Grassley: Obama’s offshore tax deal is ‘bad for the country’

Sen. Chuck Grassley (R-Iowa) blasted President Obama for issuing another executive order — this time to stop U.S. companies from moving abroad to avoid taxes. 

“The Treasury secretary first said he didn’t have the authority to do something on inversions. Now he’s found the authority,” Grassley said on Tuesday. “Unfortunately, that approach might give the president a short-term gain but it’s bad for the country in the long term.”  

{mosads}On Monday, Treasury Secretary Jack Lew announced new rules targeting the economic benefits of tax deals for companies that move offshore to slash their tax bill — a process known as “inversions.”

Grassley, who championed anti-inversion legislation passed in 2004, said he fears the administration’s move will make Congress less likely to act.

“The Obama administration’s limited action on inversions might take the pressure off for tax reform,” Grassley said. “It’s important for the president to use his bully pulpit to work with Congress on tax reform and help build a consensus on the right approach, yet this president hasn’t done it. That’s too bad because tax reform is something Congress and the executive branch could accomplish instead of jumping from inversion crisis to crisis.”

But in his announcement Lew clearly stated that the Treasury’s action doesn’t absolve Congress from acting.

Recently Democratic senators, such as Dick Durbin (Ill.), have slammed U.S. companies for moving their headquarters overseas. Burger King, medical device-maker Medtronic and pharmaceutical company AbbVie have decided to reincorporate abroad.

Lawmakers on both sides of the aisle have called for reforms. Despite Grassley’s former support for anti-inversion bills, he now says some of the corporate moves are more defensible because the main issue is the need to reduce high corporate tax rates inside the United States.

Lew has called the Republican turnabout “surprising” since Grassley previously said corporate inversion was for “unpatriotic companies that dash and stash their cash.”

— Bernie Becker contributed to this article and it was updated on Sept. 24, at 3 p.m.