Taking Care of Business

SYNOPSIS: Republicans are squandering the public trust to take care of special interests

Cynics tell us that money has completely corrupted our politics, that in the last election big corporations basically bought themselves a government that will serve their interests. Several related events last week suggest that the cynics have a point.

Consider, for starters, the airport security issue. On Thursday morning this newspaper reported that London- based Securicor the biggest of the three companies that provide almost all airport security in the United States was threatening to sue for damages if baggage screening is taken over by federal employees. This just two weeks after we learned that Securicor's U.S. subsidiary which had already been fined for employing convicted felons continued to hire employees without checking their background after Sept. 11, and then lied about it to regulators.

Under the circumstances, to claim that federalizing the business would represent a "taking" showed remarkable chutzpah. (Chutzpah, according to the classic definition, is when you kill your parents, then plead for mercy because you're an orphan.)

But the company evidently has friends in high places. Later that day the Bush administration endorsed the proposals of House Republican leaders, who have refused to allow an airline security bill to come to a vote unless it leaves baggage screening in private hands. The rhetoric behind this position emphasizes the supposed advantages of the private sector competition, accountability, etc. But there is little real competition in this industry, and as we've just seen not much accountability for companies with the right connections.

Then there was the House "stimulus" bill. The remarkable thing we learned from that bill was that conservative politicians who used to claim that they were improving incentives by reducing marginal tax rates, and that it was just an incidental side effect that big corporations and wealthy individuals were so richly rewarded no longer feel the need to disguise their payoffs. The core of the bill was a repeal of the corporate alternative minimum tax retroactive to 1986, which means that selected companies would immediately receive huge lump sum payments from the government, totaling around $25 billion, with no incentive effect at all.

The bill's sponsors claim that the money would be invested and used to create jobs, but it's hard to see why: a potential investment that Texas Utilities or ChevronTexaco wouldn't have made a week ago, because the project won't yield a sufficiently high return, will seem no more profitable after each company gets its $600 million thank-you gift. And there are no strings attached to those gifts: if the companies want to, say, pay huge bonuses to top executives, they can. Republicans have always depended on the kindness of corporations, but this bill takes that faith to extremes.

True, defenders of the House bill remind us that "business" doesn't just mean giant corporations it also means the mom-and-pop shop around the corner. Indeed but the tax refund wouldn't be going to mom-and- pop shops. Where it would go, disproportionately, is to energy and mining companies. Why? Because they already receive so many special tax breaks that in the absence of the alternative minimum tax many would pay little or no taxes. Now the House proposes not only to remove that little inconvenience, but to refund the taxes they've paid for the past 15 years.

Just to cap off a great week for the mining interests, the Bush administration also announced on Thursday that the Interior Department would no longer be able to veto mining projects on public land. You might think that extracting minerals from public land, without even paying a royalty, was a privilege rather than an entitlement; but in today's Washington, financial might apparently makes right.

I'm sure I'll be accused of being unpatriotic for suggesting that the administration and its Congressional allies are pandering to special interests at a time like this. That, of course, is what they are counting on that and the difficulty of getting people's attention when the news is all anthrax, all the time.

But the truth must be spoken. Lately our government has not exactly inspired confidence; its response to terrorism is starting to look a bit scatterbrained. But on some subjects our leaders are quite clearheaded: whatever else may be going on, they make sure that they are taking care of business.

Originally published in The New York Times, 10.28.01