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  • Mega-Omni: Another Get-Out-of-Town Budget Debacle

    The House mega-omni—the massive nine-bill appropriations package now moving toward a vote in the House—represents another disappointing failure to cut spending and prove Congress can instill some measure of fiscal discipline. Equally troubling: The procedure for considering the legislation allows everyone to vote for something he likes, while taxpayers pick up the tab.

    The main omnibus measure, formally the Final Consolidated Appropriations Bill (H.R. 3671), spends a total of $914.8 billion in annualized budget authority (BA) for fiscal year 2012, which started on October 1. (Agencies covered by the nine bills have been funded by continuing resolutions until now.) When the legislation is added to the three spending bills already enacted, total discretionary BA for the year comes to $1,042.9 billion. That is effectively equal to the bloated $1.043 trillion cap in the ironically named Budget Control Act (BCA)—the product of the summer’s debt ceiling debate—and is $31.6 billion above the House-passed budget resolution.

    The House budget resolution, passed in April with $1.019 trillion in discretionary spending, is a bold plan to put the nation on the path to fiscal sanity. It is the only real budget to have passed either chamber of Congress, and therefore the only budget with any claim to legitimacy.

    Despite its excessive figure, the omnibus bill under consideration provides too little for national security. The $518 billon for defense is just a fraction above the 2011 level of $513 billion, and well below the $530 billion passed by the House earlier in the year—which was also lower than what is needed to maintain America’s defense capabilities. Indeed, on individual bills’ spending levels, the House capitulated to higher Senate amounts in domestic areas, and lower amounts in bills related to security, specifically Defense, Military Construction/Veterans Affairs, and Homeland Security.

    But the $1.043 trillion figure understates how much Congress will actually spend in the process. After the omnibus, the House will consider an additional $8.1 billion “disaster” relief measure (H.R. 3672). This spending is misguided. It is for activities and projects that largely are state and local issues and funds the continuation of the President’s effectively nationalizing state and local disasters and widening the spigot for federal spending. Even if this were good policy, which it is not, the money would pay for projects to cover past weather events, such as Hurricane Irene and even Katrina, not new unforeseen emergencies. Therefore, the funds should have been included under the $1.043 trillion cap. A previous package of three spending bills enacted in November contained $2.3 billion of similar funds. So, all told, Congress would be providing $10.4 billion in disaster spending, bringing the total cost of spending bills to date to $1.052 trillion, or $2 billion more than 2011.

    The third part of the package (H. Con. Res. 94) calls for a 1.83 percent across-the-board reduction in all the spending bills except Defense and Military Construction/Veterans Affairs. The measure is intended to pay for the disaster-funding package, but by breaking it up into a separate bill, it will surely die in the Senate—meaning the offsets will never occur, while the spending will.

    The House is trying to push this legislation through because, although it has been agreed to by both chambers, the Senate has refused to sign off on it. Senate Majority Leader Harry M. Reid (D–NV) wants to retain it as leverage in negotiations over the other huge measure still facing Congress: the payroll tax/unemployment insurance/doc fix, et al., bill. So House leaders have decided to push the spending package in an attempt to force the Senate’s hand.

    At the end of a year that started with such promise to tackle the nation’s spending and debt problem, this final appropriations package is a highly discouraging conclusion.

    Posted in Economics [slideshow_deploy]

    One Response to Mega-Omni: Another Get-Out-of-Town Budget Debacle

    1. Just a matter of time before all this blows up in our faces and then the real day of will have already gone past to deal with the mess. So it will be all down hill for a long time. how big will the riots be in the streets then is my question?

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