Contributing to not govern

By ERNEST F. HOLLINGS, former U. S. senator

MARCH 20, 2013 -- Senators are constantly leaving the Senate and finding fault. When I left in 2005, to retain credibility, I wrote a book Making Government Work. Then I wrote numerous articles and sent copies to all the Republicans and Democrats in the Senate to tell how we can compete in globalization and pay for government. Nothing happened.


Hollings

At 91 years of age, I don't have long to tell it like it is, so I'll be direct. The President and the Congress have no idea of governing. They all play the game of: "I can do politics better than you can," refusing to pay for government, create jobs, compete in globalization and save the economy. The United States is in trouble.

We used to be conscientious about paying for government. We instituted the budget process in 1973, balanced the Social Security Budget in 1983, cut spending with Graham-Rudman-Hollings in 1985 and President George H.W. Bush broke his pledge to help us pay for government in 1992. In 1993 Newt Gingrich started his shenanigans, refusing to pay for government and attempting to close down the government in 1996. In 1993, we Democrats cut spending $250 billion and raised taxes $250 billion without a single Republican vote in either the House or Senate. This gave the U.S. eight years of the strongest economy and we gave President George W. Bush a balanced budget in 2001. Then President Bush, Congressmen Boehner and Cantor cut taxes, waged wars, added prescription drugs to Medicare, stimulated and bailed out - all without paying for them. Boehner, Cantor and the Republicans had eight years to cut spending, cut the size of government. Instead, they increased the national debt $5 trillion and increased the size of government. Now taking control of the House: "the government is too big" and "spending is the problem". President Obama stimulated the economy another $5 trillion in four years. The President and Congress engage in a charade of governing with super committees, ten year plans to cut trillions of dollars, debt ceilings, fiscal cliffs, sequesters, and government closings. All they do is raise money for reelection. The government is going out of business.

Globalization is nothing more than an economic or trade war with production looking for a country cheaper to produce. Intel for example, has gone from the United States to Ireland, to China, and now to North Vietnam. Corporate America could care less about free trade and democracy. They are going where they can make a profit. China's government controlled production, market and trade gives business certainty. Corporate America has to compete in globalization to survive. So does the United States. If the U.S. fails to fight in this economic war; continues to offshore its research, technology, production, jobs and payrolls, we will end up a Banana Republic without bananas. That is exactly where we're headed. Wall Street, the big banks and Corporate America want to keep the China profits flowing so they fight for China in this war and against the United States. They contribute to the President and Congress to not enforce trade laws against China's predatory practices; to do nothing to compete with China. The President and Congress do nothing.

"At 91 years of age, I don't have long to tell it like it is, so I'll be direct. The President and the Congress have no idea of governing. They all play the game of: "I can do politics better than you can," refusing to pay for government, create jobs, compete in globalization and save the economy. The United States is in trouble."

-- Hollings

It takes private investment to build a strong economy. The President and Congress have the duty to develop a competitive economy for private investment like our Founding Fathers did with the enactment of the Tariff Act of 1787 - two years before the Constitution. Rather than invest offshore, Corporate America withholds almost $2 trillion in offshore profits hoping to repatriate the profits tax free to invest in the United States. It knows taxes are going up and awaits the President and Congress to determine the increase. The President and Congress can give Corporate America certainty by replacing the 35% Corporate Tax with a 7 % Value Added Tax. This immediately releases the offshore profits for Corporate America to invest in the United States and create millions of jobs. The CBO estimates the 2012 Corporate Tax produces revenues of $236.8 billion. A 7% VAT for 2012 would have produced $922.5 billion in revenues - producing billions to balance the budget in two years rather than ten. Since the VAT has no loopholes, and is self-enforcing, we have instant tax reform and can cut the size of government - IRS. Since Main Street or small business is paying the full 35%, this tax cut helps small business. Then President Obama can give Corporate America certainty that its production will be protected by enforcing our trade laws. If President Obama enforced the Defense Production Act of 1950, like President Kennedy in 1961, we wouldn't be begging Russia for helicopters for Afghanistan and it would create millions of jobs. If President Obama protected steel, motor vehicles, computers and machine tools like President Reagan in 1984, we could create millions of jobs.

Before Republican and Democrat Senators started raising money against each other, they wheeled and dealed and fixed the vote. Today, lobbyist's wheel and deal. They know which lobbyist can influence a particular Senators vote and the vote is fixed long before the Roll is called. In fact, they tell the Leader when to call the Roll. Lyndon Johnson couldn't lead the Senate today. Lobbyists control. Wall Street, the big banks, Corporate America and the U.S. Chamber of Commerce cry "Free Trade!", "Protectionism!" as they develop China's controlled market while their lobbyists oppose our trade laws and the VAT tax cut. Their lobbyists contribute to the President and Congress to do nothing. Yet, people wonder why nothing gets done in Washington.

Senator Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of Making Government Work (University of South Carolina Press, 2008).

© 2013, Ernest F. Hollings. All rights reserved. Contact us for republication permission.

About Fritz Hollings

Ernest F. Hollings served the public for 56 years -- 38 years in the United States Senate and as South Carolina's governor, lieutenant governor and a member of the S.C. House of Representatives.

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