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What the Sandy Bill Teaches Us About Our Spending Problem

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Original Publication: U.S.News & World Report Blogs (AP) , December 18, 2012
Article Author:
December 19, 2012

Among all the discussion about the outlines of a deal to avert the fiscal cliff, one thing is notably absent: details about spending cuts. Both President Obama and Speaker Boehner have been reluctant to be the first one to articulate exactly which programs will be scaled back or eliminated in the name of fiscal responsibility.

On the other hand, the Senate has taken up the president's request for $60 billion in emergency supplemental spending in part in response to Super Storm Sandy. This bill, which is likely to become law even before Christmas, provides a detailed list of new spending and policy items.

The details in the supplemental bill tell us a lot about how we came to our current mess—a streak of deficit spending, in good economic times and bad, on worthy and wasteful projects and programs alike, that has left us with a $16 trillion debt.   

It is remarkable that at the same time policymakers discuss how to put our government on better fiscal footing in the long term, they are almost certain to enact a bill that is not paid for. Sadly, this is neither new nor surprising. So what can we learn?

  • Even the things on which almost everyone agrees cost money. Some of the spending provisions in the Sandy supplemental meet the longstanding Office of Management and Budget definition of emergency spending: They are necessary, sudden, urgent, unforeseen, and not permanent. There is wide support for providing resources for immediate relief and storm related infrastructure repair. But, while some of the spending in this bill may be exactly what is needed right this minute, none of the spending is paid for with new revenues or offset by other spending cuts. And while emergency spending is exempt from budget caps, the money spent in this bill will add to our deficit and debt.
  • Overlooking the details in must-pass bills costs money. The Sandy supplemental bill includes the entirety of a bill that was rejected earlier this year by a 2-1 margin to allow levees to be built on certain floodplain land in Midwest states that FEMA had declared flooding disasters in 2011. This land was specifically bought by federal taxpayers with the agreement that it would never be developed because it flooded so much. Building a levee on the land will encourage high risk development. In other words, the disaster relief bill would facilitate future disasters! Similarly, the bill includes provisions giving the Army Corps of Engineers blanket authority to build any beach project they choose while simultaneously eliminating cost-overrun protections. This for an agency famous for wasteful projects and ineffective cost management. And, my favorite, the bill includes $20,000 to help purchase a new car for the Department of Justice inspector general. Really? Because none of the other 40,000 cars owned by the Department of Justice are available?
  • Congress is willing to talk out of both sides of its mouth. There are members of each party that speak with clear consistency, and other members who eloquently describe the compromises they make. But as a whole, Congress seems utterly willing to debate a $60 billion spending bill while at the same time insisting on finding up to $110 billion in cuts to avoid whichever side of sequestration they find most fearsome. But no one seems willing to talk about that contradiction.

Which brings us back to the original point: the reluctance of both sides to discuss detailed spending cuts. The task of finding the more wasteful, less worthy projects, policies, and programs is not impossible. We found $2 trillion in deficit reducers in our Sliding Past Sequestration report. The cuts range from eliminating outdated commodity crop subsidies for more than $50 billion in savings to cancelling the lemon of an aircraft, the V-22 Osprey, for a $17 billion savings.

The reluctance to provide detail is a reflection of the simple fact that cutting spending is politically difficult, even for the most fiscally conservative members. For every constituent demanding to pay lower taxes, there is likely another constituent asking to protect the program or service seen as essential to their state, their community, their business, or their family. There is a consequence to every decision Congress makes, every dollar it spends, and every dollar it collects (or chooses not to collect).

But every single member of Congress works hard to get and keep the job they have which requires that they make difficult choices to benefit all Americans. And that means leading an honest conversation about how we got in the fiscal mess we're in, and how we can get out of it. It's not all the other guy's fault. As Harry Truman said, "if you can't take the heat, get out of the kitchen."

Time to get to work, Congress.

Written By: Ryan Alexander, TCS President

Original Publication URL: http://www.usnews.com/opinion/blogs/economic-intelligence/2012/12/18/obama-and-boehner-must-discuss-detailed-spending-cuts

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