(These comments were submitted by Gary C. Hufbauer, the Reginald Jones Senior Fellow at the Peterson Institute for International Economics and a former international tax expert in the Nixon and Ford administrations.)

By postponing passage of a critical spending bill until the last possible moment, Congress has once again opened itself to hasty “fixes” that bring lasting trouble. Calls to pay for pet projects by raising taxes on major corporations, if enacted, will undercut the ability of US firms to drive American growth and create new jobs.

The United States is already less friendly to business than other countries. The U.S. imposes the second highest corporate tax rate among OECD countries, behind only Japan. And unlike nearly every other government in the world, America requires its multinationals to pay domestic taxes on profits earned abroad.

Consider the U.S. oil and gas industry. Thanks to technology that enables the extraction of “tight oil” and shale gas, the U.S. is gradually becoming less dependent on foreign energy sources. But to sustain the more than 9 million jobs they support domestically, U.S. firms must compete against foreign, state-run firms from countries like China and Venezuela to develop international energy resources. Proposals in Congress to target U.S. companies for discriminatory tax treatment would undercut America’s competitiveness in the global energy arena.

As Martin Vieiro and I explained in a recent report (“US Tax Discrimination Against Large Corporations Should Be Discarded”), adding new taxes via selective elimination of tax deductions for the oil and gas sector—despite the fact that these provisions are available to businesses across all sectors across the economy—would means fewer jobs, less revenue, and more reliance on foreign companies for energy—essentially transferring these benefits abroad.

The political war against “big oil” hinges on a false premise that large corporations are bad for the country. But this is far from the case.

From innovation to jobs and exports, it is the largest U.S. corporations that have been the national leaders. In 2008, companies with 5,000 or more employees were responsible for 69 percent of all private research and development investment. In 2009, the largest companies provided 32 percent of all U.S. jobs. President Obama’s goal is to double exports by 2014, as laid out in his 2010 State of the Union Address. To achieve anywhere near this goal, the U.S. must rely on large corporations, which typically account for about 70 percent of export activity.

As Congress moves forward with measures to create jobs, reduce debt, and return America on its trajectory of prosperity, lawmakers must remember that raising taxes on the most productive companies is a poor decision. This is true whether the companies in question produce software, oil, airplanes, or heavy machinery.

This week, as Congress continues to work to approve legislation that will prevent the lights from going out in Washington, legislators would be wise to leave blocks to EPA’s new clean-air rules out of their negotiations.

While many stipulate that these measures will further deflate an already sagging economy, in reality, they will have little, if any, negative economic impact. In fact, if the rules are allowed to stand, as it seems they will be, their benefit will far exceed their cost.

The proposed rules on coal ash, greenhouse gases from electric power plants, and emissions from cement plants and oil refineries will curb harmful pollutants and yield positive impacts on public health and the environment.

Not surprisingly, when these regulations were announced, industry and their allies in Congress cried wolf. They claimed that compliance costs would decrease consumer demand for products and lead to thousands of layoffs. According to their story, the restrictions would have an overwhelmingly negative impact on the economy.

But their concerns are likely seriously exaggerated. Similar complaints have been heard when other environmental protections have gone into effect, and in many cases we see compliance costs come in well under their projections. Even cost projections from the EPA have proven to overestimate the true price of regulating air pollution.

And no one would argue that the root cause of our economic troubles today is overly strict environmental regulation. Until the great recession of 2008, the economy was generally healthy—GDP increased steadily in spite of all previous Clean Air Act regulations, so we should look askance at sky-is-falling warnings.

The population, however, would not be as healthy had the EPA not acted to curb air pollution. Public health research confirms the link between smog and reduced lung function, as well as between soot, cardiovascular disease and asthma. These conditions cost taxpayers significant sums in both medical expenses and lost productivity and–in the worst cases–lead to premature death.

Cleaner air produces massive benefits. In its analysis of the Clean Air Act amendments, EPA found hundreds of billions of dollars in annual benefit were generated to the American public per year since 2000, far outweighing the costs of complying.

Cutting environmental regulations would do little, if anything, to address the jobs crisis and would cost Americans billions of dollars in economic benefits. If Congress is really looking for ways to cut spending and spur economic growth it should consider doing away with their costly handouts for oil and other fossil fuels that distort the economics of how we power our lives, often in ways that imposes a wide range of costs on the American public.

