Defunding Planned Parenthood: Claim and Response

Abortion giant Planned Parenthood has been a recipient of federal dollars under Title X of the Public Health Service Act and via Medicaid reimbursements, among other sources. Last reporting year, Planned Parenthood received $528 million in taxpayer dollars – 41% of its total revenue – a significant portion of which comes from these federal government programs.

In July 2015, the Center for Medical Progress began releasing a series of undercover videos documenting leading Planned Parenthood executives haggling over the price of fetal body parts, as well as describing the use of the illegal partial-birth abortion procedure to secure intact organs. These videos have galvanized the conservative movement to demand that Congress finally defund Planned Parenthood.

But on September 30th, 2015, the House voted 277-151 to pass a so-called “clean” two-month continuing resolution (CR) that preserved federal funding for Planned Parenthood. This CR sets a new deadline for December 11, providing another opportunity to defund Planned Parenthood through the appropriations process.

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What You Need to Know: Boehner’s Zombie Budget

When John Boehner announced his resignation from Speaker of the House at the end of September, he stated his intent to “clean the barn” before the arrival of the next speaker. Now, with just a few days left in his speakership, Boehner and his leadership team have bundled together the massive Bipartisan Budget Act of 2015. The bill is expected on the House floor before the leadership election later this week.

Like most massive budget deals, the act bundles together massive increases in spending and an increase of the debt limit, in exchange for token promises and minor changes. Here are a few of the problems with the act.

$1.5 Trillion Debt Limit Increase

Established in 1917, the U.S. debt limit is a legal cap on the total amount of national debt that can be issued by the U.S. Treasury. Intended to serve as a red flag for excessive federal spending, the non-partisan Congressional Research Service (CRS) notes that the debt ceiling “imposes a form of fiscal accountability that compels Congress and the President to take visible action to allow further federal borrowing when the federal government spends more than it collects in revenues.”

But in recent years, the debt limit has been “suspended” indiscriminately by a Congress that has abandoned responsible budget practices. The current debt limit sits at $18.1 trillion, though the U.S. Treasury hit the limit in March and has been employing “extraordinary measures” to continue payments on the national debt. The Treasury currently estimates that it will run out of extraordinary measures on November 3, 2015.

This deadline should provide an opportunity for lawmakers to reevaluate current spending levels and make needed financial reforms. GOP lawmakers should use the debt limit as leverage to extract significant spending concessions from Democrats, who constantly push for a “clean” debt limit raise, if not an outright abolition of a cap they call “archaic.”

But instead of pressing the fight for conservative spending reforms, this bill will further suspend the debt limit until March 2017 equal to $1.5 trillion in new debt. According to Congressional Quarterly, this was bundled with other budget provisions so Republicans could “sell the package as raising the debt limit in exchange for constraints on spending,” while Democrats tout a clean debt limit increase to their constituents.

Budget Cap Busting

Established by the Budget Control Act of 2011, the budget caps are a limit on the federal government’s discretionary spending. These caps ostensibly force fiscal responsibility by mandating sequestration cuts if Congress continues out-of-control spending and fails to accomplish its stated aims of deficit reduction. But instead, this bill raises the caps, authorizing an additional $80 billion worth of spending over the next two years. In addition to an $80 billion cap increase, the bill provides for an additional $32 billion in Overseas Contingency Operations funding which is not subject to the caps, combining for a total $112 billion spending increase over two years. The bill also allocates additional funding of $484 million over the caps for Social Security fraud enforcement over the next four years.

Social Security Disability Bailout

The SSDI program is broken and insolvent, and registered it sixth annual net deficit in 2014 – declining by $30.2 billion since 2013. Each dollar awarded was only paired with 77 cents in payroll tax contributions. Keeping the fund solvent would require either cutting benefits by 20% or increasing taxes by 17%. But the problem is worse – the $30.2 billion deficit comes despite a series of interest payments into the fund from previous loans issued to prop up other programs – payments which come out of general revenues. The deficit caused by these payments has added up to $213 billion over the past decade.

