The Importance of Imaginary Money

As most of us are aware, the budget outlook for all Congressional committees is tight. For the Agriculture Committee, it is more than tight- it's a lot less than they had last time, as a result of high grain prices. Additionally, both the House and the Senate have committed to "paygo" rules that require them to find offsets for new spending- either by saving (cutting other programs) or revenue increases (i.e. new taxes).

In the spirit of politicians everywhere, they have figured out a way around this problem- the "reserve fund". The reserve fund is not any actual money. It is an "authorized" pool of money that can be spent by the Agriculture Committee if they can find the offsets. Not surprisingly, the Agriculture Committee wants those offsets to come from somewhere else.

In fact, many different committees have been given these reserve funds. But in the Agriculture Committee's case, many members of the committee were hoping to use this reserve fund as a way of finding new money for the 2007 farm bill- both for existing underfunded programs, and to fund new programs. There are now 20 billion dollar reserve funds for both the House and Senate Ag committees.

By the way, those other reserve funds? The Mulch Blog points out that one is for the State Children's Health Insurance Program, which is badly in need of some money. It's hard for the farm bill to compete with that if any real money is ever found.  For now, the Ag Committe has 20 billion to play with that doesn't really exist.

To be blunt, the reserve fund is a mythical pot of money that many suspect will only materialize as a result of budget shenanigans and deal-cutting between the committees and the leadership in the House and Senate. But that certainly will not stop Ag Committee members from using it to theoretically fund their priorities- and then pray the money is found somewhere.

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