By Arjun Rondla, TAB intern We often hear about what Texas is doing to remain the nation’s most competitive state. But what can the federal government do for Texans and Texas businesses?
Texans are feeling rising prices everywhere from the grocery store to the auto dealership, while the country experiences the highest inflation in decades. Supply chain problems, an easy monetary policy and unprecedented government spending have all contributed to the current surge in inflation. In the midst of all of this, Congressional leadership and the Administration for the $4 trillion Build Back Better Act. The “everything but the kitchen sink,” social spending bill, which included tax hikes for businesses. To the relief of the business community, the bill died before the Christmas deadline. We all owe gratitude to U.S. Senator Joe Manchin for holding firm. It would have hurt wages, cost as many as 1 million jobs, damage U.S. competitiveness (especially for energy and manufacturing sectors) – and fuel inflation. TAB has advocated against this bill and will continue pushing back against any revived version of it. There is no fixing a fatally flawed bill.
Trade with Mexico
Despite Covid-19, Mexico remains Texas and America’s largest trade partner. According to the Texas Economic Development and Tourism Office, trade supports nearly one million jobs across Texas, with nearly 40,000 exporters across the state. The USMCA and November reopening of the U.S.-Mexico border, both of which TAB strongly supported, have been boons for the cross-border trade relationship; however, investments are needed in port infrastructure and security south of the border. Deteriorating security conditions in Michoacán are currently under a spotlight after a U.S. customs inspector was threatened. TAB supports sensible border policies that ensure public safety while alleviating congestion.
Infrastructure Texas is expected to receive upwards of $35 billion in investments from the bipartisan infrastructure bill passed last year, according to the White House. Included are nearly $1.2 billion for Texas airports, $27 billion through federal-aid highway apportioned programs and additional investments in internet access, ports, water infrastructure and protection against cyberattacks. TAB advocates at the state and federal level to ensure Texas has the infrastructure (water, broadband, roads, ports, etc.) to support current and future employers. The bottom line is that states need maximum flexibility in how they spend infrastructure dollars.
Energy Since entering office, the Biden Administration has introduced several new policies restricting American energy producers. Most notably, the Administration has banned new oil and gas production leases on federal land and offshore waters. About 24 percent of American oil and gas production takes place on federal property, with the bulk taking place in the Gulf of Mexico. Additionally, the federal government continues to debate tax increases and unworkable environmental regulations that could put Texas at a global disadvantage, at a time when Americans are on track to paying $5/gallon at the pump. We are the no. 1 state for energy, and while Texas is known for oil, we are also leading on natural gas, wind, solar. Texas also leads the way in energy innovation. Technologies such as carbon capture will be here in the future, in part because they are being pioneered right here in Texas.
With global energy prices rising, Texas producers who would otherwise be producing more aren’t due to the threat of higher taxes and a growing list of regulations. The Texas model has been successful because we know that in order to ensure reliable energy, regulations must be both workable and environmentally sensible. As the energy capital of the world, it’s important that Texas always has a seat at the table.
Preventing the SEC from stifling American innovators
American innovators dominate not only because of our spirit, but because they are able to access the capital that allows them to bring their ideas to fruition. Over 300 American firms reached valuations above $1 billion last year – a more than five-fold increase from years before.
Texas increasingly is the destination of choice for these innovative companies.
SEC Chair Gary Gensler has indicated that he wants to see markets and investments more heavily regulated with dozens of new major regulations this year. Gensler’s SEC may increase reporting requirements, heavily regulate cryptocurrencies, introduce onerous auditing rules, among other new regulations.
Introducing a slew of new regulations at an unprecedented rate will cause long-term damage to our economy and global competitiveness. Success and growth are not indicative of a problem. There’s no need to fix what isn’t broken!