Category Archives: economy

Ushering in a New Era in Ohio Manufacturing

Posted on September 14, 2010 by | Leave a comment

By Senator Sherrod Brown

Today, when the sun rises in Youngstown, a third-shift worker driving home may well be sitting in a seat built in Warren. There is a pretty good chance that the brake system was manufactured in Findlay. An added safety feature – the folding air bag – may have been made in Dayton. The car engine and windshield glass were also probably manufactured in the Buckeye State. Ohio is ushering in a new era of auto manufacturing.

The first Chevy Cruze rolled off the assembly line in Northeast Ohio this past week. To build this new, fuel-efficient car, the GM plant in Lordstown added a third shift which created hundreds of new jobs in Ohio –a far cry from a year and a half ago when the company’s future was in doubt.

Ohio is home to more parts suppliers, materials industries, and technology companies that support America’s auto manufacturing base than almost any other state. More than 440,000 Ohio jobs directly or indirectly depend on the auto industry. It is the engine that drives American manufacturing and provides an entrance to the middle class.

A year and a half ago, the Obama Administration made the tough – and yes, unpopular – decision to save the auto industry from collapse. In the process, it helped prevent Ohio workers from losing their livelihood and helped maintain manufacturing jobs that keep our economy strong. While we still have a long way to go, the U.S. auto industry today enjoys the most job growth in a decade.

There were some naysayers who thought we should do nothing and let the U.S. auto industry crash and burn. If they had their way, we’d be looking at padlocked plant gates instead of watching new cars come off the line this week. Instead, it is a new day for the industry in Ohio.

Ohio workers – in small towns, rural areas, and big cities in 78 out of 88 counties – contribute to the U.S. automotive industry. The U.S. auto industry is one of four manufacturing industries that make up 56 percent of private sector research and development.

But as we continue to work our way toward economic recovery, one thing is clear: we’re not going back to business as usual. The Cruze – with its assembly in Lordstown and its components coming from across our state – shows that clean energy and fuel efficiency represent the future of our state’s manufacturing base.

Ohio is at the forefront of some impressive changes, quickly becoming a national hub for clean energy manufacturing. But this won’t happen without the right federal policies in place. I have been working to pass my Investment for Manufacturing Progress and Clean Technology Act – legislation that would create a revolving loan fund to help auto suppliers and other small- and mid-sized manufacturers retool their operations so they can participate in the clean energy supply chain. The IMPACT Act could create more than 52,000 jobs in our state while helping to revitalize Ohio’s manufacturing base.

We also need to ensure that our state’s most important asset – our skilled workforce – is prepared for the clean energy jobs of the 21st century. That’s why I am fighting for the Strengthening Employment Clusters to Organize Regional Success (SECTORS) Act. The SECTORS Act provides grants for sector partnerships among institutions of higher education, industry, organized labor, and workforce boards to stop the shortage of skilled workers for many emerging industries that can open doors in Ohio.

And to keep moving forward, we need to make the business climate more fertile for development by creating policies that encourage research and development. When President Obama visited the Cleveland area, he called for a permanent extension of the research and development (R&D) tax credit. R&D tax credits incentivize investment in emerging manufacturing industries like clean energy development.

The R&D tax credit promotes innovation by encouraging the domestic production of new clean energy technologies. Many important clean energy projects are under development in our state. At Hocking College Energy Institute in Logan, students are learning about automotive hybrids and advanced energy fuel cells that will continue to reshape the automotive industry. CODA Automotive – an electric vehicle manufacturer – recently announced plans to build a battery manufacturing plant in Franklin County. Building a lithium-ion battery to fuel electric cars creates clean energy jobs right here in Ohio, staves off an unhealthy addiction to foreign oil, strengthens America’s economic stability, and enhances our national security. This progress means that the late shift worker does not have to pay gas prices that fluctuate at the whim of a foreign government.

President Obama made a decision that saved the U.S. auto industry from collapse. Ohio’s steelworkers, plastics producers, and stamping plant workers were able to keep their jobs. Ohio auto parts suppliers were able to hire more people and build capacity. We owe it to our children and we owe it to Ohio workers who come home from the late shift to create a climate that fosters Ohio innovation and creates Ohio jobs.

