One particularly bad habit Congress has acquired during the war on terrorism is the emergency appropriation. Originally intended for actual, unforeseen emergencies (Hurricane Katrina would be one example), both Congress and the White House have use emergency spending bills to bypass normal budgetary controls. The Heritage Foundation’s Brian Riedl and Alison Acosta Fraser addressed this issue six months ago:

Supplemental spending should be reserved to unforeseen emergencies. Congress should offset additional spending by reducing funding for lower-priority projects elsewhere in the budget. It is unrealistic to think that all war spending would be offset, especially because there is a placeholder for some of this spending in the budget resolution. However, all non-war spending should be offset. The Administration and some in the Senate—such as Senators John McCain (R-AZ), Tom Coburn (R-OK) and John Ensign (R-NV)—acknowledge the need to cut spending elsewhere in the budget to pay for Katrina-related expenses. Polls show that Americans strongly support this kind of fiscal restraint…

Unfortunately, many of the spending items that wind up in supplementals are all too foreseeable. Because emergency supplemental bills do not count against budget caps, they are routinely loaded with additional spending that is unrelated to the original purpose of the legislation.

Unfortunately, Congress lacks that level of fiscal discipline, or at least it has up to now. One item that will greet Congress when it returns from its midterm recess will be HR 6176, the Responsible Emergency Appropriation Limits (REAL) Supplemental Act. Rep. Randy Neugebauer of Texas introduced this legislation at the end of September. It would limit the ability of Congress to use emergency appropriations to fund activities that should be easily foreseen:

Neugebauer’s legislation, the Responsible Emergency Appropriation Limits (REAL) Supplemental Act (H.R. 6176) reforms House rules so that an emergency supplemental appropriations bill can only provide for a single emergency, contain only emergency spending, and must be free of earmarks.

“The practice of loading up emergency bills with pork and other non-emergency items needs to come to an end,” Neugebauer said. “Too often, good bills that address real emergencies turn into bad bills and taxpayers are left to foot the bill.”

Neugebauer pointed to the recent emergency appropriations bill to fund the War on Terror as an example of an emergency appropriations bill that became a spending magnet. Soon after President George W. Bush submitted his request for War on Terror funding in February, 2006, a separate bill to fund Gulf Coast recovery was added to his request. In addition, unrelated, non-emergency items to fund projects in California, Hawaii and Illinois, among others, were included that increased the cost of the bill. Although President Bush’s initial request totaled $72.4 billion, the final price tag came to $94.5 billion. Neugebauer says that number would have been even bigger had it not been for fiscal conservatives in the House.

Emergency appropriations typically get rushed through both chambers of Congress, as most of them relate in part to some pressing need. The pressure of immediate action acts as an earmark attractant, and the need for haste keeps the legislation from getting the necessary oversight to remove the waste. Rep. Neugebauer’s proposal would keep the speed of the emergency appropriations process intact but filter out any provisions that did not solely and specifically focus on true emergencies. Neugebauer defines the term in HR 6176:

(1) As used in this section, the term `emergency' means a situation that-- (A) requires new budget authority and outlays (or new budget authority and the outlays flowing therefrom) for the prevention or mitigation of, or response to, loss of life or property, or a threat to national security; and (B) is unanticipated. (2) As used in paragraph (1), the term `unanticipated' means that the situation is-- (A) sudden, which means quickly coming into being or not building up over time; (B) urgent, which means a pressing and compelling need requiring immediate action; (C) unforeseen, which means not predicted or anticipated as an emerging need; and (D) temporary, which means not of a permanent duration.

The REAL Supplemental Act explicitly rules any emergency appropriation request out of order if it contains any earmarks at all. This closes the door on chronic porkers and might actually dissuade Congress from abusing the supplemental-funding process altogether. Look forward to Rep. Neugebauer’s bill coming before the Rules Committee after the recess.

Posted by Ed Morrissey at 10:33 AM | Permalink | TrackBacks (0)

Supporters of fiscal discipline in federal spending should note two important articles. First, the New York Times reviews the impact that pork-barrel spending has on the expansion of the federal budget. David Kirkpatrick’s article should be read not for its identification with one particular House member but with an understanding that many appropriators in Congress use earmarks to push legislation through to law without much consideration or debate (emphasis mine):

After becoming chairman of the defense spending panel in 1989, Mr. Murtha imposed a new discipline. Previously, the House often debated defense spending bills, which account for about half of federal discretionary spending, for weeks of contentious amendments and speeches, both in the committee and on the floor. Most Democrats often voted against the measures. “It took day after day after day,” Mr. Murtha recalled.

Not any more. Mr. Murtha installed a new system that the Republicans have continued: the chairman and ranking member work out the details behind closed doors, pack the bill with plenty of earmarks, and link future projects for members to their support for the bill. The appropriations committee now typically debates and approves the bill in less than eight minutes and the full House in less than half an hour. (The $437 billion measure passed last week took under 20 minutes.)

This is the true danger of pork. It greases the skids on legislation so that no debate of any worth takes place by essentially buying the necessary votes from House members. The House last week took all of 20 minutes in discussing one of the most complex and expensive expenditures in the federal budget. Does anyone think that this amount of time provided any member with enough information to seriously understand where that money would go?

Small wonder, then, that Congress as a whole has lost all sense of fiscal discipline. Brian Riedl wrote an alarming analysis last week that clearly shows that spending has not only failed to slow, but has actually gained momentum in this last session of Congress:

Federal spending in 2006 is set to rise 9 percent, the largest increase since 1990 and enough to earn Congress near failing grades from the Heritage Foundation’s third quarter report card. Most families facing steep new expenses would cut back on additional spending. However, the Senate is preparing to bust fiscal year (FY) 2007 discretionary spending caps by at least $32 billion to:

1. Reimburse the Pentagon for the $9 billion raided from its budget earlier this year and given to domestic programs, as well as fund additional defense and border security programs ($26.8 billion in total);
2. Fund another massive farm subsidy bailout despite high subsidy levels and a booming farm economy ($4.2 billion); and
3. Reimburse NASA for funds that lawmakers had diverted into parochial pork projects ($1.0 billion).
4. And in addition, lawmakers have promised $2 billion to $3 billion more for the labor, health, and education programs. Senators classify much of this new spending as “emergency” so that it does not technically count against the budget caps. But this spending is foreseeable—and often the predictable result of budget gimmickry—and so is not an “emergency.” For the sake of taxpayers, Congress needs to set its budgetary priorities, make tough choices, and offset any increases.

