News and Features
Who says this is a do-nothing Congress? Sure, it can't agree on expanding the childcare tax credit or approve an increase in the minimum wage. Yet, as Congress prepares to adjourn, legislators were rushing to protect and expand tax subsidies for some of the largest, most profitable corporations in the world. Under current law, US exporters can set up largely paper presences in foreign tax havens like Barbados. The exporters can then exempt between 15 and 30 percent of their export income from taxes by routing products through these entities, called Foreign Sales Corporations. In a recent case filed by the European Union, however, the World Trade Organization ruled that the FSC tax break was an illegal subsidy.
Precedent has shown the United States more than willing to bend to the will of the WTO. For example, when the WTO ruled against an Endangered Species Act protecting sea turtles, the United States quickly eased its regulations. Yet when a multibillion-dollar tax incentive is at stake, Washington falls all over itself to protect corporate welfare.
Immediately after the WTO ruling against FSCs, the Clinton Administration, a few members of Congress and the business community began meeting in secret to work out a bill that eliminates FSC in name only while actually expanding export subsidies for a total cost to taxpayers of about $4 billion a year. The beneficiaries? General Electric, Boeing, Raytheon, Cisco Systems, Archer Daniels Midland and others. The House approved this bill with only forty minutes of debate and no amendments allowed, by a vote of 315 to 109. The bill was held up in the Senate because some objected to the tax break for arms manufacturers and subsidies for tobacco exports. Despite the objections, the bill is expected to be tacked onto a must-pass budget bill and signed by the President.
The proponents of this giveaway claim it will promote US jobs. However, the Congressional Budget Office, whose director was appointed by Republicans, has written, "Export subsidies do not increase the overall level of domestic investment and domestic employment.... In the long run, export subsidies increase imports as much as exports." The nonpartisan Congressional Research Service reached a similar conclusion.
It gets worse. The tax break may actually subsidize moving US jobs overseas. There is no requirement that a substantial portion of a product covered by the subsidies be made with US content or with US labor. An Administration official said that an eligible product could have "little or no US content" and still qualify.
Not only is the legislation not economically justifiable, it is not likely to comply with the WTO ruling. The EU has already stated that the changes aren't adequate, and it intends to seek authority to retaliate by imposing 100 percent tariffs on some $4 billion worth of US goods.
I am not a fan of the WTO. It is an unaccountable, secretive, undemocratic bureaucracy that looks out for the interests of multinational corporations and investors at the expense of human rights, labor standards, national sovereignty and the environment. But by pointing out that export subsidies like FSCs are corporate welfare, the WTO has done US taxpayers a favor. It has once again highlighted the fact that US trade policy is written by and for corporations, with no concern for workers, human rights or environmental protection.
While the differences between George W. Bush and Al Gore may still be coming into focus for many Americans in the final weeks before the election, one is already stark. On tobacco, the leading cause of preventable death in America, Bush would return the nation to the failed laissez-faire attitudes of the past. A Gore administration could be expected to continue the course charted by President Clinton, the first truly anti-tobacco President.
Indeed, a Bush administration would solve so many of tobacco's problems that the Texan is virtually one-stop shopping for an industry that has drenched his campaign with cash. For one thing, he'd change the civil justice system. Clinton vetoed tort reform bills, but Bush has made such "reform" a keystone of his proposed social policy and points with pride to his record in Texas--in 1995 he placed draconian restrictions on the right to sue. Bush would help mitigate the fallout from the recent $145 billion verdict in the Engle lawsuit--the Miami class action on behalf of thousands of Floridians sickened by cigarettes--by signing a bill pending in Congress that would send all class actions to federal court. There, Engle would be decertified, downgraded into a handful of individual lawsuits, long before trial by a federal system hostile to tobacco class actions.
As to regulating cigarettes, Bush would likely work with a Republican Congress to enact a "compromise" regulation law, limiting some forms of tobacco marketing and granting toothless federal oversight in return for liability limits and giving tobacco a seat at the table of any regulatory process. Bill Clinton was the first President to make the regulation of tobacco one of his signature policy initiatives. Although the Supreme Court ultimately shot down Food and Drug Administration oversight of cigarettes, Clinton used the bully pulpit of the presidency to put tobacco on the national agenda in a way it had never been before, fulminating against the industry for peddling nicotine to children.
Bush's record indicates he would pay lip service to keeping kids off cigarettes but would put much more energy into vilifying plaintiffs' lawyers for getting rich from lawsuits that attack the industry for targeting children. Bush has pledged to kill off a multibillion-dollar RICO action by the Justice Department that charges that the cigarette companies concealed their product's deadliness, and he would likely rescind or stymie numerous Clinton executive orders, nascent regulations and programs dealing with everything from secondhand smoke to funding research on Big Tobacco's internal documents.
