Thursday, July 27, 2006

Who Represents Rochester in Congress - Not Gutknecht but McCollum

After seeing in July 21st The Free Press story on DM&E safety record, a reference was made to Representative Jeff Flake, an Arizona Republican and fiscal hawk, who called the loan an "inappropriate use of federal dollars" in a House floor speech. He urged lawmakers to contact Transportation Department officials to "put the brakes on this runaway locomotive."

I wanted to check the Congressional Record for his complete remarks (see below).

In doing so, I found a Minnesota Representative who seems to care more about Rochester than our current elected Representative.
"Mr. Speaker, I rise today to call attention to an unprecedented federal loan that is fraught with risk, would enrich a private company at public expense and threatens the people of my state, Minnesota "Why does the DM&E need to seek this massive federal support?
Could it be that private sector investors who have a fiduciary responsibility to invest soundly know a boondoggle when they see one?
Unfortunately, it appears the DM&E has been far more successful in attracting Members of Congress who seem willing to ignore their responsibility to the American people to ask the tough questions and demand protections and accountability.
It is not Congress’ role to be the lender of last resort for high risk, private sector boondoggles.
This is all the more true considering the threat the DM&E project poses to Minnesota. "The proposed DM&E line would send dozens of mile-long coal trains through the heart of Rochester, Minnesota every day. Any threat to Rochester’s continued growth is a serious concern for Minnesota since it is one of the fastest growing cities in the state and an anchor of Minnesota’s high-tech economy.
"Wrapping a profit driven scheme in the thin veneer of public good, the DM&E and its supporters in Congress are pushing a bad deal for Minnesota and imposing a financial risk upon America’s taxpayers that is irresponsible and unjustifiable.
The federal government does need to make major new investments in transportation infrastructure, but investments consistent with our national goals and in a transparent process that allows Congress to conduct necessary oversight and stewardship of scarce tax dollars.
Public dollars should support taxpayer priorities, not the whims of one company and their patrons in Congress. As is too often the case today, Congress has had no opportunity for oversight, no opportunity to ask hard questions of the DM&E and protect taxpayers from one corporation’s sweetheart deal that smells worse by the day. This $2.5 billion loan to the DM&E should not be allowed take place and taxpayers in Minnesota and across the United States should be outraged at this pork barrel corporate welfare giveaway."{...4-829B-935C582BABA3}
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So why does Minnesota Congresswoman Betty McCollum recognize the financial inappropriateness of this pork barrel project and yet First District Congressman Gil Gutknecht and Senate candidate Mark Kennedy fail to appreciate the fiscal consequences ?
If you portray yourself as a fiscal hawk, why isn’t Jeff Flake your role model ? He regularly issues “Egregious Earmark of the Week” on his website.
For more on Flake versus Gutknecht definition of fiscal responsibility, see
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Mr. FLAKE. Mr. Speaker, last year's highway authorization bill, better known as SAFETEA-LU, which brought us the bridge to nowhere, seems to be a gift that keeps on giving. It has now cleared the path for a program that may set a standard for fiscal mismanagement and favoritism by the Federal Government. Thanks to changes made to the Railroad Rehabilitation and Improvement Financing, or RRIF, program in SAFETEA-LU, the administration is considering awarding one of the largest loans to a private company in the history of the United States. This would be a $2.5 billion loan to the Dakota, Minnesota and Eastern Railroads, or DM&E, a loan larger than the Chrysler bail-out. SAFETEA-LU expanded the loan authority of the RRIF program from $3.5 billion to $35 billion and removed any prohibition on the size of any single loan, paving the way for the DM&E loan application. If drastically expanding the program's loan authority opened the door for DM&E, a handful of other changes to the program all but drive the loan application home. Mr. Speaker, the RRIF program is on the verge of being used to provide a competitive advantage. It is inappropriate for the taxpayers to finance it. H5495

Tuesday, July 11, 2006

Gutknecht and Nero – Neglecting Priorities

From Monday, July 10th’s [I] Washington Times :
The legislative year is littered with failed or stalled Republican priorities. Some -- such as overhauling immigration, repealing estate taxes and changing rules on lobbying in response to several ethics scandals -- are disappointments for many in the Republican Party and for Mr. Bush. With two-thirds of the 2006 legislative calendar over, Congress has passed and sent President Bush only two major pieces of legislation. One renewed the terrorist-fighting USA Patriot Act; the other extended $70 billion in tax cuts, roughly divided evenly between investors and middle-income families.[/I]

Exemplifying this concern, Dick Armey, the former House Republican leader who is now with FreedomWorks, which advocates lower taxes and less government, stated ``I'm not sure what this Congress has accomplished."

