TCS Daily

Regulation, Litigation and Taxation

By Rep. Howard P. McKeon - December 18, 2007 12:00 AM

As the year draws to a close, many of us find ourselves reflecting. We look back on what has happened during the past year and what we expect for the future. As lawmakers, those of us elected to serve engage in a special type of reflection on how well we have served the American people.

At a time when American families are struggling to cope with the rising costs of higher education, health care, and even the fuel to heat their homes this winter, we have a particular obligation to advance an agenda of economic freedom and security. While our economy's fundamentals are strong - we are in the midst of the longest period of uninterrupted job growth on record, the unemployment rate remains low, and real income and wages have been rising - hardworking American families are still grappling with economic uncertainty.

It is in this environment that a new report has been released chronicling the Democratic Congress's economic record. Entitled "Death by a Thousand Cuts: Democrats' War on American Jobs," this report from House Republicans paints a stark picture of the job-killing, innovation-stifling policy agenda that has been pursued since Democrats took control of Congress in January.

Simply put, it has been an agenda of regulation, litigation, and taxation.

Sometimes aggressively, sometimes cunningly, Democrats have advanced a series of policies that threaten to bog down America's job-creating engine in a quagmire of redundant bureaucracy and costly litigation. In one bill after the next, we have seen an agenda that favors labor bosses and trial lawyers at the expense of free enterprise and American ingenuity.

In the opening hours of the 110th Congress, Democrats proposed a minimum wage hike that ignored the needs of small businesses and their employees. Republican prodding helped ensure a degree of small business relief was included in the measure that became law, but Democrats have stubbornly refused to embrace the comprehensive Republican plan, which includes small business health plans to allow small businesses to band together to provide high quality health care options for their employees at a lower cost.

While recalcitrant on the needs of small businesses, Democrats have not hesitated to promote the wishes of the special interests that helped get them elected. Trial lawyers are surely salivating over the new rights to sue established by the Democratic Congress, and union leaders can look forward to the Democrats' union-growth agenda.

The Democrats' "fair pay" bill would dismantle the statute of limitations established by the 1964 Civil Rights Act for challenging allegedly discriminatory employment practices and replace it with a new system in which the litigation clock is restarted with every paycheck. This leaves employers and entrepreneurs open to legal threat for generations, and undermines the solvency of workplace retirement plans.

Further departing from established civil rights law, Democrats this year advanced legislation that creates new employment protections on the basis of an individual's perceived sexual orientation. Legislating and holding employers legally responsible for their perceptions sets a dangerous precedent that is almost certain to be decided not by Congress but by the Courts, where trial lawyers and unelected judges will sort out the vague, undefined mandates set forth by Democrats.

Adding insult to injury, Democrats have unleashed an all-out assault on democracy in the workplace with their deceptively named "Employee Free Choice Act." The reality of this union power-grab is a system in which workers are stripped of the right to a secret-ballot unionizing election, instead subjected to strong-arm tactics and possible union intimidation.

Another cleverly titled bill, the so-called "RESPECT Act," redefines the classification of a supervisor under the National Labor Relations Act in a transparent attempt to inflate the number of dues-paying union members.

The icing on the bureaucratic cake, however, is the Democrats' aggressive expansion of the Depression-era Davis-Bacon wage mandates. In one bill after another, Democrats have imposed or expanded the reach of Davis-Bacon "prevailing wage" mandates, which use flawed calculations to impose a bureaucratic wage system on federal contracts. By inflating labor rates, Davis-Bacon wages increase the costs of federal projects by as much as 15 percent - costs which get passed on to the taxpayers - and force private companies to do hundreds of millions of dollars of excess administrative work each year.

Couple the unions-and-lawyers agenda with the Democrats' plans to impose crippling tax hikes on American families and businesses and a bleak reality emerges: Democrats are waging a war on American jobs and, ultimately, on our nation's competitiveness.

Reflecting on the agenda of the Democratic Congress, it's easy to understand why American families are struggling with uncertainty. What's more difficult to foresee is whether, after a year of tax hikes and bureaucratic mandates, Democrats will recognize the pressure being placed on American families and businesses and respond with the type of reassuring pro-growth, low-tax agenda that we need.

