New York Times: Bank Lobbyists Writing Financial Reform Bills

 Banks, Campaign Finance, Congress, Economy, Government Regulation, Lobbyists, Republicans, Special Interests, Wall Street  No Responses »
May 242013
 

Three years after Congress passed what supporters claimed were unprecedented federal regulations meant to prevent a repeat of the 2008 financial collapse, lobbyists for banks and Wall Street firms have more sway than ever on Capitol Hill.

House Financial Services Committee chairman Rep. Jeb Hensarling

Republicans and some Democrats have targeted the package passed in 2010, known as Dodd-Frank, for intense criticism. Conservatives decry the string of comprehensive new regulations as onerous and guilty of stunting economic growth.

Financial industry interests have also complained, flooding lawmakers who want to rewrite Dodd-Frank with cash in the last two election cycles and gaining new influence when Republicans seized control of the House.

This political alliance has begun paying handsome dividends for financial companies as legislators hostile to the new regulations are willing to go to considerable lengths to make sure the industries covered by the oversight are given a chance to craft reforms more to their liking.

The New York Times reports on Friday that House Republicans working on bills to repeal Dodd-Frank and loosen myriad other financial regulations have allowed banking lobbyists to draft much of the legislation themselves. Three-quarters of the language in one bill that easily passed the House Financial Services Committee had been written by lobbyists for Citigroup. Industry officioals defend such a practice as “common” in Washington.

Wall Street and big banks, once reviled as the driving forces of the 2008 market crash and subsequent recession, have seen their reputations significantly polished in the nation’s capital. Banks and their lobbyists now enjoy a “resurgent influence” with business-friendly Republicans and election-wary Democrats in Congress.

Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations. Instead, the lobbyists are helping to write it themselves.

One bill that sailed through the House Financial Services Committee this month — over the objections of the Treasury Department — was essentially Citigroup’s, according to e-mails reviewed by The New York Times. The bill would exempt broad swathes of trades from new regulation.

In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)

The lobbying campaign shows how, three years after Congress passed the most comprehensive overhaul of regulation since the Depression, Wall Street is finding Washington a friendlier place.

The cordial relations now include a growing number of Democrats in both the House and the Senate, whose support the banks need if they want to roll back parts of the 2010 financial overhaul, known as Dodd-Frank.

This legislative push is a second front, with Wall Street’s other battle being waged against regulators who are drafting detailed rules allowing them to enforce the law.

The payoff for both sides in the equation is incredibly attractive. Financial companies have been able to ingratiate themselves with lawmakers already receptive to their calls for fewer regulations by spending huge sums on lavish lobbying events and bankrolling scores of congressional candidates.

And as its lobbying campaign steps up, the financial industry has doubled its already considerable giving to political causes. The lawmakers who this month supported the bills championed by Wall Street received twice as much in contributions from financial institutions compared with those who opposed them, according to an analysis of campaign finance records performed by MapLight, a nonprofit group.

In recent weeks, Wall Street groups also held fund-raisers for lawmakers who co-sponsored the bills. At one dinner Wednesday night, corporate executives and lobbyists paid up to $2,500 to dine in a private room of a Greek restaurant just blocks from the Capitol with Representative Sean Patrick Maloney, Democrat of New York, a co-sponsor of the bill championed by Citigroup.

Industry officials acknowledged that they played a role in drafting the legislation, but argued that the practice was common in Washington. Some of the changes, they say, have gained wide support, including from Ben S. Bernanke, the Federal Reserve chairman. The changes, they added, were in an effort to reach a compromise over the bills, not to undermine Dodd-Frank.

It’s unlikely to be a coincidence that the chairman of the House committee in charge of financial industry oversight and at the center of granting direct access by lobbyists to the drafting of important regulatory bills has been wined and dined by some of the nation’s leading banks.