And last week, former First District Congressman Tim Penny penned an Op-Ed piece in the [I]Rochester Post-Bulletin [/I] that is entitled “Tim Penny: Fix Social Security, or send incumbents home.”

Can any Republican Congressman be pleased with their performance and inability to enact legislation when the Republicans control both chambers of Congress and have a President who has yet to veto one bill?

So, what did First District Congressman Gil Gutknecht do last week while other Congressmen participated in immigration reform hearings?
Campaign - so that he can go back for another term - of doing nothing.
No, I am not fretting about a parade in Saint Peter, but instead with his constant choir-preaching of his 10/10 plan to the same congregation. Last week he visited Corn Plus and Bixby Energy. I don’t think these people need conversion to the advantages of ethanol. Gutknecht helped Corn Plus’ Bob Weerts get on an agriculture advisory council for President Bush during his 2004 campaign. Bixby Energy has already contributed at least $4,200 to Gutknecht’s re-election campaign.

Pushing his 10/10 plan is admirable, but why here in Southern Minnesota? Why hasn’t he taken his speaking tour on the road to other states where other forms of bio-fuels could be produced? Is it any wonder that his 10/10 plan has sit idle in Congress ?

Once again, Gutknecht has proven ineffective in promoting and resolving issues.
Makes me think of the Roman Emperor, Nero, made infamous with the preoccupation with his status and neglect priorities during a time of crisis.

Sunday, July 09, 2006

DM&E Loan Default Possible - Gutknecht Fails to Lead

Orginally posted on The Mankato Free Press on May8, 2006

The Rochester Post-Bulletin reported in today's edition that a well-respected management consulting firm report states that DM&E may not be able to pay back the government loan that they are seeking.

Why fiscal conservatives should care is that once again, Congress is spending our money by subsidizing a business. So if DM&E doesn't pay the loan back, tomorrow's taxpayers will be stuck.

The question is what how will Coleman and Gutknecht use this report ? Last week, Dayton complained that with the Republicans in control that Coleman and Gutknecht needed to step up. Coleman fell on the "Attack the Messenger" escape mechanism and cited that Dayton's complaints are why he was one of the worst Senators. Norm - whether Dayton is the worst Senator has nothing to do with DM&E. Gil and Norm are quitely trying to let this issue slip under the radar. If they are involved, state what your doing.

The Rochester Post-Bulletin online version has a firewall, so here is the complete article.

Study: DM&E may not be able to pay back loan

The Dakota, Minnesota & Eastern Railroad would face an almost impossible job repaying a $2.5 billion federal loan it's seeking for a massive upgrade and expansion, according to a financial study issued today by the Rochester Coalition. The study, conducted by independent management-consulting firm BearingPoint, formerly KPMG Consulting, was commissioned by Mayo Clinic on behalf of the coalition, a group that includes Mayo, the city of Rochester, Olmsted County and the Rochester Area Chamber of Commerce. Based on figures available from what DM&E has provided to regulators, from rail analysts and from comparable railroads' financial data, BearingPoint concluded DM&E never would make enough money to keep up with debt payments over the 25-year life of the loan. By the end of the loan term, the cumulative deficit would reach nearly $1.4 billion, the study says.

DM&E is putting up only $111 million of its own equity capital to back the $2.5 billion loan, the study says.

