Connecticut has winners, losers in $1.1 trillion U.S. spending plan

Washington – The massive $1.1 trillion omnibus spending bill that Congress struggled to approve – with little help from the state’s Democratic lawmakers – has some clear winners and losers in Connecticut.

Pratt & Whitney will benefit because the omnibus bill added money for four additional F-35 Joint Strike Fighters, at nearly $500 million apiece, that the Pentagon didn’t request. That boosts the number of F-35s that will be built next year by Lockheed Martin — and Pratt & Whitney which manufactures the fighter’s engines – from 34 to 38. The Navy will receive two of the additional planes and the Air Force the other two.

Losers in the bill are health insurers like Aetna – and possibly many who purchase health insurance.

One of the many controversial riders put in the massive bill would erode a safeguard in the Affordable Care Act that involves risk “corridors,” which are designed to stabilize insurance premiums in the first few years of the law’s implementation.

The risk corridor program works by collecting money from insurers who make more money than they expected under the ACA, and using that money for insurers that did not charge high enough premiums to cover higher-than-expected claims.

aetna courtesy photo

Aetna

One provision of the spending bill limits the amount of money the government can use to protect insurers like Aetna from big losses under the Affordable Care Act.

The Obama administration has committed to pay into the pool if many insurers have a bad experience in the exchanges and there isn’t enough money to pay them using just the funds collected from the industry. But the rider in the omnibus bill prevents the federal government from contributing to the pool.

Republicans, who say the risk corridor is a “bailout” for the health insurance industry, backed the rider. The health insurance industry says it’s needed to keep premiums from soaring.

“American budgets are already strained by healthcare costs, and this change will lead to higher premiums for consumers and make it more difficult to achieve affordability,” said Clare Krusing, spokeswoman for America’s Health Insurance Plans, an industry group that counts Aetna and other major health insurers among its members.

The ACA rider was cited by Rep. John Larson, D-1st District, as one of the reasons he opposed the omnibus bill.

“This measure was rushed to the floor with little time for members to review, and included numerous problematic policy provisions unrelated to the appropriations process,” Larson said.

No easy riders

Various riders in the bill made it difficult for many lawmakers to vote for the omnibus bill, including most members of Connecticut’s congressional delegation. One was a measure that would amend the Dodd-Frank Act to allow banks to once again trade complex financial instruments known as derivatives in units insured by the federal government.

Rep. Jim Himes, D-4th District, who championed legislation that would allow banks to trade some derivatives, and Democratic Sen. Chris Murphy, who has just won a seat on the Appropriations Committee that crafted the omnibus bill, were the only members of Connecticut’s congressional delegation to vote for the bill.

Other losers are the Coast Guard and the Coast Guard Academy in New London.

Republican efforts to challenge the president over his immigration policy will result in uncertain funding for the U.S. Coast Guard Academy in New London.

Republican efforts to challenge the president over his immigration policy will result in uncertain funding for the U.S. Coast Guard Academy in New London.

To try to win support from conservative Republicans, who are furious that President Obama has used his executive authority to give legal status to millions of undocumented immigrants, the omnibus negotiators decided to fund the Department of Homeland Security, which has authority over immigration issues, at this year’s level, only through February.

That allows the new GOP-controlled Congress to stage a showdown with the president on the contentious matter next year. All other federal agencies are funded through Sept. 30, the end of the federal fiscal year.

Since the Coast Guard is under the purview of the Department of Homeland Security, the long-term fate of its — and the Coast Guard Academy’s — budget is unclear. The lack of a set budget also makes it difficult for the Coast Guard to plan or initiate new programs.

More hunger, more heat

The budget bill is also bad news for those dependent on a program called Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), whose budget has been cut by $93 million. WIC provides low-income mothers and children with vouchers that can be exchanged for food which meets certain nutrition guidelines.

Connecticut college students, however, will receive a small lift. The 2015-16 maximum award year for individual Pell grants is expected to be $5,830 — a $100 increase over the 2014-15 amount.

The omnibus bill also slightly increases funding, from about $3 billion to $3.4 billion, for the Low Income Heating and Energy Assistance program that helps low-income families and individuals pay their heating bills. Connecticut received about $77 million in LIHEAP funds last year. But a recent study by a non-profit called Operation Fuel says heating assistance pays for only a fraction of the energy bills Connecticut residents struggle to pay.

The omnibus bill does not fund a new “National Sea-Based Deterrence Fund” established in the in the 2015 defense authorization bill that would allow the Pentagon to put as much as $3.5 billion in a special account outside the Navy’s normal shipbuilding budget to help build a new class of submarines.

Supporters of the National Sea-Based Deterrence Fund say the spending bill has money to continue to plan for the new nuclear sub and that construction money is slated to be appropriated in the next few years to comply with the Navy’s construction schedule.

Those “Ohio replacement” nuclear subs — that would likely be built by Electric Boat in Groton — would cost nearly $5 billion apiece and overload the Navy’s shipbuilding budget. So supporters of the program came up with a plan to set up a special fund to pay for the new subs.

But Taxpayers for Common Sense, an anti-spending group, said the new fund is a “gimmick,” and said “we’ll take our wins where we can get them in this massive legislation.”

“This bizarre idea would mean the new submarine would not be funded by the Navy but, instead, in the so-called ‘defense-wide’ budget,” Taxpayers for Common Sense said in a blog. “The ‘reasoning’ behind this is that, supposedly, submarines are a national asset. Where does faulty logic like this end? Aren’t silo-based ballistic missiles also national assets? How about long range bombers? Tanks?”

No Chinese chicken

Although Rep. Rosa DeLauro, D-3rd District, did not vote for the omnibus bill, the legislation included her proposal that would prohibit serving chicken processed in China in school lunches.

“Banning Chinese chicken from school meals is a common-sense step to protect our kids,” DeLauro said. “China’s food safety record is atrocious, yet last year USDA deemed poultry processed in China to be as safe as poultry processed here.”

Another rider, however, delays the implementation of sodium standards in school meals.

“While we avoided a government shutdown, the final spending bill approved by Congress could have a harmful impact on the heart health of all Americans,” said American Heart Association CEO Nancy Brown.

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