Tuesday, March 22, 2016

What is Congress hiding?

Legislators smuggled all kinds of questionable provisions into a last-minute, $1.1 trillion spending bill

EVERY FISCAL YEAR, the Congressional Budget Act of 1974 requires the House and Senate to enact 12 separate discretionary spending bills, one for each appropriations subcommittee (Agriculture, Defense, Homeland Security, and so on). They have failed to meet this minimum requirement since 1994.

When Republicans re-took the Senate in November 2014, thus ensuring GOP control over both houses of Congress, they vowed to change all that. "One of my challenges is to try to convince some of my members that passing an appropriations bill is a good thing, not a bad thing," incoming Majority Leader Mitch McConnell (R-Ky.) told The New York Times. "The Senate basically didn't do squat for years."

Continuing resolutions keep the federal government funded for short stints while politicians continue arguing about the appropriations bills they refuse to pass.

Yet squat is still the order of the day. While the unified Congress did manage for the first time in six years to pass a budget resolution--the also-required, nonbinding baseline blueprint from which the appropriations bills are supposed to be carved--the appropriations process once again devolved into an ungainly, unreadable, last-minute mess of legislation called the omnibus. Clocking in at $1.1 trillion for Fiscal Year 2016, and stuffed with bills that even the relevant committee chairs had no idea were going in (see "The Last Honest Man in Congress," page 32), the best thing that can be said about the omnibus was that at least it wasn't another continuing resolution.

Continuing resolutions (or C.R.s, as they are known in D.C.), keep the federal government funded for short stints while politicians continue arguing about the appropriations bills they refuse to pass. In practice, they increase the frequency of can't-miss deadlines--and, during periods when Congress is divided, round-the-clock headlines--after which money for all "nonessential" purposes runs out.

That hypothetical was realized on October 1, 2013, when a cutoff to appropriate funds for the next fiscal year came and went without even the band-aid of a continuing resolution. House Republicans had passed a package that purposefully did not include money for the Affordable Care Act. President Barack Obama and the Democrat-led Senate refused to consider the bill. For 16 days the government went into power-saver mode, until a heavily criticized GOP gave in and passed a C.R. that funded Obamacare.

Since that moment, Republicans--particularly their new House Speaker, Paul Ryan (R-Wis.)--have preferred that their white-knuckled deadlines come less frequently, and without the noisy arguments over a shutdown. In October, as Ryan was on the verge of taking the gavel from John Boehner (R-Ohio), the House passed a two-year budget deal to increase federal spending by $80 billion, remove the 2013 sequestration caps on military spending, and suspend the debt limit until March 2017. In one fell swoop, the comparative fiscal discipline imposed during the divided-Congress era of 2011-2014 was discarded. The main drama left was seeing how exactly lawmakers would divide up the spoils.

Omnibus packages, which combine at least two and usually more individual spending bills, offer several advantages to members of Congress at the direct expense of their constituents. By combining so many disparate elements into one big legislative glop, representatives leave a much smaller paper trail against which they might be held accountable for their votes. By coming in a must-pass rush, the packages become ripe for gaudy earmarks and tailor-made rule-changes benefiting favored interests. In the eyes of the political press, the up-or-down vote becomes a referendum on legislative responsibility where the only wrong answer is no.

The 2,009-page omnibus (along with an extra 233 pages of tax extenders) for Fiscal 2016 was introduced on December 16, passed by both chambers on December 18 (316-113 in the House, 65-33 in the Senate), then signed into law later that day. Combined with October's budget deal, the compromise effectively blows a hole through an already bleak long-term debt and deficit outlook; the Congressional Budget Office in January estimated that annual deficits would zoom back north of $1 trillion by 2022, three years earlier than its previous projections.

So what exactly is in this latest exercise in fiscal irresponsibility?

Some measures, like one opening up America's ability to export crude oil for the first time since 1975, make welcome changes to a smothering regulatory code. Others, like a grant of immunity to companies who share customer information with the feds, infringe the rights and privacy of American citizens. Below is reason's guide to the stuff politicians tucked away inside the Consolidated Appropriations Act for 2016.