The reason for this unsustainability is a drastic increase in the number of individuals on disability. While workers are healthier and jobs are safer, the percentage of the working-age population on disability increased from 2.3% to 5.1% over the past 15 years. This increase comes as a response to perverse incentives instituted by Congress in 1978, which added non-medical, vocational factors such as age, education, and ability to speak English to the list of disability qualifications (so-called “grid factors”). Currently, about 43 percent of disability awards are based on these factors. In the 1980s, Congress further loosened standards, causing a higher portion of disability awards to be based on difficult-to-verify claims such as depression and musculoskeletal pain. These subjective standards are often arbitrary, leading to inconsistent application and an ability to game the system.

In order to keep the fund afloat, Democrats have advocated reallocating a portion of payroll taxes from Old Age and Survivor’s Insurance (OASI) – the more well-known Social Security program – to the disability fund. This raid will cause OASI to run dry sooner. This budget act embraces this policy, using OASI to bail out the disability fund for six years, in exchange for token concession that do not address the perverse incentives at the foundation of the program.

Medicare Spending Increase

Medicare is in need of serious reform at the core. The current system is built on a model of arbitrary price controls that are unresponsive to changes in the market, either causing taxpayer dollars to be wasted or payments to be set too low to justly compensate the physician. The bureaucracy that has emerged surrounding Medicare has drastically skewed the healthcare services market, causing medical costs across the board to skyrocket. The program needs to shift to a model of premium support that fosters competition in the healthcare market.

At the start of 2016, insurance premiums for 30% of seniors covered under Medicare Part B (those not living on a fixed income) are set to increase from $104.90 a month to $159.30 – a 50% increase. This increase is intended to subsidize rising costs for all seniors on Medicare (due to a provision that prevents premiums from rising for seniors who live on a fixed Social Security income). This hike should serve as a red flag and prompt reform, but Congress has instead painted it as a false choice between increasing Medicare spending or allowing medicare premiums to increase.

Predictably, this bill continues Congress’s tired old tactic of throwing money at a problem. The bill freezes premiums at $120 per month, increasing the cost of Medicare for taxpayers.

Gimmicky Offsets

The bill uses gimmicky offsets to provide some illusion of fiscal responsibility. For instance, Congress has promised to extend sequestration time for an additional two years, from 2023 to 2025, with the idea that future cuts will support current overspending. This is a gimmick meant to provide justification for spending now.

The Bipartisan Budget Act of 2015 is precisely what one would expect in a behemoth budget conglomeration – spending hikes, increased debt, and plenty of showy gimmicks to hide the expansion of government. This bill should be rejected unequivocally, and the GOP conference should get back to work, using each point of legislative leverage individually to extract meaningful conservative reforms.

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Highway Trust Fund: Congress Considers Another Highway Bailout

Status: The federal government is responsible for 40 percent of national spending on surface transportation projects (highways and mass transit) through the Highway Trust Fund (HTF). Congress is looking at a bailout of the HTF that extends the federal highway program for up to 6 years and costs up to $317 billion. As a result of an $8 billion extension passed in July, on October 29 the legal authority for the HTF to distribute federal funds will expire, though sufficient funds will remain to continue covering transportation projects until June 2016.

The fact that HTF outlays have exceeded revenues since 2001 is evidence that federal surface transportation spending is out of control and inefficient. As an alternative, conservatives have long pushed the Transportation Empowerment Act (TEA) to return responsibility and revenue for transportation funding back to the states, placing infrastructure funding on a sound long-term footing.

Background: Major federal activity in highway construction began with the 1956 Federal Aid Highway Act, and with it came the HTF. The HTF was envisioned as a self-sustaining fund. Revenue would come in, and that money would be earmarked specifically for highway construction. The primary source for that revenue was, and remains, the federal gasoline tax, which at the time was 4.3 cents per gallon. Today the tax stands at 18.3 cents per gallon.

The federal highway system was completed decades ago, but Congress, accustomed to federal transportation spending, elected to continue the operation of the HTF and the taxes that supported it. Congress also created the Mass Transit Account, diverting around 17 percent of gasoline tax revenue to fund mass transit projects.

