CRomnibus Disaster Signals a Sad New Normal in D.C.
Why the Senate Would Be an Even Higher Hurdle for the GOP Health Plan ·The Fiscal Times
David Dayen
House Democrats, under the thought leadership of Elizabeth Warren, waged a monumental yet ultimately unsuccessful fight against two dangerous provisions in the so-called “CRomnibus” year-end spending package. But regardless of whether or not the budget bill included a rollback of derivatives reforms, or a nearly ten-fold increase in the donation limits for party committees, the battle on Thursday illuminated how the next two years in Washington will play out, and it doesn’t bode well for anyone who doesn’t employ a personal registered lobbyist.
In fact, the high-profile measures obscured how the CRomnibus boosts special interests at the expense of ordinary people in a host of other ways. Nobody in the Democratic coalition objected as vociferously to these other giveaways to right-wing hobby horses and corporate wish lists. And given how the White House basically turned on its own party, all too happy to accept the roll-backs of liberal priorities, it’s clear that this kind of legislative sausage-making will be the norm, not the exception, come 2015.
The CRomnibus sets spending priorities for the fiscal year, and some of the bill’s effects will be seen in those changes to spending levels. It cuts $60 million from the EPA and a whopping $346 million, about 3 percent, from the IRS, at a time when the agency’s workload will increase with Obamacare. The IRS cuts signal to wealthy earners that they can freely engage in tax avoidance, with little expectation of an audit. This has not been part of the liberal revolt on the bill at all.
Still, policy riders are where the CRomnibus will have its biggest impact. Unrelated to spending priorities, appropriators attached dozens of the kinds of legislative maneuvers that you would expect to be subject to hearings, debate and amendment. Instead, these spare parts got fed into this must-pass behemoth at the last minute with practically no review, and they will significantly alter the course of policy over the next year.
That goes beyond letting big banks gamble on derivatives inside their taxpayer-insured depository institutions, or allowing wealthy donors to flood party committees with contributions. Yes, these pieces are egregious — so much so that, in the case of the campaign finance provision, nobody will even cop to having written it; we know that Citigroup wrote the derivatives provision.
Preventing the riskiest derivatives from being pushed away from big banks and into separately capitalized entities simply gives derivatives traders a taxpayer-funded backstop, and a subsidy from creditors. Saying that it’s no big deal doesn’t square with how furiously banks have sought the change. And claiming the CRomnibus makes up for this by increasing the budget of the chief derivatives regulator, the Commodity Futures Trading Commission, makes no sense: It hardly matters that the CFTC will now have more money to do things it is prohibited from doing. Moreover, allowing deregulatory measures to be hidden inside spending bills sets an awful precedent for the future. So Warren and her confreres were right to fight this.
But there’s so much more to the CRomnibus than just those two riders. Under the bill, trustees would be enabled to cut pension benefits to current retirees, reversing a 40-year bond with workers who earned their retirement packages. Voters in the District of Columbia who approved legalized marijuana will see their initiative vaporized, with local government prohibited from taxing or regulating the drug’s sale. Trucking companies can make roads less safe by giving their employees 82-hour work weeks without sufficient rest breaks. Pell grants for college students will be cut, with the money diverted to private student loan contractors who have actively harmed borrowers. Government financiers of overseas projects will be prevented from stopping funding for coal-fired power plants. Blue Cross and Blue Shield will be allowed to count “quality improvement” measures toward their mandatory health spending under Obamacare’s “medical loss ratio” provision, a windfall saving them millions of dollars.
I’m not done. The bill eliminates a bipartisan measure to end “backdoor” searches by the NSA of Americans’ private communications. It blocks the EPA from regulating certain water sources for farmers. It adds an exception to allow the U.S. to continue to fund Egypt’s military leadership. In a giveaway to potato growers, it reduces nutrition standards in school lunches and the Women, Infant and Children food aid program. It halts the listing of new endangered species. It stops the regulation of lead in hunting ammunition or fishing equipment. It limits contributions to the Green Climate Fund to compensate poor countries ravaged by climate change. I could go on. And even if the offending measures on derivatives and campaign finance were removed, all of that dreck would remain.
Policy riders are an enduring feature of must-pass spending bills in divided government — you may remember President Obama telling House Speaker John Boehner (R-OH) “I will give you D.C. abortion,” a reference to a prior budget deal that re-imposed a ban on local funding for abortions within the District of Columbia. But the flood of them in this bill, practically all of them benefiting one donor or another, offers a window into how Washington will operate in 2015 and beyond.
Those who say that gridlock will persist in the next Congress should look at how this deal went down. Senate Appropriations Committee Democrats negotiated the bill and therefore signed off on all the aforementioned policy shifts. Not even Warren or her colleagues threatened a filibuster — that tool is unlikely to stop many Republican efforts, especially on must-pass bills. And the opposition centered on two riders, ignoring the harm caused by dozens of others.
Worse, the White House, seen as the bulwark against the GOP’s imminent legislative dominance, never threatened a veto of the CRomnibus over these riders, and eventually supported the bill, presumably satisfied with the additional funding it received for ISIS war-fighting and efforts to control the Ebola outbreak. It actively whipped against its own party leadership in the House. Democrats complained of being “targeted and lobbied by the White House” on the legislation. This is sure to be a recurring policymaking feature of the next two years.
This wasn’t even the only bad legislation passed amid a distracted public’s contemplation of the holidays. Just as the derivatives and campaign finance measures obscured the other policy riders in the CRomnibus, the CRomnibus itself obscured yet another lazy extension of mostly corporate tax breaks, and a bill to have the government backstop terrorism insurance, which despite claims that it will “save the Super Bowl” is actually a handout of a government guarantee to the insurance industry without adequate compensation to the government for that gift. By the way, the terrorism insurance bill itself contains policy riders again chipping away at the Dodd-Frank financial reform.
So this is the new normal on Capitol Hill. Stirring GOP commitments to transparency have been exchanged for dead-of-night bills nobody reads designed to make good on promises of corporate favors. Bills that are quite literally the handiwork of K Street will get legislative priority. The precedent for making changes on signature issues by tucking rollbacks into must-pass legislation has been set, without much presidential objection, or indeed, with the White House’s active cooperation. “It shows that conservatives can use must-pass legislation to repeal the regulatory state,” said one GOP aide this week. And while big theatrical fights may get waged over single provisions, dozens of others can get pushed through under cover of darkness.
