Business & Economy
Cut, Cap and Balance Act of 2011 PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Friday, 22 July 2011 22:50

Mr. President, on August 2nd, our nation will be unable to borrow money to meet our current obligations.  We’ve known for a while that this time was coming.  Our annual deficits have been near $1.5 trillion for the past two years, and will be that large this year.  With deficits of that size, no one should be surprised that we’ve hit the debt ceiling. 

Which raises the question:  What has the President offered to confront this looming crisis?  What has the Senate Democratic Majority done to address our deficit crisis?  Well, the answer is simple.  Not much.  Last year, President Obama virtually ignored his own deficit-reduction commission.  This year, he offered a budget for 2012 that would increase spending, increase taxes and add trillions to our debt.  His budget was so ill-conceived and out of touch that it was defeated here in the Senate by a vote of 97-0.  Not a single Senator voted for President Obama’s budget.  Every member of the President’s party said no to his budget.

For most of this year, President Obama said we should raise the debt ceiling without taking any measures to address our long-term deficits and debt.  It was the position of this administration that Congress should simply rubber stamp another debt ceiling hike with no plan in place to reduce our deficits.  That plan was voted on in the House and was soundly rejected.  All Republicans and nearly half of the Democrats in the House voted against increasing the debt ceiling without deficit reduction.

The President then gave a budget speech in April.  I presume he recognized the inadequacy of his budget proposal.   He outlined a budget framework that would reduce budget deficits by $4 trillion over 12 years. But he still hasn’t presented an actual budget to go with it.  The Director of the Congressional Budget Office, Mr. Elmendorf, was asked if he could estimate the budget impact of this new framework.  The CBO director state clearly, “We don’t estimate speeches.  We need much more specificity than was provided in that speech for us to do our analysis.”

We’ve heard a lot from the White House about the need to come up with a plan, but the White House itself has never offered a single debt-ceiling proposal for a vote.  And the Senate Democratic Leadership has also seriously shirked its responsibility.  They haven’t put forward a budget for more than 800 days.  Every family in America that works hard and sacrifices to pay their bills ought to be ashamed at the failure of the U.S. Senate to offer a budget.

In sharp contrast, members of the House fulfilled their responsibility and passed a budget earlier this year.  The Democrats have done nothing with it but demagogue it.  While they can’t find time to compile their own budget, they’ve sure found time to make speeches about the House budget.  While members on the other side come to the floor to oppose and demagogue the Cut, Cap and Balance plan, they’ve offered no plan of their own.  While there is now a framework from the so-called gang of six, their plan also lacks any specificity.

Perhaps that’s the political strategy the other side has chosen.  Voters and the American people can’t be upset with a position you’ve taken if you haven’t taken any.  This strategy may be politically expedient, but it will drive our economy and our country off a cliff.  The strategy of placing a higher priority on the next election rather than the economic and fiscal situation facing our county is how we got in this mess. 

Based on the lack of proposals put forth by the other side, one could assume that they’re perfectly content borrowing 40 cents for every dollar we spend.  Are they pleased with deficits of $1.5 trillion annually?  They must be, because they haven’t offered a plan to reduce these deficits.

On top of that, they have argued for tax increases.  They must believe we have a revenue problem.  According to their arguments, the American people are not handing over enough of their money to satisfy the needs of Washington to spend.  The reason the economy isn’t growing and jobs aren’t being created is because Washington isn’t spending enough money.  Remember, just two years ago they passed the $800 billion so-called stimulus as a means to keep unemployment below 8 percent.  So, we borrowed the money and spent it on government programs. 

And where is the U.S. economy today?  Unemployment is at 9.2 percent.  More than 14 million Americans are out of work.  And now the national debt is more than $14.3 trillion.  This experiment proved that government spending does not stimulate private sector job growth.  Government doesn’t create wealth.  Government consumes wealth.  The only jobs created by the government are government jobs. They don’t add value to the economy; they are a cost to the economy.

The fact is, we’re in this hole today because of our spending problem.  Historically, spending has averaged about 20 percent of our gross domestic product.  Today, and in recent years, spending has been near 25 percent of gross domestic product.  This level of spending cannot be sustained, particularly when revenue has historically been around 18 percent of gross domestic product.

