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On Thursday, July 20, the Senate Appropriations
Committee (SAC) is scheduled to "mark up" the fiscal
year 2007 (FY 07) Department of Defense (DOD) appropriations
bill. This "tutorial" anticipates what clearly appears
to be one of the major budget gimmicks the SAC will employ.
The gimmick will make it appear that a huge ($9 billion) cut
is being made in the DOD bill, when in fact no such thing will
be occurring.
The first hint appeared on June 22 when the Senate Appropriations
Committee put out a press release on an arcane but important
budget issue. The committee announced its "allocations"
for FY 07. "Allocations" are nothing less than how
much money each federal agency will get for the year from the
Appropriations Committee--and ultimately Congress--in the form
of "discretionary" spending (annual appropriations).
The allocations are distributed to each of the 12 appropriations
subcommittees that fund over 30 government agencies.
A few sharp reporters covered the SAC press release, noticing
that the Republican-controlled committee was handing the DOD
a substantial cut of over $9 billion compared to the amount President
George W. Bush had requested for the fiscal year. One reporter
even noted that the committee was, in effect, transferring that
same amount to various non-defense agencies. (An extra $1.4
billion was distributed to the subcommittee that oversees the
departments of Commerce and Justice, and NASA; the subcommittee
for the departments of Transportation and Housing and Urban Development
got an additional $2 billion; and the subcommittee for Labor,
Health and Human Services, and Education got $5 billion more
than the president requested. All of it coming out of DOD.)
It was an especially strange set of actions for the Republican-controlled
committee after many of the same party members had just finished
trashing the Democrats in the Senate chamber that same week for
advocating that America "cut and run" from Iraq. If
the Democrats had proposed a $9 billion cut in the defense budget,
one can easily imagine the howls of "anti-defense budget-slashing
Democrats" coming from many of the same Republicans who
will almost certainly vote in favor of the measure to come out
of the Appropriations Committee on July 20.
Some might also speculate that the SAC allocations will prompt
a major fight between the Senate Republicans and the White House.
When the House Appropriations Committee produced a DOD appropriations
bill, it reduced the
president's 2007 budget for DOD by less than half the Senate
amount, just $4 billion. In response, the Office of Management
and Budget (OMB) and the White House sternly threatened a veto
if any such bill reached the president's desk. Surely, the Senate
Republican appropriators' design to transfer more than twice
the House cut to civilian agencies--a predictable effort to appeal
to domestic spending constituencies in an election year--will
provoke a major political fight.
But don't count on it. What we are really observing here is
a convoluted Kabuki dance. While the performance has been played
out before, it looks like a much more elaborate display this
year. And, because the press has paid little, if any, attention
to what has been actually going on, the actors in Congress and
the White House have every reason to believe the public will
remain as much in the dark now as in the past.
They key to the gimmickry is how the Congress (all of it, the
Democrats have been willing, silent partners) and the White House
are playing with the funds intended to pay for the wars in Iraq
and Afghanistan.
A brief historical example: In June, Congress sent to the White
House the ninth "supplemental" appropriations bill
to pay for the wars. Like all of its predecessors, this most
recent one (amounting to over $90 billion for several purposes,
bringing the grand total for the wars to over $440 billion) has
an important characteristic beyond being requested and funded
outside the regular budget cycle. It is "emergency"
spending, which has a specific and unique meaning: it is intended
for spending that is "sudden, urgent, unforeseen, and not
permanent;" such spending is exempted from the annual spending
"caps" that Congress imposes on itself in the congressional
budget process. Thus, if the Congress imposes a "cap"
on defense spending with its "allocation" at some specific
level, any "emergency" spending designated for paying
for the wars in Iraq and Afghanistan comes in over and above
that and does not count in calculating whether the cap, or allocation,
is breached or not.
The "emergency" funding dodge was used in the 2006
DOD appropriations bill as well, which was signed into law last
December. In that bill's procurement accounts, Congress transferred
over $700 million in peacetime DOD programs over to the emergency
war account of the bill. It then filled the $700 million "hole"
in the peacetime procurement account with an additional $600
million in new spending. Congress then declared itself to have
saved $100 million. Of course, it had done no such thing: it
had simply changed the way $700 million was paid for, added an
additional $600 million, and told the taxpayers it was being
frugal to the tune of $100 million.
It's a neat trick: it permits additional spending, while also
permitting the politicians to claim they are saving money. And,
better yet, it all worked. The press paid little, if any, attention,
and no one among the press called out any member of Congress
for claiming to cut spending while actually increasing it. (The
fact that peacetime spending was displaced war spending was also
ignored.)
In fact, the gambit was so successful last year that this year's
Congress is upping the ante. In its new DOD appropriations bill
for FY 07, H.R. 5631, the House Appropriations Committee declared
it had cut DOD spending by $4 billion, but in truth it was using
the transfer dodge from peacetime to war funding to move $2 billion
of the $4 billion, according to OMB. Having found a total of
$2.7 billion in transfers, this author is not sure OMB counted
all of them, but in any case, it appears that of the $4 billion
"cut" by the House Appropriations Committee, at least
half of that amount was not a cut at all.
It seems that the Senate Appropriations Committee is prepared
to perhaps double the House gambit. With its allocation declaring
a $9 billion cut, it only remains to be seen how much of that
will simply be a transfer. It might be a lot. A quiet inquiry
with Republican budget and appropriations specialists on Capitol
Hill--former colleagues of the author who wish to remain anonymous--indicates
that a large portion of the $9 billion cut will re-emerge in
the uncapped "emergency" war funding account.
There are a number of advantages to this gambit, at least to
the way people on Capitol Hill think. Some amount of the money
displaced from the peacetime spending bill can be replaced with
Congress' favorite form of spending (pork); other money can be
added to non-defense bills (thereby appealing to the constituencies
those bills serve), and all the while members can claim to be
saving money.
There's a plus side for the White House as well. It can appeal
to its own political constituency by talking tough about vetoing
appropriations bills with large cuts for defense. But the budgeteers
in OMB will be able to identify most, if not all, of the transfers,
make sure the White House knows it's not all that it seems, and
let the veto talk die away. In the end, both the president and
Congress will be able to crow about their budget restraint.
On the other hand, the deficit will almost mysteriously grow
larger; war spending accounts will be shortchanged, while pork
is fully funded, and the press, and therefore the public, will
be none the wiser. What's the downside?
Winslow T. Wheeler is the Director of the Straus Military
Reform Project of the Center for Defense Information and author
of The
Wastrels of Defense. Over 31 years, he worked for US Senators
from both political parties and the Government Accountability
Office on national security issues. He can be contacted at: winslowwheeler@comcast.net.
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