Creative Tactics Swell Spending as U.S. Budget Deadline Nears

The nation’s defense contractors will have to wait an extra week to get paid this year. Routine maintenance of Pentagon facilities will be considered “emergency” spending. To keep from making cuts in education and health programs, lawmakers plan to borrow $15 billion from next year’s budget.

As the GOP-controlled Congress struggles to complete work on the budget by its deadline next Thursday, it is relying to an unprecedented degree on creative accounting tactics aimed at boosting spending beyond what its rules now allow. All told, congressional budgeteers have manufactured an additional $46 billion to spend this year on defense, farms, education and other programs.

The extra money has given congressional Republicans more confidence as they prepare for another showdown with President Clinton. Nobody is predicting a government shutdown when a temporary spending resolution expires Thursday, but GOP leaders hope they have found the funds necessary to keep their members in line as they enter final negotiations with the president over several contentious spending bills.

Still, the situation underscores the immense difficulty of writing budget discipline into law--and how easy it is for Congress and the president to circumvent what were supposed to be ironclad limits designed to keep government spending in check. Under the 1997 balanced budget agreement, the federal government was supposed to spend only $592 billion on the 13 spending bills funding government’s daily operations this year, but Congress is on target to spend roughly $640 billion.

Critics Call It ‘Gimmickry’

Clinton and Democrats have derided the Republican budget tactics as “reckless partisanship” and a “magic show,” but they have colluded in the mushrooming use of “gimmickry,” as critics call it. Indeed, independent budget experts on both the right and left said the Congress is masking the true size of its spending binge and could create more serious budget problems when the obligations for the delayed spending comes due. The actions also call into question the prospect that the government will realize soaring surplus projections, which depend heavily on Congress ratcheting down on spending.

“To the extent this approach is effective, it creates a bigger hole that has to be filled the following year,” said Robert D. Reischauer of the Brookings Institution, a former director of the Congressional Budget Office. “In a sense this is shortsighted.”

Stephen Moore, a budget authority with the libertarian Cato Institute, said the congressional budget strategy “makes the public believe the Republicans are using the same tactics the big-spending Democrats used when they ran the place.”

“Most conservatives respond to these ‘blue smoke and mirror’ tactics with a sense of rage and betrayal,” Moore added.

Republican leaders say their approach is essential to completing work on spending bills without breaking their pledge not to dip into surpluses generated by Social Security payroll taxes. They dismiss the charges that they are engaging in gimmickry; they say that money is simply being credited to the year in which it will be spent. They also said they are struggling to cope with unexpected demands from wars, disasters and other problems.

“There’s no smoke and mirrors in our budget at all,” said Senate Appropriations Committee Chairman Ted Stevens (R-Alaska), one of the architects of the GOP strategy.

Whatever the merits of the approach, the process of finishing up the 13 appropriations bills appears to be lurching to a conclusion. Only five of the bills have been completed and signed into law, but congressional leaders say the rest of the measures should be on the president’s desk by Thursday. While Clinton has threatened to veto five of the bills, Republicans are clearly planning to blame the president for drawing out the process and “raiding” Social Security if he forces them to keep working beyond the deadline.

“It is clear that the president wants to spend more money,” House Speaker J. Dennis Hastert (R-Ill.), said Friday.

In the big picture, Republicans and Democrats are not far apart on the overall level of spending, perhaps about $20 billion--or a small fraction of the $167 billion surplus projected for the current fiscal year. But much of that surplus comes from Social Security, and the Republicans and Clinton have promised not to touch those funds. Hence, lawmakers have found themselves in a spending straitjacket of sorts--and in desperate need of creative accounting.