For my colleagues who think we can reduce deficits by increasing taxes, you need to understand that it doesn’t work.  Professor Vedder of Ohio University has studied tax increases and spending for more than two decades.  In the late 1980s, he co-authored, with Lowell Galloway also of Ohio University, a research paper for the congressional Joint Economic Committee that found that every new dollar of new taxes led to more than one dollar of new spending by Congress.  Professor Vedder has now updated his study.  Specifically, he found that “Over the entire post World War II era through 2009, each dollar of new tax revenue was associated with $1.17 in new spending.”

History proves tax increases result in spending increases.  We know that increasing taxes is not going to reduce the deficit.  Instead of going to the bottom line, tax increases are a license for Washington to spend even more.

History also shows that tax increases don’t increase revenues.  Everybody thinks that if you raise the marginal tax rates, you will bring in more revenue. But the taxpayers, workers, and investors of this country are smarter than we are.  Regardless of the rate, over the past 40 years, revenue has averaged about 18 percent of gross domestic product.  Higher tax rates just provide incentives for taxpayers to invest and earn money in ways that reduce their tax liability. 

You cannot tax your way out of this problem.  We have a spending problem, not a revenue problem.  That’s why I’m supporting the only plan that has been put forth to address our deficit and debt problem.  The Cut, Cap and Balance plan passed the House with bipartisan support from 234 members.  This plan is the only plan offered to cut spending in the near term.  We need to halt and reverse the trend of the last two years when government spending increased by 22 percent, not even counting the failed stimulus program.  It will also impose budget caps to get our spending down to a manageable level compared to our gross domestic product.  Finally, it would impose a balanced budget amendment to our Constitution.  It only makes sense to impose a requirement that we live within in our means.  Washington proves again and again that it needs this kind of discipline.

I’d say to my colleagues, if you don’t support this plan, then offer your own plan.  You know the debt limit must be increased. But you also know we must take action to reduce the future levels of deficits and begin to bring our debt down.  Where is your plan to do that?  Where is your budget resolution?  How will you meet these responsibilities of elected office? 

The trajectory of our debt is alarming.  It will soon undermine our economy and our economic growth.  If we do nothing, our children and grandchildren will have fewer economic opportunities than we have had.  This is a moral issue.  Without a plan to put our fiscal situation on a better path, the next generations will have a lower quality of life than the one we’ve experienced.  We can’t let that happen. 

We must take action to correct our course.  I urge my colleagues to support the Cut, Cap and Balance plan.

 
Governor Quinn Announces Appointments to Workers’ Compensation Advisory Board PDF Print E-mail
News Releases - Business & Economy
Written by Andrew Mason   
Friday, 22 July 2011 22:21

Appointments Continue Implementation of Workers’ Compensation Reform Law

CHICAGO – July 20, 2011. Governor Pat Quinn today announced 12 appointments to the Workers’ Compensation Advisory Board. Today’s action continues implementation of the historic workers’ compensation reforms signed into law by the Governor last month. The Advisory Board will make recommendations on the appointment of arbitrators, among other duties. 

Effective immediately, Governor Quinn named Mitchell W. Abbett, Richard Aleksy, Aaron Anderson, Michael Carrigan, John Carpenter, Mark Denzler, Phillip Gruber, David Halffield, William Lowry, Mark Prince, Sean T. Stott and David Vite to serve as members of the Workers’ Compensation Advisory Board.

“Each of these appointees brings the knowledge and experience to support us in reforming Illinois’ workers’ compensation system,” said Governor Quinn. “Our efforts to overhaul and modernize workers’ compensation are critical to improving our state’s business climate. I want to thank these individuals for their commitment to our businesses and our workers, and I look forward to the board’s recommendations.”

In June, Governor Quinn signed House Bill 1698, a comprehensive overhaul of Illinois’ workers’ compensation system. The reforms are expected to save Illinois businesses between $500 and $750 million dollars, while continuing protections for injured workers. The reform package also includes a major overhaul of Illinois’ troubled Workers’ Compensation Commission. 

In addition to making arbitrator recommendations, the Workers’ Compensation Advisory Board also assists the Illinois Workers’ Compensation Commission (IWCC) in formulating policies, setting priorities and developing administrative goals. The chairman of the IWCC serves as the ex officio chairman of the Advisory Board.

The Advisory Board consists of 12 members appointed by the Governor with the advice and consent of the Senate. Members are unpaid, but may have expenses reimbursed. Six board members represent employees, and six represent employers; the structure is designed to balance the concerns of businesses, while ensuring critical protections for workers.

Profiles of the new Advisory Board members are attached.

