Congressional Hypocrites Add $77 Billion of Pork to Deficit Reduction Bill

by on January 22, 2013 · 5 comments

in Business, Economy, Encore, Government, Media, Politics

congressThe most important thing to Republicans is deficit reduction. It’s the chief thing they talk about. It’s their main concern, it’s their singular issue. Right?

Right…. Then why did they vote to add $77 billion in pork to the so-called ‘fiscal cliff’ bill? But don’t get me wrong – Democrats not only voted for it but were instrumental in adding it to the bill as well. But why were the American people kept in the dark and not told that this bill like a lot of others was all about the pork?

It’s not that this bill was not discussed at great length by the punditry. Bloviators were bloviating non-stop for months. Pontificators were pontificating full time. Purveyors of bovine excrement were shoveling constantly. But no one saw it coming. Not David Gregory of Meet the Press, not Bob Schieffer of Face the Nation, not Ed Schultz or Rachel Maddow of msnbc. It’s not like pork is a recent phenomena. But it takes sheer gall to add $77 billion in tax break loopholes for the rich to a deficit reduction bill!

The Washington crowd would have us believe that this whole Shakespearean drama came down to the wire, and that, if we went over the cliff, the middle class would be ruined, we’d go back into a recession and the whole global economy would go down the tubes. Each of the central cast of actors took their turn at center stage: John Boehner, Harry Reid, Eric Cantor and a whole host of lesser lights. But none of them mentioned the impending pork that would be added to whatever bill they came up with.

What they came up with at the last minute was a 157 page bill, most of which, while raising tax rates for the richest Americans, was devoted to tax breaks for the rich. Now the punditry and the politicians would have us believe that this was a last minute deal. No it wasn’t. How do you write a 157 page bill at the last minute? Most of it was a preconceived pork bill lying in wait to be added on to whatever last minute deal they came up with to prevent us from going over the fiscal cliff.

Wendy Caputo of Riverside was outraged. She wrote a letter to the editor of the East Bay RI which said the following:

“Dozens of tax breaks for business and industry including about $70 million for a cost-recovery program for “motorsports entertainment complexes”; i.e. racetracks! Tax breaks for Hollywood producers who shoot movies and TV shows in the US at a cost of about $430 million over the next 2 years. Legislation allowing US corporations to defer taxes on some income earned from their overseas subsidiaries costing the US Treasury $10.8 billion over this year and next. An agreement to subsidize the domestic production of rum by sending federal tax revenue collected from rum production in Puerto Rico and the US Virgin Islands back to them. A $15 million dollar-a-year tax break to the asparagus industry to compensate for a cheaper product from South America. A tax break for people who buy electric scooters, Segways, and such! And, the list goes on . . .”

It takes a lot of unmitigated gall to add all this pork to a bill that was supposedly all about deficit reduction in the first place. You remember the whole purpose of the fiscal cliff was to force deficit reduction, don’t you? The pork was at the heart of the bill and consumed the most paperwork, but no politician ever spoke about it. Oh yeah, it did things like “raise tax rates on the rich  while keeping middle class tax rates the same,” “keep extended unemployment insurance the same”, and “index the alternative minimum tax to inflation.” All this stuff could have been written on two pages.

That leaves 155 pages of the bill for pork. Such is the nature of compromise in Washington, DC. What this all boils down to is that, while Republicans go apoplectic over the deficit, what they really care about is tax loopholes for the class they represent – the very rich. And Democrats are totally misguided if they think that the pork that they added represents an economic stimulus. The whole American Taxpayer Relief Act was a sham. It gave taxpayers relief on the one hand while giving them a migraine on the other!

nascarA feature of the “tax relief” bill was a $100. million tax giveaway to NASCAR race track owners (you know, Mitt Romney’s friends) and other “motorsport entertainment complexes” in the form of “accelerated depreciation.”

Now most Americans don’t have a clue about how accelerated depreciation for businesses raises tax bills for the middle class, but here’s how it works. Say you, like NASCAR, build a racetrack. Then you charge people to come and see automobiles race. You make money. Therefore, you have to pay taxes. But wait a minute. First you get to take a tax break because your asset, the race track, has lost value or depreciated, and it depreciates more with each passing year. So you subtract the amount of that depreciation from your tax bill. Now accelerated depreciation lets you subtract this depreciation at a faster rate. Even though your race track has only depreciated a little bit the first year after you built it, you get to deduct a whopping amount from your tax bill. You might not even have to pay any taxes at all.