According to Pro Publica, Texas Rep. Jeb Hensarling met with several banking executives at an exclusive Utah ski resort — complete with a celebrity chef to cater the event — only weeks after attaining chairmanship of the House Financial Services Committee. That is the same committee now discovered to be letting lobbyists for Citigroup and other banks draft legislation intended to gut federal financial regulations.

The posh party for Hensarling’s campaign PAC may not have breached any election laws, but it presented an “invaluable opportunity” for financial companies and their lobbyists.

In January, Rep. Jeb Hensarling, R-Texas, ascended to the powerful chairmanship of the House Financial Services Committee. Six weeks later, campaign finance filings and interviews show, Hensarling was joined by representatives of the banking industry for a ski vacation fundraiser at a posh Park City, Utah, resort.

The congressman’s political action committee held the fundraiser at the St. Regis Deer Valley, the “Ritz-Carlton of ski resorts”known for its “white-glove service” and for its restaurant by superstar chef Jean-Georges Vongerichten.

There’s no evidence the fundraiser broke any campaign finance rules. But a ski getaway with Hensarling, whose committee oversees both Wall Street and its regulators, is an invaluable opportunity for industry lobbyists.

Europe Cracks Down On Oil Industry. Why Won’t The US Follow Suit?

 Congress, Consumer Advocacy, Corporate America, Europe, Fossil Fuels, Government Regulation, Oil Industry  No Responses »
May 222013
 

Pain at the pump may be a universal emotion shared by drivers on either side of the Atlantic, but only one side of the “pond” is conducting an unprecedented regulatory operation to uncover potentially illegal activity that has kept gas prices so high.

European regulators have launched an aggressive investigation into ”serious” allegations of price rigging by some of the globe’s biggest oil companies and the top oil market trading agency. Motorists in continental Europe and Britain have long voiced complaints over disparities in retail gasoline prices from the wholesale values set by traders and oil companies.

The inquest took a dramatic turn earlier this month when corporate offices of Shell, BP, Statoil and the world’s top oil pricing firm were raided by investigators with the European Commission under suspicion that the companies involved “colluded” to artificially inflate prices for crude oil and other products. Regulators now suspect the price-fixing may have been carried out for as many as 11 years before government officials were finally tipped off.

Some have called the idea of a decade-long oil rigging scheme as big as the “LIBOR” scandal that rocked financial markets last year, when banks and traders spent years tinkering with the benchmark rate for charging rates of interest.

The London offices of BP and Shell have been raided by European regulators investigating allegations they have “colluded” to rig oil prices for more than a decade.

The European commission said its officers carried out “unannounced inspections” at several oil companies in London, the Netherlands and Norway to investigate claims they may have “colluded in reporting distorted prices to a price reporting agency [PRA] to manipulate the published prices for a number of oil and biofuel products”.

The commission said the alleged price collusion, which may have been going on since 2002, could have had a “huge impact” on the price of petrol at the pumps “potentially harming final consumers”.

Lord Oakeshott, former Liberal Democrat Treasury spokesman, said the alleged rigging of oil prices was “as serious as rigging Libor” – which led to banks being fined hundreds of millions of pounds.

…….

The European authorities declined to name any of the companies raided but BP, Shell, Norway’s Statoil and Platts, the world’s leading oil price reporting agency, all confirmed they are being investigated.

In a statement Shell said: “We can confirm that Shell companies are currently assisting the European commission in an inquiry into trading activities.”

BP said: “BP is one of the companies that is subject to an investigation that was announced by the European commission. We are co-operating fully with the investigation and unable to comment further at this time.”

Statoil, which is 67%-owned by the Norwegian government, said: “The authorities suspect participation by several companies, including Statoil, in anti-competitive agreements and/or concerted practices contrary to Article 53 of the European Economic Area (EEA) [market manipulation].

“The suspected violations are related to the Platts’ Market-On-Close (MOC) price assessment process, used to report prices in particular for crude oil, refined oil products and biofuels, and may have been ongoing since 2002.”

