Justin Sykes

USPS's Latest Billion Dollar Boondoggle

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Posted by Justin Sykes on Wednesday, January 6th, 2016, 10:33 AM PERMALINK


The United States Postal Service (USPS) is set to start off the New Year with a financially ill-advised bang, by announcing plans to purchase a fleet of new vehicles with a price tag of up to $6.3 billion.  At first glance one might assume this fleet to be a to be a beneficial new asset to the USPS, however the multi-billion dollar purchase comes at a time when the financially beleaguered Postal Service is struggling to keep its head above water.

There are two issues with the Postal Service’s purchase of the new fleet that raise concerns. First, the purchase comes on the heels of the USPS’s posting of $5.1 billion dollars in losses for fiscal year 2015. Additionally, studies show that there are alternative options the Postal Service could use instead of purchasing an entire new fleet of vehicles that would be fiscally advantageous and save billions.

As mentioned, the Postal Service’s decision to spend $6.3 billion dollars on the new fleet comes at a time when the USPS should be looking to cut costs instead of creating new financial challenges. The fact is last November the USPS reported a $5.1 billion loss for fiscal year 2015, marking its 9th consecutive year of multi-billion dollar losses. Since 2007, the USPS has accumulated $56.8 billion in losses. The Postal Service has also experienced a five-year decline in first-class mail, leading to a hit in annual revenue that is cause for concern given the magnitude of this planned purchase.

A recently released study by the advocacy group Securing America’s Future Energy (SAFE) examined the USPS’s decision to throw billions away on a new fleet, finding that the problem could be addressed through cheaper, alternative means. The study also highlights issues with USPS’s inability to incorporate new technologies once the purchase is made.

 USPS plans to use the new fleet of 180,000 “Next Generation Delivery Vehicles” (NGDVs) over the next 20-25 years. Yet one issue pointed out in the SAFE study is that committing to such a massive one-time purchase locks USPS into a vehicle fleet that will have “no ability to incorporate new technologies over time” and these 180,000 vehicles will have little resale value given they are custom made for USPS.   

Conversely, the study suggested that instead USPS could look too a cheaper more efficient approach that would allow the vehicles to evolve with technology and stave off such a massive investment. For instance the study found “an alternative approach using a mix of lightly modified off-the-shelf vehicles could generate nearly $2 billion in savings for USPS.”

While it is clear the Postal Service has consistently struggled financially, posting annual losses for almost a decade, now is not the time for USPS to be making large scale, billion dollar purchases. What isn’t clear though is why USPS would decide to throw billions on another billion-dollar boondoggle when clear, cheaper alternatives exist.   

 

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JustMoved315

If you really want to criticize the solvency of the USPS, perhaps you should point the finger at Congress. They're the ones who are forcing the USPS to bank over $100 billion in pension benefits far in advance, something no commercial institution could ever do, nor would ever be forced to do. No commercial business does this. Ever. If it weren't for that, the USPS wouldn't be losing so much money, and this sustainable vehicle purchase is a logical step to significantly reduce operating and maintenance costs over the long term. Instead of criticizing a much needed $6 billion investment, seek to repeal the $100 billion mandate that Congress gave the USPS. It is simply ludicrous.

Glen Gibson

The purchase of new vehicles all at once is necessary for what is happening now. USPS employees see 4 times the amount of parcels to deliver than in prior years mainly thanks to Amazon and the move of many retailers that don't see a lot of walk in traffic but a lot of buying online. USPS is building the economy with online purchases and mailers. 7.5 million people connect their daily income to USPS either directly or through a mail related job. Without a rack system and the ability to organize the route delivery, the carrier has to spend time going back because the boxes can fall over and roll to the back of the truck. The new vehicles also offer traffic safety features and air conditioning the older models don't. Carriers will tell you it gets 120 degrees in those older vehicles in the summer and even hotter in the southern states. The basic need to cool down on a hot day is now possible and that improves morale and performance. This is a great move by USPS.


