Idaho Examiner - Sen. Larry Craig News Releases

Friday, March 24, 2006

What Message Did We Send?

by Senator Larry Craig

As you may have heard, Dubai Ports World (DPW), the company that had purchased the management rights to six U.S. ports, recently withdrew its proposal and agreed to turn over its operation of American ports to U.S. entities. Upon hearing this news, nearly everyone in the United States, for one reason or another, breathed a huge sigh of relief.

Many Americans were rightly concerned about foreign companies, especially government-owned companies, owning management rights for U.S. ports. Our ports are on the front line in the war on terrorism, and we must always be on guard against their exploitation or infiltration by terrorists.

Because of the enormous public outcry, Congress and the Bush Administration decided to reexamine the deal, to ensure that all angles and all possibilities were considered. Failure to fully vet this sale through appropriate Congressional channels, regardless of the nationality of the company, would be foolhardy in a post 9/11 world.

As a result of this event, Senator Susan Collins, Chairwoman of the Senate Homeland Security and Governmental Affairs Committee, has introduced legislation that would allow Homeland Security officials to take part in the review of potential foreign investments in the United States. But this proposal will generate quite a bit of debate about government involvement in the free market, and may muddy up the waters.

The United States needs to be careful in the messages it sends to the world. The federal government has a responsibility to take measures to safeguard Americans. Therefore, a thorough review of foreign purchases makes sense, especially when sales involve companies or infrastructure that are vital to national security. However, generations of experience have proven that overly-strict or burdensome regulations and review requirements can discourage investment. A balance must be achieved: security concerns must be given ample consideration without driving investment elsewhere and sacrificing the U.S. economy.

Another message sent by the collapse of the Dubai Ports deal is that the United States may not always be consistent in preaching the virtues of capitalism and a free market economy. While we encourage other nations to open their economies to more outside investment, we restrict foreign investment here. Practicing protectionism at home opens us up to accusations of hypocrisy abroad, and rightly so.

Finally, rejection of the ports deal sends a terrible message to our partners in the war on terror. The United Arab Emirates (UAE) has been a strong partner in this war. This country has provided forward basing for our military and intelligence services, valuable intelligence, and ironically, harbors for our naval vessels. The UAE has been a willing ally, but we have repaid them like an enemy.

Having said that, I do not mean to suggest that Americans were wrong to be concerned about the Dubai Ports deal. I shared those concerns and supported efforts in Congress to review the deal more thoroughly before proceeding. That was the prudent thing to do.

In the future, Congress must be careful to find the correct balance between a strong economy and strong security, without sacrificing one for the other. I believe it can be done, and I will continue to work in the Senate to that end. At home and abroad, our words must ring true.

Friday, March 17, 2006

Budget Bug

by Senator Larry Craig

If you were a doctor heading into flu season, how would you recommend preparing for the illness? Would you advise them to stock up on chicken soup and soda crackers, so they can counteract the symptoms after they get sick? Your patient might appreciate it more if you tell them to get vaccinated before flu season even starts, so the problem is fixed before it even arrives. It is this kind of forward thinking that is needed to address looming problems with the federal budget.

Early in February, Congressman Simpson and I wrote a piece called “Earnest Earmarks,” which discussed reforming the appropriations process. As you may remember, the appropriations process governs the part of the federal budget known as discretionary spending. Discretionary spending makes up about one-third of each year’s federal budget, and provides for defense, homeland security, law enforcement, education, many Older Americans programs, transportation, management of public lands, medical and other scientific research, disaster response, and administrative expenses.

It is this discretionary spending that contains congressional “earmarks,” and reform is absolutely necessary if we are to get federal budget deficits under control. However, the remaining two-thirds of each year’s federal budget, known as mandatory spending, dwarfs the discretionary side, and it is growing at an astonishing pace.

Mandatory spending is aptly named, because it is the portion of the federal budget that consists of payments that occur automatically (rather than yearly or discretionary), under formulas enacted in the past in “permanent” appropriations, like Social Security and Medicare benefits, some (but not all) veterans, farm, and poverty programs, and paying interest on the national debt.

According to the nonpartisan Congressional Research Service (CRS), three programs account for 75 percent of mandatory spending: Social Security, Medicare and Medicaid. Because of the 77 million members of the “Baby Boom” generation who will begin retiring soon, the total cost of these three programs is projected to explode from 8.4 percent of GDP in 2005 to 18.9 percent of GDP by 2050, according to the Heritage Foundation. It is a crisis in the making, but that crisis has not arrived yet. Just like the doctor who can prescribe a vaccine to ward off the flu before it strikes, Congress can act now to prevent this trainwreck.

President Bush proposed some solutions to begin addressing this problem, starting with Social Security. Unfortunately, congressional Democrats decided to kick the can down the road and obstruct,

rather than collaborate to solve the problem. Mandatory spending programs will not be reformed without a broad-based, bipartisan effort.