What is unclear for now is how much of an impact the alleged European rigging has had or will have on global oil markets and prices paid by American consumers. With world markets increasingly interconnected and fluctuations of any kind in one part of the globe instantly analyzed by traders and industries all over the planet, the ramifications of the probe could be far-reaching.

The fact that the globe’s leading oil market price assessment firm has been directly targeted in the investigation and the similarity of the potential oil fixing scheme to recently uncovered operations in the United States and elsewhere leads Matt Taibbi to argue that the story rates as “hugely significant” for Americans, too.

One analyst I spoke to for that piece talked specifically about Platts (and another, similar price assessment company), noting that they “do benchmarks for the entire oil market, the entire refined products market” and “you name it” – any of these benchmarks that rely on voluntary reporting could be manipulated.

It’s not clear yet exactly what is alleged to have occurred, but Europeans have long complained that retail gas prices have not seemed to match wholesale prices. In fact, complaints that wholesale prices at gas stations were noticeably slow to fall when wholesale prices fell prompted the U.K.-based Office of Fair Trading last year to conduct a cursory inquiry into possible anti-competitive behavior in the fuel markets. Early this year, they announced that they hadn’t found enough evidence to warrant a full-blown investigation. But complaints persisted.

The story is obviously hugely significant in its own right, just as the LIBOR story was. But both are even more unpleasant in conjunction with each other, and the other price-fixing scandals that have cropped up in the financial markets in the last year or two. We’ve had other price-fixing scandals involving gas in the U.K. and here in the U.S., just a few weeks ago, it came out that the Federal Energy Regulatory Commission (FERC) concluded that JPMorgan Chase used “manipulative schemes” to tinker with energy prices in Michigan and California.

While the fixing scandal is relegated to Europe for now, there is little question that similar motivations exist in the United States for oil companies to manipulate and artificially enhance market prices to improve their bottom line.

Gas prices are already beginning to soar for the summer in the US, jumping from what were seasonal highs to begin with and now approach or break price records in many locations. Oil insiders warn of higher prices after Memorial Day despite the record-setting boom in American oil production and the expansion of global supplies due to the flow of US crude.

While analysts and consumer advocates repeatedly question the causes behind the unwavering upward trend in prices at the pump, government regulators in the United States have done virtually nothing to uncover any truth to allegations of rigged markets or unfair pricing practices.

Incentive for oil companies to keep crude and pump prices consistently elevated is obvious to many experts, with one congressional report detailing how high gas prices reap a “windfall” of profits for oil giants like Exxon, Shell and BP.

At least one lawmaker has taken notice of the European investigation and is calling for a US-based inquiry into the oil markets and attempts by the industry to universally rig prices.

Vermont Sen. Bernie Sanders has proposed legislation to force federal regulators to mirror the price-fixing operations in Europe and begin a similar investigation in the United States, as well as use the government to crack down on oil speculation that is also fingered as a leading cause of high gas prices.

Sanders said a full accounting of oil markets is necessary to root out “fraud, manipulation, abuse and excessive speculation.”

With gasoline prices rising rapidly, Sen. Bernie Sanders (I-Vt.) today proposed an amendment to make U.S. federal regulators follow the lead of Europeans and investigate oil and fuel price manipulation.

Sanders also proposed a 30-day deadline for the Commodity Futures Trading Commission to use its emergency powers to curb excessive speculation in crude oil markets.

“We must do everything that we can to make sure that oil and gasoline prices are transparent and free from fraud, manipulation, abuse and excessive speculation,” said Sanders, a member of the Senate energy committee.

Over the past five months, the national average price for a gallon of gasoline has gone up by more than 41 cents. The price hikes come at a time when U.S. oil inventories reached a three-decade high while demand for gasoline is lower than four years ago when prices averaged less than $2.30 a gallon.

