Senator Orie running out of options

This just in from the Paula Reed Ward of the Pittsburgh Post-Gazette. The Pennsylvania Superior Court ruled this morning that state Senator Jane Orie's appeal against a retrial under the grounds of double jeopardy is "frivolous". Apparently the noose that Allegheny District Attorney, Stephen A. Zappala Jr., has placed around Senator Orie's head is now tightening.

In a 22-page opinion, a three-judge panel agreed with Allegheny County Common Pleas Judge Jeffrey A. Manning that declaring a mistrial was required after the discovery of doctored documents during her trial for allegedly misusing her legislative resources to do campaign work.

The mistrial was declared on March 3, after the jury started deliberating.

"[When] given the opportunity, [Ms. Orie] suggested no viable alternatives to a mistrial," the appeals court wrote. Continuing, it said, "[The] record supports the court's determination that [Ms. Orie] was responsible for the mistrial, and she cannot place liability for the mistrial on either the court or the commonwealth." Read more

PennPatriot's View:

At this point Senator Orie is running out of options. The court has indicated that she is responsible for the mistrial that resulted from the forged documents. The same documents she is now accused of forging herself. Like I suggested yesterday when the Orie news broke. It is time for her to resign and face the music.

Perzel to plead guilty in corruption case

Here is an interesting article by Brad Bumsted of the Pittsburgh Tribune-Review on former state Speaker of the House John Perzel. Now it seems like Perzel will be the latest corrupt politician from Philadelphia to go to jail.

Perzel, 61, is scheduled to plead guilty in Dauphin County Court to charges he allegedly directed a multimillion dollar scheme to use taxpayers' resources for sophisticated computer equipment to give Republicans an edge in elections. He will become only the second speaker in modern history to face criminal charges. Read more

As a blogger, I am shocked. Watching this man over the years run rough-shot over our political system here in PA is one thing, but I never thought I would see him actually admit to his guilt. Perzel is going to jail along with his crony pals who stomped all over the ideals of democracy all in the name of power and greed. I for one will not shed a tear. Well maybe a couple for the thousands of dollars of taxpayer's money that will be used to pay for his pension settlement. What a crock.

Goodbye State Senator Jane Orie

Is it time for state Republican Senator Jane Orie to resign for using her state office resources to help her sister Joan Orie Melvin's campaign for State Supreme Court Justice? The answer is obviously you bet your ass!

There is no doubt that the charges filed against State Senator Jane Orie were valid from the start. I have been following this case from the beginning and the information given to the Allegheny County District Attorney by a former Senator Orie staffer has always been credible.

This case has nothing to do with politics between the democrat D.A. and the Orie family. Nor does it have to do with the staffer's accusations being politically motivated assisted by Orie's political enemies. Both are spin tactics used by Orie's lawyers to discredit the charges.

The truth is that this case has everything to do with a culture that seemed to outright encouraged the use of state resources for campaign purposes. But the fact that everyone in Harrisburg was doing it including then Attorney General Tom Corbett does not justify what she did.

The bottom line Senator Orie. You used state resources from your state senate office to assist your sister's campaign for State Supreme Court Justice. Thus, you broke the law.

The worst part of all this is that Jane Orie could have owned up to her mistake early on and took responsibility for her actions. I even think she could have cooperated with the D.A. and worked some kind of plea deal that may have included a fine and community service. But in true Orie family fashion, she threw a fit, had a tantrum, and then tried to lie and scheme her way out of the charges. Culminating in the forging of documents during the trial to set up another long time staffer to take the fall.

Should she resign? I say yes. And there are many more questions that I would like to see answered. How much did her Sister Joan Orie Melvin now a sitting State Supreme Court Justice know what was going on at her sister Jane's office? How much did her other sister who now works for Melvin's staff know?

This is hubris run a muck.

Welfare's stigma is difficult to overcome

Guest Column by Lynn Keltz

One of the biggest problems for people who must rely on support and services available through the Pennsylvania Department of Public Welfare funding is attitude.

The stigma of individuals who live in poverty and of people who are in mental health programs or substance abuse recovery or people who look or act “different” make it easier for people in power to convince the public and even the state Legislature that waste, fraud and abuse must exist in the DPW.

