Much has been made of President Obama's recently proposed cap-and-trade, energy-tax policy that he would soon like to see implemented as a means to raise revenue for his health care reform and other big spending plans. The graph below, provided by Ways and Means Ranking Member Dave Camp (R-MI), shows the state-by-state analysis of annual per capita increases in electricity costs that would occur under a 100% auction, as President Obama has called for, to meet his target carbon emission reductions.

Annual Increase in Electricity Costs
(based on the Stern Review's recommended carbon price of $85 per ton)

Source: Committee on Ways & Means Republican Staff analysis

At a Ways and Means hearing today, Congressman Camp questioned Congressional Budget Office Director Dr. Douglas Elmendorf  about the impact of this policy on consumers in other ways as well.  As Dr. Elmendorf said, “at any point in which we are putting a price on carbon emissions, that would be passed through to the cost that consumers face on energy products but also all other products that are made using fossil fuels….I don’t know if there are any goods that use no energy in their production.  It seems to me unlikely.”

The President’s energy tax is a policy we simply can't afford.

It's vital that we ask questions of this Administration as it continues to insert itself into the private sector.  Most recently, it's reported that the Obama Administration is considering asking Congress to give the Treasury Secretary the authority to take over non-bank financial companies, such as large insurers, investment firms and hedge funds.

Giving the Secretary this authority would be an unprecedented transfer of power to the federal government. The current model for regulating the financial markets relies on independent agencies that are independent from the political process.

I have serious concerns regarding the role of government intervening in the private sector, and I expressed as much yesterday in a Financial Services Committee hearing on AIG with Treasury Secretary Geithner and Federal Reserve Chairman Ben Bernanke. Take a look:

President Obama is never at a loss to note that he inherited a trillion-dollar deficit.  But, for a man that's expressed so much outrage towards this deficit, he sure is doing his best to see that it keeps grows higher and higher.

On Friday, the CBO (Congressional Budget Office) released its analysis of President Obama's Fiscal Year 2010 budget, finding that if enacted as is, his big spending proposals would increase the federal deficit by $2.3 trillion more than the President had estimated.

According to the Wall Street Journal , the "President is seeing that $1 trillion [deficit] and raising it again and again, as far as the eye can see."

By 2019, the share of the public debt will double to 82.4% from 40.8% in 2008 - and this is without even considering the estimated $2-trillion toll that the President's health care plans will have on the taxpayers’ economic burdens.

Given the all the promises of "fiscal responsibility" we heard from the majority all last fall, the Democrats’ proposals are coming no where close to financially prudent legislation. The more we see from the White House and the Congressional majority, the more it's obvious that our nation can't afford what they're trying to sell.

It's not everyday that I find myself agreeing with the Huffington Post, but when it comes to the AIG bonuses debacle, I couldn't agree more.

    "Have you noticed how, whenever there is a serious effort to put an end to business-as-usual, we are warned by insiders like Paulson and Summers that the result will be the end of civilization?

    "'This lack of transparency -- and the lack of accountability that results -- is one of the most significant threats to our democracy,' Wyden told me. 'This is not at all how the civics books tell us the system is suppose to work. What we have here is a prime example of Washington deny, defer, delay.'

    "He's right. We deserve better. Let's make this D.C. mystery the cause celebre it deserves to be. Let's demand that the White House live up to its vows of transparency."

What has been lost in all this AIG outrage is the stark reality that this debacle is what should be expected when government moves into the Board Room.  Congress passed the misguided $700-billion bailout in October; Congress approved the second tranche of $350 billion for the bailout in January; and Speaker Pelosi and President Obama pushed through a “stimulus” package that specifically permitted these AIG bonuses on the taxpayer dime.  When Congress and the Administration took these actions they set in motion this necessity that they feign outrage over misuse of hard-working taxpayers’ money.

Congress must engage the same determination they used this week to enact an exit strategy for the American people from bailout-band-aid mania.  The American people deserve our outrage about more than just these $165 million.

After denying involvement on Tuesday, Senator Dodd admitted yesterday he is responsible for airdropping language into the stimulus package that allowed AIG to distribute $165 million in retention bonuses. But Dodd is pointing a finger directly back at the White House, claiming the Obama administration pushed for the language out of fear of potential lawsuits from AIG employees.

“I didn't negotiate with myself.  I wasn't trying to change it on my own…the administration [had] expressed reservations. They asked for modifications.”
                            --Sen. Chris Dodd (D-CT), CNN, March 18, 2009

One of the most startling things about all this is that many of those here in Washington who are expressing shock and outrage that AIG would do something like this are the same ones who accepted the language protecting the AIG bonuses in the stimulus bill and voted it into law.

