White House, Congress compromise on spending, taxes

WASHINGTON — The White House and lawmakers of both parties grudgingly embraced a massive government-wide budget deal Wednesday combining more than a trillion dollars in year-end spending with hundreds of billions in tax cuts for businesses, families and special interests of every kind. Leaders planned to push it to final passage by week’s end and quickly adjourn for the holidays, ending a tumultuous year on Capitol Hill.

The sprawling package will keep federal agencies funded through Sept. 30 of next year, staving off a government shutdown that was to begin next Tuesday at midnight under the latest in a series of short-term spending bills, this one passed by Congress and signed by President Barack Obama on Wednesday.

“In divided government, you don’t get everything you want,” new House Speaker Paul Ryan said of the 2,200-page melange of wins and losses for both parties. “I think everybody can point to something that gives them a reason to be in favor of both of these bills.”

At the White House, press secretary Josh Earnest sounded a similar note, saying Obama would sign the package despite elements opposed by the administration. Those include a GOP provision lifting the 40-year-old ban on exporting crude oil from the U.S. and delays and suspensions of several taxes to pay for Obama’s health care law.

“The president is pleased with the final product, even if it does reflect the kind of compromise that’s necessary when you have a Democratic president negotiating with large majorities of Republicans,” Earnest said.

Indeed, few ringing endorsements could be heard from either side for the sprawling package.

Despite pledges by Ryan to run a different kind of House after his predecessor, John Boehner, was ousted by conservatives angered over last-minute, dead-of-night compromises with Democrats, the new GOP speaker found himself asking lawmakers to endorse a huge, eleventh-hour deal of his own. It’s stuffed with special interest goodies, presents for powerful lawmakers and provisions of obscure origin benefiting everyone from race car owners and many others.

He pledged to do better next year. And most Republican lawmakers appeared happy to give him the benefit of the doubt and say goodbye to a roller coaster of a year that included a near-shutdown of the Homeland Security Department and Boehner’s chaotic ouster.

“There’s a whole variety of things in there I define as very positive,” GOP Rep. Frank Lucas of Oklahoma said after emerging from a closed-door meeting where Ryan pitched the deal. “Let the other side spin it however they want. I think the votes come together to pass it, and I get to go to my mother-in-law’s Saturday morning.”

Senate Minority Leader Harry Reid, D-Nev., called the package “a good compromise.” But House Democratic leader Nancy Pelosi, D-Calif., was among those expressing outright opposition, arguing that the package of tax breaks estimated to cost $680 billion over the next decade was too heavily weighted toward corporations and “practically an immorality.”

Yet House Democrats’ opposition to the tax package was expected. Republican leaders expressed confidence Pelosi would nonetheless deliver the majority of votes needed to pass the $1.15 trillion spending bill, leaving it to GOP lawmakers to provide the bulk of votes on the tax package under a widely accepted calculus allowing certain numbers of lawmakers to defect on each piece in the House without threatening the overall package.

After years of trying, Republicans claimed wins by making permanent business tax breaks for research and development and for buying new equipment.

Democrats got permanent extensions of tax credits for college costs, children and lower-income families. In exchange for lifting the oil ban they won five-year extensions of solar and wind energy production credits plus a renewal of a land and water conservation fund.

Omitted were two major GOP goals: Language dismantling Obama’s health care law and blocking federal money for Planned Parenthood, which would be certain to draw vetoes. Conservatives were also distressed at the omission of language clamping down on Syrian and Iraqi refugees. Surviving was widely supported language tightening curbs on foreign tourists visiting without visas.

And despite Pelosi’s complaints, other than lifting the oil export ban, Democrats mostly carried the day in keeping the spending bill largely free of controversial policy provisions known as “riders.”

Democrats managed to kick out more than 20 GOP-sponsored riders seeking to roll back Obama administration regulations. Efforts to stall Environmental Protection Agency rules on power plant greenhouse gas emissions, ozone emissions, mine cleanup standards and an expansion of the Clean Water Act were all killed.

