Boosting shareholder value

I don't believe it's ever been done before - at least quite so forthrightly - but perhaps it's time to outsource the dreary, divisive task of drawing up the federal budget to a private contractor.

Specifically, General Electric.

Oh, I realize the public's opinion of G.E. has dimmed considerably in recent weeks, following a New York Times report that the company made $14.2 billion in global profits in 2010, including $5.1 billion from U.S. operations, but paid no income taxes.

G.E. execs dispute those numbers, saying that, when the company files its final return later this year, it will have "a small tax liability" for 2010 in the United States.

"We are committed to acting with integrity in relation to our tax obligations," G.E.'s official, online response states. "At the same time, we have a responsibility to our shareholders to reduce our tax costs as the law allows."

As a shareholder in America, I'd say that's exactly the sort of gumption and grit we need in our fight to reduce our national deficit.

But "a small tax liability" isn't the chief item on G.E.'s resume. Not by a long shot.

During the recent rhubarb on Capitol Hill over the 2011 budget, the company fought valiantly to secure funding for its work with Rolls-Royce on the development of an alternate engine for the F-35 Joint Strike Fighter.

It lost. But, as G.E. has demonstrated again and again, that really doesn't matter a whit.

Last month, the Pentagon ordered the company to stop work on the alternate engine because the military brass is content with the primary engine being built by a competitor.

"The administration and the DoD strongly oppose the extra engine program..., " the Pentagon explained in a statement. "In our view it is a waste of taxpayer money that can be used to fund higher Departmental priorities and should be ended now."

The Pentagon contends it can save $3 billion by killing the program.

Undeterred, General Electric is proceeding with the work anyway, using its own - or would that be shareholders'? taxpayers'? - money. G.E. execs said they weren't going to be stopped by the Pentagon's "unilateral action."

And the company got a supportive backslap from Rep. Howard P. McKeon, a California Republican who serves as chairman of the House Armed Services Committee. He said Secretary of Defense Robert Gates and the folks at the Pentagon should not be allowed to "pre-empt the congressional deliberation process."

Now, there IS the small point that Congress actually has deliberated the alternate engine. Again and again. And rejected it. Again and again.

In February, in fact, the program was killed on a bipartisan vote. The GOP's budget-conscious freshman class eagerly stepped into the fray and doubled the number of Republicans who had voted to scrap the project just last May. (The House delegation from Hampton Roads, incidentally, didn't join the opposition. All members voted in favor of continued funding.)

G.E. is pressing on, despite the fact that the Bush and Obama administrations have been trying to scuttle the program for five years now.

"We're going to fight like hell in the 2012 budget," GE spokesman Rick Kennedy told USA Today. The company characterizes the money that would be spent on the second engine as "acquisition reform through competition."

See, that's bringing good things to life. And that's exactly the sort of tenacity needed in the budget debate. If at first you don't succeed, lobby and lobby again.

And, fortuitously, there's already a G.E. repairman on the scene. This year, Barack Obama appointed the company's CEO, Jeffrey R. Immelt, to act as his liaison to the business community and as chairman of the President's Council on Jobs and Competitiveness.

As The New York Times notes, one of the items on the council agenda is corporate tax reform. Imagine.

But why stop there? Instead of relying on the old-fashioned method of budget-making - letting corporations assemble the thing piecemeal - why not turn the job over to the bright bulbs in the G.E. tax department? Heck, bring in those reform-minded engine folks, too.

I don't know about you, but I'm one excited American shareholder. Let there be light.

Daryl Lease is an editorial writer for The Virginian-Pilot. Email: daryl.lease@pilotonline.com.