The DPW is the only department in Pennsylvania government that has been publicly targeted for investigation of waste, fraud and abuse.

It seems reasonable that unscrupulous practices also could occur in other state departments, so it is curious that only the DPW is being examined.

I suspect that the phrase “waste, fraud and abuse” was used to get public sympathy for budget cuts. Politicians seem to rely on age-old prejudices and stereotypes about the people needing public benefits to gain acceptance for DPW budget cuts.

This manipulation of people’s attitudes also helped achieve passage of the new welfare code law, Act 22.

The act takes away legislative oversight of this department for one year. It allows the secretary of public welfare to implement changes desired by the administration without transparent and participatory processes that have been established through many years.

Other state departments have not been given broad powers to make policy without regulation. Other departments are not subject to the same stigmas that surround the DPW and the people using its services and supports.

Cost savings might be achieved throughout state government by closely examining business practices and contract accountability.

It is easier, however, to do this where the public will buy into stereotypes and where people hurt by cuts won’t be helped by sophisticated lobbying firms.

Accusations of waste, fraud and abuse against only the poor and vulnerable imply that policymakers assume dishonesty in all people living in poverty, that all DPW program staff are incompetent and that there are thousands of people successfully pretending to have symptoms of mental illness or to have intellectual disabilities or physical disability needs so they can get services.

There might be errors made in DPW eligibility determinations for people participating in some programs. Providers of services might make billing mistakes. There might even be a few providers and individuals who intentionally commit fraud, and certainly this should be ferreted out.

It is doubtful, however, that this kind of activity will add up to the predicted millions of dollars expected to shave the size of the department’s budget.

There is a definite contrast between the governor’s creation of the Transportation Funding Advisory Committee to create a comprehensive, strategic proposal for addressing transportation funding needs versus the assignment of a fraud investigator to cut costs in the department addressing the needs of Pennsylvania’s most vulnerable residents.

It would be proactive and productive to create a similar commission, made up of users of services and other stakeholders, to study and develop creative ways to assure that children and adults living in poverty and people with a broad spectrum of disabilities receive the services and support needed to help them move ahead.

Most of us can accept that highways, bridges and public transportation need to be safe and well-maintained.

Many forget that real people need county, state and federal government funds to help them move ahead and sometimes to keep them safe.

It is the job of advocates to unite around the tough issues confronting governments and the people who rely on them.

We must examine and understand the rhetoric to demonstrate to our communities, policymakers and lawmakers that real people living next door, who vote and pay taxes, are truly and honestly in need of services and support.

We must work to eliminate stigma and to correct stereotypes about mental illness and about people who fall into poverty as they experience difficult times.

We appeal to our communities and to our policymakers to recognize when they are being influenced by negative attitudes and when they must step back from those oversimplified perceptions of the world to better understand the needs of Pennsylvania residents.

Lynn Keltz is executive director of the Pennsylvania Mental Health Consumers Association.

It’s the Spending, Stupid: A Crucial Historical Look at Federal-Government Spending

Guest Column by Paul G. Kengor

We have failed to heed the lessons of economic history, with terrible consequences for our economy and country. And the most crucial of those lessons, particularly since the start of LBJ’s Great Society, is this: deficits have been caused not by a lack of income-tax increases but by recession and, most of all, by excessive government spending.

The failure to learn that lesson is again on painful display, as President Obama travels the country pointing the finger at “the rich” for not forking over enough income. By this narrative, the 36 percent income-tax rate paid by the wealthiest Americans is somehow robbing the poorest Americans, whose income-tax rate is zero percent; something one would never know from Democrats’ class rhetoric.

Because I comment on this topic so frequently, especially in the context of Reaganomics, I constantly deal with these issues from a historical perspective. Here, I would like to make it easy for everyone to see the numbers themselves and understand the root of the problem.

The answers are as easy as googling the words “historical tables deficit.” Two sources pop up: CBO historical tables and OMB historical tables. “CBO” is Congressional Budget Office; “OMB” is Office of Management and Budget. These are the official go-to sources for data on deficits, revenues, and government expenditures.

Either source will work. To keep it simple, I’ll focus on the OMB numbers. At the OMB link is Table 1.1, titled, “Summary of Receipts, Outlays, and Surpluses or Deficits: 1789-2016.” That is an official scorecard of spending by the federal government since the founding of the republic.

