Happy Halloween to everyone from Taxpayers for Common Sense. While Halloween is only a once per year event, Congress seems to like TRICKING (mostly) and TREATING (too rarely) taxpayers all year long. Here’s a few highlights of what Congress has stuffed in goodie bags this year:
TRICK: Yet again Congress didn’t get its work done and the government kicked off fiscal year 2015 at the beginning of this month with a continuing resolution to fund government into December. The last time Congress passed all of the spending bills individually and on-time was exactly 20 years ago. Continuing resolutions are wasteful and an inefficient way to run a government. We’re hoping that the 114th Congress has a treat for us here next year.
TRICK: New farm subsidy programs are costing billions more than were advertised earlier this year. Agriculture Committee leaders touted the farm bill as the only bipartisan deficit reduction measure to pass Congress. The biggest “savings” came from replacing annual checks to farmers (even if they didn’t grow crops) with a program that sends checks when income dips. As we predicted, these “shallow” loss programs are now projected to cost up to three times as much as advertised. The $23 billion the nearly $1 trillion bill was supposed to save against the baseline has all but vanished. Neat trick.
TRICK: Who is paying for the next submarine? If the Navy and the Armed Services Committees get their way it won’t be the Navy. Their idea is to have general Pentagon spending (Defense-wide) pay for it rather than the Navy’s own shipbuilding account. So far the spending committees haven’t fallen for this trick and we hope they don’t.
TRICK: The Department of Energy finalized a whopping $6.5 billion taxpayer backed loan guarantee to build new nuclear reactors at Plant Vogtle in Georgia. Given the project’s risk, the deal should never have gone through, but adding to the trickery was that the fee for covering the government’s cost of issuing the guarantee (credit subsidy cost) was calculated to be – wait for it – $0. The credit subsidy is required to reflect the guarantee loan’s risk of default. That calculation trick saved the companies tens of millions of dollars, but puts taxpayers at risk. Besides, if there is no risk in the loan, the government shouldn’t have been involved in the first place.
TREAT: The House Appropriations Committee rejected the Pentagon’s attempt to use Overseas Contingency Funds to purchase eight new F-35s. Sure they tried to dress the F-35 up in a costume that makes it look like it is an aircraft that is actually operational and flying overseas. But the committee saw through the ruse and gave taxpayers a TREAT.
TRICK: The Bureau of Land Management (BLM) is TRICKING taxpayers by TREATING coal companies to federally-owned coal at bargain basement prices. For years, the companies have largely dictated the size and scope of mining tracts offered for lease, and they routinely submit below-market bids for pennies on the ton for public coal. The Government Accountability Office, the Senate Energy Committee, and the Department of Interior Inspector General have all released findings that BLM has failed in its task to appropriately value the coal contained in the publicly owned land it is charged with administering.
TREAT: The two most significant proposals on comprehensive tax reform to date delivered the TREAT of eliminating or reforming several decades-old oil and gas subsidies. Then-Senate Finance Committee Chair Max Baucus’s (D-MT) tax reform proposal tackled Intangible Drilling Costs, Percentage Depletion Allowance, “Last In-First Out” inventory accounting method, and more. Across the Capitol, Ways and Means Committee Chair Dave Camp’s (R-MI) tax reform package cut many of the same oil and gas subsidies. While these proposals don’t go far enough to end the giveaways they are a good addition to the tax reform debate. The trick will be getting these and more enacted into law in 2015.
TRICK: Congress appears poised to use the post-election lame duck session to extend a hodge-podge of tax breaks known as the “extenders.” Instead of adding to the complex thicket of various carve outs and loopholes, Congress should be TREATING taxpayers to comprehensive tax reform (see above).
As we said at the top, taxpayers are getting a lot more tricks than treats. We know where Congress will be on the naughty or nice list (wrong holiday). You can bet that in the 114th, Taxpayers for Common Sense will be fighting for more taxpayer Treats. Happy Holloween!