A bipartisan group of freeloaders  Senators are going for a whirlwind one week junket to Europe so that they can make better policy when they get home.

In more surprisingnews, WaPo reports:

Special interests win in Senate panel’s attempt at tax reform

It was supposed to be a first step toward tax reform. But as lawmakers tackled a list of 75 special-interest tax breaks, the special interests repeatedly won.

An accelerated write-off for owners of NASCAR tracks: That has to stay.

An economic development credit for a StarKist tuna cannery in American Samoa: That stays, too.

A rum-tax rebate for Puerto Rico and the U.S. Virgin Islands worth millions of dollars a year to one of the world’s largest distillers: Check.

A $2,500 credit for electric motorcycles and other low-speed vehicles: That stays. But “in the spirit of tax reform,” its sponsor, Sen. Ron Wyden (D-Ore.), said he agreed that electric golf carts would no longer be eligible.

When the dust settled Thursday, members of the Senate Finance Committee congratulated themselves for agreeing to jettison 20 of the perks, including a $5,000 credit for first-time home buyers in the District and a cash-incentive program for wind-energy projects that has been derided as benefiting foreign companies.

But their failure to weed out dozens more pet provisions clouded prospects for a far-reaching simplification of the nation’s tax laws advocated by President Obama, GOP challenger Mitt Romney and congressional leaders in both parties.

“The opening salvo of tax reform was little more than a whimper,” said Steve Ellis, vice president of the nonprofit watchdog group Taxpayers for Common Sense. “If this is as bold as they’re going to go, it doesn’t bode very well for fundamental reform.”

Rather than criticize themselves for not hacking through the layers of loopholes and tax favors, committee leaders noted that they had, for the first time in memory, refused to automatically renew them all. Thursday’s 19 to 5 vote not only reversed a decades-long trend, they said, it demonstrated a rare ability to work across party lines at a time when a protracted stalemate over taxes and spending threatens to throw the nation back into recession early next year.

“By doing this, we’ve come a long way toward functionality,” said Sen. Orrin G. Hatch (Utah), the panel’s senior Republican. “This is a major achievement. It certainly is not tax reform. But . . . it’s a step in the right direction.”
“I’m proud of what we’ve done as a committee,” added Finance Committee Chairman Max Baucus (D-Mont.). It’s “more than baby steps. This is not the first steps the baby’s taking. We’re walking.”

With Congress headed home for an August recess, the full Senate cannot vote on the measure until at least September. If approved, it would face an uncertain fate in the House, where the Ways and Means Committee is also reviewing the temporary tax breaks collectively known as “tax extenders” because Congress has not made them permanent.

The provisions are instead regularly renewed for a year or two “in the dark of night,” as Hatch put it, often as an amendment to must-pass bills. In 2008, for example, the Senate tacked them onto the Troubled Assets Relief Program bank-bailout legislation.

The extenders include many popular provisions, such as a credit for domestic research and development and a deduction for college tuition. The package approved Thursday also would protect millions of middle-class families from the alternative minimum tax through 2013, by far the most costly provision.
All told, the measure would add $143 billion to next year’s budget deficit, according to of­ficial estimates, with about $40 billion going to the special-interest breaks. Over 10 years, the cost would swell to $205 billion.

In a tentative deal reached late Tuesday, Baucus and Hatch agreed to wipe out more of the loopholes. But lawmakers in both parties appealed, and Baucus presented a rewrite Thursday morning that brought several back to life.

Lawmakers were by turns defiant and sheepish in defending favored provisions. The breaks, they said, are critical to home-state employers facing a tough economy. It would be easier to wipe them out, they said, as part of full-scale reform, when Congress can offer lower tax rates as a consolation prize.

“Big tax reform is where we need to look at all this stuff,” said Sen. Debbie Stabenow (D-Mich.), who joined Sen. Jon Kyl (R-Ariz.) in petitioning Baucus to preserve the break for NASCAR tracks.

