The Corner

‘Emergency’ Spending Must Be Offset

Yesterday, the House rejected a continuing resolution that would have provided $1 billion in fiscal 2011 money for the nation’s disaster-relief fund, offsetting that amount with a $1.5 billion spending cut. The CR also would have provided $2.65 billion in fiscal 2012 disaster spending. But in the eyes of the Senate, that’s not enough money and too much offset: Senate Democrats are pushing a measure that would provide $500 million in fiscal 2011 disaster aid, without offsets, and $6.9 billion for fiscal 2012.

This morning’s Los Angeles Times editorializes:

The fight over emergency funding seems silly. The root problem is that Congress and the administration invariably set aside too little money for disaster relief. … The bigger problem is using the budget process to enable repeated threats to shut down government. …

House Republican leaders seem to think that the only way to get anything done is to hold the federal government hostage. That may jibe well with the agenda of the ‘tea party’ movement…but as Congress’ shrinking approval rating shows, it’s not what most Americans want from lawmakers.

The fight over emergency spending isn’t silly at all. While the amount of money we are talking about here is relatively small (only in Washington does $7 billion seem small), and while in this particular case the disaster spending is in fact correctly labelled “emergency,” the lack of offsets is unjustifiable. Before 2002, some of the funding had to be offset, but Congress — unfortunately and conveniently — let that rule expire. It should be reinstituted.

Whether we like it or not, emergency spending should be offset, over a certain period of time. That’s what we do in our personal lives. When several days of heavy rain caused flooding in the D.C. area a few weeks ago, I am sure that many people had to spend money that they weren’t expecting to. I know I did. I also know that, with very few exceptions, when a family faces an unexpected expense, it has to find the money, by cutting other expenses or spending differently. The government should do that, too.

Besides, who believes that emergency spending from the recent natural disasters will stop at $7 billion? It won’t, if history is any guide.

The big problem with “emergency” spending has nothing to do with funding legitimate emergencies. The problem is Congress’s habitual abuse of the designation to evade spending limits. #more#In this research paper, I looked at the explosive increase in “emergency” spending over the past decade, and found a shell game in which the “emergency” spending designation is regularly used to increase predictable, non-emergency spending outside of budget limits. Emergency spending hit $174 billion (14 percent of new discretionary spending) in FY 2009.        

Here’s the game: Congress lowballs what they intend to spend in the appropriations bills, which are subject to budget limits; then they backfill funding — for everything from education to transportation to defense — by attaching it to must-pass emergency supplemental bills, which don’t count toward spending limits. Adding insult to injury, Congress conveniently allowed to expire the budget rules requiring that some of the emergency funding be offset.

So here we are, a little more than a month after they passed the debt-limit deal, and the Senate already is planning to blow through its so-called spending limit by demanding another $7 billion in emergency spending. And fiscal year 2012 hasn’t even begun!

The incredible thing is that even the loudest advocates of spending control are doing this with a straight face. How? Because the debt-limit deal didn’t fix the emergency-spending loophole; its much-touted discretionary-spending “caps” don’t actually cap anything. They’re more like spending suggestions.

Considering the nation’s financial situation, it is outrageous that lawmakers still feel entitled to spend beyond any budget limit by pretending that — as long as spending has an “emergency” designation attached — it doesn’t really count. If Congress truly intends to get spending under control, it will start offsetting emergency spending and fix the loophole.

Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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