"In short, tax increases appear to have a very large, sustained and highly significant negative impact on output … the more intuitive way to express this result is that tax cuts have very large and persistent positive output effects."

—Christina Romer and David Romer, "The Macroeconomic Effects of Tax Changes," American Economics Review June 2010

On January 1, 2011 Americans could see the largest tax increase in the history of our nation—$3.8 trillion over 10 years.

Every single tax bracket would be increased, child tax credits would be slashed and the estate tax would return in full force, if Congress does not act.

This tax hike will affect every American individual and business. Most in Congress agree that we shouldn't sit by idly and let the economy grind to a halt, but there is sharp disagreement about whether some Americans should have to pay more next year.

Treasury Secretary Timothy Geithner recently said that the American economy could "withstand" tax increases supported by the Obama administration.

In the country's deepest recession in decades, I don't think tax policy should be about what we can withstand. It should be about what can actually grow our economy.

That's where Dr. Christina Romer comes in. Dr. Romer is the Chair of the President's Council of Economic Advisers. The quotation above is taken from a recently published paper that she and her husband, also an economist, co-wrote.

They conclude that tax increases reduce economic output. Economic output has a direct relationship with employment, because it is profitable businesses who typically hire new workers.

Secretary Geithner and President Obama contend that it is no big deal to raise taxes on those that they call "rich." Unfortunately, their caricature of the rich is not based in reality. Americans in the top tax bracket are not uniformly Hollywood celebrities and sports stars.

According to the non-partisan Congressional Joint Committee on Taxation, 50 percent of those in the top individual tax bracket are small business owners.

A survey by the National Foundation of Independent Business found that 75 percent of their members are organized in a way that they pay taxes at the individual rate.

President Obama claims that his tax increase will not affect small businesses currently struggling through the recession. That may be true, but it is not struggling businesses that hire new workers. Hurting successful small businesses that are turning a profit means taking away resources from the very businesses that are most likely to hire new workers.

But small businesses aren't just imperiled by the impending increase in the marginal rates. On January 1, the estate tax will increase to 55 percent for estates valued at more than $1 million.

The value of an estate is not just how much cash is in the bank.

Business assets and property are included.

They are asset rich and cash poor.

The family of the deceased must find a way to pay the tax bill, and if they don't have the cash they must sell assets.

In my district in southeastern Pennsylvania, farmers are especially vulnerable to the estate tax. Many are eking out a living farming land that is worth millions to developers.

Farmers aren't the only ones affected. For instance, your local printer may be making only a slim profit, but the presses may be worth hundreds of thousands of dollars.

When the farmer or the printer passes away, their heirs would have to sell the land or the presses to pay the bill.

Without land or equipment, the business shuts down and employees lose their jobs.

Over the next few months, the Obama administration will try to paint a picture of those in the top tax bracket and subject to the estate tax as wealthy and wasteful.

On the contrary, most of these individuals are job creators, risking their own money to start new American businesses.

When the tax increases come, it won't mean that these individuals will buy one fewer yacht, hold off on the purchase of a new luxury car or sell their beach house.

It will mean that they will hire one fewer worker, that they will hold off on purchasing new computer equipment or that they will reconsider investing in a new business venture.

With 9.5 percent unemployment, we can't "withstand" the status quo.

Congressman Joe Pitts is a Republican who represents Pennsylvania's 16th Congressional District in parts of Berks, Chester and Lancaster counties.

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The decades-long effort to open a federal courthouse in Lancaster is expected to take a crucial step forward next week.

The federal government plans to launch a site-selection process for a $27 million facility that would be built downtown, judicial and congressional sources said Friday.

Finding and acquiring a suitable property likely will take months, but the feds expect to have a one- or two-courtroom building constructed within three years.

U.S. District Court Judge Lawrence F. Stengel, a former county judge who lives in Lancaster and commutes to Philadelphia, likely would preside at the new courthouse.

