Week of June 14, 2004

For Immediate Release:

June 14, 2004

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» Please view "The Weekly Whip" for the week of June 14, 2004

» All referenced documents are bundled in a PDF here

Energy Week
 
As part of their political agenda, dubbed "Hire our Workers" and "Careers for a 21st Century," among other slogans, Republicans declared the week of June 14th "energy week" (originally scheduled for the week of June 7th).
 
As they have for several weeks, Republicans will once again recycle bills that have already passed the House in place of real action on important issues.  (H.R. 4503 - Energy Policy Act and H.R. 4529 - Arctic Coastal Plain Domestic Energy Security & Abandoned Mine Lands Reclamation Reform Act (ANWR))

Over six months ago the House passed an energy conference report that was drafted solely by Republicans.  However, the Senate has refused to pass the conference report, which was said to be "three parts corporate welfare, one part cynical politics."
 
Democrats should make it clear to the American people that Republicans have failed to complete a bipartisan, comprehensive energy bill that would address our country's energy needs and the major energy challenges facing the next generation of Americans.
 
At the very least, legislation responding to the summer blackout that affected 50 million Americans and cost the economy billions, as well as market manipulation on the West Coast by Enron and other energy corporate giants, should have been passed months ago.  There is bipartisan support for the reliability part of the energy bill and Democrats support separating and passing provisions that deal with it immediately.

The attached documents may be helpful in doing press on these issues next week:
  • An Editorial Board Memo produced last year by the Representatives Hoyer and Dingell on the shortcomings of the energy conference report
  • Middle Class Squeeze - Prices at the Pump: The Bush Gas Tax, produced by the Committee on Education and the Workforce
  • The Cheney Energy Task Force and Higher Prices at the Pump, produced by the Democratic Policy Committee
  • Article from CBS.com regarding Enron tapes
  • Talking points on HOW and Energy Week prepared by the Office of the Democratic Leader
 
Foreign Sales Corporation (FSC) Tax bill (H.R. 4520)
 
This week the House is scheduled to consider H.R.4520, a modified version of H.R. 2896, Ways & Means Chairman Thomas’ bill to replace the FSC/ETI tax regime.
 
Republican inaction on this matter prompted trade-related sanctions imposed by the European Union on a wide variety of US products (mainly agricultural, metals, machinery, and electrical equipment) that began March 1, 2004 and could eventually amount to $4 billion.
 
Chairman Thomas has ignored substantial bipartisan agreement in the House and Senate over how best to address this problem, and in an effort to overcome two years of bipartisan opposition to his effort to increase incentives to move American jobs overseas, he has cobbled together a variety of corporate tax breaks, extenders and other sweeteners that have nothing to do with reforming international tax law. 
 
This bill is different enough from H.R. 2986, which was reported on a party-line vote by the Ways & Means Committee in November 2003, that the Chairman has had to take his bill back to committee again.  The markup of the new bill will be on Monday, June 14th.  
 
THERE ARE MANY REASONS FOR DEMOCRATS TO OPPOSE CHAIRMAN THOMAS’ BILL:
1. Continues to Push Tax Breaks for Overseas Investment and Jobs Abroad.  During a time of historic job loss in America, Thomas retains as the core of his bill $35 billion in incentives to U.S. firms to invest overseas.  The cost of these incentives rises when timing gimmicks are removed.
2. Adds to the Deficit. At time of historic deficits and lack of realistic budget plan, H.R. 4520 includes nearly $150 billion in gross tax cuts with a net cost of $32 billion over the next five years.
3. Broad Corporate Tax Cut rather than targeted US Manufacturing credit.  Thomas also chose to use revenue from repeal of FSC/ETI to provide a broad and complex tax break for larger corporations (including those with international production), rather than more focused relief that would also benefit smaller manufacturers and farm cooperatives that create jobs and have production solely in the US.
4. Safe-Harbor for Religious Political Speech.  Thomas added a controversial provision similar to one the House rejected on a bipartisan basis in 2002 lowering fines and making it more difficult to revoke the tax-exempt status for religious organizations that improperly mix religious and political activity.
5. Extraneous Provisions Likely Dropped in Conference.  In a speech to the Federation of American Hospitals this Spring, Chairman Thomas described his views on the legislative process: “The other thing that is really lousy about legislative bodies in a democracy is that everybody has the same vote.  So you have to take their interests into consideration if you want their vote, unless you can figure out a way where they think they’re getting something and they’re not, but that only happens once usually.”  Thomas could employ this strategy with extraneous provisions such as tobacco buyout and the deductibility of state sales taxes, both of which are scaled-back versions of proposals that Democrats in certain states have supported, and it remains to be seen if GOP conferees will support them
 
6. Holds important and popular tax extenders hostage.  A one-year extension of the R&D Credit, wind and renewable energy credits, and welfare to work credits are among $14 billion in extenders that have been purposely delayed so Thomas can use them as cover for his cause.
 
7. Controversial revenue raisers on individuals used to offset cost of corporate tax incentives. Buried in the fine print of Thomas’ 400-page bill are provisions to outsource IRS debt collection, create additional paperwork for charitable contributions and only nominal punishment of companies and individuals that expatriate in order to avoid taxation.
 
Also attached:
  • Tax Legislation Worthy Only of The Trash Heap by Steven Pearlstein (Washington Post, June 9, 2004)
 
Interior Appropriations bill and Homeland Security Appropriations bill
 
Republican policies have resulted in record deficits that are hampering our nation's ability to invest in important programs.  The consequences of these policies will be apparent throughout the 2005 appropriations process.
 
Next week the House will consider the Fiscal Year 2005 Interior and Homeland Security Appropriations bills.
 
The Interior Appropriations bill contains a decrease in funding from the Fiscal Year 2004 bill and the President's request.  Democrats are concerned with inadequate funding for the Land and Water Conservation Fund and the National Park Service.
 
The Homeland Security bill contains an overall increase in funding (an increase of $2.8 billion, or 9.4 percent, above the fiscal year 2004 enacted levels, and $896 million, or 2.9 percent, above the President’s request), however it fails to invest adequately in several programs. 
 
The Fire Grant Program, which provides grants to local fire departments to buy equipment and provide training and has been cut from $750 million in Fiscal Year 2004 to $600 million in Fiscal Year 2005.  It also decreases investment in First Responder Grants by $439 million from Fiscal Year 2004 levels.  Additionally, it does not require all cargo on passenger aircraft to be screened and it does not fund the SAFER program to help local departments hire additional first responders.