The massive government spending bill President Barack Obama signed on Tuesday contains provisions that bar federal funding for most abortions, forbid federal and local funding for abortions in the District of Columbia, and deny abortion funds for federal prisoners. But Planned Parenthood supported the legislation anyway. Why? Because this spending bill doesn't contain any new restrictions on abortion, and Planned Parenthood feared that if this bill was defeated, the new Republican-dominated Congress that takes office next month would pass its own spending measure—complete with harsh new limits on abortion rights.
Language barring federal funding for abortions has been attached to appropriations measures since 1976. Congress first passed the provision, known as the Hyde Amendment, three years after Roe v. Wade, the landmark Supreme Court decision that held that women have a constitutional right to abortion. Though Planned Parenthood opposes the Hyde Amendment, the group doesn't lobby lawmakers to vote against wide-ranging spending bills because of this provision, which enjoys overwhelming Republican support and has become a staple of spending legislation.
Many Democrats had threatened to block the appropriations bill after outcry over a big Wall Street giveaway tucked into the legislation. But blocking the bill could have meant a hit to reproductive rights next year, Planned Parenthood spokesman Eric Ferrero says. If Congress had failed to approve the spending measure, which funds the government through September, lawmakers would have had to pass a short-term bill continuing government spending at current levels for a few months. Then, once Republicans took over the Senate in January, they would have been able to craft a full spending bill without much Democratic input. With control of both houses of Congress, Republicans would have had a good chance of sneaking new anti-abortion measures into the bill. The "anti-women's majority could push any number of dangerous provisions," Ferrero notes, including reduced family planning funding and a measure that would allow hospitals to refuse to offer certain abortion services.
The bill that Obama signed Tuesday protected Planned Parenthood's main priorities. The group's leaders were especially happy that Democratic lawmakers succeeded in stripping several anti-abortion measures from the final bill, managed to secure current funding levels for important federal reproductive health programs, and won new abortion coverage for Peace Corps members. That's why Planned Parenthood staffers made a round of calls last week to lawmakers to make sure they knew the bill did not contain new anti-abortion provisions. Two congressional staffers tell Mother Jones that Planned Parenthood lobbied lawmakers to vote in favor of the spending bill.
"The appropriations bill is an important step in the right direction when it comes to women's health—holding the line on deeply unpopular abortion restrictions and expanding access for Peace Corps volunteers," Planned Parenthood president Cecile Richards said in a statement.
Planned Parenthood's support for the spending bill was far from assured. A month ago, when lawmakers were still hashing out what to include in the bill, Republicans tried to shoehorn in a number of anti-abortion measures. One of those was the Abortion Non-Discrimination Act, which would have allowed doctors, health insurance companies, and hospitals to decline to provide certain abortion services, and to refuse to give out information to women about abortion options. Another proposal would have prevented health insurance plans sold through the new Obamacare exchanges from covering abortion and would have nixed tax benefits for small businesses that buy health plans that cover abortion. Democrats managed to strip both provisions from the final bill.
Planned Parenthood and its allies feared that GOPers would force a reduction in funding for family planning programs next year. Here, again, Dems held their ground. The Title X Family Planning Program, which helps low-income women avoid unwanted pregnancies, got an appropriation of about $300 million, the same as last year. Congress doled out $101 million to the Teen Pregnancy Prevention Program, and roughly $600 million for international family planning programs.
In addition to staving off Republican assaults on abortion rights, Dems forced into the spending bill new rights for some federal employees. For the first time, Peace Corps members will now have access to (limited) abortion coverage. The federal government will now cover abortion for Peace Corps volunteers in cases of rape or incest, or to save the life of the mother—as it does for most other women on the federal payroll. A recent study by researchers at the University of Ottawa, Princeton, and Cambridge Reproductive Health Consultants found that out of 433 Peace Corps volunteers interviewed, 8.8 percent reported that they had been raped or sexually assaulted during their service.
"On balance," says Heather Boonstra, the director of public policy at the Guttmacher Institute, a pro-abortion-rights think tank, "in terms of the reproductive rights agenda, we could have been in a lot worse position than where we ended up."
On Tuesday evening, lawmakers released the text of the massive spending bill that Congress must approve to avoid a government shutdown. Buried on page 615 of that 1,603-page piece of legislation is a provision entirely unrelated to government funding that a few lawmakers managed to sneak into the bill without any public debate during last-minute negotiations. It's a Wall Street giveaway—written by Citigroup—that would allow banks to engage in more types of risky trading with taxpayer-backed money. Progressive Democrats and their allies have since launched an all-out campaign to strike the Citi-written provision from the spending bill. Elizabeth Warren railed against the provision on the Senate floor Thursday afternoon, warning, "A vote for this bill is a vote for taxpayer bailouts of Wall Street." As of Thursday afternoon, it was unclear whether House Speaker John Boehner (R-Ohio) could secure enough votes to pass the spending bill containing this measure and send it to the Senate. (Update: The bill passed the House.)
