Where Are The Jobs?
Everybody's asking, "Where are the jobs?" The current Administration and majority in Congress have created a booming job market in one sector: the federal government, which has grown by 9.3 percent since January 2009, not counting temporary census jobs. But as for new private sector jobs, not so much. And unemployment remains stubbornly near 10 percent.
Here in the 6th District, according to June figures, unemployment in Manitowoc and Sheboygan is still at 10.2%, Neenah is 9.7%, Fond du Lac is 9.4% and Oshkosh is 8%. In Adams County the unemployment rate is also 9.7%, in Waushara County it is 9.6%, and in Dodge County it is 8%. With the exception of Sheboygan and Manitowoc, all of these rates have increased since the previous report.
Nationally, major corporations have amassed close to $2 trillion in cash, but they are not hiring and investing. Why?
In a word: uncertainty. We have seen a great deal of activist government over the past two years with enormous deficit spending, the government takeover of car companies, bank bailouts, mandatory national health care, financial regulation and more.
I have problems with each of those initiatives and have already voted against them when considered by Congress. But no matter what their merits or faults, no one can deny that the government is imposing major new rules, regulations, and taxes throughout the economy.
A glance at the Gulf Coast reminds us that sensible regulation is necessary - and that when regulations are necessary, they should be enforced. But businesses are currently facing a complex dilemma. Not only are they being burdened with new taxes and other requirements, they also know that further burdens are coming - but the form and extent of those burdens are still a mystery.
Businesspeople plan to succeed. But when the government is making major, burdensome and as yet largely unspecified changes, it's very difficult to plan. Rather than hiring and investing, many are choosing to wait and see.
What can be done? Members of the House Republican Conference are discussing alternatives with people back home and listening to the public response, and plan to report back what we learn so that we can create a truly representative agenda. This is why the ideas below are proposals rather than a platform. Here are some of the proposals we've heard so far:
First, we should provide incentives for small business growth. Small Business Administration statistics show that small businesses create roughly 70 percent of all new jobs. We should allow businesses with fewer than 500 employees to take a tax deduction equal to 20 percent of their income.
Second, we should encourage access to credit for small businesses. The latest financial regulation law discourages banks from lending to job creators, especially small businesses.
Regulatory uncertainty has banks sitting on $1 trillion in excess reserves. We need this capital off the sidelines and working toward a job-producing recovery. Congress should act swiftly to reform areas of misguided overregulation.
Third, we should put on the back burner any big, expensive, complicated initiatives - especially if their main purpose is something other than economic recovery. Ambitious, 2,000-page reforms invariably come with complex regulations and higher taxes. They also come with hidden provisions and unintended consequences. A recession is a particularly bad time to be adding to the burdens and uncertainty of our job-creators.
Fourth, taxes are currently scheduled to shoot up this coming January. Congress will probably prevent several "middle class" tax increases, but many are determined to punish "the rich," - including small business owners, investors and entrepreneurs. Surely, everybody should pay their "fair share" of taxes, but while we argue over what that means, maybe we should recognize that raising taxes can be very bad for the economy, especially during periods of sluggish growth and high unemployment.
Fifth, Congress needs to rein in the regulators. Many in the current Administration seem to distrust business, have limited knowledge about and sympathy with free markets, and a tendency to impose regulations without adequate concerns about unintended consequences.
Yes, we need proper regulations, but American businesses cannot plan for the future with ever-changing rules. In response, one proposal would provide stability by requiring that no major rule proposed by executive agencies could be enforced without congressional approval.
A "major rule" would be defined as any regulation that would have an annual effect on the economy of at least $100 million or would create a significant increase in costs or prices for the American people. The White House's own internal departments have identified 191 planned rulemakings that will have an economic cost of at least $100 million.
Of course, congressional oversight will not guarantee that costly, ill-advised regulations will be avoided. Consider the requirement in the new health care law that all businesses must issue 1099 forms to each contractor with whom they do more than $600 worth of business. This means literally millions of new forms will have to be filed unless Congress does something about its own burdensome laws.
Last but not least, if we are to fully restore our economic vitality, we need solid, long-term plans to limit the size of government and cut spending to reduce the deficit. The federal government is currently spending about 25 percent of the nation's GDP. As recently as the year 2000, it spent 18.2 percent. We must reverse the trend.