As I've said in the past: I don’t know how any legislator could vote on a bill that they didn't even have a chance to read, yet the Democrats pushed it through anyway. This is just the latest fallout from a piece of legislation that was rushed through and passed hastily. We really shouldn’t be surprised.

The truth of the matter is:  It was full public knowledge as far back as May 2008 – long before Congress passed the misguided bailout that injected $170 million of taxpayer money into AIG.  And, in November 2008, AIG convened a working group to figure out what to do with about these very bonuses.  The Federal Reserve was a part of that working group.  Let’s not forget who was the President of the New York Fed at the time – our new Treasury Secretary, Timothy Geithner.

Even Democrat Congressman Kanjorski, who ran the Financial Services Committee hearing yesterday with the AIG CEO, Edward Liddy, had this to say:

"I am sick and tired of hearing the administration and the Secretary of the Treasury say, 'I just found out about it.'"
         --Paul Kanjorski (D-Pa), Washington Post, March 19, 2009

Legislators who voted for the bailout and for the stimulus that protected the bonuses are now scrambling to cover their backs by putting forth legislation this morning that will impose a  90% tax for bonuses received by an employee of a company that has received funds in excess of $5 billion from the Troubled Asset Relief Program (TARP)—or an employee of Fannie Mae or Freddie Mac.

Folks, two wrongs don’t make a right. Without the wrong-headed $700-billion bailout, the taxpayers would never have been put in the position of their dollars being doled out for executive bonuses in the first place.  Congress is singularly ill-equipped to be a Board of Directors, and the bailout has put them right in the boardroom.

The bill on the House floor today, while not mentioning AIG by name, is clearly meant to punish a specific group of individuals in response to public outrage over the bonuses. The author of the bill, Rep. Rangel, explains his motivation for the bill by saying that he “had an obligation to respond to the fears and anger of the people.” Given this motivation, a legislative action aimed at punishing individuals, no matter how loathed or despised they may be, is explicitly prohibited by the Constitution in Article I, Section 9, Clause 3.

Larry Summers, President Obama’s top economic advisor, had this to say over the weekend – before he got the memo that the Administration was shocked and outraged by the bonuses they specifically protected:

“We are a country of law.  There are contracts.  The government cannot just abrogate contracts.”
      -- Wall Street Journal, “Obama’s AIG Panic,” March 19, 2009

The government allowed this to happen - no ifs, ands, or buts about it. This feigned attempt by lawmakers to cover up their mistake should not distract from the fact that those responsible for allowing these bonuses thought they could sneak one by the American people and reward their political allies. This is certainly not a proud day for a Democrat White House and Congressional Majority that was elected on openness and honesty.

Given our pattern of bailouts and spending measures over the past several months, it comes as no surprise that our national debt has surpassed $11 trillion, the largest it has ever been in our nation's history.

Hopefully, this absolutely enormous number will temper President Obama's plans to continue his government spend-a-thon. But from what we've been hearing from the White House and among Democrat leaders here in Congress, it appears that we should just buckle in for more business as usual.

In fact, one of President Obama's top legislative priorities seems to be passing a "cap-and-trade" – or cap-and-tax, as I call it – policy for America that makes businesses and energy producers pay to emit carbon emissions.

Originally, the President estimated that this plan would cost $646 billion over eight years to implement. However, Jason Furman, Deputy Director for President Obama’s National Economic Council, recently stated that it could cost up to 3 times that amount - bringing the cost closer to $2 trillion.

Republicans are rightfully wary of a measure of this magnitude, particularly one that will surely mean higher costs for every American - the last thing we need when our country is in a recession. What makes this plan even more mind boggling is how much it will hurt American businesses while their competitors in countries will not be beholden to anything similar.  American businesses will be inclined to move their operations overseas to take advantage of less expensive operating costs.

Last week, I posted on how cap-and-tax legislation will affect every single American through increased costs for everything from groceries to school supplies, not to mention their energy bills. Remember the hit our wallets took last summer with $4 gasoline? If this legislation takes effect, those days will soon be returning.

The financial burden being placed on the shoulders of every taxpayer and on future generations as a result of these reckless spending strategies must be replaced with fiscal responsibility.  The spending spree has to stop.

While the dicentennial census is intended to be a decidedly non-partisan activity – and has been even before this new “post-partisan” world, much concern has been raised of-late over the infamous ACORN's new role in the process.

According to a Fox News report:

"The Association of Community Organizations for Reform Now [ACORN] signed on as a national partner with the U.S. Census Bureau in February 2009 to assist with the recruitment of the 1.4 million temporary workers needed to go door-to-door to count every person in the United States -- currently believed to be more than 306 million people.