Looking closely at the chart is an eye-opening experience. As the first two columns show, receipts (i.e., revenues) and outlays (i.e., expenditures) moved up and down throughout our history. In 1965, however, something historically unusual, something literally deviant, began: Spending increased every single year, non-stop, consistently, without exception, into the Obama presidency, from 1965-2009.

There are few constants in the universe: gravity, the sunrise, the oceans, the moon. Add another: spending by the federal government; it rises every year.

Significantly, revenues don’t increase every year. The most dependable reason for declines in revenues is not a lack of tax increases, or high enough income-tax rates, but recessions. Since 1965, as the data shows, annual revenues declined seven separate times.

At the start of the Great Society, in 1965, revenues and expenditures were nearly equal, with expenditures only slightly higher, leaving a manageable deficit of $1.4 billion. By 2009, however, annual expenditures ($3.5 trillion) had far outpaced annual revenues ($2.1 trillion), leaving a record deficit of $1.4 trillion.

Significantly, the biggest one-year drop in revenues was from 2008-9, when they declined from $2.5 trillion to $2.1 trillion. Worse, President Obama and the Democratic Congress responded with an $800-billion “stimulus” package that didn’t stimulate. In other words, they responded in the worst way: with another $800 billion in government spending. That further mushroomed the record deficits/debt we face. The math is very simple.

Government spending, which has hampered growth rather than spark growth, caused this fiscal crisis.

It is crucial to realize that this spending addiction is a new thing in American history. Previous generations of politicians showed much more restraint. Prior to 1965, expenditures were not following an ever-upward trajectory; expenditures decreased year-to-year frequently, nearly two-dozen times between 1901 and 1965, even during the administrations of big-government liberal presidents, like Woodrow Wilson and Franklin Roosevelt.

This changed in the mid-1960s, when the federal government began a serious spending problem.

How do we communicate the crisis to the wider public, beyond charts and data?

I suggest comparing the situation to a household: Your family’s annual revenue has probably not enjoyed a 40-year-plus consecutive increase. For some years, you were paid less. Perhaps you lost a job, took a pay cut, or switched jobs. Maybe your spouse was laid off, or left work to have a child. You bought a house one year, another 20 years later, spent a ton of money on your children’s college education, lost on a bad investment.

I doubt your family’s yearly revenue has been a steady upward climb since 1965. Life obviously doesn’t work that way.

And yet, imagine if each successive year, without fail, you spent considerably more money than the previous, including money that isn’t yours. You added debt each year, creating massive debts for your family and children. You paid taxes with a credit card.

How long would this go on before you ended up with a credit downgrade or in jail? Get the picture?

If President Obama and the Democrats don’t, they should. Warren Buffet certainly should. Our fiscal crisis is due not to insufficient income taxes but uncontrolled, undisciplined spending.

To paraphrase Bill Clinton’s 1992 campaign slogan, “It’s the spending, stupid.”

Dr. Paul Kengor is professor of political science at Grove City College, executive director of The Center for Vision & Values.

Cutting taxes can boost US economy

Guest Column by John F. Brinson

By now pretty much everyone knows that our deficits and debt are totally out of control, and that Congress seems powerless to do anything about it. The problem predates Obama, but there's no doubt that he has added 40 percent to the national debt in only 21/2 years, and by the end of his term of office next year he will have added 60 percent to the national debt — an increase of $6 trillion!

The Republican-controlled House of Representatives passed a budget that would reduce the deficit by $6 trillion over 10 years. It was met with derision and demagoguery by the Senate Democrats, accompanied by a television ad depicting Rep. Paul Ryan, who proposed the budget, pushing an elderly woman over a cliff.

The Democrat-controlled Senate has not passed a budget since Obama took office. To reduce our deficits, their talk has been focused on tax increases. Obama himself seems bent on taxing the richest Americans. It is clear that the Democrats have no intention of cutting spending and are intent on using class warfare as their main campaign weapon: The wealthiest should pay their fair share. (Hello! The top 1 percent already pay 38 percent of all individual income taxes.)

