Iran Election Guide

Donate to EAWV





Or, click to learn more

Search

Thursday
Aug252011

US Politics Feature: Can a Senator Named Coburn Cut $9 Trillion from the US Government's Debt?

Back in July, in the midst of the contentious negotiations over raising the ceiling on the debt of the US Government, Sen. Tom Coburn (R-Okla) released his plan, "Back in Black", to cut $9 trillion from the deficit over the next ten years and ultimately balance the federal budget. At 615 pages, and with over 3,000 footnotes, the report delivers on its author's promise to be a “thorough and exhaustive review” of the spending habits, or mishabits, of thousands of federal programs.

Coburn has long been a champion of identifying fraudulent or wasteful spending by the federal government. At his official site, he lists as his accomplishments since becoming a senator in 2004 as, in order, "Making Government Spending More Transparent and Accountable to Taxpayers", "Eliminating Billions of Dollars of Wasteful Washington Spending", and "Leading the Fight Against Corrupt, Pork Barrel Spending".

"Back in Black" leaves no stone unturned in uncovering wasteful government spending, including the suggestion that Washington eliminates its policy of liaising with Hollywood. Coburn notes the deficit could be cut by $34.5 million over ten years if this relationship was ended: “Many federal agencies have offices and programs to assist Hollywood movie producers and television execs, often with the goal of ensuring a positive portrayal of the federal government. The agencies have at least 14 employees costing $1.2 million.”

But Coburn's maverick reputation goes beyond the silver screen. Next on his list of accomplishments in his short senatorial career is "Stopping Billions of Dollars of Secret Spending", as he “single handedly saved taxpayers billions of dollars by blocking more bills than any other Senator". His website explains how he has used "holds" to stop the increasing use of the "hotline", or unanimous consent, method to bills which increase spending with no debate on the floor of the Senate.

In 2007, Politico reported on this new development: “A typical bill moving through the Senate has a number of institutional hurdles to clear: subcommittee, committee, leadership, and Coburn. It’s that last one that you won’t find in a textbook." Donald Ritchie, an associate Senate historian, said that Coburn's hold on 95 pieces of pieces of legislation in 2007 was a “jam-fest [that] likely ranks as one of the most prolific in the history of the institution.”

It is a stance that Sen Coburn has not relinquished, sending a letter with seven fellow Republicans to colleagues in March to explain the criteria a piece of proposed legislation would need to meet before they would allow it to be considered.

The point of this soliloquy on the achievements, in his eyes, of Senator Tom Coburn is that he has lived up to his promise to be a "citizen legislator", including his declared commitment to term-limit himself and retire as a Senator after this, his second, term. His history in the Senate suggests that when Coburn takes on a cause, he does so free from most of the considerations of a career politician. And that makes his recent decision to take a seat on the obscure Senate Finance Subcommittee on Taxation and IRS Oversight such an intriguing one.

This subcommittee has not been, as The Hill notes, a “hotbed of activity” in recent times, and the Senate Finance Committee website has no explanation of what its remit actually comprises. But, like all subcommittees, it can consider specific legislation if it is referred to it by the main Finance Committee. So "Coburn is given [a] new platform to battle special tax breaks", with his spokesman saying, “ Coburn looks forward to advancing the agenda he outlined in his $9 trillion deficit-reduction plan".

The relevant part of his agenda, in relation to the appointment, is Coburn's ideas for raising revenue by ending certain tax breaks. The Republican position that taxes cannot be increased to raise revenue is unlikely to change in the forthcoming super-committee meetings, charged with finding $1.5 trillion in deficit reduction over ten years, and the Democrats' call for a "balanced approach" of increased revenue alongside spending cuts is also unlikely to change. So Coburn's proposals in "Back in Black", some of which are contained in the report in the bi-partisan Bowles-Simpson Commission and "Gang of Six" in which Coburn took part, become a likely default solution to America's need to find a way to reduce the national debt in a meaningful manner.

Of the $9 trillion overall that Coburn believes can be trimmed from the deficit, $8 trillion would come from spending cuts like the government ending its liaison with Hollywood, and the rest results from increased revenue by “ending special interest giveaways, selling unused federal assets, and eliminating spending through the tax code".

Coburn's disagreements with Grover Norquist of Americans for Tax Reform have been well-publicised, with Norquist arguing that that ending any tax break that results in someone paying more in taxation as a result is actually a tax increase. And, if some of Coburn's recommendations on reforming the tax code actually are enacted, he is unlikely to make it onto the Christmas card list of the Chamber of Commerce or most business lobby and special-interest groups.

