You would think that Senator Ted Steven’s (R-AK) legal battle would be the sole occupant of his time, but according to an article in The Hill yesterday, it seems that his insatiable appetite for earmarks hasn’t been abated one bit. 

According to the article, Stevens has managed garner more than $200 million in Senate’s version of the Defense Appropriations bill.  The Senate appropriator’s recently disclosed that they intend to include more than $3 billion in project requests that the Pentagon has not requested.

Because of Senator Steven’s indictment and its alleged link to earmarks, you would think that the leadership on Capitol Hill would take a second look at earmarks, but unfortunately this article serves as evidence that it is business as usual in the appropriations committees, and the taxpayer is at the short end of the deal.

I am sure many of you have been paying attention to the debate (or lack thereof) on energy in Congress.  Well now the majority has decided to take up a bill after months of pleas from Republican members of the House.  However, this bill is designed to fail, and worse yet it increases spending and taxes.  Don’t believe it?  Here are some of the details.

Lack of Incentive: The bill allows offshore drilling, only for States that choose it, no closer than 50 miles from the coast, however it also prohibits revenue sharing of new oil and gas proceeds, thereby removing any incentive for States to “opt in” and allow drilling off their coasts. Nor does the bill offer any lawsuit protection, so companies that do search for oil will continue to be hampered with limitless litigation by environmental groups.

This bill will raise taxes: This bill raises taxes on large oil and gas companies engaged in domestic energy production by nearly $13.9 billion over 10 years, all to provide tax breaks to favored energy projects and products. The bill also limits the use of foreign tax credits on the international operations of oil and gas companies, which pushes the overall tax hike in the bill up to $17.7 billion.

Reduces revenue: The Congressional Budget Office [CBO] has estimated the government could initially receive $5 billion in additional revenue without raising taxes by opening the OCS and allowing drilling in the Arctic National Wildlife Refuge [ANWR]. Yet this bill continues to limit drilling in the OCS.  According to CBO, it reduces revenue to the Treasury by $1 billion,

New Fees for Energy Companies: The bill raises $5.8 billion by imposing new fees on certain leases that currently pay no royalties. It also imposes $1.8 billion of new fees on non-producing Gulf of Mexico leases, and requires retroactive lease payments back to 1 October 2007 on certain leases.

Higher Spending, No Deficit Reduction: The bill increases the top line for appropriated spending by $6.6 billion, so that total 2009 nonemergency discretionary spending increases by 9.3 percent over 2008. All new revenue in the bill is set aside in a reserve fund to offset future appropriated spending increases. There is no guarantee this funding will be used to reduce U.S. dependence on foreign oil.

More Earmarked Spending: The bill restructures the New York Liberty Zone Program, making it a $2-billion earmark that can be used for any transportation infrastructure project in New York City. The measure also earmarks $25 million to establish a so-called “National Energy Center of Excellence.”

New Spending for Energy Block Grants: The bill also authorizes $2.5 billion in new spending for energy related block grants, and $3.4 billion to States for transportation grants.

Exploiting the Fannie-Freddie Bailout: The bill seeks to make Fannie Mae and Freddie Mac green when the problem is they are insolvent. It directs the two financially ailing firms to develop loan products and flexible underwriting guidelines to facilitate a secondary market for energy- and location-efficient mortgages on low- and moderate-income housing. The bill also calls for Fannie and Freddie to facilitate second and junior mortgages for energy-efficiency and renewable energy improvements.

It’s no secret that this Congress has had a problem passing appropriations bills on time.  Last year, we resorted to passing a giant omnibus bill at the last minute, and this year we likely will recess until after the election by passing a continuing resolution (CR), to fund the government at its current levels.  The good thing about a CR is that at least the government will continue operating at current levels rather than recklessly increase spending levels.

Over on the Senate side, Senator Jim DeMint (R-SC) has introduced an amendment that would give the Dept. of Defense and Dept. of Energy the ability to disregard more than $5 billion in defense earmarks contained in the upcoming $612.5 billion defense policy measure ( S. 3001).

Senator Levin (D-MI), Chairman of the Senate Armed Services committee has objected to the amendment, and the bill has stalled in the Senate.  I applaud Senator DeMint and his colleagues including Senator Coburn (R-OK) for taking a stand on this issue. 

We have generals and admirals in the field who know what they need to fight and win.  It is ridiculous that we would opt to divert needed resources towards unwanted and at times ineffective earmarks, and in the end it hurts our ability to effectively provide for our national security. 

Yesterday I blogged about the new CBO numbers on the deficit and the remarkable jump in the deficit figures. 

If that is extended over the full 2008-2018 period, CBO projects that spending will average 21.1% of GDP.  Federal revenues have never exceeded 20.9% of GDP (a level reached in 1944, 2000).  Keep in mind that 1944 was one of the most active years of the Second World War.

There is no precedent for federal taxes at the level CBO projects federal spending will be over the next ten years. Spending must be cut, and the next President and Congress must hold the proverbial fiscal line.  If fiscal discipline is not exercised, in spite of what some are saying about taxing only “the rich”, they will have to take a  big bite out of everyone’s paycheck in order to pay for the spending that is being proposing.

I know most of you will never forget where you were on September 11, 2001. I know I certainly won’t. That day has been permanently ingrained in the minds of Americans.  The attacks still resonate in the hearts and minds of Americans. But when we remember the 7th anniversary of that fateful day, I hope you take a moment to remember all those who were lost that day. Also take a moment to think of our sailors, soldiers, Coast Guardsmen, airmen, firefighters, police offices, and other first responders who have sacrificed themselves in the defense and preservation of our nation and freedom. This always reminds us of the importance of defending the Homeland and ensuring that terrorism will never strike on American soil again.

God Bless.

Today, the Congressional Budget Office released its latest figures on the deficit, and they aren’t good.  According to the report the federal government will run a deficit of $407 billion for the budget year that ends on Sept. 30. 

Furthermore, CBO expects that if current policies remain in place the budget deficits will remain over $400 billion for the next two years.  The CBO figures reflect a tremendous jump from $161 billion in 2007. If the CBO projection is right, numbers would balloon to about 3% over the next two years.

CBO also estimates that during 2008 federal spending will be 8.3% higher than in 2007, meanwhile revenues will be likely be less than they were in 2007.   

Based on these numbers, at least this much is true; the next Congress and President must take a serious look at the spending addiction that permeates the Halls of Congress and the Presidency. 

This recklessness must stop.