Pelosi: Congressional Pay Cut Undermines Dignity of the Job

House Minority Leader Nancy Pelosi
House Minority Leader Nancy Pelosi

House Minority Leader Nancy Pelosi (D-Calif.) said that she opposes a cut in congressional pay because it would diminish the dignity of lawmakers’ jobs.

“I don’t think we should do it; I think we should respect the work we do,” Pelosi told reporters in the Capitol. “I think it’s necessary for us to have the dignity of the job that we have rewarded.”

The comments were made in the context of the looming sequester, which would force across-the-board cuts affecting most federal offices, including Congress. With lawmakers nowhere near a deal to avert those cuts, federal agencies are bracing for ways to absorb them with minimum damage to programs and personnel.

Pelosi, whose husband is a wealthy real-estate developer, was quick to note that a cut in her own pay would be far less significant than that for both staffers and less wealthy members of Congress.


Charlie Rangel Should Step Down

Rep. Charles Rangel said Tuesday that House Speaker Nancy Pelosi has promised him he will keep his chairmanship of the Ways and Means Committee as long as he wants – even though investigators haven’t completed their report on ethical allegations facing the Harlem Democrat.


“She told me I am her chairman of the Ways and Means Committee as long as I want to be,” Rangel boasted to reporters at a ribbon-cutting for a new East Harlem School.


The Democratic chairman of the powerful House Ways and Means Committee has been at the center of a seemingly endless swirl of questions about his activities.


He came under fire recently after The New York Times reported that Rangel worked  to protect a tax shelter for Nabors Industries, an oil company whose chief executive was pledging $1 million to a school bearing the congressman’s name.


The executive, Eugene M. Isenberg, also personally pledged $200,000 to the City College of New York, where the public policy school is named for Rangel.  Last year, the company won congressional approval to preserve its tax shelter in the Caribbean, saving Nabors tens of millions of dollars annually and depriving the federal treasury of $1.1 billion in revenues over a decade, according to a Congressional analysis by the nonpartisan Joint Committee on Taxation.


Various other aspects of Rangel’s questionable ethical activities — which have also featured maintenance of multiple rent-controlled apartments, including one (illegally) as a workspace, enjoyment of tax benefits by claiming two difference cities as primary residences, and using his Congressional letterhead to raise money for a private foundation — is theoretically being investigated by the House Ethics Committee.


One activity that I find troubling is Charlie Rangel claiming that he did not know that a Caribbean resort villa he purchased 20 years ago was financed with a no-interest mortgage from the developer and has generated $75,000 in income that he should have reported on tax and financial disclosure forms.   Is one supposed to believe that the leader of the tax-writing committee had not paid the U.S. taxes on income from his own luxury vacation home because he was ignorant of the tax laws…the New York Democrat writes the damned tax laws!


Charlie Rangel shows contempt for the country, the American people, the House of Representatives as exhibited by both his unethical activities and his cavalier attitude about it.  He is most certainly not a patriot.  One would hope that he would be challenged and defeated for his seat in Congress in 2010, but it is clear that the drones that have elected him since 1970 will overlook his shortcomings.  At the very least, he should step down as Chairman of the House Ways and Means Committee or be forced to step down.  


That is not likely to happen.  One shouldn’t be surprised, in spite of Socialist Democrat Nancy Pelosi’s promise to clean up Washington’s “culture of corruption,” that she will smile and look the other way when it is a liberal Democrat involved in the investigation.

Government Should Stay Out of Auto Business

This past Sunday on Meet the Press, President-elect Barack Obama told Tom Brokaw, “We don’t want government to run companies.  Generally, government historically hasn’t done that very well.”  Obama is absolutely correct!  Government has been shown to be a miserable corporate manager.  We should never want politicians or federal bureaucrats managing private companies.


Unfortunately, that is exactly what House Speaker Nancy Pelosi and her fellow liberal Democrats in Congress are about to do.  Under the plan being submitted by Congressional Democrats “would mandate, or at least heavily influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make.”


The latest bailout plan, which the Congress hopes to vote on Wednesday, calls for an initial $15 billion for General Motors and Chrysler.  Everybody seems to agree that these figures are just a down payment.  The plan will be overseen by an official, appointed by President George W. Bush, whom congressional lawmakers describe as an “auto czar.”  This person will act as a kind of trustee with authority to bring together labor, management, creditors and parts suppliers to negotiate a restructuring plan.  He or she will also be able to review any transaction or contract valued at more than $25 million.


Nobody is saying what will happen if Ford were to choose not to take the money at this time.  Ford’s CEO has said that they do not need the money at this time, but is requesting a $9 billion line of credit. Ford is supporting the other two auto makers getting a bailout because a failure of either or both would affect Ford so negatively.


It still poses an interesting question, though.  Will Ford be exempt from the rules and meddling of members of Congress and the Auto Czar?  If so, will they then have an unfair advantage?  Will they be forced to follow the same rules and regulation to be eligible for the line of credit they are requesting?  None of that is clear at this point.


If General Motors and Chrysler (and/or potentially Ford) get the bailout that the chief executives are asking for, you can potentially kiss the companies good-bye.  It won’t happen overnight, but the demise will be virtually guaranteed.


With or without an Auto Czar and with or without the bailout, Detroit will need to drastically restructure itself.  Detroit needs a turnaround, more than a check.


