Thompson Times August Newsletter (2010)
Debt, Taxes and Fewer Jobs…
The President’s annual mid-year update from the Office of Management and Budget in July contained new information on the debt and the deficit and none of it was encouraging.
In 2010, the budget deficit is expected to set a record at $1.471 trillion or ten percent of Gross Domestic Product (GDP). Over the next ten years the Obama budget plan would run up a cumulative deficit of $8.474 trillion, and the nation’s debt would reach $18.5 trillion in 2020, up from $5.8 trillion at the end of 2008.
Just two quick definitions for you, the deficit is the difference between the money the government takes in and the amount it spends each year. It only applies to a single fiscal year.
The debt is the accumulated deficits and that number gets added together from past years. The current national debt surpassed 13 trillion dollars in June and means each American taxpayer owes $118,000.—if we had to pay backs that debt all at once.
Spending, deficits and debt have exploded since the Democrats took control of Congress and the White House. Previous administrations must take some of the blame and the recession would have caused a large deficit regardless of who was President. But the spending has continued unabated to the point that the 111th Congress is the most spendthrift in a century outside of World Wars I and II.
The Democrats have refused to pass a budget this year. The last week in July they passed the Transportation, Housing and Urban Development funding bills, one of the few the House has worked on. That bill has a price tag of $67.4 billion. The same bill in fiscal year 2008 was $48.8 billion. That is a 38 percent increase over the last three years. The out-of-control spending continues despite my “no” vote on the bill.
The Democrat’s next step is to put in place the largest tax increase in history—more than $200 billion next year alone and $3.8 trillion over the next ten years.
This huge tax increase comes through inaction by the Democrat majority that allows the 2001 and 2003 tax cuts to expire and the new rates to go into effect in 2011. You will hear that the taxes are only on the rich and they should be paying more. But let me give you an example of where these taxes might affect you.
The child tax credit will be cut in half from $1,000 to $500. The change will limit itemized deductions such as home mortgage interest, state and local taxes, and charitable contributions. The so-called death tax is currently not in effect but will come back at rates as high as 55 percent.
Unless changes are made the higher income taxes will look like this:
- The 10 percent tax bracket goes to 15 percent
- The 25 percent tax bracket goes to 28 percent
- The 28 percent tax bracket goes to 31 percent
- The 33 percent tax bracket goes to 36 percent
- The 35 percent tax bracket goes to 39.6 percent
The Alternative Minimum Tax will ensnare 15 million taxpayers up from 4 million in 2009. Some 35 million married couples will pay an average of $595 in higher taxes next year due to a reinstatement of the marriage penalty.
The majority of these taxes will fall on hard-working entrepreneurs across the country. In fact, the Congressional Joint Committee on Taxation confirms that 50 percent of small business income in America will face higher taxes.
Let me put that in perspective for you. Small businesses create most of the nation’s new jobs, employ about half of the private sector work force, and provide half of the nation’s nonfarm, private real gross domestic product.
Small business owner confidence has slipped to its lowest level in seven years, because few small-business owners expect revenues, cash flow, capital spending and hiring to increase over the next year, according to a survey by Wells Fargo known as the bank’s small business index. The Associated Press survey of leading economists the end of July showed they foresee weaker growth and higher unemployment.
The last thing we need to do in this atmosphere with a still recovering economy is to raise taxes on our small business owners. When their confidence is at a low point, they don’t expand, create or hire. That means even fewer jobs.
Apparently that message is lost on the Democratic majority.
The Facts of Fracking Marcellus Shale:
The Marcellus Shale describes a natural gas play in Pennsylvania that has created jobs and economic growth. It is one of the largest deposits of natural gas in the world and much of it is located in my district.
However, the play is deep down and requires a process called “fracking” in which water, sand and approved chemicals are pressured into the play to “fracture” the shale to release the gas.
It is this process that has come under criticism and has been the subject of a great deal of inaccurate information both in the media and in a so-called documentary called “Gasland.”
Fracking has been used for a hundred years, hydro-fracking for 60 years. The safety is documented with zero confirmed cases of groundwater contamination in one million applications over that 60 years.
The director of the Pennsylvania Department of Environmental Protection’s Bureau of Oil and Gas Management has said he has never seen an impact to fresh groundwater directly from fracking.
Another piece of incorrect information is that no one knows what goes into fracking fluid. First of all, more than 99.5 percent of the fluid is sand and water. For the remainder, Pennsylvania law requires companies to disclose all chemicals used in the fracking process, just not the specific formula. A complete list of those chemicals is available on the PA DEP website. They include materials that help deliver the water down the wellbore and position the sand in the tiny fractures created in the formation. One of the more prominent substances is guar gum most commonly used as an emulsifier in ice cream.
There are contentions that fracking is not well regulated. To the contrary, eight federal and eleven Pennsylvania acts or laws regulate the impacts of drilling. The film “Gasland” goes so far as to assert that “the 2005 energy bill pushed through Congress by Dick Cheney exempts the oil and natural gas industries from the Clean Water Act, the Clean air Act, the Safe Drinking Water Act, the Superfund law, and about a dozen other environmental and Democratic regulations.”
That is patently false. It must comply with all of these laws with the caveat that the hydraulic fracturing process was never regulated under the Safe Drinking Water Act in its 60-year history. And that particular energy bill was supported by 74 yes votes in the Senate including those of Senators Obama and Salazar.
Most alarmingly, “Gasland” has a stunning scene of a man turning on a tap, sticking a lighter under it and watching it ignite. Gasland blames natural gas development for the flaming faucet. But the Colorado Oil & Gas Conservation Commission wrote: “Dissolved methane in well water appears to be biogenic (naturally occurring) in origin…. There are no indications of oil and gas related impacts to water well.”
But perhaps the most telling repudiation of this film comes from John Hanger, the Secretary of the Pennsylvania Department of Environmental Protection who for ten years was President and CEO of the environmental organization called Citizens for Pennsylvania’s Future. He appears briefly in the film. John Hanger said the film was “fundamentally dishonest” and “a deliberately false presentation for dramatic effect.” He called the producer a “propagandist.
I am 100 percent behind producing natural gas in a safe and environmentally sound way. If there are violations of the rules or laws, either state or federal, we rely on the good offices of the Pennsylvania DEP to do whatever is necessary to bring enforcement to the situation. They have proven to be capable and aggressive.
Gas drilling creates jobs and economic growth and contributes to our energy security. It needs to be done right, with environmental protection. But it doesn’t deserve a propaganda film, that doesn’t educate, but serves simply to demonize an industry for personal gain and political reasons.