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'Emergency' Funds Bypass Budget Cap

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  • By Eric Pianin and Juliet Eilperin
    Washington Post Staff Writers
    Tuesday, July 27, 1999; Page A1

    The GOP-controlled Congress is steadily circumventing budget limits that were supposed to restrict the growth of federal spending as it struggles to reconcile its appetite for a major tax cut with pressures to allocate more money for key domestic programs.

    Just yesterday, House lawmakers declared $3 billion in proposed funding for veterans health care next year to be "emergency" funding. By labeling such spending as an emergency even though most of the money is for routine annual expenses Congress does not have to count the money against spending limits restricting most federal programs to minimal growth.

    While derided by fiscal experts, these kinds of tactics are crucial both to passing contentious spending bills and to delivering on a major tax cut promised by the GOP. Many Republicans have said giant projected budget surpluses over the next decade mean that Congress can afford a tax cut of nearly $800 billion, with enough money left over to safeguard the finances of the Social Security program.

    Yet such large surpluses will materialize, analysts say, only if Congress lives within the budget limits approved two years ago as part of a successful effort to bring the federal budget into balance. These limits affect everything from defense and health programs to education, labor and foreign aid.

    In reality, however, the Republican-controlled Congress has been steadily breaking those limits by declaring spending emergencies and adopting other budget tactics aimed at masking the true size of its spending bills. In effect, Congress is double-counting some of the surplus money, using it on spending programs while also reserving it for a tax cut.

    The House Appropriations VA-HUD subcommittee yesterday declared $3 billion of veterans medical expenses and $2.5 billion of future disaster relief spending "emergencies" as part of a $70.5 billion fiscal 2000 spending bill. Last week, appropriators declared $4.5 billion in funding for next near's census as emergency spending.

    All told, Congress has declared $35 billion worth of emergency spending in the past year alone and is likely to declare tens of billions of dollars more this summer as it attempts to pass the politically contentious appropriations bills for the fiscal year that begins Oct. 1. Fiscal experts said some of the emergency spending, like money for the Kosovo war, seems justified but much does not.

    "Continuing to spend through the emergency loophole just increases public cynicism," said Robert L. Bixby, policy director for the Concord Coalition, a budget policy group. "Everyone knows they're playing games."

    White House budget director Jacob "Jack" Lew told reporters yesterday, "I understand the difficult time they're having in the appropriations process. . . . I think the question of what is a real emergency and what isn't is being stretched a little."

    But House and Senate GOP leaders insist their approach is fiscally responsible because they are resisting pressure from some lawmakers to throw open the gates to the use of the surplus for even larger spending increases down the road.

    House Speaker J. Dennis Hastert (R-Ill.) said late last week the House was justified in declaring the $4.5 billion of 2000 census funding an "emergency" because the Supreme Court ruled this year the government could supplement traditional methods of counting the population with a statistical sample.

    "All of a sudden we have two censuses. That is a one-in-10-years expenditure," Hastert said. "That's a legitimate emergency."

    But Rep. Carolyn B. Maloney (N.Y.), the ranking Democrat on the Government Reform and Oversight subcommittee on the census, questioned why Republicans would describe a regular population count as an emergency. "It's kind of goofy to call it an emergency. It's in the Constitution. You know you have to do it every 10 years," Maloney said.

    The controversy over the budget tactics comes as Congress attempts to put together a $792 billion tax bill and 13 spending bills that will pass muster with a majority of lawmakers while gaining the president's signature. The House passed a tax cut bill last week, and the Senate will take one up on Wednesday.

    The Congress and the administration are on a collision course: The White House has indicated the president will veto any tax bill much larger than $250 billion, while Congress has been steadily slashing Clinton spending initiatives. The VA, HUD and independent agencies subcommittee yesterday cut the NASA budget by 10 percent and trimmed some housing and climate programs below the administration's request.

    But the GOP is also being pulled from different directions within its own ranks. Conservatives want surplus funds reserved for tax cuts and Social Security, while moderates want more for Medicare and other high priority spending programs. Because all sides are committed to a boost in defense spending, cuts in domestic spending programs must be even larger under the existing budget limits.

    Appropriations Committee leaders on both sides of Capitol Hill have warned leaders that in order to stay within the caps they would have to slash domestic spending by 12 percent to 20 percent across the board. That would mean deep cuts in programs that Republicans had made high priorities, including education and medical research.

    During a pivotal meeting before the July 4 recess, House Appropriations Committee members outlined their concerns to GOP leaders. Some who thought the leadership finally had come around to their thinking were disappointed when Hastert and others renewed their commitment to the spending caps.

    But the leadership gave the appropriators and budget leaders instructions to scour all the appropriations bills and entitlement programs, including Medicare and Medicaid, for possible savings. And the leadership signed off on a liberal definition of the emergency-spending designation a backdoor method of dipping into the surplus without formally raising the spending caps.

    Appropriators are examining other spending programs that could be shifted outside the spending caps including the administrative costs and salaries of operating the Social Security administration and relief programs for economically distressed farmers.

    Republicans also have used other technical maneuvers to free up money for the spending bills. For example, they used the administration's rosier projections about how much will be needed to fund defense programs next year to save $10.5 billion for domestic programs. The appropriators also picked up an additional $2.6 billion to spend by assuming the government would auction off Spectrum radio frequencies sooner than previously thought.

    Such tactics not only have invited criticism from Democrats, but have also raised questions about whether House conservatives will go along with maneuvers that, in effect, breach the spending limits.


    © 1999 The Washington Post Company

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