Congressional Blog

Representative Tom McClintock

11-30-10

It’s still not clear what, if anything, the waning Pelosi majority will do to prevent the biggest tax increase in the nation’s history from decimating American families and small businesses on January 1.  Republican leaders have taken a solid position to protect the economy from the devastating impact of those scheduled increases.  The Democrats insist that taxes should go up – but only on the “very wealthy people” who earn over $250,000.  The problem, of course, is that more than half of those “very wealthy people” aren’t very wealthy and they aren’t even people.  More than half are small businesses filing under sub-chapter S – the very job generators that we’re relying on to restore prosperity – and yet this is the group the Democrats are targeting.  That’s insane.

The latest ploy is to limit the tax increase to those making over a million dollars a year – because, as Sen. Charles Shumer explained with statesmanlike delicacy, it’s easier to explain.  But now you run into a second problem that Arthur Laffer once described with the observation that there is nothing more portable in this world than money and rich people.  The super wealthy can move capital from high tax to low tax environments on whim – just ask John Kerry.  And they can even move the timing of their realized capital gains.

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Since I’m currently serving as ranking member of the Water and Power sub-committee of Natural Resources, I’ve been getting some local calls interested in the possibility of reviving the Auburn Dam now that we have a Republican majority.  The Auburn Dam was abandoned in mid-construction in the 1970’s – an early victim of the “era of limits/small is beautiful” lunacy that still grips the state.  Had it been completed, it would today provide enough water for more than two million households, enough cheap and emissions-free electricity for 800,000 homes, 400 year flood control for the Sacramento Delta and one of the west’s premier recreational lakes. 

We shouldn’t kid ourselves – it is a momentous issue involving multiple jurisdictions that will require a complex planning, governing and financing structure that will take years to complete even if all of the current obstacles were to be removed tomorrow.  And those obstacles are formidable, starting with the State Water Resources Control Board that revoked the development rights last year and is ideologically and politically opposed to restoring abundance as the objective of our water and power policy.

But the opportunity at least now exists to discuss the structure for the project.  I envision a joint powers agency formed among the counties that occupy the Auburn Dam Watershed with the mission of overseeing construction and operation.  A consortium of local, state and federal agencies would loan the money for the project , to be repaid by the beneficiaries.  Taxpayers would bear none of the cost but reap the cornucopia of jobs, water, electricity, jobs, tourism, flood-control and jobs – not to mention an enduring revenue stream available for local improvements  once the loans are paid off.  And jobs.