Reliance on supplemental funding draws bipartisan attack

Lawmakers say administration’s method of paying for wars and other emergency needs makes it difficult to account for the true costs.

Sen. Tom Coburn, R-Okla., doesn't like the way the Bush administration is paying for the Iraq war. Neither does Rep. David Obey, D-Wis. Granted, the two don't agree on much. But they do agree that funding the war piecemeal and off the books -- through "emergency" supplemental spending bills -- is a phony way of doing business.

"It needs to be in the budget," said Coburn, a conservative budget hawk, in an interview about the cost of the Iraq war. Likewise, Obey, the senior Democrat on the House Appropriations Committee, said that supplemental bills are "a good idea if you want to hide the cost of the war. It's a bad idea if you want to be able to offer an accounting of what our war costs are."

The Bush administration, with Congress's cooperation, has insisted on paying for the Iraq war through supplemental spending bills. The funding is not included in the president's annual budgets or, in most cases, in the congressional budget resolutions, and it is considered separately from the regular appropriations bills. The money is not counted in the budget deficit estimates that the administration routinely releases. Nor is it counted against any budget caps that Congress has set for itself to abide by throughout the year.

Since U.S. forces invaded Iraq in March 2003, Congress has approved about $250 billion in supplemental spending for the mission. Now, with another big wartime supplemental pending -- the House signed off on a $91.9 billion bill in March, while a $106.5 billion package awaits Senate approval -- the talk is increasing on Capitol Hill about ending the shell game.

"At the outset [of the war], a justification could be made that it was an emergency," said William Hoagland, budget adviser to Senate Majority Leader Bill Frist, R-Tenn. These days, Hoagland added, "it does seem that this is not something that is unexpected."

But if Congress and the White House actually put the Iraq war properly on the federal books, other budget priorities -- not to mention local pork projects -- would feel the squeeze. That explains why, particularly in an election year, the game is likely to continue.

The status quo is fine with the Bush administration. Although the Congressional Research Service recently estimated that Iraq war costs would come in at $9.8 billion a month beginning in fiscal 2006, administration officials continue to insist on paying for the war in small chunks. They say that war is unpredictable and can't be budgeted a year in advance.

"The traditional annual federal budget takes up to 12 months to formulate, it takes another eight or 12 months to pass Congress, and then it takes another 12 months to execute -- a total of something like two and a half to three years," Defense Secretary Donald Rumsfeld told the Senate Appropriations Committee in March. "Needless to say, in war, circumstances on the ground change quickly. The enemy has a brain -- is continuously changing and adapting their tactics."

Despite Rumsfeld's entreaties, a growing number of lawmakers -- Republicans as well as Democrats -- are raising objections to war-by-supplemental. "Last year, we were pretty clear, on both sides of the aisle, in this and the other body, that we think supplemental funding needs to stop," said Rep. Ike Skelton, D-Mo., the ranking member on the House Armed Services Committee, at a February hearing on the defense budget. "Congress and the American people must be able to see the full cost of the war, and it must be done through the regular process, not through supplementals."

For his part, Senate Budget Committee Chairman Judd Gregg, R-N.H., fumed in a March interview with National Journal: "The administration is running two sets of books here.... There are two sets of books, and one is not subject to the budget controls."

Appropriators, however, have used supplemental spending bills to their advantage, and they defend the current practice of separating the war money. "It gives people a picture of what the war actually costs," House Appropriations Committee Chairman Jerry Lewis, R-Calif., told NJ.

Experts have found that the Bush administration's supplemental spending requests have been designating an increasing number of Pentagon programs as "emergencies" -- thus freeing them from budget restraints -- when in reality the programs are needed for day-to-day defense activities.

According to the CRS, the Pentagon requested $782 million for research and development in the supplemental now pending before Congress. "It is unusual for [R&D] funds to be provided in emergency supplementals, because of the long-term nature of the work," the CRS said, adding that the administration failed to provide sufficient background details to justify calling the funds "emergency" spending.

On the Hill, appropriators have gone along -- and then some -- with the scheme of attaching routine defense spending to supplemental spending bills in recent years. The tactic takes some of the pressure off appropriators, allowing them to dish out more money to nondefense programs while appearing to stay within tight budget caps.

"The open purse on the defense side does provide more flexibility on the nondefense side," Hoagland said. "When you're spending $92 billion for the war on terrorism and [Hurricane] Katrina, what's another $3 or $4 billion?"

In other words, supplementals have become something of a safety valve for appropriators. "There literally isn't a month that the appropriators aren't moving defense money," said James Dyer, a former Republican staff director of the House Appropriations Committee who is now a lobbyist at Clark and Weinstock. "It's an opportunity for creative people, and nobody's more creative than an appropriator."

Numerous camps on the Hill are putting their feet down over the practice and are vowing to examine supplemental bills more carefully. Members of the conservative House Republican Study Committee have asked the Office of Management and Budget to provide detailed justification for all projects and programs contained in the White House's supplemental spending requests.

Nor do members of authorizing committees like the idea that funding for Pentagon projects gets sneaked past them in supplemental bills. "It goes around the authorizing process," said Sen. John McCain, R-Ariz., a senior member of the Senate Armed Services Committee.

Meanwhile, budgeteers -- led by Gregg and House Budget Committee Chairman Jim Nussle, R-Iowa -- are struggling with ways to restrain both the size of supplementals and their ability to carry nonemergency spending. The Senate-passed budget resolution limits the use of emergency spending designations to $90 billion for fiscal 2007. And the budget resolution pending in the House establishes a $50 billion placeholder for war costs, while also essentially capping nondefense emergency spending at $4.3 billion.

That emergency spending cap drew the ire of Lewis and his 66-member Appropriations Committee because, they complained, it would tie their hands. The appropriators' opposition -- combined with potential defections by other unhappy GOP moderates and conservatives -- forced House Republican leaders to postpone a floor vote on the budget resolution before the Easter recess.

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