The Export-Import Boondoggle
House Chamber, Washington, D.C.
May 9, 2012

Mr. Speaker:

    The Export-Import Bank dragoons American taxpayers into subsidizing loans to foreign companies, making it cheaper for them to buy products from politically-favored American companies which in turn use those products to compete against less-favored American companies.

    Past beneficiaries include such upstanding enterprises as Solyndra and Enron.  Since 2007, almost half of its money has gone to support that plucky little start-up called Boeing.  Air India got $5 billion to purchase Boeing aircraft allowing them to undercut American carriers like Delta with their own tax money.

    We’re told we need to compete with other nations that do the same thing.   If other nations want to impoverish themselves in this manner – we don’t need to imitate them.

    We’re told this doesn’t cost taxpayers – that in the last several years it’s actually turned a profit.  That what they used to say about Fannie Mae and Freddie Mac – until they blew up in our face.

    Legitimate companies have plenty of access to private capital and don’t need these subsidies.  The illegitimate ones shouldn’t be propped up with the hard-earned dollars of working taxpaying Americans.

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Amendment to Defund the Economic Development Administration
House Floor, Washington, D.C.
May 8, 2012

Mme. Chairman:

    I rise in strong support of the amendment by the gentleman from Kansas.

    The new Republican House majority was elected with the specific charge to bring spending under control.  We can’t blame the Senate or the President any more if there’s waste in the budget. Money doesn’t get spent by this government unless the House says it gets spent.  In a very real Constitutional sense, the buck starts here.

    Here is an appropriations bill originating in this House that still has outrageously wasteful and indefensible spending.  Perhaps the flagship of this folly is the $182 million in unauthorized – there’s that word again: unauthorized – spending for the Economic Development Administration.

    This is solely and simply a slush fund that gives away money for the most dubious of local projects.

    Local projects that benefit local communities should be funded locally.  We shouldn’t be robbing St. Petersburg to pay St. Paul.  We must ask ourselves, if these projects are so important to local communities, why are those local communities unwilling to pay for them?  And if the communities that directly benefit from these projects are unwilling to pay for them, why are we spending federal money that we don’t have?

    To add insult to insanity, this agency is already sitting on $845 million.  Why on Earth would we provide it with another $180 million?   We ought to abolish this agency and recover the unspent funds, not throw good money after bad.

    Tim Carney hit it on the head in the Washington Examiner last October when he wrote,

    “Nearly every Republican voted against President Obama’s stimulus in 2009, arguing that the deficit was too high, that government shouldn’t be in the game of picking winners and losers, and that Washington doesn’t create jobs.  But the EDA adds to the deficit, picks winners and losers, and purports to create jobs.  If Republicans vote to continue the EDA, they flaunt their hypocrisy to critics.”  I have to agree.

    I appreciate that the appropriations bills are making incremental improvements in the status quo, but these are times that demand much more than that.  When members vote for these appropriations bills, they are responsible for the spending – and the waste – in them. 

    And this spending is simply indefensible.  Doling out grants with little if any accountability, this ought to be the poster child for waste in government. 

    I appreciate the fact that the leadership has agreed to an open amendment process, giving us the opportunity to correct this particular oversight on the floor.  But the fact of the matter is that the House is ill-equipped to comprehensively address this kind of waste from the floor and we must do better both as authorizing committees and the appropriations committee in combing these bills earlier in the process for unconscionable and indefensible expenditures. 

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Amendment to Cut Unauthorized Appropriations to the International Trade Administration
House Chamber, Washington D.C.
May 8, 2012

Mme. Chairman:

    This amendment cuts more than a quarter billion dollars of unauthorized appropriations from the International Trade Administration.

    What does it do, exactly?  The ITA has some legitimate functions enforcing trade agreements and treaties.  This amendment leaves these functions untouched.

    But it also – to quote from its own material – provides counseling to American companies in order to develop the most profitable and sustainable plans for pricing, export, and the full range of public and private trade promotion assistance… as well as market intelligence, and industry and market specific research,”

    That’s well and good, but Mme. Chairman, isn’t that what businesses, trade associations and the Chamber of Commerce are supposed to do with their own money?  Why should taxpayers pay for the profits of private companies?  If a specific business or industry is the sole beneficiary of these services, shouldn’t it be the sole financer of them – either individually or collectively through trade associations?

