CNS News reports on the activities of the grown-up party.
Excerpt:
Senate Republicans have introduced legislation that would direct the State Department to issue permits to begin construction of the 1,700-mile Keystone XL crude oil pipeline from Canada to U.S. refineries – a project they say will create 20,000 jobs, increase domestic energy security and generate revenue.
“Jobs will be created right away and billions of dollars in investment will be unleashed through legislation introduced to permit the $7 billion Keystone XL pipeline, the largest infrastructure project ready in the United States, to commence construction,” Sen. Dick Lugar (R-Ind.) told a press conference on Wednesday.
Lugar, ranking member of the Senate Foreign Relations Committee, is lead sponsor of the new North American Energy Security Act.
In a jab to President Obama’s promotion of creating jobs through new or improved infrastructure and “shovel-ready” projects, the GOP senators said the pipeline qualifies as both. Obama’s decision to delay the approval process until after the 2012 election is putting politics above job creation, they charged.
“There is absolutely no reason to delay a permit decision on the Keystone pipeline – and the jobs that come with it – for another year in a blatant attempt to appease the president’s political base,” Majority Leader Mitch McConnell (R-Ky.) said at the conference.
[…]The lawmakers said the pipeline could reduce the nation’s dependence on foreign oil by bringing as much as 700,000 barrels of oil a day into the country from Canada.
Aside from jobs directly created in construction and pipeline operation, the private sector project is expected also to boost economic growth for the more than 1,400 U.S. companies that sell products and services for oil sands production and transport.
Consider this article by the Cato Institute, a libertarian think tank, which discusses how the Reagan tax cuts affected the unemployment rate.
Excerpt:
In 1980, President Carter and his supporters in the Congress and news media asked, “how can we afford” presidential candidate Ronald Reagan’s proposed tax cuts?
Mr. Reagan’s critics claimed the tax cuts would lead to more inflation and higher interest rates, while Mr. Reagan said tax cuts would lead to more economic growth and higher living standards. What happened? Inflation fell from 12.5 percent in 1980 to 3.9 percent in 1984, interest rates fell, and economic growth went from minus 0.2 percent in 1980 to plus 7.3 percent in 1984, and Mr. Reagan was re-elected in a landslide.
[…]Despite the fact that federal revenues have varied little (as a percentage of GDP) over the last 40 years, there has been an enormous variation in top tax rates. When Ronald Reagan took office, the top individual tax rate was 70 percent and by 1986 it was down to only 28 percent. All Americans received at least a 30 percent tax rate cut; yet federal tax revenues as a percent of GDP were almost unchanged during the Reagan presidency (from 18.9 percent in 1980 to 18.1 percent in 1988).
What did change, however, was the rate of economic growth, which was more than 50 percent higher for the seven years after the Reagan tax cuts compared with the previous seven years. This increase in economic growth, plus some reductions in tax credits and deductions, almost entirely offset the effect of the rate reductions. Rapid economic growth, unlike government spending programs, proved to be the most effective way to reduce unemployment and poverty, and create opportunity for the disadvantaged.
President Bush signed the first wave of tax cuts in 2001, cutting rates and providing tax relief for families by, for example, doubling of the child tax credit to $1,000.
At Congress’ insistence, the tax relief was initially phased in over many years, so the economy continued to lose jobs. In 2003, realizing its error, Congress made the earlier tax relief effective immediately. Congress also lowered tax rates on capital gains and dividends to encourage business investment, which had been lagging.
It was the then that the economy turned around. Within months of enactment, job growth shot up, eventually creating 8.1 million jobs through 2007. Tax revenues also increased after the Bush tax cuts, due to economic growth.
In 2003, capital gains tax rates were reduced. Rather than expand by 36% as the Congressional Budget Office projected before the tax cut, capital gains revenues more than doubled to $103 billion.
The CBO incorrectly calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion. Revenues for 2006 came in $47 billion above the pre-tax cut baseline.
Here’s what else happened after the 2003 tax cuts lowered the rates on income, capital gains and dividend taxes:
GDP grew at an annual rate of just 1.7% in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was 4.1%.
The S&P 500 dropped 18% in the six quarters before the 2003 tax cuts but increased by 32% over the next six quarters.
The economy lost 267,000 jobs in the six quarters before the 2003 tax cuts. In the next six quarters, it added 307,000 jobs, followed by 5 million jobs in the next seven quarters.
The timing of the lower tax rates coincides almost exactly with the stark acceleration in the economy. Nor was this experience unique. The famous Clinton economic boom began when Congress passed legislation cutting spending and cutting the capital gains tax rate.
Those are the facts. That’s not what you hear in the media, but they are the facts.
In the 2010 mid-term elections, Republican John Kasich won the governorship and promised to balance the state’s budget by reining in the state’s spending on salaries and benefits for public sector union employees. To accomplish this, the Ohio legislature pass Senate Bill 5. However, an effort is on the ballot to repeal the law, and Ohio voters will get a chance to keep or scrap the law on Tuesday, November 8th, 2011.
Issue 2 makes some very fair and common sense requests of our government employees to give local communities the flexibility they need to get taxes and spending under control, while providing the essential services that we rely on.
