Sunday, October 16, 2011

House Rejects EPA Oversight of Coal Ash

House Rejects EPA Oversight of Coal Ash

By: Puneet Kollipara
October 15, 2011


WASHINGTON — The House voted yesterday to approve a bill that would block the U.S. Environmental Protection Agency from restricting how utilities dispose of coal ash and would let states regulate it like municipal waste.

The bill passed 267-144, with all but three Republicans voting in favor and 37 Democrats joining them.

Republicans said the bill would prevent the EPA from issuing a rule that an industry group has said would cost up to 316,000 jobs.

“These are real jobs at stake. It’s that simple,” said Rep. David McKinley, R-W.Va., adding that bill opponents “clearly have an anti-coal agenda.”

The agency has proposed subjecting coal ash to a federal hazardous-waste-management law or requiring states to regulate it as nonhazardous waste. The proposal comes in the wake of coal-ash spills, including a billion-gallon spill in 2008 in Kingston, Tenn.

The bill would allow states to regulate coal-ash disposal no less stringently than municipal waste. The EPA could run similar programs for states that don’t regulate it.

Coal ash — the residue of coal combustion at electricity plants — contains toxic metals, including chromium, arsenic and lead. Environmental groups, which want the EPA to regulate coal ash as hazardous waste, say those chemicals can get into groundwater when ash-disposal structures fail, putting people at risk of death or serious disease.

Rep. Pete Olson, R-Texas, said the bill would “provide certainty for state regulators as well as the manufacturers that rely on coal ash as building materials ... and prevent unnecessary hikes in electricity rates.”

Democrats such as Rep. James P. McGovern of Massachusetts cited a study from Tufts University in Medford, Mass., that said the industry group’s assertion of job losses is based on flawed use of data from an unpublished academic study. The Tufts study found that the EPA rule actually could create 28,000 jobs.

“These jobs will not happen if we pass this bill. This bill basically preserves the status quo,” McGovern said.

Top House Energy and Commerce Committee Democrats such as Rep. Henry Waxman of California contend that letting states regulate coal ash like municipal waste wouldn’t ensure the safety of coal-ash sites.

The Environmental Integrity Project, an environmental-advocacy group in Washington, has said the bill also would allow for coal-ash sites that could leak up to five times more arsenic than allowed by current law.

McKinley’s bill faces tough odds in the Democratically held Senate. The Obama administration opposes it.

48 comments:

  1. We are all looking in every direction possible to find what will work best next, it is only when looking back that we realize what has been done. I for one do not look at all change as being to everyone's benefit, but we must start somewhere.

    We are involved ourselves as a new proprietary technology that will impact the global market in the energy sector. We also struggle to maximize effect on all ends, but inevitably find that someone must give up something to create progress, who is yet to be seen as volunteers are not stepping up.
    Posted by Robert L

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  2. A big picture approach may improve views on what this bill would do to many small town manufacturing companies, unemployment, higher energy cost. During the Kyoto accord the other nations throughout the world informed Mr. Gore that there would be no agreement until the U.S.A. first put these controls in place. You can see we are mandating more restrictions on Nox, Sox, and particulate matter being exhuasted from are fossil fuel units at a cost to the consumer, not the companies. Wind Turbines are being put in place and the consumer must pay for the lack of income to the corporations who build and operate these "Green Power" turbines. The turbines are a cost center to the corporations and that cost is being passed down to the poor and middle class. These machines will never make enough power to support manufacturing and residential needs in this country. At best you may see them produce usable energy 16% to 20% of the time. The maintenance costs far outweigh the operation of these units. In the mean time China, India, and other foreign countries are not placing a value on the environment, they’re too busy creating fossil fuel plants to power their growing market and employing their people.

    I just visited a company that said they will have to shut down and lay off all of their work force if this measure goes through because they cannot afford the environmental equipment to meet the tough standards being proposed. Good hard working people and an entire town will lose their income and tax base to provide resources to even pick up the trash. What are we doing to ourselves and at what cost? When are we as a majority going to sit down at the table and ask for our input? When are the people with the money and power going to start doing their part as leaders? This smells of ENRON and not a GREEN PLANET. If government is going to be involved get their wealthy friends to pick up the cost of these projects. A small manufacturing company cannot afford 250 million for flue gas exhaust equipment which adds no income to their products bottom line. 250 million is cheap by the way.
    Posted by David

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  3. Proponents of increasing government regulations may cast the increasing regulation as "moving this country to the center again". The implication is that those who question the merits of increased government regulation (often at someone else's cost) must be advocates of an extreme position. This type of argument is "ad hominem" at its core. At that point the debate begins to move away a productive discussion.
    The costs of even good environmental regulation are experienced by everyone in the US as an increment of increased environmental "purity" and increased product and service costs, higher taxes (or currency inflation if deficit spending is the funding source) and generally an increment of less future economic opportunity for most. Many people say they would pay more for "greener" products and policies. But the exact level of that regulatory cost is always obscured to a degree when government regulation is involved. Corporations may pay the initial costs but they eventually have to recover the higher costs for goods and services in prices. But of course they get blamed for the higher prices not the legislators or regulators.
    And the poor disproportionately pay a higher percentage of their income for these increased prices for basic sustenance. So how many unemployed, what higher tax rate, what amount of pension devaluation, etc. is an appropriate level of cost for the next increment of environmental purity? To leave that judgement in the hands of a professional political class or long-tenured bureaucrats with no check from the voters is not wise. Seems like the answer to that question should include the larger voting public ("tea-party" included) not just a few regulators or one cycle of Congress. And in the process the "center" may move around as we all get wiser.
    Posted by Jay Barry

