Emergency Declaration Will Worsen Fiscal Problems

Any presidential emergency declaration carries with it the potential to spend tax dollars with even less oversight and procedure than current policy already allows. This is but one reason why fiscal conservatives should be extremely concerned about the President’s use of emergency powers to build a border wall regardless of how they feel about the merits of the wall itself or the Constitutional implications. The funding shift necessitated by this action will lead to significantly higher spending levels and, in all likelihood, the final nail in the coffin of the existing budget caps.

The $6.7 billion that will be used for the wall will be shifted away from military construction projects ($3.6 billion), Department of Defense counterdrug initiatives ($2.5 billion), and an asset forfeiture account ($600 million). But the story won’t end there. Most if not all of the funding for these programs will be backfilled by subsequent funding bills due to strong political pressure on Members of Congress -- particularly on those affected by a reduction in funding for military construction. Such projects are viewed by their constituents and local interests as critically important generators of economic activity, whether justified by genuine cost-benefit analysis or not.

Fiscal conservatives are already in a tenuous position when it comes to preserving the spending caps established by the Budget Control Act of 2011. Even when Republicans had complete control of Congress, lawmakers have found ways to spend $439 billion above the caps. Now that Democrats have taken control of the House, there is even stronger demand for more spending. The budget deal from nearly two years ago that boosted spending by nearly $300 billion is now viewed as a floor for negotiations by Congressional Democrats, as indicated by new House Budget Committee Chairman John Yarmuth (D-KY), who said: “It would be stupid for us to think we can’t get, now that we’re in the majority, at least as good a deal as that.”

If past budget deals are any indication, the funding shift to pay for the wall will end up costing taxpayers far more than the $6.7 billion price tag. The political pressure on Members of Congress to replenish these funds will further weaken an already knee-capped Republican contingent on Capitol Hill. Even before this announcement, Congressional Democrats were salivating over the prospect of trading billions in more defense spending for billions in more non-defense spending. The emergency declaration and accompanying funding shift will only strengthen their hand and make a budget-busting compromise agreement far more likely. Fiscal conservatives and deficit hawks should be extremely wary.