Instead, Republicans won a repeat of old victories involving the lead content in fishing tacking and ammunition and language sought by Western interests limiting protection of the sage grouse.

“We do feel good about what we did get and would love to have achieved more,” Senate Majority Leader Mitch McConnell, R-Ky., told The Associated Press. “And it’s going to take a new president of a different party to achieve what we’d like to achieve.”

Spending and tax deal at a glance

TAXES

—Family tax credits. Permanently extends recent changes to the $1,000 child tax credit that make it refundable to families with little tax liability; makes permanent a $2,500 college tuition tax credit and a more generous credit for low-income working families.

—Sales tax deduction. Permanently extends a deduction of state and local sales taxes in states without an income tax.

—Business tax breaks. Permanently extends several business tax breaks, including the research and development credit and a deduction for small business equipment purchases. Extends tax deduction for “bonus” depreciation of business property purchases and a variety of breaks for race horses, NASCAR tracks and television and film production. Extends tax breaks for energy produced from renewable sources such as solar, wind and geothermal energy and tax breaks for biodiesel fuels and electric cars and motorcycles.

SPENDING

—Provides $1.15 trillion to fund the daily operating budgets of Cabinet agencies through Sept. 30, 2016, including $607 billion for defense, which contains $59 billion for overseas military operations. Non-defense programs would receive $543 billion. The departments of Justice, Veterans Affairs and Defense won generous increases, as did NASA.

HEALTH CARE LAW

—Delays for two years the scheduled 2018 implementation of a “Cadillac tax” on more generous health insurance plans; imposes a two-year pause in a 2.3 percent tax on medical devices and a one-year delay in a tax on health insurance providers.

—Blocks funds for “risk corridors” in which the government provides relief to health insurers with deep losses.

ADD-ONS

—Repeals the four-decade ban on exports of U.S. crude oil.

—Reauthorizes national intelligence programs.

—Tightens several security requirements of the visa waiver program, which allows citizens of 38 countries to travel to the U.S. without visas. A key element would deny visa waivers to those who have traveled to countries such as Syria and Iraq in the past five years.

—Includes cybersecurity legislation that would encourage companies to share cyber threat information with the government.

—Extends a program championed by the New York delegation that provides health care and disability payments to 9/11 first responders who worked in the toxic ruins of the World Trade Center. Adds a new compensation fund for victims of state-sponsored terrorism, including the American hostages held in Iran from 1979 through 1981 and victims of the 1998 embassy bombings in Kenya and Tanzania.

—Reauthorizes the Land and Water Conservation Fund, which devotes fees from offshore oil and gas production to create national parks, purchase buffers zones around rivers and lakes and provide matching grants for state and local projects.

ODDS &ENDS

—Requires the Food and Drug Administration to write rules for labeling genetically modified salmon before it is sold in the United States. The provision is a victory for Sen. Lisa Murkowski, R-Alaska, who says the sale of such “Frankenfish” could hurt her state’s wild salmon industry. The FDA approved the salmon last month.

—Repeals a law that requires labels on beef and pork saying where the animals were born, raised and slaughtered. The World Trade Organization had ruled against the labels, and Canada and Mexico were set to economically retaliate against the United States as soon as this month.

—Directs, at the behest of Sen. Thad Cochran, R-Miss., at least $160 million to experimental power plants, including a financially troubled “clean coal” plant in Kemper County, Mississippi.

—Provides $390 million toward construction of a new FBI headquarters that principal sponsor Sen. Barbara Mikulski, D-Md., hopes will be built in her state’s Prince Georges County.

—Restricts the Labor Department in implementing new rules governing seasonal workers under the H-2b visa program and increases the “cap” on such visas.

—Blocks the IRS from issuing new rules designed to limit the political activities of groups seeking a nonprofit designation.

—Prohibit companies from spinning off their property into real estate investment trusts.

—Prohibits the State Department and the U.S. Agency for International Development from supporting non-governmental email accounts or servers. The provision follows significant controversy in the wake of Hillary Clinton’s use of private email as secretary of state.

—Effectively overrides a policy against sledding on the grounds of the U.S. Capitol.

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