2021 New Year’s Resolutions

As the New Year begins, members of Congress will inevitably commit to all sorts of resolutions ranging from weight loss to quitting smoking. While there’s plenty of waist watch going on, lawmakers have yet to engage in serious waste watch. As officials make promises to be healthier in their own lives, they aren’t making it easier for people to do the same as they drag their feet in making reduced-risk tobacco products available. These products have helped millions of Americans quit their deadly smoking habits. It is possible for national, state, and local leaders to better themselves in the New Year while making sure that the government works better for all Americans. Here are some New Year’s Resolutions for Republicans and Democrats.

Waist (Waste) Watch

Washington has always had a spending problem, but now it is worse than ever. In 2020, the federal government ran a budget deficit of more than $3 trillion, or more than $20,000 per household. Much of this historically high spending had to do with the response to the coronavirus pandemic, which forced millions of businesses to close and prompted Congress to send out relief checks and forgivable loans to struggling companies.

But unfortunately, the small business relief program enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act morphed into a bonanza for special interests and affluent individuals. Millionaires and billionaires such as Robert de Niro and Kanye West were able to secure forgivable loans for their own businesses, while countless Americans suffered and patiently waited for relief aid. And, in a brazen conflict of interest, at least nine lawmakers indirectly benefited from the Paycheck Protection Program.

According to Sen. Rand Paul’s (R-Ky.) 2020 Festivus Report, poorly targeted coronavirus spending was just the tip of the iceberg for Washington waste. Sen. Paul unearthed dozens of examples of wasteful spending, including:

• $23 billion for unsuccessful efforts by the Defense Department to replace the Bradley Fighting Vehicle;
• $217 million for duplicative Medicare customer service access;
• $110 million for the bungled building of a drone base in Niger;
• $48 million for helping “disconnected Tunisian youth not feel like a problem”; and…
• $37 million for studying why stress makes hair turn gray.

Clearly, it is long past time for Congress to trim the fat and focus on waste (not waist) watch.

Go on more hikes (But hold off on the tax hikes)

Incoming President Biden needs to tell some in Congress (and even his own advisors) to take a hike. A large coalition of officials, ranging from House Speaker Nancy Pelosi (D-Calif.) to newly selected Treasury Secretary Janet Yellen have advocated raising taxes on struggling Americans. Biden has advocated raising the corporate tax rate from 21 to 28 percent, a move that would adversely impact virtually all Americans through higher prices, lower wages, and fewer new job opportunities. According to extensive modelling conducted by the Tax Foundation, raising the corporate tax rate to 28 percent would destroy 187,000 jobs and axe wages by nearly 1 percent. And, 2019 research from University of Chicago, Northwestern University, and City University of Hong Kong scholars reveals that more than a third of the corporate tax burden falls on consumers. According to their estimates, “A one percent increase in the corporate tax rate leads to an increase in retail product prices of approximately 0.24 percent.”

A high corporate tax rate would also encourage corporate inversions where companies move the paperwork of the company overseas to avoid domestic taxes. These inversions were popular in the United States when the corporate tax rate was 35 percent (which could exceed 40 percent when coupled with state rates). In the pre-tax reform days, Burger King purchased Canadian chain Tim Horton’s for $11 billion. The Washington Post noted at the time that, “The fast food giant stands to save as much as $1.2 billion in taxes over the next three years by moving its headquarters from the United States to Canada.” That meant billions of dollars were headed for Canadian coffers rather than the U.S. Treasury.

Meanwhile, it’s far from clear that the new Congress and administration will axe the Trump tariffs that have cost American families more than $400 per year on average. Incoming President Biden has ruled out immediately kyboshing these onerous trade taxes and has suggested “carbon tariffs” on “carbon-intensive goods from countries that are failing to meet their climate and environmental obligations.” Paired with incoming Treasury Secretary Yellen’s proposed carbon tax, this policy would mean higher prices and fewer opportunities for millions of Americans already down on their luck. Lawmakers and the new administration should steer clear of these hikes, which certainly won’t be registering on FitBits anytime soon.

Cut out the cigarettes (and help other Americans do the same)  

Of the more than 34 million adult smokers across the United States, 68 percent (or 22.7 million) actively report trying to kick their deadly habit. Fortunately, there are reduced-risk products such as e-cigarettes and heated tobacco products (such as IQOS) that give smokers the sensation of cigarettes without exposing them to an array of carcinogens. Leading scientific and medical bodies such as Public Health England report that e-cigarettes are more than 95 percent safer than their conventional counterparts. And according to the findings of a research team from the University of Bern in Switzerland, levels of deadly polycyclic aromatic hydrocarbons found in IQOS smoke were far lower than for cigarette smoke.

Despite the abundant evidence of the safety of these products, the Food and Drug Administration (FDA) continues to tightly regulate these products and limit options for millions of smoking Americans. The agency has been dragging their feet in approving (humungous) e-cigarette pre-market applications, while wantonly calling for the removal of products from the shelves. The agency has adopted a similarly slow approach to heated tobacco products, sitting on IQOS’s modified tobacco product application for years before authorizing the marketing of this harm reduction product. This slow process sets a disturbing precedent for other life-saving products, such as future coronavirus vaccines and rapid-testing systems. Congress should work closely with the agency to expedite approval processes and ensure that consumers and patients have reduced-risk products at their disposal. The stakes are simply too high to prolong the current climate of risk aversion.

In conclusion….

Plenty of Americans could stand to lose a few pounds, exercise more, and nix some unsavory habits. Congress certainly has resolutions of its own that it could stand to work on, including getting the budget under control and putting the damper on needless taxes and rules. Fortunately, TPA is here to hold the new Congress and administration accountable in its quest to change Washington, D.C.