Alexander Hendrie

American Companies Don’t Need Ex-Im Loans to Compete

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Posted by Alexander Hendrie on Tuesday, June 16th, 2015, 10:30 AM PERMALINK

By the end of June, the charter of the Export-Import Bank will expire. The bank has attracted criticism for its ties to fraud, waste, and abuse and because the majority of its loans benefit a select few well-connected corporations that do not need assistance. However, supporters of the bank continue to claim that without the bank, small businesses have no hope of competing overseas. This claim is completely false, and if Congress is serious about standing up to crony capitalism, it must let Ex-Im expire.

Ex-Im supporters claim that 90 percent of transactions help small businesses. But as the Heritage Foundation points out, this “help” refers to application numbers, not loans in terms of dollar amount. In reality, the bank subsidizes less than two percent of imports and less than one percent of small businesses. Last year, 70 percent of Ex-Im loans subsidized one exporter.

Furthermore, the way Ex-Im defines a small business is very generous. While most government bodies define a small business as less than 500 employees, Ex-Im defines one as less than 1,500. This allows the bank to inflate its own importance to American exporters. 

Regardless, the overwhelming majority of exports occur without Ex-Im loans, according to a recent study by the Mercatus Center. In 40 states, Ex-Im provided guarantees for less than two percent of exports in 2014.

Those “small” businesses that rely on financial assistance to export can easily get the same service from private financiers. As the Washington Examiner’s Tim Carney points out, numerous trade finance professionals consider Ex-Im a competitor. If Ex-Im expires, the private sector can easily step in and provide the same services.

Not only does Ex-Im compete with the private sector, it also competes with other government programs. As Senate Small Business Committee Chairman David Vitter (R-La.) pointed out, the Small Business Administration already has three export credit programs that perform the same function as Ex-Im.

If Congress really wants to help American business compete overseas, they should not look to the Ex-Im bank. Instead, they should focus on approving free trade agreements that tear down trade barriers and allow US firms to compete on a level playing field overseas. America’s free trade partners purchased 12.8 times more US goods compared to non-free trade partners, despite several top economies being excluded such as China, India, Japan, Germany, and the United Kingdom.


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ATR Supports “Ratepayer Protection Act”

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Posted by Alexander Hendrie on Tuesday, June 16th, 2015, 10:00 AM PERMALINK

The US House of Representatives will soon vote on H.R. 2042, the “Ratepayer Protection Act", introduced by Congressman Ed Whitfield (R-Ky.). This legislation is in response to the planned EPA rule known as the “Clean Power Plan.” If this plan goes into effect, it will place unnecessary burdens on businesses and households, cause higher electricity prices, and reduce reliability of electricity. ATR urges all members of Congress to support the Ratepayer Protection Act and protect families and businesses from this unnecessary regulation.

If the EPA’s rule is implemented, consumers across the country will face higher energy costs because of the agency’s stubborn determination to impose unrealistic regulatory requirements on existing power plants across America. The Ratepayer Protection Act is a common-sense solution that extends the EPA’s compliance deadlines until after judicial review is completed. In addition, the legislation states that a governor would not be forced to implement a compliance plan if it is found to have a significant adverse effect on ratepayers or energy reliability. 

Already, state and federal regulators, governors, and electric reliability authorities have raised concerns about the negative impact this rule will have. They fear that the EPA’s rule has countless legal flaws, reliability concerns and will cause economic hardship to ratepayers. In fact, the North American Electric Reliability Corporation, an independent watchdog, recently released a report which found that complying with this regulation would require a “transformative shift” in the nation’s energy infrastructure. In addition, the report found that the EPA’s current timeframe for implementing these changes are entirely unfeasible.

This legislation will provide much needed protection to ratepayers and will help address many of the problems associated with the EPA’s Clean Power Plan. ATR fully supports the Ratepayer Protection Act and urges all members of Congress to vote for this legislation.

