Congressional Leadership Fund attacks congressional candidate Pete Gallego (D-TX) over the support he has received from the League of Conservation Voters, saying that a long-dead climate change bill the group supported would have killed jobs even though it was projected to boost the economy at minimal cost to consumers. The ad also accuses Gallego of shooting down tax cuts, citing a series of bills on which Gallego primarily voted for things like preventing tax evasion and funding trauma centers. Finally, the ad’s suggestion that Gallego is “targeting jobs” is linked to an interview in which he expressed a desire for the wealthy to pay their fair share – a proposal that wouldn’t harm the economy.
League Of Conservation Voters Supports Gallego
League Of Conservation Voters Has Spent $1 Million In Support Of Gallego. From the Dallas Morning News: “The hotly contested congressional race between tea party freshman Rep. Francisco ‘Quico’ Canseco and Democratic challenger Pete Gallego has turned into one of the most expensive in the country. More than $3.3 million in interest groups’ money is pouring in every week to the sprawling, mostly rural district in West Texas. Residents have been inundated with ads from groups like the League of Conservation Voters, the Sierra Club, the National Right to Life Committee and the Congressional Leadership Fund. […] The League of Conservation Voters alone has poured in nearly $1 million, with their largest ad buy totaling nearly $600,000.” [Dallas Morning News, 10/13/12]
League Of Conservation Voters Supported Gallego In Democratic Primary Because His Opponent Voted Against Cap-And-Trade Plan. From the Dallas Morning News’ Trail Blazers Blog: “State Rep. Pete Gallego, D-Alpine, got a big boost toward tonight’s win over ex-congressman Ciro Rodriguez from the League of Conservation Voters. The left-leaning group pumped more than $350,000 into an ad blitz– more than Rodriguez spent – blasting Rodriguez for voting against a 2009 cap-and-trade plan to curb pollution. The league viewed that as a betrayal of President Obama, Democratic House leaders who thought they could count on Rodriguez’ vote until the final moments, and to the clean-air agenda.” [DallasNews.com, 7/31/12]
American Clean Energy And Security Act Would Have Boosted The Economy At Minimal Cost To Consumers
The claim that environmentalists’ “job-killing agenda” could “cost Texans almost 200,000 energy jobs” comes from a study of the Waxman-Markey bill, also called the American Clean Energy and Security Act, by the National Association of Manufacturers and the American Council for Capital Formation.
Reuters: Experts Say House-Passed Clean Energy Bill Would Have “Only A Modest Impact On Consumers.” According to Reuters: “A new U.S. government study on Tuesday adds to a growing list of experts concluding that climate legislation moving through Congress would have only a modest impact on consumers, adding around $100 to household costs in 2020. Under the climate legislation passed by the House of Representatives in June, electricity, heating oil and other bills for average families will rise $134 in 2020 and $339 in 2030, according to the Energy Information Administration, the country’s top energy forecaster. The EIA estimate was in line with earlier projections from the nonpartisan Congressional Budget Office which said average families would pay about $175 extra annually by 2020, and the Environmental Protection Agency, which said families would pay at most an extra $1 per day.” [Reuters, 8/5/09]
- CBO: Energy Costs Would Actually Decrease For Low-Income Households. According to the Congressional Budget Office’s analysis of the American Clean Energy and Security Act, if the bill were implemented, “households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245.” [CBO.gov,6/19/09]
Study: Clean Energy Legislation Would Create Jobs, Boost GDP. According to an analysis by the University of California, Berkley: “Comprehensive clean energy and climate protection legislation, like the American Clean Energy and Security Act (ACES) that was passed by the House of Representatives in June, would strengthen the U.S. economy by establishing pollution limits and incentives that together will drive large-scale investments in clean energy and energy efficiency. These investments will result in stronger job growth, higher real household income, and increased economic output than the U.S. would experience without the bill. New analysis by the University of California shows conclusively that climate policy will strengthen the U.S. economy as a whole. Full adoption of the ACES package of pollution reduction and energy efficiency measures would create between 918,000 and 1.9 million new jobs, increase annual household income by $487-$1,175 per year, and boost GDP by $39 billion-$111 billion. These economic gains are over and above the growth the U.S. would see in the absence of such a bill.” [University of California, Berkeley, accessed 5/14/12]
Gallego Supported Bills Preventing Tax Evasion And Funding Trauma Centers
To support its claim that Gallego “shot down tax cuts, voting for higher taxes and fees,” the ad cites Texas’ SB 1 from June 10, 2011, HB 2403 from April 27, 2011, HB 2654 from May 12, 2009, and HB 893 from May 1, 2001.