A Broken Fund: Today, the HTF is insolvent and will once again run out of money by June 2016. More fuel efficient cars and wasteful diversions have led to periodic transfers of federal money from the general fund into the HTF to cover obligations. Since 2008, more than $70 billion in bailouts have gone into the fund. Future shortfalls are growing astronomically, totaling an estimated $180 billion over the next decade. In the past, present, and future, funding methods for the HTF have proven deeply ineffective.

Wasteful Diversions: The gap between revenue and outlays in the HTF is self-inflicted, the result of excessive spending driven by a congressional infatuation with mass transit and pork-barrel diversions. According to the Heritage Foundation, 25 percent of all gasoline tax dollars paid into the HTF are used for a purpose other than highways.

Mass transit spending is ineffective. As spending on transit has climbed, transit ridership has decreased by 20 percent from 1980 to 2012, while driving increased by the same amount. In the meantime, traffic congestion has increased, with the average auto commuter spending almost a workweek every year (38 hours) sitting in traffic.

There are other diversions from the HTF. The Transportation Alternatives Program (TAP) allows funding for bike paths, museums, and highway beautification. Last year, the federal government spent almost $900 million on TAP. The Congestion Air Quality Mitigation Program, a program intended to help states reduce pollution, cost $2.2 billion in 2014 and has had little effect on air quality.

Unequal Treatment of States: The HTF has long allocated funds based on which states possessed the most political clout rather than on the basis of true highway needs. Transit money goes disproportionately to six cities: Philadelphia, Washington, D.C., New York, San Francisco, Boston, and Chicago. 28 states pay a larger proportion of the gasoline tax revenue than the proportion of federal highway spending that they receive. Northeastern states with large union presences get a bigger percentage of HTF revenue, while fast-growing southern states are left with more limited amounts.

Transportation Empowerment Act (TEA): TEA is the conservative solution to the current system. It would reduce the federal gasoline tax in increments over a five-year period, down to 3.7 cents per gallon. Over that time frame, remaining revenue from the gas tax and other user fees would be block-granted to the states. At the end of the five-year period, state governments would become responsible for their own transportation planning and financing. States have unique transportation needs that should be met at the discretion of state officials, not distant federal lawmakers.

Under TEA, wasteful diversions would be eliminated, ensuring that highway dollars fund highways. If states wish to fund transit projects with their highway dollars they are welcome to do so. The federal government would retain a small role in maintaining connections between state transportation networks.

Bad Solutions: But current negotiations seek to continue the policy of bailing out the fund rather than establishing a sustainable transportation policy. A proposal passed by the Senate in July threatened to inject up to $317 billion into the fund for 6 years, creating bigger fiscal cliffs for Congress to deal with down the road. Of the bailout, the supposed “pay fors” are expected to only provide three years of money, at most, and involve “tax compliance” measures and “fees & receipts” changes that are covert tax increases. Additionally, it is unlikely that selling barrels of crude oil from the Strategic Petroleum Reserve will raise as much money as expected – the Senate proposes selling 101 million barrels at $89 each, while the current price hovers around $50 a barrel. Because of the gimmicky nature of these pay fors, the bailout will begin adding to the deficit immediately, with later pay fors contributing even more.

The Export-Import Threat: The charter of the Export-Import Bank, a long-time hub of cronyism and special interests, expired this June. The bank faced overwhelming opposition from conservatives, but attempts to reauthorize the bank may be made by attaching an Export-Import Amendment to a HTF bill. In addition to making a bad bill worse, an Export-Import Amendment would bundle together two different policy issues that are best dealt with separately (for more information, see our Export-Import Brief). It is quite possible that Export-Import advocates will attempt to use Boehner’s lame duck status to attach a reauthorization to the Highway Transportation Fund during the month of October. For this reason, Heritage Action would support pushing the reauthorization date into next year, as long as such a move is not accompanied by an additional bailout.

