Taxpayer Tricks and Treats for Halloween 2022

The word “spooky” is insufficient to describe the frightful way President Biden and Congress damaged taxpayers during 2022, so today Citizens Against Government Waste (CAGW) released its 23rd annual compilation of the hair-raising, harrowing, and horrifying Taxpayer Tricks and Treats. There was so much scary spending and so many repugnant regulations that there are more tricks and fewer treats than usual.

Trick: The Monstrous Inflation Reduction Act

The Inflation Reduction Act of 2022 (IRA) qualifies as one of the most grossly misnamed laws and tricks on taxpayers in history. After the Build Back Better Act was supposed to be dead and buried, Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) dug it up from the grave and, like Victor Frankenstein, stitched it into the IRA. Sen. Manchin, who once said, “I don’t think during a time of recession you mess with any of the taxes or increase any taxes,” tried to cover up this lie by saying he made the agreement because there are no tax increases, just the closing of loopholes. Like many other members of Congress, Sen. Manchin has trouble with math. The IRA is a fiscal nightmare that will haunt taxpayers by raising taxes, increasing spending, and prolonging both inflation and the recession.

According to the Joint Committee on Taxation (JCT), the IRA would dreadfully raise taxes by $14.1 billion on those making between $200,000 and $500,000, and $16.7 billion on those making less than $400,000. By 2031, those making less than $400,000 would be devastated with more than two-thirds of the tax burden, mostly due to making them pay for the sneaky subsidies provided to higher-income earners through Green New Deal programs, like the tax credit of up to $7,500 for electric vehicles available to individuals making up to $150,000 and couples making up to $300,000. There is $737 billion in new revenue in the IRA, and more than half, or $369 billion, will be spent on these dreadful programs.

Sen. Manchin and other congressional Democrats gave up the ghost on the IRA when they refused to say when it would reduce inflation and instead kept promoting the climate change provisions of the bill.

Treat: Postal Service Reform Act Is Signed into Law

Congress and President Biden gave taxpayers a welcome victory when the Postal Service Reform Act of 2022 (Pub. Law No. 117-108) was signed into law. The law happily codifies an integrated delivery network for mail and packages, which increases efficiency and prevents the establishment of two delivery systems that would have increased costs, slowed down delivery, and raised prices for small businesses and consumers.

The Postal Regulatory Commission (PRC) found that creating separate networks would have cost a ghastly $15 billion more annually for a new fleet of vehicles and tens of thousands of new employees. The law also prevents the USPS from getting into the financial services business, a frightening proposal that should be buried forever. It increases transparency and accountability by establishing performance targets and reviews of accounting for direct and indirect costs. It also requires semi-annual reports on finances and operations, and expands the ability of the USPS Office of Inspector General to oversee the PRC.

The law is not a complete solution to the issues facing the USPS, including closing duplicative and unneeded facilities, reducing labor costs, and increasing work sharing, but it is a very good first step to creating a more efficient postal system.

Trick: COVID Funds Pointlessly Spent on Putrid Projects

Congress has passed three bills aimed at “COVID-19 relief” and missed badly, with some estimates that less that 10 percent of the $4.6 trillion provided to state and local governments have been spent on pandemic-related issues. The state of Hawaii spent $1 million on a sea urchin hatchery and $300,000 for an engineering assessment of the now-condemned Aloha Stadium. The McAllen, Texas Independent School District allowed $4 million in education recovery funds to fly away for the expansion of an urban bird sanctuary. Iowa nightmarishly allocated $12.5 million to help build a Major League Baseball stadium at the “Field of Dreams” movie site.

The myriad instances of state and local governments misusing COVID relief funds with a plethora of payments for putrid projects shows how lawmakers have pulled the ultimate trick on taxpayers.

Trick: Price Controls Will Leave an Invisible Graveyard of Patients

Just like a menacing monster in a horror movie that can’t be killed, the price controls that were supposed to die when the Build Back Better Act failed were resurrected in the Inflation Reduction Act, H.R. 5376, which was scarily signed into law on August 16, 2022.

The bill allows the government to set poisonous price ceilings, which will increase its control of the marketplace and devastate the research and development needed to treat and cure diseases like cancer, Alzheimer’s, Parkinson’s, and many others. Price controls are not only chilling for innovation but also deadly for patients. The provisions of the IRA will result in the loss of 135 new drugs, “increase healthcare spending by $50.8 billion over the next 20 years … and generate a loss of 331.5 million life years in the U.S., 31 times as large as the 10.7 million life years lost from COVID-19 in the U.S. to date.”

