House Republicans in question
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Mr. Karst, I just posted a blog post on this topic at the Blog for Rural America, but I thought you might be interested in the actual e-alert sent by the House Republican Leadership. It is pasted below (if that will work in this form). Dan Owens
From: GOP Leader Alert [mailto:GOPLeaderAlert@mail.house.gov] Sent: Wednesday, July 25, 2007 1:33 PM
Subject: House Dems to Pay for Farm Bill With Tax Increase That Threatens American Jobs
HOUSE DEMS TO PAY FOR FARM BILL WITH TAX INCREASE THAT THREATENS AMERICAN JOBS
July 25, 2007
In a sneak attack on American working families, House Democratic leaders have revealed they will pay for new spending in the 2007 farm bill by imposing a new tax increase that threatens more than 5 million American jobs. The Democratic tax hike scheme was kept secret from House Republicans and the media during weeks of committee deliberation on the 2007 farm bill, which is scheduled for a vote on the House floor tomorrow. The Democrats' surprise tax hike would raise taxes on "insourcing" companies operating inside the United States, potentially driving millions of American jobs out of the country. Specifically, the Democratic scheme would raise taxes on insourcing employers that operate throughout the U.S. and employ more than 5.1 million Americans. These jobs have an average compensation per worker of $63,428 annually - 32 percent higher than other typical U.S.-based jobs. (Source: Organization for International Investment) A list of employers in the United States likely to be impacted by the Democrats' sneak attack tax hike can be found at: http://www.ofii.org/insourcing-stats.htm#statejobs. House Republican Leader John Boehner (R-OH) today declared Republicans will fight the Democrats' tax increase and mobilize against it: "The tax increases just keep on coming. The proposed legislation - sprung on the American public at the last possible minute, right before the farm bill comes to the floor - would raise taxes and endanger the jobs of millions of American workers to pay for billions of dollars in new spending by the federal government. You can't increase the security of American farmers by destroying millions of American jobs and endangering the economic freedom and security of millions of our working families. House Republicans will stand and fight this proposal vigorously on behalf of the American people." The Democrats' surprise tax hike scheme was also condemned today by Rep. Jim McCrery (R-LA), the ranking Republican member of the Ways & Means Committee: "This proposal will raise taxes on many businesses operating in the United States. It will hurt our competitiveness and our standing in the world by carelessly violating a host of treaties. It is bad policy and bad politics.
Democrats are trying to sneak a far-reaching and potentially destructive proposal through the House without proper consideration. Any fair-minded person who cares about the U.S. economy will oppose this bill." Ways & Means Committee Republicans note that the Democratic tax hike legislation would, in some cases, impose the equivalent of a 30 percent gross receipts tax on certain American businesses owned by foreign companies. Among companies that could be affected: Honda North America, Food Lion, Nestle, Bayer, BASF, T-Mobile, and others. "To attempt to impose this sort of one-size-fits all tax increase so cavalierly and capriciously, without hearings, without a markup, without any sort of bipartisan discussion, is an insult to the Ways and Means Committee and the House," Rep. McCrery said today.
Republican Leader Press Office Rep. John Boehner (R-OH) H-204, The Capitol (202) 225-4000 http://republicanleader.house.gov/
TK: What does this message from House GOP leadership mean for support of the farm bill from Republican members of the Agriculture Committee? Checking into that right now.... Thanks to Dan Owens, and a link to his blog.
posted by Tom Karst @ 3:00 PM
1 Comments:
(*Note - this creapy politician is bought and paid for by big banking and insurance interests. He was Bush's go-to man on privatizing social security as well as being against a guest worker program and the immigration bill. He even resents the MPAA hiring past Secretary of Agriculture, Dan Glickman. My guess is that he is fear mongering for the insurance interests that enjoyed record profits from USDA rural programs in the past having their funding cut to provide for needed programs. Pure voodoo economics.)
