It’s been two and a half months since the House Democrats passed their latest $3 trillion COVID-19 response package (HEROES Act). Three months since the last response package was adopted (mostly additional Paycheck Protection Act and disaster loan funding). And nearly four months since the massive CARES Act (weighing in at nearly $2 trillion) was enacted. This week – days before many of the temporary benefits were set to expire – Senate Republicans released their HEALS Act (Health, Economic Assistance, Liability protection and Schools Act). It seems hardly anyone likes it and its trillion-dollar price tag. Certainly not the Democrats (too little) but also significant parts of the Republican Conference (too much). Heck even Senate Majority Leader McConnell (R-KY) derided the $1.75 billion stuffed into the bill for renovating the FBI Headquarters (and no that isn’t for pandemic related measures).
Once the hullabaloo and posturing settles, some of this bill will go forward, even if House Speaker Pelosi (D-CA) and Senate Minority Leader Schumer (D-NY) contorted themselves in analogies about how the HEALS Act could not be mated with HEROES Act. For this exercise let’s forget about what should go into a final deal (and there will be a final deal), and let’s look at the “heels” of the HEALS Act – the fiscal stinkers that should be dropped. Because even in the midst of a pandemic, there are special interests and lawmakers intent on exploiting this crisis.
Good thing we at TCS have years of being one with the green eyeshades and know where to look.
From the top….
With just 14 lines of legislative text, the Senate bill appropriates $20 billion in no strings attached funding to the Agriculture Secretary to use at his discretion. Contrast this with the HEROES Act, which provided more guidance (not all of it good) on what aid would go to whom and how the assistance should be meted out. The House bill totaled 766 lines in the Ag safety net sections.
Like the HEROES Act, the HEALS Act intends for “farm safety net” dollars to be spent far beyond the farm gate. But instead of mandating subsidy checks for corn ethanol plants and cotton textile mills, the Senate brings these entities into the subsidy circle through the catch-all “processors” of agricultural commodities (wink, wink).
Back at the Pentagon, procurement gets at least $7.2 billion in additional procurement funds via the HEALS Act. This will be on top of the $135 billion in Fiscal Year 2020 procurement outlays that are still being spent. We say “at least” $7.2 billion because those are the procurement programs TCS was able to identify by reading the “General Provisions” of the Department of Defense portion of the bill language. But there is more than “just” $7.2 billion in procurement. We’ve identified a total of $18.8 billion that we believe flow directly to the pockets of defense contractors.
Of that roughly $19 billion, $10.8 billion is in mysterious “Defense Industrial Base Resiliency Funds.” The Army, Navy, Air Force, Space Force, Special Operations Command and Missile Defense Agency all get a piece of it.
What are these new funds for? The General Provisions state the money is, “For expenses of modifications of the terms and conditions of contracts and agreements as authorized in Section 3610 of Division A of Public Law 116-136.” So, almost $11 billion is needed due to modifying contracts entered into under the CARES Act. That’s not a lot of direction for the expenditure of that much money.
And this lack of direction carries on into the section doling out money to the National Aeronautics and Space Administration (NASA) which we discovered is in line for just a hair under $1.5 billion in the HEALS Act. Let’s be honest: Space Operations have nothing to do with keeping Americans safe from COVID-19. Those missions to Mars are not about sending the virus to space. Congress is abandoning all fiscal discipline and normal budget process with these and other provisions.
There is a liability waiver stuffed in that protects businesses negligent in their COVID-19 protection of employees and customers from liability. Already it would be incredibly difficult to prove where an individual contracted the virus, which is why there have been few lawsuits of this nature to date (out of 3900 COVID-19 related lawsuits only 74 have been for death or injury in the workplace). Immunity from civil liability for negligence, does not prevent harm or injury. It simply shifts the burden and costs to the person or group who has been injured – and all too often, to the taxpayer. And this provision shifts all of these cases to federal court – another cost borne by federal taxpayers that should be paid for by states.
You’d think the Congress would be concerned about oversight of all this potential money. But, in fact, we only found increases for the Inspectors General of three federal departments, Education, HHS, and Labor. All told, and additional $18 million is devoted to oversight of more than a trillion dollars worth of spending.
And that’s just for starters. There will be more stinkers to be found, that’s the Achilles heel of massive legislation like this – lots of places to stash cash or policy changes at the behest of special interests. As lawmakers slog through this next tranche of COVID-19 response, we’ll keep watch on where the money is going. To be sure, there needs to be a response. The pandemic and economic situation demand it, but it needs to be targeted and effective at what needs to be done.