Pete Stark: “later today we will have an opportunity to vote on H.R. 4986, the FSC replacement bill. That is a foreign sales tax…”

“later today we will have an opportunity to vote on H.R. 4986, the FSC replacement bill. That is a foreign sales tax credit that was inaugurated by President Nixon in which the Washington Times recently, in an editorial, referred to it as one of the largest bipartisan and unanimous blunders passed by the House of Representatives. In the early seventies, I opposed the FSC bill, or the foreign sales tax credit, and was successful at least in denying that tax credit to weapons manufacturers, on the theory that all weapons sold to foreign countries had to be approved by the Defense Department and the Secretary of State and basically were sold by our government to other governments, and there was no reason to give a subsidy, which is what this FSC thing is, to weapons manufacturers in the United States. The Senate saw fit to reduce that to a 50 percent limitation and that has been the law for some 20 years. Recently, without any hearings and without any discussion, almost in the dead of night, the 50 percent limitation to defense contractors was removed. The World Trade Organization has filed a lawsuit against the United States saying that this foreign sales tax credit is a hidden subsidy, and they are right. It is a subsidy. It is being changed now in language in this bill that will come up under suspension, but the old saying, it is a duck if it quacks like a duck and it waddles like a duck.…”