Congress Passes Fiscal 2016 Spending Bill

Congress on Dec. 18 approved the $1.1 trillion Omnibus spending bill on a bipartisan vote, which will keep the federal government funded through September 2016, the end of the current fiscal year. The Omnibus is the final piece of legislation that Congress will consider as members head home for the holidays and gear up for the 2016 election year.  In the days leading up to the final bill, there were many policy riders under negotiation for inclusion in the bill. Some riders made it into the final bill, and others did not. Below is a breakdown of noteworthy “winners” and “losers” regarding these policy riders. 


Integrated Oil Companies: The Omnibus lifts the 40-year-old crude oil export ban, an historic action that reflects political and market shifts propelled by a boom in U.S. oil drilling.  Repealing the ban on crude oil exports has long been a top priority for Republicans and the oil industry. Oil companies have been lobbying Congress to lift the ban on oil exports for nearly two years, arguing that permitting oil exports would eliminate market distortions and stimulate the U.S. economy. Opponents argued that lifting the ban would increase oil prices as oil is shipped overseas rather than remaining within the United States. 

Most market analysts do not expect a near-term impact on U.S. crude prices. The West Texas Intermediate (WTI) and Brent spread is at less than $2 per barrel as of December 16, 2015; U.S. producers need at least a spread of $4 per barrel for the exports to be viable. 

As part of the deal to lift the oil export ban, lawmakers also granted independent refiners -- who may have to pay more for WTI crude -- six years of manufacturing tax credit relief to help them weather the financial impact of unrestricted exports. Lawmakers also agreed to extend renewable energy tax credits for wind and solar power as a concession to Democrats.

Employers/Health Insurers: Marking the first major change to the Affordable Care Act (ACA) since it became law five years ago, the spending bill postpones the ACA’s tax on higher-cost health plans for two years until 2020. Often referred to as the "Cadillac Tax," this tax would force employers to pay a steep 40 percent tax for expensive health plans that exceed certain cost thresholds. The objective of the tax is to cap health care costs by penalizing employers who offer expensive plans, called ‘Cadillac” plans. Both Republicans and Democrats publicly opposed the tax, arguing that it will prompt employers to scale back or eliminate benefits altogether to offset the added cost. This move could actually lead to the higher costs the tax seeks to prevent.

Hour-of-Service Rule: The omnibus contains language that continues the suspension of the Hours-of-Service (HOS) rule.  Specifically, the bill directs the Federal Motor Carrier Safety Administration (FMCSA) to expand the review of its suspended HOS restart rule for motor carriers before it may be reinstated. The bill states that the HOS restart rule’s review must demonstrate statistically that the rule results in significant improvements in “all outcomes related to safety operator fatigue,” health and work schedules.  These new metrics could maintain the rule’s suspension for many months. This provision marks a victory for the trucking industry, which argues that FMCSA imposed these restrictions on the industry without doing a proper investigation into how they might impact trucking safety and truck drivers’ health and longevity. 

In 2014, Congress passed legislation that suspended enforcement of the HOS restart rules for one year while a study is completed by FMCSA.  Truck drivers still have to adhere to pre-July 2013 hours-of-service regulations. 


Franchises/Joint Employer Standard: The deal does not include language that would stop the National Labor Relations Board (NLRB) from implementing dramatic changes to the joint employer standard.  Over the summer, the NLRB issued a decision redefining and expanding “joint employer” liability, making it easier for two or more companies to be considered joint employers. 

Larger Truck Trailers: The bill does not include a rider that would permit twin 33-foot trailers on all national highways.  This is considered a big defeat for companies like FedEx that wanted to run the larger trailers.  Inclusion of this provision may have been doomed because Mississippi, the home state of Republican Senator Thad Cochran who chairs the Senate Committee on Appropriations, restricts the use of the larger trucks.

Tobacco and Vaping Companies:  The bill doesn’t stop the Food and Drug Administration (FDA) from issuing stringent regulations on that could subject e-cigarettes and flavored cigars to the same marketing and sales restrictions that are currently applicable to cigarettes.



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