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Rep. Fincher of Tenn. asked for earmarks, critics say

8:21 AM, Apr 25, 2012   |    comments
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By ELIZABETH BEWLEY, Gannett Washington Bureau

WASHINGTON -Rep. Stephen Fincher and other freshman Republicans have touted the ban on congressional earmarks that passed after they took office last year as a step toward reducing wasteful government spending.

But Fincher, Tennessee Rep. Chuck Fleischmann, and 63 other first-term Republican lawmakers now stand accused of betraying that spirit of fiscal restraint by pushing for consideration of a tariff measure loaded with breaks for specific imports. Critics say such breaks qualify as earmarks.

The lawmakers signed an April 20 letter asking House Speaker John Boehner of Ohio to consider a measure that would suspend duties on certain imports unavailable in the U.S. in an effort to lower costs for domestic manufacturers.

"It is already 20 percent more expensive to manufacture in America relative to our major competitors," the lawmakers wrote. "The way to build manufacturing in America and create high-paying jobs is to reduce those costs - not to raise them."

Lawmakers must propose lowering tariffs on a specific import before April 30 for the proposal to be included in the overall tariff measure. Typically, lawmakers rely on recommendations from companies in their districts to decide which imports to favor - similar to how lawmakers chose local pet projects to fund before Congress banned earmarks last year.

House rules say a tariff suspension qualifies as an earmark if it benefits no more than 10 companies.

The freshmen who signed the letter said they don't think such tariff breaks are earmarks because they benefit more than just one congressional district.

"Unlike spending earmarks, as they are sometimes erroneously characterized, a duty suspension... is available to any U.S. manufacturer - including small businesses - importing the covered product," they wrote.

But in practice, the breaks tend to benefit particular goods imported by a small number of companies, said Joshua Meltzer, a fellow at the Brookings Institution who supports the concept of tariff reductions.

That's because the breaks can't result in more than $500,000 of lost revenue, so they are necessarily narrow in scope.

"They're aimed at specific industries with very specific needs," he said. "What happens is there's not that many actual manufacturers who need that import, and therefore take advantage of the benefit."

Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense, said such benefits "have a lot of the markings and trappings of earmarks, and all the concerns we had about earmarks are still there."

But he said debating whether tariff breaks count as earmarks misses the bigger question of why Congress is involved in choosing such breaks at all. The International Trade Commission - which already examines tariff measures before they take effect - could pick the benefits and submit them to Congress for a vote, preventing lawmakers from being swayed by companies that hire lobbyists and make big campaign contributions, he said.

Although more than two-thirds of Republican freshmen signed the letter, Tennessee Republican Reps. Diane Black and Scott DesJarlais didn't.

"We've got to ensure American competitiveness, but I am worried about the government picking winners and losers," Black said.

Fincher said the expiration of tariff reductions at the end of the year would amount to a tax hike for businesses.

"Washington must stop this tax increase or employers may lay off - it's that simple," he said. "While we need to create more jobs, we also need to keep the existing jobs we already have in this country."

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