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Yet Another Scandal at the Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB) was created just a few years ago and it’s already experienced more than its fair share of stumbles. The latest kerfuffle: revelations that a self-professed socialist now sits on one of the agency’s advisory boards.
Ron Ehrenreich has been appointed to the CFPB’s Credit Union Advisory Council. Flash back to 26 years ago, and he was running to be Vice President of the United States on the Socialist Party’s ticket. How times change … or have they? In any case, it’s unclear what kind of impact Ehrenreich will have in this role, but his appointment certainly underscores the need for additional oversight and accountability at CFPB. This lack of Congressional supervision is something that NTU has been concerned about for years and was a major source of contention when President Obama appointed Richard Cordray to head the agency. At that time, Republicans in the Senate blocked the appointment for months as they raised serious concerns about the inability of Congress to conduct sufficient oversight, as well as concerns about the sweeping new powers the CFPB would wield. Obama eventually used a constitutionally questionable “recess appointment” to put Cordray in office and he was later confirmed after Senate Majority Leader Harry Reid changed the rules to prevent his colleagues from using the filibuster.
The next CFPB public relations disaster occurred soon after Cordray’s Senate confirmation, when we discovered that many of its employees were extremely well-paid:
Hundreds of CFPB officials are paid more than Supreme Court Justices, senior White House officials, members of Congress, and all 50 state governors, according to a Washington Examiner analysis of salary data for the board's 1,204 workers.
As my colleague, Pete Sepp, noted in the same Washington Examiner story, “how can it be justified on grounds to hire expertly qualified people when many of the salaries far exceed the experts at places like the Federal Reserve and the Securities & Exchange Commission?”
This week, the CFPB was hit with two significant issues. First, as previously mentioned, we learned of an avowed socialist serving on a CFPB advisory board. And just yesterday, the CFPB was accused of discrimination against women and minorities.Taxpayers must be left wondering what is next for this troubled agency that is supposed to be protecting consumers from harm.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Fight for LNG Exports Reveals Ex-Im Bank Hypocrisy
Next week the House Energy and Commerce Committee will consider a bill, H.R. 6, to open up new markets for natural gas exports. Currently, natural gas exports (in the form of liquefied natural gas or LNG) are restricted to the handful of countries with which the U.S. has a free trade agreement. In order to export LNG to other countries, applicants must first pass a public interest review and the process is marked by extensive delays.
The government-imposed export restrictions are hampering the growth of the domestic natural gas industry, even as new technology makes more and more resources available. When domestic consumption of natural gas is flat and natural gas prices and consumption are high abroad, it makes perfect economic sense to take our abundant supply to the global demand. Our neighbors in British Columbia are doing so and expect to see 4 percent economic growth over the next few years. Increased LNG exports would not only bolster the profitability of domestic natural gas production, but also bring with it new jobs and economic development – two things our struggling economy desperately needs.
Writing in at TheHill.com today, Raymond Keating, chief economist of the Small Business and Entrepreneurship Council explained:
According to the Center for Liquefied Natural Gas, each new terminal created to ship LNG overseas could generate more than $10 billion in investment for the U.S. economy, including wages and purchase orders for equipment. A single project will likely generate more than $10 million per year in new tax revenue at the federal, state and local levels. For good measure, it’s estimated that very $1 billion of LNG produced creates about 5,000 construction and manufacturing jobs.
So, while it’s still frustrating that government is still standing in the way of an industry’s success, what’s even more surprising is how U.S. taxpayer-backed dollars are being used to prop up the LNG industries of other nations even as our own producers are stymied by our government.
When it came to light that recent Administration-imposed sanctions towards Russia had put the kibosh on an Export-Import Bank (Ex-Im Bank) financing deal for the Russian OAO Novatek Yamal LNG project, I wondered – how many other LNG export projects do we support in other countries? A quick search turned up quite a few.
Robust competition and free trade dictate that competitors to U.S. natural gas will and should develop their own energy resources. But the federal government shouldn’t be propping up direct competitors for U.S. products using cheap, taxpayer-backed credit. Not when our own producers are not allowed to compete on that playing field. This is doubly true when the recipients of Ex-Im Bank largess are giant corporations more than capable of securing their own private capital.0 Comments | Post a Comment | Sign up for NTU Action Alerts
April Fool’s Day Still Real Anniversary of Highest Corporate Tax Rate
Happy April Fools’ Day! Today marks the 2nd anniversary of the United States having the highest corporate tax rate in the industrialized world – a foolish policy situation that continues to plague our economy.
