GOP energy policy watered down version of the governor’s plan
“Can’t anybody here play this game?”
Casey Stengel’s famous quote, an exasperated cry over the pitiful performance of his baseball team, applies perfectly to the current inability of Republicans in Harrisburg to present any meaningful alternatives to the big government policies of state Democrats.
The latest case in point is the debate over energy policy. Governor Ed Rendell has convened a special session on energy – so special in fact he skipped the first meeting of the session to attend an Eagle’s football game. That did not deter him from submitting a wide range of energy initiatives that would dramatically increase state government’s role and control over the private sector.
House Republicans were correct when they issued a news release stating: “With electricity rate caps set to expire throughout the Commonwealth over the next several years, high gasoline prices and increases in home heating costs, Gov. Ed Rendell’s proposal to raise taxes and increase state debt is wrong for Pennsylvania.”
Those words might lead you to believe Republican legislators are returning to their roots as the party of fiscal responsibility.
Think again.
While rightly assailing Governor Rendell’s plan to spend $600 million in “corporate welfare,” as the GOP release put it, Republicans came back with a proposal that can only be described as “Rendell light.”
In announcing the plan, State Representative Stan Saylor (R-York), Chairman of the House Energy Task Force claimed the GOP agrees with the governor on “the destination, but we found a better road to get us there.” If the destination is more government intrusion into the private sector, then Saylor is correct, they have a found a better – read slower – road. If, however, the goal is to reduce government control over the private sector, then Republicans have made a wrong turn.
Claiming the use of existing funds; the GOP plan calls for spending millions on grants, deductions and credits. The problem is, there is no such thing as increasing spending from “existing funds.” Something else will get short-changed and the pressure will be on to raise taxes (pressure to which they will ultimately succumb.) The Senate Republican plan actually proposes putting our children and grand-children into further debt to the tune of $250 million by advocating a bond issue to be spent on energy-related projects.
At the risk of sounding repetitive; is it any wonder Pennsylvania voters are turning away from the GOP? How can a party claim to be the party of fiscal conservatism when all they do is propose massive debt and hefty spending increases and justify it in the name of “spending less that the governor,” – who is known far and wide as one of the most prolific raiders of the public purse ever to ride out of Philadelphia?
It would have been refreshing for Republicans to have announced broad-based tax cuts to spur the state’s overall economy rather than trying to control energy-related activity through tax credits. For example, 48 other states have no limits on their net operating loss carried forward provisions. This obscure, but critical, tax provision allows companies that experience operating losses in the start-up, research and development phases to use those losses to off-set taxes on future earnings. This encourages private sector investment in emerging technologies. Pennsylvania and New Hampshire alone limit such write-offs, making us the least attractive places in the nation to establish and/or expand such businesses.
The other issue is whether or not the state ought to be involved in setting energy policy in the first place. Governor Ed Rendell may be trying to burnish his credentials as a possible U.S. Energy Secretary in a potential Democratic administration, but the dynamics at play relative to energy are national – in fact international – in scope, meaning policy should be set at the federal, not the state level.
While the House Republican plan is laudable for its dependence on tax deductions and tax exemptions, a more effective approach would be to push for the elimination of such counter-productive taxes in the first place. Proposing grants and other government subsidies, however, merely adds to government control over the energy-related components of our economy. As such, it merely offers a big government vision as an alternative to the governor’s really big government vision.
It is time for Republicans to start advocating policy alternatives which truly represent the free market principles for which the party once stood.