Thursday, November 18, 2004

Lame Duck Confit

The New York Times
November 18, 2004

Lame Duck Confit

Having let the people's business stew for nearly a year, Congress is back in session this week, pledging to complete what the Republican leadership deemed too politically fraught to handle before the election. With time expiring, the lawmakers must raise the federal debt limit - the Senate approved an $800 billion increase yesterday, and the House is expected to follow suit today. The move will allow the government to borrow up to $8.2 trillion. Congress must also pass nine overdue spending bills totaling $355 billion.

What is happening in the halls of Congress right now is a travesty. Let us count the ways.

For nearly a year, everyone in Washington and in the financial markets worldwide has known about the need to raise the debt limit. Doing so basically requires a one-sentence-long piece of legislation. But debate on that bill was bound to draw attention - and rightly so - to the wildly expanding deficits created by the Bush administration's fiscal and economic policies. So, predictably, Congressional leaders delayed facing up to reality.

Meanwhile, Treasury Secretary John Snow has been forced to suspend the issuance of United States debt, to postpone indefinitely the announcement of the coming Treasury bill auction and to admit to Congress and the world that he is running out of legal ways to keep America afloat. In other words, with risk and uncertainty emanating from every corner of the global economy, the Congressional leaders' foot-dragging has made them look like fiscal buffoons, courting a loss of lenders' confidence in the government's ability to steward a deeply indebted nation. No one is worried about an American default. But Congress has been playing economic brinksmanship when leadership has been needed - and that's foolish.

That's not the worst of it. The new fiscal year began Oct. 1, but Congress has failed to pass the spending bills needed to pay for about 20 percent of the federal government - virtually everything except defense, homeland security, entitlements like Medicare and interest payments on the national debt. Neither the House nor the Senate was able to stay below the unrealistically low spending caps without resorting to gimmicks, ending up with competing out-of-whack bills that are some $8 billion apart. (The Senate wants more spending than the relatively more government-averse House.)

With no time or willingness to bridge their differences, and little appetite for confronting the mess they have created, the lawmakers now plan to lump all the spending into one huge bill: the dreaded omnibus. The great advantage for the faint of heart is that no one will actually see the actual bill before it's passed. The problem is that it will home in on the unrealistic spending targets with an indiscriminate, across-the-board reduction that ignores the real needs the government is supposed to be addressing. For instance, the Energy Department has predicted a 38 percent increase in the cost of home heating oil this winter, but heating assistance for low-income people will probably be cut to allow for an increase of only 5 percent.

To make really awful matters worse, members are freely larding the bill with nonessential pork even as they ignore essential needs. There are the usual last-minute anti-environmental riders undermining protections for forests and endangered species, but the worst by far is a proposed $2 billion expansion of the lock system on the upper Mississippi River, a project that the National Academy of Sciences has twice reviewed and twice declared a waste of money.

Finally, the cost-cutting aspects of this exercise are a fiscal charade. The spending that Congressional Republicans will go after - known as nondefense, domestic, discretionary spending - is not to blame for the federal budget deficit. Far from being out of control, the growth rate for such spending dropped to a mere 1 percent by 2004, after increasing noticeably in 2002, when surpluses from the Clinton years were thought to still be available. It is highly doubtful that domestic discretionary spending in 2005 will even keep pace with inflation. The real culprits in creating the deficit are the costs of the war and homeland security, and, in particular, the cost of the unnecessary tax cut legislation passed during the Bush presidency, which is 17 times as large as the increases in domestic discretionary spending.

Clamping down on domestic spending won't tame the deficit, but it will harm exactly the kinds of government services Americans support and count on. A backlash will eventually come, either from dissatisfied citizens who care about responsive government or from financial markets that care about fiscal sanity. Or both.