This is not a sci-fi horror film that can be turned off. This is socialized medicine emerging and rearing its ugly head. The price controls force pharmaceutical research and development down a dark and dreary path that leads directly into an invisible graveyard of Americans.

Treat: The Overseas Contingency Operations Account Disappeared into the Darkness

The Biden administration handed taxpayers a delightful victory in its FY 2022 budget request by eliminating the expensive and excessive Overseas Contingency Operations (OCO) account at the Department of Defense (DOD) nearly 20 years after its inception. Originally intended for emergency defense spending in response to the attacks of September 11, 2001, the OCO transitioned into a gruesome slush fund designed to inflate DOD spending far above the baseline budget and for purposes unrelated to foreign wars. Both Democrats and Republicans were happy to keep this secretive spending alive.

The continued justification for the OCO had long since reached the stage of parody, with spending far outpacing the military’s presence in combat zones. The DOD has received approximately $2 trillion from the OCO since 2001, including an alarming $68.7 billion in FY 2021. Were it considered to be a federal agency, the FY 2021 OCO funding would have made it the fourth largest, dwarfing spending at all other agencies except the DOD, and the Departments of Health and Human Services and Veterans Affairs. After spending reached Biblical proportions over the past three years, the termination of the OCO is good news.

Trick: Banning or Restricting THR Products Will Create a Dangerous Black Market

Legislative ghouls at the federal, state, and local level, along with bogeyman bureaucrats at the Food and Drug Administration, continue to haunt and criminalize tobacco harm reduction (THR) products like vaping devices, heat-not-burn e-cigarettes, chewing tobacco, and snus with exorbitant excise taxes and restrictive flavor bans. They are all disregarding evidence that these products are highly effective in helping adults stop smoking harmful and deadly cigarettes and reducing the number of people who will get cancer, emphysema, and other diseases that they cause. Imposing excessive taxes and limiting access will create a dangerous black market that will increase criminal activity and prolong the adverse impact of cigarette smoking. Instead, THR products should be widely adopted.

Treat: Creeping Crawling Critters Can’t Discount the Constitution

Creepy bureaucrats buried in the corners of federal agencies had long tried to test the boundaries of their constitutional authority. The Supreme Court decided on June 30, 2022, in West Virginia v. Environmental Protection Agency, that there are limits to an agency’s abominable ability to create regulations that flout the authority delegated to them by Congress under the major questions doctrine. This means that unless Congress provides specific and clear instructions and authority in legislation, unelected bureaucrats cannot magically transform themselves into wizards and witches who can make transformational changes and turn old laws into new regulations that would have a major economic impact. While the case applied to the EPA’s rules on emissions, it is likely to apply to other major issues like negative net neutrality restrictions on internet access, and pristine privacy rules that would impact every single business in America.

Treat: The Digital Divide Is Closing

More Americans are gaining access to broadband in unserved communities. Private investment reached a 20-year high of $86 billion in 2021, and tens of billions of dollars have been made available by the federal government through the American Rescue Plan Act and the Infrastructure Improvement and Jobs Act (IIJA), as well as programs like the Rural Development Opportunity Fund at the Federal Communications Commission. Broadband is now being deployed across the country to close the digital divide, broadband speeds have increased, and more Americans are finding new ways to access the internet. In addition, states, anticipating the receipt of funding from the IIJA, have been creating broadband offices to ensure unserved communities are first in line to get funding for broadband deployment.

There are tens of billions of dollars available to increase broadband access. But the states need to be careful and ensure that their broadband policies are effective and efficient, and then provide sufficient oversight on how this money is being distributed.

There should not be any government-mandated solutions or preferences, and government-owned networks should be avoided whenever possible since they have proven to be wasteful and ineffective. The best treat for taxpayers is to make every technology available for broadband, including the use of cable, DSL, fiber, fixed wireless, mobile, low-earth orbit satellites, and TV white space technologies. Accurate maps are also essential to avoid overbuilding broadband services and ensuring that truly unserved and underserved Americans get the access they need to the internet. Another tasty treat would be for federal agencies to stop hoarding unneeded spectrum and increase cooperation and coordination to improve communications capabilities across the country.

Trick: Resurrection of Earmarks Continues to Alarm Americans

To paraphrase Miracle Max in The Princess Bride, “earmarks were only mostly dead.”

Just in time for the 30th anniversary of the Congressional Pig Book, members of Congress frighteningly overturned the 2011 earmark moratorium and formally restored them in FY 2022. The 2022 Congressional Pig Book exposed 5,138 earmarks, an increase of 1,702.8 percent from the 285 in FY 2021, at a cost of $18.9 billion, an increase of 18.9 percent from the $15.9 billion in earmarks in FY 2021. Since FY 1991, CAGW has identified 116,816 earmarks costing $411.4 billion.