Campaign for an Accountable Congress
1025 CONNECTICUT AVENUE, NW ! SUITE 205 ! WASHINGTON, DC 20036 ! TEL (202) 955-5665 FAX (202) 955-5606 ! www.ourfuture.org
Representative James McCrery (LA-4)
Report prepared by
The Campaign for Americas Future
February 23, 2005
http://www.ourfuture.org
Synopsis
As the new chairman of the Social Security Subcommittee in the House Ways and Means
Committee, Rep. James McCrery finds himself in the national spotlight. The long-
serving congressman has spent years working alongside prominent GOP leaders helping
to draft their most controversial fiscal policies. McCrery has also quietly amassed an
enormous campaign war chest. Not surprising, among his most valued contributors are
the very financial institutions that will earn millions from managing the presidents
proposed private Social Security accounts. In addition, McCrery also has strong
connections to industry lobbyists. Not only did he reveal that he met with the top GOP
tax lobbyist in Washington every few weeks; but two of McCrerys former staff
members, including his former legislative director, work as lobbyists for the Securities
Industry Association, a trade association representing nearly 600 investment firms.
Initially McCrery made statements backing away for the presidents plan to carve out a
portion of the payroll tax to fund private Social Security accounts. He recently flip-
flopped on the issue, endorsing privatization. Im convinced the presidents approach is
worth pursuing in the legislative process, said McCrery (Associated Press, 2/3/05;
Tallahassee Democrat, 2/15/05)
McCrery Campaign Contributions
Jim McCrery, the current chair of the Ways and Means Committees subcommittee on
Social Security, has been a recipient of campaign cash from the securities industry since
first elected. These financial ties call his impartiality on the issue into question. Between
2000 and 2004, McCrery has received nearly $200,000 in campaign contributions from
individuals and PACs in those industries. Between 2002 and 2004 alone increased by 42
percent, rising from $61,650 to $87,500. Of note, for the last election cycle, commercial
banks and securities firms combined contributed the most from any corporate sector to
McCrery. Among the businesses contributing during that time are the American Bankers
Association, with $14,500; Bank of America, with $12,500; and Wachovia, with $8,000.
(Center for Responsive Politics) In 2001, McCrery supported the presidents Social
Security Commission report, which advocated the use of private accounts. (HR 2590,
House Vote 273, 7/25/01) One year later, McCrery voted for a GOP budget that raided a
$224.3 billion in surplus Social Security revenue. (H Con Res 353, House Vote 79,
3/20/02; CQ Bill Analysis) Because he has supported most of the industrys lobbies on
the issues important to them, McCrerys securities industry contributions will likely rise
as the debate over privatization continues. McCrery also sponsored legislation that
would have allowed securities firms to avoid taxation. Additionally, McCrery is also
heavily connected to key lobbyists in the industry. Two of McCrerys former aides work
for the Securities Industry Association.
Financial services firms are not McCrerys only cash constituents. Because McCrery
also sits on the Ways and Means Committees health subcommittee, he received large
sums from the health care and insurance industries. In 2000, the health care industry
contributed $66,209 to McCrery. In 2004, that figure rose by 64 percent to $108,368.
Similarly, insurance industry contributions rose more than 100 percent from $41,900 in
2000 to $84,383 in 2004. (Center for Responsive Politics; Political Money Line) Not
surprisingly, McCrery supported the GOP Medicare prescription drug bill which
amounted to an estimated $139 billion windfall to pharmaceutical companies. (HR 1,
House Vote 669, 11/22/03; Sager & Socolar, 61% of Prescription Drug Subsidy is
Windfall Profit..., BU School of Public Health, October 31, 2003) McCrery also
supported GOP efforts to cap medical malpractice damages awards with two votes in the
108th Congress. Both bills served the interests of the insurance and pharmaceutical
industries as they exempted pharmaceutical manufacturers from liability. (HR 5, House
Vote 64, 3/13/03; HR 4280, House Vote 166, 5/12/04)
Ties to Lobbyists
In addition to campaign contributions, McCrery has extensive relationships with
securities industry lobbyists and has even publicly advised industries on how to hire
lobbyists.