Last year, I analyzed this dubious occasion in an op-ed for the Washington Times. Sadly, virtually nothing has changed since then. The rate remains far too high. And even after all loopholes, credits and deductions are accounted for, our average effective rate is among the world’s highest. This has put American businesses at a huge competitive disadvantage when compared to international rivals.
A few weeks ago, House Ways & Means Chairman Dave Camp (R-MI) introduced a tax reform draft that would significantly alter the existing Tax Code. While NTU has several concerns about the plan, it represents a promising step toward fundamental tax reform. One of its most encouraging pro-growth provisions would flatten the corporate rate structure and move to a single rate of 25 percent – significantly lower than the current 35 percent rate. Such a change would create 391,000 full time jobs, according to the Tax Foundation.
Let’s hope that Camp’s proposal builds momentum for the passage of a new Tax Code that is simpler, fairer, and less burdensome than the current one. Otherwise, we’ll be “celebrating” on April Fools’ Day again next year.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Falling Behind on Corporate Income Tax is No Laughing Matter
There’s an old saying that goes, “Fool me once, shame on you, fool me twice, shame on me.” But when it comes to our tax system, the shame is a one-way street leading to our nation’s capital. Today is the second anniversary of the U.S.’s dubious distinction of having the highest combined corporate tax rate (39.1 percent) in the industrialized world. And guess who bears the burden of this cruel joke? Workers, investors, and taxpayers… everyone.
On April 1, 2012, Japan finally implemented a reform plan that lowered its corporate tax rates and simplified its tax base. “Finally” is an apt choice of words, since most developed countries had been taking such steps for years. Since 1985, for example, the simple average corporate tax rate for OECD nations has fallen from a high of close to 50 percent down to roughly 25 percent.
When was the last time the U.S. took bold steps to slash its corporate tax rate? Hint: You needed a Walkman to listen to music, a paper map to find directions, and a landline to make phone calls. The year was 1986. Today, nearly three decades later, advances in technology allow us to listen to music, navigate, and communicate all on one device. Our tax code, on the other hand, has made no such advances.
If this seems ironic for the model of capitalism, that’s because it is. There is no good reason for the U.S. to voluntarily place itself at such a competitive disadvantage. Our 39.1 percent corporate tax rate is a disincentive to domestic investment and job creation. And while some high-taxers dismiss this benchmark because it fails to account for the “effective” burden after deductions and credits, this too is a misnomer. Even by that measurement, the U.S. is still a serious laggard.
Even as we fall behind, other countries are making moves to attract American businesses with more desirable tax rates – not just Japan, but other competitors such as Canada and the United Kingdom. Still, the burden of paying taxes is not the only problem afflicting our businesses – it’s the burden of complying with taxes. As NTU’s most recent “Taxing Trend” analysis of systemic complexity reported from a PwC analysis, the U.S. ranked an underwhelming 63rd out of 185 countries surveyed for the time to fill out all the necessary business tax forms associated with a medium-sized manufacturer (“1” being the easiest to deal with).
Fortunately, some Members of Congress are starting to get serious about overhauling our nation’s personal and business tax systems. The House Ways and Means Committee’s recent tax reform discussion draft may need work in several areas, but it has helped to advance a much-needed dialogue.
The House Majority’s 10-Year Budget Resolution, introduced today, goes even further. While it does not endorse a specific plan, it calls for a wide-ranging debate over comprehensive tax reform that could include not only the Chairman’s draft but other worthy proposals to replace the code with a flat tax or consumption tax.
A day like this is a good one to remind Washington it’s time to stop fooling around with tax reform and get to work. Our lawmakers need to take action now before another three decades – and many more of our competitors – pass us by.
(Picture source: Mercatus Center, Veronique de Rugy, http://mercatus.org/publication/corporate-income-tax-rates-oecd)0 Comments | Post a Comment | Sign up for NTU Action Alerts
National Taxpayers Union Foundation's study of Presidential travel has spread far and wide, Policy Analyst Michael Tasselmyer has the low down. Plus, NTU State Affairs Manager Lee Schalk talks alcohol policy in Pennsylvania & Ohio Governor John Kasich's budget proposal! And, as always, the Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Thanks to the support and feedback of our readers as well as the hard work of our creative content team, The Taxpayer's Tab got a visual overhaul recently, and we have new research to introduce along with the new look.
