Housing And Economic Recovery Act Of 2008
Mr. Speaker, I strongly supported H.R., 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008. Buried in the provisions of this bill, however, in section 3082, on page 680, is an expansion of the Gulf Opportunity Zone to…
Mr. Speaker, I strongly supported H.R., 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008. Buried in the provisions of this bill, however, in section 3082, on page 680, is an expansion of the Gulf Opportunity Zone to two additional counties in Alabama. One of these counties is nearly 300 miles from the coast. This section doesn't have much to do with housing.
This expansion is designed to provide a subsidy for National Steel Car, a Canadian rail car manufacturer. This subsidy is unnecessary for two reasons. First, the plant is already under construction and will be operational by this time next year. Second, Alabama was under a contractual obligation to provide the subsidy itself if Congress did not.
The United States has a domestic rail car industry, with plants and facilities around the country. In fact, one borders my district, and it recently laid off over 100 employees because of the economic pressures on the industry. That company also has a facility in Alabama, but it won't benefit from this tax provision.
In Congress, we often talk about not picking winners, of letting the market make these decisions rather than the Congress, of leveling playing fields rather than tilting them. But here we picked a winner. We held a secret bidding process and a Canadian company won, despite the fact that they would have made this investment anyway. The longer we pursue this method of doling out tax breaks, the harder real reform will be.
The legislation I introduce today will ensure that these Alabama counties are able to benefit from the expanded GO Zone. The legislation also ensures, however, that taxes paid by the domestic rail car industry do not go to subsidizing their competitors and that we remove this rifleshot from the tax code.