For now, Stabenow said, the write-off for improving the tracks is “an economic development issue for Michigan,” where owners of the Michigan International Speedway west of Ann Arbor recently added 20 deluxe track-side camping spaces.
Sen. John Thune (R-S.D.) defended an array of energy incentives, including a wind-energy tax credit that Romney has targeted for elimination.

“The bigger game is going to be tax reform. This is just kind of the opening act,” he said. “I’ve made that pretty clear to folks in the industry” that when tax reform gets underway, “we’ll need to look at what we can do to start phasing these things out.”
Sen. Jeff Bingaman (D-N.M.), who has jurisdiction over U.S. territories as chairman of the Committee on Energy and Natural Resources, said he asked Baucus to save the credit for American Samoa, which has, in the past, subsidized a StarKist tuna cannery that employs more than half the island’s population.

“Samoans are U.S. citizens. This is U.S. territory,” Bingaman said. “We should not in a casual way take action that would dramatically and adversely affect their economy. If the next Congress thinks there are good and sufficient reasons for doing that, then that’s their business.”

Asked why the Samoan credit was preserved, Baucus said simply: “Jobs.”

Still, the scramble to preserve narrowly targeted perks left some steaming.

“Nobody wants to make the hard choices around here,” said Sen. Tom Coburn (Okla.), one of five Republicans who voted against the measure. Getting rid of 20 tax breaks is “better than nothing. But it ain’t anywhere close to where we need to be if we’re going to fix this country.”

“They’re good people,” he said of his Senate colleagues, “but I don’t get it.”


IMHO, Coburn gets it, committee does not.

42 Responses

  1. John Thune – “The bigger game is going to be tax reform. This is just kind of the opening act. I’ve made that pretty clear to folks in the industry that when tax reform gets underway, we’ll need to look at what we can do to start phasing these things out.”

    Scarlett O’Hara – “I can’t think about that right now. If I do, I’ll go crazy. I’ll think about that tomorrow.”


  2. You can’t do this piecemeal. It has to be one fell swoop where everyone’s oxen are all gored at the same time.

    Flat Tax. No deductions or exemptions.


  3. Don’t tax me, don’t tax thee, tax that fellow behind the tree.


  4. I swear to God this is a real caption:

    “In this April 27, 2010 file photo, a Guantanamo detainee’s feet are shackled to the floor as he attends a “Life Skills” class inside the Camp 6 high-security detention facility at Guantanamo Bay U.S. Naval Base”


  5. Orrin has outlived his sell-by date in the Senate. By at least 12 years.


  6. This could prove interesting:

    “Egypt demands release of Guantanamo detainee

    By Ernesto Londono and Ingy Hassieb, Friday, August 3, 3:31 PM

    CAIRO — The Egyptian government requested this week that the United States release the sole Egyptian detained at the Guantanamo Bay military prison, language that amounts to a stark demand by a country that has been Washington’s staunchest counterterrorism ally in the Middle East.”


  7. I went to Puerto Rico winter before last to do some important on-site research into rums. Bacardi is the largest rum seller in the world and most of their product is distilled in Puerto Rico but the corporation is headquartered in the Bahamas. The ownership is still controlled by Cuban refugees from the Castro revolution.

    In Puerto Rico, the number one brand of rum is Don Q which is made on the south side of the island. It is sooo much better than Bacardi that it is all I buy now. U.S. distribution of it is pretty spotty though. It can be found in Florida, New York, New Jersey, Chicago, and several other markets. According to Wikipedia, it makes an appearance in the R-rated talking-teddy bear movie, Ted.

    The continued influence of Cuban ex-pats in the American political system is impressive. Do not get me started on the Florida sugar industry. Their protectionist alliance with ADM is responsible for the prevalence of high-fructose corn syrup in American sodas and just about every other food you buy.