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Obamacare Database Keeps Personal Info “Forever”

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Posted by Alexander Hendrie on Monday, June 15th, 2015, 11:26 AM PERMALINK

In the wake of a security breach last month that resulted in the theft of personal taxpayer data, experts are now raising concerns over a government data warehouse that keeps the information of Obamacare enrollees forever.

The system, known as the Multidimensional Insurance Data Analytics System, or MIDAS is vaguely described on the federal as a “perpetual central repository.” When asked by the Associated Press how many people have direct access to the database, officials refused to say. 

The decision to keep the personal information of enrollees forever has raised the ire and concern of experts. Lee Tien, a senior staff attorney for the Electronic Frontier Foundation stated that it is irresponsible of the government to retain data any longer than is necessary. Similarly, Michael Astrue, a former Social Security Commissioner has argued that there is no justification for keeping this data permanently. Astrue also worried that the federal government is illegally expanding MIDAS by adding personal information from state-run Obamacare exchanges without proper privacy consent.

Almost half of state-run exchanges have faced significant construction and financing problems, with Oregon and Hawaii both shutting down this year after costing taxpayers hundreds of millions of dollars each.

Since MIDAS was first rolled out, watchdog groups have raised concerns over its safeguards. A report released last year by the Government Accountability Office found that MIDAS had been released without proper safeguards in place. As the report states:

“ had weaknesses when it was first deployed, including incomplete security plans and privacy documentation, incomplete security tests, and the lack of an alternate processing site to avoid major service disruptions.”

As the report concludes, these problems leave the personal information of Obamacare enrollees vulnerable:

“Until these weaknesses are fully addressed, increased and unnecessary risks remain of unauthorized access, disclosure, or modification of the information collected and maintained by and related systems, and the disruption of service provided by the systems.”

This news should come as no surprise to taxpayers given the federal government’s repeated inability to safeguard sensitive taxpayer information.

Last month, the IRS disclosed that it had been hacked and 100,000 households had their personal data compromised. During a subsequent hearing, the Treasury Inspector General for Tax Administration (TIGTA) revealed that the IRS had failed to implement 44 recommendations to strengthen protections, including ten more than a three years old. If these recommendations had been implemented, “It would have been much more difficult had they (IRS) implemented all of the recommendations that we made," TIGTA Chief J. Russell George stated.

Other reports released by TIGTA continue to demonstrate the government’s ineptness. A report released last week found that the IRS is failing to properly administer Obamacare tax credits, resulting in millions of individuals receiving a credit they are supposed to be ineligible for. A separate report found that the IRS did not test their Obamacare processing system until a week before tax filing season began. Earlier this year, the Obamacare CEO admitted that will not be completed until Obama leaves office.

Given the continued inability of the federal bureaucracy to safeguard personal information of taxpayers, the decision to permanently keep the personal information of Obamacare enrollees seems a disaster waiting to happen. 

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Why Hillary Clinton Loves the Ex-Im Bank

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Posted by Alexander Hendrie on Monday, June 15th, 2015, 6:00 AM PERMALINK

The Export-Import Bank (Ex-Im) is set to expire on June 30. The bank is a taxpayer-funded boondoggle rife with numerous cases of waste, fraud, and abuse. Despite these controversies, presidential candidate Hillary Clinton strongly supports Ex-Im. In her own words: “I’d like to put the Ex-Im bank on steroids.”

Hillary attempts to justify her position by claiming the bank is vital for American exports. According to Clinton, Ex-Im is “a tool for us to be competitive in order to support our businesses exporting.” In reality, the bank’s financing goes to major corporations that do not need loans to be competitive. Over three quarters of Ex-Im loans benefit ten well-connected corporations.  Less than one percent of one percent of US small businesses benefit from Ex-Im.

So why does Hillary Clinton support Ex-Im? Well, as the Washington Examiner’s Tim Carney points out, a more appropriate name for Ex-Im bank may be the International Bank of Clinton. During a 2012 Ex-Im Conference, Bill Clinton said that “this audience is full of people who once worked for me.”

