H.R. 3672, which included program-integrity measures and disaster funding; and H. Con. Res. 94, a modest across-the-board reduction to offset the spending contained in H.R. 3672.

The Senate passed only two of the three measures. Care to guess which two?

Predictably, Senate Democrats supported the spending measures and not the reduction. Despite having over $1 trillion in appropriations, the thought of reducing spending by less than $9 billion was evidently too much pain to bear.

How? The “disaster trick.” The Budget Control Act allows for spending caps to be adjusted for disasters, up to a certain amount. For FY 2012, that amount was $11.3 billion. Between the end-of-year measure and disaster spending enacted earlier in the year, Congress has appropriated just shy of the full allowance, which allowed Congress to spend above the cap. H.R. 3672 contained $8.6 billion for disaster and program-integrity spending.

H. Con. Res 94, the third piece to the puzzle, provided $8.6 billion in savings to offset the disaster and program-integrity spending that breached the cap. If Senate Democrats had passed this measure, total appropriations (not including the war) would amount to $1,045 billion in FY 2012, reflecting about $2 billion above the cap in previously enacted disaster spending. Still, this amount would be about $5 billion below last year’s levels — a modest but meaningful decline.

Unfortunately, Senate Democrats (except Ben Nelson) couldn’t bring themselves to support this modest acknowledgment of reality and killed the measure. It seems that despite the advertising, the spending disaster — pun fully intended — continues.

You don’t have to believe me. For more detailed analyses, see the excellent pieces by the House and Senate Budget Committees.

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