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NTUF Release GOP Presidential Candidates Studies
Posted By:  - 04/26/12

In case you missed it...


Study of GOP Candidates’ Platforms Finds Romney Proposes Double Gingrich’s Budgetary Savings; Paul’s Blueprint for Cuts Dwarfs Others’ Plans

(Alexandria, VA)Mitt Romney’s spending cut agenda is twice as large as Newt Gingrich’s, while Ron Paul proposes double the reductions of his nearest challenger. Those are just some of the key findings of the National Taxpayers Union Foundation’s (NTUF’s) in-depth, line-by-line analysis of the 2012 GOP contenders’ federal budget proposals. NTUF has conducted studies of Presidential and Senatorial candidates’ fiscal policy platforms for more than a decade.

NTUF analyzed all of the candidates’ key proposals outlined on their websites, in their official campaign documents, and touted in speeches. By referencing these plans with equivalent bills in Congress, items in the federal budget, and a variety of other cost sources, NTUF builds a comprehensive picture of the bottom line impact of the candidates’ budget-focused proposals. Some cost estimates are based on NTUF’s BillTally system, which since 1991 has served as a resource on thousands of pieces of legislation introduced each year that could affect federal expenditures.

All told, NTUF identified 151 proposals among the four Republican Presidential office seekers with a potential impact on annual federal outlays. Ninety-four of those impacts could not be accurately determined, generally because the candidates failed to provide sufficient detail to pinpoint a cost.

2012 Republican Presidential Candidate Spending Analysis

Type of Proposal

Newt
Gingrich

Ron
Paul

Mitt
Romney

Rick
Santorum

Spending Increase

6

2

3

6

Spending Cut

6

6

11

16

Unknown Cost

27

13

28

27

TOTAL

39

21

42

49


Source:  National Taxpayers Union Foundation

According to NTUF, GOP frontrunner Mitt Romney’s platform would reduce federal outlays by a net of $353.0 billion annually, Newt Gingrich’s extensive policy plans would shed $146.2 billion from the budget, and Rick Santorum had $670.6 billion in cuts on his radar prior to ending his campaign. Ron Paul seeks $1.2 trillion in yearly net reductions.

2012 Republican Presidential Candidate Spending Analysis

(Dollar Amounts are in Billions)

Spending Category

Newt
Gingrich

Ron
Paul

Mitt
Romney

Rick
Santorum

Economy, Transportation & Infrastructure

-$4.565

-$4.565

-$4.3

-$4.565

Education, Science & Research

-$60.056

N/A

N/A

$0.144

Energy, Agriculture & Environment

-$40.561

-$5.953

Unknown

-$2.465

Federal Government Reform

Unknown

-$1,173.0

-$383.409

-$647.158

Health Care

-$41.155

-$40.235

-$136.098

-$42.655

Homeland Security & Law Enforcement

$0.120

Unknown

Unknown

$1.148

National Security & International Relations

$0.052

Unknown

$170.802

$30.591

Veterans

Unknown

$2.704

N/A

N/A

Miscellaneous

N/A

N/A

N/A

-$5.637

TOTAL

-$146.165

-$1,221.0

-$353.005

-$670.597


Note:  Totals may not add due to rounding.

Source:  National Taxpayers Union Foundation

Key findings include:

  • Romney's plans to reform the federal government -- including proposals to limit federal spending to 20 percent of GDP and to reduce the number of government workers over time -- would save taxpayers an estimated $383.4 billion per year. The area in which Romney would propose the largest budget increase is national security with a boost of $170.8 billion. (PDF version)
  • Ron Paul’s single largest savings item is his multi-pronged effort to balance the budget – at $1.078 trillion in reductions, it is a stark reminder of the size of the current federal budget deficit. (PDF version)
  • Newt Gingrich’s moon base plans would cost at least $4 billion per year. His vision for new rocket propulsion technology could not be quantified at this time. (PDF version)
  • Rick Santorum’s largest individual savings item was signing off on a version of a Balanced Budget Amendment to the Constitution, which would save $519.6 billion per year. A major assumption was that Santorum would abide by the terms of the Amendment he backed, which calls for limiting total federal expenditures to 18 percent of Gross Domestic Product. (PDF version)

“The field of candidates has often changed over the past year, but their ideas for federal spending and savings will continue to be debated as the campaign season evolves,” concluded NTUF’s Director of Congressional Analysis Jeff Dircksen. “Through it all, NTUF will be monitoring the candidates’ proposals – including those of President Obama – to inform the vital national conversation about the future direction of Washington’s fiscal policy.”

