e-News May 7, 2010

The Week Just Past: Homeland Security and Premature Celebrations!
Rodney Rejects “Cash for Caulkers”
…and speaking of the failed “stimulus” bill…
Doctors and Health Reform Law Mandates
Protecting Small Businesses from Health Care Law Damage
Listening to Small Business Owners
Army Leaders to Picatinny
The Week Just Past: Homeland Security and Premature Celebrations!

“This week provided another stark reminder that we live in a very, very dangerous world.  Warning signs are everywhere: the failed attacks on an airplane on Christmas Day or a crude bomb placed in a parked car in New York’s Times Square. 

“I hope we will draw additional important lessons from each of these ‘close encounters’:

  1. Technology can certainly help us battle those who would do us harm, but cameras can be pointed in the wrong direction, listening devices can fail and data can be garbled.  Intelligence is our most important tool in the fight against violent international extremists – foreign-born or home-grown.  We need to support our intelligence agencies and our intelligence officers, instead of forcing them to look over their shoulders or hire lawyers as they work to keep us all safe;
  2. America needs to be on high alert at ALL times, not just when the news media chooses to cover a specific incident.  The terrorists are a very patient, intelligent and adaptive enemy.  Make no mistake: they are at war with us and our fight against them cannot be just another law enforcement matter.  We treat terrorists as common, petty criminals at our peril;
  3. All Americans have a role to play.  The phrase plastered all over subway and train stations around America could not be more appropriate: ‘If you see something, say something.’  Citizens going about their daily lives can be an effective tool in this critically important ‘war on terrorism.’

“We recognize that our nation, our citizens and our interests will always be a target for certain terrorists who fundamentally hate America.  However, history has shown us that that we achieve peace only from a position of strength.  That means ensuring that our homeland security, intelligence and defense budgets keep pace with the demands of a very, very dangerous world.  In this regard, we have grounds to worry.”

Recommended Reading:  Dana Milbank captures the essence of the moment in the Wednesday Washington Post on the dysfunctional Department of Homeland Security, “Holder and other officials celebrate catching Times Square bomb suspect.”

Recommended Reading II: Tuesday’s Washington Post editorial
Heroes of N.Y. Times Square bomb attempt show why vigilance matters.”

Rodney Rejects “Cash for Caulkers”

Over Rodney’s objection, the House yesterday approved H.R. 5019, the so-called “cash for caulkers” bill.  The measure authorizes the Department of Energy to spend $6 billion to provide rebates to contractors for energy-efficient construction work in existing homes.  It also provides funding to states to offer loans to consumers for financing energy-efficient renovations.

“Energy efficiency is an important component of any energy independence strategy,” said Rodney, the Ranking Republican on the House Energy and Water Development Subcommittee.  “However, this bill would spend another $6.6 billion, all borrowed money, when the Department of Energy has been unable to spend money already allocated under the massive weatherization program included in the so-called economic ‘stimulus’ bill.  This bill amounts to piling waste upon waste!” 

DOE’s Inspector General recently concluded that, as of February, less than 10 percent of the $4.7 billion DOE has awarded in grants to states under the stimulus bill had been used by states for weatherization purposes!  Only 30,000 homes have actually been weatherized.

Of the 10 states receiving the most money under the $4.7 billion allocated for the weatherization program under last year’s “stimulus” bill, only two states had weatherized more than 2 percent of the homes covered by the program.  Eight other states weatherized fewer than 400 homes each.  New Jersey has completed work on just 53 homes!

…and speaking of the failed “stimulus” bill…

There was new evidence this week that the federal government, not small business men and women, continues to be the nation’s largest job creator. 

The Gallop Organization’s Job Creation Index for April reveals “significantly more hiring within the federal government than in the private sector…Indeed, the federal government appears to be significantly outpacing the private sector in terms of the relative number of jobs created…Based on these reports from workers, the federal government is a growth industry…At the moment, however, the federal government is one of the brightest spots in the nation's hiring picture.”

This week, Speaker Pelosi and her leadership team held another forum with the same group of economic experts who pushed for passage of the “stimulus” bill last year.  These “experts” also projected that 90 percent of the new jobs created by the “stimulus” would be in the private sector. 

With near-10 percent unemployment and a record $12.9 trillion national debt, creating private sector jobs and employment opportunities should be the top priority for Congress.

Recommended Reading III: William McGurn writing about Governor Chris Christie in the April 13 Wall Street Journal, “Reaganism, New Jersey Style.”