In a panic to increase the debt limit by the artificial Aug. 2 deadline, Congress enacted the only thing possible in its deadlock: a temporary measure devolving responsibility to a new, 12-person congressional committee charged with deficit reduction. This committee is likely to deadlock as well because the Republicans want to cut spending but the Democrats want to increase taxes.

Now we hear nothing but calls for compromise, but in my opinion the Republicans should not agree to any tax increases or so-called revenue increases whatsoever. Increasing taxes would seriously cripple an already terribly damaged economy. Here's why.

America already has the second highest corporate tax rate in the world (Japan is first at nearly 40 percent) at 35 percent, excluding state income taxes. That number rises to 39.3 percent by including an average state income tax rate. (In Pennsylvania, the combined federal and state corporate tax rate is 44.99 percent.)

This puts our businesses at a terrible disadvantage in world markets. It also encourages armies of lobbyists begging for credits, subsidies and other breaks and encourages corporations to move overseas. Further, we tax individuals on their corporate dividends at 15 percent — with no credit for corporate taxes paid. This is plain stupid, especially in a recession and especially when we need our businesses to be competitive in world markets.

Our personal income tax rates are among the highest in the world. The top 3 percent of our earners pay 50 percent of all income taxes, the next 47 percent pay 47 percent of the income taxes, the next 17 percent of earners pay only 3 percent, and the bottom of 33 percent pay none at all. And yet, in this situation, the Democrats want the top 3 percent to pay even more.

In theory, you might think that raising income taxes would reduce our annual deficits. But the reality is that raising taxes is the last thing we should do, especially in a recession, because it would impede growth and actually result in lower tax revenues.

Look at it this way: When personal income taxes are increased, it leaves taxpayers with less money to spend, and it is spending that drives the economy. To make matters worse, not only is money removed from the marketplace, but it goes to Washington to be wasted on a plethora of unnecessary and wasteful government programs.

The only way for us to ever have a chance to reduce the huge national debt is through tremendous growth in our economy. We must do everything we can to encourage growth, and that means sending signals to the people that government spending will be reduced and taxes will not be increased — on anyone. In addition, it would be a great idea to eliminate most of the new regulations that are strangling our country.

Here's what we can do to spur growth: reduce both the corporate and the individual income tax rates to 20 percent, eliminate all individual deductions, eliminate the capital gains tax altogether, and eliminate the estate tax — a tax that destroys small businesses and farms.

Then, stand out of the way and watch our economy take off like a rocket.

John F. Brinson is chairman of the Lehigh Valley Tax Limitation Committee.

Representative Sets the Record Straight Regarding Pennsylvania School Funding

Guest Column by William Adolph

Recently various media outlets have written about school funding and how the state’s contribution to PreK-12 education was distributed to Pennsylvania’s 500 school districts in the 2011-12 state budget. Many of these articles focus on the poorest 150 school districts and report about the impact state funding will have on their ability to educate students by comparing poorer school districts to wealthier school districts.

Unfortunately, these articles are far from constructive, and in fact are misleading because most often they only discuss dollars lost. Invariably, the focus is on the impact the state budget had on poorer school districts and suggests poor school districts are overlooked in the difficult process of crafting a state budget. It is important to dispel these suggestions and present the facts that are routinely left out of the stories on this topic.

First and foremost, very few articles appreciate or even mention the huge impact the loss of federal stimulus dollars had on the education budget. Of the total 2010-11 amount spent on education, 10 percent came from federal stimulus funds, which are no longer available in this current fiscal year. The total amount of education dollars lost was over $1 billion.

Losing 10 percent of the budget for education spending created a huge hole in the state budget that required a critical assessment of what was essential to the core mission of educating children. This analysis identified redundant funding streams that needed to be changed.

The most significant example of this was the elimination of the $224 million charter school reimbursement funding. School districts were receiving two reimbursements for students that were attending charter schools and not even being educated in their school. Unfortunately, poorer school districts had a larger number of charter school students, but that does not justify keeping the flawed charter school reimbursement funding distribution method.

Pennsylvania goes to great lengths to ensure poorer school districts have additional resources. A total of $5.5 billion in state aid will go to all 500 school districts in 2011-12. The 150 poorest school districts will receive $2.73 billion or 50 percent of all available state funding, which amounts to an average of $5,600 per student and is $3,900 more per student compared to the 150 wealthiest school districts.

