As President Bush calls on the Senate to pass its version of line-item veto legislation as a means of controlling government spending, it’s important to keep in mind just how much pork barrel spending is in relation to other important budget data points.

According to Citizens Against Government Waste, the government spent $23.7 billion on "pork-barrel" spending. No small sum, for sure.

But, $23.7 billion is but a fraction (7.5%) of the $317 billion FY2005 federal budget deficit.

At less than one percent (0.96%) of the $2.5 trillion the government spent in 2005, it’s barely recognizable.

If we look at just discretionary spending - spending that is authorized each year by congress through the budget process - we see that earmark spending (i.e. "pork") composed only 2.45% of $968 billion in spending authorized by congress in FY2005.

So, for all the jumping up-and-down and speechifying about how important the line-item veto will be in restraining spending, it’s quite clear that the president and congress are not serious about getting control of the budget deficit.

Let me also call your attention to a handy set of data produced by the CBO - a PDF of Historic Budget Data. It's a set of tables neatly summarizing the revenues and outlays of the federal government 1962-2005.

Former Chair of Council of Economic Advisors for George W. Bush Greg Mankiw writes about the line-item veto. In wondering about what economists think of the line-item veto, he quotes two papers published in the August, 1998 Journal of Public Economics:

The paper examines the claim that gubernatorial line item veto power reduces state spending. Analysis of a rich set of state budget data indicates that long run budgets are not altered by an item veto....These results suggest that state budgets have not been importantly altered as a result of the existence of the line item veto and shed doubt on the use of the line item veto to reduce federal government spending.

and

...Using data from 1865 to 1994, I show that these measures are most likely proposed by fiscal conservatives who fear the loss of power in the future; in order to protect their interests for those periods when they will be in the minority, they implement institutions such as the item veto which will limit future, liberal legislatures.

The bottom line: The line-item veto is a tactic of conservatives running scared in a vain attempt to control the growth of government.

The nonpartisan Congressional Research Service has estimated in a new report that the overall cost of the wars in Iraq and Afghanistan since Sept. 11, 2001 will top $500 billion next year (the fiscal year ends September 30). The latest addition to this spending, of course, was the $69 billion allocated in the supplemental spending bill signed into law earlier this month.

The report states that even assuming the number of troops needed in the war will be brought down to 74,000 by 2010, war costs between FY07 and FY16 could total another $371 billion. Regardless of your views on the necessity of this war, this spending has simple grown too high (long ago) to be considered "emergency" anymore. If this President and Congress are going to continue spending on war efforts for years to come, they need to budget these costs along with the rest of the appropriations, not bypass the budget system time and again to request tens of billions of dollars. Doing so only rids the process of the necessary oversight and debate that should be in place when it comes to appropriating hundreds of billions of taxpayer dollars toward a single effort.

The House of Representatives passed a bill requiring the Office of Management and Budget to ensure there is a free searchable website providing access to federal financial assistance awards. This searchable database will not cover disclosure of federal contracts, however. H.R. 5060, co-sponsored by Reps. Roy Blunt (R-MO) and Tom Davis (R-VA), passed the House on a voice vote on June 21.

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House Approves Line-Item Veto, Continues to Outsource the Job it was Elected to do

The House approved (247-172) Rep. Paul Ryan’s (R-WI) Line Item Veto bill. The bill, also referred to as "line-item rescission", would give the president the power to force Congress to vote on specific line items on bills sent to him by Congress. President Clinton signed (and used) a more potent version of line-item veto, but it was declared unconstitutional by the Supreme Court.

House Republicans claim that this bill will help narrow the budget deficit by reining in some of the pork barrel spending which has exploded since Republicans have taken over the Executive and Legislative branches. But, the fact is giving the president this power will probably do little to stem the tide of red ink. In fact, this bill may actually increase the deficit.

It’s all about blame-shifting. If Congress shifts responsibility to the president to control spending, what incentive does it have to do so when it creates spending legislations?

Yesterday the House, under suspension of the rules, passed H.R 5060 - a one-sided bill sponsored by Reps. Roy Blunt (R-MO) and Tom Davis (R-VA) that would require all domestic grants made by the federal government to be posted to a new free, searchable public website. Despite intense efforts, OMB Watch and other partners were unable to get the bill sponsors to add language requiring federal contracts data to be including in a simliar fashion - as a much better and more genuine Senate bill would require. OMB Watch is strongly supportive of the Senate bill.

