WASHINGTON, May 7 (UPI) -- The UPI think tank wrap-up is a daily digest covering opinion pieces, reactions to recent news events and position statements released by various think tanks. This is the first of two wrap-ups for May 7. Contents: debating global warming; how to get a tax cut.
The National Center for Public Policy Research
(NCPPR is a communications and research foundation dedicated to providing free market solutions to today's public policy problems, based on the principles of a free market, individual liberty and personal responsibility. NCPPR was founded to provide the conservative movement with a versatile and energetic organization capable of responding quickly and decisively to late-breaking issues, based on thorough research.)
WASHINGTON --Ten second response: Time to debate global warming again
By Amy Ridenour
-- Background: The global warming debate is again coming to the forefront on Capitol Hill. Senator John McCain, R-Ariz., has scheduled global warming hearings in the Senate Commerce Committee Wednesday; Senator Joseph Lieberman is expected to give a speech Wednesday on global warming; and, most significant, consideration of the Senate Energy Bill, S. 14, began this week. Numerous amendments relating to global warming are expected to be proposed, and debate is expected to be contentious.
Expected amendments include, among others:
An amendment based on McCain-Lieberman's S. 139, which would force the electricity, transportation, industrial and commercial sectors to cut greenhouse gas emissions to 2000 levels by 2010, and 1990 levels by 2016 (see Ten Second Response #1803);
An amendment based on Senator Jeff Bingaman's, D-N.M., proposal, consistent with last year's Democrat Energy Bill, to establish a federal greenhouse gas emission reporting system;
An amendment by Senator Ron Wyden, D-Ore., to establish a "Forest Carbon Program" to give federal funding to states, forest owners, local governments and others to restore and conserve forests.
-- Ten Second Response: All global warming legislation, regardless of sponsor, tends to be expensive, and most propose policies that would kill many hundreds of thousands of jobs. Jobs at the U.S. Senate are not, however, among those imperiled.
-- Thirty Second Response: The theory that human activity is causing the planet to warm significantly is just that, a theory, and one that, so far, hasn't been coming true. Any serious discussion about global warming - whether in Senate debate, hearing testimony, speeches, prepared remarks or press releases - should include an acknowledgement that the best available scientific models of our atmosphere are not yet sophisticated enough to accurately predict either future temperatures or humankind's impact upon climate.
-- Discussion: Points to ponder as the global warming debate continues:
"One must dig carefully through (the National Academy of Sciences report "Climate Change Science") to discover that water vapor and cloud droplets are in fact the dominant cause of greenhouse warming. We are not told, however, what fraction of the greenhouse effect is due to water vapor and clouds. Nor are we told that carbon dioxide is a minor greenhouse gas -- one that accounts for less than ten percent of the greenhouse effect -- whose ability to absorb heat is quite limited. Adding more carbon dioxide to the atmosphere only increases greenhouse warming very slowly. Similarly, decreasing the amount of carbon dioxide in the atmosphere only decreases greenhouse warming very slowly." -National Policy Analysis #349: Climate Change Science? National Academy of Sciences Global Warming Report Fails to Live Up to Its Billing, by Gerald Marsh
"Carbon dioxide is a minor greenhouse gas that occurs naturally in the atmosphere and helps to maintain the earth at a temperature suitable for life. Carbon dioxide is essential to the growth of all plants. Without it, plants could not grow and all animal life would consequently die. In no way is this gas a pollutant. To call it one is badly misleading. The principal greenhouse gas is water vapor." -National Policy Analysis #458: Nonsense by Any Other Name: Calling Carbon Dioxide A Pollutant Doesn't Make It A Pollutant, by Gerald Marsh
"Approximately five million different parameters have to be followed for a computer mock-up of the climate system to be accurate. All their important interactions and impacts must be known, but they are not. Furthermore, a full mock-up, covering all the spatial scales and generating a 40-year forecast of climate change, would take more than 10 to the power of 34 years of supercomputing. In other words, an incredibly long wait and a near-impossible computational task." -National Policy Analysis #417, Climate Change and California Assembly Bill 1058: Is it Hype? by Dr. Willie Soon
"The vast majority of American scientists who specialize in climate studies - including such giants as S. Fred Singer, former head of the U.S. Weather Service's satellite operations; Frederick Seitz, past president of the National Academy of Sciences; and the University of Virginia's Patrick Michaels --- believe the (global warming) fear-mongers are wrong. The U.N. Panel on Climate Change, often cited by environmentalists, bases its projections on worst-case scenarios from two flawed computer models, each of which significantly contradicts the other when it comes to impact of global warming on specific geographical areas." -National Policy Analysis #446, McCain and Lieberman Join the Ranks of Ecoactivists With New Legislation on Global Warming, by Amy Ridenour
"Contrary to the conventional wisdom and the predictions of computer models, the Earth's climate has not warmed appreciably in the past two decades, and probably not since about 1940. The evidence is overwhelming." -Testimony of Dr. S. Fred Singer, President, The Science & Environmental Policy Project, before the Senate Committee on Commerce, Science, and Transportation on Climate Change, July 18, 2000
"Dr. Craig Idso of the Center for the Study of Carbon Dioxide and Global Change, one of the nation's leading carbon dioxide research centers, examined records of atmospheric carbon dioxide concentrations and air temperature over the last 250,000 years. There were three dramatic episodes of global warming that occurred at the end of the last three ice ages. Interestingly, temperatures started to rise during those warming periods well before the atmospheric carbon dioxide started to increase. In fact, the carbon dioxide levels did not begin to rise until 400 to 1,000 years after the planet began to warm. Concludes Dr. Idso, 'Clearly, there is no way that these real-world observations can be construed to even hint at the possibility that a significant increase in atmospheric carbon dioxide will necessarily lead to any global warming.'" -National Policy Analysis #334, Carbon Dioxide is Good for the Environment by John Carlisle
(Amy Ridenour is the president of the National Center for Public Policy Research.)