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  4. Kipp & Mr. Johnson, you make some very valid points and I appreciate the debate! It's important that we have intelligent conversation about these matters, since Washington seems incapable of doing so. Perhaps if we can put the science into play and stop demonizing Environmental Protection as a "job killer" - we could start moving this country into the center again.
    Posted by Celeste

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  5. No one is talking about irresponsible regulation. The issue is the appropriate level of regulation. FYI, 37 Democrats voted for the bill in the House, so it passed with broad bipartisan support.
    Posted by Kipp

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  6. Whether it's from the EPA or State's own laws, I think it is important that we take care of our waste products responsibly. We don't want another ash spill like what TVA experienced in 2008.
    Posted by Tina

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  7. Ms. Noren: Lots to quibble with you here, but I write to disagree with your claim that the Republican party is "back[ing] the Tea Party." How quickly history is forgotten. A sizeable number of Tea Party candidates actually ended up running against and defeating establishment GOP’ers on their way to Congress last year. The origin of the Tea Party actually goes back to the final years of the Bush presidency, and took the form of opposition to what some perceived as rampant spending under that Republican Administration. I think it is fair to say that there is now a moderate allegiance of sorts between the Tea Party and GOP in the House, but there is tension as well.
    Posted by Kipp

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  8. The perspective you voice is possibly merited if you assumptions that the regulators not only accurately understand the science, have no significant political agenda and are better qualified to judge how much protection is sufficient at what cost. Those assumptions are quite generous in most instances and thus create costs that disproportionately affect the lower income class consumers and lower skilled job holders. I disagree that the check on regulator's power should not be checked.
    Posted by Jay Barry

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  9. The Republican backed Tea Party is winning their war on Environmental Protections for Americans. Florida legislation just beat the EPA over forcing the Corporations to pay for their role in destroying water quality. They are "quietly" unraveling our protections without anyone paying attention. Does anyone remember "Love Canal" and Air Quality Standards in the 70's and 80's - Oh, wait a minute, what about BP in 2010? Hoping that corporations would "self regulate" themselves for the benefit of the common good? We have to speak up!
    Posted by Celeste

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  10. I agree that, with a Democratic President and Democratic Senate, it is important that the country move back from the Left and more towards the center. With respect to job killing regulations, I'll let the current unemployment rate speak for itself.
    Posted by Kipp

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  11. Kipp if you believe that the underlying cause for the current unemployment rate is due to "job killing regulations" you have not been listening. Many large companies and now smaller ones as well, are intentionally NOT hiring because they want to keep the economy barely afloat so that they can influence the next election and get someone into office that will bow to the profits of the corporations. We hear corporations cry all the time about how the regulations make them unprofitable and yet a look at the quarterly earnings of these same companies and you will see massive profits. Companies are now holding more money in banks than ever before. In the past they used that money to expand and grow now they are just bringing in profits and holding on to them in order to influence the next vote and remove more government oversight so that they can go back to the old days and we will have more Love canals, more rivers which we cannot eat fish out of again just like the 70s and 80s. The argument that the inspectors do not know the science is a reasonably good one but the answer is not to remove the outside inspectors but to hire more inspectors with the knowledge necessary to do proper inspections backed by the science and not the politics, unfortunately that would require more government spending and so the discussion to do that has been forbidden by the corporate controlled tea party stooges
    Posted by Randall

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  12. This is how polluters get away with what they do, by using jobs as a carrot on a stick. When will our politicians get that we can create green jobs that are a win-win situation for the economy, the environment and health?

    Posted by Patricia Herlevi

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  13. It used to be that the wealthy invested in new technology and innovation - think of Thomas Edison's experiments on lighting up Wall Street; Lincoln working with Corporate America to build the Transcontinental Railroad; Eisenhower's Interstate Highway system. This doesn't happen anymore -The Corporate Greed's motto is "Use OPM". This is why we've lost our way as American's - we need to try being the "Next" Greatest Generation... and that takes investment from the 1%, not just from the middleclass and China's checks.

    Posted by Celeste

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  14. Celeste: You say that "investment from the 1%, not just from the middleclass and China's checks," is needed for "new technology and innovation." You suggest that the "1%", whatever that means, are not making investments.

    I'm quite confused about your position, so have attempted to break it down.

    Let's start with federal expenditures on R&D, which of course are funded by US taxpayers plus annual deficit spending, with deficit spending taking the form of US debt purchased by a variety of entities, including the Chinese.

    According to the National Taxpayers Union, the top 1% of federal taxpayers, ranked by adjusted gross income, pay 36.7% of all federal personal income taxes. http://bit.ly/tKdtOX . The federal government then decides how those dollars are spent, not the taxpayers. Perhaps your complaints thus are better directed to the government, not that tax-paying public (the bulk of which again are folks who you would apparently describe as wealthy).

    To the extent that you do not believe that the federal government is doing enough for R&D spending, there are several causes. One cause is that a growing bulk of the federal budget goes for entitlement spending (e.g., Medicare, Medicaid, and soon, Obamacare). Government-funded R&D comes from the discretionary side of the budget. Over time, the discretionary side of the budget has been squeezed by entitlement spending. So we, as a society, need to decide if we want to become an European-esque social welfare state (more money for entitlements) or something else (more money for discretionary spending).

