Change the Subject!

So, now we hear of the poor Democratic members of Congress, complaining people are harassing them, and maybe even threatening violence.

Here's my guess folks, they are getting the same number of those e-mails and crank calls today as they did last Friday. The difference, today they are good fodder to change the subject from the Health Care Takeover Act to anything else.

Why? Well, the facts are getting out, and the heat is getting turned up. No one told the folks who work at Caterpillar, John Deere and Verizon that their companies would take a hundred million dollar tax hit this year, and have to lay off thousands to compensate. Those thousands are probably going to be mad as hell.

Why are they taking that tax hit this year? Well, they did the right thing a few years back and provided their retirees with prescription drug coverage. For that, they get about $665 per year from the feds; which trims the government cost for drugs by over $550 per retiree. So it's a win -win the government saves money by giving the subsidy, and the retirees end up with better prescription drug coverage.

Now, though, under the new law, that subsidy is considered business income, and taxed at 35%. So the companies will take a huge hit, and be required to restate earnings because of it. But; to them; there is an easy way out. They are going to drop the drug coverage for the retirees, quit taking the subsidy, and not have the tax burden of it. Instead, the tax payers get the full hit for the retiree drug coverage, and the retirees have to enroll in the Medicare plan now.

This will of course increase the cost of the Health Care bill by billions, and everyone in DC will say "Never saw that coming".

So much for keeping what you've got if you like it. Just another example of how Congress understands no law it passes; and no lawyer can litigate the law of unintended consequences.

So remember, when you hear Congressman Dorkus D-Wherever whine about threats, it's not really about a new threat, it's to get folks to quit talking about the piece of crap bill he or she voted for.

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Killing American Jobs, Pelosi Style

Nancy Pelosi has taken a big step towards killing a bunch of good paying, union jobs in the US, with the backing of the union's who's workers are going to be hurt.

What she's doing is changing the rules (midstream) on trade agreements. Over the last few years Congress and the Bush administration have agreed that any trade agreement sent to Congress gets an up or down vote within 90 days. Pelosi has decided to change that rule to kill the Columbian Free Trade Agreement.

Pelosi's stand is that she's protecting American workers from having cheaper Columbian goods come to the US under the agreement. That might be good if it were the truth, but it's a lie. Between 92% and 95% of everything coming to the US from Columbia is already duty free under the Andean Trade Preferences Act, which got a yea vote from 365 members of Congress 8 months ago.

The truth is, the unions, specifically the AFL-CIO has decided that anything that says "Free Trade" is bad, and that Pelosi needs to stop it. The Wall Street Journal has a great piece about the actual effects of this action. Specifically they talk about Caterpillar, which employs 50,000 US workers.

Under the agreement Cat's big machines will get rid of the 5-15% tariffs that are currently imposed on them by Columbia. Japan and Canada are also producers of similar machines, and are both expected to ratify free trade pacts with Columbia. That would give both Komatsu and Champion price advantages over US products made at UAW shops in Illinois.

If you don't think that's a big deal, Columbia has more Cat D-11 dozers running in it's mines than any other country in the world. But why buy more from Cat to replace them, when Komatsu will have a 15% price edge?

The other problem this rejection creates is a security issue. Columbia has been a good ally of the US in South America, kind of a counter balance to the Chavez block down there. However, we now get to be seen as a country that doesn't honor it's agreements, we signed the free trade agreement in 2006, and have been revising (to meet Democratic demands) since. Now we aren't even going to give it a vote. That type of action makes Hugo Chavez's anti-American rhetoric sound a little more truthful.

It's a sad day when our Congressional leaders cowtow to union heads on a deal that would have done nothing but increase the US market share in Columbia. US Union's have made boogey men of free trade agreements, and the truth is they hurt their own workers the most when they work to squash them.

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