Note: The detailed NTUF analyses of Mitt Romney’s, Newt Gingrich’s, Ron Paul’s and Rick Santorum’s federal budget policy platforms are available online at www.ntu.org.

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Confessions of a Conspirator
Posted By: Andrew Moylan - 04/18/12

I have a confession to make. You are reading the words of a man knee-deep in one of the broadest political conspiracies in America today. I and my organization, the National Taxpayers Union, are deeply involved in a coordinated campaign to achieve certain goals. What are those goals? Glad you asked! We're so secretive about them that you can find them right on our website: fighting for lower taxes and smaller government at all levels. In pursuit of those goals, we have long partnered with the American Legislative Exchange Council. You'll find that they're quite secretive about their principles as well, but I'll let the cat out of the bag: they work towards free enterprise, limited government, and federalism at the state level.

As just one example of how the organization works, NTU and ALEC joined together to craft model legislation on spending transparency. At ALEC conferences, we worked with other like-minded groups and individuals to discuss best practices and potential pitfalls, heard from success stories in pioneer states, and developed a base for legislation that puts governments across the country on a path to publicly disclosing (in real-time, online, in searchable format) every taxpayer dollar spent.

Obviously I'm being a little facetious here, but I suppose that's because I just don't understand what all the fuss is about. You may have heard about ALEC in the news recently as bored liberal activists have made it their newest target for destruction after tiring of pillorying the Koch brothers for being wealthy and daring to be involved in politics and policy (apparently it's only acceptable if you lobby for higher taxes like Warren Buffett). In their strange world, the existence of an organization that provides a forum to educate state legislators and arm them with the tools to advance limited government solutions is unacceptable and they will stop at nothing to cripple it.

ALEC's opponents claim that its model of discussing, drafting, and distributing model legislation to address policy issues undermines democracy as we know it. Funny, I haven't heard the same concern about the existence of the National Conference of State Legislatures. NCSL is a similar organization that uses many of the same "tactics" (educating legislators and providing model language for them to use) as ALEC.

Are there differences? Sure there are! ALEC's opponents will point out that it has private sector members which, because business is evil and must be stopped, makes it quite different. But don't be surprised if they neglect to mention the fact that NCSL is the beneficiary of $10 million (well more than ALEC's budget) in taxpayer money! Which do you find more offensive to the interests of democracy: an organization that has private sector members freely choosing to be involved (or not), or an organization that gets your tax dollars to fund its activities whether you support it or not?

I, for one, find it pretty darn offensive that my state of Virginia sent more than a quarter million taxpayer dollars to an organization that just came out this week in favor of the odious corporate welfare program known as the Export-Import Bank. Yes, NCSL supports the same Ex-Im bank that conservative AND liberal organizations have opposed because it doles out taxpayer money to wealthy corporations in order to subsidize their export activities. But remember, conservatives are the corporate shills.

So, is the existence of ALEC's private sector membership really driving all of this? I doubt it. Another similar organization, the National Caucus of Black State Legislators, allows for businesses (and labor unions) to be members. On their website, they tout the fact that they have "over 120 corporations and labor unions" as members, worth $1.2 million (at least) to their annual budget. Yet, strangely, I haven't come across any complaints about NCBSL's business model as being corrupt or damaging to democracy. Perhaps that's because, generally speaking, they advocate for liberal policy positions rather than conservative ones. Like ALEC, NCBSL attracts public and private sector membership based on the principles they stand for. I may disagree with some of NCBSL's positions, but I see nothing untoward with their model just as there's nothing untoward about ALEC's model.

What's really going on here is pretty simple. Liberal activist groups hate the limited government principles of ALEC and other organizations like it and they are intent on stamping them out of existence. I hope that ALEC, its member organizations (which includes NTU), and the state legislators across the country that are involved in it and support its work will stand up to these intimidation tactics. ALEC as an organization and the principles for which it stands are too important to give up without a fight.

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Caterpillar Rebounds: No Need to Reauthorize Ex-Im After All
Posted By: Nan Swift - 04/18/12

Despite our fragile economic recovery, Caterpillar, maker of ubiquitous yellow construction equipment, is doing better than ever! 