Gallego Voted Against A Bill That Cut School Funding While Exempting Businesses From Taxes
SB 1 Extended Tax Exemption For Businesses Making Under $1 Million. From the Houston Chronicle: “Texas companies with less than $1 million in annual revenues will continue to be exempted from the state business tax for another two years. Online retail giant Amazon.com must add Texas state and local sales taxes to purchases by Texas customers starting Sept. 1 if the giant online retailer still operates a distribution center in the state on that date. Both provisions were part of Senate Bill 1 that was approved Tuesday by the Texas Legislature before ending its special session Wednesday. The $1 million exemption on the business tax was due to expire next year with the exemption falling to annual revenues of $600,000 or more. The $1 million exemption now will expire in 2014. About 28,000 Texas companies have annual revenues of between $600,000 and $1 million, according to the National Federation of Independent Business/Texas, which lobbied for the two-year extension.” [Houston Chronicle, 6/30/11]
SB 1 Also Cut Public School Funding By $4 Billion. From the San Angelo Standard-Times: “The school finance plan included in Senate Bill 1 – a sweeping bill that also contains billions in ‘nontax revenue’ to help balance the 2012-13 budget – reduces state aid to public schools by $4 billion. [San Angelo Standard-Times via Nexis, 6/10/11]
Gallego Supported Bill To Keep Online Retailers From Skirting Texas’ Sales Tax
Gallego Supported GOP-Authored Bill To Make Amazon Collect Sales Taxes – Not To Levy A New Tax. From the Austin American-Statesman: “Taking a stand against Internet retailers like Amazon.com, the Texas House moved Tuesday to tighten the state’s rules on when online businesses must collect sales tax. By voting 122-23 to pass House Bill 2403 by Rep. John Otto, R-Dayton, lawmakers made their clearest statement to date that they are siding with state Comptroller Susan Combs in her push to force Amazon and other online retailers to collect taxes on sales made to Texans. Otto said his bill ‘is not a new tax, is not subjecting anybody to a new tax and is not increasing the rate of any tax. What this bill does is put into statute a clearer understanding of what constitutes physical presence,’ the determining factor in when a retailer must collect sales taxes.” [Austin American-Statesman, 4/27/11]
Allowing Online Retailers To Avoid Tax Collection Gives Them An Advantage Over Local Businesses. From the Associated Press: “Under a U.S. Supreme Court ruling, a company does not have to collect state sales tax if it does not have an office, or some other physical presence, in that state. The tax is still due on those transactions, but the customers are supposed to pay it. They usually don’t. Local retailers complain this gives Internet retailers an unfair price advantage. While Internet sales have gone up, local stores have seen a drop in revenues and blame the sales tax issue. State lawmakers also face a $27 billion budget shortfall over the next two years, and many want to see more efficient collection of taxes already on the books.” [Associated Press via Businessweek, 4/27/11]
Gallego Supported Bill Preventing Car Sales Tax Evasion
HB 2654 Imposed Sales Tax On Cars Given As Gifts, Except To Family Members Or Charity. According to the Texas House Research Organization’s bill analysis: “CSHB 2654 would amend Tax Code, sec. 152.001 to impose a motor vehicle sales tax on most recipients of a gift of, or transfer without payment of, a motor vehicle. It would amend sec. 152.025(a) to allow certain recipients to pay only a motor vehicle gift tax. A person would pay a gift tax if they received a motor vehicle gift from a: spouse; parent or stepparent; grandparent or grandchild; child or stepchild; sibling; guardian; or decedent’s estate. A tax-exempt 503(c) organization that would use the vehicle solely for purposes of the organization also would pay the gift tax.” [Texas House Research Organization, 5/11/09]
