They were so close.

After weeks of negotiations, U.S. House and Senate leaders had agreed on a year-end spending bill that would fund the federal government through March 14, extend the 2018 Farm Bill through next September, and provide more than $100 billion in disaster aid. The legislation included numerous other policies, including at least two that had been priorities for Iowa’s members of Congress. The bill would have legalized year-round sales of higher ethanol blends known as E-15 in all states. It also contained new regulations for pharmacy benefit managers (PBMs), which could have saved consumers billions while helping small pharmacies.

All of the Iowans in Congress have talked up E-15 as a path to U.S. energy independence. (In reality, only about 3,400 of some 198,000 gas stations across the country dispense higher ethanol blends.) Representative Mariannette Miller-Meeks (IA-01) and Senator Chuck Grassley have been among the most vocal proponents of PBM reform, calling for action on prescription drug middlemen in draft bills, press releases, news conferences, House and Senate hearings, floor speeches, and taxpayer-funded radio ads.

Little did they know that President-elect Donald Trump and his billionaire buddy Elon Musk were about to blow up the deal.

PREMATURE CELEBRATIONS

When it seemed like leaders had finalized the continuing spending resolution, all four Iowans in the U.S. House hailed the apparent win on their social media feeds. Representative Zach Nunn (IA-03) boasted, “Since Day 1 in Congress, I’ve been fighting for year-round E15. By securing it in the must-pass, end-of-year package, we’re doing the right thing for farmers, producers, and consumers who will benefit from cheaper fuel!”

Miller-Meeks wrote, “I’ve been fighting to make E15 available year-round. This permanent solution would lower costs for hardworking Americans at the pump, reduce emissions, and end fuel supply disruptions once and for all!” In a House floor speech, she expressed her “strong support” for Trump’s apparent call to hold PBMs accountable, adding on X/Twitter, “I’m glad key reforms are in the year-end package and will work with President Trump to deliver the results patients deserve!”

Representative Ashley Hinson (IA-02) promised, “I helped lead the charge to ensure year-round E15 was included in end of year funding legislation & I will work to get this across the finish line for our Iowa producers. Biofuels will be key to our all-of-the-above energy strategy under Trump!”

Representative Randy Feenstra (IA-04) wrote, “We need year-round #E15 at every gas station in the country to lower gas prices for our families and support our farmers.”

It will be back to the drawing board in 2025, thanks to the billionaire Republicans have lionized.

A DEAL TANKED ON SOCIAL MEDIA

Musk got up early on December 18 and trashed the funding bill in more than 100 posts on his social media platform (now X, formerly Twitter). Many of his posts contained “misleading or outright false claims” about what was in the package.

Within twelve hours, Trump and Vice President-elect JD Vance announced their opposition to the continuing spending resolution. They called for “a streamlined spending bill that doesn’t give [Senate Majority Leader] Chuck Schumer and the Democrats everything they want.”

Both Musk and Trump called for Republicans to face primary challengers if they didn’t get with the program. Musk also wanted Republicans to shut down the government until Trump’s inauguration on January 20. Weeks of negotiations went down the drain.

Trump and Vance added a surprise demand for Congress to raise the debt ceiling. With only two days left before government funding was scheduled to run out on December 20, they claimed it would be “a betrayal of our country” not to pass a funding bill “combined with an increase in the debt ceiling,” but without the policy extras in the previous package.

It’s not clear why Musk went all in against the spending deal. U.S. Representative Jim McGovern, a Democrat from Massachusetts, and journalist David Dayen have speculated that Musk was determined to scrap an “outbound investment” provision, which “would have made it harder for Musk to build Tesla factories in Shanghai.” Dayen noted in an article for The American Prospect,

You can argue about whether the U.S. should be restricting investment in China. But it’s incontrovertible that a billionaire who has a bunch of investments in China and wants to make more all of a sudden disrupted a normal congressional process that was going to restrict that investment with a bunch of lies from his media platform. And lo and behold, when the new funding bill emerged, the outbound investment feature was dropped. In fact, all traces of provisions related to China were removed from the bill.

Trump’s motives are more obvious: raising the debt ceiling now will give him a free hand as he pushes for permanent tax cuts in the next Congress, with the outgoing president taking the hit for adding to the national debt. As Trump and Vance observed in their joint statement on December 18, “Increasing the debt ceiling is not great but we’d rather do it on Biden’s watch.”

Iowa’s representatives quickly fell in line. “President Trump is exactly right. There’s no time to waste,” Hinson posted, as she endorsed a clean spending bill that also raised the debt ceiling. She also shared this photo of the negotiated funding bill next to the version Trump wanted, commenting, “A picture is worth 1,000 words.”

House leaders put the Trump plan—funding the government for three months, suspending the debt ceiling until January 2027, and $110 billion in disaster relief funding—to a floor vote on December 19. Miller-Meeks, Hinson, Nunn, and Feenstra all supported its passage. But that bill didn’t receive even a simple majority, let alone the two-thirds majority needed under the process by which it came to the floor. Almost every Democrat and 38 Republicans voted no.

