One of the most important aspects of the separation of powers is the commitment of the power of the purse to the legislative branch. It constrains the executive and the judiciary from engaging in unilateral action without congressional approval. If there's no approval, there will be no money to pay for the executive action, as the rule would have it. Unsurprisingly, with the advent of the administrative state and an aggressive executive, this power has been significantly diminished in modern times
Indeed, Article I, Section 8 of the Constitution provides expressly that “[t]he Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts,” to the exclusion of any other branch’s exercise of those powers. The upshot: the separation of powers, especially Congress’ power over appropriation priorities, is eroded as executive agencies and executive allies have access to funds not appropriated by Congress.
In order to keep their power of the purse intact, Congress originally enacted the Miscellaneous Receipts Statute in 1849. That law is now codified today in Title 31 of the U.S. Code. It requires all government officials in receipt of funds, such as settlements from civil or criminal enforcement, to deposit that money with the Treasury. As a structural point, the law effectively aims at stopping executive agencies from self-funding through enforcement or other receipts of money. It maintains their dependence on Congress for their annual appropriation.
However, the Justice Department has found a way around this law to fund political allies on the left or executive priorities without congressional approval: settlement agreements. As Wall Street Journal columnist Kimberley Strassel recently reported, “[i]t works like this: The Justice Department prosecutes cases against supposed corporate bad actors. Those companies agree to settlements that include financial penalties. Then Justice mandates that at least some of that penalty money be paid in the form of “donations” to nonprofits that supposedly aid consumers and bolster neighborhoods.”
The trick here is that Justice never “receives” the funds within the meaning of the Miscellaneous Receipts Statute, and thus has no requirement to deposit the funds it exacts from defendants with the Treasury—the donations are made directly without money ever being received into Justice’s hands.
Despite the fact that Justice Guidance discourages the practice because “it can create actual or perceived conflicts of interest and/or other ethical issues”—and, indeed, it was almost banned in 2008 due to perceptions of abuse—Justice continues to push this method of funding political allies and favored priorities of the executive. In fact, “[i]n 2011 Republicans eliminated the Housing Department’s $88 million for ‘housing counseling’ programs,” Strassel reports, “which spread around money to groups like La Raza. Congress subsequently restored only $45 million, and has maintained that level. . . [B]ank settlements pour some $30 million into housing counseling groups, thereby essentially restoring all the funding.”
Every year around this time, a ritual is underway that quietly moves the ball forward on creating a U.S. national ID. That ritual is the annual appropriations process in Congress, which doles out money for everything the government does---including weaving together a system that may one day identify, track, and control each one of us.
As I noted last year in my policy analysis, REAL ID: A State-by-State Update, DHS has spent over a quarter billion dollars on REAL ID since the 2008 fiscal year. Beginning in 2012, grants supporting state efforts to implement REAL ID were moved into the State Homeland Security Grant Program, which fairly well keeps the amounts hidden from you and me. But appropriators at any time could deny the expenditure of funds to implement REAL ID.
Why don't they do it? Judging by their records, appropriators are a strongly pro-national-ID group. Appropriations committee members who were in Congress when it passed tended to favor the national ID law---Republicans almost without exception. (And because Republicans chair the appropriations committees in both the House and Senate, they are currently the ones to watch.)
House members serving in 2005 had four chances to vote against the national ID law, and senators had two: First, when REAL ID passed the House on a test vote as H.R. 418. Second, when the rule governing debate in the House on H.R. 1268 passed by voice vote, attaching REAL ID to this spending bill. Third, when H.R. 1268 passed the House and Senate. And, fourth, when the conference report on H.R. 1268 passed the House and Senate.
Let's start with a little civics lesson: Congress spends money through a two-step process. Spending must first be authorized. That's called an authorization of appropriations. Then, in a second step, the money is actually appropriated. There are exceptions, but on the whole this is how spending works. Authorizing bills go to authorizing committees, and appropriations bills go to the appropriations committees. When both do their thing, money gets spent. It's good to keep an eye on.
In our project to generate better data about what Congress is doing, we've "marked up" over 80 percent of the bills introduced in Congress so far this year, adding richer and more revealing computer-readable data to the text of bills. That's over 4,000 of the 5,000-plus bills introduced in Congress since January. We're to the point where we can learn things.
