By Tom McClintock  On June 28, 1991, the California Assembly began debate on what was then the biggest tax increase in California’s history: a $7 billion tax hike pushed by Gov. Pete Wilson that included increases in sales, income and car taxes.
 In that debate I warned my Assembly colleagues, “Do not expect the revenue estimates from this tax to hold.  As sales decline, as layoffs increase, as small businesses which are barely hold¬ing on now are forced to close their doors     the revenue projections under this and the other tax increases are bound to decline substantially, and we'll be back here possibly by early spring, to deal with growing budget shortfalls.”
 That’s exactly what happened. Although the national recession had officially ended in the first quarter of 1991, the Wilson tax increases imposed in the third quarter broke the back of California’s economy.  By the fourth quarter of 1991, while the rest of the nation was recovering, California was suffering the biggest plunge in retail sales in 30 years.  Not only did the tax package produce only half of the revenue anticipated, it caused two consecutive years of billion-dollar declines in state revenue.
 The $12.8 billion tax increase signed by Arnold Schwarzenegger comes not during a period of economic recovery, but in the throes of the worst recession in a generation.  It will cost more than $300 for every man, woman and child in California – $1,200 taken from the discretionary spending of an average family of four – either in direct tax increases or in tax-driven price increases as businesses pass along their costs to consumers.
 By raising the sales taxes more than 13 percent and doubling the car tax, Schwarzenegger’s action will hit the automobile market particularly hard.  The sales tax – the second biggest income generator for the state – is already down by seven percent over the last 12 months and car sales account for fully one fifth of all sales tax collections.  Meanwhile, the Governator is pushing for federal action that will add as much as $5,000 in new regulatory costs to the price of a new car.
State revenues can be enhanced – but only by relieving the economy from the high taxes and draconian restrictions that this administration has imposed. 
Ironically, Gov. Schwarzenegger vigorously opposes relaxing restrictions on the development of California’s vast offshore oil reserves, despite estimates that those resources could generate billions of dollars of new revenues and royalties directly into the state’s treasury.  His AB 32 – calling for a 25 percent reduction in carbon dioxide emissions in 11 years – is systematically shutting down entire sectors of the state’s economy.
 Californians bear the sixth highest per capita tax burden in the nation. Californians pay the highest corporate tax rate in the West and the second highest gas tax in the nation.  Californians paid the highest income tax rate in the country before the Governor added another ¼ percent.  Neighboring Nevada has no income tax.   Californians paid the highest sales tax in the nation before the Governor hiked it by another penny per dollar.  Neighboring Oregon has no sales tax.
 Set aside all the ideological arguments about taxes: simply as a practical matter, Gov. Schwarzenegger has just made the state’s budget woes – and its economy –
significantly worse. 
 The dire warning that I made in vain on the Assembly floor 17 years ago came true with terrible consequences under far more favorable conditions than we face today.  If the past is prologue, Schwarzenegger’s unprecedented tax hike will produce only a fraction of the revenues promised and will significantly reduce tax collections over the next several years as the economy buckles under its weight.
 But don’t worry.  The self-proclaimed “People’s Governor” – tells us it will be “good for the people. That is the bottom line.”   One thing is undeniable: the people’s bottom line just took the biggest tax hit in state history. 
 

March 28, 2009.  Remarks at the Folsom Road Bridge Opening Ceremony.  This is more than a bridge – it is a monument to those who fought so hard and so long to bring it to fruition.

 The new Folsom Road Bridge should be nicknamed “The Bridge to Somewhere,” replacing a vital transportation link in our region for the 18,000 commuters who have struggled daily between El Dorado County and South Placer County since the closure of the Folsom Dam Road.

 This was one of those projects that came about the old fashioned way – by merit and by the determination of our region’s local, state and federal officials throughout those years, who beat the drums and carried the day.
 

House Chamber, Washington D.C.  March 25, 2009.  M. Chairman:  I certainly support HR 1404, which would allow some flexibility in managing firefighting costs on our federal lands.

 But I want to call attention to the fact that our firefighting costs would be much lower – and our revenues would be much higher – if we would restore the sound forest management practices that this Congress long ago abandoned.  Instead, this Congress has embraced a radical and retrograde ideology that we should abandon our public lands to overpopulation, overgrowth and benign neglect.  Bills like this one are necessitated by this folly of public policy.

 A generation ago, we recognized the importance of proper wildlands management.  We recognized that nothing is more devastating to the ecology of a forest than a forest fire.  And we recognized that in any living community – including forests – dense over-population is unhealthy.

 And so we carefully groomed our public lands, removing excessive vegetation and giving timber the room it needs to grow.  Surplus timber and overgrowth were sold for the benefit of our communities.  Our forests prospered and our economy prospered.  And forest fires were far less numerous and far less intense than we suffer today.

 Today, we are seeing the damage done to our forests and to our economy by the Luddite ideology that human beings shouldn’t touch our national resources. 

 My region in northeastern California has been tormented by devastating fires in the last few years.  And the reason is quite simple.  As one forester explained, “the excess timber is going to come out of the forests one way or the other.  It is either going to be carried out or it is going to be burned out.”

 A generation ago we carried it out, and it fueled prosperity throughout our region – and produced a cornucopia of revenues to the federal government.

 But today, it is being burned out, fueling devastating fires that are destroying vast tracts of land and the abundance and prosperity that we once enjoyed.
 
 The first victim of this wrong-headed policy is the environment itself.  Our recent forest fires have made a mockery of all of our clean-air regulations.  Those concerned about carbon dioxide might be interested in a report by scientists from the National Center for Atmospheric Research and University of Colorado at Boulder.  They estimated that a single forest fire in California in 2007 produced about 25 percent of the average monthly emissions from all fossil fuel burning throughout all of California.   And anyone who has seen a forest after one of these fires knows that the environmental devastation could not possibly be more complete.

 But the cost of these policies doesn’t end there.  Timber is a renewable resource – if properly managed it is literally an inexhaustible source of prosperity.  And yet, my region, blessed with one of the most bountiful renewable resources in the nation has been rendered economically prostrate.  A region that once prospered from its surplus timber is now ravaged by fires that are fueled by that surplus timber.

In the little town of Quincy, California, (population 2,000), 150 families are about to lose their jobs because the saw mill has to shut down – environmental litigation has tied up 2/3 of their timber harvest.  The company, Sierra Pacific, is also having to shut down its saw mills in Sonora and Camino, for the same reason, devastating another 300 families.

 This is not environmentalism.  True environmentalists recognize the damage done by overgrowth and overpopulation and recognize the role of sound forest management practices in maintaining healthy forests.

 So M. Chairman, while I support this legislation, we wouldn’t need to be spending so much putting out fires – and we’d have a lot more revenue to do it with – if we would spend a little more effort on restoring sound forest management practices to our national forests.

House Chamber, Washington, D.C.  March 25, 2009  M. Speaker:  Abraham Lincoln once told of a farmer who said, “I ain’t greedy for land – all I want is what’s next to mine.”

 Our federal government is starting to resemble that farmer.  HR 146 is a massive land grab that would literally put more land into wilderness designation than we have actually developed.  That pretty much means no human activities other than walking through it – as long as you don’t touch anything.

