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The Continuing Saga of the CR: Choking on Offsets

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Unread 09.24.11, 11:05 AM
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The Continuing Saga of the CR: Choking on Offsets

On 09.24.11 09:05 AM posted by Patrick Louis Knudsen

Although differences over the continuing resolution (CR) that failed in the Senate Friday seem absurdly small, the stakes may indeed be significant—and not just because of the threat of a government shutdown. The legislation is the first test of Congress’s will to cut spending, at least within the limits of the Budget Control Act (BCA) that emerged from the summer’s debt ceiling agreement. With the huge entitlement choices the BCA requires, it is imperative that Congress show it can really tackle spending discipline.

After the Senate on Friday defeated the House-passed $1.043 billion CR, news accounts indicated Majority Leader Harry Reid (D–NV) would seek a compromise to bring back to the floor Monday. Those reports suggested he would scale back his previous demand for a total of $7 billion in disaster relief funds—possibly agreeing to the House-passed $3.65 billion—but still would oppose offsetting it with reductions in “clean energy” programs.

The House measure provided $774 million of its disaster funds immediately (in fiscal year 2011) with an emergency designation and offset them with a $1.4 billion reduction in the Advanced Vehicle Manufacturing Loan Program—which Appropriations Committee Chairman Hal Rogers (R–KY) aptly described as “a stagnant ‘stimulus’ program that currently has more than $4 billion in unspent funds.” (See a further discussion of the program here.) It was this miniscule offset that Democrats opposed. During House debate earlier in the week, Appropriations Committee Ranking Member Norm Dicks (D–WA) called offsetting such spending a “radical departure” from the practice of the past decade.

Representative Dicks does have a point. Over the past decade, Congress passed large amounts of supplemental spending without offsets. Most of it was emergency-designated, such as anti-terrorism and war activity, as well as relief following Hurricane Katrina. Various other bills, including the $825 billion “stimulus” in 2009, also passed under the “emergency” designation to waive offset requirements. During the 1990s, Congress approved about $138 billion in supplemental discretionary spending, offsetting only about $52 billion with rescissions, according to the Congressional Budget Office.

But in this instance, retaining even the infinitesimal offset in the House bill is important to show that Congress is truly committed to spending discipline. Today’s fiscal conditions are extraordinary. Deficits have exceeded $1 trillion in each of the past three years—a post–World War II record—and debt held by the public is close to 70 percent of gross domestic product and rising.

Meanwhile, the $774 million for the Federal Emergency Management Agency (FEMA) and the Army Corps of Engineers is slightly more than a rounding error in the government’s more than $1 trillion in annual discretionary spending. It is ludicrous to assert that nothing can be deferred or eliminated to “provide the relief that our fellow Americans need as they struggle to rebuild their lives in the wake of floods, wildfires, and hurricanes,” as Senator Reid put it. After all, if the FEMA funding is so important, it must be more important than something else. Congress just needs to decide what that something else is.

Legislators relish trotting out bromides such as “Budgeting is governing” and “To govern is to choose.” This is a necessary time to show it by offsetting the FEMA disaster funds.

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