Corporate pork: the secret ingredient in the fiscal-cliff recipe

Once upon a time, a President or Congressional leader trying to get a bill passed would use earmarks—also known as “pork”—to buy votes from reluctant senators or representatives. In 2006, Congress passed a law ending earmarks. Hooray, we all thought: that’s the end of that. But wait. Now, we have the fiscal cliff bill. It doesn’t have specific earmarks for politicians’ pet projects—like bridges to nowhere or multi-million-dollar football stadiums for private universities—but it certainly does include some bacon-like provisions. Only this time around, they’re not called “pork,” they’re corporate tax incentives that just smell like it.

Another difference between these corporate tax giveaways and old-fashioned pork is that the new handouts aren’t all new. Many of them—technically known as “tax extenders”—are “temporary” tax breaks and incentives that are being extended yet again as a way of placating senators and congressional reps into saying yes to the fiscal cliff bill. [Some observers, noting that the bill passed the Senate with a vote of 89 to 8, question whether these provisions were actually needed to get the bill approved.]

A recent article in the Washington Post offers a top-10 list of the ham sandwiched into the fiscal cliff bill. Some of them make sense, but most of them are patently obvious giveaways to corporations with big lobbying and political-contribution budgets. The bill includes 50+ such gifts, which will save their beneficiaries an estimated $76 billion. And, by the way, under the fiscal cliff bill, the breaks are retroactive to 2012, so corporations and individuals can claim them on their 2012 and 2013 tax returns. The Washington Post’s top ten list includes:

A $9 billion “sop for Wall Street banks and major multinationals.

A rum tax for Puerto Rico

Cheaper office space for Goldman Sachs

Help NASCAR build racetracks

Treat coal from Indian lands as an alternative energy source

Promote plug-in electric scooters.

Repair the railroads

Subsidize Hollywood films

Crack down on tax cheats… in prison

Provide incentives for commuters to take the bus or trains

Not included in that top 10 list is the already infamous “asparagus bailout,” a pre-existing, and now extended, tax break for farmers—mostly in Washington state, it seems. Senators pushing this provision say it’s needed because American asparagus farmers have been “devastated” by cheap imported Peruvian asparagus.

Also not spelled out in the Washington Post summary is a section extending “tax credits for foreign subsidiaries.” Observers who know how to interpret the obtuse language of this provision explain that it allows US multinationals to not pay taxes on income earned by companies they own abroad, and that it cost $1.5 billion from 2010 and 2011. The US Chamber [previously known as the US Chamber of Commerce] loves it.

So, exactly which government officials wrote in which corporate and individual tax extenders? It would be enlightening to to see a chart with those match-ups. For now, we know that Sen. Ron Wyden (D-OR) is claiming credit for the plug-in electric scooter incentive and that Senator Patty Murray (D-WA) is proud of the asparagus provision. And it’s clear that, during the run-up to passage of the bill, corporate lobbyists put a lot of pressure on the White House. According to the Center for Responsive Politics, lobbyists representing more than 100 companies and organizations, such as General Motors, Time Warner and Coca-Cola went to the White House to push for specific boondoggle extensions. According to the Washington Post, the $9 billion corporate, off-shore financing loophole had its very own trade association, whose members include GE, Caterpillar and JP Morgan, and a super-lobbyist—Steve Elmendorf—who was paid $80,000 in 2012 to push for it.

You can read more about the specifics of these corporate subsidies at Naked Capitalism.

Bottom line: In the good old days of pork-barrel politics, some earmarks [certainly not all of them] had real, common-good benefits for ordinary people, and you could, at the very least, see who voted for what. The fiscal cliff deal was far less transparent and more like a secret-Santa gift exchange. Maybe earmarks were better?