  8. “bannedagain5446, on August 3, 2012 at 2:01 pm said:

    I swear to God this is a real caption:

    “In this April 27, 2010 file photo, a Guantanamo detainee’s feet are shackled to the floor as he attends a “Life Skills” class inside the Camp 6 high-security detention facility at Guantanamo Bay U.S. Naval Base”

    If you think that’s bad, the detainees would have had it 100 times worse had Guantanamo been closed and they had been moved to a SuperMax prison in the United States. Lock down in solitary confinement for 23 hours a day.


  9. jnc:

    Judging by the caption in that photo, GITMO has become like The Village in the old Prisoner TV series.

    Everything has a name that invokes a new and altered reality reflecting the fact that these guys have no sentence and yet can never leave.


  10. you can’t move people into a US prison who have never been convicted or charged with any crime and have no civil rights whatsoever.


  11. Yellow, my preferred rums are dark. Pusser’s British Navy Rum & Gosling’s Black Seal. Particularly good in Pina Coladas

    The high fructose corn syrup situation is annoying. It has lead to the absurdity of having to import real Coca Cola from Mexico because the shipping costs are less than the sugar tariffs would add to make real Coca Cola in the United States.


  12. “bannedagain5446, on August 3, 2012 at 2:13 pm said:

    you can’t move people into a US prison who have never been convicted or charged with any crime and have no civil rights whatsoever”

    Bullshit. They can do exactly that, and would have. That was the whole plan with the prison in Illinois until Congress blocked it.


  13. “Meanwhile, the administration’s plans to acquire the Thomson Correctional Center in Illinois to house some of the detainees from Guantanamo Bay, which critics have assailed as “Gitmo North,” remain stalled in Congress, which has rejected funding for the prison and remains reluctant to change a law that prohibits uncharged detainees from being brought to U.S. soil.

    While Illinois Gov. Pat Quinn was pleased with the decision and the economic opportunity it could provide for a depressed area of Illinois, others have worried that bringing the accused terrorists to America’s heartland would effectively put a bull’s-eye there for terrorists.

    Still, the White House says it intends to eventually utilize the facility, citing the precedent of more than 350 convicted terrorists already serving time in U.S. prisons and the economic advantage such a facility would provide. ”

    ” Indefinite Hold: Objections to Imprisoning 48 Without Charge

    Another sticking point revolves around 48 prisoners the administration says it will hold indefinitely under the laws of war. U.S. law forbids the transfer of such uncharged individuals to U.S. soil but the administration wants Congress to change the law.

    Human rights groups are opposed to the idea of bringing the uncharged detainees to Thomson Prison or any other facility inside the United States for fear that it will start a new legal precedent.

    “It’s bad enough that indefinite detention without charge is going on in places like Guantanamo and Afghanistan, but to bring it to U.S. shores creates a whole other level of problems,” Chris Anders of the American Civil Liberties Union said. “Right now in the United States, there are zero people being held indefinitely without charge. If the 48 are brought to Thomson it will make it easier for the U.S. to add to that number.”

    Malinowski of Human Rights Watch agreed, saying he’s concerned the administration might “institutionalize the problem” of the uncharged 48 by “making detention without charge a permanent feature of the fight against terrorism.”

    Furthermore, these groups say, under the Geneva Convention rules for treatment of prisoners during war, the detainees who remained uncharged are supposed to be free from detention in an environment consistent with a near lockdown of a supermax penitentiary. ”

    Had it gone through, that law would have been changed or ignored.


  14. “real Coca Cola from Mexico”

    which I buy by the crate at costco.


  15. they would have have needed the cooperation of our Federal Court system in the greatest subversion of our criminal justice system since WW II, which come to think of it Obama would have had no problem with.


  16. “350 convicted terrorists”

    the operative term being “convicted”


  17. Obama and Holder have as little respect for the Constitution as anybody in the GOP I’m shocked and saddened to say.


  18. “bannedagain5446, on August 3, 2012 at 2:20 pm said:

    they would have have needed the cooperation of our Federal Court system in the greatest subversion of our criminal justice system since WW II, which come to think of it Obama would have had no problem with.”

