Posts Tagged crisis

Governor Wolf PERCs Up

After just one year in office it is clear Pennsylvania Governor Tom Wolf is the most spendthrift governor in the nation.  After all, his proposed and still unresolved 2015-16 state budget called for a tax hike greater than that of all other 49 states combined.  It was a bit startling to see this ultra-big government advocate actually announce he was going to shutter a state agency.

You might think fiscal conservatives would applaud his move to close the Public Employees Retirement Commission (PERC) an obscure state agency that most Pennsylvanians don’t know even exists.  But, any time a politician acts out of character it is a good idea to dig deeper into his or her motives.  Such is the case with Governor Wolf’s proposed elimination of PERC.

According to its website, the Public Employees Retirement Commission is responsible for “monitoring public retirement plans in Pennsylvania, studying the retirement needs of public employees … develop objectives and recommend legislation to the Pennsylvania legislature.”  PERC further administers various mandated reporting on the health of public employee pensions and funnels state funding to municipal pension systems throughout the state.

This trip takes us through the tall weeds of Pennsylvania’s arcane and convoluted public employee pension system, but the bottom line is PERC is responsible for monitoring the health of municipal pension systems and in the process of performing that duty raises a red flag when such plans are headed into financial trouble.  As such it performs an important watchdog function especially at a time when a significant number of municipal pension systems, especially in cities, are under fiscal stress.

In addition to providing independent oversight of municipal pension systems, PERC is required to administer the process of distributing some $250 million annually to municipalities.  According to a news release from State Representatives Stephen Bloom, Seth Grove and Keith Greiner, that amounts to 20% of the contributions that are made annually to municipal pension funds.  The representatives, Republicans all, voiced concern that without those funds many municipalities would be forced to raise property taxes.

Concern over the potential demise of PERC has produced something rare in Harrisburg, bi-partisan agreement.  State Auditor General Eugene DePasquale, a Democrat, said: “If people think there’s a (municipal) pension problem now, wait until municipalities don’t get their (Act 205) payments.”   That DePasquale, who has been one of the more rational voices on fiscal matters would sound such a warning speaks to the seriousness of the issue.

To complicate matters further Governor Wolf plans to shut down PERC without seeking legislative approval.  Using the “pen and phone” approach popularized by President Obama, the governor says the agency is simply going to cease to exist.  Republican lawmakers are crying foul pointing out the governor has no authority to close an agency authorized by an act of the General Assembly.  So not only does Governor Wolf’s plan to sunset PERC put public pension plans at risk and likely trigger municipal tax increases, but it creates a constitutional crisis as well.

Pension reform has been a major component of the ongoing budget battle between Governor Wolf and the Republican-controlled legislature.  Senate Majority Leader Jake Corman, among others, has vowed not to consider any of the governor’s proposed broad-based tax hikes until the state’s pension crisis is resolved.  Why then would Wolf want to complicate matters by tossing PERC under the bus?

Perhaps because Governor Wolf simply refuses to admit there actually is a pension crisis. In his view, pension systems across Penn’s Woods are just fine – all they need is more money.  As a captive of big labor the governor is committed to blocking any and all attempts at pension reform instead favoring throwing billions more in taxpayer dollars into systems at all levels that are simply no longer viable.

While many municipal pension funds, especially those administered by townships, are financially secure, state employee funds and those in larger cities must either be reformed or taxpayers will see historic tax increases.  That Governor Wolf would open a new front in the pension battle by moving to shutter PERC shows not only is he not serious about pension reform, but he will do everything in his power to prevent it from happening.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address

Permission to reprint is granted provided author and affiliation are cited.

