While the nation was distracted with the Supreme Court’s Obamacare ruling last week, Congress passed a $96 billion double-bailout that only guarantees future bailouts in the years to come.
On Friday afternoon, within half an hour of one another, both the House and Senate voted to reauthorize the nation’s federal transportation funding programs. They then immediately fled town, which is understandable because the legislation is atrocious.
For starters, the bill spends $6 billion bailing out college students by extending the artificially low 3.4 percent interest rate on some subsidized college student loans. The change will save the average student only $7 per month, and the rates will do nothing to drive down the cost of college.
The bill also reauthorizes the Highway Trust Fund, but at higher levels of spending than the related gas tax that is supposed to fund it. To pay the difference, members of Congress did not raise the gas tax — instead, they chose to raid private pensions and flood insurance policies.
Here is how it works: First, they reduced the minimum amount that private corporations must invest in their employees’ defined-benefit pension plans. These contributions are tax deductible, so lower pension contributions will lead to higher corporate profits, which in turn translate to more government revenue. It also means more of a chance that the federal government is going to have to bail these companies out when they cannot meet their pension obligations down the road.
Second, Congress increased the premiums that these employers must pay to the Pension Benefit Guaranty Corporation — the federal entity that bails out private defined-benefit pensions when they fail. Instead of using the higher premiums to improve PBGC’s bottom line, Congress used these new funds to pay for the highway bill and the lower student loan rates.
Finally, Congress increased premiums to the National Flood Insurance Program. And instead of using the money to solidify the flood program, Congress used it — you guessed it — to pay for the highway bill and student loan bailouts instead.
Senators and representatives should have taken the time to read the full 600-page bill and debate the consequences of their theft from various insurance funds before voting to approve the measure. But both chambers forced full votes on the legislation mere hours after it was posted online. For House Republicans, this is a clear violation of their own rule requiring such bills to be posted on the Internet for 72 hours before they are voted on.
The saddest part of the whole spectacle was how bipartisan this fleecing of American taxpayers was. In the House, 373 members voted for the bill, whereas only 52 (all Republicans) opposed it. In the Senate, the vote was 74 in favor to 19 against.
If there is one thing Americans should learn from this episode, it is that when they hear the word “bipartisanship,” their immediate reaction should be to reach for their wallets.