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Mitchell Abbett has over 20 years of experience in workers’ compensation, human resources, and in developing successful policies concerning health and safety in the workforce.  Mr. Abbett is currently the human resources and safety manager at Holten Meat Inc. Previously he worked as safety and training manager at The P.D. George Company, director of safety and insurance for the city of Granite City, a claims adjuster for Crawford Company and a personnel safety coordinator at Lanter Courier Corporation.

Richard Aleksy is a partner at Corti, Aleksy & Castaneda, P.C. Mr. Alesky has served as president and director of the Workers’ Compensation Lawyers Association, and has been published extensively on workers’ compensation law.

Aaron Anderson has been an employee-class representative for the Illinois Workers’ Compensation Commission Advisory Board since 2009. He is currently the director and representative for the Painters District Council No. 30 in Aurora. Mr. Anderson has health and safety certifications from a number of organizations including the International Union of Painters and Allied Trades, U.S. Environmental Agency, the American Red Cross and OSHA.

Michael Carrigan is the president of the Illinois AFL-CIO. Mr. Carrigan brings 30 years of experience with labor organizations, and first-hand knowledge of injured workers’ experiences within the workers’ compensation system. He has served on the Illinois Workers’ Compensation Commission Advisory Board since 2005.

John Carpenter is the senior vice president of public policy for the Chicagoland Chamber of Commerce. Mr. Carpenter’s extensive business background includes work as vice president of corporate affairs for American Airlines, served on the boards of Fort Worth Chamber of Commerce, the Dallas Convention and Visitors Bureau, the Midwest Board of Directors of the National Conference of Community & Justice, and the Board of Directors of the World Affairs Councils of America.

Mark Denzler is currently the vice president and chief operating officer at the Illinois Manufacturers’ Association.  Mr. Denzler has also served the association’s Illinois government affairs specialist, director of government affairs, and a legislative analyst.

David Halffield is the vice president of Sears Holdings Management Corporation and specializes in overseeing risk management and workers compensation claims. Mr. Halffield has also had past experience as the assistant director of casualty claims services at the Midwest Region of Aon Risk Services, a claims insurance manager at Chicago Bridge and Iron, and as a claims adjuster and supervisor at Liberty Mutual Insurance Company.

Phillip Gruber is the general vice president for the International Association of Machinists and Aerospace Workers Union. Mr. Gruber has been a member of the International Association of Machinists and Aerospace Workers Union Local Lodge 688 since 1972, and has served on the Workers’ Compensation Advisory Board since 2007. 

William Lowry is a managing shareholder at Nyhan, Bambrick, Kinzie and Lowry, PC. He is a member of the Workers’ Compensation Lawyers Association, and has concentrations in trial and appellate workers’ compensation and employer liability practice. He is the author of several articles on workers’ compensation law, and he lectures throughout Illinois.

Mark Prince has been part of the Prince Law Firm in Marion, Illinois since 2004, representing clients that have been harmed on the job due to negligence or intentional misconduct. He has been awarded the William J. Harte award for his amicus curiae briefs, and he has lectured at multiple legal education seminars on the rights of injured people.

Sean Stott has 15 years of experience analyzing the Workers’ Compensation Act as the director of governmental affairs for the Laborers’ International Union of North America. He has also had prior experience with unions and workers compensation through his position as the legislative director for the Illinois AFL-CIO.

David Vite is currently the president and CEO of the Illinois Retail Merchants Association and has served for two years on the Board of Directors and Executive Committee of the National Retail Federation. He has served on the Employment Security Advisory Board since 1983, where he is the longest serving member.

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Braley Statement on ‘Gang of Six’ Deficit Reduction Plan PDF Print E-mail
News Releases - Business & Economy
Written by Kira Ayish   
Tuesday, 19 July 2011 18:28

Washington, DC – Today, Congressman Bruce Braley (IA-01) released the following statement regarding the ‘Gang of Six’ deficit reduction plan:

“As details emerge, I’m very pleased to see that thoughtful, bipartisan discussions have resulted in a compromise that could address our nation's deficit and keep the very real risk of default at bay. While many politicians in Washington have done their best to claim that default is not a real possibility – others have sat down, rolled up their sleeves and worked together to ensure our nation does not default on our obligations. This proposal will provide immediate deficit reduction, finally fix a broken payment system for Iowa's doctors, and abolish the Alternative Minimum Tax, which unfairly penalizes middle class families.  

I look forward to analyzing this proposal and moving the country away from default, and back on track towards economic recovery.”

