What Obama Should Say to the U.S. Chamber

President Obama addresses the U.S. Chamber of Commerce today as part of his post-election effort to improve relations with U.S. business.

What part of U.S. business does the Chamber represent? Mostly big business and corporate CEOs — people who make many millions, often without risking any of their own money. That’s the only way to explain that the extension of the Bush tax cuts for the very rich was the top Chamber priority last year — even though this won’t benefit the vast majority of businesses.

It's the Recession!

So just what has been the primary cause of Pennsylvania’s fiscal challenges? Some would have you believe it is overspending, but the facts tell a different story.

In the Pennsylvania Budget and Policy Center's latest February Fiscal Facts, we find that every state (except North Dakota) has faced budget deficits in the past few years. The primary culprit: loss of state tax revenue.

Strengthening the middle class

On Thursday, Derek Thompson, an associate editor at the Atlantic, wrote a guest post at Ezra Klein’s blog discussing how to rebuild the middle class.  Below is his list of possible interventions to cure what ails the middle class:

The Pinto leaves you with that warm feeling

Tom Ridge is in the Pittsburgh Tribune-Review this morning talking about economic policy:

The shale gas industry is like the auto business — it might hurt some people, but the jobs it brings to a struggling economy make it worthwhile, gas industry pitchman and former Gov. Tom Ridge said Thursday.

'You don't quit building automobiles because some people are going to crash and kill themselves,' said Ridge, who spoke at Carnegie Mellon University. 'You have to manage the risk. Capitalism and entrepreneurialism is risk management.'

Anybody remember the Ford Pinto?

Anti-health Law Bill Would Be Tremendous Setback for Small Businesses, Uninsured Pennsylvanians

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The effort to rollback health care reform is in full swing, nationally and in Pennsylvania. In one of its first acts, the U.S. House of Representatives passed a bill to repeal the Affordable Care Act on January 19, although the bill is not expected to get a hearing in the Senate, and the President has vowed to veto it.

The Pennsylvania House of Representatives is careening down the same track as its Congressional counterparts. State Representative Matt Baker, the incoming chairman of the House Health Committee, has scheduled his repeal bill, House Bill 42, for consideration by the committee on Monday, February 7.

Health reform opponents have seized on the individual responsibility provision as a key point of attack, and the Baker bill would prohibit Pennsylvania from enacting or enforcing any penalties on individuals who do not purchase insurance.

The real danger is that the bill will prevent the state from moving forward with key provisions, including establishment of health insurance exchanges that will make it easier for individuals and small businesses to shop for affordable insurance, and that will administer subsidies. Pennsylvania is already behind the curve on this one, lagging behind liberal bastions like Texas and Indiana that are moving aggressively to implement reform and take advantage of federal grants.

Introducing Fiscal Facts: PA's General Fund Spending Lower than National Average

There has been a lot of talk about Pennsylvania's high rate of spending over the past few years. The facts tell a different story. General Fund spending in Pennsylvania is below the national average and has been for 18 of the last 20 years.

In the weeks leading up to Governor Corbett's budget address on March 8, the Pennsylvania Budget and Policy Center will be releasing a series of briefs shining a light on specific budget topics in what we hope is an interesting way. We launched February Fiscal Facts this week with a brief comparing the state's General Fund spending over time to the U.S. average.

Teachable moments

Brad Bumsted of the Pittsburgh Tribune-Review leads the latest news on Pennsylvania tax collections with the following:

Kenneth Gailey of Midland doesn't like the idea of raising state taxes or cutting benefits.

The 50-year-old contractor, who spent 16 years as a carpenter for
PennDOT, said he believes state government can make a huge dent in an
estimated $4 billion deficit by eliminating or cutting high-end salaries
for management and making government more efficient.

'Do we need more taxes? Do we need cuts in the few benefits we have?
What we need is fewer people on the high end of that pay scale.'

Is this true? 

The Good News, Bad News on Pennsylvania's Revenue Picture

General Fund revenue collections have been doing better than expected in the past few months, with January numbers reported Tuesday showing another month of healthy receipts.

The result is a General Fund revenue surplus of $264 million for the 2010-11 Fiscal Year, which ends in June. That's good news and a positive sign of the state's slow fiscal recovery, but much bigger fiscal challenges loom large on the horizon.

Can we stop attacking people who lost their job because of the recession?

Capitolwire reports (paywall):

House Majority Leader Mike Turzai, R-Allegheny, said there are ways to reform unemployment compensation... Turzai said: “Without a doubt, we have to look at enrollment…We have to look at what the array of benefits are and how they compare to competing jurisdictions.” He also said he favored a “strong work-search requirement” for unemployment, echoing one of the major points made by [Governor Tom] Corbett and business organizations.

Hundreds of thousands of working- and middle-class Pennsylvanian’s lost a job in the last three years for reasons beyond their control. The more people who are out of work, the longer it takes to find a job and thus the longer the period that people remain unemployed. This is why I stress time and time again that the chief challenge in the economy right now is the scarcity of job openings relative to job seekers. Concerns over whether unemployment insurance is a disincentive to find work are just not relevant when we have four unemployed people competing for each job opening.

Welcome to Third and State

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Welcome to Third and State, a joint blog of the Keystone Research Center and Pennsylvania Budget and Policy Center.

Pennsylvania, like many other states, faces historic challenges — from ensuring that the economy brings broadly shared prosperity to working families, to addressing Pennsylvania's budget challenges in a balanced way, to implementing provisions of the Affordable Care Act, to reducing poverty and strengthening Pennsylvania's schools.

With this blog, we will present sharp and timely commentary to help you better understand Pennsylvania's economy and how state budget and other policies impact the lives of people in this state. And we'll bring it to you from our perch at Third and State — across the street from the State Capitol.

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