Smoke and Mirrors 101: When Claimed Spending Cuts Aren't Really Spending Cuts
By Scott Cox
Wednesday, June 17, 2009
House Appropriations Committee Chairman Dave Obey's (D-WI) staff has released a breakdown of spending terminations and reductions for programs contained in the fiscal year (FY) 2010 Commerce-Justice-Science (CJS) and Homeland Security spending bills.
The combined cuts claimed in the two measures total $3.08 billion compared to the current fiscal year (FY 2009) and $1.85 billion compared to President Obama's budget request.
Yet, a close examination of the announced spending reductions reveals that a notable number are not reductions at all -- at least in the purest sense. Take the House CJS appropriations bill's proposed funding termination for NASA's visitor centers as one example. Although funding for the visitor centers is zeroed-out, Obey's staff notes that the money that would have otherwise been available for the centers will go to "support higher priorities."
(Translation: The savings derived from terminating NASA's visitor centers will not be returned to the Treasury for deficit reduction, but instead will be redirected to another program or programs deemed more worthy of the funding.) Thus, not a true spending reduction. Twenty-four similar cuts totaling $195 million in potential savings -- compared to FY 2009 levels -- are contained in the House's CJS appropriations bill alone.
Claiming reductions from the "termination" of completed construction projects is another case in point. The Terminations & Reductions document accompanying the CJS spending legislation shows a $60.25 million cut from this year for the National Oceanic and Atmospheric Administration's Pacific regional facility, noting that construction on the building has been finished. Since the act of funding a completed construction project would be nonsensical, proclaiming a funding reduction does not pass the sniff test.
There are other questionable spending cuts declared by Obey's office, including reductions for programs in light of the availability of prior-year funds. The National Science Foundation (NSF), for example, would receive $100 million less than this year's allocation for major research instrumentation initiatives under the House CJS appropriations bill because, it seems, the agency failed to exhaust its current budget. This move by appropriators begs the question: Is NSF being penalized by Congress for a show -- or at least a perceived show -- of fiscal discipline?
A staple smoke-and-mirrors strategy used by lawmakers is announcing a funding hike for a program or agency in the next fiscal year when, in fact, the program or agency is either flat-funded or even sees a slight reduction when adjusted for inflation.
The White House's recently proposed "Pay-As-You-Go Act" (a.k.a. PAYGO) continues the less-than-candid trend. PAYGO requires that all new spending for "mandatory" programs such as Medicare and the food stamp program be fully offset by spending reductions and/or revenue increases (i.e., tax hikes) elsewhere. Otherwise, an across-the-board sequestration will occur.
Yet, under the administration's PAYGO proposal, any new spending enacted today would not have to be fully offset until ten years from now, when a new Congress and a new president will be steering the ship. These future lawmakers could easily claim no responsibility for a previous Congress' and administration's actions, and simply waive the offset requirement.
Granted, budgetary smoke-and-mirror tactics are nothing new and have been used by lawmakers from both parties for years. But in light of the looming fiscal mess facing the nation and its decision-makers, a little more honesty from the latter is in order.
© 2010 Capitol Hill Reports, Inc.
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