It will be no surprise to readers of this missive that I think ObamaCare is an unmitigated disaster. But, even if you think it was a good thing, the problems surrounding its implementation have injected even more government-created uncertainty into a major element of the economy. Uncertainty retards growth because it freezes capital, labor and decision makers. The uncertainty here is not just a result of the pending Supreme Court decision. It began long before that as it quickly became apparent that major elements of ObamaCare just don't work. Even the White House has admitted this. Even more problematic, the provisions that the White House has already agreed not to implement have now put other parts of the law in question as these parts were dependent on those withdrawn.

There was universal agreement that our health care system needed reform before the passage of ObamaCare. It is pretty clear now that the system today is worse as a result, not better.

But, when we say that we need reform in health care, it isn't that we have bad care as a society. Arguably, we have the best medical care in the world. People stream here from countries across the globe to access the best American doctors and procedures. And, our problem is not access either. We often hear talking heads call for "universal care". I would argue that we have universal care already. No one is turned away from an emergency room. Sick people are not roaming the streets without access to doctors. Now, that doesn't mean that everyone has equal care. That will never happen because doctors are human beings and they are different and hospitals will be different and so forth. But, we do already have universal care. Our problem is that we are paying for it in an inefficient and inequitable manner. Therein lies the challenge.

In this "Fix It" series, I have endeavored to provide you with solutions that I think can attract bipartisan support. Health Care may be the area where this is the most difficult. That is because ObamaCare is directionally opposite from where I, and all Republicans, think the solution should go. ObamaCare moves more control and decision making to the government and your employer. I believe that we should be doing precisely the reverse. We should be freeing individuals from dependency on either their employment or a government bureaucrat for their health care. You should own your policy and it shouldn’t depend on what job you have or if that job changes. Pre-existing conditions should not affect your ability to change health care providers. Not because of some government mandate, but because we all should pay into a pool to cover ourselves in the event we fall into that category some day. A premium support program (just as exists and works in Medicare Part D today) can provide increasing support for those who can't afford the coverage or are enrolled in Medicare. And, if you don't like your coverage, you should be able to easily change it. And, if you want to have a bigger deductible and pay less, you should be able to do that, too. And, if you think your provider doesn't cover everything you want covered, you should be able to switch and determine if the benefit is worth any additional cost.

That's the way human economics works. It works for something as essential as food. It can work for health care, too.

In this short piece, I can obviously not do an exhaustive explanation of this very complex subject. But, I think you get the point. Finding a bipartisan solution here will not be easy. But, fixing the way we pay for health care can free businesses to hire more workers without fear of unknown, future health care liabilities. It can free health care professionals to go back to actually providing care, instead of managing through a labyrinth of confusing and changing regulations. We can get billions of dollars of unnecessary costs and procedures out of the system. And, we can save federal dollars in support programs as well.

It will never be perfect, but we can be much closer than we are.

I'm going to call my doctor now because I feel better already!

By Rep. John Campbell and Rep. Loretta Sanchez

Monday morning, a 3.9 magnitude earthquake rattled Orange County. While it was a shallow earthquake and no damages were reported, it served as a sobering reminder of the need to be prepared for a big earthquake.

As Californians, we know that few natural disasters are as unpredictable or as destructive as an earthquake. In our state, they are a common occurrence, though most are so small they are not felt. However, we face a very real possibility that California will someday be hit by a major earthquake equal in power to that which struck off the coast of Japan last year.

Because of the San Andreas Fault, the West Coast will experience extraordinary damage when the next major earthquake occurs. Therefore, it is absolutely crucial that Californians are prepared to deal with this emergency situation – both from a safety and a financial standpoint. Though the impact of earthquakes is beyond our control, we do have full control over our own preparations for them.

California will be best-prepared financially for a major earthquake when the majority of its property owners have affordable earthquake insurance. This will ensure that Californians receive fair compensation for damages incurred the next time a disaster strikes without the need for federal emergency funds. To this end, we have joined together to introduce H.R. 3125, the Earthquake Insurance Affordability Act, which aims to make earthquake insurance more affordable. We are joined in this effort by a number of California Republican and Democratic Members in both the House and Senate.