Here are the problems with the Citigroup-drafted provision, according to Michael Greenberger, a former derivatives regulator at the Commodity Futures Trading Commission who is now a law professor at the University of Maryland.
What is so bad about this provision? If Congress okays this measure, taxpayers could be on the hook in the event of another financial crisis. This provision guts the so-called push-out rule created by the 2010 Dodd-Frank financial reform act. This rule forbids banks from trading certain derivatives—complicated financial instruments with values derived from underlying variables, such as crop prices or interest rates. Instead, banks would have to shift these high-risk trades into separate nonbank affiliates that aren't insured by the Federal Deposit Insurance Corporation (FDIC) and are less likely to receive taxpayer bailouts. If the Citi-written measure becomes law, the largest FDIC-insured banks in the country will be able to make a wider range of these risky trades.
What will happen if there's another financial crisis? If there's an economic downturn triggered by derivatives trading gone bad, banks will be able to count on a taxpayer bailout—just like they received in 2008. "It's very dangerous," Greenberger says. "If [banks] lose on this type of trading and that causes a disruption in the markets, the taxpayer will be confronted with whether to let the banks fail or bail them out to the tune of trillions of dollars."
Could taxpayers be at risk even in boom times? Yep. In 2012, JPMorgan Chase lost $6 billion on a bad trade that has come to be known as the London Whale. "JPMorgan was essentially gambling with FDIC-insured money, secure in the knowledge that major losses would be borne by the public while profits would stay in the bank," David Dayan wrote in Salon last year. JPMorgan, it turned out, was able to withstand that loss without a bailout, but a lot of other US banks couldn't, Greenberger explains: "You could have a trade that loses a lot more than $6 billion by a rogue trader, in which case taxpayers have to foot the bill."
How were lawmakers able to sneak this into the big appropriations bill? It's common for lawmakers to force bills through Congress by attaching them to larger must-pass legislation. The practice is part of the wheeling and dealing that allows Republicans and Democrats to come to agreement on major legislation. But, Greenberger says, "putting these substantive provisions in appropriations bills is very, very dangerous stuff…If you want a controversial provision in there that you couldn't get in under regular order, this is the way to do it." He adds, "Then the president has problems vetoing it because the government will shut down. It's a bad way to do business."
If Congress approves this measure, what does it mean for economic populism? "Economic populism is alive and well," Greenberger maintains. "It's just that nobody in leadership wants to take advantage of it, whether they're Republican or Democrat." Lawmakers from both sides of the aisle worked to push the Citi-written provision into the spending bill.
On Thursday afternoon, Sen. Elizabeth Warren (D-Mass.) took to the Senate floor to rail against a Wall Street giveaway that corporate-friendly lawmakers snuck into the massive spending bill that Congress needs to pass this week in order to avert a government shutdown. The measure—which was written by Citigroup—would allow big banks like Citigroup to engage in a broader range of risky trades with taxpayer-backed money. "A vote for this bill is a vow for taxpayer bailouts of Wall Street," Warren warned in her speech. Here's the whole thing.
Update Friday, December 12, 2014: On Thursday night, the House passed the spending bill with the Citigroup-written provision. The Senate is expected to approve the legislation.
A year ago, Mother Jonesreported that a House bill that would allow banks like Citigroup to do more high-risk trading with taxpayer-backed money was written almost entirely by Citigroup lobbyists. The bill passed the House in October 2013, but the Senate never voted on it. For months, it was all but dead. Yet on Tuesday night, the Citi-written bill resurfaced. Lawmakers snuck the measure into a massive 11th-hour government funding bill that congressional leaders negotiated in the hopes of averting a government shutdown. President Barack Obama is expected to sign the legislation.
"This is outrageous," says Marcus Stanley, the financial policy director at the advocacy group Americans for Financial Reform. "This is to benefit big banks, bottom line."
As I reported last year, the bill eviscerates a section of the 2010 Dodd-Frank financial reform act called the "push-out rule":
Banks hate the push-out rule…because this provision will forbid them from trading certain derivatives (which are complicated financial instruments with values derived from underlying variables, such as crop prices or interest rates). Under this rule, banks will have to move these risky trades into separate non-bank affiliates that aren't insured by the Federal Deposit Insurance Corporation (FDIC) and are less likely to receive government bailouts. The bill would smother the push-out rule in its crib by permitting banks to use government-insured deposits to bet on a wider range of these risky derivatives.
The Citi-drafted legislation will benefit five of the largest banks in the country—Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America, and Wells Fargo. These financial institutions control more than 90 percent of the $700 trillion derivatives market. If this measure becomes law, these banks will be able to use FDIC-insured money to bet on nearly anything they want. And if there's another economic downturn, they can count on a taxpayer bailout of their derivatives trading business.
