H.R. 4899 Amendments to the Senate Bill: Amendments to H.R. 4899 - The Supplemental Appropriations Act of 2010

H.R. 4899

Amendments to H.R. 4899 - The Supplemental Appropriations Act of 2010

Date
July 1, 2010 (111th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

The House is expected to begin consideration of the House Amendments to H.R. 4899, the Supplemental Appropriations Act of 2010, on Thursday, July 1, 2010, under a structured rule.  The rule provides for consideration of five amendments summarized below. 

In addition, the rule for consideration of the supplemental would “deem” the House Democrat’s FY 2011 budget resolution as passed with the rule.  The budget resolution authorizes $1.121 trillion in discretionary spending for FY 2011.  The resolution is an increase of more than $31 billion more than FY 2010’s spending despite the president’s pledge to freeze non-defense dictionary spending for three years.  By using this tactic, House Democrats avoid introducing or debating a comprehensive budget for the U.S.  While the House has deemed budgets in the past, it has never occurred without the House first considering and passing its own budget resolution beforehand.

To be sure, this represent does not represent a true budget.  This resolution does not set spending priorities for the federal government, and it does not project federal spending, revenues and deficits over five the next five years.  This represents the first time since the passage of the Budget Act of 1974 that the House has failed to pass an initial budget to set the spending priorities for the following fiscal years.

Bill Summary

AMENDMENTS

Amendment #1:  The amendment adds at least $4 billion in new spending to the bill and offsets the costs with a number of tax increases and a PAYGO timing shift gimmick.

Lawsuit SettlementsThe amendment would provide funds for the government to settle the Pigford v. Vilsacke and Cobell v. Salazar class action discrimination lawsuits.  The bill appropriates $1.2 billion to pay the claimants in the Pigford, which is the result of a 1997 case in which three African-American farmers alleged that USDA had willfully discriminated against them and other African-American farmers by denying their applications for farm loans and benefits.

The amendment would also appropriate $2 billion to settle the Cobell case, in which 300,000 individual Indian money account holders who have their funds held in trust by the federal government sued the federal government for mismanagement of funds.

Summer Jobs Spending:   The amendment would appropriates $1 billion to expand the Workforce Investment Boards, created by the “stimulus” to provide grants to states to be used for summer employment of youth ages 14 to 24.

Surface Transportation Programs Funding:  The bill would make changes to the surface transportation programs extension included in the HIRE Act (P.L. 111-147) to distribute funding for highway programs to states.  The amendment would distribute the Projects of National and Regional Significance (PNRS) and National Corridor Infrastructure Improvement (National Corridor) so that each state receives an amount equal to the states higher level of funding under the two bills.  The amendment would provide “such sums” as necessary in order to provide those funds.

Grantor Retained Annuity Trusts:  The bill would require a minimum ten year term for any grantor retained annuity trust (GRAT) wherein donors place property into trust and then receive an annuity payment for a fixed period of time.  GRATs are used to transfer property to family members while the donor is still alive in order to avoid double taxation in the form of the gift tax or the death tax.  This provision would make the use of a GRAT less beneficial and was included in the president’s budget and referred to as closing a tax “loophole.”  According to the president’s budget, the legislation would increase taxes by $2.9 billion over ten years.

Limiting the Biofuel Tax Credit:  The legislation prohibits fuels that are highly corrosive, meaning a fuel with “an acid number greater than 25,” from receiving the $1.01 per gallon cellulosic fuel production tax credit.  It is not clear how much revenue this tax increase would raise.

Corporate Timing Shift:  The amendment would increase future taxes levied on certain corporations and then decrease them by the same amount.  The provision would increase the estimated tax rate for the third quarter of 2015 by 5.25 percent, while the taxes due in the fourth quarter of 2015 would be lowered by the same amount.  This shift allows the Democrats to increase revenue inside the PAYGO compliance window, even though there is no net effect.  This gimmick is often used to artificially increase revenue to avoid PAYGO violations.

Amendment #2, Rep. Obey (D-WI):   The second amendment is the Obey amendment which would add billions in spending to the $58 billion Senate-passed bill.  Specifically, the amendment provides $75 billion in mandatory and discretionary spending for the wars in Iraq and Afghanistan, a bailout for state education accounts, disability compensation for Vietnam Veterans related to exposure to Agent Orange, the international assistance funding, Pell Grants, border security, and a myriad of other agencies and programs.  In total, funding for Department of Defense war operations is $33 billion and nearly $4 billion is provided for international activities related to the ongoing conflicts in Iraq and Afghanistan.  Thus, a total of $37.4 billion of the funding in the legislation is regarded by the Democrats as funding for the ongoing wars.  The bill also includes $11.7 billion in rescissions from existing programs, including $3.5 billion in Department of Defense rescissions and nearly $2 billion in rescissions from unspent “stimulus” accounts.  In addition, the legislation includes a number of unrelated policy provisions which are outlined below.

For more information and a detailed summary of the Obey amendment, please see the Legislative Digest for July 1, 2010, which is based on the text of the Obey amendment.

Amendment #3:  The amendment strikes all military funding in the bill for the ongoing war in Afghanistan.

Amendment #4, Rep. Lee (D-CA):  The amendment would prohibit any funds for the military operations in Afghanistan from being used for any purpose other than the protection of personnel and the withdrawal of troops.  According to the Democrat’s description of the amendment, the provision would “begin to end the war in Afghanistan by preventing an escalation of troops in Afghanistan and by limiting funding to the safe withdrawal of troops from Afghanistan.”

Amendment #5, Reps. McGovern (D-MA), Obey (R-WI), Jones (R-NC):  The amendment requires the Director of National Intelligence to submit a new national intelligence estimate on the security and stability in Afghanistan and Pakistan to the president by January 31, 2011.  Among other things, the estimate would have to include an assessment of the commitment level of the governments of Pakistan and Afghanistan and their ability to maintain security in the area.  In addition, the amendment would require the president to submit a plan with a timetable for removing U.S. Armed Forces from Afghanistan.  The Special Inspector General for Afghanistan Reconstruction would be required to issue recommendations to increase oversight on private contractors operating in Afghanistan.  Finally, the amendment would prohibit any Defense appropriations funds from being obligated in a manner that was inconsistent with the president’s announced policy to begin withdrawal troops from Afghanistan by July 1, 2011.