ATR Statement on Lifting the Crude Oil Export Ban

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Posted by Justin Sykes on Wednesday, December 16th, 2015, 5:19 PM PERMALINK


Americans for Tax Reform today expressed support for efforts undertaken by lawmakers to lift the decades old ban on crude oil exports.

The ban on the export of crude oil is a relic of 1970’s policy, put in place over concerns of domestic energy scarcity. Nearly four decades later domestic production is at an all time high and the U.S. is now one of the world’s leading producers of oil and natural gas. In fact, production in a number of individual states is outpacing some of the world’s top energy-producing nations.  

Experts agree allowing the export of U.S. crude would lead to growth in the energy sector, the benefits of which would ripple throughout the economy. Studies show lifting the ban would add hundreds of thousands of jobs annually and billions to GDP while also reducing domestic gas prices. 

Lawmakers this week realized the benefits lifting the ban would offer to the U.S. economy and American consumers by acting to lift the out-dated ban on the export of crude oil through a provision in the end of year spending bill. 

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ATR Letter Urges Lawmakers to Support Sugar Reform

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Posted by Justin Sykes on Monday, December 7th, 2015, 10:30 AM PERMALINK


Americans for Tax Reform (ATR) today sent a letter to members of Congress that was signed by eight other organizations, urging lawmakers to include efforts to reform the U.S. Sugar Program in the end of year spending bill. The current U.S. Sugar Program was introduced in 1934 with the goal of lowering sugar production and raising sugar prices. Unfortunately for American consumers, businesses, and taxpayers, the sugar program has achieved its intended goal all too well. 

The result has been a system of protectionist policies that solely benefit the sugar industry at the expense of American consumers and taxpayers. Since 1934, the U.S. Sugar Program has evolved into a thicket of government imposed price supports, import quotas, and tariffs that keep domestic sugar prices artificially high. These sweetheart deals for “Big Sugar” are costing taxpayers and consumers billions, while impacting the economy and fostering a climate of crony capitalism that rivals that of the Ex-Im Bank. The time has come for lawmakers to reexamine what is actually being accomplished by this corporate welfare scheme. Below is the full text of the letter:

Mr. Speaker:

We, the undersigned organizations, respectively urge you to take steps to begin reforming federal sugar policy this year.  The House missed an opportunity to address this programmatic dinosaur in the Agricultural Act of 2014 when a number of other farm programs were significantly reformed.  The consumers, businesses, and taxpayers of this nation deserve prompt action to begin bringing the sugar program toward a more market-oriented structure.

The current sugar program relies upon total control of the domestic market and administration of that market by federal officials to force consumer prices to rise to an artificial level unrelated to world market prices.  A recent study by economists from Iowa State University estimated that the sugar program costs U.S. consumers up to $3.5 billion per year more for sugar than the market justifies.

Good paying manufacturing jobs are being lost in the industries that use sugar as a major ingredient in their products.  Our nation has lost more than 120,000 such jobs from 1997 to 2011 while at the same time employment in the other parts of the food industry have increased.  This is not due to a decrease in consumption of sugar-containing foods.  It is simply a case of moving the manufacturing offshore.

In addition to controlling the supply of sugar, federal law provides unlimited nonrecourse loans to the processors of sugar to guarantee a minimum price for sugar. This handful of processors can take out loans on all the sugar they process, which can run into hundreds of millions of dollars for a single entity.  The ink was hardly dry on the last Farm Bill when a series of massive loan forfeitures cost taxpayers $259 million.

Mr. Speaker, the sugar program is a long-neglected corner of federal policy that demands Congressional attention.  The U.S. sugar industry operates in a market virtually off limits to foreign competition.  As a result, prices for refined sugar averaged nearly 80 percent higher than world prices for the most recent ten years.  The federal sugar loan program is the only crop commodity program that makes unlimited nonrecourse loans to processors.  In all other crop commodity programs, benefits are limited by the size of the entity or the amount of the benefit, but not for sugar.

