November 17, 2014

Working Around the Budget Process: Will We See More Supplemental Funding With the New Congress?

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The Obama administration recently sent a request to Congress for an additional $11.7 billion in additional funding for fiscal year 2015 to combat the Ebola virus and Islamic extremists in the Middle East. Funding the federal government’s operations outside of the regular budget process—and thus outside of limits intended to restrain spending—is a practice that has been abused in recent years. In addition to bypassing budget caps, supplemental bills can become a vehicle for excessive and haphazard appropriations because Congress often passes them in a rush.   

This week’s chart displays the annual amount of real (2014 $) federal supplemental funding since 1980. As the chart shows, supplemental spending exploded in 2000s during the administration of George W. Bush and a largely Republican-controlled Congress. The increases were driven by the GOP’s preference for skirting budget limits by funding the wars in the Middle East outside of the regular budget process. While this might have been justifiable at the outset of hostilities, the practice of treating war spending as if it were “unforeseen” quickly became dubious. 

After peaking at $207 billion in fiscal year 2009, supplemental spending has decreased in recent years. Gridlock on Capitol Hill and relatively mild hurricane seasons—with the exception of 2013’s destructive Hurricane Sandy—helped. The winding down of combat operations in Afghanistan and Iraq under the Obama administration is another factor. However, it’s worth noting that the Congressional Budget Office data used to construct this chart omits funding from the 2009 American Recovery and Reinvestment Act (AARA, a.k.a. the economic “stimulus” bill). According to the CBO’s original score of ARRA, an additional $585 billion was added to the federal coffers from FY 2009 to FY 2014 (approximately 85 percent of the funding occurred in the first two years). 

With relatively more hawkish Republicans back in control of Congress and problems in the Middle East beginning to boil, a return to the massive supplemental spending of the mid-2000s is a justifiable concern. At the very least, Congress should offset any additional supplemental spending with real budget cuts elsewhere. Taking that approach with the Obama administration’s recent supplemental request would be a good start. 

Data notes: Supplemental appropriations are net of recessions. The data does not include the 2009 American Recovery and Reinvestment Act (“stimulus”), which provided for an estimated $585 billion in budget authority from FY 2009 to FY 2014. The 1991 uptrend reflects supplemental spending for Desert Storm, the costs for which were repaid through allied burden sharing. CBO reports no supplemental spending in 2011 and 2012.

Full sources: Author’s compilations based on Congressional Budget Office, “Supplemental Appropriations in the 1970s” (1981), “Supplemental Appropriations in the 1980s” (1990), “Supplemental Appropriations in the 1990s” (2001), and “Supplemental Appropriations from 2000 to 2006” (2007).