Our economy has been dealt a terrible blow. Nearly 10% of Americans are out of work and in Illinois, unemployment is even higher at 11.2%. This is unacceptable. Quality jobs provide the foundation for our economic well-being and for the prosperity of every American family.
I own and operate a small business in Northfield, IL with 90 employees. I understand the pressures and challenges facing small business owners. Pressure to meet payroll. To provide health benefits for employees and their families. To invest in equipment and technology to continue being competitive. I also understand the pressures on our working families. To work hard and succeed. To save money for the future and for our children's education. Fundamentally, American workers want a stable job in a steady economy. But we also want more. We want innovation and we want new and better ideas about how to deliver goods and services. We need an environment that encourages and fosters ideas and entrepreneurship. My plan includes four critical elements to promote business growth and create private-sector jobs.
1. Make credit available to small business
2. Retrain the long-term unemployed
3. Rein in government spending
4. Reduce the tax burden on small business
Make Credit Available To Small Business
Small business created 64% of the jobs over the last fifteen years. As small business continues to face tight credit conditions, the burden of creating jobs has been left to large corporations. However, small business has lost 2/3 of the jobs in the current recession. We simply cannot rely on large business to make up for the loss of this engine of job creation. One of the greatest challenges facing small businesses today is the availability of credit. Credit is the lifeblood of small business and in today's economy, credit is constrained.
Now Congress is looking to make it harder to access credit. We need to ensure that over-zealous regulators in Congress do not further constrain access to credit for job creators through misguided financial regulatory reforms.
Retrain the Long-term Unemployed
One of the most troubling elements of the current economic pullback is the growth in the ranks of the long-term unemployed. Some 44% of the unemployed have been unemployed for six months or more. Sadly, many of the jobs these individuals held will simply not be coming back. New jobs will need to be created to reduce the levels of the unemployed. We need to do more than have the unemployed sit on the sidelines hoping for a return to the old economy. We must foster policies that enable skills development and retraining. If there ever was a time to incentivize small business to retain and retrain workers, this is it.
Rein in Government Spending
Every level of government has become over-burdened by increasing amounts of debt. The federal government has buried us in over $13 trillion in debt, and in two years total federal debt is forecast to exceed our entire Gross Domestic Product, which currently stands at $14.2 trillion annually. It is irresponsible to burden our children with this level of debt. Congress currently borrows $0.40 for every dollar it spends. This is like a family of four, earning $75,000 and spending $125,000 every year. This reckless spending must end.
This is the challenge we face and the one we must meet. There are two competing views on how we address this challenge: transfer the burden of these debts to the federal government with the expectation that taxes will increase to redistribute income and savings, or put money back in the hands of individuals and small business owners, and entrust them to make their own investment decisions and create jobs. We cannot tax our way out of this debt burden. We must instead grow our economy and our income to begin to relieve the price that children and grandchildren will have to pay.
Support a Pro-jobs Tax Policy
Small business has led the way out of our last seven recessions, creating two out of every three jobs during a recovery. But under the current Administration's policies government jobs are growing faster than private sector jobs. The Obama agenda is only set to make the environment for small businesses worse. The Obama budget plans to raise taxes on the small businesses that earn 72% of all small business income. Taxes on capital gains are set to increase 20% while taxes on dividends are set to rise to 39.6%. Obamacare not only inflicts $503 billion in new taxes by 2019, $87 billion of which come from new employer mandate penalties, but also burdens small businesses with new 1099 IRS paperwork every time they do more than $600 in business with another entity.
My plan includes a simple, common sense way to support our small businesses and to create jobs. Lower payroll taxes. We need to put more money in the hands of business owners who would be able to make prudent investment and hiring decisions. A simple and clear reduction in taxes on hiring workers will allow businesses to employee more individuals. We must also reduce the cost of health care by passing medical malpractice reform and implementing transparency in pricing and outcomes to allow more consumer-driven care. Meanwhile we must create a long term energy policy that substantially reduces the costs of energy and our reliance on foreign oil. I also support the Metra STAR Line proposal that would make public transportation more readily available in the suburbs and attract new employers to the area.
Long-term Challenges Remain
The limited recovery to date has been largely subsidized by the massive spending on the part of the federal government. The stimulus and other Congressional spending have not served to address the fundamental challenges facing our economy. Today our economy is dominated by uncertainty: uncertainty over tax rates, regulatory changes, financial and health care reforms, and the growth in federal debt. We must change course and support policies that promote the growth of small businesses and the jobs they can create.