The president’s latest stimulus plan is a $447 billion smorgasbord of perks for Democratic leaders and their private-sector clients, but some of the fanciest items are hidden behind the main spending proposals.
The 155-page menu offers a $30 billion program for construction at schools and $50 billion for highway construction, but it also provides a sweet tax break for building contractors who stay on good terms with city governments.
Also included is $49 billion in funding for more unemployment benefits, but also a tasty new opportunity for trial lawyers eager to sue states and companies that don’t hire enough candidates who are unemployed.
The bill includes a $35 billion project to keep state and city employees on public payrolls, and a smaller $10 billion fund that would give the federal government even more sway over the construction industry.
“As former congressman Rahm Emanuel says, ‘Never let a crisis go to waste,’” said Texas Republican Rep. Louie Gohmert. “Here we have a a crisis, the economy needs a boost, so this is their chance to get more government, more control,” he said.
“They’re using the bill to do a lot of [legislative] stuff they want to do anyway” but can’t get through a GOP Congress, added Andrew Grossman, a Heritage Foundation fellow.
The tax break is found on page 134, and is obscurely titled “Title IV … Subtitle A — 28 percent limitations on certain deductions and exclusions.” Government-regulated airport and port authorities promoted it in 2009 because it allows investors in their construction projects to protect their profits from the Alternative Minimum Tax (AMT).
But elsewhere in the plan is a section describing how the spending would be funded, and it includes language that would force more private sector employers to pay the AMT.
“Doing away with the AMT permanently for everyone would do far more for the economy in the long run than pick-and-choose tax policy that gives to some and takes away from others,” said National Taxpayers Union vice president Pete Sepp. “That’s why elected officials resist wholesale tax reform so strongly. They’d have to give up their power to manipulate the financial decisions of millions of Americans,” he said.
The conversion of 14 million unemployed Americans into 14 million potential legal clients appears on page 130 in a paragraph declaring that employers can’t exclude unemployed people from interviews. “If an unemployed person applies for job and does not get it, and believes it was because he was unemployed, he’ll find a lawyer to file a lawsuit,” Gohmert predicted. For the legal sector, that’s “14 million more clients that they’ll be able to have,” he said.
On page 133, in the fine print following the Obama plan’s list of spending programs, is a short item marked “Waiver of State Immunity.” This language requires states that accept federal money under Obama’s bill to give up their constitutional protection from federal lawsuits. So if the federal government decided that a state is not enforcing relevant federal mandates — including a new requirement that companies’ new hires include formerly unemployed people — that state would be at the mercy of the feds.
Grossman told The Daily Caller that this is an offensive — albeit legal — power-grab by the federal government and its lawyers. States have “sovereign immunity” that shields them from some federal lawsuits, but states commonly trade that immunity for federal money, he said “The state knows the devil’s bargain it is getting into. It might be bad as a matter of policy; but if the federal government is going to do it, they’ve got it clearly right there [in the bill], and that’s much better than hiding it,” he said.
On page 40, Obama’s jobs bill calls for the creation of an American Infrastructure Financing Authority. Democrats have long pushed for this bureaucracy, which they say is an innocuous way to allow federal government agencies to spur state and local infrastructure programs.
But this measure would likely prove very destructive, said Rep. Gohmert, because federal direction of the residential housing sector created the property bubble that has crippled the economy. The government status of a new infrastructure financing authority would ensure it had a huge impact on the nation’s non-residential construction industry, and its priorities would be determined by government’s desires, not by the market, he said.
“Who makes up the voting membership of the board of directors?” Gohmert asked, rhetorically. “It is seven voting members appointed by the president: That sounds like more more control to me.”
Some of the benefits for Democrats’ allies aren’t spelled out explicitly in the bill but exist elsewhere in federal regulations. For example, previous executives orders will prevent non-union contractors from claiming a share of the buffet and ensure that union-backed contractors get the lion’s share of work, said Patrick Semmens, a spokesman for National Right to Work, a Springfield, Va. advocacy group which opposes regulations that unduly benefit unions.
But the bill’s central purpose is betrayed by the numerous ways that it uses federal funding to expand government power over companies and people, Gohmert warned.
“It’s the Golden Rule” of Washington politics, he said. “Whoever controls the gold, controls the rules.”