"No business person would ask to borrow or be allowed to borrow with that kind of leverage," said Steve Huffines, a BearingPoint senior manager. The apparent lack of interest among private investors "speaks for itself," Huffines said. DM&E President and CEO Kevin Schieffer did not have an opportunity to review the report, but said he was not concerned about it. "They have a long history of paying consultants lots of money to come up with goofy conclusions that are submitted to the government and rejected," he said. "I would not be surprised if this is another one. We're very comfortable with the fundamental economics of the project."

Other details in the study:
• DM&E, which reported $221 million in long-term debt on its 2004 balance sheet, already is in debt beyond industry norms. Company debt then was about 50 percent of assets.
• For a variety of reasons, analysts at Morgan Stanley and JPMorgan say DM&E likely never will haul 100 million tons of coal per year, as outlined in the company's regulatory application. A more likely scenario is 25 million to 40 million tons. The coalition study assumes the railroad's best-case scenario.
• If the project goes forward as DM&E forecasts, the railroad would be reliant on coal-hauling for 80 percent of revenues. Other railroads serving Wyoming coal fields are more diversified, the study says.
Because DM&E is a private company, its financial data is hard to get, officials said. The company's loan application to the Federal Railroad Administration remains nonpublic despite several requests for it.

Coalition members said they hope the study prompts a closer look at DM&E's project from those weighing the loan application.

Rochester Chamber President John Wade said public money should not be put at risk in a "highly speculative project."
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Additional Comments on the subject of the DM&E /BearingPoint report:
I had the same concern about the use of management consultants, and that is why I asked the question, “How will Coleman and Gutknecht use this report?” I’m sure that DM&E would be able to pay a consulting group to shape the answers they way they want. But the question is shouldn’t this report require them to consider it and take action ? Remember the public sector was not interested in backing this project, so maybe their due diligence gave them access to DM&E's books.
Realistically, this government loan would not even be a question, if Congress had followed good practices and voted on it as a stand alone item … or required the TranPORKation Bill to be funded in a PayAsYouGo format as was done in the 90’s. This is the type of spending that drives fiscal conservatives batty … especially when you realize that Mark Kennedy was the deciding vote in the House.
I see this as Gutknecht's moment to stand in the spotlight. He has an angry group of constituents in Rochester who want action. He should use this report to publicly question the wisdom of this loan.

If the company does have the financial wherewithal, why won't a commercial bank be the prime lender? He needs to decide if he believes that the government needs to subsidize this railway company.

Question: Let's substitute "railroad" with "airline", and ask, should taxpayers be involved with granting loans so an airline could expand their service routes?
Gutknecht has been a wallflower on this issue ... standing on the sideline hoping that it gets resolved without impacting him. He has shown no visible support for (or support against) this project ... yet it is has an impact on the First District as well as an impact to the country's fiscal condition.
[Support] ''92 million Americans will receive an average tax cut of $1,083.'' That sounded, and was intended to sound, as if every American family would get $1,083. Needless to say, that wasn't true. The Tax Policy Center estimates that 89 million people will receive tax cuts and that the total tax cut will be $99 billion, or about $1,100 for each of those 89 million people. But this calculation carefully leaves out the 50 million taxpayers who received no tax cut at all. And even among those who did get a tax cut, most got a lot less than $1,000, a number inflated by the very big tax cuts received by a few wealthy people. About half of American families received a tax cut of less than $100; the great majority, a tax cut of less than $500.
Mark Kennedy - The Hypocrite Congressman from Minnesota
Orginally posted in The Mankato Free Press Forum on May 8, 2006

Anybody know what Congressman Mark Kennedy’s middle name is? Could it be Hypocrite?

Last week, I received an email from the Congressman bemoaning the wasteful spending by Congress. Being a staunch fiscal conservative, this complaint is one that I agree with. This complaint would resonate with me more if Kennedy had not voted for the spending in the first place. In his email, he cited his comments in Congressional testimony. But the examples that he cited were just a small portion of more than $60,000,000 projects that have questionable value. BUT, the problem is that HR 4818 was passed with Congressman Kennedy’s vote. It was not just a forced vote where if Kennedy did not support this, the bill would not pass, but it was passed 344 to 51 ( and yes, for those of you that wonder how Gil "Fiscal Hawk" Gutknecht voted, he said spend the money).

