8 steps that will revitalize our economy and set a new course for America
Daily, most of us are facing significantly higher costs for necessities like gas and foodand trying to make ends meet. It is not easy. Of course, there are many causes for the increases, but that does little to ease the pain. Notably worldwide demand is rising forboth energy and food. The emergence of India and China as nations with brisk economies and growing middle classes now eager to compete with us in the global economy all but assures this trend is not temporary. As we in Wyoming face higher prices the country has seen a decrease in the value of assets as the housing bubblehas deflated. The market will correct and the housing market will recover. What is more serious long term is invigorating the economy in Wyoming and nationally to ensure everyone can afford transportation and food, let alone economic security.
WASHINGTON HAS FAILED US. CAREER POLITICIANS - REPUBLICANS AND DEMOCRATS - BEHOLDEN TO SPECIAL INTERESTS HAVE REFUSED TO SOLVE THE PROBLEMS WE FACE. WE NEED WYOMING SOLUTIONS - WYOMING IDEAS - TO CHANGE THE DIRECTION OF OUR COUNTRY AND TURN OUR ECONOMY AROUND.
That is why I have authored "Wyoming Solutions," my plan for revitalizing our economy and setting a new course for our nation.
1. LOWER TAXES
-Make existing tax cuts permanent.
-Keep rates low on income and capital gains.
-Repeal the Alternative Minimum Tax.
-Eliminate the Death Tax.
-Simplify the tax code.
-Encourage small business investment with Elective Expensing (section 179) rules.
Paid for by Friends of Mark Gordon, Inc. Politicians in Washington can talk all they want about economic stimulus packages, but those plans all depend on more government spending not less. Why tout sending people's money when the government could have left it in the bank accounts of the people from the beginning?
The easiest steps to take are to make existing tax cuts permanent. This is a simple upor down vote on policies like the Death Tax, also known as the Estate Tax, the AMT and President Bush's other pro business tax cuts. The latter are set to expire in 2010 and ifthey do nearly half of Americans will pay an extra $1,500 per year in taxes, which negates any $600 check to stimulate the economy. In broader terms the economic stimulus was 1% of GDP, allowing these tax cuts to expire would equate to 2% of GDPall at once and just as the economy might be trying to recover. This is the sort of nonsense Washington pulls. What people are looking for are real solutions like making sure taxes stay low.
Because the Alternative Minimum Tax has been allowed to stand for so long, it will affect the lives of many more people than it should, bringing yet another economic burden to middle class families. It must be repealed.
The IRS itself says the laws on estate and gift taxes are some of the most complicated in the code. The agency recommends seeking out an estate tax practitioner to deal withthese taxes. This isn't just for the rich either, it affects our farmers and ranchers whowant to pass on a family's heritage. Even those who receive a smaller inheritance say $5,000, must also pay an 18% tax and perhaps fees to an estate tax practitioner or risk an audit. Doing away with this tax is one of the quickest ways of simplifying the taxcode, encouraging continuity in family businesses, and more importantly keeping more money in families that have earned it, instead of sending it to the government.
We must begin to simplify our tax code. Everything from the estate tax to how wehandle passive loss is so cumbersomely complicated that ordinary thoughtful people are unable to make any sense of it. By simplifying the code overall rates could be further reduced fostering greater clarity.
Repeal of the Estate Tax is only the beginning of what I would like to do to simplify the process of filing taxes. There is a huge push to move filing online and that could make filing taxes easier, but my goal is to make the process easy for those that like to file by paper too. This simplification is important because I want citizens to be able to understand and do their taxes quickly and easily. Then citizens will get their refunds rapidly and avoid leaving their hard earned money in federal coffers.
Small businesses deserve an incentive to reinvest in equipment. The opportunity to write-off equipment put in service in the same year is critical for jump starting business activity, reinvestment, and upgrading equipment. Elective expensing is a critical component of economic recovery.
2. CONTROL GOVERNMENT SPENDING
-Balance the budget.
-Do away with earmarks.
-Enforce Pay-As-You-Go rules.
-Eliminate waste and fraud.
-Reform social security.
