On Energy Issues, Remember Forgotten America

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On October 15, the Trump administration unveiled a new agreement on the Renewable Fuel Standard (RFS) – a policy intended to secure America’s domestic energy production. The plan, which will expand renewable fuel quotas, is being touted as a win for U.S. farmers and proof that the president is a champion of rural America.

But the President’s work on this issue isn’t done yet. While farmers can rest assured that Trump has their back, there is an entirely different segment of the American public that is crying out for relief: the forgotten blue-collar men and women the president also pledged to protect on the campaign trail.

Expanding renewable fuel mandates may help the president get votes in the farm belt, but he also can’t lose any supporters in other battleground manufacturing states, like Pennsylvania and Texas. He can do so by ensuring his new RFS changes benefit farmers and farmers only. Doing so would prevent the unholy alliance of Big Oil and Wall Street from manipulating the law and take his blue-collar base to the cleaners.

Making big oil firms blend more renewables won’t cause them any heartache. However, without added reform measures, the current RFS deal will decimate small refiners, which employ thousands of blue-collar workers. The reason? Independent, local refineries don’t have the financial resources to blend onsite. 

Renewable fuel mixtures have a short shelf life and degrade quickly. So, biofuels typically have to be mixed onsite – the same location they’re pumped into consumers’ vehicles. But only the biggest of the biggest refiners, like BP and Shell, also serve as retailers and have the capability to mix onsite. And yet, other smaller refiners are still on the hook to produce renewable fuel, despite having no way to make it.

This is where the Renewable Identification Numbers (RINs) come in. The government allows smaller refineries to purchase RINs credits from the big guys in lieu of mixing their own. A RINs credit is just a computer-generated serial number for every gallon of renewable created. So, what ends up happening is that Big Oil produces way more than renewable fuel than it needs and sells its extra RINs credits to its local, independent competitors.

Predictably, Big Oil and Wall Street have abused this system for financial gain. According to the New York Times, Wall Street has profited out of it – as RINs prices have become susceptible to market speculation. RINs used to cost pennies, but lately, prices have skyrocketed – reaching nearly $3 per credit in 2018. For some independent refiners, it is costing nearly half a million dollars a day just to comply with these government mandates – more than double the cost to purchase refineries. 

Now, with Trump’s new expansion of the renewable volumes, RINs are all the more ripe for speculation, and prices are bound to increase. Expanded ethanol quotas just mean local refineries will be forced to compensate by purchasing more RINs. This increased demand will yield a higher price for biofuel credits – and speculators, sensing an opportunity to profit, will bet on the price of RINs to increase. This, in turn, will force the cost of purchasing RINs even higher. Rinse and repeat.

The first adjustment the president must make is to limit Wall Street’s speculation of these credits by imposing a cap on the price of RINs. Doing so would ensure that Wall Street profiteers don’t use this farmer victory for personal gain. A RINs cap would protect the president’s manufacturing base while ensuring that thousands of blue-collar workers aren’t thrown onto the unemployment rolls. 

Additionally, the president must ensure that hardship waivers for small refineries remain in place. These exemptions provide a slight reprieve to small refiners from the crippling weight of the Wall Street-Big Oil stranglehold. The RFS’ creators gave the EPA the statutory authority to issue them at the start of the program because they knew they protect America’s energy security while posing no harm to farmers. Indeed, agricultural economist Scott Irwin said that “the data now clearly shows that small refinery exemptions under the RFS have not reduced physical ethanol use.” They are absolutely necessary to the continued success of the American energy industry.

By clamping down on special interests’ speculative behavior, President Trump can ensure the RFS system operates fairly and protects both sides of his base. The Wall Street and Big Oil interests may complain, but the president was elected to drain the swamp, not keep it filled. Here’s hoping he does the right thing.

Copyright 2019 Matt Mackowiak distributed exclusively by Cagle Cartoons newspaper syndicate.

Matt Mackowiak is president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group. Hes a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators.

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Trump Notches a Win Against Crony Capitalism

Earlier this month, President Trump provided hope he will add yet another bullet point to his growing list of accomplishments.

