Bill Summary: This was the second installment in federal disaster aid to address the impact of recent natural disasters (see House Roll Call 480, 9-8-17, re the first installment.) 

H.R. 2266, as co-opted here and amended, 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: Certainly no one disputes the enormous devastation created by the recent hurricanes and wildfires. And since the federal government has encouraged the states to view the federal government has having deep pockets and the go-to source for aid in disasters, it is not surprising that Congress has responded with this measure.

That said, there are three serious problems with the action. First, federal disaster aid is still unconstitutional, as President Grover Cleveland explained when vetoing the Texas Seed Bill (see our analysis of the recent first installment of such aid — House Roll Call 480, 9-8-17).   Unfortunately, there is hardly a voice in Congress campaigning to restore the Federal government to its constitutional limits.

Nevertheless, that campaign must be fought if our nation is to survive as a free and independent Republic. Unfortunately, the backbone for such action must come from an informed electorate. (Building that informed electorate is part of the mission of Freedom First Society and a key purpose for this no-nonsense scorecard.)

Second, these appropriations violate the rules Congress had previously established with the Budget Control Act of 2011, as subsequently modified. Those budget sequester rules capped the rate of growth of both defense and non-defense spending.   To get past those caps, the spending was termed “emergency,” even though non-emergency spending, e.g., the $16 billion in debt forgiveness for the National Flood Insurance Program, was included.

Third, there was no excuse for treating this aid as supplemental appropriations that will not somehow have a serious impact on the federal budget and the national debt. There are plenty of opportunities for cutting back federal spending elsewhere to make room for this disaster aid. There is just insufficient will in Congress to do so. And so, Congress decided to “borrow” the money through the Federal Reserve, which will “monetize” the debt (create new money out of thin air.)

During the subsequent Senate “debate” of the measure, Senator Rand Paul (R-KY) provided an excellent summary of the fiscal irresponsibility of Congress and this measure in particular. (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.

With disaster aid, Congress loves to posture as compassionate with someone else’s money. However, as Senator Paul explained above, the money to be spent here would actually 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 authority 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.

The House Has Its Big-Spenders

The spending-without-restraint mentality was apparent in several of the House speeches during the debate. We saw there a vision of the federal government as a provider for the needs of the people — a vision far different from that of the Founding Fathers. (Supported by their vision of limited government, a free and unhampered people would launch America on a path to unprecedented prosperity.) We provide here several examples.

From the Congressional Record (10-12-17) (Emphasis added):

House Appropriations Committee Chairman Rodney Frelinghuysen (R-NJ-11):

“However, with such massive, unprecedented damage, more help is clearly needed to continue to respond to these recovery efforts, to rebuild communities with dollars, with resources, with manpower, and with our support.   This emergency funding legislation, the second installment, addresses urgent short-term immediate priorities: replenishing FEMA’s Disaster Relief Fund, supporting ongoing Federal wildfire suppression efforts, providing debt relief for the Federal Flood Insurance Program, and other assistance that will help our fellow Americans in their time of greatest need….

“This package also includes $4.9 billion for community disaster loans, which will ensure local governments are able to provide basic municipal services such as police and fire protection and public education throughout this trying time.”

Rep. Ken Calvert (R-CA-42):

“Mr. Speaker, I rise in support of the supplemental appropriations bill…. In fiscal year 2017, the Forest Service had a shortfall of nearly $577 million in firefighting funds. To cover its immediate firefighting costs, the Forest Service borrowed from its non-fire programs, as well as the Department of the Interior.   The bill will replace and repay those borrowed funds and close the books on fiscal year 2017.”

Rep. Lucile Roybal-Allard (D-CA-40):

“Mr. Speaker, the past few months have witnessed one of the most devastating natural disasters ever endured by our country. They include hurricanes, voracious wildfires in my home State of California that have killed at least 23 people, required mass evacuations, and burned more than 170,000 acres and thousands of homes and businesses.   By acting quickly on this emergency supplemental, we are sending a strong message that we are here for disaster victims, including our fellow citizens in Puerto Rico and the U.S. Virgin Islands. But this is just a down-payment. We still don’t have the final damage estimates for many of the affected areas. “

Rep. Betty McCollum (D-MN-04):

“Mr. Speaker, I rise in support of this funding package. This bill is a down-payment on the recovery from the recent fires and hurricanes.   I am pleased that it contains $576.5 million to fully repay the funds that the U.S. Forest Service borrowed last fiscal year to pay for wildfire suppression.”

