The New Bipartisanship: The Big Sting

Robert Borosage

“When the American people choose divided government, I don’t think it means they don’t want us to do anything,” Senate Republican leader Mitch McConnell told reporters. “We ought to start with the view that maybe there are things we can agree on to make progress for the country.”

After the Republican electoral tsunami, McConnell, architect of the Republican scorched-earth campaign of obstruction against all things Obama, emerged as the voice of reason, instantly congealing a new conventional wisdom in Washington.

McConnell and the old guard of the Republican Senate are now looking to show that they can govern, the story goes. This offers the president a chance to add to his “legacy.”

McConnell will have to rein in zealots like Texas Sen. Ted Cruz who still want to repeal Obamacare. Obama should not “poison the waters,” as McConnell put it, by issuing his long promised executive order on immigration reform. “There will be no government shutdowns and no default on the national debt,” McConnell promised (while also pledging to use budget procedures to pass policy amendments that the president opposes). The new Republican leadership “opens up new possibilities for deal-making after years of partisan gridlock,” the Wall Street Journal reported. “It’s time for us to stop politics and start legislating — that is what we were hired to do,” said Sen. Rob Portman , a Republican from the battleground state of Ohio.

Often omitted from this patter is even the briefest glance at the substance of the proposed areas of cooperation. One peek reveals an iron law of Washington: When the two parties agree, Americans should hold onto their wallets.

For what unites the parties is the big – and increasingly dark – money that pays for their campaigns. When they agree is often when the rules get rigged to favor the few, and the deck stacked against the many.

The current agenda is clear proof of that. McConnell suggests that agreement might be found on fast track trade authority to help pass the Trans-Pacific trade accord now being negotiated, on corporate tax reform, on eliminating the employer mandate in health care, and perhaps passage of the Keystone pipeline while opening up export of oil and natural gas abroad.

This is not the agenda of the voters who voted for either party two weeks ago. It is the agenda of the Chamber of Commerce. As the right-wing National Review concluded, “Though tax reform and trade are good ideas, voters are not, in fact, waiting anxiously for any of this. Business lobbies are.”

Senator Hatch sonorously announces, “We are going to have a Republican Senate that wants to govern.” But the question is, govern for whom? The bipartisan baubles listed above not only do not address the fundamental challenges facing this country – an economy that doesn’t work for working people and catastrophic climate change that poses a real and present security risk – they make them worse.

Fast-track trade authority gives the president the power to force Congress to vote on whatever treaty he puts before them with limited debate and no ability to amend. The key treaty – the Trans-Pacific Partnership – is being negotiated behind closed doors, with global corporations and banks in the back rooms. It is less about trade than about curtailing the power of nations to control global corporations.

Since the passage of NAFTA under this model, our trade policies have racked up the largest trade deficits in the history of money. We have shipped good jobs abroad and undermined workers at home. Even the International Monetary Fund and the Federal Reserve agree that the resulting deficits contributed directly to the financial wilding that blew up the economy. And even today, we are running greater deficits with China than ever witnessed in history. If we were running a balanced trade regime, we’d be close to full employment at home, with wages beginning to rise across the board.

Corporate tax reform begins with the lie that American corporations pay the highest taxes in the world. In fact, with loopholes and tax dodges, their effective rate is far lower, while their profits capture the highest percentage of the nation’s income ever.

While there will be much talk about sweeping corporate tax reform – lowering rates while closing loopholes to make up the revenue – prospects for that are slim. Corporate lobbies battle each other to a standstill to preserve specific tax dodges. When Republican Rep. Dave Camp brought forth a comprehensive plan in the last session of Congress, his own Republicans wouldn’t even allow it a vote. 

The most likely fix is more limited and more outrageous. Multinationals have stashed over $1 trillion abroad to avoid US taxes, that are levied only when they bring the money home. They are pushing hard for a deal that would allow them to “repatriate” the funds at a discounted rate – 7 percent is often used. Democratic votes could be won by using some of the money collected to fund much-needed infrastructure projects and put people to work. The corporations also promise to invest the rest of the money, helping jobs and growth. Bill Clinton has been enlisted to sell this package.

This puts attractive wrapping around a rotten fruit. The last time multinationals were given a deal like this, there was no investment boom. They used the money largely on stock buybacks (hiking CEO bonuses) and on mergers. Worse, each time this sting is worked, more corporations stash more profits abroad in order to prepare for the next giveaway.

The proposed bipartisan agenda is simply an insult to voters. According to the election eve AFL-CIO poll, 87% of voters reported that they were treading water or sinking in this economy. The Washington Post exits showed nearly 2/3 thought the economy was rigged for the rich.  Hart Research polling shows Americans oppose fast track for the TPP trade treaty by two to one.

Nearly three-fourths (73 percent) of voters in the contested states that Republicans virtually swept support “increasing taxes on the profits that American corporations make overseas, to ensure they pay as much on foreign profits as they do on profits made in the United States,” while only 21 percent oppose this.

Americans are sick of partisan gridlock. We want the parties to cooperate and “get stuff done,” as the President put it. But the “stuff” we want isn’t on the agenda of the business lobbies. And the bipartisan agenda now being celebrated is yet another example of how the rules get rigged.

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