Friday, October 3, 2008
Giveaways attract, repel in bailout bill
Puerto Rican rum distillers, wooden arrow makers and wool researchers are just a few of the big winners in the $700 billion Wall Street bailout bill that was filled with obscure tax breaks and other sweeteners in an attempt to bolster its chances in the House on Friday.
But the bill's "pork barrel" provisions on Thursday became a major target of a group of Republican lawmakers who said the sweeteners had soured them on the rescue package and were pushing an amendment that would drastically reduce their presence in the legislation.
The pork "just jumps out at you," said Rep. Steven C. LaTourette, Ohio Republican and the amendment's sponsor. "And rum? I like the Virgin Islands, but why are we handing over $192 million for a rum subsidy in a bill that supposed to rescue the American financial markets?"
Rep. Spencer Bachus, Alabama Republican, said the bill passed by the Senate Wednesday included "a series of pork-barrel projects that are simply unacceptable."
Late Thursday it was uncertain whether Democratic leaders in the House would allow a vote on the amendment, which also would lower the amount the Treasury Department could initially spend on the bailout itself.
One of the most widely ridiculed provisions would repeal a 39-cent excise tax on "wooden practice arrows used by children" -- worth $2 million over 10 years. And it was just one of many special provisions in the Senate's 451-page economic recovery package that would add about $107-billion to the annual federal budget deficit over the next decade, according to an estimate by the Congressional Budget Office.
Others included renewable energy incentives and personal tax credits, and all were meant to coax more House Republicans to vote for the bailout after the House voted it down on Monday.
"It gives you insight into the sausage-making process, except the result isn't delicious -- it's more like a razor-blade sandwich," said Andrew Moylan, government affairs manager for the National Taxpayers Union.
The provisions are often referred to as "tax extenders" because they are renewed only periodically. Among other beneficiaries: Hollywood filmmakers, racetrack owners and fisherman who received legal settlements relating to the 1989 Exxon Valdez oil spill.
The wooden arrow tax break covers "any shaft consisting of all natural wood with no laminations or artificial means to enhance the spine of the shaft used in the manufacture of an arrow that measures 5/16 of an inch or less and is unsuited for use with a bow with a peak draw weight of 30 pounds or more," according to the Senate bill, which would also save the Wool Trust Fund $148 million over the next decade to promote "the competitiveness of American wool."
• Staff writer Sean Lengell contributed to this article.