In the introduction to the section in "Back in Black" on "Reforming Tax Expenditures & Ending Special Interest Giveaways", Coburn goes after both wealthy individuals and corporations for enjoying significant advantages under the current tax code. He criticises the provision whereby individuals with an income of more than $1 million used the mortgage interest deduction to “benefit” from more than $7 billion in tax relief last year, and he is particularly scathing about a system of deductions that saw 18,000 Americans, with an income of more than $200,000, pay nothing in taxes in 2008. In perhaps his most glaring deviation from the tired cliché that conservatives are only interested in protecting the wealth of their favoured constituency, he approvingly quotes the admonishment of Donal J. Marrion, former member of President George W. Bush's Council of Economic Advisers, that “tax preferences are social safety-net programs. They are middle- and upper-income entitlements.”

Corporations, at least those with powerful lobbying groups able to plunder the tax code for their own benefit, are also targeted for criticism by Coburn, along with the politicians who participate in this politics as usual relationship. He comments, “Washington continues to make the problem worse --- doling out new tax breaks and subsidies in the form of tax credits to well-connected companies and special interests with powerful lobbyists who seem to have more influence than most members of Congress.” And to make sure his objection is understood, he then states, “The tax code was designed to collect from citizens only those resources truly needed to fund basic federal functions, but has become the latest playground for Washington politicians to hand out benefits to their favorite special interests.”

The recommended policy changes that follow this introduction make for interesting reading. Sen Coburn highlights the special interest advantages enjoyed, among others, by the stock-car racing giant NASCAR, Hollywood, Alaskan whale boat captains, fishing tackle box manufacturers (reform here would save $11 million over ten years), and the Tribal Economic Development Bond Program, which allowed for the construction of the Arizona Diamondbacks' and Colorado Rockies' luxury spring baseball training facility in Arizona.

Coburn also calls for reform of a system that allows General Electric to receive $4.7 trillion in tax credits over three years and an end to the IRS tax exemption for recipients of the TARP bailout, and he uses the New Markets Tax Credit to illustrate how large corporations manipulate the tax code to their own advantage. This credit, intended for “individuals investing in businesses that provide capital to low-income residents in low-income communities”, was used to subsidise the $116 million renovation of Blackstone Hotel in downtown Chicago, with Prudential Financial Inc., the second-largest US life insurer, receiving $15.6 million in New Market Tax Credits.

But this is all a moot point if Sen. Coburn receives no support for his plan in Congress, which makes some of the names of the Senators also on his new Subcommittee worth noting. Fellow members of the "Gang of Six", Mike Crapo (R-Idaho) and Kent Conrad (D-NorthDakota) are there, both of whom are advocates of some of Coburn's tax reform ideas. So is Sen. John Kerry (D-Massachusetts), who, according to admiring historian Douglas Brinkley, "will be striving for a legacy accomplishment that will cement his role in US history as one of our nation’s master negotiators"

Most significantly, Coburn was appointed to this subcommittee after Sen. Max Baucus (D-Montana), Chair of the Finance Committee, accepted a place alongside Sen. Kerry on the super-committee on deficit reduction. With Coburn retiring after this term, he is not a career politician dutifully filling the party ranks on a subcommittee. Instead, he will be looking to enact parts of his "Back in Black" agenda, and he may do so in a a friendlier environment than in the full Senate.

That prospect brightened as the Republican ranking member of the Senate Finance Committee, Orrin Hatch (R-Utah), softened his opposition to revenue increases, arguing, “We need to look across the board at tax expenditures, and not simply at whatever subset happens to serve political or campaign interests. And we need to clean out our tax code. It is riddled with tax expenditures which, while often instituted with good intentions, have generated an inefficient tax code.”

Washington has a notoriously Byzantine manner of getting things done, but if his new subcommittee is ordered to write out new legislation reforming the tax code as part of a super-committee deal, Coburn will wield enormous influence. After all, he has a comprehensive plan ready to go. If that is the scenario that ultimately plays out, it will be fascinating to see the response of special interests, business lobbyists, and advocacy groups like Grover Norquist's --- can they maintain their hold over a Congress newly determined, and chagrined after the nation's credit downgrade, to begin finding a long-term solution to America's debt problem?

PrintView Printer Friendly Version

EmailEmail Article to Friend

« Bahrain (and Iran) Feature: Nokia Siemens Accused --- Again --- of Assisting Regime Detention and Abuse | Main | Syria (and Beyond) LiveBlog: Yesterday's Conflict »

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>