Comparatively, the 150 wealthiest school districts will receive $1.05 billion or 19 percent of all available state funding, which averages out to approximately $1,679 per student. Any insinuation that the poorest districts do not receive a fair portion of state funding is misleading.

The impact on poorer districts is structural because they rely on disproportionately larger amount of state subsidies for their total spending. The bottom line is that those who received the most lost the most.

What we must also understand is that our economy is in transition and the boom years of the last decade are no longer a reality. Slower growth is forecast for the next two years and governments need to rebalance spending to match lower revenue collections and also address outstanding debt issues. This means there will be continued pressure on revenue and the increases of the past decade will be harder to come by.

The commonwealth has and will continue to work with poorer school districts to make sure they have additional resources to fulfill their mission, but only looking at what districts are losing without looking at the big picture is not productive for anyone.

Rep. William F. Adolph Jr., R-165, of Springfield is Chairman of the state House Appropriations Committee.

Understanding the importance of competition when it comes to elctricity

This article, "10 Reasons Why Electricity Rates Vary in Texas", is a must read for everyone in Pennsylvania who pays an electric bill. On December 31st, 2010 the price caps set by the state Public Utility Commission came off. So it is important for consumers to understand just how electricity costs differ when it comes to shopping around. This article explains why rates vary in parts of Texas which could be the case here in Pennsylvania soon.

The rate you pay for your electrical power in Texas can vary from one household to the next, even within one neighborhood. Texas electrical service has been ‘de-regulated’, which means that the customers may have more voice in selecting where they power comes from and how much they pay. Below are ten of the factors that can cause electrical rates to vary in Texas.

1. Choice – The biggest reason for the variation in rates is the freedom for most Texan’s to choose their own source of electrical power. This creates competition for customers.
2. No choice – There are some municipalities and electrical cooperatives that have chosen not to give their customers a choice in providers. If you live in one of these areas, your rates will be determined by your local provider.
3. Aggregation – These are cooperative buying groups. Members can join these groups to gain the benefits of being able to negotiate lower rate prices from electrical suppliers because of their representation of a larger group of consumers.
4. Brokers – An electrical power broker is a sales or marketing agent for retail electric providers. These brokers put together marketing strategies for enticing customers to sign up with the REP’s they represent. The brokers earn commissions from the REP’s for each new customer they enlist. These commissions naturally will figure into the cost that these supplier’s pass on to their customers.
5. Green Power – When Texan’s look at their choice of power suppliers, they will see that some electricity is generated by 100% renewable energy sources and others only have a portion of their electricity generated by renewable sources. The amount of renewable energy and the type of renewable energy that is used can affect the pricing of the electrical power it creates.
6. Rate Plans – In addition to choosing our electrical supplier, suppliers also offer different types of rate plans. There are variable plans, in which your rate per kilowatt may go up or down from month to month. There are also fixed rate plans, where you are guaranteed a set rate for a period of time, usually 6 or 12 months.
7. Minimum Usage charges – Many suppliers have minimum usage charges. This is a base amount that you will be charged each month, even if you are not using that minimum amount of electricity. These charges can vary from one supplier to another.
8. Electrical Suppliers There are many differences between the different electrical suppliers that consumers can choose from in Texas. The Texas PUC has set up a website called Power to Choose that provides information to assist consumers in comparing their electrical power options.
9. Different fuels – One of the factors in the price of electricity is the type of fuel used to generate it, and the costs involved with that production. Electricity can be generated by wind power, nuclear power, coal and a variety of other options.
10. Location – Where the electrical power plants are located also affects the price of the electricity they supply. Not all the electricity used in Texas is generated by power plants located in Texas.
    

All these different factors affect the prices that Texans pay for their electricity. To simply choose a supplier and a plan can be quite a process of education in itself.

Creating an environment for a real electricity marketplace to emerge in Pennsylvania depends on consumers who can spur competition -- and reduce their electricity bills -- by taking the time to shop for electricity and practice better energy conservation. Remember in the 1990's the average PA electric bill was 15% higher than the national average. Again we see another case of 'de-regulation' and market forces solving the problem.