In an interview, he said all branches of the government are committed to moving forward the much-anticipated project.

"It's clearly a priority of the East District, and it's clearly a priority for the General Services Administration," said Stengel, 57. "There's a push to get this done. The process of site selection and acquiring and hiring of an architect — once those things are done, construction should proceed rapidly."

U.S. Rep. Joe Pitts announced Friday that the GSA, an agency of the federal government that owns property and leases it to the federal courts, will begin seeking "expressions of interest" for property in the city.

The agency will post the request online at FBO.gov, the government's procurement clearinghouse. FBO stands for Federal Business Opportunities.

The request is a sort of open invitation to the private sector, namely property owners and real estate firms who can help identify a suitable site. The government has appropriated $6.5 million for site acquisition and design.

The remaining $20.5 million would go toward construction of the facility.

The U.S. Senate has authorized spending the $27 million for the courthouse; the House Transportation and Infrastructure Committee also must authorize the spending.

Congress must approve of the proposal in the financial services and general government appropriations bill, said Tom Tillett, district chief of staff for Pitts.

Elected officials, local law enforcement and attorneys have been seeking a federal courthouse in Lancaster for more than 20 years.

"A federal courthouse here will aid in the prosecution of gang-related offenses, illegal firearms and other serious criminal cases since police officers will no longer have to travel to Philadelphia in order to testify," Pitts said in a statement.

"I'm going to work closely with my colleagues on the House Transportation and Infrastructure Committee to move the project forward," said Pitts, a Republican who represents Lancaster County. "Lancaster has waited decades for a federal courthouse, and today's action is a concrete step toward beginning construction."

Lancaster's facility is expected to be modeled somewhat after smaller satellite federal courthouses, such as the one in Reading.

It is expected to consist of one or two courtrooms, two judges' chambers, a U.S. Marshals Service office and other offices for court personnel.

Craig Stedman, Lancaster County's district attorney, said the latest development was "encouraging news from a law-enforcement perspective."

"We have a long-standing partnership with the U.S. Attorney's Office in prosecuting some of the worst criminals in the county in federal court," he said. "One of the only drawbacks so far has been the distance police officers, witnesses and prosecutors have to travel in order to take advantage of more serious federal sentencing guidelines.

"Anything which will cut the travel time will lessen the burden on witnesses and give the police more time to work cases rather than sitting in a car to and from Philadelphia," Stedman said.

In April, federal officials confirmed they were looking at sites for a satellite courthouse in Lancaster city.

Lancaster Mayor Rick Gray said there are several possible locations in the city: the vacant Bulova building on Lancaster Square, at North Queen and East Orange streets; the former Sovereign Bank office building at 23 E. King St., owned by the Girard Estate; and the site of the former Gunzenhauser Bakery at 811 N. Prince St.

Gray, who has been involved from the beginning with the plan to bring a federal courthouse to Lancaster, said such a facility would save city police a lot of money they now spend driving to other courthouses.

"Even if you have a pretrial conference, you have to go to Philly or go to Allentown or Reading," Gray said. "It would certainly serve the community of Lancaster — not just the city, but the county — by way of providing an easy, accessible way to get to the federal courts, whether criminal or civil."

Stengel said the courthouse could also handle bankruptcy cases, so litigants wouldn't have to go to Philadelphia.

A new poll shows that Americans now trust Republicans more than Democrats on the issue of health care, and the margin is huge: 16 percent. After passage of Obamacare, 53 percent of voters trust Republicans on the issue and only 37 percent trust Democrats. Given the fact that most Americans want the Obamacare law repealed, this isn’t surprising. In a historic context, though, it is extremely significant.

For decades, Democrats have significantly outpolled Republicans on health and other “compassion” issues, largely because of prevailing stereotypes about the two parties. Just five months ago, a poll showed that Democrats were more trusted on health care reform than Republicans by a margin of 50 percent to 37 percent.

