Heritage Experts Weigh In On Massive Omnibus Spending Bill

bill-paperworkIncreases funding for Head Start and Early Head Start by $612 million, to $8.6 billion. Head Start has been evaluated by the Department of Health and Human Services and deemed ineffective at improving child outcomes on numerous measures. In December 2012, the HHS released a highly anticipated evaluation of the program. The scientifically rigorous evaluation of more than 5,000 children found that Head Start had little to no impact on cognitive, social-emotional, health, or parenting practices of participants. On a few measures, access to Head Start had harmful effects on children. Moreover, access to Head Start had no statistically measurable effects on all measures of cognitive ability, including numerous measures of reading, language, and math ability. Policymakers should base decisions about preschool funding and programs on empirical evidence, and the empirical evidence does not support increasing spending on Head Start.

K-12

Individuals with Disabilities Education Act (IDEA), which provides federal funding to states for students with special needs, is set at $11.5 billion, $498 million above the 2013 post-sequester level. In order to more effectively serve students with disabilities, IDEA should be reformed to allow states to make their IDEA dollars portable, following students to a school or educational option of choice.

Title I funding for low-income school districts is set at $14.4 billion, which is $629 million above the 2013 post-sequester level. To better serve low-income children, Congress should allow states to make their Title I dollars portable. Title I of No Child Left Behind provides federal funding to states in order for the states to provide additional funds to low-income school districts. While the intent of Title I is to provide resources to low-income children, its design is “neither student-centered nor transparent.” Congress should simplify the Title I funding formula and permit states to make Title I funding portable, allowing funding to follow a child to the school of his parents’ choice—public, private, charter, or virtual.

Higher education

The maximum Pell Grant award per student is increased to $5,730. Pell grants, which do not have to be repaid by students, are already funded at historically high levels. Pell grant funding has more than doubled since President Obama took office in 2008; the $34 billion Pell Grant program provides grants to some 9.4 billion students. According to the Congressional Budget Office, from the 2006-2007 school year to the 2010-2011 school year, inflation-adjusted Pell spending increased 158 percent, partly due to an 80 percent increase in the number of recipients. The appropriations bill continues this trend by increasing spending and the maximum grant students can receive.

The TRIO program is increased by $42 million. The TRIO program (made up of the Upward Bound program and other smaller programs), provides federal funding for college counseling and tutoring programs, including helping low-income students apply for college. But as the Brookings Institution recently reported, these federal college preparation programs provide little to no return on investment. “Half a century and billions of dollars after these federal college-preparation programs began, we are left with mostly failed programs interspersed with modest successes.”

– Lindsey Burke is a Will Skillman Fellow in Education at The Heritage Foundation.

Obamacare’s Omnibus Funding Loophole

Funding for Obamacare’s health insurance exchanges and related health insurance regulatory activities is principally funded through the “Program Management” account of the Centers for Medicare and Medicaid Services (CMS). The 2013 appropriation for CMS Program Management was $3.86 billion. The President requested an increase of $1.35 billion (35 percent) for this account, and the Democrat-controlled Senate Appropriation Committee agreed to that request.

The Omnibus Appropriations bill sets the level at $3.67 billion, which equals a 5 percent reduction from the 2013 level. However, the bill also allows CMS to augment that appropriation with the user fees it collects. To fund the operation of the Obamacare exchanges, the Administration has imposed a user fee of 3.5 percent of premium on coverage sold through the exchanges. Thus, while it appears to be a cut in the appropriations for implementation of Obamacare, the Omnibus provides a funding lifeline through user fees.

Of course, the real costs of Obamacare – the entitlement spending through Medicaid expansion and the subsidies – remain on autopilot and underscores the reason why the law should be repealed.

Edmund F. Haislmaier is a Senior Research Fellow of Health Policy Studies at The Heritage Foundation.

Department of Energy’s Wasteful Spending Streak Continues

The Department of Energy continues to waste taxpayer money on activities that can and should be funded entirely by the private sector. Taxpayer dollars spent trying to lower the costs of energy or spent on conventional energy sources is merely another subsidy for energy technologies. In total, the bill allocates $10.2 billion for energy programs within DOE.  This includes:

Renewable Energy and Efficiency  – $1.9 billion—Much of this spending is largely toward commercialization, which should be undertaken by the private sector.  Any government support for technology applicable to efficiency and renewable energy (or any energy) should be part of basic scientific research, for which plenty of funding already exists within the Office of Science.