 So I have to ask the question, when is enough, enough?  The federal government already owns nearly 650 million acres of land.  That is 30 percent of the entire land area of the United States.  It owns 45 percent of my home state of California.

 Now compare that to the District of Columbia – Washington, D.C. – the federal capital – the home to every agency in our vast federal bureaucracy.  The federal government only owns 25 percent of the District of Columbia.

 It’s going to cost about $10 billion to pay for this land grab – and all of the bells and whistles that are attached to it.  That includes Congressional earmarks like $3.5 million to celebrate the birthday of St. Augustine, Florida and a quarter million dollars to decide what we’re going to do with Alexander Hamilton’s boyhood home in the Virgin Islands. 

 One billion dollars of the ten billion in this bill is for salmon population restoration in the San Joaquin River with the stated objective of establishing a population of at least 500 salmon.  Five hundred salmon.  One billion dollars.  That comes to two million dollars per fish. And that’s without accounting for the costs that will be incurred by Central Valley farmers as water that is already in critically short supply is diverted to this project.
 
Overall, this bill spends $10 billion of our people’s earnings – in other words, it will cost an average family of four about $130 in taxes.  I’m afraid that the mega-spending by this administration has desensitized us to any figures under a trillion dollars.  But let’s try to put this $10 billion in perspective.

 The National Parks Service reports a maintenance backlog of $9 billion on the land we already own.  In other words, we can’t take care of the land that we already have, but we’re going to spend $10 billion on acquiring additional land that we can’t take care of. 

 This bill withdraws three million acres of land from energy leasing.  Just from the reserves that we know about, that will cost the American economy 330 million barrels of oil and nine trillion cubic feet of natural gas in Wyoming alone.

  It even allows the federal government to condemn private property where fossils are found.  If you find a fossil in your backyard, you would be well advised to keep it a secret – under this bill, such a discovery could cost you your house.

 This bill also means new restrictions on BLM lands.  These public lands currently contribute to our nation’s economy by providing for multiple uses such as farming, ranching, timber harvesting, and off road vehicle recreation for the broader public good. 

I’ve got a lot of that land in my district, and the constant complaints I get from the public are not that there is too much access to public lands – but that there is too little access and too many restrictions.  This bill codifies the National Landscape Conservation System, which means less public access and more restrictions on the public’s use of the public’s land.

 So I ask again, when is enough, enough?  The preservation of public land is not an end in itself – it is a means to an end – that end being the public good.  And the public good is not served by the mindless and endless acquisition of property at the expense of the sustainable use of our natural resources, responsible stewardship of our public lands, and the freedom and property rights of our citizens.  
  
 

House Chamber, Washington D.C.  March 25, 2009.  M. Chairman:  I certainly support HR 1404, which would allow some flexibility in managing firefighting costs on our federal lands.  But I want to call attention to the fact that our firefighting costs would be much lower – and our revenues would be much higher – if we would restore the sound forest management practices that this Congress long ago abandoned.

House Chamber, Washington, D.C.  March 25, 2009.  M. Speaker,  Abraham Lincoln once told of a farmer who said, “I ain’t greedy for land – all I want is what’s next to mine.”  Our federal government is starting to resemble that farmer.  HR 146 is a massive land grab that would literally put more land into wilderness designation than we have actually developed.  That pretty much means no human activities other than walking through it – as long as you don’t touch anything.

By Tom McClintock  When President Obama introduced his new budget, it was quite a relief to hear that its $1.9 trillion in new taxes would only fall on businesses and the “very wealthy.”  If they were to fall on the rest of us, they would take nearly $2,500 per year out of the paycheck of an average family of four.
Unfortunately, the old adage, “when it sounds too good to be true, it is,” applies in this case.  As the days go by, it is becoming clear that the President has aimed his new taxes squarely at America’s middle class – working families who are struggling to make ends meet in the worst economy in a generation.
 There are two components of the taxes, and both of them are bad news to middle-class families.
 First, the President plans to raise $950 billion over the next decade by dramatically increasing upper-income tax brackets.  He assures us that unless we’re among that very small group of very wealthy folks, there’s nothing for us to worry about.
 Unfortunately, it turns out that more than half of those very wealthy folks aren’t folks and aren’t wealthy -- they’re small businesses, many of which are struggling to keep their doors open.  If you work for, or own, a small business, chances are that this tax is for you.
 The second component of the historic tax hike is in the form of business taxes, including at least a $650 billion tax increase – and probably quite a bit more – under the guise of “cap and trade.”  Using this “bold new plan,” any business that produces carbon dioxide (that is, energy production, agriculture, distilling, baking, cement production, construction, cargo and passenger transportation, automobile manufacturing – get the picture?) must pay the government for a limited number of licenses to remain in business.
 Is that anything for middle class families to worry about?  Of course not, as long as they live in Ted Kaczynski’s old neighborhood.
The problem for the rest of us is that businesses don’t pay business taxes.  Business taxes can only be paid by three groups, and they’re all us.  We pay them as consumers through higher prices, as employees through lower wages and as investors through lower earnings – mainly from what’s left of our 401(k)’s.
 The President also proposes curtailing charitable contributions for upper income taxpayers upon whom charities depend for the vast bulk of their donations.  That means a lot less charitable contributions and a lot more demand for government services.
 At just the moment when the economy desperately needs new investment to create jobs, the President proposes hiking the capital gains tax.  That means a lot less investment and a lot less job creation. 
This is not a complicated principle.  If you tax something, you get less of it.  If you tax productivity, you get less productivity.  If you tax charitable contributions, you get less charity.  If you tax investment, you get fewer jobs.  If you tax energy production, you get less energy.
This is exactly the mistake that Herbert Hoover made in responding to the recession of 1929: he dramatically raised income taxes, business taxes and spending.  By doing so, he turned the recession of 1929 into the depression of the 1930’s.
Adam Smith, the father of modern economics, pointed out that a government that raises taxes in response to a recession makes the same mistake as a shopkeeper who raises prices in response to a sales slump. 
Perhaps there is a glimmer of hope.  California has just imposed the biggest state tax increase in the history of the nation, effective April 1st.
That’s a $13 billion tax hike for California – proportionally somewhat smaller than the President’s taxes but in the same ballpark.  By the time the Obama budget with all of its taxes comes up for a vote, California will have become a poster child for what not to do.
Maybe by then the President and his majority in Congress will figure out that raising taxes in a recession is the mother of all bad economic ideas.
- 30 -
 