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Effects of Federal Tax Cuts on Small Businesses

Posted on September 13, 2010 by | Leave a comment

By Congressman Steve Austria

In the past month, I have talked with many small business owners across the 7th Congressional District – from farmers to manufactures to members of our local chambers of commerce. Each has questioned and voiced their concerns regarding the temporary tax cuts put in place in 2001 and 2003 that will expire on January 1, 2011 if Congress does not take action.

If Congress allows the tax cuts to expire, it will equate to a $3.8 trillion tax increase that will affect all taxpayers. With the numerous taxes already imposed in legislation ushered through by current Congressional leadership, the last thing Ohioans need right now are further tax increases. In particular, small businesses – which produce 70 percent of new U.S. jobs – will see a direct impact that will affect their ability to create and sustain area jobs.

Specifically, if the tax cuts are not extended the individual income tax rates will increase across the board. Not only does this take money out of the wallets of all taxpayers, but many small businesses are taxed by this rate as well. This increase could be detrimental to those businesses that are already facing difficulties in obtaining credit and meeting payroll.

In addition, if no action is taken the federal estate tax will be reinstituted. This tax disproportionately affects small businesses and family farms. Many times, upon the death of an owner, small businesses are forced to sell to pay this tax and jobs are lost.

The indecision surrounding this issue is causing uncertainty for our local businesses who are seeking assurance in these difficult economic times. Congress needs to make the tax cuts permanent including the estate tax, capital gains tax and dividends tax to assist in creating an environment of confidence and encouraging local entrepreneurs to invest in their businesses creating long-term, sustainable jobs.

Beyond permanently extending the tax cuts, Congress needs to stop the spending. According to a recent U.S. Census Bureau report, federal domestic spending increased by 16 percent to $3.2 trillion in 2009. This does not include any interest paid on foreign debt. If we don’t stop the spending and let Americans keep more of their hard-earned money we won’t be able to turn the economy around.

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More Clean Energy Jobs Going Overseas

Posted on September 10, 2010 by | Leave a comment

by Dustin Ensinger

The incandescent light bulb was born in American, and according to The Washington Post, it appears as if it will die in America as well, taking plenty of well-paying manufacturing jobs with it.

This month, General Electric is permanently shuttering its last major factory that produces incandescent light bulbs. The closure will cost 200 employees their jobs.

In all likelihood, those jobs will be transferred to China, where the much more energy efficient bulbs known as compact fluorescents, or CFLs, can be produced at a much lower cost.

Despite the fact that CFL’s were invented in America in the 1970’s, virtually none are made in American. Because they require much more hand labor than you typical incandescent bulb, labor costs are also much higher, leading many companies to the massive low-cost pool of labor available in China.

The factory closure is symptomatic of America’s larger economic problems – a declining manufacturing industry and a utter failure to adapt to changing needs in the marketplace to capitalize on emerging industries such as the CFL’s.

When campaigning for the presidency, Barack Obama vowed to restore America’s manufacturing base through clean energy technologies, innovation and less reliance on foreign oil, all with the goal of creating five million so-called “green collar” jobs.

“My presidency will mark a new chapter in America’s leadership on climate change that will strengthen our security and create millions of new jobs in the process” he said.

It appears, however, that America missed that boat. China’s cheap labor, combined with free trade policies that afford companies with international portability, have propelled China to the top of the mountain in terms of clean energy investment.

In 2009, China became the world’s leader in private investment in renewable energy, according to a report by the Pew Charitable Trusts. Even in the midst of the worst recession since the Great Depression, China invested $34.6 billion in green technologies.

America, meanwhile, has leaked clean energy investment and jobs like a sieve. According to the report, the U.S. has invested just over half the amount of China in clean energy technologies. For all of 2009, private investment in the U.S. totaled just $18.6 billion, down 48 percent from 2008.

A report by the Investigative Reporting Workshop and ABC News, found that $8 of every $10 spent on wind energy projects through the stimulus package went to a foreign company. Total recovery funds spent on wind energy projects total nearly $2 billion.

