Economy

8 Things To Know About The ‘Cromnibus’ Budget Deal Congress Just Unveiled

CREDIT: AP Photo/Cliff Owen, File

House Speaker John Boehner (R-OH).

With government funding running out in a matter of days, congressional negotiators unveiled a spending bill for the coming year late on Tuesday night. Lawmakers and their staffs are poring over the 1,600-page document now and details of what it will mean for various programs are still emerging.

While the bill doesn’t make drastic changes to total government spending, it does contain a number of changes to public policy or funding levels that concern progressive groups and weaken programs for society’s most vulnerable. Here are seven important provisions buried within the so-called “cromnibus” bill.

Tax collectors will have to get by with a lot less money thanks to a second straight year of cuts to enforcement.

The Internal Revenue Service’s (IRS) enforcement division budget is being cut to under $4.9 billion for 2015. Motivated by the belief that IRS examiners conducted an ideologically-motivated witch hunt against conservative non-profit groups that work to influence elections, conservative lawmakers have sought to punish the enforcement division by shrinking its budget over the past two years. The cromnibus cuts IRS enforcement funding by about $135 million from its 2014 levels, which were in turn significantly below the 2013 levels. The department will have to enforce U.S. tax law in the coming year with roughly half a billion fewer dollars than it had two years ago.

Congress got Wall Street two early Christmas presents.

In addition to spending appropriations, the bill includes changes to various laws that are known as “policy riders.” One of these is drawing sharp criticism from Democrats and financial industry watchdogs. The Dodd-Frank Wall Street reform package passed in 2010 put new limits on how banks that receive taxpayer backing can use high-risk financial instruments known as a swaps, which were a key driver of the last financial crisis. Banks and other financial companies hate the “swaps pushout rule,” which has been praised as a crucial component of the reform law by the White House, Sen. Elizabeth Warren (D-MA), and Bush-era banking regulator Sheila Bair.

The cromnibus repeals the swaps pushout rule. Americans for Financial Reform and the Leadership Conference on Civil and Human Rights blasted the move as “a backroom deal buried deep in a stopgap government funding measure” that will increase the risks taxpayers and the economy face. Former Rep. Barney Frank called it “a terrible violation of the procedure that should be followed on this complex and important subject, and a frightening precedent that provides a road map for further attacks on our protection against financial instability.”

Compared to repealing the swaps rule, Congress’ second gift to the financial industry is a mere stocking stuffer. But it will have long-term consequences for public oversight of risky Wall Street behavior. The bill gives the Commodity Futures Trading Commission (CFTC) a $250 million budget, which is $65 million less than what the White House asked for and $30 million less than the maximum CFTC budget that would have been allowed under last year’s long-term budget deal. While the CFTC number is an increase over previous years, the bill requires the agency to spend $50 million of the budget on information technology. The agency needs to upgrade its systems to perform its vast new responsibilities under Dodd-Frank reform, so the tech money is welcome in a sense. But it also needs way more money for staff than is allowed under the cromnibus budget. The bill won’t require layoffs at the CFTC, but it will prevent the agency from staffing up in the coming year to keep up with its growing role in regulating the financial industry, a Democratic staffer close to the negotiations told ThinkProgress. Departing CFTC commissioners have been saying for years that the agency is understaffed, and employee morale is dangerously low at the agency already according to press reports.

The bill leaves homeless advocates out in the cold.

Earlier this year, the U.S. Interagency Council on Homelessness said it will take $2.4 billion to fund local anti-homelessness efforts through the Department of Housing and Urban Development (HUD). The cromnibus provides $300 million less than that for the permanent supportive housing programs for the homeless that HUD relies upon to end chronic homelessness.

Affordable housing advocates are worried that the bill will harm low-income families.

Low-income housing programs don’t face significant cuts in the cromnibus, but the bill sets them up for serious political problems in the near future. Section 8 vouchers get a little under $17.5 billion in the bill — more than half a billion below what the White House wanted, but close to what advocates had expected according to Linda Couch of the National Low-Income Housing Coalition. “The appropriators are saying that will be sufficient,” Couch said, but she is skeptical that keeping funding flat for the program will work and wants to see further analysis before concluding that the money will be enough. “Costs increase, tenant incomes are stagnating, and the bills the housing authority has to pay are increasing.” The HUD budget also appears far smaller than it really is, Couch said, because the agency is using a one-time gimmick to reduce its appropriations needs. After years of budgeting for section 8 payments to landlords based on contractual cycles, the agency is switching to a calendar-year accounting system this year. That reduces the amount of money it needs for the remainder of Fiscal Year 2015, but come next year those savings will be gone. In order to maintain the same level of program spending for low-income housing in Fiscal Year 2016, Couch said, HUD will have to ask for a $1.2 billion increase from a Congress that appears committed to shrinking government programs for the disadvantaged.

The people who drive 80,000-pound trucks won’t have to sleep as often before getting on the highway.

Negotiators tucked a policy rider into the bill that suspends regulations covering professional truckers’ sleep. The rules are esoteric and complicated, and both the industry and some of its drivers argue that the so-called “restart rules” are too heavy-handed. But highway safety advocates insist that the new rules would make the roads safer for everyone and help reduce the number of accidents like the one that nearly killed comedian Tracy Morgan in June. Sleep scientists appear to side with the safety advocates, as ThinkProgress reported earlier this year in a detailed look at the fight over sleep rules. But if the cromnibus becomes law, truckers will once again be able to push the boundaries of fatigue as they seek to maximize their paychecks.

Washington D.C.’s marijuana legalization effort might be disrupted. Or it might not be.

Conservative lawmakers successfully included a policy rider in the cromnibus that bars the city government of Washington, D.C. from spending any money or raising any tax revenue to implement the legalization of marijuana in the District, which voters overwhelmingly approved on Election Day. But Eleanor Holmes Norton, the closest thing that federally disenfranchised District residents have to a member of Congress, has said that the provision won’t do anything to impede legal marijuana because the ballot measure was designed to be self-executing without any spending or taxation. She will nonetheless attempt to have the language stricken from the bill at a Rules Committee hearing on the cromnibus on Wednesday.

Campaign finance regulations are phased out.

Campaign finance regulations have already crumbled in a variety of ways in recent years, and the cromnibus contains a provision that would gut what’s left of them. Currently, rich people can only give $32,400 per year to a political party. The cromnibus moves the decimal point on that cap, allowing annual contributions of up to $324,000 to the Republican or Democratic national committees. An expert who helped draft that landmark campaign finance reform law told Bloomberg the deal is “an unholy alliance to emasculate the national party contribution limits that were enacted to prevent corruption.”

UPDATE


The bill cuts $300 million from Pell Grants for low-income college students and gives it to student loan debt collectors.

The Washington Post reports that a cromnibus provision reduces funding for the Pell Grant program by $303 million to make up a shortfall in what it has budgeted to pay the companies that collect student loan debts on the government’s behalf. While the Pell program is currently operating at a surplus, it is projected to fall into deficit by 2017 even without the cromnibus cuts. The shortfall in payments to student loan servicing companies was created by similar money-shuffling in last year’s budget deal, according to the Post.

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