Another Lump of Coal From Congress

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Alex Brandon/AP Photo

The $1.4 trillion year-end government spending bill released Monday is so weighted down with ornaments that the branches must be sagging.

It’s Christmas, and Congress just got their tree.

A “Christmas tree,” in legislative speak, is a must-pass bill that attaches other priorities to go along for the ride. The $1.4 trillion year-end government spending bill released Monday is just such a vehicle, so weighted down with ornaments that the branches must be sagging. The gambit gives every member of the House and Senate a chance to exult in triumph, while you have to take a step back to really get a sense of the wreckage.

The topline number was already known, a modest $50 billion increase over the previous fiscal year. Last year around this time talks deadlocked over funding for the border wall and led to a 35-day government shutdown. This time, Trump had the leverage of being able to redistribute military funds to pay for the wall, a maneuver partially blessed by the Supreme Court. The only thing House Democrats could have done was to include a provision formally barring such redistributions. But they didn’t, so the funding agreement includes in effect unlimited wall funds.

For good measure, appropriators tacked on $1.375 billion for “barriers” on the border in the Rio Grande Valley. Trump had asked for $5 billion, but since he can maneuver around any money he wants, that’s also available. There was no backfill of the $3.6 billion in funds ripped from military spending to fund the border wall last fiscal year.

There are a couple other funding surprises, like $25 million for gun violence research that had been left out of appropriations for 20 years. Another $425 million will go to election security, after Republicans zeroed out that priority last year. Medicaid funding that was on the verge of running out for Puerto Rico and the territories got extended for two years.

In some ways funding is a sidelight to the significant number of so-called “riders” in the package. These are policy changes tangentially related to government spending tucked into appropriations, and they multiplied in this bill relative to previous years.

House Speaker Nancy Pelosi, who has denounced riders in past appropriations, touted several of these as “wins” in a statement released Monday. The tobacco age rises to 21, a public health victory. The CREATES Act, which was dumped from a spending bill in 2018, returns here: It blocks drug companies from denying samples of their product to generic competitors so they can prove their versions have the same effects. Ending this common delay tactic will enhance generic competition for prescription drugs.

The bill also eliminates a series of health industry taxes. The so-called “Cadillac” tax, a 40 percent excise tax on high-cost insurance plans, was heavily disfavored by labor, which bargained for good health coverage and didn’t want to see the government encourage making it worse through taxation. Technically, insurance companies paid the excise tax, which passed in the Affordable Care Act but never went into effect thanks to legislative delays. An ACA tax on medical devices, also frequently delayed, got repealed in the bill, as did a separate health insurance tax. This finally ends the possibility of these taxes after years of repeal attempts.

It adds up to an enormous victory for the health industry. The tobacco age increase (which should lower health costs), the lack of anything broader on drug prices than CREATES, and a punt on addressing surprise medical billing—seen as a top priority in the fall until the private equity firms that own companies profiting from it ran a multi-million-dollar ad campaign—all assist health companies. Pelosi claims the bill “lays the groundwork” to address surprise billing next spring, by which time millions more Americans may get stuck paying for “out-of-network” radiologists, ER services, or ambulances, through no fault of their own.

An entire bill called the SECURE Act got dumped into the appropriations package. This was an urgent priority for Richie Neal, chair of the House Ways and Means Committee, mainly because among its mostly bland “retirement security” provisions it includes a giant gift to life insurance companies that sell annuities, investment plans that offer a stream of lifetime income. Section 204 gives a safe harbor to 401(k) plan sponsors who select annuities to appear among offerings to workers. Under this provision, if an employer picks an annuity provider and it goes out of business or rips off workers, nobody would be able to sue the employer afterward. This has been the main obstacle to placing annuities in 401(k) plans, and it could cause the flourishing of sketchy variable-income annuity products that confuse purchasers and don’t pay off as promised.

The SECURE Act had been held up by Senator Ted Cruz (R-TX), who wanted a provision restored to the bill that would give tax benefits to parents who homeschool children. That got back into the final bill, breaking the deadlock. But the real winners are life insurance companies, some of Neal’s biggest donors, who got their wish granted.

There are also extensions of three obscure handouts to various industries. Congress will reauthorize the Export-Import Bank, a loan guarantee program for foreign trade deals known as the “Bank of Boeing” for its main benefactor. The left used to rail against Ex-Im as a facilitator of carbon pollution, dictators, and tyrants. The Terrorism Risk Insurance Act, a government backstop for terrorism insurance that has never covered a single company from terrorist attack, and really is a handout to insurance companies and banks, also gets extended. So does the National Flood Insurance Program, which protects coastal mansions that are unsustainable in a time of sea-level rise.

I wrote stories on all three of these programs back in 2013 and 2014. They just keep getting reauthorized, zombie programs with real drawbacks that you can kind of, sort of tout as “job creators” or “security measures.” There’s an entirely separate bill for 50-odd corporate “tax extenders” that’s likely to pass this week, as it has for decades, even after the research and development tax credit that previously dragged all of these along was made permanent years ago. You can’t kill certain programs as long as they help certain large corporations.

By contrast, you can’t get other priorities into law if there isn’t a big enough corporate benefactor lobbying for it. This funding bill still prohibits Washington D.C. from funding abortion coverage for its low-income Medicaid beneficiaries, a continuing violation of home rule. It will allow a tax credit to expire for purchasers of GM and Tesla electric vehicles, another loss for the planet. It fails to pass not only surprise billing, but the Butch Lewis Act, which would end a crisis in multi-employer pensions that threatens the retirement plans of hundreds of thousands of union workers (there are separate provisions that fix coal miner pensions).

This bill will get bipartisan support so everyone can go home for the holidays without a shutdown. The press releases will boast of “bipartisan victories for the American people.” It’s a well-practiced performance that hopes you won’t look too deeply into the outcome, lest you see the corporate giveaways and failures for poor and working people. It’s just another song and dance, done mostly in secret, that keeps putting the public inches away from legitimate progress.

Merry Christmas.