Call to Action: The House should reject any long-term reauthorization that bails out the Highway Transportation Fund, especially if it includes a reauthorization of the Export-Import bank.

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Defunding Planned Parenthood

Background: Abortion giant Planned Parenthood has been a recipient of federal dollars under Title X of the Public Health Service Act and via Medicaid reimbursements, among other sources. Last reporting year, Planned Parenthood received $528 million in taxpayer dollars – 41% of its total revenue – a significant portion of which comes from these federal government programs.

In July 2015, the Center for Medical Progress began releasing a series of undercover videos documenting leading Planned Parenthood executives haggling over fetal body parts, as well as describing the use of the illegal partial-birth abortion procedure to secure intact organs. These videos have galvanized the conservative movement to demand that Congress finally defund Planned Parenthood.

Devaluing Life: Last year, Planned Parenthood was responsible for performing over 327,000 abortions – 1 in 3 abortions performed in the United States. While arguing that preventive care constitutes the bulk of their operations, the number of cancer screenings provided by Planned Parenthood has decreased by 50% since 2004, while the number of abortions performed annually has increased over the same time. In fact, abortion constitutes 94 percent of Planned Parenthood’s pregnancy-related services (number of abortion, prenatal care, and adoption referrals). Furthermore, Planned Parenthood has even opposed legislation that would protect infants born alive after a failed abortion.
Power of the Purse: Defunding Planned Parenthood involves attaching a legislative rider to a ‘must pass’ bill (a debt limit, annual spending bill, etc.) that withholds all federal dollars from Planned Parenthood. This would include the tax dollars received from both Title X family planning funds and Medicaid. There will be an opportunity to defund Planned Parenthood in the fall as funding for the federal government expires on September 30 and will need to be renewed.
Claim: Planned Parenthood cannot be defunded via the appropriations process, as its money comes from a mandatory funding stream.

Response: Annual appropriations bills routinely carry funding limitations to block all sorts of activities, as well as make changes to mandatory spending. One particular rider, the Hyde Amendment (which bars the use of federal funds to pay for elective abortion), has been attached as a rider to a number of appropriations bills since 1976.

Additionally, Medicaid’s budget is appropriated annually. According to the Congressional Research Service:

While most mandatory spending programs bypass the annual appropriations process and automatically receive funding each year according to either permanent or multi-year appropriations in the substantive law, Medicaid is funded in the annual appropriations acts. For this reason, Medicaid is referred to as an ‘appropriated entitlement.’ … While most changes to the Medicaid program are made through statute, the fact that Medicaid is subject to annual appropriations process provides an opportunity for Congress to place funding limitations on specified activities in Medicaid, including the circumstances under which federal funds can be used to pay for abortions.

Claim: Medicaid is a state-run program and the federal government doesn’t have the jurisdiction to stop funding to Planned Parenthood.

Response: Medicaid is a federal program. Though much of it is administered by states, it is funded by federal dollars and subjected to restrictions in federal law. As such, it is under the jurisdiction of the federal government. In fact, when certain states have attempted to remove Medicaid funding for Planned Parenthood in the past, their attempts have been struck down by federal courts precisely because such a measure is under the jurisdiction of the federal government.

Claim: States have already tried to defund Planned Parenthood, and federal courts have struck down the attempts.

Response: It is true that some state attempts to defund Planned Parenthood, such as Indiana’s, have been struck down by federal courts. Part of Planned Parenthood’s funding comes through Medicaid, a program that, though administered by the states, is still subject to a number of federal regulations. States which sought to restrict Medicaid funding to Planned Parenthood ran afoul of a provision in federal law that allows recipients of Medicaid to choose their own provider.

In short, states and localities face obstacles because of federal law. This isn’t an obstacle for Congress, since Congress is the body that creates and amends that law.

Claim: No federal dollars that Planned Parenthood receives are allocated to abortions.
Response: It is true that federal dollars cannot be used to directly fund elective abortions. However, the government funding that American taxpayers have provided to Planned Parenthood for other services has freed up other resources that allowed the organization to become the nation’s largest abortion provider. During its last reporting year, Planned Parenthood received over $528 million in government funding, which made up 41% of the organization’s total revenue. Because of the fungible nature of money, government funding for one program frees up resources to be allocated elsewhere. Federal dollars ultimately do end up funding abortions, even if they are listed elsewhere on a ledger sheet.

