'Three-martini lunch' tax break, foreign aid: Why year-end bills are stirring controversy
WASHINGTON – The $2.3 trillion spending package Congress overwhelmingly passed Monday night has a little bit of everything.
Fused from two major bills – a $900 billion stimulus package to address the economic fallout of the COVID pandemic and a $1.4 trillion spending measure to fund the government through Sept. 30 – the legislation includes money for direct payments to millions of families, vaccine distribution efforts and pay raises for the military.
But it also includes controversial provisions to extend tax breaks for race car tracks and business lunches, millions for venues that aren't open, and a requirement that carbon monoxide detectors be installed in public housing apartments. It includes billions in foreign aid, which often draws conservatives' ire, and money for President Donald Trump's border wall, which enrages progressives.
Trump has signaled he may veto the bill, saying that some provisions, such as foreign aid and money for cultural institutions, have no place in a bill aimed at helping the country weather a coronavirus pandemic that has killed nearly 330,000 and shuttered thousands of businesses nationwide.
In a video he tweeted Tuesday night, Trump called the bill a "disgrace" for not providing enough in direct payments and for spending too much on foreign aid (though the budget he submitted to Congress earlier this year calls for roughly the same funding levels).
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But many of those tax breaks and controversial spending provisions are included in the $1.4 trillion spending bill that was attached to the stimulus bill, not in the stimulus bill itself. Government watchdog groups say that doesn't excuse what Congress approved.
It is "a sweetheart deal" for defense contractors," guarantees high levels of farm subsidies deep into 2021, and tacks on dozens of other special-interest provisions "that won’t be found until days or weeks after the lawmakers have left the Capitol," said Steve Ellis, president of Taxpayers for Common Sense, a nonpartisan watchdog group that tracks government spending.
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Here are some of the most controversial sections of the second-largest stimulus package in U.S. history.
Foreign aid programs
In his surprise late-night speech denouncing the stimulus package Congress passed, Trump decried billions in funding for programs in foreign countries.
All of the funding proposals the president complained about were equal to or slightly less than the allotments in the budget Trump proposed during negotiations.
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Some of the entries include $505 million in aid to Central American countries; $25 million for gender equity and democracy promotion programs in Pakistan; $1.3 billion in military aid to Egypt; and $219.5 million in aid to Southeast Asian nations.
Expanded military budget, defense contractor deals
The negotiated omnibus bill also includes increases in military spending and contracts for military contractors through 2021.
The earmarks approved $696 billion in military appropriations, including $23.3 billion to build 10 new warships and $9.6 billion for 96 F-35 fighters. Progressive Democrats opposed the budget increases, arguing for provisions that would “reduce Pentagon spending to prevent waste, fraud, and abuse while maintaining support for personnel and families.”
The White House also initially opposed parts of the military spending bill, arguing they enabled the military's ongoing conflicts overseas.
'Three-martini lunch' deductions
Democrats objected to a provision that allows businesses to deduct two full years worth of business meals when filing taxes. Democrats derided the measure as “three-martini lunches” for the rich.
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The current tax code allows only half of those costs to be deducted. The cost of the new benefit, which the White House argued would help restaurants hurt by the pandemic, is projected at $6 billion in tax breaks for corporations over the next decade.
Keeping live venues afloat
Some $15 billion of aid is designated for performing arts centers, independent movie theaters and other cultural institutions that have been hit particularly hard by the imposition of social-distancing measures designed to limit the spread of the virus.
The Save Our Stages act is aimed at helping only those venues that have already closed or are at risk of shutting down.
Supporters of the bipartisan effort say the grants would provide financial support necessary to keep venues afloat, pay employees and preserve a critical economic sector for communities across America.
Only those outlets that have already closed or are at risk of shutting down would be eligible for the grants.
Aid to cultural institutions
More than $40 million was approved for the John F. Kennedy Center for the Performing Arts, the Washington, D.C., cultural jewel, many of whose trustees are appointed by the president.
The money includes $26 million for operations, maintenance and security, plus another $14 million for capital improvements.
The Kennedy Center is often on lists of questionable spending but it isn't the only cultural organization getting assistance in the package. Also, receiving taxpayer funds are the U.S. Holocaust Memorial Museum ($61.4 million), the National Endowment for the Arts (167.5 million) and the Smithsonian Institution (more than $1 billion).
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The National Endowment for the Arts, National Endowment for the Humanities and Kennedy Center also were directed funds as part of the government funding deal. Trump objected to the measure.
Money for the border wall
The spending bill once again includes federal aid to fulfill one of Trump's most prominent campaign promises: construction of a partition on the U.S-Mexico border.
The $1.375 billion for the border wall is not as much as the nearly $2 billion Trump wanted, but it's more than his critics want taxpayers to cover. Inclusion of the money also undercuts his campaign pledge that Mexico would be be paying for the structure.
A fight with Congress over border wall funding in December 2018 led to a 35-day shutdown of the government. There's no indication that a lack of wall funding this time is among the reasons Trump may veto the bill.
A 'NASCAR tax break'
The package also extended a tax benefit for race track owners.
Known as the “NASCAR tax break,” those owners could get a windfall of up to $224 million benefit over 10 years to write off construction and renovation costs.
Establishment of Women's and Latino history Smithsonian museums
Legislation tied to the government funding bill approved the creation of Smithsonian museums for Latino and women's history. Like all Smithsonian programs, the museums would be funded by splitting private donations and public money.
The move was deeply opposed by Sen. Mike Lee, R-Utah.
“The last thing we need is to further divide an already divided nation within an array of separate but equal museums of hyphenated identity groups," he said earlier this month.
Tax breaks for the liquor industry
The liquor industry was a big winner in the bill, which permanently secured billions in tax breaks even though studies show alcohol consumption has risen sharply during the pandemic.
Among the measures is a cut in the excise tax for beer, which would likely incur a 10-year cost of $1 billion; an excise tax break for domestic wine producers worth $2.2 billion; and a tax break for makes of distilled spirits valued at $5.7 billion.
Presidential transition expenses
The stimulus package also includes $9.9 million set aside for the expenses of the presidential transition. That funding will help President-elect Joe Biden's administration assume office in the coming year. The bill also includes at least $8 million meant for the Trump administration to aid in the process.
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While not controversial on its face, Trump would essentially be funding the very exit from office he's fighting through the courts and Congress by challenging the election results.
Postal service funding
The negotiated aid package includes a provision that converts a $10 billion loan to the United States Postal Service into direct aid. The funds are to be used to support USPS logistics and supply workers with personal protective equipment and other necessary aid.
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The bill also preserves six-day postal delivery and continues to prevent the consolidation or closure of small rural and other small post offices, measures which the president has previously opposed.
This article originally appeared on USA TODAY: COVID stimulus package includes business lunch tax breaks, foreign aid