Lew: GOP, business response to inversions ‘surprising’

Treasury Secretary Jack Lew said Wednesday that he was surprised that Republicans and the business community objected to the Obama administration’s rhetoric on the recent spate of offshore tax deals.

{mosads}Lew himself questioned the patriotism of companies that shifted their legal address abroad in deals known as inversions, while President Obama dubbed them “corporate deserters.”

GOP lawmakers and business groups like the U.S. Chamber of Commerce said the administration’s criticism went too far, with Sen. Orrin Hatch (R-Utah) labeling it “despicable.”

Lew, speaking at an event in Los Angeles, said that the administration rhetoric was “language that Republicans used in the early 2000s when they enacted legislation on inversions.”

“I actually thought it was a unifying idea, patriotism,” Lew said at UCLA, during a pit stop on his way to a Group of 20 meeting in Australia. “So I think people reacted to the word. The concept is one I think there’s broad agreement on.”

Sen. Chuck Grassley (Iowa) was among the Republicans to call inverted companies unpatriotic a decade ago. But now, Republicans and Democrats on Capitol Hill remain divided over how to deal with inversions, in which U.S. companies generally merge with smaller foreign competitors and then reincorporate abroad.

That’s left tax observers and analysts focused on the Treasury Department, where Lew has said the administration will roll out executive actions if Congress remains deadlocked. The Treasury secretary has long stressed that congressional action is far preferable to any steps the White House can take.

Lew said Wednesday any executive actions would come “very, very soon,” after saying last week the administration would make a decision in the “very near future.”

He dropped no further hints on timing, but did suggest that the department was still working on the new rules.

“I can’t preview the detail until it’s all finished,” Lew said. “But any company considering an inversion is now on notice.”