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Public Statements

Lynn's Weekly Update - Defense Cuts; Manufacturing Bill; Farm Bill; Dodd-Frank Act

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Defense Cuts: We Need a Plan

On Wednesday, I joined the House of Representatives in calling on the administration to outline its plan for the looming budget cuts that will effect military and domestic spending this coming year.

Thousands of our service men, women, and their families will be affected by these cuts, otherwise known as sequestration. Our troops at Fort Riley, Fort Leavenworth, and Forbes Field deserve to know the details. This House bill requires the President to send a report to Congress outlining the impact of sequestration within 30 days of the law being passed.

Sequestration was never intended to be the answer to our budget problems, but an enforcement mechanism to find a better solution. Due to the failure of the deficit commission to identify further cuts, we are left with what Defense Secretary Leon Panetta calls a "catastrophic" situation. This is unacceptable.

According to the Congressional Budget Office, defense cuts account for 42.6% of sequestration. How is this a fair distribution of the pain? Surely, there is room for cuts in the defense budget, but with entitlement spending five times the size of defense spending, we must acknowledge reality.

We should not be shrinking ground forces to their smallest size in 70 years in order to support our growing welfare state. It is my hope that both sides of the aisle work together to find a more sensible answer before it is too late.

Supporting Manufacturers Through Tax Reform

Thursday, the House Committee on Ways and Means, of which I am a member, held a hearing on tax issues facing U.S. manufacturers. The committee heard from various manufacturing business representatives including Ford, 3M, and several small manufacturers on how comprehensive tax reform could improve their abilities to create jobs and grow the economy.

Manufacturing is a key driver of industry in the United States and has been a bright spot during these tough economic times. The strength of our manufacturing sector, however, is being undermined by our broken tax system that puts American businesses at a competitive disadvantage compared to the rest of the world. The current code is too costly and complex. This includes temporary tax laws that result in uncertainty and prevent manufacturers from being able to plan for the future.

We need corporate tax reform, but the problem does not end there as it leaves out manufacturers organized as pass-through businesses, like sole proprietorships, S corporations, and limited liability companies (LLC). These businesses represented more than 540,000 manufacturers in 2009, and according to a Joint Committee on Taxation, that accounts for 85 percent of all manufacturing entities. More importantly, individual rates matter more to these businesses, because pass-through entities pay tax on their business income based on the individual rate structure, not the corporate rate. Unfortunately, under President Obama's budget proposal, the top statutory rate for individuals will increase from 35 percent to 39.6 percent beginning in 2013.

Comprehensive tax reform can help the United States become a more attractive place for investors if done right. Due to the importance of U.S. manufacturers in this country, we must consider them in our tax reform plans. These plans must assess how corporate and individual tax rates, as well as current tax provisions, affect manufacturers and their ability to create jobs and compete both at home and abroad.

We Need a Farm Bill Now

This week, I joined more than 50 of my colleagues from both sides of the aisle by signing a letter to encourage Speaker Boehner and House Leadership to bring the Farm Bill up for debate and a vote on the House Floor. The House Agriculture Committee has already approved its version of the five-year authorizing legislation with a strong bipartisan vote of 35-11.

Many current farm bill policies expire on September 30, 2012. While by no means perfect, this farm bill is needed for those who rely on sound agriculture policy during difficult economic times. The legislative process will provide the opportunity to improve and amend the bill. I have heard from many constituents and agriculture groups in Kansas about the importance of certainty as they go forward so that producers can continue to provide an abundant, affordable and safe food supply.

With a record-breaking drought plaguing much of the country, including Kansas, this legislation is critically important. The importance of appropriate risk management tools and an adequate safety net for farmers and ranchers is only heightened by current crop conditions throughout the nation's heartland. We owe it to our farmers, ranchers, and rural communities, to consider the many important provisions in this legislation. We need a farm bill now. It is my hope that Speaker Boehner will bring this legislation up as quickly as possible.

Dodd-Frank Two Years Later

This week I discussed the July anniversary of the Dodd-Frank Act on the House floor. Two years ago, despite my strenuous objections, Congress passed the Dodd-Frank Act. It has been two years, and only one-third of nearly 400 rules are written today. And, with only one-third of the rules, we have already added nearly 9,000 pages of new regulations and $7 billion in compliance costs.

By trying to solve a poorly-understood financial crisis, Washington created a regulatory nightmare. More importantly, it doesn't even fix the problem, because most of the Dodd-Frank provisions have little or no connection to the financial crisis. Instead it has increased costs for consumers by reducing the number of large banks that offer free checking accounts and increasing other bank fees.

New agencies, like the Consumer Financial Protection Bureau, have slowed the credit lifeline that is vital to the creation and survival of American small businesses. By impeding spending and borrowing, experts predict Dodd Frank will reduce annual job creation by 4.3%, hindering economic growth.

Instead of using crises, as excuses to expand our already over-reaching government, Washington should target regulation at the root of the problem and work to protect both consumers and our innovating entrepreneurs.

Kansan of the Year

On Tuesday, I attended the annual Kansan of the Year Banquet hosted by the Kansas Society of Washington, D.C. This year the organization honored Riley County native, former K-State football player, and current Green Bay Packers receiver Jordy Nelson. A big congratulations to Jordy and thank you to the Kansas Society of Washington, D.C., for planning a great event.


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