I am not very happy right now and it goes way beyond the economy. We have had many years where the Republicans in charge in Washington forgot their Conservative roots. Regular increases in the size and cost of government; amnesty for illegal immigrants; earmarks for anything and everything; and government stepping into the free marketplace. We have increased our debt to China so much that not only will our children be paying it off but our grandchildren will probably be saddled with some of it.

www.heritage.org

Effect of the Lieberman-Warner Global Climate Change Legislation on States

by William W. Beach, Ben Lieberman, David Kreutzer, Ph.D. and Nick Loris
May 22, 2008
WebMemo #1930

The Senate's leading climate-change bill, while aiming to combat global warming by reducing carbon dioxide in the air, actually poses "extraordinary perils" for Americans and the economy, according to a new study from The Heritage Foundation.

The study, produced by Heritage's Center for Data Analysis (CDA), forecasts severe consequences—including crushing energy costs, millions of jobs lost and falling household income—if Congress enacts the so-called Lieberman-Warner bill.

What follows are 50 state-by-state breakouts of the impact the bill would have on jobs and the economy.

How New Hampshire Will Be Affected by the Lieberman-Warner Global Climate Change Legislation

by William W. Beach, Ben Lieberman, David Kreutzer, Ph.D. and Nick Loris
May 20, 2008
WebMemo #1930

Workers and families in the state of New Hampshire may be wondering how climate change legislation before Congress will affect their income, their jobs, and the cost of energy. Members of Congress are considering a number of bills designed to address climate change. Chief among them is S. 2191, America's Climate Security Act of 2007, introduced by Senators Joseph Lieberman (I-CT) and John Warner (R-VA). 1

The Lieberman–Warner legislation promises extraordinary perils for the American economy, should it become law, all for very little change in global temperature…perhaps even smaller than the .07 of a degree Celsius drop in temperature that many scientists expected from worldwide compliance with the Kyoto climate change accords. S. 2191 imposes strict upper limits on the emission of six greenhouse gases (GHG) with the primary emphasis on carbon dioxide (CO2). The mechanism for capping these emissions requires emitters to acquire federally created permits (called allowances) for each ton emitted.

Arbitrary restrictions predicated on multiple untested and undeveloped technologies will lead to severe restrictions on energy use and large increases in energy costs. In addition to the direct impact on consumers' budgets, these higher energy costs will spread through the economy, injecting unnecessary inefficiencies at virtually every stage of production and consumption.

Implementing S. 2191 will be very costly in New Hampshire, even given the most generous assumptions. Notable costs are listed below in Table 1:

Table 1: Estimated Economic Impact of S. 2191 in New Hampshire

Consumers will be hard hit. Table 2 shows the expected increases in retail energy prices (adjusted to 2006 dollars to eliminate the impact of inflation) in 2025 for New Hampshire. Between 2012, when the restrictions first apply, and 2025, the prices of electricity, natural gas, and gasoline could rise by nearly 20 percent nationally when compared to prices in a world without S. 2191.

Table 2: Changes in Household Energy Prices in New Hampshire Due to S. 2191

Note: The current annual cost of natural gas is based on consumption and prices as of 2006, the most recent data available. The annual cost of gasoline is based on the average price of regular unleaded in each state on May 20, 2008.

In addition to taking a bite out of consumers' pocketbooks, the high energy prices throw a monkey wrench into the production side of the economy. Contrary to the claims of an economic boost from "green" investment and "green-collar" job creation, S. 2191 reduces economic growth, gross domestic product (GDP), and employment.

[1]To learn more about the economic effects of the Lieberman-Warner legislation, see "The Economic Costs of the Lieberman-Warner Climate Change Legislation", CDA Report published on May 12, 2008. This Report is available at www.heritage.org. The authors gratefully acknowledge the work of Dr. Shanea Watkins in preparing the maps used in this briefing memo.

I have come across some stories regarding the 2007 Farm Bill that is due to be sent to President Bush this week. Notice this is a bill from 2007 that has just been passed by the U.S. House and Senate, although the versions are different and are being worked out in a conference committee this week.

The first story I came across is from Reuters (Bush will veto U.S. farm bill: USDA chief) and it only says:

U.S. Department of Agriculture Secretary Ed Schafer said on Thursday …"They have failed to present the administration with a good farm bill," Schafer told reporters. "The president will veto this bill." and goes on House and Senate negotiators agreed on a $285 billion farm bill on Wednesday that puts more money into public feeding programs and denies one crop subsidy program to the wealthiest Americans.