    True, this program has been around for generations, but Franklin Roosevelt, hardly a champion of smaller government, had the right idea when he slashed its budget back in 1932 and closed 31 of its offices.  The problem is it didn’t take, and today, ITA has 240 offices.

    The ITA’s authorization lapsed in 1996 – 16 years ago.  It has not been reviewed or authorized by Congress since then, but we still keep shoveling money out the door. 

    But although it hasn’t been reviewed by Congress in all those years, it has been thoroughly weighed by the Congressional Budget Office, the Office of Management and Budget and the President’s Fiscal Commission and they have all found it sadly wanting.  

    The Simpson-Bowles Report summed it up nicely when they said – quote --

    “Services provided by ITA’s U.S. Commercial Services and other Divisions directly providing assistance to U.S. Companies should be financed by beneficiaries of this assistance. While the agency charges fees for those services, its fees do not cover the costs of all its activities.  Additionally, it is argued that the benefits of trade promotion activities are passed on to foreigners in the form of decreased export costs.”  Simpson-Bowles goes on to say, “According to a study by the Office of Management and Budget (OMB), businesses can receive similar services from state, local, and private-sector entities. The CBO option to eliminate ITA’s promotion activities or charge the program’s beneficiaries saves $267 million in 2010 and $1.6 billion through 2014.”

    Mme. Chairman, if the CBO, the OMB and the President’s fiscal commission all agree this is wasteful and Congress hasn’t bothered to reauthorize it since it expired sixteen years ago, why do we continue to spend money that we don’t have duplicating services the beneficiaries of those services either don’t need or are perfectly capable of funding on their own?

    And if the companies that we are told directly benefit from these “essential” services aren’t willing to fund them, maybe that’s just nature’s way of telling us that we shouldn’t be fleecing our constituents’ earnings to pay for them. 

    And why would we tap American taxpayers to subsidize the export activities of foreigners, as Simpson-Bowles notes.

    The rules of the House were specifically written to prevent this type of unauthorized expenditure – and they provide for a point of order to be raised if it’s included in an appropriations bill.  That’s exactly what we have here.  But alas, that rule is routinely waived when these measures are brought to the floor, making this amendment necessary. 

    This is a prime example of corporate welfare and we ought to be done with it.

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A Truly Orwellian Measure
House Chamber, Washington, D.C.
April 27, 2012

Mr. Speaker:

    Under the Fourth Amendment, if the Government wants to snoop through a person’s email, it must first convince a judge that there is probable cause to believe that person has committed a crime and it must specify the documents it believes are relevant to that charge.

    Yesterday the House passed a measure that makes a mockery of this cherished protection.  Under the guise of cyber-security it allows the government to pressure and cajole Internet providers to turn over their subscribers’ data and for the government then to use that data – without the consent or even knowledge of the individuals affected – for a wide variety of vague purposes unrelated to cyber-security – all without warrant.
   
    This is a truly Orwellian measure that our Bill of Rights was specifically written to prevent.  I hope the House will have second thoughts as it reflects on the ramifications of this act.

VOTE NOTE

HR 4628 – Student Loan Subsidies: NO.  Tuition is rising at four times the rate of inflation specifically because of the billions of dollars of subsidies that the government is pumping into that market.  Then, under the guise of “helping” students pay for these government-inflated prices, we offer them below-market student loans that they can’t possibly repay.  The result is an economy where student loans now exceed consumer credit card debt and one out of two college grads can’t find a job.  Meanwhile, they’re left to struggle with catastrophic debt that the government has lured them into acquiring with teaser rates.  As the father of two college students myself, I believe the best way we can help these students and their families is to bring tuition costs back down to earth by getting the government out of the market.  Instead, this bill continues to pump up a trillion-dollar debt bubble that will someday burst with devastating results.

The Tax Cut Illusion
House Chamber, Washington, D.C.
April 19, 2012

Mr. Speaker:

    The House just passed HR 9 that purports to give a temporary tax cut to small businesses.

    I say “purports” because it doesn’t cut spending at the same time and thus it merely shifts current taxes into the future.  Once a dollar has been spent, it’s already become a tax, taken either from today -- or from tomorrow to pay for today’s deficits.

