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Taxpayer's Tab Issue #16

April 24, 2014





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President's Trip Adds to Days Abroad & Taxpayer's Tab

Presidential TravelWith the President abroad, NTUF Policy Analyst Michael Tasselmyer updated Obama's days spent traveling the world. The addition of Japan, South Korea, Malaysia, and the Philippines will bring his total days out of the country to 14 days in 2014 alone and 133 days total in his presidency.

As Tab subscribers are well aware, NTUF keeps a travel log of the President's international travel and continues to research the costs and personnel requirements of getting the Chief Executive from point A to B. Our last full study found that Obama spent 95 days away in his first term and is on pace to be the most traveled President in terms of days spent abroad. Michael also updated the study to include Obama's fifth-year travels.

Want to help Michael and the NTUF research team to find the true costs of President Obama's international trips? Make a tax-exempt donation! The more that you choose to give to one of America's oldest taxpayer research organizations, the less you'll be forced to give Uncle Sam in 2015.

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Most Expensive Bill of the Week

The Bill: H.R. 4384/S. 2115, the America Helping Encourage Advancements in Lifesaving Science (HEALS) Act

Cost Per Year: $11.5 billion ($57.6 billion over five years)

Congresswoman Anna Eshoo (D-CA)The majority of federal funding for biomedical research is determined each year through the discretionary budget process. This means that Congress decides exactly how much to appropriate based on Members’ priorities and agendas. In contrast, mandatory spending programs such as Social Security, Medicare, and Medicaid receive automatic funding each year as is required by law.

The key federal entity when it comes to medical research and development is the National Institutes of Health (NIH). In 2013 it spent just under $31 billion on programs ranging from cancer research to alcohol and drug abuse prevention. Only $156 million of that amount – or 0.5 percent – came from mandatory authority. NIH funding received a substantial $10 billion boost for 2009 and 2010 via the “stimulus” packaged passed in President Obama’s first year. Other federal agencies with a role in biomedical research include the Department of Veterans Affairs’ Medical and Prosthetic Research Program ($586 million), the Centers for Disease Control and Prevention ($7 billion) and the Defense Health Program ($33 billion).

Prior to that, though, NIH funding in real dollars had been on the decline in every year since 2003, which was the last of five years over which the agency’s budget more than doubled. The Congressional Research Service reports that in inflation-adjusted dollars, NIH funding has decreased from a high of $27 billion in 2003 to just over $21 billion in 2013. Some lawmakers troubled by the relatively stagnant growth in biomedical research spending over recent years have introduced legislation that would ensure annual budgetary hikes for these programs.

Senator Dick Durbin (D-IL)Congresswoman Anna Eshoo (D-CA) and Senator Dick Durbin (D-IL) have introduced the America HEALS Act in their respective chambers. The bill would establish a Biomedical Research Fund that would, by law, ensure that funding for the NIH, Department of Defense’s health programs, Centers for Disease Control and Prevention, and the medical and prosthetics research programs in the Department of Veterans’ Affairs is at least 105 percent of the levels from the previous fiscal year. Spending would automatically be authorized and appropriated. The constant five percent increases would also be adjusted for GDP growth and would be exempt from any future sequestration-related budget cuts.

The sponsors claim that the guaranteed nature of the funding increases would prevent political processes from hindering crucial medical research. In a press release, Rep. Eshoo said “Investment in biomedical research... is at unprecedented lows, jeopardizing our national health ... . A trust fund for our biomedical research agencies can reverse this dangerous trend and ensure that the United States is the leader in scientific discovery.”

The FY 2015 budget estimates that these programs’ budget authorities totaled $70.5 billion in 2014. NTUF then adjusted that figure by 5 percent in each subsequent year and also factored in the Congressional Budget Office’s (CBO) projected GDP price index inflation figures. We estimate that the bill would require about $57.6 billion in additional funding over fiscal years 2015-2019, an average of $11.5 billion per year. capitol_dome_tinycapitol_dome_tinytaxtabhaticonalpha.png

The Bottom Line: The America HEALS Act would create a mandatory funding stream to supplement existing biomedical research. It would increase these programs’ budgets by 5 percent per year, totaling about $57.6 billion over the next five years.


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Least Expensive Bill of the Week

The Bill: H.R. 4379, a bill to prohibit any appropriation of funds for the National Labor Relations Board

Savings Per Year: $264 million (first-year savings)

Congressman Matt Salmon (R-AZ)Last month, a regional board of the quasi-judicial body known as the National Labor Relations Board (NLRB) ruled that football players at Northwestern University were essentially employees of the school and, therefore, could unionize. This week players will vote on whether or not they want to form and join their own labor union, however the results will be sealed for several months pending an appeal by the University to the national NLRB. The unprecedented decision was made by an entity that has been at the center of controversy before, but what exactly does the NLRB do and how do its decisions affect taxpayers?