Finally, Bush would be likely to back incursions by domestic cigarette makers into foreign markets. He would be much less disposed to sign on to a proposed World Health Organization treaty on tobacco and health and very prone to weaken it, to the benefit of a global tobacco industry now menacing Asia, and to the detriment of millions of potential new smokers who will become victims of cigarette-related disease.
Only months after a major victory on China trade, Big Business is again scavenging for cheap labor. This time, the high-tech industry is pressuring Congress to allow additional foreign technicians--particularly computer programmers and engineers--to work temporarily for US corporations. Congress, with the President's blessing, is poised to deliver a sweet deal to the industry, at the expense of US and foreign workers.
The 1990 Immigration Act set aside 65,000 H-1B visas each year to allow "the best and the brightest" from around the world to work in the United States for up to six years. In 1998, when the high-tech industry complained about an unbearable shortage of skilled US workers, Congress raised the annual H-1B ceiling to 115,000. The industry promised it was a one-time solution. But tech companies devoured the visas. Now their Washington lobbyists claim they are still starving for qualified workers.
Such evidence as exists, however, casts doubt on the alleged labor shortage. A recent study by the IT Workforce Data Project concluded that over the past fifty years, "there is no evidence that any serious shortages of technical professionals--engineers in the past, information technology specialists now--have ever occurred." If the industry faces a tight labor market, it's self-imposed. The industry has largely ignored its vast underrepresentation of women and minorities. Few tech firms recruit at African-American job fairs, and less than 1 percent of blacks with high-tech degrees have Silicon Valley jobs. The corporations also often shun older workers, who might require retraining or better pay.
The tech industry craves cheap labor, not skilled workers. H-1Bs, which are temporary and prohibit the holder from switching employers, fill the bill. H-1B workers cannot unionize, are likely to accept uncompetitive wages and do not receive the employment benefits that similarly skilled Americans would demand. Many companies reportedly force their foreign employees to work in factorylike conditions and routinely withhold wages and violate contracts. Foreign workers, dependent on their jobs for legal residence in the United States, are defenseless: If they complain, they risk being fired; if they quit, their employer can sue them. Their only legal remedy is a bureaucratic federal complaint process with few enforcement options. These foreign temps--indentured servants of the new economy--can either put up or go home.
Nonetheless, Bill Clinton, Congress, Al Gore and George W. Bush support raising the H-1B ceiling to approximately 200,000. Why? The computer industry alone has pumped more than $72 million into federal campaigns. Orrin Hatch and Spencer Abraham, sponsors of the Senate's leading H-1B bill, have received nearly $1 million in high-tech campaign contributions. David Dreier and Zoe Lofgren, authors of the industry-endorsed House legislation, each enjoy tens of thousands in Silicon Valley funding. Other powerful legislators have also profited handsomely from cooperating with Big Technology.
The industry is reminding its political welfare recipients that expanding the H-1B program is a top priority for the nation's tech firms. Their lobbyists are meeting one-on-one with politicians and are barraging Capitol Hill with daily "fact sheets." Chairmen of House and Senate campaign committees have received letters explicitly warning that tech companies will not support legislators who dawdle on H-1B. With control of Congress up for grabs, opposing the industry hardly seems worth the risk.
Representative Tom Davis, who chairs a GOP campaign committee and supports raising the H-1B ceiling, acknowledged, "This is not a popular bill with the public. It's popular with the CEOs." Once again, powerful corporations and unprincipled politicians are preparing to take advantage of vulnerable foreign labor, while many US workers are left out in the cold.
Activists have achieved power. Now they need to figure out how to use it.
Chase should immediately open its archives to slavery researchers.
The Supreme Court once championed antitrust laws as valued tools to limit corporate power and to promote the autonomy, diversity and economic rights of people and firms without power. Not anymore.
Jeremy Rifkin wants to rock the world of the jaded reader: He predicts that we're entering a completely new--the final--stage of capitalism.
So Ford now says the SUV
Is very bad for you and me.
It slurps gas to a fare-thee-well,
And makes the earth as hot as hell.
Its weight means any car it hits
In a small brick house strung year-round with Christmas lights, behind curtains made of flowered sheets, Jeremiah Smith is listening to his favorite preacher on the radio.
This spring the topic of antitrust returned to the headlines after a long absence as the government pursued and won (for the time being) its case against Microsoft and, in a more muted way, as Ti
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