    And if you respond that we need the government to do it all -- i.e., provide ever increasing R&D spending and entitlement spending -- you need to explain what that means for America's youth in terms of the crushing debt load they will face when the chickens come home to roost, and they inevitably will. The Greeks, Italians and others in Europe are learning this the hard way even as we speak. America's youth currently face rather alarmingly high unemployment, too.

    I also note that the welfare state as it is known today did not exist when Thomas Edison, Lincoln, or Eisenhower were around (although Eisenhower was on the cusp of it). So if anything, you seem to suggest that there was more technological innovation by the private sector when the government was substantially smaller. I would agree with you on that. Ayn Rand would as well.

    Let's turn next to private expenditures for R&D. Do you really believe that some of America's wealthiest are not funding technological progress? That's nonsensical, of course. Plus, some of what you would deem "rich" actually became so because they started out relatively poor or middle class, put their life savings into a good idea, worked hard, and saw it succeed. Thus, their wealth is a product of bringing technological development to society.

    Historically, technological progress was the domain of the private sector. Over time, with federal government encroachment, a larger federal role in that has emerged. I would say that your comment supports the position that the federal government is not an efficient supporter of R&D in comparison to the private sector, as a general rule (but I would concede there are exceptions to that rule, too). This is particularly perverse because it is the "1%", as you describe them, that provides the bulk of the government's revenue, at least in terms of personal income taxes. So maybe we would have more technological progress if the "1%" were able to invest in private ventures instead of feeding the ever-expanding monolith that is the federal government. I don't think this is the point you intended to make, but it is what the facts suggest.

    Posted by Kipp

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  15. This has gotten a bit political, and way off topic, but I'm going to chime some thoughts, anyway -

    With corporations' need to satisfy their shareholders at the end of each quarter, long term investments in R&D are often cut before they get started.

    There are also a lot of private companies that have made huge profits off of technology originally developed by NASA and other federal R&D programs.

    It still comes back to needing to find a way to generate electricity in a safe, efficient and reliable manner. And in "safe" you must include environmental issues. One of the reasons our heath care costs are where they are, is the level of pollution in our environment. We've done a great job cleaning up our industries since the EPA was formed, I don't think we should go backward. let's all move forward, instead, and find the third path.

    Posted by Tina

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  16. Regardless of where the money comes from or goes, it seems that we as a country are trying to fullfill wants and not not needs anymore. Why should I perform R&D services if I do not see the potential in earnings to fullfill my wants. There has been news that a good portion of the american revenue is being under utilized. We use to inspire our youth to be creative not sit and play TV games. In order to support a growth in our economy Tom Edison lit up Wall street with DC current, while George Westinghouse lit up the Worlds Fair in Chicago with AC.

    Why? To provide a need or a want? To expand the market by allowing employees to work 24 hours a day to produce products for an ever growing market? We need to realize that R&D dollars are being donated to support an ever growing older population, to fight new deases, to increase our look of youth. The demand determines the supply, the supply determines the cost. We have a population of 7 billion people on this earth and growing everyday. Are R&D dollars being put out there for energy solutions which are self sustaining, you bet.

    We need to be able to create an environment which can handle the growing population. One that allows us to belong to our own pssions, without putting our environment in jeporady. We need to find a way to slow down and reconsider what we need, not wants!

    Posted by David

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  17. Health care cost are rising for many reasons "off topic". We live longer, reduction in plant life which chemically alters CO2 to O2, population growth, Insurance cost for malpractice, drug companies charging hugh fees, Use of Asbestos, improper training of employees to keep cost down, etc...

    7 Billion people breathing air at ~21% and exhaling at ~5% CO2. With the average person breathing say 30 breaths per minute at 1,440 minutes in a day.

    7,000,000,000 x .05 x 30 x 1, 440 (minutes in day) x 365 (year) = ?
    We have reduced are natural resources, trees, schrubs, etc... by what maybe 50%.
    We are driving how many cars, mountain eruptions, natural coal fires burning in crevices since 1966. Over 167 of those not known by the general public.
    Powder River Basin coal which has a lower sulfer content but requires twice as much to burn for the same energy output and has a high risk of self combustion.
    Are we really trying, does the world really care about the truth?

    You and I both know that this is a political hot bed. I started out in the nuclear field because I believed in the process. To bad I entered in 1978. Do I have answers, no. Do I want to find answers, yes. Do I work hard every day towards that goal - YES!

    All in all, Tina, I agree we need R&D dollars to find a viable solution before our grand children have a waste land.

    Posted by David

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  18. Using Lincoln, Edison and Eisenhower as examples of where in history these leaders helped open the doors to new innovation that led to a growing economy - the reason i used this forum was because I believe that investment and innovation in alternative energy (not just fossil fuels) is the way we can turn our economy around, protect our environment (air, land and sea) and begin to build new jobs for the middle class - education,repair & maintenance, smart grid technologies etc. Thomas Friedman's Hot Flat & Crowded is a great book to inspire and get people thinking about how we can take a challenge and make it an opportunity. I want America to lead in this endeavor, but our politics are getting in the way. Other countries like Germany & China are taking the initial lead, but there is time for us.

    Posted by Celeste

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  19. Kipp:

    The reason the top 1% pay so much of the tax burden is that they take home approximately one out of every four dollars of the nation's total income! Talk about income inequality. The US has become a veritable banana republic! This is not good for democracy. We may already be in the incipient stage of a revolution, as evidenced by the demonstrations against Wall Street and Corporate greed. There was a time when the rich knew that the only way they could keep their wealth was to ensure that the middle class could enjoy a decent standard of living. It appears they have forgotten that lesson and may have to re-learn it in a painful manner.