HB 2654 Was Designed to Cut Down On Fraudulent Tax Evasion. According to the Texas House Research Organization’s bill analysis, the bill’s supporters say: “CSHB 2654 would reduce the number of fraudulent gift transactions reported and would raise an additional $26 million in general revenue over the next biennium. Texas switched to a standard presumptive value to compute the motor-vehicle sales tax in 2006. Prior to that, used vehicles purchased through private-party transactions were taxed based on the buyer’s reported purchase price. Buyers had an incentive to underreport the value of the vehicles and pay less tax as a result. Since Texas switched away from self reporting of value to the standard presumptive value approach, there has been a sharp increase in the number of vehicles claimed as gifts. The total number increased from 330,908 gift tax transactions in 2006 to 408,920 in 2007. Buyers have an incentive to report a sale as a gift because they no longer can supply their own tax information, and the gift tax is only $10. Under current law, the only evidence required to confirm that the vehicle was received as a gift is the signature of the person making the gift. CSHB 2654 would require that the person making the gift be a relative of the person claiming the gift or that the recipient be a tax-exempt charity or heir.” [Texas House Research Organization, 5/11/09]
- HB 2654 Passed By Large Margin. Rep. Gallego voted “yea” on HB 2654, along with 136 other state legislators. 12 state legislators voted “nay.” [Texas House Journal, 5/12/09]
Gallego Supported A Bill To Fund Trauma Centers
HB 893 Would Have Added $5 To Car Registration Fee To Pay For Underfunded Trauma Centers. From the Houston Chronicle: “A survey by Amir Dan Rubin, assistant vice president of operations at Memorial Hermann, revealed that the top 10 trauma centers in the state, including Memorial Hermann and Ben Taub, lost an average of $20 million per fiscal year in their emergency operations. Trauma injuries, mostly from motor vehicle accidents, bicycles, falls or industrial accidents, remain the leading cause of death in persons under 34 years of age, Rubin said. Traffic and other accidents cause 93 percent of trauma cases while only 7 percent are from violence, said Dr. Guy Clifton, chief of neurosurgery at Memorial Hermann. […] At the same time, one in three Houston-area residents are uninsured as well as one in three in Dallas. Those unprotected cases leave a statewide shortage of at least $200 million in emergency care, Clifton said. […] An even faster partial solution in Texas could be a legislative bill sponsored by state Rep. Juan Hinojosa, D-McAllen, to add a fee on the motor vehicle registration to go to fund trauma centers. Clifton testified in Austin last week before the House Committee on Transportation to support House Bill 893. […] The bill would add $5 to the annual cost of registering a motor vehicle. Under the provisions of the bill, appropriations from the revenue could be made only for the Texas Department of Health to support trauma centers. With the current 17 million cars that are registered, the new law could raise $85 million, or almost half the losses suffered by trauma centers in the state.” [Houston Chronicle, 3/26/01]
Gallego Isn’t “Targeting Jobs” — He Wants The Wealthy To Pay Their Fair Share
To support the claim that Gallego is “targeting jobs,” the ad cites a February 13, 2012, Texas Tribune interview of Gallego.
Asked About Raising Taxes On Millionaires, Gallego Expressed Support For A “Fairer” Tax Code Where Wealthy Pay More Than Poor. From a conversation between Gallego and Texas Tribune editor-in-chief Evan Smith:
SMITH: What I asked about was raising taxes on millionaires, so let me come back to that and be sure. You are for raising taxes on wealthy individuals per the president’s notion that that’s how we’re going to get ourselves out of the economic situation we’re in?