Office of Congressman Bruce Braley (IA-01)
1727 Longworth House Office Building
Washington, DC 20515
(P) 202.225.2911
(F) 202.225.6666

 
Governor Quinn Signs Legislation to Advance Clean Energy Project, Create 1,500 Jobs PDF Print E-mail
News Releases - Business & Economy
Written by Laurel White   
Monday, 18 July 2011 13:14

Leucadia Project Will Boost Regional Economy;

Provide Long-Term Price Certainty to Consumers

CHICAGO – July 13, 2011. Governor Pat Quinn today signed legislation that will help create Illinois’ first coal gasification plant and substantially reduce carbon emissions, while creating 1,500 jobs and saving consumers more than $100 million over the next several years. The new law follows principles the Governor outlined in the spring legislative session requiring all energy projects to protect consumers, create jobs and safeguard our environment.

“Projects that create jobs and protect consumers strengthen our continued economic recovery,” said Governor Quinn. “This project protects Illinois consumers, while continuing our position as a leader in clean energy technology by utilizing home grown resources to create the jobs of today and tomorrow.”

The Chicago Clean Energy project is a $3 billion coal gasification project that will be located on a brownfield site within the Chicago-Calumet Industrial Corridor at 115th Street and Burley Avenue, formerly the LTV Steel plant, on Chicago’s southeast side.

The project will utilize, for the first time in Illinois, an advanced clean coal process known as gasification. The chemical process allows production of substitute natural gas from Illinois coal and petroleum coke without burning the coal or petroleum coke. Carbon dioxide and other harmful emissions are captured as part of the process and then eventually sequestered underground. Experts view the process as a lynchpin to development of new coal facilities with sharply reduced greenhouse gas emissions.

Chicago Clean Energy expects to generate more than $10 billion in economic output for Illinois and create tens of thousands of jobs, including approximately 1,100 construction jobs, 200 permanent jobs and 165 additional mining jobs. The plant will use at least one million tons of Illinois coal per year.

“We are grateful to Governor Quinn for his foresight in seizing an opportunity to make Illinois a leader in clean energy technology, and in securing clean energy jobs for the state,” said Tom Mara, executive vice president of Leucadia National Corporation, the company behind the Chicago Clean Energy project. “We are committed to working closely with local leaders and community members to make this project a tangible benefit to Chicago and the entire state of Illinois.”

The final legislation was revised from a previous measure considered earlier this year to include input from the Governor, the Environmental Law and Policy Center, the Citizens Utility Board, local organizations near the project site and other stakeholders. The bill now proportionally allocates the natural gas produced at the facility to Illinois’ gas utilities. It also includes a number of consumer protections, including a rate cap, a robust reserve account that fairly aligns the interests of the developer with those of the consumer, and a revised system to share savings and potential revenues with consumers. 

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Q & A: Social Security and the Debt Ceiling PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Monday, 18 July 2011 10:23

Q.  What is the debt ceiling and when will the federal government reach it? 

A.  The debt ceiling is the amount of debt the federal government can legally borrow from the public and government trust funds.  The ceiling is set by law and is currently $14.294 trillion.  On May 16, 2011, the Treasury Secretary said that the government will reach the current debt ceiling by August 2, 2011.

Q.  Will Social Security recipients receive their checks if the debt ceiling is not increased by August 2?

A.  After August 2, Social Security benefits are next scheduled to be paid on August 3.  The U.S. Treasury has the authority and assets to pay Social Security benefits if the debt ceiling is not increased before August 2.  The government continued to pay Social Security benefits when the debt limit was reached in 1985 and again in 1996.

Q. How will benefits be paid if the government can’t borrow more money?

A.  The U.S. Treasury has two ways to make Social Security payments if the debt ceiling is not raised by August 2.  The first is with general tax revenues.  Regardless of U.S. borrowing authority, tax revenues continue to flow into the U.S. Treasury.  In August, the Treasury is likely to receive revenues around $172 billion and have bills due around $306 billion.  The President has the discretion to determine how the money is spent.  Whether or not Social Security would be one of his top priorities, there are special safeguards for Social Security payments.  The federal government is required to invest the payroll taxes going into the Social Security Trust Fund in special obligation bonds. These special obligation bonds are debts held by the government instead of the public.  By law, these bonds can be exchanged for public debt in order to secure infusions of cash, if needed, to continue paying Social Security benefits.  As a result, Social Security Trust Fund assets of $2.6 trillion ensure that Social Security benefits can be paid until the debt limit is increased or the federal debt is otherwise reduced. 

July 15, 2011

 
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