East Coast Wind Farm's Success Predicated on Government Mandates
An above-the-fold New York Times article, Offshore Wind Power Line Wins Praise, and Backing, has reinvigorated the debate over renewable sources of energy, in this case, offshore wind. The article outlines plans for a wind farm off the Atlantic Seaboard which would provide energy to a handful of East Coast states. With projected costs around $5 billion, Google and a New York financial firm have agreed to take a 37.5 percent equity share in the project in hopes of encouraging additional investors.
After laying out the finances for the plan, the Times article interviews a slew of environmentalists or Administration officials who, unsurprisingly, are jumping head over heels for the proposed wind farm. “These kinds of audacious ideas might just be what we need to break through the wretched logjam,” said Melinda Pierce, the deputy director for national campaigns at the Sierra Club.
But it’s not all and sunshine and rainbows for taxpayers. “Generating electricity from offshore wind is far more expensive than relying on coal, natural gas or even onshore wind. But energy experts anticipate a growing demand for the offshore turbines to meet state requirements for greater reliance on local renewable energy as a clean alternative to fossil fuels,” the Times reminds us.
To extrapolate, offshore wind costs $218 per megawatt hour compared to coal which costs $78 per megawatt hour. As such, wind companies, investment firms, and environmentalists lobby state and federal legislatures to increase the price of coal or subsidize the price of wind, a practice called corporatism. When Wall Street banks lobbied Congress for TARP funds they were decreed parasites; yet, environmentalists employ the same rent seeking practices and are given a free pass—the inconsistencies from the Left are laughable.
On the East Coast, the artificial demand for wind turbines is brought about by the Regional Greenhouse Gas Initiative (RGGI), or more commonly know as a Renewable Electricity Standard (RES). RGGI is a plan by ten states to reduce their CO2 emissions from the utilities sector by ten percent by 2018. Forcing residents to consume expensive energy, the impetus behind an RES, inevitably leads to higher costs for consumers: In states where a RES is enforced, residents saw the cost of electricity rise by 39 percent.
Furthermore, the federal government facilitates inefficient wind farms providing a $0.022 tax credit for each kilowatt-hour of electricity produced by wind. This is bad tax policy. These tax credits should be repealed and replaced in a revenue neutral way.
Essentially, the government subsidizes wind production and then forces taxpayers to buy the expensive, already subsidized energy. Who wouldn’t want to invest in a market where the government pays you to make something and forces other people to buy it? Sounds like easy work if you can get it.
This gargantuan wind farm’s success is predicated on government skewing the energy market in favor of renewable sources. So while investment firms cash huge checks and liberal politicians appease their base, taxpayers get stuck paying higher energy costs.
Tenet of Democrats' Health Care Bill Proved False
Of all the pithy phrases conjured up by Democrats during the health care debate, this had to have been one of the most effective: “If you like your health care plan, you will be able to keep it.” This phrase was beaten into the public with such regularity no one can blame Americans for beginning to believe it. Unfortunately, like so many of the Administrations proposals, the rhetoric doesn’t match the reality. Health insurance companies have dropped coverage for children as the new law makes it incredibly difficult for insurance companies to make a buck. So now children don’t have insurance and businesses aren’t profiting, nobody wins.
The most recent refutation of the “you can keep your insurance if you want it” myth comes from none other than Kathleen Sebelius, Secretary of Health and Human Services. Last week Sebelius granted waivers to companies or labor unions who couldn’t comply with the new coverage mandates included within the health care legislation. One would think that the army of economists employed by the Obama Administration could have told Democrats that if you force companies to increase benefits, costs will rise. When costs rise you get less of something, in this case health insurance. Retreating from the theoretical, the health care law raised costs on employers so much that they were going to stop providing health care for their employees, they could no longer afford to.