The Board was originally created through a Depression-era executive order to administer the collective bargaining rights established in the National Industrial Recovery Act of 1933. NLRB’s mission has expanded through the decades to protect “the rights of private sector employees to join together, with or without a union, to improve their wages and working conditions.” It acts as an arbiter or decision maker when workers and their employers disagree on labor issues.

The President appoints the NLRB’s leadership with the advice and consent of the Senate. There are two independent bodies that oversee and carry out much of the NLRB’s duties: the Board, consisting of five members appointed to five-year terms; and the General Counsel, an individual appointed to a four-year term. The Board makes rulings on cases brought before it, and the General Counsel investigates and prosecutes cases of alleged unfair labor practices.

Between 2008 and 2013, the Board was at the center of a legal battle involving three of President Obama’s appointments that were made when the President determined that the Senate was in recess. However, at the time of the appointments the Senate was still in what is known as a “pro forma session” and was not technically in recess. In January of this year, the Supreme Court heard a case challenging the validity of the recess appointments. Because the Senate is supposed to advise and approve any nomination to the Board, it went for years without having a full membership while federal courts deliberated on the matter. The situation prompted Senator Harry Reid (D-NV) to threaten the “nuclear option” in order to circumvent filibusters of the President’s nominations. Eventually, the President’s picks were confirmed.

These and other controversies have led to the introduction of H.R. 4379 by Congressman Matt Salmon (R-AZ)*. The bill would eliminate all federal funding for the NLRB. Rep. Salmon suggested that the Board’s activities are redundant, stating in a press release that “taxpayers already fund the Department of Justice to oversee a wide variety of civil, criminal and administrative labor issues ... .”

According to the latest federal budget (pages 1345-1346), the NLRB will spend $264 million this year. Most of this amount is for compensation ($166 million) and benefits ($46 million) for the Board’s 1,610 employees. capitol_dome_tinytaxtabhaticonalpha.png

* NTUF does not have a current BillTally report for Congressman Salmon. BillTally reports for Congresses prior to 2001 are available upon request.

The Bottom Line: H.R. 4379 would defund the National Labor Relations Board and cut $264 million in federal spending.


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The Wildcard

The Bill: H.R. 4444, the Long-Term Studies of Comprehensive Outcomes and Returns for the Economy (SCORE) Act

Cost Per Year: $5 million ($25 million over five years)

Congressman Reid Ribble (R-WI)The Congressional Budget Office is an independent, non-partisan government agency established in 1974 in order to offer Congress specialized economic analysis on the legislation it considers. As Congress’s office scorekeeper, CBO is required by law to produce cost estimates for just about every bill that makes it through a full House or Senate committee (these bills are designated as “reported” legislation). NTUF utilizes these reports quite often for our BillTally project, as they typically contain background information on a bill’s legislative directives as well as projections on how it could affect outlays and revenues over time if all else remained equal – that is, if current law remained unchanged.

CBO’s cost estimates generally reflect either a five- or ten-year budgetary window. Occasionally, the agency will release reports not related to any specific legislation but instead which concern the economy as a whole – for example, the annual “Budget and Economic Outlook” which projects government-wide deficits, GDP, and other economic trends based on current law. Much less frequently, the CBO releases long-term estimates in particular for comprehensive reform legislation affecting entitlement spending (for example, the recent comprehensive immigration reform bill that passed the Senate in 2013).

These reports are some of the few instances in which CBO will make projections beyond ten years. While long-term forecasts may be less reliable, there is also the concern that under the current system, lawmakers can tweak legislation according to CBO’s assumptions and methodologies in order to tout supposed savings or desirable, but incomplete, budgetary effects. NTUF has recently featured multiple bills in the Tab that use these accounting gimmicks (such as reducing war funding or moving previously-scheduled cuts into the ten-year window) in order to make the budgetary effects seem more or less severe.

In light of possible budgetary gaming, as well as the growing long-term unfunded liabilities the U.S. faces for its entitlement and health-related spending, Congressman Reid Ribble (R-WI) introduced the Long-Term SCORE Act. The proposal would provide $5 million per year to establish a long-term budget scoring division within the CBO. The new division would produce cost estimates reflecting at least fifty years of budgetary effects upon request by Members of the House or Senate.

Rep. Ribble introduced H.R. 4444 with a particular emphasis on healthcare spending, claiming Congress needs to be more informed of the long-term effects such legislation could have. “This bill will allow [M]embers of Congress to be more accurately informed about how investments made today in health care research or disease prevention will affect our nation a generation or two from now. With national health care costs continuing to rise, we must plan for the future,” he said in a statement.

The bill’s text authorizes $5 million for each fiscal year to fund the new division’s activities. capitol_dome_tinytaxtabhaticonalpha.png

The Bottom Line: The Long-Term SCORE Act would create a new division within the CBO to produce fifty-year cost estimates of legislation reported in Congress.