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Chris Prandoni

Diana Furchtgott-Roth Explains Pension Bailout Legislation on CNBC


Posted by Chris Prandoni on Thursday, May 27th, 2010, 11:40 AM PERMALINK


Echoing ATR’s coalition letter, Diana Furchtgott-Roth explains the problem with Congressional legislation that looking to bailout multiemployer pension funds.

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Fact Checking President Obama's Fuel Efficiency Standards Speech


Posted by Chris Prandoni on Wednesday, May 26th, 2010, 4:42 PM PERMALINK


[PDF Document]

Recently, President Obama gathered union leaders, Members of Congress, and business owners in the Rose Garden for a forum on vehicle fuel efficiency standards (FES). However, many of the Presidents claims do not hold up to closer scrutiny and explain why the country and industry has not embraced his fuel efficiency plans.

Myth: “The typical driver will save roughly $3,000 over the life of the vehicle.”

FACT: Mandating higher miles per gallon (mpg) will raise the sticker price for vehicles as car makers need to install newer, more expensive technology. The price tag for a “compact car will go up $1,800 to $2,000. The price of a mid-sized car is likely to increase $4,500 to $6,000... Outfitting a full-sized pickup with a diesel, rather than a gasoline-powered V-8, and other new equipment could cost $9,000,” says Sandra Stojkovski, president of See More Systems consulting firm.

Myth: “This is going to bring down the costs for transporting -- for transporting goods, serving businesses and consumers alike.”

FACT: In order for FES to reduce transporting costs, the money saved from increased fuel efficiency would have to offset the inflated vehicle sticker price necessary to comply with new FES. If this were true, federal law would be wholly unnecessary as trucking companies would make the switch to more profitable trucks on their own.

Myth: “And that’s why, when we fashioned the Recovery Act to get our economy moving again, we emphasized clean energy... It’s estimated that through these investments, we’ll create or save more than 700,000 jobs.”

FACT: Quite the opposite. Governments that tilt the markets by mandating green energy actually stunt job growth by reducing overall economic productivity. European countries whose governments subsidized renewable forms of energy found this out the hard way. It is estimated that for every government mandated “green-energy job” created, 2.2 jobs in the private sector were prevented from being created.  

Myth: “Auto companies will have the clear incentive to develop more efficient vehicles.”

FACT: It is no longer an incentive if it is mandated. Furthermore, car makers are worried that new mandates will force them to create vehicles people don’t want, “We’ll have to force a lot of hybrids, which people may or may not pay for,” said Bob Lutz, Vice Chairman of GM. Evidence of this problem can be seen in specific car markets where consumers are yet to embrace hybrid vehicles. “Performance hybrids and mild hybrids haven’t gained any traction in the market,” said Jake Fisher, senior automotive engineer at Consumer Reports.

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Maine Sens. Collins and Snowe Side with Democrat Takeover of Banks


Posted by Chris Prandoni on Tuesday, May 25th, 2010, 9:12 AM PERMALINK


[PDF Document]

Senator Dodd’s contentious financial regulation legislation passed the Senate last week, 59-39 after getting essential votes from Maine Republican Senators Olympia Snowe and Susan Collins. Republican Senators Scott Brown (R-Mass) and Charles Grassley (R-Iowa) joined Snowe and Collins to vote for the Restoring American Financial Stability Act of 2010, ensuring its passage.

This was bad legislation from the start that was only made marginally less bad through the painful amendment process in the Senate. Making the failed risky lending policies permanent that led to the collapse of Fannie and Freddie are never ideas people with ‘R’s’ behind their name should support. There were enough reasons to oppose this bill that any conservative should have had no problem voting no. Apparently, Senators Snowe and Collins thought differently,” said Grover Norquist, President of Americans for Tax Reform.

Senator Dodd’s Restoring American Financial Stability Act did not address Fannie Mae and Freddie Mac’s precarious lending practices, two of the key factors behind the current economic crisis, while it codified bailouts for financial institutions. Additionally, the Democratic legislation expands the size and scope of government creating additional bureaucracies and further empowering regulators who failed to prevent or see the financial crisis two years ago.

The real consequence of this will be to further delay our recovery by raising the cost of financial transactions and constricting the flow of capital throughout the American economy.  Financial institutions, the heart of any economy, will need to comply with additional regulations. This will raise the cost per transaction, thereby, reducing the number that can take place. With near double digit unemployment, this legislation is the last thing we need.” Norquist added.