In order to prevent hundreds of thousands of worker from losing their insurance a month out from the elections, Sebelius waived the new insurance mandate for some coverage providers. The largest benefactor was United Federation of Teachers Welfare Fund, a New York union providing coverage for over 350,000 city teachers. In 2008 alone, the same union and New York State United Teachers spent $6.6 million on political activities, presumably advocating for Democrats. While it is encouraging that thousands of teachers will not lost their health insurance, waivers should not be granted exclusively to Democratic donors—the provision should be abolished in its entirety. Given the length, the bill was over 2,000 pages, and the haste at which the health care law was rushed through Congress, there inevitably were errors. This is clearly one of them, responsible Democrats should suck it up and repeal it.
After DC lost Michelle Rhee, Waiting for Superman is a Welcomed Pick-Me-Up
Having spent most of my life living in or around DC, I’ve been socialized to know that DC public schools, well, they suck. At age eleven, with tears in my eyes, I asked my parents why were moving from DC to a nearby Maryland suburb. They consoled me coolly explaining that, “the schools are much better. I know it’s tough, but in the long run, you’ll thank us.” Wandering around my parent’s dinner parties, I’d overhear adults tell each other how they would fix DC’s broken public schools. I’d listen to local newscasters rattle off statistics that condemn DC’s youth. I’d catch a glimpse of my dad’s newspaper which chastised the amorphous DC establishment.
Residents of DC, unknowingly, have come to accept its unacceptable schools. Just like the sun will rise, DC will have bad schools. We’ve become desensitized by politicians that make promises they never keep and set goals they never reach. But who can blame us, we don’t know anything different. I suspect lifelong residents of most major cities have similar tacit beliefs about the public school system.
After years of frustration induced apathy, Mayor Fenty and Michelle Rhee burst onto the scene. An irreverent School Chancellor Rhee invigorated a city that had been lulled to sleep. People loved her, and people hated her. She immediately became the most divisive figure in DC firing objectively bad teachers and the principals that protected them. She closed down failing schools. In doing so, she stirred up the hornets nest; she affronted the teachers’ union. Rhee was cleaning house so that children could get the education they deserved.
Teachers’ unions exist to protect their dues paying members; the quality of education children receive is not of their concern. It is important to differentiate between the union, which inhibits reform at every turn, and teachers who are part of the union. Teachers are incredible public servants who, for the most part, care deeply about the children they feel compelled to educate. Conversely, unions refuse to make any meaningful concessions lest they lose clout. Rhee picked a fight with the neighborhood bully.
After only three years in office, Rhee’s reforms were working; DC’s test scores were rising faster than test scores of any other large metropolitan area. Rhee knew that the reforms she implemented would be her downfall, that the unions would run her out of town. And they did. Union-backed Mayoral candidate Vincent Gray trounced Adrian Fenty, and subsequently Michelle Rhee, in the Democratic primary this year. It seemed the establishment had won, that unions controlled the system.
Back to the status quo, the sun will rise and DC will have bad schools. But maybe, the night is darkest before the dawn, a sentiment believed by Davis Guggenheim. Guggenheim, who directed Al Gore’s an Inconvenient Truth, set his sights upon America’s public schools in his new film, Waiting for Superman. Not only does he walk the audience through the problems inherent in our school system, but he personalizes abstract dropout statistics. The film follows a handful of academically engaged, adorable children who are on track to attend America’s “drop-out factories,” schools where nearly every student is destined to fail.
Waiting for Superman puts faces to the millions of dropouts every year. It is enraging to think that children who attend these schools never really have a chance. Guggenheim’s refrain is that everyone in America is supposed to have a shot; if you work hard enough you’ll succeed. Unfortunately, this comforting axiom could not be farther from the truth—children who are unlucky enough to be born in areas with bad schools will be crippled for life.
Waiting for Superman has the possibility to change the current debate, and it is already succeeding. Everyone and their mother is publishing op-eds about school reform. My lefty friends are beginning to rethink teachers unions and their role in propping up a failing system. After Michelle Rhee’s departure, everyone engaged in the education debate pick-me-up. Thank heaven for Waiting for Superman.