    While it is true that we need to do something to get entitlement spending under control (like means-testing so the top 1% pay more for medicare) the amount of federal R&D spending is laughably small relative to our GDP. It is not being crowded out by entitlement spending.

    What we need to do is raise more tax revenue. We can't do that while the economy is fragile but once we are back on the road recovery we need to let the Bush tax cuts expire and we also need to eliminate the tax subsidies to agriculture and fossil fuels. It also would not hurt to phase out the deductions for mortgage interest and property taxes, which encourage people - especially the top 1 % - to buy more house than they need. Canadians do just fine without these housing subsidies.

    Higher tax revenues will allow us to begin retiring the national debt, or at least hold its growth rate to that of GDP. The next generation will inherit the debt but they will also inherit the wealth of their parents. That's not a bad tradeoff, particularly for the offspring of the top 1% who never earned the money they will inherit and therefore should not begrudge giving much of it back in the form of inheritance taxes to help retire the national debt.

    As for the days of Edison, Lincoln and Eisenhower being the golden age of technological innovation, get real! Have you forgotten the microprocessor, the internet, the iPhone, LCD TVs, advances in medicine, etc. We have seen more technological innovation in the last 30 years than in the rest of the history of the country. Ayn Rand had nothing to do with that - or anything else, other than authoring a couple of interesting fictional novels.

    And yes, some poor and middle class people have become "rich" or at least have entered the top 1% club (I'm one of them - my father drove a truck for a living). However, study after study confirm the high correlation between a person's income and wealth and the income and wealth of his/her parents. How do you think the 1% perpetuates itself? Through hard work and perseverance? Give me a freaking break!

    Kipp, you need to read an article by Nobel Prize winner, Joseph Stiglitz: http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105 .

    Posted by Robert L.

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  20. Celeste, what leads you to those conclusions, other than hope and belief?

    Posted by Bradley

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  21. A key here, that is often forgotten in these arguments, often made with hidden agendas on both sides, is that these corporations don't like bad press, or big payouts from lawsuits. Why then, would a big IOU then purposely over pollute? In fact, most generators of electricity who use Coal as the central fuel are burning at rates much cleaner than ever! AND, these regulations were keeping Generation IOUs from upgrading plants to newer, cleaner standards, therefore polluting more! Sometimes the fog of a sudo religious belief of a POLICY must be cleared so as to see the unintended consequences.

    Posted by Bradley

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  22. I agree, Bradley, the New Source Review regulations have forced a lot of plants to reject potential efficiency upgrades. Unintendend consequences, for sure. I have heard that there are discussions now about adjusting the NSR policies for this very reason.

    Posted by Tina

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  23. Bradley,
    History is what leads me to my conclusions. Bright People with Big Ideas to help solve problems, it happens over and over. People united over a common cause - think of the innovation that came out of World War II - Companies and People banded together - they sacrificed together, and collectively we came out of the Depression, stronger, wiser and financially more stable and upwardly mobile - and Yes, Hope & Belief plays a big role in our success. The environment today is far more political, divisive & toxic. Remember the start of the American Revolution? A majority of the colonists (loyalists) were fat, rich and happy letting England rule, but many others had no opportunity. If it weren't for our Founding Fathers creating a voice and debating the larger populations discontent, where would we be today? United we Stand, Divided we Fall. As Mr. Borlick's post suggests - the 1% needs to invest more in their country and many of the 1% agree!

    Posted by Celeste

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  24. Here's an example: http://www.energycentral.com/generationstorage/environmentalemissionsandcarbonmanagement/news/en/22350027/We-Energies-says-some-coal-ash-cleanup-costs-won-t-be-passed-along
    What gets me, is the PUC trying to make sure the rate payers don't pay for any cleanup. If rate payers don't pay for it, who will? If the company foots the bill, it will end up in the rates, sooner or later. If it doesn't, the company would go out of business.
    In any case, even with older plants and newer emissions controls, WE Energies is able to maintain normal operating costs at or below the rate of inflation.

    Posted by Tina

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  25. I wonder if the inability to "bill" customes for cleanup costs might drive utilities to perform major upgrades to ash disposal areas and then try to include the cost of those upgrades in their rate base.
    In other words, the customer would pay for less costly preventative measures.

    In light of recent events, I would think that a Utility would have a good case with the PUC's to be reimbursed for these costs.

    Posted by John

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  26. Celeste
    You make a good point about investment and where it should come from.
    My personal concern about this concept is that the additional money will flow through the Federal Government before it would be used for any of it's intended purposes.

    In the hands of politicians there is a high probablility that the much of the increased revenue will be wasted on non- related entitlements and pork barrel projects.

    At this point in time, I think more good will be done by keeping that extra 1% in the hands of the private sector.

    Maybe I sound cynical, but I personally believe (my opinion) that the greed of today's Congress far surpasses any level of greed in the private sector.

    Posted by John

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  27. Tina,

    Your comments about utility customers having to pick up the clean-up costs is not true. Customers (ratepayers) are only legally (and appropriately so) responsible for costs that were "prudently incurred" and were associated with efficient management practices. If a utility has an accident that was caused by poor management practices all cleanup costs should be paid by the shareholders - not the customers. If shareholders object they should fire the CEO for incurring the costs.

    Making utilities pay for imprudently incurred costs will not drive them out of business; it will just reduce their profits and most likely the market price of the stock. This is as it should be. It provides an incentive for the management to stay on their toes and not become complacent.