"ACORN, which claims to be a non-partisan grassroots community organization of low- and moderate-income people, came under fire in 2007 when Washington State filed felony charges against several paid ACORN employees and supervisors for more than 1,700 fraudulent voter registrations. In March 2008, an ACORN worker in Pennsylvania was sentenced for making 29 phony voter registration forms. The group's activities were frequently questioned in the 2008 presidential election."

While ACORN maintains its non-partisan tax status, it's no secret that they are a strong ally of the Democrat Party. The census is used to determine distribution of taxpayer money through formula grants and more, as well as the apportionment of the 435 seats in the House of Representatives, so a skewed count can have clear ramifications for the political make-up of our federal legislative body.

Partisan politics must not be an issue in compiling the results of our 2010 census, and I hope the necessary safeguards are in place to crackdown hard on any violations that may arise throughout the process.

It turns out that Chris Dodd, Chairman of the Senate Banking Committee and the largest single recipient of campaign contributions from AIG, has found himself embroiled in the recent AIG bonus scandal and is quickly trying to reverse course, in both his policies and rhetoric.

First, Dodd inserted language into last month's “stimulus” package that specifically prohibits the government from stopping the taxpayer-funded $165 million in executive bonuses at AIG to happen.  Now that there is a political firestorm rising over these very bonuses, he is calling for a 91% excise tax on those bonuses.

According to a Fox Business report:

"While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law."

When trillions of your hard-earned tax dollars are at stake, we need leadership that does not reward political allies. The American people are struggling, and despite what rhetoric you now hear from Senator Dodd and the Democrats who proposed and led the charge on approving this so-called “stimulus” package, they were clearly not looking out for you.

Despite his repeated pledges, first on the campaign trail last fall and then again in his address to the Congress last month, President Obama is once again talking about tax increases that will firmly impact America’s struggling middle class.  For instance, his budget includes a cap on the mortgage interest deduction, a limit on charitable donation deductions, and a newly created tax on carbon emissions that could cost the average American family about $4,000 a year.  

And now, the Obama administration is discussing with Congress the possibility of taxing employee health benefits - an action that he criticized last fall as being “the largest middle-class tax increase in history.” In fact, he went on TV denouncing Senator John McCain's proposal to do just that. But as the New York Times notes, the "advertisements did not point out that Mr. McCain, in exchange, wanted to give all families a tax credit to subsidize the purchase of coverage."  No word yet about whether President Obama would allow that same trade-off.

Clearly, the President’s message of personal responsibility and fiscal restraint has yet to make it from the teleprompter to the policy pen. For a President who was elected on the sound bite of being a watch dog for the middle-class American taxpayer, his administration and Democrat colleagues sure have a funny way of expressing their appreciation.

Diana Furchtgott-Roth with Real Clear Markets did a very detailed analysis of President Obama's tax hikes as outlined in his new budget for 2010 and the impact these increases will have on working wives. It’s not promising, at all.

President Obama has promised us that taxes on Americans making less than $250,000 will not be raised by "one single dime," to give you the illusion that the only ones being hit will be the rich while the middle class is shielded from his revenue hikes. As I explained in my post about the carbon tax, this is simply not the case. And other examples of how the middle class will feel the tax hike pinch abound. For instance, the marriage penalty will also be on the rise if President Obama gets his way.

Remember that when you get married and start filing a joint tax return, your taxable income may substantially increase simply as a result of combining your incomes. Additionally, taxpayers may not receive the full value of their itemized deductions, further adding to the fiscal disadvantages of marriage for some couples. So if it were all just a matter of tax codes and finances, essentially, it's in your interest as a taxpayer to stay single instead of getting married.

But the institution of marriage is good for society, so this is not exactly the trend we want to be setting here in the United States.  Unfortunately, President Obama's 2010 budget is more concerned about generating money for his proposed expansion of the government. With the economy in the rough condition that it's in, a fiscal policy of higher taxes and more government spending is certainly not a recipe for success.

Today, the Omnibus Public Land Management Act of 2009 failed to pass in the U.S. House – but only by a very small margin. Its defeat today is a rare, fiscally responsible action in a Congress that has been gung-ho on spending since being sworn into office in January. The Democrat majority had hoped to sneak this 1,200-page, $10-billion package through with no more than 40-minutes of debate.
 
