"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi

Another Political Show Vote By Democrats Risks Putting U.S. At “Competitive Disadvantage”

September 27th, 2010 by mopns · No Comments

After wasting time last week on playing politics, Senate Democrats now finally appear interested in discussing issues related to the economy. But unfortunately, they’ve decided to prioritize another political exercise instead of seriously doing something to foster economic growth.

According to The Wall Street Journal, “The Senate will consider a bill this week aimed at discouraging U.S. businesses from outsourcing jobs overseas, a plan that Democrats describe as an effort to fight unemployment but which Republicans deride as a pre-election political maneuver. Democrats admit they don’t have enough votes to defeat a possible attempt by Republicans to block the bill. But they hope that bringing the issue to the Senate floor will underscore their concern about unemployment, now at 9.6%.”

Democrats’ admission that they don’t have 60 votes for this bill is just one of several factors indicating that this is once again an unserious exercise. Certainly, Democrats haven’t been reading the Constitution very closely this Congress, but this latest bill, S.3816, presents a bit of a problem for them. The bill originated in the Senate, but it “rais[es] revenue,” in other words, raises taxes, and the Constitution states that “All bills for raising revenue shall originate in the House of Representatives.” So if Democrats really wanted to pass this bill, they’d have used a House-passed bill as a vehicle for this language.

Another problem pointing to Democrats’ unserious approach is that of timing. Majority Whip Dick Durbin (D-IL) told Roll Call last week that Democrats were eying adjourning by the end of this week to go home and campaign. But before Congress leaves, it must pass a continuing resolution (CR) to fund the government until Congress reconvenes, because Democrats have failed once again to complete work on appropriations bill before the end of the fiscal year on September 30th. Senate Majority Leader Harry Reid (D-NV) has already filed for cloture to move to a continuing resolution this week. But if cloture is invoked on Democrats’ “outsourcing bill,” that will leave no time to also take up the CR if the Senate is to leave by Friday. So Democrats either expect to lose the cloture vote tomorrow or plan to spend little to no time on the bill.

And that’s without even getting into the substance of the Democrat bill, which some Democrat senators are already criticizing. The Wall Street Journal reports, “Sen. Max Baucus, the Montana Democrat who chairs the Senate Finance Committee, expressed concern last week that the bill would damage the competitiveness of U.S. companies, said Congress Daily, a Capitol Hill publication. ‘I think it puts the United States at a competitive disadvantage,’ Mr. Baucus said. ‘That’s why I’m concerned.’” The WSJ also notes, “The Business Roundtable, a trade group representing chief executives of big U.S. companies, sent a letter to senators on Friday urging them to vote against the anti-outsourcing bill, saying it would harm the economic recovery and result in job losses.” Recall that the Business Roundtable was a close ally of Democrats and the Obama administration in passing their unpopular health care bill. Yet even they think Democrats’ competitive disadvantage bill is a bad idea.

The Wall Street Journal’s editors have little patience for this poorly conceived legislation. “Democrats may be dodging a vote on the Bush-era tax cuts, but that doesn’t mean they don’t want to raise taxes before November. Witness this week’s showdown in Congress over increasing the tax on the profits of American companies with foreign subsidiaries to punish firms that relocate plants overseas. How much more harm can this crowd do before it’s run out of town? Like so many others, this tax increase is being promoted by President Obama, who declared last week that ‘for years, our tax code has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries. I want to change that.’ Democrats around the country are making this issue their number one campaign theme, since they can’t run on health care, stimulus or anything else they’ve passed into law.” The editorial continues, “We’re all for increasing jobs in the U.S., but the President’s plan reveals how out of touch Democrats are with the real world of tax competition. The U.S. already has one of the most punitive corporate tax regimes in the world and this tax increase would make that competitive disadvantage much worse, accelerating the very outsourcing of jobs that Mr. Obama says he wants to reverse.”

The WSJ editors conclude, “The lesson here is that tax rates matter in a world of global competition and the U.S. tax regime is hurting American companies and workers. Mr. Obama would add to the damage. His election-eve campaign to raise taxes on American companies making money overseas may not be his most dangerous economic idea, but it is right up there.”

What Senate Democrats, encouraged by President Obama, have here is another political show vote, designed almost exclusively for themselves to campaign on, and not with an eye to actually addressing serious economic problems or even having a serious debate in Congress. It’s long past time for Democrats to stop playing political games and do some real legislating on something that would help all Americans, including job creators: preventing massive tax increases in January.

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