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A Debate Worth Having on Emergency Offsets

Hopeful budget watchers predicted that Congress would have fairly smooth fiscal sailing now that statutory spending caps are in place. That obviously underestimates the ability of Members to whip up their own squalls.

In my previous column, I lamented Congress’ failure to enact any of its regular appropriations bills on time. It was next to unimaginable, though, that it would stumble over passing even a short-term, stopgap funding measure and come close to putting the entire government in lockdown. But it did.

Fortunately, this time Congress did not wait until the eleventh hour to resolve the controversy. It was saved from itself when the Federal Emergency Management Agency discovered it had enough money after all to get through the last week of the fiscal year without an infusion of emergency disaster funds. That discovery allowed Congress to table a fight over whether a $1 billion supplemental appropriation for FEMA should be offset by $1.5 billion from an energy-efficiency loan fund for automakers.

Although some leading House Democrats initially signaled support for the continuing resolution and FEMA supplemental, the opening for mischief was just too tempting to ignore — a political twofer: Republicans were vulnerable to the charge of holding natural disaster victims hostage for a ransom to be pilfered from a clean energy piggy bank. Put another way, the GOP poked a stick in the eye of Democrats over a pet program, and Democrats retaliated by grabbing the stick and whipping Republicans with it (beware of boys with sticks).

Proponents of the offset argued that for three years there has been “more than $4 billion in unspent idle funds in the pipeline” for the auto energy technology loan fund. Moreover, an identical offset passed the House, without controversy, as part of the disaster relief supplemental in June’s Homeland Security appropriations bill.

Republicans, meanwhile, were having a tough time holding their own ranks together. Some fiscal conservatives complained that the continuing resolution spending levels, although adhering to those agreed to in the Budget Control Act, were still too high because they exceeded amounts adopted earlier in the Republican budget resolution (as if the Senate and president would have a change of heart).

The upshot of these controversies was the initial defeat of the CR/FEMA supplemental measure by 35 votes, with 48 Republicans joining nearly all Democrats in opposition. Republicans suffered most from the showdown — portrayed in the media as dissing displaced disaster victims and once again threatening a government shutdown if they didn’t have their way. In reality, it was 97 percent of House Democrats and one-fifth of the Republicans who voted against keeping the government open and providing disaster relief because they didn’t get their way.

Not only was the whole episode much ado about little, but the facts of the case were scrambled in the process. Speaker after speaker on the Democratic side asserted that it was unprecedented to demand offsets for emergency disaster aid, and that Republicans were guilty of a double standard by never demanding offsets for supplemental war spending.

Appropriations Chairman Hal Rogers (R-Ky.) tried to refute those charges. “Offsetting emergency spending is not a unique practice,” Rogers said, noting that in the past decade more than half of the supplemental appropriations bills contained offsets for both defense and nondefense spending —“over $60 billion in emergency offsets since 2001.”

Congressional Budget Office data on “Supplemental Budget Authority for the 2000s” support Rogers’ contention. Offsets, in the form of rescissions and transfers, have been used for both defense and domestic needs in 15 of the 29 emergency measures enacted since 2000. On average, 7 percent of defense discretionary spending has been offset in those bills and 15 percent of nondefense spending.

While Rogers argued that the offsets included funds for disaster relief and recovery on numerous occasions, including for Hurricane Katrina in 2006, Appropriations ranking member Norm Dicks (D-Wash.) countered that none of the supplementals was used directly for those accounts. (The CBO does not make a distinction in its data.) Nevertheless, on the second round the following day, with only 24 GOP defections, the measure passed the House with an additional $100 million rescission for the Solyndra solar energy loan. The Senate promptly tabled the House amendment.

The issue of whether emergency appropriations should be offset has been debated for decades. Appropriators have sporadically included partial offsets, though nowhere near the full amounts. The issue is all the more salient in recent years because of soaring deficits.

One distinction that escapes some Members is the effect of the “emergency” designation attached to war and disaster relief supplementals. On the one hand, it means those funds will not be counted against the statutory spending ceilings and therefore will not trigger sequestration (across-the-board cuts). On the other, they still count toward the debt and deficit. It is not free money.

It is unrealistic to expect emergency spending ever to be fully offset, but the debate over providing substantial offsets, for wars and disasters, is well worth having if Congress is serious about bringing deficits under control.

Don Wolfensberger is a Congressional scholar at the Woodrow Wilson International Center for Scholars and former staff director of the House Rules Committee.

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