11.16.11

Sessions: Debt Deal Includes Yet Another Washington Gimmick To Conceal Deficit Spending

“[Under the Budget Control Act,] we’re supposed to spend $1,043 billion, down $7 billion from $1,050 billion in discretionary spending last year. Unfortunately, this is just one more empty Washington promise. Because the bill was rushed to passage in the 59th minute of the 11th hour, nobody knew the gimmick at the time… The truth is that it’s not, and never was $1,043 billion, but $1,054 billion… If we can’t even reach the paltry goal of $7 billion in savings, how on Earth can we tackle our $15 trillion debt?”

WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, spoke on the Senate floor today to address a gimmick in the Budget Control Act that increases the discretionary cap by more than $11 billion dollars, even though the promised savings for this year are only $7 billion. This means that, over the next ten years, Congress can spend over $110 billion beyond the stated cap without having to declare an emergency designation or offset the expense in any way. Once that amount has been exhausted, Congress can then authorize additional emergency expenditures without the longstanding 60-vote threshold.

Sessions’ remarks, as prepared, follow:

“During the summer, Democrats and Republicans in Congress had a big fight over trying to reduce spending as we approached our nation’s debt limit. As we know, the product of that fight was a leadership-brokered deal that promised long-term savings in discretionary spending of around $900 billion over ten years. It also created the supercommittee, which has been meeting in secret to find another $1.2 trillion in alleged savings. Whatever they come up with must be voted on without amendment and cannot be altered in any way. This is concerning: virtually every deal we’ve seen this year has been filled with empty promises. We don’t need one more plan with tax hikes that never go away and spending cuts that never materialize.

Indeed, the debt limit deal—which produced the Budget Control Act—contains a phony spending cap. The cuts that matter most are, in many respects, those that take place right away. But after all that fighting and drama, we ended up with a deal that cut only a paltry $7 billion from Fiscal Year 2012’s discretionary budget. To put this number in perspective, total outlays for FY 2011 are $141 billion greater than FY 2010—and our deficit is nearly $1.3 trillion.

Nonetheless, $7 billion in discretionary cuts is at least a real cut, right? We’re supposed to spend $1,043 billion, down $7 billion from $1,050 billion in discretionary spending last year. Unfortunately, this is just one more empty Washington promise. Because the bill was rushed to passage in the 59th minute of the 11th hour, nobody knew the gimmick at the time. Here’s how it works.

The BCA created a 'cap adjustment for disaster relief funding'—it took 10-year average for disaster spending, estimated to be $11.3 billion for 2012. But, this $11.3 billion is a new fund. And, it is spent by regular appropriations, not by 60 votes as in the past for emergency designations. And it is above the $1,043 billion figure.

So the truth is that it’s not, and never was $1,043 billion, but $1,054 billion. And they went even further—they changed Senate rule to eliminate the 60-vote rule for emergency spending, creating another loophole.

The new fund can be spent any time as a normal appropriation as if it were within the budget and without any 60-vote requirement. This eliminates all pressure to stay within the budget or to offset annual disaster spending. For instance, if you have $2 billion in disaster spending as part of a particular appropriation, instead of eliminating $2 billion in waste elsewhere to keep total spending under budget, you have free access to the $11 billion fund and don’t have to worry about offsetting a penny. You also don’t need disaster-funding approval.

So the real spending cap is $1,054 billion—$4 billion more than what we spent the prior fiscal year. And only if you want to spend more than that do you need to go through the emergency designation process—although even that does not require 60 votes.

The irony here is that there was widespread belief in this chamber that we needed to tighten emergency designations. To give one unbelievable example, the Senate counted $210 million in routine census spending as an emergency. But the Budget Control Act—designed to control out-of-control spending—has succeeded in actually weakening the standard for emergency spending and creates just one more loophole for the big spenders.

Again, the effect of this $11 billion fund is that it effectively nullifies the cap. Appropriators have no incentive to achieve savings when they can spend every penny of the $1,043 knowing that there is another $11 billion to spend once they’ve run through their initial budget.

The evidence of this is before our very eyes. To date, in one form or another, 7 appropriations bills have come to the Senate floor. Four of them have been voted on and passed. The Energy and Water bill is before this week. We should have been considering all of these bills individually and doing our due diligence, but we haven’t. But I am glad that this bill will be considered on its own and is not bundled with others as a mini-bus or omnibus as the Washington parlance goes.

The bad news is that the 7 bills we’ve seen on the floor have already increased spending by $9 billion through the Disaster fund. We are well on our way to using every cent of the $11 billion fund, with no effort to achieving savings elsewhere to stay under budget.

The Energy and Water bill on the floor now increases spending by 1 billion. That may seem small in Washington terms, but it’s the reason we are going broke. If we can’t even reach the paltry goal of $7 billion in savings, how on Earth can we tackle our $15 trillion debt?

Or consider food stamps. Federal welfare spending is now about $700 billion a year. It’s more than $900 billion a year when you count state obligations or contributions to the same programs. Food stamps are the fastest growing major item in the welfare budget—they’ve quadrupled in a decade. They are one of 18 federal nutritional support programs in our budget. The number of people receiving them has climbed from about 1 in 50 when the program began its national expansion to almost 1 in 7 today. Some of the more than 45 million people receiving food stamps exceed the program’s eligibility requirements, but receive them only because they get them as a reciprocal benefit for the other federal benefits they receive. And reports of fraud and abuse are widespread. We were promised recommendations by the Chairwoman of the Agrictulture Committee, Senator Stabenow, for how the supercommittee could achieve savings in the agriculture budget, of which food stamps are the largest component. They were supposed to arrive by November 1st but, as of now, we are still waiting.

The Democrat-led Senate has still made no serious attempt to confront the debt—which is the greatest economic danger of our time. If we ultimately fail to control federal spending—which has nearly doubled in ten years—we will experience a debt-crisis that leads to a loss of jobs, growth, and opportunity. Such a crisis will hurt those with less income the most. It is our duty to stop the occurrence of this very preventable tragedy.

Instead of the irresponsible spending favored by the political class, it’s time for Washington to be accountable and focus on the middle class. That means creating jobs through the private sector; producing more American energy; making the government lean and productive; confronting our dangerously rising debt; adopting a globally competitive tax code; upholding the rule of law in trade; eliminating unwise and damaging regulations; and finally delivering the good people of this country the honest and responsible budget they deserve.”