Another "Emergency" Spending Bill

March 20,  2006    

Congress funds the federal government through 13 enormous appropriations bills, but even an annual budget of more than $2 trillion is not enough to satisfy Washington’s appetite for new spending.  As a result, a new category of spending bill has emerged, known as the “emergency supplemental” appropriation.  There’s no real emergency, however; Congress simply needs a 14^th spending bill as a grab bag filled with hundreds of pages of goodies for countless favored groups, industries, individual companies, and foreign governments.  It’s common for dozens of amendments to be added to the supplemental bill, all with more money for somebody.

So-called emergency supplemental spending bills, once a rarity, have become the norm over the last ten years in Washington.  There’s always some excuse why Congress cannot stick to its budget, so supplemental bills are passed to permit spending extra “off-budget” funds.  “Emergency” spending now has become routine, planned spending.

American taxpayers should know this latest emergency supplemental bill spends almost $92 billion, making it the largest supplemental appropriation in the history of the U.S. Congress.  The entire federal budget was less than $92 billion in the early 1960s!

Is there really an “emergency” that requires $1.2 billion to pay off our allies for their help in Afghanistan?  If Pakistan, Jordan, and other nations chose to join our war effort, why can’t their taxpayers foot the bill? Won’t those nations in closer proximity to Afghanistan benefit from the stability we are told U.S. troops will provide?  Perhaps they should pay us for stabilizing their neighborhood.  But it’s always American taxpayers who end up paying.

What is the emergency that requires $36 million for taxpayer-funded broadcasting programs overseas?  How about $30 million to build roads in Liberia? 

If we’re serious about spending money for emergencies, surely $92 billion could be better spent addressing the aftermath of two domestic emergencies, namely hurricanes Katrina and Rita. 

The real emergency is in Washington, where Congress is spending and borrowing America into a perfect storm.  As economist James Turk explains, the federal government now relies upon debt to finance 20% of its spending.  Low interest rates during the 1990s and early 2000s kept interest payments on government debts- Treasury Bonds and Treasury Bills- somewhat manageable.  During the same period, however, the Federal Reserve greatly increased the money supply, which has caught up to us in the form of price inflation.  The Fed now must raise rates to combat this inflation, but higher interest rates will chill economic growth and slow tax revenue.  To quote Mr. Turk, “The federal government faces a potentially toxic mix of constrained revenues, soaring expenditures, ballooning debt, and rising interest rates.” 

This is the real emergency that must be addressed in Washington, and the only solution is to reduce government spending substantially.  If we don’t put the brakes on the spending spree soon, we may find ourselves facing another period of economic malaise that rivals the 1930s.