Category Archives: taxes

Getting Washington’s Fiscal House in Order

By Congressman Steve Austria

During the last Congress, our country witnessed the passage of several costly pieces of legislation that I opposed, including the $1 trillion “stimulus” package and countless “bailouts.” I have and will continue to support reversing this egregious spending and getting our nation back on a path to prosperity. That is why I cosponsored and strongly supported two bills that provided a solution for real change to our nation’s spending practices. The Cut, Cap and Balance Act (H.R. 2560) and the Balanced Budget Amendment to the Constitution (H. J. Res. 2) called for cuts in our current federal spending levels and caps for the future spending by Congress. The Balanced Budget Amendment required Congress not to spend more than it receives in revenues while also providing a limited exception in times of war and serious military conflicts.

Jobs and the Economy

With the national unemployment rate at or above 8 percent for 34 consecutive months, it is clear that the borrowing and spending policies of this Administration have not worked. Since the failed $1 trillion “stimulus” was enacted, unemployment has averaged to 9.4 percent.

To jump start our economy and get Americans back to work, we must reverse the direction of borrowing and spending that this Administration and the previous Congress had led us. Since January, my Republican colleagues and I have worked furiously to cut spending and rein in government. We have passed 28 bipartisan jobs bills that now await action by the Senate. These bills remove the burdensome regulations that have plagued our small business owners and job creators, and promote common-sense, pro-growth policies. It is time to get America back to what it does best-create, innovate and lead.

Tax Policies

I was pleased to be a part of the effort in repealing the “1099 Provision,” which mandated that all businesses file an IRS Form-1099 for any vendor with which they have more than $600 in yearly transactions, resulting in burdensome costs for small businesses. This provision, added to President Obama’s health care law, had a adverse impact on small businesses and was included as a method to finance this new entitlement program.

Last week I supported a bill that passed the House that provided a full year extension of reduced tax rates, offered job incentives, extended doctors pay for our seniors care, and decreased discretionary spending by over $80 billion in the next ten years without raising taxes on small businesses. Our nation’s hardworking taxpayers and job creators deserve a solution that reflects real efforts to cutting Washington’s reckless debt, and focuses on creating certainty in our financial market to grow long-term jobs that are needed to putting our economy back on a robust path.

Energy Policies

We all want to be good stewards of the environment, but America must become less reliant on foreign on by using all of our natural resources we have here domestically. This includes wind, solar, nuclear, ethanol, clean coal, natural gas and oil. Unfortunately, the current policies offered by government bureaucrats are counterproductive, ignoring the energy resources we have domestically and excessively enforcing burdensome regulations that are costly for our nation’s employers and families. Expanding American energy production will lower prices, create new American jobs, reduce our dependence on foreign oil, strengthen our national security and raise revenue to help tackle the $14 trillion national debt.

House Republicans launched the American Energy Initiative – an ongoing effort to stop government policies that drive up gasoline prices; to grow American energy production to lower costs and create more jobs; and promote an ‘all-of-the-above’ strategy to increase all forms of American energy. I was also a cosponsor of the Roadmap for America’s energy Future (H.R. 909). This legislation aims to cut through the bureaucratic red tape and move forward with leasing and drilling in the Outer Continental Shelf (OCS) and with oil shale leasing programs halted by the Administration. It also moves forward with environmentally responsible exploration in the Arctic National Wildlife Reserve (ANWR), an exploration that could lead to 1 million barrels of domestic oil each day. Opening domestic offshore drilling will help decrease America’s dependence on foreign oil – something that is essential to our energy policy and our national security.

Government Takeover of Health Care

Last Congress, President Obama signed a $2 trillion health care bill into law, which increases the size of government; cuts more than $500 billion to Medicare that increases premiums on hardworking American families. These were all reasons why I opposed the so-called health care reform bill and voted this year to repeal the law by supporting H.R. 2, the Repealing the Job-Killing Health Care Law Act. Congress must work hard to give Americans the quality health care options they deserve by: ensuring everyone has the right to pick their own doctor; letting doctors and patients make health care decisions – not Washington bureaucrats; and guaranteeing access to affordable health care and health insurance for all.