    The problem is that not enough CEOs get fired for incompetence or bad judgments. And when they do they walk away with multi-million dollar golden parachutes. The CEO of PG&E, Peter Darby was recently fired for poor performance. Guess what, he walked away with a $38 million severance package! That's the stuff that is destroying the country and causing the demonstrations on Wall Street.

    I hate to sound like a bomb thrower but we really do have to clean up the corporate corruption that has overtaken the country. Peter Darby is just one example and a minor one considering what the Wall Street got away with.

    Posted by Robert L.

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  28. John,

    Get real.

    There are unethical practices going in congress, like the insider trading that was recently covered by "60 minutes." But nobody in the congress is walking away with $100 million dollar payoffs like we see going on routinely in the private sector. And these payoffs are legal because they were agreed to by Boards of Directors who all belong to the same club and look out for one another.

    Our version of capitalism stinks to high heaven. Stuff like this doesn't happen routinely in Europe, Japan, Australia, Canada or New Zealand. What do they know that we don't? Do you think that maybe they don't allow the private sector to openly bribe their politicians with huge campaign contributions?

    Posted by Robert L.

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  29. Robert
    My comment is in response to the comment about raising INDIVIDUAL income taxes forthe 1% highest wage earners - and where that money will go.
    I do not believe that additional "revenue" will be efficiently used if it is funneled through Congress.
    Congressman may not walk away with $100 million dollar payouts that you ridiculously claim are "routine" in the private sector, but they have no trouble throwing away......
    - $50 million for an indoor rain forest in Iowa
    -a $400 million dollar earmark for a "bridge to nowhere" that the 13,000 people in Kechikan AK neither asked for nor wanted.

    -$615,000 to the University of California to digitalize pictures of the Grateful Dead (Dead Head groupies would gladly do it for free)
    -$1 million to zoos to post plaques with poetry (what's a zoo without poetry?)
    -a $743,000 grant to see if sheep in Montana will eat weeds (why not ask a farmer instead?)

    yup - I will take your suggestion for me to "get real" and I will go see a shrink to see if he can convince me to enter the "real world" and agree with you - but it will probably take massive doses of Thorazine for that to happen.

    Posted by John

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  30. Well John,

    I think we are both guilty of hyperbole. I will agree that $100 million payouts are not routine in the private sector but lavish bonuses and severance packages exceeding $10 million, and ranging well beyond $100 million occur often enough to be in the news at least on a monthly basis.

    The examples that you cited represent earmarks, which I oppose. However, they amount to only about 1 percent of the Federal budget. So while many of the individual project expenditures may be egregious wastes they are not big money. I suspect that corporate jets cost the economy more than do those earmarks.

    Making the top 1% pay more in income taxes has another purpose beyond just raising revenues. It is simple justice. Why should some hedge fund manager pay only the low capital gains rate on commissions he earns from his clients' trading accounts? He has none of his own money at risk. The same argument goes for rich people who live on dividend income, which today is also preferentially taxed. Meanwhile some construction worker has to bust his hump just to make ends meet and then gets hit with a tax rate that is double what the hedge fund managers pay. As I said, its all about achieving justice.

    Posted by Robert L.

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  31. Robert --

    Your inference that the "rich peple who live on dividend income" haven't done enough rings hollow. Dividends are double taxed in the United States -- indeed, the US is one of the few countries that does so. A corporation pays taxes on its earnings, which reduces the earnings to shareholders, then the shareholders pay the dividend tax upon receipt of the dividend which of course comes out of after-tax corporate earnings. Moreover, not all dividends are the same: there are ordinary and qualified dividends. The maximum tax rates for ordinary dividends and the income tax are currently the same (35%).

    Higher income taxes have several negative impacts on society. They result in less, not more, federal revenue due to supression of taxable economic activity. They impede the incentives for hard work and advancement. They punish America's job creators, the bulk of which are small business owners who you might describe as "rich." I suspect your hypothetical construction worker works for somebody you might describe as "rich," too. A society without the wealthy is a society where everybody is poor.

    You suggest that the income tax should be used to extract "justice." Perhaps you meant "fairness" instead. To the extent taxes are needed, they should be applied fairly. It is neither fair nor just for half of Americans to pay the income tax and half not, however.

    You assume that the inhabitants of the upper income bracket are static when in fact folks move in and out of that bracket (and other brackets) all the time. Is it fair or just for your hypothetical construction worker to spend a career developing a new type of cement, the market success of which lands her in the upper class, only to face then an even more regressive income tax? You might call that "justice"; my read of that situation is that the new cement wouldn't have been developed in the first instance.

    You state that you "suspect that corporate jets cost the economy more than do those earmarks." Elimination of tax incentives for corporate jets would return $3B in federal revenue. http://bloom.bg/rCji3e . DOE reports that it has issued $35.9B in federal loan guarantees to date. At the moment, corporate jet owners are creating jobs, whereas DOE seems to be doing a decent job of destroying them.

    Finally, any discussion of the income tax without a prior discussion of the proper role of the federal government has the cart before the horse. The role of the federal government, in part, is to set the stage for individuals to prosper through hard work. The Constitution guarantees liberty and freedom, not equal outcomes. Your "justice" based formula seems to turn this pillar of American society on its head. The world has been there before -- it's called communism.

    Kipp

    Posted by Kipp

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  32. It's tempting to focus only on the large industries, such as Utilities, that have the ability to raise capital to buy equipment to meet EPA regualtions.

    Smaller companies, however, are not as fortunate. In California, where I live, environmental regulations are not only very strict, but permitting for new industry or expansion takes excessive amounts of time.

