By Rep. Diane Black
In President Obama's recent speeches on jobs and the deficit, the White House missed a real chance to create a better environment for job growth and American prosperity.
On the deficit, the president's plan ignores one of the true drivers of our debt: health-care spending. Obama's Medicare proposals only add three years to the program's solvency; unfortunately, current estimates show that Medicare will go bankrupt in 10 years. Also disappointing is his gimmick of counting $1.1 trillion in savings from troop drawdowns in Iraq and Afghanistan -- money that would have never been spent anyway.
The national unemployment rate continues to hover over 9 percent -- in Tennessee, unemployment rates are even higher. I agree with the president on certain parts of his jobs speech, like small-business tax credits and ensuring that veterans find jobs. But Washington doesn't create jobs, and a "Stimulus Part Two" that seeks to pay for temporary job programs by enacting permanent tax hikes on small businesses would do more harm than good.
A recent article in The Tennessean asked local business owners on what they need to start hiring again. The answers were similar to what Sixth District businesses have been telling me: They need greater access to capital, more certainty about the national debt and a reduction in government regulations. Big government and Washington red tape are getting in the way of Tennessee job creators, and the president's current proposals will only make it worse.
According to the Heritage Foundation, federal agencies under the Obama administration have so far created more than 75 different regulations costing more than $38 billion. While some might think that only large corporations get stuck with the bill, a September 2010 study by the Small Business Administration showed small businesses bear a large share of the federal regulatory burden. Regulations can on average cost $8,086 per employee, but for a business with fewer than 20 employees, the cost shoots to $10,585. While regulations for safety and consistency are important, Washington has become a red tape factory. Currently, there are 4,000 new rules in the pipeline that could cost small-business owners.
Unfortunately, job creators will feel more squeezed under Obama's jobs proposal, which requires $447 billion in increased taxes on families and businesses earning more than $250,000 a year. In the U.S., 98 percent of businesses are organized as "pass-through" entities, which means they pay their business taxes on their individual returns rather than a corporate return, so this tax hike would hit small businesses hard. Even the Treasury Department admits that 90 percent of businesses that pay taxes through the individual income tax code and employ workers would pay more taxes under the president's plan.
Government must get out of the way and create a better environment for business. Raising taxes and picking winners and losers is not how we fix the economy. The House has passed a dozen jobs bills that are waiting on Senate action -- and more are on the way. We must empower American entrepreneurs to grow the economy, and continue to limit Washington bureaucrats from stifling it.