PERSUASION IN INK

Newscom

In a refreshing break from tradition, the House Appropriations Committee approved a $967 billion discretionary spending plan that would stay within the fiscal year 2014 sequestration spending levels.

The measure would protect defense from further cuts and instead deliver the total savings through reductions to domestic discretionary programs. It was in keeping with the instructions provided in the House budget, which was passed earlier this year.

Now it is up to chairman Harold Rogers (R–KY) to deliver the 12 spending bills that must be passed into law by September 30, the end of the federal fiscal year. These bills authorize annual spending for everything from national defense to foreign aid.

Regrettably, Rogers seemed less than enthusiastic about the necessary spending cuts, reportedly saying the committee’s hands were tied. “It is my sincere hope that there will soon be a budget compromise that will undo the damaging sequestration law and give us a single, common top-line allocation with the Senate.”

It’s always easier to spend money than to cut. No doubt Senate Appropriations chairwoman Barbara Mikulski (D–MD), who is planning to ignore sequestration, will have the easier job. The Senate’s total appropriations funding, at $1.058 trillion for 2014, is $91 billion above the House level. Mikulski closes some of the deficit gap by hiking taxes. So the Senate once again gets to coast; meanwhile, Rogers will have his work cut out for him.

But this is precisely what Congress should do—stick with the Budget Control Act (BCA) agreement to cut spending. It promised these spending cuts in exchange for the $2.1 trillion increase in the debt limit. And after all, the BCA is partially responsible for today’s temporary improvement in spending and the deficit, so moving away from it is totally unacceptable.

What is crucial, however, is that Congress comes to an agreement on how to reprogram the sequestration cuts, which fall disproportionately on defense. As Heritage defense expert Baker Spring explains:

Public perception may be that the sequestration cuts to the defense budget is about eliminating waste and inefficiency in the Department of Defense (DOD). In reality, sequestration will result in the loss of military capabilities.

The House committee’s spending plan would adhere to the sequestration level top line for discretionary spending while protecting defense from further cuts. This is an important achievement, as military furloughs planned for later this summer are not enough to protect against further deterioration of military readiness. As defense analyst Brian Slattery explains:

Sequestration has gone into effect, but its effects are still largely unknown. However, the Armed Forces’ service chiefs have begun to describe what is in store under such dramatic reductions. For example, Army Chief of Staff Raymond Odierno explained that reductions to maintenance and training will put the Army “on the outer edge of acceptable risk for our future force and our ability to meet our National Security Strategy.”

The House should lead the Senate by sticking to the standard that it set in its budget and the Appropriations committee reaffirmed:

• Adhere to the spending reductions in the Budget Control Act, including sequestration;
• Lessen the damage to national defense, the federal government’s core constitutional function; and
• Do not raise taxes.

The post House Appropriations Plan Delivers Sequestration Cuts and Protects Defense appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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Have a question about the debt ceiling, Benghazi, or the IRS? Get the inside scoop from the champions of conservatism in the House of Representatives.

This month’s meeting of Conversations with Conservatives will take place Wednesday at 11:30 a.m. It will be streamed live online. Viewers may  participate in the conversation on Twitter (tweet to @conversations using #CWC113). You can also leave a question in the comments below.

Conversations with Conservatives is a group of free market and liberty-minded members of Congress that meets monthly with traditional press and bloggers to discuss the most important issues of the day.

Led by Representatives Tim Huelskamp (KS-01), Raúl Labrador (ID-01), and Jim Jordan (OH-04), each meeting features different conservative members of Congress to share their ideas and field questions from the media.

In addition to Huelskamp, Labrador, and Jordan, participating members for today’s session include: Representatives Justin Amash (MI-03), Jim Bridenstine (OK-01), Ron DeSantis (FL-06), Thomas Massie (KY-04), Todd Rokita (IN-04), and Steve Scalise (LA-01). Additional participants may be announced.

The post WATCH: Conversations with Conservatives Today at 11:30 a.m. appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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Members of Congress called Apple executives to testify on Capitol Hill yesterday. Why? Because the company makes money overseas, and some Senators want to get their hands on the cash.

A Senate subcommittee accused the company of “shifting” profits from the U.S. to other countries and avoiding paying taxes.

But Apple pays its U.S. taxes. Heritage tax expert Curtis Dubay said the earnings aren’t “shifted,” because “it’s not income that’s earned here in the U.S.”

