The White House and both sides of the aisle in Congress are rushing to put together a stimulus package to limit the economic impact of the Coronavirus pandemic. While the full extent of the economic fallout from the coronavirus crisis is yet to be determined, the global economy is facing dramatic turbulence. 72% of Americans say the Coronavirus crisis has disrupted their lives, while the list of companies that are laying off or furloughing employees continues to grow.
In response, state and federal authorities are taking dramatic steps. At least half of all mortgage holders will be granted flexibility in their re-payments if they are affected, while the income tax filing deadline has been extended until July 15th. Lawmakers in the Capitol are also desperately trying to hash out a trillion dollar stimulus package, which could provide billions for industries like the beleaguered airlines as well as checks for individuals.
Despite this rare and laudable show of bipartisanship, lobbyists have come to feed at the trough. The examples of politicians and lobbyists trying to take advantage of the crisis is quite appalling. Here are just a couple of them:
- Members in the House have proposed wiping out the United States $25 billion in debt – debt that existed long before the virus ever surfaced.
- Some have proposed a provision requiring employers who receive aid to pay a $15 minimum wage to their workers.
- Others are lobbying for caps and limits private lending, which will dry up much needed capital and loans to consumers.
- There is a Democratic proposal to provide aid to sanctuary cities.
- Some want to require union representation on corporate boards.
None of these provisions have anything to do with the coronavirus. It is just political pork. Lobbyists in the nation’s capital never waste a good crisis.
As this editorial will explain in fuller detail, now energy and car industries are seeking to slip in provisions that will harm more Americans than they help. If the stimulus package is to reach its full potential, it cannot be a front for welfare for the rich.
Under the cover of the turmoil, energy and transport industry groups are seeking to score legislative goals that will work against the interests of most Americans. Electric car makers, for example, are pushing to extend the EV tax credit. The scheme slashes the tax bill of individuals and corporations by up to $7,500 if they buy from manufacturers who have sold less than 200,000 electric cars.
The problem is that the EV tax credit is first and foremost a taxpayer handout for wealthy car shoppers, rather than a lifeline for struggling manufacturing workers and their families. Among individuals who claimed the credit in 2016, the Congressional Research Service notes that 78% had an adjusted gross income of $100,000 or more. And, because the EV credit only offsets an existing tax bill, low income consumers are denied the rebate.
While restricting access to the EV tax credit for the rich has previously been proposed, the scheme remains unchanged, albeit limited, in its current form. Unsurprisingly, increasing sales to wealthy buyers through the EV credit extension has been a goal of motor lobbyists since long before COVID-19 joined the public lexicon.
To make matters worse, the EV tax credit has long been subject to wanton fraud. A report from the Treasury’s Inspector General for Tax Administration in September last year found that more than $73 million worth of potentially erroneous claims had been submitted through the scheme. A similar audit in 2011 found that one in five EV tax credit claims were erroneous. Despite almost a decade of corruption, the Inspector General’s 2019 report highlights that Treasury still does not have an appropriate process to stop further fraud.
Let’s be clear, the electric vehicle industry is hurting because of this crisis. It’s employees and their families are facing the same uncertainty and insecurity as workers and consumers across America. But opening the public purse strings to help families in a time of crisis should not be an opportunity for corporations and their wealthy customers to raid the taxpayers’ coffers.
Whether electric vehicles tax credits, private loan regulations or a postal bailout, at a time of national crisis, consumers and workers who are affected should be the first priority; and not political pork.
It is time for Washington to stop feeding at the trough.