Detroit’s problems are structural and cannot be cured simply by an injection of taxpayer money.  There are other auto makers (such as Toyota, Honda and BMW) building cars on American soil and actually making a profit by doing so.  The biggest problem for the Big Three is their completely uncompetitive labor costs which come to more than $70 an hour.  Some people have disputed this number, but have not been able to provide any evidence that refutes it.  The numbers break down this way:  about $30 in base pay becomes $40 after average overtime pay is included; then another $33.58 is tacked on in benefits which include health care, dental, life insurance, disability, unemployment insurance, pension payments and payroll taxes.  These numbers come from GM itself!


All of these costs are for current employees and do not include any payments or benefits for current retirees.  If you were to figure in the $4.9 billion that GM paid to retirees and surviving spouses in 2006, the hourly wage goes up another $31 leaving GM with labor costs of $100 an hour!  Contrast these numbers with the $43 an hour that Honda is paying its workers and the problem becomes clearer.


That extra burden is estimated to be more than $2000 per car.  Think what that means:  Ford, for example, needs to cut $2000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon.  Of course the Avalon feels like a better product—it has $2000 more put into each one!  Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars.  But if this cost penalty persists, any bailout will only delay the inevitable.


The huge disadvantage in costs relative to foreign brands needs to be eliminated.  That will mean new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Toyota and Nissan.  Furthermore, retiree benefits must be reduced so that the total burden per automobile for domestic automakers is not higher than that of foreign producers.


Management, whether the existing group or new managers, must work with labor leaders to see an end to the enmity between labor and management.  The division is a holdover from the last century and companies in the 21st century cannot perpetuate the destructive labor relations of the past.  This may mean a totally new direction for the U.A.W., perhaps in profit sharing or stock grants to all employees or perhaps something else.


Investments need to be made for the future.  Investments should be made in truly competitive products and innovative technologies—especially fuel-saving designs—that may not arrive for years.  Starving research and development is like eating the seed corn.


The federal government should invest substantially more in research—on new energy sources, fuel-economy technology, materials science and such—that will ultimately benefit the automotive industry.  That is where Congress can help rather than dictate.  Washington is spending about $4 billion on energy research today and should commit to investing at least $20 billion a year.  The research could be done at universities across the nation, at research labs and even through public/private collaboration.


Another way Congress could assist the automakers is to rectify the imbedded tax penalties that favor foreign carmakers.


The American auto industry is vital to our national interest as employer and as a hub for manufacturing.  A managed bankruptcy may be the only path to the fundamental restructuring the industry needs.  It would permit the companies to shed excess labor, pension and real estate costs.  The federal government could, and should, provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.


Whether through a managed bankruptcy, or simply through their own restructuring (which Ford seems to think they are doing), the federal government could assist and propel newly competitive and viable automakers, rather than sealing their fate with a bailout check.


I would hope that, rather than rushing to send a check, some in Washington will consider that there are options other than government taking over the business of business.  Apparently, I won’t get what I hope for from Congress…again.

Ban on Offshore Drilling to Expire

The Democratic controlled Congress have apparently decided to let the 26 year ban on offshore drilling, which had to be renewed every year, die without any further fight.

The Democrats gave one final attempt at a victory when Speaker Pelosi and company introduced an energy bill in the dead of night and forced a vote the next day which passed through the House, but died in the Senate.  The bill was a sham of an energy bill that, while allowing offshore drilling, would only allow it in areas more than 50 miles offshore where the likelyhood of finding oil is in suspect.

Even the Democratic candidate for President, sensing the mood of the country, indicated that he would support limited offshore drilling.

Many Republicans are calling the failure of Democrats to continue the ban on drilling as a major victory.  Several conservative talk show hosts are saying the same.

I caution against claiming victory at this point.  The Democrat Party playbook tells them to try to win the day with votes and if that is not possible it tells them to stall for as long as possible.  When the inevitable happens and they cannot win with a fair vote, they will do what they always do.  They will take it to court.  Sometimes I think they would prefer to skip all that petty election stuff and just find a friendly judge to settle all matters!

Watch for any attempt to begin drilling to be met with legal action by some liberal, environmental group.

That, I believe is their plan until Barack Obama is sworn in and can issue another Presidential ban on drilling.  Ah, democracy in action the Democrat Party way!

Pelosi Wants to Block House Vote on SAVE Act

Nancy Pelosi has decided that the country should not have a chance to have the Secure America with Verification and Enforcement (SAVE) Act.  The SAVE Act is a bi-partisan bill seeking to strengthen border security and limit illegal aliens in our work force

Pelosi has threatened political exile to the 50 Democrats in Congress who co-sponsored the bill, but have yet to sign its discharge petition which would bring the bill up for a vote on the House floor.

It doesn’t seem to matter to the Speaker of the House that a majority of Americans are in favor of securing our borders.  It doesn’t matter that the constituents in the 50 Democratic House districts might want the bill brought to the floor.  It doesn’t matter that the Speaker promised to work in bi-partisan manner when she took her position in 2006.  It doesn’t matter to Ms Pelosi what is good for the country.   

Six years after 9-11, the federal government still hasn’t done what nearly 70% of Americans want: secure our borders from the continuing flood of illegal aliens.

The SAVE Act targets employers with still penalties for hiring illegal aliens, secures both the northern and southern borders of our country by adding 8,000 new border patrol agents and increases interior enforcement by allowing for additional federal district court judges and providing more resources for law enforcement officers.

As of June 25th, there were 190 of the needed 218 signatures required.  Urge your representative in Congress to sign the petition which would bring the bill to the floor for a vote.