Our federal government must always take responsibility for the nation's security needs and commitments. Moreover, it must recognize its responsibilities to programs such as Medicare and Medicaid, although even these programs must be reviewed because ourability to pay for them as a nation of taxpayers is not unlimited. Over the past severalyears we have tried to fool ourselves by allowing deficits to grow by borrowing from foreign investors. This behavior gives rise to inflationary fears and compromises our posture in trade negotiations.
I believe the deficit must be reduced to offset incipient inflation and help strengthen the dollar. We must balance the budget by cutting government spending and not on the back of our taxpayers who seem to be the unwitting underwriters of ever new "good intention." None of that will happen easily, nor will the choices be popular, but it is important for our nation's long-term economic health and our international standing that we bring real commitment to this preeminent concern. These are a few of the things Ibelieve we must do immediately to stem the erosion of our economy.
To start with, the Congress must stop allowing earmarks. Here I must agree with John McCain who has drawn a line in the sand; for although earmarks have been used for some noble purposes, there are far too many instances of abuse and fraud to continue the practice without more thought given to transparency. Funding requests need tostand on their own, they cannot be part of the earmark process, especially because now is such an important time to rein in spending.
Pay-as-you-go rules dictate that Congress cannot authorize new spending without finding a new funding source or reducing spending somewhere else. These rules unfortunately expired under Republican leadership. Democrats have given lip service to putting these rules back into effect since they took over the Congress, but instead of reducing government, they have promoted it. The rules are vital to balancing the budget because they impose a discipline on government. As a small business owner, I know that in the real world a budget must be balanced if we hope to stay afloat. Dwindling taxpayers' wallets at will just simply won't do.
Two titans of federal government expense are Medicare and Medicaid. These programs have enormous budgets, bureaucracies, and problems. We must concentrate on reining in the rate of growth that these programs have experienced and begin to responsibly address how these two programs can be reformed to reflect 21st century challenges. Furthermore, just as we must examine all other government programs we must relentlessly ferret out fraud and abuse in both of these programs.
The Social Security program is another behemoth of the federal government, but it is also something senior citizens depend on. There is a promise that we must keep and there is also a reality that we must face. We have known for years that this program must be reviewed and the choices we can make are all difficult to contemplate; but we must do something and generally speaking, I believe most workers today favor someform of personal control over their future retirements. Thus some combination of 401k programs and Health Savings Accounts might go a long way towards helping to reduce the obligations of Social Security without sacrificing future benefits. HSAs can be further structured to ensure contributions can be used for future health care and other costs incurred after retirement. Combining these efforts will reduce payroll tax obligations, keep Social Security independent, and help ensure that the program remains viable for those who most depend upon it. Our children will appreciate the courage and forethought we give to this impending dilemma.
3. DIVERSIFY OUR ECONOMY
-Make capital available.
-Provide a trained and adequate workforce.
-Ensure the regulatory structure is simple, makes sense and is reliable.
-Open more markets.
Wyoming's economic future will depend on diversification. Our economy is currently dominated by the energy industry, which is doing amazing things for our state and so many of us individually. Somewhat disconcertingly though, the preeminence of energy has played a role in the decline of Wyoming's economic diversity through no fault of its own. The jobs available in Wyoming working for the energy industry are good jobs witheven better benefits, but the trend has perhaps weakened our economic resilience by narrowing its base. I remember once before when prices for oil, gas, uranium, and coal collapsed in Wyoming and what it meant for our state.
Beyond the normal peril of life in the commodity lane with its dramatic ups and downs, there is also the knowledge that at some point in the future, particularly at a local level, these mineral resources will be gone. That is why it is so important that we strive to encourage vibrant communities expanding economic activity across the board as an antidote to the turmoil a bust might bring on. The answer lies in enabling and encouraging small businesses and entrepreneurs. This is true for the entire country and that's why Wyoming solutions are needed.
We need to make sure entrepreneurs find and have access to the funds necessary totake their ideas from the napkin or drawing board to the marketplace. Congress' first role is to make sure there is a strong, responsible, and competitive banking community by recognizing the value of the dual charter system. Competition in this sector, with a mix of small state banks, medium regional banks and larger national or international lenders will promote access and keep rates competitive for borrowers.
