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Public Statements

Grassley Urges President, Senate Majority to Take Bipartisan Approach to Encourage Job Creation

Statement

By:
Date:
Location: Washington, DC

Mr. President -- Just a few weeks ago, the Senate considered a so-called jobs bill that would have provided $35 billion for the purpose of creating or saving the jobs of teachers, cops and firefighters. This state bailout was included in President Obama's $447 billion stimulus package that he proposed in September. When it became apparent that the Senate leadership didn't have the necessary votes for the whole package, Majority Leader Reid chose to move this part individually.

Proponents argued that this $35 billion bailout was necessary to prevent the layoff of teachers and public safety employees. Don't forget, this isn't the first time the Senate has considered this type of bailout. The $814 billion stimulus bill that Congress enacted in early 2009 included billions in bailout money for state and local governments. President Obama stated that bill would save or create up to four million jobs over the following two years. That bill was supposed to create or save 150,000 jobs of teachers, nurses, firefighters and police officers, according to the President.

Then in August of 2010, Congress passed another state and local government bailout, this time sending $26 billion to states to save or create public sector jobs. Robert Gibbs, the White House spokesman stated that this bill was, "a very important proposal, particularly to ensure that 160,000-plus teachers didn't get fired as a result of bad state budgets." This $26 billion was the second major effort by Congress to help states plug their budget holes, while claiming that we were saving the jobs of teachers and other government workers.

The truth is, these efforts to save state and local public sector jobs are more simply a bailout of state and local governments that have failed to reign in their own spending. They've become addicted to tax and spend, big government policies, and federal bailouts have only aided that addiction. Rather than make the necessary and difficult budget decisions, they've come to rely on the spendthrift behavior of Congress to spend more and plug their budget holes.

Nationally, the debt held by states is approaching $3 trillion. This figure doesn't even include unfunded pension liabilities. Some of the states in the worst trouble are Massachusetts, Rhode Island, New York, New Jersey, Connecticut, Illinois and California. The increase in debt has had a significant impact on their bond rates and ability to find competitive bond rates and financing. The free-spending legislatures, coupled with a huge public workforce, have driven up the cost of doing business in these states. It has also negatively impacted their unemployment rates and their economic growth.

For much of the history of our country, states have been responsible for financing their schools, police, firefighters, first responders and more. Most of the time, they've done a pretty good job. States that have done well have grown economically and attracted more jobs and more taxpayers. States that haven't managed their budgets well have had the opposite result. This competition has created a system that demands good governance in order to attract employers and workers. A federal bailout of states upsets this balance. It rewards bad behavior, and ultimately hurts the American economy. It eliminates the risk associated with poor economic policies. It sends a message to the bad actors, that there is no negative consequence of their failure to effectively govern. This type of federal stimulus is ineffective at saving or creating jobs, and it does nothing to promote private sector growth.

Annual federal deficits are close to ten percent of GDP and our national debt is $15 trillion. We cannot afford to bail out states and continue to encourage poor fiscal behavior by states. A bailout of Democratic governors and state legislatures, and public employees may be good politics, but it is terrible economics and creates an even worse fiscal situation.

Rather than propose political solutions during this economic downturn, the President should work with Congress to find real solutions to our economic and unemployment problems. The recession began in December of 2007. Nearly one in ten Americans remains unemployed. More than 26 million Americans are either unemployed or underemployed. The policies of the past 2½ years have not worked. They've made things worse. The time for political documents has long passed. It's time to govern and work together to get our economy growing again.

For those who are unemployed, it's a depression. It's time we did something to help turn their situation around. Private sector employers need an international trade agenda that opens new doors to sell U.S. agricultural goods, manufactured products and services. I'm glad that the Senate finally approved three pending trade agreements last month. They were delayed unnecessarily for years, and the rest of the world is moving ahead without us. We're more than capable of increasing exports, but we need the markets to do it. President Obama has said he wants to double exports. In order to reach his goal and to do everything possible to generate economic activity and opportunities in the United States, the administration needs to move forward on other job-generating trade initiatives without delay.

It's time to put an end to the job-killing federal regulations. New regulations from the EPA, Department of Labor, the National Labor Relations Board and others are making it harder for businesses to grow. In some cases, the new regulations are actually destroying jobs. With unemployment at 9.1 percent, it's time for the federal bureaucracy to stop their harmful, job-killing regulations. It's also time to develop domestic energy resources that will create jobs while increasing domestic energy supplies. Making more energy available will drive down prices and make our country more energy independent. The President's energy agenda is moving us backward. Gas prices have risen while access to domestic sources of energy has been restricted. It's time to change course and develop energy sources here at home and create jobs in the process.

Finally, in 2009, President Obama said that you don't raise taxes in a recession. He stated his position clearly that the last thing you'd want to do is raise taxes on anyone during a recession because it would harm businesses and economic growth. Yet, every so-called jobs package that the Democratic Majority has brought to the Senate includes job-killing tax hikes. That's why they've been received with bipartisan opposition. A few courageous Senate Democrats have consistently said "no" to their leadership when it comes to raising taxes on small-businesses and other job creators. The only bipartisanship we've seen so far is bipartisan opposition to these ill-conceived political documents.

The Democratic Majority needs to get serious about addressing our economic problems. It's time to consider policies that will get people back to work without harming the economy with a tax increase. It's time to stop the political charade. Unemployed Americans need to know that we're going to do something to help create jobs and grow the economy. Unfortunately, so far, the Democratic Majority and President Obama are more interested in political strategies than job creation and economic growth.


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