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This Week on Lincoln Radio Journal: PA Budget Impasse Update

Radio Program Schedule for the week of August 29, 2015 – September 4, 2015

This week on Lincoln Radio Journal:

  • Eric Boehm has news headlines from
  • David Taylor of the PA Manufacturers Association is joined for a Capitol Watch discussion on the latest developments in the state budget crisis by Neal Lesher from the National Federation of Independent Business-PA and by Nathan Benefield of the Commonwealth Foundation
  • Lowman Henry has a Town Hall Commentary on the rise of Donald Trump

This week on American Radio Journal:

  • Lowman Henry talks with Jim Phillips of the Heritage Foundation about the proposed nuclear deal with Iran
  • Doug Sachtleben of the Club for Growth has the Real Story on style over substance in the presidential campaign
  • Eric Boehm gets details from Jonathan Wood of the Pacific Legal Center on the EPA gone rogue on this week’s Watchdog Radio Report
  • Colin Hanna of Let Freedom Ring, USA has an American Radio Journal commentary on the suddenly competitive race for the Democratic Presidential nomination

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

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Epic Failure in Baltimore

The real victim of the riots in Baltimore is the Left-wing philosophy of cradle-to-grave big government that has inevitably collapsed under the weight of its own faulty theories and inept implementation.  It wasn’t just a drug store that went up in flames; it was generations of nanny state public policy that got incinerated in Lord Baltimore’s burg.

If ever there was a poster child for a progressive Utopia it would be the city of Baltimore.  Nestled by the bay of the most liberal state in the union, Baltimore has been ruled by Democrats of the most Leftist variety for a half century.  As a majority black municipality, Baltimore is governed by an African-American mayor and city council.  The police chief is African-American as are three of the six officers involved in the tragedy that sparked the violence.

There is no way to claim racial under-representation.  Yet mostly young blacks took to the streets out of frustration to protest, and then riot in a desperate bid to be heard. With race not being a factor, the only conclusion that can be reached is that those governing the city, and the policies they champion, have failed.

Let us set aside for now the fact many of the rioters were simply taking advantage of the situation, and that the mayor’s handling of the riots was incompetent.  Rather, we should examine the root causes of the city’s failure, of which there are at least four:

The most significant factor contributing to the crisis is the decline of the family unit.  It is rare in such an instance of societal meltdown for one image to encapsulate the solution to the problem.  The mom who saw her son rioting, went out into the street, literally smacked him upside the head (repeatedly) and then dragged him home represents the ultimate solution.

Young people need somebody who cares; somebody who will be both a mentor and a disciplinarian.  The skyrocketing rate of out-of-wedlock births has deprived many children of a stable two-parent household, and sadly in all too many cases, not even one responsible adult is present.  Policies that foster stronger family ties, rather than seeking to replace the family with government programs are a foundational step that must be taken.

Second, it is time to admit public education in our cities is a failure.  Federal, state and local school district spending on public education has far outpaced the rate of inflation for decades, yet our inner city public schools continue to fail.  Teacher unions and bloated bureaucracies, rather than students have been the prime beneficiaries of this taxpayer largess.  In some cities – Washington, D.C. is a prime example – charter schools have provided students and parents with choices.  But union opposition has kept charter schools from realizing their full potential and trapped students in under-performing schools.

Third, good job opportunities are a must.  The unemployment rate among African-Americans is more than double the national average, worse in urban cores.  Decades of overtaxation and hyper-regulation have driven business and industry out of cities.  As the good jobs have left, so too have the people qualified to hold them; leaving a largely unskilled workforce which serves as an additional disincentive to economic development.

And speaking of disincentives, our system of public welfare must be reformed to encourage recipients to seek the education or training that leads to employment.  Arcane and complex public assistance formulas often create welfare “cliffs” that make it more profitable for recipients to stay on welfare than to enter the work force.

The time has come for a complete reassessment of urban public policy.  Decades of experimenting with government centered solutions have clearly failed.  These progressive policies that trap people in poverty must be tossed out and replaced with a realistic approach based on time-proven principles that will help people move from poverty to prosperity.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is

Permission to reprint is granted provide author and affiliation are cited.

