GOP Sens. Filibuster ‘Insourcing’ Tax Credit Bill
A bill to provide a tax credit for U.S. companies “insourcing” jobs while simultaneously ending a credit that purportedly rewarded outsourcing failed to advance in the U.S. Senate Wednesday, after Republicans filibustered the bill when their proposed amendments were not considered.
Senators voted 54-42 in favor of cloture on S. 2569, the Bring Jobs Home Act, falling short of the 60 votes required to end debate, with the measure failing to win support from even a single Republican senator.
Prior to the vote, several Democratic senators had urged their colleagues to support the bill, with Sen. Debbie Stabenow, D-Mich., describing it as a “no-brainer” that would help stem the flow of U.S. jobs being moved overseas, and Sen. Dick Durbin, R-Ill., saying it would also bring jobs — in particular “good-paying manufacturing jobs” — back to the U.S.
“I don’t know what the debate’s about,” Durbin said. “I don’t know what Republican could go to a town meeting in any state in the union and argue this is not a good idea.”
The Bring Jobs Home Act was designed to provide new incentives for businesses to bring overseas-based jobs to the U.S., or insourcing, while closing a tax loophole that rewards companies for outsourcing jobs away from the U.S., according to Stabenow and co-sponsor Sen. John Walsh, D-Mont.
It would have provided a tax credit for 20 percent of the costs companies incur for shutting down an overseas business unit and relocating to, or opening an equivalent business unit in the U.S., barring severance fees for overseas workers, as long as the number of full-time or full-time equivalent U.S.-based workers at that company increased during the year for which they claim the credit.
Conversely, the bill would also have blocked any tax deduction for costs related to the relocation of business units outside of the U.S., ending a “loophole” allowing companies to claim the moving costs when sending jobs overseas as a tax-deductible business expense, Stabenow said when introducing the bill.
Senators had overwhelmingly agreed in a 93-7 vote on July 23 to begin consideration of the bill, even after Senate Minority Leader Mitch McConnell, R-Ky., had slammed it the day before as “campaign rhetoric” ahead of the November midterm elections and indicated that it would not win Republican support to go forward.
Sen. Rob Portman, R-Ohio, however, indicated that although he did not believe in the utility of the Bring Jobs Home bill itself, he nonetheless believed the issue of how lawmakers could support “economic patriotism” and keep jobs in the U.S. — particularly through comprehensive corporate tax reform — was worth discussion.
Reflecting this view, Republicans suggested several amendments to the bill, including a measure proposed by Sen. John McCain to lower the effective corporate tax rate for the return of overseas earnings to the U.S. from 35 to 8.75 percent — 5.25 percent if the relevant company expands their U.S. payrolls — and penalize those who eliminate full-time U.S.-based jobs by imposing an additional tax burden.
But Senate Majority Leader Harry Reid, D-Nev., rejected Republicans’ call for an open amendment process earlier this week, saying that without a finite amount of proposed GOP amendments, he would not put any Republican proposal on the Senate floor for a vote, prompting Wednesday's filibuster.
Wrangling over outsourcing, inversion — where U.S. companies acquire a foreign company in order to move their headquarters overseas and take advantage of lower tax rates — and corporate tax reform has become more pronounced as midterm elections approach, with both Democratic and Republican lawmakers each accusing the other party of abdicating their responsibilities to create jobs and bring in more income to federal coffers.
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