Joe Biden was officially sworn in as the 46th President of the United States on Wednesday. Even with a significant presence of National Guard and security personnel, the transfer of power was peaceful. The streets were calm and no protests were seen. What I saw most of were people taking selfies with the National Guard. Now that the pomp and circumstance is over with, the real work begins. This week I want to highlight two economically disastrous policies that the new administration has put forward.
Shutting Down the Keystone XL Pipeline – Bad for the Economy and the Environment
Almost exactly a year after former President Trump green-lit the right-of-way for the Keystone XL pipeline, newly inaugurated President Biden reversed course and made the project a no-go. This hasty decision, conducted without proper consultation with Canada, is the result of loud “environmentalist” voices alleging that more pipelines come at the cost of ecological degradation. But, contrary to the narrative pitched by many environmentalists, approval of these pipelines is both a boon for economic development and a step in the green direction. After crude oil is extracted in the tar sands of Canada, the “liquid gold” travels through a tortuous 2,100 mile pipe from Alberta to Nebraska. From there, completed parts of the Keystone pipeline whisk the oil to points further south and west. But the pipeline segment connecting Canada to the United States is already a decade old, and pipelines become prone to leaks and spills as they age.
The winding nature of the line opens it up to a greater chance of rupture. According to the Pipeline and Hazardous Materials Safety Administration (PHMSA), every one-mile segment of pipe will break and spill once every 7,400 years on average. The proposed addition to the system (Keystone XL) would create a streamlined, 1,200 mile route from Alberta to Nebraska. Even if we disregard pipeline age, creating a shorter route will nearly halve the number of spills over the next decade coming from that portion of the system. The policy discussion over pipeline construction ought to accommodate these facts and take the failed status-quo into account. Rather than repeat the same national spill statistics every time a new pipeline is proposed, environmental advocates should critically examine the regulations that compromise safety efforts. International pipelines are traditionally approved or rejected based on economic and environmental analysis undertaken by the State Department. This process was compromised when the Obama Administration thwarted the Keystone XL pipeline, despite favorable analysis from the State Department. When former President Trump swung the pendulum back in the other direction, pipeline opponents began to realize that politicization is no panacea. This pivotal realization needn’t fade even if their preferred leader is at the helm and making policy decisions. To restore the rule of law, Congress needs to once again make the State Department and Army Corps of Engineers processes workable. Political tug-of-wars over pipeline projects are worsened by protracted review procedures with little transparency on timetables, communications, and budgetary priorities. Making predictable, expedited decisions the norm instead of the exception can go a long way in correcting course on pipeline policy. Meanwhile, deregulation can clear the way for more investment and innovation in pipe safety.
Canceling the pipeline will mean thousands of jobs will be lost and millions of dollars in economic activity will disappear.
Minimum Wage Increase Means Maximum Economic Harm
If there’s any lesson to be learned from American history, it’s that politicians will use times of crisis to implement sweeping policy changes. Sadly, these sweeping reforms are often pretexts to increase government power and end up harming our nation and economy. President Woodrow Wilson used World War I as a pretext to implement unprecedented government controls on our economy. In the midst of the Great Depression, President Roosevelt ushered in the New Deal, fundamentally shifting the scope of the federal government to this very day. The coronavirus pandemic has, unfortunately, not been any different. Spending has risen to levels never before seen in our nation’s history. Universal basic income, a concept that had previously been laughed out of any political conversation, has now become the norm, with direct checks being distributed indiscriminately to American citizens. The latest proposal, a federal $15/hour minimum wage, would be quite devastating.
This proposal by President Biden and congressional Democrats would more than double the current rate. Businesses are already languishing under the weight of the lockdowns. Now, many of those that are struggling will have to more than double their spending on personnel. This is the opposite of reform and recovery. This will actively harm small businesses across the country and ensure those who survived the lockdowns do not come back. According to estimates from the Congressional Budget Office (CBO), the minimum wage hike to $15/hour would cost the nation 3.7 million jobs. Fortunately, there is at least one voice of reason in DC. Sen. Tim Scott (R-S.C.) had this to say when he heard the proposal, “Forcing a $15 minimum wage into a coronavirus relief bill would do nothing but shutter the millions of small businesses already on life support and would force those that survive to lay off employees.”
It is not just businesses that rely on minimum wage employees and those employees themselves who will be adversely harmed by this minimum wage increase. Those businesses that do survive this foolish reform will be forced to raise the prices of their goods and services, perhaps significantly so. That means every family that depends on these goods and services will feel quite the pinch when they look at their budgets at the end of the month. Some of the worst policies to come out of Washington are surrounded by good intentions. While the desire to help struggling workers is a noble one, if it were truly as simple as snapping our collective fingers and mandating they be paid more, many of the government jobs here would be rendered obsolete. Raising the minimum wage to $15/hour in the midst of a global pandemic is an idea that only makes sense if you don’t dedicate much thought to it. We need to collectively demand better from our elected leaders and demand they reject this proposal that stands to harm the economic well-being of millions.
Blogs:
Tuesday:
New Congress Must Slash Spending
Wednesday:
The $2.6 Trillion Stimulus Was One Heck of a Holiday Bonus for Defense Contractors
Wednesday:
TPA Congratulates President Biden, Expresses Concern Over Initial Executive Actions
Thursday:
TPA Leads Coalition Letter Opposing the Breakup of Big Tech Companies
Friday:
TPA’s Policy Analyst Lindsey Stroud’s Testimony Before the North Dakota Senate Committee on Finance and Taxation
Media:
January 15, 2021: The Galion Inquirer (Mt. Gilead, Ohio) ran TPA’s op-ed, “USDA secretary: New boss same as the old boss.”
January 15, 2021: TPA VP of Policy Patrick Hedger joined the Jimmy Sengenberger Show on 710 KNUS (Denver) to discuss President Trump’s fight with social media and Section 230.
January 18, 2021: WBFF (Fox, Baltimore) interviewed me about President Biden’s $1.9T stimulus plan.
January 18, 2021: Catalyst ran TPA’s op-ed, “The Pandemic Proves U.S. Healthcare is Underrated.”
January 18, 2021: One News Now quoted TPA in their story, “Biden's 'huge overreach' could see opposition.”
January 19,2021: The Center Square ran TPA’s op-ed, “Finally, property rights win in court.”
January 19, 2021: Townhall.com ran TPA’s op-ed, “Pai Leaves Behind Strong Legacy in Four Years as FCC Chairman.”
January 20, 2021: WBFF (Fox, Baltimore) interviewed me about Joe Biden’s inauguration.
January 20, 2021: I appeared on KRC Radio (Cincinnati, Ohio) to talk about Joe Biden’s inauguration.
January 20, 2021: The Epoch Times quoted TPA in their story, “Biden to Rely on Executive Orders, Appointees to Push Progressive Agenda.”
January 20, 2021: Issue & Insights ran TPA’s op-ed, “To Improve Pipeline Policy, Look Beyond Partisan Posturing.”
January 20, 2021: The Carolina Journal (Raleigh, N.C.) ran TPA’s op-ed, “Broadband funding will capture lawmakers’ attention this session.”
January 21, 2021: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about President Biden’s spending plans.
January 21, 2021: Fox Baltimore quoted TPA in their story, “’The state has let them down’: Unemployment claims on the rise in Maryland.”
January 22, 2021: National Review quoted TPA in their blog, “Biden’s Higher Ed Opportunity.”
Have a great weekend, stay safe, and as always, thanks for your continued support.
Best,
David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org