“The skyrocketing cost of gasoline and oil is causing tremendous hardship to the American consumer, small businesses, truckers, airlines and fuel dealers. In fact, as we struggle to claw our way out of this terrible recession, high oil and gas prices are enormously detrimental to the entire economic recovery process,” Sanders said.

Obama’s Commerce Nominee Under Fire From Labor Activists

 Congress, Corporate America, Labor, Labor Rights, Obama Administration, President Obama, Unions, Workers  No Responses »
May 222013
 

President Obama’s nominee for Commerce Secretary is facing a surge of opposition from grassroots labor groups as moderate lawmakers on Capitol Hill line up behind Penny Pritzker, foreshadowing what could be a surprisingly easy official confirmation process.

Republican Sen. Mark Kirk of Illinois has thrown his support behind the president’s selection, part of the charm offensive billionaire philanthropist and Obama campaign bundler Pritzker has been conducting behind the scenes with key lawmakers leading up to Senate hearings.

But moderate Republicans may be the easiest to placate regarding Pritzker.  A close friend of the president and a wealthy heiress known for bankrolling charitable causes and political campaigns, Pritzker also remains deeply involved with the business practices of her family’s source of wealth, the Hyatt Hotels chain.

Criticisms over contract negotiations and unfair treatment of employees at the hotel company has several grassroots labor organizations launching protests and calling on President Obama to rescind Pritzker’s nomination. 

UNITE HERE, a major service employee union, has accused Hyatt of worker mistreatment and openly violating safety protocols. Pritzker and the chain’s current executive leadership have refused to sign new union contracts for more than three years.

Organized labor will break its silence and oppose President Obama’s nominee for Commerce Secretary, Chicago’s Penny Pritzker, the Daily News has learned.

The decision stems from long-standing grievances with labor practices at the Hyatt Hotels chain, a source of her family’s fortune, and despite earlier reports that unions would not raise objections to the nomination.

Donald “D” Taylor, president of the 270,000-member union of hotel and restaurant workers known as UNITE HERE, confirmed the move to The News on Monday. His opposition was spurred by his just learning that the Senate Commerce Committee was moving up its confirmation hearing for Pritzker.

The union had been led to understand that hearing would take place perhaps well after the Memorial Day weekend. But the surprise decision to move up the hearing forced the union’s hand.

“We are opposed to the nomination of Penny Pritzker based on what has taken place at Hyatt,” Taylor said in a phone interview.

…….

UNITE HERE’s disputes with the hotel chain date to 2009 and the expiration of contracts at those Hyatt hotels that are unionized. There have been many demonstrations nationally related to its outsourcing previously unionized housekeeper positions at hotels in Boston and Baltimore and hiring what the union alleged were often temporary workers paid minimum wages.

The union has also alleged worker safety issues and argues the Hyatt track record run contrary to Obama’s call for more vigilant enforcement of safety regulation by the Occupational Safety and Health Administration. UNITE HERE alleges that housekeepers have been obligated to clean bathroom floors on their hands and knees rather than have access to a mop.

Labor groups call Hyatt the “worst hotel employer in America” and have tried to get hourly employees named to the Hyatt corporate board that Pritzker chairs as a means of making sure employee complaints are addressed.

 But Pritzker’s nomination will also roil the Democratic base, particularly organized labor. That’s because Pritzker sits on the board of directors for Hyatt Hotels, the national hotel chain co-founded by her father, which is currently engaged in a protracted struggle with the hospitality workers union UNITE HERE.

“Hyatt has singled itself out as the worst hotel employer in America,” according to a UNITE HERE-maintained website called Hyatt Hurts. The allegations which UNITE HERE has brought against the company include wage theft, unreasonable workloads, unjust firings, and conditions which lead to high injury rates.

Pritzker has been a repeated target of UNITE HERE demonstrations, but with her nomination the campaign has moved into a new phase. Now the union is requesting that Hyatt appoint a worker to fill her seat on the board of directors.