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This Week on Lincoln Radio Journal: Pension Crisis

Radio Program Schedule for the week of July 19, 2014 – July 25, 2014

This week on Lincoln Radio Journal:

  • Eric Boehm has news headlines from
  • David Taylor hosts a Capitol Watch roundtable discussion on what happens next with public sector pension reform with Kevin Shivers of the PA Chapter of the National Federation of Independent Business and with State Representative Steve Bloom (R-Cumberland)
  • Lowman Henry has a Town Hall Commentary on the immigration crisis

This week on American Radio Journal:

  • Lowman Henry talks with Jason Fichtner from the Mercatus Center at George Mason University about the failure of the home mortgage interest deduction to spur middle class home ownership
  • Andy Roth of the Club for Growth has the Real Story on conservative wins in run-off races in Alabama and North Carolina
  • Eric Boehm and Benjamin Yount have a Watchdog Radio Report on the impact of illegal immigration on non-border states
  • Col. Frank Ryan, USMC (Ret.) has an American Radio Journal commentary on trickle-up poverty

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

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Huddled Masses

The flood of illegal immigrants crossing America’s southern border has become a crisis.  Those arriving are not “undocumented” or “refugees,” what is occurring is a blatant disregard for the immigration policies of the United States, however flawed those policies may be.  We are not dealing with immigrants “yearning to breathe free,” rather this is Mexico and the countries of central America dumping their economically dispossessed, gangs and criminals on our doorstep.

This is a humanitarian crisis, with reports of the bodies of small children washing up on the shores of the Rio Grande.  It is a law enforcement crisis as drug cartel “coyotes” transport illegals across the border for money.  It is a political crisis as leaders of both parties have been unable to come together to develop a coherent immigration policy.  It is a foreign policy crisis as Mexico detains one U.S. Marine who accidentally wandered into their territory while sending tens of thousands across our borders and suffering no ill consequence.  It is a constitutional crisis as our president refuses to perform his sworn duties and enforce the immigration laws passed by congress.

The degree of President Obama’s arrogance on this matter was on full display last week as he played pool and drank beer during a visit to Texas rather than tour the border and holding facilities.  Imagine the uproar if President Bush had gone to New Orleans in the aftermath of Hurricane Katrina and instead of delivering a substantial address while standing in front of the St. Louis Cathedral he had gone off for some Beignets at Café du Monde?

Media reports would have us believe that those flooding across the U.S. border with Mexico are small children looking for a better life in the United States. They are often referred to as “dreamers,” an effort to slap lipstick on the immigration crisis pig.  While some are small children, the fact is criminals, drug dealers, and those sick with infectious diseases are also arriving in the current wave.  And how does it benefit those who are small children to separate them from parents and send them into camps filled with miscreants and disease?

The preponderance of the blame for this situation lays with the president and his administration whose refusal to establish effective border security and whose political pronouncements telegraphed an open border policy to Mexico and its southern neighbors.  Administration spokesmen engage in Orwellian double speak, a frequent dialect in this White House, claiming the borders are more secure than ever.  Really?  So the most secure border ever has resulted in a wave of illegal immigrants that have so overwhelmed the system more border control agents are attending to basic human needs than providing security?

Former White House Chief of Staff Rahm Emanuel once said no good crisis should ever go to waste. By that he meant a crisis gives the president the opportunity to take actions he might not otherwise be able to take.  That is why the Obama Administration has allowed the current immigration crisis to occur.  It was predictable and encouraged and designed to help the president achieve his personal political goal of letting tens of thousands of new immigrants – who will become dependent on the government services his party champions, and ultimately voters for future progressive regimes.

Against the backdrop of this harsh reality Republicans and responsible Democrats in congress must act quickly to change current law allowing those who have crossed the border to be sent back immediately.  The current process is unenforceable, unrealistic and partially to blame for triggering the crisis now unfolding.  Then, steps must be taken – including the deployment of troops – to seal off the nation’s southern border.  And finally, congressional leaders must come together to craft a reasonable and enforceable immigration policy going forward.

A nation is not truly a nation if it cannot control its own borders.  The time has come for us to regain control of ours.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is

Permission to reprint is granted provided author and affiliation are cited.

