Hoosier Clout Rebound on Capitol Hill Young Ascends to Ways & Means, Stutzman to Financial Services After Indiana Seniority Bleed by BRIAN A
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V18, N18 Thursday, Dec. 6, 2012 Hoosier clout rebound on Capitol Hill Young ascends to Ways & Means, Stutzman to Financial Services after Indiana seniority bleed By BRIAN A. HOWEY and MARK SCHOEFF JR. WASHINGTON – With the Indiana congressional delegation bleeding seniority to the tune of 78 years this year due to the exits of U.S. Sen. Dick Lugar, and Reps. Dan Burton and Mike Pence, a restoration of some of the clout is coming from the Class of 2010. Last week, U.S. Rep. Todd U.S. Rep. Marlin Stutzman (left) with House Speaker John Boehner during the annual Con- Young landed a seat on the House gressional Baseball Game in Washington. Boehner had urged the young Indiana delegation to Ways & Means Committee. This act in a more cohesive way. week, U.S. Rep. Marlin Stutzman won a seat on the House Financial Services Committee. Both are so- Indiana, I am so proud of Todd. He’ll represent Indiana called “A” committees that aspiring members covet, bring- interests and our tax policy, he’ll be an ally and a friend for ing with them power and prestige for the state. our delegation to go to when it comes to tax issues, trade “These two really set the economic policy for issues, so many things surrounding that. It’s only going to the country,” said a jubilant Stutzman on Tuesday. “For Continued on page 3 Looking over the fiscal cliff By LARRY DeBOER WEST LAFAYETTE – Economics is not an experi- mental science. We can’t say to Congress, “Honorable ladies and gentlemen, please drastically raise taxes and ‘‘Give us the tools.” cut spending all at once so we can measure the effects on the economy - Evansville Mayor Lloyd Winnecke, of changes in the federal government’s in announcing the ‘Trust Local’ budget.” This is not what elected of- ficials do. campaign aimed at the Indiana Except that’s just what is sched- General Assembly uled to happen come Jan. 1, 2013. What a great experiment! Think how much we’ll learn. Unfortunately, we’d all have to live inside this experi- HOWEY Politics Indiana Page 2 Weekly Briefing on Indiana Politics Tuesday, Nov. 27, 2012 ment. We would be the mice in the 2020, the debt will be down to 61 maze. percent of GDP and falling. Now, it’s It’s the famous fiscal cliff, of 73 percent and rising. course. Come Jan. 1, the Bush-era tax When taxes are less than www.HoweyPolitics.com cuts expire, so everyone’s tax rates spending, the federal government bor- will increase. The two-year cut in the rows the difference. Eventually, with Social Security payroll tax will expire, too much borrowing, lenders will only Howey Politics raising taxes some more. The Alterna- lend at higher interest rates. Higher Indiana tive Minimum Tax won’t be adjusted rates reduce borrowing by businesses. is a non-partisan newsletter for inflation, so millions of people Investment projects that would have based in Indianapolis and will see their taxes rise still more. added new equipment and better Nashville, Ind. It was founded Automatic spending cuts will kick in, technology don’t get done. Economic reducing both defense and entitlement growth slows down. The Federal in 1994 in Fort Wayne. spending. Extended unemployment Reserve may try to hold interest rates It is published by insurance will expire; so two million down by increasing the money supply, WWWHowey Media, LLC people will lose benefits. And Medicare but that leads to inflation. 405 Massachusetts Ave, payment rates to doctors will be cut. It’s a nasty choice: recession Suite 300 You can get the amazing details from and unemployment now, or high inter- the Congressional Budget Office in its est rates, inflation and slower growth Indianapolis, IN 46204 annual budget and economic projec- later. tion, at http://www.cbo.gov/publica- There may be a way to avoid Brian A. Howey, Publisher tion/43539. this nastiness. Deficits are not causing Mark Schoeff Jr., Washington Add it up; these changes problems now. We’ve been running Jack E. Howey, editor will yank about $500 billion out of huge deficits since 2008, yet lenders the economy. Higher taxes and lower still are falling all over themselves to entitlement payments will cut spend- lend to the federal government. Inter- Subscriptions ing by households and businesses. est rates are at record lows. Inflation $350 annually HPI Weekly Government will spend less, laying off is low, too, despite trillions in new $550 annually HPI Weekly and employees and cancelling contracts money created by the Fed. The prob- with businesses. With spending down, lems we expect to see from all that HPI Daily Wire. businesses will have less reason to borrowing are nowhere to be found. 