The National Center for Policy Analysis
(The NCPA is a public policy research institute that seeks innovative private sector solutions to public policy problems.)
DALLAS, Tex.-- How to get a tax cut
By Bruce Bartlett
By Thursday, both the House Ways and Means Committee and the Senate Finance Committee will have completed mark-up of a major tax bill. They will probably bear little resemblance to each other, because the Senate is operating under a $350 billion revenue loss cap while the House has $550 billion to play with.
Within even the lower number, there is a lot of good that could be done. But it is essential for the White House to push as hard as possible for meaningful growth provisions. Unfortunately, it is not doing so because it is still wedded to its own $726 billion plan that has no chance of passage as is.
I strongly supported President Bush's proposal to eliminate the double taxation of corporate profits by allowing shareholders to receive dividends tax-free. But since that proposal was made in January, the economy has been much more sluggish than the administration or I expected it to be. This means that there is much greater need for tax cuts that will provide more immediate stimulus than the president's plan does.
The White House recognizes that the political and economic landscape has changed. But rather than alter its proposal, it has simply revised its rhetoric. Now, instead of making the correct argument for its dividend plan -- that it will raise productivity, growth and incomes over time -- the White House talks only about jobs, jobs, jobs. The problem is that the dividend plan probably won't create many new jobs and very few of those will come in the short run.
True, the Council of Economic Advisers has forecast that by 2004 there will be 900,000 more jobs than would be the case without additional stimulus. But there are any number of stimulus proposals that would be predicted to do as well or better, given the CEA's methodology for calculating the figures. Basically, it used a standard Keynesian model in which tax cuts stimulate growth mainly by increasing demand via the deficit. There are no supply-side effects in the CEA analysis.
The problem is that fiscal stimulus can probably be delivered more efficiently in other ways. This means that the same model the CEA used could potentially show more jobs being created in the short-run with the same impact on the deficit. Moreover, the nature of Keynesian demand models is such that the impact of fiscal stimulus wears off once the economy gets back to its potential. In other words, there is no permanent increase in jobs or growth.
By contrast, in a supply-side model, tax cuts can permanently increase jobs by reducing the after-tax cost of employment. By reducing the wedge between what it costs employers to create jobs and the after-tax wages received by workers, it is possible both to lower the cost of employment and increase the reward to work simultaneously. But this only results if tax rates are cut. Tax rebates and other tax cuts that do not alter effective marginal tax rates will have no impact whatsoever.
Oddly, the Bush Administration has never made this argument, even though its proposal would reduce income tax rates for all taxpayers. Nor has the administration ever released a revenue estimate of its proposal that would take account of the faster growth that would result from its enactment. Reportedly, such an analysis was done several weeks ago by the Treasury Department, but was never released by the White House.
Those who have seen the Treasury analysis tell me that it strongly supports the president's plan and shows why it would lose much less revenue than the official estimate of $726 billion. Why the administration would bury such an analysis when its plan is under severe attack is a mystery.
Another mystery is why the administration continues to press for full elimination of taxes on dividends when it has been clear for weeks that this is untenable, given the limited amount of revenue available under the congressional budget resolution. By continuing to press for its plan -- no matter how stupidly it is implemented, perhaps with long phase-ins and a sunset provision -- it reduces the chances of enacting good supply-side tax measures such as those proposed by Ways and Means Committee Chairman Bill Thomas (R, Calif.).
Mr. Thomas would cut the tax rate on both capital gains and dividends to 15 percent and increase first-year depreciation allowances on new equipment by 50 percent, along with other measures that President Bush has proposed such as speeding up rate reductions, increasing the child credit and reduction of the marriage penalty. I believe that such a plan is as solidly growth-oriented as the president's plan, but with the added virtue of being more stimulative in the short-run.
The White House should get behind the Thomas plan and start figuring out how to get as much of it as possible through the Senate.
(Bruce Bartlett is a senior fellow with the National Center for Policy Analysis.)