New Spending Bill, More Fiscal Stupidity

Lurita Doan
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Posted: Nov 21, 2011 12:01 AM

If Congress was ever in search for a theme song, it would surely be the 60’s hit by Sonny and Cher called—“The Beat Goes On”. Americans received yet another reminder of just how far this group of fiscal miscreants will go to avoid making tough budget decisions when Congress passed a “minibus” spending bill. This hodgepodge of appropriations manages to simultaneously delay, once again, the painful necessity of confronting excessive spending, while simultaneously eroding the little fiscal discipline that does exist.

No one should be surprised that fiscal malpractice continues in Congress as we lurch from CR to CR to Omnibus budget for the past few years. Our Senate has been too busy for the last 960 or so days to submit a budget, and it has become clear that congress doesn't have the stomach, nor the will, to truly trim the fat off the federal budget. Instead, members of congress focus their efforts on lots of photo ops, sound bytes and a Supercomittee Big Top circus that would put Barnum & Bailey to shame.

But, tucked away inside the most recent spending bill, is language that will further erode our finances and fiscal health. While Obama's signature on the legislation will keep the doors open for continued operations of the Departments of Commerce, Justice, USDA, NASA, FDA, Transportation, HUD and several other federal agencies, the bill, in no way, encourages restraint in spending.

Given the language used, the new Minibus bill will almost certainly cause more problems than it solves.

One example of the language problem, which seems to encourage unfettered federal spending is clearly outlined in Section 524 of the recently ratified H.R. 2112 (the "Minibus") spending bill, in which congress tells the leaders of agencies that it is okay to exceed the budget allocated by congress.

In fact, so certain is congress that one or more agencies is going to exceed the budgets set for them, that the "Minibus" proceeds to outline the process these agencies should follow when they blow the budgets.

Here's what the "Minibus" tells executive agencies to do.

First, the agency program manager (who blew the budget) is required to notify the agency's head. Then in 30 days the agency head is required to notify congress. This 60 to 90 day window allows the bloat to continue. At no point is the agency told to issue a Stop Work Order to government employees and federal contractors, nor are they told to trim back project expenses and live within the expenditures appropriated by congress. Instead, agencies are told to submit the new revised, increased estimate of costs for congressional approval, accompanied by a validation statement from the project manager that the new estimate will be sufficient.

Three problems become immediately apparent. First, congress has shown that it does not intend to hold federal agencies responsible for staying within their budgets. Second, congress has, de facto, shown that cost overruns will be rubber stamped for approval. Third, congress has indicated that it is not interested in fixing the problem, since there is no prescriptive action required such as monitoring or penalizing the project manager, the federal contractor or the government employees responsible for the cost overruns.

Congress has, in essence, given federal agencies a license to overspend. This is, perhaps, the inevitable result of electing folks who don't understand how business and budgets work.

Those who come to the conclusion that the primary problem with our government's budget is not that it is taking in too little taxes, but that it is simply spending too much, will have their worst suspicions of government-sanctioned, runaway spending confirmed.

The recently approved "minibus" appropriations only reduce the level of spending by a mere $1 billion dollars. But more importantly, given the flexible, fungible spending language throughout the legislation, such as Section 524, that $1 billion in savings could easily get gobbled up pretty quickly by cost overruns. Hence, even the paltry savings that Congress would like us to believe they support, is masked by yet more fiscal irresponsibility that will likely result in higher taxpayer expenditures. The beat just goes on.

The "minibus" appropriations bill raises as many questions as it answers. For example, a quick review of the Agriculture section (pages 82-137) of the legislation reminds Americans of what Congressman Paul Ryan said: "Why is Washington wasting your money on entrenched agribusiness?"

For those hoping for a merciful end to the $6 billion annual gift to the ethanol lobby, forget about it. That beat will go on and on until wiser statesmen can muster the courage to stop that peculiar madness.

Worse news awaits anyone willing to read the section on Housing and Urban Development appropriations, Title II, page 355. Incredibly, Congress has decided to expand the scope and its promise to continue to backstop mortgages that people can't afford, with money the federal government doesn't have. This remarkable bailout expands entitlements and assumes even more governmental risk for dodgy mortgages, which of course is how the country got into the housing mess in the first place.

Americans should be shocked and outraged, but congressional fiscal malpractice has long been established as an ingrained attribute of Washington. So, cue up Sonny and Cher. For the beat goes on--yes, and the beat goes on. La-de-da-de-de, la-de-da-de-da.