Critz considering a run against Shuster

The Hill is reporting that sources in Rep. Mark Critz's inner circle are hinting that he may challenge 9th District Republican Bill Shuster instead of taking on Democratic incumbent Jason Altmire if his district is eliminated during Pennsylvania's redistricting process. Something that I've been following for a while now.

There is no doubt that defeating Shuster is an uphill challenge for any Democrat. But a possible Critz vs. Shuster showdown would be an exciting match up for us political pundits.

It would be an uphill fight. Republicans are unlikely to add too many Democratic voters to Shuster's district, which gave Sen. John McCain (R-Ariz.) 63 percent of its vote in 2008.

But Critz has proven himself a tough candidate, winning a 2010 special election in a marginal district by eight points and holding onto his seat in the Republican wave election that fall. He is pro-gun rights and anti-abortion rights, and opposed Democrats' healthcare and cap-and-trade legislation in 2010.

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But if there is a democratic candidate out there that fits the mold needed to defeat Shuster, Critz is it. Critz is 100% pro life and pro gun. Eliminating the hot button social issues in the race does even the playing field a bit.

Since Shuster is my Congressmen, I know firsthand that he has always been on shaky ground since taking over for his father Bud Shuster. The Shuster's are starting to be viewed as a dynasty around here, and it is hard to tell what a very anti-incumbency 9th District electorate would do if given the choice between Shuster and Critz. Especially, considering incorporating half of Murtha's old, blue collar democratic district would change the dynamics.

Shuster has been painted as a big-time, pork spending, old guard republican in the mold of his father by his critics. Non more bigger that State Senator John Eichelberger who defeated Senate Pro Temp Robert Jubelirer in 2006 after the pay raise debacle here in PA. Rumors are spreading like wildfire through the Blair County GOP that state Senator John Eichelberger may also be considering challenging Shuster in the republican primary. Eichelberger is not on the ballet this year and this would be a perfect time to take on Shuster.

We will have to wait and see what happens. But all signs points to a very interesting 2012 election here in the "Alabama country" of Pennsylvania.

The darker side of electric deregulation

Guest Column by Matthew Woessner

I must confess that, as a conservative, I have an almost religious attachment to the power of free markets.

So, when Pennsylvania moved to deregulate the power industry, permitting consumers to select electricity providers on the basis of who had the best rate, I held out hope that, through the magic of the free market, consumers would experience improvements in services and lower prices.

However, free markets benefit consumers only under a set of conditions, the most important of which is transparency. While the consumer is perfectly capable of looking out for his or her own best interest, regulatory agencies can play an important role in forcing companies to disclose the true cost of their products and services.

My renewed appreciation for the virtues of regulatory oversight came recently when I opened my electric bill, only to discover that my discount carrier, PalmCo Energy, had charged me more than twice the going rate for the month of June. Whereas other energy providers in our area were charging 8.5 cents per kwh for generation (not including transmission and other costs), PalmCo billed me for 16.3 cents per kwh.

So how did this happen? How does a power company marketing itself as a cost-effective alternative to Met-Ed, double its advertised prices practically overnight?

At the heart of the problem are serious defects in the way deregulation was implemented in Pennsylvania, providing some companies with the ability to conceal the true costs of their services. While I have to presume that PalmCo Energy has not violated state and federal law in setting its monthly utility rates, the company has nonetheless taken advantage of lax disclosure requirements as it advertises its services.

To protect the integrity of a deregulated electricity market, the Pennsylvania Utilities Commission should institute simple reforms that empower consumers to make more informed decisions about the true cost of selecting an energy provider.

First, the Pennsylvania Utilities Commission should improve its website, forcing variable-rate energy providers to more fully disclose the terms of their service. For example, during the same month PalmCo tried to charge me 16.3 cents per kwh for power, the PUC lists its variable-rate price as 7.4 cents. The PUC’s website is clear that the rate is not an introductory price. Yet in the fine print of the pricing agreement, PalmCo reserves the right to raise electricity prices practically at will.

If companies such as PalmCo Energy are, in fact, offering customers a teaser rate to attract new business, like the credit card companies, they should be compelled to clearly identify the length of this special rate as well as the present energy costs to existing customers.