The report estimates stimulus funding for wind projects have created roughly 6,000 manufacturing jobs overseas and just hundreds in America. Thus far, the Recovery Act has paid to create 1,807 wind turbines to fuel American homes, businesses, schools and other buildings. Just 588 of those were manufactured domestically, according to the report.

“The United States’ competitive position is at risk in the emerging clean energy economy,” Phyllis Cuttino, director of the Pew Environment Group’s Global Warming Campaign, said in a statement attached to the group‘s report.

Originally published in Economy in Crisis on September 8, 2010.

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The Hosptial Tax

Posted on September 7, 2010 by | Leave a comment

By State Representative Jarrod Martin

As you may be aware, Ohio faces incredibly important fiscal decisions as an $8 billion budget deficit looms in the next year. With 10.5 percent of Ohioans unemployed and thousands of jobs lost in the past 12 months alone, it is important that lawmakers in Columbus be focused on finding long-term solutions to our state’s budget problems.

House Bill 1, the biennial budget for 2010-2011, included a new hospital franchise fee, which raised taxes on our health care sector. According to the Ohio Hospital Association, this fee will generate approximately $718 million for the state.

Approximately $575 million of the new hospital franchise fee will be reimbursed to hospitals. To correct the disparity between these two figures, Ohio’s hospitals are responsible for about $150 million in new fees. This new responsibility has caused many of Ohio’s hospitals to cut jobs, reduce services, or delay expansion projects.

Hospitals are an important presence in Ohio, as they are among the top employers in the state. They represent a growing sector within the economy at a time when this sort of economic expansion is scarce. As a growing sector, hospitals also generate crucial economic activity. In fact, they are one of the major drivers of Ohio’s economy and provide much-needed jobs for many communities.

The new hospital franchise fee attempts to balance the state’s budget by drawing from Ohio’s hospitals. The goal is to decrease the deficit, but the consequences of this tax must be noted. It has the potential to affect job creation efforts and the welfare of Ohio’s families for years to come.

I am concerned that this hospital tax will not be an effective way to raise revenue for the state. It creates a palpable strain on the health care system. In addition, it adds pressure to Ohio’s taxpayers, as it asks them to take on the duty of balancing the budget.

As a solution, Representatives Terry Boose and Troy Balderson have introduced House Bill 497, which aims to minimize the hospital franchise fee. The proposed bill would subtract the cost of uncompensated care from the tax base, as well as Medicare and Medicaid costs. It would also reduce the tax base from 1.61 to 1.5 percent. These courses of action would follow the recommendations from the Ohio Hospital Association.

By relieving hospitals of taxes on the free services they provide, hospitals could save millions of dollars. This money saved could be used to pay their employees, renovate facilities and maintain stellar service to Ohioans. Ensuring a consistently outstanding health care system promotes the well-being of both the citizens of Ohio and the state’s economy. House Bill 497 is a step in the right direction toward rebuilding our economy and making Ohio a great place to work, live and raise a family.

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Cost of Government Day and Ohio

Posted on August 23, 2010 by | Leave a comment

Ohioans worked 230 days before their portion of government spending and debt was paid. The national average was 231.6 days, according to the Cost of Government Day report.

“The calculation of Cost of Government Day for each state is based on the varying government burdens suffered in each state. Federal tax and spending burdens are also a large contributing factor. These federal burdens vary because relatively higher burdens are borne by states with relatively higher incomes. State and local tax and spending burdens vary as well.”

“In recent years most states increased taxes to continue their spending extravaganzas during the economic downturn.” The Cost of Government reported state tax increases since 2003 based on the National Association of State Budget Officers (NASBO). Ohio earned the honors of the state with the 9th highest tax increases. Since 2003, Ohio taxes increased over $13.2 billion. That means the average tax increase for every Ohio citizen was $1,140.98.

“Unfortunately, state lawmakers’ penchant for tax hikes has shown no sign of abating this year: FY 2010 net tax increases across the U.S. total $23.9 billion. As governors and legislators have learned that tax increases are political losers that lead to a loss of business, jobs, residents, and economic growth, they have started to search for less visible ways to acquire revenues that keep them from being forced to cut spending.” Some examples of less visible means of taxation include increasing fees, increasing sin taxes, etc.