Many of the other news stories only highlight the fact that the President will veto the bill and how much of the debate focuses on overriding the veto. 

I had to do some serious research to find out what the farm bill is.

The videos below are from July 2007 when the bill was first being debated in congress.

This video is from October 2007 when Congress thought they would pass the bill.

In my research I found an old story (October 24, 2007) from NPR that was updated with a radio segment on April 30, 2007 (Battling Out the Farm Bill). The story and audio are supportive of the bill and the subsidies included in it. This story did provide some direction for my research by showing pro and con discussion on the major points included in the bill. It shows:

Crop Subsidies

In a Nutshell: The farm bill includes many programs that hand out payments to farmers. …

Supporters Say: Subsidies are necessary to ensure that American farmers can survive …

Critics Contend: Subsidies are an example of unnecessary pork-barrel spending …

Qualifying for Payments

In a Nutshell: Anyone who owns land can qualify for subsidies, whether they are farming the land themselves or renting it to others…

Supporters Say: The House bill represents a fair compromise…

Critics Contend: The House-passed farm bill is a continuing subsidy to big agricultural operations …

Conservation Programs

In a Nutshell: These programs encourage and assist farmers and ranchers to protect vulnerable land…

Supporters Say: Environmentalists argue that conservation payments are the best kind of farm subsidy…

Critics Contend: Some of these programs aren't well targeted, and don't deliver as many benefits as hoped…

There is much more involved with this bill. The next story I came across is from the Associated Press dated May 2, 2008 (Congress still struggling to finish farm bill By MARY CLARE JALONICK). This story states:

Negotiators reached a tentative agreement last week on how to pay for the bill, which would cost almost $300 billion… The bill's negotiators have tried to appease Bush in the last few days, agreeing on stricter limits for those government payments. That agreement would still allow growers who earn up to $950,000 annually in farm income to receive payments, far from the $200,000 annual income cap the Bush administration originally suggested…

Mary Clare Jalonick submitted another AP story on May 9^th titled Lawmakers finish farm bill as White House repeats opposition, that states:

Married couples with joint incomes of up to $1.5 million from their farm operation could still qualify for crop subsidies under… farm couples with incomes totaling $2.5 million… could also qualify.

The legislation would:

_ Increase the nutrition programs, including food stamps and emergency domestic food assistance, by more than $10 billion. It would also expand a program to provide fresh fruits and vegetables to schoolchildren;

_ Expand subsidies for certain crops, extend dairy programs and increase loan rates for sugar producers. It includes language which calls on the federal government to buy surplus sugar and sell it to ethanol producers, where it would be used in a mixture with corn;

_ Make small cuts to direct payments, which are distributed to some producers no matter how much they grow;

_ Cut a per-gallon ethanol tax credit that supports blending fuel with the corn-based additive from 51 cents to 45 cents in favor of more money for cellulosic ethanol, which is made from plant matter;

_ Add dollars for conservation programs designed to protect farmland;

_ Eliminate loopholes that now allow farmers to collect subsidies for multiple farm businesses;

_ Cut expanded food assistance for an international school lunch program that was passed in the House farm bill last year. While the House had included more than $800 million in permanent dollars for the McGovern-Dole program, the final bill includes less than $100 million;

_ Pay farmers for weather-related farm losses out of a $3.8 billion disaster assistance fund. Schafer on Thursday criticized the program, which he says questions the government's investments in existing crop insurance for farmers and discredits farm programs;

_ Give tax breaks to owners of race horses, a provision added by Senate Minority Leader Mitch McConnell, R-Ky. Animal rights groups criticized the provision, saying Congress shouldn't help the industry in the wake of a Kentucky Derby entrant collapsing and having to be euthanized last weekend.

There is another story from Reuters that you can research at Bush administration outlines farm bill priorities

One of the things that is difficult to find in this bill is the fact that subsidies for corn-based ethanol will decrease from 51¢ per gallon to 45¢ per gallon but subsidies for cellulosic ethanol are included for the first time at $1.00 per gallon to support the 2007 Energy Bill that is still being debated.

I feel that it is clear from the research I’ve done that this bill is overburdened with pork and should be open to more debate with a focus on true savings for the taxpayers.