We believe that it is long past time to begin the process of removing this significant burden from consumers’ wallets and ending the special privileged status of the handful of domestic sugar processors.  We urge you to include provisions in this year’s federal funding legislation to begin curbing the excesses of the sugar program.

Sincerely,

 

Americans for Tax Reform

U.S. Chamber of Commerce

Council for Citizens Against Government Waste

Competitive Enterprise Institute

Consumer Federation of America

National Consumers League

Taxpayers Protection Alliance

Taxpayers for Common Sense

Center for Individual Freedom

 

 

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ATR Urges Lawmakers to Oppose the Solar ITC and Wind PTC

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Posted by Justin Sykes on Thursday, December 3rd, 2015, 11:14 AM PERMALINK


As lawmakers meet this week during negotiations over the tax extenders deal, Americans for Tax Reform (ATR) encourages them to oppose any efforts to extend the Investment Tax Credit (ITC) for solar past 2016 and also urges opposition to reviving the Production Tax Credit (PTC) for wind. American taxpayers have already been forced to pay billions in handouts to the wind and solar industries and the time has come to end such anti-free market practices.

The ITC for solar energy was originally introduced in 2006, and provides a 30 percent credit for commercial and residential solar. Similarly, the wind PTC  provides wind producers with a 2.3-cent tax credit for every kilowatt-hour of electricity produced over ten years. Currently the PTC is expired, and in 2016 the residential credit under the ITC will expire with the commercial credit dropping to 10 percent.

Lawmakers should oppose any efforts to extend the ITC or to revive the PTC that may come during tax extender negotiations. Both of these credits are massive burdens that have benefited a small number of those in the wind and solar industry at the expense of billions in taxpayer dollars. According to a recent report by Citizens Against Government Waste (CAGW), from 2004-2015 tax expenditures for the ITC and PTC have cost $11.5 billion. Since 2008 alone the PTC has cost taxpayers over $7 billion. 

Ironically, a number of those in the renewable energy sector agree that propping up renewable energy is not a burden that taxpayers should be expected to bear. For instance John Berger, CEO of the third-largest residential solar company called Sunnova, supports “letting the ITC expire, and believes the industry can stand on its own two feet…without being overregulated and subsidized using unnecessary taxpayer dollars taken from hardworking Americans.”

Similarly, Enphase Energy CEO Paul Nahi told Forbes in a 2013 interview that “where there is no projected end to funding, subsidies stop being a catalyst, and start becoming a crutch.” Nahi went on to conclude that “a robust, renewable energy market will remain hampered if the energy industry continues to chase the next subsidy.” 

The fact is both Berger and Nahi are all to correct. Special treatment from the government does not advance solar and wind related technologies but instead stymies progress as the industries become more and more complacent in their dependency on taxpayer handouts. The government should not be picking winners and losers in the marketplace. Such anti-free market policies result in taxpayers being on the hook for the government’s gambles, as is the case with the ITC and PTC that have cost taxpayers billions.

When the free-market is compromised by government sweetheart deals that favor one industry over another at the expense of taxpayers, the competitive edge and drive that has made America great is lost. This year lawmakers on Capitol Hill should not perpetuate this economically disastrous cycle. Congress should instead represent the best interests of their taxpayer constituents, and choose to oppose efforts to extend the ITC and efforts to revive the PTC.

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ATR Urges Congress to allow the Solar Investment Tax Credit (ITC) to Expire

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Posted by Justin Sykes on Thursday, December 3rd, 2015, 8:51 AM PERMALINK


Americans for Tax Reform (ATR) today sent a letter to members of Congress urging them to allow the Investment Tax Credit (ITC) for solar energy to expire and encouraged lawmakers to oppose any efforts to extend the ITC in this years tax extenders deal.

Originally enacted in 2006, this 30 percent commercial and residential credit was intended to facilitate a fledgling solar industry. Yet in recent years solar has sufficiently matured and the time has come for these taxpayer backed handouts to end.  