Riedl exposes the “emergency” tactic that Congress has adopted of late, especially since the beginning of the war on terror. In reality, Congress creates the emergencies by playing shell games with spending, and then pushing through these “emergency” appropriations that serve two purposes. One, they allow Congress to bypass spending caps; and two, they attempt to pre-empt criticism of the spending by casting the bills as a rescue for some vital program.

Fortunately, Congress has to deal with much more sunlight than ever before. The corrosive nature of earmarks and the fiscal irresponsibility they produce has already aroused the ire of the American electorate. We need to keep educating ourselves in these budgetary parlor tricks in order to hold our representatives accountable for their actions. As Andrew Grossman points out, these stories will become more frequent in direct relation to increases in federal spending, giving more opportunities for Americans to discover these sordid machinations. Only then will Congress start operating with any discipline on spending.

Posted by Ed Morrissey at 12:50 PM | Permalink | TrackBacks (0)

Ten years after Congress first passed a line-item veto to allow presidents to help control spending—and nine years after the Supreme Court ruled it unconstitutional in that form—Congress has the opportunity to try again. A line-item veto bill has already passed in the House, 247-172, in late June and has been awaiting action in the Senate ever since.

Most of the reform effort at the end of this session has focused on two proposals: the Federal Funding Accountability and Transparency Act of 2006, otherwise known as the Coburn/Obama on-line database, and the rule changes in the House that now require all earmarks to include the identities of their sponsor in the Congressional Record. Since President Bush challenged the Senate to pass the line-item veto in the last days of June, not much attention has fallen on the effort.

It’s a shame because, although the line-item veto has its limitations, it represents yet another step towards accountability and fiscal discipline. As Brian Riedl noted in March, this line-item veto gives the executive additional tools with no real downside:

The Line Item Veto Act of 1996 allowed the president to veto specific provisions that allocate discretionary budget authority, increase entitlement spending above the baseline, or create limited tax benefits.[1] This operated as a regular veto, with Congress needing a two-thirds vote to override it.[2] The Supreme Court struck down this authority, ruling that it violated the separation of powers. With a straightforward line-item veto forbidden, crafting an effective tool to eliminate wasteful, unnecessary individual spending provisions without running afoul of the Court now requires some creativity.

Thus, President Bush does not propose to create a traditional veto for line items, as the 1996 law did. Rather, his proposal would enhance the president’s existing rescission authority. Rescission is the process whereby the president sends legislation to Congress to cancel budget authority that was previously enacted but not yet spent. Like any legislation, rescission bills must be passed by the House and Senate and then signed by the president. Currently, however, Congress can kill a rescission request by voting it down or simply ignoring it. The President’s Legislative Line-Item Veto Act of 2006 improves on existing rescission authority in several ways:

• The president could “veto” entitlement changes and special tax breaks, as well as all discretionary appropriations;
• Congress would have to act on “veto” packages within 10 days of the president submitting them;
• Congress would have to hold up-or-down votes that could not be amended on the “veto” package bills;
• Senators could not filibuster a “veto” package bill; and
• Only a simple majority would be required to pass a “veto” package bill.

The question about the line-item veto isn’t whether it would do damage to the Constitution, it’s whether it would get used. This administration has been the most reluctant in American history to veto legislation, although it has used the threat of veto. The Senate probably takes this proposal less seriously considering this track record and may have thought to put more effort into the other reforms as a result.

The White House already can simply choose not to spend the monies appropriated by Congress, especially the earmarks in conference and committee reports. In fact, the line-item veto won’t apply to such earmarks—only those line items listed in the official budget. And nothing will get trimmed if the White House refuses to challenge Congress on spending, an effort sadly lacking in this particular administration over the past six years. But, President Bush’s support for the line-item veto indicates that he wants to change that in his final two years in office as evidenced by the hard push OMB Director Portman and other administration officials are making for this change

While some may object to this version of the line-item veto as doing too little, it’s important not to let the perfect become the enemy of the good. Later Congresses can address its shortcomings as they become clear and as voters demand more discipline in spending. Having this tool in the hands of the executive will allow for some challenge to the sillier projects attached to the federal budget, forcing Congress to vote on a number of embarrassing efforts, such as the $3 million allocated to the Charles Rangel Center for Public Service. Any tool that can shame Congress into reduced spending is worthwhile to the American taxpayer.

Posted by Ed Morrissey at 01:25 PM | Permalink | TrackBacks (0)

In our efforts to expose the petty corruption involved in earmark abuses, we should remember that not all earmarks are pork and not all pork comes through earmarks. Earlier this week an AP story highlighted some questionable spending at the Legal Services Corporation, the federal agency that carries a mandate to provide legal assistance, at taxpayer expense, to those unable to afford it. Unfortunately, more of them do without legal assistance because some of the federal funding for the agency gets spent on other priorities:

Agency documents obtained by The Associated Press detail the luxuries that executives of the Legal Services Corp. have given themselves with federal money - from $14 "Death by Chocolate" desserts to $400 chauffeured rides to locations within cab distance of their offices.

The government-funded corporation also has a spacious headquarters in Washington's tony Georgetown district - with views of the Potomac River and a rent significantly higher than other tenants in the same building.

And board members wrote themselves a policy that doubled the amount they could claim for meals compared with their staff. …

The headquarters has multiple conference rooms and kitchen/pantry areas. Yet, the corporation's 11-member board of directors holds its meetings at hotels around the country, including Washington, at costs ranging from $20,145 to $55,125 - the latter in San Juan, P.R.

National Review picked up same story and provided more background. The tony Georgetown digs cost the LSC $17.1 million in leases, of which its Inspector General Kirt West estimates at least $1.3 million to be overpayment. West also noted that the lease includes arrangements for $2 million in payments to Friends of the Legal Services Corporation—an organization with “close ties” to the LSC’s board members. That, West told Congress, could represent a criminal conflict of interest.

Despite this track record of waste and abuse, Congress has voted to increase the agency’s funding, even while it had to intervene to keep the LSC’s board from firing West. The Senate has approved a $31.5 million increase, while the House gave the LSC $25 million more. No doubt the impetus for more funding came from reports that the LSC only services 50 percent of eligible clients, and that only 20 percent of all legal needs of low-income Americans are being met. However, one would think that Congress would insist on better money management by the LSC—and perhaps a more responsible board of directors—before giving them even more money to waste.

