Duty Drawback Doublecross: The Games Congress Play Always Hurt Americans

By Robert Romano

Recently I wrote about a small sideshow in the ongoing Congressional war over the budget reconciliation bill that dealt with the so-called “duty drawback” provision.  Based on the magnitude of President Donald Trump’s One Big Beautiful Bill Act and his policies to put America first on trade, such an insider play dealing with relatively tiny amounts of money would normally not make the cut for commentary. 

But for some reason, one GOP House member has decided he cannot live without “winning” on this issue. And in classic D.C. style, he is looking to tar and smear other members of Congress with him.

From all appearances, the Senate version is likely to drop the repeal of the duty drawback. It should. The drawback, a device first used by Alexander Hamilton and Congress in 1789, has proven itself effective in developing American assets, blocking foreign dumping, and opening up new markets for U.S. products. But there are major interests that want it gone. They want to hurt competitors who use the device so they can further push their foreign workforce products on America. 

Seeing that they are about to lose the issue when the Senate returns a bill to the House, one member, U.S. Rep. Mike Lawler (R-N.Y.), the chief advocate for increasing the deduction of state and local taxes (SALT) — the 2017 Trump tax cuts capped it at $10,000 — has taken the position of fighting to the last to get the repeal. 

Lawler is telling anyone who will listen that unless he gets a huge increase in the tax deduction for state and local taxes — the House version has increased the deduction cap to $40,000, while the Senate is maintaining 2017’s $10,000 cap — he will work to kill the bill that President Trump and Republicans won the 2024 election campaigning on. 

In effect, Lawler is demanding that taxpayers in most states subsidize a few people in New York and Illinois and California: super high-tax states. By increasing the deduction for SALT, he is forcing everyone in America who lives in a responsible, well-governed state to cover the costs of the reckless spending in a few ultra-left-wing states.

Ultimately, while some cap on the SALT deduction will likely be included in the final legislation — that is certainly better than an unlimited SALT deduction that defeat of the legislation would entail come Dec. 31— the question will be how much of a cap both the House and Senate are comfortable with.

And now he is saying it is essential that a major provision of law that helps American farmers and producers is gutted in order to benefit a major international corporation. There is a common denominator here. Lawler wants to subsidize a few well-heeled interests at the expense of the many.

A June 27 letter from Lawler and 26 other House Members demanded Senate Majority Leader John Thune (R-S.D.) include the repeal in any final bill. It is an absolute joke and insult. 

By pushing for the repeal of the duty drawback and asking Leader Thune to force American farmers and producers to subsidize international corporations who have moved most of their jobs overseas.

Just exactly who is Mike Lawler working for anyway? He vaguely asserts that the $12.1 billion a year that he claims will be realized by repealing the drawback can “pay-for” his SALT raid but that money is an illusion. Repeal the drawback and that money disappears. 

What is most galling about this entire example is the raw disdain Lawler and his cronies have for the American people, asking families in rural parts of the nation, hard-working industrial workers in the heartland, farmers, fishermen — producers — to subsidize the homeless wreckage that is found in Democratic-run urban zones. He is demanding that the insane taxers in Democratic blue states get supported by everyone else. Not a word or thought that maybe if those states had to fund the ridiculous levels of spending on their own, maybe the public would not stand for it and make real changes.

Or, for that matter, Rep. Lawler seems to think that hurting American farmers and production workers is fine as long as international corporations get an advantage for their overseas employees.

The whole game being played in Congress has become so revolting that it is getting more difficult all the time to even look at it.

Hopefully no more members of Congress will fall for Lawler’s gambit. His “subsidize those who don’t need or deserve it” platform is a sure loser and needs to put in the trashcan where it belongs. And it needs to be held up for all to see as the tarnished example of a system that is being manipulated by the few against the interests of the vast majority of Americans.

Robert Romano is the Executive Director of Americans for Limited Government.