As a new study released yesterday by Navigant Consulting reveals, one of the things at stake in year-end legislative deliberations, although it would be included in a tax bill, rather than a spending bill, is new American manufacturing jobs in the wind power industry.

Navigant finds that with stable tax policy, the wind industry can create and save 54,000 American jobs in the next four years, including growing the wind manufacturing sector by one third to 46,000 American manufacturing jobs. This will keep the wind sector on track toward supporting the 500,000 jobs by 2030 envisioned in a report by the U.S. Department of Energy during the George W. Bush administration.

The bad news: Navigant also finds that if Congress allows the Production Tax Credit (PTC) for wind to expire, jobs in the wind industry will be cut in half, meaning a loss of 37,000 American jobs and a one-third cut to American wind manufacturing jobs, while private investment in the industry would drop by nearly two thirds. The report can be found here.

American manufacturing jobs are coming back, with tens of thousands of new jobs from wind power. But these jobs could vanish if Congress allows the Production Tax Credit to expire, in effect enacting a targeted tax increase and sending our jobs to foreign countries. Congress must act now to keep this American manufacturing success story going.

With the support of a stable PTC, wind energy is powering one of America’s fastest growing manufacturing sectors. Over the last six years, U.S. domestic production of wind turbine components has grown 12-fold to more than 400 facilities in 43 states and the domestic content in a typical turbine has risen from 25 percent in 2005 to 60 percent, shifting manufacturing jobs from overseas back to the U.S.

The Navigant study finds that wind energy’s geographically diverse manufacturing base would spread job gains around the country. States that would see significant job and private investment gains from a PTC extension include Colorado, Texas, Iowa, Illinois, Pennsylvania, California, Oregon, North Dakota and Ohio.

“We have made a significant investment during the last three years creating several hundred jobs for the state of Illinois to support the wind industry domestically,” said Terry R. Royer, CEO of Winergy Drive Systems Corp., a wind equipment manufacturer based in Elgin, Ill. “With the uncertainty of the PTC extension, we are seeing the hesitation of our customers to make continued commitments for orders in late 2012 and 2013. An immediate extension is needed to support the investment we have made in our operations and secure the jobs that have been created.”

But, with a job-killing tax increase on the horizon and the PTC's future uncertain, businesses are hesitant to plan future US wind projects, American manufacturers have seen a drop in orders, and layoffs have already started. For the purposes of the American wind industry manufacturing sector, which needs lead time to make its products, the PTC effectively expires at the end of this year.

Bipartisan legislation (H.R. 3307, the “American Renewable Energy Production Tax Credit Extension Act”) recently introduced by Representatives Dave Reichert (R, WA-08) and Earl Blumenauer (D, OR-03) would extend the PTC for wind energy for four years. This legislation has attracted the support of 36 cosponsors, including 11 Republicans.

H.R. 3307 also recently received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, the Western Governors’ Association, the United Steelworkers and many members of the environmental community. A four-year PTC extension also has the support of the bipartisan Governors’ Wind Energy Coalition, comprised of 23 Republican and Democrat Governors from across the U.S.

As families across our country struggle with unemployment, and as businesses are cutting back just to survive, it’s past time for the U.S. Congress to focus its ideas and efforts on proposals that will create jobs and get our economy moving again. Extending this key tax incentive for wind and other forms of renewable energy generation is one of the best ways to spur economic development and create the good jobs we need.

A vote for a PTC extension is a vote for growing clean, homegrown, affordable energy resources and badly needed new American manufacturing jobs.

This week the GOP sent a clear message to President Obama by tying support for the Keystone XL pipeline to a vote on payroll taxes. Namely, that jobs and energy security are the GOP’s top priorities. Yesterday’s incident* in the Strait of Hormuz has only underscored the importance of decreasing America’s reliance oil and gas imported from foreign, unstable regimes. (*The Iranian government provoked global panic after it implied it could close the most important oil transit channel in the world on a whim using a new military maneuver.)

Keystone XL is a proposed pipeline intended to bring Canadian oil to the United States. Its construction alone would immediately create 20,000 new jobs. But despite more than three years of public meetings and exhaustive environmental assessments, President Obama has sidelined approval until at least 2013, by which time the project may be mothballed altogether. Why? Because he is pandering to the Left.