Or perhaps they would be better advised to cut all funding to the Legal Services Corporation. As Heritage Foundation President Edwin J. Feulner wrote earlier this month, plenty of questions surround the LSC’s own legal status. Despite explicit restrictions on representation of clients outside the U.S., the LSC actively recruited migrant workers in Mexico to join a lawsuit against American farmers. It also has violated prohibitions on allowing its resources to be used in class-action lawsuits in Georgia and California. Edwin Meese outlined these offenses to Congress in 2002—and the response to the waste and the abuse has been to give the LSC ever-expanding increases. Nor are these problems recent; Virginia Thomas and Ryan Rogers reported in 1999 that the LSC inflated its case workload in order to justify increased funding. This was no mere fudging, or a case of excessive rounding—LSC reported handling 370,000 cases in a year when they only handled 198,000, an overstatement of 86 percent. That’s significant even by Congressional budget standards, and indicates a systemic honesty issue at the LSC.

Reforming the mechanisms of appropriations in Washington, D.C. is an important first step in eliminating waste, fraud, and corruption. We need to make sure we’re keeping a close eye on all the other means that our government wastes money and under-delivers its services.

Posted by Ed Morrissey at 01:37 PM | Permalink | TrackBacks (0)

Roll Call reported yesterday on the effect that the new House rule requiring each earmarks to carry the identification of its sponsor. Because the House and Senate could not agree on terms that would cement this commonsense approach to open government in law, the House had to settle for a rule change. That hasn’t kept reformers in the Senate from trying to get a similar rule in the upper chamber, but they are using a rather strange strategy to accomplish it. According to the report, they’re deferring the matter to the Rules Committee chair, a Senator who has already established a long track record of opposing such reforms:

The two Senators taking the lead on reforming their chamber’s earmark rules need to come up with a measure that can sail through the Senate before GOP leaders approve it, a senior leadership aide said.

The Senate is struggling to match the reform enacted last week by their House colleagues, and with the clock ticking down to adjournment, it is unclear whether Senators will be able to produce any workable rules changes.

For now, Senate Republican leaders are deferring to Rules and Administration Chairman Trent Lott (R-Miss.) and ranking member Chris Dodd (D-Conn.), a GOP leadership aide said.

Similarly imperiled is a plan that Lott and Dodd want to push to eliminate the long-standing Senate tradition of secret holds, in which Senators can block legislation without identifying themselves. Republican leadership in the chamber remains opposed to the proposal.

Senator Lott’s track record indicates that he is unlikely to move quickly to reform earmarks. A Roll Call article from last year quotes the former Majority Leader as openly boasting of his ability to bury funding in bills so deeply that other Senators might never realize they’ve approved it. It also indicates that eliminating the secret hold might further enable other Senators in disguising their pork just long enough to be successful:

Still, during his more than 30 years in Congress, Lott said he has learned something about how to keep the likes of Coburn from stopping his pet projects from becoming law.

“The way I do it is, I fold them into bills where you can’t find it,” Lott said. “I’ve been around here long enough to know how to bury it.”

Indeed. There is little mystery about why Senator Lott and others want to end secret holds, especially given this rather telling admission. The hold notifies leadership that a Senator plans to object to a call for unanimous consent, a delaying tactic that allows members extra time to review the language in a proposed bill or resolution. It can’t stop the bill from receiving a vote, but as we saw earlier, it can complicate its path enough to get a lot of attention. While the value of secrecy in the holds is certainly debatable, the hold itself provides a longer feedback loop on legislation and spending. It makes it much more difficult for politicians to “bury” pork long enough to escape the red pencil during debate.

Rules on earmarks should clearly identify their source to allow voters to hold their elected officials responsible for the spending. However, reform should not have unintended consequences that make finding pork projects more difficult.

Posted by Ed Morrissey at 03:12 PM | Permalink | TrackBacks (0)

If the politics of appropriations seems somewhat different lately, you aren’t the only one to notice. The Examiner notes that the signing of the federal spending database bill this week will allow taxpayers to find and identify wasteful spending and hold politicians accountable for their actions:

First, for most of our history, the vast majority of Americans lacked the time or resources to keep track of how the federal government was spending our tax dollars. Even with the coming of the spreadsheet programs, personal computers and the Internet’s infancy in the early 90s, it was all but impossible for any but the most determined and technically savvy citizen to see where the tax dollars were going. Among the most visible contemporary results of that situation are congressional earmarks in which anonymous Members of Congress are able to insert spending projects that can enrich campaign donors, family members, favored special interests or the Member himself. Coburn has called earmarks “the gateway drug to spending addiction.” Progress is being made on that front, too.

Now with Coburn-Obama, every citizen with access to the Internet will be within a few mouse clicks of knowing where their tax dollars are going and who is benefitting from them. Such access moves our democracy beyond Government 1.0 web sites that mainly just provide passive information and encourages more active and informed citizenry. Call it the dawn of Government 2.0. It is especially fitting that a database of federal spending — the blood flow of governance — marks the opening of the new era.

We’ve covered this topic many times here, but the point is well worth emphasizing. As the federal government grows, its accounting has become more and more opaque—to the point where even its architects have no real specific understanding of how the money gets spent. That development has put a barricade between government and the governed, and one could argue that the power inherent in such an incomprehensible budgetary system substantially reduces our freedom, at least in terms of informed consent.

John Fund notes that neither party has truly come to terms with the new era for openness, and that the party in charge will pay the price if they do not do so soon:

As modest as it is, the transparency bill spent much of August in limbo after Senate Commerce Committee Chairman Ted Stevens of Alaska, chief defender of the infamous "Bridge to Nowhere," put a hold on it, using the tradition allowing any senator to secretly block a bill. These games feed the perception of an out-of-touch Congress and demoralize many GOP voters. "Every event I go to, someone complains about overspending and pork," says Rep. Chris Chocola of Indiana, one of the most embattled GOP incumbents. "They still don't think we get it." Many members simply don't believe the political costs of pork can ever exceed the benefits. Democrats have been largely silent. After all, they get about 45% of them even as a minority. "One man's pork is another man's steak," is how many members dismiss reform. …

The federal government is now an astounding 185 times as big in real terms as it was a century ago. A general sense that Republicans have forgotten why they were sent to Washington is a big reason why only 43% of Republicans approve of Congress in this month's Fox News poll. If Republicans can't better explain how they plan to get a grip on spending, many voters will conclude they both deserve and need a time-out from power.

The GOP contingent and a significant portion of the Democratic caucus addressed the issue last week, which perhaps indicates that some old dogs can still learn new tricks. The House passed a new rule defining earmarks and requiring earmark language to include the sponsor in the bill or conference report. While this does not create a searchable database that President Bush will sign into law, it does put all earmarks and their source into the Congressional Record. Combined with the new budget database, it will provide a powerful tool with which to investigate the influence of special interests.

All of this new oversight should cause some hesitation on the part of our representatives to associate themselves with needless outlays and vanity projects. Even more importantly, our efforts to put sunlight on processes that had been hidden in darkness for decades or longer will remind our legislators who works for whom in a representative democracy.

