Saturday, October 04, 2008

Pork-laden Bailout Bill is Very Bitter Pill

I was relieved to see the House swallow hard and pass the bailout. The bailout is a bitter pill, but unfortunately it is necessary medicine to keep our ailing economy from dying. (See my post: Congress Should Pass the Palson Plan)

What disgust me in this whole mess, is that the bailout did not pass until it was sweetened with billions in pork. (I’m not mixing my metaphors; this is some very sweet pork.) It is disgusting that some in Congress had to get their favorite project included before they would support it. These congressmen would not pass it because it was the right thing to do but because they were bought.

Consider the following amendment to the bailout bill:

Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by children.

Current law places an excise tax of 39 cents on the first sale by the manufacturer, producer, or importer of any shaft of a type used to produce certain types of arrows. This proposal would exempt from the excise tax any shaft consisting of all natural wood with no laminations or artificial means to enhance the spine of the shaft used in the manufacture of an arrow that measures 5/16 of an inch or less and is unsuited for use with a bow with a peak draw weight of 30 pounds or more. The proposal is effective for shafts first sold after the date of enactment. The estimated cost of the proposal is $2 million over ten years, according to the Joint Committee on Taxation.
According to Taxpayers for Common Sense, Oregon’s senators were the sponsors of the above provision which is a $200,000 benefit to a single company, Rose City Archery in Myrtle Point, Oregon. (read more)

Other sweeteners in the bill according to an article in the San Francisco Chronicle (link), included the following:

Racetracks: Earmark would allow auto racetrack owners to depreciate their facilities over seven years, saving the industry $100 million over two years.

Rum: Offers rum producers in Puerto Rico and the Virgin Islands a rebate on excise taxes worth $192 million over two years.

Wool: Reduces tariffs for U.S. makers of wool fabric that use imported yarn, worth $148 million over five years. The measure was pushed by Reps. Louise Slaughter, D-N.Y., and Melissa Bean, D-Ill.

Exxon Valdez: Plaintiffs in the suit over the 1989 oil spill could spread their tax payments on punitive damages over three years, cutting their tax bill by $49 million. The measure was backed by Rep. Don Young, R-Alaska.

American Samoa: Allows certain corporations to reduce their tax liability on income earned in American Samoa, at a cost of $33 million over two years.

Even Hollywood got something out of the Senate bill: renewal of a tax incentive worth nearly $48 million a year for film and TV producers who produce their work in the United States.

At a time when I did not think my contempt for Congress could get any lower, it just did. John McCain says he will change the culture of Washington and curtail pork barrel spending. I think it is possible to curtail it, but difficult. Congress needs a basic change in their operating rocedures to make pork barrel spending more transparent. One should not have to load a deserving bill with goodies, like hanging ornaments on a Christmas tree, in order to get it passed.

I served eleven years in the Metro Council of Nashville and years ago I served as a student intern with the State legislature for about three months. In both the State Senate and the Metro Council, one could not have a bill that was broader than the caption. That was a rule. That is not to say that there is not wasteful spending by both the Metro Council and the State government, but a bill could not be amended to include spending for a project totally unrelated to the topic of the bill. On a bill to authorize the issuance of tax increment financing bonds for the construction of a sports arena, one could not include funding for new sidewalks in Woodbine.

There was still wastful spending and deals were still make, but this rule made it more diffilcut to do than it would have been without the rule. Sometimes we need rules to keep us honest. Currently, the way Congress operates, holding a bill hostage and loading it with pork is encouraged. I believe that If Congress would adopt a rule that the body of a bill could not be broader than the caption of the bill, we would see a drastic decrease in spending such as was included in the bailout bill.

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1 comment:

  1. Wow. Yes, I completely agree with your analysis of the "pork." Really unfortunate that Congress had to load up this bill with "something for everyone" in order to attain the necessary votes.