Author: Heritage

On 02.17.10 02:00 PM posted by Sarah Torre

With over a week of in-class instruction lost to two blizzards and many Washington, D.C., Virginia, and Maryland schools forced to contemplate longer school years, a few Maryland teachers found an effective, online alternative to letting snow drifts reduce student achievement. Even as record snowfalls threatened most lesson plans, online learning proved to be an efficient tool for academic instruction for the few students and teachers fortunate enough to participate.

As The Washington Post reports, the accessibility of virtual chat rooms, whiteboards, and quizzes allowed some students to keep up with class readings and assignments despite prolonged classroom absence. Patricia Lynch Carballo, a history teacher at Maryland’s Albert Einstein High School, utilized online learning to help her students stay on track for the standardized International Baccalaureate exam. She remarked on the experience:

‘In some cases, the quality [of the responses] is even better’ online, Carballo said. ‘They have a little more time to think about it.. It’s not unlike what we’d do in class. We’re just doing it online.’

Virtual learning has become a successful alternative to traditional classroom instruction, whether through a fulltime online school, a blended virtual learning program, or an impromptu snow day class. The Department of Education’s recent meta-analysis of online schools and virtual programs echoes Ms. Carballo’s sentiments regarding online learning, reporting significant success in student achievement and test scores:

…students who took all or part of their class online performed better, on average, than those taking the same course through traditional face-to-face instruction.

K-12 online education has a lot to offer: greater teacher and student flexibility, increased availability of classes, better individual customization to students’ needs, and a more efficient, productive use of education funds. With over 1 million students taking some form of online instruction in the 2007-08 school year, students, teachers, and school districts across the country are already benefiting from virtual learning.

While the effectiveness of a virtual classroom kept some Maryland students on track for standardized testing last week, most students in the D.C. Metro area and throughout the East Coast will spend the next few weeks trying to make up for lost time. With many schools considering longer days and shorter summers, even in the face of state budget shortfalls, the cost to teachers, parents, students, and taxpayers for schools to meet state demands for minimum academic instruction should factor into future availability of online classes. The efficient, cost-effective nature of virtual learning’s easily accessible instruction should give school districts a good reason to provide online classes throughout the year and to all students, regardless of the snow forecast.

http://blog.heritage.org/2010/02/17/…-snowmageddon/

On 02.17.10 03:00 PM posted by Marguerite Higgins

The Robert Wood Johnson Foundation and the University of Wisconsin Population Health Institute just released a new report that exposes the diversity of health care across the country on a county-by-county basis. What’s striking about the interactive report is the high level of variance found in health care for counties within a single state.

For example, Montgomery and Howard counties ranked in the top slots in Maryland while Baltimore City and Allegany County trailed at the bottom. “In health care, one size does not fit all,” said Dr. Donald Shell, the health officer for the Prince George’s County Health Department, during a discussion of the report findings.

No truer words could be spoken. However, Congress has been trying to enact a one-size-fits-all measure for the past year with Obamacare, which would indiscriminately impose nationalized health requirements on counties. As Heritage health policy expert Stuart Butler has noted, Congress should be examining modest adjustments to the health care system and allowing states to take the lead in experimenting with new reform models:

History shows that changing even seemingly minor features of legislation or administrative decision making with regard to health care can have major — and sometimes unintended — consequences for the systems evolution.

Taking even small steps to improve coverage, it turns out, involves decisions that could have profound effects on the future of the U.S. health care system. Thus, it would be unwise to try to rush through a scaled-back bill on the assumption that minor changes do not require careful scrutiny. It is important to take the time to think through the implications of any new legislation.

Butler along with analysts within Heritage’s Center for Health Policy Studies has long advocated the need for genuine reform of America’s health care system. But that approach must be state-based to determine what works best in the intricate and complex workings of the U.S. health care sector. Nevada state officials will have a better idea of what residents in Lander County (ranked 14th in the state) need over those in neighboring Pershing County (ranked second).

States must have the tools and flexibility from Congress to test their ideas and find out what reforms work best or need to be changed. That won’t happen with the Obama Administration’s current health care agenda, especially in light of the upcoming Health Care Summit. The new report should serve as a wake-up call to Congress and the Obama Administration — trying to create a one-size-fits-all health care system is harder than it looks.

http://blog.heritage.org/2010/02/17/…health-reform/

On 02.17.10 06:36 AM posted by Conn Carroll

Facing new polling showing that 52% of the American people believe that he does not deserve a second term in office, President Barack Obama attempted to reach out to conservatives yesterday by promising $8.33 billion in federal loan guarantees for a pair of nuclear reactors in Georgia. The President told an enthusiastic audience of union officials in Lanham, MD: “Those who have long advocated for nuclear power — including many Republicans — have to recognize that we will not achieve a big boost in nuclear capacity unless we also create a system of incentives to make clean energy profitable.”

In other words, as newspapers across the country have noted this morning, President Obama’s nuclear loan guarantee announcement is really nothing more than a transparently cynical attempt to revive his moribund cap-and-trade/energy tax proposals currently languishing in the Senate. In reality, the $8.3 billion announced yesterday is actually just a first down payment on the $18.5 billion in loan guarantees that were authorized under the Energy Policy Act of 2005. While the administration should be applauded for following the law, loan guarantees are not enough to recreate a robust nuclear industry in the United States. Indeed, an expansion of the program could do much more to stifle the industry’s growth than to help it.

And expanding the nuclear loan guarantee program is exactly the approach the Obama administration plans to pursue. Their 2011 budget provides an additional $36 billion in loan guarantee authority to nuclear energy projects. When added to the $18.5 billion previously authorized under the Energy Policy Act of 2005, the American taxpayer will now be subsidizing $54.5 billion in loans to the nuclear industry. But just as conservatives do not support subsidies for wind, solar or biomass energies, conservatives should not support subsidies for nuclear power, either. Heritage Research Fellow Jack Spencer explains:

Expansive loan guarantee programs, however, are wrought with problems. At a minimum, they create taxpayer liabilities, give recipients preferential treatment and distort capital markets. Further, depending on how they are structured, they can remove incentives to decrease costs, stifle innovation, suppress private-sector financing solutions, perpetuate regulatory inefficiency and encourage government dependence.

President Obama’s bureaucratic/special interest/Washington approach to energy policy is clear: tax and regulate those energies unpopular with his political base while subsidizing and mandating the use of those energies that his supporters favor. This is the same approach the United States tried in the 1970s under President Jimmy Carter, and it was a colossal failure.

What America really needs is a true free market approach to the energy sector, and the nuclear industry is a great place to start. Specifically, the federal government should: limit the loan subsidies of Energy Policy Act of 2005 to existing law; avoid creating a government-dependent nuclear industry; remain committed to scientific conclusion on Yucca Mountain; introduce market principles into nuclear waste management reform; and focus the government on key responsibilities like establishing predictable and effective regulation that will ensure safety and security.

