POLICY AND TECHNICAL
“What do you mean by defunding Obamacare?”
Defunding Obamacare means attaching a legislative rider to a “must pass” bill (debt limit, annual spending bill, etc.) that 1) prohibits any funds from being spent on any activities to implement or enforce Obamacare; 2) rescinds any unspent balances that have already been appropriated for implementation; and 3) turns off the exchange subsidy and new Medicaid spending that are on auto-pilot.
“There is no such thing as defunding Obamacare.”
That is a false statement. Congressmen who assert this are either asserting that funding is not being spent to implement Obamacare (false) or that a defund amendment cannot technically be executed (again, false). Defunding Obamacare can be done, and it has been attempted by the House of Representatives recently. For instance, in 2011, after gaining the majority, the Republican House included such a defunding provision on the continuing spending resolution (HR 1) when the bill first passed the House. The provision was later discarded in negotiations with the President and the Senate, but the effort began with promise.
On June 20, 2013, the House of Representatives voted down the Federal Agricultural Reform and Risk Management Act, the so-called “farm bill,” by a vote of 195 to 234. The bill would have cost an estimated $940 billion over ten years. By comparison, the last farm bill, enacted in 2008, cost $604 billion. That equals a 56% increase in farm and food aid since the last reauthorization. Roughly 80% of the nearly trillion dollar bill is comprised of food stamps and nutrition programs. This is because there are now nearly 48 million individuals on food stamps, compared with 30 million in 2008 and 17 million in 2000. One in seven Americans now collect food stamps. Since the bill failed, the following excuses have arisen from Congressmen to justify their vote on behalf of the legislation:
Excuse: “It’s unfortunate that farm spending and food stamp spending are combined in one bill, but that’s the existing framework and how the bill was presented for me to vote on. I had no choice.”
Response: Congressman Marlin Stutzman proposed an amendment to separate food stamps from the farm programs, but the House leadership would not allow it to come to a vote. It was not allowed to be considered because the Republican Leadership knew it could pass. Each Congressman who voted in favor of “the rule” (H.Res. 271)—the Leadership-written procedural resolution that mapped out which amendments would be offered—blessed this decision. Congressman Stutzman voted against H.Res. 271. Why didn’t more Republicans join him? Because too many Republicans view “procedural votes” as party line votes instead of policy votes. However, in the words of the longest serving Member in Congress, John Dingell, “If you let me write the procedure, and I let you write the substance, I’ll [beat] you every time.” The reason the effort to separate the two issues failed was because GOP Congressmen voted with their Leadership instead of Congressman Stutzman.
“We will end the practice of packaging unpopular bills with ‘must-pass’ legislation to circumvent the will of the American people. Instead, we will advance major legislation one issue at a time,”
GOP Pledge to America
Both the House and Senate Agriculture Committees passed legislation to reauthorize federal farm and food stamp programs—these bills will soon be considered by the full House and Senate. These so-called “farm” bills were considered in the 112th Congress but were blocked by widespread conservative opposition. Proponents are once again seeking to pass the legislation though Congress.
- Cost: The House bill costs $940 billion over ten years. By comparison, the last farm bill, enacted in 2008 with the initial cost of $604 billion. That equals a 56% increase in farm and food aid since the last reauthorization. Proponents argue that the bill will save $33 billion, but not in any real world sense. The bill includes policies that over ten years will cost 56% more than the last farm bill. It is only because the Congressional Budget Office must ignore the expiration date of these programs and assume their continuation into eternity that the bill can be judged to “save” billions. Similarly, the Senate bill costs $955 billion over ten years, an increase of 58% from the last farm bill.
- Food Stamp Nation: Roughly 80% of the bills are comprised of food stamps. This is because there are now nearly 48 million individuals on food stamps, compared with 30 million in 2008 and 17 million in 2000. One in seven Americans is now collecting food stamps. Yet, the reduction to the food stamp program made by these bills are miniscule (2.7% in the House and 0.5% in the Senate), not the sort of reforms needed to roll back the program. This is one reason why most conservatives are so intent on splitting up the bill between its food stamp and farm subsidy components—a reform ignored by both Agriculture Committees.
- Unaffordable Subsidies: The remaining 20% of the bill contains lavish price supports and revenue guarantees for farmers. For instance, while both bills eliminate wasteful direct payments to farmers, they redirect much of those “savings” back into a new “revenue protection” entitlement program that will effectively guarantee the profits for farmers that currently benefit from direct payments, and likely an even larger number of farmers (thus expanding the dependency and the number of beneficiaries of future farm bills). This additional safety net is on top of currently subsidized crop insurance available to farms and set at current crop prices, which are at or near all-time highs.
- Violation of the GOP Pledge to America: Packaging the food stamp spending and commodity subsidies together is the definition of legislative “logrolling” that has been used for generations to shield these programs from bold reforms by securing as large a coalition of supporters as possible. The American people voted that type of legislating out of office in 2010 when House Republicans adopted the Pledge to America, which precluded the packaging of unpopular legislation together.
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices,” Adam Smith, Wealth of Nations
One of the main justifications made by the proponents of the so-called Marketplace Fairness Act (S. 743) is that it remedies an unfair tax advantage that online businesses enjoy over their brick-and-mortar counterparts under current law. As a result, S. 743 has enjoyed strong support from many small retailers across the country. However, the legislation will prove to be a Trojan horse to the competitive interests of small retailers. Here is why:
- Boon to Big Business: Amazon is a key supporter of S. 743. As an online behemoth, why would Amazon support a bill that is designed to ensure that more taxes are collected for online purchases? Perhaps for the same reason Big Pharma supported Obamacare despite its inclusion of a tax on brand-name pharmaceuticals: because it means more business for them. Amazon now has a physical presence (a “nexus”) in most states, as a result of their distribution system, and is thus required to collect the sales taxes on transactions within those jurisdictions. Amazon is seeking to displace brick-and-mortar retailers by offering same day delivery, but this requires them to have a nexus in each state, meaning they will eventually have to collect sales taxes on almost all transactions. So to keep up with or eliminate their smaller online competitors who do not have a nexus in each state and therefore do not have to collect taxes on most transactions, Amazon has reversed course and thrown its support towards S. 743. Like any reasonably competitive business, Amazon’s support for S. 743 is rooted in its desires to drive out its competition (online and brick-and-mortar alike), rather than to lift them up.
: The Senate will soon consider the so-called “Gang of 8 bill,” a comprehensive package of reforms to the nation’s immigration system. The legislation (S. 744) provides amnesty to roughly 11 million illegal aliens within six months of enactment by granting them temporary legalized status
. The Heritage Foundation defines amnesty as follows:
The term “amnesty” is often used loosely with reference to aliens unlawfully in the United States. Sometimes it refers to converting the status of an alien from unlawful to lawful, either without conditions or on a condition such as a payment of a fee to the government. Sometimes it refers to granting lawful authority for an alien unlawfully in the U.S. to remain in the U.S., become a lawful permanent resident, or even acquire citizenship by naturalization, either without conditions or on a condition such as payment of a fee to the government or performance of particular types of work for specified periods. Amnesty comes in many forms, but in all its variations, it discourages respect for the law, treats law-breaking aliens better than law-following aliens, and encourages future unlawful immigration into the United States.