For much of the day on December 20, a federal government shutdown seemed plausible. But just before 6:00 PM, the House approved a scaled-back funding bill by 366 votes to 34. All four Iowans voted for the last-minute legislation, which funds the government through March 14, extends the 2018 Farm Bill until the end of the current federal fiscal year on September 30, and contains about $100 billion in disaster relief. An estimated $2 billion of the disaster aid will benefit Iowans.

In case you had any doubt about who was calling the shots: House Speaker Mike Johnson told reporters at the Capitol on December 20 that “he was ‘in constant contact’ with Trump and spoke with Musk an hour before the vote.”

The Senate approved the funding bill by 85 votes to 11 shortly after midnight on December 21. Iowa’s Senators Grassley and Joni Ernst were part of the bipartisan majority.

CHALLENGING TASKS FOR 2025

Hinson, who serves on the House Appropriations Committee, promised over the weekend to “do everything in my power” to approve a budget next year by passing twelve appropriations bills, rather than a huge omnibus or continuing spending resolution. Congress hasn’t managed to approve a budget on time through “regular order” since 1997, including during the GOP trifecta years of 2003 through 2006, 2017, and 2018.

Making year-round E-15 sales happen during the second Trump administration may be an even heavier lift. Trump picked former U.S. Representative Lee Zeldin to run the Environmental Protection Agency; Thor Benson explained here why Zeldin is an “inside man” for the fossil fuel industry. As a member of Congress, Zeldin expressed skepticism about U.S. policy on ethanol. Both Zeldin and Trump’s choice for secretary of agriculture, Brooke Rollins, have prominent roles with the America First Policy Institute, a conservative think tank that supports increased fossil fuel production.

During the first Trump administration, the EPA did issue a rule allowing year-round sales of E-15. However, the U.S. Court of Appeals for the DC Circuit ruled in 2021 that the EPA had exceeded its authority in doing so. It appears that the new Congress would need to approve a bill on E-15 sales, and Trump would need to sign it into law. But would he? Trump’s EPA also granted waivers to many petroleum refineries, “effectively exempting them from an obligation to use more ethanol in their products.”

If Musk and Trump hadn’t pressured House Republicans to toss the deal negotiated last week, Biden would have signed year-round E-15 into law by now.

IOWANS BACKED DEFENSE AUTHORIZATION BILL

Earlier this month, the whole Iowa delegation voted for the National Defense Authorization Act, which allocates $895 billion in defense spending during the current fiscal year.

Before the House approved the bill on December 11, Speaker Johnson “inserted some last-minute language in the bill that would restrict the use of funds from TRICARE — the health care program for active-duty service members — for gender-affirming care for the children 18 years and younger of military members.”

Many military bases are located in states that (like Iowa) have banned gender-affirming care for minors. The defense authorization bill will make such treatment even less accessible.

Other aspects of the bill were less controversial. Active service members will get a significant pay increase:

Under the National Defense Authorization Act, which received approval in the House on Dec. 11 and the Senate on Dec. 18, troops in the ranks of E-1 through E-4 will see a 14.5% raise next year, while other service members will get a 4.5% pay bump. […]

The 4.5% raise will take effect at the beginning of 2025, while the extra 10% raise for junior enlisted troops will kick in at the start of April.

With the 14.5% raise, junior troops will earn about $3,000 to $6,000 more per year, depending on rank. For example, E-1s will make $27,828 per year, compared to $24,206 now, while E-4s with at least six years of experience will make $44,107, compared to $38,368 now.

The pending 4.5% raise doesn’t quite match service members’ 5.2% increase in 2024 or 4.6% in 2023, but it still tops the 2.7% and 3% raises in 2022 and 2021, respectively.

Ernst noted in a press release that the defense authorization bill includes provisions to prevent, monitor, and treat traumatic brain injuries among service members. That language was part of a bipartisan bill led by Ernst and Democratic Senator Elizabeth Warren of Massachusetts.

A separate provision of the bill “would empower the Pentagon to take countermeasures against drones and other unmanned aircraft crossing the northern or southern borders.”

Grassley’s office highlighted several other parts of the bill, including:

• “Construction of a new field maintenance shop for the Sioux City Armory”;
• “Support for the Rock Island Arsenal’s Energy Resilience and Conservation Investment Program project to provide secure, self-sufficient energy”;
• “Full funding for joint U.S.-Israel cooperative missile defense programs, including the Iron Dome, David’s Sling and Arrow”; and
• “A provision prohibiting universities with Chinese Communist Party-ties from receiving DOD funding.”

The White House announced on December 23 that Biden had signed the defense authorization bill.

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Top photo of Elon Musk with Donald Trump was first published on Trump’s campaign Facebook page on November 19.