e-News October 29, 2010

The Week Just Past: A Very Small Victory for New Jersey

“New Jersey received a tiny sliver of good news this week when the respected Tax Foundation published its annual Business Tax Climate Index.  For the past four years, our state’s business climate has been rated dead last of all the 50 states.

“Now the good news: for 2011, we moved up two full notches!  Our neighbors in New York now rank last, with California occupying the 49th spot. 

“I raise this issue to make this point: the business climate of our state is important when it comes to competing with other states for new jobs or retaining existing jobs.  Similarly, the business climate of America is important as we try to compete and win in the global economy.

“Fundamentally, the business climate is important to our efforts to create new private sector jobs – an effort on which President Obama and Speaker Pelosi have utterly failed in the last 20 months.  Even the New York Times acknowledged this failure, noting this week, ‘the White House and Congress have fallen short by any reasonable standard, including their own.’

“What the President and Speaker fail to recognize is that it is important that we lower tax rates AND rein in the unnecessary regulation and red-tape that chokes the dreams and activities of entrepreneurs.  Indeed, the small businessmen and women I meet uniformly report that they want government to ‘get out of their way.’

“The first step is to agree that higher taxes won't get anybody hired.  Raising taxes on job creators won't create jobs. That is why it is so important that Congress acts quickly to prevent record tax hikes in January.

“Likewise, Congress must also reassess the size and the scope of the federal government itself, including its recent major interventions in our financial and health care systems.  (See Paul Boudreau’s Op Ed on ‘scary’ health care ‘reform’ below.)

“The current Congress, acting in concert with the President, his Cabinet and his ‘Czars,’ has exploded the size of government, expanded into more sectors of our economy and created a hostile environment for businesses, large and small.  (This is especially important to New Jersey as we struggle to maintain our remaining pharmaceutical base and what’s left of our manufacturing base.)

“As a result, companies lack the certainty or financial flexibility to hire new employees or invest in new plants or equipment. Instead, they hoard their capital, assuming that regulatory costs and taxes will only increase.

“It is a glaring indictment of current policies that U.S. businesses, including many in New Jersey, have decided to sit back and gain interest on their stockpiles of cash rather than invest and innovate.

“Private enterprise, not the federal or state government, is the heart and soul of our economy. Therefore, by discouraging private investment, we harm job growth. 

“Setting the stage for economic growth and fostering private job creation should be the top priority for the Congress that convenes in January.”

                                                                   Rodney Frelinghuysen

Recommended Reading: Paul Boudreau, President of the Morris County Chamber of Commerce, writing in the Monday Daily Record, “Haunted by health care reform.”

Recommended Reading II: Tuesday’s Wall Street Journal editorial, “Big Insurance, Big Medicine. Obamacare is already driving a wave of health-care consolidation—and higher costs.” 

Recommended Reading III: Mark Schoofs and Maurice Tamman, writing in the Monday Wall Street Journal, “In Medicare’s Data Trove, Clues to Curing Cost Crisis.”

The Speaker on Spending:  What was that again???

When Rep. Nancy Pelosi (D-CA) gave her inaugural address as Speaker of the House in January of 2007, she vowed there would be “no new deficit spending.”

Since that day, the national debt has increased by $5 trillion, according to the U.S. Treasury Department.

Hidden: Costs of the AIG Bailout

The government watchdog charged with monitoring the Troubled Asset Relief Program (TARP) says the United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group (AIG).  TARP Inspector General Neil Barofsky made the charge this week.

Read Mary Williams Walsh’s story in the Tuesday New York Times, “Treasury Hid A.I.G. Loss, Report Says,” here.

Not Hidden: Staggering Price of Fannie Mae and Freddie Mac Life Support

The Federal regulator in charge of Fannie Mae and Freddie Mac has released staggering new estimates for the ongoing bailout of the mortgage-guarantee giants.

If housing prices and the economy continue as they are now, the taxpayer will take a net hit of $154 billion.

If we're lucky and the housing market recovers sooner, the net cost could be a bit lower: $141 billion.

However, if a double-dip recession develops, the price tag shoots up to $259 billion.

Accountability for Trans-Hudson tunnel

Citing the likelihood of runaway costs, Governor Chris Christie this week permanently scrapped a proposed multi-billion rail tunnel connecting New Jersey and New York City under the Hudson River.

Rodney backed the Governor’s decision. 

“I have always supported mass transportation for our area to include another trans-Hudson tunnel,” he said.  “However, I have also said that a tunnel with an initial estimate of $5.3 billion looks significantly different when it now carries a $14 billion cost to our taxpayers!” 

Under existing agreements, the burden of any cost-overruns would be borne solely by the Port Authority and the State of New Jersey.  Experts say cost overruns could exceed $5 billion, bringing the total cost of the project to $14 billion!

“I have said publicly and privately that Governor Christie has the right and responsibility to question more recent cost estimates because ultimately New Jersey taxpayers would have to pay more.

“Furthermore, as I have also said publicly, the existing plan is flawed, as it is connected to no other transportation networks in New York City, is solely dedicated to New Jersey Transit, which it should not be, and has not taken fully into account where commuters will park on the Jersey side.”

Rodney said he looked forward to working with Governor Christie and federal transportation officials to explore and develop new methods of modernizing the transportation network across the region. 

If You See Something, Say Something

The Wednesday arrest of a Pakistani-born, naturalized citizen plotting to bomb Washington D.C.’s subway system and this afternoon’s reports about possible explosive devices aboard commercial aircraft bound for the U.S. are reminders that we live in a very dangerous world.  Authorities are telling us that new types of attacks, aimed at inflicting mass casualties on innocent victims, are being planned right now. 

This latest instance of “homegrown terrorism” reminds us that “If You See Something, Say Something” to local law enforcement.

Recommended Reading IV: Bret Stephens writing in Tuesday’s Wall Street Journal, “The Pakistani Paradox.”  A good “read” on a complicated issue.