Keystone XL isn’t the only private infrastructure project under attack. Additional pipelines, necessary for the expansion of the northeast regional natural gas market, are also being threatened.

For instance, a proposed 16-mile New Jersey/New York pipeline that would carry 800 million cubic feet of natural gas daily is awaiting approval from the Federal Energy Regulatory Commission and the U.S. Army Corps of Engineers. Though the project would support thousands of jobs in the Northeastern natural gas industry and cut down on 6 million tons of pollution annually, opponents are mounting political pressure on President Obama to step in.

Yet it’s clear that staunch adherence to ideology rather than concerns over safety drives the opposition to these pipelines. In fact, it is well established that pipelines are the safest form of energy transportation. Take Keystone XL. With around-the-clock surveillance, high-grade steel, and state-of-the-art leak detection sensors, this line would exceed even the design and regulatory requirements set by the Obama administration.

The NJ/NY natural gas pipeline similarly complies with the New Jersey DEP’s demands to minimize neighborhood and environmental disturbances. Like Keystone XL, the proposed pipeline employs high-tech year-round security protocols including high-tech inspection tools, an automatic shutoff mechanism within 90 seconds, and reduced pressure settings based on the terrain through which the pipeline flows.

By understanding what’s at stake for Keystone XL and beyond, perhaps President Obama will make the right choice. New pipelines are essential not only for jobs, but also to increase the flow of safe and secure energy resources to consumers.

In 2010 private firms added an additional 2,142 miles of natural gas transportation capacity in the U.S., which totaled roughly $8.1 billion in new investments according to the U.S. EIA. These projects were located primarily in the south: northern Texas as well as Louisiana, Arkansas and Mississippi. In the next few years additional pipeline capacity will be necessary to support the growing development of domestic shale gas and then link production to U.S. consumers.

The Obama administration must carefully weigh the ramifications of delaying Keystone XL. Slow-walking one pipeline will set a dangerous precedent for additional energy infrastructure projects and ultimately hurt employment, consumers and energy security alike.

What is at stake is the lives of thousands and the health of millions who breathe dirty air that should have been cleaned up two decades ago. Congress should say “no” to the big corporate polluters who have asked them to attach anti-clean air policy riders onto “must-pass” pieces of legislation.

Earlier this month, EPA proposed new air toxics standards for industrial boilers. EPA has not even taken public comment on this proposal and already, the US House leadership is working to block these life-saving protections. It is past time to move forward with these life-saving standards and those in Congress looking to block them should desist.

Research has shown that toxic air pollution – like mercury, lead and arsenic - from industrial boilers harm human health, targeting the circulatory, respiratory, nervous, endocrine, and other essential life systems. These toxic emissions can even cause cancer, developmental disorders and premature death. Cleaning up emissions from industrial boilers and incinerators will prevent up to 8,100 premature deaths each year. It will also prevent 5,100 heart attacks, 52,000 asthma attacks, 3,000 emergency room visits, and 400,000 missed work days annually.

For the past two decades, the cleanup of toxic air pollution from boilers has been delayed, allowing these industries to pollute communities across the nation. The American Lung Association’s position is clear: we call on EPA to uphold its responsibility as required by the Clean Air Act and clean up toxic air pollution from these boilers to protect public health from mercury and other dangerous air toxics.

What is also at-stake for Congress is that by supporting efforts to block clean air protections they risk alienating the public. In polls we conducted this year, the public consistently support EPA’s efforts to update clean air standards and do not want Congress interfering with the process.

What is at stake is the health of our children and future generations. Do our children finally get the gift of more healthful air to breathe or will polluters be allowed to continue to pump their toxics into our neighborhoods making people sick and cutting lives short? The choice seems pretty clear to us.

In an ideal world, Congress would pass a clean bill to fund government operations past Friday. Policy riders on spending bills diminish our ability to consider and make good policy, and cloud spending decisions with controversial extras. But with high unemployment, exploding federal debt, and a stagnant economy, it’s entirely appropriate to make spending contingent upon thoroughly reviewed, pro-growth policies. Here’s my energy wish list.

Approve Keystone. Alberta tar sands will be developed and sold to market, regardless of American action or inaction on a new pipeline. By punting on the decision to build Keystone XL, President Obama challenged Canadian oil developers to find another buyer, compromised our ability to expand our profile in the international oil market, and put to bed thousands of American jobs. Congress can and should use the spending debate to force the administration’s hand. Speaker Boehner has kept his eye on the prize – job creation – and it’s time the administration stepped up.