On February 12, Trump’s Environmental Protection Agency (EPA) signaled to farmers and blue-collar refinery workers that the administration will soon release a draft rule that puts American workers at the heart of our energy policies.

The first way the EPA is expected to do this is by lifting burdensome restrictions on the production and sale of ethanol. Prior to the EPA’s decision, Big Oil benefited from the EPA’s arbitrary regulations on the sale of high-ethanol gasoline. Passed due to claims that ethanol exacerbated smog, these laws prohibited producers from selling E15 – mixtures of gas that contain 15 percent ethanol – during the summer months of the year. In reality, the rules against the production of ethanol-rich gasoline only allowed Big Oil to consolidate its influence over the energy marketplace, damaging America’s biofuel industry in the process.

The Trump administration’s anticipated deregulation of the ethanol industry couldn’t have come at a better time. In 2019, U.S. farm income was expected to have fallen 50 percent from its 2013 high point. The EPA’s move to increase ethanol production will not only lessen the influence of Big Oil, but it will also reinvigorate the country’s farm industry.

According to Trump, “We want to eliminate the intrusive rules that undermine [farmers’] ability to earn a living, and we will protect the corn-based ethanol and biofuels that power our country.” Removing red tape with respect to E15 sales will do just that.

But the Trump Administration doesn’t seem to be stopping there. In a win for small and independent refiners across the nation, the EPA’s new draft rule will also reportedly curb biofuel credit speculation, a tool used by large oil companies to disadvantage smaller, local refineries.

Here’s how it works: According to the U.S. Renewable Fuel Standard (RFS), oil refiners must mix a set amount of biofuel into their fuel to meet the government-mandated requirements. The government then assigns each gallon of fuel that meets this threshold a Renewable Identification Number (RIN) to ensure the oil refiners are holding up their end of the bargain. Similar to a system of cap and trade, these RINs can be bought, sold and speculated upon, much like transferring rights to a gallon of renewable fuel.

The problem is that most small, local refiners don’t blend their fuel with ethanol, since the mixture degrades quickly and they are not in the blending business to begin with. Only large companies like BP and Shell have the infrastructure to sell directly to consumers by mixing their fuel with ethanol at the gas station pump. Big oil companies, therefore, have a substantial competitive advantage due to their ability to blend onsite, while independent refineries have no choice but to purchase excess RINs to compensate for their inability to mix the fuel.

Consequently, Big Oil holds the local refineries over a barrel, forcing the smaller companies to purchase the RINs from them at exorbitant rates – prices that started at a few pennies a credit when the RFS began and have risen to a high of close to $1.50. After crude oil, these RINs are refiners’ biggest operating costs.

The price-rigging has become so extreme that it has caused some refineries to declare bankruptcy, weeding out competition and allowing Big Oil to expand its influence. Unsurprisingly, the large oil companies have lobbied to keep the status quo in place, but the EPA’s expected plan to curb biofuel credit speculation will serve as a much-needed crackdown against this malicious business practice.

The Trump administration’s draft rule is much more than just a decisive victory over crony capitalism. It is a huge win for the men and women that propelled the president into office. By expanding the sales of ethanol blends and curbing biofuel credit speculation, the president will pave the way for an economic revival for American farmers, northeast refiners, the forgotten men and women of Middle America, and the United States energy industry at large.

Copyright 2019 Matt Mackowiak distributed exclusively by Cagle Cartoons newspaper syndicate.

Matt Mackowiak is president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group. He’s a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators.

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Abandoning Principles to Please a Republican Billionaire?

Is President Trump’s own Department of Justice (DOJ) poised to undermine his commitment to drain the swamp?

Unfortunately, with news that the agency is preparing to reverse a near decade-old policy that allows states to set their own Internet gambling laws, it seems that it’s certainly a possibility.

Plowing over states’ rights with respect to iGaming has been the long-term goal of casino owner Sheldon Adelson, who over the past several years has waged a one-man, multi-million-dollar campaign to empower the federal government to shut down the so-called electronic casinos.

Few, if any, believed that it would be the Trump administration of all White Houses that would consider giving him the crony New Year’s gift that he wanted, and yet here we are.