    Nope. They were going to have Congress change the law. If there was even a hint of judicial review in the offing, the whole plan would have been called off and they would have been moved to say Bagram. The entire point is to ensure no judicial review.

    There is no way that the administration, Congress, or the American people would have tolerated a court ordering the release of a “terrorist” transferred from Guantanamo.


  19. Closing Guantanamo was all a PR stunt by the administration. I stand by my original point:

    The detainees themselves are and will continue to be treated more humanely at Guantanamo than they would if they were moved to the United States. The security particulars of Guantanamo give the military commanders there considerable political leeway on how to treat the detainees that would not be tolerated if they were relocated to the United States.


  20. Glenn Greenwald points out why, yes, in fact corporations do indeed have free speech rights:

    “Free speech and donations
    A Nation writer defends the attack on Chick-fil-A. I have some questions for him and those who think like him
    By Glenn Greenwald
    Monday, Jul 30, 2012 01:50 PM EDT”


  21. Re: greenwald:
    he writes: “I actually can’t believe that there are self-identified liberals who want to use the force of law to outlaw political activism with which they disagree.”

    I thought that was the whole point of the opposition to CU. silencing objectionable speech.


  22. Gosling Black Seal is THE rum for making Dark and Stormies (rum and ginger beer) for which I think they actually have a trademark.


  23. “The Obama GITMO myth
    New vindictive restrictions on detainees highlights the falsity of Obama defenders regarding closing the camp
    By Glenn Greenwald
    Monday, Jul 23, 2012 07:10 AM EDT

    “Last week, the Obama administration imposed new arbitrary rules for Guantanamo detainees who have lost their first habeas corpus challenge. Those new rules eliminate the right of lawyers to visit their clients at the detention facility; the old rules establishing that right were in place since 2004, and were bolstered by the Supreme Court’s 2008 Boumediene ruling that detainees were entitled to a “meaningful” opportunity to contest the legality of their detention. The DOJ recently informed a lawyer for a Yemeni detainee, Yasein Khasem Mohammad Esmail, that he would be barred from visiting his client unless he agreed to a new regime of restrictive rules, including acknowledging that such visits are within the sole discretion of the camp’s military commander. Moreover, as SCOTUSblog’s Lyle Denniston explains:

    Besides putting control over legal contacts entirely under a military commander’s control, the “memorandum of understanding” does not allow attorneys to share with other detainee lawyers what they learn, and does not appear to allow them to use any such information to help prepare their own client for a system of periodic review at Guantanamo of whether continued detention is justified, and may even forbid the use of such information to help prepare a defense to formal terrorism criminal charges against their client.

    The New York Times Editorial Page today denounced these new rules as “spiteful,” cited it as “the Obama administration’s latest overuse of executive authority,” and said “the administration looks as if it is imperiously punishing detainees for their temerity in bringing legal challenges to their detention and losing.” Detainee lawyers are refusing to submit to these new rules and are asking a federal court to rule that they violate the detainees’ right to legal counsel.”

    President Obama is worse than President Bush on detainee civil rights.


    • Vote Libertarian, JNC. Oh, right.

      YJ, Don Juan is Banned.

      YJ, I think including payroll tax in the argument makes sense if you are trying to compare to JNC’s flat tax, which I think rolls payroll tax into the system, and may treat SS/Medicare as current. Right, JNC?

      Otherwise, I prefer to isolate payroll taxes against the trust funds for SS/Medicare/UI, so that the argument remains in the same terms for all its parts.

      For example, George wants to do away with entitlements because, in part, they threaten our solvency. But SS/Medicare/UI are still in surplus. They will go negative if we don’t fix them, but they can be fixed.

      Mix the partially prepaid, partially insurance devices into the operating budget and you then make them the welfare that FDR feared, politically.


  24. “yellojkt, on August 3, 2012 at 2:45 pm said: Edit Comment

    Gosling Black Seal is THE rum for making Dark and Stormies (rum and ginger beer) for which I think they actually have a trademark.”

