How corporate tax credits got in the 'cliff' deal
January 2, 2013 | 6:00 pm

CHICAGO - JANUARY 2

The "fiscal cliff" legislation passed this week included $76 billion in special-interest tax credits for the likes of General Electric, Hollywood and even Captain Morgan. But these subsidies weren't the fruit of eleventh-hour lobbying conducted on the cliff's edge -- they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week.

The Family and Business Tax Cut Certainty Act of 2012, which passed through the Senate Finance Committee in August, was copied and pasted into the fiscal cliff legislation, yielding a victory for biotech companies, wind-turbine-makers, biodiesel producers, film studios -- and their lobbyists. So, if you're wondering how algae subsidies became part of a must-pass package to avert the dreaded fiscal cliff, credit the Biotechnology Industry Organization's lobbying last summer.

Some tax lobbyists mostly ignored the August bill "because they thought it would be just a political document," one K Streeter told me. "They were the ones that got bit in the butt."

Here's what happened: In late July, Finance Chairman Max Baucus announced the committee would soon convene to craft a bill extending many expiring tax credits. This attracted lobbyists like a raw steak attracts wolves.

Former Sens. John Breaux, D-La., and Trent Lott, R-Miss., a pair of rainmaker lobbyists, pleaded for extensions on behalf of a powerful lineup of clients.

General Electric and Citigroup, for instance, hired Breaux and Lott to extend a tax provision that allows multinational corporations to defer U.S. taxes by moving profits into offshore financial subsidiaries. This provision -- known as the "active financing exception" -- is the main tool GE uses to avoid nearly all U.S. corporate income tax.

Liquor giant Diageo also retained Breaux and Lott to win extensions on two provisions benefitting rum-making in Puerto Rico.

The K Street firm Capitol Tax Partners, led by Treasury Department alumni from the Clinton administration, represented an even more impressive list of tax clients, who paid CTP more than $1.68 million in the third quarter.

Besides financial clients like Citi, Goldman Sachs and Morgan Stanley, CTP represented green energy companies like GE and the American Wind Energy Association. These companies won extension and expansion of the production tax credit for wind energy.

Hollywood hired CTP, too: The Motion Picture Association of America won an extension on tax credits for film production.

After packing 50 tax credit extensions into the bill, the committee voted 19 to 5 to pass it. But then it stalled. The Senate left for the conventions and the fall campaign. Meanwhile, House Republicans signaled resistance to some of the extensions -- especially for green energy.

One lobbyist said he didn't worry too much about the Baucus bill because "we knew the House wasn't going to pass it." But another lobbyist, who had worked on the Puerto Rico issues, said he saw Baucus' bill as an important starting point that "set the parameters" of a future fight with House Republicans.

But there never was a fight. Baucus' bill sat ignored until last week, when the White House sat down with Senate Republicans to craft a deal averting the fiscal cliff.

A Republican Senate aide familiar with the cliff negotiations tells me the White House wanted permanent extensions of a whole slew of corporate tax credits. When Senate Republicans said no, "the White House insisted that the exact language" of the Baucus bill be included in the fiscal cliff deal. "They were absolutely insistent," another aide tells me. (The White House did not return requests for comment.)

Sure enough, Title II of the fiscal cliff legislation is nearly a word-for-word replication of the Family and Business Tax Cut Certainty Act of 2012.

So, this wasn't a case of lobbyists sneaking provisions into a huge package at the last minute. That probably wouldn't have been possible, many lobbyists told me Wednesday, because the workload in the past two weeks was too large and the political stakes were too high.

One lobbyist who worked on the bill over the summer said he would never ask a member " 'Hey, can you do this for a client,' when their political lives are on the line."

"The legislators and the staff go underground when things get so intense," another Hill staffer-turned-lobbyist told me. "Nobody has time for a meeting. Nobody wants to talk about what's going on. ... The key is to plant the seed months in advance."

GE, Goldman Sachs, Diageo -- they planted their seeds over the summer. They'll enjoy the fruit in the new year.

No one's gonna read that shit.

tl;dr Wrote:
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> No one's gonna read that shit.


Congress didn't read it either. Fortunately for our clients.

Thanks Barry, we owe you one!

tl;dr Wrote:
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> No one's gonna read that shit.
Attachments:

Shocking! Just shocking!

By the time the mainstream media reports on it, it's too late. (just like Iraq and WMDs, financial crisis and mortgages, and so on). Why do we keep shoveling cash to WS firms by the billions and trillions?

Not to worry--as long as they keep those money presses running, the money is going to be endless.....And the shovel to keep shoveling it will shovel on and on and on...

How many generations will it take to learn that balance is of the essence for the continuing survival of all things in the universe, including the local planetary monetary and economic systems, especially for said local universe to keep on holding together in a state of stability.

These lessons have been cycling around throughout the human element for centuries, over and over again--but, no one seems to care about learning from history any more, nor about repeating the same negative choices and their resulting experiences over and over! We seem to have have turned our destinies over to those still in a preschool level of experience and wisdom, so enjoy the ride, while they reinvent the same old wheel--over and over and over again!

(Meanwhile, be sure to watch all the survival shows that have been running epidemic on TV--you will need those skills in the future to stay alive when the kiddies in charge have succeeded in taking all your available cash with new and hidden taxes to keep the masses poor, hungry and on the dole. That is how power creates the slavery that keeps itself in power. As has been said before, an unbalanced system of any type sews the seeds of its own destruction. Every several millenia, it happens, if you believe the evidence left in the geologic record of previous global wipeouts--the whole world gets destroyed so it can be made anew, when the system can no longer be sustained in a balance.

It's all just part of the plan! Try to learn what you came her to learn so you can graduate and leave room behind you on the ladder for the infants left behind to also make the climb up and out!

Tim Carney Wrote:
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> The K Street firm Capitol Tax Partners, led by
> Treasury Department alumni from the Clinton
> administration, represented an even more
> impressive list of tax clients, who paid CTP more
> than $1.68 million in the third quarter.
>
> Besides financial clients like Citi, Goldman Sachs
> and Morgan Stanley, CTP represented green energy
> companies like GE and the American Wind Energy
> Association. These companies won extension and
> expansion of the production tax credit for wind
> energy.