A Pork Train Is Pulling Out
What started out as a trim, tidy bill intended to bring U.S. trade practices into line with international standards has become a jiggling mountain of pork. Bad things happen when legislation falls victim to election-year politicking. The bill, which cleared the U.S. Senate on Tuesday, was supposed to eliminate the flawed export tax breaks for U.S. companies that had prompted the World Trade Organization to approve stiff retaliatory tariffs on some U.S. products.
Common sense demanded that Congress simply drop the flawed export tax credits and use the savings to help reduce the deficit. But the wheels of Congress are not greased with common sense. Because legislators are reluctant to propose new bills -- which could prove controversial, and thus damaging to one’s political fortunes -- during an election year, very few new pieces of legislation are likely to pass this session. The trade bill, SB 1637, made what both political parties could agree were necessary fixes. That made its passage almost a sure thing.
Senate speechwriters have used train analogies to describe SB 1637. That’s because, as one of the only trains getting out of the station this year, it has attracted an inordinate number of riders. Sen. John Breaux (D-La.) conceded that many senators would do “what they have to do” to catch the train.
The extra weight on SB 1637 began to appear almost immediately when the Senate opted to add a new round of corporate tax breaks to the export tax changes. Within weeks, the bill had a new name: the “Jump-Start Our Business Strength Act.” The patriotic-sounding legislative package soon was packed with $170 billion in pork for, among others, Oldsmobile dealers, NASCAR track operators, thoroughbred owners and archery equipment manufacturers. What’s good about the bill -- tax credits for employers whose workers are deployed in National Guard and Army Reserve units and a proposed tightening of the controversial “SUV loophole” that encourages businesses to buy gas guzzlers -- is heavily outweighed by the bad, including more than $13 billion in energy industry credits and tax breaks plucked from the ruins of last year’s ill-fated energy bill. Rather than taking the time to craft comprehensive, reasoned corporate tax reform, the House and Senate fell back on politics as usual.
The situation could get uglier when the Senate bill and a still-evolving House counterpart enter a conference committee. The stiff retaliatory tariffs won’t disappear if the committee fails to reach an agreement. Meanwhile, the Senate bill promises to counter the bill’s $170-billion price tag by tightening or eliminating existing tax loopholes, but the House version makes no such promise. Getting rid of old tax loopholes to clear the way for a new round of giveaways is not the way to make progress. But adding new breaks without dumping the old ones is a train wreck in the making.
