WASHINGTON -- Congress on Monday unveiled a 5,593-page spending bill and then voted on it several hours later, with lawmakers saying urgent action was needed to rescue an ailing economy ravaged by the coronavirus pandemic.
But tucked into the bill was more than $110 billion in tax breaks that strayed far from lawmakers' marketing to many Americans. These giveaways include big tax cuts for liquor producers, the motorsports entertainment sector, and manufacturers of electric motorcycles.
Some of these measures, added onto the broader spending bill, are known as "tax extenders" -- tax breaks targeted at specific, sometimes niche industries. And routinely extending these "temporary" measures has become something of a year-end tradition, despite complaints from some lawmakers who allege the votes largely benefit special interest groups that stand to gain money from the outcome.
These tax extenders are designed to be temporary but are frequently renewed -- often at the urging of industry lobbyists -- in late-night votes at the end of the year. The Joint Committee on Taxation estimated the extenders benefiting industry and special interests included in the stimulus bill would reduce tax revenue by $110 billion over 10 years.
Tax experts have criticized such short-term tax-relief extensions, arguing they hide the true cost of the cuts and favor industries with the most well-connected lobbyists.
"They are a gravy train for members and lobbyists, who repeat the same exercise every year or two," Howard Gleckman, a tax policy expert at the Urban Institute, said in an email. "The lobbyists get to keep billing hours. The members get campaign money from the same people. Many of these are classic special interest tax breaks that do not benefit the overall economy in any way."
One measure, for instance, makes permanent a cut in excise taxes for producers of beer, wine and distilled spirits, which first became law in 2017 as part of the Republican-led tax-cut package. The cuts were due to expire without congressional action, and the alcohol industry had pushed hard for their renewal, arguing that their businesses had been decimated by the pandemic. The industry has supporters among both Democrats and Republicans in Congress, who in turn pushed their leaders to include a provision making the cuts permanent.
Anheuser-Busch, the Distilled Spirits Council, Bacardi North America, and the Brewers Association all lobbied Congress in recent months on the excise tax issue, lobbying records show.
"I wrote this law for one purpose: to help small brewers and wineries and everybody in this space because the rules, the regulations and the taxes were practically from Prohibition," said Sen. Ron Wyden, D-Ore.
The excise-tax cut has won praise in some corners. An analysis by the Progressive Policy Institute published last month argued that the cut would help fuel an expansion in brewery employment, a rare bright spot amid overall U.S. manufacturing decline.
Another extension, of a tax credit aimed at helping the wind industry, sparked impassioned speeches on Monday night as the Senate debated the bill. Sen. John Hoeven, R-N.D., introduced an amendment to strip the credit from the bill, and he was backed by Republican colleagues Kevin Cramer of North Dakota and James Lankford of Oklahoma. They argued that the credit benefits a mature industry that doesn't need the extra help, adding that its benefits and harms had not been fully debated by lawmakers.
Lankford said the wind production tax credit was a "zombie" after legislators years ago had agreed it should be ended, only for it to be resurrected by lobbyists. Cramer called the credit a "market-destroying atrocity" and called for an end to all tax extenders.
"Let them all expire," Cramer said. "K Street wouldn't like it, but it would be one less section in this giant package."
The American Wind Energy Association, the trade group for the wind industry, did not immediately respond to a request for comment. Hoeven's amendment was not approved.
Another extension benefits the motorsports entertainment industry, such as NASCAR, by allowing for the faster write-down of costs related to their complexes. That provision, which has appeared in legislation going back to 2004, helps those companies lower their overall tax bills, and it has now been extended until 2025.
A spokesman for NASCAR, which has lobbied Congress on the extension, did not respond to a request for comment.
Another extender grants a tax credit to buyers of "two-wheeled plug-in electric vehicles" -- that is, electric motorcycles. That credit is worth 10% of the cost of the motorcycle, up to $2,500. Manufacturers of the bikes, such as Energica and Zero, advertise the tax credit on their websites.