Congress now has a great opportunity to clean up America's tax code and begin peeling back government policies that unfairly pick winners and losers - simply by taking no action. Below is the full text of the letter: 

Dear Chairman Brady: 

On behalf of Americans for Tax Reform (ATR), and millions of taxpayers nationwide, I urge you to allow the Investment Tax Credit (ITC) for solar energy to expire. 

The ITC was never intended to be permanent but has received repeated extensions over the years. Congress is under no obligation to continue to extend temporary tax policy; simply because the ITC is law in 2015 does not justify the tax credit’s existence indefinitely.

ATR supports allowing the ITC to expire and also urges lawmakers to oppose the inclusion of any ITC extension in this years tax extenders deal. Allowing the ITC to continue disadvantages energy consumers by skewing America’s energy market, unfairly picking winners and losers and distorting our tax code.  

Originally introduced in 2006, the 30 percent credit for commercial and residential solar was intended to facilitate a fledging industry. Since then, the solar industry has sufficiently matured and its power generation is even mandated in a number of states. 

Relying so heavily on the ITC, the solar industry has put Congress in the awkward and ill-suited position of deciding whether Americans will consume more or less solar energy. America’s energy markets are enormously complex systems, which function most efficiently without government’s distortive policies. 

Burdened with political considerations, the federal government is ill-equipped to determine what source of energy Americans should use. With the federal ITC set to expire at the end of 2016, Congress has a great opportunity to clean America’s tax code and begin peeling back government’s distortive policies – simply by taking no action. 

Sincerely,                                

Grover G. Norquist                                                     
President                                                                   
Americans for Tax Reform  

 

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ATR Supports Rep. Barton's Amendment to Lift the Crude Oil Export Ban

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Posted by Justin Sykes on Tuesday, December 1st, 2015, 11:15 AM PERMALINK


Americans for Tax Reform today sent a letter to members of Congress urging them to support an amendment offered by Rep. Joe Barton (R-Texas) to H.R. 8, the North American Energy Infrastructure Act,  that would lift the outdated federal ban on crude oil exports.  

The current ban on the export of crude oil is a relic of 1970's policy, enacted in response to fears of a domestic energy shortage. Yet today this outdated ban is no longer justified with domestic production at an all time high and the U.S. now one of the world's leading energy producers.

By acting to lift this outdated ban, the U.S. will be able to fully realize the economic benefits of the ongoing renaissance in domestic energy production. Below is the full text of the letter:

Dear Speaker Ryan and Majority Leader McCarthy: 

On behalf of Americans for Tax Reform and millions of taxpayers nationwide, I respectively urge you to support an amendment offered by Rep. Joe Barton (R-Texas) to H.R. 8, the North American Energy Infrastructure Act, which would effectively lift the ban on crude oil exports. The current ban on the export of crude oil is not only outdated, but lifting the ban will ensure the creation of new jobs, increased economic growth, and lower domestic gas prices. 

Countless experts and studies have shown lifting the ban on exports would have widespread economic benefits for the country. A recent study by the Government Accountability Office (GAO) found lifting the ban would “increase the size of the economy, with implications for employment, investment, public revenue and trade.” 

The GAO’s findings are echoed by over a dozen other studies that show lifting the ban would contribute millions of new jobs to the economy over the next few years, and increase U.S. GDP by $73 billion in 2016 with an additional increase of $134 billion in 2018. Additionally, the Energy Information Administration (EIA) found “gasoline prices, would be either unchanged of slightly reduced by the removal of current restrictions on crude oil exports.”    

Lifting the crude oil export ban is also projected to increase average disposable income per household by $391 in 2018. A recent study by the Aspen Institute further found that real household income could increase up to $3,000 per household over the next ten years as a result of lifting the ban. 

