The Federal Budget's Long Emergency

Got a boondoggle you're not proud of? Stick it in a supplemental appropriations bill.

Veronique de Rugy from the December 2006 issue

Will giving $150 million to the National Oceanic and Atmospheric Administration help win the wars in Iraq and Afghanistan? How about spending $500 million to repair a shipyard and an extra $2.3 billion for avian flu preparedness, on top of the $3.8 billion already appropriated for that purpose? Congress and the White House think so. All those expenditures are part of a $94.5 billion supplemental spending bill for the war on terror and hurricane relief signed by President Bush in June.

Politicians may cry crocodile tears about deficit spending, but their actions demonstrate that they remain addicted to big government. The Republican Congress that has expanded federal spending by 45 percent since fiscal year 2001, more than doubled education spending, and enacted insanely expensive agriculture, highway, energy, and prescription drug bills is still bingeing on our tax dollars. But instead of working through the regular appropriations process, Congress is hiding behind “emergency” supplemental bills.

Supplemental spending, “emergency” spending in particular, has become Washington’s tool of choice for evading annual budget limits and increasing spending across the board. Funding predictable, nonemergency needs through supplementals hides skyrocketing military costs and allows Congress to boost regular appropriations for both defense and nondefense programs, thereby enabling the spending explosion of the last five years.

In theory, supplemental appropriations provide additional funding to an agency during the course of a fiscal year for programs and activities that are considered too urgent to wait until the next year’s budget. The Budget Enforcement Act of 1990 gives emergency bills special exemptions from rules designed to restrain spending. For instance, the requests lack the level of detail used to justify the federal government’s annual budget requests, making accountability more difficult, and supplemental funding is left out of the deficit projections that accompany the annual budget.

Although there are no limits on the amount or type of spending that can be designated an emergency requirement, historically there has been an understanding that emergencies are sudden, urgent, unforeseen, and temporary conditions that pose a threat to life, property, or national security. Not anymore. For years, Congress has abused its emergency spending powers. But things have gotten much worse since Republicans won control at both ends of Pennsylvania Avenue.

Except for a sharp spike in 1991 to fund the first Gulf War, supplemental appropriations remained at roughly 1 percent of new discretionary spending during most of the 1990s. After 1998, they started to rise as the federal budget began running surpluses. But in those days, the United States still enjoyed the benefits of a divided government. After 2002 Republicans conveniently allowed the few budget rules meant to constrain their behavior to expire. Hence supplemental appropriations designated as emergency spending no longer count against the annual budget limits set by Congress and do not trigger automatic cuts if they push outlays above the caps. In fiscal year 2005, supplemental appropriations represented 16.7 percent of new discretionary spending and, adjusted for inflation, reached an all time high of $143 billion—up from $7 billion in fiscal year 1998, when supplementals accounted for 0.9 percent of new discretionary spending. And this year’s $94.5 billion supplemental bill is the largest one ever.

The White House deserves most of the blame. The Bush administration has used supplementals to hide the true cost of the wars in Iraq and Afghanistan. Three years in, the Iraq war can hardly be called an emergency or an unpredictable event. This is especially true since one of the largest expenditures goes to the salaries and benefits of Army National Guard personnel and reservists called to active duty. Yet each year President Bush leaves out all war costs when he presents his budget to Congress, knowing that he will be able to secure the funding later through the supplemental process. This year Congress will appropriate nearly 20 percent of total military spending via supplementals.

Meanwhile, the lack of detail in supplemental budget requests and their expedited approval process have made supplemental bills a magnet for pork and other projects that wouldn’t be funded on their own merits. No politician wants to vote against emergency aid money aimed at supporting U.S. troops in Iraq or helping victims of Hurricane Katrina. And because the president—especially this president—will usually sign emergency bills without blinking at their cost, many wasteful nonemergency spending items go through at taxpayers’ expense.

This year’s emergency spending bill, for instance, contains $118 million to bail out private fisheries, on top of tens of billions in disaster relief funds the Federal Emergency Management Agency and the Small Business Administration are already paying to that industry. It also includes $335 million to subsidize “volunteer” work through AmeriCorps and a $703 million add-on for highway projects unrelated to the Gulf Coast—some of them in Hawaii and California. Those aren’t the only projects in the bill that aren’t anywhere near Iraq or the Gulf Coast: There are Army Corps of Engineers earmarks for North Padre Island, Texas; Sacramento, California; and water systems across Hawaii.

Expect more bills like this in the future. Waste is endemic in Congress, and the White House has refused to restrain the legislature’s spending explosion. Until that changes, politicians will still claim with straight faces that $500 million for farm and ranch subsidies or $500,000 for the Mississippi Children’s Museum qualify as “emergency” spending.

Véronique de Rugy is a resident fellow at the American Enterprise Institute..