Our bill would lower premiums on new and existing policies by as much as 20 percent. This would mean that more Californians would be able to afford the insurance they need, thereby expanding the number of California homes that would be protected in the event of an earthquake. It's good news for all of us as 90 percent of homes in the state are currently completely unprotected from earthquake emergencies.

However, our bill not only protects homeowners, it protects the taxpayer. The legislation gives the secretary of the Treasury the power and authority to facilitate qualifying state programs in accessing global investors for the purpose of securing private capital to pay for losses. In California, this state program is the California Earthquake Authority, a financially separate entity from the state, which is charged with providing Californians with earthquake insurance. However, given the potential cost of recovering from a catastrophic earthquake in California, the price of earthquake insurance is currently astronomical. Our bill would help put earthquake insurance within the reach of many more Californians while reducing our reliance on FEMA and other government programs that are often inadequate, inefficient, or both.

A major earthquake will hit Southern California. We need to prepare now for the recovery. In a time of growing concern over the national debt, we should proactively address this issue to protect you, other taxpayers, and California's fragile economy. To be very clear, this legislation would protect the American taxpayer against future federal bailouts, allowing private investors to fulfill a role traditionally played by the government. State based programs like CEA have robust financials and a strong ability to repay debt, and they would benefit California consumers by saving them over $1 billion dollars over five years.

Although April is California Earthquake Preparedness Month, California families should be prepared for a catastrophic earthquake 365 days of the year. Please empower yourself by taking steps to prepare and protect you and your family from the next big quake. For more information on how you can be best prepared, please visit the website of California's Emergency Management Agency at http://www.calema.ca.gov. We would also encourage you to contact your representative and express your support for the Earthquake Insurance Affordability Act. By making earthquake insurance affordable, the costly cleanup that would ensue following an earthquake can be mitigated.

Warning that the Ex-Im Bank could run out of lending capacity to finance U.S. exports within weeks, the group said in a letter to House Speaker John Boehner (R., Ohio) and House Majority Leader Eric Cantor (R., Va.) that delaying the renewal of the bank's charter could cause significant damage to exports and jobs in the country.
"As conservatives, we believe it is imperative that Congress move forward with a multi-year reauthorization of Ex-Im that provides certainty and stability for U.S. manufacturers and exporters as soon as possible," they said in the letter.

Given that the conservative wing of the Republican party has presented the greatest opposition to reauthorizing the agency with a higher lending cap, the letter presents the clearest signal yet that a deal is near.

"I think a multi-year deal is imminent," Christopher Wenk, senior director of international policy at the Chamber of Commerce, told Dow Jones Newswires.
"I think this letter goes to demonstrate that there are conservatives in the House that support Ex-Im Bank," said Wenk.

Cantor has been working with his Democratic counterpart Minority Whip Steny Hoyer (D., Md.) to narrow differences between the parties on reauthorizing the agency in the House, though there is more bipartisan support in the Senate for a multi-year deal.

Hoyer has been pushing for a four-year renewal of the bank's mandate with an increase in its current $100 billion cap to $140 billion during that period--in line with what the Ex-Im Bank has sought and with what has been proposed in the Senate.

Cantor originally proposed a draft bill that would have only increased its lending cap to $113 billion and renewed its mandate through next June. That legislation would also include a raft of requirements aimed at increasing transparency at the bank. Most contentiously it would have instructed the administration to initiate negotiations with major foreign trading partners aimed at ultimately winding down the existence of government assistance to the flows of exports.

Several authors of the letter, including Blaine Luetkemeyer (R., Mo.) and John Campbell (R., Calif.), are members of the Republican Study Committee, which has supported Cantor's position.

In the letter, they argued that there should be no need to provide export-financing "in a perfect world," but said competitors have been using uncertainty about the Ex-Im bank to their advantage.