Doctors and Health Reform Law Mandates

The reimbursement rate that doctors receive for treating Medicare patients is scheduled to drop 21% at the end of this month, causing serious additional hardship for physicians and patients alike.  This week, the Congressional Budget Office (CBO) reported that preventing the reimbursement rate cut will cost the taxpayers more money than previously estimated.

Speaker Nancy Pelosi had previously tried to pass the “doc fix” as part of the massive health care bill passed in March.  However, she decided to take it out, in order to make the price-tag for the President’s health care bill appear smaller.        

CBO estimates a five-year fix will cost $88.5 billion and a ten-year fix will cost $275.8 billion. The cost of the full ten-year fix is a 33 percent increase from a previous ten-year estimate.

Recently, Congress passed a temporary freeze in Medicare reimbursement rates for doctors, but that expires on June 1, 2010.  The Congressional Majority is reportedly pursuing a five-year fix, which CBO estimates will cost taxpayers $88.5 billion, and they are not planning on offsetting this funding with spending reductions elsewhere in the budget. 

New Jersey physicians, including orthopedists, anesthesiologists, plastic surgeons and pediatricians, have visited with Rodney in Washington in recent weeks.  Many report that they have been forced to cut their payrolls due to the passage of the massive health care bill and the demise of their group practice.

Protecting Small Businesses from Health Care Law Damage

Among the many little-known provisions of the new health care law is Section 9006.  This section will require business owners to submit a separate 1099 form to the IRS and to each and every company with whom they do business valued over $600 in any given year! (Under current law, businesses must report services performed by non-corporate entities, i.e., independent contractors.)

The health care law vastly expands that requirement by extending it to corporate services and to property and goods. 

This means virtually all business owners, large and small, will have to get employer tax ID numbers and provide 1099 forms for basic businesses expenses such as phone and internet service, shipping costs, office supplies, and travel – substantially increasing the price of doing business in an economic environment that is already challenging. 

This tax reporting burden is especially oppressive for small business owners who outsource their accounting services and creates privacy concerns for sole proprietors whose employer tax ID number is their social security number. 

“Like many other provisions on the health care law, this onerous provision has nothing to do with health care,” Rodney said.  “It is merely a revenue raiser to offset the cost of the health care bill.”

Rodney has cosponsored H.R. 5141 which seeks to repeal the 1099 reporting expansion. 

Listening to Small Business Owners

The IRS 1099 form, excessive government regulation, and goals for government contracts for women-owned small businesses were among the topics Rodney discussed with small business owners on a tour sponsored by the New Jersey Association of Women Business Owners (NJAWBO) on Monday.  He visited four small businesses run by women and met with their owners and employees.

“Whether the federal government believes it or not, small businesses are the job creators in our economy.  Women-owned small businesses have their own specific challenges and we need to do what we can to help them succeed.  Because when they succeed, America succeeds,” Rodney said.  “Primarily, we need to stop threatening them with higher taxes and more bureaucratic red-tape and additional government mandates.  The federal government needs to get out of the way and let these talented business owners grow their enterprises.  They can barely be profitable now, and the new health care law makes their tax burden much higher!”

Rodney visited Oxford Learning in Whippany, Zimmerman Architects in Denville, Coastal Financial Group in Montville and Refeather your Nest Showhouse in Mendham.
Recommended Reading IV: Gretchen Morgenson writing in the May 2 New York Times, “At GM, Repaying Taxpayers With Their Own Cash.”  Can you believe it?

Army Leaders to Picatinny

At Rodney’s invitation, the Army's second-highest civilian visited Picatinny for the first time since he was sworn in last September.  Dr. Joseph Westphal, Under Secretary of the Army, visited the Arsenal to tour the installation and receive updates on the current and future technology being developed there for the military.  As the Army’s Chief Management Officer, he also was briefed about Picatinny's business practices.

Westphal said he wanted to, "acknowledge the good work the men and women are doing here in support of our soldiers. The work they've been doing here has been significant the last couple of years, so as we continue to modernize our Army I think it's important for us to come and really focus on the specifics of that and get some ideas of where the technologies are leading us."

Under Secretary Westphal was joined on the visit by two senior Army decision-makers: Assistant Secretary for Acquisition, Logistics and Technology, Dr. Malcolm Ross O’Neill, and Assistant Secretary for Financial Management, Mary Sally Matiella.

“Picatinny plays a unique role in the United States’ ability to maintain the peace and to protect our interests,” said Rodney.  “I will continue to encourage every senior leader in the Army, Navy, Air Force, Marines and Coast Guard to visit Picatinny and learn about this installation’s vital contributions to our national security.”