Proposed Energy Taxes Would Result in the Loss of 150,000 Jobs
A new study warns that President Obama’s proposed energy taxes would impel job loss, reduce economic activity, and deprive states of much needed tax revenue. Examining the economic impact a repeal of Section 199 and a rewriting of dual-capacity tax law for oil and natural gas producers would have on the economy, Dr. Joseph R. Mason reveals how imprudent these proposals are.
Published by the American Energy Alliance, Dr. Mason finds that repealing these tax deductions—which are enjoyed by every domestic company—only for energy producers would result in:
- The loss of over 150,000 jobs across the country by the end of 2011
- The loss of 56,000 jobs, and $24 billion in wages, to the Gulf community
- A loss of $68 billion dollars in wages nationwide
- The loss of $18 billion in local government revenue
- The loss of $65 billion in federal revenue
- $341 billion dollars in reduced U.S. economic activity between 2011 and 2020
It is important to note that these tax hikes—and subsequent economic repercussions—have been proposed in the Presidential FY 2011 Budget and used as “pay-fors” by Democrats in numerous pieces of legislation.
1099 Skirmishes Indicative of Party Ideologies
Upon returning from recess, the Senate was captivated by two amendments to the bill. Passions flared not only because of the punitive impact each amendment would have, but because the legislation each side advocated for exemplified the ideological differences between Republicans and Democrats.
This proxy war was fought over the 1099 reporting requirements for small businesses that the Patient Protection and Affordability Care Act radically increases. While both Democrats and Republicans agree that 1099 reporting for all small businesses are unnecessary and burdensome, they have offered different remedies.
Representing the Democratic camp, Sen. Bill Nelson (D-Fla.) proposed a tax hike on America’s five largest oil and natural gas producers. Sen. Nelson would use the newly garnered revenue to exempt some small businesses from 1099 reporting.
In the GOP corner, Sen. Mike Johanns (R-Neb.) offered an amendment that eliminates the reporting requirements for all small businesses. To plug the fiscal hole created by exempting small businesses from onerous 1099 reporting, Sen. Johanns wants to cut $15 billion in .
While neither amendment received enough support to pass, they are indicative of the ongoing debate between Republicans and Democrats. A rejuvenated Republican Party has pledged to cut spending and reduce the size and scope of government. The Democratic Party, seemingly incapable of trimming America’s $3.7 trillion annual budget, looks to tax America’s most productive businesses to pay for its policies.
Senator Bill Nelson Proposes Job Killing Energy Tax Hike
Senator Bill Nelson (D-Fla.) introduced amendment SA. 4595 to the Small Business Lending Act which would raise taxes on America’s energy companies and result in extensive job loss and reduced economic activity.
Sen. Nelson introduced SA 4595 to remedy the burdensome 1099 reporting requirements imposed on small businesses by the Patient Protection and Affordability Care Act. To fund exemptions for some small businesses, Sen. Nelson’s amendment repeals the Section 199 manufacturing deduction for the nation’s leading oil and natural gas companies. Enacted in 2004 to foster domestic job creation and economic growth, Section 199 allows all American companies to deduct a portion of their income derived from domestic production and manufacturing activities.
Repealing this job creating tax rule for just oil and natural gas producers is an effective tax increase on an industry that indirectly or directly employs over 9 million workers and adds over a trillion dollars to the American economy.
“The last thing our economy needs is a punitive tax upon its energy infrastructure and its nation’s largest employers. The Nelson amendment will only exacerbate our economic woes by hamstringing growth and slowing job creation,” said Grover Norquist, President of Americans for Tax Reform.
Also looking to address the onerous 1099 reporting requirement, Sen. Mike Johanns (R-Neb.) has introduced amendment SA 4596 which would exempt every small business from the health care bill’s 1099 mandate. Differentiating itself from Sen. Nelson’s amendment, Sen. Johanns’ proposal funds the 1099 exemption through reductions in future spending rather than taxing energy producers.