"It seems counterproductive to unilaterally disengage," they said, while supporting efforts to increase transparency at the agency.

And the clear “winner” was the Sec. 41 research and development (R&D) tax credit, favored by many Republican and Democratic lawmakers alike. Rep. Erik Paulsen, R-Minn., was one of several lawmakers who noted that the R&D credit has been allowed to expire 14 times and should be made permanent. He also called for changes to the credit, stating that “the IRS makes it difficult to comply with.”  Rep. Kevin Brady, R-Texas, echoed his support, mentioning that his bill (H.R. 942) would increase the amount of the alternative simplified credit from 14% to 20% of qualified expenditures.

In December 2010, Congress extended various expired and expiring tax provisions through Dec. 31, 2012. Most of these provisions had expired at the end of 2009 and were among temporary provisions that have typically been extended numerous times over recent years as part of the annual package of “tax extenders.”

Only members of Congress who had sponsored legislation to repeal, extend, or make permanent one of the extenders could testify at Thursday’s hearing.  “For too long,” subcommittee chairman Pat Tiberi, R-Ohio, remarked, “Congress has rubber stamped the extender package” without examining their effectiveness. The ones that are worthy should be made permanent, he said, noting that it may not happen until comprehensive tax reform occurs.

What was striking about the hearing was not the arguments for why certain tax credits or deductions should endure (certainty for taxpayers, job creation, and energy conservation ranked high as reasons) but rather the frequent comments from both sides of the aisle praising the same items in a body known for its partisanship. Even Tiberi noted one unusual pairing: “Let the record show that Rep. Richard Neal [D-Mass.] and Steve King [R-Iowa] agree.”

Extension of the subpart F active financing income exception (Secs. 953(e) and 954(h)) has key backing as well. Chairman Tiberi called it one of the most important expired provisions, and Neal, ranking Democrat on the subcommittee, echoed his support.

Other extenders that were extolled by lawmakers include:
• New markets tax credit—created to encourage investment in economically distressed areas and supported by Reps. Neal and Charles W. Boustany Jr., R-La., chairman of the Oversight subcommittee.

• Leasehold depreciation—15-year straight-line cost recovery for qualified leasehold improvements, restaurant buildings and improvements, and retail improvements (Sec. 168(e)(3)(E)). This was also supported by Neal and Boustany, who criticized the 39-year timeline that would return for restaurants if the 15-year depreciation period is allowed to expire as “nowhere near reality.”

• Deductibility of state and local sales taxes on Schedule A (Sec. 164(b))—described by Brady as “middle-class relief in a big way.” The Joint Committee on Taxation recently estimated that in 2012, taxpayers will claim approximately $291.5 billion of these taxes on federal returns.

• Transit subsidy—the maximum amount an employee can exclude from income for employer-provided transit passes and transportation in a commuter highway vehicle for 2012 is $125 per month, down from $230 per month in 2011 (Sec. 132(f)). “At a time of high gas prices, it makes no sense to penalize commuters,” said Rep. James McGovern, D-Mass., sponsor of a bill (H.R. 2412) to provide parity between public and private transit commuters.

• Mutual fund flowthrough—Rep. John Campbell, R-Calif., cosponsor of H.R. 4623, told the committee that the benefit does not change investors’ tax liability, just the timing of the payment.

• Energy production—support for which tax break should stay varied among members according to energy source. Rep. Brian Bilbray, R-Calif., argued forcefully for nuclear energy. “Natural gas should be the last choice” he said, while others called for wind, biomass, or natural gas incentives.

Between 2010 and 2011, the average Taxpayer Score in the House rose from 42 percent to 50 percent, the first time the House mean has managed to reach the halfway mark since 1996. The Senate's average inched up from 45 percent to 46 percent. The Taxpayer Score reflects a lawmaker's commitment to reducing or controlling federal spending, taxes, debt, and regulation.

