Friday, February 02, 2007

Betty Sutton Cosponsoring Trade Bills

From the e-bag comes word that newly minted Rep. Betty Sutton is putting her name of a couple of bills as an original cosponsor. First, the Patriot Corporations of America Act:

    The PCAA will soon be introduced by Rep. Schakowsky (D-IL) and provides real incentives to keep jobs and businesses in Northeast Ohio and in America. Companies who meet the criteria of the PCAA would receive priority for government contracts and a 5% tax reduction in taxable income.

    The PCAA is a revenue neutral proposal and would be paid for by closing corporate offshoring loopholes and repealing some of the most recent tax breaks for
    millionaires. Criteria to become a Patriot Corporation requires companies to:
    • Produce at least 90% of their goods and services in the United States
    • Limit top management compensation to no greater than 100 times that of their lowest-compensated full-time workers
    • Spend at least 50% of their research and development budgets in the United States
    • Contribute at least 5% of payroll to a portable pension fund
    • Pay at least 70% of the cost of health insurance plans
    • Maintain neutrality in employee organizing drives
    • Comply with existing federal regulations regarding the environment, workplace safety, consumer protections and labor relations
Second, the Fair Currency Act, which has already been introduced as H.B. 762 (but not yet available on Thompson. Here’s what the presser has to say.
    The Fair Currency Act provides tools to American businesses that are hurt by unfair currency manipulation by foreign governments, such as China. While the Bush Administration has failed to address this issue, American workers and businesses have been hurt by a Chinese currency that is undervalued by 40%. This has led to an estimated $800 Billion U.S. trade deficit with China and endangered America's national security.

    The legislation requires the Secretary of Treasury to take action to determine if any trading partner manipulates the exchange rate.
The PCAA – whatever. If we are going to play with corporate tax breaks, it makes sense to tie them to criteria that actually helps America.

As for the currency bill, we don’t have a lot of information in the presser about what the Treasury Sec. can do once he determines that China is manipulating. From a quick and cursory search on The Google, I discovered that Sec. Treas. Paulson got cuffed around at a Senate hearing on the issue. The BushCo. line is that they are “constructively engaging” with the Chinese. Some heavy hitters, including John Dingell and Evan Bayh, are lining up to push the Administration toward a more muscular approach.

One of the unsung accomplishments of the Clinton administration was taking an aggressive stance on trade. Conservatives tend to be trade doves, letting our trading partners flout rules in a way that military adversaries could never get away with. I’m hopeful that the Congress will force

I’m not an across-the-board protectionist. That’s why I've opposed pols like Cafaro and the brothers Kucinich. But we need trade agreements to work for everyone, not just corporate management. And when we make agreements, we need to hold our partners too them. That’s why I support a guy like Sherrod Brown. I’m happy to see Sutton attaching her name to this sort of legislation.

6 comments:

Daniel Jack Williamson said...

"One of the unsung accomplishments of the Clinton administration was taking an aggressive stance on trade."

NAFTA? WTO?

boringmadedull said...

One of the few things that the Clintons did right was NAFTA and generally pursuing a free trade agenda. However, I'm not sure that their approch to China was on the right track (given the substantive allegations on national security issues).

Setting that aside, the PCAA doesn't seem to be much of an inducement, given the substantive costs associated with the requirements.

Assuming a 38% corporate tax rate, $100 dollars of income generates $38 in federal taxes. $95 generates $36.10 in taxes. For $1.90 per dollar of income I have to a) put myself at a disadvantage for getting a top noch CEO; b) pretty much agree to compulsory unionization; and c) give up on overseas competitiveness by not being able to produce products in local overseas markets.

The union positions alone are cost killers.

And in order to do this, we have to screw the successful, in order to provide a chimera of a tax break.

Government managed trade policy has alwasy been a bad idea, and this sort of thing only puts boldface on the type.

Pho said...

DJW:

That's kinda my point. Clinton muscled up trade agreement enforcement to the betterment of American business, but that fact is lost in bad feelings over NAFTA. I disagree with BMD regarding NAFTA (tho I was in favor at the time.) I feel better about WTO, tho I think what you are really referring to there is GATT.

BMD:

I think what this bill aims at is 1) symbolism and 2) slowing the race to the bottom among companies that currently meet the criteria. It would be interesting to know how many companies are included in that group. Methinks they would overwhelmingly be small businesses, which also isn't a bad thing.

And BTW, I think your assessment of compulsory unionization is overstated, unless you believe that every nonunion shop in the US routinely violates the NLRA.

Daniel Jack Williamson said...

Thanks for the clarification, Pho, on what was meant by that sentence.

BMD, I agree, our trade policy with China really does rankle. We are China's enablers. We have financially strengthened a sinister regime and I'm apprehensive about what lies ahead.

boringmadedull said...

Pho, thanks for the thoughts.

Generally, I'm not crazy about sybolism bills. 'the law of unintended consequences is the one congress always passes'.

I agree, it's aimed at smaller companies. Whether it would help them or not is another story.

On the union issue, my general thought is that unions are a product of a) poor management (you get the union you deserve, and if you've got a union, you had problems that you did not address) and b) it's an imperfect world, and sometimes people do stupid things like join unions out of ignorance, fear, or greed, irrespective of condition a).

Roman said...

• Produce at least 90% of their goods and services in the United States
Why? It's cheaper overseas and Americans want the biggest bang for their buck.

• Limit top management compensation to no greater than 100 times that of their lowest-compensated full-time workers
Hmm. There's a word for that... let me think...communism...yes.

• Spend at least 50% of their research and development budgets in the United States
Why? All the really smart people are in China, India and Eastern Europe.

• Contribute at least 5% of payroll to a portable pension fund
Can you say 401k?

• Pay at least 70% of the cost of health insurance plans
Why? Don't we all want National Health Care?

• Maintain neutrality in employee organizing drives
Code for having a Union and therefore having no work meritocracy.

• Comply with existing federal regulations regarding the environment, workplace safety, consumer protections and labor relations
Um yah don't we have to do this anyway??

O Betty Boop this is just a paper tiger you're supporting. Don't be a classic liberal and do something for Lorain, if you have figured out where that is, by the way.