Power of the Purse
by Thomas R. Eddlem

Two years ago, the first Republican Congress in nearly four decades began with an ambitious budget plan. GOP congressmen pledged to abolish three Cabinet departments -- Energy, Commerce, and Education. They promised to zero out more than a dozen agencies and kill several hundred federal programs, boards, commissions, and authorities, including AmeriCorps, National Endowment for the Arts, and Goals 2000.

Two years later, the three Cabinet agencies continue to function, enjoying budgets on a par with what earlier Democratic Congresses funded. AmeriCorps continues to pay "volunteers" with federal funds approved by Congress. The National Endowment for the Arts and the National Endowment for the Humanities each have nearly $100 million in federal largesse to dispense this year. And in fiscal 1997, funds for Goals 2000 increased by 40 percent to $491 million. All in all, the vast majority of the major programs slated for oblivion two years ago continue unmolested.

Clinton-Gingrich Tag Team

What happened to the "Republican Revolution"? The answer: Newt Gingrich and Bill Clinton. The whole budget battle between Congress and the White House was a cleverly choreographed charade. The show began with a presidential veto of a number of annual appropriations bills. Newt Gingrich played along, declaring in November 1995, "We are prepared to fight until December." When the federal government did shut down briefly, the major media intimated that the Republican Congress was not doing its duty to negotiate a budget deal, but was stubbornly insisting on shutting down the federal government. In reality, it was the President's actions that shut down the government.

Congress, of course, is charged by the Constitution with initiating all spending bills. If it doesn't want money to be spent on a program or agency, inaction ends funding. President Clinton used his veto power to shut down the government in order to spur the appropriation of new revenue. But the President is in no position to tell Congress to begin spending programs, if Congress follows the Constitution. House leaders could simply have stated:

The Constitution requires all spending bills to be initiated in Congress and we have sent a bill containing all the spending we can justify. The President will therefore not get the spending he wants. If the President chooses to shut down the entire government in order to blackmail Congress, he may create a lot of unnecessary pain and suffering for the American people, but he will not bully Congress into shirking its constitutional duty. If the President wants more money, he should do the responsible thing and sign our bill to keep the government open.

But instead of taking a winning public relations tactic by characterizing the Clinton Administration's vetoes as mere temper tantrums and bullying that are hurting the nation, the House Republican leadership seemed to be implying that they had shut down the government and would do so until President Clinton cried "uncle." As a result, the American people blamed the GOP for the government shutdowns and the Republicans hit rock bottom in opinion polls.

The February 2, 1996 Kiplinger Washington Letter observed that Republicans in Congress didn't need to make a deal with President Clinton to cut federal spending: "Republicans won't need a budget deal to squeeze federal spending. That's apparent in the austere stop-gap bills passed to keep government open. The longer the impasse, the more agencies will be cut to the bone...." Moreover, after a second government shutdown, the GOP congressmen began to explain the real reason for the crisis to their constituents, and Republican poll numbers improved. Faced with the American people becoming aware of the appalling duplicity of the Clinton blackmail scheme, a losing hand in the budget battle, and presidential primaries just around the corner, the President would have been forced to capitulate sooner or later.

The only way the Republicans could have lost at that point was for the GOP leadership to cave in to Clinton demands on spending issues -- and that is exactly what Newt Gingrich engineered. Twenty-one days into the second shutdown, Gingrich announced to his Republican colleagues his plan to reopen the government, warning in the stormy meeting that he planned to "keep a list" of those who did not follow his plan to come to terms with the Clinton Administration on the budget. After several consecutive stopgap bills which continued federal funding of key Clinton Administration priorities, Gingrich inked a budget deal with Clinton. The final budget agreement, signed in April 1996, was a complete Republican capitulation. The glee expressed by President Clinton in his victory speech on April 26th helps to demonstrate the sellout of fiscal conservatism:

We have a bill we can all be proud of.... The Congress ... sought to kill AmeriCorps, the National Service program. This bill retains it, as I had insisted, funding the Corporation for National and Community Service at $402 million.... The House sought to terminate Goals 2000.... This bill restores funding for Goals 2000. In another bill I vetoed, the Congress sought to end the Community Oriented Policing Services (COPS).... That program is continued.... [T]he Congress proposed to end the Department of Commerce's Advanced Technology Program (ATP).... Adequate funding is provided for that program.... Other programs or agencies that one or both houses sought to end, but which this bill restores, include the Community Development Financial Institutions program, the Summer Youth jobs program, and the Council on Environmental Quality. Very importantly, the bill provides $22.8 billion for the Education Department.... The bill also restores other programs close to, or above, last year's levels that at least one house of Congress had sought to cut deeply. These include Head Start, Department of Labor worker protection programs, and payments to international organizations for peacekeeping and other programs.

