VIDEO: Lankford Criticizes ‘Corporate Payment Shift’ Phony Pay-For In Preferences Trade Bill
WASHINGTON, DC – Senator James Lankford (R-OK) made the following remarks on the Senate floor today on the ‘Corporate Payment Shift’ pay-for gimmick being used in The Trade Preferences Extension Act of 2015 (S.1267) to project deficit-neutral legislation.
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“Mr. President, I have a concern. It’s not about trade. Quite frankly, trade is one of the things we’ve done as a nation all along. We were free traders before we were a nation. One of the grievances we had in the Declaration of Independence was the fact that King George was restricting our trade. We’ve always been individuals and a nation of trade.
“My issue is particularly with this preferences bill that’s coming. And again, it’s not about the protections in it. It’s about the way — and again, it’s not about the protections in it. It’s about the way we pay for it. As odd as it sounds while we’re doing trade and while we engage in things, we can’t lose track of this simple thing called the deficit that’s hanging out there as well.
“We have basic rules on how we actually handle budget issues. Anything that we set out that’s going to take several years to pay for, we have basic rules. Those rules involve it has to be deficit-neutral in year six and it has to be deficit neutral in year eleven. The reason that’s set up is you can’t game the system that way. You can’t just back load the whole thing and say we’re going to be deficit-neutral in the very last year but every other year we’re going to run up the bill and have some pretend pay-for at the very end.
“So the way this is set up is to have this basic gap. Halfway through you are deficit-neutral. At the other end of it, you’re also deficit neutral. Well, here is what the preferences bill does. The preferences bill sets up this unique something called the corporate payment shift. Corporate payment shift. So here’s how it works. Six years from now, every corporation that has a billion dollars or more in assets has a 5.25% tax increase in year six. In year seven, every one of those companies that has a billion dollars or more in assets gets a 5.25% tax refund. Let me run that past you again. This is set up and the way the bill is written six years from now taxes go up on every company, that’s 2,000 companies in America that has a billion or more in assets by 5.25%. And until thes in — in the next year, they get a refund of that same amount.
“Can somebody help me understand exactly why every company in America has to gear up, change the way they do all their tax policies, pay an extra tax that year and so the next year they can get a refund? That’s additional costs, that’s additional expense, only to help this body circumvent the basic rules that we have said we’re going to abide by. Now, in all likelihood, these companies won’t actually do that six and be seven years from now because in all likelihood next year this body will come through and will waive the corporate tax shift because it’s now not year six and be seven. Now it’s year seven and eight and so it doesn’t apply. This is ridiculous.
“This is a problem that this body is playing a game in how we’re trying to actually accomplish a basic rule. Now if anyone can stand up in this body and say that’s a good idea that we’re going to raise taxes six years from now on all these companies and refund the same amount the seventh year, if anyone can tell me that’s actually a good idea, please do. All that’s set up to do is to be able to help us in our C.B.O. scoring.
“So here’s what I think we should do. Option number one, have a real pay-for. Not pretend and say this is a deficit-neutral bill when it’s not a deficit-neutral bill. We have a $3.7 trillion budget. I think we can find a real pay-for to be able to put into this bill. If you’re lacking for any of those, my office can give you many options that are real pay-fors rather than something fake year six and year seven.
“Here’s option number two. At least admit that this is not a deficit-neutral bill and that these pay-fors are fake. There is something this body has called a budget point-of-order and it should apply in this sense because this is not a real pay-for. Now, I have had these conversations with staff behind the scenes, with individuals in this body and I have been told the same thing over and over, this is how we always do it. In other words, you’re a new guy here. You don’t know this is how the game is played on the budget-neutral deficit eliminating bills that really don’t do that. Okay, yes, that’s true. I am the new guy here. And I’ve heard this is an old practice. And it needs to go away because no one can defend this.
“How about this? How about next week I try to go get a car loan and I try to negotiate with the car dealer a five-year loan and I tell him I’ll pay all of my loan off year four, but I want a full refund in year five for all that I paid off. Do you think I’m going to get that car loan? No. I’m not going to get that car loan because he’s going to say that’s fake. And I will say I paid it off completely — I will pay it off completely in year five. Yeah, but we paid it all back the next year. We’ve got to be able to actually have real accounting at the end of the day. This is not invisible money.
“This is debt that’s being added. And with a $3.7 trillion budget, we can find real pay-fors. Mr. President, this is a practice that has happened in this Congress and in previous Congresses that has to stop. We have the ability to do that. I have to oppose this bill because it’s not genuine in how we’re actually paying for it. Saying that we pay for it in year six and refunding in year seven is not real, and we know it. In the days ahead, I hope we can address this practice and not just eliminate for this bill but that we can eliminate it from ever being used again in any bill as a gimmick pay-for. With that, I yield the floor and I note the absence of a quorum.”