ATR has also continued to support H.R. 702, sponsored by Representative Joe Barton of Texas, which would lift the outdated crude oil export ban. We were happy to see the measure recently pass the House with a bipartisan vote of 261-159, which enjoyed the support of 26 Democrats and a majority of House Republicans.

Considering the widespread economic benefits lifting the export ban would have on the U.S. economy, as well as the growing bipartisan support, there has never been a better time for Congress to act. By lifting the export ban Congress can ensure the creation of millions of new jobs, billions in increased GDP, and reductions in domestic gas prices. 

It is for these reasons that I respectively urge you to support Rep. Barton’s amendment to H.R. 8, to lift the ban on crude oil exports. 

Sincerely,                                

Grover G. Norquist             
President                                                                   
Americans for Tax Reform
                             

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Grover Norquist Calls for End to Sugar Subsidies at Hill Briefing

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Posted by Justin Sykes on Thursday, November 19th, 2015, 11:22 AM PERMALINK


Americans for Tax Reform president Grover Norquist this week spoke at a Congressional Briefing on U.S. sugar reform hosted by Rep. Bill Shuster (R-Penn.), where Mr. Norquist and three other experts called for an end to policies under the U.S. Sugar Program that harm American taxpayers, consumers, and businesses.

Addressing a standing room only crowd at the Rayburn House Office Building, Mr. Norquist charged that the sugar program amounts to a system of corporate welfare that allows the sugar industry to “get rich on other people’s money,” branding the sugar reform fight as “the new Ex-Im.” 

Norquist also issued a warning to Congress that “those politicians who vote to maintain the status quo with the Sugar Program are opening themselves up to more scrutiny than they’ve had in the past.”

The briefing included opening remarks by Rep. Bill Shuster (R-Penn.) and Rep. Mike Kelly (R-Penn.), with Shuster stating, “this briefing lays the groundwork for a needed discussion on the issue, and I will continue working with my colleagues to make reforms to the program." 

Speaking on the domestic impacts, the panel noted that the program cost American taxpayers nearly $300 million in 2013 alone, and the Congressional Budget Office projects it could cost taxpayers an additional $115 million over the next 10 years. It was also pointed out that the program has contributed to the loss of nearly 10,000 jobs annually in the U.S. food industry, and that for every one sugar-growing job saved by high U.S. sugar prices, approximately three U.S. manufacturing jobs are lost.

While most of the panel’s focus was on the domestic impacts of the sugar program, the discussion also expanded to issues the program causes for American trade negotiations. “This disrupts all of our efforts to get free trade and damages every American exporter and consumer not just in this zone, but because in order to do this stupid thing to our consumers we have to give way on other stuff that also does damage to our consumers and our producers,” Norquist stated. 

Looking ahead the panel noted that opportunities for reforming the program could soon come in an appropriations bill or during the budget process. 

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Top Five Reasons to End U.S. Sugar Subsidies

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Posted by Justin Sykes on Monday, November 16th, 2015, 12:58 PM PERMALINK


The current U.S. Sugar Program was introduced in 1934 with the goal of lowering sugar production and raising sugar prices. Unfortunately for American consumers, businesses, and taxpayers, the sugar program has achieved its intended goal all too well. 

The result has been a system of protectionist policies that solely benefit the sugar industry at the expense of American consumers and taxpayers. Since 1934, the U.S. Sugar Program has evolved into a thicket of government imposed price supports, import quotas, and tariffs that keep domestic sugar prices artificially high.

These sweetheart deals for “Big Sugar” are costing taxpayers and consumers billions, while impacting the economy and fostering a climate of crony capitalism that rivals that of the Ex-Im Bank. The time has come for lawmakers to reexamine what is actually being accomplished by this corporate welfare scheme. Below are five reasons the sugar program is quite literally all cost and no benefit for Americans. 