“If they put someone like me on the Hyatt board of directors, that would certainly send a signal that corporate American is listening extensively to what workers on the ground have to say,” said Cathy Youngblood, a Hyatt housekeeper in West Hollywood and the architect of the union’s “Someone Like Me” campaign to place a worker on the Hyatt board of directors. In December 2012, she kicked off the campaign by submitting a resolution to Hyatt corporate headquarters.

Senate Republicans To Block Tornado Disaster Relief?

 Austerity, Congress, Economy, Environment, Extreme Weather, Natural Disasters, Republicans, Spending Cuts  No Responses »
May 212013
 

Victims of Monday’s deadly tornado that ripped through an Oklahoma City suburb may face delays in receiving relief aid and assistance from the federal government. At least one Senate Republican is vowing to enforce a demand that any disaster aid funds be offset with substantial spending cuts from another sector of the federal government.

The lawmaker speaking out about the need for austerity at a time of disaster is none other than Oklahoma Sen. Tom Coburn. His constituents faced a terrifying ordeal on Monday when a massive twister leveled much of Moore, Oklahoma, including schools, businesses and many neighborhoods. At least 51 people are confirmed dead, including many children.

But Coburn quickly put out a statement that promised to line up spending cutds before any taxpayer funds were appropriated for tornado cleanup. As much as $200 million was needed following the deadly Joplin tornado in 2011, and Coburn confirmed that he would “absolutely” seek funding offsets if a similar figure was called for following the Oklahoma disaster.

The tornado damage near Oklahoma City is still being assessed and the death toll is expected to rise, but already Sen. Tom Coburn, R-Okla., says he will insist that any federal disaster aid be paid for with cuts elsewhere.

CQ Roll Call reporter Jennifer Scholtes wrote for CQ.com Monday evening that Coburn said he would “absolutely” demand offsets for any federal aid that Congress provides.

Coburn added, Scholtes wrote, that it is too early to guess at a damage toll but that he knows for certain he will fight to make sure disaster funding that the federal government contributes is paid for. It’s a position he has taken repeatedly during his career when Congress debates emergency funding for disaster aid.

Both Oklahoma US senators — Coburn and fellow Republican James Inhofe — have a controversial history concerning federal disaster relief. They have argued against money for FEMA and  joined with other Republicans in Congress to successfully stall federal aid for victims of Hurricane Sandy last year, sparking outrage from the regions affected by that storm and even fellow Republican New Jersey Gov. Chris Christie.

But both Sooner State lawmakers have also called for immediate federal money when natural disasters have scarred their own home state. A Coburn staffer claims things will be different in the aftermath of the Moore twister.

Sens. Jim Inhofe and Tom Coburn, both Republicans, are fiscal hawks who have repeatedly voted against funding disaster aid for other parts of the country. They also have opposed increased funding for the Federal Emergency Management Agency (FEMA), which administers federal disaster relief. 

Late last year, Inhofe and Coburn both backed a plan to slash disaster relief to victims of Hurricane Sandy. In a December press release, Coburn complained that the Sandy Relief bill contained “wasteful spending,” and identified a series of items he objected to, including “$12.9 billion for future disaster mitigation activities and studies.”

Coburn spokesman John Hart on Monday evening confirmed that the senator will seek to ensure that any additional funding for tornado disaster relief in Oklahoma be offset by cuts to federal spending elsewhere in the budget. “That’s always been his position [to offset disaster aid],” Hart said. “He supported offsets to the bill funding the OKC bombing recovery effort.” Those offsets were achieved in 1995 by tapping federal funds that had not yet been appropriated.

In 2011, both senators opposed legislation that would have granted necessary funding for FEMA when the agency was set to run out of money. Sending the funds to FEMA would have been “unconscionable,” Coburn said at the time.

……..

