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5 of the shadiest things in the government spending deal

Congressional negotiators reached a deal this week that would extend most government funding through fall 2015 — learn all about it here. But since this is basically a must-pass bill, party leaders have thrown in several provisions that little or nothing to do with funding the government, but are instead gifts to important interest groups or constituencies. Here are 5 of the shadiest.

1) Campaign finance limits will be weakened

Campaign finance change in cromnibus

One part of the compromise would give political parties the ability to raise a whole lot more money. Previously, the limit on giving to a party committee was $32,400 per individual per year. The spending deal makes certain changes to campaign finance laws that would effectively let party committees to raise ten times as much more money from individual donors as current limitations allow, according to an analysis by Matea Gold of the Washington Post.

Previously, the limit on giving to a party committee was $32,400 per individual per year. Under the new proposal, a donor can give money toward earmarked funds - for presidential conventions, party headquarters buildings, or recounts - that will be subject to separate, higher, contribution limits. By directing his or her money in that way, a donor will soon be able to give $324,000 to a party each year, if this bill is signed into law. The provision was negotiated by top aides to Speaker John Boehner and Senate Majority Leader Harry Reid, report Jake Sherman and John Bresnahan of Politico.

The change is an effort for the parties to regain control of campaign fundraising, after years where larger and larger sums have been steered to outside groups. It could be argued that this is a good thing, because the parties are theoretically more accountable for their fundraising and spending than outside groups, and have to disclose their donors (see Jonathan Bernstein for more). Still, it's being thrown into this last-minute must-pass bill without any significant public debate.

2) Big banks will get to trade "custom swaps"

The spending deal includes a gift for big banks too. Currently, Section 716 of the Dodd-Frank financial reform law says FDIC-insured banks can't trade "custom swaps," which are difficult for regulators to supervise. The government funding bill would repeal this part of Dodd-Frank and allow these banks to trade these financial products again, as Matt Yglesias explains. Erika Eichelberger of Mother Jones found that the provision appears to have been written by Citigroup's lobbyists.

Sen. Elizabeth Warren has harshly criticized the inclusion of this provision in the compromise as a sop to powerful financial interests, and called for it to be removed. The House Appropriations committee's Republican staff argues, in contrast, that the provision "protects farmers, ranchers, [and] job creators from onerous regulatory burdens."

3) A major health insurer will get a big benefit

Health provision spending bill

At National Review, Yuval Levin flags a section of the deal seemingly designed to benefit one big health insurer. Obamacare's medical-loss ratio requirers insurers to spend a certain amount of their premium payments on medical claims or quality improvements. However, the law's language led the IRS to rule in January that Blue Cross/Blue Shield couldn't count quality improvements to meet this requirement, because it's already getting tax benefits from being a nonprofit. This provision of the spending deal would let Blue Cross/Blue Shield do this.

"This section is, simply put, a special favor for Blue Cross/Blue Shield allowing them to count "quality improvement" spending as part of the medical loss ratio calculation required of them under Obamacare," Levin writes. "And it's made retroactive for four years, saving them loads of money."

A representative of the Blue Cross/Blue Shield Association writes in response: "This provision is a purely technical tax correction.  It has no cost associated with it. It corrects a mistake — immediately recognized by both parties in both the House and Senate — that occurred in 2010 when the Affordable Care Act was enacted." The Wall Street Journal's Louise Radnofsky has a good rundown of the issue here.

4) The marijuana legalization DC voters approved will be blocked

marijuana

A marijuana plant. (Uriel Sinai / Getty Images News)

Though voters in Washington, DC, approved an initiative to legalize marijuana in November, Congress is now trying to stop it from happening. Even though marijuana legalization in DC will save the district money overall — since pot laws would no longer need to be enforced — this spending deal blocks it.

The way it works is that the spending deal contains a provision blocking both federal and local funds from being used to implement legalization. "The budget bill would prohibit DC Council from spending its time and resources to approve the legalization initiative and send it to Congress," writes German Lopez. "Under federal law, that's a necessary step for legalization to take effect."

This change comes at the request of Rep. Andy Harris (R-MD), who Politico's Manu Raju and Jonathan Topaz say is "the leader of a small band of anti-marijuana hardliners in Congress" who were lobbying behind the scenes to block legalization in DC.

5) More coal plants overseas will get US government financing

india coal

An Indian laborer adjusts coal being loaded onto a truck at the Kankaria Railway Yard in Ahmedabad on September 5, 2012. (Sam Panthaky / AFP / Getty)

Should the US government be in the business of financing US coal plants overseas? Between 2007 and 2013, the Export-Import Bank loaned out $2.2 billion for coal power plants, and $5.2 billion for coal mining, abroad. But last year, President Obama announced new restrictions on the practice, responding to environmentalist concerns that it was funding dirty energy and exacerbating climate change.

Supporters of coal, including Sen. Joe Manchin (D-WV), pushed back. As a result, the spending deal blocks the Export-Import Bank and Overseas Private Investment Corporation from using money "to enforce these new restrictions on coal projects," the Huffington Post's Kate Sheppard reports.

Update: This post was updated to add a statement emailed by a representative for the Blue Cross/Blue Shield Association.

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