Even at this point, it's unclear why Mr. Blunt and Mr. Davis believe disclosure of federal spending on grants requires transparency to the public, but federal spending on contracts does not? What exactly are they afraid will be reveiled? What are they hiding?

Disclosure, transparency, and access to government information are themes of good government properly ordered regardless of political ideology or party affiliation. Sens. Coburn and McCain - the Republican sponsors of the Senate bill realize this, as do the 43 conservative organizations who pledged their support to the Coburn effort. Federal contracts need to be disclosed to the public.

In all the talk about the deficit and Social Security one rarely hears of the heroic role that Social Security plays in masking a $170 billion in budget shortfalls.

During the opening remarks of yesterday’s markup of Sen. Gregg's (R-NH) Stop Over-Spending gambit bill, committee Republicans continually advanced the idea that not only could we not tax our way out this problem, but that curtailing entitlement spending was the only way to close the gaping hole in the budget. Gregg’s package has several proposals aimed at reducing Social Security, Medicare, and Medicaid spending. Republicans droned on and on about how much of a threat Social Security (and Medicare and Medicaid) is to the budget.

Interesting. Republicans have the situation completely backward. Social Security is just fine, thank you very much. It’s working exactly the way it was designed to work. The General fund’s (the government’s operating budget) massive deficits are the problem. Each year, Social Security loans billions of dollars to federal government. In 2005, the Social Security trust fund took in $171.8 billion more than it paid out in benefits. The trust fund loaned, through purchasing government bonds, that $171.8 to the federal government’s General fund. So, FY2005’s reported $319 billion deficit would have been $490.8 billion without Social Security performing its civic duty of buying government bonds.

We previously blogged on an effort by Sens. Coburn and Obama (and Carper and McCain) to establish a comprehesive website the public could search for information on federal financial assistance, including federal contracts and grants, by Jan. 1, 2007.

OMB Watch has circulated an endorsement letter for the legislation that currently has 32 organizations signed on. The National Taxpayers Union circulated their own endorsement letter, attracting additional support from conservative circles.

We hope the bill will be marked up in the Homeland Security and Government Affair Committee sometime in July.

UPDATE: The National Taxpayers Union has an updated version of its letter posted this afternoon with over 40 groups! Kudos to NTU and their partners!

This morning’s Senate Budget Committee’s markup session on Judd Gregg’s (R-NH) Stop Over-Spending Act of 2006 saw more Republican hand wringing over the budget deficit, but not much more. Republican senators took turns this morning bemoaning the level of federal expenditures and how that spending has crated the huge deficits we now face.

"You can't tax your way out of this problem" was the refrain sung by the supply-side choir boys this morning. Gregg’s bill is 100% aimed at controlling spending (at least that’s the Republicans’ claim) with no mention of increasing revenues through taxation. On this point the Republicans were inflexible.

But I’m glad that’s the approach supporters of this bill want to take - that raising taxes does not increase revenue - because it draws attention to the economic theory behind this argument - supply-side economics. This theory is based on the premise that taxes discourage capital investment and labor, and that when the government lowers taxes, capital investment and labor increase so much that government revenues actually increase. In other words, "tax cuts pay for themselves." It’s an interesting theory, but, empirically, wholly without merit. Even on a theoretical level it’s a bit daft. If one follows supply side theory to its logical conclusion, then one finds that a 0% tax rate results in infinite revenue.

Supply-siders, like the Republicans currently charting the government’s course to fiscal disaster, would have us believe that the only way to increase revenue is to lower taxes. It’s unfortunate for them that no credible, mainstream economist (whose name does not rhyme with "affer") seriously argues that tax cuts pay for themselves or that tax revenues increase when tax rates are decreased - not one. Even George W. Bush’s former Chairman of Council of Economic Advisors, Greg Mankiw, accedes that only "half of a capital tax cut is self-financing." It’s an unfortunate situation because as long as this crew is devising fiscal policy, we will be adrift on a sea of unending red ink.

Does welfare reform work? Do food stamps really feed the needy? Are government assistance programs really helping those in need? How effective is our social safety net?

Congress certainly doesn’t want to know. Right now, the House Appropriations Committee is considering a Bush recommendation to terminate a program designed to answer these questions.

