A Cornucopia Of Thanks, and a Parade of Turkeys

Weekly WastebasketA Cornucopia Of Thanks, and a Parade of TurkeysThe Weekly Wastebasket - 2018 Thanksgiving edition

Budget & Tax,  | Quick Take
Nov 20, 2018  | 8 min read | Print Article

Our taxpayer tables overflow with thanks, and a parade of turkeys, courtesy of the last year. A rushed once-in-a-generation tax bill without fully thinking through the consequences, anyone? How about seconds of the border wall issue where the facts simply do not support the sentiments in an ever noisier debate? Or maybe you’re up for the interest on the national debt, which is eating the budget pie. Ah yes, food. Which reminds us of the failed farm bill.

The (Failed) Farm Bill

This turkey’s been sitting on the counter for over a year, but lawmakers can’t settle on a recipe to get it done. It’s now chock full of budgetary salmonella. From allowing every distant relative to get subsidies without ever stepping foot on the farm, to opening up programs to millionaires and billionaires, to clear crop insurance cronyism, the bill is turning into something taxpayers can’t stomach. Lawmakers should abandon this bird and start fresh in the new year.

We’re not entirely ungrateful at the state of things in farm country. Unlike the House version, taxpayers can give thanks for a few common sense subsidy reforms baked into the Senate farm bill. The Senate wisely trims the number of “managers” each farm can claim to generate subsidies, from unlimited to just one. The bill narrows program eligibility to individual farmers with a bottom line not fatter than $700,000 in annual profits (down from $900,000). And it avoids adding numerous carveouts for cotton.

A (Losing) Trade War

President Trump’s trade war is gobbling up taxpayer dollars. Many of the foods you’ll see on your plate this Thursday are affected by the twilight zone of tariffs. An estimated $96 million will go to corn producers, $290.3 million will go to hog producers, $32.8 million to cranberry producers, $44.5 million to potato growers, and $11.8 million to pea farmers. In September, the Trump Administration announced $6 billion in hush money to ag businesses affected by Trump’s trade war. But the USDA is still hungry for more taxpayer dollars. They’re going to spend $6 billion more on direct cash payments to producers starting in December.

Space Farce

The biggest turkey of the year from the Pentagon? It only took us a nanosecond to settle on the colossal waste of money and effort that will be the “Space Force.” Laughably, the Air Force says a Space Force will “only” cost about $13 billion. The Deputy Secretary of Defense hinted last week that he thinks it could be less than $5 billion. Ha! If it is a “separate but equal” department, we’re looking at about $190 billion a year to run a new military service and the enormous bureaucracy of a new department.

We do give a modicum of thanks to the Pentagon for finally subjecting itself to a financial audit, after years of saying such a huge organization shouldn’t be subjected to one. That’s the good news. The bad news: oops, with a few minor exceptions, the Pentagon failed the audit. Well, we’re thankful that we now know where to look for the wasteful spending.

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Taxpayers Lose Royal(t)y

The Department of the Interior’s (DOI) Royalty Policy Committee makes for a juicy turkey this Thanksgiving. The committee is made up of a group of outside advisors, the majority of whom work for the very industries DOI charges and collects royalties from. Unsurprisingly, the committee’s recommendations reflect industry wishes, often at the expense of the federal taxpayer. With a hefty serving of public scrutiny regarding the unbalanced make-up of the committee, DOI is asking for additional members to join the committee ranks. Let’s hope DOI puts this bird to bed and appoints some taxpayer advocates to the committee this time around.

MOX is Nixed

Among the precious few things to be thankful for this year are the Department of Energy’s (DOE’s) actions to (FINALLY!) move away from the Mixed Oxide Fuel Fabrication Facility (MOX) in South Carolina. The MOX project was concocted nearly two decades ago as a means to dispose of surplus weapons-grade plutonium, but quickly became a poster-child for government boondoggles. The cost increased from the initial estimate of $1 billion in 2002 to $4.8 billion in 2007, when construction began. And in 2016, it was officially revised up to $17 billion. Both the Obama and Trump administrations have pushed to shutter the facility, but MOX proponents in Congress have resisted. Finally, in September, Congress enacted an Energy & Water appropriations measure allowing the use of funds for shutdown activities. In October, DOE issued a notice to terminate the MOX construction contract just one day after an injunction against ending the project was lifted. But like a pumpkin pie with a burnt crust, the news is bittersweet – DOE spent more than $5 billion on MOX before recently moving to shut it down.

Taxes, And Lack of Common Sense

On the heels of last year’s massive tax cut, the House is back at it with so-called Tax Reform 2.0 (never mind that we didn’t even get Tax Reform 1.0, just a more than $1 trillion revenue loss) that would make permanent some of the individual income tax cuts set to expire under the law. Thing is lawmakers made them expire to reduce price tag on last year’s law. Since the legislation only affects two and half years at the end of the ten year budget scoring window, the cost comes in at $0.5 trillion, but the second ten years reveals the cost to be more than $3 trillion. The tax code sorely needs reform, but last year’s tax law increased the country’s dire fiscal situation and stuffing this turkey on top would make it even worse.

There is still a lot of things to do before the 116th Congress takes their oath in January. And we’re sure we’ll see some turkeys and areas to give thanks. Have a Happy Thanksgiving and watch out for that tryptophan coma.