AS THE HOUSE AND SENATE hammered out the final details of the more than $ 13 billion “emergency” spending bill for Kosovo last week, the real issue was never whether this extra military funding would be approved, but how it would be paid for.
Congress and the president made no secret of how they would finance Kosovo: by raiding the Social Security surplus (something both parties pledged not to do only last month) and shrinking an already minuscule tax cut. “There’s no way we can find offsets for the Kosovo bill,” insisted House appropriator Sonny Callahan, the Alabama Republican. “It’s got to come out of the surplus.”
Why? So readily dismissing spending restraint as an option is bad politics and even worse policy for the GOP. You would think a Republican Congress could find $ 12 billion in savings out of a $ 1.72 trillion federal budget: It amounts to cutting about 7 cents from every $ 1,000 of spending. Not so. Oklahoma Republican Tom Coburn could only muster 101 votes in the House for his amendment to offset the emergency spending with cuts elsewhere in the budget.
In fact, the defense bills could have been paid without imperiling the promised tax cut, raiding Social Security, or gutting popular domestic programs. To understand how, we need to examine more closely the past decade of budgetary realities in Washington.
Since the end of the Cold War, the Pentagon budget has shrunk in real terms in every fiscal year except one — 1991, when the Persian Gulf War temporarily inflated military spending. The result: Today, only 16 cents of every dollar spent in Washington goes for defense, a smaller share than at any previous time in American history.
Throughout the 1990s, Congress and the White House have engaged in a giant fiscal scam. They have systematically cannibalized the defense budget to finance a sustained but stealthy expansion of social programs. During the Clinton years alone, Congress and the White House have ransacked the military budget by a cumulative $ 110 billion and re-routed the money into education programs, government run health care, pork-barrel highway projects, sugar subsidies, and peanut butter research. This year may well be the first time in American history in which we spend more money on domestic discretionary programs than on defense. And of course, the combined expenditures for entitlements like Social Security, Medicare, and welfare are already two to three times larger than the defense budget.
The figures are startling: For every $ 1 in defense cutbacks under Clinton’s presidency, domestic discretionary programs have received a $ 4 windfall. Actually, it’s worse than that. Congress has stashed away some $ 5 billion to $ 10 billion of social spending in the Defense Department’s budget, and when that’s shifted from the defense column to the domestic discretionary column, the windfall is closer to $ 5 in new domestic discretionary spending for every dollar of defense cuts.
The obvious conclusion to be drawn is that if the president and Congress wanted to approve $ 12 billion in extra Pentagon funding, fine. But they should have reversed the shortsighted — and even reckless — budget practices of the 1990s. For 10 years, the domestic spending build-up has been paid for by defense cut-backs; it should be payback time.
There is certainly no shortage of domestic agencies, bureaus, projects, and programs for the Republican Congress to target for savings. Several dozen new social programs have been created during Clinton’s presidency: Americorps, Goals 2000, the Direct Student Loan Program, school to work, the 100,000 teachers, the 100,000 policemen, several new healthcare entitlements, and on and on. Since few of these programs actually work, they all belong at the top of any program-termination list. Meanwhile, even the few programs canceled by the Republicans in their first budget are starting to rise from the grave. Honey bee subsidies, the Interstate Commerce Commission, and Wool and Mohair payments all were reinvented by the GOP in last year’s $ 500 billion omnibus spending bill.
So how hard would it have been for Congress to fund the Kosovo war entirely with domestic cut-backs? Not very. Each additional dollar for defense that the Republicans demanded could have been paid for by a 4 cent sliver out of domestic discretionary programs. That would have taken back only a small fraction of the 30 percent increase in domestic discretionary programs since 1993. Alternatively, if Congress had ended corporate subsidies — farm payments to giant agribusinesses, Department of Commerce payments to Democratic National Committee corporate contributors, Export-Import Bank insurance to the Fortune 500, and so on — it would have saved enough to pay for Kosovo five times over.
Finally, some of the savings could have come from within the Defense Department itself. After all, despite the recent cutbacks, we’re still spending $ 280 billion a year on defense. Yet fighting even a minor war, like that over Kosovo, somehow has to cost extra. Which begs the question: What are we buying with the other $ 280 billion?
Clearly we should spend as much on national defense as we need to protect U.S. national security interests. The problem today is that an ever declining share of the money actually appropriated to the military is spent on activities that are even tangentially related to preserving our national security.
Over the last few years, the Pentagon budget has become a convenient hideout for social spending and parochial projects, including at least $ 4 billion in corporate welfare, much of it for weapons systems and research the Pentagon doesn’t want. In recent years, the nonpartisan General Accounting Office has identified more than $ 5 billion of “non-defense” pork spending in the Pentagon budget, including $ 3 million for urban youth programs, $ 9 million for the World Cup Soccer tournament and Ted Turner’s Goodwill Games, $ 57 million for AIDS research, $ 20 million for cancer research, and $ 10 million for U.S.-Japan management training. In the last Congress, Senate Appropriations Committee chairman Ted Stevens of Alaska actually paid for the construction of day care centers and a car wash in Fair-banks, Alaska, with military funds. No wonder we’re running out of missiles.
Republicans cannot continue to inflate the federal budget year after year with tens of billions in “emergency” spending without offsetting spending cuts. It is instructive to point out that last October the Republicans’ political fortunes began to sink almost the day after the GOP approved the bloated $ 500 billion omnibus spending bill. Conservatives were so disgusted with Republicans’ acting like Robert Byrd Democrats that they stayed home on Election Day.
If Republicans don’t start imposing some fiscal discipline on Capitol Hill, one casualty of the Kosovo War will be the GOP majorities in Congress.
Stephen Moore is director of fiscal policy studies at the Cato Institute. Scott Hodge is senior fellow for tax and budget policy at the Citizens for a Sound Economy Foundation.