What Lies Ahead

This past year in Congress brought with it many difficult decisions, and as a member of the House Appropriations Committee, I understand the difficult spending decisions. But, the conclusion of this year also brings new opportunities for next year to revise the expansion of the federal government and the regulatory uncertainties that are directly affecting our nation’s hardworking taxpayers and job creators, which our nation’s prosperity is dependent on.

How to Dig a Four Billion Dollar Hole

By Cameron Smith

Recently, Jefferson County, Alabama filed the largest municipal bankruptcy in U.S. history. However, the filing is only the latest chapter in a sad story for the county as well as the state. More importantly, many Alabamians have little idea how a county of less than 700,000 residents was able to accumulate more than $4 billion in debt.

In 1993, three Alabama citizens filed suit alleging that Jefferson County was polluting the Cahaba and Black Warrior Rivers in violation of the Clean Water Act. This case ultimately merged with a similar lawsuit filed by the EPA in 1994. In 1995, the judge in the case granted summary judgment for the EPA and plaintiffs because the facts, even viewed in a manner most favorable to Jefferson County, clearly demonstrated that the county had violated federal law. Instead of challenging the ruling further, Jefferson County agreed to negotiate a settlement known as a consent decree.

A consent decree is a judge’s order based on a voluntary agreement between parties in a lawsuit, which is enforceable by contempt and can be modified only by court order. In this case, the consent decree provided a mechanism for remedying flaws in the sewer system. The decree called for the county to provide the EPA with a series of evaluations of the sewer system which, in turn, resulted in an implementation plan to correct the offending features of the system.

Unfortunately, the decree also contained a provision that the county could, at its own discretion, make modifications to the implementation plan for “projects not specifically covered by [the] [c]onsent [d]ecree.” This provision permitted Jefferson County to add projects to their sewer improvement plans while giving the impression the improvements were necessitated by the initial consent decree.

In a comprehensive doctrinal dissertation at Auburn University entitled Jefferson County, Alabama: A Perfect Storm of Ethical, Financial, Political, and Market Failures, Louis Ray Morris, Jr. notes that Jefferson County’s 1997-1998 capital budget contained 50 projects required by the consent decree as well as 54 additional sewer-related projects, twice as many projects as actually necessary.

As the cost of the sewer system ballooned, Jefferson County engaged in the risky practice of municipal interest rate swaps as a means to protect against higher future interest rates on the county’s variable rate debt. These swaps were supposedly going to save the county more than $200 million. A Bloomberg Markets article released in 2008 noted that Jefferson County paid banks “$120 million in fees-six times the prevailing rate-for $5.8 billion in interest-rate swaps.” Instead, rates changed direction and the county piled on almost $300 million in additional debt.

The construction and financing of the sewer system were also fertile ground for criminal activity. The flexibility and lack of transparency afforded by the consent decree enabled more than two dozen Jefferson County commissioners, employees, and contractors to engage in a wide range of illegal activities.

To make matters worse, Jefferson County’s occupational tax, which accounted for around $66 million in fiscal year 2010, was struck down as unconstitutional. Legislators in Montgomery have been unable to reach an agreement to replace the lost tax revenue, in part because of concerns over the county’s recent history of poor management, lack of planning, and criminal activity. But even if those revenues remained consistent and were entirely allocated to paying Jefferson County’s debt obligation, it would take more than sixty years to pay off the principal owed without accounting for interest.

In the bankruptcy filing, Jefferson County acknowledged more than $3 billion in outstanding sewer warrants, more than $800 million in school capital improvement warrants, and more than $200 million in general obligation warrants. With accelerated payment and penalty interest provisions, the county’s debt could increase exponentially.

Jefferson County residents now face bankruptcy and a $4 billion hole that translates to more than $6,500 in debt for every resident of the county. Jefferson County leaders dug that hole the same way the federal government dug a $15 trillion one: nobody held government officials accountable for playing fast and loose with borrowed money. If this pattern continues in Alabama and across the country, Jefferson County’s fall will be just the beginning.

Cameron Smith is General Counsel for the Alabama Policy Institute, a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.

Election Results: The Issues (updated)

The latest report from the Secretary of State shows the following:

Issue 1, the Constitutional Amendment increasing the age of at which a person may be elected or appoinnted judge, is losing. The percent of votes against the amendment are 62% and votes for it 38%.