In the latest NTU Rating, 53 lawmakers attained scores sufficient for an "A" grade (a minimum score of 85 percent in the House and 90 percent the Senate) and therefore won the "Taxpayers' Friend Award" - representing a decline from the 79 who achieved the honor in 2010. Over 200 Senators and Representatives were tagged with the title of "Big Spender" for posting "F" grades (20 percent or less in the House and 19 percent or less in the Senate), somewhat lower than in recent years.

The best performance in the House belonged to Representative John Duncan, Jr. (R-TN), with a 93 percent. Close behind with rounded scores of 92 percent were Ed Royce (R-CA), Ron Paul (R-TX), and John Campbell (R-CA). In the Senate, Tom Coburn (R-OK), earned the number one prize with a 96 percent score, followed by Ron Johnson (R-WI) with a 95 percent.

Representative Andre Carson (D-IN) had the worst House score, roughly 6 percent. Dale Kildee (D-MI) also came in at about 6 percent. Among Senators, Sherrod Brown (D-OH) had the rock-bottom score at 6 percent, while both Bob Casey (D-PA) and Debbie Stabenow (D-MI) had fractionally higher scores that still rounded to 6 percent.

Between 2010 and 2011 average Taxpayer Scores for Republicans fell by 10 points in both chambers. Democratic averages rose by 1 percentage point in the Senate and 5 points in the House.

"National Taxpayers Union's 2011 Rating shows a Congress making some progress toward the limited, affordable government taxpayers deserve while still having a long way to go," said NTU President Duane Parde. "For every single Taxpayers' Friend who bravely sought to conquer Washington's mound of fiscal woes, four Big Spenders worked to make the pile of problems even more difficult to climb."

NTU is a nonprofit, nonpartisan citizen group founded in 1969 to work for limited government. Note: The 2011 Rating and a searchable Rating database dating back to 1992 are available at www.ntu.org .

SOURCE National Taxpayers Union

Energy: The "fix" for our energy problems is actually one of the simpler ones. And, the reason it is simple is not because of any action of Congress or the President. It is not even because of our founding fathers. It comes from God.

This country is blessed with enormous natural resources. We have more coal than any other country on earth. We can make electricity from coal. We also have enough natural gas, by some estimates, to last us for a century. We make electricity from natural gas. We have a number of nuclear plants that generate electricity and we can build more. And, we have rivers to create hydroelectric power which can be harnessed to create more power should we need it. I have just described four sources that currently create more than 90% of all the electricity in this country. And, we can expand them all if we want or need to without importing anything from any other country.

But, you say, you haven't mentioned anything about our primary transportation fuel: oil. Currently, we import about half of all the oil used in the United States. But, we don't have to.

Last year, the National Petroleum Council (NPC) released a study showing that there are now enough proven oil reserves in the U.S., Canada and Mexico to meet all the projected oil use in those 3 countries for the next 30 years, at least. That means we can use all the oil we need without importing a drop from Saudi Arabia, Russia or anyplace else outside of North America. Now, some of you will assume that NPC is some front organization for evil oil companies. Sorry. It was formed by the U.S. Department of Energy to keep the Energy Secretary informed about petroleum reserves in the country and its membership includes several environmental groups. And, NPC is not the only organization reaching this conclusion.

Back in the 1920s, as more and more cars were being built, President Calvin Coolidge wrestled with the predictions that the world would run out of oil in 1935. But, technological improvements found more and more oil. My father was a petroleum geologist working in Kern County, California in those days, and he used the latest innovations of the time to find that oil. This same scenario is playing out again. New technologies have developed new ways to economically extract oil that previously either could not be found or could not be extracted. We have new proven reserves in the Dakotas, in Pennsylvania, West Virginia and many other states, including even California and New York. We have the ability as a country to be completely energy independent. This is a tremendous national asset. The Germans can't do this. The Japanese can't. Even the Chinese can't. We are the only country on earth that has energy resources that we are choosing not to use, opting to import that energy instead. Why?

