Congress: Better, sort of

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

You could say that what Congress accomplished this month was a vast improvement. You also could say it wasn’t nearly good enough.

On Tuesday, President Obama signed a 1,600-page, $1.1 trillion “cromnibus” bill passed by Congress. The “cr” is an abbreviation for “continuing resolution,” which is a short-term funding mechanism that will be used for the Department of Homeland Security. “Omnibus” is the mechanism funding the rest of the discretionary budget – in other words, not entitlement programs such as Social Security and Medicare, which are on autopilot. Homeland Security is funded only until February so Republicans can try to undo Obama’s immigration order.

This is a step forward because Congress finished this task without a government shutdown, though the deadline for one came pretty close again. Next year will be a circus like always, but at least Congress won’t be playing Russian roulette with the economy for a while.

Unfortunately, important provisions were slipped into this spending bill that weren’t related to the budget. One, written by the big bank Citigroup, amends the Dodd-Frank law passed after the bank bailout and will let banks engage in riskier behavior backed by your tax dollars. If they make money, they’ll keep it. If they lose money, you’ll bail them out. Another provision increases the amounts that big donors can give to the Democratic and Republican National Committees tenfold, from $32,400 to $324,000.

Moreover, Congress relied on a few gimmicks to make the numbers work. The Committee for a Responsible Federal Budget, in fact, has found $30 billion it says violate the spirit of the sequester and the 2013 Murray-Ryan agreement. Without going into too much history, the sequester is a series of automatic spending cuts affecting non-entitlement programs. Murray-Ryan set spending caps for two years and raised spending levels above the sequester.

Google it if you need more. It’s hard to write about this stuff.

Thirty billion dollars is less than 3 percent of $1.1 trillion, so again, it’s not too bad. Still, it’s not great. One provision shifted $7 billion from regular defense spending, which is capped under the sequester and Murray-Ryan, to war spending in Iraq and Afghanistan, which is not.

This is one of many reasons why we should be reluctant to fight all these wars.

In addition to the cromnibus, Congress also passed a one-year bill extending 55 tax breaks retroactive to the beginning of 2014. These were deductions for wind energy production, big business foreign profits, schoolteacher supplies, college tuition, etc.

Some of those may be worthy policies, but there are several problems with doing it this way. First, the tax extenders bill reduces revenues to the federal government by $41.6 billion over 10 years – money future taxpayers will have to cover because Congress didn’t also cut $41.6 billon in spending. Next year, the tax breaks probably will be extended again, further adding to the debt. Also, by extending the tax breaks year after year instead of just cutting taxes permanently, Congress can hide how much these actions actually increase the national debt over time.

“It really is no more complicated than me going home and saying to my kids, ‘I’m going to ask you to pay for this $42 billion because we didn’t want to,’” Maya MacGuineas, CRFB president, said in an interview.

Finally, the whole point of a deduction is to encourage behavior. All of these tax breaks expired at the end of 2013. Waiting until the end of the year and then re-enacting them retroactively created uncertainty and made it harder for businesses to make the investments Congress is trying to encourage. If the credits are a win for the economy, then Congress should have extended them through 2015 so beneficiaries could include them in their plans moving forward. Congress did not do that.

Being a member of Congress often means choosing between two options that are less than ideal. For the record, here’s how Arkansas’ members voted on the two bills. On cromnibus, the yeses were Sen. John Boozman, Sen. Mark Pryor, Rep. Tim Griffin, and Rep. Steve Womack. The no votes were Rep. Rick Crawford and Rep. Tom Cotton. On tax extenders, everybody voted yes except Cotton.

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