This week's Tab features a proposal from Congressman Ken Calvert (R-CA) to reduce the Department of Defense's civilian workforce of 770,000 by 15 percent. In doing so, H.R. 4257 would save about $16.5 billion per year, or $82.5 billion over the next half decade.
Also featured this week:
Be sure to check out the full Tab online for more information on these bills and our research.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Taking suggestions from our base of dedicated subscribers and looking to the future, NTUF released a new and improved version of The Taxpayer’s Tab – NTU Foundation’s weekly BillTally newsletter. This update is the first major redesign in the Tab’s almost five-year history and we’re not just talking about rounded corners and a sleeker look. Now, readers will have multiple options to read and share Tab content in an easy and simple fashion.
Thanks to the generous donations of NTU Foundation supporters, our Creative Content Manager Tim Howland and the NTUF research staff present you with a responsive and sleek insight into the bills that Members of Congress are proposing, supporting, and hoping to pass into law. Subscribers can read the Tab, as they always have, as it appears in their inboxes and can now go to our website to share each of the Tab’s articles and to broadcast the message of fiscal transparency to their social networks.
We’ve also started a new “Bottom Line” section to summarize each bill so if you don’t want to read the entire Most Expensive Bill of the Week article, you can just scroll to the bottom and get the cliff notes. As before, NTUF will be updating taxpayers on our research and the issues of the day through our tweets, blog posts, cross-posts on TruthAboutBills.com, and cost estimate numbers on WashintonWatch.com.
Like what you see? Consider making a tax-deductible donation to NTU Foundation to help us educate more Americans on government spending, taxes, and regulations! The more that you help NTUF out is the less that you’ll give to the IRS next April.
Again, thank you for your support and we welcome feedback on our new Taxpayer’s Tab!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Senate Advances Ukraine Aid Package - What's Really in the Bill May Surprise You!
Yesterday, the Senate moved forward with S. 2124, the “Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014.” As the name suggests, S. 2124 is an aid package for embattled Ukraine that includes measures legislating loan guarantees, sanctions, security assistance. But that’s not the whole story.
S. 2124 also contains some significant changes in the U.S. relationship with the International Monetary Fund (IMF). Under the misnomer “reform” the changes were first announced in 2010 by the IMF, but until now, Congress has declined to enact the modifications that the Obama Administration supports. The so-called reforms call for a doubling of our annual funding quota along with a major change in the rules for election of the IMF executive board.
Currently, the U.S. appoints our own representative to the executive board (the group tasked with day to day IMF decisions). Under the 2010 proposal, all members of executive board would be elected by the Board of Governors, which is comprised of representatives of each IMF member country, making it harder for the U.S. to protect our interests. Having a U.S. representative at the table is an important accountability tool for American taxpayers who provide the majority of IMF’s funds, $64.5 billion annually.
The U.S. also contributes the lion’s share of funds to an IMF account called the New Arrangements to Borrow (NAB). So far, taxpayers have committed $106 billion (18.7 percent of total NAB) to what was supposed to be a temporary, emergency program. Under the proposed 2010 plan, that would be half-true. NAB is going away, but the high price tag is here to say - shifted back under our overall IMF quota and putting taxpayers on the hook for an additional $63 billion a year. In addition, subsuming NAB funds into the general quota eliminates our veto on crucial IMF decisions
For taxpayers, the IMF reforms mean a lot more money for a lot less influence in how that money is spent. Any way you split it, that’s a terrible deal. Unfortunately, with the focus on Ukraine, the IMF changes aren’t getting the consideration they warrant.
Before agreeing to give billions more to the IMF, lawmakers should be mindful of some big picture concerns. For instance, the IMF suffers from severe democratic deficiency, not unlike the U.N. and other global entities the U.S. is involved with. Without the ability to vote on IMF decisions, taxpayers and U.S. lawmakers alike have little influence on IMF decisions. Taxpayers should have a say if their funds are to be used to bail out sovereign states such as Greece and Ireland. As it stands, the hundreds of billions of dollars taxpayers have entrusted to the IMF over the years have funded Communist regimes, contributed to fiscal irresponsibility, and increased moral hazard. By doling out credit at rock-bottom prices, the IMF provides little incentive for recipient countries to the reforms they need to avoid economic catastrophe.