Just as with the health care debate, the White House seems to believe they can win conservative support for their big government policies by buying off selected industries. What the White House continues to fail to realize is that true conservatives are pro-market, not pro-business. Subsidies and mandates are never the answer to an ill-functioning market. A predictable and reliable regulatory framework where firms and consumers can find the best solutions through undistorted price signals is the better approach for energy, health care … and really just about everything.

Quick Hits:

• U.S. Marines and Afghan soldiers seized the site of Marjah’s government offices, setting the stage for Kabul to attempt to resume its authority.
• The Obama administration’s economic-stimulus program has delivered only about a third of its total $787 billion budget so far, much of that to maintain social services and government jobs and to provide tax cuts for workers.
• More than $3.5 billion in economic stimulus funds are going to programs that President Obama wants to eliminate or trim in his new budget.
• The ink is barely dry on the pay-as-you-go law, and Democrats are seeking to bypass it to enact parts of President Obama’s Second Stimulus.
• According to a Texas Health Science Center poll, 57% of respondents said Congress should start over on health care reform.

http://blog.heritage.org/2010/02/17/…nuclear-power/

On 02.17.10 07:00 AM posted by Israel Ortega

According to a recent story by the McClatchy newswire, Hispanics are frustrated with President Obama now that it is becoming increasingly clear that his campaign promises were nothing more than empty rhetoric. Although the article focuses on Hispanics’ disappointment in the lack of a comprehensive immigration bill to emerge from the Democratic-controlled Congress, Hispanics would do well looking beyond the immigration issue to realize how misguided the President’s policies are for all Americans – including Hispanics.

Nowhere is this more evident than on the issue of education, where the high school drop out rate for Hispanics stands at a frightening fifty percent in some of our country’s biggest cities. Instead of supporting increased measures to provide Hispanic families with the opportunity to choose for themselves where to send their children to school, this Administration’s education policies have been more of the same.

Despite previous failed attempts to boost academic achievement with increased federal spending, last year’s stimulus bill included almost $87 million dollars for education spending, doing very little to improve accountability and transparency. And despite promising to fund only programs that work, the President has been excruciatingly silent as the successful DC Opportunity Scholarship Program is on the verge of being eliminated. The DC Opportunity Scholarship Program has been a lifeline for many working families in the District looking for a way out of the worst public school system in the country.

On healthcare, instead of adopting market-friendly measures to increase affordability and increased consumer options, the President insisted on pushing forward with a government-run health insurance exchange. Of significance to the Hispanic community, health insurance portability would be particularly advantageous given the community’s propensity to work for various employers. Instead, the President and his allies in Congress, including the Congressional Hispanic Caucus, told Hispanics that their plan was the best way to provide health insurance.

But perhaps of most significance, with the unemployment rate at nearly 10 percent for all Americans and nearly 13 percent (according to the Washington Post) for Hispanics, the President continues to insist that his stimulus bill has been a resounding success. Despite the obvious failures of last years’ stimulus bill, Congress is working on yet another “stimulus bill” that will amount to nothing more than a pork-laden piece of legislation that will only add to our national debt and do little to improve the economy. If signed into law, Hispanics, just like the rest of our country, will get stuck paying off this expensive bill. Meanwhile, *spend-happy politicians will surely point to it before this year’s congressional elections to show the electorate that they have done something to help the economy, even if that “something” is nothing more wasteful spending.

Instead of providing Hispanic families with increased opportunities to choose for themselves where to send their children to school or allowing them to keep more of their hard-earned money through tax cuts, it seems like many in the left want to continue pushing Hispanics into depending on the federal government for everything.

Hopefully, the disappointment in the President’s empty campaign promises will transcend into further distrust of the liberal agenda and big government.

http://blog.heritage.org/2010/02/17/…ope-for-obama/

On 02.17.10 07:43 AM posted by Lisa Curtis

The recent capture of the number two Afghan Taliban leader Abdul Ghani Bahadur in Pakistan is a blow to the Afghan Taliban and their ability to coordinate the insurgency in southern Afghanistan. Bahadur’s arrest will help reestablish Pakistan’s counterterrorism credentials with Washington. The Pakistan military leadership also may be seeking to ensure a role in determining the future direction of Afghanistan, at the same time U.S. and coalition forces begin an important offensive in a Taliban stronghold in Afghanistan’s southern Helmand province. While it is too early to say whether the arrest of Bahadur signals a sea change in Pakistani thinking toward the Afghan Taliban, it shows at least a willingness to exert influence over the movement at a crucial moment in the Afghanistan war.

While the administration should encourage these signs of fresh cooperation from Pakistan, the U.S. must remain clear-headed about Pakistani goals in the region and accept that Pakistani interests often diverge from those of the U.S. While the U.S. seeks to prevent Afghanistan from again serving as a safe haven for international terrorists, Pakistan’s primary goal is to curb Indian influence in the country. Pakistani Chief of Army Staff General Ashfaq Parvez Kayani restated in press interviews last week that India remains the primary threat to Pakistan and the focus of the Pakistani military.

Pakistan’s fixation on India should give pause to U.S. policymakers when considering Pakistan’s expressed interest in brokering peace talks with the Taliban. While reintegration of local Taliban fighters into the mainstream democratic process is indeed part of the overall counterinsurgency strategy, it is necessary to distinguish this process from one that would legitimize the Taliban’s ruthless ideology. The enhanced focus on supporting Afghan-led reintegration has fueled speculation in the region and in some European capitals that the U.S. is seeking a political deal with senior Taliban leaders as part of an exit strategy from the region. Seeking to negotiate a political deal with the Taliban leadership (primarily based in Pakistan) before U.S. and NATO forces gain the upper hand on the battlefield in Afghanistan would be a tactical and strategic blunder with tremendous negative consequences for U.S. national security.

The U.S. should back with diplomatic and financial support Afghan efforts to pursue reconciliation on the ground inside Afghanistan, and at the same time squeeze the Taliban leadership based in Pakistan that is still closely linked to al-Qaeda. These actions should occur simultaneously so that the local Taliban fighters view the U.S./NATO/Afghan authorities as being on the winning side and at the same time see a process through which they can switch sides. If, on the other hand, the U.S. appears overly anxious to negotiate with the senior Taliban leadership in Pakistan, this would likely undermine efforts to coax local fighters into the political mainstream, thus jeopardizing General McChrystal’s counterinsurgency strategy in Afghanistan and prolonging instability in the region

http://blog.heritage.org/2010/02/17/…trategy-shift/

On 02.17.10 08:00 AM posted by Kathryn Nix

Dr. James Eelkema, a Burnsville, MN family practice physician was fed up with the costly paperwork insurance companies required and the second guessing of his medical decisions by company bureaucrats. So when he learned that up to a third of his pay was to become contingent on “measures such as whether his patients got pap smears or whether he got them to stop smoking,” Dr. Eelkema decided enough was enough and converted to a cash-only practice.