I came across an AP story on Reuters titled “Families suffer as food prices jump: lawmakers” by Christopher Doering dated May 1, 2008. This story talks about how the soaring food prices have forced American families to cut back on their food purchases to stay within their budgets. This story says:

“"Everywhere you go food prices are higher and higher and higher," Sen. Charles Schumer said at what has been billed as the first Congressional hearing with House and Senate lawmakers to discuss the impact of high food prices.”

Senator Schumer, the NY Democrat in charge of the Joint Economic Committee goes on to say “When gas prices are high, families may decide to drive a little less or carpool or take the subway. When food prices are higher, families can't just decide to not feed their children”, which is mighty generous of him to notice.

This story goes on about how Congress is going to work at providing more funding to agriculture programs such as Food Stamps, but completely ignores the fact that they have created the situation that has caused food prices to increase. The article can be viewed and printed in PDF format here and on the internet here.

This article ties into another article from Reuters written by Missy Ryan and Tabassum Sakaria titled “Bush proposes $770 million for world food crisis” that is also dated May 1, 2008. This article covers President Bush’s call for Congress to spend an additional $770 million in U.S. food aid donations to “…stave off a food crisis threatening to envelope the developing world.”

The article says:

“Surging prices for wheat, rice and other staples, along with record-high fuel prices, have eaten into aid budgets in the United States, the world's largest food aid donor.

"I think more needs to be done. …" Bush told reporters …

…That will help "improve the ability of the developing world to feed itself," said Stephen McMillin, a top budget official.

…the funds would become available on October 1, and would bring overall support for global food security to $2.66 billion for 2009.

The announcement comes several weeks after Bush approved the release of 250,000 metric tons of wheat from an emergency crop trust…”

Once Again there is no talk about the fact that our President and Congress have created this situation. This second article can be viewed and printed in PDF format here and on the internet here.

There are, however two things that really stand-out in my mind about these two stories. First, the lawmakers are STARTING TO TAKE NOTICE and second, Our CONGRESS and PRESIDENT have created a humanitarian problem that reaches around the world. The question remains; WHEN will they notice that THEY are the ones that created this problem, all in the name of energy.

I came across the video from April 28, 2008 below and a report from Ernest Istook from April 29, 2008. For those of you who don’t know Ernest Istook is “recovering from serving 14 years in Congress” where he was a representative for Oklahoma’s 5^th Congressional District. (His report can be found at this link)

Ernest writes “It’s time for consumers to strike back against the real culprits behind rising gasoline and food prices” and I can’t agree more. But who deserves the blame? OPEC, Oil Company Executives, Commodities Speculators? NO!!! It is our very own United States Congress that deserves the blame, along with the Presidents of the last 3 – 4 decades.

Congress has led our government into disastrous decisions by being a patsy to radical environmentalists and prophets of doom. Presidents have done little to resist the direction Congress has taken us and politicians try to evade and shift the blame. Reversing the misguided attempts of Congress can and will lower gas prices, and food prices too. I remember taking Economics 101 and learning about Supply and Demand. They should have learned this too, but they refuse to follow this important principle of Economics. They have choked off the domestic supplies and forced us to rely on foreign oil.

Ernest writes “Politicians keep promising a plentiful supply of alternative energy, but that remains far in the future, and much of it will be more expensive than $4-per-gallon gasoline. Ponder this: How could you afford any fuel that needs government subsidies to compete with $120-a-barrel oil? Those will never be affordable to consumers.” That is pretty straight forward and to the point. There is no shortage of oil and gas reserves in the U.S. but they have been placed “off-limits” to us. That is why 60% of our oil is being imported and over 1 million jobs have been lost in oil and gas during the past 25 years. Do we have “Green-Collar” jobs to replace them? NO!!!

Congress called the Oil Company Executives to come before them and discuss record-high profits, with the hope to justify taxing them another $18 Billion on top of the $90 billion they already pay. Of course this extra “tax” would be given to other types of energy (see corn farmers) that are too expensive to operate profitably. Another problem is “Boutique” blends of fuels, the majority of which shift corn from the food chain to the fuel chain.

Watch the Video and Read the Report!

You will find it interesting and there is more information there than I have posted here.

I just came across a survey on FoxNews.com that says gasoline prices easily tops the list of economic woes facing families in the U.S. when people were asked how changes in the economy have affected peoples lives. (see the report here)

It shows that about 44% of the survey participants said paying for gasoline is a “serious problem” for them. This response was the most frequently cited economic concern across all income levels. It goes on to say that for households with income levels more than $75k per year the number was over 25% and for households with incomes less than $30k per year the number rose to 63%. I hope Washington is taking notice of this and what the American people are saying.

