Opinion

The Great Debate

New fuel standards aren’t as tough as they look

 Diana Furchtgott-Roth–- Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. –

Good news for Americans with large families or who need to transport substantial amounts of gear: President Obama’s new vehicle emissions standards are not as tough as they seem. But this is bad news for environmentalists, who want to lower the use of gasoline.

When Obama, using authority granted to the president in the 2007 Energy Act, announced earlier this month that automakers will be required to achieve a higher fleet average, 35 miles a gallon, by 2016—four years earlier than Congress had mandated—Americans might have been forgiven for thinking that in 2016 the window stickers on the new cars would reflect this new standard.

Not so.  Window stickers describe only the calculated gasoline efficiency of the model they are pasted on.  Moreover, even if miles per gallon (MPG) were averaged for all models, the result would fall below the new standards Obama announced for 2016.

What he promulgated was a higher “fleet average” for each automaker as calculated by the Department of Transportation, using a kind of vehicular treadmill to test cars’ fuel efficiency.

Develop domestic oil reserves for energy independence

 Diana Furchtgott-Roth– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. —

President Obama is in favor of moving towards “energy independence,” but his new 2010 Budget specifically seeks to raise taxes on domestic oil exploration by $31 billion over 10 years, a larger tax increase than on any other industry. In addition, oil and gas producers would bear a disproportionately heavy share of other tax increases on business, more than $320 billion.

Surely a president who desires energy independence would leave oil companies alone so that America could develop greater domestic reserves.  But this is not the case.

Thousands lose jobs due to higher federal minimum wage

 Diana Furchtgott-Roth– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. —

As President Obama considers whether to fulfill his campaign promise to raise the minimum wage from $7.25 to $9.50 per hour by 2011, there’s no better illustration of the consequences of well-intentioned policy-making than recent events in American Samoa, a United States territory in the South Pacific that falls within the purview of Congress.

Chicken of the Sea, the tuna company, announced this month that it will close its canning plant in American Samoa in September. The culprit is 2007 legislation in Washington that gradually increased the islands’ minimum wage until it reaches $7.25 an hour in July 2009, almost double the 2007 levels.

Lessons from Jack Kemp

 Diana Furchtgott-Roth – Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. —

Jack Kemp, who died on May 2 at the age of 73, lived the American dream as the football star who was elected to the House of Representatives. He had the vision to translate his intellectual ideas into the practical tax cuts, housing vouchers, and enterprise zones that sparked not only the Reagan revolution in America but also similar economic revolutions in many countries around the globe.

Jack Kemp spent his life as a champion of the little guy, the forgotten man, the person left behind in a world too busy to care. It is easy to look to other way and ignore the cries of the weak and the helpless. Jack Kemp could have done that. But Jack Kemp always stopped to listen. And when he listened, he stood up for the downtrodden.

President Obama’s first hundred days

 Diana Furchtgott-Roth– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.  The views expressed are her own. —

In his first one hundred days, President Obama has shown himself to be one of the most radical U.S. presidents in history.  He is harming America’s defenses by publishing memos on interrogation of detainees and threatening to prosecute lawyers who drafted supportive memos.  He shakes hands with America’s enemies, such as Venezuelan leader Hugo Chavez, and sends mixed signals to its friends, such as Colombia’s President Uribe.

And, in the name of combating a recession, he is destroying the fundamental institutions of America’s free-market economy.

The economic cost of climate change legislation

 Diana Furchtgott-Roth– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.  The views expressed are her own. —

Chairman Henry Waxman of the House Energy and Commerce Committee announced yesterday that his American Clean Energy and Security Act of 2009 “will create millions of jobs, revive our economy, and secure our energy independence.”

The 648-page bill, co-sponsored by Waxman and fellow Democrat Edward Markey, Chairman of the House Energy and Environment Subcommittee, has been the subject of four days of committee hearings this week.  It would set new limits for greenhouse gas emissions, and prescribe radically new standards for energy production and use.

A simpler way to pay taxes

 Diana Furchtgott-Roth– Diana Furchtgott-Roth, dfr@hudson.org, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own.  –

It’s April 15, and you’ve finished the arduous task of filing your taxes. You’ve found your W-2 form from your employer, your pennies of interest income from your checking account. If you itemize, you’ve tracked down the acknowledgement of your charitable contributions to the church, the Sierra Club, and the local anti-poverty organization.

The system is so complex that it may have contributed to the tax delinquencies of four Cabinet-level Obama appointees (or their spouses) who had to pay up to win Senate confirmation. At least two other Obama choices withdrew because of their tax problems.

Immigration can speed economic recovery

 Diana Furchtgott-Roth

– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. –

It’s welcome news that President Obama will turn his attention to immigration reform this year, as was announced on Wednesday by Deputy Assistant to the President Cecilia Muñoz. Economic recovery will happen more quickly if both high- and low-skill immigrants are permitted to enter the United States and work legally.

Two years ago, when Congress was considering comprehensive immigration reform, both President Bush’s Council of Economic Advisers and the Congressional Budget Office, headed by Peter Orszag, an economist closely identified with the Democratic Party, estimated that the benefits of additional immigrants outweighed the costs. If Congress allowed more immigration, then American taxpayers would come out ahead financially.

Keep the charitable tax deduction

 Diana Furchtgott-Roth– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. —

The economy is in a painful slump. Growing numbers of people need help, charities are facing a decline in donations and states are cutting back on services. The April employment report from the Labor Department will show a further increase in the number of unemployed.
Yet, rather than harnessing the generosity of Americans to help out, President Obama has proposed to reduce the tax incentives for charitable giving. He wants Congress to limit to 28 percent the tax saving from contributions for taxpayers who itemize their deductions.

Mr. Obama proposed to use the revenue gained to fund universal health care. He would make the 28 percent cap on the tax saving for contributions take effect in 2011, when he contemplates letting the Bush 2001 tax cuts for upper-income people expire.
The combination of higher rates and a 28 percent cap on the value of deductions for charitable contributions (and mortgage interest) would diminish donations to charities ranging from local churches to national opera companies. Cutbacks on charitable giving would be more pronounced among the well-to-do, not only because they have more to give, but because their tax rates would rise at the same time as their deductions would be limited.

Trillion-dollar deficits are not the answer

– Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. —

On Tuesday, President Obama suggested that his new proposed spending, if adopted by Congress, would be an investment that will pay for itself.

Mr. Obama declared: “We invest in reform that will bring down the cost of health care for families, businesses, and our government.” Such investments, he argued, will in the long run make the economy operate more efficiently.

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