Dr. Eelkema’s decision represents a growing trend of medicine returning to its fundamental role as a market-oriented, patient-driven profession. Cash-only practices have a number of advantages over traditional practices. First, they allow the doctor to save time and personnel on insurance paperwork and redirect resources to patient care, simultaneously passing savings on to the consumer. Second, they encourage a closer doctor-patient relationship, free of interference from third parties such as insurance companies or government programs. Most importantly, cash-only practices curtail expenditures by linking health care decisions and cost directly to consumers; after all, when the insurance company is paying for your checkup, who bothers to ask how much it costs?

The experience of Dr. Vern Cherewatenko demonstrates the merits of cash-only practices for physicians, patients, and the health care system at large:

Six years ago, Cherewatenko was drowning in paperwork and red ink, accepting more than 300 different insurance plans with 7,500 different medical codes.* “We were losing $80,000 a month. We were inundated with paperwork. What we found is the more patients we saw, the more money we lost, and it was devastating,” he says. Unable to survive, Cherewatenko discovered what he says is a better way — a cash-only practice that’s grown into a national network of 1,600 doctors. “We have lowered our fees anywhere from 30 percent to 50 percent on some of our services which is incredible,” he says. ‘And it’s really charging less and making more.’

Cash-only doctors serve as an excellent counterpart to consumer-driven health care plans, which include high deductible health insurance plans and health savings accounts (HSAs).* High deductible insurance plans offer lower premiums and supplement the cash-based market, ensuring consumers have coverage for catastrophic and unforeseen events.* For all other medical costs, patients would pay out of pocket, using HSAs for predictable health expenses like checkups and lab tests.* This system empowers the patient while enhancing affordability of care.* Cash-only practices complement and enhance the beneficial aspects of this system by providing more consumer control of care and a better doctor-patient relationship, all at equal or less cost to the consumer.

So what’s keeping these practices from becoming more widespread? As usual, big government has its fingerprints all over the crime scene. Unfortunately, such ideas are discriminated against by the federal tax code in its virtually exclusive treatment of comprehensive, employer-provided health insurance. Every dollar paid directly to a doctor, without going through the bureaucratic apparatus of a third party payment system , must of necessity be an after tax dollar. The most effective, though limited, relief from this tax discrimination against direct payment is the health care savings account. But Congress caps the maximum contribution employees and employers can make to an HSA. Congressional policy, in other words, divorces the economic principles of supply and demand.

In reforming health care, lawmakers should create a level playing field for different types of care. This means that Congress should not be picking winners and losers, or favoring one type of health care delivery system over another. It means that cash-only practices and other consumer-driven options should not be on the receiving end of official discrimination in either law or regulation. Patients should make the choice of how they get care. *As Heritage’s Ed Haislmaier writes, “[Maximizing value] can be achieved in health care only if the system is restructured to make the consumer the key decision maker. When individual consumers decide how the money is spent, either directly for medical care or indirectly through their health insurance choices, the incen*tives will be aligned throughout the system to gen*erate better value—in other words, to produce more for less.”

Co-authored by Vivek Rajaskhar.

http://blog.heritage.org/2010/02/17/…n-health-care/

On 02.16.10 10:35 AM posted by Conn Carroll

Over the past year, Iran has declared itself a nuclear state and continues to expand their ballistic missile program, Director of National Intelligence Dennis Blair has testified to Congress that Al Qaeda and its affiliates are planning a large-scale attack on American soil within the next six months, and failed Flight 253 Umar Farouk Abdulmutallab has told the FBI that he met with other English speakers at a terrorist training camp in Yemen.

Meanwhile, the scientist at the center of Climategate now tells BBC News that there has been no statistically significant rise in temperature in the past fifteen years and the Intergovernmental Panel on Climate Change has been forced to admit their 2007 report substantially overstated global warning’s impact on glacier loss, hurricane damage, and African crop failure.

So how is the Obama Administration focusing our precious national security resources? Lieutenant Colonel in the US Army Reserve (rtd) explains in The Telegraph:

Under American law, every four years the US Defence Department must present to Congress a comprehensive review of the security threats and challenges to America. The security picture presented in the review provides the justification for planning and creating the appropriate military forces and capabilities. The Quadrennial Defense Review (QDR) is supposed to be a non-partisan and objective strategic document – free of partisan politics. … Last week the Defense Department released the 2010 QDR. It is a remarkable document.
…
However, it’s not what is in the document that surprises the reader – it’s what was left out. There presence of two elephants in their living room apparently escaped the notice of American’s top civilian and military leaders. Islamic radicalism does not receive any mention whatsoever in the American Defense Review and the threat posed by a nuclear Iran is mentioned in only one general sentence at the end of a document (page 101). To put this lack of discussion in proportion, contrast this non-discussion with other security issues mentioned in the document. For example, the security effects of climate change are highlighted and discussed in depth in eight pages of the document.
…
In late January [President Obama] demanded that Congress cut $2.5 billion from the defense budget for the purchase of C-17 transport planes. Obama declared the money for military transport was “waste, pure and simple”.

Of course, “waste” is a matter of interpretation. No one says that the C-17 is a bad aircraft or doesn’t do its job very effectively. In fact, it’s probably the best and safest large transport plane in the world today, and has done sterling service in Afghanistan and Haiti. But, according to Obama’s Pentagon officials, there is just no need to maintain such a large military transport fleet. If the Pentagon’s own assessment determines that there are not too many threats out there – and you can do that if you ignore minor things like Iranian nuclear weapons and the radicalisation of millions of followers of Islam – then you can feel safe in cutting defense expenditures and free up even more money for the President’s domestic agenda.

It’s a neat political trick to ignore the elephants in your living room. But Obama is making a huge gamble and betting the lives and security of Americans that these particular elephants will remain perfectly behaved for the next four years.

More Heritage research on defense spending here:

The Pentagon’s Quadrennial Defense Review: Simply an Extension of the President’s 2010 Defense Budget Plans

President Obama’s 2011 Budget: How Congress Can Reform Defense Spending and Address Shortfalls

http://blog.heritage.org/2010/02/16/…eat-than-iran/

On 02.16.10 11:30 AM posted by Allie Winegar Duzett

Last week, First Lady Michelle Obama launched a campaign against childhood obesity, which is interesting considering President Barack Obama’s past statements on hunger in America.

In November of 2009 — only three short months ago — President Obama “reacted with concern” at a report that Americans are suffering “record levels” of “food insecurity,” according to a report from the Boston Globe.* President Obama was quoted as saying that “it is particularly troubling that there were more than 500,000 families in which a child experienced hunger multiple times over the course of the year.”* In his statement, the President committed to “reversing the trend of rising hunger.”

“In addition, a bill I signed into law last month invests $85 million in new strategies to prevent children from experiencing hunger in the summer,” President Obama said.

