Heading into the State of the Union address, the White House is placing a big bet on competition policy to tackle some of the biggest challenges in the economy. Today, the administration announced the creation of an interagency Strike Force on Unfair and Illegal Pricing, co-chaired by Federal Trade Commission chair Lina Khan and Justice Department Antitrust Division head Jonathan Kanter. Together, Khan and Kanter will coordinate efforts across the government to target companies engaged in pricing activities that violate laws around fraudulent and deceptive practices, or unfair methods of competition. The goal is to reduce prices in sectors where tricks and traps are prominent, from health care to housing to financial services.

"Competition delivers real results to real people, that’s precisely what we are doing," said Kanter on a press call on Monday. "And we’re doing it with fewer people than we had in 1979."

That last bit was a tell, a flash of frustration at a development over the weekend, pushed by a bipartisan group of appropriators, that could lead to a dramatic cut in the Antitrust Division’s budget, precisely at the time when the Biden administration is elevating its work—relying on it, even—in advance of the election. While some members of Congress are furious about it, the White House seems to be resigned to the outcome.

As Matt Stoller first reported, the Senate Appropriations Committee released its "minibus" of six full-year appropriations bills that will likely get a vote this week. The bill would end half of a government funding standoff that has dragged on for months in Congress.

One of the six appropriations is the "Commerce, Justice, and Science" bill, which includes the Department of Justice. On the Senate side, Sen. Jeanne Shaheen (D-NH) presides over it. That bill includes a $45 million cut from Kanter’s DOJ Antitrust Division, from $278 million to $233 million, leaving the agency with about a 20 percent smaller budget than what they expected. (The appropriation will be a nominal increase, essentially flat once adjusted for inflation, from the fiscal year 2023 appropriation of $225 million.)

Even at $278 million, DOJ Antitrust was far outstripped by corporate giants fighting attempts to limit their power. The cut will grow the disparity even wider. The initial Commerce, Justice, and Science appropriation did not have this cut. Antitrust is not mentioned in the Senate Appropriations Committee’s bill summary.

Just on Monday, JetBlue and Spirit called off their merger after DOJ Antitrust beat them in court, one of several wins for the agency in recent months. More lawsuits against Apple and Ticketmaster are expected, and the division has an open investigation against UnitedHealthcare that was recently made public. But Shaheen’s appropriation would make it impossible for DOJ Antitrust to have the same impact.

The budget cut is worse when considered over the long term. Congress passed the Merger Filing Fee Modernization Act in late 2022, as part of a different appropriations deal. That bill was supposed to allow DOJ Antitrust to keep a portion of merger fees to compensate for periods of high merger activity and the accumulated work of taking on corporate power.

This was passed through a law, not through the Appropriations Committee. And because Congress is a more (or less) evolved form of high school, this has angered appropriations members and even their staffers, who demand first cut on where government money goes.

As a result of this turf war, appropriators unilaterally rolled back the law, which passed in a recorded vote overwhelmingly, 88-8, in the Senate. The bill (p. 264) literally says that, "notwithstanding" the Merger Filing Fee Modernization Act, "none of the funds credited to this account as offsetting collections"—in other words, filing fees—"shall become available for obligation in any fiscal year" unless through a subsequent appropriations. So the appropriators just overwrote the law, denying DOJ Antitrust its share of filing fees for the first time in 35 years.

That could rob hundreds of millions from DOJ Antitrust over the next decade. An explanatory statement on the bill makes very clear what this is about. "The agreement recognizes the importance of predictable, sustainable funding for the Antitrust Division, and encourages the Department to work with Congressional committees of jurisdiction to address such challenges." In other words, the Justice Department will have to come crawling to the appropriators to get this fixed.

"Appropriations staffers seem to think elected officials work for them, instead of the other way around," said Stoller, with the American Economic Liberties Project. "Heads should roll for this wildly inappropriate exercise of power by what are in effect ignorant, turf-hungry technocrats."

