Peter Overby for NPR created a segment focused on the all the special deals and tax breaks that make their way into federal legislation, even without officially being able to use earmarks anymore:
Congress likes to say it no longer does earmarks, the provisions that direct federal dollars to serve local interests or campaign supporters. And though that may be true, it’s also a fact that targeted provisions are still useful in moving legislation — even critical legislation like the bill that pulled Washington back from the fiscal cliff last month.
..Those people have votes the leadership needs. So their interest gets added to the bill.
“That’s usually called an engine,” he says. “It passes legislation.”
That nice old metaphor comes from the age of railroads. Here, one big engine would be tax extenders — special tax breaks that Congress gives to different industries. They amount to about one-third of the bill.
Robert Levine, a columnist for the Moderate Voice, discusses the $500 million giveaway to drug companies that was included in the latest fiscal cliff deal. He also mentions that the lobbyists for Big Pharma were also former chiefs of staff for the various congressmen:
Enacting the law that kept the nation from going over the fiscal cliff, lawmakers on both sides of the aisle gave a $500 million gift to Amigen and other drug companies, by inserting an unrelated provision into the bill.
Veronique de Rugy, scholar the the Mercatus Center, writes at The Corner blog about the recent tax increases compared to the funding of cronyism, and how they stack up:
Taxes collected from increasing rates on the rich in FY 2013 amount to $27 billion, while the tax revenue collected based on the ten-year average is roughly $62 billion. Even in the best-case scenario for tax collection, the increases in revenue are lower than the amount being paid out in subsidies.
If President Obama had let all of the special tax breaks for businesses and energy companies expire, he would have raised more revenue than he did with tax hikes on high-income earners. The president’s actions contradict his professed desire to ensure that “the wealthiest corporation and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.”
An editorial at the New York Times explains how one politically connected company received significant benefits from the recent fiscal cliff bill:
Senators who play a major role in federal health care financing were happy to help Amgen, the world’s largest biotechnology company, evade Medicare cost-cutting controls by delaying price restraints on a class of drugs used by kidney dialysis patients, including Sensipar, a drug made by Amgen. That provision was inserted into the final fiscal bill by Senate aides. Many members of Congress did not know it was in the bill until just hours before it was approved…
This dreadful episode is a classic example of the power of special interests to shape legislation and shows how hard it may be to carry out the reforms needed to cut health care costs.
Alicia Mundy writes an article in the Wall Street Journal about a questionable provision inserted at the last minute in the fiscal cliff deal:
A provision, inserted at the last minute, sharply cut Medicare payments for the company’s product while leaving unchanged those of its direct competitor, Varian Medical Systems Inc., VAR -0.35% of Palo Alto, Calif.
The insert looks like the kind of provision helping a specific company or industry that lawmakers have repeatedly vowed to halt. Nonetheless, even in the budget bill tackling the so-called fiscal cliff, lawmakers found time to craft such provisions.
Andrew Evans at the Washington Free Beacon writes about the threat that cronyism and corruption might enter into the fiscal cliff negotiations:
Some see a danger of political cronyism and corruption arising from a back room deal as Congress negotiates with the White House to avoid the fiscal cliff.
“With any lame duck deal, you have a much higher risk of more spending and favorable tax credits, deductions preserving some for special interest groups,” said Romina Boccia, a domestic and economic policy expert at the Heritage Foundation.