President Obama’s remarks drastically differ from those of his wife, who recently stated that obesity is now a threat to national security since obesity is “one of the most common disqualifiers for military service.”* CNSNews reports on how the First Lady plans to combat this national security threat:

Some of the goals include ending what Obama referred to as “food deserts” with a $400 million a year “Healthy Food Financing Initiative,” which will bring grocery stores to low-income neighborhoods and “help places like convenience stores carry healthier food options.”

Mrs. Obama also plans to have the government spend over $10 billion to feed even more children through government programs, under the Childhood Nutrition Act.

So which is it?* Is the real problem here hunger, or is it obesity?

According to the Heritage Foundation’s Robert Rector, “the major dietary problem facing poor Americans is too much, not too little, food.”* He goes on to explain that while it would be nice for Americans to stop drinking so much soda pop, and start exercising more, “simply expanding the Food Stamp program would not accomplish that goal. What is required is a very difficult effort to change food preferences.”

Can a First Lady make a difference in changing America’s food preferences?* If her greatest idea right now is expanding the Childhood Nutrition Act to feed even more children — in essence, expanding the Food Stamp program, making more food more available to already apparently obese children — it appears as though her plan is likely to fail.* In fact, not only may it fail, it may also be a $10 billion waste of money for Americans everywhere, both obese and not.

Of course, the best part is that both President and Mrs. Obama have the same solutions to their respective problems with America’s food situation: spend more money, and make more people dependent on the government for food.* Apparently with them every problem has the same solution.

At least they’re predictable.

Allie Winegar Duzett currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit:*http://www.heritage.org/about/departments/ylp.cfm

http://blog.heritage.org/2010/02/16/…her-flip-flop/

On 02.16.10 12:30 PM posted by Nick Loris

With wind, solar and geothermal receiving much of the government handouts when it comes to energy production, biomass is back in the game after the Senate Finance Committee unveiled its tax extender plan, which includes a $100 million in production tax credits for biomass energy as part of a larger tax extender package. Politico reports,

As drafted, Section 503 breathed new life into an unusual production tax credit, first awarded to the industry in 2004 as part of a one-time, five-year deal benefiting nearly 80 biomass electric-generating plants, most of which were up and running well before the tax break was enacted. The House balked at renewing this bargain in December, saying production tax credits are to spur new production, not to subsidize old. But Finance subtly changes the old wording from five years to six, thereby adding 12 months to a tax break that is typically worth about $1.75 million annually for a qualified 20-megawatt plant.”

So if biomass production received government support when it wasn’t needed, why does it need more help now? Robert Cleaves, president of the Biomass Power Association, answers, “The production tax credit is really a lifeline for the industry. It’s not a windfall. We’re on the ragged edge as it is.” This should be a pretty convincing indicator that biomass is currently an uncompetitive product and might not be in the market without production tax credits. Biomass, one of the cheaper renewable energy sources, may play a role in America’s energy portfolio, but if it cannot compete in the market, it doesn’t deserve to be there. And biomass isn’t as environmentally friendly as some might suggest.

Billionaire Sam Zell is a financial supporter of biomass. He also bought the Chicago Tribune in 2007, only to see it go bankrupt by the end of 2008. “[I]f you bought something and it’s now worth a great deal less, you made a mistake. And I’m more than willing to say that I made a mistake. I was too optimistic in terms of the newspaper’s ability to preserve its position,” said Zell after the paper went under. Maybe he should consider the same for biomass. Although Senator Harry Reid stripped the tax extenders set to expire at the end of the year from the larger jobs bill, the $31 billion in tax extenders could be broken out into a separate bill.

This comes at a time when President Obama’s budget plans to reduce the deficit by eliminating $36.5 billion in tax breaks to the oil and natural gas industry. Without removing tax breaks and subsidies to other sources of energy, this is essentially a tax increase on our proven sources of energy. The Americans for Tax Reform has more here.

Removing government support for energy production isn’t necessarily a bad thing, but it should be done across the board. A good starting point would be to*ending the*special tax breaks for biomass.

http://blog.heritage.org/2010/02/16/…-get-tax-hike/

On 02.16.10 12:59 PM posted by Nick Loris

President Obama announced $8.3 billion in federal loan guarantees today to commence projection construction on two nuclear reactors in Burke County, Georgia. This is good news. Congress has authorized $18.5 billion in loan guarantees for nuclear energy projects under the Energy Policy Act of 2005, which also provided other subsidies for nuclear power to help mitigate the effect of decades of regulatory risk for approximately the first six nuclear reactors built in the U.S. While the administration should be applauded for finally getting this program off the ground and getting the remaining $10.2 billion issued should be a priority, loan guarantees are not enough to recreate a robust nuclear industry in the United States. Indeed, an expansion of the program could do much more to stifle the industry’s growth than to help it.

Reuters reports that “A spokesman for Southern [Company] said the loan guarantee would cover up to 70 percent of the company’s portion of the project’s costs.” The money would be paid back if Southern Co. earns back its costs. Loan guarantees can help overcome some near-term financing obstacles, but they are subsidies and should not be expanded. Heritage nuclear expert Jack Spencer writes:

Expansive loan guarantee programs are wrought with problems. At a minimum, they create taxpayer liabilities, give recipients preferential treatment, and distort capital markets. Further, depending on how they are structured, they can remove incentives to decrease costs, stifle innovation, suppress private-sector financing solutions, perpetuate regulatory inefficiency, and encourage government dependence.”

Spencer lays out the problems with energy loan guarantees here.

Instead of expanding the loan guarantee program, the government should focus its attention on implementing policies that create a sustainable nuclear industry and reduce the taxpayer liability of the existing loan guarantees. New nuclear policy should address the problem and create a solution for waste management. The government should not take the geologic repository for nuclear waste, Yucca Mountain, off the table but instead allow the Nuclear Regulatory Commission (NRC) to come to an objective, scientific conclusion on Yucca’s usability.

It is equally important for Congress to make the regulatory process for permitting new nuclear reactors more efficient, and to equip the NRC for regulating different reactor technologies. Establishing a predictable and effective regulatory structure for the nuclear industry, without compromising safety and security, will do much more to drive a nuclear renaissance than perpetuating the status quo with nuclear subsidies.

http://blog.heritage.org/2010/02/16/…ut-not-enough/

On 02.16.10 03:00 PM posted by Kathryn Nix

As the White House prepares for a bipartisan summit on health care later this month, the rhetoric and reality of the President’s plans for health care reform continue to conflict.* President Obama claims that he wants to bring congressional Republicans to the table to achieve health care reform.* However, he has also expressed the desire to present a final piece of legislation prior to the summit, focusing on marrying the differing ideas of House and Senate Democrats rather than those of Democrats and Republicans. In any case, this is not off to a bipartisan start.

Though the White House perseveres in pushing the main elements of the massive Democratic health care bills, the unpopularity of these legislative proposals soars; it is a stark fact of life that is *unacknowledged by the President. *A classic example of a provision that is highly unpopular is the excise tax on “high value” health plans included in the Senate bill to raise revenue to cover the uninsured. The tax increase is a tax increase; it is not a much needed reform the inequitable tax treatment of health insurance. Though support from Democrats in Congress and even labor leaders who helped cut the deal continues to dwindle, the White House continues to urge Congress to include the Senate excise tax in a final health bill.