    Nor does HR 9 do much to promote economic growth because it does little to reward new productivity at the margin.  At best it produces a one-year sugar high until the bills come due.

    Tax cuts without spending reductions or real economic growth are an illusion. 

    Real tax reform would permanently reduce the marginal tax rate for all businesses and cut government spending concurrently.  This would encourage and reward economic growth, shift investment decisions from politicians to entrepreneurs and not rob our economy of its future.

    I hope, before the end of this session, that we will do so.

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IRS Harassment of Tea Party Groups
Remarks by Congressman Tom McClintock

House Chamber, Washington D.C.
April 17, 2012

Mr. Speaker:

A defining aspect of the American tradition is that groups of citizens band together for a wide variety of civic purposes.  They recruit volunteers, raise funds and spend those funds to promote whatever project or cause brings them together.

For more than a century, our tax laws have recognized that such voluntary associations – non-profits, we call them today – should not be taxed, because their proceeds are devoted entirely to improve our communities through education, advocacy, and civic action.  Section 501 of the Internal Revenue code recognizes them today, and civic groups like Move-on-dot-org, the League of Conservation Voters, the ACLU, the National Rifle Association and various taxpayer groups have always been included in this definition. 

We don’t apply a political test to these civic groups – we recognize the fundamental right of Americans to organize and to pool their resources to promote whatever causes they believe in – left or right.  Indeed, whatever their political persuasion, these civic groups perform an absolutely indispensible role in our democracy by raising public awareness, defining issues, educating voters, promoting reforms, holding officials accountable and petitioning their government to redress grievances.   Abolition, Women’s Suffrage, the Civil Rights movement – all would have been impossible without them. 

In order to be recognized as non-profit groups, these organizations must register with the IRS – a purely ministerial function that has, in the past, been applied evenly and without regard to their political views.     

At least until now.

It seems that Tea Party groups are now being treated very differently than their counterparts on the political Left.  For the last two years, many have been stone-walled by the IRS when they have sought to register as non-profits and most recently, they have been barraged with increasingly aggressive and threatening demands vastly outside the legal authority of the IRS.  Indeed, the only conceivable purpose of some of these demands could be to intimidate and harass.
 
A Tea Party group in my district is typical of the reports we are hearing from all across the country.  This group submitted articles of incorporation as a non-profit to the state of California, and received approval within a month.  Then, they tried to register as a non-profit with the IRS.  Despite repeated and numerous inquiries, the IRS stonewalled this group for a year and a half, at which time it demanded thousands of pages of documentation – and gave the group less than three weeks to produce it. 

The IRS demanded the names of every participant at every meeting held over the last two years, transcripts of every speech given at those meetings, what positions they had taken on issues, the names of their volunteers and donors, and copies of  communications they had with elected officials and on and on. 

Perhaps most chilling of all, the organizer of this particular group soon found herself the object of a personal income tax audit by the IRS.

Mr. Speaker, these are groups of volunteers who pass the hat at meetings to pay for renting the hall.  They give of their own time to research issues and pay out of their own pockets for printing fliers. 

The donations made to them aren’t tax deductible, so there is no legitimate purpose for asking the names of their donors, let alone of their volunteers – unless – and this is the fine point of it – unless the intention is to harass and intimidate. 

Ironically, the same tactics we now see used by the IRS against the tea parties were once used by the most abusive of the southern states in the 1950’s to intimidate civil rights groups like the NAACP.
   
No such tactics have been reported by any similar civic groups on the political left, so the conclusion is inescapable – that this administration is very clearly, very pointedly and very deliberately attempting to intimidate, harass and threaten civic minded groups with which they disagree using one of the most feared and powerful agencies of the United States Government to do so.  
   
Mr. Speaker, these facts speak for themselves and need no embellishment or interpretation.  They should alarm every American of good will regardless of political philosophy, for if this precedent is allowed to stand, no one’s freedom is safe.  I bring these facts to the attention of the House today and ask that they be rigorously investigated; and if found accurate that those officials responsible be exposed, disgraced, dismissed and debarred from any further position of trust or power within our government. 

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House Water and Power Subcommittee
Chairman’s Opening Statement
Legislative Hearing on H.R. 460 and H.R. 2664
April 17, 2012

The subcommittee sits today to hear two bills, one removing government impediments to development of one of the cheapest and cleanest forms of electricity generation and one proposing more government subsidies for one of the most expensive forms of water delivery. 