And despite their voting record on disaster aid for other states, both Coburn and Inhofe appear to sing a different tune when it comes to such funding for Oklahoma.

In January of 2007, Coburn urged federal officials to speed disaster relief aid after the state faced a major ice storm.

A year later, in 2008, Inhofe lauded the fact that emergency relief from the Department of Housing and Urban Development would be given to 24 Oklahoma counties. “The impact of severe weather has been truly devastating to many Oklahoma communities across the state. I am pleased that the people whose lives have been affected by disastrous weather are getting much-needed federal assistance,” he said at the time.

Inhofe has on Tuesday distanced himself somewhat from both his colleague Tom Coburn’s stand on offsetting disaster spending and his own recent history in voting against federal aid for other parts of the country.

Confronted with his current request for federal assistance for Monday’s deadly Oklahoma storm juxtaposed with his vocal opposition to aid money for Sandy victims, Inhofe said that the two situations are “totally different” and that the Sandy bill included “pork” spending.

In the wake of the devastating tornado in an Oklahoma City suburb, Sen. James Inhofe (R-Okla.) rejected comparisons between federal aid for this disaster and the Hurricane Sandy relief package he voted against.

That was a “totally different” situation, Inhofe told MSNBC, arguing that the Sandy aid was filled with pork. There were “things in the Virgin Islands. They were fixing roads there and putting roofs on houses in Washington, D.C.”

“Everyone was getting in and exploiting the tragedy that took place,” he said. “That won’t happen in Oklahoma.”

Corporations Avoid Billions In Taxes Through Offshore “Gimmicks,” Still Demand Tax Cuts

 Behavior, Congress, Corporate America, Economy, Tax Avoidance, Taxes  No Responses »
May 212013
 

Apple, of the world’s most valuable companies and the driving force behind some of the world’s most popular consumer technology, is facing serious new charges of “gimmicky” tax avoidance even as its executives prepare to lobby for a sweeping overhaul of US tax codes meant to further reduce their shrinking tax burden.

Apple CEO Tim Cook

Suspected for years of employing unusually skilled and complicated maneuvers to skirt tax laws in the United States and other countries, a new congressional investigation finds that Apple’s efforts at dodging the IRS are far more extensive than previously indicated. Apple has shifted billions of dollars to overseas tax havens in a strategy shared by many other familiar American brands and which is most prevalent among tech companies that have particularly mobile assets and operations.

But the New York Times reports that the US Senate, as part of its broader look at simplifying the federal corporate tax system, has discovered a massive “scheme” put together by Apple executives to insulate a significant chunk of the company’s profits and cash assets from government regulators. Lawmakers say the company behind the iPhone and iPad has achieved the “holy grail of tax avoidance” with “gimmicks” that leave much of the company’s profits held in offshore accounts that are technically “stateless” — thus out of the reach of the US or other governments.

Even as Apple became the nation’s most profitable technology company, it avoided billions in taxes in the United States and around the world through a web of subsidiaries so complex it spanned continents and went beyond anything most experts had ever seen, Congressional investigators disclosed on Monday.

The investigation is expected to set up a potentially explosive confrontation between a bipartisan group of lawmakers and Timothy D. Cook, Apple’s chief executive, at a public hearing on Tuesday.

Congressional investigators found that some of Apple’s subsidiaries had no employees and were largely run by top officials from the company’s headquarters in Cupertino, Calif. But by officially locating them in places like Ireland, Apple was able to, in effect, make them stateless — exempt from taxes, record-keeping laws and the need for the subsidiaries to even file tax returns anywhere in the world.

“Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven,” said Senator Carl Levin, a Michigan Democrat who is chairman of the Senate Permanent Subcommittee on Investigations that is holding the public hearing Tuesday into Apple’s use of tax havens. “Apple successfully sought the holy grail of tax avoidance. It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere.”

