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Stop the Extremists on Global Warming
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Press Release

Stop the Extremists on Global Warming

Open letter to ExxonMobil Shareholders: Some well-intentioned individuals have joined a radical fringe environmentalists in their support of the Kyoto Protocol on greenhouse gas emissions which would cost the US economy hundreds of billions of dollars – and our sovereignty.

05/26/2003
Tax Cuts Help Tame Government Growth
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Tax Cuts Help Tame Government Growth

BY Wayne T. Brough

On numerous occasions, Nobel laureate Milton Friedman has argued that tax cuts are the only effective measure to discipline federal spending. In fact, the question of whether the tax cut will boost economic growth or stimulate the economy is secondary for Friedman. What is more important, and what should be the topic of debate, is the need to limit the size and scope of government, which at the federal level alone already consumes 20 percent of the nation's output.

05/25/2003
Tax Cuts Help Tame Government Growth
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Tax Cuts Help Tame Government Growth

BY Wayne T. Brough

On numerous occasions, Nobel laureate Milton Friedman has argued that tax cuts are the only effective measure to discipline federal spending. In fact, the question of whether the tax cut will boost economic growth or stimulate the economy is secondary for Friedman. What is more important, and what should be the topic of debate, is the need to limit the size and scope of government, which at the federal level alone already consumes 20 percent of the nation's output.

05/25/2003
Tax cuts help tame government growth
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Tax cuts help tame government growth

BY Wayne T. Brough

On numerous occasions, Nobel laureate Milton Friedman has argued that tax cuts are the only effective measure to discipline federal spending. In fact, the question of whether the tax cut will boost economic growth or stimulate the economy is secondary for Friedman. What is more important, and what should be the topic of debate, is the need to limit the size and scope of government, which at the federal level alone already consumes 20 percent of the nation's output.

05/25/2003
Austerity with an Asterisk
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Austerity with an Asterisk