Unfortunately, various groups with political influence use "environmental" reasons to block U.S. energy development. But, the "environmental" arguments are just a smoke screen for people who are against any growth in human activity at all. I can refute every supposed environmental argument to the development of our own U.S. energy resources, but it would take the next 4 episodes of this epistle to do so. Suffice it to say, for example, that developing all the available oil in Alaska would impact only the land equivalent to a postage stamp on a football field. Slant drilling will enable the extraction of much of our offshore oil without ever penetrating the ocean floor. And even if this were not the case, is it better to buy the oil from foreign countries whose environmental regulations contain none of the protections that ours do?

But, let's assume that I am wrong and that there are environmental impacts. Those must be weighed against the benefits of developing our own oil. Let's assess what those benefits are: (1) Jobs - The states with the lowest unemployment in the country today are generally the energy producing states like Oklahoma and Texas. We can have a lot more of those. And, the jobs produced are good paying jobs and often union jobs. (2) Trade Deficit - We can vastly reduce the trade deficit if we don't have to import so much oil. (3) Security - Some of you probably believe that we entered the Persian Gulf War to protect Kuwait as a source of oil. If we didn't have to import oil from there, (or other non-North American countries), our foreign policy towards such countries could be completely different. And, I think it is unlikely we will be attacking Canada any time soon. (4) Price - There is a world price of oil. But, we can have a great deal more control over what we pay at the pump if we are domestically sourcing our own oil. So, what are we giving up in exchange for the weak environmental arguments? Jobs, lower deficits, security and lower prices against.......no real argument at all.

So, you ask, where is the bipartisanship here? When we have voted to complete the Keystone pipeline, nearly one third of Democrats in the House joined every Republican in support, in spite of heavy, heavy pressure from the White House on Democrats to oppose. Without that pressure, an overwhelming majority of both the House and the Senate will support an initiative to develop all of our domestic energy. Unfortunately, President Obama has become a captive of a small, fringe element of his support base that opposes all growth. That is not where most Democrats are. That is not where most people are. No other country on earth has the ability to be energy independent and chooses to import it instead.

You may also ask why I have not talked about the oft-discussed wind and solar options. I have nothing against wind and solar. But, they can never be anything but supplemental for any number of reasons because the wind does not always blow and the sun does not always shine. Solar might be more effective in the future if there is a breakthrough technology. But, the interests promoting wind and solar are doing so precisely because they know that reliance on these sources will make energy scarce and expensive. In the end, that is what they want because it will stifle growth. I think about this when I drive past the windmill farms near Palm Springs. How can that huge blight on an otherwise beautiful desert landscape that produces so little energy can be considered environmentally sound? With much less environmental impact, for less money and without potentially killing birds, we can produce so much more energy in so many other ways. I think wind is one of our least environmentally-friendly energy sources.

As far as I am concerned, this discussion is not about using more oil or burning more gas. The car I drive most of the time in California is an electric car (more about that and electric cars in general in a future laptop). We have a number of energy choices to power our future and we should let technology and the market decide which energy source is best. But whatever that source is, we can make it here. We don't have to import it from outside our continent or be dependent on some unstable or unfriendly government to get it. And, we can add a lot of jobs, economic growth and, yes, tax revenue along the way. This is truly a no-brainer element of fixing the American economy.

Random Thought of the Day: Last week, we voted on several alternative budgets to the Paul Ryan budget, which was the budget we ultimately passed. One of them was President Obama's budget. The President's budget failed by a vote of 0 - 414. You read that correctly. Not one member of the House of Representatives, Republican or Democrat, could bring themselves to vote for the Obama budget. Is that some indication of just how bad the Obama budget is? Just as this vote was finished up on the House floor, I heard another congressman quip, "Well, Obama said he was going to bring us all together and unite us. And, he has finally done that!"

Until Episode IV, have a Happy Easter and Blessed Passover.

The House approved its bill, H.R. 4281, in a 266-158 vote that saw 37 Democrats join all but 10 Republicans in passing it — a fair amount of bipartisanship given the bitter debate heard in the House throughout much of the week.

Because the House plans to leave for recess at the end of Thursday, the Republican bill was daring Senate Democrats to reject the bill just days before federal authorization expires.The Senate however passed the measure, accepting a short-term solution leaders in the upper chamber vehemently opposed.