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This Week on Lincoln Radio Journal: Challenges for State Government

Radio Program Schedule for the week of January 5, 2013 – January 11, 2013

This week on American Radio Journal:

  • Lowman Henry talks about poverty in America with Rachel Sheffield from the Devos Center for Religion & Civil Society at the Heritage Foundation
  • Andy Roth of the Club for Growth has the Real Story behind the fiscal cliff deal
  • Adam Tragone of Human Events previews the 2014 U.S. Senate races
  • Colin Hanna of Let Freedom Ring, USA has an American Radio Journal commentary on why resolution of the fiscal cliff dilemma was a deal rather than a solution

This week on Lincoln Radio Journal:

  • Kevin Shivers from the PA Chapter of the National Federation of Independent Business hosts a Capitol Watch look at the major issues confronting state government in 2013 with Matthew Brouillette of the Commonwealth Foundation and Eric Boehm from
  • Lowman Henry has a Town Hall Commentary on the media double standard in coverage of the two political parties

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

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A Lump of Coal for Charities?–‘Fiscal cliff’ talks threatened Federal charitable tax deduction

The stubbornly sluggish economic recovery has created a perfect storm of bad economic news for the state’s charitable nonprofit sector. During times of economic distress funds dip as individuals and foundations see their fortunes decline. At the same time, the demand for services escalates as unemployment and related social ills soar. State and county governments, also caught in a vice between escalating demand and the inability to increase taxes on financially stressed taxpayers, cut funding to social service and charitable organizations.

And the problem could be about to get worse, much worse. One of the items on the table in the so-called “fiscal cliff” negotiations in Washington, D.C. is the scaling back or elimination of the Federal tax deduction for charitable contributions. While it is true many Americans give out of an innate sense of charity, with the income tax deduction being a secondary consideration, the deductibility of contributions does have an impact on whether or not a charitable contribution is made and how many dollars are given.

The Lincoln Institute of Public Opinion Research in conjunction with the Pennsylvania Association of Nonprofit Organizations (PANO) recently conducted the annual Pennsylvania Charitable Organizations Survey.  Seventy-five percent of the respondents said the loss of the Federal tax deduction for charitable contributions would have a negative effect on their organization – 40% said the effect would be “significant.”   Conversely, just 10% felt the loss of the deduction would have no effect, and 2% predicted a positive effect.

Business Climate

Despite the challenging environment in which they are operating, there was an increase in the number of charitable organizations that report their ability to fulfill their core mission has improved over the past year. Seventeen percent say they have a greater ability to carry out their core mission compared to the 11% who felt that way in 2011. In the current poll, 55% reported their ability to fulfill their core mission has remained about the same as last year, while 26% felt they have less ability to fulfill their core mission. That is down from the 31% who last year reported less ability.

Generally speaking, the nonprofit organizations participating in the Lincoln Institute/PANO poll felt business conditions in Pennsylvania have remained about the same over the past year. That, however, is not good news as the business climate for charities has been challenging in recent years. Despite that, 21% of the respondents said business conditions in the commonwealth have improved over the past year; that is up from just 8% who reported improving business conditions a year ago. Also, 24% said they felt the state’s business climate has gotten worse over the past twelve months; that is down from the 40% reporting a worsening business climate last year.

A further ray of optimism was reflected in responses to the question: Looking ahead one year, do you expect business conditions to be better, about the same or worse than they are today? Thirty-four percent said they expect business conditions in the state to improve over the coming year – that is up from the 27% who forecast an improving economic climate last year. Nineteen percent expect the state’s business climate to get worse, down from the 26% who last year predicted declining business conditions.   Forty-seven percent said they expect the state’s business climate to remain about the same over the coming year. Again, “about the same” means continuation of a business climate that is not favorable.

The Lincoln/PANO poll also found employment levels at Pennsylvania Nonprofits have declined over the past year. Fifty-six percent of the nonprofits participating in the survey said employment levels at their entity were about the same as a year ago. But, 26% said they employ fewer people than a year ago, while 18% reported more people on payroll.   Looking ahead, 21% forecast rising employment levels, while 13% expect employment at their nonprofit to drop.

Impact of a Sluggish Economy

The lingering economic downturn has had a negative impact on 82% of the nonprofits participating in the 2012 Pennsylvania Charitable Organizations Survey. Of that number, 25% said the negative impact on them has been “significant.” Twelve percent said the economic downturn has had no impact on them, while 6% said the bad economy has positively affected them.