BY Amy Gardner, Dan Kane

In Oregon they cut short the school year, and in Kentucky they let inmates go free. But as the budget crunch continues for a third year in North Carolina, class size is shrinking, more officers are guarding prison inmates, and a waiting list for children's health coverage has dwindled to nothing. From schools to prisons to services for the disabled, many state functions have remained intact since the first billion-dollar budget shortfall nearly three years ago, state officials say. Gov. Mike Easley has demanded that classrooms not be compromised. He and the legislature have agreed to raise some taxes each year. And in many areas of government, officials report that good management has allowed them to preserve their primary functions. "So far, we have been able to rearrange the way we do things, to work harder, smarter, and not let the reductions that we've had over the past biennial budget destroy our core mission," said Carmen Hooker Odom, secretary of health and human services. She oversees $ 3.7 billion in state spending, the second-largest budget after public education. Not everyone agrees. Some point to specific programs, such as child abuse prevention or historic sites, that have been nibbled at. Others say that although spending has not decreased broadly, it also has not kept pace with demand, which in some cases has risen substantially as the economy has fallen. Even those who think the effect has been minimal say that will not be the case in the coming year, when more cuts are likely. "We've had a huge deficit of services, like tens of thousands of people not beng served, long before this budget crunch," said Beth Melcher, who lobbies for the North Carolina office of the National Alliance for the Mentally Ill. "Now, you have more people needing services, because that's what happens when you have an economic downturn, and you've cut all these rates for providers, so they're seeing fewer people. So even if you can look at a budget number and say, 'We're not reducing that number,' there's a bigger story underneath it." Still, there are plenty of examples just in the Department of Health and Human Services where programs have not been cut and, in some cases, are serving more people than ever. Medicaid, the enormous health-insurance program for the poor, elderly and disabled, has reduced payments to providers but has suffered no reductions in benefits or eligibility over the past three years. A longer wait for aid The waiting list for child-care subsidies has declined from about 15,000 to 10,308 over the past year, and funding has ticked up slightly. Even Health Choice, the health program for low-income children that was frozen with a waiting list of 34,000 in an early round of budget cuts two years ago, is now open to all eligible children and serves nearly 100,000 children. "There's been some cost-cutting, but it hasn't been so huge that it's starting to drastically affect people yet," said Adam Searing, a public-interest lobbyist who works on health issues for the poor. In state prisons, officials say they have maintained the ratio of three inmates per guard, even as the number of inmates has grown. The Attorney General's Office is keeping up with a steady increase in appeals of criminal convictions without adding more people, Chief Deputy Edwin Speas said. The state budget itself demonstrates why many services have managed to go on. It has continued to grow through the crisis, from $ 13.22 billion in spending three years ago to an estimated $ 13.95 billion now. Personnel records show that the number of state employees as of April 30 -- 91,186 -- is about 1,100 less than three years ago. The figure, which excludes teachers and professors, amounts to a 1 percent reduction in the work force. Those numbers are possible in part because in each year of the crisis, the legislature has drummed up new money. Two years ago, at Easley's prodding, the General Assembly raised the general sales tax. Last year, it allowed local governments to raise taxes in exchange for taking state aid to local governments. "It's the same story," said Jonathan Hill, state director of Citizens for a Sound Economy, a national antitax organization. "We seem to be looking for more revenue, and the first place we should be looking is cutting the size of government. And that's been the big failure." Whether education has emerged unscathed depends on who is talking. Easley has demanded extra money for More at Four, his academic pre-kindergarten program, and to lower class size in elementary school. He has pledged that he will not allow the budget crunch to harm the classroom, whether public schools, community colleges or public universities. Still, education officials say budget cuts have made it hard to keep up with growing numbers of students. Services outside the classroom such as financial aid and career counseling are suffering. Guilford Technical Community College used to evaluate an application into the college's