In May 2013, the New York Times reported that Citigroup's proposed language was reflected in more than 70 lines of the House financial services committee's 85-line bill. Mother Jones was the first to publish the document showing that Citigroup lobbyists had drafted most of the legislation. Here is a side-by-side of a key section of the House bill:
The bill—sponsored by two Dems and two Republicans—passed easily out of the House financial services committee on a 53-6 vote. The six no votes came from Democrats. In October 2013, the measure passed the Republican-controlled House 292-122. Seventy Dems voted in favor, but that was far fewer than expected, partly due to press coverage of Citi's involvement in the bill's drafting.
Back then, the bill's chances of becoming law seemed dim. Treasury Secretary Jack Lew voiced his opposition to the measure, saying it would be "disruptive and harmful." Obama signaled to lawmakers that he opposed it. It never came up for a vote in the Senate.
And the legislation was left on the table for corporate-friendly lawmakers on both sides of the aisle to now sneak into the pending spending bill. But Democratic leadership is raising concerns about the Wall Street-friendly provision. House Minority Leader Nancy Pelosi (D-Calif.) blasted out a statement Wednesday morning slamming the provision for allowing "big banks to gamble with money insured by the FDIC." And Sen. Elizabeth Warren (D-Mass.) is calling on the House to strike the Citi-written language from the spending bill.
"I am disgusted," Rep. Maxine Waters (D-Calif.), the ranking Democrat on the House financial services committee, said in a statement. "Congress is risking our homes, jobs and retirement savings once again."
Rep. Alan Grayson (D-Fla.) issued an even more dire warning, calling the bill "a good example of capitalism's death wish."
Now that Republicans control Congress, they're again threatening to end Obamacare. On Monday, Senate Majority Leader-elect Mitch McConnell (R-Ky.) vowed to hold a repeal vote when Republicans take over the upper chamber in January, adding that GOPers "will go at that law…in every way that we can." Obamacare is not going anywhere as long as President Barack Obama is in office. But there is a sneakier way GOPers could deal a blow to the health care law in the next two years: They can make the law look more costly than it is, boosting the case for dismantling it.
In 2012, the Congressional Budget Office (CBO)—which produces official budget projections—calculated that the combined effect of the tax increases and spending cuts in the Affordable Care Act will reduce the deficit by $109 billion over the next decade. (This is the CBO's most recent estimate.) Conservatives cried foul, saying that the CBO double-counted savings in the law and ignored billions in health care spending in order to make the economic effects of the law seem rosier than they were. They charged that Obamacare actually adds billions to the deficit. The CBO and other economists say these assertionsare nonsense. But Republicans kept complaining. Now that they control both houses of Congress, they can do something about it. All GOPers have to do is install a new CBO director who is willing to change the agency's budget math to make it appear that Obamacare adds to the deficit. Republican leaders are reportedly considering roughly a dozen candidates to replace the current CBO chief, Doug Elmendorf, and conservatives are demanding a new director who doesn't "cook the books" on Obamacare.
In a letter to House and Senate GOP leadership last month, conservative anti-tax activist Grover Norquist called Elmendorf's analysis of how Obamacare would affect the budget a "facade" and urged Republicans to replace him. Democrats fear that Republicans will appoint someone who is willing to change the math to make Obamacare look more expensive, according to a congressional aide. At least one of the candidates Republicans are reportedly considering—James Capretta, a health care policy expert at the conservative American Enterprise Institute—is on record claiming the law increases the deficit.
Spokesmen for Senate budget committee chair Jeff Sessions (R-Ala.) and House budget committee chair Rep. Tom Price (R-Ga.), who will have the final word in selecting the new CBO director, declined to comment. But Sessions and fellow Republicans on his committee agree that the CBO should change how it calculates Obamacare's effects on the budget. In October, the Senate budget committee's Republican staff released a report claiming the Affordable Care Act will increase the federal deficit by $131 billion over the next decade, and touted support for the new analysis from several conservative health policy experts.
The CBO stands by its math. Elmendorf wrote in June that the CBO and the Joint Committee an Taxation, which calculates how tax laws affect revenue, "have no reason to think that their initial assessment that [health reform] would reduce budget deficits was incorrect."
"CBO has accounted for deficit reduction in exactly the same way in previous Congresses, under both political parties," Paul Van de Water, a senior fellow at the left-leaning Center on Budget and Policy Priorities (CBPP), wrote in 2012. "Until opponents of health reform latched onto the notion, no one accused CBO of faulty accounting."
If Republicans succeed in making the law look like a huge burden on taxpayers, they could ease the way for efforts to chip away at the health care law, says Lawrence Jacobs, a political science professor at the University of Minnesota and coauthor of Health Care Reform and American Politics: "The conservative push is serious and part of the subterranean attack to 'prepare the battlefield' for the new Republican Congress."
It is still possible that GOPers will reappoint Elmendorf as CBO director. Several prominent conservative economists havepraised his work. But congressional aides told the New York Times last week that they are betting against him.