We have first, HR 460, by Congressman Chaffetz of Utah.  It removes a Catch-22 in federal law that makes development of 50 megawatts of hydropower on a federal irrigation facility impossible.  This self-defeating roadblock is a requirement that before a hydro power generator can be placed on this facility, the developer must pay the sunken costs for the facility itself.  I am a staunch defender of the beneficiary pays principle of financing federal water and power projects – which means that the beneficiary pays for the price of the project and NO MORE.  In this case, the federal policy is to require that a hydro-power add-on pay for the entire facility – in this case, $161 million.  This requirement renders the project cost-prohibitive.  It prevents another 50 megawatts of power – enough for 50,000 homes – and denies the nation the nearly a half-million dollars of new money that the project would pay every year to the Federal Treasury.

It is akin to a family renting out a room, but first requiring the renter to pay off their mortgage.  Then they are shocked just shocked that nobody wants to rent from them.  The family is no further along in paying off its mortgage and has denied itself the rental income that a renter would otherwise provide.

I view this bill as taking another step to remove impediments in law that are keeping us from harnessing our nation’s vast hydropower resources.  The Subcommittee has focused on removing federal obstacles to hydropower development with this bill, Congressman Tipton’s H.R. 2842 and Congressman Smith’s H.R. 795 and it will continue to do so.   
 
Also today we will hear H.R. 2664 by the ranking member, Congresswoman Napolitano.  It provides additional federal subsidies for water desalination research, wind and solar promotion and public outreach.  It reflects a lot of what is wrong with our federal policy on water and energy development.

Desalination of seawater or brackish water dates back to the second century AD.  It makes economic sense in extremely arid and remote regions where water cannot be imported.  There’s a market for it.  Ships, remote resorts, and remote desert outposts have relied on it for centuries.  I remember in 1963 as a young child visiting the island of Aruba and having it impressed on me that we were drinking distilled seawater and that it was tightly controlled because it was so expensive.  That would not have been the case in a rain forest.

Because a market exists for this process, private industry invests between $100 million and $150 million a year for research and development according to the National Academy of Sciences.  This bill would add – pardon the pun – a drop in the bucket – $2 million a year for government to do the same thing.

Well, almost the same thing.  One of the aspects of this bill is integration of renewable energy – that is, wind and solar -- and the other is public outreach – which is Washingtonese for “political self-promotion.”

The Congressional Research Service has pointed out that “current desalination processes are already operating close to the theoretical minimum energy required.”  The reason desalination is so expensive is that it is highly energy dependent.  What does this bill do?  It attempts to graft onto this highly energy dependent process the most expensive forms of electricity generation that we have yet invented: wind and solar.  This is lunacy. It bespeaks of political – not scientific or practical – objectives.

Which brings us to funding public “outreach” programs.  That is purely political – although no doubt necessary to combat public outrage when taxpayers see how their money is being squandered.

Even if the measure were for pure basic research, it begs the question, why should taxpayers subsidize the R&D budgets of some of the biggest companies in the country – G.E. for example – and why should the taxpayers of Tacoma, Washington pay for water delivery systems that cannot conceivably benefit them in such a water-rich region?

The bottom line was well expressed in testimony from Mr. Crews of the Competitive Enterprise institute: “a viable technology needs no subsidy and a non-viable technology probably can’t be helped by one.”

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House Chamber, Washington, D.C.
March 28, 2012

I thank the gentleman (Mr. Ryan) for yielding and I thank him for his vision and courage.  It has truly been an honor to serve on this committee under his leadership. 

Mr. Chairman, a year ago, the House passed a budget that would have put our nation back on the path to fiscal solvency and ultimately paid off the entire national debt.  It would have saved Medicare and Medicaid from collapse and put them back on a solid and secure foundation.  According to Standard and Poor’s, it would have preserved the triple-A credit rating of the United States Government. 

That plan was killed in the Senate, which has not passed a budget in three years.  The Senate Majority Leader complained that it threatened the Cowboy Poetry Festival in Elko, Nevada.  An allied group ran a smear campaign, depicting Congressman Ryan as a monster willing to throw his own grandmother off a cliff.

Sadly, that’s what passes for reasoned discourse on the Left.

