September 16, 2025 12:22PM # The $15 Trillion Emergency Spending Loophole By [Dominik Lett](https://www.cato.org/people/dominik-lett) --- SHARE Listen to this article Generated with [ ElevenLabs](https://elevenlabs.io/) AI technology. Loading the [Elevenlabs Text to Speech](https://elevenlabs.io/text-to-speech) AudioNative Player... ![broken piggy bank](/sites/cato.org/files/styles/pubs_2x/public/2025-09/GettyImages-182874850.jpg?itok=n0tgPg3C) *Read the new paper* [*here*](https://www.cato.org/policy-analysis/15-trillion-emergency-spending-loophole-federal-emergency-spending-1991-2025)*.* The Cato Institute has [just released](https://www.cato.org/policy-analysis/15-trillion-emergency-spending-loophole-federal-emergency-spending-1991-2025) an updated version of the emergency spending paper I co-authored with Romina Boccia last year. The key takeaway: Congressional abuse of emergency spending designations is worse than we initially thought. Adjusted for inflation and including interest costs, Congress has spent a whopping $15 trillion through the use of emergency designations. As I explain in the new policy analysis: > Over the past three-and-a-half decades, Congress has increasingly used emergency spending designations as a workaround to sidestep budget rules, avoid trade-offs, and pass massive spending bills with minimal congressional and public scrutiny. Emergency designations have expanded from their original purpose—narrow exemptions for unforeseen and urgent events—to become a routine means of unaccountably expanding the federal budget. > > From the wars in Iraq and Afghanistan to disaster relief and the COVID-19 pandemic, emergency designations have enabled more than $12.5 trillion in spending since 1991—**comparable to the entire amount spent on Medicaid and veterans’ programs combined**. This surge in off-the-books spending has added an estimated $2.5 trillion in new interest costs, accelerating the growth of the national debt and weakening the US fiscal position. **Congress has spent $15 trillion altogether through emergency spending designations since 1991**. Congress is incentivized to use emergency spending to bypass budget controls because there are no real constraints on what can be classified as an emergency. As a result, emergency spending has spiraled out of control, accelerating our nation’s fiscal decline. Congress desperately needs a budget enforcement mechanism for emergency spending. Without a process to offset emergency spending, Congress will continue to use emergencies as a pretext to pass budget-breaking spending initiatives with no plan to rein in future spending. Luckily, we can glean a few lessons from our European neighbors on how to design good fiscal rules without abandoning the emergency exemption altogether. > In Switzerland and Germany, so-called debt brakes—binding fiscal rules that limit borrowing—include mechanisms to exempt certain emergency spending, provided it is repaid over subsequent years. The COVID-19 pandemic response put these provisions to the test. In the German case, it prompted a ruling from the federal Constitutional Court reaffirming a narrow application of the debt brake and restricting the use of emergency spending. > > Since 2019, both Germany and Switzerland have reduced their governmental debt-to-GDP ratios. Meanwhile, nations with weaker fiscal rules, including the United States, have substantially increased their debt-to-GDP ratios. **Strong, well-designed fiscal rules anchor public expectations about politicians’ responsibility to budget in a forward-looking manner. Accordingly, emergency spending exemptions can provide needed flexibility during a crisis without sacrificing economic and fiscal stability, so long as they are designed correctly.** In the last few years, some promising policy proposals have been put forward, including several that have received bipartisan attention. These reforms include two bills I spotlight in the paper, Rep. Stutzman’s Emergency Spending Accountability Act and Rep. Emmer’s Responsible Budget Targets Act, which adopt Swiss-German-style budgetary mechanisms to track and offset emergency spending. The table below highlights additional reforms I discuss in the paper: ![Table 1 [print]: Emergency spending reform bills introduced in Congress](https://infogram-thumbs-1024.s3-eu-west-1.amazonaws.com/372281aa-785e-47f5-8d09-98f190e06003.jpg) *Read the full paper* [*here*](https://www.cato.org/policy-analysis/15-trillion-emergency-spending-loophole-federal-emergency-spending-1991-2025)*.* *The author thanks Romina Boccia, Alex Nowrasteh, Ashley Mason, and Ivan Osorio for their invaluable edits and feedback during the paper review process.* ##### Related Tags [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).