Not Too Late To Kill 'Cap-And-Tax' Bill

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Not Too Late To Kill 'Cap-And-Tax' Bill

Not Too Late To Kill 'Cap-And-Tax' Bill

By ROBERT E. MURRAY

Perhaps the most destructive legislation in our country's history will, as soon as this week, be voted on in the House of Representatives: the Waxman-Markey tax bill in the guise of addressing climate change.

It will have adverse and lingering consequences for every American. It will raise the cost of electricity in our homes, the fuel for our cars and the energy that produces our manufacturing jobs, with little or no environmental benefit.

Further, independent experts estimate that it will cost Americans more than $2 trillion in just over eight years.

All Americans in the Midwest, South and Rocky Mountain regions will be most drastically affected because the climate change legislation will destroy the nation's coal industry and the low-cost electricity it has provided to these regions for generations.

Wealth will be transferred away from almost every state to the West Coast and New England.

The most abundant and by far least expensive energy source in our country for generating electricity is coal. America's coal reserves rival the energy potential of Saudi Arabian oil.

Unfortunately, the proposed climate-change legislation in the House of Representatives, the Waxman-Markey bill, forces America to throw away this tremendous resource, and our low-cost electricity with it.

The legislation discards coal and low-cost energy with it by setting an unattainable cap on carbon dioxide emissions by 2020, with the first reductions due by 2012.

Under the program, businesses that emit carbon dioxide would be required to purchase or obtain from the government special carbon dioxide credits. This carbon dioxide cap will force utilities to switch from lower-cost coal to natural gas or other more expensive energy sources.

Reliable estimates show that this bill will cost each American family at least $3,000 more in energy costs each year, notwithstanding the $2 trillion cost to the economy in just eight years. The chief executive of one of the nation's major utilities recently said it best in the Wall Street Journal:

"The 25 states that depend on coal for more than 50% of their electricity . . . will have to shut down and replace the majority of their fossil fuel plants as a result of the climate change legislation."

The supporters of this ill-conceived legislation point to two provisions that they claim will help coal. The first is that they give electric utilities free credits. However, those credits are worth millions of dollars, and the utilities will be free to sell the credits and use the proceeds to build more expensive natural gas or nuclear power plants, and not use our lowest-cost fuel — coal.

Second, the authors of the legislation invest money in carbon capture and storage technology, claiming that this will save jobs. But this technology will not be commercially available for at least 15 to 20 years, long after the reductions are required in 2012 and long after our coal plants are shut down and our manufacturing jobs are exported to China, India and other countries.

All these countries have stated that they will not place any restrictions on carbon dioxide emissions. China alone, which has surpassed the United States in carbon dioxide emissions, brings a new 500-megawatt coal-fired power plant on line every week. They will have low-cost electricity, and America will massively export more jobs to them.

It is not too late to tell Congress to kill this flawed bill. Call your representative in Congress and ask him or her to vote no on the Waxman-Markey climate bill (otherwise known as cap-and-tax) and support affordable energy, American jobs and our quality of life.

Murray is chairman, president and CEO of Cleveland-based Murray Energy Corp., the nation's largest independent coal producer.

Exit Ahead? Not So Fast

Exit Ahead? Not So Fast

By RANDALL W. FORSYTH | MORE ARTICLES BY AUTHOR

The collapse in tax revenues should show the FOMC how far short the economy is from recovery.

THE FEDERAL OPEN MARKET COMMITTEE supposedly is discussing an "exit strategy" at its policy meeting that ends Wednesday. That presumes that its destination is anywhere in sight.

Notwithstanding the so-called green shoots that appear to be popping up in various series of economic statistics, other numbers show things to be withering, if not rotting outright. What's more these data are not seasonally adjusted or otherwise fudged. They're tax receipts, and nobody pays taxes on phony, phantom jobs or earnings.

According to Trim Tabs, income-tax withholdings in the past four weeks are down 6.1% from a year ago; in the last two weeks, they're down an even bigger 8.1% from last year. That marks a sharp deterioration from May, when income-tax withholdings were off "only" 4.8% from a year ago.

"The deterioration in growth since May indicates wage declines and job losses have accelerated," according to note to TrimTabs' clients.

Meanwhile, "other" taxes were down 39.5% year-on-year, down from 33.6% in May. Corporate income taxes were down 35% from a year ago in the latest four weeks after having been down 12.3% year-on-year in May.

TrimTabs' numbers corroborate the dismal numbers on state personal tax revenues, which were down 26% in first four months of the 2009 from a year earlier.

According to the Nelson A. Rockefeller Institute of Government, 34 of 37 states that submitted data reported declines. Arizona, one of the epicenters of the housing collapse, saw the biggest drop, a stunning 55%. The Nos. 2 and 3 states were South Carolina and Michigan, with declines of 38.6% and 34.4%, respectively. California, whose massive budget woes are front and center, had the fourth-highest decline, at 33.8%

Not only do plunging tax revenues tighten the fiscal vise on the federal, state and municipal coffers, they provide unambiguous confirmation of the truly dire straits of the economy.

