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Op-Ed: Washington's Elusive Quest For Jobs

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Op-Ed: Washington's Elusive Quest For Jobs

With unemployment at 10.2%, it is imperative that we focus on job creation. In the halls of Congress, there are reports of yet another "stimulus" spending bill. It is great that jobs are again on the agenda, but to continue to do the same thing (simply spend more money) and expect different results is the definition of insanity. As the private sector continues to shed jobs, the size and scope of the federal government is expanding at breakneck speed: trillions in new taxes, spending, and debt; the creation of new government entitlement programs; unprecedented power grabs over our financial, health care, and energy sectors. Washington needs to drop its adherence to the notion that spending your money and printing new money are the only answers to promoting jobs here at home.

As we open another stimulus debate, it is instructive to revisit the passionate and vocal case made earlier this year for the trillion dollar spending package (H.R. 1). In January of 2009, President-elect Obama's economic team released a detailed report that made clear the need for their spending bill and the consequences if we didn't rush one-trillion dollars out the door ("The Job Impact of the American Recovery and Reinvestment Act", 1/10/09). The following chart, along with updates that mark the actual unemployment data, makes clear the disparity between Washington's promises and the dismal results.

In his first Weekly Radio Address since taking office, President Obama urged swift passage of his American Recovery and Reinvestment Act, which he argued would "immediately jumpstart job creation" (White House, 1/23/09). He added, "If nothing is done, the unemployment rate could reach double digits." Shortly after the massive spending bill became law, House Speaker Nancy Pelosi sought to assure the skeptical public by stating, "We must make sure the public understands this is a very fiscally sound package. The choices that were made in it were to create jobs, jobs, jobs and jobs and jobs as soon as possible" (Democratic Steering and Policy Committee, 3/10/09). In June, when pressed to explain why jobs, jobs, jobs were not materializing, Vice President Joe Biden noted, "The speed of job growth will really pick up in the next few months" (Time Magazine, 6/2/09). Since that time, the economy lost 1.33 million jobs.

By any objective standard, the so-called stimulus has been a failure. Since the stimulus was enacted, the private sector has lost over 3 million more jobs and the unemployment rate has reached double digits. In addition to dismal jobs numbers, the record new spending has contributed to a $1.4 trillion federal budget deficit this year.

In the face of these irrefutable facts, the Obama Administration and leaders in Congress continue claim that they've "created or saved" millions of jobs. They argue that things would have been worse had Congress failed to shovel trillions of dollars out the door. Yet again, facts continue to tell a different story. The data used to back up these claims has come under widespread scrutiny. According to an independent Milwaukee Journal Sentinel analysis, a White House report citing that "640,000 jobs were created or saved by the stimulus package" was "rife with errors, double counting and inflated numbers based more on satisfying federal formulas than creating real jobs" (Milwaukee Journal Sentinel, 11/5/09).
Click to enlarge

"Track the Money" -- Recovery.gov -- Accessed: 11/18/09

Recovery.gov has been rightly criticized for crediting jobs that don't exist, jobs at companies that don't exist, and jobs in Congressional districts that don't exist. Earlier today, I visited the Obama Administration's Recovery.gov myself to check out its impact on Wisconsin: http://www.house.gov/ryan/recovery1.htm.

The Administration claims to have spent $2.4 billion in the state of Wisconsin, resulting in 10,073 jobs "created or saved." In the Wisconsin's 1st Congressional District, taxpayers spent roughly $1.5 million per job. More troubling, millions more of your money has apparently been spent in six congressional districts that don't exist. Despite promises of unprecedented accountability, it is unclear what has happened to the $1.2 million earmarked for the non-existent 55th Congressional District of Wisconsin, as the Badger State only has eight congressional districts. These false jobs claims are not only embarrassing, but further erode the trust between Wisconsinites and their federal government.

This exercise illuminates Washington's fundamental error in its elusive quest for job creation: the belief that only greater government spending can generate jobs. Because every dollar Congress spends must first be taken from the economy, Congressional spending can't grow the economic pie - it just redistributes the slices. Congress must recognize that real, sustained growth and job creation comes from the work, savings and investment of American families and businesses - not from the federal government.

Should this message get through to the White House and leaders in Congress, what can Congress do to encourage small businesses and entrepreneurs to take risks, expand their operations and create jobs? As argued during the previous stimulus debates, there are legitimate steps Congress can take to help the American economy in both the near and long term, including the following:

*Support Real Policies for Growth. Fast-acting tax policy - such as allowing expensing on all new investments - would boost incentives to expand business operations and create jobs. In addition, lowering the corporate income tax rate - currently the second highest in the industrialized world - would help attract investment in the U.S., and reduce the incentives to shift business operations and jobs overseas.

*Provide Tax Certainty. Due to next year's expiration of past tax laws, the Majority is set to hit Americans with new tax increases on investment, savings, businesses, families and workers. This threat is stifling business investment and job creation today because of the uncertainty in tax laws. Congress should permanently extend the current tax laws and drop its insistence tax increases. This would serve as a de facto tax cut, increasing the after-tax rate of return on investment and unlocking billions in private, idle capital.

*Get Spending Under Control. Congress threatens to erase any potential economic gains if we fail to get a grip on our fiscal crisis. We are set to double our national debt in five years, triple it in ten - and then the spending really explodes as the baby boomers retire. Absent serious reform, our entitlement programs will not only grow themselves right into extinction, but they will impose a crushing blow to our budget, our currency, and our economy in the process. We should stop the creation of a new health care entitlement and make sustainable existing programs that strengthen our health and retirement security. I will continue to promote my efforts to tackle this challenge head on (www.americanroadmap.org; www.house.gov/ryan/budgetreform/).

If the Majority puts aside its ideological commitment to growing government, these ideas could be included in bipartisan solutions to bring jobs back into our economy.


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