Congress’ good deeds for 2015
By near-universal reckoning, congressional lawmakers registered yet another disastrous session in 2015, marked by polarization and gridlock. The Republican majority wasted time pushing an extreme agenda against White House resistance, compromise was impossible, the debt mounted, there’s still no update on the authorization for military force, and blah blah blah.
Well, maybe it’s just the eggnog talking, but right now I’m more focused on the surprising number of significant policy reforms that Congress did enact, on a bipartisan basis, with President Obama’s signature.
First, a provision in the year-end omnibus spending bill abolished the 40-year-old ban on crude-oil exports from the United States. Enacted after the 1973-74 Arab oil embargo, the ban was a simplistic means to a valid end: limiting the United States’ vulnerability to the price-gouging of oil-exporting nations.
Subsequent history, however, proved the superior power of market forces, which broke down the oil-exporting cartel and stimulated the production of vast new amounts of oil within the United States itself.
The problem now is that much U.S. crude is ill-suited chemically for U.S. refineries but could be readily refined abroad.
Environmentalists object that exports will enable the world’s fossil fuel addiction, but to the extent that’s a problem, the solution is to enact wise deterrents to consumption—not to make the supply chain less efficient, which is what the export ban does.
Even a nice green country such as Norway gets 67 percent of its export revenue from oil and gas. Far better to have environmentally aware, politically accountable democracies such as that Scandinavian state, Canada or now the United States supply world oil markets than dictatorships such as Saudi Arabia and Iran.
Which brings us to a final reason to applaud the ban’s end: There is less risk that Iran can exploit the nuclear agreement with the Obama administration to increase its oil market share and, hence, its ability to fund terrorism and other mischief.
Congress’ second good deed was to make permanent some enhancements to the earned-income tax credit that were enacted in the 2009 economic stimulus package but extended only on a temporary basis.
Essentially a wage subsidy for adults with children, the credit has been one of the federal government’s most successful tools for encouraging work and fighting poverty since it was first enacted during the Ford administration.
For technical reasons however, it included a “marriage penalty” that reduced the subsidy for low-income families in which both parents held jobs and were committed to each other—the ultimate perverse incentive. A provision tucked into the year-end “tax extenders” bill fixed that glitch; another provision in the same bill also increased the size of the credit for families with more than two children.
The Center on Budget and Policy Priorities, a liberal think tank, estimated that these changes, taken together, would save $1,190 for a married couple with three children and earnings of $35,000 in 2018.
Finally, the National Defense Authorization Act has modernized military compensation, so that soon almost all U.S. troops will have some access to retirement benefits, as opposed to 20 percent of them under current rules.
Before the new law, the military norm was a fixed pension for those who stay in uniform 20 years or more and nothing for the vast majority who don’t.
Now troops will be able to open 401(k)-style accounts, into which amounts equal to 11 percent of their pay may flow each year, partly from their own contributions and partly from government matching funds. Like the ones already available to many private-sector workers, these accounts will be fully portable. Service members can invest the money and carry it along throughout their post-military careers after at least two years in uniform.
Yes, each of these improvements only made it into law as part of a multithousand-page legislative monstrosity, voted on in haste and full of wasteful spending and giveaways to the rich paid for with borrowed money. In that sense, Congress’ performance was indeed dysfunctional business as usual.
The fact remains, though, that Congress, with Obama’s approval, enhanced the economic efficiency and political tractability of global energy markets, made it easier for poor Americans to get ahead through work and marriage, and enabled our armed forces to recruit the best and brightest on the basis of fairer, more flexible compensation.
If we can’t emphasize the positive now, can we ever?