Lobby Hero

[Guest guest]

More and more corporate giveaway at the cost of

citizen taxpayers. F.

 

http://www.tnr.com/doc.mhtml?i=20040719 & s=editorial071904

 

Lobby Hero

by the Editors

Post date: 07.08.04

Issue date: 07.19.04

 

An unnamed lobbyist quoted in The Washington Post last

month said it all: " Anybody who's a good lobbyist in

this town has gotten one or two provisions in it. "

" It " is the mammoth corporate tax bill, approved June

17 by the House and, in a slightly different version,

by the Senate last month. The bill began as an attempt

to eliminate $4 billion in tax breaks for American

exporters, which were recently found to be in

violation of World Trade Organization (WTO)

provisions. The WTO ruling allows the European Union

to impose escalating penalties on U.S. exports as long

as the law remains unchanged.

 

But an attempt to offset the loss of these corporate

tax breaks has turned into Christmas in July for K

Street. The House bill, euphemistically titled the

American Jobs Creation Act, is jam-packed with new tax

breaks for everything from bow-and-arrow manufacturing

to ceiling-fan imports. Other than a provision to cut

the top corporate tax rate from 35 to 32 percent, none

of these is very large, but they add up to $143

billion--call it fiscal irresponsibility by a thousand

cuts. (The Senate bill is even worse, totaling $167

billion.) Each tax break is sponsored by a different

myopic representative who claims, with a straight

face, that his or her add-on is a minor, yet integral,

element to getting the economy moving (as if it

weren't already). And yet, it's hard to understand how

spending $169 million to help Puerto Rican rum

manufacturers or $35 million for tackle box-makers is

the most efficient way to boost economic growth.

 

The special interest spending spree was so tempting

that even 48 Democrats ended up supporting the

legislation, thanks in part to such last-minute

add-ons as a $9.6 billion buyout for the tobacco

industry, a sweetener aimed at Southern Dems. (Had

just half of those representatives joined their

Democratic colleagues and the 23 Republicans who

opposed the bill, they could have killed it.)

 

The bill employs a time-honored trick for making tax

cuts look smaller than they really are: sunset

provisions, which phase out cuts over the next decade.

Combined with a few nips and tucks at various tax

loopholes, the bill, we are told, will cost a mere $34

billion over ten years. But that's assuming the

various tax cuts, structured as temporary relief, are

allowed to expire. And that almost never happens in

Washington. If all the add-ons are eventually renewed,

as is likely, the bipartisan Joint Committee on

Taxation says the total cost of the bill will come to

a deficit-busting $224 billion. Just what

America--facing the twin fiscal burdens of the war on

terrorism and the looming retirement of the

baby-boomers--doesn't need.

 

How does Congress get away with this? To find the

answer, just head up Pennsylvania Avenue. In February,

the White House openly criticized the bill, noting

that it could open a raft of tax loopholes. In recent

weeks, however, the administration has changed tack

and offered its cautious support, saying in a June 17

statement that it would back any provision that

removed the EU penalties. " The administration didn't

want to step into the middle of a food fight and wind

up irritating one camp or another, " Dan Mitchell, a

tax analyst at the Heritage Foundation, told the Post.

 

 

But it's a food fight of the Bush administration's own

making. Pork-barrel spending is part of congressional

life. It's Bush's job to rein it in--and, for three

years, he hasn't even tried. He has never vetoed a

spending bill. And his own tax cuts--the most recent

of which will cost between $350 billion and $800

billion (depending on whether they are allowed to

expire)--swamp even this latest example of

congressional irresponsibility. In fact, his continued

willingness to conflate K Street's interests with

those of the American public has given congressmen a

green light to do the same. Bush has consistently

pushed bills through Congress that neither

intellectually honest liberals nor conservatives can

defend--the Medicare bill, the farm bill, the steel

tariffs.

 

The latest tax cuts are opposed by think tanks and

public interest groups from right to left, including

the staunchly pro-GOP Heritage Foundation. But, in

Bush's Washington, there's no prize for honesty, and

there's no reason to do the right thing when you can't

get punished for profiting off the bad. And so this

latest outrage, it seems, will soon become law.