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REDUCED PRIVACY

LODGED MORE THAN 1,700 pages deep in the omnibus is the Cybersecurity Act of 2015. Originally known as the Cyber Intelligence Sharing and Protection Act and then as the Cybersecurity Information Sharing Act, the law purported to serve as a mechanism for private businesses to share and disseminate information about online security threats with the help of the federal government.

Sharing information necessarily also means sharing customer data. Many tech companies, such as Google and Apple, opposed the legislation out of concern for their users' privacy. After all, the personnel office of the same government that would be responsible for protecting this shared data was struck by a major hack in 2015. Data about millions of people were stolen.

Retailers, though, supported the proposal, and it's easy to see why. In exchange for sharing customer data with the federal government to help fight cybercrime, the law also protects retailers from liability if anything should go wrong.

President Barack Obama threatened to veto an early version of the legislation. But this didn't reflect a concern about privacy--according to a memo obtained by Reuters, the administration was actually pushing for the ability to use the data to fight more than just "cybercrime." That push won the day: The Cybersecurity Act of 2015 allows the government and law enforcement to use the information they gather not just to combat hackers and terrorists, but also any "specific" threat of physical or economic harm, any threat to a minor, fraud, identity theft, and espionage. And now, even if the information sharing violates the terms of a company's service, users have no legal recourse to object.

Scott Shackford (scott.shackford@reason.com) is an associate editor at reason.com.

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INCREASED VISAS

H-2B VISAS ALLOW lower-skilled, non-agricultural, and seasonal migrants to temporarily work in the United States. They're often employed in leisure, landscaping, and labor-intensive occupations like crabbing on Maryland's Eastern Shore. Prior to the passage of the omnibus, such immigrant workers were capped at 66,000 annually (and, unsurprisingly given both supply and demand, maxed out every year).


The omnibus increased the number of H-2B visas indirectly by exempting renewals from the 2016 cap, which means that H-2B workers who were here in 2013, 2014, and 2015 won't be counted against the 2016 quota. This is a tried and true legislative method for increasing the de facto number of visas without technically adjusting the number of caps written into law.

A similar increase in the mid-2000s doubled the amount of H-2B workers, but new Department of Labor and Department of Homeland Security regulations make such a large increase unlikely today. The Congressional Budget Office (CBO) estimated that the latest change will increase H-2Bs by about 8,000 in 2016. 1 predict a maximum of 20,000 additional H-2Bs will be issued, if bureaucrats work efficiently and the economy grows at a decent clip.

Guest worker programs like the H-2B garner tremendous bipartisan support. This H-2B expansion passed the appropriations committee with unanimous Republican backing and was enthusiastically endorsed by Democrats such as Maryland Sen. Barbara Mikulski.

H-2B visas are so numerically limited that they do not have a discernible effect on the American labor market as a whole. They could conceivably impact certain occupations, potentially lowering wages or increasing unemployment for a small number of Americans. But many of the seasonal occupations staffed by H-2B workers would simply disappear if foreign workers were unavailable. The expanded H-2B cap is a small, temporary, and welcome liberalization of a modest visa program.

Alex Nowrasteh (anowrasteh@cato.org) is the immigration policy analyst at the Cato Institute's Center for Global Liberty and Prosperity.

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CRUDE EXPORT BAN LIFTED

ON NEW YEAR'S EVE, the Theo T oil tanker left Corpus Christi, Texas, for Italy carrying the first crude oil exported from the United States in 40 years. During the "energy crisis" of the 1970s, Congress passed the Energy Policy and Conservation Act, which banned, with just a few minor exceptions, the export of unrefined petroleum. Congress wrongly believed that the export ban would somehow insulate the United States from the global petroleum market and help to achieve the illusory goal of "energy independence."