Most notably, Ex-Im President Fred Hochberg was a Clinton appointee and in 2008 he was a “Hillraiser”, meaning he helped raise six figures for Hillary’s failed Presidential campaign. Hochberg also donated a five figure sum to the Clinton Foundation, the non-profit that has come under scrutiny for – among other things -- accepting donations from foreign leaders while Clinton was Secretary of State.

Ex-Im has also come under scrutiny for its connections to a consulting firm run by former Clinton officials. Questions over the bank’s decision to provide millions in loans to clients of the firm, which is run by Bill Clinton’s former Chief of Staff, led to watchdog groups filing a FOIA request in 2013. At this time Ex-Im has failed to comply with this request.

But perhaps the biggest reason that Clinton loves Ex-Im is because it has become part of her political machine. As House Financial Services Chairman Jeb Hensarling (R-Texas) has noted, many of the biggest donors for the Clinton Foundation happen to be some of the biggest beneficiaries of Ex-Im:

“Hillary Clinton is a natural cheerleader for the Export-Import Bank. After all, Ex-Im’s biggest beneficiaries are foreign governments and giant corporations. Conveniently, these just happen to be among the biggest donors to the Clinton Foundation as well as major underwriters of the speaking fees that added millions of dollars to the Clinton bank account.”

Perhaps these donations are why Bill Clinton believes attacks on Ex-Im are “ridiculous.”

Hillary Clinton may want to play the populist card on the campaign trail, but her Ex-Im record makes her a crony capitalist through and through.

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As Senator, Hillary Voted Against Income Tax Cuts for All Americans

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Posted by Alexander Hendrie on Thursday, June 11th, 2015, 12:00 PM PERMALINK

As a United States Senator, Hillary Clinton voted against income tax relief for all Americans. In 2001 she voted no on "the Economic Growth and Tax Reconciliation Act" (H.R. 1836), the Republican tax cut package.

This legislation made several improvements to the tax code that reduced the burden on American families.  The bill created a new, low ten percent bracket and reduced all existing tax brackets. Tax cuts for higher brackets were phased in over several years, with the top rate being cut by only 0.5 percent in the first year.

Not only did H.R. 1836 provide across the board tax relief, it also doubled the child tax credit from $500 to $1,000, raised the 15 percent bracket threshold to protect families from the marriage penalty, increased the contribution limit for retirement savings accounts from $2,000 to $5,000, and increased the death tax exemption to $3.5 million.

Clinton characterized the tax relief as a “spendthrift tax plan. On May 23, 2001, she voted no on the bill, which passed 62-38. She later voted no on the conference report on May 26, 2001, which also passed, 58-33.

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NAFTA Proves Why We Need More Free Trade Agreements

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Posted by Alexander Hendrie on Wednesday, June 10th, 2015, 12:13 PM PERMALINK

Critics of Trade Promotion Authority (TPA) argue that this legislation is putting America on the path to outsourcing. According to this narrative, the 1994 North American Free Trade Agreement (NAFTA) devastated American industries, and new trade agreements will do the same. The truth is NAFTA encouraged trade between Canada, Mexico, and the US. If anything, it should be evidence for TPA.

In the 21 years since NAFTA has been in effect, trade with Canada and Mexico has risen by almost 350 percent to $1.2 trillion. Today, the two countries buy almost one-third of US exports, and this trade supports almost 14 million jobs. More broadly, 46 percent of US exports went to one of 20 free trade partners despite these partners not including economic powerhouses such as China, India, Japan, Germany, and the United Kingdom.

Critics of trade  rely on the myth that NAFTA lead to outsourcing. However, a report by the Heritage Foundation debunks this claim. Manufacturing output in the US has increased: workers earn more, and they are more productive. Most of the jobs that were outsourced from the US went to Asia, which was not even involved in NAFTA.

The fact is, TPA should not be controversial at all. Congress has delegated trade authority to the President since 1934, and has granted TPA to Republican and Democrat Presidents five times over the past 30 years. The current version of TPA contains some of the strongest oversight provisions ever and it ensures that Congress will always have the final say. Agreements like the Trans-Pacific Partnership and NAFTA should not even be part of the TPA debate. With or without TPA, trade agreements still have to be approved by Congress.