These numbers, of course, are at odds with the surge in the stock market, which had lifted the averages by about a third from those March lows. Now, however, equities appear to be rolling over, which could be nothing more than profit-taking to nail down wins ahead of the end of the second quarter.

But the advance also seems to be losing steam in bourses abroad as well as in commodities, which suggests much of the surge was liquidity-driven, not unlike last summer's spike in crude oil prices to $147 a barrel. We'll see.

ONE BOURSE THAT HAS HAD an "official" bear market appropriately enough is Russia. The RTS index, which is denominated in dollars, fell another 2.9% Tuesday, bringing its decline since June 2 to 21%.

Faring even worse has been the Templeton Russia and East European Fund (ticker: TRF), which was among the egregiously overpriced closed-end funds featured here a couple of weeks ago ("The Closing of the American (Investor) Mind", June 10.)

Since then, the price of the Templeton Russia and East European Fund has come crashing down even harder, to 15.95 from 23.15, a loss of 31% in a mere fortnight.

Part of that reflects the air coming out of the closed-end fund's premium over net-asset value, which was deflated by half. Even so, TRF still commands an outrageous 48% premium to NAV, down from the absurd 98% premium when I pointed it out in my earlier column. That's the danger of paying too much for a closed-end fund, or anything for that matter, no matter how hot the stock seems at the time.

U.S. Doesn't Need the Ultra-Liberal Public Option

U.S. Doesn't Need the Ultra-Liberal Public Option

By Larry Kudlow

Why do we need President Obama's big-bang health-care reform at all? What's the real agenda here? If it's really to cover the truly uninsured, a much cheaper, targeted, small-ball approach would do the trick. But on the other hand, maybe the real goal is a larger, ultra-liberal plan aimed at a government takeover of the U.S. health system.

In a recent column, Larry Elder points to an ABC News/USA Today/Kaiser Family Foundation survey that shows 89 percent of Americans are satisfied with their health care. That means up to 250 million people could be happy with their plans. So why is it that we need Obama's big-bang health-care overhaul in the first place?

In a new Pew Research Center poll, only 41 percent of those surveyed believe the U.S. health-care system needs to be completely rebuilt. In early 1993, when Mr. and Mrs. Clinton started on health-care reform, 55 percent said the system needs a complete overhaul. So something has changed.

In a new CBS/New York Times poll, 38 percent say the economy is the most important problem facing the country, 19 percent say jobs, and only 7 percent say health care. In an NBC/Wall Street Journal poll on the same question, 24 percent say the budget deficit is today's most worrisome problem while only 11 percent say health care.

There's more. According to the U.S. Census Bureau we don't have 47 million folks who are truly uninsured. When you take college kids plus those earning $75,000 or more who choose not to sign up for a health-care plan, roughly 20 million people are removed from the list of uninsured. After that you can remove the 10 million who are not U.S. citizens and the 11 million who are eligible for SCHIP and Medicaid but for some reason have not signed up for those programs.

So that leaves only 10 million to 15 million people among the long-term uninsured.

Yes, they need help. And yes, they should get it. But not with mandatory universal coverage, or new government-backed insurance plans, or massive tax increases. And certainly not with the Canadian-European-style nationalization that has always been the true goal of the Obama administration and congressional Democrats.

Instead, we can give the truly uninsured vouchers or debit cards that will allow for choice and coverage, and even health savings accounts for retirement wealth. According to expert Betsy McCaughey, rather than several trillion dollars and socialized medicine, this voucher approach would cost only $25 billion a year -- with no socialized medicine.

Columnist Peter Robinson, writing for Forbes.com, relates an interview with the late free-market Nobelist Milton Friedman about the inefficiencies of health care. Friedman stated simply and clearly that the cost problems in our system can be traced to the fact that most payments for medical care are made not by the patients who receive the care, but by third parties -- typically employers or government.

"Nobody spends somebody else's money as wisely as he spends his own," said Friedman. He also fingered the tax code, which allows for an exemption from the income tax only if health care is employer-provided. This is a free-lunch syndrome, one that removes incentives for competition and cost-control because we're all playing with somebody else's money. And in the case of Medicare and Medicaid, caregivers have become employees of insurance companies and the government.

A new government-backed insurance system will intensify this free-lunch syndrome. It also will surely lead to a government takeover of what's left of our private-enterprise system.

But the Democratic agenda has never really been just about the uninsured, has it? And according to the Congressional Budget Office, with a price tag of $1.6 trillion in new spending, it certainly hasn't been about real cost-cutting or budget restraint. Nor has it been even remotely about true market choice and competition. Nor has it been about tort/trial-lawyer reform, which itself would be a major cost cap.

And let's not forget a spate of new tax-hike proposals that would sink economic recovery: employer benefit taxes, higher payroll taxes, taxes on soft drinks and alcohol, a VAT tax, or another income-tax hike for successful earners. And remember, existing health-care entitlements are estimated to be roughly $80 trillion in the hole over the decades to come. Wouldn't it make sense to solve these bankrupt entitlements before we layer on new ones?