Claim: Defunding Planned Parenthood is an unconstitutional bill of attainder.

Response: Article I, Section 9 of the U.S. Constitution states that “No Bill of Attainder or ex post facto law shall be passed.” In Selective Service v. Minnesota Public Interest Research Group, the Supreme Court defined a bill of attainder as a “law that legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial.” In order to be ruled a bill of attainder, a legislative act must 1) specify the affected persons, 2) include punishment, and 3) lack a judicial trial.

In ACORN v. United States, the Second Circuit Court of Appeals ruled that a 2009 law defunding ACORN by name did not constitute a bill of attainder because it did not meet the historical, functional, or motivational tests for punishment. Historically, the statute did not involve traditional forms of punishment, such as imprisonment, banishment, death, or other similarly severe consequences. Functionally, the statute furthered non-punitive purposes. Motivationally, there was no legislative record overwhelmingly reflecting a clear intent to punish, as opposed to merely ensuring that tax dollars no longer flowed to the organization.

A statute defunding Planned Parenthood would similarly fulfill the historical, functional, and motivational criteria. Defunding Planned Parenthood would not involve consequences historically recognized as punishment, it would further the non-punitive legislative purpose of protecting human life, and it would not overwhelmingly reflect a clear legislative intent to punish.

Claim: Defunding Planned Parenthood would result in a government shutdown, causing conservatives to lose face.

Response: This effort will set up a major political confrontation with President Obama, but it is the sort of conflict that will allow conservatives in the House of Representatives to remind the American people that it is taxpayer dollars that enable the horrors we’ve witnessed from Planned Parenthood, and that a defunding rider could pull out the supports propping up the abortion industry.

If House conservatives insist on defunding Planned Parenthood, it is possible that the Obama Administration will shut the government down. This would not be the end of the world, and it needs to be an option. President Clinton shut the government down in 1995 by refusing to sign legislation funding the government. While most pundits in Washington, DC believe this was a catastrophic political failure for Republicans, it is a fact that the House Republicans maintained their majority in 1996, even with a popular president of another party on the ticket. Their willingness to not accept all of Clinton’s demands was crucial towards eventually balancing the budget and reforming welfare.

Similarly, in 2013, House Republicans fought to defund Obamacare, and President Obama with Senate Democrats ultimately shut the government down. Again, pundits have heralded this as a political failure for the Republican Party, but the fact remains that Republicans grew their majority to their largest since 1929-30, and took control of the Senate. Meanwhile, Obamacare continues to be destabilized.

Claim: Planned Parenthood can dissolve and reform under a different name. ACORN did this in response to a bill from Congress cutting off their funding.

Response: ACORN did dissolve in 2010, after a bill passed Congress specifically defunding the organization. But they did not reform as a national organization. Instead, various state organizations splintered off and formed their own groups. While remnants of the organization were able to survive defunding by Congress, the blow to the organization was decisive.

Each organization has different structures and streams of revenue. Though Planned Parenthood’s path to becoming the nation’s abortion giant was made possible by federal funds (which provided 41% of the organization’s revenue in 2014), they still receive considerable funding from private donors. Dissolving and reforming would be a significant blow to Planned Parenthood’s branding, as well as their corporate sponsorships. Transferring ownership of facilities and resources is also a long and arduous process. If Planned Parenthood decides to dissolve and reform, it will still be a significant blow to their ability to perform 327,000 abortions a year, and a significant blow to the abortion-on-demand movement as a whole.

Claim: Congress should ban funding flowing to any abortion provider.

Response: Congress could attach a broader rider aimed at all taxpayer funding of abortions, and we would support such a policy. But given the blatant disregard for human life showed by this particular organization – which happens to perform 1 out of every 3 abortions in the country – Planned Parenthood is a good place to start.

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