By Tom McClintock

  The Laffer Curve is a simple but elegant method of demonstrating how increasing taxes reduces economic productivity until a point of equilibrium is reached when further tax hikes actually reduce revenue.
     If the tax rate is zero, tax revenues are zero.  But if the tax rate is 100 percent, tax revenues also reach zero, because there’s no point in working.
      Thus, every increase in a tax rate produces a progressively smaller return of tax revenues as people adjust their behavior to reflect the reduced value of their work.  When taxes exceed an economic tipping point, revenues begin to fall. 
     California vividly demonstrated this effect in 1991 when Gov. Pete Wilson imposed the biggest state tax increase in American history.
      The $7 billion tax hike broke the back of California’s economy. While the rest of the nation’s economy expanded, California went into a nosedive, including the biggest plunge in retail sales in 30 years.  Wilson’s taxes brought in barely half of the new funds he had predicted and then produced two consecutive years of billion-dollar-a-year declines in state revenues. 
     California is about to get another very expensive lesson in the Laffer Curve, courtesy of Gov. Arnold Schwarzenegger’s $13 billion tax hike that will sock an average family with more than $1,200 of new taxes. 
      The nation should watch California’s experience carefully in the days ahead, because it will be a harbinger of its future under President Obama’s proposed tax increases.
      Although California already has the highest sales tax in the nation, Gov. Schwarzenegger has just increased it by another 13 percent (or a penny per dollar).
      Although California already has the highest income tax in the nation, Gov. Schwarzenegger has just imposed an additional across-the-board quarter percent levy on income.
      Although California’s sales tax is the second biggest generator of revenue for the state and automobile sales comprise a fifth of all sales taxes, the Governor has also doubled the car tax and is lobbying for new regulations that will increase the price of a new car by as much as $5,000.
Benjamin Franklin said that “Experience keeps a dear school, but fools will learn in no other.” 
Appropriately, the California tax increases will take effect on April Fool’s Day, illustrating that some people won’t even learn from experience.
     But perhaps some good will come of it.  If California’s experience with the Wilson tax increases is any indication, the impact of the Schwarzenegger tax hike is likely to be immediate and devastating. 
California’s agony may serve as an invaluable lesson for the Obama administration, which recently announced a whopping tax increase of $1.4 trillion over the next ten years – averaging about $1,800 per family per year.
     The President promises that these taxes will fall only on the “very wealthy” (individuals earning $125,000 and couples earning $250,000).  But the fact is that 65 percent of these folks aren’t folks at all – they’re small businesses that are the very foundation of our economy, many of which are barely holding on as it is.
     The other tax will directly hammer families with higher energy and consumer prices through a $656 billion carbon tax. 
     Obama’s budget has yet to be enacted, and the tax increase he contemplates won’t take effect until 2010.  By then, California will have become a poster child for governments gone wild, a vivid warning of life on the downside of the Laffer Curve.

Congressman Tom McClintock represents California’s Fourth Congressional District.  His website address is http://www.mcclintock.house.gov. 

March 19, 2009.  HR 1586 would tax 90 percent of the bonuses that push an executive’s earnings above $250,000 IF his company has received more than $5 billion in federal bailout funds. 

I reluctantly supported HR 1586 for a simple and singular reason: it will stop or slow the corporate bailouts that are bankrupting our country.

Until HR 1586, there has been no downside for the executives who persuaded Congress to hand them the keys to our nation’s treasury and who are now plundering it with impunity.  This measure takes away the personal profit for the executives who are doing so.  In addition, since the bill would not apply to any corporation that returns its bailout windfall, I believe it will be a powerful incentive for companies immediately to repay the funds that Congress should never have authorized in the first place.

I do not believe the act qualifies as a bill of attainder, as some have suggested.  The measure applies to any recipients of TARP money, making no distinctions among them, in the same manner as the tax code applies separate tax treatments under a wide array of circumstances.

Nor do I believe this is a tax increase in any conventional sense since it seeks solely to recover tax revenues that are being spent for purposes other than Congress approved.

I abhor a number of aspects of this bill, starting with the fact that it is necessary at all.  I believe the government bailout of failed companies is prolonging and deepening our recession and for that reason I have opposed this policy every step of the way.  The only justification for this bill is that it will greatly reduce the number of companies seeking or holding government bailout subsidies. 

I am also deeply concerned with the use of the tax code for purposes other than generating revenue.  It is a dangerous precedent justified only by the dangerous precedent of the bailouts themselves.  

I will vigorously oppose any legislation seeking to interfere with compensation decisions made by private companies with private funds.  But once a company has accepted government bailout funds and begins operating with public capital, it has also invited public oversight of its decisions.  And that never ends well.

House Chamber, Washington, D.C.  March 17, 2009.  M. Speaker:  I have been asked to present more than 6,000 postcards generated by the Armstrong and Getty radio show to protest policies that can best be described by the new bumper sticker, “Honk if you’re paying my mortgage,” or today’s reprise, “Honk if you’re paying AIG’s bonuses.”

 Rick Santelli of CNBC struck a nerve last month when he asked, “How many of you want to pay for your neighbor’s mortgage who has an extra bathroom and can’t pay their bills?”

 Jack Armstrong and Joe Getty, who host the most popular radio talk show in Northern California, asked the same question of their listeners.  And here is their response.

 On each of these thousands of post cards is the story of a responsible family struggling to make ends meet in the worst recession in a generation – families who are meeting their obligations, staying current with their mortgages – even though many of them are upside down on their home values and owe more than their home is worth.

 And they’re watching as this government says to borrowers who lied on their loan applications, who put no money down and accepted teaser rates, who withdrew all the equity of their home to pay for stuff, don’t worry, we’ll force your neighbor to pay for your mortgage.

They’re watching as this government says to lenders who knowingly made loans to people they knew couldn’t afford them, who made millions creating the housing bubble, don’t worry, we’ll cover your bonuses with taxpayer money.

 But the families who sent in these postcards keep making their payments, many eating into their savings, foregoing vacations, postponing retirements, turning down consumer purchases – because they stand by their word.

These are the families that turned down the opportunity to flip that house, to make a quick fortune, to cash out their equity for a second home or a boat they couldn’t afford.  They are the 92 percent of borrowers who are making their mortgage payments, despite all the incentives that this administration is offering them to stop.

 And these postcards are eloquent testimony to their resentment at being required to bail out the banks and the borrowers who created the housing bubble, who caused the credit collapse, and who now are being subsidized, bailed out, and lavished with multi-million dollar bonuses paid for with our tax money.

 Joe Getty asked the question yesterday: “What has happened to the words ‘Sadder but wiser;’ what has happened to the American tradition that you make your own decisions – good or bad – and then you live with them?

 The President tells us that if your neighbor’s home is on fire, you don’t quibble over who pays for the water.  That’s true, but as Jack Armstrong pointed out, if my neighbor burns down his house by shooting off Roman candles in his living room, I’ll be darned if I’m going to pay for him to rebuild it. 

 Armstrong and Getty, Rick Santelli and others are speaking for the vast silent majority of Americans who pay their bills, who honor their commitments, and who make this country run. 

 The President recently said that we’re all to blame.  No, we’re not all to blame.  Those families who passed up the get-rich-quick real estate seminars and who turned down the loans they couldn’t afford, or who settled for a smaller home or who rented because that’s what they could afford – they’re not to blame.  And they shouldn’t be left holding the bag.

 Ninety two percent of Americans are making their mortgage payments not only because it’s the right thing to do, but because they know that the sooner the market corrects itself, the sooner our homes will begin to appreciate once again.

Sadly, by prolonging the real estate correction, by propping up bad loans, by undermining responsible homeowners, and by subsidizing bonuses for the smartest guys in the room who created this catastrophe, this government is extending the agony and postponing the day when the market will bottom out and homebuyers can safely re-enter the housing market. 

M. Speaker, I take great hope from the public’s response to Armstrong and Getty’s invitation to protest the mortgage bailout.  It means that the American spirit is not dead, that there are still millions of Americans who believe in individual responsibility and integrity.  Even if such people are in short supply in Washington today, they still comprise the vast majority of our nation and that great silent majority is growing tired of remaining silent.

