Two weeks ago, Senate Finance Chairman Chuck Grassley (R.-Iowa), like most of his fellow Senate Republicans, was thrilled that Congress had agreed upon a budget for the coming fiscal year. "It is discipline for the Congress," he said, "and [as] anybody knows, when it comes to spending money, Congress needs discipline." Indeed. With the ink barely dry on the fiscal year 2006 budget resolution, the Senate began consideration of the federal highway bill, setting in motion the first real test of that "discipline."

Though weighing in at a robust $284 billion over six years, this still didn't satisfy the Senate's insatiable appetite for transportation spending. Grassley directed his Senate Finance Committee staff to scrub the tax code in search of an additional $11 billion in revenues that would, in turn, be dedicated to even more transportation spending. The resulting package of highly arcane "revenue raisers" was quickly added to the highway bill by Senate Environment and Public Works Chairman Jim Inhofe (R.-Okla.). "I support it [the bill] at a higher level," Inhofe explained, "because that is what we are supposed to be doing around here."

Enter the Senate's leading fiscal conservative, Budget Chairman Judd Gregg (R.-N.H.). After reviewing the Grassley package, Gregg concluded it was "unequivocally, unquestionably a budget buster." Gregg learned that some of the provisions would simply reallocate revenue from the general treasury to the highway trust fund. Another controversial item would raise $15.9 billion over 10 years by giving the IRS more power to fine businesses for engaging in transactions that the agency determines lack "economic substance." Exercising his prerogative as chairman, Gregg invoked a budget point of order against the entire 1,291-page bill, thus requiring 60 senators to vote to save the bill.

Despite a firm veto threat from the White House, a warning from Transportation Secretary Norm Mineta that the bill would lead to higher gas taxes or a bankrupt highway trust fund, vocal opposition from Senate Majority Leader Bill Frist (R.-Tenn.), and heated denunciations from conservative taxpayer groups, Grassley and Inhofe prevailed on an overwhelming 76-to-22 vote. All together, 30 Senate Republicans who two weeks earlier had celebrated the "discipline" in the budget resolution joined all but two Democrats in jettisoning it.

Little wonder that budget experts such as the National Journal's Stan Collender can note credibly that "the GOP is now a political party that favors increases in federal spending" and that "Republicans may now be able to claim the federal spending increase championship they have for so long awarded to Democrats."

Money Matters
The next time one of your liberal friends contends that we are systematically underfunding vital national needs, ask him: Then why is it that so many billions of dollars appropriated in Washington remain unspent, sitting in the coffers of state and local government agencies?

In a previous column, I referred to a study by the House Education and Workforce Committee that found that over the last few years an astonishing $6 billion in funding for the No Child Left Behind program had been distributed to state and local education agencies, but remains unspent. This appears to be part of a larger trend. An investigation by the House Committee on Homeland Security, chaired by Rep. Chris Cox (R.-Calif.), has found that some $4 billion in funds appropriated for the Department of Homeland Security's first responders' program since 9/11 remains unspent. Now you have the makings of an interesting conversation.
Cox's committee found that state and local governments have spent only 31% of the $6.3 billion appropriated by Congress since 2002. The proportion of unspent funds is highest, moreover, in states with the highest risk of terrorist attacks such as California, New Jersey, Connecticut, Massachusetts, Florida and Pennsylvania. California, for example, has used only $114 million of the nearly $600 million it has received. The District of Columbia has spent an even smaller proportion-barely 10%-of the $132 million it has received.

Cox's investigators also uncovered more than 1,500 examples where homeland security dollars have been spent in extraordinarily wasteful ways. "The monies are being doled out," he explained, "not necessarily according to national security risk, but rather, according to political formulas." Examples include:

• $7.2 million to provide every law enforcement officer in Missouri with hazardous materials suits.
• $100,000 to enroll District of Columbia sanitation workers in Dale Carnegie public speaking sessions.
• $160,000 to provide the government in Montgomery County, Md., with eight large-screen plasma television monitors.
• $100,000 to develop a rap song to teach children in the District of Columbia about emergency preparedness.
• $250,000 for air-conditioned garbage trucks in Newark, N.J.

Cox and the ranking Democrat on the committee, Rep. Bennie Thompson (Miss.), teamed up to introduce the Faster and Smarter Funding for First Responders Act. The bill, which easily passed the House last Thursday, would target funds to areas with the greatest security threats and vulnerabilities and require states receiving the funds to allocate resources based on necessity, rather than other factors. 
 
Mr. Franc, who has held a number of positions on Capitol Hill, is vice president of Government Relations at The Heritage Foundation.