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06-10-2016 Rokita Report
Thank you for the opportunity to update you on the work of the 114th Congress. I trust this finds you and your family well, as we work together to bring Hoosier common sense to Washington.
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In this week's Rokita Report
Welcoming Prime Minister Modi
This week, Prime Minister Narendra Modi of India addressed a joint session of Congress. It was an honor to welcome Prime Minister Modi back to the United States. I had the privilege of meeting the Prime Minister back in 2014, and was impressed by his comments on free markets and democracy, in addition to his goal of wanting to reduce government red tape and corruption in India. These are goals that we share, and should serve as a reminder to lawmakers of what we should be striving for with every bill we consider.
When I was Indiana’s Secretary of State, I was the first state-wide officeholder to travel to India in an official capacity. In the House, I am a member of the House India and Indian Americans Caucus. Before Prime Minister Modi’s speech, I met with fellow Hoosiers who came to Washington to be a part of the festivities. I held a small event in my D.C. office to meet with Indiana Indian-Americans to discuss current events, India-Indiana relations, and the importance of Modi's address.
Chairing Hearing on Budget Reforms
On Thursday, as Vice Chairman of the House Budget Committee, I was asked to chair a hearing focused on the need to control automatic spending and unauthorized programs in the federal budget. It was the second of this year’s hearings aimed at informing a rewrite of the Congressional Budget Act of 1974.
The authors of the Congressional Budget Act did not anticipate that the chronic deficits and automatic spending of today would become so dominant. While discretionary spending is authorized through legislation every year, two-thirds of government spending is from autopilot spending programs that include Social Security, Medicare, and Medicaid. Discretionary spending programs include infrastructure, education, medical research, and national defense. These already represent a shrinking portion of the federal budget. If we do not tackle the entire budget and deficit spending, we will leave future generations with an ever-larger national debt. Cutting discretionary spending will not solve our fiscal challenges and passing a debt to future generations is downright unfair.
Standing Against Federal Overreach
Today the House took a stand against federal overreach for the President's green agenda. The House passed two bills expressing our views on proposed policies that hurt Hoosiers by driving up energy prices.
H.Con.Res. 89, which I cosponsored, expresses the sense of Congress that a carbon tax would be detrimental to the United States economy. The carbon tax is a proposal to tax fossil fuels and is a form of carbon pricing where the government intentionally drives up fuel costs. Indiana has enormous coal deposits that power over 80% of Hoosier homes. Regulations proposed during the President's war on coal are already causing rate increases on affordable electricity. A carbon tax would only add to these expenses. The House voted 237 to 163 to make clear the Congressional position against a carbon tax.
Every year, the President is required to submit a budget to Congress. This President has made his budgets overtly political documents. In this year's budget, the President proposed a ten dollar tax on every barrel of oil sold. The President proposed using this increase to subsidize a green energy agenda. It is not President Obama's responsibility to pick winners and losers in the energy economy. Nor should the President seek to increase the pressure Hoosiers feel at the pumps as we have just seen the price of fuels drop. The House passed H.Con.Res. 112 by a margin of 253 to 144. This was a sense of Congress opposing the proposed ten dollar tax to provide favors for the green energy lobby.
This week's Rokita Reading is an article that was first printed in the Investor's Business Journal entitled "As Bad as ObamaCare Is, Hawley-Smoot Tariff Act Was Worse." A friend of mine from Brownsburg recently brought the article back to my attention. The article discusses the massive economic impact of the Hawley-Smoot Tariff Act of 1930.
The article describes the stage for the passage of the act. "The U.S. economy already was well into recession in 1930, with unemployment rising and national output plunging. Concerned with an impending election, Congress sensed the need to placate nervous voters. Its solution was the Hawley-Smoot Act, the brainchild of Rep. Willis C. Hawley, R-Ore., and Sen. Reed Smoot, R-Utah." The act created hundreds of tariffs for goods. "The rate on woolen goods was 59.83%, earthenware and glassware 53.64%, agricultural products 34%, and dolls, just in time for Christmas, a full 90%."
Despite calls from prominent economists and American manufacturers, including Henry Ford himself, the law was enacted. The response from other nation's came quickly. The U.S. trade surplus dropped to half of what it was before the act within three years. In 1934, FDR rolled back the tariffs but with Europe at the brink of World War II, opportunities for restoring trade had faded.
Even after being repealed, the Hawley-Smoot Tariff Act had a lasting impact on the economy. Both Rep. Hawley and Sen. Smoot left Congress in 1932. Today, our economy suffers from legislation that includes ObamaCare and the Dodd-Frank Act. The reality is that even a full repeal will not undo the damage from these bills. Insurance companies have had to make dramatic changes because of ObamaCare and the financial sector has felt the impact of Dodd-Frank. Businesses suffer the consequences of bad policies.
Hawley-Smoot is a reminder that we should be smart about our trade policy. Large tariffs of goods not found in the United States are not the answer. This year, I was an original cosponsor on legislation to restore the Miscellaneous Tariff Bill (MTB) process. This bill restores a process that allows for the consideration of tariff waivers on products that are not found or produced in the United States but used by American manufacturers.
Thank you for your continued interest in Congress and for supporting my efforts to bring Hoosier common sense to Washington. Take care.