So there is a strong suspicion that the Democratic agenda has always been a class-warfare, anti-business attack on private-sector doctors, hospitals, insurance firms, and drug companies. In the name of cost cutting, what's really going on is a major knockdown of profits. Liberals have always railed against the "excess profits" of insurance firms, drug companies, and physicians.

Knocking down profits and telling people what to do because government planners know best, right? Wrong. Absolutely wrong.

Lawrence Kudlow is host of CNBC's The Kudlow Report and co-host of The Call. He is also a former Reagan economic advisor and a syndicated columnist. Visit his blog, Kudlow's Money Politics.

A Weak American President

A Weak American President

Anne Bayefsky

Behold Obama on Iran.

President Obama has staked his reputation on being a human rights guru to people around the world. But his remarks at Tuesday's news conference and behavior since taking office have instead exposed a different persona--that of human rights charlatan.

On June 15, three days after the phony Iranian elections and the same day that seven Iranian demonstrators were murdered, Obama's UN Ambassador, Susan Rice, made a speech in Vienna promoting the Saint Obama vision: "The responsibility to protect is a duty that I feel deeply. … We must prepare for the likelihood that we will again face the worst impulses of human nature run riot, perhaps as soon as in days to come. And we must be ready. … We all know the greatest obstacle to swift action in the face of sudden atrocity is, ultimately, political will. … It requires above all the courage and compassion to act. Together, let us all help one other to have and to act upon the courage of our convictions."

A week later there were multiple casualties, injuries and threats, and 46 million voters wrenched away from that doorway to freedom that had opened--if only a crack. But when the president was asked Tuesday: "Is there any red line that your administration won't cross where that offer [to talk to Iran's leaders] will be shut off?" He answered: "We're still waiting to see how it plays itself out."

And when asked again, "If you do accept the election of Ahmadinejad … without any significant changes in the conditions there, isn't that a betrayal of what the demonstrators there are working to achieve?" He answered: "We can't say definitively what exactly happened at polling places."

And asked again: "Why won't you spell out the consequences that the Iranian people…" He answered: "Because I think that we don't know yet how this thing is going to play out."

And yet again: "Shouldn't the present regime know that there are consequences?" He answered: "We don't yet know how this is going to play out."

This is a man who embodies the opposite of the courage to act. His appalling ignorance of history prompted him to claim at his press conference that "the Iranian people … aren't paying a lot of attention to what's being said … here." On the contrary, from their jail cells in the Gulag, Soviet dissidents took heart from what was being said here--as all dissidents dream that the leader of the free world will be prepared to speak and act in their defense.

The president's storyline that we don't know what has transpired in Iran is an insult to the intelligence of both Americans and Iranians. Our absence from the polling booths doesn't mean the results are a mystery. The rules of the election were quite clear. Candidates for president must be approved by the 12-member Council of Guardians. As reported by the BBC, more than 450 Iranians registered as prospective candidates while four contenders were accepted. All 42 women who attempted to run were rejected. So exactly what part of rigged does President Obama not understand?

Instead of denouncing the fake election, President Obama now tells Iranians who are dying for the real thing "the United States respects the sovereignty of the Islamic Republic of Iran." Whose sovereignty is that? The Hobbesian sovereign thugs running the place? Sovereignty to do what? To deny rights and freedoms to their own people? In a state so bereft of minimal protections for human dignity, why should the sovereignty of such a government be paramount?

But President Obama didn't want to dwell on the daily reality of sovereign Iran: A criminal code that permits stoning women to death for alleged adultery and hanging homosexuals for the crime of existing. Instead, he repeatedly invoked "respect" for "their traditions and their culture."

This is the same mantra he espoused to the Islamic world in Cairo when three times he spoke of the "rights" of Muslim women to cover up their bodies. Knowing full well that women in the Muslim world face the contrary problem of surviving after refusing to cover up their bodies, he never once dared to mention that this was also a human right. What part of cultural relativism and traditional oppression does President Obama not know how it plays out?

In his scripted remarks, the president gave the impression of talking tough: "The Iranian government … must respect those rights [to assembly and free speech]. … It must govern through consent and not coercion." But with the "or else" pointedly missing from his lines, he made it plain that he continues to have high hopes of partnering with this current Iranian theocracy. "I think it is not too late for the Iranian government to recognize that there is a peaceful path that will lead to stability and legitimacy and prosperity for the Iranian people."

This Iranian government has told us in deeds, as well as in words, exactly what path it has chosen. President Obama has told us his path also: pandering to Islamic radicals and empty posturing. Ironically, the rest of the world claimed they wanted a weak American president whose foreign policy would read "apologize, capitulate and stand down." Now that they have what they asked for, real human rights victims are being forced to pay the piper.

Anne Bayefsky is a senior fellow at the Hudson Institute and professor and director of the Touro College Institute on Human Rights and the Holocaust in New York.