Cato@ Liberty: Emergency Spending

[Winehole23]

Emergency Spending


Posted by Tad DeHaven


A recent paper by Veronique de Rugy examines how policymakers use various budgeting gimmicks to increase spending and obscure liabilities. One particularly abusive mechanism is the designation of supplemental spending as an “emergency.” The emergency designation makes it easier for policymakers to skirt budgetary rules, particularly “pay-as-you-go” (PAYGO) requirements.


The following chart from the paper shows how supplemental spending, most of which was designated as “emergency,” has taken off in the last decade:



As the chart notes, much of the increase is attributable to supplemental appropriations for the wars in Iraq and Afghanistan. The Bush administration was rightly criticized by analysts across the ideological spectrum for funding the wars outside of the standard budget process.
However, with the Democrats in control, the emergency designation is now being abusively applied to domestic spending. Congressional Research Service data obtained by the office of Senator Tom Coburn (R-Okla.) finds that emergency spending has increased deficits by almost $1 trillion since the 111th Congress was seated in January 2009.


The biggest chunk came with passage of the $862 billion “emergency” stimulus bill in February 2009. The Obama administration insisted that the emergency spending legislation was necessary to jump-start the economy and keep unemployment below 8 percent. Oops.


Congress has since passed additional multi-billion dollar “emergency” bills to extend supposedly simulative activities like unemployment benefits. The latest “emergency” extender bill that is bogged down in the Senate would add another $57 billion in debt.


What is Congress allowed to designate as emergency spending? Keith Hennessey, a former economic advisor to George W. Bush, offers the best definition: “it’s whatever you can get away with labeling as an emergency.”
However, Hennessey points out that there was originally a test with a fairly high bar created by the Office of Management and Budget in 1991 under the first President Bush. According to Hennessey, all five of these conditions had to be met:

1. Necessary; (essential or vital, not merely useful or beneficial)
2. Sudden; (coming into being quickly, not building up over time)
3. Urgent; (requiring immediate action)
4. Unforeseen; and
5. Not permanent.

Hennessey says the definition was included in congressional budget resolutions during Bush II’s administration and that the president proposed codifying it in law. But that doesn’t seem to be the policy that the Bush II administration actually followed. With perhaps the exception of initial hostilities, there was nothing “unforeseen” about Bush’s “emergency” war spending in Iraq and Afghanistan. It seems that Bush’s inability to abide by his own proposal is another sad reminder that his fiscally reckless tenure helped pave the road to Obama.

[boutons_deux]

Typical Cato lies.

dubya's emergency was created by his war-for-oil, with the MIC and oilcos being the huge beneficiaries.

Magic Negro's emergency of the Banksters' Great Depression was inherited from 30 years of Repug/conservative deregulation.

MN's emergency spending was a too-small-by-$2T counter-cyclical attempt to reduce Americans' pain.

dubya's emergency spending was to grab the oil for US/UK oilcos so Russia, China, France wouldn't get it.

Cato confounds the two as similar to hide dubya's crimes. There's NO EQUIVALENCE

[Winehole23]

Typical Cato lies.

Can you highlight the lies? Please be textually specific.

dubya's emergency was created by his war-for-oil, with the MIC and oilcos being the huge beneficiaries.

They still are. Obama is a full accomplice to this "crime," if it is one.

Magic Negro's emergency of the Banksters' Great Depression was inherited from 30 years of Repug/conservative deregulation.

In what way does this excuse "off-books" treatment of war spending? I thought you were against that, once upon a time.

MN's emergency spending was a too-small-by-$2T counter-cyclical attempt to reduce Americans' pain.

Wah.

dubya's emergency spending was to grab the oil for US/UK oilcos so Russia, China, France wouldn't get it.

BTW, how'd that work out for us?

Cato confounds the two as similar to hide dubya's crimes.

They are similar. The continuity with Bush is striking on a lot of fronts. Your contortions to cover Obama's complicit, corporatist ass are funny.

[Wild Cobra]

Why are we worrying about a trillion dollars over about 8 years when Obama has topped that in one?

[Winehole23]

Why are we worrying about a trillion dollars over about 8 years when Obama has topped that in one?

That was a big problem too. A trillion dollars is a lot regardless of who borrows it, silly.

[MannyIsGod]

One line really pisses me off in this article, WH. I suspect you're going to know what it is. The point where they didn't keep it under 8% completely ignores that without the stimulus there is no way that unemployment would have been at teh same level but would have been higher. Instead of focusing on whether or not the stimulus had a role in making jobs or keeping them they focus on the fact that he didn't make his target.

Intellectual dishonesty at its finest.

[George Gervin's Afro]

I miss the days when losing 8 billion dollars in Iraq was our most pressing issue...

[Winehole23]

Instead of focusing on whether or not the stimulus had a role in making jobs or keeping them they focus on the fact that he didn't make his target.