The measure, H.R 4281, now goes to President Obama. It extends the current funding for road and transit projects until June 30, the ninth-such continuance of the last multi-year highway authorization that was approved by Congress, which expired in 2009.

The approval of the highway funding stopgap averts an interruption in the federal government's authorization to collect the 18.4 cent-per-gallon gas tax, which had been set to expire Saturday. The money is traditionally used to fund transportation projects.

Even as they were approving the measure in an anti-climatic voice vote, Democrats sharply criticized Republicans for not accepting a two-year, $109 billion version of the transportation measure the Senate had approved on a bipartisan vote earlier this month.

"If the House had a bill, this would be a negotiation between two bills," Sen. Mary Landrieu (D-La.) said during debate on the temporary extension on the Senate floor.

"The problem is they don't have a bill," Landrieu continued. "They have ideas, they have speeches, they have platforms, but they don't have a bill. We couldn't negotiate with them even if we wanted to."

But House Republicans knew they were putting intense pressure on the Senate to find some way to ensure federal highway funding continues after Saturday, one that would also allow it to save face in light of the House decision to send its temporary fix over at the last minute.

This dynamic, in which the House is once again pushing its solution at the Senate, had Democrats enraged during Thursday's debate on the bill. Rep. Peter DeFazio (D-Ore.) earlier in the week said of some Republicans that they must "hate America," and on Thursday, he said some Republicans are "bozos" for apparently wanting to reject the idea of a national transportation program altogether.

"We're going to lose half of the proposed projects this construction season around America, tens of thousands of jobs, needed investment, because they got a bunch of bozos in their caucus that don't believe we should have a national transportation system," he said.

At another point, Rep. George Miller (D-Calif.) went on a rant for a full minute beyond his allotted speaking time, forcing presiding officer Rep. Charlie Bass (R-N.H.) to announce that he was no longer recognized.

"This kind of cold-blooded political calculation, to use the jobs of American working people as political cannon fodder for your agenda to defeat the Obama administration, is outrageous," Miller said as Bass started to bang the gavel. "It should be rejected by your party, it should be rejected by my party."

House Minority Leader Nancy Pelosi (D-Calif.) also criticized the short-term extension as one that would continue to throw uncertainty into the jobs of thousands of Americans, a point many other Democrats were making. Pelosi also noted that the House Republican budget resolution, up later on Thursday, would cut transportation funding in future years.

"In the budget that they're going to be voting on today, they have cut transportation funding in half, from $90 billion to $46 billion," she said. "That's $44 billion worth of jobs, promotion of commerce, improving the quality of life of the American people, building the infrastructure of America."

As they have all week, Republicans painted Democrats as members who were hyperventilating over an extension of federal highway programs, similar to the six extensions they approved when they ran the House and Senate.

"There appears to be on the other side a mass case of a loss of memory," House Transportation and Infrastructure Committee Chairman John Mica (R-Fla.) said near the end of the debate.

Mica also defended the original House proposal to authorize federal programs for five years, and said House Republicans would continue to push for a bill that does not include the thousands of earmarks contained in past bills.

"The … era of the biggest gorilla walking off with the most bananas is over," Mica said.

Senate Majority Leader Harry Reid (D-Nev.) admitted that the extension was not the outcome he and other leaders in the Democratically controlled upper chamber had sought.

"This has been a difficult time for everyone," Reid said from the floor shortly after the Senate had approved the House's transportation measure. "What we have is what none of us wanted."

Reid said he hoped that Republicans in the House would reconsider their opposition to the Senate's version of the transportation bill after the two-week recess lawmakers are scheduled to begin next week.

House Republicans voting against the 90-day extension were Reps. Justin Amash (Mich.), John Campbell (Calif.), Robert Dold (Ill.), Jeff Flake (Ariz.), John Fleming (La.), Jim Jordan (Ohio), Tom McClintock (Calif.), Jean Schmidt (Ohio), David Schweikert (Ill.) and James Sensenbrenner (Wis.).