    The result - manufacturing is fleeing the state, often going to Mexico or Asia where regulations are overly lax. Jobs are lost, products are imported, and the pollution from other countries still enters the US via air. 25% of California's air pollution comes from China.

    Reasonable regulations can help keep industry within our own borders, and reasonable US regulations are still much more stringent than in most other countries meaning less worldwide pollution if jobs stay at home.

    Posted by John

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  33. run a company. I keep myself employed and I hire people. I am a mechanical engineer and a "Job Creator". I am NOT in the 1%. Far from it.

    I would argue most "Job Creators" are small businesses making a few million or less a year (in gross revenue, not profit), often scraping to get by and sometimes bypassing officer income to meet payroll.

    When you place more tax burden on these middle-class, small business people, you are hurting the true "Job Creators". When you refund more money to the top 1% (we're talking about the people, not the businesses themselves), those tax breaks and extra funds go directly into their bank accounts and stock portfolios - and maybe a new jet. Sure, building jets creates jobs, but how many jets, summer homes and yachts does one person need? Meaning - once the 1% has all the toys they want, any more tax breaks will not be going back into the economy in any useful fashion.

    The 1% are already successful, they are more likely to be retired than still building businesses (just look at the ages of people in the Forbes 400 list). The small struggling business owners (including many construction firms) are the ones creating jobs and opportunities. Help the small businesses (i.e middle class businesses) be more successful, and that will get our economy going again. Tax breaks to the 1% have already been tried and have done very little if anything to move our country forward.

    I look forward to the day when my hard work pays off and I join the 1% - and I look forward to being able to pay taxes to support the systems that allowed me to reach that level of success.

    I agree a discussion on the role government should play is important, but right now we need to find a way to fund the current spending levels (that which has already been approved by our elected representatives)... cutting government programs and benefits in a recession would be akin to shooting ourselves in the foot.

    Just my $0.02.
    And we're waaay off topic now...

    Posted by Tina

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  34. Kipp,

    Dividend income is taxed twice, as are all forms of corporate income – assuming that the corporation actually pays any income taxes. But my point is still true; dividend income is preferentially taxed to the recipient, whereas wages and other forms of earned income are taxed at higher rates. Clearly, this benefits upper income people relative to the working class, whose income is mostly in the form of wages.

    Higher income taxes do have negative effects on society but so does insufficient tax revenues. We need to optimally balance one negative against the other. Your comments about high taxes reducing federal revenues is a version of the supply-side “voodoo economics.” That may have been true when the top marginal rate exceeded 50 percent, that is not the case today. Extrapolating your comment would lead to the conclusion that we can maximize tax revenues at a zero marginal tax rate -clearly absurd.

    So high tax rates “punish job creaters?” How many jobs did Goldman Sachs create selling bogus asset-back securities (which they privately referred to as “crap”) to their clients? The overwhelming majority of small business owners earn less than $100,000 per year – far short of that needed to qualify for the top 1 percent. Very few would be affected by raising the top income tax rate. Furthermore, most are self-employed individuals with no employees. Not big job creators.

    Your comment about the economic mobility of people moving in and out of the top 1 percent is overstatement. Once someone gets into that income bracket he/she stays there. Success begets success – even for incompetents. Bob Nardelli, former CEO of Home Depot, almost destroyed the firm by cutting employees to the point where customer service suffered badly. The board fired him but paid a severance package in excess of $100 million. Next job? CEO of Chrysler!

    Posted by Robert L.

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  35. Kudos, Tina,

    Your words reflect what I have often thought.

    Posted by Robert L.

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  36. Wow lots of wandering. The EPA is trying to take control of issues. Right or wrong, do you want the federal governmnet controlling more and more? States can be responsible for their laws and regulations. The biggest problem with the EPA has been uncertainty as to whether they were going to use hazardous or non hazardous designations on fly ash.. The TVA and Lake Michigan spills were both dam problems not fly ash problems. Proper disposal and benefical use of fly ash is economically and environmental good for everyone.

    Posted by Richard

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  37. It comes down to Cost, does it cost more to produce clean coal or to have sick people and an sick environment? If regulations on the Coal industry or too burdensome then we loose coal jobs and gain Solar jobs instead. So where do we loose jobs? They use that jobs argument way too much. They used the exact same arguments when Child Labor laws were proposed and passed. We all know that the Govt. is filled with Fossil fuel and Coal executives and lobbyists and that is why we get the laws that we get. That is why they don't like scientists. That is why they won't honestly discuss Global Warming and the effects of their pollution. Is all about business to them, it is not about an honest debate or what is the right thing to do for the Country as a whole.

    Australian coal plant operator considering solar-thermal conversion
    http://yes2renewables.org/2011/11/16/alinta-considers-converting-port-augusta-generators-to-solar-thermal/


    . The push is on to discredit clean energy investment. "...for the professionals involved in the promotion of clean energy and climate solutions -- the think tanks, advocacy groups, and trade associations -- the right response is to pound louder." http://www.grist.org/politics/2011-11-16-the-push-is-on-to-discredit-clean-energy-investment

    Posted by John

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  38. Well, Well, gotta love the way Americans are so influenced by political parties and everything comes down to what one side or the other is doing...
    Burning coal to produce power produces coal ash. Seems to me instead of fighting over how it is disposed of, finding a way to re-purpose the ash would be a good idea.

    On that 1% thing, so they make one in four dollars, they then pay 3.7 to the government.

