The Hurricane Sandy relief bill racing through the U.S. Senate is a perfect example of the spend-now-save-later practices that are driving the government deeper in debt. Lawmakers cannot seem to find $55 billion in offsets to prevent a devastating cut in national defense, but they can easily whip up $60.4 billion in new deficit spending ostensibly to aid Sandy’s victims.
Not surprisingly, the President and his congressional allies have chosen the current lame duck session to push through the excess spending, ensuring it will not receive ample deliberation.
Following the President’s lead, the Senate Appropriations Committee is exploiting the “disaster” and “emergency” loopholes in the Budget Control Act (BCA) to slide the new spending through. The BCA allows any funds so designated to be spent above the $1.047 trillion discretionary spending cap for fiscal year (FY) 2013, without offsets.
The legislation clearly needs more thorough analysis than it will get now. For example, as previously detailed by The Heritage Foundation’s Matt A. Mayer, fully $28 billion of the spending would go toward future disaster mitigation projects on the East Coast.
These projects, if worthwhile, should be included in the regular budget, not in a hasty emergency supplemental. Another $3 billion would go toward repairing or replacing federal assets, such as buildings and vehicles, damaged during the storm. This is not urgently needed aid to Sandy’s victims, and should not be tacked on to the supplemental. There is also a dubious $10.7 billion in emergency spending for public transportation projects.
Then there is the truly audacious $17 billion in Community Development Block Grant (CDBG) funds, an embarrassingly transparent slush fund—also included in previous emergency bills—that states can use as they wish. Of this amount, $2 billion to mitigate future risks, not existing damage. The Secretary of Housing and Urban Development is required, under the Senate bill, to ensure a “minimum award” of CDBG funds to all the states affected by the hurricane. Get the picture?
All this would be bad enough any time. It is worse now, with the federal government likely facing its fifth consecutive trillion-dollar deficit in fiscal year 2013, and publicly held debt exceeding three-fourths of the economy’s total resources. Debt held by the public is on course to be twice the size of the economy in 25 years.
More immediately, Congress and the President face the manufactured crisis of across-the-board spending cuts that will, among other things, decimate national defense. Lawmakers cannot agree on a way to resolve this problem—which they have known about for a year—but they can readily gin up reasons to burn through $60 billion more.
As Mayer concluded, much of the supplemental should be addressed in the regular budget. Given the government’s untenable fiscal condition, any amount truly needed should be offset with reductions elsewhere. That is called budgeting, a practice Congress and the President need to learn.