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Club for Growth Blog

Topic: Cap and Trade

Solve the debt-limit problem and promote growth?

Posted on Jul. 21, 11 | 06:22 PM by David Keating | Topic: Cap and Trade
Larry Kudlow makes a good point in his column this week:

So is a deal possible? I still think it is. The high end of the budget cuts from the White House and the House GOP possibly could be coupled with a tax deal on repatriation and even future tax reform. After all, economic-growth measures should be crucial in this sputtering economy.

Reducing the corporate-tax wedge and reducing the budget-spending wedge, to quote my friend Arthur Laffer, would provide a tonic for the economy. In other words, a debt deal can still work and promote growth.

And Louis Woodhill warns in his new  Forbes column about the failure of the UK's take hike in their budget deal, noting that "the tax increases derailed England’s economic recovery."  Excerpt:

Unfortunately for fans of tax hikes, a government can’t pay its bills with tax rates.  This requires tax revenues—real tax revenues.  In addition to the 56% increase in the capital gains tax rate, the U.K.’s “Emergency Budget” also raised their VAT by 14%, from 17.5% to 20%.  So, how successful were all of these the tax increases in increasing real government revenues?

U.K. government revenues in April and May 2011 were £80.7 billion, up 3.1% over the same two-month period in 2010.  Unfortunately, year-over-year CPI inflation was 4.5%. This means that real government revenues actually declined by 1.4%, despite all of the tax increases. 

Lesson:  Growth is key for jobs and for solving the budget deficit.  Growth generates revenue and cuts spending on programs like unemployment insurance and food stamps.  Tax hikes could make the debt problem tougher to solve and leave everyone poorer.
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An Optimistic View on the Debt Problem

Posted on Jun. 27, 11 | 05:41 PM by David Keating | Topic: Cap and Trade
Brian Wesbury and Robert Stein are out today with an optimistic view of solving the budget challenges ahead.  And they could well be right -- I certainly hope so.

Part of the solution is higher revenues, which they see rebounding even if tax rates are not increased.  This would add trim about 4% of GDP of the budget gap if revenues rebound to roughly 18.5% of GDP from growth.

They see the budget negotiations leading to a drop in discretionary spending of 1.5% of GDP.

So, still a budget gap of roughly 3% of GDP.

Excerpt:
Of course, that still leaves the long-term entitlement problem. But even there we can see the outlines of solutions looming in the distance. For Medicare and Medicaid, which are much bigger problems than Social Security, we think ultimately the forces of smaller government win. We do not know whether it will be in 2012, 2016, or 2020. But one of those elections is likely to result in a Republican in the White House with control of both the US Senate and House. And at that point, they can enact major reforms along the lines of some recent proposals to turn Medicare into premium support and turn Medicaid into block grants to the states.
 
Parliamentary rules will allow the GOP to enact these changes with only a simple majority in the Senate (with no chance for a Democratic filibuster). And to reverse these reforms, because it would make future budget deficits larger, Democrats would need 60 votes in the Senate!
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Chris Chocola Op-Ed argues for Balanced Budget Amendment

Posted on May. 02, 11 | 10:50 AM by Barney Keller | Topic: Cap and Trade
Balanced budget: A Sisyphean task
Constitutional amendment would ease the uphill fiscal struggle
By Chris Chocola
The Washington Times
 
Sisyphus, a king in Greek mythology, was punished by the gods by being forced to roll a boulder up a hill over and over again. No matter how high he got, the boulder would slip through his fingers and roll back to the bottom of the hill. Poor Sisyphus was doomed to keep repeating this task for eternity.
 
For decades, the American people have felt like Sisyphus, bearing the burden of a boulder that is ever-larger spending and debt. Poor Sisyphus could never make it up the hill because of the rules the gods had made for him. But what if the gods had changed the rules? What if they shrank the boulder? What if they allowed poor Sisyphus finally to push the boulder over the top?
 
In Washington, the politicians are like the gods who created the rules by which Sisyphus lived. Their rules make it impossible for Americans to get out from mountains of debt, just as Sisyphus could not cease pushing his boulder. Right now, the proposed solution to the growing debt burden on Americans is a one-time cut in federal spending and then a raising of the federal debt ceiling. That is equivalent to simply telling Sisyphus to "try harder this time."
 
A balanced-budget amendment to the Constitution (BBA) is the rule change Americans need. A BBA would cause the stock market to take off, open up credit, encourage investment and restore the American economy to greatness. The Club for Growth supports the BBA proposed by Sen. Mike Lee of Utah and Rep. Joe Walsh of Illinois. Their BBA caps spending at 18 percent of gross domestic product and requires supermajorities in both the House and the Senate in order to raise taxes, spending and the debt limit. It is, in short, the change we need that finally would allow Americans to end the cycle of spending and debt caused by a government that is simply too big.
 