Social Security, Medicare and Medicaid are worthy programs that have served Americans well over the years. Congress has a responsibility to act before the crisis arrives, so these programs may continue.

The debate over discretionary spending and “earmarks” has been getting all the attention lately, and for good reason. Changes are needed in this area. However, mandatory spending is a much larger portion of the federal budget by far. If we changed discretionary spending and failed to address the mandatory side of things, that would be like watering the lawn while a fire starts in the house.

As a member of the Senate Appropriations Committee, I will work with my colleagues in the Senate to reform both discretionary and mandatory spending, so our fiscal affairs are in order, now and in the future.

Like many a doctor has said, “An ounce of prevention is worth a pound of cure.”

Friday, March 10, 2006


Move will allow for better constituent service

POCATELLO, ID – Idaho Senator Larry Craig announced that his Pocatello regional office is moving from its current location in the U.S. Courthouse, effective Tuesday, March 14. The address of the new office is:

275 South 5th Avenue, Suite 290,
Pocatello, ID 83201

“I’m always looking to improve and provide the best constituent services possible,” Craig said. “The new location will provide Idahoans better access and allow my Pocatello staff to operate with greater efficiency.”

The office will be closed on Monday, while the move is completed. Telephone and fax numbers will remain the same:

Telephone: (208) 236-6817

Fax: (208) 236-6820

Thursday, March 09, 2006

The Taxing Experience

by Senator Larry Craig

March 15th is quickly approaching. What’s so special about March 15th? When that day arrives, it means we are now one month away from that most dreaded of days — April 15th. Tax day.

Every year, millions of Americans wait until crunch time to sit down, do their taxes, and submit the forms to the IRS. You have probably heard the suggestion numerous times already, but I’ll repeat it. Avoid the rush and do your taxes early. Although we’d like them to, those forms won’t fill themselves out!

Meanwhile, Republican leadership in the Senate and I will keep working for continued tax relief for all American taxpayers. There is much to be done to guarantee that workers and their families can continue to take home a greater share of what they have rightfully earned.

In November, the Senate passed S.2020, the Tax Relief Act of 2005. This bill would prevent the expiration of several relief measures that benefit all taxpayers. While some Democrats in Congress complained that Republicans were approving “tax cuts for the rich,” what we did was simply extend tax relief that was already on the books. It shouldn’t be difficult to understand that allowing tax relief to expire – no matter how you try to explain it – results in higher tax rates. In fact, if we fail to extend President Bush’s tax relief, it will result in the largest tax hike in history.

The bill also made changes to the Alternative Minimum Tax (AMT), so middle class families aren’t stung by a much higher tax rate. Created in 1969, the purpose of the AMT was to keep the wealthiest taxpayers from claiming so many deductions that they paid almost nothing in income taxes. Unfortunately, the AMT was not adjusted for inflation, so it began to catch more and more middle class taxpayers in its net. If the AMT is not fixed, more than 19 million taxpayers will have to pay the AMT in 2006, up from just 2.3 million in 2003.

While the Tax Relief Act contained these important tax relief solutions, I could not support the bill on final passage. I voted “no” to express my disappointment that the measure did not include an extension of the current lower tax rates on dividends and capital gains, which have played such a large role in spurring economic activity and growth. It also closed off tax credits American companies pay to foreign governments for their overseas operations, which would make these companies less competitive abroad.

Finally, the bill included a new energy windfall profits tax, which will not do anything to reduce gas prices. According to a 1990 study by the nonpartisan Congressional Research Service, the windfall profits tax in effect from 1980 to 1988 caused domestic oil production to fall roughly 3 to 6 percent, and oil imports increased between 8 and 16 percent.

A conference is underway to resolve the differences between the House and Senate versions of the bill, and I am confident that extensions of the current capital gains and dividend rates will be included. If the foreign tax credits, capital gains, and dividend rates are preserved, and the energy windfall profits tax is eliminated, I’m much more likely to support the bill.

In addition to extending President Bush’s tax cuts mentioned above, I will also be working to repeal the tax on death. The federal government does not have a birthday tax or a gray hair tax, but one part of the natural life-cycle it does tax is the last, when someone dies and passes his or her possessions on to loved ones. This is wrong. Congress did pass legislation to phase out the tax on death, but it only disappears temporarily, returning in 2011. We need to permanently eliminate this shameful tax and the uncertainty that surrounds its fate.

I have always believed that American families deserve to keep more of what they earn, and that those earnings will be used more wisely and efficiently by them than the federal government. I still believe that.

Over the past five years, Congress and the president have acted several times to instill some balance in the federal tax system. But a lot of work remains. Tax day will never be painless, but it could – and should – be less painful.