Does Congress Really Care About the Deficit? Not When It Comes to Vets and Highways.
Next time a lawmaker starts to pontificate about the desperate need to reduce the budget deficit, remind him (or her) about what Congress did just before it left town last week. It passed two bills that are extremely important, but didn’t pay for either of them. And they are likely to add tens of billions of dollars to the flow of red ink over the next decades.
The first was the Veterans Access to Care Act. There is broad agreement across the political spectrum that vets are struggling to get care through the VA system. And, in a rare show of bipartisanship, Congress passed a measure in July that promises to improve vets’ access to health care. But of the law’s $16 billion in new spending, only about $6 billion is paid for. Thus, it would add $10 billion to the deficit over the next 10 years, according to official congressional scoring. In reality, it is very likely to add much more than that.
The measure includes a number of fixes, including more money for the VA to hire extra doctors and nurses and making it easier for some vets to get care outside of the VA system (paid for by the VA). But many of those fixes are temporary—officially, at least. Of the $13 billion in new spending to increase access to care, the Congressional Budget Office projects more than $10 billion will occur in 2014-2016 and all of it will be spent before 2020.
Lawmakers didn’t fully pay for even this limited bill because they deemed it an “emergency,” and thus not subject to the usual congressional requirement that new spending be offset with cuts in other programs or by new taxes.
But the veterans’ health problem is not an emergency in the same sense as, say, an unusually bad hurricane or fire season. Those costs are unexpected and transitory. The VA problem is neither.
Yes, making health care more accessible to vets is an urgent issue. But it is also a permanent and completely predictable one. Indeed, we know it will only get worse as veterans age.
Congress’ attitude towards emergencies is, shall we say, flexible. Congress approved $60 billion without offsets for victims of Hurricane Katrina within two weeks of it hitting the Gulf Coast. Yet Hurricane Sandy assistance was delayed for months while lawmakers argued about how to pay for it. And in 2010, Congress treated Census funding as an emergency, though the nation has been doing the count every 10 years for two centuries.
Just before the Senate passed the veterans measure, Senator Jeff Sessions (R-AL) objected to this budget gimmick. But few colleagues wanted to be accused of opposing veteran’s healthcare. Only 18 senators backed him.
Even sponsors of the measure concede it is only a temporary fix. Vastly more dollars will be needed when Congress returns to this problem, as it inevitably will, in just a couple of years. It is hard to imagine, for instance, that for lack of new funding, Congress will lay off those docs and nurses who are hired under the new law.
And the costs will skyrocket. Unsurprisingly, CBO figures that when vets have better access to health care, they will use more of it. And it estimates that the Senate version of the measure (somewhat more ambitious than the final bill) would eventually increase federal costs by $50 billion-a-year.
That, of course, will have to be addressed in some future legislation. And, perhaps, it will be paid for. But I wouldn’t bet on it.
Then, there is the infamous Highway Trust Fund fix. That sad story is well known to regular Tax Vox readers. Unable to raise the gas tax, or broadly reform the way road and transit construction is financed, Congress agreed to a temporary funding patch that will last only to next spring.
And where did it get the money? It let businesses delay their contributions to their worker’s pensions.
This is just as nutty as it sounds. And while, according to congressional scorekeeping, this “pension-smoothing” provision will pay for most of those construction costs over the next 9 months, it will lose a bundle over the long run.
Plus, of course, Congress still has no idea how it will pay to keep the highway fund solvent after 9 months.
Keep all this in mind early next spring, when Congress and the President are likely to have another one of their self-generated fiscal crises. You’ll see lots of hand wringing about the long-term deficit and hear wailing about what it means for our children. But never forget: The deficit is an issue lawmakers care deeply about, except when they don’t.