As might be expected, taxpayers have been looking to escape the burden of increasing taxes. Migration to states with lower taxes is reportedly the preferred strategy.

“Several studies, including the American Legislative Exchange Council’s “Rich States, Poor States,” and past reports by the Americans for Tax Reform Foundation have documented the movement of taxpayers from high tax to low tax states in recent years.”

“These studies present compelling evidence that taxes are the single largest factor in interstate migration, compared to factors such as climate, employment, family relocation, etc.”

Using Internal Revenue Service data, the report shows that “the ten states with the highest tax burden lost over 3 million residents from 1998 through 2008. These residents took with them a staggering $92 billion in income”.

“During the same period over 2.3 million migrants moved to the states with the lowest tax burden, bringing more than $97 billion with them.”

“In addition to higher levels of emigration, higher tax states also maintain higher unemployment rates, placing an expanding tax burden on a shrinking tax base. It is unsurprising, then, that the top five highest-tax states consistently have about a 0.5 percent higher unemployment rate than the five states with the lowest tax burden.”

“States that attempt to raise taxes to balance their budgets encourage their most productive citizens to find more welcoming homes. They also discourage productivity, as taxpayers get to keep less of what they earn in high-tax states. Worst of all, increased taxes provide government with the permission it needs to grow by sustaining the bloated spending of irresponsible state governments. Absent significant changes in their tax-and-spend schemes, these high tax states will soon find themselves without a populace to support the extravagant costs of living in those states.”

I still wonder if allowing casinos to operate in Ohio will do much to lessen the tax burden. In the long run, I the negative social impact of related crime and wrecked families will likely prove the cost was greater than the benefit.

A more responsible approach would have been to cut more unnecessary programs instead of threatening those programs most needed for the most vulnerable in order shame those who still possess a moral conscience.

Nevertheless, the report presented one positive development. In 2009, Ohio ranked 31st among the 50 states in terms of number of days worked to pay for national spending. This year, Ohio was ranked 27th. This means citizens worked fewer days to pay for the Empire’s spending spree than they did last year.

Hoo Rah!

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Cost of Government Day Finally Arrives on August 19, 2010

Posted on August 23, 2010 by | Leave a comment

Every year, the Americans for Tax Reform Foundation and the Center for Fiscal Accountability calculate Cost of Government Day. This is the day on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government on the federal, state, and local levels.

In 2010, Cost of Government Day falls on August 19. That means working people must toil 231 days out of the year just to meet all costs imposed by government. In other words, the cost of government consumes 63.41 percent of national income.

“Two years ago Americans worked until July 16 to pay for the cost of government: all federal, state and local government spending and regulatory costs. That government was too expensive and wasteful. Two years later, we work until August 19 for the same bloated government. We have lost an additional full month of our income to pay the cost of government in just the last two years,” said Grover Norquist, president of Americans for Tax Reform.

Key findings of the Cost of Government Day report include:

  • Cost of Government Day (COGD) falls 8 days later in 2010 than last year’s revised date of August 11.
  • Workers will have to labor 104 days just to pay for federal spending, which consumes 28.6 percent of national income.
  • Taxpayers will have to work 52 days just to pay for state and local government expenditures.
  • The average American worker must labor 74 days to cover the costs of government regulations. A breakdown of the COGD components can be found here.
  • The report also includes a state breakdown. The earliest Cost of Government Day occurs in Alaska, on July 28. Connecticut has the latest COGD, on September 17.
  • One of the contributing factors to increased spending is the growth in government payrolls. The federal workforce totaled 4.4 million employees this year, while the addition of state and local workers brings the total government workforce to 24.315 million employees.
  • The report also tracks taxpayer migration, showing taxes are a driving component behind interstate movement. In 2008, the ten states with no income tax gained over 80,000 new residents who brought with them over $900 million in net adjusted income. In contrast, the states with the highest tax burden lost 129,445 residents and $10.2 billion in wealth.

To read more, go to the Americans for Tax Reform webiste.

