MOUNT VERNON — One man’s pork is another man’s just desserts. The earmark spending programs, or “pork,” included the financial bailout plan Congress passed on Friday have been controversial, as mainly small, specific groups will benefit from the extra initiatives, according to Taxpayers for Common Sense, a nonpartisan budget watchdog group. The earmarks were included as incentives to sweeten up the bill to uncommitted members of both political parties.
“The inclusion of about $112 billion in pork barrel spending in the $700 billion bailout is yet another indication that the U.S. Congress is not very concerned about what it takes and what it spends of the American taxpayers’ money,” said Lou Petros, chairman of the Knox County Republican Party.
Knox County Democratic Party chairman Jim Zak said he was very disappointed to see pork added to a bill in such a serious situation. The controversial encrustations were added by the Senate after the House of Representatives rejected a more focused bill.
“The senators need to be held accountable for what they did,” Zak said.
Some special interests that aren’t directly related to the bailout will benefit handsomely from provisions in the law. For instance, importers of rum from Puerto Rico and the U.S. Virgin Islands will receive rebates of $13.25 per gallon of the $13.50 per gallon excise tax they are required to pay. That will cost taxpayers $192 million in lost revenue in the next two years. In the same time period, IRS regulations will be circumvented so that motorsports racing track owners can depreciate their facilities in seven years instead of the IRS-dictated span of 15 years. Cost: $100 million.
But are those true costs? It turns out that both the rum and racing track depreciation earmarks are extensions of policies that have been in place for many years. Thus the programs are not costing taxpayers any new money, they are merely extending the status quo those businesses have grown to rely on.
Regardless of its popularity, some of the so-called pork has clear enough reasoning behind it. One of the most expensive initiatives in the 451-page law is Section 301, which is estimated to cost taxpayers $19 billion in the next two years. This is for a research credit, awarding a tax break to companies and corporations reinvesting money into research and experimentation. Without such tax credits, the fear is that many of these companies would relocate to other countries which do offer tax incentives.
There is a $3.3 billion program for payment in lieu of taxes to rural schools and communities in the west; the program was specifically installed to help communities surrounded by federal lands, which do not receive any property tax revenue. Another program of the same cost allows residents of states without income tax to deduct their higher sales taxes from their federal taxes. One program offers $478 million over 10 years to film and television production companies; again, there are fears of losing part or all of this industry to cheaper overseas producers.
The only perks likely to benefit a handful of Ohioans directly are deductions of the costs of creating cellulosic biofuel plants and equipment, allowing companies to write off expense reimbursements to bicycle commuting employees, the same as automotive mileage is written off, and interest from the abandoned mine reclamation fund being transferred to the United Mine Workers of America to help pay benefits owed to retired miners in Appalachia.
