Spoils of war

With Americans distracted by war, Republicans are trying to loot the public purse with a shameless "stimulus" plan.



Joe Conason
November 16, 2001 4:55AM (UTC)

At times like these, as Americans rediscover the big bad world out there, we often talk about the importance of convincing downtrodden peoples abroad of the benefits of democracy. This is a fine idea, of course, so long as we focus on the high-minded ideals of equality and liberty embodied in the Constitution, and don't call too much attention to the grubbier details of our system as it actually functions. Let's not mention last year's presidential election, for instance, when the guys who got fewer votes took office because so many ballots went uncounted.

And let's try to avoid the subject of the influence of money in democracy's homeland, too -- because our country's ruling elite looks far too much like the larcenous oligarchies that already rule those other benighted places. Whatever may have changed in Washington since Sept. 11, the fealty of our elected officials to moneyed interests remains the same. Only the rhetoric has changed, with greed masquerading as patriotism.

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The latest evidence has been compiled in a trenchant investigation by three research organizations, which shows how corporate donors have used the "economic stimulus" legislation passed by Republican leaders in the House of Representatives to pilfer the treasury. Public Campaign, a nonprofit and nonpartisan group that advocates strong campaign finance reform, joined with Citizens for Tax Justice and the Institute on Taxation and Economic Policy to produce the 30-page study of the relationship between corporate campaign contributions and the tax breaks lavished on the most generous donors.

The general tenor of their report, titled "Buy Now, Save Later," will scarcely shock anyone who has paid attention to the continuing degradation of American politics over the past two decades. But it is nevertheless bracing to see corporate and congressional names paired with specific dollar figures (about $55 billion in tax breaks to 41 companies that contributed $150 million to various influential pols -- and that's only one of several case studies).

Among the grossest giveaways contemplated by Congress are those involving an arcane element of the IRS code, known as the Alternative Minimum Tax. The AMT was enacted in 1986 to make sure that the country's most profitable companies paid something to keep government running, like ordinary citizens are obliged to do every week. Until then, many of those wealthy corporate citizens had escaped the income tax altogether through various shelters and loopholes; more than a few were reaping millions of dollars in "rebates." These outfits are obviously managed by people who think only suckers pay taxes, and they understandably have wanted to rid themselves of the AMT for well over a decade.

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Their faithful servants in the GOP sprang to this task as soon as the Republicans took control of the House in 1995, but their first effort to repeal the AMT was vetoed by President Clinton. He signed a weaker version two years later, which provided some additional loopholes but left the alternative minimum tax on the books -- at least until now.

With a Republican administration in power and a nation distracted by war and terror, the industries that would benefit most from complete elimination of this progressive tax clause saw a fresh opportunity. So did their friends in the House leadership, who included not just a repeal of the AMT but a refund of all the taxes paid by corporations because of it. Americans who received those piddling $300 federal income tax rebates last summer (which in many cases will have to be paid back next spring) may be interested to know what kind of rebates are about to be handed over to the country's biggest corporations by Tom DeLay, Dick Armey and George W. Bush.

The top beneficiaries cited in the Public Campaign/Citizens for Tax Justice study are 16 companies, including major energy firms and airlines that have just gotten another taxpayer bailout, that will receive upward of $7.4 billion under the House legislation. Ford Motor Company would get a cool billion bucks. IBM would get $1.4 billion. General Electric, owners of NBC, would get $671 million. Bush's pals at Enron would get $254 million. American Airlines would get $184 million.

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Those "rebates" are only half the story, however. The other half entails the $45 million vouchsafed by those behemoths to their favorite politicians over the past 10 years. They have donated twice as much to Republicans as to Democrats, and that doesn't include the donations made on their behalf by lobbyists, accounting firms and other affiliated practitioners of legal graft. Among the best-greased is an obscure backbencher named Phil English, the Pennsylvania Republican whose main distinction is his unquenchable zeal to repeal the AMT.

The undoing of the Alternative Minimum Tax is merely one of several outrageous provisions of the "stimulus" bill that would be unimaginable without the corrupting influence of special-interest money. Public Campaign argues that the only meaningful way to reform the system is to remove private contributions altogether, as Maine, Vermont, Massachusetts and Arizona have tried to do in state law.

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Such radical measures seem distant indeed. The McCain-Feingold bill, whose far less stringent reforms came close to passage earlier this year, is now relegated to the fringes of congressional concern. In a letter to the editor of the New York Times published Oct. 30, Senator Mitch McConnell spoke for all the bagmen of Capitol Hill when he gloated that campaign finance reform "has dropped off the list [of priorities] completely as the president, Congress and the country are focusing on terrorism and the economy."

The spoils of war are obviously not found only on distant battlefields. Subverting the people's house and looting the public purse are much easier when true patriots are looking the other way.


Joe Conason

Joe Conason is the editor in chief of NationalMemo.com. To find out more about Joe Conason, visit the Creators Syndicate website at www.creators.com.

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