Retire energy tax credits. This move will be a sting to financial backers of new and emerging energy technologies, but it’s a necessary step. Our bloated government has no defensible role to play in picking winners and losers in the energy market, and all signs suggest that Washington subsidies favor election cycles over long term benefit to the energy sector. Congress should work toward tax reform that encourages growth, income, and employment, not tax policy that inhibits market competition.

Reign in the EPA. We all want to breathe easy, and the Clean Air Act has been a tremendous tool to fight pollution, but new regulations out of EPA smack of overreach. Each new action threatens small businesses with onerous and burdensome compliance requirements for strict, prescriptive regulation. Though it seems obvious, the administration can’t seem to grasp that public health and cost concerns are not mutually exclusive factors. This kind of behavior should spark scrutiny from our elected officials. Delays in both boiler MACT and ozone rules prove that extensions are feasible, and EPA’s new MPG standards for cars with “potentially severe economic consequences,” warrant some major oversight. The spending debate is a chance for Congress to weigh in on EPA decision making.

The federal budget and the national economy are both a mess. I hope Congress sees this week as a test to chip away at overspending and support growth in energy and our economy.

The federal budget for 2012 has already been established. What remains to be determined in the final weeks of this year is how that budget will be spent. Congress should focus on properly funding energy programs that are producing results and strip politically motivated measures that have no impact on the budget.

The Defense and the Energy and Water appropriations measures contain funding for a cooperative effort by the Navy, the Department of Energy and the USDA to accelerate commercial production of advanced biofuels for military jets and ships. The Navy has laid out a precise timeline for decreasing its reliance on foreign oil by 2020. The necessary testing of biofuels has been completed on schedule and to the Department of Defense’s exacting standards. The next step, a demonstration of the Great Green Fleet during Rim of the Pacific military exercises this summer, is already planned, and the Navy has contracted to purchase 450,000 gallons of advanced biofuels.

By approving the 2012 appropriations measures as adopted by the Senate, Congress can enable the Navy to effectively work with U.S. companies to meet the next milestone – a worldwide demonstration tour of the Great Green Fleet in 2016. The Senate version of the2012 National Defense Authorization Act also would ask the DOD to prepare a report on the authorities available for multi-year contracts for advanced biofuels. Companies must continue to make substantial capital investments in large-scale production facilities in order to meet the Navy’s goal for competitively priced alternatives. Long-term DOD contract authority for advanced biofuel offtake agreements could help unlock private investment in the industry and eventually produce more stably priced fuels for commercial aviation.

By comparison, a measure included in the House version of National Defense authorizations would undercut a provision of the Energy Independence and Security Act of 2007 – the last comprehensive energy measure from Congress – that has supported private investments in advanced biofuel technologies. The DOD has testified to Congress that the measure is not affecting their budget – in fact, the volatile price of oil has forced the DOD several times this year to request budget reprogramming – and alternative fuel industries have also testified that they can meet the requirements of this provision. Congress should strike section 844 of the House-passed National Defense Authorization Act for Fiscal Year 2012.

Congress could take a great step toward rehabilitating its image with the American people by focusing spending on energy programs that provide results. The Navy’s efforts are a good example of performance-based results.

As we approach the end of the year, Congress is going to have to make some tough decisions about which policies are most important to our country’s future. In this difficult economy, lawmakers’ top priority should be to continue proven policies that create jobs and give Americans the most bang for their buck. One such policy, the Treasury Department’s 1603 Program, is set to expire on December 31, and Congress should act now to extend it.

Energy fuels America’s economic growth. The 1603 program has helped the solar industry – and about a dozen other energy industries – power our economy and enhance our energy security.

The best way to turn the economy around is to get more Americans working again. The 1603 program has done just that. Since it became law in mid-2009, the program has spurred almost $23 billion in private sector investment for more than 22,000 completed clean energy projects, supporting tens of thousands of jobs located in every state.

A one-year extension of the 1603 program would support an additional 37,000 American jobs in the solar industry alone, according to an analysis by EuPD Research. And since solar is only one of about a dozen energy technologies eligible for the 1603 program, many more jobs are at stake across other energy sectors. At a time when unemployment is above 8 percent, forfeiting tens of thousands of American jobs is simply unacceptable.