The Small Business Administration provides capital to back up lenders ready to encourage smaller entrepreneurs with bigger dreams. This program is beneficial because the entrepreneurs who qualify for this money could be those that have solutions for huge problems or develop products that fill an important niche for consumers in areas such as energy independence and transportation innovation. I have listened to criticisms of the SBA program and it appears there is some room for improvement. Nonetheless, the program is important for helping to revitalize anddiversify our economy. I would like to listen to bankers and businessmen alike on what improvements could be made in the SBA program that could both improve access to capital and also improve the program so that businesses would be better able to use theconnection to grow. I would not like to see this program turn into a subsidy just a way to help small businesses get a leg up.
In Wyoming business owners from cow/calf operators to owners of burger joints knowhow hard it is to find employees. There are restaurants in this state that can't stay open every day of the week because they can't find workers. This has to change if we're going to see new sectors of the economy flourish. As evidenced by the push to attract ex-employees of the auto industry to Wyoming there is currently an inadequate supply of workers in the state. One way to encourage workers would be to help defray the cost of moving through incentives for out-of-work Americans to move to parts of the country where workers are in demand. A better, more secure, and adequate temporary foreignworker program with better more traceable visas could also give businesses such as those in agriculture and tourism a lift. These visas would be available when companies applying for them were unable to find Americans to do the job under the stringent guidelines of the program.
The regulatory environment for all businesses needs to be more consistent, reliable,and appropriate. Regulation must reflect the law not bureaucratic whimsy. Excessive or well meaning regulation that goes beyond the spirit of the law must be addressed. Concerns from the excesses of Sarbanes-Oxley to safe drinking water compliance must make sense.
For businesses it does not matter how great a product is if it cannot get to consumers. In Wyoming this is as simple as ensuring the highways are adequate to get trucks in and out of state, but it also means there has to be high speed internet, a competitive rail system and airports that are secure and safe. We need to access new markets and ensure those that we have remain open. The world will be best served- as will Wyoming- by making sure that we enjoy free and fair trade, we must resist as other countries flirt with protectionist tariffs on American products. It is essential that we ensure products from beef to trona are given a fair break in the world marketplace.
4. FUELING AMERICA
-Stop filling the Strategic Petroleum Reserve.
-Foster American ingenuity and entrepreneurism.
-Do not ignore existing energy sources.
-Make the grid more efficient.
-Look for small scale answers too.
-Never ignore the long term goals.
This is a two edged dilemma for Wyoming. On the one hand prices are affecting us all by making it more expensive to travel, commute and eat, while on the other, higher prices mean more mineral revenue. We must address the two with a coherent energy policy, one which responsibly addresses both supply and demand and which moves our great nation towards more energy self-reliance. Wyoming solutions can help do that.
Immediately, what this nation needs to do is stop putting oil into the strategic reserves. It will not do much, but it is at least a step towards addressing the press of demand by eliminating one pretty big consumer.
Next, we must recognize the fastest and cheapest way to increase energy supply is to improve efficiencies. There are a host of exciting opportunities ready for the market. More efficient vehicles, home appliances, and better ways to insulate and build houses are already available to consumers.
My plan calls for incentives for entrepreneurs to find and invent technologies that take advantage of new sources of energy or use less of existing sources. I believe that the best solutions to our energy dilemmas will arise out of a multiplicity of approaches and technology all competing in a marketplace and that government on its own cannot nor should it define the solution. The role of government is fundamentally different. American entrepreneurship made this country great and will continue to.
We must recognize that our traditional sources of energy will continue to play a prominent roll, and we will find further ways to use them. That is good news for Wyoming. Clean coal and coal-to-gas processes are in development. I believe our nation will continue to refine these technologies and those that emerge commercially viable will be the best.
Nuclear energy is another source of power that our country cannot ignore. Through standardization of components and design, it is getting safer and more cost competitive. Longstanding concerns about storage and disposal of waste and security are being responsibly addressed as well. Siting concerns will require leadership, but the future of nuclear power is much clearer today than it has been in a decade. That is good because the lead times for these types of projects are so long.