A BBA to the Constitution has been embraced by the Senate but not by the House. We have a historic opportunity to change the spendthrift ways of Washington by rewriting the rule book, and organizations such as the Club for Growth intend to pressure Speaker John A. Boehner and the Republican leadership to embrace it.
 
If we were able to get two-thirds of the vote in both houses of Congress, the BBA easily could pick up enough momentum to be ratified by the states. The Republican Party controls the governorship and both houses of the state legislature in 22 states. Four more states have Republican governors with split legislatures. States like Kentucky and Missouri that are more conservative by nature add seven more to our total, giving the BBA 33 states - and enough momentum to inspire five more to make it happen, especially after the stock market takes off and Standard & Poor's upgrades our debt forecast once again. Like a heavy boulder rolling down a hill, it would be impossible to stop.
 
If someone changed the rules to help Sisyphus, he easily would get the boulder over the hill. If politicians change the rules by passing the BBA, it will be possible for us to cut spending and shrink the debt. Politicians Washington in rarely do the heavy lifting unless they are forced to do it. They need to be forced by the American people to embrace these new changes. Sisyphus never had standing to fight with the gods, but the beauty of American democracy is that there is little difference between the politicians and ordinary men.
 
Chris Chocola, a former Indiana congressman, is president of the Club for Growth.
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Former Club for Growth President and Senator Pat Toomey on Fox & Friends

Posted on Apr. 28, 11 | 09:08 AM by Barney Keller | Topic: Cap and Trade
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CQ: "Much of the credit for the strong showing went to the Club for Growth"

Posted on Apr. 25, 11 | 09:57 AM by Barney Keller | Topic: Cap and Trade
Today's CQ gives the Club for Growth credit for pushing spending federal spending cuts and the BBA:

Club Takes Notes On Budget Votes
CQ Weekly, 4/25/11
By Alan K. Ota, CQ Staff

Just before the spring recess, a faction of House Republicans came close to victory on a fiscal 2012 budget pushing spending cuts even deeper than the resolution offered by Budget Committee Chairman Paul D. Ryan , R-Wis. The alternative budget drafted by the Republican Study Committee nearly succeeded before party leaders worked the floor to switch enough votes to defeat the plan, 119-136. (Most Democrats voted “present.”)
 
Much of the credit for the strong showing went to the Club for Growth, a group of anti-tax, small-government evangelists who sometimes back primary challenges to Republicans the group doesn’t think are conservative enough. Club president Chris Chocola had staged a blitz in favor of the plan offered by the most conservative wing of the House GOP.
 
Now the club is prodding Republicans to back an ambitious balanced-budget constitutional amendment cosponsored by the group’s former president, Sen. Patrick J. Toomey of Pennsylvania, and his 46 Senate GOP colleagues, that also would cap spending at 18 percent of gross domestic product.
 
...
 
Chocola has not decided whether to punish House Republicans if they spurn Toomey’s proposal in favor of a weaker alternative, which has 219 cosponsors. But he makes it clear his group won’t brook excuses in counting its key votes for this year. “There are no asterisks on our score card,” Chocola said.
 
Many Republican incumbents fear the club’s clout in primaries, says former Republican Rep. Bill Frenzel of Minnesota, a guest scholar at the Brookings Institution. “The safer your district,” Frenzel says, “the more trouble you are in.”


 
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Club for Growth Hails Senate Repeal Effort

Posted on Feb. 02, 11 | 06:31 PM by Michael Connolly | Topic: Cap and Trade
WASHINGTON – The Club for Growth today commended the 47 Senators who voted for Senate Minority Leader Mitch McConnell’s ObamaCare repeal amendment, and urged future votes on repeal legislation throughout the 112th Congress.

“Today’s vote reconfirms that the fight to repeal ObamaCare continues to gain strength,” said Club President Chris Chocola.  “The majority of Americans want it repealed, the majority of states are suing to overturn in, the House of Representatives passed a repeal bill, and now the Senate has come within four votes of a majority in support of repeal.  This issue isn’t going away -- too many jobs, too many lives, too much freedom is at stake.  The fight for health care freedom will not end until it is it won.”

The Club for Growth launched its Repeal It project last January, before ObamaCare was even passed.  Since then, more than 400 federal lawmakers and candidates have signed a pledge to repeal the federal health care takeover.

“The Club for Growth commends Senator Jim DeMint for first introducing this legislation, and Senator McConnell for forcing today’s vote, and we encourage all Senators to continue bringing repeal legislation to the floor until it is passed into law,” Chocola added.

###
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Romney’s Big(ger) Problem

Posted on Feb. 01, 11 | 12:22 PM by Michael Connolly | Topic: Cap and Trade
Jen Rubin at Right Turn is right about the inadequacy, thus far, of Mitt Romney’s defense/explanation/answer about RomneyCare in Massachusetts.  His tack, repeated this morning on ABC, has been a legalistic defense of states’ rights:

“I’m not apologizing for it, I’m indicating that we went in one direction and there are other possible directions. I’d like to see states pursue their own ideas, see which ideas work best,” Romney told [George Stephanopoulos].
 