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Sermon on the Mount : Any Relevance Today?

Posted on August 22, 2010 by | 1 comment

There are two versions of Jesus’ Sermon on the Mount. One is in the gospel of Matthew and the other is I Like’s gospel. Jesus’ sermon encompasses chapters 5-7 in Matthew and Luke 6:20-49. Jesus’ sermon begins with a series of nine wisdom sayings or blessings in Matthew and only four in Luke’s gospel. In this post, I will address the first blessing: “Blessed are the poor in spirit, for theirs is the kingdom of heaven” or “Blessed are you who are poor, for yours is the kingdom of God.”

It is possible that Jesus’ preached this sermon from the top of Mount Gerizim. What better place to proclaim the blessings of practicing the principles of the Torah than from the place where Moses did the same. In the Deuteronomy 28, Moses pronounced four blessings for practicing daily the law of God. Ironically, Mt. Gerizim is in Samaria, which in Jesus’ day it was regarded by Temple authorities as a land of unclean gentile people. However, that didn’t stop Jews from coming to hear Jesus. They came from Judea, Jerusalem, Galilee, and other surrounding regions, and most likely gentiles came as well even from Syria, Sidon and Tyre. What is relevant about this bit of history is the benefits of practicing God law.

Of particular social significance is the first blessing Jesus proclaimed to the masses of people. The two versions give us a composite picture of the blessing of God that people of all races, cultures, religions, and nations may grasp. Matthew captures the inner working of divine law while Luke shows the heart of God for struggling people.

In Matthew, Jesus says, “Blessed are the poor in spirit.” To be poor is to lack wealth. To be poor in spirit means to lack fullness of spirit. Jesus said God is Spirit. However, Jesus did not mean to be poor in spirit is to lack God. Jesus was saying you who are needy of God are blessed. Those who depend on God for their moral and material welfare are those who are blessed. According to Jesus’ apostle Paul, God supplies all our needs according to His riches in Christ Jesus in the divine welfare program. It is also God who empowers the faithful to keep His law.

Luke’s version was influenced by his own experience of God redemptive grace. Luke was a Roman physician who became a follower of Jesus. He was poor in spirit and in the knowledge of God. In ancient society, poor people were often sick and without adequate care. Although he was not poor himself, he would have provided care for needy people. Therefore, Luke emphasizes God’s blessing for the poor. The poor are those lacking wealth either because of an unjust political economy that was beneficial only to elites and their immediate associates or because of terrible circumstances such as bad health. Throughout both the Torah and the writings of the prophets, God revealed his great concern for their welfare. This concern is demonstrated in Genesis 39-49, in the account of the Jews exodus from Egypt slavery (Ex. 1-17), in the law concerning the poor (Lev. 25; Deut. 15; 24:12-22), in Isaiah’s prophecies (58:6-12). This is also fleshed out in early Church as reported throughout the gospels and letter of the apostle of Christ.

Because of God’s great abiding concern, the needy have access to the greatest of all resources: God. The Creator of nature’s wealth has a welfare program specifically for them. By entering the kingdom of God with Jesus Christ, they can expect their material and spiritual needs will be met. By living under the divine covenant rule, the poor gain the right to God’s provision. The obligation of citizen in God’s kingdom is to live according to God’s law and grace with Lord Jesus.

The King of the Universe invites the poor and needy to enter His kingdom. His welfare program is eternally better than any that wealthy social elites or special interest groups can ever offer. God is genuinely concerned about the welfare of the poor and needy. All the they have to do is say Yes, Lord Jesus, I want in God’s righteous kingdom.

By Daniel Downs

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Kudos to Austria for Supporting Ohio Project’s “Heath Care Freedom Amendment”

Posted on August 20, 2010 by | 1 comment

Kudos are due Austria for his support of The Ohio Project’s grass root effort to place a constitutional amendment on the November ballot. He was in the act of signing their petition at a recent outing, which is posted on the Ohio Project website. His public display of local patriotism may have been a vote-getting ploy. Nonetheless, along with his legislative opposition to Obamacare, his local patriotism deserves mention.