Issue 2, the referendum to repeal the public employee collective bargaining reform law SB 5, is also losing. The percent of votes against SB 5 becoming law is 61% to 39% of the votes in favor of it.

Issue 3, the proposed Constitutional Amendment to preserve the freedom of Ohioans to choose their health care and health care coverage, is winning by 2 to 1 margin. The percent of yes votes are 66% and 34% of the votes are against it.

The latest Greene County Board of Elections report shows the following levy results:

County Issues
Issue 14: Greene County Career Ctr – 52% for and 48% against
Issue 15: Greene Memorial Hospital – 61% for and 39% against

Local Issues: Xenia
Issue 13: Xenia Schools – 34% for and 66% against

Local Issues: Others
Issue 5: Cedarville Twp & Village – 69% for and 31% against
Issue 6: Jefferson Twp Fire – 68% for and 32% against
Issue 7: New Jasper Twp Roads – 45% for and 55% against
Issue 8: Spring Valley Twp – 65% for and 35% against
Issue 9: Sugarcreek Twp – 46% for and 54% against
Issue 10: Xenia Twp – 53% for and 47% against
Issue 11: Beavercreek Schools – 44% for and 56% against
Issue 12: Greenview Schools – 36% for and 64% against
Issue 17: City of Bellbrook – 46% for and 54% against
Issue 18: City of Bellbrook – 56% for and 44% against
Issue 19: City of Fairborn – 53% for and 47% against
Issue 20: City of Fairborn – 58% for and 42% against
Issue 21: Bowersville Village – 67% for and 33% against
Issue 22: Bowersville Village – 63% for and 37% against
Issue 23: Spring Valley Village – 66% for and 34% against

Voters apparently intend for their cities and villages to maintain services. Thus far, voters seem to be telling school districts they have already voted for enough emergency, operating, permanent improvement, and renewal levies-enough is enough. As far as the Career Center is concerned, it is still too close to call for the GCCC, but county votes apparently want Greene Memorial Hospital to keep up its facilites.

Voters appear to have bought the union message as well as the call to maintian personal freedom over health care choices. Could there be a contradiction or confusion of views here?

Issue 13, Analysis of Xenia Community School Emergency Operating Levy (revised)

By Daniel Downs

On November 8, Xenia Community School District officials ask voters to pass an emergency operating levy to avoid a budget deficit. School officials estimate the annual operating deficit will be $3,078,329. The 4.8 mill levy will generate the same amount for 5 years and will increase taxes about $147 a year on property valuated at $100,000.

After passing a bond issue, ½ percent permanent improvement levy, and several renewal levies, one has to ask whether or not this levy is really needed. To answer that question, I did my homework. I researched our state’s public school funding budgets. I then evaluated Xenia Community School District’s financial reports and budget projections including the recent five year budget forecast.

The levy is proposed as a way to avoid a budget deficit projected by the school’s five year forecast. The forecast is based on various assumptions concerning the economy, state and federal funding, and local conditions. Most of the budget assumptions seem reasonable. For example, property taxes and income tax revenues are expected to increase annually by a meager 1.5 percent. What does not seem reasonable is the belief that Gov. Kasich’s new foundation formula will result in zero growth after 2013. Historically, basic state funding for local public school has always trended upward. Decreases have been brief while increases have continued long-term. The new state budget (HB 153) continues this trend. This year the unrestricted state funding for Ohio schools totaled $6.4 billion. It increases to $6.69 billion in 2012 and $6.72 in 2013. There is no reason to believe it will not continue to keep up with inflation. This assumption of the Xenia budget forecast may be based more on the fear or dislike of Gov. Kasich’s increased funding for alternate forms of schooling than on real historical trends. Federal funding of alternate forms of schooling also consists of millions of dollars.

Several other budget items estimated to decrease over 34% include “restricted grants-in-aid” and “all other revenue”. Here again, the estimates do not seem reasonable. Xenia’s financial statements show federal restricted grants-in-aid has grown from $2.4 million in 2000 to $6.3 million in 2010. Even with the end of most stimulus money, federal funding continues to increase until 2013. The state budget does project a 14.4% decrease in federal funding for 2013; but barring a double-dip recession or zero GDP growth, federal aid will most likely bounce back in 2014.