“I can’t go down to the Apple store here in Washington, buy an iPad, and have Apple then ‘shift’ that income abroad,” Dubay said.

The Senators were up in arms about Apple keeping income in Ireland. The issue was the company’s foreign income earned from all those iPhones and iPods that people around the world are buying.

The reason the Senate feigned indignation over an issue that had nothing to do with the U.S. is that some Members want Apple to pay more U.S. tax on all that foreign cash. They want Apple to bring all of that profit back into the U.S. and pay the U.S. corporate tax rate—the world’s highest—on it. But as long as we keep the U.S. rate the highest in the world, Apple and other multinational businesses are going to keep their foreign income abroad.

Senator Rand Paul (R-KY) said it was offensive that Senator Carl Levin (D-MI) called in the leaders of a company that is trying to do right by its shareholders. He said:

Instead of Apple executives, we should have brought in here today a giant mirror, okay? So we could look at the reflection of Congress, because this problem is solely and completely created by the awful tax code. If you want to assign blame, the committee needs to look in this mirror and see who created the mess.

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Apple—and any other company that does business outside the U.S.—isn’t doing anything illegal to minimize its tax liability. In fact, America’s high corporate tax rate drives companies to do more business overseas.

Not only that, but “we’re the only country that effectively taxes our businesses on income they earn around the world,” Heritage’s Dubay said. “They’re keeping that income abroad because we add that extra layer of tax.”

What to do? Other developed countries have been cutting their corporate tax rates for 20 years. That’s what Congress needs to be looking into, as well as moving away from our “worldwide system” of taxing foreign income—not putting on business-bashing hearings for show. Fortunately, House Ways and Means Committee Chairman Dave Camp (R-MI) has been doing that necessary and difficult work.

As Senator Paul wrote in an op-ed for Rare:

If you want more money to be earned in the United States—make profit welcome here. Until that time arrives, count me out of any government dog and pony shows that badger business.

Read the Morning Bell and more en español every day at Heritage Libertad.

Quick Hits:

• “A top IRS official in the division that reviews nonprofit groups will invoke the 5th Amendment and refuse to answer questions before a House committee,” reports the LA Times.
• A Senate committee approved the Gang of Eight immigration bill last night. It will go to the Senate floor after Memorial Day.
• We haven’t forgotten about Benghazi. Watch our powerful video and help us spread the word.
• Anthony Weiner, the former congressman who stepped out of public life after his lewd messages to young women were exposed, is now running for mayor of New York City.
• Have a question about the debt ceiling, Benghazi, or the IRS? Get the inside scoop today at 11:30 a.m. ET from the champions of conservatism in the U.S. House.

The post Morning Bell: What Did Apple Do Wrong? appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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Newscom

A backroom deal made during the writing of Obamacare will harm seniors and the poor, according to The Wall Street Journal (WSJ).

During their closed-room dealings with the Obama Administration, the hospital industry’s lobbyists agreed to support Obamacare—provided that the law placed restrictions on physician-owned “specialty” hospitals, noted WSJ. These innovative specialty hospitals frequently have quality outcomes better than most traditional facilities, but no matter—the big hospital lobbyists wanted to eliminate a source of competition. So Obamacare prohibits new physician-owned hospitals from receiving Medicare payments — and prohibits most existing facilities from expanding if they wish to keep treating Medicare patients.

WSJ highlighted the actions specialty hospitals have been forced to take in response to these Obamacare restrictions:

Forest Park Medical Center in Dallas has stopped accepting Medicare patients, allowing it to escape the law’s restrictions entirely…. Rejecting Medicare ‘was a big leap, but we felt like the law gave us no choice,’ said J. Robert Wyatt, a Forest Park founder….

Other doctor-owned facilities are asking the federal government to let them duck the law’s restrictions altogether. Doctors Hospital at Renaissance near McAllen, Texas, is trying to get a waiver allowing it to expand as more than 53% of its payments come through the Medicaid federal-state insurance program for the poor.

In other words, because hospital lobbyists cut a backroom deal to support Obamacare, seniors and low-income patients have fewer health care options. Think that these examples of Americans losing access to care would prompt the hospital-industrial complex to reconsider its backroom deal? Not a chance:

Any effort to undo the expansion limits faces an uphill battle with Democrats, because the restrictions were a deal-breaker for hospitals when the White House sought their support for the law in 2009, industry lobbyists say.

