The Daily Strike-5/4/09-Tax Havens

Good evening and welcome to the Daily Strike. Make sure you're all caught up on the upcoming week in politics by reading our previous entry!

THE WHITE HOUSE: The big event at the White House today was a join announcement with the President and Treasury Secretary Tim Geithner on tax reform. The plan calls for the IRS to hire 800 new investigators to investigate offshore tax loopholes. The plan would also reform deferral rules, thus raising taxes on multinational corporations by about $240 billion. I talked earlier about how that's not really a lot of money, but on second thought, if it eliminates incentives for companies to ship jobs overseas, it could help facilitate long-term economic growth. The way it is now, our tax code provides a competitive advantage to companies who ship jobs overseas. Even worse, companies avoid paying their fair share of taxes by claiming that they are "headquartered" in places like the Cayman Islands. Obama pointed out today that one address in the Cayman Islands houses about 18,000 businesses. I'm pleased with the tone this new policy will set, but I still have my concerns. As journalist David Sirota wisely points out, the Panama Free Trade Act, being pushed by U.S. Trade Representative Ron Kirk, runs completely counter to this new policy. According to Public Citizen a new report "details how Panama explicitly created an industrial policy designed to create a 'comparative advantage' in tax-evasion and money-laundering services for entities such as the bailed-out American International Group (AIG) and Mexican and Colombian narcotraffickers." Not cool.

Obama also took time out of his day to call Senators Hatch (R-UT) and Specter (D-PA) to solicit advice on his Supreme Court nomination. Apparently, Hatch said that Republicans would be happy to cooperate if Obama nominated a consensus Justice, and not a radical. Press Secretary Robert Gibbs said that Obama hopes to be a good way through the nomination process by the August Congressional recess. I hope they get it done sooner than that, because an August recess is a perfect time for Republicans to mount a smear campaign.

ON THE HILL: Meanwhile, Obama's court nominee will face a new ranking Republican on the Senate Judiciary Committee. Republicans have apparently chosen Jeff Sessions (R-AL) to replace Specter as the top Republican on the committee. Sessions was lower in seniority on the committee than either Hatch or Charles Grassley (OH), but Hatch has already served as chair of the committee, and Grassley is the current ranking member of the Finance Committee. The irony of Sessions' ascent is that his own nomination for a federal court seat was defeated by the Senate Judiciary Committee in 1986 because of his "insensitive views" on race. As U.S. Attorney in Alabama in 1984, Sessions spent hours interrogating voters in predominantly black districts for voter fraud, finding 14 allegedly tampered ballots out of 1.7 million cast. Sessions tried to prosecute three civil rights workers, including a former aide to Martin Luther King Jr. The workers were acquitted after four hours of jury deliberation. What a great new face for the Republican party!!

The full Senate held two votes today on amendments by Senator Clown on the "Helping Families Save Their Homes" act, a bill implement loan modification programs. The first amendment wasn't TOO clownish, though it was certainly not germane to the matter at hand. The amendment would have removed any impediments to the repayment of TARP funds. The amendment was defeated 39-53 by a majority who obviously doesn't trust anything David Vitter does. Democrats Bayh (IN), Kohl (WI), Nelson (NE) and Webb (VA) joined 35 Republicans in voting yes. Republicans Corker (TN), Gregg (NH) and Lugar (IN) voted with the Democrats. Finally, Specter joined his new party on an important vote!

The next amendment was TRULY clownish. It would have stipulated that the primary function of the Federal Housing Administration was to stay financially solvent. In other words, the goal of the FHA is not to help people stay in their homes and protect their nest-egg with low-cost loans, but to "save money." You have got to be kidding me. Why don't we just let all the people who rely on FHA loans suffer because we want to make a cheap political point about fiscal responsibility? Luckily, the amendment was soundly defeated 36-56. This time, no Democrats crossed the aisle. The only Republican voting now was Voinovich (OH). Again, Specter voted on the good side. He's 2 for 4 since his party switch.

On the House side today, they voted on a couple of bills under suspension of the rules. House Democrats also unveiled their version of a spending bill for the wars in Iraq and Afghanistan. The bill gives President Obama pretty much everything he asked for, except money to close down Guantanamo Bay. Appropriations Committee David Obey expressed major concern about the administration's Afghanistan policy, but said that he was willing to give the new President one year to prove that he can make real progress. The bill will include benchmarks that will measure the success of the mission. I hope that President Obama agrees to these conditions.

That's it for us today. Please leave us some comments! See you tomorrow night!!