Economic conditions have caused 26% of the nonprofits surveyed to cut services, while 24% say they have increased services as a result of the poor economy. Exactly half said their level of service has remained about the same over the past year. Thirty-eight percent of the nonprofits say they have cancelled or postponed expansion plans to deal with economic conditions. Thirty-two percent have had to lay-off staff; 29% have reduced employee hours; 27% have had to borrow operating money; 27% have cut or eliminated benefits; and 10% have cut salaries.

Looking ahead over the coming year, 48% participating in the Lincoln Institute/PANO poll said funding for their organization remained about the same in 2012 as it was in 2011. Twenty-six percent of the entities experienced a funding decline this year, while 21% saw an increase in revenue. Forty-two percent of the respondents report state funding has decreased over the past year, 18% said funding they receive from the state has remained about the same, while state funding has increased at just 3% of the nonprofits. Thirty-seven percent said they don’t receive or utilize state funding.

Sector Issues

Sixty-three percent of the poll’s respondents rated public trust in the nonprofit sector as “medium.”   Twenty-one percent rated public trust as “high,” while 11% said public trust levels were low. Looking back over the past couple of years, 45% said public trust was about the same, 28% said trust in such institutions is lower; 22% said trust levels are higher.

Given that many nonprofits receive some part of their funding from government, a number of entities engage in lobbying activities.   Just 6% of the respondents are registered under provisions of the Pennsylvania Lobbying Disclosure Act. But, 28% say they lobbied state government over the past year. Nineteen percent report having lobbied at the federal or county level, and 15% lobbied at the local level during the past twelve months. Looking ahead 29% say they expect to lobby government at some level on a public policy issue over the coming year, 51% do not expect to lobby.

Eighty percent of those participating in the Lincoln/PANO poll said they currently provide health insurance for their employees. Of that number, 48% report that the major portion of premiums is paid by the employer with some employee co-pay. Thirty-two percent reported the entire health care premium is covered by the employer.

The property tax exemption for nonprofits continues to face challenges by county and municipal governments. However, just 8% of those participating in the 2012 Pennsylvania Charitable Organizations Survey say they have had their property tax status challenged over the past two years. But, 20% are concerned that county or municipal government may challenge their status in coming years.


The 2012 Pennsylvania Charitable Organizations Survey was conducted by the Lincoln Institute of Public Opinion Research, Inc. in conjunction with the Pennsylvania Association of Nonprofit Organizations (PANO). The poll was conducted electronically between December 3, 2012 and December 17, 2012. A total of 289 nonprofit organizations participated in the survey.   Complete numeric results are available on-line here.

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This Week on Lincoln Radio Journal: PA Pension Crisis

Radio Program Schedule for the week of September 1  – September 7, 2012

This week on American Radio Journal:

  • Lowman Henry talks with Heritage Foundation President/CEO Dr. Edwin Feulner about his new book The American Spirit: Celebrating the Virtues and Values That Make Us Great
  • Col. Frank Ryan, USMC (Ret.) has an American Radio Journal commentary on why deflation may be worse than inflation

This week on Lincoln Radio Journal:

  • Matthew Brouillette of the Commonwealth Foundations hosts a Capitol Watch roundtable look at the looming state pension crisis with Kevin Shivers from the PA Chapter of the National Federation of Independent Business and with Rick Dreyfus of the Commonwealth Foundation
  • Lowman Henry has a Town Hall Commentary on the intolerance of the Left

Visit the program web sites for more information about air times. There, you can also stream live or listen to past programs!

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U.S. Senator Pat Toomey to Address PA Leadership Conference

Joins Brit Hume, Grover Norquist & John Gizzi as announced speakers

PA Leadership Conference 2012United State Senator Pat Toomey will be the kick-off speaker at the 2012 Pennsylvania Leadership Conference, the premiere annual gathering of conservatives each year in Pennsylvania.   This year’s conference will be held March 23rd and 24th at the Radisson Penn Harris in Camp Hill (Harrisburg), Pennsylvania.

