In vetoing the appropriations bill funding the Departments of Labor, Health and Human Services, and Education, the President charged yesterday that Congress plans an irresponsible increase of $205 billion over the next five years in domestic discretionary spending (spending on domestic programs funded through the appropriations process) over the levels he proposed. This claim of a $205 billions increase is misleading in a number of respects.
As explained in this paper, the five-year difference in proposed discretionary funding between the President and Congress is $173 billion. How does the President get a figure of $205 billion?
Nearly all of the discrepancy is caused by a $30 billion gimmick in the White House’s accounting. The President’s budget proposes scrapping most existing aviation user fees, such as the airline ticket tax, and replacing them with new fees to support the air traffic control system, starting in 2009. The Administration and others believe the proposed fees would raise revenue in an economically sounder way.
The $30 billion in new fees would almost exactly equal the existing fees they would replace. Thus, the Administration’s change would merely substitute one fee for another. It would not shrink any domestic discretionary programs or the overall cost of the air traffic control system, and would affect neither the deficit nor the size of the government.
For technical accounting reasons, the elimination of the existing fees is recorded in the President’s budget as a tax cut of nearly $30 billion, while the new user charges would be accounted for as an offset to, or a “reduction” in, spending. But in presenting the collection of the new fees as a $30 billion reduction in discretionary spending, the White House is deceptively claiming that congressional Democrats favor another $30 billion in “irresponsible” discretionary spending increases over what the President has proposed.
The President’s own budget, issued in February, acknowledges that the proposed aviation fees do not constitute a reduction in domestic discretionary funding. In the section of that document proposing statutory caps on overall annual appropriations through 2012, the cap levels do not treat the proposed new aviation fees as reductions in appropriated spending.* Consequently, those cap levels are $30 billion higher than the amount of appropriations funding that the President claims he favors over the next five years when he charges that Congress would increase spending by $205 billion.
*See Analytical Perspectives, Budget of the United States Government, OMB February 2007, page 212.