We have not yet won all the battles to shove the workings of federal appropriations into the open, but we have started well.

Posted by Ed Morrissey at 03:02 PM | Permalink | TrackBacks (0)

Yesterday, Bill Frist surprised everyone by seizing a propitious moment to demand a floor vote on S. 2590, the Coburn-Obama bill creating a searchable online database for all federal spending. Taken aback, no senator present objected to a call for unanimous consent to the vote, and the bill passed by acclamation. Senators Tom Coburn and Barack Obama released a statement crediting the energy of American citizens for pressing Washington to adopt the measure to increase openness and accountability in government:

“This bill is a small but significant step toward changing the culture in Washington. Only by fostering a culture of openness, transparency and accountability will Congress come together to address the mounting fiscal challenges that threaten our future prosperity.”

“The group that deserves credit for passing this bill, however, is not Congress, but the army of bloggers and concerned citizens who told Congress that transparency is a just demand for all citizens, not a special privilege for political insiders. Their remarkable effort demonstrates that our system of government does work when the people take the reins of government and demand change,” Dr. Coburn said.

“By helping to lift the veil of secrecy in Washington, this database will help make us better legislators, reporters better journalists, and voters more active citizens,” Obama said. “It’s both unusual and encouraging to see interest groups and bloggers on the left and the right come together to achieve results. This powerful grassroots alliance shows that at the end of the day, Americans want to see Congress work together to get something done and not continue to engage in the partisan gridlock that so often brings Capitol Hill to a grinding halt.”

The effect of the combined power of common-citizen activism and cross-spectrum partnerships of newspapers and think tanks has been nothing short of amazing. Perhaps the most gratifying part of the experience has been to see politicians who attempted to engage in old-school procedural obstruction get publicly shamed into changing their ways. In a way, we just saw a million Mr. Smiths go to Washington—and Washington recognized it.

However, the effort is far from complete. The House passed a different version of the legislation last June. H.R. 5090, sponsored by Rep. Tom Davis, excluded government contracts from the database, which is a mistake given the nature of earmarks. Normally, when the two chambers pass significantly different legislation, they form a conference committee to reconcile the two bills and resubmit the modified bill to both houses for approval. This process takes quite a bit of time, however, and the session has precious little of that left.

And so some are now pressing for House Speaker Dennis Hastert to submit S. 2590 for a vote in the House and drop H.R. 5090 altogether. This would eliminate the need for a conference committee, especially since Rep. Davis, the House bill’s sponsor, has agreed to include contracts in any case. Minor issues, such as separating contracts and grants, could be quickly resolved, so long as the final version retains the core of S 2590: downloadable and complete federal budget data.

Whatever the two chambers’ leaders choose as their legislative strategy to make it happen, they should work quickly and not allow a handful of politicians to use procedural obstacles in order to keep the federal government’s expenditures under wraps. This job is not finished, and citizens should remain focused on ensuring that Congress acts on fiscal transparency this session.

Posted by Ed Morrissey at 10:02 AM | Permalink | TrackBacks (0)

As a few members of the Senate continue to play games with S.2590, the Coburn/Obama bill creating an online searchable database for federal spending, the enthusiasm for smoking them out has declined considerably. The Hill reports that watchdogs such as Porkbusters and OMB Watch have begun counseling their supporters to put less energy into detective work to unmask the secret holders and to put more pressure on the leadership of both Senate caucuses to bring the bill to the floor:

Bloggers on both sides of Washington’s partisan chasm called for a halt to Senate blocks on the bill, which would set up a public database of all federal grants and contracts, including those resulting from earmarks. Senate Commerce Committee Chairman Ted Stevens (R-Alaska) and an unnamed Democrat were said to have active holds as of midday, but congressional sources said Stevens removed his late yesterday.

At this point, supporters’ playing Sherlock Holmes produces less benefit and may play into a strategy of tactical delays. In the end, it really doesn’t matter whose hold remains on the bill if a handful of senators intend to deny unanimous consent to a floor vote. One hold or a dozen will still force the bill to survive up to three cloture motions over six legislative days before proceeding to an up-or-down vote.

Under normal circumstances, this would present little difficulty. However, the Senate is running out of legislative days before the upcoming election; according to Majority Leader Bill Frist, the Senate has only 15 days before it goes home for the election. Squeezing the database bill into an already-packed legislative agenda and keeping up with the cloture motions will require some effort. That doesn’t take into account the time needed to reconcile S.2590 with its House cousin.

For this reason, activists would be better served by channeling their energies into demanding immediate action on the bill now despite the holds. Frist has already gone on record saying that he will take all action necessary to get S.2590 passed before the election. The Hill notes that Minority Leader Harry Reid, who has offered public support for the bill, has not made any similar commitment to pushing against procedural obstacles. To see if Reid is indeed serious about increasing the transparency of federal spending, activists might ask him for a signal against the three-card monty of holds in which senators from both caucuses have engaged.

Posted by Ed Morrissey at 03:19 PM | Permalink | TrackBacks (0)

Now that Congress has returned to business after the summer recess, perhaps the leadership can address the coming disaster in entitlement spending. As Brian Riedl notes, the demographics and added benefits to Medicare and Social Security will see entitlements metastasize from 8.4 percent of GDP today to 18.9 percent in 2050, or almost the entire amount used for the current federal budget.

One hopes that the political class can do better than D.C.’s latest effort to show Medicare savings, however. As the AP reported two weeks ago, Medicare will simply delay payments in an attempt to shove a few billion dollars out of this year’s ledger:

Many health care providers will have to make do next month without a government paycheck or two. The Bush administration says it will not make any Medicare reimbursements to hospitals, doctors and scores of other providers during the last nine days of the current budget year, from Sept. 22-30. Congress ordered the hold.

The providers taking care of older people and the disabled will get paid in full after the new budget year begins Oct. 1. They should not count on any interest on the amount they are owed.…

By delaying payments, the government moves $5.2 billion in Medicare expenses to next year's budget, rather than the current one.

This type of shell game has been tried in the past during the 1980s. Congress allowed it to occur on one occasion, but stopped it on the other. As we can see, the “check’s in the mail” method of saving money does little to reform the system, but instead penalizes health-care providers for participating in the system.

While entitlement spending remains one of the nation’s sacred cows, we can expect little substantial effort for reform. Eventually, however, politicians will have to address the demographic time bomb, and the longer we wait the more painful it will be. As Heritage wrote last December, this “is merely an accounting gimmick and an insult to doctors and other medical professionals.” Robert E. Moffit presented a much more effective plan to address the critical flaws of the current system, and reformers should use it as a starting point for real change.