A poll done by the AFL-CIO found that the new Senator Scott Brown (R-MA), who ran on the platform of opposition to Obamacare, won 49 percent of the vote among union members.* His opponent, Democrat Martha Coakley, received just 46 percent of the Massachusetts union vote. This is a stunning political development. *And that’s even after union leaders cut a sweetheart deal for union workers exempting them from the excise tax on high-cost health plans and thus shifting those costs onto the rest of American households that had similar health plans. In January, Rasmussen reported that 63 percent of all Americans opposed an excise tax on Cadillac plans.* When union members are exempt from the tax, opposition rises to 70 percent.

The excise tax is, in fact, a middle class tax increase- in direct violation of the President’s high profile promise not to raise taxes on American households making less than $250,000 per year. The special tax represents just one of many provisions of Obamacare which have plummeted in public approval ratings. Most Americans say they want Congress to start over again on health care reform. Clearly, ordinary Americans aren’t buying the White House’s prescriptions for overhauling the health care system.* A constituent of Rep. Edward Markey (D-MA), quoted in the New York Times, said it best: “Eddie, I’ve voted for you my whole life.* But if you think you will tax my benefits and give the money to Ben Nelson in Nebraska, you’re crazy.”

http://blog.heritage.org/2010/02/16/…razy%e2%80%9d/

On 02.16.10 06:00 AM posted by Dan Holler

Last week, two blizzards knocked Congress (and the rest of the federal government in Washington, DC) out of commission.

The snow kept the House out the entire week preventing them from taking any votes.

The Senate was only slightly more productive—confirming Joseph Greenaway to be U.S. Circuit Judge for the Third Circuit. *Also, the controversial nomination Craig Becker to be a member of the National Labor Relations Board was blocked. *On February 22, the Senate will begin debate over another stimulus/special interest spending bill.

http://blog.heritage.org/2010/02/16/…ry-15-19-2010/

On 02.16.10 06:29 AM posted by Conn Carroll

Tomorrow is the one-year anniversary of the <ahref="http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009">Am erican Recovery and Reinvestment Act, or as it is more accurately described, President Barack Obama’s Failed Stimulus. When President Obama signed the <ahref="http://www.washingtontimes.com/news/2010/jan/27/stimulus-price-tag-soars-as-jobless-rate-rises/">now $862 billion deficit-spending bill into law, the <ahref="http://www.bls.gov/news.release/archives/empsit_02062009.htm">unemployment rate stood at 7.6% and the U.S. economy employed <ahref="http://www.bls.gov/news.release/archives/empsit_02052010.htm">133.5 million people. At the time President Obama promised the American people that, thanks to his stimulus, <ahref="http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf">unemployment would never go higher than 8.2% and <ahref="http://blog.heritage.org/2009/06/09/morning-bell-the-obama-jobs-gap/">the U.S. economy would support 138.6 million jobs by December 2010.

At the one year mark <ahref="http://www.bls.gov/news.release/archives/empsit_02052010.htm">unemployment is now 9.7%, <ahref="http://blog.heritage.org/2009/11/09/obamas-failed-stimulus-in-pictures-102-unemployment/">after rising above 10%, and the U.S. economy has lost 4 million jobs leaving the White House 9 million jobs short of the 138.6 million they promised to deliver by December of this year. By any objective measure President Obama’s $862 billion stimulus must be judged as a complete failure. Undeterred by these facts, the White House Council of Economic Advisers (CEA) published a <ahref="http://www.whitehouse.gov/sites/default/files/microsites/100113-economic-impact-arra-second-quarterly-report.pdf">report on the economic effects of the Administration’s economic stimulus plan claiming that there are 2 million more jobs in the economy than there otherwise would have been had the President’s stimulus not become law. But as Heritage Policy Analyst Karen Campbell has <ahref="http://www.heritage.org/Research/Economy/wm2799.cfm">documented, the CEA report relies on completely arbitrary benchmark projections that fail even basic standards of economic analysis. If the Administration had used other economic forecasts, the results would not have been as impressive – in fact, <ahref="http://www.heritage.org/Research/Economy/wm2799.cfm">some would have shown that the economy lost more jobs after the stimulus package was implemented.<spanid="more-26492"></span>

Armed with their CEA propaganda, President Obama is dispatching his Cabinet officials to <ahref="http://thehill.com/homenews/administration/81067-dems-try-to-avoid-overselling-jobs-bill-">35 communities across the country this week to try and convince the American people that his Failed Stimulus is in fact, a success. The President faces an uphill climb: according to the latest poll from <ahref="http://www.cbsnews.com/htdocs/pdf/poll_Obama_Congress_021110.pdf">The New York Times only 6% of Americans believe the stimulus has created jobs and 48% of Americans believe it never will.

One might hope that after $862 billion in failed stimulus spending, that liberals in Washington would take a break from spending other people’s borrowed money. No such luck. The House has already passed a new $154 billion stimulus package and Majority Leader Harry Reid (D-NV) is pushing a$15 billion plan in the Senate, <ahref="http://www.csmonitor.com/USA/2010/0211/Harry-Reid-scales-back-Senate-jobs-bill-reflecting-voter-anger">$13 billion of which is a temporary Social Security payroll tax exemption for new hires. This temporary tax break will <ahref="http://blog.heritage.org/2010/02/15/payroll-tax-holiday-misguided-reform-to-social-security-financing/">further increase our Social Security system’s existing deficits, <ahref="http://news.yahoo.com/s/ap/20100211/ap_on_bi_ge/us_what_jobs/print">will cost $1 million per only eight temporary new jobs according to the Congressional Budget Office, and will do nothing to decrease long-term unemployment.

While this would be President Obama’s second stimulus, it would actually be this recession’s third. In February 2008, President George Bush passed an equally useless mix of <ahref="../2008/01/08/morning-bell-18/">temporary tax cuts and mortgage grantees for Fannie Mae and Freddie Mac totaling <ahref="http://www.bloomberg.com/apps/news?pid=20601087&sid=aMljy8GxkKoc&refer=home">$16 8 billion. That stimulus did nothing to stop the recession and neither will President Obama’s second stimulus. Our nation simply can’t afford wasting hundreds of billions of dollars and deficit Keynesian stimulus spending every February. Now is a good time to stop.