The rationale for accelerated depreciation is guess what? It creates jobs. Only problem is that that is not true. David Cay Johnston in The Fine Print says:

“…future Nobel Prize winner Robert Solow showed that accelerated depreciation deductions do not increase economic growth. Other studies by leading tax economists, including Dale Jorgenson of Harvard University and Robert Hall of the Hoover Institution at Stanford University … came to the same conclusion. Most compelling of all, the coauthor of the study that was behind the 1954 accelerated depreciation law, Evsey Domar, acknowledged in 1957 that Solow was right and he was wrong – accelerated depreciation does not produce faster economic growth.”

Johnston goes on to say, and I paraphrase, that even that antibusiness socialist, Barack Obama, sponsored 100% immediate write-offs of all new investment during most of his first term, which should have made him a darling of the pro-capitalist business crowd. Meanwhile, as you, the American people, have your taxes taken immediately right out of your paycheck, the big business crowd gets to defer them. This means that you, the 99%, have to pay more taxes to maintain the same level of public services. Of course, the right wingers think you should go without them at all thus keeping the cost of government down while all the while they add tax breaks for themselves to deficit reduction bills.

But to be fair the pork was sponsored by both Republicans and Democrats according to an article in the New York Times.

“The tax break in the new federal law closely resembles the language of racetrack tax bills introduced by Senator Debbie Stabenow, Democrat of Michigan, home to the auto industry and the Michigan International Speedway; Representative Vern Buchanan, Republican of Florida, home of the Daytona International Speedway; and Dean Heller, a Republican senator and former representative from Nevada, home of the Las Vegas Motor Speedway.

Among the co-sponsors, or chief backers, were Senator Pat Roberts, Republican of Kansas, home of the Kansas Speedway, and the senators from North Carolina, home base for many race teams and the Nascar industry — Richard M. Burr, a Republican, and Kay Hagan, a Democrat.

“Also supporting the legislation was Senator Jon Kyl, Republican of Arizona, whose love for the sport earned him the nickname Mr. Nascar. Mr. Kyl, who just retired from Congress, used to volunteer at the Phoenix International Raceway.

“Ms. Stabenow’s Web site includes pictures of her at a Nascar race at the Michigan track in August.”

goldman1In addition to NASCAR, the pork in the American Tax Relief Bill is helping to fund Goldman Sachs’ new headquarters in lower Manhattan and subsidize the very profitable Disney corporation. Nascar, Wall Street and Hollywood came out the big winners. But nobody in the media even mentioned it. Like it was not important. Like we should just accept it without comment. Hey, it’s just the cost of doing business. It’s “normal.” Deficit reduction be damned.

Hey, vaunted punditry, why don’t you wake up and publicize the pork in each bill before it goes down. Or is it top secret?

 

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John Lawrence

John Lawrence graduated from Georgia Tech, Stanford and University of California at San Diego. While at UCSD, he was one of the original writer/workers on the San Diego Free Press in the late 1960s. He founded the San Diego Jazz Society in 1984 which had grants from the San Diego Commission for Arts and Culture and presented both local and nationally known jazz artists. His website is Social Choice and Beyond which exemplifies his interest in Economic Democracy. His book is East West Synthesis. He also blogs at Will Blog For Food. He can be reached at j.c.lawrence@cox.net.
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avatar bob dorn January 22, 2013 at 9:40 am

Big media itself probably enjoy the depreciation allowance; after all, there’s plenty of equipment and property to write down, and the parent companies (GE, Disney) are conglomerates, and know tax law. So, American activists can’t expect to get much help from the nightly news in exposing this hypocrisy, and I thank John Lawrence for getting down to real business. The $77 billion worth of pork from the “nanny state” should be thrown in the face of self-styled budgetary conservatives every time they talk of cutting social programs. Conventional journalism won’t, because their jobs won’t allow them to.

