What Will Make the Cut in a Fiscal Cliff Deal?

As lawmakers try to reach (or avoid) a deal to avert the fiscal cliff, tax hikes aren’t the only things on their minds.  They’re also trying to negotiate a number of other legislative “priorities,” some of which have better chances of becoming part of the agreement than others.  One thing they all have in common though is they should be considered in the next Congress, not rammed through carelessly in any last-minute fiscal cliff deal lawmakers might strike.

Below, we’ve highlighted seven such “priorities”:

  1. VAWA: There has been pressure from the left to include the Violence Against Women Act (VAWA) as part of the fiscal cliff deal.  First enacted in 1994 with the intention of better protecting women from domestic violence, the most recent Senate reauthorization of VAWA “engages in mission creep by expanding VAWA to men and prisoners… and without precedent, the bill surrenders the rights of Americans who are not American Indians to racially exclusive tribal courts.”  Not only this, but there have been no scientifically rigorous evaluations of the effectiveness of this bill, and there has been no proof that it actually helps protect women against violence.  In this vein, historically and constitutionally, the police power is reserved to the states, which have laws to protect all citizens from crimes committed against them.  The goals of VAWA are a federal overreach; both in its original form and in its subsequent reauthorizations.
  2. Sandy Supplemental:  President Obama’s Sandy supplemental request is a whopping $60.4 billion.  We’ve expressed our strong opposition to the President’s funding request, since it contains altogether too much spending — far and above the amount actually needed to help victims — and the spending is not offset.  Moreover, there are a number of bogus items in the request that should rightfully be considered in the upcoming budget process – assuming Harry Reid engages in that process – during which lawmakers can be more circumspect about how useful and necessary these items are.
  3. Farm Bill: Some suggest that it’s unlikely a farm bill will be included as part of the potential fiscal cliff deal.  Proponents of the farm bill cite the threat of high milk prices as one of the main reasons for wanting to get the bill done sooner rather than later.  Yes, the decades-old “permanent law” is problematic – and presumably easy to repeal – but talking about problems with “permanent law” only serves to ignore the problems with the “temporary law” and “proposed law.”  One such problem contributing to farmers’ high production costs is the rising cost of feed, a problem lawmakers made worse with the ethanol mandate they imposed. So rather than continuing to provide farmers with taxpayer backed subsidies, they should eliminate the ethanol mandate.  They should also tackle food stamps, which have quadrupled over the past decade.
  4. Postal Bailout: Some folks are lamenting localized closures of the United States Postal Service (USPS) and say that the “usual suspects,” “hyperpartisan politics and ideological arrogance” are to blame for its imminent service cut backs.  The USPS is “indeed at a crisis point,” but there is a way out… that is, if Congress will allow it.  Each year, the USPS suffers great financial losses.  Rather than receive a government bailout, Heritage suggests that the USPS should “change its business model, eliminate expenses, and innovate to be competitive in the market place.”  Because of current laws, however, it is difficult for the USPS to close even its smaller, struggling facilities.  Rather than passing a postal bailout, which would result in the USPS becoming a “taxpayer-supported dinosaur existing on billions in taxpayer funding each year,” Congress should allow the USPS to reform itself.
  5. Wind Production Tax Credit: The wind lobby has been working hard to convince Congress to extend their wind tax credits before December 31.  This is ill advised, and odds are that this issue will not be addressed.  Heritage’s David Kreutzer explains that “[t]he wind production tax credit (PTC) has created an industry that produces overpriced, intermittent power, and it will continue to produce overpriced, intermittent power so as long as there is a PTC to pay for it.”
  6. Unemployment Benefits:  Unemployment Insurance (UI) benefits are also in the balance in fiscal cliff negotiations.  Heritage suggests that to deal properly with the UI program, Congress should maintain these benefits on humanitarian grounds, but shorten the period in which they are available, gradually phasing them out completely as unemployment returns to normal levels.  UI recipients should also be required to improve their skills while they are receiving UI benefits.
  7. National Infrastructure Bank:  Heritage’s Ronald D. Utt explains that such an institution would have limited benefits, and even those benefits could be “offset by the problems that could emerge from such entities.”  Many on the left, and even some on the right, view this as an economic stimulus, much like the Export-Import Bank, which is nothing more than a Fannie Mae for exporters.

When – or if – you hear word that a deal has been struck on the fiscal cliff, be wary.  You never know what else may be included at the last minute to garner scarce votes.

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