“The Senate has every reason to exempt the nation’s small business from unnecessary federal regulations, but there’s no reason we should have to rob Peter to pay Paul. Senator Nelson’s proposal simply shifts economic damages from small businesses to America’s oil and natural gas producers,” said Norquist.
Norquist Urges Senators to Support Sen. Johanns' Amendment, SA 4596, During Small Business Vote
After digesting the 2,000 page health care bill, legislators and pundits realized it contained numerous problematic provisions, specifically, the 1099 reporting requirements for small businesses.
Tomorrow the Senate looks to remedy this oversight by passing one of two amendments, SA 4596, proposed by Senator Johanns (R-Neb), or SA 4595, proposed by Senator Bill Nelson (D-Fla.).
Americans for Tax Reform President Grover Norquist sent a letter to the Hill urging Members to support Senator Johanns’ proposal and oppose Senator Bill Nelson’s.
While both amendments look to remedy the burdensome 1099 reporting requirements imposed on small businesses by the Patient Protection and Affordability Care Act, they achieve this goal in markedly different ways.
To fund exemptions for some small businesses, Senator Nelson’s amendment repeals the Section 199 manufacturing deduction for the nation’s leading oil and natural gas companies. Enacted in 2004 to foster domestic job creation and economic growth, Section 199 allows American companies to deduct a portion of their income derived from domestic production and manufacturing activities. Repealing this job creating tax rule is an effective tax increase on an industry that indirectly or directly employs over 9 million workers and adds over a trillion dollars to the American economy.
Conversely, Senator Johanns’ proposed amendment reduces government spending by cutting unnecessary programs and uses the savings garnered to exempt small businesses from the onerous 1099 reporting requirements.
Flush With Union Cash, DC Mayoral Candidate Vincent Gray Looks to Roll Back DC School Reform
The fight for the Democratic mayoral nominee in Washington DC encapsulates the national struggle for education reform. On one side you have Mayor Adrian Fenty and his appointed School Chancellor Michelle Rhee, true reforms who took on the teachers unions in hopes of improving DC’s schools.
On the other side you have Fenty’s primary opponent, Vincent Gray. Gray is your typical big city politician. He ran a dirty campaign that mischaracterized and demonized Fenty’s term, he’s owned by special interest groups (see teachers unions), and will only pay lip service to reform, something DC desperately needs.
For decades, Washington DC’s public schools were the laughingstock of the country, consistently ranking near the bottom in every education metric. Fed-up with the status quo, Fenty appointed Michelle Rhee as Chancellor of Washington’s schools giving her free rein to battle the self-serving teachers unions and implement reforms she deemed essential. So, did it work? How does DC’s education system compare to other cities, now?
A new study by AEI’s Rick Hess examines “which of thirty major U.S. cities have cultivated a healthy environment for school reform to flourish.” Hess found that DC’s education environment now ranks second in a study of major US cities, largely due to Mayor Fenty and Michelle Rhee’s reforms.
Reform is painful; Fenty bruised some egos in the process making a lot of powerful enemies. Hess writes, “Survey respondents report that Mayor Adrian Fenty is the only municipal leader willing to expend extensive political capital to advance education reform.”
Gray has capitalized on union antipathy towards Fenty and formed alliances with DC’s biggest labor unions, receiving endorsements from:
AFSCME, AFGE, AFL-CIO Washington Labor Council, Carpenter's Union, Fraternal Order of Police, Fraternal Order of Police-Department of Corrections, Fraternal Order of Police District of Columbia Lodge #1, Firefighters Local 36, Gertrude Stein Club, , National Association of Government Employees, National Association of Social Workers, Nurses Union, Teamsters Local Union 639, Teamsters Local 689.”