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Good Employment News, Sort of


Posted by Chris Prandoni on Thursday, May 20th, 2010, 3:33 PM PERMALINK


Although the unemployment rate rose to 9.9 percent, it was largely due to people re-entering the workforce in an attempt to find work (people that are unemployed for a long period of time and stop looking for work are not included in unemployment calculations), employers created 231,000 private sector jobs. Similarly encouraging, hours and wages increased.

James Sherk of Heritage explains the increase in the unemployment rate:

“The rate of job creation is not high enough to keep up with these potential workers. The increase of the unemployment rate from 9.7 to 9.9 percent is simply due to the rapid growth of the labor force and the slower rate of job creation. The unemployment rate could continue to climb if the new entrants to the labor market continue at such a brisk pace. The labor force participation rate is still well below the pre-recession level, which indicates that hundreds of thousands of workers have not yet started searching for work.”

It is the private sectors inability to create jobs that has led to such high levels of unemployment, not job loss. The below chart from Heritage compares the 2001 recession to make this point:

So, now that the problem has been identified, job creation, what should the government due to foster job growth? The government could make it easier to higher employees by reducing mandatory benefits and payroll taxes. Employers would be much more likely to hire employees if there were fewer strings attached. Secondly, the government should reassure businesses that they will not levy additional taxes or regulations. Many businesses fearful of the health care reform’s implications or the Democrat pushed energy tax are acting prudently and not hiring. The low job creation numbers are largely due to the uncertainty surrounding Congress.

Sherk’s more specific remedies:

Congress should promote more rapid job growth in this recovery. America cannot afford a repeat of the European experience. In the 1970s, Europe had relatively low levels of unemployment. Unemployment increased sharply in the early 1980s and has remained persistently high through the present day. This is in large part because of the expensive social-democratic welfare states that European nations created. These highly regulated welfare states discouraged entrepreneurship and wealth creation-and thus the incentive to create new businesses and jobs. Ten percent unemployment has become normal in Europe.

Congress should not allow 10 percent unemployment to become normal in America. Congress should jettison Keynesian ideology and instead promote job creation by encouraging entrepreneurship and new investment. Congress can do this through a combination of explicit actions and by eliminating specific, Washington-based threats to the economy. Such a no-cost stimulus would create jobs without adding to the deficit by:

  • Freezing all proposed tax hikes and costly regulations at least until unemployment falls below 7 percent;
  • Freezing spending and rescinding unspent stimulus funds;
  • Reforming regulations to reduce unnecessary business costs, such as repealing Section 404 of the Sarbanes–Oxley Act;
  • Reforming the tort system to lower costs and uncertainty facing businesses;
  • Removing barriers to domestic energy production in Alaska and in Colorado oil shale;
  • Repealing the job-killing Davis –Bacon Act;
  • Passing pending free-trade agreements with South Korea, Colombia, and Panama; and
  • Reducing taxes on companies’ foreign earnings if they bring those earnings home.

Implement these changes and watch unemployment numbers drop. Until then, we watch as our economy wrestles with Congress’ burdens.

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Americans Want an Energy Bill, Not a Climate Change Bill


Posted by Chris Prandoni on Thursday, May 20th, 2010, 12:21 PM PERMALINK



The latest National Journal/Pew Research poll reveals,
predictably, that “the job situation” (81 percent) is the most important issue for Americans these days. Coming in second, Americans’ viewed “the country’s energy needs,” (67 percent) not to be confused with “climate change” (32 percent). Given the huge disparity between these two often conflated topics it is surprising that recent legislation, Waxman-Markey in the House last year and Kerry-Lieberman in the Senate these days, makes no distinction between climate change and the country’s energy needs.

Certainly, it would be possible to pass smaller bipartisan legislation that addresses the country’s energy needs, a nuclear power bill, perhaps, for a public concerned about this issue. So why hasn’t this happened? Politics. Were a nuclear energy bill signed into law, it would reduce the leverage Democrats have over Republicans as they could no longer include nuclear power provisions in their climate bills. We saw the same thing happen during the health care debate. If a bill came to the floor that allowed people to purchase health insurance across state lines it would pass. But again, then Republicans would be less inclined to vote for the Democrat health care bill.

There are many drawbacks to the legislative style employed by the majority in power. First, it is confusing. The Kerry-Lieberman bill is over a thousand pages. Incremental legislation would be transparent and simple. Second, it prolongs the legislative process. Simpler legislation, by its nature, is easier to pass or kick to the curb. The month long debates about health care were due to its convoluted nature. Unfortunately, we are unlikely to see smaller, simpler legislation because it makes it impossible for Democrats to hide many of their unpopular initiatives.   