1. The sugar program has cost taxpayers billions. For American taxpayers, the sugar program has led to billions of their hard earned dollars being wasted propping up the sugar industry. Estimates show that from 2000-2001 the sugar program cost taxpayers almost half a billion dollars. In 2013 nearly $300 million was charged to taxpayers by the program, and the Congressional Budget Office (CBO) projects the program will cost taxpayers an additional $115 million over the next 10 years. 

2. Consumers pay the price for sugar subsidies. As a result of the sugar program, the average wholesale price of domestically produced sugar in the U.S. is more than twice the average world price of sugar, an average of 14.87 cents higher per pound. For instance in August of 2015 the U.S. sugar price of 33.13 cents per pound was more than double that of the world price of 15.57 cents. This means that American consumers are not only footing the bill for these government backed handouts to big sugar, but are being made to pay higher prices for sugar and related goods as a result.  

3. Sugar subsidies are crony capitalism at its worst. Much like the beleaguered Ex-Im Bank, the U.S. sugar program is the antithesis of free-market policy. The program instead represents the worst of corporate welfare and cronyism that so often plagues D.C. politics. Through the use of price supports, import quotas and tariffs, the sugar program destroys competition in the market, protecting the politically connected sugar industry at the expense of hard working Americans. 

4. The sugar program is destroying thousands of U.S. jobs annually. Protectionist policies under the U.S. sugar program have led to artificially high prices for domestic sugar, creating incentives for manufacturers to import certain sugar products or to relocate their operations outside of the U.S. As a result, the sugar program has led to a loss of nearly 10,000 jobs annually in the U.S. food industry. The Department of Commerce (DOC) estimates that for every sugar-growing job saved through high U.S. sugar prices, approximately three manufacturing jobs are lost. 

5. Sugar handouts distort the market and harm domestic businesses. The current U.S. sugar program uses protectionist policies to prop up the sugar producing industry, insulating producers from market forces and most importantly competition. While artificially high prices and restricted competition is good for sugar producers, domestic sugar-using manufacturers alternatively are competing globally but paying for domestic sugar at a rate twice that of the global price, putting them at a severe disadvantage.  

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Cruz Calls for End to Sugar Subsidies in Presidential Debate

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Posted by Justin Sykes on Wednesday, November 11th, 2015, 2:54 PM PERMALINK


Despite all the discussion of corporate welfare and cronyism in recent GOP presidential debates, one of the most dramatic examples of corporate welfare, U.S. Sugar Subsidies, has gone unmentioned. That is until last night’s debate in Milwaukee when Republican presidential candidate Senator Ted Cruz valiantly called for an end to the taxpayer funded “corporate welfare” that is the U.S. Sugar Program.

What most Americans don’t realize is that the price they pay for sugar and related consumer goods in the U.S. is kept artificially high by the government. In fact the average wholesale price of U.S. domestic sugar is more than twice that of the average world price. For example, in August of 2015 U.S. sugar was priced at 33.13 cents per pound, while the world price was a mere 15.57 cents per pound.

The reason U.S. sugar prices are so high is due to a laundry list of protectionist policies put forth under the Federal Sugar Program that serve only the interest of the sugar industry at the expense of American consumers and taxpayers.

Currently the Federal Sugar Program imposes a minimum price for U.S. sugar and sets a limit on the amount of sugar domestic processors are allowed to sell. The Sugar Program also sets import quotas on sugar that limit the amount that can be imported. Taken together these policies keep prices artificially high while also preventing competition, amounting to a massive handout to “Big Sugar.”

As Senator Cruz pointed out in Tuesday night’s debate, sugar subsidies are one of the most egregious examples of “corporate welfare” in the U.S. and are the type of cronyism that is “bankrupting our kids and grandkids.” And Senator Cruz is exactly right, as the cost of supporting such corporate welfare falls squarely on the backs of American consumers and taxpayers.

Studies show the Federal Sugar Program cost U.S. consumers and businesses up to $3.5 billion annually. For taxpayers, the program cost almost a half a billion dollars between 2000 and 2001, and nearly $300 million in 2013. For 2015 the Congressional Budget Office predicts the sugar program will cost taxpayers an additional $115 million over the next 10 years.

