E-News 7/8/11

The Week Just Past:  “At least they’re talking”

In debt talks, Obama offers Social Security cuts

Washington Borrowing Stifles Job Creation

Businesses Cross the Delaware…In the Wrong Direction!

Another Step Toward More Trade-Created Jobs

The Week Just Past: “At least they’re talking”

“At least they’re talking.

President Obama met yesterday at the White House with the bipartisan Congressional Leadership to try to break the stalemate over raising the nation’s debt limit.  It seems like everyone in the room thought the meeting was ‘constructive’ even though all reported that both parties are still ‘far apart’ on a wide range of issues.  In fact, the negotiators will reconvene the day after tomorrow for more talks.

“As an optimist, I take this activity as a sign that an agreement will ultimately be reached. 

“That’s very important because the federal government reached its legal borrowing limit on May 16 and has been taking ‘extraordinary measures’ since then to keep the country out of default.  The Obama Administration claims that if the debt ceiling is not raised, Treasury would not be able to pay nearly half of the 80 million payments it needs to make every month and the Treasury Secretary would have to choose which bills to pay and which ones to put off.  According to the Treasury, that ‘day of reckoning’ will arrive on August 2.

“This completely avoidable event could prove catastrophic to the U.S. economy, our national financial reputation around the globe and most importantly, to taxpayers.

“I think it is important to note that the debt ceiling is not a cause of rising debt or a ‘license to spend more’ -- as some incorrectly believe. It simply authorizes Treasury to pay the bills the President and Congress already chose to incur when they passed years worth of spending increases and established current tax policy.

“That’s why it is so important that before we even think about any debt ceiling increase we enact immediate and steep federal spending cuts so that the American people know we’re serious about getting our fiscal house in order.   We don’t want to become ‘Athens on the Potomac!’

“We also must have significant changes to our budget process so that we can avoid a recurrence of today’s debt mess. 

“Finally, the changes signed into law must be permanent, to spare future generations from being forced to deal with the crisis facing us today.

“Unfortunately, for his part, the President continues to insist that steep tax increases be part of any debt limit agreement.

“With the release of another disappointing jobs report this morning, we know that unemployment has now exceeded 8.5 percent for an unprecedented 28 consecutive months.  I cannot think of a worst time to raise taxes than in the middle of a weak, jobless recovery.

“We can only hope that the President finally acknowledges this fact.

“But, at least they’re talking.”

                                                        Rodney Frelinghuysen

Recommended Reading:Lori Montgomery wrote in The Washington Post on Wednesday, “In debt talks, Obama offers Social Security cuts.”

The text of the article.

“President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue.

“At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action.

“As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

“Obviously, there will be some Democrats who don’t believe we need to do entitlement reform. But there seems to be some hunger to do something of some significance,” said a Democratic official familiar with the administration’s thinking. “These moments come along at most once a decade. And it would be a real mistake if we let it pass us by.”

“Rather than roughly $2 trillion in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade, stabilize borrowing and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages.

“That would represent a major legislative achievement, but it would also put Obama and GOP leaders at odds with major factions of their own parties. While Democrats would be asked to cut social-safety-net programs, Republicans would be asked to raise taxes, perhaps by letting tax breaks for the nation’s wealthiest households expire on schedule at the end of next year.

“The administration argues that lawmakers would also get an important victory to sell to voters in 2012. “The fiscal good has to outweigh the pain,” said a Democratic official familiar with the discussions.”

Read more on the debt limit negotiations here.

Washington Borrowing Stifles Job Creation

What is holding our economy back?  Well, the House Budget Committee released a report yesterday which demonstrates that economic hardships have been made worse by Washington’s misguided spending spree that has failed to create the jobs it promised, and has significantly hindered hiring and investment.  

The report, “The Debt Overhang and the U.S. Jobs Malaise”, cites prominent economists that have both challenged the discredited economic assumptions made to bolster the case for federal government stimulus efforts. 

Read the full report here.

Recommended Reading: Jeffrey Anderson, writing in the Weekly Standard,: Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job:”

Businesses Cross the Delaware…In the Wrong Direction!

Big-name corporations appear to be “voting with their feet.” They are fleeing high tax, high “red-tape” states like New Jersey and New York and taking hundreds of jobs and thousands of dollars in tax revenue to neighboring states.

The Morning Call of Allentown, Pennsylvania recently reported that between February and May, three New Jersey companies will leave our state and re-locate in the nearby Lehigh Valley of Pennsylvania. 

Is there a lesson in this trend for the Garden State?

Read the Morning Call story here.

Here’s a similar story from Delaware.

Another Step Toward More Trade-Created Jobs

The House Ways and Means Committee yesterday held an informal “mark-up” and cleared the way for consideration by the full House of Representatives of the pending free trade agreements with Colombia, Panama, and South Korea.

“These trade pacts have languished for far too many years and New Jersey exporters have suffered as a result,” Rodney said.  “The facts are that these trade agreements would add billions of dollars in economic growth and hundreds of thousands of jobs here in the United States.  They would increase our competitive edge globally.  Creating jobs, expanding exports and growing investments here at home are essential.” 

Colombia, Panama, and South Korea all currently maintain higher barriers on U.S. exports than our government imposes on imports from those countries. We can level the playing field in a beneficial way by getting rid of existing barriers to mutually advantageous commerce, or we can get left behind as these countries implement trade agreements with other countries.  By the way, the European Union-South Korea Trade Agreement took effect just this month.

Rodney On the House Floor…

…Working for National Security Funding…

Rodney this week helped shepherd through the House the Defense Appropriations bill for the fiscal year that begins in October.  The legislation provides $530 billion for core Pentagon activities, $8.9 billion less than President Obama’s budget request. It also includes $119 billion in funding for the wars in Iraq and Afghanistan, $39 billion less than in fiscal 2011.

The Defense Appropriations bill provides a 1.6% pay raise for military personnel and appropriates more money next year for defense health programs.

You can read more about the bill here.

…and kicks off debate on the Energy and Water Appropriations bill

As author of H.R. 2354, the Energy and Water Development Appropriations bill for Fiscal Year 2012, Rodney kicked off debate on the bill this afternoon.

“The Energy and Water Development Appropriations bill supports programs critical to our nation’s security, safety, and economic competitiveness. The bill clearly shows that strong fiscal discipline, a strong national defense, and a strong economy, can be achieved together,” he said

This is a fair bill that recognizes the stark fiscal reality that faces our country. The Committee has worked hard to ensure that our highest priorities – defense of our country and support for American innovation and competitiveness – receive critical funding. At the same time, the bill cuts back on programs with large unspent balances, ensuring that every hard-earned taxpayer dollar will be well spent. This bill improves oversight of the agencies under the jurisdiction and rightly so to protect taxpayer money.”

You can view his statement on the House Floor here.