House Chamber, Washington, D.C., March 17, 2009.  M. Speaker:   I have been asked to present more than 6,000 postcards generated by the Armstrong and Getty radio show to protest policies that can best be described by the new bumper sticker, “Honk if you’re paying my mortgage,” or today’s reprise, “Honk if you’re paying AIG’s bonuses.”
 

House Chamber, Washington, D.C.  March 12, 2009.  Mr. Speaker:  Many people were quite relieved when President Obama promised to reduce taxes on 95 percent of Americans.

Last week, the President introduced his new budget that depends on a staggering tax increase of $1.4 trillion over the next ten years.  If that fell on all of us, it would come to nearly $15,000 on an average family of four – or $1,500 per year out of that family’s paychecks.
So what a relief to hear the President’s assurances that it’s only going to be a tax on the rich.

 Except, it’s not.  As we begin dissecting the President’s new taxes, it’s becoming crystal clear that they actually squarely hit the middle class – working families who are struggling to make ends meet in the worst economy in a generation.

 Let me walk you through the reasons that the President’s new taxes are something that every middle class family should fear.

 There are about $650 billion of direct tax increases, including a boost in the income tax to nearly 40 percent.  That’s the part that the President says will only be on the very wealthy, which he defines as people making $125,000 a year or couples making $250,000.

 But when you scratch the surface, you learn that more than half of these folks aren’t folks at all – they’re small businesses.  So if you work for or own a small business, chances are that this tax is for you.

 The rest is coming from increases in business taxes either as direct taxes or as “cap and tax” fees for carbon dioxide emissions.   Cap and tax is a huge levy on every business that emits carbon dioxide – which means construction,  agriculture, cargo transportation, energy production, manufacturing, distilling, to name a few.

 Is that anything for middle class families to worry about?  You bet it is.

You see, businesses don’t pay business taxes.  There are only three possible ways that a business tax can be paid: it is paid by us as consumers through higher prices, by us as employees through lower wages and by us as investors through lower earnings – mainly what’s left of our 401(k)’s.

 There is simply no other way a business tax can be paid.

 The income tax deduction for charitable contributions is being curtailed for upper income taxpayers upon whom charities rely for the vast bulk of their donations every year.  That means a lot less charitable contributions and a lot more demand for government services.

 At just the moment when investment is desperately needed to create new jobs, the President proposes hiking the capital gains tax.  That means a lot less investment. 

This is not a complicated principle.  If you tax something, you get less of it.  If you tax productivity, you get less productivity.  If you tax charitable contributions, you get less charitable contributions.  If you tax investments you get less investment.  If you tax energy production you get less energy production.

So just at the time when we need more productivity, more charity, more investment and more energy, the Obama administration proposes a massive tax increase that they have the gall to tell us will stimulate the economy.

These taxes will hammer every American either directly or indirectly.  At exactly the time when we should be reducing burdens on the economy, this administration wants to increase them.

If the President wants to raise taxes because the government is out of money – what makes him think the American people are flush with cash?

This is exactly the mistake that Herbert Hoover made in responding to the recession of 1929: he dramatically raised income taxes, import taxes and spending.  And he turned the recession of 1929 into the depression of the 1930’s.

Adam Smith, the father of modern economics, pointed out that a government that raises taxes in response to a recession makes the same mistake as a shopkeeper who raises prices in response to a sales slump. 

California has again ignored that warning and is set to impose the biggest state tax increase in the history of the nation on April 1st.

That’s a $13 billion tax increase for California – proportionally somewhat smaller than the President’s taxes but in the same ballpark.  I suspect that by the time the Obama budget with all of its taxes come up for a vote, California will have become a poster child for what not to do.

And maybe by then the Administration and the majority in Congress will figure out that raising taxes in a recession is not exactly the smartest thing that we could be doing.

House Chamber, Washington, D.C., March 12, 2009.  Mr. Speaker:  Many people were quite relieved when President Obama promised to reduce taxes on 95 percent of Americans.  Last week, the President introduced his new budget that depends on a staggering tax increase of $1.4 trillion over the next ten years. 

Heartland Institute, New York, New York, March 9, 2009.  I must admit to being a little nervous to accept your kind invitation to come to New York to discuss global warming.  I remember that it was right here in this city a year and a half ago that no less an authority than Robert F. Kennedy Jr. said that those of us who still have some questions over their theories of man-made global warming are “liars,” “crooks,” “corporate toadies,” “flat-earthers” and then he made this remarkable statement: “This is treason and we need to start treating them now as traitors.”

Ah, the dispassionate language of science and reason.

I certainly don’t want to die a traitor’s death, so I want the record to be very clear: I believe that the earth’s climate is changing and that our planet is warming. 

I must tell you that this is a somewhat sore subject for me.  You see, it was me – and not Al Gore – who discovered the theory of Global Climate Change, and yet all you ever hear is Al Gore said this and Al Gore said that.

My climate change discovery came in the fall of 1964, when Miss Conroy took our third grade class to the Museum of Natural History. 

It was there that we saw the panorama of dinosaurs tromping around the steamy swamps that are now part of Wyoming.  That panorama was right next to the exhibit of the Wooly Mammoths foraging on glaciers that were also once the same part of Wyoming. 

 And I thought to myself, “Gee, those dinosaurs are nifty.”  And then I thought to myself, “Good God, the climate must have changed from time to time.”

And I never got a Nobel Prize for that discovery.  In fact, I later found out that Miss Conroy never even nominated me!

 So, instead of jetting around the world in a fleet of Gulfstream Fives to tell people they need to feel guilty about driving to work, I have to take the subway. 

 And I don’t get paid $100,000 a speech for my original discovery.  But then again, I don’t have Al Gore’s electricity bills either, so I guess it all balances out.

 (You have to admit a certain Helmslyesqe quality to it all: “We don’t conserve – only the little people conserve.)

Anyway, a few years after making my discovery about planetary climate change, I got to high school in the 1970’s and learned from the Al Gores of the time that we foolish mortals were plunging ourselves into another ice age. 

It was, after all, beyond dispute.  All the scientists agreed.

By the way, you may have seen the Washington Times story last year about the researcher who had stumbled upon a lurid story in the Washington Post dated July 9, 1971.  It included the scary headline: “U.S. Scientist Sees New Ice Age Coming.” 

The scientist based this on a scientific climate model developed by a young research associate named James Hansen.  They warned that continued carbon emissions over the next ten years could trigger a run-away ice age.

And it was rather amusing, because a few months before this old newspaper clipping surfaced, the very same James Hansen had published a paper claiming that continued carbon emissions over the next ten years could trigger a run-away greenhouse effect.

For those in the liberal elite who jet to environmental conferences in Gulfstream Fives and drive around in Hummers singing the praises of hybrids and bicycles, the Left now sells indulgences – you can actually calculate your carbon sins on-line and they’ll gladly tell you how much money to send them (all major credit cards accepted) to assuage your conscience.

In fact, I had a friend who paid $45 for one of these “carbon offsets” for his Lincoln Navigator.  By paying $45, this company sends him a very attractive 10-cent decal that certifies his SUV now has absolutely NO carbon footprint. 

