End-of-session spending bill looks after special interests

Bush OKs measure critics call `embarrassing' for earmarks, lack of debate

December 21, 2006|By Tom Hamburger and Walter F. Roche Jr. | Tom Hamburger and Walter F. Roche Jr.,LOS ANGELES TIMES

WASHINGTON -- President Bush signed into law yesterday the last major piece of legislation approved by the outgoing Congress - including a $100 million-a-year boost in the Medicare reimbursement rates for dialysis providers who proved to be heavy-spending lobbyists and generous contributors to important legislators, notably House Ways and Means Chairman Bill Thomas of California.

The dialysis providers were among many special interests benefiting from a piece of legislation that was designed to simply extend existing tax cuts and credits but ended up as a bill freighted with billions of dollars in new spending earmarks for everyone from the coal industry to Brooks Brothers.

There have been more scandalous end-of-session bills, but after the midterm elections - when corruption and fiscal incompetence were campaign themes - some lawmakers found the latest package particularly offensive.

Republican Sen. Judd Gregg of New Hampshire, chairman of the Budget Committee, termed the legislative spectacle "embarrassing." He offered a scathing review of the final bill on the Senate floor, citing its myriad earmarks and other expenditures that had never been reviewed by a congressional committee or subjected to debate.

His statement covered the big-ticket items: A budgetary sleight of hand that blocked a planned 5 percent reduction in Medicare fees to doctors, a top priority of the powerful American Medical Association; the insertion of a rum excise tax shift that benefits Puerto Rico; an earmark to provide funds for $35 million in health care in the state of Tennessee.

Gregg reserved special scorn for the $4.9 billion item requested by coal state senators for health and mine safety spending, necessary, they said, because some coal companies had not fulfilled health care responsibilities to miners and because abandoned mines are a serious problem in coal country.

Even Brooks Brothers, the venerable clothing purveyor, walked away a winner. The company was part of a coalition that won about $32 million in refunds of tariffs paid in the past that it said had penalized the declining domestic shirt-manufacturing industry. The measure would also aid domestic cotton growers, many of whom are in California.

A Brooks Brothers vice president, Joe Dixon, said the company sought the tariff relief as a way to "save clothing manufacturing jobs in Pennsylvania and North Carolina." The refunds, he said, would make it possible for Brooks Brothers and other U.S. shirt makers to better modernize plants and better compete with foreign manufacturers.

But the watchdog group Taxpayers for Common Sense called the cotton measure "another example of special interests grabbing on to the last train leaving the station. ... Obviously Congress didn't think enough of this proposal to pass it on its own during the past two years." The largesse for the dialysis industry, like other nuggets in the bill, had not been authorized by a congressional committee, and its addition to the tax bill was made in a secret middle-of-the-night meeting in the waning hours of the session Dec. 7.

Ways and Means Chairman Thomas got $84,250 in campaign money during the last campaign cycle from DaVita Inc., a leading dialysis company. Thomas was among the negotiators at the late-night meeting that agreed on the dialysis earmark.

Thomas's former chief of staff, Cathy Abernathy, lobbies on its behalf. After decades of working for Thomas, Abernathy has built a multi-million lobbying business focused on health care clients, including a coalition of dialysis providers, patients, and manufacturers.

Tucked away in a Senate conference room with House Speaker Dennis Hastert, Sens. Charles E. Grassley and Max Baucus and other leaders, Thomas led the charge for the dialysis coalition's proposals, according to a staffer who attended. He recommended not only raising Medicare reimbursements for the dialysis industry but also including an automatic inflation adjustment. He also pushed for incentive bonuses for good health care results.

In the end, the private group of negotiators agreed only to a one-time, 1.6 percent raise in the Medicare reimbursement rate for dialysis, which will cost taxpayers $400 million over five years, according to the Congressional Budget Office.

Both Thomas's staff and DaVita officials said that the campaign contributions and the congressman's relationship with Abernathy played no role in his championing of the dialysis cause.

Tom Hamburger and Walter F. Roche Jr. write for the Los Angeles Times.

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