A Congressional Halloween: all trick, no treat
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We’ve got to give it to them, Congress is getting pretty clever. Unfortunately, they’re tricking us with our own money and ultimately jeopardizing the fiscal health of the country. In our new Halloween-themed budget breakdown, we visualize the budget tricks Congress continues to get away with. Click here to download.
This designation was intended to provide Congress a vehicle with which to quickly fund actual emergencies (think unforeseeable occurrences, such as an extraordinary natural disaster, or the start or unanticipated ramping-up of a war.) But it increasingly has been exploited as an enormous loophole through which Congress can claim nearly anything an “emergency” and bypass budget limits and PAYGO restrictions.
NOT-SO-FUN FACTS: Congress’ exploitation of the “emergency” spending designation has exploded in recent years. In 1988, Congress passed $1.3 billion in “emergency” spending; by 2007, Congress’ “emergency” spending had grown nearly one hundred-fold, to $120 billion. The wars in Iraq and Afghanistan, for instance, have been largely funded under this designation.
Used to mask the true cost of new spending with absurd assumptions, this scam typically involves dramatically spiking a program’s spending levels for several years, then pretending a future Congress will suddenly decide to slash the program’s funding back to pre-spike levels (yeah sure…that’s likely). This often is used to make 5- and 10-year spending and deficit levels look better, and to get around PAYGO requirements.
NOT-SO-FUN FACTS: Congress recently employed this gimmick to downplay by tens of billions (over just ten years) the true costs of their entitlement program expansion du jour (in this case, SCHIP) and to side-step their own PAYGO rules.
The pay-as-you-go mechanism has been weakened, scammed, used to chase higher spending with higher taxes, and simply waived so often its reality bears no semblance to its common-sense sounding name.
NOT SO FUN FACTS: PAYGO often comes with the feel-good slogan “No more deficit spending!” But since its most recent implementation in 2007, the deficit has exploded – from $160 billion in 2007, to $1.29 trillion in 2010.
Bump and Freeze
Washington loves to claim it will “freeze” spending, but this façade of fiscal austerity tends to quickly crumble when you consider what will be excluded (all of mandatory spending and a good chunk of discretionary spending is often exempted), or at what level a politician would hold spending (see the “bump and freeze” example, below).
NOT-SO-FUN FACTS: The “bump and freeze” version of this gimmick involves hiking spending by huge levels one year, then claiming austerity the next year by “freezing” spending at the inflated levels. Here’s an analogy: add a huge amount to your regular budget one year – a down-payment on a house, for example – then simply spend the same amount (including whatever you spent on the down payment) the next year, and pretend you’re being frugal because you “froze” your spending at last year’s level.
This time-honored scam often involves artificially lowering spending projections relative to what Congress will actually do. In fact, Congress often holds press conferences to assure constituents the apparent cuts aren’t real…they’re just for, you know, “accounting
purposes.” See “doc-fix” example below for a bi-partisan favorite use of this gimmick.
NOT-SO-FUN FACTS: Oh, the bipartisan classic Medicare “savings” assumption no one even bothers to pretend is real: the “doc fix.” In short, because of errors in a Medicare physician payment formula, there are cuts assumed in the spending projections every year (cuts that everyone knows will never happen) to doctors who take Medicare patients. Rather fix the formula to reflect reality, both sides have long chosen to do an annual payment “fix” so that “they” will only be charged for that year. This sleight of hand allows Congress to mask hundreds of billions in future Medicare costs.