    I’m partial to Pina Colada’s as they are so easy to make from scratch and remind me of being in the Caribbean or at least Miami.. Why anyone would ever use a pre-made mix is beyond me.


  25. “markinaustin, on August 3, 2012 at 3:03 pm said:

    Vote Libertarian, JNC. Oh, right.

    YJ, Don Juan is Banned.

    YJ, I think including payroll tax in the argument makes sense if you are trying to compare to JNC’s flat tax, which I think rolls payroll tax into the system, and may treat SS/Medicare as current. Right, JNC?”

    Correct. This effectively removes the income cap on the Social Security portion which is a long standing goal of progressives/liberals. In addition, my proposal would treat capital gains, dividends and other investment income the same as earned income from wages. To do otherwise in the context of eliminating widespread deductions isn’t a flat tax, it’s a give away to the investor class.


  26. JNC – so based on the recipe I see from your link, all i really need is some pineapple juice and Coco Lopez ® Cream of Coconut. And rum of course. My kids have some friends that are from Nicaragua who brought me back some Flor de Cana rum on their last visit. Seems like a good weekend to try it.


  27. OT, another summer of fires. It’s weird, but nice for a change, that CA isn’t in the group of states suffering from the heat. Okie’s had computer problems so I haven’t heard from her, anyone else? Our internet goes down here when it gets into the hundreds so maybe that was her problem with getting on line. Also, my grandparents on my mother’s side were part of the migration from OK during the depression where they left that part of the country behind and settled in CA.

    OKLAHOMA CITY (Reuters) – Wildfires burned out of control on Friday in Oklahoma, destroying homes and shutting down highways in a state that has suffered 18 straight days of 100-plus degree temperatures and persistent drought.

    Emergency officials counted 11 different wildfires around the state, with at least 65 homes destroyed in parched areas north and south of Oklahoma City and south of Tulsa.

    Oklahoma joins several states that have been plagued by wildfires this summer, including Colorado, Arkansas and Nebraska. Fires are being fed by a widespread drought.

    Nearly two-thirds of the contiguous United States was under some level of drought as of July 31, according to the Drought Monitor, a weekly report compiled by U.S. climate experts.

    Governor Mary Fallin, who earlier in the day invoked a statewide ban on outdoor burning after declaring a state of emergency for the state’s 77 counties, told Reuters fire conditions may be worse on Saturday.

    “The fire danger might be even higher,” she said.

    Oklahoma has contacted neighboring states for help, but they are contending with their own wildfire threats and no out-of-state help is on its way, she said.

    On Friday, Oklahoma City tied its all-time record for the highest temperature ever recorded when the thermometer reached 113 Fahrenheit (45 Celsius), a mark last recorded in the Dust Bowl days in 1936, according to the National Weather Service in Norman, Oklahoma.

    Volunteer fire departments have made a public plea for Gatorade donations to keep their crews hydrated in the scalding conditions.

    From Mark: news this morning is that an arsonist started a dozen of the fires around OkC. Dozens of homes burned to the ground.


  28. We haven’t seen okie posting recently. I hope everything is ok!


  29. I finally got tired of the Benen list each week so I actually took the time to reply to about a third of them.

    I still don’t understand why people think it’s necessary to make up their own lies to combat Romney. He certainly does lie often enough that simply exposing them should be enough. Instead you have people like Benen and Harry Reid fighting fire with fire so to speak. Hey, if you think you’re a good guy, or you want to be, then you accept that you operate under a handicap as a given. You don’t torture people, because good guys don’t torture people. You don’t create a twilight prison subject to no law. You don’t create Japanese concentration camps. You don’t harass and intimidate protestors.

    It’s just a handicap that we should be willing to live with. Otherwise let’s drop the pretense and invade Canada! They’ve got huge mineral wealth and we can beat the bastards pretty easy this time.


