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The White House said that they would work to convert the Antitrust Division’s budget into mandatory spending, which would put it outside the purview of congressional appropriations.
Last week, Congress passed a partial appropriations package for the 2024 fiscal year that slashed the Justice Department Antitrust Division’s budget by nearly 20 percent relative to expectations, and reversed a 2022 law, the Merger Filing Fee Modernization Act, that allowed the division to keep more premerger filing fees to deal with expansions in reviews. Throughout the week, Democrats and the White House said this was not their intention, but the requirements of the Fiscal Responsibility Act, the budget constraints passed as a condition of raising the debt limit, required caps on federal agency accounts, and that Republicans, gunning for the Antitrust Division’s budget, drove a hard bargain.
Therefore, it was surprising to see a very similar formulation in the president’s proposed fiscal year 2025 budget released on Monday. The president’s budget, which is just a benchmark of the White House’s intention, does not contain Republican input. And a fact sheet on the proposed budget touted more money for the Antitrust Division and that “agencies would always have access to the full amount of [premerger filing] fees. But while the budget does request $288 million to the Antitrust Division, a 24 percent increase from the $233 million passed last week for fiscal year 2024, it does indeed cap that budget figure and force premerger filing fees out of the division.
“Such collections collected in fiscal year 2025 in excess of $288,000,000 shall be credited to this account and shall be available in future fiscal years only to the extent provided in advance in appropriations Acts,” reads the proposed budget language.
I asked the White House whether there was a discrepancy here, and they assured me there wasn’t. A spokesperson indicated that the Fiscal Responsibility Act required caps, and that they would not have included them on the Antitrust Division otherwise. (That said, there were appropriations that were not capped and even increased in last week’s bill.) More important, the White House said that they would work to convert the Antitrust Division’s budget into mandatory spending, which would put it outside the purview of congressional appropriations. This way, the division would just be funded by the premerger filing fees it takes in, and would not have to send portions of that back in caps.
But if that’s the White House’s view, why would they resign themselves to the cap in FY2025? Sen. Jeanne Shaheen (D-NH), the head of the appropriations subcommittee that deals with the Justice Department’s budget, promised last week, in response to internal pressure from senators and reporting on her and her staff’s ties to large corporations that benefit from a gutted Antitrust Division, that she would work to fix the situation in the very next budget year. In a Senate floor colloquy, Shaheen told Sen. Amy Klobuchar (D-MN) that the FY2024 caps on filing fees would not carry over to 2025. “I hope in 2025 we are able to convince our Republican colleagues in the House that this is something that the original legislation that you and Sen. Grassley passed intended,” Shaheen said.
So I asked the White House if their desire to move the Antitrust Division’s budget to mandatory spending was applicable to fiscal year 2025. The spokesperson said it was. That effectively nullifies the position that was in the president’s budget.
Questions have been raised about whether the budget cuts for the work of the Antitrust Division were demanded by House Republicans.
But even that is too late, really. For the next six months, the Antitrust Division will have to do more with less, constrained by a capped budget just as it investigates some of the biggest monopolies in the economy—Apple, Ticketmaster, UnitedHealth—and as legal cases continue with the likes of Google. The fiscal year 2024 budget is not complete, and advocates want to see language attached to the final set of appropriations that either moves the antitrust budget to mandatory spending or raises the cap to the expected level of premerger filing fees, originally estimated at $278 million.
Nearly two dozen groups called for this last week in a letter to the White House and key appropriators. There have been no indications that changes would be made for this fiscal year.
Additional questions have been raised about whether the budget cuts for the work of the Antitrust Division were demanded by House Republicans. While some House Republicans, like Judiciary Committee chair Rep. Jim Jordan (R-OH) and Antitrust Subcommittee chair Thomas Massie (R-KY), have been generally hostile to stronger antitrust enforcement, that doesn’t necessarily extend down to Appropriations. Five House Republicans on the committee—Reps. Mike Simpson (R-ID), Tom Cole (R-OK), Steve Womack (R-AR), Ashley Hinson (R-IA), and Michael Cloud (R-TX)—voted for the Merger Filing Fee Modernization Act, which allowed the Antitrust Division to keep the caps. While none of those five are on the specific subcommittee overseeing the Justice Department’s budget, it’s not clear that anyone who is has any kind of special antipathy for antitrust.
Sources knowledgeable about the situation have expressed skepticism over whether House Republicans really took a stand over the Antitrust Division’s budget. Last September, Rep. Ken Buck (R-CO) told Attorney General Merrick Garland in a House Judiciary Committee hearing that “there are efforts, I’m told over in the Senate … S.2321, to take $50 million in funding for the Department of Justice Antitrust Division, and it would be an 18 percent cut, and move it to the general Department of Justice operations fund to try to further cripple the efforts going on in court.” That’s essentially exactly what happened.
S.2321 was Sen. Shaheen’s appropriations bill for agencies including the Justice Department, and while it did have the full $278 million appropriation for the Antitrust Division, it did indeed say that “within the amounts appropriated, $50,000,000 shall be transferred to ‘Justice Operations, Management, and Accountability.’” That does the same basic job as the cap. So the idea that this was forced upon the Senate by House Republicans is questionable.
The Federal Trade Commission’s budget for the current fiscal year, meanwhile, has not been determined. Observers are more confident that it will not be slashed in the same way. Just yesterday, Choice Hotels and Wyndham abandoned a merger deal after FTC scrutiny.
