Fiscal cliff deal: TARP 2.0
In the fall of the 2008, the Bush Administration and Congress ironed out the details of what would come to be known as TARP in secret negotiations, hoping that rent-seekers on Wall Street would react positively. Fast-forward to 2013 — Washington has done it again.
Matt Kibbe, President and CEO of FreedomWorks explains that Congress has again stuck it to hard-working Americans with the passage of the “fiscal cliff” deal that not only raises their taxes, but includes special interest tax breaks and corporate welfare:
On New Year’s Day, Republicans and Democrats joined together to bilk taxpayers with their phony “fiscal cliff” deal. They voted to raise taxes on 77% of Americans, yet larded the bill with pork, corporate welfare, and special-interest giveaways. They voted to increase spending by $330 billion, while throwing around buzzwords like “compromise” and “deficit reduction.” And they once again postponed the promised sequester spending cuts negotiated in 2011.
It was a team effort. Senator Mitch McConnell and Joe Biden drafted an outrageous bill behind closed doors; Harry Reid gave Senators all of 6 minutes to read and vote on the bill around 1:30am on New Year’s Eve when nobody was watching; Speaker Boehner scheduled a rushed, up-or-down vote in the House the following day without allowing for sufficient time to read or amend the bill.
This type of collusion against the average American is no surprise. Republicans have been negotiating with themselves ever since the Boehner-led House Republicans passed the consensus “Cut Cap Balance Act” in July 2011 and then began walking away from it. Democrats have been winning since that day, and the goal of fiscal responsibility has been losing.
The latest McConnell-Biden deal (which I consider to be TARP 2.0 for the way it was crafted in secret and contaminated with special deals) is a microcosm of the world surrounding power and politics. It’s exactly the type of insider horse-trading we saw over four years ago with the TARP bailout, which gave rise to the first wave of the Tea Party movement.
While Republicans and Democrats in Congress voted to raise taxes on 77% of Americans, they extended the existing special interest loopholes in our tax code, including $119 million for companies to hire Native Americans, $3.71 billion for “leasehold, restaurant, and retail improvements,” $248 million for film production expenses (we’re subsidizing Hollywood), $222 million for rum production in Puerto Rico and the U.S. Virgin Islands, $12.1 billion for the wind production tax credit and $2.18 billion for biodiesel producers.
If we are ever going to take our country back, we have to stop the collusion of big government and big business. The truth is, big business loves big government.
Rather than competing to be a top market performer, corporations hire Washington lobbyists to compete in the rat race for special deals and government handouts.
Corporate welfare is unfair and harmful to all of us, regardless of whether we are playing for the red or blue team. Politicians on both sides of the aisle and their corporate cronies pick winners and losers in the marketplace at the expense of everyday individuals. The fiscal cliff deal raised taxes on nearly all Americans, so that politicians in both parties can continue to give our money to connected friends and campaign donors.
Kibbe also explains that the United States need a fairer, more simplified tax code that “treats all Americans equally — not Beltway power players competing to carve holes in our tax code bigger than a slice of Swiss cheese.”
“It shouldn’t matter who has the best lobbyist in Washington, because when the heavy spenders close out their tab, it’s ‘We the People’ footing the bill,” wrote Kibbe.
The cover of The Economist from this past week really says it all. What was a seemingly slow decent into a European-style welfare state has been accelerated under President Obama. As Veronique de Rugy recently explained, the “fiscal cliff” deal passed by Congress still brings taxpayers a deficit of $6.9 trillion over the next 10 years.
Hey, but at least the special interests don’t have to worry about getting stuck with the tab. As long as they keep sending donations to their buddies in Washington, they won’t have to worry about anything.
The “fiscal cliff” taught us the same thing that TARP did — Cronyism is alive and well in Washington. And the charlatans in Congress who decided to help the special interests by voting for this bad deal may soon find themselves out of a job.