  30. Hey I don’t know how these things are handled, but somebody should invite Brian Thonrton to come over and once again beg sue to do so.

    There’s probably nobody whose addition would be greater than sue.


    • Agreed on both counts, DJ. Politically, we would be balancing, again, a liberal and a conservative if we got them both, but you are talking about two emotionally balanced thoughtful people, now rare at PL. Maybe Lulu can try SueK again.

      MsJS, who is a lapsed ATiMer, is also someone we should try to get back in the fold.


  31. They’re really pretty mad at me on Benen’s blog. I seem to get that everywhere I go.

    Everybody wants their own small bubble where they can close the zipper and the rest of reality can’t get in.

    This is the last outpost of civilization! (until we conquer Canada)


  32. We’re off to the beach in about 30 minutes. We’re taking the train from Corona to San Clemente pier. Unfortunately, it’s a little cool down there today.

    Anyway, I’ll reach out to sue again via email and see what she says. She knows where we are and is an author and one of the early people to come over here. She has a loyalty to Greg that I understand so I don’t like to push her too hard.

    If I give Brian my plumgirls email I’ll catch hell again from the PLers, which I don’t mind really, but I doubt brian would take me up on it as he doesn’t know me very well and so I think it would be a waste of time.

    I doubt MsJS will come back either but I’ll ask. A lot of the girls lost some interest after the battles from a few months ago. I almost bailed myself since I was sick anyway but decided to stick it out. I’m not fond of the comment sections anywhere else so here I am still.

    I would love to have more people around though, especially other girls.

    See y’all later.


    • Lulu, if you will first try to entice SueK and MsJS to drop in I will invite Brian after awhile.

      I split my britches with MsJS some time ago, as you may recall, but I did apologize to her privately.
      Never got a response, so I think I remained persona non grata.


  33. Amusing – James K. Galbraith rejects the idea of military spending as Keynesian stimulus:

    “But note, as you acknowledge, that the federal budget counts weapons systems as “investments.” Back in the 1960s, that was mainly what federal investment was. We were building nuclear bombers, submarines, missiles and warheads; today we are downsizing that arsenal, happily unused. Do you really think that those “investments” had anything much to do with economic growth? If so, you are misinformed.

    Even today, military procurement is around 40 percent of total federal “investment” – $221 billion out of about $540 billion in 2011, according to the Analytical Perspectives in the Budget. Whatever you think of the F-35 and F-22, it’s silly to add that number to (say) federal aid to education. The sum is not a gauge of anything.”

    How they can square this with the idea that World War II military spending represents the premier success story of Keynesian stimulus escapes me.


    • JNC and DJ – building 100000 airplanes in one year in relatively labor intensive factories while 16M Americans of employable age were in uniform put an end to unemployment in America with high paying jobs in abundance. The money did not go overseas to subcontractors. The pent-up demand in the economy, by late 1945, was such that supply side was Keynesian, as factories needed to retool to build automobiles, trucks, and housing components and appliances. The GI Bill IN ’46
      expanded the university experience to millions. The rest of the world was in literal ruin. We could afford to rebuild it and sustain high marginal tax rates without fear of our investment money going overseas or fear that anyone else had a skilled labor pool that could compete. Building hundreds of fighter planes now in highly automated plants does not compare, as stimulus, in magnitude for so many reasons.


      I pick ’55 b/c that was when GM and UAW agreed on such a rich contract that while it worked for awhile, once VW and the Japanese were competing again, it locked in the decline of Detroit, later.

      On a Congressional Rant Note:


  34. No to mention that defense spending is really the premier manufacturing jobs left in the country.


  35. mark

    I don’t think either of us would have any fundamental disagreement with you except that on the manufacturing side today, it’s the only button we have left to push.


  36. As I have pointed out before the ffailure of Rattner and his agreement, signed off on by the president who didn’t know any better perhaps, to have any controls on GM and Chrysler meant that a large amount of taxpayer dollars went to creating jobs outside the US and continue to do so.


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