George White of the AICPA reports today in the Tax Insider that LIFO may be on “life support.” He says the double whammy of a revenue-minded Senate and global-minded FASB could be trouble.
But we’ve heard that there’s more to the story. There’s an anecdote floating around Washington about a meeting a few weeks ago between Sen. Grassley (R-Iowa) and several of his Iowa constituents who oppose LIFO repeal. Grassley reportedly indicated that he is not personally behind the LIFO proposal; that it got started as a result of a misunderstanding between him and Sen. Frist (R-Tenn.). Grassley said that the LIFO proposal came up during consideration of the energy bill this spring when the oil & gas industry was the target. The LIFO proposal was the same one as last fall: repeal limited to the oil & gas industry. Grassley said he objected, saying he was opposed to targeted punitive measures, and adding that if LIFO repeal was to be considered, it should be across-the-board. Grassley told his constituents that Frist misinterpreted this throwaway line as representing Grassley’s support for across-the-board LIFO repeal.
As our source remarked: “Sounds a little pat, but that’s the story Grassley fed his constituents.”