Quick Hits:

• In a secret joint operation by Pakistani and American intelligence forces, <ahref=" http://www.nytimes.com/2010/02/16/world/asia/16intel.html?ref=todayspaper">the Taliban’s top military commander was captured several days ago in Karachi, Pakistan.
• As fighting in Marja carried into its third day, the number of Taliban fighters in the area has <ahref="http://www.nytimes.com/2010/02/16/world/asia/16afghan.html?ref=todayspaper">dropped by about half.
• Opposition to a <ahref="http://www.nytimes.com/2010/02/16/world/europe/16germany.html?ref=todayspaper">European Union bailout of Greece, where the retirement age is 63, is growing among Germans, who can’t retire until age 67.
• Latinos who backed President Barack Obama are <ahref=" http://www.sacbee.com/topstories/story/2539376.html">frustrated by the*lack of amnesty for illegal aliens.
• According to the latest <ahref="http://www.rasmussenreports.com/public_content/politics/general_politics/february_2010/59_favor_letting_states_opt_out_of_federal_program s">Rasmussen poll, 59% of likely voters say states should have the right to opt out of federal government programs they don’t agree with.

http://blog.heritage.org/2010/02/16/…-a-second-one/

On 02.16.10 08:03 AM posted by Matt Mayer

<ahref="http://blog.heritage.org/wp-content/uploads/DHS.png"></p>Looks like Mother Nature didn’t get the message about the budget crises in most of the states. So, she twice dumped a bunch of snow on the Midwest and East that required states, cities, and counties to plow – in between frantic calls to the Federal Emergency Management Agency (FEMA) for reinforcements.

The calls prompted FEMA to fire-up its fleet of snowplows and dispatch its army of snow shovel crews. Not really. FEMA doesn’t have snowplows or snow shovel crews, so why the frantic calls to Washington? Answer: FEMA has money and, when it declares a disaster, it pays for 75 percent or more of the costs. So, the calls to FEMA are really about getting taxpayers outside of the impacted states to subsidize the snow removal costs in the Midwest and East.

Unfortunately, this cost-shifting move by governors isn’t new. <ahref="http://www.heritage.org/Research/HomelandSecurity/bg2323.cfm">In 1993, FEMA started issuing a greater number of declarations for natural disasters that historically had been handled and paid for entirely by the states. Like most things, we have federalized routine natural disasters in America so that Washington subsidizes virtually every flood, fire, or tornado.<spanid="more-26502"></span>

From 1981 to 1993, FEMA issued on average a meager 43 declarations per year. From 1993 to 2001, President Bill Clinton approved on average 89 FEMA declarations per year, including the record of 157 in his reelection year. To prove the bipartisanship aspect of FEMA, President George W. Bush approved on average 130 declarations per year. President Obama started strong with 108 FEMA declarations – in a year devoid of hurricanes or earthquakes.

Since 1953, FEMA has issued 294 declarations due to winter storms. Of those, 37 were issued from 1953 to 1992, roughly one winter storm declaration per year. In contrast, the other 257, or 87 percent, occurred over the last 17 years – 15 winter storm declarations annually. Clinton’s FEMA accounted for 108 of those declarations, Bush’s FEMA 128, and Obama’s FEMA has 21 so far, putting him on track for roughly 160 such declarations should he serve two terms. The problem is the money isn’t free.

The other problem is that a November rule change may prevent states from pushing their snow removal costs to FEMA. The rule for an emergency declaration requires the snowfalls to occur within a 48-hour period. The two storms that hit the Midwest and East this month were separated by about 72 hours, which means each snowstorm would have to be significant enough on its own to qualify for federal aid. In most states, they don’t. In fact, as of today, only New Jersey has qualified for a FEMA declaration. So, now the pressure will build from governors and their congressional delegations to get FEMA to waive the new rule. With all of the snow-covered states already facing enormous budget deficits, there is no money to pay for the snow removal.

With the <ahref="http://www.heritage.org/Research/HomelandDefense/bg2032.cfm">federalization of natural disasters, states have learned they don’t have to plan or set aside funds. FEMA will pay. This mentality is what has us in the fiscal mess we are in. It is high time this federalization movement comes to a halt and for states to plan and
budget for their known costs.

http://blog.heritage.org/2010/02/16/…-pay-for-fema/

On 02.16.10 09:22 AM posted by Brandon Stewart

</p>A <ahref="http://www.youtube.com/watch?v=MBiutQznDCA">video from a David Horowitz retreat several months back<ahref="http://www.coloradopols.com/diary/11581/pat-caddell-environmentalists-purpose-is-to-deconstruct-capitalism"> has already cost one person a job. The video shows <ahref="http://en.wikipedia.org/wiki/Patrick_Caddell">Patrick Caddell, former pollster to Jimmy Carter, lament that “the whole idea of the*environmental*movement isn’t to clean up the*environment” but rather to “basically deconstruct capitalism. They are against capitalism.” A little later Caddell continues,* “I happen to believe this country needs a good dose of what it believes in: real democracy and real free enterprise.”

While*embarrassing*to those on the left who promote the sort of policies Caddell refers to, the remark comes as no surprise to The Heritage Foundation—our*<ahref="http://www.heritage.org/research/energyandenvironment/">extensive research on the subject has long demonstrated that*succumbing*to the environmental lobby has often come <ahref="http://www.heritage.org/Research/Economy/bg2365.cfm">at <ahref="http://www.heritage.org/Research/EnergyandEnvironment/wm2766.cfm">the <ahref="http://www.heritage.org/Research/EnergyandEnvironment/wm2795.cfm">expense of jobs and free trade.

http://blog.heritage.org/2010/02/16/…le-capitalism/

On 02.15.10 12:00 PM posted by Allie Winegar Duzett

While the nation suffers an unemployment rate of nearly 10 percent, Barack Obama spent last week talking about job creation with “civil rights” leaders — despite the fact that President Obama’s last job creation ideas haven’t even been properly analyzed, let alone proven to work.

The New York Times reports that President Obama met with Benjamin T. Jealous of the NAACP, Marc H. Morial of the National Urban League, and Reverend Al Sharpton on Wednesday to discuss “how the economic crisis was affecting all manner of poor people.” According to the article, the vast majority of the meeting was spent discussing “how to get Republican leaders to support Mr. Obama’s jobs proposals.”

This is mildly hilarious, considering that on February 9th, President Obama “gave his strongest signal yet that he is willing to compromise on key priorities,” according to Reuters’ report of his Tuesday solo news conference. Yes, on Tuesday, Mr. Obama said he was willing to compromise with Republicans, and on Wednesday, he spent the day trying to figure out how to avoid compromise.

But the most disturbing part of the President’s meeting isn’t merely his lack of desire to truly compromise — the disturbing part is his arrogant assumption that his “jobs proposals” are ready for serious consideration. This is especially true considering the fact that, as the Heritage Foundation’s Dr. J.D. Foster pointed out, President Obama “explicitly” admitted the “failure [of] last year’s $862 billion stimulus program” during this year’s State of the Union address.

As the Heritage Foundation recently reported, there is still no proof that President Obama’s first stimulus bill worked. The study on last year’s stimulus package conducted by the White House Council of Economic Advisors (CEA) “fails basic standards of economic analysis,” according to Heritage expert Dr. Karen Campbell. The Heritage report, titled “Did the Stimulus Create Jobs? White House Economic Report Is Unclear,” clarifies the many logical problems involved with the studies that “prove” that the President’s last proposals worked. As Dr. Campbell said, “the American people deserve to have a true economic analysis done.”

