The “Corker Kickback” vs. the “Cornhusker Kickback”
When the Affordable Care Act (ACA) was working its way through Congress, a provision with a cost of $4.5 million annually was inserted to help pay for Medicaid expansion in Nebraska. It’s not exactly a secret that it was added in to help get Nebraska Senator Ben Nelson’s support and push the bill to 60 votes. Conservatives pounced upon this and it was dubbed the “Cornhusker Kickback.” Then-Minority Leader Mitch McConnell called it a “kind of smelly proposition,” another Republican senator said it amounted to “corruption.” A dozen Republican state attorneys general even went so far as to call it unconstitutional. Noted journalist Karen Tumulty said at the time that it “may have been one of the biggest blunders in modern political history.”
The messaging was so effective that during hearings on the constitutionality of the ACA, Supreme Court Justice Antonin Scalia referenced the “Cornhusker Kickback” as a provision, despite the fact that it was removed from the final bill.
With this in mind, let’s look at the newly added provision in the tax bill that’s been dubbed the “Corker Kickback.” This provision to benefit pass-through real estate income was, by most accounts, revealed last Friday in the Republican tax bill that’s set for a final vote today. David Sirota found that, “If the GOP ends up applying a 20 percent deduction to all such passive real-estate income, those 13 legislators who have overseen the tax bill could be permitted to deduct a total of between $520,000 and $3.2 million from their taxable income each year, based on their 2016 filings.”
Sen. Bob Corker, one of the wealthiest members of Congress, changed his potentially decisive vote from no to yes right around the time this provision was first reported. The Center for Economic and Policy Research estimated that Corker could potentially save up to $1,190,000 a year in taxes from just this new provision.
In fairness to Corker, there is a critical difference between this situation and the one with Ben Nelson — Corker disputes that he was even aware of “his” kickback. There are some questions about this though, since Senate Majority Whip John Cornyn stated that it was added to “cobble together the votes we needed to get this bill passed.” Also, Corker announced he will be changing his vote despite the bill not meeting his top criteria, which that it not add to the deficit.
With that being said, there are a number of ways in which, by the merits, the Corker Kickback is far worse than “one of the biggest blunders in modern political history.” For starters, one thing that was often overlooked in the furor over the Cornhusker Kickback was that the money was literally being spent on health insurance for low-income households, the disabled and the elderly. The Corker Kickback meanwhile will largely amount to a significant tax cut for people with significant, passive real estate income, like, say, President Donald Trump and Senator Bob Corker. Ben Nelson didn’t personally benefit at all from ACA provision, nor did he indirectly benefit politically, as it was unpopular and he never ran for reelection. Also, critically, Nelson’s folly never actually made it into the law, while the tax break will, barring something totally unexpected.
Given how late in the process it was introduced, we have no official estimates as to how much the Corker Kickback may cost tax payers. However, extrapolating out from disclosure forms, it is possible that just providing this benefit to members of Congress could cost taxpayers more than the entirety of the never-implemented, endlessly derided Cornhusker Kickback.
We still have a few hours to stop this bill that is larded with not just this apparent kickback, but other provisions that amount to self-dealing by Trump and wealthy members of Congress. Click here for instructions on how to call Congress to voice your opposition to the bill.