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Dear Member of Congress:
As all Americans continue to mourn the events of September 11, 2001 and begin the difficult process of returning to "normalcy," we thank the Congress for your leadership. We recognize the difficult challenges you face.
Among the most urgent issues facing the United States is the need to restore economic growth and vitality. A slowdown had begun months ago, but the massive disruptions caused by the terror attacks have made the economic situation more severe and more acute. America needs pro-growth economic legislation passed before Congress adjourns for the year.
Citizens for a Sound Economy (CSE) has developed an economic growth agenda that meets the challenges head-on. Our 280,000 citizen-activists are committed to working to help Congress and the Administration enact a package of legislation that will:
1) INITIATE PRO-GROWTH TAX POLICY - A Strong National Defense Requires a Strong Economy
2) PROVIDE LONG-TERM ENERGY SECURITY - We Need Energy Self-Reliance
3) DEVELOP ECONOMIC PROSPERITY - Economic Growth Initiatives are the Key to Prosperity
4) CONTROL CONGRESSIONAL SPENDING - Now is Not the Time for Wasteful Spending
1) TAX POLICY: Key to a strong and prosperous nation is a healthy economy. Simply increasing government spending is not the answer. Congress must pass a permanent growth package that contains tax cuts directed at increasing saving and investment in both the short and long term. Any such package should include:
Accelerate the tax cuts and make them permanent. In May, the President signed a pro-growth tax cut. These cuts could have a faster positive impact if we accelerate the implementation schedule. And, equally important, if the tax cuts are made permanent, it would immediately have a positive effect on investment decisions.
Reduce the Capital Gains Tax. We need to give investors incentives and confidence to take risks. A lower tax on risked capital provides the right signal and will increase risk-taking.
Accelerate Depreciation Schedules. The current tax code discourages capital investment by prohibiting businesses from deducting full investment expenses in the year of purchase. Unlike all other expenses, deductions for investments must be made over many years according to complicated depreciation schedules. Congress should streamline these schedules to lessen the disincentive on capital investment and help expand the economy.
2) ENERGY SECURITY: America has long had a self-imposed over-reliance on foreign sources of energy. In fact, today the United States imports nearly 60 percent of its crude oil—the highest level in history. This reliance on foreign sources of energy not only exports environmental damage to other countries, but gives foreign governments undue influence over America’s economy. We have long needed a new approach to energy policy that recognizes the need to find new domestic sources of energy. Key to this approach is the opening of ANWR and other areas to energy production. America has abundant and diverse energy sources. We should be allowed to take advantage of them in an environmentally sensitive manner.
In the days ahead, and given the current international situation, America’s energy security must be a national priority. The House of Representatives and the President have worked together to craft legislation that would help America better meet it’s own energy needs. In this time of uncertainty, the Senate should follow the course and take a principled stand on restoring America’s energy security and independence by passing the bi-partisan Securing America’s Future Energy (SAFE) act of 2001.
3) REMOVE BARRIERS TO ECONOMIC PROSPERITY: Congress has a significant role to play in restoring economic growth. Since the start of the year, the Federal Reserve has cut interest rates 8 times and has injected over $100 billion of easy money into the economy through the purchase of securities. But this effort to re-inflate the economy has proven fruitless because of regulatory barriers that prevent American businesses from competing in the global economy. The current economic malaise has been caused, in large part, by government attempts to handicap economic growth in an effort to satisfy the wishes of favored constituencies. This shortsighted political infiltration of the market process must come to an end. Congress must act to eliminate policies designed to protect particular industries, or industry subsets, that hamper economic development.
Trade Promotion Authority: In this time of crisis we can no longer afford to keep our friends at arm’s length. When terrorists can cross borders with ease, it makes little sense to close our borders to commerce that can build constructive relationships. Free trade agreements can enrich the lives of people in underdeveloped nations, expand the virtues of civilized society to all corners of the globe, and benefit American consumers and entrepreneurs in the process. Although TPA is just a simple change in parliamentary procedure, it is a first step in the fight to eliminate trade barriers between the U.S. and its trading partners. Trade restrictions protect inefficient domestic industries and insulate consumers from lower prices and better value. Worse, trade barriers deprive the world’s poorest communities of even a glimpse of the lifestyle Americans take for granted. During consideration of TPA legislation, Congress should oppose further legislative attempts to attach environmental, labor, or agricultural standards to free trade agreements. These types of side agreements substitute government mandates for private decisions and crush opportunity in the world’s poorest communities.
Modernize Telecommunications Regulations:
Do Not Force Telephone Companies to Share Networks. Regulations that force telecommunications companies to share their networks create a disincentive to maintain the communal network. Further, these regulations produce a single communications network that is easy to disrupt during natural disasters or times of national crisis. Congress must strip away these harmful, outdated regulations.
Modernize Regulations that Limit Investment in Broadband. Currently, network-sharing regulations price access to the network at below cost. As a result, the level of investment in improved broadband service is feeble. Congress must eliminate these broadband price caps to encourage investment in broadband and return growth to the high-tech economy.
Allow mergers and acquisitions. The cost-reducing synergies achieved through mergers may be the only way to save the airline industry without direct taxpayer subsidy. Antitrust prosecution would be more than adequate to address any alleged consumer harm that may result down the road.
Enact a Moratorium on New Regulations. President Bush should introduce a 90-day moratorium on new federal regulations that may hamper economic growth. In addition, each agency should review existing regulations to identify and eliminate unnecessary regulations that restrict or constrain economic growth. Rules subject to statutory or judicial deadlines or those responding to health or safety emergencies would be exempt.
4) MAINTAIN FISCAL DISCIPLINE: A war against terrorism is a costly endeavor that will require a significant share of the government’s resources. Because overall spending will almost undoubtedly increase, it is especially important to exercise fiscal discipline and avoid waste. Congress must prioritize America’s needs and avoid excessive spending on wasteful government programs that stymie economic growth.
New resources have already been appropriated by Congress to fund rescue, rebuilding and anti-terrorist efforts. More spending will come soon. But that should not be used as an excuse for Congress to appropriate dollars in areas extraneous to this effort. Since the $15 billion airline assistance program, several other industries have campaigned for similar support. These legislative fixes should be avoided at all costs as they would create a slippery slope of endless spending and constant government intrusion into some of our most profitable industries. Spending priorities should be established and traditional pork barrel politics should halt. Reforms in domestic spending programs made good sense before and should still be pursued. Now more than ever, revisiting spending priorities is an economic necessity.
The assault on the World Trade Center was also an attack on the economic freedoms of every American. The economy faced challenges before September 11th and the pro-growth policies that made good sense then are now an economic imperative. Ultimately, the strength of our country relies on the strength of our economy. As our nation’s leaders, I ask that you take action now to ensure our continued economic freedom.
Recovering from the devastation of September 11th represents an entirely new landscape to which all Americans must adapt. I hope that we can work together to invigorate the creative abilities of the entrepreneurs and innovators who have fueled our economy in the past, to provide us the necessary strength to keep our country strong and proud in the future.
President and CEO