Adelson, the owner of the Sands Casino empire, is pushing for the Justice Department to short-circuit states’ constitutional rights for the seemingly selfish purpose of reducing competition for Las Vegas and its hotel owners. To that end, Adelson has employed an army of lobbyists and created a grass-tops organization dedicated to only one thing – reversing the DOJ decision.

The one-man show has had its allies introduce legislation in Congress, but the bill has hit a wall on almost every front. At a hearing before the House Government Oversight Committee, members of Congress tore the Adelson effort to shreds.

Conservatives noted the hypocrisy of Republicans advocating giving more power for the federal government. Rep. Jody Hice (R-GA) and then-Rep. Mick Mulvaney (R-S.C.), who is currently the president’s acting chief of staff, cited concerns about the bill’s effect on state’s rights. Rep. Thomas Massie (R-KY) took their point a step further, questioning whether the federal government passing an anti-Tenth Amendment online gambling prohibition could create the stepping stone to sweeping gun control legislation. Liberals also discussed the obvious reality that banning state-regulated online gaming would drive more traffic to unregulated online casinos, something nobody wants.

With the bill stalled in Congress, Adelson turned to the executive branch for assistance.

He pressed then-Attorney General Jeff Sessions to reverse the policy, but Sessions was forced to recuse himself on the matter. As most observers in the political arena know, though, Adelson hasn’t become one of the richest men in the world by accepting “no” for an answer. He pressed ahead and now appears to finally be making headway.

It has been reported that the Department of Justice is preparing to reverse its 2011 opinion legalizing online gaming. For what? To please a Republican billionaire? Why would Republicans take power away from the states and grant it to the federal government?

Such a move would pull the rug out from under a dozen states that have created jobs and economic growth based on the previous ruling.It would undermine the Constitution and the ability of states to govern themselves, all while suppressing the White House’s approval ratings by bringing about calls of crony capitalism for catering to the desires of the GOP’s biggest donor.

Now is the time for Justice Department to reconsider.

DOJ should be cleaning out corruption in our political system, not encouraging it.

Copyright 2018 Matt Mackowiak distributed exclusively by Cagle Cartoons newspaper syndicate.

Matt Mackowiak is president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group. He’s a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators.

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The Truth about Medicare For All

Like a cheap sweater that can be pulled apart by tugging at a thread, Obamacare is in tatters. Soaring costs of premiums coupled with outrageous deductible hikes have made things worse, not better. All of this was predictable.

Despite being less than a decade old, the law has clearly failed. The cost of health care did not bend downward as promised. The cost of insurance did not fall, and families certainly didn’t save the promised “$2,000 a year,” as President Obama guaranteed. The law was built on a foundation of sand – the faulty belief that more government intervention could make things better for everyone. It hasn’t.

Just ask those who signed up for Obamacare-created health care co-ops, of which nearly 85 percent have already collapsed. These non-profit enterprises promised to bring down health care costs by eliminating the profit motive from health care. If profit was eliminated, the theory went, then consumers would get a better deal. That idea flopped too.

Within a few years and backed by millions of dollars in federal grants and subsidies, 19 Obamacare co-ops closed. Today, only four remain, and some of those are also hanging by a thread. ‘

New Mexico’s Health Connections is the latest co-op to be running a balance sheet in the red. A recently filed financial statement reveals that the co-op was financially depleted and reported a net loss for the second quarter. State law mandates that if the company’s risk-based capital is below the 30 percent threshold, the state regulator takes control of the company. To avoid this eventuality, the co-op sold portions of its business to a for-profit company. Someone made off like a bandit, but it wasn’t the taxpayers, who kicked in $77 million in loans that do not appear will ever be paid back, despite claims to the contrary.

A common thread over these “non-profit” cooperatives is that executives were the ones who profited. According to documents filed with the Internal Revenue Service, Dr. Martin Hickey, the CEO of Health Connections, was paid nearly half a million in salary a year. Key members of the staff all received six-figure salaries as well.

Unfortunately, rather than recognize that government intervention is not a panacea, many members of Congress- from Sen. Bernie Sanders to newly-elected Rep. Alexandria Ocasio-Cortez – are demanding bigger government. They have endorsed the so-called “Medicare for All” proposal, which outlaws most forms of private health insurances, eliminates patients’ relationship with their doctor, and forces tens of millions of Americans into a socialized health care plan. By adding more bureaucracy, this proposal is nothing more than a continuation of the failed status quo that will open a Pandora’s Box of new unintended consequences.