Republicans care about the needs of people just as much as Democrats do.  We’re just more realistic about what can actually be done with limited resources without seriously harming the country. Now that Americans are aware that we have $107 trillion in entitlement promises we have no plan to pay for, it seems that people are demanding a government that can actually do math.

A year ago, on January 28, 2009, I voted against the Democrats’ “stimulus bill.” I predicted, correctly, that it would be too ineffective to justify the massive price tag. It was supposed to cost $787 billion and keep unemployment from exceeding eight percent. Well, today unemployment is at ten percent and the CBO just announced the stimulus will cost another $75 billion more than advertised.

Not content to just criticize, I issued a memorandum to my constituents on the day Congress passed that bill. I called for tax reduction, increased energy production, and trade promotion as the three things that would genuinely stimulate the economy.

A year later, in Wednesday’s State of the Union Address, the President finally called for these three things in what appears to be a serious way. While I disagree with much of what he called for in his speech, we at last agree on some of the areas we should be focusing our efforts.

It’s a year late. But I’m glad to see the President finally realize that tax cuts are the quickest and surest form of stimulus. I’m glad to see him recognize that we need to expand energy production, not constrict it as his “cap and trade” proposal would do. I’m glad to see him realize that we must open new markets for manufacturers to sell their wares to.

If he had acted on these things a year ago, unemployment might really have stayed under eight percent. It remains to be seen if he will actually act on them even now.

After two straight elections with huge gains for Democrats, Democrats control the entire federal government. You’d think they would be happy--but Democratic voters and officeholders alike are increasingly grumpy.

Democrats in Congress are increasingly nervous that their leaders’ policies are heading them for big trouble with the voters. At the top of their list of complaints is the lack of even a plan to reverse growing unemployment. Read this very interesting article for more on this.

As for Democratic voters, even Tuesday’s primary—which included a big win for Democrats in western Pennsylvania—contained an ominous sign for Democrats going into the fall: Democrats stayed home in unexpectedly high numbers. Read this from a pollster on what this means.

I’ve had several Democrats call and write to me asking how they can switch parties. I received this email from a woman on Sunday: “Hello, please help me change parties…. I am currently a Democrat. … I was raised a Democrat, my father a carpenter in the union. I can no longer belong to a party I do not believe in,,.please tell me how I change parties.”

If you would like to change your registration or register to vote for the first time, registration forms are available at most public libraries and many other government offices. If you can’t find one, please call my office and I’ll send you one!

As you are no doubt aware, the United State receives the majority of our oil from overseas sources. Unfortunately, we are dependent on volatile regions and despotic regimes for the petroleum that runs our cars. Just a few years ago it appeared that the United States would soon be dependent on foreign nations not only for oil, but also for natural gas.

With easily acquired natural gas deposits beginning to run dry, energy companies started to look to foreign liquefied natural gas to make up the difference. Gas prices spiked and there were battles over where to locate new industrial facilities to import gas.

Now, however, the Energy Information Agency predicts that we will decrease the percentage of natural gas imported into the U.S. from 13 percent in 2008 to 6 percent in 2035. That's quite a turnaround, and it will happen because of hard working Pennsylvanians unlocking the Marcellus Shale that runs below much of our state.

By now, you've probably heard about the Marcellus Shale, a layer of rock running thousands of feet below the ground. We've known for years that the shale held natural gas, however, standard drilling only yielded small amounts of this gas.

By combining the decades old hydraulic fracturing process with newer methods of horizontal drilling, energy exploration companies are able to extract shale gas in significant quantities for the first time. Hydraulic fracturing involves injecting a water-based mixture into the rock, creating tiny cracks in the shale and releasing gas. The process was first used in Texas to release gas from wells that were considered dry.