health services programs in one week. It now takes a month. "It's not that the governor and the General Assembly have not worked with community colleges -- they have," said Kennon Briggs, the system's vice president for business and finance. "But through the process of having to revert funds this year and last year, the places we have been hurt are in student services and in expanding offerings to meet the demand." Beyond education, there are more obvious examples of programs reduced or eliminated over the past three years, notably those for troubled youths. The Department of Juvenile Justice and Delinquency Prevention cut $ 20 million over the past two years by returning nearly half of the youths in detention centers back to the counties, which finance group homes, counseling and other services. But the counties got no additional money for those youths. In Wake County, the waiting list can be as long as three months for group homes and family counseling. Almost all the money serves juveniles already in the criminal justice system, and little is left for prevention. That's troubling to advocates who argue that the state will pay more in the long run, when troubled youths become prison inmates. Down the road "We need to take a longer-term view of this," said Mike Rieder of Haven House Services of Wake County, which runs two group homes, a runaway shelter and a counseling program. "If we don't provide resources to adequately serve these kids, the population that will grow is the prison population." Many smaller services scattered across state government also have taken hits. A sampling: - The SBI has lost lab technicians, expanding the backlog of evidence awaiting analysis. Cuts also led the SBI to cancel its academy last year, just as many agents retired. The SBI is now down about 30 agents, said Director Robin Pendergraft, forcing it to forgo investigating lesser crimes and to turn down some crime scene investigation work for municipal police. Last year, SBI agents opened 3,699 cases, 392 fewer than the previous year. "We're having to be creative, and we're having to prioritize so that the most violent crimes are addressed," Pendergraft said. - State parks have lost 13 positions this year, forcing rangers to do maintenance work and to cancel some wildlife education tours for schools. Last week, ranger David Brown was the sole guide for 54 second-grade students on a nature walk through Raven Rock State Park in Harnett County. Usually, the park would assign a second ranger for such a large group. "It knocks out pointing out smaller things like spiders, lizards and beetles and stuff," Brown said. - At the Division of Archives and History, six positions responsible for reviewing applications to the National Register of Historic Places have been eliminated, causing the review time for such applications to grow from three months in 1997 to 15 months in 2002. - At the Department of Environment and Natural Resources, backlogs for permits have grown -- although officials say the budget crisis is only partly to blame for the attrition that has left offices short-staffed. The backlog for permits for wastewater and industrial discharges has risen from 111 applications two years ago to 239 now. Hidden costs There also is the cost of not expanding programs. Division TEACCH, a program at UNC-Chapel Hill to treat autistic children, absorbed a 7 percent cut this year, while demand for its services rose 25 percent. Now, families wait an average of six or seven months for a diagnosis, up from four or five months, said program director Gary Mesibov. Similarly, a broad reform of mental-health services is supposed to begin July 1. But the state has not invested the money in the community-based services that are supposed to help move the mentally ill out of institutions, said Melcher, the lobbyist for the National Alliance for the Mentally Ill. "There's nowhere for them to go," Melcher said. "Any savings, the folks suck it right up to plug a budget hole. So any of the money that was supposed to be saved at the institutions and reinvested in the communities, that just hasn't happened." There is the alternate view that the state cannot afford to provide all the services under the sun, even if they have value. "There is always more that one would want to spend on than you have available," said John Hood, president of the John Locke Foundation. "So it gets a little bit tiresome to hear about state government having unmet needs. Even wealthy families have unmet needs." Still, even those agency chiefs who say they have suffered few ill effects of the budget crisis warn that they cannot absorb further spending reductions without harming services. Lawmakers are considering freezing Health Choice, narrowing eligibility for Medicaid and laying off teaching assistants, among other options. "There comes a time when you can no longer continue to fine-tune," said Philip Price, an associate state superintendent with the Department of Public Instruction.