The “all other revenue” item mentioned above consists of many different types of revenue sources. Some of those are interest income, rental income, tuition fees, compensation for loss of assets, and oddly enough federal restricted grants-in-aid. Except for interest income, this item coincides with revenues under a category called “other government funds” in the school district’s financial statements. Federal “restricted grants-in-aid” and the “other government funds” refer the are the same thing with rent and tuition included under Other Government Funds.

Another problem with the assumption concerning “restricted grants-in-aid” is the error about the Education Jobs Fund. The state budget shows it continuing into 2013 not ending. The $1 million from this fund will still be available in 2013 and probably beyond. (See footnote 1)

Xenia’s budget forecast lists “career technical fund” as a annual revenue source of only $82,678. Yet, a “special education fund” has over 10 times the amount of the “career technical fund”. Why not use this fund for students with learning disabilities. The Race to the Top fund also has about 10 times more money available for local schools. A new restricted use fund is the math science partnership fund. It has about $1 million more than the “career technical fund” that is available to school districts.

Without a doubt, there are some state and federal funds being phased out while new ones are being added. Coupled with economic uncertainty, confidence about the future of the economy is a scarce commodity. In light of the above, it is equally difficult to believe that the proposed budget deficit is real. If another recession occurs or if near zero growth continues, a budget deficit may occur, but only because employee costs continue to grow. According to the school’s budget forecast, union employees have agreed to a pay freeze. If so, only rising costs of employee benefits will contribute to a deficit. Of course, a loss of funds used to replace school buses, compensate for loss of tangible property tax revenues, and the loss of stimulus funds must count for something. (See footnote 2)   Yet, overall state and federal funding for local school continues to increase.

My analysis can be summarized this way: A vote for Issue 13 comes down to whether voters believe the school district’s forecast, whether they believe the historical funding trends and the state’s actual budget, or whether they believe the recent predictions of a slowly improving economy.

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Note 1:   Xenia Community School District’s 5-year forecast was published in October 2011. However, statements about Ohio’s biennium budget that passed on 30 June 2011 indicate part of the forecast was written before its publication, which explains the errors mentioned above.

Note 2:   In my original post, I wrote the “a large portion of funds for bus replacement, tangible property taxes, and stimulus money must count for something.” My original statement seems somewhat misleading and has been corrected. However, Xenia School District’s 2010 financial statement shows lost “bus purchase allowance” funds amounted to $52,850. These funds were reported under the revenue category “Capital Grants and Contributions.” This amount is not enough to effect a serious budget deficit.

Issue 14, An Improvemant Levy Renewal & Student Improvements

The Greene County Career Center is asking voters to renew its .75 mill permanent improvement levy.

The $2,050,00 generated annually by the levy will be used to upgrade equipment and technology to keep pace with industry developments. GCCC plans to offer a number of new programs including an international business and finance, health science academy, improve and expand the information technology and welding programs. GCCC also wants to upgrade the fire and security systems thoughout its facilities.

Important as is state-of-the art equipment and educational programs that promise to prepare our youth for the competitive market-place, a more important question is whether the Greene County Career Center is actually doing so.

According the last performance reports, its seems the GCCC is. The lastest proficiency tests shows GCCC students making significant improvements. For example, the percent of students achieving an at or above level on reading test increased from 90% in 2009 to 93% in 2010, from 85% in 2009 to 91% in 2010 on the mathematic test, and from 53% to 65% on industry skills testing.

Another impressive aspect of the latest performance report was the increase of the number of student completing both their career training and graduating. In 2009, the Greene County Career Center graduated 90% of its students, but 98% of GCCC graduated in 2010. That is an amazing improvement.

Of course, the purpose for vocational training is getting a job. The state career-tech performance assessment also reported on after-graduation placements. The report indicated that fewer GCCC greaduates got jobs in 2010(65% in 2009 to 54% in 2010) and fewer pursued college or advanced technical training (58% in 2009 to 52% in 2010). The report even showed fewer going into the military or an apprenticeship.

The recession is one likely reason for these negative results.

Whatever the reasons, students attending Greene County’s only vocational-tech school need the best possibly training to compete in an increasingly global marketplace.

Voting Yes on Issue 14 will enable the Greene County Career Center to provide the the needed equipment and technologies for that training.

