Bill Summary: H.R. 2266, as co-opted and amended in the House, appropriates an additional $36.5 billion for federal disaster aid, over and above the regular budget (supplemental appropriations). That total includes $18.67 billion for the Federal Emergency Management Agency’s (FEMA) disaster relief fund, $16 billion in debt forgiveness for the National Flood Insurance Program, $1.27 billion in supplemental nutrition assistance money for Puerto Rican residents and $576.5 million in wildfire suppression.The measure also included the original, relatively minor measure by Rep. John Conyers (D-MI-13) to increase bankruptcy judges.

Analysis: This was the second installment in federal disaster aid to address the impact of recent natural disasters (the Senate approved the first $15.25 billion installment on 9-7-17, Senate Vote 192). Here, the House leadership used the political popularity of such aid to push thru additional non-emergency spending, such as $16 billion in debt forgiveness for the National Flood Insurance Program.

Aside from the fact that federal disaster aid is unconstitutional (see our analysis of Senate Vote 192), this measure made no effort to scale back less urgent or even reckless spending in other areas to address the recent natural disasters. The measure’s fiscal irresponsibility can be seen in the fact that no Democrat opposed the measure in either the House or the Senate.

In an immediately prior vote (Senate Vote 247), the Senate waived all budgetary discipline regarding the spending in H.R. 2266.

During the October 24th Senate “debate” on the measure, Senator Rand Paul was allowed time to register his opposition (contrary to normal procedure when the leadership of both parties are in agreement).   His assessment of the lack of spending restraint in Washington deserves serious attention. (Note, however, that Senator Paul failed to make the argument that much of what the federal government does is unconstitutional. For the future of our nation, Congress must be forced to respect the Constitution, not merely spend up to what the federal government receives in taxes.)

From the Congressional Record (10-24-17):

Senator Rand Paul (R-KY) (Emphasis is added):

“Mr. President, we currently have a $20 trillion debt.   Now, we might ask ourselves, whose fault is it, Republicans or Democrats? The easy answer is both. Both parties are equally responsible, equally culpable, and equally guilty of ignoring the debt, ignoring the spending problem, and really I think allowing our country to rot from the inside out.   This year, the deficit will be $700 billion, for just 1 year for our country, $700 billion. We borrow about $1 million a minute. Under George W. Bush, the debt went from $5 trillion to $10 trillion. Under President Obama, it went from $10 trillion to $20 trillion. It is doubling under Republicans and Democrats.

“Right now, we are in the midst of another spending frenzy. People will say: Well, we are spending the money for something good. We are going to help those in Puerto Rico, in Texas, and in Florida. My point is, if we are going to spend money to help someone in need, maybe we should take it from another area of spending that is less in need. I think that just simply borrowing it — even for something you can argue is compassionate — is really foolhardy and may make us weaker as a nation.

“Admiral Mullen put it this way. He said: The No. 1 threat to our national security is our debt. In fact, most people who follow world politics — while we do have problems around the world — don’t really see us being invaded anytime soon by an army or an armada, but people do see the burden of debt.

“So what we have before us is a bill, $36 billion, much of it going to Puerto Rico, Texas, and Florida. My request is very simple: We should pay for it.   About 1 month ago, we had $15 billion for the same purposes. We are set, in all likelihood, to have over $100 billion spent on these hurricanes. I simply ask that we take it from some spending item that seems to be less pressing. We could go through a list of hundreds and hundreds of items….

“I think we ought to think twice about sending money to countries that burn our flag, sending money to countries that persecute Christians, sending money to countries that, frankly, don’t even like us.   We spend about $30 billion helping other countries. If you were going to help your neighbor, if your neighbor was without food, would you first feed your children, and if you have a little money left over, help the children next door? That is what most people would do.

“If you are going to give money to your church or synagogue, would you go to the bank and borrow the money to give to somebody? Would that be compassionate or foolhardy? Is it compassionate to borrow money to give it to someone else?

“People here will say they have great compassion, and they want to help the people of Puerto Rico and the people of Texas and the people of Florida, but notice they have great compassion with someone else’s money. Ask them if they are giving any money to Puerto Rico. Ask them if they are giving money to Texas. Ask them what they are doing to help their fellow man. You will find often it is easy to be compassionate with somebody else’s money, but it is not only that. It is not only compassion with someone else’s money, it is compassion with money that doesn’t even exist, money that is borrowed….

“They are giving money they borrowed.   So what am I asking? Not that we not do this. What I am asking is: Why don’t we take it from something we shouldn’t be doing or why don’t we try to conserve? So if you decided you want to help the people next door, you might say: I am not going to the movie theater. I am not going to go to the Broadway play. I am not going to the NFL game. I am going to save money by cutting back on my expenses so I can help the people next door who are struggling, the father and mother out of work, and they need my help — but you wouldn’t go to the bank and ask for a loan to help people.

“That is not the way it works, unless you are a government. Then common sense goes out the window, and you just spend money right and left because you are compassionate, you have a big heart, because you have the ability of the Federal Reserve just to print out more money.

“There are ultimately ramifications to profligate spending. We are approaching that day. Some say you get there when your debt is at 100 percent of your GDP. We have now surpassed that. We have about a $17 trillion, $18 trillion economy, and we have a $20 trillion debt. Is it getting any better? Have we planned on fixing it at all? No, there is no fixing.