Obamacare’s backroom deals (the “Louisiana Purchase,” the “Gator Aid,” and the “Cornhusker Kickback”) represented the worst in politics—well-heeled lobbyists seeking to obtain government largesse through pork-barrel spending and regulatory loopholes. The Wall Street Journal story reminds us how those backroom deals have real-world consequences when it comes to medical access—another example of how Obamacare has harmed patient care.

The post Big Hospitals’ Obamacare Deal Betrays Seniors and the Poor appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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A letter from a small group of four pro-Internet-tax advocacy groups sent to Members of Congress yesterday claims that The Heritage Foundation is wrong on the policy and the facts regarding the issue of Internet sales taxes. Their assertion falls short.

There are several fatal problems with the bill, which would allow states to force out-of-state businesses to collect sales taxes for them. The misnamed Marketplace Fairness Act (MFA) would be bad for consumers and bad for America.

Right now, under the long-standing “physical presence standard,” states can force only businesses that have a store, plant, or warehouse within their borders to collect their sales taxes on their behalf. This standard originated in the 1992 Quill Supreme Court case and has worked well since.

This is why, if you buy something online from a business that had no presence in your state, it doesn’t have to collect sales tax from you. The MFA would overturn the physical presence standard and force those out-of-state businesses to collect that tax and remit it to your state.

The authors of yesterday’s letter argue that such state power “asserts federalism” by “returning decision making authority over the collection of state taxes to state legislatures, where it belongs.” This interpretation misses the mark.

State legislatures been not been denied their right to establish their own sales tax laws. Indeed, they have all made decisions as to whether—and to what extent—sales should be taxed. Rather, they’ve been denied the ability to apply those laws to businesses that have no presence within their borders. That states can have their own laws that apply only to people and businesses that choose to reside within the state’s borders is at the very heart of federalism. Strike that away, as MFA does for sales taxes, and federalism becomes a badly weakened principle.

In their letter, the four signers also point to a statement in a joint memo signed by the president of our sister organization Heritage Action—as well as more than 50 other conservative leaders—that the MFA would impose “added costs for retailers and American consumers, directly through the sales taxes imposed, but also through the added burden of collecting the taxes for the 9,600 separate taxing jurisdictions in the U.S., each with its own unique definitions, holidays, and rates.”

The four signers of yesterday’s letter argue that this statement is incorrect, since the MFA requires states to identify a single statewide agency to administer sales tax collections. This provisions limits taxing jurisdictions to “only” 46 authorities. But retailers would still be subject to the tax laws of each of the nearly 10,000 tax jurisdictions, each of which has its own rates and tax base, a Herculean task.

Allowing state tax officials to force online businesses in other states to collect their taxes is simply a bad idea.

The post Pro-Internet-Tax Groups Get the Facts Wrong appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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With the weekend’s grand slam appearance on the Sunday talk shows by yet another official unqualified to talk about Benghazi, the Obama Administration has again shot itself in the foot.

White House Communications Director Dan Pfeiffer attempted to defend U.N. Ambassador Susan Rice’s mischaracterization of the Benghazi terrorist attack, which she blamed on the now infamous anti-Islam video. It was a poor show.

All of this stands in stark contrast with White House’s handling of the Navy SEAL Team Six raid that killed Osama bin Laden on May 2, 2011. We have all seen the images of President Obama and Secretary of State Hillary Clinton huddled in the White House situation room with the national security staff, riveted to live images of the nighttime raid. It was hardly over before President Obama, speaking proudly as commander in chief, went on national television to announce the death of the enemy of the American people. The Administration even cooperated with the producers of the movie Zero Dark Thirty about the mission to kill bin Laden.

But now, “irrelevant” is the word chosen by Dan Pfeiffer over and over to describe some of the most pressing questions regarding the White House’s role in the Benghazi affair. Instantaneously, “irrelevant” became the word of the day on social media.

Where was President Obama the night of the terrorist attack? Unlike the Osama bin Laden raid, the President was disturbingly disconnected from the attack on an American ambassador. After the five o’clock intelligence briefing in which Obama was informed that the U.S. diplomatic facility was under attack and the U.S. ambassador to Libya missing, the President’s whereabouts remain unaccounted for the rest of the evening. The next day, Obama flew to Las Vegas for a fundraiser. “I don’t remember what room the President was in on that night, and that’s a largely irrelevant fact,” Pfeiffer snapped at Fox’s Chris Wallace.

