In a move clearly motivated by next
month’s elections, a modest piece of legislation aimed at
complying with a World Trade Organization ruling snowballed out of
control in an avalanche of special interest and fiscal
recklessness. With a vote of 280-141, the House passed the
far-reaching tax bill dealing with the original trade violation
along with a broad array of tax breaks to manufacturers, small
businesses and energy producers.

Angela Cesere

The bill was originally designed to repeal a $5 billion export
subsidy deemed illegal by the WTO. While the WTO has no intrinsic
enforcement powers, it gave the European Union permission to enact
retaliatory tariffs against American goods unless the United States
dropped its export subsidies. Unfortunately, instead of simply
passing a bill to comply with the WTO ruling, Congress has chosen
to pass one of the most irresponsible corporate giveaway packages
conceivable.

The bill provides corporations, as well as farmers, in
politically important states with $145 billion worth of tax cuts
and credits. With its substantial lobbying presence within the
Beltway, the Starbucks Corp. managed to reclassify the post of
“coffee roaster” as a manufacturing position, thus
permitting Starbucks to be eligible for tax breaks. The CSX
Corporation, which operates railways, managed to secure a 50
percent, $501 million tax credit over 10 years to maintain its
tracks. The bill provides gifts to NASCAR track owners, importers
of Chinese box fans, the oil and gas industries, producers of
ethanol fuel and makers of bows, arrows, tackle boxes and sonar
fish finders. Rep. Charles Rangel (D-N.Y.), the ranking Democrat on
the House Ways and Means Committee, said, “It’s
Christmas in October for multinational corporations and lobbyists
with friends in high places.”

The promising aspects of the bill, including a proposal to grant
the Food and Drug Administration greater power to regulate
cigarette companies, were taken out by negotiators attempting to
resolve differences between the House and Senate bills. In the
original Senate bill, tobacco companies would have received a $10.1
billion buyout, but the deal would be linked to increased FDA
regulation. Striking this provision, unfortunately, was a blatant
attempt to attract Southern Democratic senators who would not have
otherwise supported it. Sen. John McCain (R-Ariz.) commented,
“They have removed the linchpin in the passage of this
legislation in a complete sellout to the tobacco
companies.”

The bill, because of its timing, is virtually guaranteed to
pass. This close to a general election, few senators in tight races
will have the courage to oppose a tax cut. For example, Senate
Minority Leader Tom Daschle (D–S.D), mired in a close race
for re-election, came out in support of the bill, hoping it will
improve his chances.

Under the Bush administration, the nation’s fiscal
situation deteriorated dramatically. A series of unprecedented tax
cuts coupled with serious economic shocks has created the largest
budget deficits in American history. As national security costs
rise, Medicare premiums grow and college funding shrinks, Congress
is fundamentally misguided in passing yet another round of tax
cuts.

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