Commentary

Fiscal Incontinence

By Stephen Slivinski
This essay originally appeared in The New York Post on May 11, 2001.
The budget resolution just passed by Congress is designed to enforce spending discipline. But if history is any guide, lawmakers could bust the spending targets by the end of the year in a blaze of fiscal incontinence.

President Bush wants to limit federal spending increases to 4 percent, half of last year’s 8 percent growth. But even 4 percent is faster than either inflation (2.6 percent) or the growth of the economy (2.5 percent to 3 percent by White House estimates). Congress, bristling at the thought of slowing spending, thought that was too little and approved a discretionary budget increase of 5 percent.

This was not unexpected. For weeks, many on Capitol Hill have been saying the president’s budget hikes are paltry. And those are the Republicans. Sen. Ted Stevens (R-Alaska), chairman of the Senate Appropriations Committee and one of the most important Republicans in the budget process, said that Bush’ s 4 percent increase is “too low.” Sen. Pete Domenici (R-N.M.), head of the Senate Budget Committee, has expressed similar sentiments.

A budget resolution is required by the Budget Enforcement Act of 1974, which also put into place rules that would safeguard the budget targets in the resolutions. But the numbers in the resolution are often treated as suggestions. During the course of the budget process members of Congress can pass supplemental bills that exceed the budget caps. They call these “emergency” spending bills, as if funneling pork back to the home district is the equivalent of providing hurricane relief. “Emergency” spending totaled $35 billion in 1999 for such “crises” as the decennial Census and an expansion of congressional staffs. Last year’s tally was $8 billion for such unexpected emergencies as the Salt Lake City Olympic games. Unfortunately, there are no safeguards to keep “emergency” spending under control in this new budget resolution.

Congress can even ignore its own rules by stating in its new budget that the rules of the old budget don’t apply. Last year, for instance, the military construction bill included a provision that threw out the spending caps from the budget resolution passed three months earlier.

The result is that over the past five fiscal years lawmakers have spent a total of $142 billion above what the budget resolution said they could.

And what of those five-year spending caps passed in 1997? Congress pulled the plug on them, too. The budget would be $136 billion smaller this year alone if those caps were still in place.

In recent years, the spending targets in the budget resolution have been more of a floor than a ceiling, thanks to large tax surpluses. Policymakers would be advised to find ways of keeping the budget caps in place. Tightening the rules that allow Congress to pass emergency spending bills would be a good start. Actually cutting government spending would be even better. Best of all would be getting the surplus money out of Washington.

Tax cuts do that, which is why there should be a tax cut every year there is a surplus. If Congress tries to spend more this year than Bush’s already generous budget will allow, the president should veto those bills. And fiscal conservatives in the House and Senate need to make sure Congress follows its own rules. This budget resolution is not the worst possible outcome, but it’ s not the best either. At the very least, the budget caps must be honored. The cost of failure is steep—literally billions of dollars a year.

Stephen Slivinski is a fiscal policy analyst.