Rep. Scott Garrett, R-N.J., the chairman of the House Subcommittee on Capital Markets and Government Sponsored Enterprises, opened the hearing by stating his concern that the PCAOB was overstepping its mandate by considering the issue of mandatory audit rotation.

Other subcommittee members asked whether the PCAOB has done a cost-benefit analysis on auditor rotation, and whether it plans to conduct one before issuing a standard. Regulators and business leaders —including AICPA President and CEO Barry Melancon—were among the witnesses who testified.

Doty addressed the day’s most pressing issue by replying that the PCAOB merely has issued a concept release related to auditor independence, professional skepticism, and objectivity, and that mandatory auditor rotation was a topic that stakeholders were asked to consider.

“It would be putting the cart before the horse to start evaluating the costs and benefits of some form of rotation before you have the sense of whether you’re going to go there and what [the format] would be,” said Doty, whose board listened to two days of testimony last week from firms, business leaders, academics, and former regulators on the skepticism and objectivity issue.

Wednesday’s subcommittee meeting was titled “Accounting and Auditing Oversight: Pending Proposals and Emerging Issues Confronting Regulators, Standard Setters and the Economy.” Mandatory audit rotation wasn’t the only issue discussed.

Witnesses had the opportunity to discuss recent rules, proposals, and guidance related to accounting and auditing as well as Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, provisions that apply to accounting and auditing.

Speakers also had a chance to comment on a House bill (H.R. 3503) that would amend the Sarbanes-Oxley Act of 2002 (SOX) to make PCAOB disciplinary proceedings public. But audit rotation—and a legislative proposal by Rep. Michael Fitzpatrick, R-Pa., that would prohibit the PCAOB from mandating firm rotation —was the most prominent issue.

Four regulators—Doty, SEC Chief Accountant James Kroeker; FASB Chairman Leslie Seidman; and GASB Chairman Robert Attmore—spoke first at the hearing. They were followed by a group that included Melancon; University of Tennessee professor Joseph Carcello; Xerox Vice President and Chief Accounting Officer Gary Kabureck, who spoke on behalf of Financial Executives International; and Tom Quaadman, U.S. Chamber of Commerce Center for Capital Markets Competitiveness vice president.
Fitzpatrick, explaining the reason for his proposal, warned during the hearing against adding to regulations that could unnecessarily burden businesses.

“Our economy is in the slowest economic recovery since World War II,” Fitzpatrick said. “And what the American people need is for the economy to grow in the private sector and create jobs. What the people do not need is their own government getting in the way of that economic recovery and private sector job creation.”

Quaadman, whose organization is emerging as an adversary to the PCAOB on the issue, labeled the PCAOB’s consideration of rotation “mission creep.” Last week Doty sparred with Quaadman’s colleague, David Hirschmann, at the PCAOB hearings exploring the issue of audit rotation. Doty took exception to the Center for Capital Markets Competitiveness’ assertion that the PCAOB was going beyond its mandate.

But Carcello, a member of PCAOB’s Investor Advisory Group, defended the PCAOB’s consideration of the issue. He said mandatory rotation should be considered because the PCAOB continues to identify a significant number of audit deficiencies that are often related to inadequate professional skepticism.

“Exploring this issue is not only appropriate, it’s the very mission of the PCAOB,” Carcello said.

Melancon discussed the costs of mandatory audit firm rotation. He said the profession is committed to strengthening auditor independence and skepticism, and referenced SOX in saying there are other solutions.

“Sarbanes-Oxley delegated responsibility for overseeing the hiring and firing of the external auditor to independent audit committees,” Melancon said. “We believe in the audit committee’s authority and support efforts to strengthen its role, not undermine it.”

The subcommittee explored other issues, too. Kroeker discussed the SEC’s consideration of whether to adopt IFRS for U.S. public companies; Rep. John Campbell, R-Calif., spoke in favor of the more principles-based approach that would create, but wondered if moving away from a rules-based approach would lead to more litigation in the United States.