Posted by Ed Morrissey at 02:34 PM | Permalink | TrackBacks (0)

The Hill takes a revealing look at the nature of earmarks and their correlation to electoral opportunities today. Jonathan Allen notes that not all incumbents get served equal portions of pork and that the amount of money allocated by earmarks in a particular district has a high degree of correlation to the difficulties of an incumbent’s re-election bid:

Veteran House Republican Ed Whitfield is poised to take home $650,000 in Labor-HHS-Education appropriations earmarks this year, a sum that will no doubt be welcome in his hardscrabble western Kentucky district but which pales in comparison to the federal largesse due to arrive across the rest of the Bluegrass State.

Whitfield, who is neither a member of the Appropriations Committee nor in danger of losing on Election Day, will see his district haul in less than one-third of the $2 million lined up for the northeastern 4th District, where freshman Republican Rep. Geoff Davis is battling to hold his seat in the face of a fierce challenge from his predecessor, Democrat Ken Lucas.

Whitfield’s take is barely more than a quarter of the $2.4 million slated to flow into appropriator Rep. Hal Rogers’s southeastern 5th District, and is paltry compared to the money headed to the Louisville-based 3rd District where Rep. Anne Northup has used her slot on the Appropriations Committee and its Labor-HHS-Education subcommittee to help protect her perenially precarious seat for the GOP. Northup’s district is in line to get a dozen earmarks worth a total of $3.6 million.

These funds come from just one appropriation bill, the proposed Labor-HHS funding that Congress will take up now that their summer vacation has concluded. The Hill’s analysis shows that a whopping 30 percent of all earmarked funds (out of a total of $146 million in pork) go to 15 Representatives – all of them appropriators. In fact, the average pork chop for appropriators comes to $2.76 million, while endangered incumbents get $1.35 million – and everyone else averages $663,000.

In other words, we get to pay for their re-election campaigns, not through voluntary contributions, but from the tax money extracted from us by the federal government. Perhaps this is a new version of campaign finance reform, but I suspect it’s a far older type of politics that has spun out of control.

This bill is only one of a series of appropriations that Congress has to finish before the end of this session. Even with that limited scope, the Hill reports that 97 percent of all House districts benefit from earmarks in this one bill. Imagine the scope of the problem when Congress appropriates funding for the rest of the government.

Posted by Ed Morrissey at 01:27 PM | Permalink | TrackBacks (0)

When word hit the blogosphere that a bill with wide bipartisan support had an anonymous hold blocking its procession to the floor, bloggers immediately put on their deerstalker hats and elaborate pipes and played Sherlock Holmes to find the culprit. In the end, we found that Ted Stevens had put the hold on S. 2590, the Coburn/Obama bill that would create an online searchable database of the federal budget for taxpayers to research. Now late word has it that a Democrat has also placed a hold on the bill, perhaps Robert Byrd, as he remains the only senator who has not responded to questioning.

The blogospheric effort in support of S. 2590 has sent a clear message to Washington, D.C., that constituents expect openness in government and sunlight in appropriations. The pork which politicians once used as fodder for stump speeches in pursuit of re-election has begun to shift from an asset to a liability. The database promised by S. 2590 will only accelerate that process, as taxpayers find more and more silliness in earmarks.

However, some voices began to question our voraciousness in attacking the secret hold. In the first place, many of us may have misunderstood its nature. We have seen the obstructionism that the now-defunct blue-slip process has wrought over the years with judicial appointments, where a home-state Senator could spike a nominee without identifying himself and without a vote. As Senate Majority Leader Bill Frist explained on Tuesday, the hold process does not keep a bill from coming to the floor:

What a hold is – a lot of legislation has come to the floor and things are moving kind of fast – but what a hold is, is the ability of someone to say “Slow down and protect me on the floor.” You hear all the arguments about last-minute holds or holds occurring right before a break, and people will say, “Slow it down so we can take a look at it.” Part of it is that things come to us so quickly, and this particular bill probably most people didn’t see it because we were doing so much those last two or three days. But an individual can’t stop it or hold it from coming to the floor. What it does mean is “Put a pause on it until I can see it and protect our rights on the floor.” It’s a way to support the comity of the Senate. It doesn’t mean it can’t be taken to the floor.

So what will happen is if I take it out to the floor, whoever it is – Democrat or Republican – will have to say, “I object.” And if you object, the problem with that is that it takes up to six days of votes to get it to come out to the floor. You have to file cloture positions and motions to proceed, and there have to be three of them. The first cloture is two days, the second is two days, and the third is two days.

The hold signals the Senate leadership that a bill will not get unanimous consent for passage. It gives the bill’s sponsors and the leadership some extra time to convince the doubters to support a floor vote, even if the member won’t vote for the bill itself. And as Tim Chapman noted on Tuesday, the hold allows senators to ensure that legislation cannot be rushed through without due time for review and deliberation – especially appropriations:

More often than not it is conservatives — anti pork, limited government types — who employ the secret hold. They use the hold to slow down legislation that is incessantly offered by liberals in the Senate. Legislation that would appropriate x amount of billions of dollars to this or that socially acceptable and politically popular cause is often the target of these holds. Why? [B]ecause without a hold the bill goes to the Senate floor and passes with unanimous consent for fear of opposing a politically popular piece of legislation that is often either not constitutional or further bloats the federal government. In this case, [unanimous] consent is often anything but…it is more like unanimous ignorance.

In his interview, Frist talked about the benefits of keeping the hold secret. If a senator had to enter his hold into the Congressional Record, it would make him or her less likely to be amenable to changing positions based on the debate. Once a politician has taken a public position, especially these days, they fear being tarred as a flip-flopper. The anonymity allows them to keep all their options open.

Any secret process rightly inspires skepticism and calls for openness. The ability of a single senator to create six legislative days of obstruction on any legislation should come under considerable review by the leaders of both parties to determine if any modifications can be made for better efficiency. However, we may want to refrain from throwing out secret holds. It appears that they may serve a good purpose and keep the Senate from acting from haste and ignorance.

Posted by Ed Morrissey at 08:42 AM | Permalink | TrackBacks (0)

The controversy over the secret hold on S. 2590, Senator Tom Coburn’s bill creating a federal spending database on the Internet, continues to grow – as does the scrutiny of this secret practice of the upper chamber. The Sacramento Bee castigates the anonymous senator for his/her anonymous action in spiking the legislation, and the Senate as a whole for allowing it to happen:

Who would block legislation promoting more openness in government, especially when it has strong bipartisan support? At the moment it's an unnamed U.S. senator who, some watchdog groups believe, has a hidden agenda. Whatever that agenda may be, the tactic tarnishes the integrity of an institution that needs to update itself.

