The White House issued its Statement of Administration Policy on the farm bill reauthorization yesterday, H.R. 2419, threatening a veto of the bill. (Here it is in .pdf format.) The SAP’s paragraph on the tax increase on foreign investment (blogged about here and here):
The Administration strongly opposes the provision that would raise taxes on payments by U.S. subsidiaries to foreign affiliates. In addition to being a tax increase, this provision would discourage foreign investment in the United States, override tax treaties the U.S. has with many nations, and raise questions under other international agreements. Foreign investment in the United States creates American jobs and strengthens economic growth. This provision would adversely affect job creation in the U.S. and relationships with our major trading partners and could provoke retaliation in the form of higher foreign taxes on U.S. firms.
And a summary of the other objectionable provisions:
The Administration is concerned that the House bill “offsets” $4.7 billion in real spending with changes in the timing of direct, counter-cyclical, and crop insurance payments. These shifts in timing do not result in real savings to the taxpayers. The Administration would strongly oppose tax increases as offsets, and the unnecessary expansion of the Davis-Bacon authorities.
The final farm bill should include further real reform, should identify offsets without gimmicks or tax increases, and should not include an expansion of Davis-Bacon. The Administration believes these concerns can be addressed by continuing to work with Congress. However, if the bill were presented to the President in its current form, the President’s senior advisors would recommend that he veto the bill.
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