Monday, December 22, 1997

In Congress, it's Christmas every day of the year

By JOAN LOWY

Scripps Howard News Service

WASHINGTON - Most children believe Santa Claus has a big, white beard and lives at the North Pole with a bunch of elves and a team of reindeer. Foolish children.

Actually, Santa resides in a mighty marble edifice topped by a large dome called the Capitol. He comes and goes in black limousines, dispensing gifts throughout the year with the aid of his elves, also known as "congressional staff."

This year, Santa has been particularly generous to the good boys and girls of Special Interest Land.

They've received wonderful presents from Santa, who was grateful for the good deeds they performed all year long: Making campaign contributions, hosting fund-raisers, buying Santa lunch, and taking Santa to restful resorts and on exotic vacations.

For example, Santa delivered to Microsoft's Bill Gates, the richest man in America, and the rest of the software industry, a tax exemption worth nearly $2 billion over the next 10 years. Microsoft and nearly 100 other U.S. companies who export software can now skip paying taxes on 15 percent of their export income. Ho ho ho!

By the way, software companies, their political action committees, officers and employees have given more than $1.3 million to Santa's party committees and candidates since 1995.

Santa tucked a special present for the timber industry into the Forest Service's budget. The provision eliminates the $50 million cap on how much the Forest Service may give timber companies in subsidies in exchange for building roads for logging.

The biggest beneficiaries of the subsidies are billion-dollar companies like Louisiana-Pacific Corp., Boise Cascade Corp., and Weyerhauser. By eliminating the cap, critics contend Santa has given the Forest Service a blank check to underwrite the cost of environmentally destructive roads and logging.

Note: The timber industry has made more than $8 million in political contributions since 1991. That buys a lot of Christmas trees.

The folks at Amway Corp. must have been wearing mistletoe because they got a big smooch from Santa. Buried in the tax bill is "Provision C, Section XI." This provision could be worth millions of dollars to the shareholders of Amway, a distributor of household and personal care products.

The new provision changed the rules for determining whether the assets of Amway's two Asian subsidiaries are passive investment companies, thus making them no longer subject to taxation.

The two largest contributions ever to the Republican National Committee were made by Amway and its president and his wife. The company gave $2.5 million in 1994 and Richard DeVos and his wife, Elisabeth, gave $1 million this year. Amway also donated $1.3 million last year to underwrite the cost of in-house coverage of the Republican National Convention on a cable channel owned by televangelist Pat Robertson. That's the old Christmas spirit!

Broadcasters found their stockings brimming with goodies from Santa. First, Santa bent a new Federal Communications Commission rule governing the return of old analog TV licenses so that it is quite likely that broadcasters will get to keep their analog licenses even after they move to digital. That will cost the government billions of dollars it would have raised by auctioning off the old licenses.

Second, Santa made an end run around an FCC prohibition against one media company dominating a particular market. Budget language opens the door for media companies to eventually own two TV stations, or one newspaper and one TV station, in markets with a population of at least 400,000.

Third, Santa nixed efforts to impose fees on broadcasters to "rent" their access to the broadcast spectrum, saving the industry about $3 billion.

Broadcasters have given almost $5 million in soft money contributions to Republican and Democratic party committees since 1991. Tra la la la la!

Finally, corporations throughout the land are grateful to Santa for reducing the "alternative minimum tax," otherwise known as AMT, at a cost to the Treasury of more than $18 billion over the next 10 years.

Created in 1986, the AMT was intended to prevent profitable companies from escaping all tax liability by applying more stringent rules about certain tax deductions, such as depreciation. Santa, however, changed the AMT's depreciation rules, greatly reducing the tax liability of companies that invest in new machinery and equipment. Jingle all the way!

All of which goes to show that for most Americans Christmas comes but once a year, but in Congress it's Christmas every day.