I was surprised to find just how often the bills that authorize spending leave the amounts open-ended. A recent sample of the bills we've marked up includes 428 bills with authorizations of appropriations. Just over 40 percent of them place no limit on how much money will be spent. They say things like "such sums as may be necessary," leaving entirely to the appropriations committees how much to spend. (There are many bills with both defined amounts and open-ended spending. To be conservative, we treated any bill having limited spending as not unlimited.)
This leads me to two related conclusions. First, authorizations of appropriations being a potential brake on spending, this surprisingly common practice is part of Congress's fiscal indiscipline. The members of Congress and Senators who introduce such bills and vote to authorize open-ended spending are avoiding their responsibility to determine how much a program is worth to us, the taxpayers.
It’s appropriations season! -- that wonderful time of year when the House and Senate pass competing versions of legislation to fund government agencies, bureaus, and...whatever pork and pet projects they can squeeze in.
Congress has made most of its spending decisions over the past few years through last-minute continuing resolutions or consolidated appropriations bills. That makes it harder to follow the money (which may be part of the reason they've been doing it that way), but it's important to watch the dollars because some of that money is going toward national ID systems and biometrics.
Last week the House passed their FY 2014 Department of Homeland Security appropriations bill. As in years past, the legislation contains funding for three of everyone’s favorite identification programs: REAL ID, E-Verify, and US-VISIT/the Office of Biometric Identity Management (OBIM), a DHS office covering biometrics for travelers at airports, ports, and other points of entry.
For the coming fiscal year, the House appropriated $114 million for E-Verify, $232 million for OBIM, and $1.2 billion for the State Homeland Security Grant Program (SHSGP), from which grants for REAL ID implementation get doled out to states.
These numbers are consistent with past levels of appropriations for these programs, with the exception of REAL ID, which had its own funding stream until it was folded into SHSGP in fiscal 2012.
If America descends into Greek-style fiscal chaos, there's no doubt that entitlement programs will be the main factor. Social Security, Medicare, Medicaid, and Disability are all fiscal train wrecks today, and the long-run outlook for these programs is frightful.
Just look at these numbers from the Bank for International Settlements and OECD to see how our fiscal future is bleaker than many of Europe's welfare states.
Simply stated, if we don't implement the right kind of entitlement reform, our children and grandchildren at some point will curse our memory.
But that doesn't mean we shouldn't worry about other parts of the budget, including the so-called discretionary programs that also have been getting bigger and bigger budgets over time.
That's why I want to add some additional analysis to Veronique de Rugy's recent piece in National Review Online, which might lead some to mistakenly conclude that these programs are "shrinking" and being subject to a "Big Squeeze."
...there is another number to look at in that budget. It’s the shrinking share of the budget consumed by discretionary spending (spending on things like defense and infrastructure) to make space for mandatory spending and interest. This is the Big Squeeze. ...in FY 2014 mandatory spending plus interest will eat up 67 percent of the budget, leaving discretionary spending with 33 percent of the budget (down from 36 percent in FY 2012). Now by FY 2023, mandatory and interest spending will consume 77 percent of the total budget. Discretionary spending will be left with 23 percent of the budget.
She's right that discretionary spending is becoming a smaller share of the budget, but it's important to realize that this is solely because entitlement outlays are growing faster than discretionary spending.
Here's some data from the Historical Tables of the Budget, showing what is happening to spending for both defense discretionary and domestic discretionary. And these are inflation-adjusted numbers, so the we're looking at genuine increases in spending.
As you can see, defense outlays have climbed by about $100 billion over the past 50 years, while outlays for domestic discretionary programs have more than tripled.
If that's a "Big Squeeze," I'm hoping that my household budget experiences a similar degree of "shrinking"!
Veronique obviously understands these numbers, of course, and is simply making the point that politicians presumably should have an incentive to restrain entitlement programs so they have more leeway to also buy votes with discretionary spending.
But I'd hate to think that an uninformed reader would jump to the wrong conclusion and decide we need more discretionary spending.
Particularly since the federal government shouldn't be spending even one penny for many of the programs and department that are part of the domestic discretionary category. Should there be a federal Department of Transportation? A federal Department of Housing and Urban Development? A federal Department of Agriculture?
No, NO, and Hell NO. I could continue, but you get the idea.