Then there is our own national balance sheet with a debt to GDP ratio of 73 percent and on track to hit 100 percent in the next 25 years unless Congress takes action to address out of control entitlement spending and enacts pro-growth policies. In light of our ongoing economic challenges and poor fiscal outlook, lawmakers should prioritize funding domestic needs.
Finally, it’s unnecessary to logroll IMF reform with Ukrainian aid. With an estimated $400 billion available, the IMF doesn’t need a new injection of taxpayer backed dollars to meet global needs and commitments. Our relationship with the IMF is one that deserves reexamination and the close scrutiny of stand-alone legislation debated on its own merit.0 Comments | Post a Comment | Sign up for NTU Action Alerts
President Obama is Most Internationally Traveled President through 5 Years
The President is overseas once again, this time for a rapid-fire trip to Europe and the Middle East, with plans to visit five countries in five days: the Netherlands, Belgium, Vatican City, Italy, and Saudi Arabia. Ahead of the trip, we here at National Taxpayers Union Foundation (NTUF) are taking a moment to update our ongoing Presidential travel research to give taxpayers an idea of how often the President is going abroad using taxpayer dollars, and how that compares to past Chief Executive travels. (For more on the cost of the President's current European trip, click HERE.)
When we released our last major update of Presidential travel in June of 2013, Barack Obama was scheduled to make at least two international trips in the final six months of the year. Now that the calendar has turned and his trips are officially in the books, the final count stands at:
Over the last half of the year, the President made two trips, though only one of those was scheduled at the time of our last report.
In September, Mr. Obama spent three days abroad as he visited Russia and Sweden to meet with those countries' respective leaders.
He was originally scheduled to spend 8 days in October visiting Malaysia, the Philippines, Indonesia, and Brunei as part of the 2013 Asia-Pacific Economic Cooperation (APEC) conference. However, those plans were cancelled when the federal government shut down during debates. An impromptu December trip to South Africa to pay respects to the late Nelson Mandela wrapped up the Prsident's international travels for the year.
The table below shows how President Obama's fifth year stacks up against those of other Presidents' in terms of total trips, days spent abroad, countries visited, and the average length of those trips.
The data also show that President Obama has taken more trips and spent more time abroad after five years in office than any other modern president. The table below shows the cumulative totals through 2013.
At least one travel trend from the President’s first term seems to be carrying over into his second: while he is taking slightly higher number of total trips abroad than his two most recent predecessors, those trips have been shorter, on average. Our report last summer showed that over the course of his first term, President Obama spent about 3.8 days abroad per trip, fewer than any modern president since Johnson. That pattern seems to have carried over into his fifth year in office, where he spent fewer days abroad per trip than George W. Bush, Bill Clinton, Ronald Reagan, Richard Nixon before him.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Obama’s Euro-Trip Air Force One Flights Cost over $6.6 Million
The most internationally well-traveled President, through five years, is also flying the most expensive-to-operate Air Force One to date. (For analysis of Presidential travel over the first five years, click HERE.)
As reported in the Washington Examiner last month, new records obtained via a Freedom of Information Act request show that it cost about $228,288 per flight hour to operate Air Force One in FY 2013. That figure represents a 27 percent increase from the previously confirmed $179,750 cost that NTUF used in our last study of Presidential Travel.
Taken on its own, the $48,535 jump may not sound all that significant. However, when trips are many thousands of miles and span several time zones and continents, the difference can quickly add up.
For example, the President’s current European trip will likely involve about 29 hours of total travel time, assuming a cruising speed of 575 mph between Washington, Amsterdam, Brussels, Rome, and Riyadh, and then back to D.C. Using the previous estimate, the total cost of flying Air Force One between those international cities would be about $5,212,750. Using the new data, the cost comes out to $6,620,352.
While these figures are approximations, and do not account for the additional (and likely greater) expenses of transporting the President’s Secret Service and diplomatic entourage, backup aircraft, land vehicles, and advance security teams, it goes to show that higher Air Force One operational costs substantially change the budgetary magnitude of these trips.0 Comments | Post a Comment | Sign up for NTU Action Alerts