Indeed, President Obama hasn’t even ordered a true economic analysis to be done on the results of his last “proposal”—the expensive economic “stimulus” he argued would create jobs.

Before he bothers focusing on how to gain Republican support to ram through even more expensive legislation, the President might want to take a closer look at the results of his last jobs plan. It would be a travesty if he let his arrogance and the support of “civil rights” leaders take the place of legitimate economic analysis in the quest to find a solution to America’s current economic crisis.

Allie Winegar Duzett currently is a member of the Young Leaders Program at the Heritage Foundation. For more information on interning at Heritage, please visit: http://www.heritage.org/about/departments/ylp.cfm

http://blog.heritage.org/2010/02/15/…-on-first-one/

On 02.15.10 06:00 AM posted by Julia Shaw

This season’s snow falls and Snowpocalypse presents a great opportunity to remember our president who also suffered through the cold to save the Republic.

Happy William Henry Harrison Day! No wait. That is not right. <ahref="http://millercenter.org/academic/americanpresident/harrison/essays/biography/1">Failing to wear a coat in cold weather is not the same as <ahref="http://www.heritage.org/Press/Events/ev061005a.cfm">defeating the British during a blizzard.

<ahref="http://www.heritage.org/Research/PoliticalPhilosophy/wm426.cfm">The third Monday in February has come to be known—wrongly—as President’s Day. But, this is not a day to celebrate every president in our Nation’s history: like one who served only a month in office. This is the day that we celebrate the man who led America to victory in the War for Independence, who was instrumental in the creation of our Constitution, and whose character forever shaped the executive branch. We celebrate George Washington. That’s why it’s Washington’s Birthday; not President’s day.

What makes George Washington a great president, worthy of such celebration, and example to all other presidents? In short, he was committed to the principles of the American Founding. <ahref="http://westillholdthesetruths.org/downloads/Intro.pdf">Liberty, Natural Rights, Equality, Religious Liberty, Economic Opportunity, the Rule of Law, Constitutionalism, Self-government, National Independence: these are the truths that George Washington held.<spanid="more-26470"></span>

Matthew Spalding, in his latest book <ahref="http://westillholdthesetruths.org/">We Still Hold These Truths, explains each of these first principles in depth and often points to Washington as an exemplar practitioner. For instance, Spalding points to an important series of letters to different religious congregations as an example Washington’s commitment to the principle of religious liberty. <ahref="http://teachingamericanhistory.org/library/index.asp?document=21">In a letter to a congregation of Jewish people, one of the most persecuted religious minorities in all history, Washington explains:

The citizens of the United States of America have a right to applaud themselves for having given to mankind examples of an enlarged and liberal policy—a policy worthy of imitation. All possess alike liberty of conscience and immunities of citizenship. It is now no more that toleration is spoken of as if it were the indulgence of one class of people that another enjoyed the exercise of their inherent natural rights, for, happily, the Government of the United States, which gives to bigotry no sanction, to persecution no assistance, requires only that they who live under its protection should demean themselves as good citizens in giving it on all occasions their effectual support.

Washington understood that citizenship did not require professing particular religious doctrines. Nor does the possession of rights depend upon one’s membership in a certain race or social class.

Not all presidents are George Washington. But all presidents—and all Americans—can and should dedicate themselves to preserving American’s First Principles.

Quick Hits:

• American, Afghan and British troops <ahref="http://www.nytimes.com/2010/02/14/world/asia/14afghan.html?hp">seized crucial positions across the Taliban stronghold of Marja this weekend.
• The scientist at the center of the Climategate emails, admitted to the BBC yesterday that there has been <ahref="http://www.dailymail.co.uk/news/article-1250872/Climategate-U-turn-Astonishment-scientist-centre-global-warming-email-row-admits-data-organised.html">no ‘statistically significant’ warming in the past 15 years.
• The IPCC <ahref=" http://www.reuters.com/article/idUSTRE61C1V420100213">admitted this weekend that their 2007 report overstated how much of the Netherlands is below sea level.
• According to the latets CBS News-New York Times poll, <ahref="http://news.yahoo.com/s/bloomberg/20100212/pl_bloomberg/aesowriv31_g">just 8 percent of Americans want the members of Congress re-elected.
• Thanks to President Barack Obama’s ambitious health care, financial, and energy policy agenda, a <ahref="http://www.opensecrets.org/news/2010/02/federal-lobbying-soars-in-2009.html">record $3.47 billion was spent on federal lobbyists this year.

http://blog.heritage.org/2010/02/15/…is-countrymen/

On 02.15.10 07:45 AM posted by Nick Loris

The Drudge Report linked to a number of articles updating the public on Climategate including a number of concessions from Phil Jones, director of the Climatic Research Unit (CRU) at the University of East Anglia. In an i<ahref="http://news.bbc.co.uk/2/hi/science/nature/8511670.stm">nterview with BBC Jones admitted that there was no statistically significant rise in temperature in the past fifteen years, that the Medieval Warming Period was as warm or warmer than today and that he had trouble keeping track of the information. In fact, “Colleagues have expressed concern that the reason he has refused Freedom of Information requests for the data is that he has lost some of the crucial papers.”

While these are all undoubtedly important revelations, this one is an answer that should grab Congress’s attention. BBC <ahref="http://news.bbc.co.uk/2/hi/science/nature/8511670.stm">asked, “When scientists say “the debate on climate change is over”, what exactly do they mean – and what don’t they mean?” Jones <ahref="http://news.bbc.co.uk/2/hi/science/nature/8511670.stm">answered,

It would be supposition on my behalf to know whether all scientists who say the debate is over are saying that for the same reason. I don’t believe the vast majority of climate scientists think this. This is not my view. There is still much that needs to be undertaken to reduce uncertainties, not just for the future, but for the instrumental (and especially the palaeoclimatic) past as well.”

<spanid="more-26485"></span>

If the vast majority of climatologists do not believe the debate on climate change is over, why do our politicians pushing for cap and trade and a transition to a “clean energy economy” repeatedly assert that the science is settled? Because the Intergovernmental Panel on Climate Change said so and <ahref="http://www.dailyexpress.co.uk/posts/view/158214">told us that a warming planet was “unequivocal.”

One of the additional benefits of Climategate is that it’s bringing dissenting science from the backburner to the front. The UK’s Times <ahref="http://www.timesonline.co.uk/tol/news/environment/article7026317.ece">highlights the work of climatologist John Christy, a former lead author on the IPCC, who studied the upward biases in weather stations. Christy <ahref="http://www.timesonline.co.uk/tol/news/environment/article7026317.ece">said, “The popular data sets show a lot of warming but the apparent temperature rise was actually caused by local factors affecting the weather stations, such as land development.”

