With "economic stimulus," Republicans
reward their most loyal constituents
by John Nichols
In These Times magazine, December 24, 2001
Corporate lobbyists pulled off one of the most remarkable
raids on the public treasury in American history when, just days
after the September 11 terrorist attacks, they grabbed $15 billion
in federal payments and loan guarantees for the airline industry.
So with that precedent fresh in mind, it's no surprise the
lobbyists are back at the trough. The Brooks Brothers Brigades
are crowding the steps of Congress, clutching records of campaign
contributions paid, to return for the big prize: $16 billion in
tax refunds to the nation's largest and most profitable corporations.
The economic stimulus bill that House Republicans rammed through
their chamber in late October is now moving rapidly toward a vote;
at press time, the Senate was likely to vote on the package immediately
after Thanksgiving. Rarely since the war-profiteering scandals
of World War I has Congress seen such a blatant attempt by business
to use international turbulence as an excuse to redistribute wealth
upward. If passed by the Senate and signed by President Bush,
the GOP stimulus plan would restructure tax policy to end the
alternative minimum tax-a rule placed on the books after a series
of Reagan-era business tax cuts to ensure that corporations make
minimal contributions to the public treasury.
Eliminating the law, according to an analysis by Citizens
for Tax Justice, would mean that "some of these corporations
will be able to pay little or no U.S. income tax, forever."
Worse, besides eliminating the alternative minimum tax for the
future, the GOP "stimulus bill" includes a proposal
to refund every cent that corporations have paid since 1986 under
the alternative tax rule. The payouts to profitable corporations
would be dramatic, and include rebates totaling billions of dollars
to the likes of IBM, Ford, GM and GE. Huge payouts would also
go to energy firms closely tied to President
Bush and Vice President Cheney: hundreds of millions to Chevron-Texaco,
Enron, Phillips Petroleum and CSM Energy alone. And remember the
airlines that collected $15 billion in federal aid in September?
They would get even more under the GOP stimulus plan: United Airlines
and American Airlines are slated for handouts of $371 million
and $184 million each.
The elimination of taxes and direct payouts are just the beginning
of a bill thick with benefits for corporations- including a tax
break for U.S. businesses operating abroad. How much will the
tinkering with taxes on overseas income help corporations? They'll
start by saving a cool $21 billion, and the benefits will just
keep adding up as the years-and the foreign investments-go on.
Why would congressional Republicans continue to fight for
the scheme even after much of the media have exposed the worst
excesses of the legislation? Here's a hint: According to Public
Campaign, Enron gave $2.4 million in campaign contributions in
2000, General Electric contributed $1 million, and Ford popped
$780,000 into various campaign funds. The list goes on.
Thus, with only a single Senate vote separating them from
an end to long-term tax responsibilities, the corporations are
pressing hard for a repayment on their investments-er, contributions.
For big business, securing free money and freedom from taxation
is job one-even in a time of terrorism, anthrax and war. As Sen.
Robert M. La Follette explained when he fought the profiteers
of World War 1, "Wealth has never yet sacrificed itself on
the altar of patriotism."
The Republican plan goes so far, however, that it has finally
awakened Senate Democrats from their long bipartisan slumber.
Chastened by their constituents for failing to stand up for working
Americans in a time of economic decline, Democrats now seem prepared
to fight. Sen. Dick Durbin (D-Illinois) and other Democrats first
backed a modest $73 billion stimulus plan that provided some tax
cuts but also extended unemployment benefits for out-of-work Americans,
helped hard-pressed farmers and offered a measure of the public
investment needed to shore up the sagging economy.
After Republican maneuvering, the plan didn't make it off
the floor, despite having the support of 51 senators. While the
Democratic plan fell far short of the level of investment needed
to genuinely stimulate the economy, it was superior to a package
of tax breaks for vast corporations. As New York Sen. Hillary
Rodham Clinton notes, "If there is any dollar that will be
spent immediately into our economy, it is unemployment insurance."
What is the GOP counter to that argument? They have, of course,
questioned the patriotism of senators who might choose to serve
the interests of the vast majority of Americans. "You don't
override the president at a time like this," warns Sen. Pete
Domenici (R-New Mexico). And they are charging Democrats with
dividing an otherwise unified America. "What we're going
to see (from Senate Democrats) is almost a class warfare on the
issue of the stimulus bill," says Sen. Frank Murkowski (R-Alaska).
Will Senate Democrats engage in class warfare? We can only
hope. If they do use their majority status to block the GOP plan,
they will simply be mounting an all-too-rare defense of the working
Americans they should have been representing in the fight over
the airline bailout, and every battle since.
John Nichols is the author of Jews for Buchanan: Did You Hear
the One About the Theft of the American Presidency? (The New Press).