But then he discovered that Priuses, which do have a carbon footprint, get to use our diamond lanes for free, while his Lincoln Navigator – which for just $45 now has no carbon footprint whatsoever – has to sit in bumper to bumper traffic with all the rest of us carbon sinners. 

These carbon offsets are supposed to be used for such activities as planting more trees to absorb carbon dioxide.  After all, young trees absorb much more of this “greenhouse gas” than old trees. 

But isn’t replacing old-growth timber with young-growth timber exactly what lumber companies used to do until Al Gore’s acolytes stopped them?

Trees are also very important to reducing energy demand – we’re told that to conserve electricity we need to plant lots of shade trees to shield our roofs from the sun so that we don’t use our air conditioners.  We’re also all supposed to install solar panels on our roofs, although they don’t work so well in the shade from our trees.

In fact, a year or two ago, a Sunnyvale, California couple was ordered to cut down the old redwood trees in their own backyard.  Why?  Their neighbor had installed solar panels in the shade of those redwoods, and the couple was informed that under state law, they’d be fined a thousand dollars a day if they didn’t cut their redwoods down at once.

One word of warning, however.  Even though you had to cut down your trees at once if a neighbor decided to install solar panels in their shadow, you are forbidden to clear flammable brush from around your home in hazardous fire areas, because that’s an affront to Mother Nature.  You’re supposed to let it burn – and your home along with it – because this is the most environmentally friendly way for Nature to dispose of carbon trapping vegetation – and thereby releasing lots of carbon dioxide into the atmosphere. 

That’s also why we’re supposed to do away with chemical fertilizer and replace it with natural compost, because replacing man-made greenhouse gases with natural greenhouse gases is the wave of the future.

Another important battle in the war against carbon is to force everyone to use electric cars and trains.  But this also gets a little complicated, because at the same time, we’re all supposed to be cutting way back on our electricity usage – to the point that the California Energy Commission now wants to require every household thermostat to have a remote-control device that will allow the bureaucrats to decide what is the appropriate temperature of your living room.

You need to keep your thermostat set to 90 degrees in the summer to conserve electricity, but we’ll be happy to spend millions of your tax dollars for you to take an electric bullet train from L.A. to San Francisco for the weekend.

In fact, there are only two ways of generating vast amounts of clean electricity for electric cars and trains: hydroelectricity and nuclear power.  But there’s no faster way to send these Luddites into hysterics than to mention that inconvenient truth.

The politically correct replacement is solar energy.  Solar energy is roughly 17 times more expensive than either nuclear power or hydroelectricity – meaning, of course around 17 times LESS electricity to run electric cars and trains.
 
Energy conservation, then, is the answer, which is why we’re required only to use energy efficient fluorescent lights rather than the warm and fuzzy incandescent bulbs.  But wait – California has banned the disposal of fluorescent lights with your trash because of the extreme environmental hazard they pose in our landfills.

So I approach the subject this morning with an admitted level of confusion as to what these people are thinking.

So let me merely pose three inconvenient questions.

First, if global warming is caused by your SUV, why is it that we’re seeing global warming on every other body in the solar system?  For the last decade or so, the Martian south polar ice cap has conspicuously receded.  Pluto is warming – about two degrees Celsius over the past 14 years.  Jupiter is showing dramatic climate change by as much as 10 degrees Fahrenheit. Even Neptune’s moon, Triton, has warmed five percent on the absolute temperature scale – the equivalent of a 22 degrees Fahrenheit increase on Earth – from 1989 to 1998.      

If you have any doubt, just Google “Pluto Warming” or “Mars Warming” or whatever your favorite planet or former planet might be.

Me anwhile, solar radiation has increased a small but measurable five hundredths of a percent since the 1970’s. 

Now, I’m just thinking out loud here, but do you think it’s possible that as the sun gets slightly warmer, the planets do too?

This would be a little scary in its own right, except for the second inconvenient question: If global warming is caused by your SUV, why is it that we have ample historical records of periods in our recent history when the planet’s temperature was warmer than it is today?

During the Medieval Warm Period, from about 900 to 1300 AD, we know that wine grapes were thriving in northern Britain and Newfoundland -- and that the temperature in Greenland was hot enough to support a prosperous agricultural economy for nearly 500 years.  That’s why they called it “Greenland.”

That period was brought to an end by the Little Ice Age that lasted from 1300 until 1850.  We know that during colonial times, Boston and New York Harbors routinely froze over in winter and during Elizabethan times, an annual Winter Festival was held on top of the Thames River, which froze solid every year.

And finally the third inconvenient question: If global warming is caused by your SUV, why is it that increases in atmospheric carbon dioxide always follow increases in global temperatures by several hundred years?  Again, I’m just thinking alout here, but is it possible that if CO2 increases follow temperature increases that might possibly mean that increased CO2 is a byproduct of increasing temperatures – not a cause. 

Now, Al Gore must have an answer to these and other questions that have been raised by us treasonous-corporate- toady-holocaust-deniers.  You’ve seen the “Inconvenient Truth.” In it, Al Gore portrays himself as a tireless, lonely sentinel (who should have been President of course) wandering the planet trying desperately to awaken the world to the danger it faces.  “I’ve given this speech a thousand times,” he says about a thousand times. 

So I wanted to touch base with all of you today, to find out when he is planning to accept the Heartland Institution’s invitation for an international debate on the subject.  I am absolutely certain that this pious paragon of truth – who assures us he’s willing to go anywhere and talk to anybody to save us from our mortal folly – should be chafing at the bit to show us the error of our ways. 

As I understand it, the Heartland Institute has offered our Nobel Peace Prize laureate of the left to debate any one of three internationally recognized authorities, and that you are willing to front all costs – at Oxford University, no less, and in a format of Gore’s own choosing.

After all, Gore’s book extols the importance of science and reason in the public policy debate, so what better way to deliver the coup de grace to us “skeptics” than to expose our fallacies in front of an international audience? 

And yet, Al Gore, who has given his speech “a thousand times,” won’t give it just once in a forum where it might be questioned by a knowledgeable authority. 

In a sense, though, we had that debate in the British courts several years ago.  The High Court of Great Britain determined that there were no less than ELEVEN factual errors on key scientific points in that film, and ordered that a disclaimer to that effect must be made in ANY public classroom where this film is shown.

But I would like to address myself to a serious and grim subject: and that is the actual threat that global warming poses to our planet – and most specifically to California.  And that threat is very real and it is devastating.

I speak of the radical policies that the global warm-mongers are now enacting.
 
In the summer of 2006, in the name of saving the planet from global warming, California adopted the most radically restrictive legislation anywhere on the planet, including AB 32, which requires a 25 percent reduction in man-made carbon dioxide emissions by 2020.

To put this in perspective, we could junk every car in the state of California right now and not meet this mandate. 

At about the same time, the same politicians who adopted these measures also adopted $40 billion of bonds that they promised would be used for highways, dams, aqueducts and other capital improvements. 

Now here’s the problem.  Building highways, dams, aqueducts and other capital improvements requires  tremendous amounts of cement. 