    The major problem in the US is that health care is a commodity. Everyone should ask why people die of curable diseases because they cannot afford healthcare?
    Insurance companies are making many hundreds billions in profits in profits at the cost of the American middle class, which is declining at an unprecedented rate.
    Check the numbers, at a greater rate than the great depression.

    Back to environmental regulation; I find it very interesting how different the regulations are state to state. California vs. Texas to take the two extremes. California is loosing millions of manufacturing jobs to Texas and Mexico due to strict regulations.
    I spoke to one company last week, while working on a separate power issue, who recently shipped 100 well paying jobs to Mexico, not for the cost savings, but for air regulations that no longer allow him to manufacture some of his products in California.

    ALL the environmental policies need to be revisited and enforced nationally, rather that the hodge podge of regulation existing now across the US.
    For example, take a look at the last time an oil refinery was created. It takes dozens of years to get approval to build a new one, at a cost way too high for any company to even consider such a project, even in Texas. Yet when one goes down what is left of the middle class suffers, because the cost of everything goes up.

    Everyone has good intentions, however idealism seems to be the rule, and the result is the decline of the American empire towards third world standards... Shame for those suffering...

    Posted by Kevin

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  39. Celeste, your populist comment about the 1% is an example of fuel for the very political climate to continue to flourish.
    One view that I Believe is often lost in the discussion of those who helped establish our country, is that they made the decisions they did without the push of the government. In fact, one would argue that the government thinking they can push people into innovating is silly, at best.
    There are innovators out there who are working on cheap ways to produce electricity, and many are clean. In the meantime, a zealous persecution of traditional fuel sources will only make the lives of those who need cheap power to live more difficult. Take for example those who live in old, rickety houses in the urban centers. They need cheap energy to keep their bills affordable. When the answer to fixing a problem caused by ignorantly created government policy is more government policy, it shows that the problem is the originating government policy!
    It is true that the population of the US would benefit from cheap, clean energy sources. It is for that fact alone that they will be created. Government policy and pushing ONLY serves to stifle creativity and push innovators in the direction that politicians and the lobbyists behind them will benefit most from.

    Posted by Bradley

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  40. USA utilies are reusing ash for many purposes. It is utilized for creating cement which is less toxic then portland cement. It is being used in combination with road asphalt. it is being used to building materials. It is being used to create a non-toxic pourable mixture around underground piping to reduce piping corrosion. The by-products from our clean coal technology is beingused as well. Our Flue Gas Desulpherizationn units use lime stone and the waste product is gypsum for making wall boards. Another building material.

    I agree that ALL the nations of the world need to agree on the subject of using our natural resources. I agree that we as a world need to work together. At the Kyoto accord conference the "Third World" countries felt the USA must lead the way before they would agree to anything. It was stated that the countries who have not been able to enjoy a higher standard of living should be allowed that opportunity and the USA would get no cooperation unless the USA inacted laws on environmental standards.

    I, also, agree that clean coal technology does have advantages such as more jobs in the UISA. Keeping mass power productionn centralized, using solar, nuclear, thermal. What I do not agree with is Wind Farms.

    As for idealism, I must say that I do not understand if people want their way of life changed. Those jobs heading to Mexico are not increaasing the wealth of the people, it is however feeding the pockets of the individuals who could polute as much as they want too. Power is the very thing that has done this for the USA as well as the world. Who am I to tell anyone what they should or should not do?

    7 billion people creating a chemical compund everytime they breath called CO2. I wonder what that has done to the atmosphere? What are all the green house gases? Does the world climate shift over time? I went to Alaska and discussed the growth of the glaciers with one of the Forest Ranges who monitor and data on these ice sheets. Yes I said growth. I did not believe they have been growing. The Ranger assured me that the data was exact, they were using Satilite GPS to monitored expansion and shrinkage of the glaciers. The ocean water temperatures have dropped 1/2 degree F in the last 8 years. I don"t know what to believe anymore.

    Posted by David

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  41. Energy companies rake in massive profits and use this wealth to leverage elections, write legislation, scale back regulations and escape accountability. In 2010 the O&G industry spent $145m on lobbying and the mining industry spent $30m

    http://www.alternet.org/environment/153103/the_5_most_toxic_energy_companies_and_how_they_control_our_politics/

    We need a Solar Lobby.

    Posted by John

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  42. John,

    Your comment is on-target. The $145 m spent by those fossil fuel industries reaped handsome returns. Check out the following graphic, which shows the cumulative federal subsidies to all energy over the 2002-2008 period:

    http://www.eli.org/pdf/Energy_Subsidies_Black_Not_Green.pdf

    Their motive is not providing cheap energy for the good of the people; it is to make huge profits by driving up demand for their products.

    BTW, we have a solar lobby and one for wind as well. They just lack the resources of EXXON or Southern Company.

    Posted by Robert L.

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  43. Why solar parity scares big utilities

    The overwhelming evidence from Australia and overseas is that they bring the wholesale cost of energy down, sometimes so much that the reduction in prices is greater than the cost of the subsidies that got them built in the first place. And established utilities with higher-cost fuel, such as coal and gas, don’t like it one bit, and are suddenly realising the extent of the threat to their business. http://tinyurl.com/7wdeo9t

    Posted by John

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  44. John,

    I don't think that renewable energy is a threat to established generation unless it contributes to an excess reserve margin, which will depress prices. But adding any type of generation to excess will have the same effect - renewables are not unique.

    The NEM is an energy-only market, i.e., generators do not receive capacity payments. In that environment they need high prices during the peak hours to recover their fixed costs and earn a profit level that is sufficient to attract investment in new generation when it is needed. The fact that prices have spiked up to $10,000 per MWh tells little about market efficiency. However, it tells much about market price volatility.

