UPDATED: No tariff waivers without MTB reforms, Senate duo says

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Watchdog,Mark Flatten

Tariff waivers for hundreds of imported goods probably won’t become law unless Congress reforms the “ugly” process for getting them heard, two senators pushing for changes said today.

There is enough opposition to block passage of pending Miscellaneous Tariff Bill (MTB) legislation, particularly among Senate Republicans who view them as violations of the congressional earmark ban imposed last year, said Sen. Claire McCaskill, D-Mo.

The key to getting the process moving again is reforming the MTB process so that members of Congress are no longer required to sponsor bills for a company to receive a tariff waiver it is entitled to by law, said McCaskill.

The Missouri Democrat is co-sponsoring legislation to do that with Sen. Rob Portman, R-Ohio. Tariff waivers are available for products that have no domestic manufacturer.

With their proposal stalled in the Senate, McCaskill and Portman will attempt to attach its provisions as an amendment to an unrelated small business measure on the Senate floor this week.

Two powerful committee chairmen – House Ways and Means head Rep. David Camp, R-Mich., and Sen. Max Baucus, D-Mont., who leads the Senate Finance Committee – are the biggest roadblocks to reform, according to McCaskill and Portman.

The two reformers say MTBs are good for jobs, but the requirement of congressional sponsorship corrupts the system the same way earmarks did.

Companies that can afford lobbyists and campaign contributions do well, McCaskill said. Those that cannot should not have to “come begging” for a congressman to sponsor an MTB, she said.

“The process is not something that is transparent and there is a lot of political fundraising wrapped up in this ugly stew,” McCaskill said. “If we allow this process to continue, then we really have allowed the earmark process to continue.”

More than 2,000 MTBs have been sponsored this year, most benefitting companies that spend money on lobbyists or political donations, according to a recent analysis by The Washington Examiner.

Companies listed as the beneficiaries of 10 or more MTBs this year have spent a combined $279 million on lobbying and $25 million in campaign contributions since 2009, the Examiner analysis found.

Much of the campaign money went to congressional leaders, Camp and Baucus. Congressmen who sponsored MTBs this year have also collected about $600,000 since 2009 from companies they listed as the beneficiaries.

Importers would be allowed to apply directly to the International Trade Commission (ITC), which certifies there is no domestic manufacturer of the product, under the McCaskill-Portman proposal. Congress would retain veto  authority on all ITC waivers.

The MTBs proposed this year are stalled because many members of Congress in both parties believe they violate the earmark ban under of the current process, McCaskill said.

Portman said the compromise to get the MTBs moving again is to link their passage to approval of the reforms he and McCaskill are seeking.

“Without reform, I think it would be very unlikely it could get through the Senate,” Portman said of any pending tariff waiver.

Republican Senate leaders have signed on as co-sponsors to the reform bill. Baucus is the main impediment in the Senate because the current system gives his committee so much control over the process, McCaskill said.

Senate Democratic leaders are unlikely to allow the changes to proceed without his approval, she said.

UPDATE, 10 a.m. Thursday: Baucus spokesman Sean Neary said it is wrong to lump MTBs in with earmarks. Tariff waivers cut costs for importers, he said. Earmarks allocate taxpayer dollars to special-interest projects.

“The system isn’t broken,” Neary said.

In the House, Camp opposes the changes proposed by the two senators, said spokeswoman Sarah Swinehart.

Giving the ITC power to award tariff waivers would expand the federal bureaucracy and make it more difficult to track special interest influence, and Congress would abdicate its constitutional duty to set tariffs, she said.

Mark Flatten is a member of The Washington Examiner’s special reporting team. Contact him at mflatten@washingtonexaminer.com.

See our previous stories on miscellaneous tariff bills:
Tariff waivers open floodgates of dollars for sponsors (July 10)
Examiner publishes complete list of tariff breaks (July 6)

Tariff waivers are cash cows for Hill leaders (July 4)

 

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