Howard P. "Buck" McKeon, is Ranking Republican on the House Education & Labor Committee.



Keep pounding this message!
You may be speaking truth but you need to get past the Dem's message of sticking it to "the rich". That seems to go pretty far for them.

The Dems seek economic downturns because they wish to show the population the "wisdom" of giving over control of our lives to big government. It is their way of saying, "See. The system is broken. Let us take care of you."

Sadly, it sometimes works. People should fear the talk of taxing "the rich" or the taking of corporate profits but it seems to play well for the idiots on the Democrat plantation... If you know what I mean.

Hey Congressman McKeon!
...please explain why YOU and your fellow Republicans never did anything while you were in power to disembowel these anachronistic laws and regulations in the first place?

Why didn't you:

- Amend Taft-Hartley so that ALL of America is an open shop 'right to work' environment?

- Actually strip the existing 'prevailing wage' clause when you had the power to do so instead of cynically using the issue to get campaign contributions now that you are out of power?

- Require all tort action suits involving interstate activities be handled in federal courts and require the courts to operate on a 'loser pays' rule in order to nail the trial lawyers?

- Add a 'progressive tax' to union dues that unionized employers deduct straight out of members paychecks? You could spin it as making the 'RICH' union paid workers pay their 'fair share' so it can be redistributed to all those workers you aren't 'benefited' by union representation and dare the Dems to vote against it.

Aside from that last point which you'd want to be as public as possible (even if it does down in flames, to serve notice to the unions that their continued support for Dems will cost them dearly), you could have easily done the first three quietly by slipping it into those omnibus BS bills that come out of conference committee for both chambers to vote up or down on. You know, the kind of bills that the Alaskan bridge to nowhere was included in and acceptably forwarded on the legislative process effortlessly as if by magic?

You and your fellow Republican congresscritters can't b--ch about how the unions/lawyers are doing you or the general taxpayer in when you don't seem to worried about it when you are in power. Those of us who follow these things aren't fools, but you sure think we are.

And don't give me excuses that appeal to your intentions to doing those things. We conservative voters don't vote on feelings, but outcomes. If you think otherwise, you confuse us with liberal voters, sir.

And those reasons and more was why conservative voters stayed home in those critical districts that sent Pelosicrats to share in the Dem power back in '04.

Not to mention that we can't stand voting for stupid politicians who refuse to defund their own political enemies on the federal trough just like they refuse to defund our nation's physical Islamofascist enemies by cutting our addiction to oil. At least with regards to the former, the Dems know how to play ball way more than you guys do, I am forced to having to admit.

-An Angry Conservative Who Demands That You Walk The Walk That Matches Your Talk.

Good points
Republicans are only worth a darn when they're in opposition. When they're in power, they do nothing more than pass out boxcar lots of pork to their cronies while making sure they don't undermine the relevancy of their nascent opposition.

Good government in a two party system is pipe dream.

boiling the frog
we have allowed this to happen ever since FDR and probably Lincoln.

the fact that they actually take an oath to uphold the constitution and at every turn attempt to pervert it is amazing.

the problem is that there is a central gov't and not a real federal gov't. it only stands to reason that corruption increases as power increases. that is why we have the lawyers and the lobbyists in washington.

they do it, not because they are benevolent, but because corruption pays.

we need to start pushing for amending the constitution and repealing the 16th amendment and several others to give the people a chance.

So the dems sell out to the trial lawyers once again and now open up business to endless lawsuits.

I am always amazed how the dems view business as a cow to be milked and always promote the non-producers of society over the producers.

In effect, we have trial lawyers who produce absolutely NOTHING favored over business owners who risk it all to produce.

It is impossible today to keep abreast of every single regulation that the useless state thinks up but the lawyers have all the time now to find a way to make you pay.

The end result? Certainly less incentive to hire in a age where small business is the largest employer.

The Republicans are certainly, of late, pretty lame in pushing their ideals but the corruption of the democratic party is so profound, so arrogant it is sickening.

Anyone know a congressman from LA? Can we say Harry Reid?

I feel like puking.

Because bad economics makes for good politics
"I am always amazed how the dems view business as a cow to be milked and always promote the non-producers of society over the producers."

