Congress

Massive spending, tax packages headed for Senate

Lawmakers pointed out both sides had to make sacrifices in order to pass the bills

Speaker Nancy Pelosi, D-Calif., makes her way to a meeting of the House Democratic Caucus in the Capitol on Tuesday. (Caroline Brehman/CQ Roll Call)

The House approved $1.4 trillion in spending for the fiscal year that began almost three months ago, in an almost surreal business-as-usual fashion that seemingly ignored the historic articles of impeachment scheduled for the floor the very next day.

Lawmakers made a show of dividing the spending measures into two bundles, in order to avoid the oft-ridiculed omnibus bill that both sides say represents the worst of the “swamp.” But the rushed nature of the vote, and in particular the late-night deal that tacked on a nearly $54 billion tax package, runs counter to promises of a more transparent process where the rank-and-file has input and time to study the legislation.

“I’m not going to do it again. Nobody read it. It’s only hours old. Some people don’t even know what is in” it, President Donald Trump said in March 2018 when he signed a $1.3 trillion fiscal 2018 omnibus bill.

Instead, lawmakers released 2,313 pages of legislation Monday afternoon with both chambers expected to vote within a few days. “Congress is just cutting the omnibus into two bills, sending them to [Trump] at the same time, and hoping he won’t notice or care that it’s still just actually one big omnibus,” tweeted Brendan Buck, a former aide to then-Speaker Paul D. Ryan, R-Wis.

 

Texas GOP Rep. Chip Roy noted the House waived a rule saying lawmakers will have at least 72 hours to review bills before voting. “Days like today everyone declares bipartisanship, but in this version of bipartisanship, it is the bipartisan smell of Christmas jet fuels and everyone’s desire to get home,” he said.

There was also some strategic packaging involved, as congressional leaders combined what they deemed “security”-related spending into one $860 billion measure that lost support from House progressives but picked up Republicans. The vote on that measure was 280-138, with 75 Democrats voting ‘no.′

A separate bill, combining $555 billion in new appropriations for domestic and foreign aid programs with $445 billion in tax breaks and benefit program extensions, passed on a 297-120 vote, with nearly all Democrats in support but less than half of Republicans.

The Senate is expected to vote on the spending packages this week and key White House aides have indicated Trump plans to sign the bills before a temporary spending bill expires at midnight Friday. 

Wins and losses

During floor debate, lawmakers pointed out both sides had to make sacrifices in order to pass the bills.

“This is not the bill I would have written on my own, but I am proud we have been able to do so much good in this political environment,” House Appropriations Chairwoman Nita M. Lowey, D-N.Y., said during the debate on what lawmakers called the “national security minibus.“ 

Before the vote on the security-related bills, Congressional Progressive Caucus and Hispanic Caucus members said they’d oppose the four-bill measure, which includes the Defense, Commerce-Justice-Science, Financial Services and Homeland Security bills. They decried the lack of strings on border wall funding and immigration enforcement capabilities.

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“The bill before us today will not stop the abuse and wrongful detention of people in custody, nor will it prevent the Trump Administration from misusing federal funds to advance their horrific mass detention and deportation agenda. We also find it offensive that at a time when millions of families can’t afford to put food on the table, this bill wastes $1.375 billion on the pointless, immoral border wall,” Progressive Caucus co-chairwoman Pramila Jayapal, a Washington Democrat, and co-chairman Mark Pocan of Wisconsin said in a statement.

In total, the packages provide $8 billion more for defense programs than the $738 billion envisioned by the July budget caps deal, though there was little objection because the money was for emergency repairs to military bases damaged by natural disasters. 

There’s also about $37 billion more than the $632 billion for nondefense programs in the July pact, including $15 billion allowed under a prior agreement to limit “phantom” offsets from mandatory programs that don’t need the extra money. The deal also sets aside more than $17 billion for Federal Emergency Management Agency disaster relief funds, and money for wildfire suppression accounts, biomedical research and more that’s accounted for in prior budget deals but doesn’t violate regular spending caps.

All told, nondefense accounts would get about 5 percent more than they received in fiscal 2019, while defense programs would see a 4 percent bump.

Both sides were able to tout “wins” in the deal: On the wall, for example, Democrats kept overall funding to last year’s level, while Republicans removed some restrictions on the money and the president’s transfer authority would remain in place. While it took months to hammer out the compromise, it was ultimately implemented in a way that had little of last year’s drama.

Riding the train

Congressional leaders and the White House added a lengthy list of additional measures to the eight-bill package, including legislation that would increase the age to buy tobacco products to 21 and a fix for retired coal miners pension and health care benefits.

The legislation would repeal three key taxes included in the 2010 health care law, in an unexpected surprise backed by labor unions, employers, health insurers and medical device manufacturers. Eliminating those three taxes alone would cost $373 billion over a decade, according to the Joint Committee on Taxation.

And late Monday night, key negotiators were able to reach a bipartisan agreement to attach a slew of tax extenders to the package through a self-executing provision in the rule governing floor debate on the spending package.

The move would renew several tax provisions that already expired or would end Jan. 1. Among the renewed tax breaks are deductions for mortgage insurance premiums, college costs and large medical expenses; excise tax breaks for craft brewers and distillers; credits for employer-paid family and medical leave, investors in low-income communities, and faster depreciation for racehorses and motor sports complexes, among others.

The Distilled Spirits Council said the agreement to extend the craft distillers’ tax cut would prevent a 400 percent tax increase starting Jan. 1.

The tax package includes an extension through 2022 for lapsed biodiesel and short-line railroad maintenance credits as well as several “technical corrections,” including for churches and other nonprofits that provide employee parking and rural electric cooperatives that could have lost their tax-exempt status.

For Speaker Nancy Pelosi, D-Calif., who had to give up prized expansions of refundable tax credits for low-income workers, the backing of vulnerable House Democrats for certain provisions made the deal easier to swallow.

The biodiesel industry leveraged powerful support from Senate Finance Chairman Charles E. Grassley, R-Iowa, who helped establish the credit 15 years ago. And National Biodiesel Board CEO Donnell Rehagen gave Grassley and Rep. Abby Finkenauer, a freshman Democrat, equal praise for securing the deal. 

Finkenauer and Cindy Axne, D-Iowa, a co-sponsor of Finkenauer’s bill to renew the biodiesel credit, both flipped GOP districts in 2018. Inside Elections with Nathan L. Gonzales rates Axne’s race a “Toss-up,” while Finkenauer’s is rated “Tilt Democratic.”

The nation’s largest biodiesel producer, Renewable Energy Group, is headquartered in Iowa. Sen. Maria Cantwell, D-Wash., who helped broker the late-night tax agreement, represents a huge REG facility in her home state.

The deal gives the biodiesel credit a longer extension than most, to 2022, a distinction shared only by a track maintenance tax credit for short-line and regional railroads. The short-line credit enjoys broad bipartisan support in both chambers, with legislation to make it permanent backed by 297 House members and 63 senators. Senate Minority Leader Charles E. Schumer, D-N.Y., is among the original co-sponsors in that chamber.

In October, Schumer said renewal of the railroad credit was necessary for a planned $3 million track upgrade important to Wayne County, N.Y., employers like Mott’s, the apple juice and applesauce manufacturer.

Doug Sword contributed to this report.