Oil, Coal and Natural Gas – $562 million—The fossil energy industry makes plenty of money to support its own research and development efforts. Funds that go toward fossil energy either simply offset spending that the private sector would have undertaken or supports efforts that have no market viability.

Nuclear Energy – $889 million —Federal programs to help the existing nuclear industry to operate more efficiently or to build its own workforce should be cut. Further, the Department of Energy should not be picking winners and loser in the reactor technology business. Instead, to the extent that the federal government spends resources related to nuclear energy, those resources should go to the Nuclear Regulatory Commission to build their regulatory expertise. And finally, any money for nuclear waste that does not support Yucca Mountain should be cut.

Office of Science  – $5.1 billion —While federal support for some basic scientific research can be justified, much of the money in the Office of Science goes to programs to advance pet projects or develop technologies to support commercial activities.

ARPA-E – $280 million – The Advanced Research Projects Agency–Energy (ARPA-E) is another energy program designed to fund high-risk, high-reward projects that the private sector would not embark on on its own. The problem is that ARPA-E does not always seem to follow this clear guideline: The federal government has awarded several ARPA-E grants to companies and projects that are neither high-risk nor something that private industry cannot support. Congress must hold ARPA-E accountable to its mission and intended purpose. More scrutiny is necessary to ensure that ARPA-E is not funding projects already receiving private funding or using technicalities to justify those grants. Confining ARPA-E to its mission is critical to the program’s success and could serve as a model for how DOE’s research programs could be restructured.  Funding for ARPA-E should be cut until the appropriate reforms are made.

Congress should get serious about removing attempts to drive politically preferred sources of energy – of all kinds – towards commercialization.

Nicolas Loris is the Herbert and Joyce Morgan Fellow at the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

More Federal Transportation Spending, Bigger Government

In the fiscal year (FY 2014) omnibus bill, appropriators have propagated the false notion that government spending on transportation and infrastructure projects is “essential to growing the nation’s economy and commerce”—in essence, that it will create jobs. And they have missed the myriad opportunities to reduce transportation spending or eliminate related programs that this Heritage Foundation report outlines.

For starters, Congress could swiftly phase out subsidies to airlines to offer service in rural communities, under the decades-old Essential Air Service program. Instead it continues subsidies to air carriers to the tune of $149 million.

Additionally, it could have included provisions aimed at exploring the privatization of the Federal Aviation Administration, a bold, structural policy change with which Canada has experienced success and not compromised safety in the process. Even providing for a study of the benefits and challenges of privatization would have been a positive step forward. Instead, this omnibus bill would spend $12.4 billion on the FAA, which was so politicized when “Sequest-air” caused a media frenzy. While that amount is less than was spent in FY 2013, Congress could have tightened its belt further.

On Amtrak, the National Passenger Railroad Corporation, the bill would spend $1.39 billion in operating and capital subsidies. Instead, lawmakers should make future Amtrak subsidies contingent upon reduced operating costs brought about through competitive contracting for its operations and similar reforms—not reward its poor financial performance.

The transportation provisions in this bill fuel the federal government’s tremendous, overbearing, and unnecessarily expensive involvement in America’s transportation system. Congress should prioritize scaling back that role and instead empower the states. There is plenty of room to re-prioritize at the federal level and reduce spending and, given the nation’s dismal fiscal situation and sluggish economy, Congress had better get started.

Emily Goff is a Research Associate at the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Hidden Green Handouts

High profile taxpayer-funded failures like Solyndra and Fisker have made it a little more difficult for the feds to play venture capitalist, and deservedly so.  But that hasn’t stopped policymakers from using other channels to promote their special interests.

Included in the omnibus bill is $1.5 billion in funding for the Clean Water State Revolving Funds, a loan program for water quality improvement projects,  is language that says, “to the extent there are sufficient eligible project applications, not less than 10 percent of the funds made available under this title to each State for Clean Water State Revolving Fund capitalization grants shall be used by the State for projects to address green infrastructure, water or energy efficiency improvements, or other environmentally innovative activities.”

Further, a stipulation as part of the funding for The Export-Import Bank of the United States is that “not less than 10 percent of the aggregate loan, guarantee, and insurance authority available to the Bank under this Act should be used for renewable energy technologies or energy efficiency technologies.”

