November 1, 2014

Washington Budget Report: June 10, 2014

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VA Plan in Senate Doesn’t Fit ‘Emergency’ Designation

As the backlog scandal at Veterans Affairs (VA) health facilities continues to unfold, a plan that Senate Veterans' Affairs Committee Chairman Bernie Sanders’ (I-Vt.) and Sen. John McCain (R-Ariz.) agreed to last week would authorize “emergency” spending for more VA facilities, additional staff and the use of some private doctors.

Sponsors said their plan would cost nearly $2 billion. Senate Majority Leader Harry Reid has promised to bring the legislation to the Senate floor quickly. The House passed legislation with some similar reform provisions last month but without increased spending.

Unfortunately, the plan developed last week in the Senate did not specify how the new spending would be paid for. To exceed discretionary spending caps, it would authorize emergency spending that would have to be approved in subsequent appropriations legislation.

However, the traditional understanding has been that the emergency designation is for spending that is necessary, sudden, urgent, unexpected and temporary. The additional spending in the Senate plan, while addressing serious problems, does not fit that criteria.

The VA has struggled to provide effective and timely health care services. While some lawmakers, including Sanders, say the VA suffers from inadequate funding, it also faces management and structural challenges that more funding will not automatically resolve.

Lawmakers should follow standard budget procedure and work within the spending caps they set into law. They have many options to offset proposed new spending, including ending VA enrollment for high-income veterans with no service-related injuries. Another option: cuts to mandatory spending.

Working within the caps would force Congress to make decisions on how to best serve veterans without further weakening the country’s fiscal standing.

Millennials Face a Myriad of Challenges

Personal financial worries and the federal government’s growing debt cloud the future of younger Americans, who often seem neglected in Washington.

“As more and more baby boomers retire, younger Americans are expected to help sustain entitlement programs and, eventually, help lower federal deficits to put the debt on a sustainable path,” explains Chase Hagaman, The Concord Coalition’s 26-year-old New England regional director.

But young adults are also trying to pay off their college loans, launch careers, build new homes and even save for their own retirements. As Hagaman notes in a recent column in Seacoast Sunday, a slow economy has made all that even more challenging.

Nevertheless, he says young people must take a proactive approach in dealing with their personal finances as well as helping the country chart a better fiscal course.

Bob Kerrey, a former senator who also served as a Concord Coalition co-chairman, recently urged older Americans to demand more youth-oriented priorities in the federal budget.

“If we’re trying to figure out how to advance the next generation’s future,” the 70-year-old Kerrey told New York Times columnist Frank Bruni, “we need to be spending more on the next generation, and we’re spending it on yesterday’s generation. I am not the future. My 12-year-old son is. But if you look at the spending, you’d think I’m the future.”

Overseas Military Operations Account Should Not Be Abused

The Overseas Contingency Operations (OCO) account, which funds combat missions abroad, is exempt from discretionary spending caps. As this part of the Pentagon’s budget begins to take shape for the coming year, policymakers must resist the temptation to use the account for expenses that should be subject to the caps.

The administration has announced two new initiatives centered on counterterrorism and European stability that would be funded through the account. One would increase the U.S. presence in central and eastern Europe in response to Russian threats to Ukraine. The other new initiative would build alliances with partners around the world to deal with terrorism.

These new proposals appear to stretch the boundaries of the OCO account, which was originally set up to fund the wars in Iraq and Afghanistan.

Even the administration’s own OCO guidelines -- issued by the Office of Management and Budget -- state that the account should be reserved for major equipment, aircraft and support in the geographic areas where direct combat missions take place. A useful proposal in the House would codify the OMB guidelines.

Congress has approved caps on defense and other discretionary spending that are increasingly tight. Yet lawmakers have been reluctant to approve reasonable cost-cutting measures that the Pentagon has repeatedly proposed.

This may increase the temptation to use the OCO account to circumvent the spending caps and avoid difficult budget choices. Lawmakers, administration officials and military leaders must work together to achieve the necessary cost savings while maintaining strong and balanced armed forces.