The House is currently in recess for the Thanksgiving District Work Period and will reconvene on December 4, 2006.

Another Broken Pledge

For years, Democrat leaders and candidates have solemnly pledged that, if elected to the majority in congress, they would implement all of the recommendations of the bipartisan commission that examined the attacks of September 11, 2001. Interestingly, now that they have secured control of congress, these same leaders have decided against implementing the one reform over which they have the most control. The 9/11 Commission had called for the wholesale restructuring of congressional oversight and funding of the U.S. intelligence agencies. In 2004, the commission urged congress to grant the House and Senate Intelligence Committees the power to fund intelligence agencies and shape intelligence policy, as well as oversee their administration. However, Democrat congressional members and aides stated this week that a reorganization of congress would not be part of a package of homeland security changes up for consideration in the “first 100 hours” of the Democratic Congress.

Said 9/11 commissioner and former representative Timothy J. Roemer (D-Ind.) of this sudden change of heart,“The Democrats pledged to implement all the remaining 9/11 reforms, not some of them.”

What to do about the AMT?

The Alternative Minimum Tax (AMT) was enacted in 1969 to prevent 155 super-rich taxpayers from using legitimate deductions and credits to completely avoid paying taxes. However, because it was never indexed to inflation, the AMT now applies to millions of upper- and middle-income taxpayers. And, every year more households are negatively impacted by it. This year, the AMT is expected to apply to 3.5 million people. Then, it will dig into the pockets of 23.5 million taxpayers next year, 30 million in 2010, 40 million in 2013, and 50 million by 2016. To illustrate the magnitude of the situation, in California alone, an additional 1.7 million will shoulder liability for the AMT next year.

The key question for congress is whether, under the new majorities, the institution will act to protect Americans from increased taxation. AMT reform is clearly not a matter of “tax cuts for the rich” as Democrat leaders have wrongly labeled the across the board tax cuts enacted under Republican leadership in recent years. This is and will be a middle-class problem. Reining in the AMT is increasingly essential for the economic prosperity of individual families and the nation at large.

R.I.P Milton Friedman

On November 16th, Milton Friedman, arguably the most influential economist of the 20th Century, passed away at the age of 94. His contributions, not only to academia but also public policy, were numerous and far-reaching. It was 44 years ago that he published his classic text “Capitalism and Freedom”. In 1976, he received the Nobel Memorial Prize in economics for arguing the importance of the money supply in economics – insights which led to the changes in monetary policy that led America out of the “stagflation” of the 1970s. He showed that people spend money in accordance with their income expectations over the long-term, not in response to one-time “stimuli” from the government. In short, he brought to light numerous flaws with the Keynesian school of economic thought, paving the way for the supply-side economic policies that propelled the robust economic growth of the last three decades. Starting in 1966, he wrote a column in Newsweek for 18 years persuading Americans of the importance of economic freedom. In so doing, he popularized free-market principles. Perhaps most importantly, his writings even sparked revolutionary changes in the former Soviet block and modern China. Indeed, he was one of the bright lights whose influence will continue to be felt long after his lifetime.

Quote of the Week

“Given our monstrous, overgrown government structure, any three letters chosen at random would probably designate an agency or part of a department that could be profitably abolished.” – Professor Milton Friedman