January 2, 2013
Editorials, U.S.

Congress gives out end-of-year perks to interest groups

By Editorial Board, Published: January 2 | The Washington Post | www.washingtonpost.com

Congress, apparently, couldn’t end the year without showering billions on a handful of interest groups, some of which you probably didn’t even know existed.

The Post’s Brad Plumer points out that the “fiscal cliff” bill that passed Congress on Tuesday contained a bonanza for single-issue lobbyists, extending supports for Puerto Rican rum distillers, Hollywood studios, tribal-lands coal, electric-scooter makers and other corporate interests that Congress will subsidize through the tax code for another year or two. It’s easy to blame some combination of policy inertia and congressional distraction for the largely rote reauthorization of some of these items; most lawmakers simply didn’t have the capacity to think much about the relatively small tax loophole for NASCAR racetracks. Yet that’s not true of some of the biggest-ticket items, which have been the subject of reform discussions all year long.

One of those is the production tax credit (PTC) for wind energy. Extending the decades-old subsidy will cost more than $12 billion through 2022, Congress’s Joint Committee on Taxation reckons. True, lawmakers have a more legitimate interest in supporting renewable electricity than they do in rum. Yet the PTC is an unnecessarily crude and expensive way to do it, and a group of lawmakers wanted to cancel, or at least reform, the policy. Even the wind industry agreed last month that, after two decades of direct assistance, Congress should set the PTC to phase out by 2019. Instead, lawmakers made only one change as they extended the credit for another year, and that change made the policy more generous.

Yet another expensive piece of the cliff deal was a nine-month extension of the 2008 farm bill, a monstrous money-waster that lawmakers had also aimed to reform last year. Reform bills had even advanced in both houses of Congress. Among other things, members were finally contemplating the elimination of one of the most egregious wastes of taxpayer money, the direct-payments program, which hands cash to folks who don’t even farm. Instead, direct payments will linger on, along with much of the rest of the government’s byzantine farm-support apparatus, until September.

The most positive spin on these measures is that Congress has given itself more time to fine-tune reforms; perhaps the fiscal wrangling scheduled for 2013, in which the big budget renovation that the nation’s leaders keep talking about is supposed to happen, will even provide a more favorable context. Yet lawmakers have already had plenty of time, and the fiscal cliff did not force a policy breakthrough. Congress has no excuse for more procrastination.


URL to article:  https://www.wind-watch.org/news/2013/01/02/congress-gives-out-end-of-year-perks-to-interest-groups/