Busy highway

Another Highway Bailout and How Not to Finance It

On May 30, 2014, House Republican Leaders announced a plan to bail out the federal Highway Trust Fund (HTF) to the tune of $15 billion, paying for it with savings generated by reforms to the U.S. Postal Service (USPS). This proposal is flawed on a number of levels and should be rejected by Congress.

Highway Bailout:

Under current law, drivers pay a tax of 18.4 cents per gallon on gasoline and 24.4 cents on diesel fuel, which gets deposited into the HTF. Excessive spending levels set by highway bills enacted in recent years, and many spending diversions to non-road, non-bridge activities, have left the HTF with too many bills to pay but not enough money on hand. An additional $5 billion is needed to keep spending on pace through the end of the fiscal year, and that figure jumps to $15 billion for a one-year extension at current spending levels. If Congress does not bail out the HTF by the end of July, the federal government will continue to collect federal gas tax revenues, but it would have to begin slowing down its reimbursements to state Departments of Transportation.

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American Flag

The Water Resources Bill–A Return to Earmarks?

Proponents of the WRDA legislation have made much about the legislation being “earmark free.” Now while the bill seems to comport with the current earmark moratorium, it does fund or expand previous earmarks. A headline in the Washington Examiner this morning said it all: Earmarks may be dead, but pet projects live on.

For instance, the bill increases the cost share for the Olmsted Lock and Dam in Kentucky from 50 percent to 85 percent. This project was first authorized in 1988 at a cost of $775 million, and it is still not finished and now costs $2.9 billion. Why would the federal government take on more of the burden of the project? The WRDA bill has 34 expansions (authorization for construction) and 8 project modifications (increases in spending) to existing projects in the Army Corps of Engineers’ list of projects, but the real danger is the earmark-like process it sets up to authorize new projects going forward. Heritage Foundation analyst Emily Goff cautioned:

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Doctor

Defunding Obamacare: Questions & Answers, Excuses & Responses

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.      

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Farm tractor

Food Stamp and Farm Bill Excuses and Responses

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.

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Farm tractor

What Every Taxpayer Needs to Know About the “Farm Bill”

“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.
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