So while Democrats try to find enough energy provisions to include in their climate change legislation to get them 60 votes, the American people are left without a comprehensive energy plan. 

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ATR Will Rate Against Cloture Vote Supporting Dodd-Lincoln Substitute Amendment to Financial Bill


Posted by Chris Prandoni on Wednesday, May 19th, 2010, 12:40 PM PERMALINK


Today, Americans for Tax Reform (ATR) announced they will rate against a vote for cloture on the Dodd-Lincoln substitute amendment #3739 to the “financial reform” bill, the Restoring American Financial Stability Act of 2010, in their annual Congressional Scorecard.

The amendment process has not “fixed” this bill – in many instances, this bill is worse. The following problems continue to plague this proposal:

  • Cauterizes “too big too fail:” Section 113 of the bill establishes a “Financial Stability Oversight Council,” charged with identifying firms that would “pose a threat to the financial security of the United States if they encounter “material financial distress.” By being placed under this identification, this bill sends the signal that some company’s are indeed too big too fail.
  • Permanent bailout authority: Section 204 of the bill authorizes the Federal Deposit Insurance Corporation (FDIC) to “make available … funds for the orderly liquidation of covered financial institution.” As the Heritage Foundation notes, “Although no funds could be provided to compensate a firm’s shareholders, the firm’s other creditors would be eligible for a cash bailout. The situation is much like the scheme implemented for AIG in 2008, in which the largest beneficiaries were not stockholders but rather other creditors, such as Deutsche Bank and Goldman Sachs”
  • Violates consumer privacy: The new Office of Financial Research is created in Title I, Section 151-156, is tasked with collecting and sharing data without restriction. This agency will collect data, create software to standardize financial industry data, and share with other agencies – regulations will be imposed as deemed fit under paragraph (2) of subsection (c).
  • Regulating over-the-counter (OTC) derivative trades: Title VII requires OTC derivative transactions to pass through a government monitored central exchange. Requiring OTC derivatives to pass through a clearinghouse and maintain high cash levels will increase the costs associated with OTC derivatives, making it more expensive for a company to insulate itself from risk. Inhibiting OTC trades for end users would unnecessarily lock up capital that a company would have used to invest, grow, and retain and create jobs -- effectively removing liquid capital from corporate balance sheets. In order to satisfy new standards set by the Dodd bill, many companies would have to establish new credit lines or sell current assets.·    
  • Creates Fannie Mae 2.0: Title 12 of this bill, misnamed “Improving Access to Financial Institutions” on page 1398, creates Fannie Mae 2.0. Fannie Mae collapsed because it became a slush fund for bad loans the government forced banks to make. This Title pays banks to advertise to, and seek out, low income people who would otherwise not qualify for loans. The bank, backed by the government, issues risky loans and either the loan is paid back on time, in which case the bank keeps all the profits, or the loan defaults and the government uses taxpayer money to cover the bank’s loss. Win-win for government backed banks, total failure for taxpayers.
  • Promotes activist/union shareholder proxy terrorism: Section 972 of Subtitle G under Title IX authorizes the SEC to require firms to allow shareholders to nominate directors in proxy statement. This ensures political popularity and influential power trump knowledge and experience. The political agenda of the far left – the trial lawyers, environmental elites, and labor unions – will have a controlling stake in the corporate governance of financial institutions.
  • Regulates non-banks under financial regulations: Section 102 of Title I provides that any “U.S. non-bank financial company,” that is “substantially engaged in activities in the United States that are financial in nature” be regulated under the same applications this legislation provides for traditional financial institutions. According to former Treasury official Gregory Zerzan, this includes things such as “holding assets of others in trust.” Department stores could be potentially regulated under this bill if they offer “layaway” – a system where they hold assets of consumers in trust until a certain period whereby an obligation is met and an exchange of goods/services occurs.
  • Seizure of private property without judicial review: Section 203 of Title II gives the Secretary the authority to take over by seizure any financial or non-financial institution that “is in default” or is simply “in danger of default,” which includes institutions that “are, or are likely to be, less than its obligations to creditors and others.” This is regulating based on assumptions. This classifying determination is only subject to legal review on a “substantial evidence” basis, meaning that the seizure must be upheld if the government produces any evidence in favor of its action – making reversal of this decision nearly impossible.