A Penn State University estimate shows that there is now enough gas in the Marcellus Shale to supply the entire U.S. for more than 14 years. Obviously, the Shale is not going to be tapped all at once and will not be the sole source of gas in the U.S., meaning that wells in Pennsylvania will provide a source of natural for decades.

It is estimated that natural gas exploration could lead to more than 100,000 jobs statewide. While Pennsylvania's 16th Congressional District is not located above the shale, local companies will certainly benefit.

Dutchland Inc. in Gap, Pa. manufactures precast concrete for wastewater facilities. The company is an important part of keeping our environment clean as we take advantage of our domestic resources. Since hydraulic fracture injects water deep into the bedrock, companies must take proper care to deal with dirty water. The Marcellus Shale is thousands of feet below the water table, so drilling does not affect groundwater.

There are environmental precautions that need to be taken as gas is extracted from the shale, but there are a number of environmental advantages to using natural gas. First, since natural gas burns cleanly, electrical plants running on gas have greatly reduced emissions. Extraction of gas also impacts the environment less than extraction of other fossil fuels such as coal. Finally, natural gas vehicles, such as buses, emit far less emissions compared to gasoline and diesel vehicles.

Extracting gas from the nearby Marcellus Shale also has a significant cost savings over piping gas from Texas or the Rocky Mountains. Reducing the consumer price for gas will benefit homeowners and could also attract new manufacturing businesses to the state.

Natural gas is not a solution for all of our energy problems, but I believe we need to develop our domestic natural gas supply while we continue to move forward with renewable sources such as wind and solar. I believe a broad strategy of developing gas, nuclear, clean coal and renewables is the best way to reduce our dependence on foreign fossil fuels while gradually reducing our emissions.

We have to ensure that safety and protection of the environment are priorities for the companies developing the Shale, but with many Pennsylvanians looking for work we shouldn't pass up this opportunity to create new jobs. Responsible development of the Marcellus Shale can reduce energy costs while improving air quality.

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By Congressman Joe Pitts

The Democrats’ health legislation has now been forced through Congress and into law despite bipartisan opposition in Congress and widespread public opposition. Three dozen House Democrats opposed it. Every Republican opposed it. Only slightly more than a third of the public supports it.

Democrats were barely able to pass the bill, even though there are 75 more Democrats in the House than Republicans, and an unusually lopsided majority in the Senate as well. Only a year’s worth of cajoling, back-room deals, demonizing of industry, and cooking of the numbers made it possible.

What will the consequences be? It won’t be pretty.

Not counting the new law, the nation’s unfunded liability for entitlements is already $104 trillion dollars. That is seven times the size of the U.S. economy. That’s according to Richard Fisher, President of the Federal Reserve Bank of Dallas. The unfunded liability is the difference between promised benefits and the money that will be collected in taxes to pay for them.

The entitlement crisis has arrived. This year, many years before it was projected to, Social Security will pay out more in benefits than it will collect in payroll taxes. Former President Bush, with my support, proposed a plan to change the way Social Security is paid for to put it on a sound footing. After a shameful campaign of scaring seniors, Democrats defeated this plan without ever offering their own. Now, Social Security is well on its way to insolvency.

Medicare’s problems are far worse. Medicare’s unfunded liability is five times that of Social Security. Obamacare doesn’t solve this crisis. It adds to it.

Instead of finding ways to make these programs solvent, Congress and President Obama have hastened their collapse. By adding an entire new entitlement program we cannot afford, the solvency of the government itself is now severely threatened. The math just doesn’t add up. It is no wonder, then, that Moody’s has announced it is likely to downgrade the government’s bond rating soon. The cost of that alone will be dramatic.

What, then should we have done instead?

On my website, I have a detailed memorandum outlining affordable ways to help the uninsured, to cover people with pre-existing conditions, and to achieve the other worthy goals of Obamacare.

The fundamental problem behind our entitlement crisis is the lack of free market forces involved. Already, nearly half of all Americans are on government healthcare programs that compete with no one. Even private insurance sees only limited competition, since the government will not allow insurance companies to compete across state lines.