It allows an employee’s job performance to be considered when determining compensation, rather than just awarding automatic pay increases based only on an employee’s length of service.
It asks that government employees pay at least 15 percent of the cost of their health insurance premium. That’s less than half of what private sector workers are currently paying.
It requires that government health care benefits apply equally to all government employees, whether they work in management or non-management positions. No special favors.
It asks our government employees to pay their own share of a generous pension contribution, rather than forcing taxpayers to pay both the employee and employer shares.
It keeps union bosses from protecting bad teachers and stops the outdated practice of laying off good teachers first just because they haven’t served long enough.
Finally, it preserves collective bargaining for government employees, but it also returns some basic control of our schools and services to the taxpayers who fund them, not the union bosses who thrive on their mismanagement.
Even under the reforms of State Issue 2, Ohio’s government employees will still receive better pay, better health care and better retirement benefits, on average, than the vast majority of Ohioans who work in the private sector.
There are a number of myths going around about Issue 2, and it’s important to set the record straight, so I’ll do that below.
Ohio Average Pay: Public Unions vs. Private
Myths and truths about Ohio State Issue 2
Here’s a common myth:
State Issue 2 would “cut salaries and benefits.”
The truth:
Issue 2 would not cut salaries or benefits for any government employee. Employees would simply be asked to pay a modest share of their benefits, just like employees in the private sector do. For health care coverage, they would pay at least 15% of their overall plan. (Many local government employees currently pay less than 9% of their health care premium, while the average private sector worker pays upwards of 30%.) In addition, employees would be required to pay their personal share of a retirement plan (only 10%), rather than asking taxpayers to pay that share. That’s not too much to ask at a time when many private sector workers get no retirement benefit at all. Finally, Issue 2 requires that benefits apply equally to all public employees, so no one gets special treatment.
And another common myth:
State Issue 2 will eliminate government employee pensions.
The truth:
Government employees will still get a very generous pension benefit – an annual payment that averages their three highest annual salaries. That’s a pretty nice deal, when many private sector workers get no retirement benefit at all. State Issue 2 only ends a practice where some government union contracts require taxpayers to pick up the tab for BOTH the employer AND employee shares of a required pension contribution. In this economy, it’s simply not right to ask struggling taxpayers to foot the bill so government employees can get a free retirement. Issue 2 simply says government employees should pay their required share (10 percent) and taxpayers will contribute the employer share (14 percent).
Another myth:
State Issue 2 will cut teacher salaries.
The truth:
That’s one of the scare tactics government unions are using to turn people against these reforms. Nothing in Issue 2 determines salary levels. It only ends the practice of handing out automatic pay raises, or “step” increases, and longevity pay – or bonuses just for holding the job for a certain period of time. Issue 2 also asks that performance be added as a factor in teacher compensation, a goal President Barack Obama set out in his national education policy in 2009.
And another myth:
State Issue 2 will cost jobs
The truth:
Just the opposite is true. Ohio’s state and local tax burden ranks among the top third in the nation. As a result, companies large and small have left our state in pursuit of better tax incentives elsewhere, taking hundreds of thousands of jobs with them. If Ohio hopes to compete for new job growth, we have to make our state a more affordable place to live, work and do business. That starts with getting the cost of government under control so we can direct more of our limited resources into economic development, community revitalization and better schools.
The fiscal picture of local governments and school districts, especially, will improve as they are able to right-size their work forces and their expenditures on services. That will happen over time, not overnight, as new contracts are established.
Repeal SB 5, though, and it’s going to be awfully hard for local governments to manage their payrolls without resorting to larger-scale layoffs than would otherwise be necessary. And local governments will continue to be hamstrung by anti-merit seniority rules that lead to worker complacency and protect dead weight and time-servers.
Voting YES on Issue 2 will prevent layoffs by keeping public sector wages and benefits in line with what the private sector can afford to pay.
Despite the insistence of opponents, the effort to reform Ohio’s out-of-balance collective-bargaining law is not an expression of disrespect for or dissatisfaction with Ohio teachers, police officers, firefighters and other government employees. It is a much-needed attempt to restore control over public spending to the public officials elected to exercise that control.
It does not assert that public employees are worth less than the compensation they’re receiving, only that the compensation has grown faster than the public’s ability to pay for it.
[…]With more ability to control the escalation of salary and benefit costs, governments won’t be forced as often to impose layoffs, and might be able to afford to keep even more police and firefighters on the streets.
Again, no one is saying that public sector workers don’t matter – the question is whether we can afford to give them better wages and benefits than the private sector workers who are their customers and their employers. Public sector workers work for the public, and the public can only afford to pay so much.
Conclusion
Government employees are paid 43% more than private sector employees, in salary and benefits:
I think that people who care about the long-term prosperity of Ohio should vote “YES” on Issue 2 to make public and private salaries and benefits MORE EQUAL. Ohio is facing enormous economic pressure from the global recession, and everyone has to make sacrifices. Now is not the time for public sector workers to insist on higher wages and benefits, especially when the private sector workers who pay their salaries don’t make as much money, nor do they get the pensions, nor do they get the better job security. Ohio voters can certainly go back and renegotiate union salaries and benefits when Ohio is out of the recession.
WINTERY KNIGHT 