Dec 01, 2015
Appropriations Riders That Should be Included in 2016 Spending Bill
Post by Freedom Partners
Last month, Congress passed a budget-busting agreement that increased 2016 federal spending by $50 billion above levels agreed to in the Budget Control Act of 2011. Now Congress has until December 11 to negotiate the details of spending for next year and pass a bill to avoid a government shutdown.
While the budget will undoubtedly be a disappointment for anyone concerned with Washington’s unsustainable spending trajectory, Congress can include other provisions—often called “riders”—that will help shield taxpayers from wasteful spending and protect the economy from bureaucratic overreach.
In no particular order, here are some examples of common-sense policy riders that Congress should insist on including in any spending legislation considered in the coming weeks.
Prohibit Bailouts for Obamacare Risk Corridors: The Affordable Care Act (ACA)—otherwise known as Obamacare—included a provision that was intended to protect insurers from the risk of losses associated with expanded coverage. This “risk corridor” policy required profits from some insurers be used to offset losses experienced by other insurers.
Like almost every other part of Obamacare, this policy hasn’t worked out as planned. Insurance companies lost much more money than expected and have been increasing premiums across the county. Now insurers are facing a $2.5 billion shortfall from what they expected to receive and are looking to taxpayers for a bailout.
Last year, Congress and the president agreed to a provision in appropriations funding that would prohibit more taxpayer dollars from bailing out insurance companies for losses incurred by a program that was supposed to pay for itself (Sec. 227). Congress must protect hard working Americans by retaining that rider.
Prohibit DOJ From Using Bank Settlement Funds Without Oversight: On August 21, 2014, the Department of Justice (DOJ) announced a $16.6 billion settlement with Bank of America to resolve claims against the company related to mortgage loans.
Under the terms of the settlement, $6.6 billion will be dispersed in a “form of relief to aid hundreds of thousands of consumers harmed by the financial crisis precipitated by the unlawful conduct.” DOJ has incentivized giving billions to organizations that provide HUD-approved housing counseling. Many of these organizations have used resources in the past to fund a wide variety of political activity.
On June 2, 2015, the House adopted H. Amdt. 318 as an amendment to the Commerce, Justice, and Science Appropriations Act of 2016 (H.R. 2578) by voice vote. The language of this amendment would prohibit any future settlement agreements like the one made with Bank of America and should be included as an important taxpayer protection.
Prohibit “Sue and Settle” Rulemaking by the EPA: “Sue and Settle” is a process through which activist groups collude with the EPA to impose new regulatory burdens without going through the normal rule-making process. Under this practice, an activist group will sue the federal government if regulations aren’t created to address a perceived threat. Then, the group will come to a “settlement” agreement wherein the EPA agrees to implement the new rule.
The process is now being used to avoid implementation practices designed to determine things like the economic impact of legislation. Huge regulations are being imposed without proper oversight or consideration and often the least fortunate Americans are hit hardest. Congress should prohibit funding for this end-run around the regulatory process.
Change CFPB’s Source of Funding: The Consumer Financial Protection Bureau (CFPB) was established by Dodd-Frank (H.R. 4173) to regulate financial products. Under the law, CFPB was given a mandate to “protect” consumers from contracts and products that it deemed harmful.
Unfortunately, CFPB was designed to circumvent any oversight from Congress and is currently running under a unilateral leadership structure. This has created a new wave of regulations that are raising costs for consumers and making it harder for the least fortunate Americans to access traditional lines of credit.
Congressional oversight of this regulatory agency is prudent and necessary. The House Appropriations Committee included language in its Financial Services bill (H.R. 2995) to bring CFPB funding under the normal appropriations process rather than letting it operate without oversight or accountability. Any FY 2016 spending legislation should retain that important provision.
Prohibit the Implementation of Greenhouse Gas Regulations for New and Existing Power Plants: The EPA recently finalized its first-ever carbon pollution standard for new and existing fossil fuel power plants, known as the “Clean Power Plan.”
These regulations are targeted at coal-fired power plants, which provide affordable, reliable energy for millions of American families. The regulations will drive up costs of production, which will be passed on to all energy customers.
These costs will impact low-income Americans hardest, who already spend more than 10% percent of their post-tax income on electricity. And for all the costs imposed, the EPA itself has admitted that the plan will have a limited impact on global climate change.
Prohibit the IRS from Applying Gift Tax to Tax-Exempt Social Welfare Organizations: Earlier this year, the IRS released a statement citing ambiguity as to whether donations to social welfare organizations, organized under the tax code sections 501(c)(4) and (c)(6), should be subject to the federal gift tax. Despite the fact that donations to these non-profit organizations have never been taxed as gifts, the IRS has threatened some groups with gift tax applicability.
This year, legislation to clarify the tax-exempt status of these organizations (H.R. 1104) passed without objection in the House of Representatives, but has yet to be considered in the Senate. While permanent legislation to clarify this issue is necessary, Congress can protect free speech in the meantime by including language to block the IRS from applying the gift tax in ways that were never intended.
Prohibit Issuing New NLRB Joint-Employer Standards: The National Labor Relations Board (NLRB) recently adopted a new standard for determining “joint-employer” status that will have a substantial and negative impact on the franchise industry.
The NLRB had long held that a “joint employer” for the purposes of legal liability was the company that exercised “direct and immediate” control over the terms of employment. Now, rather than looking for evidence of direct control, the NLRB will simply look to see if the parent company could conceivably control those conditions, regardless of whether or not that power is ever exercised. This will negatively impact and drive up costs for any business, large or small, using a franchise or contract/subcontract model to sustain their business. It will drag parent companies into employment litigation, force unionization on employees where it has never existed and discourage large companies from contracting with small, local businesses.