The senators who worked to increase merger filing fees and DOJ Antitrust budgets are not happy. "Diverting these fees is just wrong," said Sen. Amy Klobuchar (D-MN), in a statement to the Prospect. "We passed strongly bipartisan legislation with an 88-8 vote to ensure that the Antitrust Division at the Justice Department has sufficient resources to vigorously enforce our antitrust laws. In an increasingly complex world, the Division is going up against major monopolies with unlimited legal resources, and we must even the playing field for consumers and small businesses. I will keep fighting to ensure our enforcers have the resources they need to do their jobs."

Sen. Elizabeth Warren (D-MA), who also strongly supported the filing fee bill, told the Prospect, "The army of lobbyists and lawyers representing Wall Street and Big Tech is doing cartwheels about potential funding cuts for antitrust enforcement by the Justice Department. It’s powerfully important that lawmakers immediately address this self-inflicted wound."

Other offices suggested that discussions were under way about the cut. But it’s not likely to be easy. The minibus appropriation was a carefully negotiated compromise designed to avert a government shutdown. Opening up any one piece will likely have to be accounted for. And since the House must go first with federal spending bills of this type, the best option would be to fix it there.

Attorney General Merrick Garland, when asked by Rep. Ken Buck (R-CO) in September about "efforts in the Senate" to cut funding for DOJ Antitrust, said that he supported the division getting that filing fee income. But the Biden administration made little effort to fight the change in response to questions from the Prospect.

An administration official responded that the president strongly supported funding DOJ Antitrust in its fight for free and fair competition and lower costs, but they stressed the nominal increase in funding over the prior year, added that all accounts were subject to budget caps because of last summer’s debt limit deal (which doesn’t explain the future limitation on DOJ Antitrust using filing fees in years outside the caps), and that the appropriations were a compromise to prevent a government shutdown, where neither side got everything they wanted.

The news will come as a relief to large corporations under the microscope of DOJ Antitrust, particularly the major tech platforms. The Justice Department has an active case against Google in the midst of a trial with another on the way, and a case against Apple is imminent.

Given the insular nature of the process, one well-placed appropriations staff member, or a veteran of the committee that spun through the revolving door, could influence a matter like this with relative ease. "Big Tech has allies across committee offices and personal offices of Republicans and Democrats," said Dan Geldon, former chief of staff to Sen. Warren. "And this is an example of the reach and power they have."

Sen. Shaheen’s office did not return a request for comment. The Appropriations Committee has been telling members that they had to work within funding constraints, and that the volatility of merger filing fee income, and the attendant boom-and-bust impact on DOJ Antitrust’s budget, would be "undesirable."

Reps. Jerrold Nadler (D-NY), ranking Democrat on the House Judiciary Committee, and Lou Correa (D-CA), ranking Democrat on the House Antitrust Subcommittee, also did not respond to comment requests.

Faced with lingering public anger over high prices, the White House has turned to competition policy for answers. "Vibrant capitalism is based on strong competition, it’s good economics and has a real impact on affordability," said Lael Brainard, head of the White House National Economic Council, on the press call.

In addition to the pricing strike force, today the Consumer Financial Protection Bureau is announcing a final rule to cap late fees on credit cards at $8, about 75 percent below the current average. CFPB is closing a loophole that granted banks immunity from a 2009 law banning unreasonable credit card fees. The Department of Agriculture is finishing its Packers and Stockyards Act rule on competition and market integrity that will crack down on deceptive contracts farmers and ranchers sign with processors and prevent retaliation against them; the goal is to allow competition to flourish. And the Federal Communications Commission is issuing a proposed rule that would ban landlords from "bulk billing" all tenants for specific broadband services without anyone getting a choice.

The contrast is rather stark: While the administration is highlighting competition policy actions to lower costs, Congress—with the White House’s implicit assent—is on the verge of kneecapping one of the most important agencies in that fight.