The senatorial hold is an arcane custom so secret it's not even part of the Senate rules. It allows any senator to delay legislation, or a presidential appointment, indefinitely. And it can be done secretly, although often the perpetrator's identity is known. If holds have sometimes stopped something bad from happening, more often they serve a single lawmaker's agenda while obstructing the public's business.

A bill sponsored by Republican Tom Coburn of Oklahoma and Democrat Barack Obama of Illinois would create a database that anyone could tap into to find out who wins government contracts, grants and loans for how much and on what terms. That process last year consumed $2.5 trillion of taxpayer funds. The bill sailed through the Senate Homeland Security Committee by voice vote and seemed headed for passage. But then came the hold, whose motive remains unclear.

The motivation seems pretty clear: someone feels threatened by the public accountability S. 2590 will bring to the appropriations process. This action holds out the possibility that opponents of open government can run out the clock on S. 2590, forcing Senators Coburn and Barack Obama to re-introduce it next year, forcing reformers back to the starting gate. It’s an attempt to tire out the proponents of clean government and budgetary discipline and to protect the powerful political tool of government appropriations.

Secret holds are an affront to open government, and perhaps they should be the next target of reformers. Some senators have attempted to defend the practice by relating anecdotes about midnight lawmaking and the ability of the hold to delay votes until proper oversight can be exercised on the process. However, that argument fails on the commonsense question: why must the hold be secret? If holds preserve due process and open government, then one would think that a senator would not feel the need to hide his or her identity. In fact, the secret hold only perpetuates the appearance – and most likely the reality – of closed-room deal-making and star-chamber legislation.

Posted by Ed Morrissey at 01:59 PM | Permalink | TrackBacks (0)

While transportation systems for humans still require plenty of improvements, Congress will now consider a bill that allocates millions of dollars for the prevention of transporting horses for human consumption. H.R. 503 will amend the Horse Protection Act to enact federal bans on sales, donations, transport, and possession of horses for slaughter. That may be bad enough for fans of federalism, who will rightly wonder about the constitutional basis for federal protection of horses. However, the text at the end of the bill should get some attention:

Section 12 of the Horse Protection Act (15 U.S.C. 1831) is amended by striking “$500,000” and inserting “$5,000,000”.

In a month when we have seen at least one, and now possibly two, terrorist plots against American airlines, Congress seems more interested in the safety of horses. Not only does Congress have some priority and jurisdiction issues, the financial impact seems highly strange. Did the dangers of human consumption of horses suddenly expand tenfold?

But it won’t just end with the $5 million this bill demands. The Congressional Budget Office notes that this level of funding will prove woefully inadequate:

The bill would authorize the appropriation of up to $5 million per year to implement its provisions, but CBO estimates that those amounts would be insufficient to cover costs incurred by the U.S. Department of Agriculture (USDA). Assuming appropriation of the necessary amounts, CBO estimates that implementing H.R. 503 would cost USDA $21 million in 2007 and $233 million over the 2007-2011 period.

Once again, Congress has produced a program while ignoring the costs it creates. The 203 cosponsors of this bill will push through a program with wholly inadequate funding. H.R .503 may start at a relatively minor $5 million, but it will surely grow into yet another expensive bureaucracy managing a task that doesn’t belong to the federal government at all.

This demonstrates the inevitability of budget problems on Capitol Hill. Congress at some point arrogated to itself a task for which it has no real jurisdiction, and now it has decided to expand this nonexistent mandate and, not coincidentally, expand its powers along with its reach into our pocketbook.

Posted by Ed Morrissey at 03:14 PM | Permalink | TrackBacks (0)

The Christian Science Monitor reports on the phenomenon of earmark opposition, centering on the joint effort behind the Sunlight Foundation’s Exposing Earmarks website. Despite the normal August doldrums in the nation’s capital, the growing chorus of voices demanding reform in the appropriations process has gained the attention of lawmakers:

House Republican leaders promise that even if lobby reform stalls - as it has - they will do something to rein in earmarks when they return to Capitol Hill next month.

The reason: There's too much flak over lawmakers who are cashing in on earmarks - legally, as campaign contributions; illegally, as bribes. Even good projects look bad when they're muscled into spending bills late in the process, anonymously, and with no competition, debate, or chance to delete them. …

Last week, the Sunlight Foundation, a coalition of interest groups opposed to earmarks, released a spreadsheet of 1,811 earmarks pending in the fiscal year 2007 Labor, Health and Human Services Appropriations bill. If you knew where to look, you could find a list of earmarks on a government website. But it leaves out what reformers say is the key fact about any earmark: who sponsored it.

"Once you know who the member is, you can start asking questions such as: Is there a direct financial connection with a member of the board of directors who is a [campaign] donor? How was this hospital or training program chosen over another? Sometimes it's because it's the best program; sometimes it's because there's a lobbyist who is paid," says Zephyr Teachout, national director of the Sunlight Foundation. "We hope to turn K Street upside down."

Activists run across the political spectrum, including Ms. Teachout, who directed Howard Dean's online campaign, and conservative-leaning organizations, such as the Club for Growth, Human Events Online, the National Taxpayers Union, and the Heritage Foundation. Other participants include the Washington Examiner, the blog Porkbusters.org, and Citizens Against Government Waste, a public-interest group.

The response to this effort has been very encouraging. A number of lawmakers have taken appropriations reform seriously, including Senators Tom Coburn (R-OK) and Barack Obama (D-IL). While DC veterans at first dismissed the activists as gadflies to be ignored, within a few months of the first organized efforts to demand reform, lawmakers have been forced to respond. In fact, it has unnerved politicians to the extent that an anonymous senator has placed a hold on Senator Coburn’s bill to put the entire federal budget into a searchable database, where constituents can finally see all of the activities that Congress funds.

What makes this attention so remarkable is that this is usually the time of year when the press casts its gaze towards home districts and, in an even-numbered year, to the upcoming elections. Budgets get shunted to the shadows during August as lawmakers stream homeward for fundraising and politicking among their constituents. Even the president usually leaves town for a good part of the month, and political writers focus their gaze on broader themes.

But this citizen’s revolt has caught their attention. Those who wish to keep the momentum going should are talking to their representatives this month, before they return for the upcoming budget negotiations. Constituents are letting their representatives know that not only do they reject the addition of any more earmarks to spending bills, they want to see the 1,811 in the Labor, Health, and Human Services bill currently under consideration eliminated. Making earmarks a liability instead of an asset on the campaign trail could be what wins some fiscal responsibility from Congress.

