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

What is the difference between a good idea and a bad idea? Sometimes the difference is slim. When it comes to tax policy, something that sounds good can still be a failure.

Last week, President Obama announced he would put forward a new plan to encourage job growth at the beginning of September. Some of the details have already leaked to the press. At the top of the list are tax cuts for companies that hire new workers. Most likely this will be done by giving employers a break on the payroll tax for each new employee hired.

This has been tried before. We only have to look at past examples to see that there are better ways to provide a tax break to employers.

In 2010, the President signed the HIRE Act. This bill eliminated the employer's contribution to the payroll tax when they hired someone who had been out of work longer than 60 days. If the employee stayed at least one year, the HIRE Act granted the business an additional $1,000 credit. However, this credit was only temporary. After a year, the employer was again required to pay their share of the payroll tax.

New York Times economics writer Catherine Rampell sums up the problem with the credit in this way: "The challenge, of course, is making sure that the tax credit actually induces hiring, rather than just being claimed for people who would have gotten jobs anyway."

Rampell goes on to note that economists have no clear way of figuring out what difference the tax credit made in hiring. When the Treasury Department held a conference call to discuss the program they included the CEO of a North Carolina company. He openly admitted that the tax benefit was not directly responsible for the decision to hire new employees, although he was appreciative of the extra cash.

The HIRE Act wasn't an original creation of the Obama administration. In 1977, President Carter signed similar legislation. The results were similar — little real affect on the unemployment rate.

I believe that the best way to provide a break to employers is through permanent tax reform. There are two major problems with our current tax system: uncertainty and complexity. Neither of these problems is solved with a temporary credit for new hires.

For the past few years small employers have faced the possibility of a significant increase in their tax burden. It was only late last year that Congress was able to reach an agreement to extend current tax rates for another two years. Now employers are less than a year and a half away from facing the same tax hike.

The job growth we really want to see is full-time, long-term positions. The type of job that provides assurance for families so that they can invest in a new home, purchase a new car, and settle into their community. That's the kind of job that is good for people and for the economy. When employers think about creating these type of jobs, they have to look years down the road. Only permanent change to the tax code can provide certainty to spur long-term employment.

We also need to simplify the tax code by eliminating special interest provisions. All of these special interest provisions add complexity that make it harder to comply with the tax law and make it harder for the government to figure out who is following the law. If we eliminate the hundreds of billions of dollars in special tax breaks, we could actually reduce the marginal and corporate tax rates without reducing government revenue.

The best thing about permanent reform is that it would encourage economic growth, decrease unemployment, and increase government revenue. Ronald Reagan signed the Economic Recovery Act in August of 1981, the largest tax cut in American history. In just eight years, government revenue increased from $599 billion to more than $1 trillion.

I'm glad that the President is thinking about how we can change the tax code to encourage private sector employment. He's on the right track. However, it is permanent reform — not a temporary break — that employers truly need. That's the difference between a good idea and a bad idea.

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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According to the Constitution, a bill that gets a majority of votes in the House or Senate passes, and can proceed to become law. However, it doesn’t matter how much support a bill has if there isn’t a vote. 

Speaker Nancy Pelosi and Majority Leader Steny Hoyer have the power to decide which bills get voted on and which ones don’t.  Unfortunately, that power is being abused to prevent Republicans from even offering amendments to key bills that are on the floor.  More and more bills are going through the House with no amendments allowed unless they are pre-approved by the Democratic leadership.   There have always been some limits on amendments. But it has never before been done on the all-important appropriations bills that decide how your money is spent.  This week, for the first time ever under the modern appropriations process, Republicans had to get our appropriations amendments pre-approved by Democratic Leaders.  The reason?  They’re scared Democrats will vote with us and our good ideas will become law.

Before I got involved in politics, I taught high school science and math. I don’t think a student ever tried to tell me, “My dog ate my homework.” But if one did, I think I would have called his or her parents to make sure the family actually owned a dog. If you’re going to make excuses, at least make them plausible.

This week at the White House, President Obama announced a new proposal to stop manipulation of the international oil market. He’s calling on Congress to pass legislation and spend an additional $52 million to enforce regulations.

The average price of a gallon of regular gasoline has climbed to $3.95 in the state of Pennsylvania. Consumers expect the President to do his homework and propose solutions to stabilize and bring down prices. However, when you go looking for the market manipulators and speculators that the President blames for the current prices, they are difficult to find. You can’t blame the dog for eating your homework if there isn’t a dog.