But if TPA is not passed, the US will fall behind its competitors. In total there are over 400 free trade agreements in the world, but the world’s largest economy is part of only 14. In contrast, the EU has agreements with over 50 countries. As a result, the EU is the top trading partner for 80 countries while the US is the top trading partner for just over 20 countries. Now, developing countries like China are beginning to catch up to the US. China has 11 agreements with 18 countries.

The potential benefits of trade cannot be ignored. 234 countries and territories purchase American goods and services. Passing TPA will put the US on a path to reducing barriers with many of these countries that will allow American innovators to thrive. 

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RSC’s Obamacare Replacement a Patient-Centered, Free Market Alternative

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Posted by Alexander Hendrie on Wednesday, June 10th, 2015, 10:30 AM PERMALINK

Earlier this month, the Republican Study Committee (RSC) released its Obamacare alternative, H.R. 2653, "The American Health Care Reform Act (AHCRA)." This proposal, released by Congressmen Phil Roe, M.D. (R-Tenn.), Austin Scott (R-Ga.), and RSC Chairman Bill Flores (R-Texas) replaces Obamacare with a series of patient-centered, free market reforms. The AHCRA is one of several common-sense proposals released by Congress to repeal Obamacare and make healthcare efficient and affordable.

Five years after it passed, it is clear that Obamacare has resulted in spiraling healthcare costs, lower quality care, and has reduced patient choice. The RSC plan will repeal this failed law and replace it with a series of free-market solutions that establish patient-centered care.

Firstly, this legislation will reduce discrepancies and inconsistencies between individuals receiving healthcare from employers and from the individual market. Secondly, AHCRA will expand and encourage the use of health savings accounts to empower individuals to make their own choices. Third, it will help increase access to healthcare for vulnerable Americans. Fourth, AHCRA will encourage competition and better support medical innovation. Lastly, it will address medical liability laws that all too often tie the hands of physicians.

The RSC plan will fully repeal Obamacare and replace it with a series of meaningful reforms that lowers costs, increases efficiency, and empowers patients and doctors across the country. 

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New Report Finds IRS Failing to Administer and Monitor Obamacare Tax Credits

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Posted by Alexander Hendrie on Wednesday, June 10th, 2015, 9:00 AM PERMALINK

The IRS is failing to properly administer subsidies to individuals on Obamacare, according to a newly released report by Treasury Inspector General for Tax Administration (TIGTA). The IRS administered nearly $11 billion in Obamacare tax credits in 2014, however according to the report an undisclosed number of individuals received subsidies after they were ineligible to.

As the report notes, the IRS is unable to verify whether individuals enrolled in Obamacare are eligible for a Premium tax credit (PTC). As the report states:

“the IRS will be unable to ensure that all taxpayers claiming the PTC bought insurance through an Exchange as required.”

In part, this is because the agency did not receive enrollment data from several exchanges in a timely manner. As the report notes, both federal and state exchanges have failed to provide information to the IRS:

“CMS indicated that it would not send approximately 1.7 million (40 percent) of the approximately 4.2 million Federal Exchange enrollment records to the IRS until mid-February. In addition, six of the 15 State Exchanges had not provided enrollment data to the IRS as of January 20, 2015.”

According to the TIGTA report, the IRS failed to properly address and monitor repayment of PTCs that occurred when it was later found an individual did not qualify for the credit. As ATR’s Ryan Ellis correctly predicted during Testimony before the House Ways and Means Committee Subcommittees on Health and Oversight last year, the failures of, poor record keeping by the government, and individual error have combined to create a flawed and confusing process for correctly receiving the PTC.

This convoluted process has forced that the majority of enrollees to repay part of their subsidy during tax season because of discrepancies between expected income and actual income. A report released by H&R block this year found that up to 52 percent of PTC recipients have to pay back as much as 17 percent of their subsidy.

