In more ways than one, Senator Jeanne Shaheen, Democrat of New Hampshire, created a trust problem earlier this week when her subcommittee bill summary omitted any mention that its stopgap appropriation included a 20 percent cut for antitrust enforcement at the Department of Justice. Antitrust happens to be one of the Biden administration’s top economic priorities. “We weren’t able to see it ahead of time,” Senator Amy Klobuchar of Minnesota, who chairs the Judiciary subcommittee on competition policy, antitrust, and consumer rights, complained on the Senate floor. “They just took the money and ran.”
Klobuchar and four congressional colleagues from the House and the Senate, including two Republicans, wrote Representative Kay Granger and Senator Patty Murray, the appropriations chairs of the House and Senate, to say, in effect: What the hell? A follow-up letter signed by 28 Democratic members of the House and Senate urged that the cut to antitrust funding be struck from the House funding bill. But the cut remained in the legislation, which passed Wednesday, 339–85, largely on the strength of Democratic support. Given time constraints, it’s probably too late to take the antitrust cut out of the Senate version, which must pass by midnight Saturday to avoid a government shutdown.
In a joint statement, Murray and Shaheen blamed House Republicans, who they said proposed deeper antitrust cuts in “tough bipartisan negotiations.” They pointed out that the Justice Department’s antitrust division will actually receive more than it got last year, which is true. House Republicans wanted to cut antitrust funding 14 percent below last year’s level.
But the appropriated funding is still less than what the Congressional Budget Office, or CBO, projected based on filing fees paid by merging corporations, a sort of tax that, since 1989, has been used to help fund the antitrust division. In 2022 those fees were increased for the first time in two decades, prompting CBO to estimate that the antitrust division would this year receive $278 million in funding from the fees. But the new appropriations language imposes a cap on how much of those fees the antitrust division may keep. As a result, a projected $40 million will be diverted, for no apparent reason, to other functions at the Justice Department.
Keep in mind that the Shaheen-Murray compromise with House Republicans does not save taxpayers a dime. Taxpayer money funds only part of the Justice Department’s antitrust activities; the filing fees cover the rest. House Republicans wanted, stingily, to eliminate the taxpayer part and let the antitrust division be funded entirely through filing fees. Shaheen and Murray’s compromise in effect said, “No, let’s instead limit how much of those filing fees the antitrust division may keep.” The taxpayer will pay just as much. Merging corporations will pay just as much in filing fees. The net result will be a reduction in funding for the antitrust division. The only logical reason for Democrats and Republicans to clasp hands in support of this change is to reduce vital antitrust activity.
The Federal Trade Commission, led by the charismatic Lina Khan, has gotten more press for its trustbusting under President Joe Biden than the Justice Department’s antitrust division, whose chief is Jonathan Kanter. But both agencies have reenergized antitrust enforcement, which was scaled back in the Reagan years and remained somewhat moribund until Biden took office. Among other accomplishments, the Justice Department’s antitrust division blocked Penguin Random House’s acquisition of Simon & Schuster, ended a monopolistic alliance in the Northeast between American Airlines and JetBlue, and prevented Tenaris from acquiring a Benteler Steel and Tube factory in Shreveport that would have further concentrated the market for steel pipes used in oil and gas extraction.
Writing for The Lever, Freddy Brewster suggests that reduced antitrust activity is precisely what Shaheen was seeking. His evidence: a rather tall pile of campaign contributions from companies that benefit from corporate mergers, including $495,000 from private equity and investment firms. Capital Group, which has given Shaheen $82,000, has lobbied against stricter antitrust enforcement. United Health Group, which has given Shaheen $34,500, is the target of a Justice Department antitrust probe. So is Raytheon, which gave Shaheen $30,000.
A House “explanatory statement” about the antitrust cut offers a more prosaic explanation: It’s about defending the prerogatives of the appropriations committees. The 2022 increase in filing fees emanated from the Senate Judiciary Committee, not the Senate Appropriations Committee, so now the Appropriations Committee must show the Judiciary Committee who’s boss. Matt Stoller, director of research at the American Economic Liberties Project and a leading antitrust champion, explained to Brewster that appropriations staffers “are saying … that they’re mad that the Antitrust subcommittee increased fees for the division without going through Appropriations.” If antitrust funding must suffer, so be it. I don’t know whether this is the real motive, or one of several real motives, but it’s certainly stupid enough to be true.
Klobuchar says she will try to get the antitrust cut reversed in the second of the two must-pass funding bills, which has an April 30 deadline. If the appropriators refuse to do that, they should be forced to explain to their constituents why they favor reduced spending on antitrust enforcement and the corresponding increase in corporate concentration that will surely result.
