The State Department may miss a year-end target to approve TransCanada Corp’s Canada-to-Texas Keystone oil sands pipeline, a U.S. official told Reuters on Tuesday, risking a further delay to the most important new crude oil conduit in decades.
The official, who spoke on condition of anonymity, said the State Department still hoped to make a decision by the end of this year, which has been its target, but that its highest priority was to carry out a thorough, rigorous review. The decision has already been pushed back once.
A further delay would not only be a blow to TransCanada, it could also prolong a massive gap between U.S. and global oil prices because oil traders are counting on Keystone’s 700,000 barrel-per-day capacity to relieve a build-up of crude in the Midwest, which doesn’t have enough pipelines to ship growing Canadian output to Gulf Coast refineries for use around the United States.
The ruling, which falls to the State Department because the line crosses national borders, is forcing President Barack Obama into a decision that effectively pits environmental safety against job creation and energy security.
[B]usinesses actually want to do something with the oil that would be transferred on the pipeline, and the delay in moving the oil through the refining process and to market will impact those businesses, the energy supply, and ultimately energy prices and the broader economy.
Reuters describes the Administration’s dilemma in ruling on the Keystone pipeline as pitting “environmental safety against job creation and energy security.” That may be how some environmental extremists are trying to frame it, but it’s really a false choice. As I wrote before, Canada’s oil sands are going to be developed one way or another. The State Department’s decision is whether the U.S.—with our many environmental regulations—will being doing the job or if Canada will find another, much less environmentally-friendly, partner.
Barack Obama is blocking job creation in order to appease his environmentalist constituents.
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.
Consider this article by rock-star economist Arthur Laffer.
Excerpt:
In the recent past, federal tax revenues from the personal and business income taxes, all payroll taxes, and the capital gains, gift and estate taxes have averaged $2.3 trillion, while gross domestic product has averaged about $14.5 trillion. The total revenue from these taxes as a share of gross domestic product averages around 16%. Sometimes it’s a good deal higher, as in the boom of the late 1990s, and sometimes its lower, as in today’s “Great Recession.” But a number in the 16%-19% range is as good as you’ll get under our current tax code.
By contrast, the three tax bases for Mr. Cain’s 9-9-9 plan add up to about $33 trillion. But the plan exempts from any tax people below the poverty line. Using poverty tables, this exemption reduces each tax base by roughly $2.5 trillion. Thus, Mr. Cain’s 9-9-9 tax base for his business tax is $9.5 trillion, for his income tax $7.7 trillion, and for his sales tax $8.3 trillion. And there you have it! Three federal taxes at 9% that would raise roughly $2.3 trillion and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax.
The whole purpose of a flat tax, à la 9-9-9, is to lower marginal tax rates and simplify the tax code. With lower marginal tax rates (and boy will marginal tax rates be lower with the 9-9-9 plan), both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs. Tax revenues will also increase enormously—not because tax rates have increased, but because marginal tax rates have decreased.
By making the tax codes a lot simpler, we’d allow individuals and businesses to spend a lot less on maintaining tax records; filing taxes; hiring lawyers, accountants and tax-deferral experts; and lobbying Congress. As I wrote on this page earlier this year (“The 30-Cent Tax Premium,” April 18), for every dollar of business and personal income taxes paid, some 30 cents in out-of-pocket expenses also were paid to comply with the tax code. Under 9-9-9, these expenses would plummet without a penny being lost to the U.S. Treasury. It’s a win-win.
I have heard precious few conservative commentators reporting the facts on Herman Cain’s plan, so it’s nice to see Art Laffer looking at the details.
Here are three facts about Cain’s plan:
Fact #1: People below the poverty line are exempt from ALL the taxes.
Fact #2: It is a stupid objection to say that the tax rate can be raised. ALL taxes can be raised, and Cain has already said that his plan would require a 2/3rds majority to raise the tax rates.
Fact #3: This plan has nothing to do with state income taxes or state sales taxes or state corporate taxes – his plan only reforms federal taxes. State tax laws are outside of the jurisdiction of the President.
I was really disappointed to hear some of the people in Tuesday night’s debate disparaging Herman Cain’s plan, especially Michele Bachmann, who ought to know better because this is her strength. When people say that a tax is regressive, that means that it is not progressive. And a progressive tax is communist. It punishes success. What we want to have is a flat tax rate that doesn’t punish success and broadens the tax base so that everyone pays something. What Cain’s plan does is lower the punishment on job creators and workers, and raises the tax on consumers who spend money. And isn’t that a good thing? Aren’t we in this whole mess because we spend too much money? Maybe we should incentivize job creation and work instead of spending. Cain’s plan would be the greatest boon to job creation that this company has ever seen – it’s brilliant precisely because it eliminates the cost of having to comply with an onerous, complicated tax code. We are getting this wealth for free, and the only losers will be the IRS and the Washington lobbyists.
WINTERY KNIGHT 