Congress passed an omnibus-spending bill before leaving for Christmas that fully funded most of the government through September 2015, the end of the fiscal year. Nicknamed the “Cromnibus”, the bill did contain one continuing resolution (CR) component for the Department of Homeland Security, which received only a three-month extension. The Cromnibus was passed over heavy opposition from both political parties.

Conservatives did not like the fact that they were funding the government for a full nine months when they will have increased majorities in January, while liberals opposed some of the provisions that they perceived as favors to the banking industry. In the end, the White House and Congressional leaders came together to whip enough votes to narrowly pass the House of Representatives 219-212. The Senate passed the bill by a margin of 56-40 with 21 Democrats, 18 Republicans and one Independent Socialist voting “no.”

The Cromnibus kept federal spending levels roughly the same for the coming year ($1.1 trillion), but there were some shifts in priorities and several winners and losers from this 1695 page piece of legislation.

Winners

• The Banking Industry: The Cromnibus repealed a provision of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that required banks to spin off their risky derivative activities to affiliates that are not FDIC insured. Democrats complained that this change would give big banks license to gamble with taxpayer money.

• Political Parties: Individual donors are now able to contribute a total of $1.5 million combined to the national parties and their committees each two-year election cycle. Previously, the Federal Election Commission (FEC) had ruled that individuals could only contribute $32,500 annually to each committee. This is a big win for the major parties and their committees, but it could also open the door to a third party receiving top-tier funding through the contributions of a few wealthy donors.

• Farmers: Farm ponds and irrigation trenches are now exempted from the Clean Water Act, meaning the Environmental Protection Agency (EPA) will not be able to use these in their calculations for lowering greenhouse gas emissions.

• Internet Users: Congress extended the moratorium on federal and state Internet taxes for another year. Congress also let the two-year session expire without acting on the Marketplace and Internet Fairness Act, a bill that passed the Senate last year allowing states to collect sales tax on goods purchased online. Proponents of this bill will have to start over in the new Congress under far less favorable terrain.

Losers

• Health Insurance Companies: The Cromnibus states that no taxpayer money will be used in the future to bail out health insurers. The Affordable Care Act of 2010 created a fund that all insurers must contribute to that is to be used to offset losses for policies sold on the public exchanges. However, there is a widespread belief that this fund will need more money to stay solvent. If true, insurers will not be able to ask the government to make up the difference.

• Sage Grouse: In a gift to the oil industry, sage grouse will not be placed on the Endangered Species List. This should open up more land for oil drilling.

• Washington D.C. Pot Users: D.C. voters passed a referendum in November legalizing the recreational use of marijuana. Congress has final jurisdiction in Washington D.C., however, and they opted to reverse this referendum.

• The IRS: Perhaps the biggest loser of all, the IRS had their budget cut by $346 million dollars, returning them to 2008 funding levels. It is rare for any federal agency to have their funding cut year-over-year, which makes this development even more surprising. The commissioner has complained that this will lead to lower staffing levels, customer service challenges and refund delays.

 

Contact BASC Expertise, your trusted Mesa accounting firm for details on how these additions and deductions from the 2015 federal budget will impact your business.