The VP of Taxpayers for Common Sense discusses tax incentives in the fiscal cliff bill that cater to special interests.
Rush Transcript:
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BANFIELD: So what would emerge later were some of the backroom details about what happened in the tense days leading up to the vote. There were ultimatums and poison pills and reports of House Speaker John Boehner F-bombing the Senate majority leader, Harry Reid, no joke.
And the political blogs are all over this. But, "Keeping Them Honest" there's another backroom angle that does not seem to be getting quite as much coverage. This bill that most people think is all about the fiscal cliff is also about calling a shopping cart full of pork not that. It's like a kennel full of pet projects and special interest spending, pork, pork, pork.
Lawmakers who barely had the time to pass the bill and who didn't have the time to pass a storm relief bill somehow found the time to extend a series of tax breaks. And now bear in mind that the tax incentives are how government shapes policy. There's tax breaks for homeowners, parents with children, charity donors, small businesses, you name it.
But according to Taxpayers for Common Sense, some of the items in this bill don't really make much common sense. Are you ready? -- $46 million in 2013 for motor speedways, clearly a benefit for NASCAR, $199 million in tax breaks for rum making, that largely benefiting a big liquor conglomerate -- $38 million in tax incentives benefiting StarKist and other companies doing business in American Samoa.
They are all in this bill and they have got nothing to do with the fiscal cliff, so to speak.
Joining us now is Steve Ellis, vice president of Taxpayers for Common Sense. Steve, the fact that these lawmakers hemmed and hawed about tax cuts for the rich and nearly drove this nation into another recession, but didn't even seem to raise an eyebrow about the billions of dollars of tax pork in this bill would seem to the layperson as outrageous. Are we sure there's nothing meritorious in some of what appears to be pork?
STEVE ELLIS, VICE PRESIDENT OF PROGRAMS, TAXPAYERS FOR COMMON SENSE: Certainly, somebody will argue they like this or whatever, but, to me, you know, this is what feeds voters cynicism about the process.
All this talk has been about fiscal cliff, and about tax rates and about the across-the-board cuts of sequestration. And then stuffed in there are dozens of these little tax provisions, some of which that expired a year ago and that they retroactively reinstated. We're looking at $70 billion or more of these expenditures in 2013.
BANFIELD: You know, sometimes something that would seem frivolous or like people call it pork or earmarks actually does benefit and stimulate the economy. Isn't there something in at least that short list that I gave you that you can see as a benefit?
ELLIS: Well, certainly, it is benefiting somebody, but the question really is, is this the best use of the taxpayers' money? These haven't really been thoroughly vetted. Once they get into this system, they just remain there.
I would argue that, yes, having the U.S. Virgin Islands bankroll a distillery for Diageo, the world's largest liquor conglomerate, so they can move their Captain Morgan operations from Puerto Rico, another U.S. territory, to the Virgin Islands, well, yes, there's some economic benefit there, but it's clearly not something the federal taxpayers should be bankrolling.
BANFIELD: When it is pork and when is it something that can actually get votes? Because clearly especially in the paralysis that we see on Capitol Hill, you got to do something to get the votes.
ELLIS: Well, there's certainly always been this talk about log rolling.
(CROSSTALK)
BANFIELD: Is that what it's called, log rolling?
ELLIS: Log rolling is often -- yes, you add something in and you just kind of keep adding it so everybody goes along. But the thing is that this got 89 votes in the Senate. I mean, how many votes? Maybe it picked up a handful by putting this in here.
But in reality, is that what we want to do? We want to have legislators vote that will against their interests or what they would otherwise do on the fiscal cliff, the big part of this package, just because some tax break got in there for -- you know, for motor scooters? BANFIELD: But what about those larger industries that say they have to have incentives like this in order to stay competitive with companies in China?
ELLIS: Well, there's a lot of reasons why things are competitive here in the United States. It's not just about the tax breaks or -- it's about an educated work force. It's about consistent laws and regulations that's predictable. It's about not having the fear of industrial espionage and theft of -- intellectual property thefts. There's a lot of reasons to be here.
But even beyond that, you look at this and you have to question is this the best use of the taxpayers' money? And what everybody has been arguing about this year has been we need to have fundamental tax reform, eliminate the loopholes, eliminate the breaks, lower the rates, expand the base. This goes exactly the opposite direction from what everybody has been talking about.
BANFIELD: But you got to admit that sometimes it's a great sport to attack what seems like silly spending. I remember the big argument over fruit flies and that drew a lot of ire. But in the end, fruit flies ended up being something that saved researchers money, because a fruit fly dies much quicker and the life cycle is faster. Therefore, you can study their patterns much quicker and save researchers money.
So can't you see in the end some of the things that don't appear maybe to be meritorious actually are?
ELLIS: Ashleigh, at Taxpayers for Common Sense, we look very hard at this. We try not to just sort of make a joke out of these things because this are serious issues and there is somebody behind this.
But in reality a lot of this is simply corporate welfare. And, yes, there's issues of research into fruit flies as you're saying or there was one olive fruit fly research that we spent money on in France, but in reality...
BANFIELD: That was decades ago, almost a half century ago, for heaven's sakes.
(CROSSTALK)
ELLIS: No, no, no. That was about six years ago.
BANFIELD: Not the Paris one. The Paris one was back in the '30s, I believe.
(CROSSTALK)
ELLIS: No, this one was in Montpellier. Montpellier, France, is where it is. There is a USDA, Department of Agriculture research station there that had olive fruit fly research.
But nevertheless the whole -- the point here is, is that a lot of this ends up being seems like it makes sense or it could make sense, but in reality we have to step back. We're a nation that is $16 trillion in debt. We have a trillion-dollar deficit we're running each year. So we have to make sure we're not just doing the nice to haves, the OK to haves, the good to haves, but the actual essentials to have.
BANFIELD: Yes.
Steve Ellis, it's good to talk to you. Thanks so much for bringing the perspective.
ELLIS: Thank you, Ashleigh.
BANFIELD: Appreciate it.
We have a lot more happening tonight as well, a lot of it outside of the beltway. The students of Sandy Hook Elementary School are going to go back to school tomorrow. It's not the same school, though, that they're going to be going to. They have a new place to learn. We will tell you all about it.
And also you will hear from the daughter of the principal who was killed in last month's shooting at the school and what she has to say about the next step for the children of Sandy Hook. That's coming up next.
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Read more of this transcript here.
Original Publication URL: http://www.cnn.com/video/?/video/bestoftv/2013/01/03/ac-steve-ellis-fiscal-cliff-pork.cnn
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