From a politician's view point, whatever one can use to ride into power, the better. Since there is a huge portion of the population who are AOK with using the power of government to rob Peter's wealth, rape Peter's wife and shoot Peter's dog in order to benefit members of said portion of the population (I call them The Loser Wing, or 'Liberals'), it will be reflected in the political will of the voters.

Fundamentally, the fact that politician's get truck with that is really a symptom of the moral decrepitude of the people that vote for them, after all.

"Capitalism can't survive once the populace discovers that it is easier to vote for a living than it is to work for a living"

The other side of the equation
First, let me say, I agree with most of the Congressman's assessment of the Democratic Party. However, I must say, the Republican congress has not done much for American jobs either:

For the last 20 years, AMericans have become more and more productive. shows that productivity has increased per worker since 1987. However, as a result of the things I list below, our wages, standard of living, financial and healthcare security, are falling apart. Meanwhile, the top 1% are making out like bandits, having tripled or quadrupled their wealth over the last 10 years. So, we are working harder and making less, while the top 1% quadruple in wealth. Something is NOT very "trickle down" about that.

The government gives us these totally bogus inflation numbers...estimating inflation at about 3% a year. They do this by manipulating the CPI so that the numbers look good. However, common sense shows you that if you factor in the rising costs of healthcare, education, energy, housing, food, and couple that with the low interest rates which are inflating our currency, the REAL inflation rate is at about 10% a year. This is taking its toll on American wages, and the Republican party isn't doing or saying a damn thing about it (except for Ron Paul).

"Globablization" is a word bounced around by Republicans (and Democrats) as something that is suppossed to be good for us. But "globabalization" really means "entangling alliances", the collapse of borders and loss of national sovereignty, illegal immigration, outsourcing and offshoring, and in general, reducing the wages and job opportunities of the average American. There is much more to this "globalization" than "free trade" (which is not "free" at all..but managed by global cartels, and international banking syndicates). I think there is a definite fascist undertoe going on here that the Republicans seem to be embracing.

The Republicans are also embracing a complete onslaught on privacy, civil rights, and freedom. For God' Sake, when a Republican Attorney General says there is no right to Habeus Corpus, SOMETHING IS ROTTEN in the Republican camp. The Patriot Act...I mean, my God. I remember when I was a kid, reading about the MILLIONS of dossiers East Germany kept on its citizens. And how East Germany and the Soviets had listening posts and citizen spys that report on other citizens. I remember thinking how HORRIBLE that was. And what have we now in the US...FAR WORSE. We are LITERALLY building a technocratic psytocracy of control grids. Europe completely surveils its people now (1 camera for every 4 to 10 people in Britain!). ITs sick...and its UNAMERICAN.

...yet, not a peep from the Republicans.

So, while I agree with the Congressman about the Democrats and their love affair with trial lawyers, regulatory power, identity politics, and other evils, I have to say to my Republican brother: TAKE A LOOK IN THE MIRROR LATELY?

re: education committee
Congressman, if you're on the edu committee and are not advocating for the separation of edu and state, like separation of church and state, that means you're just another Big-government statist.

Re taxation, we notice that Ireland has a company tax of 12.5%, and many other countries are reducing their to such levels. Why should Americans be more than that? And don't bother telling us that the US needs higher taxes so they can dole out more for all the pork-barelling you guys do.

Pushing back
I'd love to push for several constitutional amendments to severely limit Congress' power. But be forewarned - it'll be an uphill battle the entire way because even conservatives don't seem to be able to think outside the box.

For example, just the other day I heard a conservative talk show host oppose term limits for Congress because the congressional aids, who typically work in Congress for decades, would then enjoy too much influence and power. Of course, the idea of imposing term limits on congressional aids never occurred to him, nor did the idea that the reason congressional aids are useful is that they're the only people on Capitol Hill who understand the bizarrely complex procedural rulebooks eight generations of legislators have compiled to conceal their bad behavior from the American people. Citizen legislators may repeal these rulebooks and start from scratch, obviating the need to conceal bad behavior and thus the need to rely on congressional aids to assist the same.

The above presents just one example of the kind of knee-jerk, unreasoning opposition to radical political change currently pervading America that will have to be undone. But factor in the media, who will join Congress in opposing the undoing, and you begin to appreciate the Herculean nature of the task we're presented.

