Posted on 10/28/2008 10:39:22 AM PDT by Born Conservative
Democratic U.S. Rep. Paul E. Kanjorski believes the best way to jump-start the economy is to restore confidence in its financial institutions.
Republican Lou Barletta favors instituting a flat tax of less than 20 percent on individuals and corporations to replace the current tax system.
The two candidates for the 11th Congressional District seat Mr. Kanjorski has held for almost 24 years have divergent views when it comes to economic and tax policy.
The nation is facing its greatest financial crisis since the Great Depression as major lending institutions have collapsed and loans have became harder to come by, freezing any hopes of economic expansion.
Polls show the economy, by wide margins, trumping all other issues in the presidential and other election races across the country.
“We have to really gain back the confidence of the American people in the American economy and its financial institutions,” Mr. Kanjorski said. “And it’s been reflected in the last several weeks with what they call the credit freeze.”
Banks, burdened by massive debts, became wary of lending to other banks, businesses and consumers. With credit frozen, fewer people buy homes or cars, and fewer businesses borrow for job-producing expansions.
Congress passed a $750 billion bailout earlier this month, which Mr. Kanjorski championed as necessary, if unpopular, and which Mr. Barletta panned.
The success of the bailout remains undetermined. Without it the country faced economic chaos, Mr. Kanjorski said. Mr. Barletta opposed the bailout partly because it lacked provisions for an independent commission to investigate the way Congress oversaw institutions. He blames Mr. Kanjorski for failing to prevent the problems. Mr. Kanjorski, a member of the House Capital Markets subcommittee, contends he fought for more regulation only to be thwarted by a Republican Congress. He said Mr. Barletta flip-flopped, supporting the bailout, then rejecting it.
Mr. Kanjorski said avoiding a repeat of the financial crisis depends on better regulation of financial institutions, especially by establishing “transparency” so investors better understand the riskiness of certain investments.
Mr. Kanjorski is on a House task force working on a new economic stimulus package that he said is likely to include $75 billion to $150 billion for construction and repair of roads, bridges and other public works.
As for gas prices, Mr. Kanjorski said, “We’re going to open up an awful lot of areas to drilling. But this recession or depression is not going to change the fundamentals as to what has to be done. And that is to find an entirely new, substantial, American-produced base (of energy).”
He favors developing a variety of alternative energy sources — solar, wind, biotechnology, hydrogen and nuclear.
“I think we should have ... a Manhattan-type project to break through the technologies that are out there that can be put together, a ‘buy American’ program,” he said. “Finance ideas already out there here in America. … That will create both jobs and will give us a substantial amount of energy production.”
Mr. Kanjorski, who opposed President Bush’s tax cuts, said he favors Democratic presidential nominee Barack Obama’s proposed shifting of the tax burden from the middle class to wealthy Americans.
Mr. Kanjorski touts his record of producing federal money for projects that help produce economic development, including the Wyoming Valley levee-raising project, the planned Commonwealth Medical College in Scranton and money for advanced medical research at Schott Glass Technologies in Duryea.
For Mr. Barletta, reforming the nation’s federal tax system is job one.
“There’s widespread consensus that the current tax system is a complicated failure, and it’s hindering our nation’s growth,” he said. “We have the second-highest corporate tax rate in the world of large nations. So we’re losing corporations, we’re losing businesses.
“I support the flat tax. It’s simple, it’s fair, it’s good for growth. And instead of 893 pages of forms that are required now, a flat tax would use two postcard-sized forms.”
The only loophole would be based on family size.
“A family of four would not begin to pay taxes until its annual income reached more than $30,000,” he said.
Deductions for items such as mortgage interest would also be eliminated, he said.
Mr. Barletta said he would also work to end the nation’s severe trade deficits by pushing to undo bad trade treaties such as the North American Free Trade Agreement, which have led to major losses in manufacturing jobs.
“We have 31 straight years of trade deficits. We’re losing jobs because of bad trade agreements,” he said.
For example, he said, Korea is allowed to export 700,000 cars annually to the U.S., but imports only 3,900 American cars.
Another key is “an energy policy to reduce cost of energy and cost of doing business,” he said.
“We need to drill here, drill now; obviously it’s a nice slogan, but it’s true,” he said. “It sends a message that we’re not going to rely on foreign nations for our oil. However, we need to also reduce our addiction to oil even here at home. And by doing that, we’re to create jobs by using American workers instead of sending our jobs to foreign countries.”
Mr. Barletta favors tax incentives to encourage development and use of any technologies that work — wind, solar, geo-thermal, nuclear, cellulosic ethanol. The best approach might be taking advantage of potential energy sources available in different regions, he said.
“For example, here in Northeastern Pennsylvania, we stand on more coal than oil in Saudi Arabia,” he said. “Clean-coal technologies should be developed.”
He pointed to the development of an energy-efficient housing development in downtown Hazleton as a major accomplishment of his mayoral administration, along with renovations to major downtown buildings and the planned development of a 20,000-seat amphitheater not far from downtown.
He also said Americans’ economic plight can be improved through better enforcement of the nation’s immigration laws. Mr. Barletta has made a national name for himself crusading against illegal immigration by passing local ordinances to restrict it. A judge ruled the ordinances unconstitutional, but an appeal hearing is scheduled for Thursday.
“We’ve got to stop this underground work force that’s coming in here taking jobs and suppressing the wages of the American workers,” he said.
He especially favors getting federal deficits under control.
“This government has run amok. Wasteful spending, wasteful earmarks,” he said.
Earmarks, special funding for congressmen’s pet projects, make up a tiny fraction of the nation’s spending.
“Yeah, but … all those little bits eventually add up, and we have a deficit because they cannot control themselves,” he said.
In recent days, Mr. Kanjorski’s campaign has criticized Mr. Barletta for failing to control Hazleton’s deficits. The city is facing a year-end deficit of potentially more than $1 million.
Mr. Barletta said Hazleton is no worse off than any other city hurt by the downturn in the economy. He faulted Mr. Kanjorski for failing to help control illegal immigration, which has left the city with a large population but unchanging income tax revenues.
“So much of that blame goes right back to the federal government,” he said. “We’re struggling on the local level because the economy has failed.”
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