If it Walks Like a Lame Duck
I’ve always found the term “lame duck Congress” an affront to waterfowl everywhere. And it’s odd to boot. Why does it matter if they have a funny hiccup to their walk? Wikipedia informs me the phrase derives from an 18th century term describing stockbrokers who defaulted on their debts. Neither “Bull” nor “Bear,” a “Lame Duck” cannot keep ahead of predators—that is, creditors. Maybe it isn’t so odd after all.
The combination of the words “Congress” and “predator” in the same sentence leads to all kinds of literary opportunity. But I will stick to the basics. So first I should ask: What should Congress do before they head home for the holidays?
Here at the Competitive Enterprise Institute, we promote economic freedom because we see it as the freedom to prosper. From energy to labor to technology policy, and more, we seek to foster entrepreneurship and innovation and to safeguard Americans’ abilities to pursue new ideas. We fight back against government regulatory overreach that holds people back from starting a new business or creating a new product. That’s a tall order, and we know we can’t achieve it all by Christmas. But we have to start somewhere.
So, for members of Congress who want get something done before the year, and the current congressional session ends, here are five opportunities to have a positive effect on the economy and do well by your constituents and fellow citizens.
Protect Americans’ Access to Affordable Energy. Congress will likely consider reauthorizing a tax extenders package that includes production tax credits (PTC) for wind and solar energy. These credits deserve to go the way of the Model T. They amount to subsidies for politically connected energy firms that cannot compete in the energy marketplace on either price or reliability. Energy from wind, solar, and other renewable sources is more expensive than energy from fossil fuels. So-called renewables are costly, and those costs are ultimately passed on to consumers, for no discernable environmental benefit. Nine of the 11 largest wind power-producing states are experiencing skyrocketing electricity prices, rising more than four times the national average.
Don’t Pass an Internet Sales Tax. Senate Majority Leader Harry Reid has indicated he wants to bring the Marketplace Fairness Act (MFA) up for a vote. If enacted, the MFA would empower state governments reach beyond their borders to tax businesses in other states outside their borders—a clear case of taxation without representation. Currently, a sales tax is only applied to online purchases when the seller has a physical presence in the state where the buyer resides. It would also pose a serious threat to small businesses. A recent study finds that compliance and maintenance costs for midsize retailers could range from $57,500 to $260,000 a year.
Investigate and Defund Operation Choke Point. Operation Choke Point is the biggest threat to small business you’ve never heard of. It is an egregious example of executive overreach through which the Obama administration seeks to shut down perfectly legal—yet politically incorrect—businesses by cutting off their access to banking services. The Department of Justice, under the pretext of fighting consumer fraud, is strong-arming lenders into canceling bank accounts for a wide variety of politically disfavored businesses—including firearm dealers, pawnbrokers, payday lenders, and even home-based charities—many with years of good relationships with their banks. Congress should hold hearings to investigate how this systematic abuse of power came to be, vote to defund it, and look for ways to prevent it happening again.
Avoid Policies that Increase Unemployment. Calls to raise the minimum wage make for great political stump speeches, but the policy itself actually harms those it is intended to help. Raising the minimum wage would cost thousands of jobs, especially among the poor and low skilled. Most economists agree the minimum wage increases unemployment among young and unskilled workers. And the Congressional Budget Office has concluded that a $10.10 minimum wage would reduce total employment by 500,000 jobs. The federal minimum wage is already set to increase in January 2015. It should not be raised further. Some workers might get a raise, but many more others would see their hours cut or lose their jobs entirely.
Pass the Insurance Capital Standards Clarification Act. The Dodd-Frank financial reform law has proven extremely burdensome for small businesses. Reforming Dodd-Frank will prove to be a major task. But a good place to start is by paring back rules that have helped to further entrench Fannie Mae, Freddie Mac, and other “too big to fail” financial institutions. The Insurance Capital Standards Clarification Act, which cleared the Senate unanimously earlier this year, would provide some needed relief for insurers. This would help ensure Dodd-Frank doesn’t cause life, home and auto insurance premiums to skyrocket by clarifying that Dodd-Frank’s bank capital requirements do not apply to insurance firms.
There you have it; there is nothing lame about these ideas at all. In these and other areas CEI will continue to offer reforms, both practical and bold, and we hope lawmakers will use them to advancing the principles of limited government, free enterprise, and individual liberty.