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Sen. Tom Coburn announced today that he would not allow easy passage through the Senate of bills that don’t pay for themselves in the same year the money gets spent.
The move could hamper Senate efforts to quickly pass popular legislation and allow sanctions against Myanmar to lapse.
During an exchange with Senate Finance Chairman Max Baucus (D-Mont.), the Oklahoma Republican said he has grown tired of budgetary gimmicks that allow legislation to be paid for with increased taxes or fees almost a decade in the future. It has become common practice to pay for short-term extensions with changes in fee schedules more than nine years in the future.
The dispute came to a head today when Coburn tried to call up his own version of a trade package on the Senate floor that includes an extension of trade sanctions against Myanmar and trade incentives for African countries. Baucus pointed out that the sanctions against Myanmar actually expire today.
Myanmar has taken steps toward democracy after being ruled by a repressive military junta. The Senate’s leaders on the issue — Minority Leader Mitch McConnell and Intelligence Chairwoman Dianne Feinstein (D-Calif.) — say that while the country has shown signs of progress, the sanctions authorization should be renewed for another year to ensure the United States has the tools to keep pushing the new government in the direction of increased freedom.
McConnell traveled to the country in January, where the Kentucky Republican met with pro-democracy leader Aung San Suu Kyi.
Coburn said he will not support efforts to expedite the legislation without changing the offset to one that actually pays for the measure as the spending happens.
“I’m not going to be a part of kicking the can down the road again. I am not going to be a part of playing gimmicks where we ask corporations to overpay their taxes so we can get around the 1974 Budget Act and PAYGO,” Coburn said. Baucus responded that the provision has been used repeatedly.
“This is not the first time we’ve used the corporate timing shift,” Baucus said. “I nonetheless understand that Sen. Coburn now has concerns about the offset. I am willing to work with him to find [alternative] offsets in future trade bills. We need to move forward on this bill in its entirety as soon as possible.”
In effect, the government assumes that companies will prepay their taxes due 10 years from now and then have them refunded several months later, once the 10 years covered by federal budget rules expire. Coburn said he refrained from offering offset amendments during a committee markup because he knew Baucus would throw them out as nongermane. He also disputed Baucus’ contention that the bill is actually paid for, even though it complies with budget rules.
“I would put forward to the American public that if you went to Wendy’s this afternoon and said, ‘Give me a double cheeseburger, and, oh, by the way, over the next 10 years, I’m going to pay for it,’ most Americans would not say it’s paid for,” Coburn said.
“We’ll never solve our other problems until we get out of the mindset of saying, because of the rules, we can stretch out the payment and call it paid for. This bill isn’t paid for,” Coburn said. “It’s going to be paid for by the people who import things 10 years from now — not now.”