Second, the Pennsylvania Utilities Commission’s website should provide additional information about the potential swings in utility prices under a variable-rate contract. Any customer who has considered a variable-rate mortgage is familiar with how rates vary depending on market conditions.

Accordingly, while variable rate customers (whether for energy or interest rates) might pay somewhat lower prices in one month, it is equally likely that they’ll pay somewhat higher prices in another.

However, unlike the gradual and somewhat predictable changes in home mortgage rates, swings in variable-rate utility prices can be sudden and dramatic. Even now, as PalmCo is charging double the rates of its fixed-rate competitors, the PUC permits it to list its price as 7.4 cents per kwh, with no mention of the remarkable price fluctuations to which its customers might be exposed.

To give customers a chance to make a more informed decision, PalmCo should be required to clearly disclose the highest and lowest price it has charged consumers in the last 12 months. Consumers considering giving their business to PalmCo should be made aware that while their electricity rates will start out at the advertised 7.4 cents, many of its customers were recently paying as much as 16 cents per kwh for electricity.

Third, in an effort to bring transparency to the electrical utility market, the PUC should require variable rate providers to post up-to-date information on the monthly cost of their electric services.

As it stands now, variable-rate customers are playing a kind of Russian roulette, as they consume electrical power with little or no idea of how the energy will be billed at the end of the month.

While we hope that consumers are ever-vigilant to reduce their electric bill, conservation takes on new urgency when consumers are aware that their variable-rate bill spiked as a result of changes in the market. Additionally, if the variable electrical rates rise too sharply, consumers can make arrangements to switch to an alternative supplier before they’re locked into the service for yet another billing cycle.

Whatever the virtues of deregulation, the PUC ought to compel variable-rate energy providers to step into the sunlight, provide consumers with clear rules on the pricing of electricity, and keep them informed of dramatic changes in their electricity rates.

Only when electric consumers are provided with clear and consistent information can deregulation control costs and improve services for citizens of the commonwealth.

Matthew Woessner is associate professor of political science and public policy at Penn State Harrisburg.

The Reagan Stimulus vs. the Obama One

Guest column by Paul G. Kengor

How ironic that as America debated its debt ceiling all summer and faced a stunning credit downgrade, the nation approached a most timely anniversary: It was August 13, 1981, that President Reagan signed the Economic Recovery Act. Understanding Reagan’s thinking 30 years ago is critical to discerning where we are now.

Reagan’s initiative was the antithesis of President Obama’s $800-billion “stimulus” that didn’t stimulate. The 2009 version was the single greatest contributor to our record $1.5-trillion deficit. It was, plain and simple, what Reagan didn’t do.

When Reagan signed the Economic Recovery Act at his ranch near Santa Barbara, it was the largest tax cut in American history. He also revealed leadership that Democrats and Republicans alike agree we are not seeing currently from the White House. Even the Washington Post called Reagan’s action “one of the most remarkable demonstrations of presidential leadership in modern history.”

The enemy that day was America’s progressive federal income-tax system, birthed in 1913 by Congress and President Woodrow Wilson. It was revolutionary, requiring a constitutional amendment. That tax, which began as a 1 percent levy on the wealthy, would rocket up to a top rate of 94 percent by the 1940s.

Ronald Reagan personally felt the toll. In the 1940s, the so-called “B”-movie actor was one of the top box-office draws at Warner Bros. Then a Democrat, Reagan saw no incentive in continuing to work—that is, make more movies—once his income hit the top rate. He also realized who suffered from that choice. It wasn’t Reagan; he was wealthy. It was the custodians, cafeteria ladies, camera crew, and working folks on the studio lot. They lost work.

Reagan viewed such rates as punitive, confiscatory—”creeping socialism,” as he put it. In speeches in the 1950s and 1960s, he blasted the tax as right out of Marx’s Communist Manifesto.

By the late 1970s, Reagan concluded that out-of-control taxes, spending, and regulation had sapped the economy of its vitality and ability to rebound. And so, on that August day in 1981, Reagan, with a Democratic House and Republican Senate, secured a 25 percent across-the-board reduction in income tax rates over a three-year period beginning in October 1981. Eventually, the upper rate would drop to 28 percent.