Posted by Ed Morrissey at 09:30 AM | Permalink | TrackBacks (0)

Government spending has become something like a fungus – it grows in the dark, and most people fail to notice it until it really starts to reek. Thanks to an ever-increasing federal budget and the esoteric methods used to create and maintain it, the average taxpayer has little chance of gaining any insight into how our government spends our money. Even the people tasked with making the decisions about federal spending seem to have little understanding of both the process and results.

In practice, the federal budget has become the biggest national secret. No one fully comprehends it, and attempting to learn all of its manifestations would take years of research. By that time, of course, it would have grown larger and even more incomprehensible.

What America needs is a viral network of analysts, interacting and competing with each other to shed light on federal spending. Such a network could find expertise in all of the darkest areas of the budget, allowing taxpayers to get better comprehension of all the ways our tax dollars disappear. Even better, these analysts could help us connect the dots between the power brokers, the people who support them, and the connections of federal dollars that bind them together.

The viral network has arrived. The Sunlight Foundation, Heritage Foundation, Club For Growth, and bloggers from across the political spectrum have banded together to start attacking pork-barrel spending and waste in the federal budget. The initial efforts can be found at Sunlight and The Truth Laid Bear for the Exposing Earmarks Project.

The group has begun the project by reviewing earmarks in the Labor-Health and Human Services appropriations bill, finding all sorts of information about where your tax dollars go. For instance, did you know there is an earmark of a million dollars on the University of Virginia Center for Politics for the Youth Leadership Initiative? Or that three million will go to City College of New York, for the Charles B. Rangel Center for Public Service? Almost a million dollars is proposed for the Massie Heritage Center in Savannah for exhibit restorations and equipment upgrades.

Does the federal government need to spend money on such pursuits? Some may say yes, while others would disagree. Now, however, at least you can know that the spending exists, and that is a necessary first step to slow the growth of earmarks and pork-barrel politics.

Posted by Ed Morrissey at 08:18 AM | Permalink | TrackBacks (0)

With Congress on holiday and the President out of town, one usually hears little about policy efforts during the August doldrums. When a midterm election is approaching, politicians don’t like to rock the boat by discussing potentially divisive issues. However, the Washington Post reports that the Bush administration has begun to approach Members of Congress about forming a new bipartisan effort to tackle entitlement spending:

The Bush administration has begun sounding out lawmakers and other key figures about mounting a new bipartisan effort to rein in the costs of Medicare, Medicaid and Social Security after the midterm elections, according to officials in the administration and on Capitol Hill.

No specific plan has been advanced, and administration officials are proceeding gingerly given the political debacle that beset the White House last year when President Bush promoted a plan to create private accounts in the Social Security program. But they have been sending strong signals in recent weeks that they want to try something again after the elections in November.

When Bush nominated Henry Paulson to run the Department of the Treasury, it was difficult to tell whether he meant to make a real effort at reducing the runaway spending projected for entitlements. Paulson made his preferences known from the start, and in his maiden speech pointedly noted his motivation in accepting the position sprang from the opportunity to make a difference in this area.

Will the effort produce any results? It’s hard to know, and we can be absolutely sure we will hear little about it until after November. The White House lost big on its effort to reform Social Security last year, and it will not risk another effort just before an election. It looks more like preparation for 2007, when the political world will be between elections and Bush will have his last chance for bipartisanship on anything. Few subjects are more worthy of what political capital the President can muster.

Posted by Ed Morrissey at 02:14 PM | Permalink | TrackBacks (0)

USA Today revisits a budget reporting anomaly that has traditionally received far too little attention through several administrations and both Democratic and Republican control of Congress. The budget deficit numbers used by both Congress and the White House seriously mislead Americans because they do not include deficits from entitlement programs. The true numbers paint a much bleaker picture than we have heard for at least a generation:

The audited financial statement — prepared by the Treasury Department — reveals a federal government in far worse financial shape than official budget reports indicate, a USA TODAY analysis found. The government has run a deficit of $2.9 trillion since 1997, according to the audited number. The official deficit since then is just $729 billion. The difference is equal to an entire year's worth of federal spending.

Congress and the president are able to report a lower deficit mostly because they don't count the growing burden of future pensions and medical care for federal retirees and military personnel. These obligations are so large and are growing so fast that budget surpluses of the late 1990s actually were deficits when the costs are included.
The Clinton administration reported a surplus of $559 billion in its final four budget years. The audited numbers showed a deficit of $484 billion.

In addition, neither of these figures counts the financial deterioration in Social Security or Medicare. Including these retirement programs in the bottom line, as proposed by a board that oversees accounting methods used by the federal government, would show the government running annual deficits of trillions of dollars.

The Bush administration opposes including Social Security and Medicare in the audited deficit. Its reason: Congress can cancel or cut the retirement programs at any time, so they should not be considered a government liability for accounting purposes.

Why does the government keep two sets of books? The Bush administration, following the lead of other presidents and Congresses, claims that the liabilities from entitlement programs should not count until the benefits get paid, even though they have been guaranteed in the current budget year. This allows the federal government to publish numbers that increasingly have no bearing on reality. Despite all of the fanfare in the 1990s, we never had a balanced budget in the past generation.

Congress, however, only allows the government to play by these rules. Securities regulations force private enterprise to report “entitlements” as soon as businesses make the commitment to provide them. In fact, as USA Today points out, this regulation forced many publicly-held corporations to cut back on retirement and pension participation, as the costs could not be deferred until payment – for good reasons.

That’s not the only hypocritical part of the budget fudge, either. Even the audited numbers are incomplete. Why? Because several agencies do not produce numbers that auditors will certify, including the Department of Defense. This, mind you, is the same federal government that forces publicly-held corporations to waste countless man-hours and billions of dollars complying with Sarbanes-Oxley regulations in order to provide audited reports on every aspect of their businesses. Why should Congress allow 25 percent of federal agencies to escape business practices they force on private enterprise?

We need to insist that the government start painting a realistic picture of our financial condition, using the same business practices they force the rest of us to use, and quit hiding behind a false image of financial stability. Until that happens, we will never acquire the political will to tackle the underlying roots of runaway budget deficits that may hide now but will become crushingly apparent all too soon.

Posted by Ed Morrissey at 10:58 AM | Permalink | TrackBacks (0)

The last five-and-a-half years have proven frustrating for those who hoped for budgetary discipline from Republicans in Congress and the White House. Having achieved political control through arguments against federal spending and the expansion of Washington’s power, the GOP increased both once in full control. As Brian Riedl noted here at Heritage in February of this year, both discretionary spending and entitlements have increased over the last fifteen years, and that growth has not slowed in the last five.

