Yesterday, NTU applauded a number of provisions in the HEALS Act, Senate Republicans’ newly released Phase 4 coronavirus legislation. This bill contains some important measures to address the ongoing public health and economic crises and represents a major improvement over House Democrats’ HEROES Act. However, it requires significant revisions to ensure it is focused on the important tasks at hand and isn’t a vehicle for pet projects that are unrelated to COVID-19.
The HEALS Act would appropriate $20 billion to support farmers and related businesses that have been impacted by COVID-19. There’s no question that the pandemic has hurt the agricultural industry, but the level of spending is excessive relative to historic support for agriculture.
In 2019, the federal government spent $23.7 billion on farm assistance programs -- the largest amount in our nation’s history. This was nearly $10 billion more than what was spent in 2018 and approximately double what was spent in any of the previous ten years, in current dollars. This is an extremely concerning trend for taxpayers that appears to be getting much worse.
The $20 billion in HEALS would be in addition to the $19 billion already appropriated via the Coronavirus Food Assistance program that was created earlier this year by the CARES Act. Of that amount $16 billion was allocated for direct payments to producers and $3 billion is provided for the U.S. Department of Agriculture (USDA) to purchase agricultural products. On top of that, the USDA has $873.3 million at its disposal to purchase agricultural products for food banks. Additionally, according to USDA, the CARES Act and the Families First Coronavirus Relief Act provided “at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million will be designated for food purchases.”
We are currently on track to spend more on agricultural assistance than we ever have before. Adding $20 billion more -- an amount that on its own eclipses total farm support in any year prior to 2019 -- would be extremely excessive.
The HEALS Act is laden with over $18 billion in defense spending that is completely unrelated to COVID-19. These items should be evaluated during consideration of the National Defense Authorization Act and the Department of Defense appropriations bill -- not stuffed into an important bill intended to help American families and businesses during the pandemic.
Some of these items include:
- $10.8 billion in Defense Industrial Base Resiliency Funds across the Pentagon;
- $153 million for ship depot maintenance;
- $283 million for 21 new AH-64 Apache helicopters;
- $375 million for Stryker vehicle upgrades;
- $19.5 million for Force Protection upgrades;
- $1.1 billion for P–8A Poseidon aircraft procurement;
- $41.4 million for LCS OTH Missile procurement;
- $1.5 billion for procurement of four expeditionary medical ships;
- $260 million for one EPF Expeditionary Fast Transport ship;
- $250 million for amphibious shipbuilding programs;
- $250 million for the surface combatant supplier base program;
- $49.1 million for Sonobuoys;
- $636 million for F-35A procurement;
- $720 million for C-130J procurement;
- $650 million for A-10 wing replacement;
- $76.3 million for THAAD Battery #8;
- $243.3 million for BMDS AN/TPY–2 Radars: THAAD Battery #8;
- $40.1 million for one DHC–8 combat loss replacement;
- $65.8 million for Hypersonic Defense unfunded requirements;
- $39.2 million for Cruise missile defense indications and warning unfunded requirements;
- $200 million for Ground-based Mid-course Defense SLEP;
- $290 million for Hypersonic and Ballistic Tracking Space Sensor.
In addition, the bill contains a boost of more than $2.6 billion to operations and maintenance funding, on the heels of the CARES Act, which provided $1.9 billion for the same purpose.
“Buy America” Protectionism
The US MADE Act, championed by Sen. Lindsey Graham (R-SC), would incorporate “Buy America” provisions in the HEALS Act by requiring the Department of Health and Human Services to purchase domestically sourced PPE and other medical supplies. NTU has long opposed similar protectionist efforts, which raise costs for taxpayers and reduce the availability of critical goods and materials.
As NTU’s Bryan Riley warns, “This would unnecessarily inflate costs and invite our trading partners to adopt similar protectionist restrictions affecting billions of dollars of U.S. exports.”
Other Unrelated Spending
One controversial spending provision in HEALS is a $1.75-billion line item for a new Washington, D.C. headquarters for the Federal Bureau of Investigation (FBI). Regardless of why the provision was included, a nearly $2-billion appropriation to the FBI for a new HQ is neither an “emergency” nor a proper inclusion in a legislative package focused on COVID-19.
There are other questionable line items throughout the 177-page supplemental appropriations bill:
- $377 million for the “West Wing Phase 2 Modernization and Pennsylvania Avenue Screening Facility”;
- $50 million for “credential authentication technology units” at the Transportation and Security Administration (TSA); these units appear to have much more to do with basic airport security than COVID-19;
- $175 million for the Corporation for Public Broadcasting (CPB), which already received $75 million in supplemental funding from the CARES Act; these two line items would combine to a total of 56 percent of CPB’s entire fiscal year (FY) 2020 operating budget;
- $75 million for the Essential Air Service (EAS) at the Department of Transportation; NTU has called for the elimination of this heavily subsidized program before, and this $75 million supplemental appropriation represents nearly half of EAS’ entire FY2018 appropriation amount;
- $10 billion for “Grants-In-Aid for Airports”; this is on top of $10 billion already granted airports in the CARES Act; though airports asked for “a new $13 billion bailout” earlier in July, there is no compelling reason to offer a specific industry dedicated funds when they are not absolutely essential to defeating COVID-19.
Also included in the package is Sen. Tim Scott’s (R-SC) “Supporting America’s Restaurant Workers Act.” This legislation would allow businesses to deduct 100 percent of the value of food and beverages purchased at restaurants through December 30, 2020. While there are few indications this would be a particularly expensive provision of any Phase 4 package, tax experts on the right and the left have questioned its usefulness during a pandemic. As the American Enterprise Institute’s Kyle Pomerleau put it: “many Americans continue to be uncomfortable with dining out in the presence of the virus.”