Under the resuscitated and regurgitated earmarking process, members of House and Senate leadership and the most powerful committees are highly likely to get the sweetest deals at the expense of everyone else. In FY 2022, the 89 members of the House and Senate appropriations committees, making up only 17 percent of Congress, were responsible for 41.1 percent of the earmarks and 29.1 percent of the money.

Senate Appropriations Committee Ranking Member Richard Shelby (R-Ala.) was the biggest vampire sucking the blood of taxpayers by receiving by far the highest dollar amount of earmarks. His 16 earmarks cost $647,936,000, which is $270,437,000 (71.6 percent) more than the legislator in second place, Rep. Brian Mast (R-Fla.), who received six earmarks costing $377,499,000. But Democrats overall fed from the trough far more than Republicans, with 99.3 percent of the former getting earmarks versus 45.8 percent of the latter.

No taxpayer will rest easy until earmarks are forever buried in the legislative graveyard with no chance of coming back alive.

Trick: The National Debt Will Haunt the U.S. Forever

The horrific national debt of $31 trillion is set to grow at a record pace over the next decade. Making matters worse, every percentage point increase in interest rates on a $31 trillion debt will increase interest payments by $310 billion annually, forbiddingly crowding out funding for all other federal programs.

A May 2022 Congressional Budget Office (CBO) report forecast an average annual deficit of $1.6 trillion between FYs 2023 and 2032, after it reached $2.8 trillion in FY 2021. The annual deficits during this period will add a startling $15.7 trillion to the national debt, bringing it to a bloodcurdling $46.7 trillion by FY 2032.

The most significant cause of this grossly bloated debt is massive, wasteful spending in the nation’s capital.

The impact of the debt on our children and grandchildren is far worse than stealing candy from their bags on Halloween.

Trick: Legislator’s Moribund Fiscal Management

Members of Congress have a few simple jobs under the Constitution, including creating and passing a budget.

While passing bills on time should be as routine as passing out candy on Halloween, in every year since fiscal year (FY) 1997, Congress failed to pass all 12 appropriations bills by the first day of the fiscal year, which is October 1. Timely passage has occurred only three other times since the Budget Impoundment and Control Act was passed in 1974. Instead, members have passed continuing resolutions (CRs), which provide the same funding level as the prior year to buy time to complete the appropriations process. There have been 123 CRs beginning with FY 1998, averaging 5.1 such bills each year, lasting on average nearly five months.

The House of Representatives passed only half of the FY 2023 appropriations bills before the deadline and the Senate was even more inept since it failed to pass a single spending bill prior to the deadline for the fourth consecutive year. President Biden signed a CR on September 30, 2022, to fund the government until December 16, 2022. The likelihood of another CR is nearly 100 percent, especially if Republicans win the majority in the House and/or Senate on November 8, 2022.

The inability to adhere to the most basic guidelines of the budget process is likely a chief driver of American’s ghastly opinion of Congress. Only 23 percent of Americans currently approve of the way members of Congress do their jobs, while 75 percent disapprove.

Trick: The Fiscal Nightmare Continues at the Department of Defense

The Department of Defense (DOD) remains the sole federal agency that has not undergone a clean audit under the Chief Financial Officers Act of 1990, and the latest estimate it that it will not comply until 2027, or 37 years after it was required to do so by law. This is not shocking since DOD financial programs have been on the Government Accountability Office’s High-Risk List since 1995.

The financial mismanagement includes health benefits and procurement. The Defense Health Agency (DHA) claims that it reduced improper payments to $168 million, a 50.4 percent reduction from the $338.9 million in FY 2020, but these figures were disputed by a January 11, 2022, DOD Office of Inspector General (IG) report, which found that the agency did not have the ability to provide accurate information about improper payments and that the estimate was unreliable.

The Joint Strike Fighter (JSF) program has attracted more bad reviews than the last-minute Halloween costume. Total costs JSF are estimated to reach $1.727 trillion over the lifetime of the program, which should make taxpayers shake in their boots.

Burying the JSF deep underground entirely will prove difficult. Only two states (Hawaii and North Dakota) do not have at least one supplier for the aircraft. This gives all but two representatives and four senators more than enough incentive to not only keep greasing the wheels, but also to add 33 evil earmarks for the JSF program, costing $10.6 billion, since FY 2001. This is one of many ways that defense programs rise from the dead even on the rare occasion that they get killed off.

