A top Democratic leader in the U.S. House of Representatives recently said, "We've got to spend our way out of this recession." Rep. James Clyburn, the Democratic Whip, said that we have two choices -- either "high deficits and low unemployment" or "high unemployment and low deficits." The statement revealed the strategy behind the President's $3.8 trillion budget, which is the latest in a series of massive spending initiatives that will burden our nation with a record-breaking $1.56 trillion deficit this year alone.
Creating jobs and economic opportunity must be our main focus. However, there are several ways we can undertake this national priority without out-of-control spending and unsustainable deficits.
Small Business-Friendly Reforms
First, we should scrap the $3 trillion government takeover of our nation's health care system. As it stands now, the massive health care bill is a job killer. If small business owners expect to be hit with tax hikes, mandates, and fines -- all of which would happen under this plan -- they may stop hiring workers and making investments. However, if Congress shows that we are serious about reducing health care costs for small businesses through step-by-step reforms, companies are more likely to have the financial resources and the confidence to expand their businesses. One such reform would allow small businesses to pool together to provide insurance coverage for their workers, granting them access to the same volume discounts available to large businesses and corporations.
Another way is to extend tax relief to small businesses. The tax rate reductions that were adopted in 2003 in response to the economic slowdown immediately reversed job losses, helped stabilize the stock market, and spurred business investment. Yet the 2001 and 2003 provisions, which included relief from income taxes, capital gains taxes, dividend taxes, and death taxes, are set to expire next year. If tax relief is not extended, it will amount to a massive tax hike on small businesses during a recession. We should extend those provisions and enact other reforms, such as payroll tax relief and tax incentives for small business investment. This would reward job creation and encourage entrepreneurship.
Targeted Infrastructure Investments
To create high-paying, skilled jobs, the federal government must spend wisely -- not spend more. In 2009, when Congress was debating a stimulus bill, I was willing to support a scaled-back plan that would have focused efforts more productively on targeted infrastructure projects. Ultimately, I voted against the $1 trillion so-called stimulus bill because it spent too much and accomplished too little. Unfortunately, the President's budget proposal similarly misses the mark.
In an Armed Services Committee hearing last week, Chairman of the Joint Chiefs of Staff Admiral Mike Mullen testified that the budget does not provide adequate funds for the Navy to meet its required level of military readiness, including a naval fleet of at least 313 ships. At the proposed funding levels, the Navy will barely be able to maintain its current ship fleet of 287 ships, which is the smallest fleet the service has had since 1916. The budget should make this military infrastructure investment a priority. In doing so, we would strengthen the security of our nation and create quality jobs across America, including at our own Mississippi shipyards.
Domestic Energy Investment
Similarly, our nation should expand domestic energy production. This would serve the dual purpose of ending our dependence on foreign energy, while redirecting the billions we spend each year to import oil and investing it at home. The administration and lawmakers from both parties have expressed support for expanding offshore drilling. Congress should move swiftly to remove regulatory barriers to offshore drilling, so coastal states like Mississippi can lead the way for American workers to produce American energy.
At the same time, we should invest in inexpensive, clean nuclear energy. Some in Congress have set a goal of 100 nuclear power plants in 20 years. This would provide a safe alternative to fossil fuels, and it would employ hundreds of thousands of Americans. One corporation estimates that building 41 new nuclear reactors would add more than 600,000 jobs to the U.S. economy. The federal government should guarantee loans to those corporations willing to invest in this economically powerful energy source.
Finally, we need to get serious about debt reduction. Continued excess spending and accumulating debt will send our nation's interest rates through the roof, and the value of the dollar could decline further. A significantly weakened dollar would impact every aspect of our economy, straining American families and small businesses alike. We cannot allow that to happen. I recently supported the establishment of a bipartisan debt reduction commission. That aggressive approach has yet to gain traction in Congress, but it represents the bold thinking needed to address out-of-control spending, historic deficits, and nearly 10 percent unemployment.