Oil industry pressure on Congress for permission to export has grown as domestic production has nearly doubled since 2008 due to advances in fracking and horizontal drilling, unlocking billions of barrels from shale formations. Because of the export restrictions, the price for bottled-up Midwestern oil was lower than the worldwide market average. The price differential in recent years between the global benchmark Brent crude and West Texas Intermediate oil has frequently exceeded $15 per barrel, although by mid-January 2016 the spread between the two crudes had essentially collapsed.

U.S. refiners, of course, liked paying the lower prices. Producers, however, argued that allowing American oil to be shipped abroad would encourage further drilling and development of domestic supplies. This in turn would create more jobs and reduce the trade deficit. Logrolling was ultimately the key to lifting the ban: Republicans wanted oil exports and Democrats wanted investment tax credits for solar and wind energy. Both got what they demanded.

Science Correspondent Ronald Bailey (rbailey@reason.com) is the author of The End of Doom: Environmental Renewal in the 21st Century (St. Martin's).

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TITLE IX WINDFALL


THE AGENCY MOST responsible for the widespread deprivation of college students' free speech and due process rights got a big raise in the omnibus spending bill. The legislation included a 7 percent funding bump for the Department of Education's Office for Civil Rights (OCR).

OCR is the obscure agency responsible for making sure colleges and universities are following Title IX, a gender-equality guarantee in federal funding for higher education. As written, Title IX is innocuous. It merely states that "No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving federal financial assistance." But in recent years, the unelected bureaucrats who work for OCR have interpreted that single sentence as a mandate to zealously patrol college campuses for anything and everything that could possibly qualify as sexual harassment.

Their efforts have been a disaster for campus free expression. Students and faculty members who say the wrong thing are increasingly investigated for possible Title IX violations by administrators paranoid they are going to lose federal funding if they don't play along. Even worse, OCR, having decided that the adjudication of rape is part of its purview, has sent guidance to universities instructing them to deprive accused students of basic due process by, for example, forbidding them from cross-examining their accusers.

Republican leaders, at least, have not been blind to OCR's overreach. Tennessee Sen. Lamar Alexander recently accused the agency of making up laws on the spot. It's a shame, then, that Republicans joined Democrats in granting additional funding to the office to carry out its Tide IX witch hunts in 2016. Talk about being rewarded for bad behavior.

Robby Soave (robby.soave@reason.com) is a staff editor at reason.com

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WAVERING WAIVERS

ABOUT 20 MILLION VISITORS each year take advantage of the Visa Waiver Program, which enables easy travel to and from the United States without a visa from friendly nations. For the last 25 years, the vast majority of citizens from 38 countries (Europe, basically, plus Australia, Brunei, Chile, Japan, Singapore, and Taiwan) have been able to come and go freely for trips of less than 90 days.

But thanks to the Visa Waiver Program Improvement and Terrorist Travel Prevention Act of 2015, which was folded into the omnibus, many of those travelers will now have to schlep to an embassy or consulate to obtain a visa to gain entry into the Land of the Free.

According to new rules, anyone who has traveled to Iraq, Syria, Iran, or Sudan in the last five years is no longer eligible for a visa-free visit. Dual citizens of those nations (and other countries the Department of Homeland Security designates as "nations of concern") will also have to obtain visas. The rules require sophisticated passports from nearly all travelers under the program as well as Interpol database checks. As written, the law offers no exceptions for children, students, researchers, or aid workers. And because these agreements are reciprocal, travel by U.S. citizens to those countries is likely to become more difficult in the very near future as well.

Opposed by everyone from the American Civil Liberties Union to the European Union's ambassador to the U.S., the move is largely security theater: Lots of paper will get pushed and movement hindered for what are likely to be minimal or nonexistent security gains.

Katherine Mangu-Ward (kmw@reason.com) is managing editor of reason.


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TAX EXTENDERS

THE 2016 OMNIBUS BILL made a host of temporary tax provisions permanent that together amount to a 10-year, $500 billion-plus tax cut.

