How Conservatives Sell Off the Federal Budget, Bit by Bit, to the Highest Bidder

by James Goodwin

May 02, 2016

Once upon a time, congressional conservatives pretended to care about the appearance, if not the reality, of corruption afflicting the federal budgeting process. Strangely, they chose to act on their sanctimonious outrage by banning earmarks – or legislative instructions that direct federal agencies to spend appropriated funds on certain specified projects – while leaving the much greater problem of "limitations riders" intact. These riders essentially function as the reverse of earmarks by prohibiting federal agencies from spending appropriated funds on certain specified projects, and today, they are typically used to block public safeguards at the behest of powerful corporate interests. 

Last year, I published a report along with CPR Member Scholars Tom McGarity and Richard Murphy that examined the growing problem of anti-regulatory limitation riders in the current Republican-controlled Congress. To highlight this problem, we looked at the then-pending Fiscal Year 2016 Interior and Environment Appropriations bills moving through both chambers of Congress. These bills, which are used to fund the Environmental Protection Agency (EPA) and the Department of the Interior, were larded with dozens of anti-regulatory riders that targeted several critical rules those agencies were working on, including rules to limit carbon dioxide pollution from power plants, protect public health and the environment from harmful ozone, and safeguard fragile headwater ecosystems against the ravages of mountaintop removal mining. 

If enacted into law, these kinds of anti-regulatory riders would be disastrous for the public interest. For example, our report found that just three of these provisions would have barred the EPA from annually preventing up to 10,900 premature deaths; 5,000 non-fatal heart attacks; 1,110,000 asthma attacks in children; and 1,690,000 missed school and work days.  Fortunately, the breakdown of last year's budget process prevented these and other anti-regulatory riders from becoming law. 

Of course, the flipside is that anti-regulatory riders provide a huge financial windfall for manufacturers, fossil-fueled power plants, the oil and gas sector, the coal mining industry, and other corporate polluters by sparing them the costs of curbing their harmful activities. So, it should come as no surprise that the large companies within these industries spend lavishly on their campaign contributions to individual members of Congress who are uniquely influential in attaching these provisions to pending appropriations bills. 

For example, Rep. Evan Jenkins (R-WV) was responsible for attaching a rider to block the EPA's then-pending ozone rule to last year's Interior and Environment Appropriations bill.  During the preceding election cycle, he had received $187,400 from the mining industry, $48,666 from the oil and gas industry, and $25,950 from the manufacturing industry – all sectors that would benefit from that rule's continued delay.  

In another example, Sen. Lisa Murkowski (R-AK) was the chair of the Senate appropriations subcommittee in charge of last year's Interior and Environment appropriations bill, which contained several anti-regulatory riders. During the preceding election cycle, she had received significant contributions from industrial sectors that would have benefited from these riders, including $561,096 from the electric utilities industry, $550,531 from the oil and gas industry, and $143,944 from the real estate industry

Of course, the limitations rider game is off limits to those of us unfortunate enough not to be among the top one percent. Small businesses and working families don't have the connections or the financial wherewithal to obtain specialized provisions in appropriations bills that uniquely benefit their economic interests. 

If they could, what kind of limitation riders would average Americans seek? Perhaps Tom Ward, a brick and stone mason from Detroit, would request a limitation rider that prohibits the White House Office of Information and Regulatory Affairs (OIRA) from using any of its appropriated funds to review draft proposed and final rules under development by the Occupational Safety and Health Administration (OSHA). Already infamous for delaying critical worker health and safety rules, OIRA played a major role in holding up OSHA's recently finalized silica dust standard – a rulemaking that took more than 40 years to completeOIRA's review of the draft proposed silica rule lasted over two-and-a-half years – well beyond the 120-day maximum permitted by Executive Order 12866, which spells out its regulatory review authority. 

Ward has witnessed the costs of this regulatory delay firsthand. He watched his father die from silicosis, a deadly lung disease he had acquired through occupational exposure to harmful levels of silica dust. Ward also has toiled for decades in worksites that were enshrouded in clouds of silica dust, and he now lives with the fear that he might someday suffocate to death due to silicosis, too. 

Or perhaps New Belgium Brewing Company, a craft beer brewery based in Fort Collins, Colorado, would request a limitation rider that bars the Small Business Administration's (SBA) Office of Advocacy from expending any of its appropriated funds on interfering with the EPA's pending clean water rules. Despite its statutory mission to represent the interests of real small businesses like New Belgium, the Office of Advocacy operates as an anti-regulatory force, working on behalf of large corporate interests instead.  

For example, the SBA Office of Advocacy has been doing the bidding of the American Farm Bureau, which represents the interests of multinational industrial agro-giants, and the National Association of Home Builders, which represents wealthy land developers, by carrying out a multi-year crusade against the EPA's "Waters of the United States" rule, which would more clearly define the scope of waters that are protected by the Clean Water Act. 

Most notably, the SBA Office of Advocacy wrote a comment letter complaining that the EPA failed to conduct a "Small Business Advocacy Review" (SBAR) panel, even though the agency was not legally required to take this step and even though it would not have improved the quality of the rule. Instead, the Office of Advocacy wanted to delay the rule – the SBAR panel process can add several months, sometimes more than a year to the rulemaking process – and give big businesses an early opportunity to attack the rule's substance well before its provisions were shared with the general public. 

Nowhere in the SBA Office of Advocacy's letter does it mention that most small businesses, including New Belgium, would benefit from a strong Waters of the United States rule. As one New Belgium official puts it, "Our brewery and our communities depend on clean water. Beer is, after all, over 90 percent water and if something happens to our source water the negative affect on our business is almost unthinkable." Nor does the Office of Advocacy's letter even attempt to represent the views of those small businesses that actively support the rule but lack the means to express these views effectively in the rulemaking process. Reading the letter, one would never know that a 2014 survey by the American Sustainable Business Council found that 80 percent of the small businesses polled (all with 100 employees or fewer) supported the Waters of the United States rule. 

There are many other Tom Wards and New Belgiums in this country who would support the kinds of limitation riders that would advance the public interest, rather than defeat it. These provisions would actually help level the economic playing field for families and small businesses, providing them with vital protections that enable them to pursue their full potential. 

Instead, we can expect that congressional Republicans, working on behalf of their corporate benefactors, will continue to attach anti-regulatory riders to this year's appropriations bills, as well as those for future years. For example, House Republicans have already succeeded in attaching an anti-regulatory rider to one of the chamber's funding bills for the upcoming fiscal year that would block implementation of the Waters of the United States rule. 

The inevitable tragedy of the corruption that anti-regulatory riders perpetrate on the congressional budget process is that it reinforces and exacerbates the problems of income inequality that afflict the United States. Through these riders, congressional Republicans would empower the wealthiest companies in the world to continue shifting the costs of their harmful activities onto the public. Thanks to this unjust wealth transfer, corporate polluters would see their profits increase while the public picks up the tab in the form of lost wages, higher health care costs, increased cancer rates, and premature deaths. 

The problem of anti-regulatory riders warrants a long-term legislative solution, and our recent paper outlines the most effective options for severely curtailing this abuse of the budget process. Unfortunately, these legislative solutions have little chance of passing while conservatives control both chambers of Congress. In the short term, and during this year in particular, public interest allies in both parties must do all they can to prevent the passage of any appropriations bills that are laden with harmful anti-regulatory riders.

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Also from James Goodwin

James Goodwin, J.D., M.P.P., is a Senior Policy Analyst with the Center for Progressive Reform. He joined CPR in May of 2008.

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