Rep. Debbie Wasserman Schultz (D-FL-23):

“While I rise to support this critical emergency appropriations bill, this supplemental leaves much to be desired. This legislation provides vital recovery funds to my home State of Florida, as well as Texas; the U.S. Virgin Islands; Puerto Rico; and California, where wildfires remain ablaze. However, it neglects to include SBA loans for small businesses and homeowners, as well as making smart investments in our ports, coastlines, water systems, and electrical grids.   This bill also neglects to address the devastating agricultural losses, especially to Florida’s $10 billion citrus industry. It is also important to note that, in Florida, this vital funding will not be able to address the public health hazard of debris strewn across our lawns and streets as Governor Scott shamefully refuses to allow our cities to fully access FEMA funds.   While the majority has said these and other issues can be part of future omnibus negotiations, this delay will leave constituents waiting months longer to receive the services they so desperately need. They should not have to wait.”

Rep. Nydia Velazquez (D-NY-07):

“Mr. Speaker, I want to thank both the gentleman from New Jersey, the chairman, [Mr. Rodney Frelinghuysen] and the ranking member from New York [Rep. Nita Lowey] for their work…. The legislation we are debating today is far from sufficient. It is not enough, but it is a start. It is a down-payment in helping the response process…..

“Mr. Speaker, let’s be clear. There is going to need to be much more assistance in the future. Puerto Rico will need help rebuilding its energy grid, repairing telecommunications networks, and putting its ports, bridges, and roads back together, and we cannot forget shoring up the island’s Medicaid system, something that was critical before Maria, but is even more important now.   This problem is of Congress’ making, and we must fix it. Make no mistake. Those priorities will require more money, and we will need to come back and address them in a few weeks.   The people of Puerto Rico are American citizens…. Yes, American citizens, when, in 1898, Puerto Rico was invaded and taken over by the U.S. Government. So now it is our responsibility to make Puerto Rico whole.”

Rep. Mario Diaz-Balart (R-FL-25):

“Specifically, we are going to have to deal with the agricultural impact of this storm, and again, particularly on the citrus industry, that has been devastated by this storm.”

Non-Voting Member Stacey Plaskett (Virgin Islands):

“I am pleased to see much-needed support for ongoing disaster response efforts in the Virgin Islands, Puerto Rico, and other hurricane- affected areas, including direct assistance to families, debris removal operations, and emergency protective measures carried out by FEMA, and additional activities of numerous other Federal agencies that are on the ground working around the clock to help us to recover and rebuild. I cannot thank enough all of our Federal and local personnel helping us through this.

“However, I am deeply concerned about the important relief that was left out of this bill and the administration’s disaster relief request last week….

“The package does not include community development and social service block grant funding, Economic Development Administration funds, supplemental housing assistance, nor additional funds for repair of our water infrastructure, ports, community facilities, airports, roads, parks, wetlands, and fisheries.   Damage sustained in all of these areas has been catastrophic, and waiting around until another end of the year for auxiliary funding for these pressing needs is not acceptable.   Perhaps most concerning is the lack of Medicaid program assistance to the territory. Even before two consecutive Category 5 hurricanes that decimated our hospitals and medical infrastructure, the Virgin Islands was forced to operate a Medicaid program that is capped in an amount that has no relationship to local needs, and our rate of Federal matching funds, our FMAP, is limited to an arbitrarily low 55 percent Federal to 45 percent local contribution.

“Thousands of our citizens go without adequate care due to this treatment every year, in addition to the impacts on our providers and hospitals due to uncompensated care, but after these back-to-back storms, there is no revenue being generated in the Virgin Islands and Puerto Rico at this time.”

Rep. Maxine Waters (D-CA-43):

“This bill also provides for partial debt forgiveness of $16 billion for the National Flood Insurance Program….   Following the losses that will be incurred as a result of the recent hurricanes, the NFIP needs debt forgiveness more than ever. But let’s be clear. The partial debt forgiveness will leave the NFIP with a crushing level of debt. Although this is a step in the right direction, we should forgive all of the debt that the NFIP has accrued from catastrophic storms like Katrina and Sandy instead of burdening the NFIP policyholders with hundreds of millions of dollars in interest payments every year.”

Rep. Barbara Lee (D-CA-13):

“Mr. Speaker, the supplemental is a good first step. It is a good first step in a very long process, but we must provide more long-term assistance to help communities rebuild and to help them recover very quickly, and we must leave no one behind.”