Caterpillar has money to spend. The company reports first quarter earnings on April 25, with analysts expecting $2 billion of profit on $16 billion in sales, or a 47 percent increase in earnings over the entire course of 2009. Revenue this year is expected to top $71 billion, which would be $20 billion more than the company reaped in 2008.

"We came out of the recession much stronger and faster than expected," Caterpillar Chief Executive Doug Oberhelman said in a company report in March. "I'm not one for passing up sales, so we really had to ramp up production quickly."

Key to this optimism is Caterpillar's record order backlog of $30 billion, three times higher than it was in 2009. Some customers will not get trucks they have ordered until as late as 2014.

To anyone paying attention to the Export-Import Bank (Ex-Im) reauthorization debate, it’s easy to see how this could come as a surprise.  Fans of the bank go on at length about how Ex-Im helps small businesses, businesses that wouldn’t be able to sell things if it weren’t for the bank – the way they go on, one would expect trade and capitalism as we know it to collapse without their loans.

So what is so surprising about Caterpillar’s recent success?  Caterpillar is one of the Ex-Im’s largest beneficiaries. In fact, it ranks in the top 10 largest recipients of Ex-Im and taxpayer largess with $453,897,359.95 in total disbursements.  Though to hear Ex-Im defenders, it would be easy to think that Ex-Im’s customers would go under without the bank, not that Ex-Im funds have contributed to less than one percent of Caterpillar’s expected revenue this year.

Remind me again why the government should be giving handouts to private businesses in this way?

A closer look at Caterpillar’s neighbors in the top dollar ranks doesn’t answer where Congress has the authority to be doing this – but it does explain why these companies got such big bucks and a big part of why Ex-Im continues to operate.

Alongside Caterpillar are companies like John Deere ($544,452,847.89 in Ex-Im disbursements), Ford ($500,000,000.00), and GE ($213,352,417.29). Like Caterpillar, all are well known for their cronyism and rent-seeking tactics (though, to Ford’s credit they did resist the siren song of the Auto Bailout.)  At one time, they were all members of USCAP, the United States Climate Action Partnership – a big business/big government partnership that lobbies for cap and trade.  Caterpillar, John Deere, and Ford all left USCAP, only when the policies the group was advocating for became policies that might hurt their bottom line.  GE, the company of Obama-BFF Jeffrey Immelt, is still a proud member because their profits would skyrocket when customers are forced to buy their expensive “green” products.

It is also notable that two of the biggest advocates for Ex-Im, the Chamber of Commerce and National Association of Manufacturers, have board members that also sit on the boards of or work for Caterpillar, GE, Ford, and Boeing.  Though not a member of USCAP, Boeing is the single largest recipient of Ex-Im funds with total disbursements approaching $30 billion, and received more than 40% of total Ex-Im financing in 2010. It probably doesn’t hurt that Boeing CEO Jim McNerney “chairs the president’s Export Council.” Or that “Former White House chief of staff Bill Daley served on Boeing’s board of directors…”

And that’s not the end of the crony capitalism.  The Washington Free Beacon reports that the bank Candidate Obama said was “corporate welfare” is “run by political donors for the benefit of political donors.”

The bank’s board of directors—appointed by the president and approved by the Senate—is stocked with large political donors and campaign bundlers.

Ex-Im Bank chairman and president Fred P. Hochberg, for example, has personally given more than $100,000 to Democratic candidates and committees since 2007, including almost $10,000 to President Obama.

That is on top of the money he bundled for the Obama campaign in 2008—between $100,000 and $200,000.

Vice chair Wanda Felton has given more than $9,000 to Democrats since 2007, nearly all of which went to the Obama campaign.

They are joined by ex officio members Ron Kirk, the president’s trade representative, and John Bryson, who Obama recently appointed Secretary of Commerce.

Kirk bundled between $50,000 and $100,000 for Obama in 2008, and personally contributed more than $7,000 to the president’s campaign.

With new examples emerging weekly of taxpayer dollars wasted on bad bets like Solyndra and co., or used to bailout private corporations and homeowners, or to shore up Fannie Mae and Freddie Mac (two entities that, like Ex-Im, were supposedly independent, self-funding, and no risk to taxpayers), it is difficult to see why anyone in Congress would continue to abuse their responsibility towards taxpayers and continue to expose our hard earned dollars to increasing amounts of risk, especially in light of the fact that the companies who receive the most are exactly the companies that don’t need cheap government loans and loan guarantees. 