Since 1990, discretionary spending has increased 93 percent. Entitlements have risen 137 percent in the same period. The news did not get better under all-Republican rule. In fact, the federal budget has grown across the board since 2001, outstripping inflation (12 percent, overall) in several categories, such as education (137 percent), community and regional development (342 percent), Medicare (58 percent), housing and commerce (58 percent), Medicaid (49 percent), and water transportation (46 percent). The federal budget for health research and regulation has grown by 78 percent since 2001 and now consumes $76B of the overall budget.

Some budget hawks blame the Bush tax cuts for the deficit, but the taxes have stoked the economy and bolstered federal revenues. The deficit has returned to its historical level of about 2.3 percent of GDP, but that will not continue for long as the budget continues to swell uncontrollably. In a Tuesday speech to Columbia University, new Treasury Secretary Henry Paulson diagnosed the long-term risk we face regarding the budget:

The biggest economic issue facing our country is the growth in spending on the major entitlement programs: Medicare, Medicaid, and Social Security. The cost to the federal government of these three programs, without fundamental reform, is projected to more than double, from the current level, 8 percent of GDP, to nearly 17 percent by 2060. If left unchecked these programs would significantly impair our economic flexibility and erode our competitiveness.

Demographics don't lie and demographics aren't partisan. Social Security was created in 1935. Today, people are living longer than they did in 1935, yet Social Security's basic structure has barely changed. Just 3.3 workers are paying into the system to support each beneficiary, while 16 workers did so in 1950. The President put forward a plan last year to strengthen and modernize Social Security. The longer we wait to fix this problem the more limited will be the options available to us, the greater the cost and the more severe the economic impact on our nation. …
We've made progress, but the deficit is still too large. I wish it were less and I am working with my colleague and friend Rob Portman, the Director of the Office of Management and Budget, to restrain federal spending. But let's be honest with each other. The big budget issue is the longer-term structural entitlements challenge staring us in the face.

Paulson’s first public speech since his confirmation gives some hope that the Administration may finally get serious about spending in general and revitalize its efforts to reform entitlement programs. The White House did try to push on Social Security last year, hoping to get a solution passed outside of an election year. The reform effort stalled amid partisan bickering in Congress, but perhaps Paulson’s speech indicates that the effort will be renewed after the mid-terms.

For that to happen, it will take extraordinary cooperation between Congress and the White House, the Senate and the House of Representatives, and Democrats and Republicans. We have seen little of that spirit for quite some time, but at least Paulson recognizes the extent of the problem. That’s a necessary first step.

Posted by Ed Morrissey at 03:20 PM | Permalink | TrackBacks (0)

This week the Senate debates the Defense Appropriations bill, and as can be expected, the upper chamber has seen fit to lard the bill with amendments that have little to do with securing our nation but everything to do with bringing home the bacon. While Americans follow the debate, they should be aware of the programs that will get attached to our national security funding. For instance:

• Senator Daniel Inouye wants to spend $5 million for the Dwight D. Eisenhower Memorial Commission (S.4752);
• Inouye also wants $500,000 for a traveling exhibit on the military experience of World War II (S.4766); and
• Senator John Warner requests $7.5 million for the Joint Advertising, Market Research, and Studies program (S.4779).

Can anyone explain how these programs, totaling $13 million, assist in defending the nation? And bear in mind that this is just the beginning; expect more of these amendments and earmarks within defense funding, as the annual appropriations bill has little risk of veto under all but the most extreme circumstances at any time, let alone during a war.

Posted by Ed Morrissey at 03:01 PM | Permalink | TrackBacks (0)

Congress has fitfully made progress on pension reform, even considering the blowup between House and Senate Republicans over extending business tax exemptions last week. However, it looks like the promising reform measure may contain exemptions so large that one could fly a 787 Dreamliner through them – quite literally. Heritage’s David John recommends a veto on HR 2830, sending a message to Congress regarding their coddling of an industry with a long history of pension underfunding:

Some policies are so bad that they overshadow the good features of legislation. If Congress insists on including special treatment for airlines and potentially other industries in the conference report to the Pension Security and Transparency Act (H.R. 2830), then President George W. Bush should veto it. Various reports suggest that Delta and Northwest could receive up to 20 years to repay the under funding of their pension plans, while American and similar airlines could receive less than that, but still more than the seven years other sponsors of defined benefit pension plans would have to eliminate their under funding. Even more alarming are reports that defense contractors want an extra three years before the new pension funding requirements apply to them. If these reports are accurate, and this special treatment is included in the conference report, President Bush will have more than adequate justification for a veto.

Even though other parts of H.R. 2830 would strengthen pension funding and reduce the probability of a massive taxpayer bailout of the Pension Benefit Guaranty Corporation, the airline provision would open a huge loophole that politically connected industries could use to under fund their pensions. Why should auto parts companies and even auto manufacturers themselves spend billions of dollars better funding their pensions if airlines don’t have to do so? Given a precedent, they will lobby congress for similar relief using the same arguments of their industry’s importance to the national economy and the potential losses their retirees will face. Once congress has fallen for that argument once, it is extremely unlikely to be able to resist future requests for “parity”. Rather than signing such flawed legislation into law, congress should be given the opportunity to re-pass it without the offending provisions.

Airlines employ hundreds of thousands of Americans and the risk to those pensions will require immediate action. This free pass allows the industry to continue its under-the-radar flight on pensions, which hides the instability of the industry’s economic position. Postponing action does not mean that the PBGC would not have to bail out these pension funds; if history is any judge, exemptions and postponements result in less compliance, not more.

Not only does the bill contain these exemptions, putting the retirement of many Americans at risk, the Senate has played their usual pork-barrel games in putting together this legislation. What do scenic prairie roads and the cleanup of abandoned mines have to do with pension reform? To the untrained eye, nothing at all – and yet two Senators have earmarked $50 million and $5 billion for these tasks in HR 2830, respectively.

Rep. Mike Pence has voiced serious reservations about the Abandoned Mine Land Fund under any circumstances. Since 1977, AML has existed on fees charged for coal production, and these fees will expire in 2007. The fees go to cleanup of old mining sites, and also to supplement health-care premiums of miners whose companies have left the industry or gone under altogether. The new proposal starts lowering fees on coal production, increases payments to states and retirees, and forces the federal government to replace the funds – and changes AML from discretionary to mandatory spending. This adds the $5 billion to an already-bloated set of entitlement spending by the federal government, making it ever more difficult to reduce the federal budget.

If George Bush wants to send a message to Congress on earmarks, lobbyists, and entitlements, HR 2830 gives him that opportunity.

Posted by Ed Morrissey at 10:47 AM | Permalink | TrackBacks (0)