Trick: Student Loan Forgiveness Should Haunt President Biden

President Biden decided that the federal government will forgive up to $10,000 of student loan debt for borrowers making less than $125,000 and up to $20,000 for Pell Grant recipients. His August 25, 2022, announcement is patent political pandering that should hauntingly backfire on him. There are far more people who have paid off their loans or their children’s loans and will be outraged over this decision than there are borrowers who have not yet paid them back.

This could be the most outrageous, unfair, inequitable, and ghoulish proposal ever made by any president, especially since it is not clear he has any authority to do so. Student loan forgiveness is inflationary and regressive, forcing low-income taxpayers to bailout wealthy borrowers, and it is especially insulting to the tens of millions of Americans who served the country and received free or reduced cost tuition under the GI bill. The Congressional Budget Office (CBO) confirmed that this move will cost the government about $400 billion, but other estimates show it could petrifyingly be more than $1 trillion. Excessive government spending has contributed to the high inflation that is haunting the wallets of every American.

Treat: Consumers May Get More Data Privacy Protection

Congress is finally taking steps to move forward on data privacy legislation to help keep ghastly ghouls who dress up like Casper the Friendly Ghost from trying to steal all kinds of personal information for their own profit. The need for a flexible national consumer data privacy framework that can meet the needs of consumers and businesses is more critical than ever as more as states continue to establish their own confusing and conflicting privacy laws and regulations.

While the Senate held hearings on privacy but did not report the bill, the House Energy and Commerce Committee reported H.R. 8152, the American Data Privacy and Protection Act, out of the committee on July 20, 2022, by a vote of 53-2. Senate Committee on Commerce, Science, and Transportation Committee Chair Maria Cantwell (D-Wash.), said she will not consider H.R. 8152 as written. The House bill includes many of the provisions of CAGW’s proposals for a national data privacy framework as made clear in a letter sent to the committee that expressed both general support and specific concerns over provisions related to state preemption, private rights of action, and more authority for the Federal Trade Commission. But Sen. Cantwell wants to include a scarier and stronger private right of action and even less preemption of state laws, which means this treat comes with a caveat that it could turn into a trick.

Trick: More IRS Funding Will Terrify and Torment Taxpayers

The so-called Inflation Reduction Act will wreak havoc for taxpayers, especially the intrusive inclusion of $80 billion to hire up to 87,000 new Internal Revenue Service (IRS) employees. The Biden administration claims that these new employees will be used to improve the agency’s IT and customer service but it’s likely that this army of auditors will be used to target low and middle-income taxpayers. The IRA also allows the IRS to become the preparer and enforcer of tax returns. The ghost of failures past should stop this idea in its tracks. After the IRS wasted $17 million trying to create its own tax preparation system in 2002, the government formed the Free File system in 2003, which provides access to private sector tax preparation services that can file tax returns for up to 70 percent of taxpayers. Horrendous information technology problems continue to haunt the agency.

The ghoulish taxman frightens taxpayers enough as it is. If the IRS becomes tax preparer, biller, and enforcer, taxpayers will be tormented. Fortunately, House Republicans have promised that the first action they will take if they take back the majority will be to bury the extra IRS funding deep underground.

Trick: FTC Chair Lina Khan’s Dastardly Decisions Devastate Businesses

Federal Trade Commission (FTC) Chair Lina Khan made one of the dastardly decisions in the agency’s history by abandoning the 100-year-old consumer welfare standard in 2021 and alarmingly abusing antitrust powers. She has continued to lead the FTC’s efforts to intimidate and terrorize businesses large and small throughout 2022, opposing nearly every deal across numerous industries and reviewing long settled and previously approved standards and practices in other businesses. Chair Khan has expanded the agency’s actions beyond all reasonable and legal bounds, including a proposed rulemaking to increase the agency’s antitrust power, and an advanced notice of proposed rulemaking (ANRPM) on consumer data privacy that will affect every single business and consumer in America at the same time Congress is finally considering legislation on that issue.

FTC Commissioner Christine Wilson made clear the alarming expanse of Chair Khan’s efforts in her dissent to the privacy rulemaking, stating that the “ANPRM wanders far afield of areas for which we have clear evidence of a widespread pattern of unfair or deceptive practices.” She further noted that she did not have any “reason to believe that she [FTC Chair Khan] harbors any concerns about harms that will befall the agency (and ultimately consumers) as a consequence of her overreach.”

Likewise, former FTC Commission Noah Phillips recently warned that the agency was preparing to issue antitrust regulations, even though the FTC has no authority from Congress to issue antitrust regulations and its attempts to exercise “power over the whole economy … would violate the Constitution’s separation of powers.” It is hard to think of a scarier proposition on Halloween or at any other time of the year.

CAGW is the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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