Extraneous Spending Undermines Phase Four of the GOP Proposal
The Senate Republican Phase Four legislation, the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act includes many positive proposals. In its legislative package, the Senate included tax relief for remote workers and volunteers facing tax assessments in multiple states, expanded the scope of the Employee Retention Tax Credit, and provided for a fiscally responsible review of America’s trust funds. Yet at the same time, the $1.1 trillion legislation includes wasteful spending proposals that make the HEALS Act less taxpayer-friendly than it could be.
While agricultural producers have suffered significantly from COVID-19, the HEALS Act would continue a worrisome pattern of profligate spending on agricultural production. Last year, Congress authorized a significant $10 billion jump in farm assistance appropriations, up from $13 billion the year before, in order to combat the negative impact of trade restrictions. The 2019 spend was also about double what had been appropriated in any of the last ten years.
The coronavirus has only exacerbated this lack of spending restraint. The Coronavirus Food Assistance Program, established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, authorized an additional $9.5 billion in emergency agricultural aid above normal appropriations. The HEALS Act would compound this by appropriating an additional$20 billion. It’s important that crucial industries impacted by the virus are not left behind, but this unprecedented level of spending is not justified by the circumstances.
Even less defensible are supplemental appropriations for defense included in the HEALS Act, totalling $18 billion. This amount includes funding for new military vehicles and aircraft, ship building and depot maintenance, and armaments procurement. There is also an additional $2.6 billion appropriation for operations and maintenance spending, to be added to the $1.9 billion provided for by the CARES Act.
Funding for defense is of course important, but it has no place in legislation designed to provide emergency relief to American businesses and families. The place for these proposals is in dedicated appropriations bills for the Department of Defense, not tagging along in unrelated — and badly needed — emergency legislation.
Misguided trade barriers also made their way into the HEALS Act in the form of Buy America provisions. Back in May, more than 250 economists signed on to a National Taxpayers Union letter urging the federal government to stay away from provisions that restrict the access Americans have to foreign medical supplies.
That’s because shortages of needed supplies and materials used to combat and assist recovery from the coronavirus are already hampering the American response to the pandemic. Arbitrary barriers on these critical supply chains can only serve to further reduce these supplies.
After all, the ostensible purpose of trade barriers on foreign goods is to stimulate demand for American suppliers, but demand for medical supplies, personal protective equipment, and testing capacity is already sky-high. So high, in fact, that many major businesses have shifted production away from normal consumer goods to produce goods related to combating the virus.
And unfortunately, that’s not where the waste ends. Other non-emergency, non-COVID-related provisions tucked in to this legislation include $1.75 billion for a new FBI headquarters, $175 million for the Corporation for Public Broadcasting (on top of $75 million already appropriated in the CARES Act, and $75 million for the misnamed “Essential” Air Service (a program that the National Taxpayers Union has called for the elimination of in the past).
While there are certainly positive provisions for taxpayers to applaud in the HEALS Act, it nevertheless falls victim to the Washington, D.C. habit of tucking unrelated spending into larger bills. Congress should aim to improve on this legislation by removing these unnecessary line items.