On Friday, Congress passed and the President signed the Bipartisan Budget Act of 2018. It was a major win for Washington, DC – but a major loss for taxpayers and the next generation. Here are 10 things that we hate about the deal.
1. Size – both its Gargantuan Price Tag and its Numerous Major Topics
Weighing in at 652 pages and up to $2 trillion in new debt, the Bipartisan Budget Act of 2018 that Congress passed last week was one of the largest taxpayer giveaways that Congress has ever put together. It was not only a budget busting spending deal, it was also a collection of industry specific tax breaks, a package of health care program extensions, an expansion of farm subsidies, a massive $87 billion disaster relief package, and a debt ceiling increase that pushes any consideration of fiscal responsibility off until after the midterm election.
2. A closed door process with no opportunity for anyone but leadership to weigh-in
Any of those elements would have been major spending bills themselves – worthy of extended debate and amendments. Instead, Congressional leaders rolled them all into one massive bill and did not allow for a single amendment – opting to temporarily shut down the government rather than allowing anyone else have a say. In summary, the Bipartisan Budget Act of 2018 is the antithesis of good governance.
3. A collection of special interest tax breaks, including for Hollywood, race horse owners and Nascar
One of the worst traditions that Congress has created is a product called the “tax extenders package.” It’s a collection of narrowly tailored tax provisions that are typically industry specific and that are allowed to expire on an annual basis – only to have Congress retroactively renew them for another year. It’s a process that everyone hates except for the lobbyists whose jobs are preserved by their work on them.
The Bipartisan Budget Act of 2018 included a set of 32 tax breaks that expired at the end of 2016. The law renewed most of them for only one year. Yes, you read that correctly. Congress renewed tax breaks for 2017 – which means it is essentially a giveaway to the businesses who are eligible for them with no economic growth benefits. These include (costs over next 5 years):
- Race horse owners: $24 million
- Puerto Rican Rum Distillers: $676 million
- TV, film, and theatre productions: $441 million
- NASCAR: $38 million
- Railroads: $215 million
- Two-wheeled plug-in electric vehicles: $1 million
- Energy production and conservation: $8.5 billion
In total, the tax extenders package will cost $17.4 billion over the next 10 years – $13.3 billion of that price coming in 2018. Given the fact that Congress just passed “comprehensive” tax reform, there is no excuse for Congress to continue these tax loopholes on a year to year basis.
4. An Expansion of Expensive Subsidies for Livestock, Cotton and Dairy Farmers
Later this year, Congress is expected to consider the 2018 Farm Bill – a massive combination of farm subsidies and welfare payments. Division F of the Bipartisan Budget Act of 2018 provided livestock, cotton and dairy farmers an early harvest from their favorite crop – taxpayer dollars. The Bipartisan Budget Act of 2018 will include about $1.2 billion in new farm program spending, a “win for cotton and dairy producers, who for years have told Congress that 2014 farm bill programs aren’t providing enough help during the four-year downturn in the agricultural economy.” Notably, cotton is already the third most subsidized crop-by acre – receiving an average of $104 in tax dollars annually per acre from 2014-2016 – double the average of $48.52 per acre. The Bipartisan Budget Agreement also included $2.4 billion in disaster relief for farmers and ranchers.
5. Massive Spending Increases Without Much Needed Reform
Rather than eliminating duplicative programs and implementing much needed reforms – Congress decided to massively increase spending – to the tune of $300 billion over the next two years over the spending caps. We have already outlined how the lifting of these caps without commensurate changes to our nation’s long-term debt picture is a betrayal of future generations – but it also shows that they are not at all interested in doing the hard work of prioritizing funding that already exists.
The Government Accountability Office and Offices of Inspector General are constantly releasing reports with ways that could save billions in tax dollars while increasing efficiency. There is a list of 35 “high risk” areas that GAO has identified are especially vulnerable “fraud, waste, abuse, and mismanagement, or are most in need of transformation.” Instead of reform – Congress is just going to throw more money at these programs and hope it works out.
6. A Defense Boost Without a Pentagon Audit
The driving force for the entire bill was the incessant, blinding devotion by Republicans to spend a ton more on defense, $165 billion over the next two years. This, despite the inability for DoD and Congress to track where the defense dollars are going – as exemplified by a report last week that found the Defense Logistics Agency lost track of $800 million. Protecting the nation is a critical and fundamental role of the federal government – and the brave men and women in the armed forces deserve robust support. However, given report after report of wasteful spending at the pentagon and throughout the federal government, a prioritization of resources rather than a funneling of new debt would have better served our military and our taxpayers.
In addition, the bill negotiation process turned into a nearly equal level of spending increases for non-defense spending and wound up providing more defense spending than what President Trump requested and more non-defense spending than what President Obama requested in his final budget.
7. Reneging on the Framework of the Original 2011 Budget Bill to Betray an entire Generation
Read more here!
8. Lifting the Debt Limit by Adding a Ton More Debt
Once upon a time, Republicans believed that the debt limit was a critical juncture to consider our nation’s finances – even demanding a dollar of deficit reduction for every dollar that the debt limit is increased. This time around – they are ramping up the debt while pushing off the debt ceiling. This makes it more likely that one day we will hit the market’s debt ceiling – where we will no longer be able to fund our nation’s massive and rapidly growing debts.
9. Trying to Use Budget Gimmicks to Cover Some of the Costs
Congress pretended to offset some of the spending increases by extending fees and budget caps that will apply nine and ten years from now. In exchange for spending $296 billion extra dollars in 2018 and 2019 – Congress will spend $80 billion less in 2026 and 2027.
10. An Attempt to Quickly Move On Like Nothing Happened
Like David Blaine’s street magic – Washington will try to distract us by quickly turning focus to the Trump Budget, an infrastructure proposal, and a contentious immigration debate in hopes that the American people will quickly forget the budget blowout that paid off DC’s closest friends and made a mockery of the taxpayers. Unlike the Republican party’s memory loss on campaign promises of fiscal responsibility – we will not forget the month that Congress blew a hole in the federal budget and potentially brought down the hopes of generations with it.