Or who doctored the talking points, served up to the media and the American people by Rice on September 16 with such conviction? That also, according to Pfeiffer, is “irrelevant.”

Contrary to the election-time narrative that “al-Qaeda is on the run,” defeated by the Obama Administration, President Obama and his staff are now pleading ignorance across the board. Pfeiffer’s problematic media appearance could fit into an emerging narrative that the Obama Administration may have been more incompetent, than Machiavellian in its handling of the Benghazi terrorist attack. Administration officials spoke to CBS News on condition of anonymity, proffering the line that bungling, ignorance, and inexperience may have been at the root of the debacle that left four Americans dead in Benghazi.

It is not likely, though, that Members of Congress will be satisfied with being told that their questions are “irrelevant” when hearings to unearth the truth resume this week.

The post White House Spins Obama’s Role in Benghazi: From Competence to Irrelevance (VIDEO) appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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Chris Maddaloni/CQ Roll Call/Newscom

Senator Byron Dorgan (D–ND) told Greenwire (subscription required) that an energy efficiency bill that passed through the Senate Energy and Natural Resources Committee would be a necessary “first step” to more federal efforts to overhaul energy policy.

The legislation, introduced by Senators Jeanne Shaheen (D–NH) and Rob Portman (R–OH), contains a number of subsidies for commercial and residential building upgrades, manufacturing and industrial processes, and worker training programs and would be a giant step in the wrong direction for U.S. energy policy.

The Energy Savings and Industrial Competitiveness Act, more commonly known as Shaheen–Portman, uses taxpayer dollars to skew decisions that families and businesses should make on their own. For instance, the legislation creates:

• A “voluntary” building code standard for commercial and residential buildings in which the Secretary of Energy would be able to dangle carrots by providing federal funding to state governments and tribal communities to meet the building codes.
• More of the government playing the role as investor by allowing the Secretary of Energy to provide grants to the states for retrofit projects for commercial and private buildings. The states would have the discretion to use that grant money to establish a loan guarantee program, a revolving loan fund, and other financing mechanisms and encourages states to “consider establishing such other appropriate policies, incentives, or actions” to further promote efficiency upgrades.
• Subsidized worker training programs to establish building training and assessment centers, to train architects and engineers in energy efficiency, to promote research for alternative energy uses, and other activities.
• Handouts for public-private partnerships that would research and commercialize energy efficient manufacturing technologies and processes. The bill would also offer rebate programs for manufacturers that use more efficient electric motors and transformers.

These programs are a wasteful and inefficient use of taxpayer dollars and ignore the efficacy of how markets promote efficiency gains. Businesses make investments in technological innovations because it saves them money in the long run. Families will install more insulation in their home without a taxpayer incentive to do so.

When the government substantially alters those decisions with other peoples’ money or with mandates, there are opportunity costs for businesses and families, which can take away other energy efficiency investments consumers would make in a world without efficiency mandates and subsidies.

Further, families and businesses already place a high value on saving money. And even when a family isn’t capturing the energy savings it should, that doesn’t mean they’re making an inefficient decision or that government mandates and subsidies will make it better. By taking decisions away from the homeowner or business owner, these programs are making Americans worse off, not better.

Whether or not the subsidized investments that would come from the Shaheen–Portman legislation save money or improve efficiency is irrelevant. The question is whether taxpayer money should be used to support them and the answer is simple: they should not. Companies will make these investments if they believe the technology is promising, worth the risk, and the best use of their investment dollars.

If politicians believe Shaheen–Portman should be a springboard for broader energy policy reform, we’re jumping into a pool of more subsidies and unnecessary government intervention into the energy economy. That’s a pool American taxpayers and consumers don’t want to be swimming in.

The post Energy Efficiency Bill Is a Big Step in the Wrong Direction appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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JIM WATSON/AFP/Getty Images/Newscom

Later this week, President Obama will travel to the National Defense University (NDU) for a major policy address.

Under massive pressure to address his Administration’s mishandling of the terrorist murders of four Americans in Benghazi, Libya, and potentially illegal surveillance of Associated Press reporters, Obama will attempt to refocus the nation toward his polices for fighting what remains the most immediate threat to America: terrorism. This will include the use of drones, prisoners at Guantanamo Bay, and progress in the War on Terror in general.

