Paying for the Wall

Recent news reports say that President Trump's wall construction plans are likely to take three years and cost north of $20 billion. This is broadly consistent with a CATO study of the wall and will be in addition, of course, to earlier spending that reflects existing investments. According to the Washington Post, "since 2001 more than $7 billion has been spent to build what is now almost 653 miles of Southwest border fencing — costing nearly $5 million per mile in some spots — nearly half in Arizona."

Whose going to pay for it? Or, more prosaically, do we need a new law to pay for it or is the money already appropriated by Congress?

To begin with, new fence construction is broadly authorized by the Safe Fence Act. That bill authorizes DHS to take "all actions necessary and appropriate" to achieve "operational control" of the border. Control, in turn, is defined in fairly absolute terms as "the prevention of all unlawful entries into the United States, including entries by terrorists, other unlawful aliens, instruments of terrorism, narcotics, and other contraband." (my emphasis). It seems reasonable to conclude that Congress has already spoken. They want full border control -- however impossible that may actually be.

But, as students of Congress know, an authorization is different from an appropriation. It's the expenditure of appropriated funds that drives actual government activity. In FY 2016, Congress appropriated a little more than $436 million for fencing construction in the DHS/CBP account. In the DHS appropriations bill for FY 2017 the sum was less -- only $261 million. Also, somewhat notably, $55 million from FY 2016 was rescinded because it had not been "obligated" (that's budget speak for contractually committed to be spent). Thus, the total for the last two years of border fencing spending is roughly $635 million, all told.

In addition to the appropriated funds, the President and Secretary often have some modest reprogramming authority -- that is the ability to move money around from one account (say personnel) to another (say construction). But that, of course, applies only to funds that have not been "obligated" to their original purpose and is likely to be modest in scope. The general rule is that reprogramming that exceeds $25 million or 5% of a component's budget requires Congressional approval.

All of which is a long way of saying that right now the money isn't there. Not even close. As House Homeland Security Chairman McCaul has already made clear, funding for the wall will require supplemental appropriations. And, if the estimates are right -- that we will spend roughly $7 billion/year for the next three years -- that expenditure will require a budget that is roughly 15-20 times the construction budget that CBP has annually today.

And, for comparison sake that $7 billion per year is roughly equal to the total of what we have spent on wall construction in the past decade. Or, for another comparison, consider that the entire budget for DHS in FY 2017 was $53 billion. In other words, the projected costs for the wall will be on the order of 13% of the current overall budget -- requiring either a commensurate level of cuts in DHS or funding from non-DHS sources (via higher taxes, larger deficits, or offsets in other departments). These are the hard fiscal realities that face the project -- by no means insurrmountable, but very real indeed.

[Note: Special thanks to Jordan Brunner for research support.]