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ANALYSIS

Massive infusion of spending ends era of restraint for Pentagon, federal agencies

By HEATHER LONG AND JEFFREY STEIN | The Washington Post | Published: February 9, 2018

WASHINGTON — The massive infusion of cash approved by Congress early Friday morning is slated to lift the budgets of federal agencies and the Pentagon far beyond what they were at the start of the Trump presidency, ending the era of restraint that had gripped the federal government for most of this decade.

The deal, signed into law by President Donald Trump, will pump more than $500 billion over two years into domestic agencies and the Pentagon, the biggest increase in spending in almost a decade. It ends months of budget squabbles and provides far greater certainty for the government officials responsible for the military, disaster relief and the nation's domestic agencies.

Pentagon leaders welcomed a 10 percent jump in funding to $700 billion this year and $716 billion the following year, which they will help arrest what they called an alarming decline in the country's military readiness. Domestic agencies looked forward to a roughly 10 percent jump in nondefense spending — to $591 billion this year and $605 billion next — that will be used to buttress local health programs, veterans' hospitals, college affordability programs and child care for poor children.

The deal also addresses several urgent priorities, including better funding to manage the opioid crisis and aid Americans affected by last year's major natural disasters.

The deal represents a sharp break from the era of austerity and government restraint, which began roughly six years ago when Republicans forced President Barack Obama to accept rigid budget caps that limited federal spending for a decade.

Republicans' decision Friday, supported by Democrats, to effectively bust those caps, with few offsets, suggests that the attitude toward government spending in Washington has fundamentally changed and agencies will be more able to address their priorities.

"What we have been doing is lurching from one big crisis to another, and that's very unsettling for agency heads and recipients of federal money and anyone trying to plan around the government," said Alice Rivlin, the former director of the Office of Management and Budget in the Clinton administration. "It's good not to have that lurching, at least for a little while."

Still, some argued that the respite from budget crises would prove temporary given lawmakers' decision to push up the deficit to pass the budget deal.

The Committee for a Responsible Federal Budget projects that the United States will have a $1 trillion budget deficit by next year and continue with that number for years to come. It is unusual for the government to have such a high deficit during a time of economic prosperity.

"We couldn't be enacting a stupider policy. There is no economic justification for this," said Maya MacGuineas, president of CRFB. "It's fiscally dangerous, but politicians are willing to trade their favorite priorities for someone else's and put it all on a credit card."

Military leaders had complained for years that the spending caps were making it more difficult for the Pentagon to upgrade its technology and equipment to meet 21st century demands, while tight budgets forced the military to slash essential tasks such as pilot training or ship maintenance.

"No enemy in the field has done more to harm the readiness of the U.S. military than the combination of" budget caps and temporary funding resolutions, Defense Secretary Jim Mattis said earlier this week.

Analysts said the deal is likely to alleviate the military's concerns.

"The defense hawks got everything they wanted in this deal," said Todd Harrison, a budget expert at the Center for Strategic and International Studies. "This certainly gives the Defense Department all of the funding it could possibly expect."

But there's concern that the largesse could lead to a lack of fiscal discipline within the military's ranks. The Pentagon, for example, reports it still has 22 percent excess base capacity that should be eliminated. The extra money may also reduce pressure to cut weapons systems that some analysts say are no longer suited to today's threats, such as the U2 high-altitude surveillance plane.

Ivan Eland, a former Government Accountability Office analyst who monitored security spending during the Reagan era, warns that defense contractors will be salivating over the new funds and some of it could be wasted.

"When you try to spend money that fast, you just end up wasting it," said Ivan Eland, author of "Eleven Presidents: Promises vs. Results in Achieving Limited Government." "People with the most political power get the most money."

Aside from the military, the package delivers big chunks of money to aid those stricken by natural disasters, health-care programs that Congress had left unfunded and a slew of other government priorities that range from $1.1 billion for dairy farmers to $20 billion in new infrastructure projects.

"On the domestic side, you have money from everything to child health to domestic spending and infrastructure to cancer research that has been sorely needed and extremely lacking," said Stanley Collender, a longtime Washington budget expert.

About $16 billion of nearly $90 billion in disaster relief money will go to Puerto Rico, as swaths of the island continue to deal with power outages and a lack of safe drinking water, said Ramón Luis Nieves, a former member of the Puerto Rico Senate who has lobbied Congress for more funding for the island.

The allocation is still short of the $94 billion that Puerto Rico Gov. Ricardo Rosselló said is necessary to help the island recover from Hurricane Maria.

"I hope this is just the beginning of trying to comply with the governor's request," Luis Nieves said.

The spending deal does not fill in all the details of where the money will go. Congressional appropriators still have to take up the hard task of deciding where to direct money, and they are expected to come up with a more detailed budget that Congress can approve by March.

"There are a ton of unmet needs out there because of federal cuts: job training, low-income assistance programs, help for students with Pell Grants, child care assistance," said David Reich, a senior fellow of the Center on Budget and Policy Priorities, a left-leaning think tank. "This is the opportunity to make some progress with those needs. Money here will help."

Meeting a key Democratic priority, the agreement funnels billions of dollars for several key health-care priorities — funding community health centers for two years, extending the Children's Health Insurance Program for an additional four years (on top of six years that had been previously authorized), and staving off several cuts to Medicare and Medicaid that would have been triggered had the caps not been lifted.

"All I can say is the obvious: It's great to get the funding for these finally nailed down," said Tim Jost, a health-care expert at the Washington and Lee University School of Law. "It finally brings stability to some very important health-care programs." About $7 billion will be spent on the community health centers, which provided care to 26.5 million Americans in 2016.

Still uncertain is the fate of more than 107,000 former and current coal miners, mostly in Appalachia and the Midwest, whose pensions have been at risk of expiring for several years amid mass closures in mining. The miners say the federal government promised to insure their pensions and health care in the wake of strikes in the 1940s. The deal calls on Congress to form a bipartisan committee to issue a "special report" on how to address the problem, but offers no money to them.

"This is a good step forward, but it's not what we'd hoped for," said Phil Smith, spokesman for the United Mine Workers of America.

To some conservatives and fiscal hawks, the new spending agreements represent a setback at a time when Republicans control the federal government. "Democrats seem to have gotten more of what they wanted than Republicans did," said Justin Bogey, senior policy analyst for fiscal affairs at the conservative Heritage Foundation. "This is significantly higher than Obama's budget for domestic spending."

In the end, enough lawmakers bought into the argument that an imperfect deal was better than none at all.

"You get some things you like; you give the other side things they like," House Speaker Paul Ryan, R-Wis., said. "That's what bipartisan compromise is all about."
 

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