“Is one party better than the other? No, they are equally bad. They are terrible. One side is at least honest. They don’t care about the debt. The other side is just hypocrites because they say: We are going to win the election by saying we are conservative, we care about the debt, but they don’t. The debt gets worse under both parties….

“When I first came up here, I was elected in this tea party tidal wave that was concerned about debt. Something called a sequester was passed. Guess who hated it. All the big-spending Republicans and all the big-spending Democrats. They couldn’t pass out their goodies and favors enough because there was some restraint.   You say: Well, I heard the sequester was terrible. I saw people at school and I saw people in my town saying that the sequester wasn’t giving them enough money.   The sequester was actually a slowdown in the rate of growth of spending….

“So we had a sequester, and it was evenly divided between military and nonmilitary, between Republican interests and Democratic interests. It did not cut; it slowed down the rate of growth of spending over 10 years. It was actually working to a certain degree….

“Who destroyed the sequester? Really, the voices were louder on the Republican side than the Democratic side, but both parties were complicit. The sequester has essentially been gutted and destroyed, and the spending caps have become somewhat meaningless.   We have before us today $36 billion. It will exceed the spending caps. We have a sequester in place, but there are all these exemptions, so it is exempt. Anytime you say it is an emergency, it is an exemption. Within the $36 billion, though, there is $16 billion because we run a terrible government-run flood program that is $16 billion in the hole. So we are going to bail it out by letting it wipe out all of its debt. That sounds like long-term mismanagement in a badly run program rather than an emergency. Yet it is going to be stuck in an emergency bill so it can exceed the caps.  

“What am I asking for today? I am asking that we obey our own rules. We set these rules. We set these spending caps. We set the sequester. Let’s obey them. The other side will say: Oh, we are obeying the rules; we are just not counting this money. That is the problem. We have this dishonest accounting where people say: Oh yeah, we are obeying the rules. But we are not….

“A lot of this money is actually done as an off-budget thing. It is called the overseas contingency operations. It is really a way of cheating, a way of being dishonest in your accounting. It is a way of evading spending caps, but it has also gone a long way toward making it easier to keep spending money without restraint. We tried to put restraints on military and nonmilitary, and they were exceeded by this slush fund. They call it OCO funding, or overseas contingency operations.”

Freedom First Society:  Senator Paul’s assessment that Congress doesn’t obey its own rules illustrates why the GOP demand for a Balanced Budget amendment is a deceptive if not dangerous excuse for continued fiscal irresponsibility. Rules do little good if they are not enforced and obeyed.

Since most federal spending is a violation of the Constitution, the federal monster exists and prospers because Congress regularly ignores those rules. Instead of passing new rules to be ignored, Congress must be forced to obey the existing rules — the current Constitution — by an informed electorate back home. Building that informed electorate is part of the mission of Freedom First Society and a key purpose for this no-nonsense scorecard.

The Big-Spenders

During the “debate,” several senators were eager to take credit for responding to the disasters by spending someone else’s money. Even worse, as Senator Paul explained above, the money to be spent would be created through the Federal Reserve System. Fabian Socialist economist John Maynard Keynes understood how this process worked. In his 1920 Economic Consequences of Peace, he wrote:

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some…. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner which not one in a million is able to diagnose.”

The Fed’s ability to inflate the money supply (create new money out of thin air, diluting the value of existing money), has allowed the enormous growth of the federal monster. As the federal monster grew, gobbling up financial resources and offering easy money, the independent ability of the states to fund projects or even provide state aid decreased as they became increasingly dependent on Washington.

In reading the Senate debate, we were reminded of the comment Harry Hopkins made to a friend during an outing at a New York race track. Hopkins, assistant to President Franklin Roosevelt, said that the strategy of the Roosevelt administration was to “tax and tax, spend and spend, elect and elect.”

The arguments of Senator Patrick Leahy (D-VT), leading the Democratic side of the debate, illustrate the mentality that federal money grows on trees and that politicians are “working hard,” “helping,” and contributing by spending it.

From the Congressional Record (10-23-17):

Senator Patrick Leahy (D-VT) (Emphasis added):

“Six years ago, I remember, in Vermont, Marcelle and I watched as communities around Vermont felt the devastating impact of Tropical Storm Irene…. Do you know the one thing that occurred to me as I traveled around the State of Vermont? It is that I had heard from my fellow Senators, both Republicans and Democrats, saying that they would help us rebuild. I had heard the same thing from the President of the United States. They stood by Vermont’s side to help us rebuild — again, Republicans and Democrats alike — because that is who we are as Americans. We lift each other up in times of disaster. We are one country….

“Millions of Americans all over the country, as well as the Americans in Puerto Rico and the Americans in the Virgin Islands, need us to work together to help lift them up, just as we have seen in past disasters. This is not a Republican or a Democratic issue; this is an American issue. This is who we are as a country. We hold together.   I have been privileged to serve here since the time of President Ford. In times of disaster, I have seen every single President, Republican and Democrat, work to help Americans and do it out of concern for Americans, not for themselves…..

“Today, I urge all Senators to support this emergency supplemental bill that will provide much needed assistance for disaster relief across the country, but it is still just the next step on the path to recovery. The Trump administration is committed to putting forward a third, more comprehensive disaster package in the coming weeks. As vice chairman of the Senate Appropriations Committee, I intend to hold the administration to that commitment.   In conclusion, even in the years since Irene, this Vermonter still takes comfort in the number of Republican and Democratic Senators who called me during that storm and pledged support and, along with the pledge, came through with the support.”