By eliminating consumer choice, Medicare for All would destroy the one segment of the health industry that is thriving: the so-called “concierge” doctors that refuse to take any form of insurance. These growing number of primary care doctors are abandoning the paperwork, battles with reimbursement, and mounting regulations to treat patients, which is what they were trained to do.And guess what – patients are getting better service and more customized treatment, while doctors earn a profit, all without government involvement.

In a sea of bureaucratic ruin, the success of concierge doctors is a testament to the wonders that can be achieved by free market forces. Why do politicians seem intent on ruining a good thing? Why are they trying to solve the healthcare industry’s problems caused by big government with more government?

When asked about how to pay for the estimated $33 trillion-dollar price tag, Ocasio-Cortez said, “you just pay it.”It doesn’t seem to matter to her that $33 trillion is equivalent to eight times the size of the current federal government.

The Obamacare co-op fiasco is just the latest stain on a law that has harmed more than it helped, drove costs up rather than down, and chased doctors out of the profession. Let’s learn from these mistakes and correct them by chopping away at red tape, not adding more.

Copyright 2018 Matt Mackowiak distributed exclusively by Cagle Cartoons newspaper syndicate.

Matt Mackowiak is president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group. He’s a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators.

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Lame Duck Congress Should Roll Back Disastrous Health Tax

The issue of Obamacare’s hidden health insurance tax has been widely debated over the years, but it has taken on additional urgency yet again.

At a time when the economy is booming and wages are rising for the first time in more than 10 years, Congress should act immediately to prevent a new headwind from forming.

A quick reminder: The tax, known as the HIT, was a hidden and unnecessary tax inserted into the original Obamacare legislation. Even President Obama recognized the tax as harmful and unnecessary – he signed a bill that delayed its implementation through 2017. But now the expiration deadline is looming and the tax is back. Congress should move quickly to prevent health insurance premiums from increasing due to their inaction.

Health insurance premiums for 2020 are set now, in the fall of 2018. For as long as the HIT is around, insurance agencies will bake in this tax to premiums and pass the cost on to consumers. This is a fact.

From a political standpoint, repealing the HIT is a slam dunk. Employers, employees and families – no one benefits from this tax. Repealing the unnecessary HIT frees up hundreds of dollars annually for families.

This is also a way Congressional Republicans can roll back the HIT while moving closer to keeping their long-delayed promise to repeal Obamacare. While the HIT is an ingeniously clever device within Obamacare, repealing it continues to meaningfully chip away at the massive health care legislation.

Politics aside, HIT directly affects employers, seniors, families and consumers across America. Oliver Wyman, an international management consulting company, has released actuarial analysis on the HIT and the effects on specific markets.

The report estimates that some 152,000 and 286,000 private sector jobs will be lost by 2023 due to HIT, with increased premiums of $479 for families with small group coverage at small businesses. Seniors will see premiums increase annually at a similar amount – $482, which takes a toll on a fixed income.

Individually, consumers will see premiums increase $196 – further driving away healthy consumers from buying insurance and further destabilizing the market. In total, the report projects that, come January 1, 2020, over 142 million Americans will face a new tax to the tune of $20.3 billion.

Without Congress taking urgent action, these new tax increases threaten the Republicans’ biggest achievement of the last two years: tax reform.

The House Ways and Means Committee projects the 2017 tax law will result in $2,059 savings for the average family. The HIT will mean an increase of taxes by about $500 – instantly taking away 25 percent of the savings from the tax law.

Those are just the estimates; the reality could be worse. But only if Congress fails to act.

A bipartisan effort is already underway. The Health Insurance Premium Reduction Act, introduced by Republican Reps. Kristi Noem of South Dakota and Jackie Walorski of Indiana and Democratic Reps. Kyrsten Sinema of Arizona and Ami Bera of California, suspends the health tax. Sen. John Barrasso, Wyoming Republican, had a companion bill in the Senate. But both have gone nowhere since introduction.