As biographer Steve Hayward notes, even when Reagan compromised with Democrats on tax increases in exchange for promised spending cuts in 1982, he “never budged an inch on marginal income tax rates.” Reagan understood that not all taxes, or tax increases, are equal.

After a slow start through 1982-83, the stimulus effect of the cuts was extraordinary, sparking the longest peacetime expansion in U.S. history. The “Reagan Boom” not only produced widespread prosperity but—along with the attendant Soviet collapse—helped generate budget surpluses in the 1990s. Carter-Ford era terms like “malaise” and “misery index” vanished. Only now has America re-approached similar misery-index levels, reaching a 28-year high.

Unfortunately, liberals have so maligned Reaganomics that they are unable to separate facts from myths—to the detriment of their party and president. Among the worst myths is that Reagan’s tax cuts created the deficit, even as the deficit increased under Reagan.

In fact, Reagan inherited chronic deficits. Since Franklin Roosevelt, the budget had been balanced a handful of times, mainly under President Eisenhower. From 1981-89, the deficit under Reagan increased from $79 billion to $153 billion. It peaked in 1983-86, hitting $221 billion. Yet, once the economy started booming, the deficit steadily dropped.

Tax cuts were not the problem. Tax revenues under Reagan rose from $599 billion in 1981 to nearly $1 trillion in 1989. The problem was that outlays all along outpaced revenue, soaring from $678 billion in 1981 to $1.143 trillion in 1989.

The cause of the Reagan deficits was the 1982-83 recession and spending—as is always the case. And, yes, the culprit was not just social spending by congressional Democrats but Reagan defense spending designed to take down the Soviet Union. What a bargain that turned out to be: It helped kill an “evil empire” and win the Cold War, paving the way for a peacetime dividend in the 1990s.

Yet it is clear today that we have refused the proper lessons of history. For one, our problem remains excessive spending. Obama must bear this in mind if he’s considering tax increases (which hamper growth) as part of his “balanced” approach to deficit reduction. More than that, the best “stimulus” relies on the tried-and-true American way: Let free individuals stimulate the economy through their earnings and activity.

Ignoring such realities explains the mess we face in August 2011—a millennium removed from the wisdom of August 1981.

Dr. Paul Kengor is professor of political science at Grove City College and is the executive director of The Center for Vision & Values.

LCFS Program Would Mandate the Replacement of Traditional Fuels

As the Regional Greenhouse Gas Initiative (RGGI) looses momentum, a new policy threatens to take its place.  Low carbon fuel standards, or LCFS, are being introduced across the Northeastern States. While Pennsylvania was not a member of RGGI, it will be included under a regional LCFS if passed.  An LCFS program will mandate the replacement of traditional fuels such as gasoline and diesel with alternative “low carbon” fuels such as ethanol. While a federal renewable fuel standard is already in place to promote low-carbon fuels, these fuels are unavailable in the affordable quantities required by the public.  

According to a 2010 study by the Charles River Associates, a national LCFS would cause U.S. gasoline and diesel prices to increase by nearly 80% within five years and 170% within ten years.  Forcing providers to ration their traditional fuels to supply these scarce fuel alternatives will drastically increase the cost of gasoline, diesel, and home heating oil for the consumer. 

Despite efforts, an LCFS does not accomplish its goal of reducing greenhouse gas emissions (GHGs).  In fact, the implementation of LCFS will generate increased emissions as a result of “crude shifting,” a product of forcing increased transportation of crudes to and from far away markets.  Further limitations will be placed on secure crude imports from Canada into the United States, forcing Canada to ship its exports greater distances to the Asian market. In the U.S., regional “fuel islands” will emerge, distorting the crude market and further increasing costs.  

Pennsylvania is home to the world’s first commercial oil well and leads the northeast in petroleum refining. As a leader and pioneer in America’s energy sector, Pennsylvania should act now to secure its prominent position in American energy production.  Pennsylvania voters should be educated on the consequences of implementing an LCFS to ensure that the proposed policy does not become law.  A regional LCFS will increase the cost of fuel and hurt jobs at a time when Americans can least afford it. 

To learn more about how a low carbon fuel standard would hurt Pennsylvania consumers you can visit www.secureourfuels.org.  Follow us on twitter or like us on Facebook to stay up to day on how to help defeat an LCFS in Pennsylvania.