McCrery said, Should any lobbying organization take into account whos in the
majority? I think that would be wise. With regard to the Motion Picture Association of
Americas recent hiring of former Democratic Congressman Dan Glickman, McCrery
said, I dont mean to imply that they [the MPAA] shouldnt have hired Dan Glickman.
What they might want to do now is bolster their staff under Dan with Republicans. I just
think thats common sense. (Associated Press, 10/8/04)
McCrery himself also considered leaving Congress for the lobbying world. One day after
announcing that he would remain in Congress for at least another term, McCrery revealed
that he discussed the idea of forming a lobbying shop with fellow Louisianan, Sen. John
Breaux. (Roll Call, 3/8/04)
With regard to financial sector lobbyists, McCrery publicly stated he regularly visits
Kenneth Kies, the leading GOP tax lobbyist. In 1998, Kies left his job as chief of staff at
the Joint Committee on Taxation to pursue a career in lobbying. Since then he and
McCrery have crossed paths on numerous occasions. In 1998, Kies held a workshop at
the White House Conference on Social Security entitled Social Security and Private
Market Investments. McCrery was a participant. (Federal Document Clearing House,
12/9/98) In 2001, McCrery sponsored a measure that would have permanently extended
the subpart F exemption to the internal revenue code. McCrerys sponsorship would
have allowed securities firms to defer taxation on earnings from foreign operations at an
estimated cost to the Treasury of $21.2 billion over a 10 year period. (HR 1357, 4/3/01;
CQ Weekly, 2/2/02) Kies was named a major player on the issue, working for the
securities industry. (American Lawyer Media, 12/17/01) In 2003, McCrery told the
press that Kies visits him every few weeks. (The Hill, 10/14/03) According to Political
Money Line, Kies current list includes Bank of America and Goldman Sachs. Both
entities could potentially profit from the presidents privatization plan.
Affect on Louisianans
All of this lobbying influence, combined with McCrerys apparent submissiveness to the
agenda of his financial backers, begs the essential question: For whom is he really
working? Its clear that the banks and Wall Street firms that fund his campaigns will do
well by McCrerys actions. The interests of his constituents, though, will suffer. With
contributions from Wall Street flowing in and his support for the presidents 2001 Social
Security Commission report, McCrery could place the livelihoods of 109,238 Social
Security beneficiaries in his district at risk. Of note, as of December 2003, the average
monthly benefit for retirees in McCrerys district is only $830 per month. (Social
Security Administration: Congressional Statistics) Similarly, with his support of the
GOP Medicare prescription drug bill, McCrery placed Louisianas 620,000 Medicare
beneficiaries at the mercy of another major campaign contributor: insurance companies.
(Kaiser Family Foundation)
A Part of Washingtons Revolving Door
If McCrery does at some point enter the lobbying world, he will be following some of his
former staff members. McCrerys former legislative director, Jonathan Traub, joined the
Securities Industry Association as vice president for federal tax legislation and as one of
their registered lobbyists. (The Frontrunner, 4/1/04; Political Money Line) Traub joined
Richard Hunt, another McCrery aide who had already since joined the SIA. (Roll Call,
4/5/04)
Overview of Social Security
Before Congress even returned to Washington to begin work, President Bush made clear
his intention to push for legislation creating private Social Security accounts. The plan,
which the administration says is a response to a looming crisis, seeks to place a portion of
collected payroll tax receipts into private accounts. The accounts would then be managed
by Wall Street firms, much like individual retirement accounts.