How is cement produced?  It is produced by taking limestone and super-heating it into a molten state – it comes out the other side as a compound called clinker.  Clinker is about 2/3 the weight of the original limestone.  The missing 1/3 of that weight is carbon dioxide.  And when you include the emissions required to superheat the limestone, it turns out that for every ton of cement, a TON of carbon dioxide is released.  It’s the third biggest source of carbon dioxide in all human enterprise. 

But now we have a law that specifically forbids us from doing so.  That was the essence of lawsuits now being filed against construction projects across the state.

So much for construction. 

Agriculture is in big trouble, too. 

You can start with nitrogen fertilizer, which is a critical component of all agricultural activity.  Unfortunately, it produces large amounts of nitrous oxide, another so-called greenhouse gas that must be radically curtailed in California.

The wine industry is also in for a shock.  Fermentation of wine occurs when a molecule of glucose in the grapes is converted into EQUAL PARTS of alcohol and carbon dioxide.

But the biggest agricultural impact is the administration’s mandate for heavily subsidized use of ethanol fuel.  Ethanol is produced in exactly the same way as the alcohol in wine: the glucose in corn is converted into equal parts of ethyl alcohol and carbon dioxide.

Following AB 32, this administration imposed a requirement that all gasoline sold in California by next year must be comprised of at least ten percent ethanol, doubling the current mandate. 

Now pull out your calculators and we’re going to have a little fun with math.  An acre of corn produces about 350 gallons of ethanol.  There are 15 billion gallons of gasoline used in California each year.  In order to meet the ten percent requirement in three years, it means converting 4.3 million acres of farmland to ethanol production.  Now that’s a lot of farmland, considering that we have a total of 11 million acres producing crops of any kind.

Current ethanol mandates are already producing serious shortages in other parts of the world, as farmland that had been producing food, shifts to ethanol to chase hundreds of millions of dollars of government subsidies coming out of your pocket. 

 Higher taxes, higher food prices – and higher gas prices.  What’s not to like?

And we’re seeing this across the board – including commodities like milk and beef that are responding to increased prices for corn feed. 

As you see your grocery prices rise as a result of this policy, just be glad you’re not in the Third World.  Food is a relatively small portion of the family incomes in affluent nations, but it consumes more than half of family earnings in third world countries.

So when the global warming alarmists predict worldwide starvation, they’re right.  They’re creating it. 

Electricity prices are also taking a heavy hit.  California already suffers the highest electricity prices in the continental United States, but that situation is about to worsen. 

A companion measure to AB 32 was SB 1368 that prohibits the importation of electricity produced by coal – even state-of-the-art plants thousands of miles from California that meet all EPA requirements.

Truckee became the first victim of this law.  Truckee was about to sign a 50-year contract for electricity produced by a new coal fired plant in Utah.  They were forced to back off because of AB 1368.  The original contract was for $35 per megawatt hour – the green replacement power will cost Truckee consumers $65 per megawatt hour.

The radical laws now in place in California are having a dramatic impact on energy production, agriculture, manufacturing, wine-making and construction, cargo transportation, just to name a few sectors of our economy.

We are already seeing the economic impact in California. 

Until last year, Californian’s unemployment rate tracked with the national figures, but since January of 2007, California’s unemployment rate began a radical divergence from the national figures and is now in double digits and nearly 40 percent higher than the national unemployment rate.   

Even more ominous are the figures reported by the census bureau.  In the last three years, 2/3 of a million more people moved out of California than moved in.  Outbound U-HAUL rates are now between six and seven times the cost of renting the same truck to move in to California.

You cannot blame the national economy for these developments – for these you must look to state public policy.

I was struck by the Governor’s speech to the United Nations as he was imposing this lunacy.  He told them:

“Last year in California, we enacted groundbreaking greenhouse gas emission standards. 
“We enacted the world’s first low carbon fuel standard. 
“Do I believe California’s standards will solve global warming?  No.       
“What we’re doing is changing the dynamic, preparing the way and encouraging the future...”

So even the individual most responsible for this economically catastrophic public policy ADMITS that it’s not going to solve global warming. 

He just wants to set an example.

And in that singular respect, I believe that he has succeeded beyond his wildest dreams.   

There is one other thing that strikes me on this issue, and that is how puny is the amount of carbon dioxide produced by human enterprise, compared to simple, natural processes.

The AB 32 mandate is to reduce man-made carbon dioxide emissions by 170 million metric tons per year.  That’s what all this tremendous economic dislocation is about.

Now let me mention one other man-made source of carbon dioxide that they don’t count. 

Every one of us in this room will produce about 2.2 pounds of carbon dioxide today – by breathing.  That’s over 800 pounds of carbon dioxide per year.  Keep your calculators out and stay with me here.

There are 6.6 billion of us on this planet.  That comes to 5.3 trillion pounds or 2.4 billion metric tons of carbon dioxide – simply through the process of human respiration.  And that’s before you count up all the cats and rats and elephants. 

So there are 2.4 billion tons of carbon dioxide emissions worldwide by breathing and 170 million metric tons is what all the fuss in California is about. 

 You’ve all been snickering a lot and I know that watching Californians running amock is great spectator sport.  New Yorkers especially enjoy knowing that there is at least one state more screwed up than your own.  But I feel compelled to warn you that if the Luddite Left finally succeeds in wrecking California, there are 49 other states that we’re all going to move to – and yours is one of them.

 People love to watch events in California – in much the same way that people love to gawk at car wrecks.  You feel guilty about it, of course, and you know you shouldn’t stare, but you just can’t help yourselves. 
 
 But you do anyway and there’s at least a respectable reason for it.  When you drive by that wreck, you can tell your children, “Kids, that’s what happens when you don’t pay attention when you drive.”

 And California’s wreck is a good time to remind voters, “Kids, that’s what happens when you don’t pay attention when you vote.”

 While we’re on that subject, the Obama Administration has just unveiled its budget, a $3.6 TRILLION monstrosity that includes some $650 billion in business taxes.  They call it “cap and trade” but they mean, “cap and tax.”

 The problem with business taxes, of course, is that businesses don’t pay them.  Business taxes can only possibly be paid in one of three ways: by us as consumers through higher prices; but us as employees through lower wages and by us as investors through lower earnings on what’s left of our 401-K’s.

 And the President’s cap and tax plan is going to cost about $2,100 for every man, woman and child in the nation, or about $8,400 out of the purchasing power of an average family of four in the worst economy in a generation.

 Now before the nation follows California off the cliff, perhaps we should first ask how these policies are working in California. 

And in that respect, maybe we can assist Gov. Schwarzenegger in his goal of making California an example for the rest of the nation. 

Not only has the Governor’s promise of a new era of green jobs failed to materialize, the impact of these restrictions on California’s economy has been nothing short of catastrophic.  As the unemployment rate has skyrocketed since the enactment of AB 32, Californians are clawing their way to escape our new environmental paradise, and the state’s revenues are imploding.

To replace evaporating tax revenues, the Governor just imposed the biggest state tax increase in the history of the country – $13 billion – including increases in income taxes, sales taxes and the car tax.

As California’s economy continues to implode, I think we’re going to see Americans rapidly coming to the conclusion that this isn’t the smartest policy to pursue.

In normal times, people don’t pay a lot of attention to public policy, and that’s why democracies occasionally drift off course.   But when a crisis approaches, that’s when you see the strength of a democracy emerge.  One by one, citizens sense the approach of a common danger and they rise to the occasion.  They focus – they look beyond the symbols and rhetoric – and they begin to make very good decisions. 

