Corporate Payoffs

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).

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