'Call Adrian France produce goods and services, so they’ll That’s because an economy trying to 812.455.4070 or email cut production and reduce employ- emerge from recession is different [email protected] ment. from one that’s fully recovered. We’ve The spending loss amounts to got unused capacity - workers with- about 3 percent of the economy. Since out jobs, buildings without tenants, Contact HPI output has been growing less than factories closed or producing less than www.howeypolitics.com 3 percent per year, the loss of that they could. [email protected] spending will turn growth negative. That keeps wages, rents 'Howey’s Cabin: 812.988.6520 That’s a recession. The CBO projects and prices from rising, so we don’t get a half-point decline in gross domestic inflation. Banks have money to lend 'Howey’s cell: 317.506.0883 product by the end of 2013, with the but don’t see enough low-risk borrow- 'Washington: 703.248.0909 unemployment rate climbing back ers. Money not lent is money unspent, 'Business Office:812.455.4070 above 9 percent. so it doesn’t add to economic growth. But wait! With higher taxes Federal government borrowing and © 2012, Howey Politics Indiana. and lower spending, the federal spending in an economy like this All rights reserved. Photocopy- budget deficit will decrease, and we’ll gives businesses a reason to produce add less to the national debt. That’s a and hire. It doesn’t crowd out private ing, Internet forwarding, fax- good thing, right? investment. ing or reproducing in any form, Yes it is. The CBO projects Deficits now are OK. They whole or part, is a violation of that the higher tax rates and lower help our economy. Congress needs federal law without permission spending will begin to reduce the to agree to keep taxes down and from the publisher. v national debt as a share of GDP. By maintain spending in 2013. Once the HOWEY Politics Indiana Page 3 Weekly Briefing on Indiana Politics Thursday, Dec. 6, 2012 economy has recovered, we’ll need to bring down those We aren’t lemmings on a cliff, either. v deficits to prevent high interest rates and inflation. Con- gress needs to agree on a plan to get that done. DeBoer is a professor of agricultural economics at Forget the experiment. We aren’t mice in a maze. Purdue University. throughout the election was that in the past, the Indiana Clout, from page 1 delegation hasn’t always been as cohesive as other delega- tions,” said Stutzman, R-Howe. “My goal, and of all the be that more important over the next couple of years as others, is to have a delegation that works together for the we talk about tax restructuring. And then, when it comes state of Indiana. We are more effective when we’re work- to financial institutions, it’s about the money supply issues, ing together. We sat down in a room, went through all the the Federal Reserve, the big banks, the small banks, com- committee requests and submitted them.” munity banks, insurance, how does insurance play its role He said the competition between Young and Rep. within the economy. All of these are major factors in what’s Todd Rokita, another member of the class of 2010, “worked going to get the economy growing again. To have the two itself out” with Young landing the slot. “We’re behind all of us on these two committees is a huge gain.” the requests by the other candidates,” Stutzman said. “So “At this critical time, I look forward to working on we get the committees that will help our delegation be the things like tax reform to make our country more economi- cally competitive, prepare us for faster private sector job cre- ation, and allow middle income Hoosiers to take home more pay,” Young said in a statement to HPI. “There’s also a big role to play on trade issues to help our Indiana farmers and manu- facturers export more products.” In a separate state- ment, he acknowledged the tough competition for a coveted Ways & Means position. “There were some strong candidates for these seats, so I’m humbled to have been chosen,” said Young, a rising sophomore who won his first re-election handily earlier this month. There hasn’t been a U.S. Rep. Todd Young (left) and House Budget Committee Chairman Paul Ryan, the Republican Hoosier on the Ways & Means nominee for vice president. Committee since former U.S. Rep. Andy Jacobs Jr. served there more than two decades ago. In addition to the 78 most effective for our state.” years of seniority lost this year, the Indiana delegation lost When Lugar exits the Senate, it will be the first almost 25 years in 2010 when Democrats U.S.