I want to be a part of the effort to modernize the delivery of electricity and would makethat a priority. Right now we are using a technology for the grid that is from the 1950s. A smart grid that uses technology and has more flexibility and ability to take advantage of distributed diverse supplies will only make the nation's electricity supply safer, more reliable, and over the course of years help to manage energy demand thus helping to contain costs. This modernization and opportunity will benefit energy producers and consumers alike. It will take time to consider how, when, and where this new grid will be built. But, it is time to start this process and Congress must find a way to facilitate this discussion.
Not all of these answers come in the shape of national reforms or eye popping inventions, some will come on a very personal level as people find ways to take responsibility for the amount of energy they use and produce. As someone with solar panels on his home and a wind turbine on the way, I think all of us can do something to reduce the demand for energy. In Congress I would lead the charge to encourage energy innovation and promote opportunities for individuals to do more on their own. Through all of this, I believe we cannot lose sight of what matters so much to us in Wyoming. That is our land, water, air, wildlife, and our way of life. As a nation we need the energy Wyoming has to offer. As a state we want to keep the economy strong and grow it. As people, we cannot lose sight of what makes Wyoming so special to us as citizens, sportsmen, mountaineers, and Wyomingites.
5. STRENGTHEN THE DOLLAR
-Reduce the Deficit.
-Restore Consumer Confidence.
-Build Sound Fiscal Policy.
-Ensure Price Stability.
The weakened dollar is dramatically impacting the American economy. While I recognize that a cheap dollar improves our competitive position in the world, nonetheless, it is us citizens who have to pay more every day for gasoline, diesel, and other products relative to others in the world. Consumers benefit by having a stronger dollar because they see more purchasing power and price stability.
To have a strong dollar we must reduce the deficit. A deficit and uncontrolled federal spending discourages investors from holding US dollars and from buying them. The deficit is a sign the country is not living within its means and shows investors that the country is unstable and cannot continue spending at this rate. Those investors then choose to buy currency from countries that have stronger economies. Putting an end to deficit spending is a key to getting the economy on track.
Once we put an end to the deficit and the dollar rebounds it will restore consumer confidence and encourage investment in the economy. When Americans know their dollar is strong and their assets are secure, they will invest in the economy.
Keeping the dollar strong will require a sound federal fiscal policy. When the federal government is a good steward of tax dollars the dollar gains value. This means balancing the budget and cutting waste in bureaucracies. This was the domain of Republicans for years and without a return to our fiscally conservative roots we will not help the economy come back to life.
Another benefit of a strong dollar is that the price of goods and services stabilizes. This is a huge source of anxiety right now; consumers do not know how high the cost of fuel or bread will go and that anxiety causes shoppers to cut back on the necessities rather than investing.
On an international level if the American dollar is to be the currency facilitating trade for our goods as well as the goods of other nations, the dollar must strengthen. For instance the price of a barrel of oil is always quoted in US dollars. If the Euro becomes the preferred currency our economy loses.
6. SECURE OUR BORDERS
-Deploy additional border agents and new technology.
-Create a legal and traceable workforce through temporary work visas.
-Streamline coordination between federal, state and local law enforcement.
Our porous borders are a threat to our national security. Those who enter the United States illegally drive wages lower, and impact local schools, hospitals and other essential public services. We must secure our borders.
We need additional border agents and new technology to help stop illegal immigration and the transport of drugs and dangerous materials into the US.
At the same time we have to encourage people to enter our country legally. This can only happen after the visa system is improved and biometric identification processes are used, creating a legal and traceable workforce.
Amnesty is not the solution. That would reward people for breaking the law. Amnesty does nothing but encourage others to illegally enter the US in the future. Encouragingly, we are starting to see better cooperation between local and national law enforcement. The more this happens the better the opportunity to detain and deport dangerous criminals who enter our country illegally.
7. MAKE HEALTH CARE AFFORDABLE
-Find market solutions not government programs.
-Ensure that small business owners are able to provide health care to their employees.
-Permit interstate pooling.
-Incentivize healthy behavior.
-Modernize health care.
-Encourage the use of tax exempt personal health savings accounts.
-Increase accessibility to health care in rural and frontier areas.
-Eliminate unfair tax handling.