While not new programs or avenues to subsidize green companies, the continued promotion of handouts is a signal that politicians still don’t get it. We need to be removing subsidies for all sources of energy. Whether a government-backed project succeeds or fails, it is a waste of taxpayer dollars to pick winners and losers among energy technologies.  The market does a fine job of determining what makes economic sense and what doesn’t.

Nicolas Loris is the Herbert and Joyce Morgan Fellow at the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Obsolete Rural Programs

The FY 2014 Omnibus bill continues to fund rural programs that should have been repealed long ago, including the following two examples:

Rural Cooperative Development Grants ($26,050,000): The federal government awards grants to cooperative development centers. These centers provide technical assistance to individuals and entities to help start and expand rural cooperatives and businesses. Taxpayers shouldn’t be subsidizing consulting services for private businesses. Private entities themselves should seek out and pay for whatever expertise they need for their operations.

Rural Energy for America Program ($3.5 million):  Taxpayers are forced to subsidize the development of renewable energy programs for agricultural producers and small rural businesses. It is bad enough that taxpayers are required to subsidize one type of energy over another (picking winners and losers), but they are also forced to subsidize costly and unreliable energy. If producers and small rural businesses seek to develop renewable energy systems, they can and should do so on their own dime.

– Daren Bakst is a Research Fellow in Agricultural Policy at The Heritage Foundation.

No Cuts for National Endowment for the Arts and National Endowment for the Humanities 

It looks like the budgets for both the National Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH) survived with absolutely no reduction in funding, getting $146 million each.

So, just what are some of the essentials that these programs fund?  Examples of recent NEH Grants include:

  •  $40,000 for artists to ”spend a year in Rome in the historic setting on the Janiculum, one of the highest hills within the walls of Rome” complete with stipend, studio space, housing and meals
  • $55K for a traveling exhibition on “Survival Architecture” – artistic solutions for “emergency housing housing necessitated by natural disasters and climate change”
  • $10K for dance choreography that explores life in a “1961 Oasis trailer,” to be performed in parking lots and community parks with “audience participation”
  • $10K for a theater program that explores the comic book hero “Wonder Woman”
  • $10K to a San Francisco theater group for a premiere and touring of a play on same-sex marriage “created in response to the ongoing battle for marriage equality”

Apparently Congress thinks these kinds of grants are so critical that they can’t afford to cut a dime out of NEH or NEA. The House had proposed a 49 percent cut for NEA and NEH — which went nowhere. Perhaps House Appropriation leaders need an NEH grant in the “art” of negotiation.

– Laura Trueman is a Director of Strategic Operations at The Heritage Foundation.

Justice Department Appropriations for 2014

When it comes to the Justice Department, the latest Consolidated Appropriations Act for 2014 (the Act) has some good provisions but others that the House proposed have been dropped. A summary by Democrats on the House Appropriations Committee trumpets the fact that the Senate version dropped provisions that would have prevented Attorney General Eric Holder from challenging state immigration laws as he did with Arizona and a number of other states, as well as another provision that would have prevented Justice grants from being awarded to “sanctuary” cities that refuse to cooperate with the federal government in finding and detaining illegal aliens. So unfortunately, DOJ will be able to continue its assault on states that are trying to help the federal government stem our illegal immigration crisis and sanctuary cities will be able to continue to defy federal law.

In March 2013, the DOJ’s Inspector General issued a devastating report about the rank politicization of the Civil Rights Division and its biased handling of some of its cases, as well as the unchecked harassment and intimidation of Division employees perceived to be Republicans or conservatives. The Act authorizes one million dollars from the $86.4 million appropriated for the IG to be used for a commission that will conduct an independent review of the management and policies of the Civil Rights Division. This has been long needed, particularly in light of the intransigence of the Obama political appointees inside Justice.

Of course, the other thing needed with the Civil Rights Division is a cutback in its budget, which has grown considerably, and gives Eric Holder the resources to file numerous suits challenging common sense voter ID, immigration, and other state laws he does not like.  There are also at least two dozen lawyers and support staff in the Voting Section of the Civil Rights Division who have seemingly had nothing to do since the U.S. Supreme Court declared the coverage formula for Section 5 of the Voting Rights Act unconstitutional in June 2013. These DOJ personnel who worked on Section 5 matters are now on a permanent, extended coffee break – yet not a single one of them has been laid off. This is an enormous waste of taxpayer funds that should have been eliminated by Congress.