Political majorities can shift very quickly in such times.  Polls can reverse themselves almost overnight in such times.  And I believe that day is now rapidly approaching.

We have based our entire form of government on the assumption that when people start paying attention, they start making very good decisions. 
The radical policies now imposed on California are taking a dreadful toll on its economy and will become ever more dire in the days ahead.  As the impact of these policies is felt, people will begin paying close attention to policy making and to the policy makers responsible, and then they’ll begin exercising something that the majority of California’s public officials have so completely lacked: simple common sense.

 Abraham Lincoln put it this way.  He said, if the voters get their backsides too close to the fire, they’ll just have to sit on the blisters a while.

 Our nation has some very painful blisters to sit on for a while, but in the process, like Coleridge’s Ancient Mariner, a sadder but a wiser nation we’ll rise the morrow morn.

House Chamber, Washington DC.  March 9, 2009.  Perhaps only one generation in a century is fortunate enough to actually know a truly great leader – and ours was that generation. But our children and their children will know him too, through the power of his words and the force of his ideas – his undying faith in freedom and his eternal belief in America.  And they will know him – and know him well – because our generation will make sure of it.

The passing of Ronald Reagan did not mark the end of an era – rather, his life marked the beginning of one – an era of American renaissance and resurgence – an era when America rediscovered her belief in liberty and her faith in her ultimate destiny.  Ronald Reagan opened that era; it is now for our generation to cultivate it, to expand it, and to extend it to the next.

He often reminded us that for America, the best is yet to come.  He was right, because his memory will be walking beside us and counseling us and guiding us to those bright decades and centuries ahead.

This Commission is a small step in support of a large pledge – a pledge from this generation to all future generations: that we will keep Ronald Reagan’s memory alive: that we will uphold and advance his vision of America’s greatness and of her goodness.  And this Commission and its work will be yet another thread in the tapestry of memory that will stretch through time to the latest generation.   
 

House Chamber, Washington DC, March 9, 2009.  Perhaps only one generation in a century is fortunate enough to actually know a truly great leader – and ours was that generation.  But our children and their children will know him too, through the power of his words and the force of his ideas – his undying faith in freedom and his eternal belief in America.   And they will know him – and know him well – because our generation will make sure of it.

House Chamber, Washington, D.C., March 9, 2009.  M. Speaker:  I rise to honor the memory of Dr. Gregory Freydman of California. 

Dr. Freydman spent most of his life seeking freedom for his family, and finally fulfilled that dream at the age of 72 when he legally immigrated to the United States from the Soviet Union.  He had been a renowned oncologist there and had risked his livelihood and his liberty to speak out against Soviet abuses.

Having seen first-hand the misery that tyranny inflicts on its people, Dr. Freydman devoted himself to learning English, studying the American system of government and passing on his appreciation of American founding principles to his children and grandchildren.  He proudly became a U.S. citizen at the age of 77. 

The highlight of his life was spending his final years in freedom with his beloved wife Polina, secure in the knowledge that through a lifetime of struggle, that he had secured the blessings of liberty for his posterity.

May he now rest in peace.

House Chamber, Washington, D.C., March 9, 2009.  M. Speaker:  I rise to honor the memory of Dr. Gregory Freydman of California.  Dr. Freydman spent most of his life seeking freedom for his family, and finally fulfilled that dream at the age of 72 when he legally immigrated to the United States from the Soviet Union. 

House Chamber, Washington, D.C.  March 6, 2009.  M. Speaker:  I rise today in tribute to Rev. Wadahawa Singh Gill, who passed away last week at the age of 87. 

For many years, Rev. Gill was the spiritual leader of the Sikh community in Northern California.  He was an amazing man who not only ministered to the more than 100,000 Sikh faithful in the Sacramento region, he made himself a bridge between the Sikh community and the general public.

House Chamber, Washington, D.C.  March 6, 2009.  M. Speaker:

I rise today in tribute to Rev. Wadahawa Singh Gill, who passed away last week at the age of 87. 

For many years, Rev. Gill was the spiritual leader of the Sikh community in Northern California.  He was an amazing man who not only ministered to the more than 100,000 Sikh faithful in the Sacramento region, he made himself a bridge between the Sikh community and the general public.

No religious group has suffered more at the hands of Islamic extremists than the Sikhs, yet because a turban is part of traditional Sikh clothing, his parishioners suffered greatly from public reaction after the attack of September 11.

It was Rev. Gill who reached out across that gulf of misunderstanding and began a remarkable process of assimilation that has made Sacramento’s Sikh Community an integral part of the interfaith life of Northern California. 

His spiritual leadership will live on not only in the many books that he published, but through the example that he set for those of all faiths who share the Sikh tradition of peace, tolerance and goodwill to all mankind.

House Chamber, Washington, D.C.
  March 5, 2009

  Mr. Speaker:

 We have all heard a great deal of rhetoric blaming the Bush administration for the nation’s economic woes, and I actually rise to join that chorus.

 We all are painfully aware that the Bush administration increased spending twice as fast as it did under Bill Clinton.  The Bush administration added $160 billion to the deficit through tax transfers with its first stimulus bill a year ago – despite warnings that it would do nothing to stimulate the economy.  It didn’t.

 The Bush administration added another $700 billion to the nation’s deficit with the bailout bill last fall, despite many warnings that it would not stabilize the economy.  It didn’t.

 That administration ended with record spending, record borrowing, record deficits, and an economy in shambles.

 But my question to many of my friends in the majority is this: if record spending, record borrowing and record deficits is the path to economic recovery – why aren’t we already enjoying a period of unprecedented economic expansion?

In fact, all of the bailouts, handouts and loan guarantees already enacted add up to $9.7 trillion – more than the modern day cost of the Space Race, the Vietnam War, the Louisiana Purchase, the Marshall Plan and the New Deal --combined.

The fact is that these policies don’t stimulate an economy, they destroy it.  And it doesn’t matter whether these policies are enacted under a Democrat or a Republican – they don’t work.

They didn’t work in the recession of 1929 when Republican Herbert Hoover increased the marginal tax rate from 25 percent to 65 percent and piled up taxes on imports.  They didn’t work in the resulting depression of the 1930’s when nearly a decade of Democrat Franklin Roosevelt’s New Deal spending failed to stimulate the economy.  We forget that the unemployment rate in 1939 was actually slightly higher than it had been in 1931.

We know from a year of failed bailouts and handouts and loan guarantees that these policies aren’t working any better today.

Today we learned that General Motors, despite billions of dollars of taxpayer bailouts is still going under.

Monday, we learned that AIG, despite billions of dollars of taxpayer bailouts is still going under.

M. Speaker, don’t they understand that the sooner we stop bailing out failing companies, the sooner we can begin a genuine economic recovery? 

Before the failed $700 billion Bush bailout bill, the nation’s budget deficit was less than $550 billion.  Because of that mistake – which President Obama and many of my Democratic friends in this house supported and ultimately consumated – and all the other bills that have rushed through this house in the last few weeks with such reckless abandon, our deficit has tripled to $1.5 trillion for this year – on its way to an additional $1.75 trillion next year.