There are over 46 million Americans currently living without health insurance. Far too many of those who do have health care are crippled by the rising costs of insurance premiums. For small business owners like me, the struggle can be all consuming and, at the end of the day, can force us out of the market.
We must have a government that clears the path for individuals and businesses through tax breaks, not penalties, when they choose to seek a private health care provider. We must have a government that understands the burden of small businesses and also understands how vital their survival is to the survival of our national economy. Governments and large corporations have a distinct advantage in the marketplace because of the size of their employee pool. Small businesses can be fragile and theirbottom lines can be thin; our government must allow small businesses with shared interests to pool their resources and bring down the cost of health care for all of their employees.
There has to be a change where government values and encourages smart health care decisions. A large majority of health care expenditures in our country are wasted on catastrophic illness that could have been prevented had our government nurtured a sense of personal responsibility and accountability for one's own health and health care decisions.
When possible the market needs to recognize the value of individuals taking care oftheir own wellness through exercise and diet. The push to manage their weight in a healthy, doctor supervised manner is something that should have an economic incentive from an employer or insurance provider because this saves us all money. This is being done in some rare cases and needs to happen more often, it can also be usedto encourage people to quit smoking. We must have a government that addresses head-on the issue of medical malpractice lawsuits and their effect on doctors, nurses, and patients in this country. Claims can be more effective and appropriately handled through unbiased medical review boards and arbitration.
Also, we must have a government that focuses itself on bringing our health care administration into the 21st century. As a businessman, one of my first goals in any business is to ferret out inefficiencies. The current medical record system we struggle with in this country can nearly qualify as prehistoric. Huge amounts of time and money could be saved by tackling the hard work of updating this system and bringing it into the electronic age, making individual medical histories portable and easily transferrable. We can have the greatest health care system in the world and if we do not have access to health care providers in rural and frontier areas we cannot provide quality health care. Our health care system must encourage nurses, nurse practitioners, pharmacists, dentists, mental health professionals and doctors to offer care to those of us who live in under served parts of the country. This can be accomplished through debt forgiveness, tax incentives, and other benefits offered to these professionals.
Employees who do not have insurance provided for them and pay for it on their own cannot deduct this amount from their taxes. This unfair practice needs to be addressed immediately.
Senator Mike Enzi is leading the way to bringing down the cost of health care. I fully support his ten initiatives and know that the Senator, as a former business owner, knows how important it is to be able to afford health care for your family and your employees. Senator Enzi has developed a plan that embodies the Republican problem solving approach of bringing individual responsibility back to the table and removing government roadblocks that prevent businesses and individuals from making the best decisions for themselves and their families. This is the kind of Republican plan I support today and will support each and every day I serve in Congress.
8. ADVANCING HOME OWNERSHIP
-Simplify the Truth in Lending Act.
-Refuse to bailout investors who take big risks and lose money.
I am tired of our government using taxpayer money to provide bailouts for troubledsectors of the economy. Rather than create new bubbles with tax incentives or bailing out difficult circumstances, I want to encourage proper business relationships with a series of steps that allow consumers to choose wisely without unnecessarily constraining lending institutions or penalizing sectors of the financial community which were not at fault. I also call on Congress to prevent something like this from happening again with Wyoming solutions.
Washington wants to spend money or regulate its way out of this crisis, but those are not the answers. The solutions I see are: the creation of more transparency in the lending process to ensure consumers know what they are getting and can compare options easily and making sure no one engages in fraudulent practices. Bailing anyone out is not the answer.
The Truth in Lending Act is a good start because it made sure that all lenders used the same language and values in their agreements with borrowers. What has happened is that some found ways to confound consumers either by confusing the regulations or bybeing outside of the scope of those regulations. I believe the consumer wants and deserves the ultimate responsibility in any transaction but can be overwhelmed by the confusing array of disclosure statements and terms that make it very hard to compare products across platforms. I would like to ask Congress to rethink its disclosure requirements, to simplify them and to provide a straightforward calculation of the total cost of a loan.
I also want to work for legislation that would allow homeowners who are truly able to afford a mortgage and have stayed in their homes, an opportunity to renegotiate with their existing lender or find a new one so they can stay in their home and pay for it, not receive a handout.