And in all this largesse is some money for Minnesota. But the only project that I saw on the list of more than 100 questionable projects was $50,000 for Wild Rice Research … thank goodness, the project includes funding the Coca-Cola Space Science Center in Columbus Georgia … every time I drink a Coke, I will thank Mr. Kennedy for keeping my soft drinks affordable and not requiring a namesake company to make a greater contribution.It is not only an irony that Kennedy is complaining about Congressional spending, but one of the candidates to replace Kennedy is Congress lists the following on his website :

I, like many of you, have been disappointed with what has been happening in Washington. We have a Republican majority in Congress and control of the White House; yet, we have seen spending reach new highs and our conservative agenda left at the wayside. I believe it is time to create not only a Republican majority in congress, but a true conservative majority.

Many of our elected Republican’s have become too complacent, and the fervor of the “Republican Revolution” of 1994 needs to be rekindled. The reason for this complacency is that we have elected from our party, the status-quo candidates, who have been serving in government their entire careers. [Question : Could this last sentenace be a dig at Gil Gutknecht ? ]

If you wish to see more waste approved by Congressman Kennedy’s vote, here is a link :

And the following is Congressman Kennedy's statement in Congress.
"Mr. Chairman, as someone who spent 20 years in the business world before coming to Congress, I understand that for any business to be successful, it needs to have leadership that establishes priorities. The owners of businesses big and small know this, but, over the past couple of decades Congress has decided to follow a different set of rules. You don't have to look any further than the proliferation of earmarks, which have grown from 958 in FY1996 to nearly 14,000 in FY2005.
"Egregious examples of waste are easy to see: $2,000,000 to relocate a kitchen in Fairbanks, Alaska; $950,000 for the Please Touch Museum in Philadelphia; and $150,000 for the Therapeutic Horseback Riding Program at the Lady B Ranch in California.
"These no longer come as a surprise to us. So we shouldn't be surprised that FY2006 spending is projected to reach an all-time high of $23,638 per U.S. household, of which $3,800 will be borrowed.

Kennedy & Gutknecht - Two Poor Policymakers

Orginally posted on The Mankato Free Press Forum - May 1,2006

On Friday, I received emails from Mark Kennedy and Gil Gutknecht. The subject was escalating gasoline prices. Well, not to put gas on a fire, but isn’t it a little late now to tell voters that they are fighting for us? Why preach to us, when Congress needs to ask themselves why they have not addressed the problem? This Do-Nothing Congress has spent more time “in District listening sessions” (which really means campaigning and fundraising) then in legislative session. Since this session of Congress started, they have introduced a number of bills to affect gasoline consumption. But those bills have largely been sitting … inactive … waiting for committee action. Why? Part of the reason, I am afraid, is so that they go come home to the district and talk up what they want to do … when they should be going to other districts and explaining why their bill is the best for America’s future. I’m sorry, Gil but talking up your 10/10 plan in Southern Minnesota has not generated one Congressperson from Iowa – a leading ethanol producer – or other Midwest states to support your bill. If Gutknecht really wanted to advance his proposal, then take the show on the road and visit the other 49 states.