While Senator Cruz’s vocal calls for an end to sugar subsidies in Tuesday night’s debate stood out, he is not the first presidential candidate to do so. In fact, last month Republican presidential candidate Jeb Bush argued for a phase out of U.S. sugar subsidies. A Bush spokesperson noted that Bush “believes we should constantly be moving to reduce government interference and create a level playing field for all commodities on the world market.”

It is clear that more and more candidates for president are realizing just how detrimental U.S. sugar subsidies are to American consumers and taxpayers, and anti-sugar subsidy rhetoric will likely be an increasing theme going forward. The disturbing truth is the Federal Sugar Program is now one of the most onerous examples of crony capitalism, rivaled only by that of the Ex-Im Bank, and until it is repealed Americans will continue to suffer from artificially high prices and billions in wasted taxpayer dollars. 

 

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Obama's Carbon Rule Much Worse for States than Originally Anticipated

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Posted by Justin Sykes on Tuesday, September 8th, 2015, 12:53 PM PERMALINK


Last month the Obama Administration and EPA released the final version of their so-called “Clean Power Plan,” which seeks to regulate carbon in the U.S. While the President and his army of EPA bureaucrats tout the “flexibility” of the carbon rule, the reality is the rule is anything but flexible and will hits states the hardest. Projections show the finalized version of the carbon rule will have a much more devastating impact than originally expected in the proposed version.

For states, the finalized rule means massive energy rate increases and compliance scenarios that will prove crushing for their economies. The carbon rule offers two compliance scenarios, both of which are practically unworkable for states and will send energy rates skyrocketing.

It is projected that over 40 states will see double digit rate increases under the carbon rule, inevitably killing thousands of jobs and pushing integral industries to search for lower energy prices, potentially oversees. 

Worst of all is the impact the carbon rule will have on 22 states that were blind-sided by much more stringent emissions reduction targets in the finalized rule than in the proposed rule. Twenty-one of these 22 states enjoyed average electricity prices 12% below the national average last year. More stringent targets however mean residents will be paying more for energy and sectors such as manufacturing could soon leave states for more affordable climates.

For instance the reduction target originally proposed for North Dakota was 11%, yet the target contained in the finalized rule is almost 50%. Iowa, Kentucky and Wyoming were originally projected to see targets just below 20% but the finalized rule requires well over 40% reduction targets for each. States such as Indiana, Kansas, and Montana also saw their compliance targets roughly double in the final rule.   

Furthermore, in drafting the final rule, the assumptions made by Obama and the EPA are not only illogical but extremely misleading. In the final version the EPA assumed that roughly 100 GW of coal would inevitably be retired by 2020, even without the carbon rule. 

This assumption however is much larger than the 66 GW the EPA originally projected in the proposed rule or the 55 GW the Energy Information Administration projected. By assuming more coal retirement in the final version absent the carbon rules enactment, the EPA tries to misrepresent the actual impact the carbon rule will have on the industry.          

The final version of the rule also assumes that 41,000 MW of renewables such as wind would come on line by 2030. The EPA claims such sources would replace roughly 38,000 MW of coal the Agency projects will be retired during the same period.  However this swap is not only wildly impracticable but doesn’t take into account the unreliable nature of wind.

Because wind generation is so sporadic it is estimated that for such a drastic shift in energy supply to be effective over 170,000 MW of wind would actually be needed, as opposed to the 41,000 MW the EPA projects. The feasibility of doing so would require over 20 million acres of wind generation, a landmass the size of 16 million football fields or roughly the State of Indiana.    

As unclear and unforthcoming as the President and the EPA have been in disclosing the impact the final carbon rule will have on states, the one thing that is clear is a majority of states will be hurt. For the 40 or so states that will see double digit rate increases, or the 22 states facing compliance targets well above those initially projected, this rule will prove an economic disaster that ripples across the U.S. 

 

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