The result is that today, our country is another year older and more than a trillion dollars deeper in debt.  We have lost our Triple-A credit rating.  We have watched our nation’s debt exceed our entire economy, putting us in the same league as the worst-run European governments. 

Mr. Chairman, this is not a perfect budget.  No budget ever is.  But it will save our country from the calamity now destroying Greece.  That should be reason for a resounding and (dare I hope) bi-partisan vote. 

A year ago, a panel of experts from Left to Right warned us that we were then, at best, five years from a sovereign debt crisis. I wonder, how many more years we’ve got?  I wonder how many more chances will we have to set things right before events overtake us and we enter the inexorable downward spiral of bankrupt nations?

Let’s not find out the answer to that question.  Let us redeem our nation’s finances and restore our nation’s freedom while there is still time.  That is our generation’s responsibility and our generation’s destiny.

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House Chamber, Washington, D.C.

March 27, 2012

M. Speaker:

The House is about to consider a budget in a dangerous hour in the life of our country.  Last year, we barreled past several urgent warning signals: the loss of our nation’s triple-A credit rating; the size of the national debt surpassing our entire economy; a record third year of trillion dollar-plus annual deficits.

I believe this to be one of our last opportunities to avert a financial crisis unprecedented in our nation’s experience and on a magnitude far greater than that now destroying Greece. 

The blueprint passed by the House Budget Committee last week is a disappointment to those who believe the budget can and should be balanced much sooner, and I do not entirely disassociate myself from those sentiments. 

But the immediate issue before us, as Lincoln put it, “is not ‘can any of us imagine better?’ but, ‘can we all do better?’”  The approaching financial crisis demands first and foremost that we turn this country away from the fiscal precipice and place it back on a course to solvency. 

This budget does so.  Indeed, it improves on the House budget last year that was killed in the Senate, but which according to Standard and Poors, would have preserved the triple-A credit rating of the United States Government.  This budget, I believe, will restore it.

It is a long road back, balancing by the late 2030’s and ultimately paying off the entire debt by the mid-2050’s.  But even relying on the static scoring of the CBO which presents a worst-case scenario – it still means that my children – who are now in college – will be able to retire into a prosperous and debt-free America.

There is a great deal in it for Conservatives not to like.  That is not the issue.  The issue is, will this Congress and ultimately this government change its fiscal trajectory enough to avert the sovereign debt crisis that fiscal experts across the spectrum warn us is just a few years dead ahead?

This is not some moonless night on the Atlantic.  We can see this danger right ahead of us and we can see that it is big enough to sink this great ship of state.  We have precious little time remaining to avert it.  This budget will turn us just enough to avoid that calamity – and I fear we won’t have many more opportunities to do so.

The alternative is unthinkable.  The President’s budget would subject our nation to one of the biggest tax increases in its history – striking especially hard at the small businesses that we are depending upon to create 2/3 of the new jobs that Americans desperately need.   And even so, by its own numbers it NEVER balances, and thus courts the fiscal collapse of our nation. 

Hemingway asked
“How do you go bankrupt?”  “Two ways,” he said. “Gradually, then suddenly.”

For the last decade, this nation has been going bankrupt gradually. 

History warns us that if we do not change this course very soon, we will cease going bankrupt gradually and start going bankrupt quite suddenly.  It may happen through a chain reaction set off by a seemingly minor international event.  It may happen one day when a routine bond auction sours. 

Interest rates will start rising rapidly.  Financial panics will begin.  The government will have to respond by increasingly frantic efforts to maintain a stream of capital, either through massive policy dislocations or catastrophic inflation.

The approach of great cataclysms that are so obvious to historians in retrospect, are often unheeded by contemporaries at the time.  Just thirty days before the outbreak of World War II, Neville Chamberlain recessed Parliament to go on extended holiday.

Let that not be how history remembers this Congress.  This budget is not perfect – but it is adequate to spare our country from the convulsions of Greece.

I wholeheartedly support this budget for that reason – and I expect it will have the overwhelming support of this House.  I can only hope that the Senate this time will put aside its own differences and heed Lincoln’s plea that “the dogmas of the quiet past are inadequate to the stormy present.  The occasion is piled high with difficulty, and we must rise – with the occasion…We must disenthrall ourselves, and then we shall save our Country.” 

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