Schumer Named Porker of the Month for Rail Project

WASHINGTON — Citizens Against Government Waste (CAGW) named Sen. Charles Schumer, D-N.Y., its May Porker of the Month for attempting to use the tax code to earmark a $2 billion subsidy for a commuter rail between Manhattan and the JFK airport.

Schumer wants to take advantage of the New York Liberty Zone (NYLZ) tax credits, which were intended to stimulate the redevelopment of downtown Manhattan after 9/11, for a rail project that has been under consideration since well before 2001.

Sen. Schumer added the project to Senate Amendment 4585 to the FAA Reauthorization Act of 2007 (H.R. 2881). After questions were raised about the number and controversial nature of the non-aviation-related spending items tacked onto the bill, it was withdrawn from consideration. Congress is expected to return to the legislation before the end of June, but members may at that time have an opportunity to vote on a substitute FAA modernization bill introduced by Sen. Kay Bailey Hutchinson, R-Texas, which would deal only with aviation issues.

On May 1, Schumer said on the Senate floor that the project is not an earmark, this is not a specific project. However, the Senate Finance Committee report published November 13, 2007 determined that the project is a limited tax benefit, or earmark. There are constitutional questions as well, according to CAGW.

A Congressional Research Service (CRS) memo dated April 30, 2008, says the earmark could raise concerns under the [Constitutions] Uniformity Clause because it explicitly provides a tax benefit based on a geographical classification. The Uniformity Clause says that all Duties, Imposts and Excises shall be uniform throughout the United States.

Since Schumer has been pushing this rail project since 2005, he is likely to insert it as an earmark into an appropriations bill. This use of the tax code to provide a grant to a locality to fund a specific infrastructure project would be unprecedented and could potentially invite a flood of similar maneuvers from members of Congress who want to earmark funds for infrastructure boondoggles.

The funding mechanism envisioned by Schumer and his allies to fund the project is so convoluted, it might be best to defer to experts from lower Manhattan to explain it.
— Business Wire