Beyond economics and business models, however, we need an entirely new way of looking at healthcare. Early in this debate a Republican said, “We don’t have healthcare in this country—we just have sick care.” Americans wait until they are sick to pay attention to their health. The point is, as Ben Franklin said, “An ounce of prevention is worth a pound of cure.”

Chester County’s John Emmons works for a company called Mannington Mills. The company is self-insured, so every dollar spent on employee health comes out of the company’s bank account. John is the leader of the company’s wellness initiative.

The program offers free health screenings for early detection, a fitness center, offers health classes, a Weight Watchers program, a smoking cessation program, sports leagues, and wellness coaches.

John reports that “Mannington’s health care costs have fallen both in 2008 and 2009. We’re going for three in a row in 2010.” Clearly, Mannington Mills is doing it right.

John says, “Unfortunately, our president and the Democratic-led Congress just wasted a year, further dividing the country and burdening taxpayers with a new source of debt. … If they are serious about solutions, perhaps they should come and talk with some of us who have done it, rather than twist arms, make deals and mislead the American people.”

Health reform is possible. John Emmons’ company has done it. If Washington had listened to John and the millions of Americans who think like he does, real reform might have happened this year. Real reforms would protect patients while lowering costs. Instead, our problems are now worse.

By U.S. Rep. Joe Pitts, guest columnist

We all know how difficult it is to run a family farm. Sometimes there are not enough hours in the day to do everything that needs to be done. From a young age, farm sons and daughters pitch in to help, driving tractors and other farm equipment once they have the skills.

Running a family farm is hard, but now the federal government wants to make it even harder. New regulations from the U.S. Department of Transportation and the Pennsylvania Department of Transportation are about to come down on all Pennsylvania farms at the worst possible time.

The new regulations would put a number of new requirements on farmers whenever their vehicle travels along, or even just across, a public road. When you think about Pennsylvania farms, you realize that many of them, especially in our area, have roads running through them. Here are just some of the new regulations farmers would have to comply with if they want to drive on a road:

Anyone under 18 years of age would not be able to drive on the road.

Drivers would need to be medically tested and certified as physically qualified.

Drivers would have to keep extensive logs of driving hours and break times.

Also, Drivers would have to complete reports before and after using the vehicle.

Finally, drivers would be required to begin and end their work at the same location.

The new regulations would keep licensed teenage drivers from operating equipment on their family farm. Family farmers across the state would lose important members of their workforce, the very people that they would like to hand the farm down to one day. There won't be a farm to hand down if the work doesn't get done. With many farms just scraping by, the loss of help could be the breaking point.

All the new logs and reporting required would eat up time that would be better spent doing the actual work of farming. Do we want farmers to plant and harvest or do we want them to shuffle paperwork? As I stated before, there are only so many hours in a day. Time is money on a farm and all these new reporting requirements will cost farmers money that they may not have.

The USDOT is forcing PennDOT to accept these regulations or give up federal funds. PennDOT is complying for now since these are important funds used to keep all of our roads and highways safe. I know that they have responsibility for roads and not farms, which is why I'm working with my colleagues to prevent USDOT from forcing our state to take action that will hurt our farmers.

Farming is the number one industry in the state of Pennsylvania. It's also an important part of our history and culture. These regulations would apply specifically to Pennsylvania and not necessarily other states. This would place our state and our farmers at a competitive disadvantage when we can least afford it.

Much of this goes to the broader issue of government regulations promoted by the present administration. I don't think that government does a good job of creating jobs, but I most certainly think that government can hurt job growth.

Regulations coming down from Washington can make it much more difficult for businesses to hire new employees, raise costs like healthcare benefits or energy bills and, in some cases, cause a business to shut down all together.

