Trickle-Up Economics

The budget deal is chock-full of outrageous considerations for corporations bought with campaign cash.

WHEN THE SCANDAL broke over the White House fat-cat coffees, the renting of the Lincoln Bedroom, the laundered Asian cash, and the other tawdry manifestations of Bill Clinton's selling of the presidency, the First Fundraiser defended his shady doings by proclaiming that his greed was justified because the '96 campaign was one of the most fundamental ideological battles of this century. But the budget deal announced last week incorporates most of the pernicious provisions of the Republican Balanced Budget Act of 1995, which Clinton vetoed. From the cuts in the capital-gains tax to the slashing of Medicare and Medicaid by some $130 billion, this bill is a triumph for Newt Gingrich, who can now lead the House Republicans into the '98 midterm elections shorn of the extremist label which the president's ad campaign hung around their necks last year. The political result will undoubtedly be an increase in the GOP's House majority, while in the Senate--where Democratic retirements and unpopular incumbents already give the Republicans a virtual lock on victories in Arkansas, Kentucky, Ohio, Washington, and Illinois--Trent Lott will probably now be able to pick up enough seats to override any presidential veto.

Thus betrayed by their president, the congressional Democrats behaved like lemmings: only a handful voted against the deal that will take many of them over the cliff. Dick Gephardt, who is trying to position himself as the anti-Gore for 2000, voted against the bill, but took no part in the floor debate and made no effort to persuade his troops to join him; so much for leadership. (Gephardt brought the United Steelworkers convention to its feet a week ago with his rostrum-pounding declaration that "there are more important things than making money"--never mentioning how, in a lifetime on the public tit, he has managed to acquire not only a residence in the nation's capital, but a Virginia beach condo, a vacation home in Aspen, and a lavish villa in St. Louis.)

Minnesota's Paul Wellstone, Oregon's Pete DeFazio, and Barney Frank of Massachusetts saved their honor with speeches flaying this budget as an assault on the poor that stuffs more money in the pockets of the already wealthy. But the chutzpah award goes to New York blowhard Charlie Rangel, who had it both ways: He showed up smiling and applauding at Clinton's Rose Garden declaration of a budget "victory" and then returned to the House to vote against it.

The Washington Post has identified 79 tax loopholes in the new plan designed to aid special interests, but they missed a few. The budget deal is chock-full of outrageous considerations for corporations bought with campaign cash. A perfect example of what's wrong with this devil's pact is the 11th-hour tax break won by Amway, the multinational sales giant, uncovered by the Wall Street Journal. Amway's founder, Richard DeVos, and his wife wrote two $500,000 checks to the Republicans in April to help draw down the GOP's '96 campaign debt. This cool million bucks came on top of another $416,000 that DeVos and Amway funneled to the Republicans in the '95-'96 election cycle.

As the Journal reported, Lott and Gingrich "shepherded a last-minute addition to the tax bill long sought by the company that eases the tax bite on its two Asian affiliates under foreign tax rules... The Amway provision stands out because it wasn't in either of the tax bills produced by the House or the Senate." Not only was this giveaway never debated on the floor of either house of Congress, Lott and Gingrich were able to sneak it into the budget deal with the support of the Clinton administration: Just three days before the deal was finalized, Amway secured a letter from Clinton's acting assistant Treasury secretary for tax policy saying Clinton "would not oppose" the provision.

Another example: the giant conglomerate Archer Daniels Midland, the price-fixing, bipartisan influence-buying behemoth, which was able to preserve tax subsidies for ethanol despite the opposition of the GOP's arch tax-cutter, Texan Bill Archer. ADM has been a leading soft-money contributor to both Democrats and Republicans, and the White House supported the continuation of this profligate subsidy because it benefits the corn-growers of Iowa, where Al Gore is seeking support in the state's crucial presidential caucuses for 2000.

As long as our political parties and their candidates continue to be dependent on big money from corporations and the wealthy to finance their campaigns, we will continue to be served up budgets like this one that penalize the poor and coddle the rich. That's what makes the current congressional hearings into campaign financing so important. And the American people aren't as dumb as the Beltway media make them out to be: Despite a barrage of conventional wisdom portraying the hearings as boring and inconsequential, a new CNN/Time poll shows that 58 percent of the public wants them to continue.

 
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