No wonder Fenty is trailing in the polls, all of DC’s power players have united against the mayor. Most depressing is that Michelle Rhee announced she would leave if Gray is elected; their views are incompatible--Rhee is focused on giving DC’s poorest students chance to succeed, Gray is concerned with protecting teachers unions.
Carried across the finish line by union money, Gray’s election could well nullify the education gains Fenty and Rhee made over the past three years--the last thing DC needs.
Harry Reid Looks to Resurrect RES During Lame-Duck
Harry Reid (D-Nev.) made news Tuesday when he announced that he would try to pass an energy bill during the lame-duck session. This comes as a surprise to most as Reid pulled his energy bill right before recess began as he couldn’t muster up the requisite votes. Even more surprising is that Reid said a key component of his lame-duck bill would be a national Renewable Electricity Standard (RES), a contentions policy amongst Members.
RES requires that a percentage of a state’s energy production be derived from “clean” energy sources, generally understood as wind and solar. Government imposed RES are necessary because wind and solar are not economically viable, they need government subsidies and mandates to compete with cheaper forms of energy.
While some think this is a political move to drum up support from the environmental lobby--Mr. Reid is currently involved in a heated primary debate with Republican Sharron Angle—let’s take Reid at his word. What are the economic implications for a national RES?
Heritage Foundation scholars crunched the numbers and found that instituting a 35 percent RES by 2035 America would loose 1,000,000 jobs.
Don’t take their word for it; look at Europe. In Spain, government subsidies for the wind and solar industry prevent 2.2 jobs from being created in the private sector and have contributed to the country's high unemployment levels.
Domestically, the DeSoto Solar Center in Florida was supposed to be the “largest solar power plant in the United States,” according to President Obama. The Center received $150 million from the Recovery Act. After using 400 construction workers to build the site, the Solar Center now employs only two people. So while the transition to new energy sources creates jobs, many of them are temporary, a distinction many on the left fail to make.
With unemployment already hovering around 10 percent, the last thing we need is from soon-to-be jobless Senators is an unnecessary energy bill. Implementing an RES during the lame-duck is bad policy, undemocratic, and appallingly arrogant.
Rally for Jobs Kicks Off Today in Texas
Since coming into office, the Obama Administration has taken an antagonistic stance against America’s oil and natural gas producers--energy sources that power our country-- barring exploration along most of our coastline and threatening to levy job-killing tax increases.
In an attempt to push back against this anti-growth agenda, the American Petroleum Institute has organized nationwide Rallies for Jobs throughout the month of September--the first of which are held today in Texas.
The message of these rallies is clear: higher taxes mean fewer jobs.
Responsible for more than 9.2 million well-paying jobs across the country, oil and natural gas production is one of America’s biggest industries. Furthermore, this industry is already taxed at an exorbitant rate: the effective tax rate for oil and natural gas companies in 2009 was 48 percent compared to 28 percent for the rest of Standard and Poor’s industries.
The taxes being floated by the Obama administration would undoubtedly result in job loss. With the unemployment rate already hovering around 10 percent, further taxing America’s energy producers would be imprudent and irresponsible.
If you cannot make it to the Texas rallies today, you can view them and forthcoming rallies at http://energynation.org/.
Below is a list of the subsequent rallies across the country, I hope you will be able to join the thousands of Americans uniting to rebuke the job-killing policies coming out of Washington.
|Sept. 1||11 a.m.||George R. Brown Convention Center||Houston, TX|
|Sept. 1||11 a.m.||American Bank Center Convention Center||Corpus Christ, TX|
|Sept. 1||11 a.m||Port Arthur Civic Center||Port Arthur, TX|
|Sept. 7||12 noon||Canton Memorial Civic Center||Canton, Ohio|
|Sept. 8||11 a.m.||McGee Park||Farmington, NM|
|Sept. 8||11 a.m.||Pipefitters Training Center||Mokena, IL (Joliet)|
|Sept. 10||11 a.m.||Two Rivers Convention Centrer||Grand Junction, CO|