The Corner

Winners and Losers from the Omnibus Spending Bill

The omnibus spending bill about to pass Congress is being seen a bipartisan victory. House appropriations chairman Hal Rogers (R., Ky.), for instance, said that “the bill reflects careful decisions to realign the nation’s funding priorities and target precious tax dollars to important programs where they are needed the most,” while his Senate counterpart, chairman Barbara Mikulski, boasted, “This agreement shows the American people that we can compromise and that we can govern. . . . It puts an end to shutdown, slowdown, slamdown politics.”

Make no mistake, though: In Washington-speak, this celebration just means that Congress is agreeing to spend more money that it should on both defense and domestic projects. The $1.1 trillion omnibus spending bill, following the outlines set by the Ryan–​Murray plan, spends above levels set by the sequester back in 2011. CQ reports this morning:

The current stopgap funds the government at an annualized rate of $986 billion in base discretionary spending, measured as budget authority or money that is obligated, not including war spending and emergency costs. That breaks down to $518 billion for defense and $468 billion for non-defense through Jan. 15. At the time the stopgap was enacted in February, the post-sequester, base discretionary spending caps for fiscal 2014 were $498 billion for defense and $469 billion for non-defense. If those caps had remained in law, the $518 billion funding for defense would have exceeded the defense cap, potentially triggering across the board cuts to defense programs later this month.

However, the Ryan-Murray budget deal (PL 113-67) passed by Congress last month raised the fiscal 2014 defense cap to about $520 billion and the non-defense cap to $492 billion, for an overall spending limit of $1.012 trillion. Current stopgap spending for defense and non-defense is below those caps, meaning no sequester would be required.

One of the main losers here – after taxpayers and future generation – is Congress’s reputation. This move validates the belief that it can’t be trusted to keep its promises to cut spending, no matter how small the cuts are. It also makes it even harder to believe that lawmakers on both sides of the aisle will be up to the task of reforming the drivers of our future debt before it is too late.

The No. 1 winner is, of course, the Pentagon, since it won’t be subjected to budget cuts that had been planned for the next two years. The military not only scores more spending through its regular budget but, as a bonus, it gets a raise through its Overseas Contingency Operations budget. The bill provides $85.2 billion in war spending, a $5 billion hike over what was on the books. And we should expect that number to go up, as Congress has used the war budget as a slush fund since the wars started in 2002 by abusing the emergency-spending loopholeI am not sure how the increase in war spending can be justified, considering that we are supposedly drawing down from two wars, but there you have it.

The next big winner is the military-industrial complex, headed by the biggest defense contractor of them all, Lockheed Martin. The Hill reports:

All major weapons systems procurement requests were fully-funded, including the F-35 Joint Strike Fighter — the Pentagon’s most expensive weapons system in history. 

Also fully funded were the Army’s M1 Abrams tank program, and the Navy’s shipbuilding plans for eight new ships. 

Israel is also a winner in the omnibus spending bill, with money fully provided for the Arrow, David’s Sling, and the Iron Dome rocket defense systems

Lockheed Martin’s victory is even more troublesome considering the large consensus in the defense world that the F-35 program has wasted a gigantic amount of money on a plane that still can’t fly properly. 

Why on earth is Congress allowed to insist that it can’t spend within the limits set by the sequester, when there is so much waste and unjustifiable spending in the budget? Take the following items, for instance:

‐ Nondefense DOD spending: A report by Senator Tom Coburn called “The Department of Everything” identifies almost $70 billion over ten years in wasteful Pentagon spending that can be eliminated “without cutting any Army brigade combat teams, Navy combat ships, or Air Force fighter squadrons.” Examples: eliminating the $9 billion spent for Pentagon-run grocery stores, or the $10.7 billion spent to educate children of military families in the United States, where these kids already have the option of attending public schools. Coburn’s press release notes that the report merely skims the surface – much more can be done.

‐ DOD improper payments: A May 2013 report by the GAO found that “DOD had overspent $1.1 billion on payments for services such as military health benefits, civilian, travel and commercial pay to vendors. According to the audit, the DOD did not even have the proper paperwork to confirm the $1.1 billion due to ‘missing invoices and other flawed paperwork, as well as errors in arithmetic’” (more on this here and here). This is on top of reports that show that the DOD has overspent “$747 million of our taxpayers’ money on a large contract extension worth $4 billion, at least $6 to $8 billion lost on Iraqi reconstruction and at least $475 million worth of Afghan oil that ‘vanished without a trace.’”

‐ Duplicate programs: An Government Accountability Office report found 162 areas where agencies are running redundant programs, at the cost of billions to taxpayers – 23 different federal agencies, for example, support green energy efforts, while every branch of the military is developing its own new camo uniforms. The Obama administration’s budget, in fact, thinks that $25 billion can be saved over the next ten years from consolidation alone.

Dan Mitchell also has a recent list of wasteful items that caught my attention, and Chris Edwards has a long list of wasteful spending the federal government provides in aid to the states. Unfortunately, one doesn’t need to look very hard to find much more waste than what’s already mentioned in this post. A fiscally responsible Congress should have no problem spending within the limits they themselves set a few years ago.

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