GALLEGO: I am for a fairer tax system that creates a balance where people who are in higher tax brackets are paying at a rate that they can pay and the people who are in lower brackets are not paying a higher—they’re not in a higher percentage than—I think that’s fundamentally fair. [TexasTribune.org, 2/13/12]
CRS: Allowing Tax Cuts For The Rich To Expire Will Reduce Deficits “Without Stifling The Economic Recovery.” According to Reuters: “Letting tax rates for the wealthy rise will not put a short-term damper on the economic recovery, according to a report by the non-partisan research arm of the U.S. Congress. […] Republicans want the cuts continued for all income groups while Democrats favor letting them expire for the most affluent Americans. ‘If the economy is still weak, a temporary extension (of all the rates) will not harm the economy,’ despite adding to the deficit, the CRS report said, citing CRS economist Thomas Hungerford. But allowing the rates to rise just for the wealthy could help ‘reduce budget deficits in the short term without stifling the economic recovery.’” [Reuters, 7/19/12]
Ad Cites A Study That Does Not Model Actual Democratic Proposals
To support the claim that Gallego is “targeting jobs,” the ad also cites the Washington Post on July 17, 2012, likely referring to this story about an Ernst & Young study commissioned by business associations.
Washington Post: Study Found Letting Taxes Go Up On To Earners Could Hurt Jobs. From theWashington Post: “Should Congress allow the tax rates for the nation’s highest earners to expire at the end of the year, millions of small businesses could be forced to cut jobs and wages, placing an enormous strain on the already sluggish economic recovery, according to a new study. […] Commissioned by a host of pro-business advocacy groups, Ernst & Young conducted this latest study in an effort to predict the long-term economic impact of letting the top rates increase at year’s end — and the findings stand in stark contrast to the repeated assurances from Democrats that their proposal would have minimal effect on small business owners.” [Washington Post, 7/17/12]
Ernst & Young Study Didn’t Address President’s Proposals. According to economist Jared Bernstein: “First off, E&Y quite conspicuously fail to simulate what it is the President is proposing, so their main findings shouldn’t be considered in evaluating his proposals. Second, when they get a little closer to what he is proposing, they find it adds jobs.” [JaredBernsteinBlog.com, 8/14/12]
Ernst & Young Study Assumes Revenue From Ending Tax Cuts Will Pay For More Spending, But Obama Proposed To Use It For Deficit Reduction. From an analysis by the National Economic Council’s Jason Furman via the White House: “The President has proposed to let the high-income tax cuts expire and use the resulting $1 trillion in savings (over 10 years) as part of a balanced plan to reduce deficits and debt and put the nation on a sustainable fiscal course that includes $2.50 of spending cuts for every $1.00 of revenue. But rather than modeling the President’s proposal to reduce the deficit, the headline numbers in the study explicitly assume that the revenue would be used entirely to finance additional spending. In fact, the study explicitly states, ‘Using the additional revenue to reduce the deficit is not modeled.’” [WhiteHouse.gov, 7/17/12, underlining original]
When The Study Models Ending Top-Tier Tax Cuts While Giving Middle Class Cuts, It Projects An Employment Increase. According to economist Jared Bernstein: “But for all of that, they actually find that when they model something that’s closer to what the President is proposing — getting rid of the Bush tax cuts for high-income families, while providing additional tax cuts to the middle-class — employment grows by 0.4%, or almost 600,000 jobs. When they simulate the wrong scenario of new tax revenues used to support higher spending (column 1, table 2), they estimate that employment would fall by 0.5%. But if the revenue was used to finance across-the-board tax cuts, employment grows.” [JaredBernsteinBlog.com, 8/14/12]
[NARRATOR:] Radical environmentalists have spent nearly $1 million to help Pete Gallego advance their job-killing agenda. An agenda that could cost Texans almost 200,000 energy jobs and stop up to $40 billion from coming into our economy. Pete Gallego already shot down tax cuts, voting for higher taxes and fees. Now he’s targeting jobs. November 6th, let’s make sure Pete Gallego is the one hunting for a job. Congressional Leadership Fund is responsible for the content of this advertising. [Congressional Leadership Fund via YouTube.com, 10/30/12]