This survey shows good paying jobs was ranked at 29% and affordable health care came in at 28%, followed by paying the rent or mortgage at 19%.

Nearly 30% of the participants said they have put off or postponed needed health care services and almost a quarter said they skipped a treatment or recommended test. Nearly the same numbers have skipped getting a prescription filled. This is a sad state of affairs when the numbers are looking this way for the economic perceptions.

This survey of 2,003 adults was collected April 3 – 13, 2008 on behalf of the Kaiser Family Foundation, which conducts health research. The margin of error on this survey is plus or minus 3%.

This brings us to the question what is our government doing about the situation? The House of Representatives and the U.S. Senate have passed differing versions of an Energy Bill. This bill needs to go to a conference committee to iron out the differences, but we may be lucky that they are refusing to do meet over this because of the problems this bill would create.

The intent of this bill is to reduce and ultimately reverse the growth of carbon emissions from many sources, including gasoline-powered vehicles. This is done through provisions requiring higher Corporate Average Fuel Economy (CAFE) standards for cars and more biofuel content in retail gasoline. All of the mandates and programs are to be paid for through a series of tax increases, most of which fall on the producers of gasoline. The results of these mandates and programs will increase prices at the pump even more.

The requirement to increase the biofuel content in retail gasoline reduces the nation’s flexibility in the gasoline supply and adds to the production costs, primarily from the higher costs of producing ethanol and cellulosic alcohol.

The CAFE standards are included with the intent that if the nation’s automobile and truck fleet achieves the higher fuel efficiency targets demand for gasoline will fall, exerting a downward pressure on gas prices. However the pressure will only offset about 25% of the increased costs for the biofuel requirement contained in the bill. Some argue that the effect on prices will be greater but this fuel efficiency idea has been around for decades and the historical data only supports a modest effect on pricing. This historical evidence doesn’t include any upward pressures from mandates such as biofuel. Increasing the CAFE standards also requires reducing the size of vehicles, which reduces safety of the American people.

One of the most likely initiatives in the energy bill is the Price Controls contained in it. There is no environmental focus in this initiative and the House has adopted a stand-alone legislation that the Senate is considering. This program is to prevent “price gouging” or especially high prices well in excess of “market prices”. Many times over the past 100 years this well-meaning effort has been used with the unintended consequences of reduced supply and even higher prices through standard supply/demand economics. I don’t know how many of you remember the price controls of the 70’s in response to the Arab Oil Embargo. Many say this was the start of the “stagflation” that hit this country through much of that decade. We don’t want a repeat of this.

Then we get to the increased taxes. The bill has a number of changes to tax law that will affect the price of gasoline. These increases are (1) increased taxation of income derived from foreign oil and gas production; (2) Reduced deduction for domestically produced oil and natural gas production; and (3) changes in the amortization period for oil and gas exploration equipment, which raises oil company tax payments. The loss of tax credits is particularly dangerous to consumers ($13 – $19 billion over 10 years) because companies tend to recoup tax increases in the form of higher retail prices. This doesn’t even count the 51¢ per gallon subsidies for ethanol.

The tables below shows the estimated price effects of H.R. 6 on regular unleaded gasoline. The state averages only looks at our neighboring states..

Survey - Gas Prices Top Economic Fears.pdf    Paying More at the Pump 4-23-2008.pdf

More to follow…

The link below is from Ben Lieberman discussing the Energy Bill on the John Grambling Show on WABC Radio in New York City.

Ben discusses what has, or hasn’t happened with the differing versions of the Energy Bill that was passed by the Senate and the House of Representatives.

After listening you need to ask yourself if this version is something we really need.

Ben Lieberman on WABC radio

I have a lot more information on this energy bill and not very much of it is good. In fact I think this bill will be detrimental to the economy, the environment, and most importantly to our ability to save our money.

I have often said that we should open up importation of ethanol to meet our needs but now I am thinking this is only a short term solution.

It is ironic that we have presidential contenders that cry foul to the subsidies to oil companies and yet they willingly give subsidies to corn farmers, ethanol producers and ethanol distributors to the tune of 51 cents per gallon. Subsidies to something that is worse for the country and environment than gasoline. Go figure.

In fact the video below is Ben Lieberman talking about some of the other half-truths that came out of the Pennsylvania campaign and debate last week. These are the important things to remember come November.