Intellectual dishonesty at its finest.

Sure. Cato has an axe to grind. But surely it's in no way misleading or dishonest to report that Obama missed his own target.

[MannyIsGod]

It is when the target is not really the important issue. The aim of the stimulus bill was to lower unemployment. It did not do that to 8% but it lowered it. Presenting it in the way they did makes it seem like it was a failure and that is absolutely incorrect.

The failure was a purely political one in failing to meet a target they should have never set. If they could go back and do it again, I'm sure they still pass it but they don't give the 8% figure. So if it was a failure why would they go back and do it again?

[Winehole23]

It is when the target is not really the important issue. The aim of the stimulus bill was to lower unemployment. It did not do that to 8% but it lowered it. Presenting it in the way they did makes it seem like it was a failure and that is absolutely incorrect.

You disagree with their emphasis, but put that down to their integrity. That's the way WC and boutons reason: all ad hominem all the time.

Convincing people the stimulus was a success when even its proponents concede it was far too small might be a hard row to hoe. Good luck with that, Manny.

[MannyIsGod]

Well, increasing it isn't exactly the same boat as eliminating it or discounting what it did by proving a political figure with no context.

Give me a valid alternative reason for them to use the 8% figure other than wanting to paint the stimulus in an unfair light, WH and I'll consider it. You label my attack as the same as others on here but can you give me another reason outside of intellectual dishonesty to have phrased it the way they did?

[doobs]

It is when the target is not really the important issue. The aim of the stimulus bill was to lower unemployment. It did not do that to 8% but it lowered it. Presenting it in the way they did makes it seem like it was a failure and that is absolutely incorrect.

The failure was a purely political one in failing to meet a target they should have never set. If they could go back and do it again, I'm sure they still pass it but they don't give the 8% figure. So if it was a failure why would they go back and do it again?

Speaking of intellectual honesty . . . can you back any of this up?

[Winehole23]

Give me a valid alternative reason for them to use the 8% figure other than wanting to paint the stimulus in an unfair light, WH and I'll consider it.

Correspondence with reality.

Measuring Obama against his own goals is intrinsically fair. It seems to me an elementary form of accountability. Obama had an unrealistic view of how much good his stimulus could do.

How much good it has already done did was not really addressed, and I suppose this is the really root of your cavil, that Cato does not pose the case as you would.

[MannyIsGod]

Speaking of intellectual honesty . . . can you back any of this up?

I have provided links to independent studies that show that in the past. WH and I have been through this song and dance quite a few times.

[MannyIsGod]

Correspondence with reality.

A select version of reality, sure. Not the entire version

Measuring Obama against his own goals is intrinsically fair. It seems to me an elementary form of accountability. Obama had an unrealistic view of how much good his stimulus could do.

And thats a fine critique, but its not an economic one, IMO. Its a political one made with an agenda in mind. The agenda in this point is to point out how poor the spending was.

Thats fine, but I think thats easily countered when shown that the stimulus did save jobs and that without it we would have had larger unemployment figures.

When you avoid the facts that easily counter your argument I believe that to be intellectually dishonest. They were able to make the point only by ignoring this. That is of course assuming that point was to prove how bad this spending was. If the point was to prove that Obama's target goals suck, then they did a great job. But I don't see how that goal fits into the rest of the piece.

How much good it has already done did was not really addressed, and I suppose this is the really root of your cavil, that Cato does not pose the case as you would.

Of course thats the root of the issue WH. When writing a piece that is using this piece of legislation as an example of bad spending shouldn't whether or not it did any good be taken into consideration and not whether or not they hit a goal?

I'll give you an analogy. Patient looks like he needs to have his leg amputated at the thigh. Doctor performs a procedure that will try to save the leg. He tells the patient that he'll save the entire leg but once its done he's only saved everything above the ankle. Was the procedure bad or was the doctor guilty of setting bad expectations?

[Winehole23]

Anyway, the 8% thing was a minor emphasis. The focus of the OP was the emergency budgeting process. This includes the Obama stimulus. It included the wars his predecessor fought abroad. Financial prestidigitation comes in for censure @ CATO now as it did then, and stresses the rather obvious theme of continuity as b/w Obama and Bush. Meet the new boss, same as the old boss. What's so misleading about that?

[MannyIsGod]

Anyway, the 8% thing was a minor emphasis. The focus of the OP was the emergency budgeting process. This includes the Obama stimulus. It included the wars his predecessor fought abroad. Financial prestigitation comes in for censure @ CATO now as it did then, and stresses the rather obvious theme of continuity as b/w Obama and Bush. Meet the new boss, same as the old boss. What's so misleading about that?

Nothing, which is why in my OP I said I only had a problem with that part. You know how much of a hot button that is with me.