The administration also seeks to change the benefit calculation method. Currently, an
individuals benefit amount is indexed based on their growth in wages. The
administration proposed a formula which ties benefits to consumer prices. Thus, many
future retirees could see severe reductions in benefits, because consumer prices rise at a
much slower rate than wages. The Bush administration defended this so-called price
indexing, stating that overall benefits would be higher than if Congress did nothing to
Social Security. According to the Congressional Budget Office, under price indexing, the
combined income from Social Security and private accounts would be less than the
benefits that would be paid if policymakers took no action and Social Security benefits
were reduced to levels that the programs revenues could support after its trust fund was
exhausted. (Center on Budget and Policy Priorities: Social Security Off to a Misleading
Start, 1/7/05)
According to the Social Security trustees, full benefits can be paid until 2042 and 70
percent of benefits can be paid afterward. (Center on Budget and Policy Priorities:
Social Security Off to a Misleading Start, 1/7/05) Opponents of the plan argue the
trustees projections do not warrant the label of crisis, and legislation should be
developed that wont reduce benefits for future retirees.
The impact of private Social Security accounts would be widespread, and nowhere more
so than on Wall Street. According to estimates, investment banks stand to collect
estimated inflows upwards of $75 billion in the first few years of their inception alone.
(Los Angeles Times, 1/18/05) Aware of this potential this windfall, commercial banking
and securities interests contributed enormous sums to political campaigns. During the
2004 cycle, individuals in the industry as well as corporate PACs contributed more than
$68 million to congressional candidates. The figure is up from the $35.2 million
contributed during the 2002 cycle. Over the last decade, these interests have made
combined contributions totaling $240 million to federal candidates. (Center for
Responsive Politics) They have also contributed heavily to the presidents campaign
committee as well. In 2004, securities firms and commercial banks gave the president
more than $11.7 million, double the amount they contributed to Sen. John Kerry, who
received $5.5 million. Similarly, in 2000 the president received $5.4 million from the
industry compared Al Gore, who only received $1.7 million. (Center for Responsive
Politics)
While lobbying by the securities industry for private accounts has been publicized
recently surrounding the current debate, the industry has been pursuing this agenda for
many years. In an often-quoted 1983 article in the Cato Journal, the two Heritage
Foundation analysts who wrote the piece argued that building a constituency for Social
Security reform requires mobilizing the various coalitions that stand to benefit from the
change . The business community and financial institutions, in particular, would be an
obvious element in the constituency. (Los Angeles Times, 1/30/05)
In 1998, The National Association of Manufacturers, the nations largest industrial trade
association, created the Alliance for Worker Retirement Security. The Alliance is a
coalition of financial and other corporate interests headed by Derrick Max. Max is a
registered lobbyist and former director of government affairs at the Cato Institute. In that
role, according to the Alliance website, he was instrumental in helping to advance Catos
presence in the national debate on Social Security reform. The Alliances 35 members
include the Securities Industry Association, the lobbying arm and trade association of
nearly 600 of the worlds most powerful investment houses. For the 2004 election cycle,
the SIA spent more than $10 million in lobbying for their varied interests. (Political
Money Line)
According to the Center for Responsive Politics, Alliance members spent nearly $108
million lobbying the federal government during 2003 and the first half of 2004.
Combined, Alliance members have donated $34.6 million to federal candidates and
political parties since 1999. Of that, $25.8 million went to Republicans. (Center for
Responsive Politics, 1/25/05) While Wall Street has tried to stay out of the spotlight to
deflect its interest in receiving a windfall in profits, according to the press, Max
commissioned the Securities Industry Association to write a report showing how little
Wall Street firms would benefit from managing these accounts. The report stated that
firms could generate as little as $39 billion in fees over a 75-year period, no more than
$279 billion during the same time. (Roll Call, 12/13/04) But University of Chicago
business school professor Austan Goolsbee refuted the SIAs findings stating that
financial institutions could see a potential gain of $940 billion. (Roll Call, 12/13/04) In
addition, several investment firms have also pushed for privatizing Social Security. Max
told the press that Schwab Brokerage helped fund the groups effort to push private
accounts. The conservative Cato Institute also reportedly received funds from American
International Group, T. Rowe Price, E-Trade Financial and others to fund studies on
private Social Security accounts. (Los Angeles Times, 1/18/05)
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