Pay raise for federal judges and tax shelters snuck in Auto Rescue/Bailout bill
Let's say you're a Congressman and your constituents are begging for a bronze statue of Johnny Cash in the center of town. Fortunately, there's an important bill being voted on this week, so you just slide a federal funds provision for "urban improvement" in there and vote Yes for the larger matter along with your buddies. It's called pork and the Auto Rescue/Bailout Bill approved by the House last night contains a couple bites of it.In addition to approving $14 billion in government loans for the Detroit 3, the bill also provides a cost of living adjustment (COTA) for federal district judges, otherwise known as a good old raise. They currently make $169,300/year, which some fear is too little for the important function they serve. Normally these judges earn exactly what those in Congress make, but while politicians in the House and Senate automatically get a COTA each year, they must vote to give the same to judges. The Senate has already approved this year's COTA for judges, but the House hasn't. To remedy this, Senate Majority Leader Harry Reid (D-NV) slipped the provision into the Auto Rescue/Bailout Bill. This also has the added benefit of hiding the raise behind the larger issue of aid for U.S. automakers, as the general populace might not look kindly on any government employee getting more money in the midst of a recession.
The other piece of pork in the bill involves a big tax shelter for corporations that allows them to avoid paying taxes. We had a hard time following exactly how this one works, but Zac over at BloggingStocks is really miffed about it, so it must be bad.
[Source: Wall Street Journal, BloggingStocks]
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Reader Comments (Page 1 of 2)
Joe K. 2:36PM (12/11/2008)
Pretty creative way for the Crooks to buy justice.... on the backs of taxpayers...
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Rick 2:38PM (12/11/2008)
Just like the financial bailout,dems need to put in some PORK to get the republicans to vote for it.They love to hold out on important issues to get the loot they crave above anything that benefits the people.
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Dinger 1:21PM (12/15/2008)
Rick,
The Dems control both houses of Congress. They don't need any Republican votes to pass a bill. The pork is there because the legislation is so bad they can't get enough Dems to vote for it to pass.
Blaming problems in Congress on the Republicans while the Dems control BOTH houses is like blaming the waterboy instead of the head coach.
BrianFL 2:38PM (12/11/2008)
Maybe that corporate tax break is going to that Alabama senator's auto plants? He has been against the bailout from the begining since his state stands to benefit from them collasping. Just speculating...
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MJL 2:40PM (12/11/2008)
Thankfully, Judge Judy is not (and was never) a federal judge
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jamie 2:41PM (12/11/2008)
Only turkeys eat pork.
It's about time that all these gerrymandering and pork filled Congressmen take a long hike off a short pier. They would make good shark fodder, though I'm not sure which one would win.
We elect people who are supposed to represent our best interests while maintaining a decorum of valor. With all the shady deals and corruption going on in government nowadays, it's time to wipe the slate clean and start over gain. Today's leaders have made a mockery of our fine political, economic and judicial system.
Sorry for ranting off topic. But stuff like this wouldn't happen if every bill was separate from every other bill. NO PORK! EVER!
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Alex Nunez 2:47PM (12/11/2008)
Nobody "snuck" in anything. These guys practically brag about doing this s*it. This whole thing is a very unfunny joke at the taxpayer's expense.
TaxProf has a post with all the relevant links regarding the tax shelter:
http://taxprof.typepad.com/taxprof_blog/2008/12/big-3-bailout-bill-includes.html
Basically, the tax shelter thing involves transit agencies selling assets to another party, from whom they then lease said assets back from, allowing said other party to claim the depreciation on the assets. Click the link above, which explains why Chuck Grassley's pissed, and also has a link to a WSJ op-ed on the matter.
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stecki 2:50PM (12/11/2008)
obama will fix it, don't worry...
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Yar 3:10PM (12/11/2008)
Will that be before or after he walks across the Atlantic and opens up non-provisional talks with the Ayatollah?
Jj 2:53PM (12/11/2008)
It would be great if this sort of thing were illegal, but that would be a very difficult thing to do.
Why? Because it’s the main bargaining chip that congressmen have to get votes for their bills. Take this auto industry “bailout” package. If you need a few votes to get it passed you go find someone from a district that does not have a lot of auto industry in it. His constituents don’t really care one way or another how he votes because it doesn’t effect them so politically, he can vote either way without too much worry of it biting him in the next election. But he has his own agenda so you add some pork to the bill that does affect his district and you can chalk him up as a yes vote.