Panelists also debated the PCAOB’s request of Congress to make disciplinary procedures public. Proponents say keeping them private leads to lengthy litigation by firms with no reason to settle, but opponents say publicizing unproven charges can wrongly damage the reputation of a firm or auditor.

Doty also discussed the PCAOB’s projects on creating a new auditor’s reporting model and enhancing communication between auditors and audit committees. And regarding audit rotation, Doty made the point that other jurisdictions worldwide are proposing rotation. The European Commission in November proposed limiting engagements to six years, with some exception, for public companies.

“The question is whether there are sufficient safeguards to objectivity, skepticism, and independence,” Doty said. “One of the things you have to look at is the fact that in some cases, a company has had the same auditor for a century.”

That means we are debating the budget for the upcoming fiscal year. There are proposals and amendments and such.

Below, I've included a 5 minute video clip of a response I gave to another (sigh) proposal to "tax the rich more". I received a number of accolades on this speech, including many from Democrats. I hope you enjoy it.

By the way, the amendment was defeated.

Click to Watch Video

CAMPBELL: Biggest National Security Threat is Debt

Conservatives should not oppose attempts to makes cuts to defense, homeland security.

By Congressman John Campbell

As conservatives, we are always trying to reduce federal spending because there is a lot of waste and inefficiency in government, because more government spending often does not result in better outcomes, and because there are many things the federal government simply should leave to "the States respectively or to the people," as the 10th Amendment instructs.

Clearly, spending for the "common defense," enumerated in the preamble to the Constitution, is one of the unassailed responsibilities of the federal government. No argument there.

But, why is it conservative orthodoxy to assume that defense spending is immune from waste and inefficiency or that more spending in this area alone is always better? It shouldn't be. It is inconsistent and wrong. Defense spending should be subject to scrutiny for cuts just like any other type of federal expenditure.

For example, there are now 800,000 civilian Defense Department employees – 800,000 people not in uniform or carrying a weapon. And, that doesn't include employees of defense contractors. That number is not available because we don't audit the Pentagon, which is another issue.

Some people estimate that the contractors employ a similarly large number of employees entirely through our defense spending. If that's true, then the civilians working in some way for the Defense Department would outnumber the 1.4 million uniformed members of the Armed Services.

That makes no sense. That is a huge bureaucracy that military personnel tell me does more to get in the way of their duties than help.

Many defense-spending hawks will point out that our Navy now has the smallest number of ships since 1914. OK. What relevance does this have? At the outbreak of World War I, potential European foes had large navies that represented a legitimate threat. Today, we have 10 supercarriers. That is over three times more than the rest of the world combined, including our allies! And, the three foreign fleet carriers are refurbished versions of decades-old ships.

Instead of recapitalizing our existing fleet of Humvees at a much lower cost, we are spending billions developing a new Joint Light Tactical Vehicle with slightly upgraded mission capabilities.

Some people say we need a new strategic bomber to replace our aging B-52s without considering the reduced credibility of the deterrent threat of long-range bombers in an age of missiles and drones.

In no way do I want to reduce the capabilities of the Armed Services to fight existing threats or cut uniformed military pay or benefits. But, throwing more money and equipment at weaponry or strategies to counteract threats that no longer exist makes no sense.

Furthermore, we face another threat, which is much more likely to cause serious damage to U.S. prosperity, hegemony and security than any foreign army. That threat is our huge national debt. Throughout history, great nations have fallen economically before they have been conquered militarily. The most recent example is the Soviet Union, largely brought down by economic, rather than military, failure.

We must get these debts and deficits under control or they will bring us down more quickly and conclusively than anything else.

We can defend the country for less. We can reduce spending and waste without reducing capability to counter threats. And, we must do so. Not only because no element of the budget should be immune to cuts when you are spending 30 percent more than you are taking in. But, also because it is hard to argue that there is waste and cuts to be made in social programs, but zero waste in defense or homeland security.

More spending does not necessarily yield better results.