Bringing the bucks back home by Tory Newmyer @FortuneMagazine May 16, 2011, 9:04 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons The Congressional champions of a corporate tax holiday for multinationals with more than $1 trillion parked abroad are taking a curious approach to advancing their cause.The concept is simple enough: give tech, pharmaceutical and energy giants a temporary break from the 35% top corporate rate so they can bring home loads of their overseas cash at a bargain basement rate of 5.25%. The companies could then pump that money into investments and hiring, boosting the economic recovery.The trouble is that policymakers tried this once before, in 2004, and companies that took advantage of the break back then sent much of the repatriated money to stockholders. Some even laid off workers. That, despite policymakers’ efforts to ensure the money went directly to job-creation by limiting how the money could be used, including forbidding stock buybacks and dividend payments. Money, alas, is fungible.The experience burned the tax break’s boosters and cast a shadow over the current push to repeat it. So it would be reasonable to assume those proposing another tax holiday would pair it with much tighter controls to guarantee the windfall benefits taxpayers this time around.Instead, the Freedom to Invest Act, introduced in the House on Wednesday afternoon by a bipartisan team of lawmakers, offers even fewer restrictions than its controversial antecedent. True, the measure would add $25,000 to a company’s taxable income for every worker they lay off after claiming the benefit. But the proposal otherwise includes no directives about what companies can do with their low-tax loot.Texas Republican Kevin Brady, a senior member of the House Ways and Means Committee and a lead sponsor of the bill, explained that since the strings broke free last time, it didn’t make much sense to tie them on again. And besides, he told reporters on a conference call, “it would be a mistake for Washington to create artificial restrictions on the use of this when clearly the aggregate of this investment is going to be very positive for the economy.”That argument has its defenders, in this space included. Stop apologizing for 2004, the thinking goes, when that round coincided with a stock market bump and healthy GDP growth. Corporate chiefs petitioning for a second holiday are similarly making the case that it would act as a bank-shot stimulus, in part by increasing consumer confidence.But the pitch ignores a political reality: as a stand-alone measure, the proposal faces a near-vertical climb in the Senate, where a proposed repatriation holiday gathered only 42 votes in 2009. Consideration of that version, which would have been attached to the economic stimulus package, focused on the record of the 2004 break. Backers did, in fact, engage the history, if not outright apologize for it. California Democrat Barbara Boxer, a lead sponsor, kicked off the debate by telling her colleagues, “Now, some of the things you are going to hear I do not like to hear. I do not like that some companies did not act in the spirit of the amendment.” But she outlined a litany of tightened strings, including a required audit of every company taking the break. The tougher restrictions failed to move a bare majority in the upper chamber.In that context, it’s difficult to view the latest proposal as anything but an opening bid in what is sure to be an extended campaign by the deep-pocketed multinationals hoping to muscle it into law. That roster — including Apple aapl , Cisco csco , Duke Energy duk , Google goog , Kodak ek , Microsoft MSFT , Pfizer pfe , and Oracle orcl — is organized under the banner of the Win America Campaign. The coalition is already leaning into the effort, with print ads premiering this week in the Capitol Hill publications that lawmakers keep tucked under their arms.Plan A is to convince members of Congress to fold the holiday into a much broader revamp of the corporate tax code that’s gotten something of a soft launch. The idea would be to sell the temporary break as a transition to a new, territorial system common in other developed countries. The Treasury Department, and leading Democrats like Senate Finance Chairman Max Baucus (D-Mt.), have said encouraging things about that approach. And it’s favored by House Ways and Means Chairman Dave Camp (R-Mich.).But if the tax code rewrite fails to gain steam by the fall, the companies plan to push for the holiday as a stand-alone measure. Their hope, in that scenario, would be that the White House would come around to support it as a last-minute economic boost heading into the reelection campaign. Lobbyists close to the effort acknowledge the companies will be ready to accept new restrictions on the use of the repatriated money, especially to move the proposal on its own. Given the dicey politics and long odds, they may need to.