05/23/2003
The IMF and the World Bank
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Press Release

The IMF and the World Bank

Before getting into the specifics of the debate over two of the most controversial institutions in modern times, consider this admittedly far-out analogy: the International Monetary Fund (http://www.imf.org) and the World Bank (http://www.worldbank.org) are like two huge financial aid organizations, but instead of doling out financial aid to countries, imagine they dole it out to college students.

05/23/2003
Congress Passes Meaningful but Modest Tax Relief
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Press Release

Congress Passes Meaningful but Modest Tax Relief

Today Citizens for a Sound Economy (CSE) applauded passage of H.R. 2 (the "Jobs and Growth Tax Relief Reconciliation Act of 2003") as a meaningful but modest step toward real tax relief for American families, but said the tax relief job is not done. CSE called for more tax relief and said that fundamental tax reform is the ultimate solution.

05/23/2003
Tax-Cut Negotiators Nailing Down a Plan Lawmakers Say They're Keeping Bill Under $ 350 Billion, As Senators Want
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Tax-Cut Negotiators Nailing Down a Plan Lawmakers Say They're Keeping Bill Under $ 350 Billion, As Senators Want

BY Paul Barton

WASHINGTON - As House and Senate negotiators scrambled Wednesday to reach agreement on a tax-cut plan before Memorial Day, Sen. Blanche Lincoln of Arkansas signaled that she still might support it, depending on its provisions. It was a seesaw day of developments. Early Wednesday, it appeared that a House-Senate conference committee had reached agreement on a $ 383 billion tax-cut plan that emphasized major cuts in dividend and capital-gains taxes. Later Wednesday, there were signs that the agreement had hit a major snag, as some senators refused to support any package that went above $ 350 billion in tax relief over 10 years, the level set in March by the Senate budget resolution. But by Wednesday night, negotiators said they had found a way to keep the bill under the $ 350 billion limit. It is expected to contain about $ 315 billion in tax cuts, $ 20 billion in aid to cashstrapped state governments and $ 15 billion in refundable child credits. Work on the details of the package continued through the night, but Senate Majority Leader Bill Frist expressed confidence that there were enough votes for passage, something never in doubt in the more heavily Republican House. But the Senate vote is expected to be extremely close and Vice President Dick Cheney was playing a key role in negotiations with individual senators. While administration supporters hailed the tentative package as vital to spurring economic growth, liberal groups denounced it as doing less for middle- and lower-income families than earlier versions of the plan. They maintained that the tax-cut effort remained too tilted toward investment income and mainly benefited upper-income groups. Taxes on dividend income would not be eliminated, as President Bush had wanted. But the rate at which dividends are taxed would be reduced to 15 percent. Dividend income is now taxed at the same rate as any other income, as high as 38 percent. The capital-gains tax rate would also be reduced, from 20 percent to 15 percent in the case of upper-income taxpayers. For lower-income taxpayers, those in the 10 percent and 15 percent brackets, the capital gains tax would be lowered to 5 percent. Most of the tax cuts would be retroactive to Jan. 1, and many workers could start seeing a difference in their paychecks as early as July, assuming the bill becomes law this month. "We have an understanding. It's only an understanding," Rep. Bill Thomas of California, chairman of the House Ways and Means Committee, said after one many meetings of negotiators. MODERATE DISPLEASURE Lincoln is among Senate moderates who have not ruled out voting for the plan on final passage, her staff said Wednesday afternoon. She was the only Democrat to support a tax-cut package two weeks ago in the Senate Finance Committee, but she was later displeased by changes in the bill on the Senate floor and voted against it there. Aides said Lincoln and others who want a "family friendly" plan, Republican Sen. Olympia Snowe of Maine and Democratic Sen. Evan Bayh of Indiana, were not happy Wednesday when they heard that provisions key to tax relief for middle- and lower-income groups had been diluted in the conference committee. Lincoln declined to comment publicly, however. The Arkansas senator may yet be approached by Republicans to see what it would take to get her vote for the package. In particular, the conference committee put "sunsets," or expiration dates, on marriagepenalty relief, expansion of the 10 percent tax bracket and an increase in the child-tax credit from $ 600 to $ 1,000 per child. Those provisions would only last through 2005 under the terms that Rep. Bill Thomas, chairman of the House Ways and Means Committee, announced early Wednesday. Although the bill contains $ 15 billion for refundable child credits, the conference committee deleted language making the $ 1,000 fully refundable. Under refundability, those families too poor to owe income taxes would receive the child credit in the form of a government check. Full refundability had been at the top of Lincoln's priority list and remained there Wednesday, aides said. TOO COMPROMISING? Other Senate moderates, including Democrat Ben Nelson of Nebraska and Republican George Voinovich of Ohio, were also unhappy with the conference-committee product. Bayh, Nelson and Voinovich had voted for it on the Senate floor. Voinovich insisted that the cost of the package not go above $ 350 billion. Nelson was unhappy about changes in the treatment of dividends and financial aid to states. Liberal groups denounced the compromise that the conference committee reached. "They don't sunset the capital gains and dividend [provisions ], but they sunset the family stuff. That's a comment on where their priorities are," said Max Sawicky, economist with the Economic Policy Institute, a liberal think tank. "It's still very skewed toward upper-income groups," said Joel Friedman, tax analyst for the Center on Budget and Policy Priorities, another liberal think tank. But tax-cut advocates hailed the agreement and hoped it would sail through. "It cuts taxes for everybody," said Brenna Hapes, spokesman for Citizens for a Sound Economy. As for it favoring the wealthy, she added: "That's the only argument [liberals] can make. I'm not sure it has much traction." Information for this article was contributed by The Associated Press, Bloomberg News Service and the Los Angeles Times.

05/22/2003
Crossing the Finish Line on Tax Cuts
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Press Release

Crossing the Finish Line on Tax Cuts

Today, the House of Representatives passed the tax relief plan, and tomorrow the Senate will follow suit. Congress and the President are sprinting across the finish line to give Americans tax relief this year.

05/22/2003
How the Power of Ideas Can Transform a Country
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Press Release

How the Power of Ideas Can Transform a Country

José Piñera is the Founder and President of the International Center for Pension Reform and the co-chair of the Cato Institute's Project on Social Security Choice. This note was originally a letter to Secretary of State Colin Powell. You can read more about José Piñera and Social Security reform at The Center for International Pension Reform

05/22/2003

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