avatar John P. Falchi January 22, 2013 at 1:48 pm

I agree with Bob Dorn hat the mainstream media is not going to help the alternative Press to expose this hypocrisy on the part of our Republican and Democratic legislators. It is up to the activists in the alternative media to keep up the drumbeat of revelation of this $70 Million of pork every time they propose to cut valuable social programs.

avatar iam he January 23, 2013 at 9:40 am

reality: there are two large and powerful factions of America that are engaged in a war of survival against each other.

one reactionary… the vast majority of middle class Americans, a pity they did not believe it or see it coming. prevention could have prevented it, they were ripped off and continue to be ripped off.. and their vital interests undermined.

the others? the unconscionables, in pathological -anti-social sense- Represented by GOP leadership. US style Capitalism, driven by the unconscionable tactics and agenda of anti-social greedy personality disorders.

anti-social capitalists VS the social middle class

the capitalist want the most money they can get out of American society, any way they can get it.. welfare, medicare, social security, education, all take money out of the system, and that is money they the capitalists can not have.. so they have distorted being social, social responsibility, social conscience, as the enemy… “Socialism” it takes a sociopath to make social conscience into an enemy. The GOP is antiSocial in the pathological sense. and it is trying to take over the government of the US..

there are relatively few sociopaths in society… and it is a disaster to let them take over our government and social systems of humanity, Humans are social animals, being social is a virtue not the enemy.

So what happens if capitalist gain control of an armed force to violently attack the social middle class…

Capitalist GOP? to direct the government, police, the military, black-water against middle class america? how will middle class america defend them selves? how will they arm themselves?

The 2nd Amendment allows Americans to prepare for this and create a deterrent… don’t worry about hunting. worry about getting caught up in a shooting war with capitalistic pigs..

people sense this and want their militaristic weapons.. not to go hunting.. but to defend them selves.. from groups of armed people who would do them harm.

The second amendment is our birth right.. and it is a good thing…. but no person who uses unconscionable tactics to accomplish unconscionable agenda -sociopaths- should be allowed to have a fire arm.

There is way to scale this problem down to size… and make things more civilized and less dangerous…. but that is another topic..

Our US government is loaded with natural born genetic/psycho/social personality disorders. Nothing is there to keep them out! And the GOP is a magnet for them.

avatar Paul Keleher January 23, 2013 at 11:05 am

The business lobby wins again. The irony of asking taxpayers to fund perks for big business (They don’t get much bigger than Nascar and Goldman-Sachs) in the VERY SAME BILL whose purpose is deficit reduction has not been lost on any of us.

This incident is just one more example of the dire need for the people to pass a constitutional amendment that will speak to the morally correct distribution of capital in a capitalist economic system.

Amen!

avatar Frank Thomas January 23, 2013 at 12:02 pm

For some time now, Paul Krugman has been leading the chorus that cutting the budget deficit is NOT the big problem nor priority for solving our near term terrible structural job development stagnation. As Krugman says correctly this time in my view, the deficit we now have is a result of a still seriously depressed economy (thanks to Bush Jr. and a Republican Congress against job stimulus) and concomitant human disaster of long-term unemployment.

For the economy to really recover, the urgent priority is supporting demand by creating new jobs. This means stimulating both through added investments in infrastructure, education, green energy, etc. How far does the secretly agreed to $77 billion in tax breaks and pork go towards expanding short-term job opportunities … as opposed to benefiting the profitability of some corporations already now paying less than 10% in taxes and incomes of top 5% already now paying less than 18% in taxes??

We don’t know because the ‘tax pork’ deal was non-transparent and covertly consumated between Republicans and Democrats. Avoided was any public debate of the pluses and minuses of this underhanded tax cave-in … once again disproportionately enriching special interests !

Of course, if we this deficit inducing action could be more than balanced off with a “financial transaction tax” like Europe is moving to, one might overlook the $77 billion tax revenue giveaway. But, of course a financial transaction tax would be an equitable, sensible step too far for bipartisan support in our broken-down, completely polarized governmental system.

Absent evidence otherwise, the $77 billion tax-dodge boondoggel is just another example of undemocratic governance by the unusual — or should I say usual — corrupt compromise process of stealthy bipartisan political cooperation not in the general public interest.

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