Gingrich's deal with Clinton was nothing short of a disaster for the Republican Party re-election effort as well. As Rich Lowery of National Review observed, "The final irony was that the poll numbers (all the Administration seems to care about) were beginning to turn against Clinton in both shutdowns just as the Republicans called it quits; the GOP got all of the pain and none of the gain."

While the Republican cave-in represents a crucial failure for the 104th Congress, a budget battle can be picked up by the 105th if the Republicans can agree in advance not to capitulate. The battle must be waged this fall, in fiscal 1998 (which begins October 1, 1997), and not postponed until the election year when President Clinton can successfully pull off another short-term budget blackmail bluff. The list of government agencies the Republican leadership of the last Congress pledged to abolish should be the starting point for the axe. Added to that should be the $11 billion annual foreign aid giveaway. But even if the current complexion of Congress makes it impractical to completely eliminate foreign aid, Congress can continue to chip away at the diminishing annual giveaway. A good place to start cutting is aid to Israel and Egypt, where levels have not been cut one cent while overall foreign aid has been cut by nearly 30 percent over the last four years. Because nearly half of all foreign aid can be traced to Jimmy Carter's Camp David accords, in the form of assistance to Israel ($3.0 billion per year) and Egypt ($2.1 billion per year), additional cuts in foreign aid programs cannot proceed in any meaningful manner without including cuts in aid to Israel and Egypt.

A Balanced Budget

Congress must also work aggressively toward a genuine balanced budget -- one which is balanced within the two-year term to which the representatives are elected. Congress always has a plan to balance the budget in the future, if only the taxpayers will keep re-electing the incumbent. In the 1980s, Congress had Gramm-Rudman. Then it was Gramm-Rudman-Hollings. Now it is the seven-year plans, which postpone most of the serious cuts until after the year 2000 (the end of the 106th Congress). The Republican plan postpones four-fifths of the projected budget cuts until after the year 2000. During the last election cycle, many candidates pledged to vote for a balanced budget by 2002 (the 107th Congress). The candidates should have been told by voters: "Fine, we'll be sure to vote for you then." The Republicans of 1996 should insist upon securing a balanced budget by the time they face re-election; it is their duty.

Most importantly, the House needs to reassert its primacy over funding measures. The Mexican peso bailout of 1995 constituted the first brazen act by a President to spend billions of taxpayer dollars without congressional approval. President Clinton took that bold step because he knew he couldn't get congressional approval. Congress should have stepped in at once. Absent the power of the federal purse, Congress is nothing more than an impotent debating society. Gingrich's complicity in the Clinton Mexican bailout only served as a precedent to justify future incidents of misappropriation of taxpayer funds.

One such incident was the maneuver to prevent a default on federal debt obligations. The federal government shutdown resulting from the budget impasse later on in 1995 created concern that the federal government would default on securities that came due in November of that year. Treasury Secretary Robert Rubin repeatedly warned that unless Congress raised the federal debt limit, the federal government would go into default. But while he was publicly shrieking about the coming financial apocalypse, he plotted in private to circumvent Congress by tapping government pension funds. The maneuver was eventually implemented by the Clinton Administration in order to avoid a default.

If the President may appropriate taxpayer funds without congressional approval as long as Congress does not object, the President becomes a super-legislator, able to spend as much money as he wants on anything he wants unless a veto-proof two-thirds majority of both houses of Congress acts affirmatively to counter the spending. And if Congress concedes this much of its power of the purse, what principle is left to prevent the President from subsequently reversing a congressional act? The path of surrendering the power of the purse to the Executive is the path to dictatorship. Future usurpations of the funding mechanism of Congress must be thwarted by a serious consideration of impeachment. And future budget measures should in general be more tightly written, with less room for presidential "slush funds" which give the President an excuse (however illegitimate) to use the funds for purposes other than those approved by Congress.

Following the poor leadership on budget matters in the 104th Congress, the 105th now faces the choice of learning from these mistakes and making the needed adjustments, or taking a gun-shy attitude and throwing in the towel to the Clinton Administration.

Source:   January 6, 1997 issue of The New American