These are resources that should be provided by private banks and institutions, not the government.  And if the loans made by Ex-Im are as profitable and safe as proponents claim, there is no reason (other than the fact that Ex-Im distorts the marketplace and they might not be able to compete with Washington’s cut-rate cash) why private investors wouldn’t be thrilled to make the same kind of proceeds.

As frustrating as it is, in the face of so many bad examples and flagrant corporate welfare,  there are still those in Congress, people who should know better and who claim to stand for limited government, that are still fighting for Ex-Im to be reauthorized.  Last week, RedState.com revealed that Majority Leader Eric Cantor is pushing a deal to re-up Ex-Im:

Roll Call is reporting that Eric Cantor is negotiating with Steny Hoyer in an effort to reauthorize the Export-Import Bank, which is set to expire May 31.  What’s worse is that GOP leadership is seeking Democrat support for a “compromise” to circumvent the lonely 50-70 Republicans who might block the reauthorization:

The finely calibrated deal under discussion, as described by lobbyists and aides working on the issue, would grab enough Democratic votes to overcome a bloc of 50 to 70 Republicans who strongly oppose reauthorizing the bank’s lending authority. Such a result would signal at least an appearance of centrism.

“We are working to formulate a bipartisan bill to reauthorize the Ex-Im Bank that includes needed reforms and accountability measures,” Cantor spokeswoman Laena Fallon said.

Even worse, the article goes on to state that a group of RSC members, members of the conservative Republican Study committee, are “preparing a letter supporting the bank’s reauthorization.”

It is no coincidence, that after leading a vocal outcry against Ex-Im, Delta is one of the latest recipients of Ex-Im subsidies.  One can only imagine what Ex-Im and its allies have offered these others for their support.

Still, not all in Congress are so easily bought. In the House, Congressmen Amash and Flake, and in the Senate, Senator Paul, are offering “Terminate Ex-Im” legislation that provides a dignified death to an institution that has overstayed its welcome.  These legislators, and those that side with them, should be applauded for their leadership on this issue – especially when even their erstwhile allies are undermining them.  All three are 2011 NTU Taxpayers’ Friend Award winners and it is clear they deserve this title.

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Only $780 Billion
Posted By:  - 04/06/12

From the CBO Director's Blog: "The federal government incurred a budget deficit of almost $780 billion in the first half of fiscal year 2012...."  The good news, if this can be viewed as such, is that the deficit is $53 billion less than it was at this point last year.  It's too bad that the deficit is still projected to exceed $1.2 trillion for the entire fiscal year.

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Look Maryland, No Tax Hikes! Virginia Shows How It Can Be Done
Posted By: Brent Mead - 03/29/12

This week, Virginia gives preliminary approval to a new budget proposal absent of major tax hikes and free of most gimmicks. Yet, neighboring Maryland is seeking another round of record-setting, job-killing tax hikes.

It is an old story, but not a good one for taxpayers, as the Maryland State Senate and Governor O’Malley continue to mislead citizens by claiming tax hikes offer the only path to a balanced budget. A familiar refrain, reminiscent of the talk in states like Illinois and California, that have forsaken any shred of budgetary discipline.

Maryland continues to risk going down this economically damaging tax and spend path. Indeed, Virginia was tempted to take this direction as well, but its leaders chose a different approach. It may not be perfect, but promises a more prosperous destination for its citizens.

Some stark examples of how Maryland and Virginia's policy differences have impacted both states:

  • Virginia went from a projected deficit of over $4 billion to a budget surplus of $402 million, primarily by controlling spending and easing tax and regulatory burdens.
  • Maryland, despite passing the largest tax increase in state history four years ago, faces a billion-dollar deficit this year and is again considering massive tax hikes.
  • Virginia won a high-stakes regional battle in 2010 over Maryland and the District of Columbia to lure defense giant Northrop Grumman’s headquarters.
  • Maryland-based Bechtel Corporation announced it would relocate to Virginia, bringing 625 jobs and $18 million in investment.
  • Acentia, located in Silver Spring, also announced it would move to Fairfax, costing Maryland 60 jobs and investing $3.1 million in its new Virginia headquarters.
  • Maryland is ranked 42nd in business climate versus Virginia’s 26th. It comes as no surprise that Maryland has the 5th-highest tax burden in the nation.

