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Consolidated Appropriations Act, 2014, Signed Into Law by President Barack Obama

Barack ObamaWithin a few hours after my January 17, 2014 blog post, as we suspected, President Barack Obama signed the Consolidated Appropriations Act, 2014 (“2014 Act”) into law.  Now, at least until September 30, 2014, our federal government may operate without interruption.

Each year, our government must pass bills that appropriate funds for all discretionary spending.  In most years, a bill is passed by each of the twelve subcommittees in the House Committee on Appropriations and each of the twelve subcommittees in the Senate Committee on Appropriations.

When Congress cannot pass separate bills, it rolls the bills into one omnibus bill like the 2014 Act.  This has become the norm rather than the exception over the past several years.  You may be asking yourself why would Congress roll the bills into one single act rather than pass several smaller bills which will be easier for our lawmakers to review and debate.  There may be many reasons, including:

    • Too much party disagreement to pass individual specific bills;
    • Too many issues pending before lawmakers to deal with several pieces of legislation;
    • Time constraints that may prevent dealing with appropriations in a piece meal fashion; and/or
    • The desire to bury in a single massive act some controversial spending provisions.

In the case of the 2014 Act, the answer is likely “all of the above.”  In recent years, party disharmony appears to have heightened the difficulty of passing separate bills.  With our government’s fiscal year being October 1 to September 30, timing is always a critical issue, making passing separate bills cumbersome.  Not wanting to repeat the disastrous “fiscal cliff” historic event, however, lawmakers were likely especially anxious to get the 2014 Act passed as soon as possible.  It is also the case that lawmakers currently have many other legislative matters on their plates, including tax reform and health care.  With these pressures, an omnibus bill results.

The combined piece of legislation usually has buried in its 1000 plus pages some spending provisions that may be considered by some to be controversial.  Given the size of the 2014 Act, over 1500 pages, lawmakers had little time to debate, let alone study, the entire bill and its nuances.  Regardless of your party affiliation, you can find some provisions in the 2014 Act that you believe are troublesome.  Maybe that is what compromise is all about.  The 2014 Act includes many provisions that could have, standing alone, stalled or prevented the passing of individual smaller bills, including:

    • $90 billion of funding for the war in Afghanistan;
    • $1 billion of funding cuts to the Affordable Care Act’s Prevention & Public Health fund;
    • 1% increase in federal workers’ pay;
    • Cutting the IRS budget by over $500 million when the Tax Gap seems to keep growing;
    • Prohibition against the US Postal Service from eliminating Saturday delivery service; and
    • Prohibition against the US government transporting military prisoners in Guantanamo Bay, Cuba to the United States.

If you find none of these provisions the least bit troublesome, hopefully you will find humor in the provision in the 2014 Act that bans the funding of new portraits for our government officials.  I guess lawmaking is akin to sausage making in that you throw all the contents in one end and a finished product comes out the other end.

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Larry J. Brant
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Larry J. Brant is a Shareholder and the Chair of the Tax & Benefits practice group at Foster Garvey, a law firm based out of the Pacific Northwest, with offices in Seattle, Washington; Portland, Oregon; Washington, D.C.; New York, New York, Spokane, Washington; Tulsa, Oklahoma; and Beijing, China. Mr. Brant is licensed to practice in Oregon and Washington. His practice focuses on tax, tax controversy and transactions. Mr. Brant is a past Chair of the Oregon State Bar Taxation Section. He was the long-term Chair of the Oregon Tax Institute, and is currently a member of the Board of Directors of the Portland Tax Forum. Mr. Brant has served as an adjunct professor, teaching corporate taxation, at Northwestern School of Law, Lewis and Clark College. He is an Expert Contributor to Thomson Reuters Checkpoint Catalyst. Mr. Brant is a Fellow in the American College of Tax Counsel. He publishes articles on numerous income tax issues, including Taxation of S Corporations, Reasonable Compensation, Circular 230, Worker Classification, IRC § 1031 Exchanges, Choice of Entity, Entity Tax Classification, and State and Local Taxation. Mr. Brant is a frequent lecturer at local, regional and national tax and business conferences for CPAs and attorneys. He was the 2015 Recipient of the Oregon State Bar Tax Section Award of Merit.

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