Issue 3, Why Vote Yes?

Issue 3 seeks to preserve the freedom of Ohioans to choose their health care and types of coverage by an amendment to our state Constitution. Issue 3 aims at preventing the democratic party’s socialist version of health care reform from being forced on the citizens of Ohio. As proven in Europe and Canada, compulsory health care increases the overall cost of health care while reducing the quality of care. Those costs have contributed to the severity of the economic turmoil in the Europe.

The compelling case argued for the Obamacare is its claim that no one with an existing medical condition can be denied coverage and that the millions of poor Americans and their children will gain access to adequate health care. Those are two benefits touted by the media and all other proponents of Obamacare.

Obamacare law is supposed to prevention bankruptcy due to catastrophic illness and it will help small business provide health insurance to its employees.

It is also true that Obamacare will cost business more money to implement Obamacare. It will penalize individuals for not signing up for health care and small businesses for meeting the laws imposed of them. Physicians and other health care professionals support Issue 3 for similar reason–it will cost them too much financially and professionally. It will benefit insurance companies by increasing revenues to compensate for insuring people with preexisting illnesses. However, wealthier Americans will pay more for health care in order to compensate for the higher costs incurred by doctors, other health practitioners, and by government. Government-run health care will require more people and resources to run completely socialist health care system. Consequently, Obamacare will require more taxpayers funding. As Obama and his party associates in Congress have made clear, the wealthy are the taxpayers of choice.

Because of bureaucratic inefficiencies, corruption, high costs, fewer quality health professionals and the like, waiting long periods for treatment is common. That is why similar health care system in Canada and Europe are known for “rationing” services to the elderly and disabled. The same is expected under Obamacare, or rationed care.

On principles of inherent human rights alone, a Yes vote is necessary to preserve the enjoyment of what freedom we have left. With regard to efficiency and economy, a Yes vote will ensure government bureaucracy doesn’t destroy the quality of health care we already have.

Health care certainly needs improved, but Obama’s version will not provide it.

Why Vote Yes on Issue 2? Here Are Some Facts to Consider

Issue 2 is a referendum on the newly passed collective bargaining and other public employment contracts reform bill titled SB 5. The bill was passed in order to enable state government to reduce labor costs, balance the state budget, make public jobs more competitive and performance oriented, and attract as well maintain good workers.

One of the ways the governor, legislators, and many local officials agreed would enable them to accomplish these goals was reform the standards and practices of public workers.

Two organizations are leading grass root campaigns with regards to the passage of Issue 2. The union backed organization “We Are Ohio” lead the ballot referendum, wrote ballot argument opposing the SB 5, and produced most of the media ads seeking to persuade a no vote on November 8. “Building a Better Ohio” is the organization promoting the new law. “A Better Ohio” is behind the media ads, telephone calls, and literature campaign in favor of SB 5. It also has written the ballot argument for making it public law.

When in it comes to truth-in-advertising, “A Better Ohio” gets an “A” but “We Are Ohio” has earned an “F”. That is, statements and arguments made by “A Better Ohio” tend to be true while statement by “We Are Ohio” often have been shown to be false. The Plain Dealer’s PolitiFact Ohio is the source of these observations.

A number of other news, public policy think tanks, and other organizations have been focusing on this issue. They include Buckeye Institute (see links in right column above), Principled Policy Institute, Ohio Farm Bureau Federation, Dayton Chamber of Commerce, and others.

The ballot text voters will see presents two arguments. The “Vote No on Issue 2, Repeal SB 5” arguments make the following claims. SB 5 puts our families at risk by making it harder for fire and police to negotiate for needed safety equipment. Issue 2 also makes the nursing shortage worse by making it illegal for nurses, hospital and clinic workers to demand reasonable staffing levels. PolitiFact Ohio proves these arguments are clearly false. SB 5 specifically states safety employees DO have bargaining rights over equip and related issues (in section 4417.08 of the bill), and only about 10% of all nurse work for the state. What administrator is going to deny a real need for more nurses if a genuine health and safety issue can be proven? The state has monitoring mechanism to deal with such issues.