    I like energy-only markets and fully expect them to be adopted in the US within 15 years. However, the NEM has a design defect in that it has virtually no price-responsive demand! If it had enough price-sensitive demand to reduce the peak loads by about 10 percent during supply shortages, energy prices would seldom reach $10,000. More likely they would (rarely) go to about $3000-$4000, which is approximately the value of lost load (VOLL) for residential customers (based on some crude modeling I did back in 2003). Furthermore, prices would gradually increase over many hours, rather than spiking up to extreme levels for just a few hours in the year, as they do now.

    I do not understand why the Australians haven't implemented more demand response in the NEM. They certainly have a lot of smart economists who surely understand this concept. Perhaps someone can answer that question.

    Posted by Robert L.

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  45. Everyone wants funding for their niche over another, and in the case of solar, the Chinese have already won that production battle.
    before anyone starts to decry the Chinese, remember they are only copying what was common in America as it became industrialized. At one time the Factory Town was the norm, everyone who lived in the town worked for the company that created it. Essentially indentured laborers similar to share croppers. The difference being the Chinese do it in a far more civilized manner.
    It is far past time to argue who should be getting the bigger part of the pie, energies would be better utilized in eliminating the Washington Lobby industry. Good luck with that.
    The American experiment has failed, the system set up to provide for the masses has only provided for the bankers. The unreasonable goal of ever increasing profits, no matter what has virtually destroyed the American middle class.
    Real unemployment at the highest level ever, foreclosure rate still growing, people sick and dieing because they cannot afford healthcare, local economies based on the service industry, etc...
    Sounds more like a third world country than an industrial giant.
    Fixing this system, if it is even fixable, will be an interesting exercise.
    The fix will be painful for many people, however the alternative is far worse.
    Unbridled commercialism has failed as surly as the communist model failed decades ago.
    Time for a new approach, not likely to happen...

    Posted by Kevin

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  46. I find it interesting that a group of people who are highly educated seem to not have any idea how their government functions.
    US government policy, good or bad is decided after consulting.
    This is where the problem exists, everyone seems to have an expert on any subject, and a group backing the issue. In fact in Washington there is an industry dedicated to just that, have an issue, they will find the so called expert, and create a group to back up the stance.
    There is more money spent on establishing a position as best for the country than on actually solving any issue.
    For example look at healthcare, currently managed by insurance companies and their systems of hospitals and doctors. Every time change is proposed that would actually help the general public, a huge campaign starts to protect the profit margins of the insurance companies.
    Those who have the most money and can make the most noise get their way, every time, at the cost of the people. The US system, which does not work for the people is the only place on the planet where this system exists. So how does Germany do it?
    One of the best healthcare systems existing today, and one of the strongest economies.
    The US is in a deep hole, run by elected officials who only look to the next election cycle and keeping their job. Interesting how many of the elected officials went to Washington as upper middle class and are now part of that fabled 1%.
    Sorry, getting off topic.
    There are many solutions to the energy issues, but only those who have the deepest pockets will have a voice loud enough to be heard.
    Interesting change is happening however, Richard Branson, and Bill Gates have both invested large sums of their own capital into CO2 capture projects, two very promising projects have been built and are in the proof of concept stage.
    Burning Coal to produce power and the related byproducts is really not the issue, what is the issue is the lobby system that manages to get it's way.

    Briefly on the glaciers, yes indeed some are growing, and ocean temperatures in some places is dropping.
    Global climate change is something that has happened many times over the billions of years the planet has existed, simply a function of how the weather systems function.
    Anyone who can claim there never has been any change may as well claim dinosaurs never existed. We just happen to be witnessing a period when climate change is happening.
    Have a wonderful day everyone and don't loose any sleep worrying about things you cannot change.

    Posted by Kevin

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  47. Well Kevin,

    While I agree with most of what you say I don't think the US problem is insoluble - at least I hope it isn't. The power to change the system does reside in the hands of the voters, if they just wake up and go to the polls. There are politicians offering to solve the problem of controlling the influence of lobbyists and corporations. Most of them are Democrats.

    If we return the House and Senate to Democratic control I think you will see a lot of changes in favor of restoring the well being of the middle class. When Republicans unabashedly state their desire to not extend unemployment benefits, cut Medicare, Medicaid and Social Security while refusing to even consider very modest increases in the tax rates for people with annual incomes exceeding one million dollars, I think it is clear how different the two parties are.

    So I still have hope for the US. If it doesn't happen I guess I can still renew my Canadian permanent residence status and move north. LOL

    Posted by Robert L.

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  48. Hi Robert.
    You said it; "if they wake up and go to the polls" is the problem.
    During the election cycle people are bombarded with attack adds at every turn, this only leads to apathy.
    One side pointing to the other claiming ass sorts of evil intent, and the general public only shakes their collective heads and want nothing to do with what they conceive as a total waste of time.
    The two US parties are too polarized to be able to accomplish anything. Perhaps a third party would help?
    The US political system is far too broken, more so at the state level. California puts off insolvency by playing accounting games, every year. True unemployment is still near 20% when you take into account the number of people who no longer look for work.
    Congress is deadlocked on extending benefits to the current unemployed, which will add nearly a million people with no income of any kind. Even extending benefits with money they do not have only puts of the inevitable.
    Fixing the current system requires far too much pain, and none of those who only look to the next election cycle will do nothing that might threaten their position.
    Time to move north...

    Posted by Kevin

    ReplyDelete