Supplemental Spending On The Rise

In recent years, Congress has maintained a relatively low level of spending on supplemental appropriations bills. Unfortunately, if Congress agrees to fund the latest request from the Office of Management and Budget (OMB), that streak could be over.

The OMB letter requests $44 billion in emergency spending in response to the series of natural disasters this fall. This comes on top of an October supplemental that provided an additional $20.5 billion, along with $16 billion in debt forgiveness to the National Flood Insurance Program for a total of $36.5 billion. Which, in turn, came on top of an earlier $15.3 billion in disaster relief in H.R. 601, the September continuing resolution. Though due to the peculiarities of fiscal years (FY), because this earlier tranche of funds fell before September 30, it doesn’t count against the current project FY18 numbers in the chart below. However, it is still important to note that so far, $95.8 billion has been earmarked for 2017 hurricane and wildfire response.

The chart above (source: Congressional Budget Office reports: 1990s, 2000-present)  maps total un-offset supplemental spending by fiscal year starting in FY 1990, which has rarely exceeded $50 billion. The major exception being the early 2000s when enormous sums were spent promulgating wars in Iraq and Afghanistan under the then new “War on Terror.”

The merits of War on Terror spending - along with the federal response to natural disasters - can be debated elsewhere. What’s important from a fiscally responsible perspective is how we budget for that funding. Is it offset? Do we pay for new spending with cuts elsewhere? The answer too often is no, or “not entirely.”

That’s a serious problem that has contributed to a breakdown in both the budget process and the willingness of Congress to restrain spending. Designating spending as “emergency” provides an easy out to circumvent the 2011 Budget Control Act (BCA) caps and go outside the regular appropriations process. In addition to the major impact this has on our national debt, this leads to less oversight and more wasteful spending. When a legitimate emergency situation arises, Congress too often includes pet-projects in “must pass” bills.

Better planning, a rainy-day fund, reducing wasteful spending that doesn’t adhere to strategy, and better prioritization could all mitigate the effects of necessary spending when true emergencies arise.

Unfortunately, the numbers in the chart above and current negotiations to increase spending far above the BCA caps demonstrate an appetite for spending that Congress appears unwilling to curb. To avoid setting a new dire trend in deficit spending, Congress should put itself under the simple, common sense rule that new spending must be paid for.