The most effective thing to do...
...would be to limit total federal spending to a fixed portion of GDP (and making sure a politically neutral committee is appointed that measures GDP so the figures can't be manipulated). Such a limit can only be changed by Congress and ratified by a national plebiscite of voters. During times of declare war, the increase would kick in temporarily right away but need to still be ratified in the next election.

Another one, repeal the 16th Amendment. The 16th Amendment wasn't something that specifically granted the Feds the power to tax incomes, but rather it granted them the power to tax w/o regard to apportionment. So, under the old rules of taxing only by apportionment, if a state's population is only 10% of the national total population, then no more than 10% of the total federal tax revenues could come from that state. After all, no taxation w/o representation also had the flip side of no representation w/o taxation. Now, with the 16th Amendment, some states pay more in taxes than they are getting corresponding representation in Congress for that bandit's haul.

Of course, both require constitutional amendments that won't see the light of day. But one other trick that doesn't require constitutional amendments would be the abolition of income tax withholding. THAT would work wonders.

My point is: Besides thinking outside of the box, people need to step back and look at the big picture too. Why monkey with 'symptomatic treaments' like term limits when the real issue is the government's power to tax or borrow to spend?

be sure
to include the cost of regulations and federal mandates when calculating the cost of federal spending.

In recent years congress has discovered that they can pass a law requiring someone else to do it. That way they get the glory for "solving the problem", without having to worry about paying for it.

Free to Choose
Take a look at Milton Friedman's book "Free to Choose". He lays out several constitutional amendments regarding Congress' power to tax, borrow and spend. For a while after the book's release, these amendments enjoyed serious consideration by serious people. But I haven't heard much about them lately.

Regarding big picture taxation fixes, I like the idea of requiring next year's tax base to be reduced in direct proportion to this year's tax gap, which is the amount of money that should have been paid to the IRS but wasn't. The tax gap roughly measures American taxpayers' willingness to pay for the goodies they get from the Feds, and reducing the tax base to reflect what taxpayers are willing to pay for is a necessary adjustment. In addition, if American taxpayers don't pay for federal goodies, then they shouldn't get them, so total federal spending must also be reduced in proportion to the reduction of the tax base. In sum, matching Federal outputs to inputs to the American taxpayers' willingness to finance both is necessary to reign in Congress' out-of-control spending. I doubt this will ever happen, though, because the very nature of politics is to impose asymmetrical rights and obligations on the entire polity to benefit political cronies at the expense of the entire polity.

I agree that constitutional term limits don't directly address fiscal issues, but they do address the central issue underlying them: Career Congressmen maintain their power by imposing asymmetrical rights and obligations on all Americans, i.e., by bringing home more pork for their districts than their districts pay for in federal taxes, and by favoring the special interest groups populating their districts at the expense of the average American. Short-term citizen legislators may not be so inclined to do this because their terms will be severely limited.

Therefore, this is a big-picture fix to taxing, borrowing and spending even though it seems unrelated.

I made the point of the Republican sellouts.
Hey,I am the first to agree the Reps have sold out. The party I believe in is not the party of 2007. It is the democrats without the nasty disposition.

I am so fed up with WA DC I could vomit, yet what can you do today? They have so entrenched themselves voting them out is difficult at best. Couple that with the handout mentality and you have life long losers like Ed Kennedy in office forever. The man is a pig, has never held a job, has never produced anything except hot CO2.

He is a gas bag with a glass of scotch and yet MA voters endlessly elect him.

Go figure. Excellence, personal freedom, all myths. Ever read Robert Graves Claudius?

I dream of the Republic but the masses cry long live the Emperor. Hail Ceasar.

"when a Republican Attorney General says there is no right to Habeus Corpus, "
Check your Constitution.

It states clearly it can be suspended, which suggests it is NOT a right.

We also have a stated right to keep in bear arms, except in DC.

As a libertarian, I would support the concept of using trial lawyers instead of government regulations. I would change the rules to state that all civil settlements would be public record once a suit is filed.

congressman too busy to answer us.
He's probably too busy lobbying for more pork. It can't be that he's too humiliated to answer but sleazy politicians have no shame.

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