Anthony Watts, creator of the website <ahref="http://surfacestations.org/">SufaceStations.org and blogger at <ahref="http://wattsupwiththat.com/">wattsupwiththat.com does similar work in the United States. <ahref="http://surfacestations.org/">SufaceStations.org is a project that monitors the quality of data at America’s 1,221 weather stations. Once a believer that manmade carbon dioxide had a significant effect on the earth’s atmosphere, Watts’ change of heart is largely based on the lack of credible science.

Watts is widely known in the climate change science community for visiting weather stations across the country. He found that several biases in the location of many of the temperature reading devices. Many are on unnatural surface temperatures: on cinder, asphalt, wood chips, and concrete. They lay on top or roofs or on airport runways. Other spots for stations included spots next to an incinerator, waste management facilities (where it’s much warmer) and outside of an air conditioning unit right next to where the warm air is released. One station in Baltimore had readings of over 100 degrees F when no other nearby station did. That station has been shut down but the climate records remain. His conclusion is that most of the weather stations have an upwards bias of 1 degree Celsius and in many cases, it’s 2 degrees C.

Kevin Trenberth, the author reserved for the observed temperature changes chapter in the IPCC report <ahref="http://www.timesonline.co.uk/tol/news/environment/article7026317.ece">acknowledged these biases but also noted other physical changes such as rising sea levels and ice cap losses as other evidence for global warming.

The UK will go forth conducting an independent review of the Climategate scandal. One member of the independent panel already resigned after skeptics questioned his impartiality. Given the importance of this review, his resignation is admirable; let’s hope the six-member panel of investigators remains impartial.

http://blog.heritage.org/2010/02/15/…e-concessions/

On 02.15.10 08:00 AM posted by Conn Carroll

</p>In the video to the right, BBC’s Andrew Neil grills Chief Scientist at the Department for the Environment, Professor Robert Watson on the many many mistakes in the <ahref="http://www.ipcc.ch/">Intergovernmental Panel on Climate Change’s <ahref="http://www.ipcc.ch/publications_and_data/publications_and_data_reports.htm#1">2007 report.

As the Wall Street Journal has documented, in just the past year <ahref="http://online.wsj.com/article/SB10001424052748704182004575055703697897576.html"> the IPCC’s 2007 report has been exposed for overstating the science on glacier loss in the Himalayas, crop loss in Africa, Amazon rain forest depletion and damage from weather catastrophes. No wonder the government of India it says they <ahref="http://www.telegraph.co.uk/earth/environment/climatechange/7157590/India-forms-new-climate-change-body.html">“cannot rely” on the IPCC and has established their own body to monitor the effects of global warming.

http://blog.heritage.org/2010/02/15/…g-credibility/

On 02.15.10 10:00 AM posted by John Ligon

<ahref="http://blog.heritage.org/wp-content/uploads/piggybank.jpg"></p>Despite efforts by Senator Baucus (D-MT) and Senator Grassley (R-IA) to draft a broad and bi-partisan federal legislation as part of another round of federal “stimulus” <ahref="http://www.nytimes.com/2010/02/12/us/politics/12cong.html?hp">Senator Reid (D-NV) has now derailed the endeavor.* After eliminating most of the tax cuts in the bi-partisan effort put forward by Senators Baucus and Grassley, one of the few “tax cuts” Senator Reid has retained is the payroll tax holiday plan.

What is the Payroll Tax Holiday? Sec. 101 of <ahref="http://finance.senate.gov/sitepages/leg/LEG%202010/021010%20HIREACT%20draft.pdf">the Hiring Incentives to Restore Employment (HIRE) Act outlines a suspension during 2010 on the employer share of the Social Security OASDI (Old-Age, Survivors, and Disability Insurance) payroll tax.* The OASDI payroll tax is normally divided into an employer and an employee share, where each is responsible for 6.2 percent on total payroll (or wages earned for employees).* Sec. 101 only applies to qualified employers hiring a qualified individual from February 3, 2010 to December 31, 2010.* It largely excludes public sector organizations hiring workers, except for <ahref="http://finance.senate.gov/sitepages/leg/LEG%202010/021010%20HIREACT%20draft.pdf">“post-secondary educational institutions”.<spanid="more-26386"></span>

How Will This Impact Employers? As evidence by continuing unemployment trends during 2009 and now into 2010, it is clear that <ahref="http://www.cbo.gov/ftpdocs/89xx/doc8916/01-15-Econ_Stimulus.pdf">firms have suspended hiring workers – and in many instances fired current workers – because of the significant drop in demand for goods and services. **In the absence of real demand for these firms’ products, <ahref="http://www.cbo.gov/ftpdocs/110xx/doc11042/02-03-CaseyLetter.pdf">it is reasonable to assume most employers will not react strongly to this temporary incentive to hire. Participating in the payroll tax holiday program will reduce the cost of labor during the eligible time frame, <ahref="http://finance.senate.gov/sitepages/leg/LEG%202010/021010%20HIREACT%20draft.pdf">although temporarily and not by a large share.

How Is It Financed? The payroll tax holiday program will be financed with money from general revenues.* Specifically, those funds otherwise used from the Treasury—amounting to lost revenue in the Federal Social Security OASDI Trust Fund—will be “replenished” with equal amounts from the federal general revenue account.

Implications to Social Security.* <atitle="http://www.heritage.org/Research/SocialSecurity/wm2727.cfm" href="http://www.heritage.org/Research/SocialSecurity/wm2727.cfm">The Social Security system is effectively drained of real money.* In 2009, Social Security ran on a deficit of $4.3 billion, and by 2016, these deficits will continue to grow permanently. <atitle="http://www.heritage.org/Research/SocialSecurity/wm2632.cfm" href="http://www.heritage.org/Research/SocialSecurity/wm2632.cfm">In 2020, the annual deficit is project to reach $68.5 billion. Financing deficits in one program with deficits from another – <atitle="http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020100981.html" href="http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020100981.html">the White House has already released its $1.57 trillion federal deficit-spending agenda – means that the real cost of the proposed $13 billion of this hiring incentive plan will be much higher and permanently add to growing Social Security debt.* Moreover, any shift towards a partial general revenue financing arrangement of Social Security opens the way to a <atitle="http://www.heritage.org/Research/SocialSecurity/wm2632.cfm" href="http://www.heritage.org/Research/SocialSecurity/wm2632.cfm">back-door tax increase that everyone will incur down the road.

Moving Forward.* At this nexus, Congress should concertedly reconsider passing a “jobs stimulus” plan that will 1) potentially create a net decline in employment, 2) fail to provide incentives for productive and permanent employment; and 3) contribute significantly to the on-going deficits in the Social Security system—especially if the financing involves deficit spending from general revenues.* A more promising message to employers of all sizes would be if Congress commits to reducing burdensome regulation, taxes, and federal government spending that all contribute to the crippling uncertainty of planning and operating a business.

http://blog.heritage.org/2010/02/15/…ity-financing/