Congress continues to spend money we don’t have, without considering the effect on businesses.
In case you haven’t noticed, there continues to be a stampede of complicated and confusing legislation being driven through Congress with gargantuan price tags that, in my opinion, foretell of more serious economic woes ahead for our country and for the secondary wood products industry. Before I go further, I want to dispel any impression of my playing partisan politics because there is plenty of blame to go around. My concern for the future of our industry is all that compels me to address this important issue at this time.
It all started last fall at election time with TARP (Troubled Asset Relief Program), where an estimated $700+ billion was pledged to shore up “troubled” assets throughout our financial system. After the first of the year, Congress passed the economic stimulus bill with a price tag of $1.1 trillion, according to the Heritage Foundation. This bill was passed despite the fact that hundreds of pages were added in the middle of the night, before the vote, and few, if any, had a chance to read it — much less understand it.
Then we learned of the omnibus spending bill with over 9,000 earmarks costing hundreds of billions of dollars, and next came the Budget Resolution that continues the spending binge in 2010 and begins to raise taxes. If that is not enough to take your breath away, hold on, that’s just the beginning!
According to published accounts, Uncle Sam has borrowed $1.9 trillion thus far this year — because those we have elected continue to spend money we don’t have.
More to Come
I mentioned there was more to come, and there is. It seems that there is a blind desire for change at any cost in Washington these days. There is an irresponsible stampede to spend, spend and spend and to pass legislation without considering the effects on small businesses such as those that make up a good portion of our industry. The following are some examples that should not be ignored:
1. In its wisdom, Congress tried to pass the “Card Check Act” that would deny employees the use of the secret ballot to vote for or against representation by a union. (See May’s Management Matters at iswonline.com/managementmatters.) This bill may not be dead, but lying on the sidelines waiting for initial resistance to subside while we become preoccupied with other issues. As I stated in May, if this bill becomes law, it is my belief that many companies will fall to unionization, even though the majority of its employees do not want this to happen.
The use of coercion to rebuild the labor unions in the wood products industry will drive down productivity and increase costs. Raising prices to cover increased costs due to union demands will not be a viable option as global competition continues to mount during the coming years. Thus, Congress will be putting our industry and others at risk if they pass this legislation.
2. In June, the House passed the 1,500-page H.R. 2454, the American Clean Energy and Security Act of 2009, also known as the Waxman-Markey Cap and Trade Act. Congress says this bill is going to create “millions of jobs” — as my congressman said in a press release as well as in a letter to me. Also, I was told it is going to end our dependency on foreign oil by facilitating the development of alternative energy sources, such as wind and solar, thus saving the planet from global warming.
Someone must have typed the name of this bill wrong because I believe if this becomes law it will become the “Cap on Trade” bill and not the “Cap and Trade” bill. If Congress wants to create jobs and help the economy, it should include a “drill here — drill now” policy to drive the price of carbon fuels down here in America and provide incentives for alternative fuels. While these are being developed, the flow of trillions of dollars to the Middle East would cease in just a few short years.
If Congress would keep it simple, it could provide incentives and regulatory relief and enable 75 percent or so of our electricity to be generated by nuclear energy within 20 years. We went to the moon in less than 10 years, but it takes longer than that to get a nuclear power plant approved and built.
Waxman-Markey would raise the cost of energy to the consumers that buy our wood products. If not, someone will have to pay taxes to subsidize the cost of energy to the consumer. In fact, my congressman wrote to me that the poorest 20 percent of families would actually get subsidies to reduce their energy costs. You and I, and our businesses, will pay for this subsidy with higher rates and higher taxes.
Under the proposed bill, if I want to sell my house, I will first have to make it meet the energy conservation mandates of the government. That may help window manufacturers, but it will not be a boost to the housing market that continues to be in the doldrums.
According to the Heritage Foundation, climatologist Chip Knappenberger states that this bill would moderate temperatures by only hundredths of a degree in 2050 and no more than two-tenths of a degree by the end of the century. EPA Administrator Lisa Jackson reported to the U.S. Senate Committee on Environment and Public Works: “I believe the central parts of the EPA chart are that U.S. action alone will not impact world CO2 levels.” The obvious question is why are we doing this?
It seems that Congress would have us try to manufacture our products and compete globally with an ever increasing cost of energy. At the same time, we will become less competitive with manufacturers in China, India, Brazil and other developing countries because they refuse to make a comparable effort to reduce their carbon emissions.
3. National Health Care is being stampeded through Congress as I write this column. Again, there is an overriding sense of urgency that this must be done before the August recess. I can hear them in the halls of Congress: “Hurry, hurry, hurry. Don’t take time to read it. Trust me … just pass it. The sky is falling — just pass it now!”
This is a huge issue and one that is so complicated that it will take months to understand and debate the hidden agendas and costs. Is it going to cost another trillion dollars or more as some are forecasting? How is Uncle Sam going to pay for all of this?
The Bottom Line
In my opinion, Congress could be called out of control and the greatest constraint to economic recovery in this country at this time. If Congress gets all it wants, many in our industry will face a further loss of business due to rising costs, higher taxes and a smaller consumer base with less disposable income with which to buy furniture, kitchen cabinets and other wood products.
My question to you is this: Have you written to your congressman or congresswoman to express your opinion on what he or she is doing? Have you written to your senators? Better still: Have you taken the time to call each of them?
I used to think it would not make any difference what I said in a letter or phone call. After all, I am just one person out of millions. But I have found that my voice is heard and when hundreds of others do so, it makes an impact. You may not agree with all I have said in this column, but I know for a fact that if you ignore the stampede in Congress, you will wake up one day and ask: “What happened?”
Businesses like yours are what have made our country and its economy great. You must become more proactive in resisting irresponsible spending, taxing and borrowing by our government. We need a strong economy, which the world respects, in order for us to continue to prosper in this country.
Tom Dossenbach is the president of Dossenbach Associates Inc., a Sanford, NC-based international consulting and research firm. Contact him at (919) 775-5017 or e-mail email@example.com.
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