Washington is in danger of inspiring a second tea party movement to stop cronyism and the overspending that has crippled the American economy. One of the biggest problems contributing to the $35 trillion in debt and annual deficits approaching $2 trillion a year is cronyism. The lobbying interests in Washington have secured some terrific deals for a handful of companies and individuals that contribute to the lack of a will on the part of Congress to try to balance the budget.
Cronyism is government doling out jobs, cash and contracts to friends and those who help politicians get elected. Merit for the spoils of government is tossed aside in favor of favoritism. Many politicians and bureaucrats have forgotten the adage “Not Yours To Give” when doling out taxpayer money taken from taxpayers or borrowed from future generations. The practice needs to end if our government is ever going to cut spending.
I was one of the leaders of the tea party movement, which came to Washington demanding change. The passage of the Troubled Assets Relief Program, more commonly referred to as the Wall Street Bailout, and the spending spree inspired by President Barack Obama, which led to Obamacare and massive spending on green energy programs, all helped motivate Americans to demand change. The movement led to the elections of Republicans Rand Paul of Kentucky and Mike Lee of Utah while being an inspiration for today’s House Freedom Caucus. That movement may be rejuvenated if things don’t change.
This is not a Republican versus Democrat battle. It is the American people versus a Washington that has lost its way. Studying the ways Congress is taking from the poor and giving to the rich is a way to find waste, fraud and abuse in government spending to end it. There are numerous examples, large and small, but some are so hidden that you may have never been made aware of them.
One classic example of cronyism is something called the “Duty Drawback.” Special interests are pushing confusing legislation that would give large importers of foreign whiskey preferential treatment. Sen. Bill Cassidy, R-La., has introduced a counterpart to legislation by Rep. Morgan McCarvey, D-Ky. Under current law, whiskey importers are allowed to avoid duties, taxes and fees if they export whiskey. Still, the point of this legislation is to expand the provision to allow for the export of products other than whiskey to qualify for the avoidance of paying the government. It seems reasonable, but it is not for a few reasons.
The free-market position would be to abolish all these fees, duties and taxes importers pay. An across-the-board abolition of these payments to the government would be the fairest way to inspire competition. The problem is that this provision is used to benefit large importers to the detriment of smaller ones. In other words, favoritism in law provides a competitive advantage to some that smells of cronyism.
This is a complicated issue that deals with Harmonized Tariff Schedule codes and the types of commodities that qualify. Changing the codes seems like a technical correction of law, yet exporting something that is not the same as what you import appears to fly in the face of the law’s original intent. It makes sense to give credit for exporting the same thing you import, but it makes no sense to give credit for exporting something different.
A big problem with how this is structured is that the companies that benefit from the Duty Drawback don’t merely withhold the payment of all the fees, taxes and duties and keep the cash. The government doles out checks to these companies that total in the billions. It makes no sense for the government to collect all this money and then fire off a check to these same companies under this provision of law. There is a cost associated with all the bureaucracy it takes to collect and then send money from the Treasury to large multinational importing companies.
The Duty Drawback is one illogical government program that makes sense only in Washington. There are many more. It may be time for the second tea party movement to rise up and push politicians of both parties to get their act together or find new jobs.