Thanks to what lawmakers called “gimmicks” and “schemes,” Apple was able to largely sidestep taxes on tens of billions of dollars it earned outside the United States in recent years. Last year, international operations accounted for 61 percent of Apple’s total revenue.

While much of the hidden money is technically under the purview of foreign governments, Apple has also managed to avoid American taxes on tens of billions of dollars in profits. From 2009 to 2012 alone, the tech giant sent $74 billion to offshore tax havens that would have been subject to taxation in the United States. It’s effective tax rate on the profits it did make available to the IRS was also significantly less than the company has public reported, a 20 percent corporate rate that saved it $8 billion over three years.

Apple allegedly ran a scheme that Republican Sen. John McCain claims makes the company “one of America’s largest tax avoiders.”

Over all, Apple’s tax avoidance efforts shifted at least $74 billion from the reach of the Internal Revenue Service between 2009 and 2012, the investigators said. That cash remains offshore, but Apple, which paid more than $6 billion in taxes in the United States last year on its American operations, could still have to pay federal taxes on it if the company were to return the money to its coffers in the United States.

John McCain of Arizona, who is the panel’s senior Republican, said: “Apple claims to be the largest U.S. corporate taxpayer, but by sheer size and scale, it is also among America’s largest tax avoiders.”

……

The Senate investigators also found evidence that the company turned over substantially less money to the government than its public filings indicated.

While the company cited an effective rate of 24 to 32 percent in its disclosures, its effective tax rate was 20.1 percent, based on the committee’s findings. And for a company of Apple’s size, the resulting difference was substantial — more than $8 billion in 2009, 2010 and 2011.

The extent of Corporate America’s distasteful and publicly embarrassing — though not illegal — tax avoidance gamesmanship has not stopped the same executives and business interests from lobbying Congress for even lower rates on the few taxes they do pay the federal government. Already enjoying effectively zero-percent taxation thanks to aggressive accounting and offshore havens, many of the nations largest companies are simultaneously demanding that lawmakers cut their tax burdens even more.

Apple, Google and other big multinational corporations are partners in a powerhouse lobbying organization that has been pressing Washington for big changes to the federal tax code. The centerpiece of their plan is a  corporate tax “holiday” that would allow companies to repatriate at least $1 trillion held overseas back to the United States.

The idea behind the tax holiday is to foster investment in the US and shift profit-generating projects that had been based offshore back onto American soil. Such a deal is awfully sweet for corporations and has critics complaining of preferential treatment. After previously avoiding all taxes on profits shipped offshore to countries with a low or non-existent tax rate, corporations would be able to move their profits back to the US tax-free, a veritable double-dip of tax avoidance.

Apple CEO Tim Cook will actually present his own proposals for a“dramatic simplification” of the corporate tax code at the same Senate hearing where details of his company’s tax strategies will be questioned.

While lawmakers grill Cook over Apple’s apparent success in dodging tax bills around the globe, the executive will continue to lobby for a “reasonable” — and significantly lower — corporate tax rate designed to save potentially trillions in corporate profits.

Apple chief executive Tim Cook plans to propose a “dramatic simplification” of corporate tax laws when he testifies for the first time before Congress next week, just as lawmakers are considering an overhaul of the tax code.

In an interview with The Washington Post, Cook said he will present specific proposals aimed at encouraging companies to bring back foreign earnings to the United States and invest that money injob creation, as well as research and development. He will speak at a Senate hearing Tuesday that is taking aim at companies that shift profits overseas to lower their tax bills.

More than 1,000 U.S. companies hold an estimated $1.7 trillion in earnings overseas, according to a JPMorgan report. And Apple, which has built up one of the biggest cash piles in corporate history, holds massive amounts in foreign countries.

Some companies, especially large multinationals, have argued that U.S. rates are too high and out of step with other developed economies.

“If you look at it today, to repatriate cash to the U.S., you need to pay 35 percent of that cash. And that is a very high number,” Cook said in an interview Thursday. “We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable.”