Americans for Tax Reform continues to urge all Senators to oppose this bill for, but not limited to, the above reasons. Real reform must address and eliminate the egregious over-regulation this bill will bring on the U.S. economy and individual consumers.

For more information, please contact Federal Affairs Manager Brian Johnson at bjohnson@atr.org.

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Public Service Recognition Week - Fact #2


Posted by Chris Prandoni on Tuesday, May 4th, 2010, 11:26 AM PERMALINK


Coinciding with national Public Service Recognition Week, the Alliance for Worker Freedom will send out a press release everyday highlighting some of the problems associated with America’s public sector workers.

[PDF Document]

While America’s public sector workers play an important role in the maintenance of the United States government and its agencies, the number of public sector workers and their responsibilities has so greatly expanded that it has begun to distort commerce and unnecessarily burden taxpayers. With the scope of government ever-growing, private companies are finding themselves hamstrung by government regulation or in direct competition with public workers or government backed companies.

Everyday this week the Alliance for Worker Freedom will release statistics that highlight many of the problems that accompany America’s public sector workers:

While 40% of federal workers say their employer is hiring, only 28% of non-government workers say their company is adding jobs.

The Alliance for Worker Freedom recognizes the necessity of public workers but suggests that America would be better served if many of the current functions undertaken by public sector workers were competed for by private businesses.

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Public Service Recognition Week - Fact #1


Posted by Chris Prandoni on Monday, May 3rd, 2010, 10:59 AM PERMALINK


Coinciding with national Public Service Recognition Week, the Alliance for Worker Freedom will send out a press release everyday highlighting some of the problems associated with America’s public sector workers.

[PDF Document]

While America’s public sector workers play an important role in the maintenance of the United States government and its agencies, the number of public sector workers and their responsibilities has so greatly expanded that it has begun to distort commerce and unnecessarily burden taxpayers. With the scope of government ever-growing, private companies are finding themselves hamstrung by government regulation or in direct competition with public workers or government backed companies.

Everyday this week the Alliance for Worker Freedom will release statistics that highlight many of the problems that accompany America’s public sector workers:

Federal employees on average earn $11,091 more than their private sector counterparts, a discrepancy every American pays for.

The Alliance for Worker Freedom recognizes the necessity of public workers but suggests that America would be better served if many of the current functions undertaken by public sector workers were completed by private businesses.

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New Jersey Would Gain $2 Billion From Offshore Drilling


Posted by Chris Prandoni on Friday, April 30th, 2010, 9:30 AM PERMALINK


With New Jersey facing a predicted $11 billion shortfall and 9.8 percent unemployment, Americans for Tax Reform continues to urge President Obama, Congress, and state elected officials to look toward energy exploration and production to create jobs, decrease the cost of energy and increase our domestic supply. 

  • Allowing for full development of New Jersey’s offshore resources would bring necessary commerce to New Jersey, increasing its economic output (GSP) by $2 billion annually. 
  • While the private sector continues to shed jobs, offshore drilling would bring 5,098 long-term, well paying jobs to the state of New Jersey over the next seven years – every job associated with offshore drilling earns above average wages, according to the Bureau of Labor and Statistics.
  • Investment in oil exploration would bring in $217 million in additional tax revenue annually, without raising taxes, and could be used to pay down New Jersey’s $11 billion deficit. 

The current plan proposed by President Obama restricts or prohibits states from complete oil exploration, substantially reducing the economic gains readily available to struggling states.

 “All of the benefits associated with offshore drilling, increased economic output, well-paying jobs, new tax revenue, remain locked up in America’s oil reserves. Although a majority of Americans support offshore development, the Obama administration has put forth a plan that inhibits New Jersey’s economic recovery and ability to grow over the coming years,” said Grover Norquist, President Americans for Tax Reform.

Click here for the PDF Version and click here for source

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AFL-CIO Throwing in Towel on Card Check


Posted by Chris Prandoni on Thursday, April 29th, 2010, 5:07 PM PERMALINK


From Chamber Post

Today the AFL-CIO removed the large banner supporting EFCA which had covered the corner of the building facing the White House for the past year or so. Let's just take in the moment:

Picture 005


A second banner just around the corner was taken down as well.  But now the bad news. BNA reports today that the AFL-CIO is "not backing away" from EFCA. So removing the issue from public view might not indicate surrender, but merely that a decision has been made by the AFL-CIO to bypass a public debate on card check in Congress to try and slip it through the back door.

For today though, let's stay positive.

For more on card check and the Employer Free Choice Act click here

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