Just in the past year we've seen the Consumer Product Safety Commission shut down factories producing children's toys and the Environmental Protection Agency move to regulate all carbon dioxide sources. In the next few years, I believe we'll see many more job killing regulations come from Washington.

Government certainly has responsibility to ensure safety and clean air, but I believe many new regulations go too far and are not supported by elected officials. I don't want to see government regulators shut down our farms. We need to focus on growing our economy and getting Americans back to work, hurting Pennsylvania farmers is no way to get us there.

U.S. Rep. Joe Pitts is a Republican who represents Pennsylvania's 16th Congressional District in parts of Berks, Chester and Lancaster counties.


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Common ground on the abortion issue is hard to find.  But there is one question that the vast majority of Americans have long agreed on: the government shouldn’t pay for it.  In poll after poll, Americans of all political stripes agree on this.  Likewise, in vote after vote, Congress has for decades barred the use of federal funds to pay for the procedure.

Polling data show that majorities as large as 71 percent do not believe the government should run or subsidize programs that perform or pay for the procedure.  That was reflected in a recent vote in the House of Representatives to bar new programs in the Democrats’ proposed health overhaul from paying for abortion.  The amendment passed with broad bipartisan support.  Every pro-choice Republican and a great many pro-choice Democrats voted for it.  One fourth of all Democrats voted “yes,” including most of the twelve Democrats from Pennsylvania. The amendment reflects the mainstream of American opinion.  It reflects the conviction of decent Americans who recognize that however much people may disagree on this issue, we should respect each other enough to not publicly fund something many of us find abhorrent.

There is, however, a small minority in America and in Congress that insists on using this legislation to fund abortion through major government health programs. Much like those on the right who have claimed the health bill sets up “death panels,” the simple facts don’t seem to matter much to them.  Politifact.com has posted three “truth-o-meter” studies debunking the claims made by left-wing members of Congress on this issue.  National Public Radio and other respected sources have done the same.   Nevertheless, the wild claims continue. One of the organizers of a Saturday rally to protest my co-sponsorship of the amendment told the Daily Local News that I oppose birth control—something that is absolutely not true.

All of this reflects the unfortunate side of American politics today.  It has become harder and harder for elected officials and activists on opposing sides of the issues to have grown-up, respectful conversations with each other.  Lincoln-Douglas debates have been replaced by the Rachel Maddow show.  After the House vote, a liberal activist from Lancaster (who intends to run against me next year) wrote on a blog: “Everybody's angry. And everybody wants to punish someone—anyone!—for this travesty!” and then asked readers to give her money.

Given the heated rhetoric, I believe it is important for everyone to remember what this debate is about.  It has nothing to do with the legality or availability of abortion.  It is purely, and only, about whether or not the government will pay for abortion in the so-called “public option” and through new “affordability credits” if the legislation now in Congress becomes law. 

Because the vast majority of Americans do not want public money spent that way, those who do want it spent that way are faced with two options.  Either accede to the will of the majority, as Speaker Pelosi has done, or use budget gimmicks to pay for abortion while claiming not to.  (Unfortunately, the new Senate bill includes exactly that kind of gimmick.)

There is a saying that “politics is the art of compromise.” That is almost always true.  It is not true here.  You simply can’t compromise on an either/or scenario.  Either we are going to use public funds to pay for abortion or we aren’t. Giving money to a government contractor who then pays for abortions isn’t a compromise.  It’s deception.  Likewise, pretending that money isn’t fungible, as Senator Reid has done, is not a compromise.  Either the government is going to pay for abortion or it isn’t, and Congress needs to be honest about what it is doing. 

Democracy relies on the honesty and the good will of elected officials and activists alike.  We should compromise when we can and let the majority rule when we can’t.  Mudslinging, dishonest “spin,” and Saul Alinsky-style tactics undermine democracy and hurt our country.  For decades, the government has not paid for abortion services and it should not start now.  That is the overwhelming will of the American people.  The House has listened to the people, and the Senate should too.

 

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