Congress should support this bipartisan legislation that helps small businesses, families, seniors and everyday Americans immediately.

Copyright 2018 Matt Mackowiak distributed exclusively by Cagle Cartoons newspaper syndicate.

Matt Mackowiak is president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group. He’s a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators.

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Getting Things Done in a Divided Congress

With the result of the midterm elections coming into clearer focus, it is now clear that Democrats will hold a comfortable majority in the House of Representatives come January.

While one’s reaction to this alteration of the power structure hinges upon his or her political preferences, there is one potential aspect of this change that most are begrudging: the prospect of watching yet another do-nothing Congress fueled by the childish obstinance of both sides.

Poll after poll indicates that the American people detest when legislative branch partisans engage in party-on-party warfare, where barking at the opposition on the House or Senate floor becomes a higher priority than passing bills. The voters’ expectations for the functionality of their government are far from unreasonable; however, the legislative branch will never meet them if both sides of the aisle continue with their divisive political tactics that put party, rather than country, first.

It is critical for Democrats and Republicans to step away from the divisiveness and instead find areas of overlap in their agendas that could catalyze a fruitful working relationship in the new Congress. That means focusing on the three C’s for political unity – criminal justice reform, civil liberties, and crony capitalism.

For years, everyone from hardcore conservatives such as Sen. Rand Paul (R-Ky.) to true-blue progressives like Sen. Cory Booker (D-N.J.) have expressed the importance of fixing the current criminal justice system that unfairly targets minorities and tears apart families, sending people to prison as a first response rather than a last resort.

President Trump’s announcing his support for Congress’ First Step Act on November 14, a reform deal that will make rehabilitation a priority, is a welcome step in the right direction. However, much more needs to be done. Mandatory minimum sentencing and other draconian punishments for nonviolent offenders require further addressing to ensure that all Americans still have the chance to succeed, prosper, and pursue the American Dream. Democrat and Republican congressional leaders would be foolish not to utilize this issue as an icebreaker for working together at the start of the next congressional session.

From protecting the freedom of the press to ensuring the free movement of thoughts and ideas online, there is plenty of agreement on free speech issues that both sides can and should work on come January.

Given both sides’ opposition to companies’ unauthorized use of American citizens’ personal information from the Internet, now would also be the ideal time for the two parties to come together to safeguard privacy online.

Lastly, but perhaps most importantly, is the hatred for corporate welfare that most modern-day liberals and conservatives share.

Firebrand Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.) and Fox News host Tucker Carlson recently agreed that the added $2 billion in subsidies Amazon CEO Jeff Bezos will receive to build its new headquarters is absurd when considering the state of the country’s current infrastructure needs. However, most would agree that even more egregious than this gift to Bezos are the $5 billion in giveaways billionaire CEO Elon Musk has received over the years.

Take SpaceX, for example. While Musk touts the low cost of his reusable rockets, he recently imposed dramatic price increases on the government. Although concerning, these price hikes don’t put a candle to Musk’s seeming over-promising. Andy Pasztor at T, he Wall Street Journal suggests that the Falcon Heavy may now be incapable of achieving SpaceX’s original objectives. Meanwhile, Musk’s other rocket, the BFR, is currently only scheduled to conduct a private space tourism trip. It doesn’t take a rocket scientist (no pun intended) to recognize that this is not a good use of government money.

Given the extent that both sides railed against crony capitalism on the campaign trail, in January members of both parties would be wise to put divisive talks about taxes and healthcare on the backburner and instead unite to ensure that government funding benefits the middle-class rather than millionaires and billionaires.

The American people have spoken, and while the two houses of Congress might not think favorably at the prospect of working together, governing is what they get paid to do. While being far from a comprehensive list, the three C’s for political unity will provide a great starting point for both sides to begin humanizing one another and recognizing that partisan stalemates are far from necessary.

Hopefully, the soon-to-be members of the new Congress trade in their impassioned political dialogue for thoughtful conversations on these issues sooner rather than later.

Copyright 2018 Matt Mackowiak distributed exclusively by Cagle Cartoons newspaper syndicate.

Matt Mackowiak is president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group. He’s a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators.

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