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POLITICS

Is 'MTB' the new name for earmarks?

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Politics,Beltway Confidential

First of a three-post series

Eyelash curlers and nail clippers. Electronic ice shavers and battery-operated jar openers. Leather and non-leather basketballs.

These are some of the things members of Congress have busied themselves with in recent months, introducing more than 1,200 bills to grant special exemptions from tariff duties for those and other products sought by certain favored companies.

The measures – known as Miscellaneous Tariff Bills (MTBs) – waive or substantially reduce government duties charged on a wide variety of imported goods, ranging from ordinary kitchen utensils to complex chemical cocktails, usually for three years.

To get the exemption, the domestic companies that use or sell the product must convince a member of Congress to introduce an MTB. It is then referred to either the House Ways and Means Committee or the Senate Finance Committee.

There is little chance an MTB will be disallowed, so long as it meets the statutory requirements that there are no domestic manufacturers of the product and the cumulative annual cost will not exceed $500,000.

Supporters say MTBs save American jobs by cutting manufacturing costs. Critics argue the MTB process favors big companies that hire pricey lobbyists and make generous campaign contributions.

Other critics worry that MTBs are in some ways analogous to earmarks as a kind of pork barrel favor, even though earmarks spend tax dollars, whereas MTBs merely waive tariffs.

The Congressional Budget Office (CBO) estimated that the last MTB, passed in 2010, cost nearly $300 million in uncollected duties over three years.

It’s too early to know which companies will benefit most from MTBs filed this year, or how much the tariff exemptions will be worth. The deadline for filing the bills expired earlier this month.

A Washington Examiner review of tariffs bills introduced since the current congressional term began last year identified more than 1,200 that will allow free or substantially reduced import fees on certain goods.

Most of those bills extend existing exemptions that expire in December for another three years. Others add new products to the list. Approved MTBs will be bundled together in one big bill later this year, for an up-or-down vote by Congress.

Rep. G.K. Butterfield, D-NC, sponsored the eyelash curlers MTB, as well as separate measures to eliminate fees on nail clippers and manicure and pedicure sets, all on behalf of the Revlon cosmetics company, said Saul Hernandez, Butterfield’s chief of staff.

Revlon is a big employer in Butterfield’s district, Hernandez said, and no American company makes the products covered by the MTBs.

Butterfield has received no campaign contributions from Revlon or individuals listing the company as their employer, according to the Center for Responsive Politics. He has, however, received $10,000 since 2009 from the political action committee of Revlon’s corporate parent, MacAndrews & Forbes.

Another sponsor of unusual MTBs is Rep. Bobby Scott, D-Va., whose name is on at least 20 MTBs for kitchen appliances, including electric knives, portable slow cookers and electric skillets.

But some seem tailored to a specific product, such the Scott MTB for self-contained, carafe-less automatic drip coffee makers with an electronic clock. Another targets certain types of battery-operated ice cream makers.

A third Scott MTB waives the tariff on electromechanical ice shavers and a fourth allows duty-free importation of combination single-slot toasters with ovens.

The beneficiary of Scott’s bills is Hamilton Beach Brands Inc., based in Glen Allen, Va., which is just outside of Scott’s district.

“We are talking about jobs,” Scott told the Examiner. “Particularly in this economy, you have to help these companies as much as possible.”

Scott has received no campaign contributions since 2009 from Hamilton Beach, individuals naming the company as their employer, or its parent corporation, Ohio-based NACCO Industries.

Other unusual items targeted for tariff waivers include:

  • Electric wine bottle openers through a bill sponsored by Rep. Keith Ellison, D-Minn. Other Ellison MTBs cover certain coupon holders and swimming pools.
  • Leather basketballs would get an exemption via an MTB by Rep. Brett Guthrie, R-Ky, who also sponsored measures to waive tariffs for rubber basketballs, basketballs having an external surface other than leather or rubber, and volleyballs.
  • Artichokes prepared in vinegar or acetic acid through a bill sponsored by Rep. Rodney Frelinghuysen, R-N.J., who introduced a separate bill exempting artichokes prepared other than by vinegar or acetic acid.
  • Rep. Bill Pascrell, D-N.J., sponsored bills to waive the duties on capers and pepperoncini, both preserved and not preserved by vinegar or acetic acid.
  • Camel hair, vicuna and Kashmir goat hair through a variety of bills sponsored by Sen. Joseph Lieberman, I-Conn. The main beneficiary of that bill is a Connecticut textile company.
  • Fireworks of various sorts through bills sponsored by different members.

The most generic product targeted for an MTB came from Rep. Mel Watt, D-N.C., who described it as for “certain other made up articles.”

Next: MTB process favors big corporations.

Mark Flatten is a member of The Washington Examiner’s special reporting team. He can be reached at mflatten@washingtonexaminer.com or 202-459-4929. Jennifer Peebles, the Examiner's data editor, contributed - mightily - to this series.

Part I - Is 'MTB' the new name for earmarks?

Part II - MTB process favors big corporations

Part III - Bipartisan Senate duo seeks MTB reform

 

 

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