Virginia lawmakers deserve praise for making the right decisions on their budget. On the other side of the border, taxpayers and businesses must keep fighting to prevent Maryland politicians from perhaps permanently crippling their economy.

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U.S. Exports to China Up Despite Dwindling Ex-Im Bank Funds
Posted By: Nan Swift - 03/14/12

Knowing that the Export-Import Bank (Ex-Im) will reach its $100 billion lending cap in the near future has sent defenders of the corporate welfare institution into a tizzy.  Yet, despite worries that trade and perhaps even capitalism will grind to a complete halt, trade has continued to flourish.  The Washington Post reports that “American exports to China have increased by 468 percent since 2001, when the country joined the World Trade Organization, and are up by nearly 50 percent since 2008.”

Surely, these amazing numbers are the product of our government’s “lender of last resort” and the taxpayer backed dollars we loan to businesses that were unable to get private funding?

Sadly, for those who are pushing reauthorization, no.

China imported more soybeans from the U.S. because people’s living standard has improved and they need more nutritious food,” said Zheng Fengtian, a professor of agriculture and rural development at Beijing’s Renmin University. Importing soybeans “satisfies people’s needs for meat, eggs and milk,” he said.

The effects of China’s newfound wealth and tastes are showing up elsewhere in the food business, to the benefit of American exporters. For the first three quarters of 2011, the Agriculture Department saw increases in exports to China in four categories: snack foods, pork, dairy products, and beer and wine.

“You’re seeing the impact of the economic growth in China that has brought much of the population into that middle-income consuming status,” said Scott Sindelar, Agriculture Department consul at the U.S. Embassy in Beijing. “It’s the growing population of middle-income consumers who are changing their food preferences and moving more and more to a meat diet.”

Total U.S. exports in 2011 came to $2.1 trillion.  During the same year, Ex-Im approved $32.7 billion in loans.  Though these are both HUGE numbers, when you do the math, Ex-Im rates just over one and a half percent of those exports and its impact is negligible.  What is making an impact, however, are free markets – simply people with more money with the ability to buy more new things.  The markets could always be freer of course, but it’s hard to see how a government entity here is responsible for more consumers in another country.

NTU sent an open letter to Congress last week urging legislators not to reauthorize more wasteful spending on Ex-Im.  And for more, excellent, information, I urge you to read Cato’s Sallie James on the Ex-Im Bank here.

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NTU Rates Congress and Presidential Candidates
Posted By: Andrew Moylan - 02/24/12

*Important note: NTU has not endorsed and will not be endorsing any Presidential candidate, nor is this post intended to suggest support or opposition for any Presidential candidate.*

There's been a lot of attention paid to NTU's annual Rating of Congress recently with regard to the Republican Presidential candidates. Since 1979, NTU has performed an annual Rating of Congress where we look at every vote on tax and fiscal policy, weight it from 1 to 100 based on importance, and calculate a percentage score indicating a Member's support for limited government (We did ratings before 1979 too but used a "key vote" system that's not directly comparable to our modern Rating). You can look at the entire record post-1992 (the year we began issuing letter grades) on our website, and our 2011 analysis will be available in a few weeks.

To clarify the record given the recent coverage, we released this statement yesterday where we published the entire Rating history for Rick Santorum, Ron Paul, and Newt Gingrich going back to 1979.

In last night's debate, Rick Santorum cited NTU in an exchange with Ron Paul...

"Ron, The Weekly Standard just did a review, looking at the National Taxpayers Union, I think, Citizens Against Government Waste, and they measured me up against the other 50 senators who were serving when I did and they said that I was the most fiscally conservative senator in the Congress in the -- in the 12 years that I was there.

My -- my ratings with the National Taxpayers Union were As or Bs."

The analysis to which Santorum is referring was performed by Jeffrey Anderson, a writer for the conservative Weekly Standard. Anderson did a couple of interesting things with the data, some of which I think are insightful and some of which I think are misguided. I'll try to lay my thoughts out in detail here, but it would really behoove you to go read his piece first for reference.