Reducing the squeeze on taxpayers is always reason to celebrate. But the new law also makes the tax code marginally simpler, which is more unusual. Previously, there were over 50 temporary tax provisions that Congress had to reauthorize every year or two. The omnibus makes about half of them (representing about two-thirds of their total cost) permanent. That's good news for taxpayers, since an Internal Revenue Code that's constantly changing is a moving target that businesses and families cannot plan around.

The provisions the bill makes permanent have been the subject of massive lobbying efforts for the past decade or more. Houses have been built and tuition accounts funded throughout the Beltway on the fees earned by people advocating for and against items in this "tax extenders" package.

The bill also makes future tax reform much easier. Because these extenders are now permanent, government scorekeepers can assume a certain amount of revenue will never be collected, thus lowering the baseline. That means someone designing a tax reform bill doesn't have to raise as much new money. Put another way, a candidate who runs on cutting taxes just saw the idea become more likely, since it too will score as $500 billion less "costly" over a decade than it would have before December.


Ryan Ellis (ryanleonardellis@gmail.com) is a conservative tax activist and the former tax policy director for Americans for Tax Reform.

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ASSET FORFEITURE REFORM

ONE SALUTARY EFFECT of the omnibus bill is an at least temporary death to the Department of Justice's "equitable sharing" asset forfeiture program. That program's budget was first reduced by $746 million in November's Bipartisan Budget Act of 2015, then cut by another $478 million rescission in the Consolidated Appropriations Act for 2016.

The equitable sharing program lets local cops evade more stringent requirements for seizing people's assets in some states by allying with federal law enforcement. In doing so, those agencies get forfeiture kickbacks from the feds of up to 80 percent of the property taken from citizens. A 2015 Institute for Justice study found that from 1997 to 2013, only 13 percent of people who lost property through this program were even charged with a crime.

This does not mean an end to the practice of asset forfeiture--just the federal kickbacks to state and local authorities for their help. But the lack of a payoff may lead to less local cooperation, and thus less forfeiture. At least six law enforcement interest groups, including the National District Attorneys Association and the National Sheriffs' Association, have protested the cut in strong terms.


The Justice Department swears it will resume the payoffs once it can afford to again, but for now, the funding reduction is a big deal to local law enforcement. States and localities gained some $643 million from the practice in 2013, more than triple the corresponding figure from 2000.

Senior Editor Brian Doherty (bdoherty@reason.com) is the author of four books, including Ron Paul's Revolution: The Man and the Movement He Inspired (Broadside/HarperCollins).

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CANNABIS CONFUSION

THE OMNIBUS SPENDING bill renews three cannabis-related riders that together reflect a Republican Party torn between its anti-pot prejudices and its avowed federalist principles.

Section 542, introduced by Reps. Dana Rohrabacher (R-Calif.) and Sam Farr (D-Calif.), says the Justice Department may not use money appropriated by the bill to "prevent" states, Guam, Puerto Rico, or the District of Columbia from "implementing" their medical marijuana laws. The Justice Department claims the rider does not forbid it to prosecute medical marijuana suppliers or take their property. Rohrabacher and Farr disagree, and so does at least one federal judge.


Section 763, backed by Senate Majority Leader Mitch McConnell (R-Ky.), says money appropriated by the bill may not be used "in contravention of" a 2014 law authorizing experimental hemp cultivation projects. The amendment adds that the feds may not "prohibit the transportation, processing, sale, or use of industrial hemp that is grown or cultivated" in accordance with that law--language aimed at preventing meddling by the Drug Enforcement Administration.

Section 809, introduced by Rep. Andy Harris (R-Md.), says the District of Columbia may not use "funds contained in this Act" to "enact any law, rule, or regulation" that legalizes a Schedule I substance. Since Initiative 71, the 2014 ballot measure that eliminated penalties for possession, sharing, and home cultivation of marijuana in the nation's capital, has already been enacted, that language does not affect those aspects of legalization. But the rider does block D.C. from proceeding with plans to regulate the commercial production and distribution of recreational marijuana with money allocated by this bill or the previous one.

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