Congress will never outlaw the practice because it gets them votes on their bills and get small pet projects done that otherwise would probably never see the floor.
Not saying it’s a good thing by any means…just the way it is.
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Polly Prissy Pants 3:33PM (12/11/2008)
I believe in the private sector that's called bribery.
Samurai Jack 4:13PM (12/11/2008)
Actually there is a solution to this. It's called the line item veto. It's a power the Republicans managed to pass towards the end of the Clinton administration that was slated to take effect when Bush took office. However it was ruled unconstitutional shortly afterwards.
Since most states have line item vetoes in place the way to change this is to propose a constitutional amendment, then get the states -- not Congress -- to ratify it. Then trust that the President (of either party) has the political will to use it wisely.
Nightcrawler 3:03PM (12/11/2008)
It sounds like they are skeptical of having enough votes for the bailout to pass the Senate. If it doesn't pass, does anyone have a good feel as to the implications? Do GM and Chrysler have enough cash left to hold on until the new administration and new Congress take office, when the bill could be considered anew?
It was always going to have to be revisited anyway, because the $14B was far less than they needed. That amount was just to buy some time for Obama to take over.
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Alex 3:05PM (12/11/2008)
I throught it was a COLA (Cost Of Living Adjustment)?
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Pip 3:18PM (12/11/2008)
Yeah, it looks like a COLA, but it probably shouldn't be attached to these sorts of bills. They need to keep all this extra stuff out on its own and be voted on by itself rather than as a big package of who knows what. Hopefully it'll be voted against, or maybe even Vetoed until the extras are taken out.
Dems didn't get put in power to do this sort of thing. Now they need to do what we elected them to do.
Fingers crossed.
happy_penguin 3:18PM (12/11/2008)
Yeah, I never heard of COTA.
1337 5:35PM (12/11/2008)
Perhaps drugs are getting expensive these days...judges need a COTA (cost of tripping adjustment).
notYou 3:24PM (12/11/2008)
from BloggingStocks (who autoblog seems to concur with): "The scheme costs the government tens of billions of dollars each year."
I love the government-centric mindset where a loss of revenue (read: letting people/corps _keep_their_own_money_) is referred to as a "cost".
The presumption being that it's not your money, it's _theirs_ - and you keeping it is the problem.
Oh, and before you cite the complexity of the scheme as the issue, realize that it's actually only a symptom. People/corps rely on "schemes" like this because they're trying to keep what is _theirs_ not _yours_.
It's precisely thinking like this which has gotten us into this problem.
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joseph 3:26PM (12/11/2008)
The reason we should be against the Fed. judges and any other person in that kind of power from making too much money is because you don't want someone doing such an important job for the money (and yes 169k a year should provide a comfortable life)... they should do it for the priveledge the honor. For this reason i believe corporate ceo's should never make too much money... i'm looking at you all you financial ceo's. Although i belive the auto industry would be hurting still but not nearly as much as it is right now because of the lack of financial backing.
Also i like that the Auto Ceo's are working for only a dollar a year however, the lack of "new" blood may hurt the industry in the long run. As a 24 year old male i believe that they have become disconnected with the public. Which isn't their fault alone but with the introducion of technolgy they had the ablity to read the masses minds but durring the hay day of suv's, and big trucks they forgot that they also had the task of developing and alteritive i.e. cars. i believe they had such tunnel vision that they could not see another segment that had the ablity to grow even larger than the truck market and omg out sell the American love F series. so how does the U.S. and soon to be world Auto industry recover from such a blow. First slow production and lay off workers (bravo GM, Ford) it sucks to say but if you have to lay off people to save the company then it is there duty to step down graciously (UAW you have to learn this it doesn't matter how many employees a company has if it goes under!), Second you must build products that the masses want and not build more then you can sell (very important!!! the japanese are starting to run into this problem) Third and maybe the most important once this is all over and there is still a big three or two remember this could happen again so save money for a rainy day.
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RG 3:28PM (12/11/2008)
In Columbus, COTA (Central Ohio Transit Authority) is the regional bus service.... Somehow I don't think the judges and senators would appreciate the new found perk of riding the bus to work.
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