The first thing Anderson did was to confine his comparison of Santorum only to other Senators that served the entirety of his twelve year tenure in the Senate (from 1995 to 2006). While I suppose he would say he was trying to compare apples to apples, I think the end result is a bit of data cherry-picking which paints Santorum in a more positive light than would otherwise be the case. This restriction necessarily compares Santorum only to long-serving Senators, many of whom (like Robert Byrd or Daniel Akaka) had decidedly poor records based on NTU's metrics.

Anderson also converted each Senator's letter grade to a "grade point average," not unlike that which terrified you during your high school days. Anderson's conversion yielded a GPA of 3.66 on a 4-point scale for Santorum, a result which sounds quite good to anyone who remembers college applications. The problem with this is that it converts a short-hand measurement intended to give readers a general sense of a Senator's voting record to a precise number when our analysis already has precise numbers that do a better job. For example, Santorum's lifetime average score out of a maximum of 100% was 75.2%, including his House and Senate years. His Senate-only average was about 77.7%.

Another very instructive metric that doesn't garner quite enough attention, in my view, is the average rank. In addition to letter grades and percentage scores, we indicate how a Member compared to his or her peers by including their rank within the Chamber. To illustrate how useful it can be, look at Santorum's last year in the Senate, 2006. He received a grade of B+ and a score of 80%, but how did that compare with his peers? Well, it yielded a rank of 27th out of 100 Senators, meaning that 26 Senators had more conservative voting records that year and 72 had less conservative voting records. Santorum's average rank in the Senate was 19.5, which reflects a decent record (after all, he never received a grade worse than a B) but also one with a fair amount of variance (he ranked as high as 3rd overall in 2002 and as low as 33rd overall in 1999). Perhaps I'm biased because I work on the Rating, but I think these numbers are more instructive than the converted short-hand GPA from Anderson's analysis.

Beyond these quirks, Anderson actually did something quite interesting in comparing Santorum's voting record to how conservative (or not conservative, in this case) his state was...

"Based on how each state voted in the three presidential elections over that period (1996, 2000, and 2004), nearly two-thirds of senators represented states that were to the right of Pennsylvania.  In those three presidential elections, Pennsylvania was, on average, 3 points to the left of the nation as a whole.  Pennsylvanians backed the Democratic presidential nominee each time, while the nation as a whole chose the Republican in two out of three contests.

Among the roughly one-third of senators (18 out of 50) who represented states that — based on this measure — were at least as far to the left as Pennsylvania, Santorum was the most fiscally conservative.  Even more telling was the canyon between him and the rest.  After Santorum’s overall 3.66 GPA, the runner-up GPA among this group was 2.07, registered by Olympia Snowe (R., Maine).  Arlen Specter, Santorum’s fellow Pennsylvania Republican, was next, with a GPA of 1.98.  The average GPA among senators who represented states at least as far left as Pennsylvania was 0.52 — or barely a D-.

But Santorum also crushed the senators in the other states.  Those 32 senators, representing states that on average were 16 points to the right of Pennsylvania in the presidential elections, had an average GPA of 2.35 — a C+."

This is a rather novel way to look at things, and one I'd admit hadn't really occurred to me before. It is, of course, true that a Republican Senator from Utah can "afford" to vote in a much more conservative manner than a Republican Senator from Massachusetts and still keep his or her job. The cynic in me decries the fact that politicians test the winds before casting votes, but it is an undeniable fact of life and it manifests itself time and again in Congress.

While I've spent most of this post talking about Rick Santorum, I'd be remiss if I didn't mention Ron Paul, with whom Santorum had the debate exchange. On our Congressional Rating, Ron Paul is almost without peer. His lifetime average is over 90%, he has snagged the top spot four times, ranked 2nd overall seven times and has never ranked lower than 10th overall in the House. In other words, in his "worst" year on our Rating, he still had a more fiscally conservative voting record than 425 out of 435 Representatives. I haven't done any in-depth analysis on this question, but the only Members I can think of that could claim to equal his performance would be Jeff Flake (92.4% lifetime average, 1st overall eight years in a row, never lower than 2nd overall) and Jim Sensenbrenner (85.9% lifetime average, 1st overall twice, 2nd overall four times, never lower than 13th overall).

The only issues I can think of on which Ron Paul might have harmed (obviously only by a very small amount) his Rating would be free trade agreements (which he generally votes against and NTU supports) and the myriad earmark elimination amendments that Jeff Flake carried from 2006-2009 (which NTU supported and he generally voted against). But on the whole, his record is exemplary.