In addition, TIGTA found that the IRS and Health and Human Services (HHS) regulations do not ensure that the IRS is able to confirm whether an individual is eligible to receive a subsidy. In addition, procedures have not been established for exchanges to notify the IRS when an individual is ineligible to receive subsidies after enrollment.

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Congressman Price’s “Empowering Patients First Act” a Patient-Centered Obamacare Alternative

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Posted by Alexander Hendrie on Tuesday, June 9th, 2015, 5:56 PM PERMALINK

Congressman Tom Price, M.D. (R- Ga.) recently introduced H.R. 2300, the “Empowering Patients First Act.” This legislation replaces Obamacare with a series of patient centered reforms that will help undo the damage to healthcare caused in recent years. The Empowering Patients First Act is one of several common-sense proposals released by Congress to repeal Obamacare and make healthcare efficient and affordable.

After five years of spiraling healthcare costs, canceled plans, lower quality care, and less choice it is clear that Obamacare does not work. H.R. 2300 will repeal this failed law and implement a series of reforms to healthcare based on the principles of affordability, accessibility, quality, innovation, choice, and responsiveness.

Specifically, this legislation will make several important improvements to the current healthcare system. First, it will implement tax credits for health insurance coverage in place of the confusing system of subsidies that exists today. Second, it will also encourage the use of health savings accounts to empower individuals to make their own healthcare choices. Third, it will take power away from malpractice lawyers and Washington bureaucrats and put it back in the hands of patients and doctors across the country.

Congressman Price’s legislation will fully repeal Obamacare and replace it with a series of meaningful reforms that lowers costs, increases efficiency, and empowers patients and doctors across the country. This proposal is an excellent improvement over the system that Obamacare has created which is characterized by increasing healthcare costs, decreasing patient choice, and has put unelected bureaucrats in charge of personal decision making.

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Trade Promotion Authority Provides Stronger Oversight and Transparency Than Ever Before

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Posted by Alexander Hendrie on Tuesday, June 9th, 2015, 10:30 AM PERMALINK

If you listen to critics of Trade Promotion Authority (TPA) you would believe that Congress is recklessly ceding its authority over secret trade deals to President Obama. But the truth is, TPA provides more, not less Congressional oversight and public visibility over the approval of future trade agreements.

TPA does not give new authority to Obama. The executive branch already has the ability to negotiate trade agreements with or without TPA. Despite the last iteration of TPA lapsing in 2007, the current administration has been negotiating several trade agreements. In fact, the Obama administration currently has very few limitations negotiating trade agreements without TPA.

But if TPA is in place, the President will be bound by almost 150 negotiating objectives and guidelines when negotiating any agreement. If the administration negotiates a trade agreement that does not meet these guidelines, Congress can say no.

If a member of Congress votes for TPA, he or she is not approving the Trans-Pacific Partnership, or any future trade agreement. They are simply setting the guidelines for how these agreements are negotiated. Each and every member will have the opportunity to vote on trade agreements in the future, with or without TPA.

In addition, TPA provides Congress with numerous new oversight tools that would otherwise be unavailable to them. The legislation establishes Congressional consultation and access to information requirements that the US Trade Representative must follow throughout the entire process. It also creates advisory groups to oversee negotiations and ensure the compliance and enforcement of trade provisions.

Not only does TPA grant Congress greater oversight over trade, it also increases public visibility. TPA requires Obama to make a completed agreement public for at least 60 days before he signs it. It also requires the President to submit the full legal text of an agreement to Congress 30 days before the submitting the actual legislation.

Even with these oversight and accountability provisions within TPA, critics point to the fact that the legislation removes the ability of members of Congress to offer amendments to trade deals as “evidence” that this bill is reckless. But having 535 negotiators, each with their own objectives and the ability to modify an agreement does not work. Without this provision, the US is an almost impossible partner to negotiate agreements with because Congress can continually amend an already completed agreement.

The fact is, TPA makes trade agreements more transparent than ever. This legislation not only provides the public with greater information on future deals, but Congress will more opportunities to perform oversight.

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