International oil markets aren’t freewheeling saloons where gamblers play poker with each other. They are highly regulated and closely watched. Playing the market certainly entails risk, but it is not gambling. Investors analyze market forces and make informed decisions about the price of oil. Just like with stocks, they want to buy low and sell high. Investments don’t always pay off, but unlike a Vegas casino, the house doesn’t always win.

Meanwhile, multiple government agencies are watching the market, making sure that trades are being made according to the rules and that traders aren’t gaming the market. These agencies include the Department of Energy’s Energy Information Agency, the Federal Trade Commission, and the Commodity Futures Trading Commission.

The Federal Trade Commission regularly reports on the state of the gasoline market. In 2005, 2008, and just last year, they came to the conclusion that market forces were the main driver of what Americans pay at the pump. The major factors setting prices are demand for crude oil and refinery capacity.

At the start of the recession in 2008, worldwide demand for oil dipped. Now with economies recovering, especially in developing nations like China and India, demand is well above 2008 levels.

Certainly there are actors involved in the market who bend or break the rules. In last year’s FTC gasoline report, they note action taken against a terminal and pipeline owner to prevent a sale that could lead to higher fuel prices for consumers. Also, in June 2011, the FTC announced that they were undertaking another investigation into whether there is any market manipulation.

Despite this ongoing investigation, the President wants to give tens of millions of dollars to the Commodity Futures Trading Commission to conduct a duplicative examination. In his speech this week, the President failed to cite a single existing case of manipulation. How many government agencies do we need to investigate the President’s hunch that something is wrong?

What is often forgotten is that speculators drive prices up at their own risk. You can certainly try to artificially inflate a market for personal gain, but if you don’t pull out at the right moment the bubble bursts and you’ve lost perhaps billions of dollars. Market manipulators risk the loss of a fortune and prosecution.

Unnamed speculators are easy targets for the President. For good reason, the American people don’t trust Wall Street traders. Even if we find speculators and crack down on them, the problems of supply and demand don’t go away.

To solve a problem created by demand, you increase supply. This week, the House attached approval of the Keystone XL pipeline to the transportation bill. It passed overwhelmingly with 293 votes, 69 of them Democrats. Keystone XL by itself will not have a huge effect on price, but it should be part of a comprehensive program to increase supply.

The President is standing in the way of solutions that don’t cost the American people one dime. In fact, increasing access on public land and allowing private development of energy infrastructure brings revenue into the government. It’s time to stop blaming the dog and do the work that needs to be done to lower gas prices.

Rep. Joe Pitts is a Republican who represents Pennsylvania’s 16th Congressional District, which includes 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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Feb 17, 2012

This morning, approximately 13 million Americans woke up and looked for work. Over 8 million Americans went to a part-time job, but would prefer to work more hours. Millions more Americans gave up looking for a job in the past few years. There are more jobs opening up, but the question for many of these job-seekers is how they will find their new employer and how they will get to work everyday.

Not everyone makes enough to own a car. According to Consumer Reports, the average American car-owner spends around $8,000 a year on their automobile. Because of the recession, fewer Americans can afford a car. In 2009, the number of cars in the U.S. dropped by four million.

Many Americans rely on mass transit to find and keep a job. For many low-income Americans, this is their only option.

For many years, I’ve worked to support local mass transit agencies like the Red Rose Transit Authority in Lancaster County and the Berks Area Regional Transportation Authority. In the late 1990s, Congress passed a law prohibiting transit systems that service urbanized areas exceeding 200,000 in population from using federal transit funds for operating expenses.

This law used an out-dated and arbitrary threshold, the consequences of which were not realized until after the 2000 Census, the first census carried out under this law. Following the 2000 Census, many transit systems, including RRTA and BARTA, were forced to significantly cut routes and raise fares.

I introduced the Transit System Flexibility Protection Act to provide a long-term solution to this problem. Specifically, it adds a provision to current law stating that if an urbanized area exceeds a population of 200,000, but the transit system continues to operate fewer than 100 buses on fixed-route service during peak service hours, that transit system can maintain its funding flexibility. By offering amendments, I’ve been able to have my language included in various transportation bills.

The new House transportation bill that will be considered in a few weeks contains this provision. Unfortunately, it contains no dedicated stream of funding for mass transit. This could make it very difficult for transit systems to plan for the future.

I think this is bad news for job-seekers, especially in our area. Unlike major metropolitan areas like Philadelphia, the bus is the only mass transit available. If local transit agencies have to cut back, workers and the unemployed will face a big setback.

