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Legislative Update: A Shot Across the Bow


Fourth Quarter - 2014

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by Bob Moss, Principal and National Director of Governmental Affairs

In the sailing days before radar and binoculars, one ship meeting another from a distance might not be able to tell the country from which she hailed. The captain would order a “shot across the bow,” asking her to show her true colors. Even in today’s world “a shot across the bow” happens, and recently it occurred on land – a place called Capitol Hill.

Senator Tom Coburn (OK) has always been a leading voice against wasteful Washington spending and how your tax dollars are being used. He has worked hard to uncover waste, and his “Pork Report” clearly resonates with taxpayers, but his recent criticism of the New Markets Tax Credit (NMTC) needs to be examined more closely. Recently, he issued a shot across the bow at the program, calling it a “reverse Robin Hood scheme” paid for by the taxpayer. This report was issued concurrently with the Governmental Accountability Office (GAO) report, entitled “Better Controls and Data are Needed to Ensure Effectiveness”. 

But according to the New Markets Tax Credit Coalition, the reports fail to recognize the role of the NMTC as the federal government’s largest and most effective tool for community revitalization. The facts are, since it was enacted in 2000, the NMTC delivered more than $60 billion in capital1 to business and revitalization projects, which in turn has created over 500,000 jobs in some of the poorest rural and urban communities in America.  Coburn is shooting at a program that delivers $8 dollars of investment in low-income communities for every dollar of tax revenue forgone by the federal government. Many would argue we need more programs exactly like the NMTC. History tells us this is not the first time a program has been in the sights of a member of Congress.

In July of 1995, Ways and Means Chairman Bill Archer asked the GAO to investigate the Low Income Housing Tax Credit program (LIHTC), based on an earlier IRS internal audit. Archer supported a repeal of the program, despite a letter from the IRS commissioner saying that the estimates in their report were unreliable. It turns out the commissioner was correct, and the LIHTC has continued on to produce 2.5 million2 affordable rental units to this day, making it the most successful affordable housing program in our nation’s history.

To avoid these types of cannonballs from Congress, we must be vigilant in gaining support from both sides of the aisle for programs like the NMTC. We will have a new Congress soon with new members and committee changes. We need to fight for permanency so more low-income communities can depend on this incredible economic development tool. In the meantime, we have to push for the NMTC to be included in an extenders package this fall. Let’s use the quote of former Springfield, MA Mayor, Congressman Richard Neal (MA), a champion of the NMTC, when we advocate for the program, “The NMTC is the most cost effective way to create jobs and economic development in communities otherwise ignored by traditional capital.”

Sometimes a shot across the bow is simply a wake-up call, even if the shot is off-target. 

Bob Moss is a CohnReznick Principal and National Director of Governmental Affairs. Bob leads the Firm’s federal and state government relations efforts, particularly in the area of affordable housing. He can be reached at bob.moss@cohnreznick.com or 617-648-1406. For more legislative insight from Bob, visit our Capitol Connection webpage.


1 NMTC Coalition
2 US Department of Housing and Urban Development, HUD User Database, http://www.huduser.org/portal/datasets/lihtc.html


This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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