Let’s look at some of the bills.
Can you guess which bill Kennedy or Gutknecht are the lead sponsor?
H.R.3683 ( 27 cosponsors – Last Action 9/7/05 )Title: To amend the Internal Revenue Code of 1986 to suspend for 30 days the Federal excise taxes on highway motor fuels.
H.R.3762 ( 70 cosponsors – Last Action 9/19/05 )Title: To require higher standards of automobile fuel efficiency in order to reduce the amount of oil used for fuel by automobiles in the United States by 10 percent beginning in 2016, and for other purposes.
H.R.4357 ( 36 cosponsors – Last Action 12/2/05 )Title: To amend the Clean Air Act to require all gasoline sold for use in motor vehicles to contain 10 percent renewable fuel in the year 2010 and thereafter, and for other purposes.
H.R.4409 (67 cosponsors – Last Action 12/16/05 )Title: To promote the national security and stability of the United States economy by reducing the dependence of the United States on foreign oil through the use of alternative fuels and new vehicle technologies, and for other purposes.
H.R.4623 ( 23 cosponsors – Last Action 12/17/05 )Title: To repeal tax subsidies for oil and gas enacted by the Energy Policy Act of 2005 and to use the proceeds to double certain alternative energy incentives provided for in such Act.Looking at the bills,
H.R. 3762 has the most cosponsors and actually makes the most sense -- reducing consumption through improved performance of vehicles. Guess what – neither Gutknecht nor Kennedy is cosponsors. What about the bill with the second highest number of cosponsors –
H.R. 4409. Well, the stated goal of that bill is to make the U.S. independent form oil imported from the Middle East by 2015. Once again, a good goal – it even includes mandating that 10 percent of all gasoline in the U.S. be renewable fuel by 2015. But once again, Gutknecht and Kennedy are not co-sponsors. Gutknecht specifically opposes this bill. You will have to decide if Gutknecht authorship of the 10/10 bill has motivated him to not support this broader bill.

What Minnesotans need is Congressmen who actually work for us, not just preach slogans. Give me substance over slogans and action over apathy.
Bush Fails to affect textbooks and school teaching

Discussing Iraq, President Bush said during an appearance with the Israeli Prime Minister, Ehud Olmert on Tuesday, May 23, "Trying to stop suiciders — which we're doing a pretty good job of on occasion — is difficult to do."

Wouldn’t you like to see some statistics to back up that claim ? Everyday in Iraq there are killings – some are the result of suicide bombers including on an attack on a market this past Sunday. Afghanistan has seen increased instances of suicide bombers.

Have you heard Tom Friedman compare the Wal*Mart procurement practices to suicide bombers? According to Friedman, “Wal-Mart has designed a global supply chain down to the last atom of efficiency, so if you take an item off the shelf in Brooklyn, another is immediately made in Shenzhen, China. Al Qaeda is nothing more than a mutant supply chain. Al Qaeda is an open source religious political movement that works off the global supply chain. You take one bomber and deploy him in Baghdad, and another is manufactured in Riyadh the next day.” Friedman’s concern is that the war in Iraq has been an enormous boon to the international Jihadi movement, encouraging angry youths from all over the world to join it to fight.

The 9/11 hijackers were suicide bombers primarily from Saudi Arabia. So what makes someone become a suicide bomber ? The 9/11 Commission decried the teaching of Wahhabism in madras schools in Saudi Arabia. The government of Saudi Arabia said they were going to change what was taught in schools.

According to an Op-Ed piece in the Washington Post, these changes are entirely insufficient. Here is a sample of what is being taught in the First and Twelfth Grades Saudi Arabian schools :
"Every religion other than Islam is false"
Fill in the blanks with the appropriate words (Islam, hellfire): Every religion other than ______________ is false. Whoever dies outside of Islam enters ____________.
Jihad in the path of God -- which consists of battling against unbelief, oppression, injustice, and those who perpetrate it -- is the summit of Islam. This religion arose through jihad and through jihad was its banner raised high. It is one of the noblest acts, which brings one closer to God, and one of the most magnificent acts of obedience to God."

The Bush Administration, which claims that Saudi Arabia is such a good friend, must denounce these “improved” textbooks. If these are our friends, you can only imagine what our enemies are teaching the next generation.
Following up on my April 25 post of Iraq Timetable : May 22,2006

The first trigger date has technically been achieved with the news over the weekend that Iraq Prime Minister Nuri al-Maliki had named 37 cabinet members on the surface is good news. Albeit some of the functions are not exactly what many of us would consider to be significant (Minister for Immigration, Minister for Tourism and Antiquities, Minister for Culture, and Minister for Sports and Youth may have open time on their daily planners.) The three main functions are still undetermined -- Minister of National Security, Minister of Interior and Minister of National Defense. Also, disappointing is that that only four women were named to the cabinet which implies that one of Bush’s talking points of promoting women’s role in government may not be achieved. The previous interim governments had more women involved.