Another argument is that Columbus politicians exploited a loophole, giving a special exception to the same standards. As PolitiFact Ohio shows, politicians have always been exempt. The politicians already pay 15% into their healthcare and 10% to their pensions. And, they never can give themselves raises. Current politicians can only increase pay for future elected officials.

What is unfair about Issue 2 is the unions attempt to deceive voters into opposing the savings SB 5 will produce by making government more efficient.

A careful reading of the final argument against SB 5 is that Columbus politicians giving corporation tax-break incentives to moving businesses to Ohio, start new businesses, expand business operations, and keep them in Ohio is reason for Ohio economic problems. Union members should not be penalized for problems created by big business. Yet, politicians like Kasich are creating policies to curb corporate lobbyist influence peddling. Politicians like Kasich are not attempting to reduce pay but rather make public compensation, especially benefits, as fair as those creating profits that grow the economy. No public employee produces profits. As necessary as fire fighters, police, teachers, and support personnel are, public employee pay reduces available income or pay of all profit-makers, from the low-wage earner to the over-paid CEO.

Voting Yes on Issue 2 will NOT hurt us all. Ohio government made more efficient and public employee benefit package comparable the private-sector will not hurt us all either. It provides the necessary incentive for improving the quality of local education as well as all other sectors of government by making teaching and all other jobs based on results rather than mere tenure.

Yes on Issue 2 will provide more equality in union bargaining. Local communities and their representatives will be in a better position to handle economic down-turns when increasing taxes is reasonable. Taxpayers, in other words, will gain better legal standing regarding local government, schools, unions power, and taxation.

Greene Memorial Hospital Renewal Levy

Issue 15 will continue needed funding for both Greene County Hospital(GMH) and its sattelite care facilities across the county. As the annoying signs claim, the 1/2 mill renewal levy will not increase taxes but it will underwrite part of the GMH’s operational costs.

What is the amount generated by Issue 15? The levy will continue generating annual operating revenues in the sum of $1,646,000.

If passed, the levy renewal thus will enable Xenia’s local hospital to continue its many medical services including critical emergency, cardiac, cancer and out-patient services.

For more information, go to http://www.keeplocalhealthcare.org

The Truth About Obama’s Jobs Bill

By The National Inflation Association

Last Thursday evening, President Obama gave a speech to a joint session of Congress discussing the jobs situation here in America. The purpose of Obama’s speech was to convince the American public and their elected representatives in Washington to support Obama’s new $447 billion ‘American Jobs Act’, which has a cost that is 49% larger than the $300 billion act most people were expecting. NIA believes this bill will do nothing to reduce unemployment in America and that it is nothing but another stimulus bill in disguise that will add to our budget deficits.

Obama’s bill proposes a $4,000 per employee tax credit for businesses that hire somebody who was previously unemployed for 6 months or more, at a cost of $8 billion. At the same time, Obama wants to extend emergency unemployment compensation (EUC), which allows Americans who have exhausted standard unemployment benefits that last for 26 weeks to continue receiving them for between 20 and 53 additional weeks. EUC benefits are set to expire at the end of 2011 and continuing them through the end of 2012 will cost U.S. taxpayers $49 billion.

It is totally absurd for Obama to give employers money to attempt to hire people he is simultaneously paying to stay out of work. What makes this even more outrageous is that employers have an incentive not to hire recently laid off workers, when only those unemployed for 6 months or more will bring them a $4,000 check. If this bill is passed it will make the unemployment situation in America far worse than it already is.

NIA has heard from members who own farms and have positions on their farms available, but can’t find anybody interested in working for them and filling the available positions. Every time they hire somebody to work on their farm, the worker purposely does a poor job and tries to get fired. Their sole purpose of getting a job is to convince their local unemployment agency that they are trying to find employment so that they can keep receiving unemployment benefits, when in reality they are trying to take advantage of the system. Continue reading

Obama on Jobs: Missing “Rigid” Ideas

By Cameron Smith

Currently, there are almost 600 bills before Congress that contain the word “job.” Politicians have talked about “job creation” nonstop. Oddly enough, this rhetoric demonstrates that those political leaders are listening to what concerns Americans, primarily their economic future.

Their responses fall into two fundamental categories: Those who believe that the government creates jobs and economic growth, and those who believe the private sector accomplishes those ends. The former believe that substantial government spending charges the economy in troubled economic times while the latter tend to believe an unhindered marketplace will correct itself.