It’s already hard for those relying on mass transit. Last year, the non-partisan Brookings Institution took a look at access to mass transit and where jobs are being created. Seventy percent of residents in major metropolitan areas have access to transit. However, a typical resident can only reach about 30 percent of jobs via transit in 90 minutes. In other words, those who only have access to transit are very limited in the number of jobs they can apply for.

Much of the job growth in our nation has shifted from urban centers to more suburban areas. Suburbs and lower-density areas offer many advantages to new small businesses that need to keep expenses low in order to grow. Cutting back on mass transit makes the climb back to employment even steeper.

The first priority of our transportation bill has to be the maintenance of our roads and bridges. Mass transit funding has always been a small but critical portion of larger transportation bills.

I know that there are many other members who agree with me and I will be working with Democrats and Republicans on an amendment to restore this dedicated funding. In a few weeks, this bill should be coming to the floor. I am hopeful that a bipartisan coalition will be able to correct the bill before it is sent to the Senate.

We want every American to be able to find and keep a job. Transit is especially important for low-income Americans, younger workers, and the elderly. We don’t want lack of an automobile to be a barrier to a job.

For the first time in 16 years, Democrats control the entire federal government with big majorities in the House and Senate.  The “tax and spend” policies we used to complain about have returned on steroids.  This year, Washington will borrow 46 cents for every dollar it spends.  But that’s just the beginning.  An ill-conceived health bill is coming that has a price tag of $1.6 trillion.  An energy bill is coming that could also cost more than $1 trillion.  (How much is a $1 trillion?  If you spent $1 million a day from the day Jesus was born until now, you still would not yet have spent that much!)  Both bills would be paid for by raising your taxes by thousands and borrowing hundreds of billions from the Chinese. I serve on the congressional committee that is responsible for both of these bills, and I am in the thick of the fight on both of them.  I’m running for Congress again because I am in a unique position to provide an effective check and balance on the excesses of the Nancy Pelosi Congress.

Lancaster – Congressman Joe Pitts (R, PA-16) endorsed former three-term congressman Pat Toomey today in the 2010 race for the United States Senate.  The Congressman’s statement follows.

“Pat Toomey is the right candidate.  No one else comes close.

“I worked with Pat in Congress for six years.  He is one of the smartest people I’ve ever known.  He’s also one of the most caring and passionate people I’ve served with.  A lot of politicians have lost credibility in recent years.  Pat Toomey isn’t one of them.  Pat has good ideas that he actually believes in, and he will work hard to make people’s lives better.

“Pat Toomey is a bona fide fiscal conservative at a time when Washington desperately needs more of them.  Pat knows where jobs and prosperity come from, and he knows they don’t come from Washington.

“Pat has strong convictions, but they are convictions with bipartisan appeal.  Pat proved during his three terms in Congress that he has the ability to inspire Democrats and Republicans alike.

“Pat Toomey is going to win this race.  He is principled, thoughtful, caring, and qualified.”

I’m concerned that our number-one national priority, job creation, is being ignored in Washington. Washington is too distracted by scandals, partisanship, and other things that simply aren’t as important. America is still faced with an unemployment crisis, and Washington needs to stay focused on it.

Government statistics tell us Pennsylvania’s unemployment rate is 7.5 percent, more than a point lower than it was a year ago. That’s not the number I’m most interested in. The number that matters to me is 477,113. That’s the number of Pennsylvanians who don’t have jobs. Almost half a million of our neighbors can’t find work.

But even that number is misleading. It doesn’t count people who have settled for low-paying or part-time jobs. It doesn’t count those who have given up looking. Pennsylvania’s “effective unemployment rate,” which counts these people, is far higher than 7.5 percent: it’s 14.4 percent. That means nearly a million Pennsylvanians are out of work or have taken low-paying jobs out of desperation.

A key reason voters gave Republicans a second chance last year was America’s belief that the trillion-dollar “stimulus” and the multi-billion-dollar bailouts were little more than expensive failures. I and many others pushed hard for better approach.

In January of 2009, and again a year ago, I proposed a path to job creation based on six core principles. If we did each of these things, businesses could quickly begin to invest in new jobs:


Congress cannot force employers to hire. But Washington can create an environment that encourages businesses to hire. Amazingly, Washington has not only failed to act in these areas, it has actually done the opposite of what is necessary to spur job creation. Here’s an update on each of the six action items.

