Friday, April 11, 2008

our trillion $$ effort in Iraq and the ridiculous use of supplemental appropriations

From Veronique de Rugy in Reason...

At the end of December, Congress approved $70 billion in bridge funding—a down payment to cover the gap between the beginning of the fiscal year and the passage of the actual appropriation bill—to keep financing the wars in Afghanistan and Iraq. Legislators at the time were still chewing on the rest of President George W. Bush’s request for a fiscal year 2008 war budget of $196 billion. Should that funding be appropriated—and if recent history is any guide, it certainly will—then the total price tag for America’s present wars will rise to at least $822 billion, approximately 80 percent of which will be spent on Iraq. That surpasses the cost of the Vietnam War ($670 billion in inflation-adjusted dollars). And the Iraq portion dwarfs the $50 billion to $60 billion cost predicted at the outset of the war by Mitch Daniels, then director of the Office of Management and Budget.

Mitch was way off on that one...Hopefully, he's been better at estimating things at the state level!

These runaway costs do not include a single dollar from the Pentagon’s annual operating budget, which in 2008 reached a whopping $481 billion...

To distract people from the real price tag of a two-front war, the president and Congress have used an unprecedented and fiscally irresponsible budgetary trick: a series of “emergency” supplemental spending bills totaling hundreds of billions of dollars. This scheme has allowed them not only to hide the costs of the conflicts but also to avoid painful budget choices while funneling billions of dollars in unvetted goodies to favored interest groups.

Once a small blip among federal outlays, emergency supplementals have exploded since 2002, when the Republican Congress let a key legislative restriction on their use expire. In May 2007, President Bush signed into law the biggest supplemental bill in history, $120 billion, to fund military operations in Iraq and Afghanistan ($100 billion) and pay for hurricane recovery and agricultural disaster relief at home. This came just five months after Congress approved another $70 billion emergency request for the wars. By contrast, the average annual amount of emergency supplemental spending in the 1990s—a decade that saw interventions in Iraq, Somalia, Haiti, Bosnia, and Kosovo—was just $13.8 billion (see Figure 1).

Supplemental spending does more harm than merely obfuscating the costs of military conflict. It effectively removes the upper limit on the White House’s war budget. It allows the Pentagon to seek and receive much more funding for mundane operations than it could receive via the normal budget process. And its comparative lack of oversight encourages Congress to shovel out pork to Gulf Coast shrimp harvesters, Hawaiian highway builders, Florida orange growers, and other recipients who have nothing to do with fighting terrorism. As Bush prepares to exit office, this out-of-control spending stands to become one of his most lasting and nefarious legacies.

Presumably, "conservatives"-- even those who favor the ongoing effort in Iraq-- can agree that this is unacceptable.

President Bush has never included a comprehensive war spending request in his annual February budget. Instead, he has submitted emergency war requests to Capitol Hill, usually sometime in the spring, weeks after the defense appropriation subcommittees begin picking through the Pentagon budget....

The costs of the war may be necessary and temporary, but they are by no means sudden or unforeseen....

In the 1990s, the Republican-led Congress showed a kind of discipline it would completely forget during the Bush presidency, directing President Bill Clinton in fiscal year 1996 to fund all ongoing military operations, including the enforcement of no-fly zones over Iraq, from the regular defense budget rather than supplementals. From then on, Clinton sought funding for Bosnia and other conflicts entirely through the regular appropriations process.

In the 1980s, throughout President Ronald Reagan’s military buildup, no Cold War spending was allocated through supplementals (see Figure 2). And once you account for the offsetting contributions from American allies during and after the first Gulf War ($35 billion out of the total $42 billion price tag), it is clear that until recently very little U.S. military spending was treated as an emergency.

What a difference with today’s wars. Five years into the Iraq conflict and seven years into Afghanistan, the administration and Congress have buried all of the explicit funding—totaling more than the spending on either the Korea or Vietnam wars when adjusted for inflation—in emergency supplementals....

What changed?

Aside from internal fiscal discipline, the single biggest procedural shift came in 2002, when the Congress let lapse a law that had required budget cuts to “offset” emergency expenditures....

From the beginning, the administration has argued that supplemental bills have the advantage of being prepared closer to the time when the funds will be used, allowing for a more accurate assessment of needs and quicker access to money. It also notes that making the spending separate prevents it from becoming a permanent feature of the defense budget. In other words, the administration argues, using supplemental bills is the fiscally responsible thing to do.

A more likely explanation has little to do with military strategy or budgetary concerns, and everything to do with the fact that “emergency” spending has very beneficial features for big spenders in Washington.

In 1990, under bipartisan congressional pressure to reduce the size of the deficit, President George H.W. Bush signed the Budget Enforcement Act (BEA), which exempted emergency bills from other rules of the era designed to restrain spending. The BEA allowed the government to exclude emergency spending from the deficit projections required in the annual budget. To prevent lawmakers from abusing that loophole, the law required that Congress offset supplemental spending with rescissions—that is, by permanently withholding already appropriated funds....

But Congress let the BEA expire in 2002. Since then, supplemental appropriations exceeding budget caps have no longer triggered automatic cuts elsewhere....

This profligacy is par for the course with President Bush. Since fiscal year 2001, the Bush White House has expanded federal spending by 66 percent, in nominal terms, enacting extremely expensive and pork-swollen bills covering agriculture, highway, energy, and prescription drugs while doubling the same federal education budget that Republicans once sought to eliminate.

Regular military appropriations, too, have more than doubled under Bush. According to the Office of Management and Budget, the $481 billion defense request for fiscal year 2008 is 66 percent higher than the budget Bush inherited from Clinton in 2001. If you add to that amount the $196 billion of requested emergency war funding, the Pentagon’s budget is, in inflation-adjusted dollars, larger today than at any point since the end of World War II....

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