Elected in 2010, Senator Toomey has quickly become a major player in pushing a conservative economic agenda in congress. He has authored a number of bills and played a key role in efforts to restore America’s historic free market system.

In addition to Senator Toomey, Fox News Senior Political Analyst Britt Hume, Grover Norquist of Americans for Tax Reform and Human Event’s Political Editor John Gizzi are confirmed conference speakers.   The conference will also feature a debate among the candidates seeking to become the Republican nominee to take on incumbent U.S. Senator Robert P. Casey, Jr. this November.

“Early bird” discounted registration for the 2012 Pennsylvania Leadership Conference is now open at An updated conference agenda and listing of conference sponsors and exhibitors can also be found on the web site.

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Another State Budget Battle Lies Ahead

Governor Tom Corbett and Republicans in the state legislature have spent the last six months patting themselves on the back for fulfilling their main constitutional duty of passing a state budget on time. It was a significant achievement, more so because it held the line on taxes. But that victory was fleeting because yet another budget battle is getting underway.

The problem is despite large Republican majorities in both chambers of the General Assembly and the coming to power of a Republican governor the budget victory has not been followed up by the enactment of structural changes to address the cost drivers in the state budget. Major funding issues, such as the state’s ongoing need for investment in roads and bridges, remain untouched.

State Budget Secretary Charles Zogby signaled the start of the 2012 budget battle in late December by reporting that revenue collections are coming in below estimates and that budget makers will once again face a deficit. Spending interests decried Zogby’s report as a tactic, but the fact is the ongoing national recession coupled with Pennsylvania’s generally inhospitable business climate have depressed economic activity resulting in less income and earnings to be taxed.

Also contributing to budgetary pressures is the Corbett’s administration’s failure to address labor costs. A number of union contracts expired last year and, generally speaking, the new agreements lacked significant cost-saving concessions.   It was a missed opportunity to bring labor costs under control that will have a lasting impact for years to come.

Legislatively, unions survived the first year of Republican domination of state government largely unscathed. Even minimal reform, such as increasing the ceiling for prevailing wage laws to kick in on public works projects, have yet to advance through the legislative process. Issues such as ending government collection of union dues and passage of Right-to-Work legislation have not seen the light of day.

Structural reforms to education, such as school choice, ran aground in the legislature. Privatization of the state’s liquor store monopoly is stalled. Calls for passage of a severance tax on Marcellus Shale gas continue to echo around the halls of the capitol, creating uncertainty in the state’s biggest growth industry. A year into the governor’s term, no plan for eliminating waste and cutting the state’s out-of-control welfare system has emerged.

And now the bad news: this is an election year. Every seat in the state House of Representatives and half of the state Senate will be on the ballot in the upcoming April primary. The official start of the election process, gathering signatures to get on the ballot, begins in just a couple of weeks. Typically most major legislative accomplishments occur in non-election years because incumbents shy away from casting controversial votes in the midst of their re-election campaigns. Thus expectations for progress this year are low.

Those who thought large Republican majorities in the legislature would result in a more fruitful session are disappointed. But, the lack of output by the General Assembly reveals an inconvenient truth: Republican control does not equate to conservative policies. There continues to exist within both the House and the Senate – particularly in the Senate – a small but pivotal number of Republicans who are beholden to labor unions and whose goal it is to prevent enactment of the conservative policy agenda espoused by the governor.

In short, the GOP is a dysfunctional family. Governor Corbett and the state House leadership tilt conservative, but the Senate leadership is under labor union sway. Thus the three power centers cannot agree on an agenda, resulting in gridlock. Given that most state policies currently in place are not to the liking of conservatives, gridlock is a bad state of affairs.

With another budget battle getting underway against the backdrop of election pressures look for little to get accomplished in 2012. In fact, holding the line on taxes and getting another budget passed on time will be a Herculean task. Simply holding on to 2011’s meager gains may be all that is possible in the upcoming year. On the positive side voters have before them the opportunity to elect to office senators and representatives who will pursue more taxpayer friendly policies. The key to future progress is an educated and involved electorate in this important election year.

(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal. His e-mail address is

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