The other thing that should have been done but which wasn’t would have been a cutback in the budget of the Community Relations Service inside the Justice Department. This is the office that is supposed to go into communities where there are racial tensions to work at calming things down. During the Zimmerman trial in Florida, however, reports surfaced that the CRS personnel attended meetings in the state trying to stir up trouble and promote protests and racial disharmony and unrest, which was the exact opposite of their mission goal. Unfortunately, CRS receives $12 million in this Act.

Another foolish waste of taxpayer money is $2.5 million for the State Elections Commission of Puerto Rico to conduct “objective, nonpartisan voter education about, and a plebiscite on, options that would resolve Puerto Rico’s future political status.” But Puerto Rico already held a vote on that issue in 2012. Residents pretty much split on the question of whether they wanted to stay a territory or change their political status. There is no reason for the American taxpayers to spend any money on another plebiscite – if the Puerto Rican government wants to do so, why doesn’t it do it on its own dime?

On the plus side, and obviously with Operation Fast and Furious on their minds, lawmakers put a provision in the Act (Sec. 216) that prohibits federal funds from being used “by a Federal law enforcement officer to facilitate the transfer of an operable firearm to an individual if the…officer knows or suspects the individual is an agent of a drug cartel, unless law enforcement personnel of the United States continuously monitor or control the firearm at all times.” Clearly, Congress doesn’t want any more guns “walking” anywhere – particularly into Mexico. On the other hand, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), which was primarily responsible for this reckless, out-of-control operation and which appears to have retaliated against the whistle-blowers who exposed this wrongdoing, is given $1.18 billion, which is almost $50 million more than the ATF’s 2013 budget.

Hans von Spakovsky is a Senior Legal Fellow at The Heritage Foundation.

Waste Water, Waste Treatment — Government Waste

On page 436, the Omnibus bill sets aside over $80 million for the Appalachian Regional Commission (ARC).  The programs, authorized by the Appalachian Regional Development Act of 1965, are not specifically defined by the bill. Luckily, the ARC’s website gives us a rundown of how it spent some of its funds last year in 13 states running from New York to Alabama. Here are some highlights:

  • $200,000 for Alabama Literature and Educational Teacher Training
  • $100,000 for Energy Efficiency Implementation for Small Cities
  • $60,000 for University of Alabama Center for Economic Development and Tourism Expansion
  • $89,888 for the Haleyville Medical Area Sewer
  • $300,000 for the Winston County Hands On iPads Technology Project
  • $25,000 for the Chief Ladiga Trail Corridor Planning
  • $115,153 for Addison Sewer System Improvements
  • $25,000 for the Bryon Herbert Reece Farm Interpretive Center
  • $54,969 for the Hall County Community Based Energy Training and Demonstration Program
  • $300,000 for the Jackson County Wastewater Treatment Plant Improvements
  • $452,954 for Oral Health Improvement Through Sustainable Local Coalitions
  • $500,000 KY Appalachian Housing Program Capitalization
  • $50,000 for Prime Time Family Reading Time
  • $480,000 Jolly Center Auditorium/Training Center Renovation
  • $50,000 for the Evergreen Heritage Center Green Site
  • $50,000 for the Washington County Broadband Impact Study
  • $250,000 for the Garrett County Broadband Extension Phase I
  • $30,000 for the Garrett County Heritage Area Strategic Initiative
  • $250,000 for the Meadow Mountain Trail
  • $15,000 for the Frostburg Grows, Grow it Local Greenhouse
  • $100,000 for the Chickasaw Trail Industrial Park Road Improvements
  • $24,144 for the Mississippi Appalachian Community Learning Project
  • $101,047 for the Foundation for a Fit Future
  • $265,376 for the Byhalia Historic School Building Renovation
  • $30,840 for Promoting Economic Development Through Capacity Building Within the Local Food Community
  • $100,000 for Building a Clean Energy Economy in Western NC
  • $100,000 for Western Carolina University Rural Assessment Center for Older Adults
  • $65,262 for Marcellus/Utica Shale Welder Training
  • $250,000 for the Center for Advanced Manufacturing
  • $250,000 for the Somerset Village Historic District Streetscape
  • $400,000 for the Town Creek Bike Park
  • $40,000 for Poverty Studies Intern Program at Furman University
  • $500,000 for the Travelers Rest Performing Arts Cultural Center
  • $500,000 for the Birthplace of Country Music Cultural Heritage Center
  • $338,000 for the Wayne C. Henderson School of Appalachian Music and Arts
  • $44,415 for the Country Cabin Outdoor Venue Enhancement

Jack Spencer is a Director of Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

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