July 14 (Bloomberg) -- Senate Finance Committee Chairman Ron Wyden is investigating the economic harm he said is being caused by the U.S. National Security Agency’s surveillance methods.
Wyden, a persistent critic of the NSA, is using his perch as the panel’s chairman to broaden his attack on the agency’s practices, he said in an interview with editors and reporters at Bloomberg News headquarters in New York.
“Nobody has looked at it from an economic standpoint, purely economics, dollars and cents,” said Wyden, an Oregon Democrat. “If a foreign enemy had inflicted the damage on the American economy -- these cutting-edge, innovative companies -- that the overreaching by the NSA surveillance brigade had done, people would be up in arms all over the United States.”
Companies including Yahoo! Inc. and Microsoft Corp. have been waging a public-relations battle for more than a year in response to revelations of NSA spying exposed by former government contractor Edward Snowden.
U.S. technology companies may lose as much as $35 billion in the next three years from foreign customers choosing not to buy their products because of concerns they cooperate with spy programs, according to Daniel Castro. He’s a senior analyst with the Information Technology and Innovation Foundation, a Washington-based nonprofit group.
The German government has announced it was ending a contract with Verizon Communications Inc. because of NSA spying.
Wyden said his staff has been examining the issue and he’ll make judgments about what to do later.
“It certainly will help us begin to sort of think through what we want to do as a country,” he said. “If these NSA surveillance practices are not making us any more secure but are threatening our liberty, and now the Finance Committee has documented how it’s damaging our ability to grow economically, that too, I think will be something of a wake-up call in this debate.”
Wyden also renewed his intention to seek retroactive tax legislation to stop U.S. companies from moving their legal addresses to other countries.
Since Jan. 1, 2012, 12 U.S. companies have completed so-called inversions and another seven are pending, including Medtronic Inc.’s planned purchase of Dublin-based Covidien Plc.
AbbVie Inc. is moving closer to buying Shire Plc and moving the legal address to Ireland. Mylan Inc. is buying the generic drug business of Abbott Laboratories and forming a new company incorporated in the Netherlands.
Wyden has proposed legislation that would in effect prevent U.S. companies from gaining foreign addresses by buying smaller competitors. His proposal would be retroactive to May 8 and he said companies are aware that he’s committed to that.
His preference is to make that change as part of a broader revamp of the U.S. tax code in the next 15 months. He also said a heightened pace of inversions may prompt Congress to act more quickly on a standalone measure.
“If there’s one of these every 72 hours there’s going to be a pretty big drumbeat to do something quickly,” he said.
Republicans have resisted such legislation, saying they would prefer to focus on broader tax changes.
Wyden said the Finance Committee will hold a July 22 hearing on international taxes that will address inversions.
Wyden said companies are paying attention to attempts to impose retroactive limits on inversions. He said Medtronic’s inclusion of a clause allowing it to unwind the deal if tax laws change shows that the effort is having an effect.
“If you have American companies that have been major employers, employers that pay good wages, saying that they’re just gonna pack up and go somewhere else so they can have a lower tax rate,” Wyden said, “that has very ominous implications for our country and what we want to do to create high-skill, high-wage jobs.”
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