Prohibit EPA Waters of the U.S. Regulations: This year, the Environmental Protection Agency (EPA) issued new rules to expand the legal definition of “Waters of the United States” in order to drastically increase the agency’s authority to regulate water on private property. Since its issuance, 27 states have challenged the EPA’s power grab and a U.S. Court of Appeals halted the implementation of the rule in October.
The House Appropriations Committee already included language to specifically block the implementation of this costly regulation (Sec. 422). Any 2016 funding should continue this prohibition and protect Americans from costly government overreach.
Exempt DOD from Costly Green Energy Executive Orders: In recent years, a host of federal mandates have resulted in the Department of Defense wasting limited resources on expensive green energy when cheaper energy is readily available. Military spending is already high and these mandates force the military to misallocate their funding.
To impose burdensome regulations on the military further strains our armed forces during a time of unrest around the world. It is important to allow the DOD to measure and determine best practices for implementation of effective defense strategies without having to artificially increase costs to satisfy a political agenda.
The Appropriations Committee included in its DOD appropriations bill a House-passed amendment to exempt the DOD from a number of these costly green energy mandates. Any other spending legislation should include this amendment.
Prohibit Funding for Operation Chokepoint: Operation Chokepoint is the name given to a politically charged program carried out by the Federal Deposit Insurance Corporation and Department of Justice in order to discourage financial institutions from offering financial services to certain legally operating industries. Targeted industries that are being “choked off” from the banking system include ammunition and firearms, fireworks, coin dealers, debt collectors, tobacco and pharmaceuticals.
Giving the federal government’s power to decide which industries are favored and, more importantly, which are not, sets a dangerous precedent for operating businesses in this country. Congress should use its power of the purse to cut off funds for this harmful and unfair program.
Prohibit Funds for the FCC to Implement Net Neutrality Until Court Challenges are Resolved: Earlier this year the Federal Communications Commission reclassified internet service providers (ISPs) as “common carriers” under the Communications Act of 1934. This means the Internet can now be regulated the same way as other public utilities like telephone services.
Up to this point, ISPs had been classified as “information providers” and therefore subject to less stringent regulations. Supporters of this regulation and so-called “net neutrality” ignore the significant costs that these policies create: One study from New York University of Law found that net neutrality regulations could cost the economy $63 billion over five years and eliminate half a million jobs. More importantly, regulation of the web jeopardizes the freedom that has made the Internet what it is today. Congress should retain a House-passed rider to block this overreach.
Prohibit Implementation of the HUD Disparate Impact Rule: Earlier this year, the Department of Housing and Urban Development (HUD) released its Affirmatively Furthering Fair Housing rule, which requires municipal governments to “perform an assessment of land use decisions and zoning to evaluate their possible impact on fair housing choice.” Under the rule, it is much easier for a plaintiff to bring a housing discrimination claim against mortgage lenders, insurers, and landlords—because they no longer need to prove intentional discrimination.
Now, even if a mortgage company or similar entity engages in nondiscriminatory risk assessment in housing determinations, they can be held liable if those assessments result in different approval rates for protected groups of consumers. This will open the floodgates for housing discrimination lawsuits and require lenders, insurers and landlords to abandon best business practices in order to comply with HUD. Ultimately, this will make it harder and more expensive for Americans to get credit. Congress should prohibit funding for this rule.
Prohibit Regulatory Changes to the Definition of the Term “Fiduciary”: The Department of Labor (DOL) recently implemented a new standard that imposes fiduciary obligations on securities brokers and financial advisors providing advice for individual retirement accounts (IRAs).
DOL’s plan, deceptively advertised as requiring financial advisors to put the interests of their clients ahead of their own financial interests, could actually cost retirement savers as much as $80 billion over 10 years. A large portion of these costs would be borne by small savers, who could lose access to human financial advisors because their small accounts would become uneconomic to serve under the rule, since they would expose advisory firms to new liability risks.
Rather than protecting retirement savers, the rule imposes burdensome costs and will limit the professional assistance available to small investors when making important retirement investment decisions.
Prohibit Enforcing Section 526 Fuel Mandates: The Energy Independence and Security Act (EISA) of 2007 limits the federal government’s ability to purchase certain fuel with the intention of forcing government agencies and contractors to rely on renewable energy sources.
Specifically, the bill states that the government cannot buy fuels unless the greenhouse emissions are “less than or equal to such emissions from the equivalent conventional fuel produced from conventional petroleum sources.” In reality, however, this just leads to reliance on foreign oil because shale and other domestic sources have a more energy-intensive extraction process.
While Congress should act to repeal this provision, the military should be able to utilize reliable, cost-effective, and readily available fuel in the meantime. Congress should prohibit funds from being used to enforce Section 526 of the EISA.
Prohibit EPA from Imposing New Regulations on Wood Burning Stoves: Last year, the EPA proposed new rules to regulate home-heating woodstoves that would have the effect of banning the sale of 80 percent of current wood-burning heaters.
The regulation of wood-stove emissions is a clear government overreach that could end up negatively impacting the most vulnerable Americans. Congress should take common-sense action and include an amendment to prohibit funds to implement the EPA’ performance standards regulation for new residential wood heaters, hydronic heaters and forced-air furnaces.