There has been speculation that the 1603 program might be extended early next year. That might work for expiring research and development provisions, but expiration of the 1603 program will have a severe impact immediately. Make no mistake – if 1603 is not extended by the end of this month, projects are going to be cancelled, businesses are going to cut new investments, and jobs are going to be lost.

It’s important to note that these are mostly blue collar jobs and relatively small projects that benefit small businesses. In fact, about nine out of every 10 solar awards from the 1603 program (89 percent) are less than $500,000. And the average size of a solar project award is about $65,000.

The public recognizes the importance of programs like 1603. The vast majority of Americans – 82 percent – support federal incentives for solar, according to recent polling. And support is strong across the political spectrum, with 71 percent of Republicans backing incentives for solar.

With only days left in the legislative session, Congress has a clear choice: stand with the American people and extend the 1603 program to help get the economy moving again, or do nothing and surrender tens of thousands of American jobs. The clock is ticking.

The primary criterion for budget decisions should be whether or not an action is good for the economy. All other considerations, at this time, should be secondary. Life is always about trade-offs and so is good decision making. Indeed, good decisions strike a balance among competing considerations.

Actions that reduce the deficit, put in place a process for reducing the debt, and stimulate job creation do not have to reduce environmental protection or advances in cleaner energy even though environmental advocates and energy rent seekers assert that they do.

As with building a house that will stand the test of time, you have to start with a strong foundation. The foundation of our economy is not strong and if Congress and the Administration do not take steps to strengthen it many objectives will go unfulfilled as we experience our own “lost decade”.

EPA’s budget has grown by 20% since 2008. Taking its budget back to that level or lower would not be as draconian as some, like Administrator Jackson, might assert. Private companies faced with lower revenue find ways to increase productivity and streamline operations. EPA could benefit from a major streamlining. Government agencies rarely get re-invented. Instead they just keep on keeping on and growing in the process. We cannot afford business as usual at EPA or any other federal agency. The time for a major government reorganization is long overdue. The last one, the Hoover Commission, was 80 years ago.

The House of Representatives has proposed a major overhaul of the regulatory process that would reform the Administrative Practices Act, require more transparent analyses, better data, and Congressional approval for all regulations costing over $100 million. Those are all steps in the right direction because recent EPA regulatory proposals have been extreme, imposing far greater costs than claimed benefits. In the past 30 years, the Code of Federal Regulations has grown by over 50%. It should be possible to have a “look back” and eliminate regulations that either have achieved their objectives or no longer can be justified on cost-benefit grounds.

The subsidies for “clean energy” that are due to expire should be allowed to do so. They have been a major waste of resources.

If wind, solar, and biofuels cannot stand on their own after years of handouts, they should go the way of Solyndra. Wind and solar cannot meet base load electric power requirements and at best serve a niche market. Renewable portfolio standards and other forms of subsidy drive up electric power costs and enrich special interests. The EU experience provides compelling evidence.

So called “clean energy” subsidies are not free. They involve taking money from taxpayers and giving it to rent-seekers or increasing deficit spending so rent-seekers can be enriched. Subsidies for renewables now stand at almost $15 billion.

Since the 1970s, we have seen industrial energy policies put in place to replace imports and reduce reliance on fossil energy. They have been a colossal waste of resources. The advances in energy technologies have come primarily from the private sector. Further advances will flow from successful companies and from incentives for more research and development, not from government mandates or subsidies.

Even as the state of Nebraska has taken steps to deal with Keystone pipeline issues, President Obama has vowed to veto any legislation requiring immediate approval of the project. The President will no doubt claim that such a mandate infringes on Executive Branch authority and it does. But, a stronger case can be made that the Keystone Project has been studied to death and the Administration is slow walking approval. Over analyzing and under deciding is not a prescription for progress. The US does not have the luxury of turning its back on the creation of good paying jobs. Keystone will create 20,000 jobs and if the Administration opened access for more domestic oil and gas development even more jobs would be created. All anyone has to do is look to North Dakota which has the lowest unemployment rate in the nation because of oil and gas development.

Actions to strengthen our economic foundation are not a mystery. Instead, they are hostage to excessive partisanship that is not serving the national interest.