Logrolling Fills COVID Relief Bill With Waste
The latest example of how professional politicians generate costly waste on Capitol Hill just became official.
Shortly after a number of COVID-19 relief measures passed earlier in 2020 as part of the CARES Act expired, President Trump signed a $2.3 trillion spending bill to extend them. The spending bill combines $900 billion of COVID-19 relief measures with $1.4 trillion of funds for operating the federal government through the end of its 2021 fiscal year.
The bill authorizes direct checks of $600 for people earning up to $75,000 per year. The amount decreases for higher earners, and people who make over $95,000 get nothing.
There’s an additional $600-per-child stimulus payment.
The bill also creates a new $300 weekly unemployment supplement and replenishes a forgivable loan program for small businesses. It includes protections against evictions and money for COVID-19 vaccine distribution and cash-strapped transit systems. But the legislative package also includes measures unrelated to the pandemic, such as creating new criminal penalties including prison time for violating copyright laws with online streaming.
“Unrelated measures” are a synonym for “government waste”. It’s a sign the politicians who put together the spending bill are placing their interests ahead of those of regular Americans.
But Wait, They’re Not Done Yet!
Unfortunately, the total bill for federal government spending in 2021 isn’t yet finished. President Trump wants to expand COVID relief funds for Americans from the $600 that was just approved up to $2,000 per eligible individual adult.
But in communicating that request, the free-spending President did something uncharacteristic of his tenure in office. He asked Congress to rescind funds for several items he identified as wasteful in the combined spending bill. Done right, these rescissions could make additional relief funds available without adding even more to Uncle Sam’s borrowing. Here is the relevant text from the statement the President issued after signing the bill into law.
As President, I have told Congress that I want far less wasteful spending and more money going to the American people in the form of $2,000 checks per adult and $600 per child.
As President I am demanding many rescissions under the Impoundment Control Act of 1974. The Act provides that, “whenever the President determines that all or part of any budget authority will not be required to carry out the full objectives or scope of programs for which it is provided, or that such budget authority should be rescinded for fiscal policy or other reasons (including termination of authorized projects or activities for which budget authority has been provided), the President shall transmit to both Houses of Congress a special message” describing the amount to be reserved, the relevant accounts, the reasons for the rescission, and the economic effects of the rescission. 2 U.S.C. § 683.
I will sign the Omnibus and Covid package with a strong message that makes clear to Congress that wasteful items need to be removed. I will send back to Congress a redlined version, item by item, accompanied by the formal rescission request to Congress insisting that those funds be removed from the bill.
I am signing this bill to restore unemployment benefits, stop evictions, provide rental assistance, add money for PPP, return our airline workers back to work, add substantially more money for vaccine distribution, and much more.
Tallying Up Some Examples of Waste
The combined $2.3 trillion spending bill does not lack for examples of wasteful spending. The new spending package features several highly questionable spending line items. None of which appear to have any legitimate place in a bill intended to provide targeted relief to the economic disruptions from 2020’s coronavirus pandemic and to fund the regular operations of the U.S. government, such as:
- $1.3 billion in military aid for Egypt.
- $1 billion to establish an American Women’s History Museum and a National Museum of the American Latino in Washington, D.C.
- $505 million in foreign aid to reduce income inequality in Central American nations.
- $40 million for the Kennedy Center for the Arts in Washington, D.C., which has been closed since March 2020.
- $10 million for “gender programs” in Pakistan.
- $5 million to help build a National Coast Guard Museum in New London, Connecticut.
President Trump’s rescissions have already been rejected by the majority House Democrats sitting on the House’s Ways and Means Committee. The wasteful spending will not be removed. To provide additional financial relief to ordinary Americans, the government will be forced to borrow even more.
Why Does This Keep Happening?
Jon Miltimore of the Foundation for Economic Education explains why this kind of waste keeps getting added to the U.S. taxpayers’ tab:
People are right to see that tying COVID relief to defense provisions is, well, stupid. But there’s a phenomenon that helps explain why this happens. It’s called logrolling.
Logrolling is essentially the trading of favors among legislators for mutual benefit. Bills often get passed by winning the support of lawmakers by including provisions that benefit their special interests, but which may not align with any public good. As a result, successful legislation tends to be chock full of special-interest spending.
This trap is highlighted by “public choice” economics, which assumes that politicians vote to forward their own interests just like everyone else. In this case, however, they impose costs on the country in exchange for a big benefit to a special interest group who supports them.
If you’re wondering how a vote for COVID relief for Americans becomes tied to $10 million for gender programs in Pakistan and hundreds of millions of dollars in defense for another country, look to the incentives lurking within government institutions.
Without the perverse incentives of Washington, D.C. politicians and bureaucrats, Americans who have become economically displaced because of the coronavirus pandemic could have had their desperate needs taken care of months ago. Instead, the U.S. government will borrow billions more for the sake of benefiting the interests of politicians and bureaucrats that will provide little, if any, benefit to ordinary Americans.
Congress could have helped fix that situation by following through on President Trump’s proposed rescissions. Deep down, they just don’t want to fix the out-of-control spending situation from which they benefit. They lack good incentives.