As Rubin notes, this probably isn’t good enough.  But Romney’s problem may be worse than that.

Remember that aside from health care, Romney’s biggest political vulnerability is the sneaking suspicion many conservatives have that Romney is a bit too slippery.  His opponents in 2008 were able to show Romney’s “evolving” positions on everything from immigration to campaign finance reform to abortion.

In a political moment craving authenticity, and already carrying a bit of a reputation  for flip-flops (however deserved), Romney may face even greater risks disavowing RomneyCare than in embracing it.  Insufficient as Romney's current health care answer is, the current answer may be as good as it gets.

UPDATE: Another take is this, from Ben Smith at Politico, who thinks the legalistic nature of Romney's argument is actually a strength:

Romney's argument is now much stronger. Because the main objection to ObamaCare, as its critics call it, is no longer a matter of policy nuance. Now critics primarily make the case that it's an unconstitutional expansion of specifically federal power. And on that turf, the similar structure of the plans doesn't matter. Romney enacted his at a state level, and states have -- conservatives argue -- more power to regulate the insurance industry, as they do with car insurance. 
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McCotter's Analogy of the Tax Compromise

Posted on Dec. 20, 10 | 03:06 PM by Andrew Roth | Topic: Cap and Trade
Alluding to the new GOP majority in the House next year, Rep. Thad McCotter offers a great analogy for why he opposed the tax compromise:
 
"Imagine prior to the Battle of the Little Big Horn, General Custer looking at his troops and saying, "We must strike now before there are more...of us."


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Coming to Theaters April 15 -- Atlas Shrugged

Posted on Dec. 13, 10 | 11:45 AM by David Keating | Topic: Cap and Trade
After decades of waiting, and incredible twists and turns, Atlas Shrugged will finally appear as a film April 15.  

There is an interesting Forbes article on the film and John Aglialoro, the Cybex CEO turned movie producer.  After he acquired the film rights 18 years ago, he spent millions on screen adaptations, but could not put together the right studio deal, so he decided to produce it.

If you want to learn more and follow it to the release day, you have a choice of an official Facebook Fan Page, excellent outsider blog, and the official movie website (not yet live).
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Chocola on The Kudlow Report

Posted on Dec. 10, 10 | 08:52 AM by Michael Connolly | Topic: Cap and Trade

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Cool It, the Movie

Posted on Nov. 22, 10 | 06:45 PM by David Keating | Topic: Cap and Trade
I've got to hand it to Bjorn Lomborg, author of the book “The Skeptical Environmentalist.”  He's done it again, bringing calm analysis to a politically charged subject in the new documentary film "Cool It," which went into wide release over the weekend.

While you likely won't agree with everything in the film, keep in mind its audience for how to spend hundreds of billions -- the European Union, not Congress.

No, what is truly amazing how it can make writers at newspapers like The New York Times and The Washington Post reflect on the facts about climate change and reconsider Al Gore's scary documentary, "An Inconvenient Truth."

By the second half, however, Ms. Timoner has found her footing, and the film really digs in. Debunking claims made by “An Inconvenient Truth” and presenting alternative strategies, “Cool It” finally blossoms into an engrossing, brain-tickling picture as many of Al Gore’s meticulously graphed assertions are systematically — and persuasively — refuted. (I was intrigued to hear Mr. Lomborg say, for instance, that the polar-bear population is more endangered by hunters than melting ice.)
      The New York Times Critics Pick Movie

"Cool It," in other words, is an attempt to rehabilitate Lomborg's image. But it also presents an alternative to solutions like cap-and-trade legislation. Several alternatives, in fact. If it's propaganda, it's surprisingly effective.

With the charismatic, articulate (and, yes, kind of hunky) Lomborg in front of the camera for much of the film - along with a parade of scientists who support his views - "Cool It" makes a convincing case that there are better things we can do than drive a Prius. Not that there's anything wrong with that, he says; it's just not going to solve much.
   The Washington Post

With its follow-the-money mind-set, the documentary works its way through problem and solution many times over, always in a brisk, no-nonsense way. By bringing in a diverse group of big thinkers to take part in a very animated, sometimes agitated, discussion, the filmmaker has succeeded in bringing what could have been a very dry mountain of data, theories and experimental research to vibrant life.

Timoner came to the project a skeptic herself, and that serves the film well. Though the charismatic Lomborg is very much the center of the storm, she lines up an impressive number of experts from the environmental and scientific research community to stand on either side of the divide. Nearly every assertion Lomborg makes is met by a devil's advocate — though the late Stephen Schneider, Nobel winner, MacArthur fellow and long a professor of environmental biology at Stanford University, carries much of that load. Still, there is little doubt from the beginning who will win the final round.
     The Los Angeles Times
 
The movie is a lot better than the trailer, and is worth seeing.  Be sure to invite your liberal friends who loved Al Gore's "An Inconvenient Truth."





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