Establishing a functioning government with so many political parties, which seem to be based on ethnic, regional, tribal and obviously religious basis, is extremely perilous. The spoils of governance can be disseminated through patronage and nepotism. When jobs are assinged to persons that are less competent or experienced, will not only lead to a poorly functioning government but also a more factional government as minor parties may elect to not participate in the government giving rise to increased violence and increased dominance of miltias. PM al-Maliki has stated one of his prime concerns is ending corruption and embezzlement (in government offices) – let’s hope he succeeds.

The real positive news (if it comes to pass) is that The Organization of the Islamic Conference may propose sending a peacekeeping force led by itself or the United Nations to end violence in Iraq. many have suggested, the peace may best be accomplished when Arab and Muslims are participating as peacemakers. Quieting a civil war may be easier when the troops have an indigenous understanding of the language, culture and religious practices.

My concern still is that Bush will buckle to political pressure of the November elections and start pulling troops out before a national army is in place. The country could easily implode and the region would be in a mess.

Iraq Timetable - 4/25/06

Orginally Posted on The Free Press Forum April 25,2006

It’s been so hard to find good news coming out of Iraq that even Gil Gutknecht’s Happy News weekly email listed in This Week’s Progress in Iraq: “DIWANIYAH - About 1,600 households in Diwaniyah are receiving reliable electricity thanks to 40 new transformer kiosks.” Although that may technically be progress, I thought the population of Diwaniyah was about 400, 000 … so I wonder who decides what households will have reliable power.

But, there was some good news out of Iraq.

The Representative Government (not a Democracy according to the leading Iraqi political party) finally produced the beginnings of an operational government selecting as Prime Minister Jawad al-Maliki and President Jalal Talabani. The Iraqi government now has a timetable. PM al-Maliki has 30 days to set up a cabinet and four months to make any changes to the Constitution. Sunni Arab delegates are determined to overturn the provisions that allow provinces to form confederacies and to claim 100 percent of future oil and other natural resource finds, denying those resources to the federal government. Since Sunni Arabs have no such resources presently, they will be severely disadvantaged by such a system. The Kurds have already been setting up oil deals based on the oil reserves in their territory. PM al-Maliki’s political party objects to a paragraph that allows two-thirds of the population in three governorates to obstruct what the majority decides; it ultimately gives the minority the ability to impede the decision of the majority, which is against democracy.The next months will tell us if this government can function. Violence may escalate over that time period as Iraqi on Iraqi attacks may continue. PM al-Maliki announced that all local militias are to be disbanded in favor of the National Iraqi Military forces. This is a major challenge to PM al-Maliki. The first reaction from President Jalal Talabani was to insist that the Kurdish peshmerga is not a militia but rather a "regulated force." The Kurds say that federal forces will never set foot on Kurdistan soil, and that the peshmerga is the army of the Kurdistan regional confederacy. Aside from the Kurds militia, this could still work if Muqtada al-Sadr complies and disbands the Mahdi Army, then this government has a chance. A little background on Jawad al-Maliki. He is a member of the Dawa Party which was inspired by Iran’s Khomeini in the 80’s. He fled Iraq for Iran in 1980 when Saddam Hussein made it a capital crime to belong to the revolutionary Shiite Dawa Party, which was working for an Islamic state. He later left Tehran for Damascus, where he was in Dawa's political office. The Iraqi Dawa was engaged in anti-Western attacks in Lebanon during the 1980s, and helped form the Lebanese Hizbullah in 1984. It is not clear if al-Maliki had been involved in any of those activities. If the Bush Administration was unhappy with Ibrahim Jaafari, then there probably not overly excited about Jawad al-Maliki.