The Ohio Project amendment is titled The Health Care Freedom Amendment .It will prohibit federal and state governments from enforcing the federal mandate making individuals purchase health care. It also prohibits government from criminalizing those who do not or who purchase health care outside of the federal insurance pools.

Thus far, the Ohio Project has gathered the required petition signatures in 46 counties. Greene County is among those counties where 5% of voters have signed the petition. What is now needed is 5% more to meet the 10% state ballot requirement. Greene County has until the end of September.

Serbert Gluckian (Xenia) and Steve Rogers (Fairborn) were taking petition signatures at their business offices. If interested, you could e-mail Gluckian at saguckian@ameritech.net or Rogers at steverogers@allstate.com to see if they are still doing so.

To learn more about the Amendment, go to the Ohio Project website

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Individual Mandates in Health Care Reform Law

Posted on August 20, 2010 by | Leave a comment

By Rep. Steve Austria

As you may know, the recently passed health care law includes a provision that will require individuals to enroll in a health insurance program. The individual mandate provision will go into effect on January 1, 2014. At that time, 19 million additional Americans will be required to enroll in a health insurance program. Most of the details surrounding the implementation of individual mandates will be left up to the states to decide, including creating exchanges, educating the public, and organizing an enrollment structure and process.

In response to the new law, voters in Missouri recently passed a measure that would block the health insurance mandates included in the law. While Missouri is the first state to take such action, other states, including Arizona, Florida and Oklahoma are expected to consider similar measures in November.

The sweeping regulations and mandates in the new law have also generated activity in Congress. Congressman Ted Poe has introduced a bill, that I cosponsored, which prohibits the use of funds to enforce the Federal mandate to purchase health insurance. As the implementation of the new health care law moves forward, it is important that the process is carefully monitored, and the American people stay well-informed regarding the law’s potential impact on their personal health care.

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Democrats, Deficits, the “Middle Class” and the Bush Tax Cuts

Posted on August 16, 2010 by | Leave a comment

by Gerald Prante

Right now, Washington is in a debate over whether to extend the so-called “Bush” tax cuts for all taxpayers versus allowing them to expire on those taxpayers at the very top. Democrats claim that it’s fiscally responsible to let the tax cuts expire for those at the top.

The fact of the matter though is that extending the tax cuts even under the Democrats’ plan adds a tremendous amount to the deficit. It’s also worth mentioning that supply-siders are correct to point out that over the long-term, the tax cuts for high-income taxpayers would have a larger feedback effect than the tax cuts for low-and-middle income taxpayers, which were largely economically equivalent to writing checks (e.g., 10 percent bracket, increasing the standard deduction, and increased child tax credit).

For the past ten years, Democrats have painted a myth among a large fraction of the public that the Bush tax cuts only benefited the lucky few at the top of the income spectrum. It’s simply not true. Some provisions in the Bush tax cuts may have been targeted at the very top (such as the changes to PEP and Pease and the estate tax along with the rate cuts at the very top), but trillions of dollars in tax relief went to those beneath the president’s so-called “middle class cut-off” of $250,000. How do we know this? Even under Obama’s plan for the expiring tax cuts that calls for only the top rates to go back up, $2.3 trillion would be added to the deficit over the next 10 years (relative to full expiration).

Overall, looking at the long-term horizon that the country’s finances face, the Democratic rhetoric of the past 10 years that has helped ingrain in a large fraction of the population the myth that we can just go after the rich to solve our fiscal problems is just that…a myth. Sure, it sounds good for Democrats to play class warfare, but if they are serious about preventing the U.S. fiscal system from falling off a cliff in 30 years, they are going to eventually have to resort to supporting one of two policies (or a combination of the two):

(1) Cuts to Medicare and/or Medicaid
(2) Tax increases on those making less than $250,000

So throughout this entire debate over the Bush tax cuts, when Democrats say that they are concerned about middle class tax relief, be sure to ask them whether this concern is just temporary due to the economic situation we are in or whether it is permanent? And if it’s permanent, ask them what they are going to say when a VAT, which hits all citizens, comes to the table within the next five years.

Source: Tax Foundation: Tax Policy Blog, August 8, 2010.

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