Action Item 1: Helping Right Now

While the best solution to unemployment is a good job, I’ve done my part to help those who need assistance in the meantime. I voted repeatedly to extend unemployment benefits throughout the recession, but I also insisted that they not be paid for with more government IOUs.

Status: When Pennsylvania’s unemployment rate dropped below 8.5 percent, we no longer qualified for these extensions. That makes it even more important that we act quickly to create jobs for people whose benefits have run out.

Action Item 2: More and Cheaper Energy

Every part of our economy runs on energy: from driving to work to turning on the lights when you get there. Manufacturing, a key driver of middle-class job creation, is particularly dependent on energy. When energy sources like electricity, diesel, gasoline, and natural gas are expensive, companies have less money to spend on people. It is essential that we make energy as inexpensive as possible, without endangering the environment.

Status: Continued opposition to domestic energy production is hurting our economy. The Administration’s policy of keeping the dollar weak has also led to high gas prices. The House of Representatives has passed several bills to increase domestic energy production from all sources. If passed by the Senate and signed by the President, we would lower energy prices for everyone and lessen our dependence on imported fossil fuels from unstable parts of the world.

Action Item 3: Low and Stable Taxes

Jobs don’t come from the government. Jobs come from successful business that grow, take risks, and hire. For years, our tax code has been a major disincentive to hiring. Our corporate tax rate is one of the highest in the world (though loopholes do allow some businesses to avoid paying their share.) But only half of American businesses pay corporate taxes. The other half pay taxes the way you and I do: using a 1040 form. These are usually the small, entrepreneurial businesses that are the real engines of our economy. Seesawing tax rates and frequent talk of raising taxes on the “rich” (who are often actually just struggling businesses) has made it impossible for employers to plan for the future and hire.

Status: A month after the election last year, a bipartisan agreement was reached to extend the current tax rates for two years. This averted what would have been the largest tax increase in history. While job creators still can’t plan for the long term, they at least know what to expect for the next two years.

Action Item 4: Open New Markets

New markets for American goods would very quickly create tens of thousands of new jobs. Three already-negotiated trade agreements have been left unratified by Congress for almost four years. South Korea, Panama, and Colombia are just three of the countries that are eager to buy more of our goods, but they can’t until Congress acts. That has cost jobs.

Status: While these agreements have been languishing, our competitors have been moving ahead. The European Union ratified its own trade agreement with South Korea on February 17. If we don’t act quickly, Europe, China, and others will beat us to the punch, leaving American employers at a disadvantage. That will cost jobs. Four years of inaction has already cost 250,000 jobs, according to Obama Administration numbers.

Action Item 5: Balance the Budget

Our government is more than $14 trillion in debt. About 40 cents of every dollar our government spends is borrowed. We have over $100 trillion in binding commitments we have no plan to pay for. This is extremely dangerous to our current and future prosperity. It has to stop. In a sign of how serious this is, S&P downgraded its outlook on America’s credit rating to “negative” in April, expressing pessimism that we will get our fiscal house in order. Moody’s Investor Services warned on June 2 that its rating will “depend on the outcome of the negotiations on deficit reduction.”

Status: Politics and demagoguery are the primary reasons for inaction. The truth is, if we raised the top tax bracket to 100 percent and completely shut down the Department of Defense, the budget still would not be balanced. We must save, strengthen, and fix Medicare and other entitlement programs to solve this problem. Until both parties can work together on this, progress won’t happen.

Action Item 6: Wise and Consistent Regulation

“Cap and trade,” increased government control of healthcare, and many of the other initiatives from the last Congress promised major disruptions to America’s regulatory structure. Businesses weren’t only waiting to find out what would happen to their taxes—they were also waiting to find out what new regulations were going to cost them. In the meantime, they didn’t hire. Regardless of the merits of these proposals, the timing of them was terrible.

Status: The President’s healthcare plan is now law, but that has not ended the uncertainty. The Department of Health and Human Services is working overtime to write sweeping regulations that will affect nearly every employer in America. At the same time, the law’s continued unpopularity and a strong challenge to its constitutionality make it uncertain whether the law will survive at all.

Looking Ahead

Despite Washington’s errors, the economy seems to be improving slowly. I believe there is good reason for optimism as we look ahead. Long-term, the American people won’t stand for a government that ignores our nation’s biggest challenges. But we must deal with the situation we are faced with now, and that means doing everything we can to make sure every American—and every Pennsylvanian—who wants a job can find one. This is my top priority.