Based on this timetable, there are only three scenarios which US troops come home this summer.
#1. The Iraqi Government requests us to leave. This is not out of the question, as it was a platform of some of the Iraqi political parties as some believe that keeping the occupation forces means keeping problems.
#2. Rove access that it a political necessity to draw down troops prior November’s mid-term elections.
#3. The Iraqi Government is functioning so well that they do not need us.
Although all these are possibilities, I think Bush foretold his thoughts when he said that the next president would decide when the troops would come home.
So now that there is a timetable, the question is how does Bush feel about the exit strategy whereby the endgame could be decided where the US is sent home with Iraq and the region unstable? Will he cave to internal and external political pressure, declare Mission Complete, and retreat; or, will he tell the American people that not only is the War on Terrorism a long war, but that the stablization of Iraq is instrumental to a new world order and that the US forces will remain there.

Deficit : Gutknecht -v- Bush

The Bush White House has not exactly exhibited a concern with truly addressing the deficit (see below for Cheney’s comment), but when it raises fiscal concerns of a bill the House has approved, that should be a loud warning shot to any fiscal conservative. On June 29th, the White House issued a statement on that bill. “The Administration strongly opposes the bill’s revenue-sharing provisions because of their adverse long-term consequences on the Federal deficit . The Administration’s preliminary estimate is that the revenue-sharing provisions of H.R. 4761 would reduce Federal Receipts by several hundred billion dollars over 60 years.”
Note : Bolding added by me.

So I was surprised when I read Gil Gutknecht’s weekly email and he promoted this bill as a main House accomplishment of the past week.The bill had detractors – both Republican and Democrat – but was easily passed. Some of the Republican detractors included Minnesota Congressman Jim Ramstad and other fiscally concerned representatives including Iowa Representative Jim Leach, New York retiring Representative Sherwood Boehlert who chairs the Committee on Science, Republic Study Committee members Connie Mack and Roscoe Bartlett. If you are wondering about Mark Kennedy and John Kline, they both voted with Gutknecht. Gutknecht, Kennedy and Kline have at one time or another been a member of the Republican Study Committee which advertises itself having the purpose of advancing a conservative social and economic agenda in the House of Representatives.

H.R. 4761 concerns itself with allowing drilling for oil on Outer Continental Shelf (in other words, coastal areas such as Florida and California.)
For discussion sake, let’s ignore the impact to tourism and the environment and only focus on the fiscal impact (since that is what the White House is basing its concern.)

Currently, the way it is supposed to work, the Federal government signs leases to let oil companies drill offshore. Once the companies recoup their original investments, payments to the public, or royalties, kick in. A single oil lease can yield millions of dollars in royalty payments ... and as oil prices go up and up, so do the royalties. Except that some of the leases do not have clauses in them for government payments and some have caps so the oil companies do not have to pay premium prices (like today with oil over $65 a barrel.)

But this bill has some changes to it. A provision changes the revenue sharing so that states' share of royalties would soar eventually as much as 75 percent. The Interior Department estimated that the changes could cost the federal government as much as $69 billion in lost royalties over 15 years.

This change in who gets the money is why I oppose it. Benefiting from the oil royalty payments Alaska, where state residents receive a rebate from the state’s Permanent Fund, does not have any state income tax nor state sales tax (Dividend checks from the Alaska Permanent Fund (APF) paid $845.76 to every Alaska resident last year.). As you may recall, the 2005 TransPORKtation bill included dubious earmark projects such as the Alaska BridgeToNowhere … so the other 49 states pay while Alaska benefits. With this change in practice, the pool will open so that coastal states get more direct royalty payments plus will have Congressman earmark projects to benefit their districts. It is desirable to reduce our use of foreign oil, but that does not mean that Minnesotans, and the nation as a whole, would receive lower oil prices and definitely not if the Federal Deficit is raised. The Senate needs to take revenue-sharing provisions out.

So why would any Fiscal Hawk vote for this bill ? Let’s see, gas at $3 per gallon and an election in five months. What I see is Fiscal Short-sightedness. Congressman Gutknecht I see the facts – you’re more concerned about the election than our fiscal well-being. Here’s a link to Gutknecht’s email

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Dick Cheney comment as reported in the book, The Price of Loyalty: George W Bush, the White House, and the Education of Paul O'Neill :Treasury Secretary Paul O'Neill “went to see the vice president expecting to get a sympathetic hearing for his concerns over the deficit. Instead he is told: "You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due."