The burden of federal government spending in the United States is far too high and it should be reduced. That includes discretionary spending and entitlement spending.
P.S. For those who don't have the misfortune of following the federal budget, "entitlements" are programs that are "permanently appropriated," which simply means that spending automatically changes in response to factors such as eligibility rules, demographic shifts, inflation, and program expansions. Sometimes these programs (such as Social Security, Medicare, Medicaid, etc) are referred to as "mandatory spending."
The other big part of the budget is "discretionary spending" or "appropriations." These are programs funded by annual spending bills from the Appropriations Committees, often divided into the two big categories of "defense discretionary" and "nondefense discretionary."
Rep. Nita Lowey (D‑NY) fears it will:
Lowey Statement on 2013 Continuing Resolution
Congresswoman Nita Lowey, Ranking Democrat on the House Appropriations Committee, today delivered the following statement on the House floor regarding the FY2013 Continuing Resolution and Defense and Military Construction/VA Appropriations bills:
Mr. Speaker, the bill before us contains a defense bill and a military construction/Veterans Affairs bill adjusting the FY 2012 funding levels to meet FY 2013 needs. It is unacceptable that federal agencies and departments covered by the 10 remaining bills would be forced to operate under full‐year continuing resolutions based on plans and spending levels enacted 15–18 months ago.
Congress’ failure to do our jobs and pass responsible, annual spending bills limits our ability to respond to changing circumstances, implement other laws enacted by Congress, and eliminate funding that is no longer necessary.
Specifically, this bill will delay implementation of the Affordable Care Act, scheduled to begin enrolling participants in October. Without IT infrastructure to process enrollments and payments, verify eligibility and establish call centers, health insurance for millions of Americans could be further delayed.
But wait. The Obama administration says ObamaCare will roll out on schedule. Does Lowey know something?
Lots of other stories have dominated the headlines lately, so people have paid little attention to news that House and Senate leaders have settled on a plan to fund the government for the first half of fiscal 2013 through a continuing resolution.
Senator Reid’s press release states that the agreement “will avoid a government shutdown while funding the government at $1.047 trillion.” If only that were true. The president’s most recent budget estimates that federal outlays will be something more like $3.8 trillion.
Whatever the case on the total figures, this is a good time to be asking just what will be in that six‐month extension of government funding. And I’m particularly interested in whether it will continue to fund our national ID law, the REAL ID Act.
Not being a dialed‐in appropriations lobbyist, all I have to go on are the proposals for Department of Homeland Security spending that the House and Senate have put together. Those proposals are H.R. 5855, the Department of Homeland Security Appropriations Act, 2013, and S. 3216, the Department of Homeland Security Appropriations Act, 2013. Both bills spend about $450 per U.S. family on the operations of the DHS.
Poring through the bills and committee reports, I find REAL ID funding in a pot of over $1.7 billion administered by FEMA in its “State Homeland Security Grant Program.” The House Appropriations Committee says the money should be divided among many different programs “according to threat, vulnerability, and consequence, at the discretion of the Secretary of Homeland Security.” Considering what little REAL ID does for security, the Secretary could zero out REAL ID. But this is unlikely to happen.
I find no mention of REAL ID in the Senate bill, though there is a similar pot of money that I assume might fund REAL ID implementation in the states. Precious dollars that local bureaucrats feel utterly obligated to chase after.
With REAL ID funding becoming an also‐ran in the world of homeland security grants, its long, slow decline continues. But I have no capacity to calculate the amounts going to REAL ID implementation. That’s nicely hidden in the opacity and arcana of federal government grant‐making.
Were I asked what to put in the upcoming continuing resolution, I would simplify things dramatically. I would recommend that REAL ID be stripped from the “State Homeland Security Grant Program.” Zeroed out. Nada. Nothing. In fact, I would add REAL ID to the cluster of Provided’s and Provided further’s that make appropriations bills so hard to read:
Provided further, that no funds shall be used to implement section 204 of the REAL ID Act of 2005 (49 U.S.C. 30301 note).
The country rejects having a national ID. The government is under tight budgetary constraints. The policy that kills two birds with one stone is to entirely defund the national ID law, barring any federal expenditures on its implementation. If Congress can’t see fit to repeal the law, the DHS can issue another blanket extension early next year when a new faux implementation deadline for the national ID law arrives.