This omnibus bill today cobbled together over 170 different bills, including 75 measures that we never even reviewed in the House.  Hidden amongst its pages are 19 provisions to restrict American-made energy production and jobs by withdrawing federal land from mineral leasing - such as oil, gas, and coal exploration. It withdraws 3 million acres from energy leasing and recreation use. And, it eliminates 331 million barrels of recoverable oil and 8.8 trillion cubic feet of natural gas resulting from energy exploration in Wyoming.

Whether you agree with these measures of not, you cannot argue that a bill like this should be brought to the floor and voted on with just 40 minutes of discussion and no ability to offer amendments. Thankfully, this measure did not pass, but the bipartisanship that the Democrats promised on the campaign trail continues to remain nonexistent.  Their procedural maneuvers and failure to require proper vetting continue to show a level of disrespect not only to the Congressional minority – but the American taxpayer.

This is something I've heard very little reported about in the mainstream media. Minnesota is becoming the first state to make new mortgages available to individuals based strictly on their faith. While there are a few private banks and lenders who offer this type of mortgage in the U.S., Minnesota’s state-agency-provided “Islamic mortgages” are a first - and they raise some interesting questions.

For instance:  Is faith a precondition for these mortgages?  Would any prospective homebuyer – Jewish, Christian, atheistic -- be able to take this deal if she wanted to?  And, do these homebuyers qualify for the home mortgage interest deduction – that is, until President Obama takes it away as recommended in his budget?

According to reporting by the Minnesota Public Radio, essentially, the way the program works is that the state buys a home and resells it to the buyer at a higher up-front price.  The borrower supposedly pays the same amount as everyone else in the end but without “paying interest,” which is against Islamic law. According to MPR,  Islamic law makes exceptions to the ban on interest "if one's family is at stake," but many faithful worshipers of Islam would rather stay clear.

Give the story a read for yourself. I applaud private lenders for filling this niche in the market – such innovation is what makes a capitalist economy strong, but when government takes the reins and taxpayers assume the costs, we should answer all the questions first.

Amongst the several revenue-raising proposals in President Obama’s $3.9-trillion budget proposal is a carbon tax that will impact all American families.  His budget aims to raise $646 billion through a cap-and-trade tax on energy.

Last year, Peter Orszag, who was then Director of the Congressional Budget Office and is now President Obama’s Director for the Office of Management and Budget, testified before the House Ways and Means Committee on a similar proposal.  Speaking about a cap-and-trade proposal to cut carbon emissions by 15%, he said it would cost the average household about $1,300 a year through higher energy costs.  He also noted that working class families would be hardest hit.

President Obama’s current proposal aims to cut carbon emissions by more than 3 times that of last year’s proposal – 83%.  John Feehery, writing in The Hill's Pundits Blog last week, noted that using Director Orszag’s analysis, this would mean that the average family will pay close to $4,000 a year, or $333 a month.

The White House seems to acknowledge that the costs of this tax will impact low-income families hardest and suggests a $500-a-year subsidy.  But, that doesn’t even cover two-months cost for the average family.  And, it doesn’t take into account the increased costs for everything from groceries to school supplies that a carbon tax will also impose on everyone.  We had a little taste of that last summer with the increased fuel costs adding to the costs of just about all consumer goods and I’m not sure American families want to return to that budget-busting scenario.

Earlier this week I told you about  the growing list of banks that are choosing to opt out of the TARP program and give the money back. Today, TCF Chief Executive Bill Cooper appeared on Fox News to explain his reasons for doing so.

If you had any doubts about the impact and effectiveness of the $700 billion TARP funding approved by Congress last year (which I opposed), look no further than the growing list of banks that are choosing to opt out of the program and give the money back.

The Minneapolis Star Tribune reported yesterday that TFC Financial Corp. has joined Northern Trust and Iberiabank Corp. as financial institutions who are staying clear of the government's Troubled Asset Relief Program.

The way TCF Chief Executive Bill Cooper views it:

"I don't want to be part of the new regulatory regime that's growing up around TARP. Congress is now talking about putting their oar in the water on just about everything we do. That puts us at a competitive disadvantage."

There's been much criticism of TARP, going back to its origins late last year, that this was not the best way to assist our struggling financial institutions. Sadly, the trademark of Washington, D.C. during a moment of crisis is that we have to do something. It's not as important to grasp the ramifications of what exactly we're doing, but as long as we're doing something, then we can't be blamed for doing nothing.

This is a dangerous philosophy.

In a recent letter to Berkshire Hathaway shareholders, Chairman Warren Buffet, a proponent of the TARP program said:

"Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome after effects.

"Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.

"Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly."

If we continue to let the government grow in its power and influence, the end result will be the decline of our tradition of entrepreneurial spirit. We must always remember that government is not the end-all-be-all of our nation’s prosperity; the people are.