In 1984 the Census Bureau initiated the Survey of Income and Program Participation, or SIPP. SIPP’s purpose is to “collect source and amount of income, labor force information, program participation and eligibility data, and general demographic characteristics to measure the effectiveness of existing federal, state, and local programs.” It is an invaluable tool used to determine how well (or how poorly) government assistance programs deliver on their promises.

Good governance requires good information, and since Congress isn’t interested in the former, one can conclude it’s not interested in the latter. Researchers seeking to understand low-income families and the programs designed to help them have very few places to turn when they look for data, and SIPP is unique in its depth, scope, and quality of data. In other words, it is THE place researchers (inside and outside the government) go to when they look for basic (and more complex) information about government assistance programs.

At $32 million per year, SIPP is a veritable bargain because of the quality and amount of information it supplies to policymakers. The existing FY2007 Science-State-Justice-Commerce Appropriations bill calls for just enough funds to wrap-up data collection for this year, effectively ending the program. However, Rep. José Serrano (D-NY) is proposing to add $10 million to keep the program in existence. It isn’t full funding, but it’s enough to ensure that the program continues.

UPDATE: Rep. Serrano was successful!

Tomorrow the Senate Budget Committee will be marking up the Legislative Line Item Veto Act. On June 15, the House Rules Committee approved legislation (H.R. 4890) that would give line-item veto power to President Bush, in an 8-4 party-line vote.

The Congressional Budget Office has estimated in this report that the line-item veto legislation's impact on the budget would depend on the "extent of the President's use of the new cancellation procedure and on future Congressional actions," but concludes it would not have huge fiscal implications. What the proposal would do is give the executive branch the power to force Congress to consider the president's spending priorities under fast-track procedures and allow the president to influence congressional compromise negotiations almost at any point.

After reporting yesterday that the House and Senate had yet to reach a compromise on the supplemental spending bill, they did in fact reach one last night. The $94.5 billion bill to fund the military and hurricane relief also sets the budget spending cap for the Senate at $873 billion (the Senate, remember, had orignally passed a budget resolution allocating $16 billion more in funding, mostly for human needs programs). A number of Senators wanted to boost the cap to $880 billion, but were unable to do so because of resistance from the White House and the House leadership.

The majority was able to get over the budget jam by gaining the support of a couple of Democrats, specifically Mary Landrieu (D-LA) and Daniel Inouye (D-HI). Inouye said in a statement that "I signed also because I was given assurances from [Appropriations Committee] Chairman Cochran that every effort would be made that $7 billion in advance funding would go to the Departments of Labor, and Health, and Human Services."

Now that the Senate knows the amount of money they have to work with -- even though it insufficiently funds human needs programs -- they can begin the process of setting 302(b) allocations.

We haven't commented on this issue in a while, but the criticisms of the methods used by this administration to fund the wars in Iraq and Afhganistan have not gone away. Sen. John McCain (R-AZ) is the latest to throw his hat into the ring - announcing Thursday he intends to introduce an amendment to this year's Defense Authorization bill that would force the Pentagon to request war funds through the annual budget process.

McCain is just the latest in a growning group of lawmakers - both Democrat and Republican - who are displeased with the repeated use of emergency supplemental spending bills to fund the war effort.

In 2004, McCain, Senate Armed Services Chairman John Warner (R-VA) and Defense Appropriations Subcommittee Chairman Ted Stevens (R-AK) and other Republicans joined with Democrats to pass an amendment to that years supplemental urging the administration to change its practices, but it did not require the Defense Department to alter its future request.

Apparently McCain has decided enough is enough. Kudos to him for leading the charge.

The FY 2006 emergency supplemental bill to fund war efforts in Iraq and Afghanistan was held up this afternoon because of a dispute over where the Senate should set the discretionary spending limits for FY 2007 appropriations bills. According to CQ Today, a spokeswoman for Senate Appropriations Committee Chairman Thad Cochran (R-MS) "confirmed that a resolution 'deeming' a Senate fiscal 2007 spending cap had not been resolved. She said it would be difficult to reach agreement on a final bill without a deeming resolution attached to it."

This means that Congress will likely be waiting until next week to pass their supplemental (HR 4939). Because the two chambers of Congress failed to reach agreement on a budget resolution (which includes a cap on discretionary spending), Senate appropriators want to use the supplemental to "deem" a limit for their spending bills. Without a cap they would be unable to assign specific funding allocations for each spending bill.