It is not yet known what Obama will say. Will he retrench further on drone use against terrorists abroad? Will he move again to close Guantanamo? He will certainly not be able to claim that the “tide of war is receding,” as he once did.

This Administration has had some stunningly significant victories, most especially the killing of bin Laden. It has also had some terrible repudiations: disaster in Benghazi, the French intervention in Mali, a kidnapping in Algeria, Boko Haram in Nigeria, and homegrown bombers in Boston. The intent of the present policies may have been good, but the effects have been poor.

The over-reliance on drone strikes is a significant issue. The use of drones to kill leaders of the terrorist movement is laudable and a great tool, but it is wildly optimistic to think that alone, drone strikes would be enough to end al-Qaeda’s threat to Americans.

Even adding in the amazing capabilities of our high-end Special Operations Forces (SOF) is not sufficient. Al-Qaeda has metastasized from a centrally led organization to a nearly completely decentralized web that operates on the vaguest of “commander’s intent.” Groups in diverse areas attach themselves to al-Qaeda, and individuals self-radicalize in America and around the world. Instead of being beaten down, al-Qaeda grows every day.

Obama could also make a call to move counterterrorism back to the realm of law enforcement, where it resided during the Clinton Administration. This inadequate view led to the September 11 attacks in 2001. Such an effort would probably make many of the President’s supporters happy (the same ones who called Major Nidal Hassan’s terrorist attack on fellow Army service members an act of “work place violence”), but would be an unmitigated disaster. That would be exactly the wrong direction to go.

Likewise, a new effort to close Guantanamo would not be positive. Soon after his first election, Obama recognized that the Bush Administration had tried to “give back” nearly all the long-term detainees, but either could not find a country who would take them, or the detainee refused to be repatriated to their native lands because they did not want to face justice there (many countries’ prison systems are less hospitable then Guantanamo’s facilities).

Today this thorny problem still evades a solution that Congress can agree on. Obama’s desire for a public relations victory is not obtainable without the suspension of good judgment.

What does this all auger for the address at NDU? Clearly a new direction is required in the U.S. response to terrorism. The approach of the past five years has proven inadequate and been motivated more by wishful thinking than by harsh realities.

The terrorist threat to America and her allies is greater today, and more dangerous. Rather than back down and declare victory where none exists, the nation needs to push forward and aggressively hunt down its enemies.

Drones and SOF are not enough alone, trying to twist into a “legal pretzel” to close Guantanamo is a complete waste of effort, and wishing away the expanding threat of al-Qaeda’s affiliates is delusional. Yes, a new counterterrorism direction is needed, but it is more likely that this Administration does not have the stomach to provide the kind of aggressive strategy that is required.

The post With Growing National Security Threats, A New Counterterrorism Direction Is Needed appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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Xinhua/Sipa USA/Newscom

Our thoughts and prayers are with those affected by the Oklahoma tornado yesterday. The tornado, which touched down at 2:56 p.m. yesterday outside Oklahoma City, left massive destruction in its wake and took the lives of at least 24 people.

On average, over a thousand tornadoes strike throughout the U.S. each year, but very few reach the level of devastation caused by yesterday’s storm, which had 166 mile per hour (mph) to 200 mph winds. Oklahoma itself is also no stranger to these storms. Indeed, already this year more than 16 tornadoes have touched down in the state.

President Obama has already issued a federal disaster declaration for the state and ordered federal aid to the region. Yet even though the Federal Emergency Management Agency (FEMA) has begun to deploy to the area, the reality is that local governments, businesses, nonprofits, faith-based organizations, and community members will be the focal point of most response and recovery activities. Already we have seen this fact ring true in Oklahoma, as community members came to each other’s aid, the local Salvation Army and Red Cross mobilized, and police and rescue workers quickly responded.

For families and individuals, the best thing they can do is be prepared for the worst. Being prepared will ensure that emergency workers can instead focus on vulnerable members of the community and those in need. So to, it is the individual whose family is safe and secure who can volunteer at a disaster relief center or local charity and come to help others.

What Oklahoma needs now, however, is the assistance and support it needs to rebuild.

For more information on how to help, individuals can visit RedCross.org or UnitedWayOKC.org.

The post Prayers and Assistance for Oklahoma Tornado Victims appeared first on The Foundry: Conservative Policy News Blog from The Heritage Foundation.

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