After listening to President Obama’s “jobs speech” to Congress, Americans should have little doubt that the President believes the government has a central role in job creation and a virtually unfettered control over the economy.

President Obama led off by stating that government needs to ask whether “[it] can restore some of the fairness and security that has defined this nation since our beginning.” Remember, this is the same nation that Ben Franklin admonished should not give up “essential liberty to purchase … temporary safety” lest it “deserve neither liberty nor safety.” This is a nation where meaningful opportunities for all are prized above equal outcomes. The President’s sentiment is troubling, not because “fairness” and “security” have suddenly become vices, but because government imposition of those virtues is radically different than the average American’s concept of them.

The President even acknowledged that “the drive and initiative of our workers and entrepreneurs … has made this economy the engine and the envy of the world.” But he also qualified those remarks by suggesting that Americans share “a belief that we’re all connected, and that there are some things we can only do together, as a nation.”

The President is correct that there are some things Americans can only do together as a nation, and even more convenient for the President, Americans have agreed on those tasks. The Constitution provides a number of express powers where states and individuals, through the federal government, work together for the common welfare. Conversely, the same Constitution prevents the federal government from interfering in the lives of individuals, their communities, and their states where powers are not granted to the federal government. These constitutional restraints do not mean the American tradition of helping each other is dead but rather that the tradition has meaning because it comes from the hearts of the American people rather than by government compulsion.

Regrettably, President Obama has a different perspective on the limits of government. During the speech, the President asked, “[w]hat kind of country would this be if [Congress] had voted down Social Security or Medicare just because it violated some rigid idea about what government could or could not do?” The “rigid ideas” that limit government action are found in the Constitution. The President would do well to remember that those ideas were enshrined by those who knew the threat of powerful oppressive government to free society, the countless Americans who shed their blood to protect them, and a people who have agreed to amend them only 27 times over more than 200 years.

When the President of the United States takes such a jaundiced view toward fundamental restraints on the federal government, Americans should be outraged. The Constitution’s limits on government are there SPECIFICALLY to prevent the federal government from becoming too powerful. Even when they are not convenient, those limits are extremely important.

Parts of the President’s plan for stimulating the economy make sense. Stabilizing and reducing costs for Medicaid and Medicare as well as authorizing free trade agreements are music to the ears of many Americans. Unfortunately, these are conspicuously absent from the American Jobs Act which the President called on Congress to pass.

Many components such as new unemployment benefits and “shovel ready” infrastructure projects are simply another chorus of an all-too-familiar tune. Rather than engaging in common sense tax reform, the President’s tax credits fail to reduce the overall tax burden on job creators by borrowing against Social Security and putting conditions on the types of workers those businesses must hire to obtain the credits. To be sure, America needs a real infrastructure plan for the future, and tax reform has been put off for too long. But the President’s political “Hail Mary” falls far short of meeting those requirements.

The President also failed to mention the $450 billion cost of his plan. While he assured America that “everything in [his] bill will be paid for,” the White House summary of the American Jobs Act states that “the President will call on the Joint Committee [on Deficit Reduction] to come up with additional deficit reduction necessary to pay for the Act and still meet its deficit target.”

Relying on the highly divided “supercommittee” to come up with another $450 billion in cuts on top of the $1.5 trillion already assigned seems highly unlikely.

Even if that substantial cost could be offset, the Congressional Budget Office projects a $1.3 trillion deficit for 2011 alone. Should Congress could find a way to “pay for” the President’s proposals, they would almost certainly be doing so with money the American people do not have.

With unemployment at more than nine percent, Americans definitely need jobs. They also need representatives and a President who understand their limits.

[Since Smith wrote this article, President Obama has proposed paying for his jobs bill by “closing the corporate tax loophole and asking the wealthiest Americans to pay their fair share.” In other words, he wants the rich to pay for government screw ups. It’s federal government monetary policies that aid the development of financial bubbles and busts. It is the federal government that has increases the national debt to unsustainable levels. If enough Americans buy Obama’s tax increasing strategy, the middle class will end up paying for it through increased prices on goods and services, which is also known as trickle-down inflation.]

Cameron Smith is General Counsel for the Alabama Policy Institute, a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.