Hopefully this is helpful in adding to the debate, and stay tuned for our 2011 Congressional Rating release in a few weeks.

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Tax Hikes Go Back to the Future
Posted By: Andrew Moylan - 02/07/12

Today, the Senate Finance Committee is marking up their transportation bill with an eye toward adding billions in tax increases to cover the overspending in the bill. More spending, more tax hikes to pay for it. Stop me if you've heard this before. But there are two proposals in particular that gave me a little bit of policy deja vu.

First, the so-called "Chairman's mark" includes a $3 billion retroactive tax increase targeting the "carrying forward" of credits claimed back in 2009. You might remember 2009 as the year before the year before this year. The halcyon days when we passed a "stimulus" bill that was going to help our economy boom by 2012. The optimistic times when we could totally afford a trillion-dollar government-run health care program and our debt was "only" $10-11 trillion (as opposed to $15 trillion and counting today). Some on the Senate Finance Committee apparently would like to relitigate tax policy from that wonderful era in American history and enact a retroactive tax hike.

Now, it should be noted that the two credits they're targeting (the alternative fuel mixture credit and the cellulosic biofuel producer credit) are not ideal tax policies by any stretch of the imagination. Particularly the alternative fuel credit, given that it's "refundable" and thus acts like government spending rather than simple tax reduction. A smart tax code wouldn't include either of these policies but would levy low, consistent taxes across the board for all types of fuels and producers. But enacting retroactive tax increases is a much more egregious violation of principles of sound tax policy than either of those dumb credits.

The second effort, a proposed amendment to the Chairman's mark from Senator Robert Menendez (D-NJ), would target the oil and gas industry for punitive tax treatment by eliminating provisions like the Section 199 manufacturer's deduction or the "dual capacity" credit for them alone. If we've written it once, we've written it a hundred times: singling out oil and gas companies for higher taxes is bad tax policy and it's bad energy policy. Thankfully, the Congress has thus far largely agreed with us as the dozens of attempts in recent years to impose Menendez-like tax increases have all failed at one point in the process or another.

The Senate Finance Committee will be taking up these issues this afternoon and we hope they focus their efforts on reducing wasteful spending and not on retroactive tax hikes or tired attempts to punish an unloved industry.

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FAA Conference Report: Positive Steps, Missed Opportunities
Posted By:  - 02/06/12

Later today the Senate will vote on the Conference Report on the Federal Aviation Administration (FAA) Reauthorization Act. Although the bill takes many positive steps forward, it ultimately missed several opportunities for savings and reforms that fiscal conservatives had sought.

Since 2007 the FAA has been lurching from short-term extension to short-term extension (23 in all), which has become a serious logistical impediment for the aviation sector’s attempt to modernize and grow. The Conference Report would reauthorize FAA operations and programs for four years, thus creating a more stable funding path for the agency and predictability for the aviation sector. Moreover, it does so without worsening the already onerous tax burden on air travel. Given that consumers can often face a higher effective tax rate on their airline tickets than they do on their 1040 tax returns, it’s too bad Congress couldn’t go one step further and actually provide relief from this heavy tax load.

The bill makes incremental (and in some cases solid) progress on a number of other issues. Although funding for the wasteful Essential Air Service has not been eliminated, the modest eligibility restrictions in the legislation could provide a starting point for deeper reforms. Language was also included to increase airports’ ability to hire private security screeners in place of Transportation Security Administration (TSA) workers. Furthermore, the package would make improvements to a National Mediation Board rule so as to better balance labor organizations’ attempts to unionize a workplace with the rights of workers to not participate in union activity.

Despite this progress, the Conference Report’s elevated authorization levels remain a major concern. NTU has previously expressed its support for the House-passed FAA Reauthorization Bill, which would have funded the FAA at 2008 levels. By contrast the Conference Report would extend FAA funding at inflated 2011 levels – a $3.8 billion increase. At a time when taxpayers are expecting government agencies to do more with less, the Conference Report could have been more aggressive at restraining expenditures and reinforcing a private sector-driven model that allows our aviation industry to more effectively innovate and evolve. Bottom line: even as lawmakers line up to vote for this compromise legislation, Congress could have done – and in the near future will need to do – more to ensure aviation policy is on a fiscally and economically desirable flight path.  

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