House Version Of Bailout Bill Examined
ROBERT SIEGEL, Host:
By Friday, we expect the bailout bill will be voted on in the House of Representatives. As its supporters have been at pains to point out, the Emergency Economic Stabilization Act of 2008 is not just for Wall Street but for Main Street. And the fact is that the package of tax incentives attached to it also finds some side streets and some back roads to benefit as well. It includes billions of dollars of tax breaks and credits for the likes of Microsoft, Harley Davidson, and the wool manufacturers. Many of the provisions are extensions of existing tax incentives, but some others are new. Keith Ashdown is the chief investigator for Taxpayers for Common Sense. He's been pouring over each line of the 451-page bill. Welcome back to the program, Keith.
KEITH ASHDOWN: Hello, Robert. Nice to be with you.
SIEGEL: Let me ask you about a new tax break that's made some headlines. The children's wooden arrow tax break, 39 cent excise tax repealed, what's that about?
ASHDOWN: Well, what we have with that tax provision was it's a provision that supports a few manufacturers of wooden arrows in the state of Oregon and, I think, one or two manufacturers in Wisconsin, and it provides an excise tax reduction on the manufacturing of wooden arrows.
SIEGEL: But as I understand it here, the provision in question would exempt wooden arrows that are made for children's bow and arrow toys from the broader category of wooden arrows which would still pay the excise tax.
ASHDOWN: Yeah, correct. It was Senators Wyden and Gordon Smith from Oregon that decided that this was an important provision. And it's unclear if this is moving votes, but it's definitely something that is sort of added, sort of a left turn on this bill at the last moment here.
SIEGEL: An interesting fact, Senator Wyden - who had promoted this on behalf, I gather, of Oregon manufacturers - ended up voting against this bill last night in the Senate.
ASHDOWN: Yeah, and I think, principally, you know, this is one of the toughest votes that a lot of our lawmakers have ever had to make on a piece of legislation. Nobody's happy with the legislation. But at least in the Senate, there was this idea that, hey, this is the last legislative train leaving the station, so let's put as much baggage onto it as possible. And that's why we had an increase of $110 billion to the final package that was voted on last night.
SIEGEL: And would save the 10 manufacturers, evidently, of children's toy wooden arrows $200,000 a year for the next 10 years, a $2 million tax break.
ASHDOWN: Right. You know, according to reports, one of the manufacturers is this company called Rose City Archery in Myrtle Point, Oregon, and they are definitely one of - one company that's definitely benefiting from this final bill.
SIEGEL: Now, there are two tax breaks. They're estimated at $478 million for movie and television producers who choose to shoot films in the United States. Do we know who sponsored that one?
ASHDOWN: The long-term supporter of these types of tax breaks has been a woman named Representative Diane Watson who is from Southern California. I don't know who the Senate sponsor is, but we know Representative Watson has been a big advocate for Hollywood to keep their production in the U.S.
SIEGEL: Keith, these are not spending projects. These are tax incentives. So I guess they're not technically earmarks. But they are provisions that individual members work for, try to get attached to something, and in this case they get attached with, I would say, dubious relevance to this huge bailout of the financial sector.
ASHDOWN: Exactly. Under congressional definition of them, they're called tax earmarks. So they're a little different that we're normally dealing with in the annual appropriations bills. But what listeners should remember, it's these are, you know, honey pots. You want to add them as slices to legislation, so it's like the old adage of sausage making this right. There's a lot that is being added to this bill, so we can have a final vote in the House that firms the legislation, so the president can sign it.
SIEGEL: So that some member can say, sure, I voted for that bill, but for me it was a matter of keeping 20,000 movie set jobs in this country instead of see them go north to Canada, or something like that.
ASHDOWN: In some of these provisions, to be fair about - the proponents will argue that they have some economic stimulus. And so, you know, what I've heard from Capitol Hill all week is this is one of the toughest bills anyone's ever had to vote on. Nobody likes the legislation, but everyone feels that we have to do something to make sure we turn our economy around.
SIEGEL: Well, Keith Ashdown of Taxpayers for Common Sense, thanks a lot for talking with us again.
ASHDOWN: Thank you.