As tempting as it is to censure the folly of the Bush Administration’s fiscal policies, I think we should be far more concerned with the quantum leap in borrowing and spending that we are now pursuing.

There is one institution that doesn’t look back, and that’s the stock market.  The past is utterly irrelevant to the stock market.  The stock market is strictly a forward-looking measurement of what investors are betting will happen to our economy in the future under current policy.  And its precipitous decline since these policies have been unveiled should be a warning to us all.  Today the stock market closed at its lowest point in 12 years.

If the policies we are embarked upon were destined to save our economy, you would think that those who make their livings betting on the economy would be buying like crazy. 

Mr. Speaker, perhaps we would do well then to stop the partisan bombast and realize that bad policy produces bad results whether the President is a Republican or a Democrat.  And perhaps we should recognize that Einstein was right: doing the same thing over and over and expecting different results is the definition of insanity.

House Chamber, March 5, 2009.  The discussion going on right here in these hallowed halls of Congress is exactly the same discussion going on around dinner tables, over back yard fences, over coffee at Starbucks.  Everybody understands that our nation is in great trouble and getting in deeper, and every citizen realizes that each of us has a responsibility to play in being part of that discussion.

House Chamber, Washington, D.C., March 3, 2009.  The Laffer Curve is a simple but elegant method of demonstrating how increasing taxes reduces economic productivity until a point of equilibrium is reached when further tax hikes actually reduce revenue.
 

House Chamber, Washington, D.C.
March 3, 2009

M. Speaker:

 The Laffer Curve is a simple but elegant method of demonstrating how increasing taxes reduces economic productivity until a point of equilibrium is reached when further tax hikes actually reduce revenue.

If the tax rate is zero, tax revenues are zero.  But if the tax rate is 100 percent, tax revenues also reach zero, because there’s no point in working.

Thus, every increase in a tax rate produces a progressively smaller return of tax revenues as people adjust their behavior to reflect the reduced value of their work.  When taxes exceed an economic tipping point, revenues begin to fall. 

California vividly demonstrated this effect in 1991 when Gov. Pete Wilson imposed the biggest state tax increase in American history.

The $7 billion tax hike – a staggering combination of increases in sales, income and car taxes – broke the back of California’s economy.

While the rest of the nation’s economy expanded, California entered into a nose-dive, including the biggest plunge in retail sales in 30 years.

Those taxes brought in barely half of the new revenue predicted and then produced two consecutive years of billion-dollar-a-year declines in state revenues. 

California is about to get another very expensive lesson in the Laffer curve, courtesy of a $13 billion tax increase that will sock an average family with more than $1,200 of new taxes.

We should watch California’s experience carefully in the days ahead, because it will be a harbinger of the impact we can expect under President Obama’s proposed tax increases.

Although California already has the highest sales tax in the nation, and it is about to rise by another 13 percent (or a penny per dollar).

Although California already has the highest income tax in the nation, it is about to have an additional quarter percent increase.

Although California’s sales tax is the second biggest generator of revenue for the state and automobile sales comprise a fifth of all sales taxes, the state has also doubled the car tax and is lobbying for new regulations that will increase the price of a new car by as much as $5,000.

Benjamin Franklin said that “Experience keeps a dear school, but fools will learn in no other.” 

Appropriately, the California tax increases will take effect on April Fool’s Day, illustrating that some people won’t even learn from experience.

But perhaps there is hope.  If California’s experience with the Wilson tax increases is any indication, the impact of the Schwarzenegger tax hike is likely to be immediate and devastating. 

Perhaps it may serve as an invaluable lesson for the Obama administration, which last week announced a whopping tax increase of $1.4 trillion over the next ten years – averaging about $1,800 per family per year.

 I know, the President promises that these taxes will fall only on the very wealthy (individuals earning $125,000 and couples earning $250,000).  But the fact is that 65 percent of these folks aren’t folks at all – they’re small businesses that are the very foundation of our economy, many of which are barely holding on as it is.

 The other tax will directly hammer families with higher energy and consumer prices through a $656 billion carbon tax. 

 It’s not that another example should be necessary.  Herbert Hoover’s response to the recession of 1929 was to increase the marginal tax rate from 25 percent to 65 percent and to burden international trade with steep tariffs.

 Obama’s tax increase has yet to be enacted, and if passed this year it will not take effect until 2010.  By then, California will have become a poster child for governments gone wild, a vivid warning of life on the downside of the Laffer Curve.

 It’s a lesson that may yet save our nation from an economically devastating mistake.
 
 

House Chamber, Washington D.C, March 3, 2009.  I’d like to offer a word of caution about the law of unintended consequences.

 Last week, this house passed the Administration’s proposal to allow homeowners to force banks to reduce the size of their mortgages and interest rates.
 

House Chamber, Washington D.C.
March 3, 2009

M. Speaker:

 I’d like to offer a word of caution about the law of unintended consequences.

 Last week, this house passed the Administration’s proposal to allow homeowners to force banks to reduce the size of their mortgages and interest rates.

 Millions of families – including my own – now owe more on our mortgages than our homes are worth – yet more than 90 percent of homeowners continue to make our mortgage payments in hopes of better days to come.

 Question: How many of these people who have been faithfully making their mortgage payments will now take advantage of this new law to reduce their mortgage debt by hundreds of thousands of dollars?

 And another question: as these borrowers decide to cash in on this windfall, how many additional banks will fold as the value of these perfectly sound mortgages are crammed down by this new law? 

And a final question: how high will the surviving banks raise their interest rates and down-payment requirements to protect themselves against future governmental interventions?

 I’m afraid that all we will have accomplished is to produce a society with fewer banks able to make loans and fewer homebuyers able to access loans and an additional downward spiral in home values.

 The law of unintended consequences is beyond the Congress’ jurisdiction, and we would do well to heed it. 

House Chamber, Washington D.C, March 3, 2009.  Sierra Pacific has just announced the closure of its sawmill in the town of Quincy, California, in my district, throwing another 150 families out of work.

House Chamber, Washington, D.C., March 3, 2009.  M. Speaker:  Sierra Pacific Industries just announced the closure of its sawmill in Quincy, California, throwing another 150 families out of work.

 They made it clear that the recession wasn’t the cause but merely the catalyst. The real cause is that their regulatory costs – and litigation because of regulation – now exceeds their profit margin.  Two thirds of their harvest is tied up as a result.

 Sierra Pacific constructed this small log-mill when the Congress passed legislation promoting tree-thinning in the surrounding forests to prevent forest fires.

 But that law has not been implemented because of endless litigation by environmental groups.  Sierra Pacific notes that (quote) “nearly two thirds of the current year’s timber sale program is enjoined or withheld from sale pending the outcome of litigation.”

 So today, another 150 families in the little town of Quincy are without work – direct casualties of a retrograde Luddite ideology that finds its power in the tangle of government laws that is destroying the enterprise and prosperity of our people.
 
 

House Chamber, Washington D.C., February 25, 2009.  When it was announced that Randolph Churchill had been hospitalized to remove a benign tumor, a parliamentary wag commented, “What a pity it is to remove the only part of Randolph that isn’t malignant.”  As I look at this bill, I can only remark what a pity it is to remove the only part of the nation’s education system that actually works.