June 3, 2011

For too long, the American people have been asking “Where are the jobs?”  Unfortunately, the 13.9 million unemployed Americans have been ignored by the President and Democrats in Washington.  Higher taxes, record spending, and bigger government has failed to create jobs or boost economic growth.  Put simply, this economy is growing too slowly to replace the millions of jobs that have been lost.  GDP growth in the first quarter of 2011 fell to 1.8 percent, down from 3.1 percent in the last quarter of 2010—this is the slowest economic growth since the second quarter of 2010.  The failure of the President’s runaway spending, deficits, and debt is being felt by every family struggling to put food on the table and pay their mortgage.  Instead of expanding the size of government, Republicans in Washington are committed to a pro-growth economic agenda that will put America back to work.

The American People Are Suffering

The economic policies of the President have failed and Americans are paying the price.  High unemployment, soaring energy costs, rising food prices and slow growth have been the products of the Obama administration for more than two years.   As a result of the administration’s failed policy, unemployment has remained over 8 percent for 28 months, the economy is not growing fast enough, and the American people are forced to suffer the consequences.

• From the President’s first day in office through April 30, 2011, the economy has lost 2.5 million jobs—an average of 3,044 jobs lost every day under this administration.[1]
  
  
• Not comforted by assurances from the policy makers at the Federal Reserve, the American people are concerned about the looming threat of high inflation.  Indeed some reports indicate that rising prices are already here.  A recent CNN Money article reported, “Inflation accelerated to its fastest annual pace in two and a half years in April…The Consumer Price Index, the government’s key inflation measure, rose 3.2 percent over the last 12 months…the biggest 12-month jump since October 2008.”  Americans don’t need government statistics to confirm what they already feel as their family budgets are squeezed to buy groceries or put gas in their cars. 

• Compounding Americans’ falling purchasing power are new indications that the economic recovery is slowing down, well short of recovery trends following previous sharp recessions.  From slowdowns in industrial production to drops in existing home sales and housing starts, an economy threatening to slow down or stall means that unemployment for millions of Americans could be prolonged.

• Today, there are 44.6 million Americans receiving food stamps.  That equals 14 percent of the population and is by far the largest number in history.  When President Obama took office, there were 31.9 million Americans using food stamps.  Under President Obama, the number of people on food stamps has increased by 38 percent.[2]
  
  
• Jobs in our nation’s crucial industries are disappearing.  Despite all the talk about “shovel ready projects,” since President Obama took office, the slumping economy has lost 1 million construction jobs, a decrease of 19 percent in just over two years.[3]
  
  
• Unemployment is hitting families particularly hard because our economy is not creating enough jobs to make up for those lost.  According to the Bureau of Labor Statistics, 150,000 new jobs need to be created each month just to keep up with the population growth.  Instead, we have lost 2.5 million jobs from the time President Obama took office to April of this year.  As a result, the average unemployed American has been searching for a job for 39 weeks—the longest average time to find a job in history.[4]
  
  
• Adding to the stress of struggling families and small business owners, gas prices have increased by 123 percent since President Obama took office.[5]

All these statistics ultimately say the same thing—everyday Americans are struggling and will keep struggling until our economy turns around.

What is the Obama Administration Doing?  Killing More Jobs

While Americans, scrimp, save, and make do with less, President Obama and Democrats in Washington have continually ignored the cries for jobs and pushed for legislation that will destroy jobs and hurt our economy. On average, three years after the four deepest previous recessions started, real GDP was 7.6 percent higher than the pre-recession level. During the Obama recovery, real GDP is up only 0.1 percent. Forty months after the start of the 1953, 1957, 1973 and 1981 recessions, total employment was on average 4.7 percent higher than the pre-recession peaks, while total employment today is still down 4.7 percent—that's a total employment gap of 13.9 million jobs.[6]

The Job-Destroying Stimulus:  In 2009, the White House claimed that if the $1.16 trillion (CBO estimates the cost of the bill will reach $814 billion and interest on the debt for the bill will be at least $347 billion) stimulus was approved, unemployment would not rise above 8 percent.  In reality, unemployment is currently 9 percent and has been above 8 percent for 28 months.  In the same report, the Obama administration claimed the stimulus would “save or create at least 3 million jobs by the end of 2010.”  In fact, a new report by economists Timothy Conley from the University of Western Ontario and Bill Dupor from Ohio State University, found that the President’s failed stimulus “destroyed or forestalled roughly one million private sector jobs.”  Instead of creating jobs, the largest stimulus bill in history crowded out private sector growth and cost Americans jobs.

The Job-Destroying Health Care Takeover:  According to CBO, “the legislation, on net, will reduce the amount of labor used in the economy by a small amount—roughly half a percent—primarily by reducing the amount of labor that workers choose to supply.”[7]  That “small amount” is equal to 711,000 jobs today. In January 2011, two hundred economists released a letter to Congress calling for the health care law to be repealed and replaced.[8]  These economists—including former CBO Directors, Federal Reserve economists, White House officials, and a Nobel laureate—all agreed that the law would damage the economy by implementing more than $500 billion in tax increases at a time of record-high unemployment.  As a testament to the job-destroying nature of the legislation, the administration has granted businesses 1,372 health care takeover waivers for over 3 million Americans.  Half went to union members—even though they account for only 11.9 percent of the workforce.

Job-Destroying Energy Policies and Gas Prices:  The Obama administration has actively blocked and delayed American energy production including instituting a ban on all new offshore oil development—destroying jobs, raising energy prices and making the U.S. more reliant on unstable foreign countries for energy.  As a consequence of the Administration’s policies, drilling equipment has been idled and moved overseas.  The American Petroleum Institute estimates that this expected permit delay will cause 125,000 jobs to be lost by 2015.[9]  The long-term impact of the President’s moratorium, if sustained for 18 months, could cause over 36,000 jobs to be lost nationally, over 24,000 jobs lost in the gulf region, and over 14,000 jobs lost in the state of Louisiana, according to a study by Louisiana State University economist Dr. Joseph Mason.  By delaying the process to issue drilling permits, the President has continued a de facto moratorium with the adverse economic consequences therein.  While blocking American energy jobs, the president is offering to help Brazil drill for oil—an effort he says would make the U.S. “one of [their] best customers.”[10]

Job-Destroying Regulations:  According to a September 2010 report from the Small Business Administration, total regulatory costs amount to $1.75 trillion annually—enough money for businesses to provide 17.5 million private sector jobs with an average salary of $100,000.[11]  As of 2008, small businesses—which have created 64 percent of all new jobs in the past 15 years—face an annual regulatory cost of $10,585 per employee, which is 36 percent higher than the regulatory cost facing large firms.  Some of these regulations include requiring microwave manufacturers to measure the amounts of energy their products use in the “off” position, stricter regulations on the amount of dust on American farms or imposing a fee on tree sales to promote tree sales.[12]  Unfortunately, President Obama continues to make the burden worse.  According to Republican staff estimates, the government’s health care takeover has already added 6,578 pages of regulations and Federal Register notices and the laws major provision don’t take effect until 2014.  A recent study by the Heritage Foundation found that an unprecedented 43 major regulations were imposed in fiscal year 2010 with a total economic cost of $26.5 billion, the highest total since at least 1981.[13]

According to the Joseph Mason study, the Department of Interior’s de facto moratorium of exploration in the Gulf of Mexico could cost 36,137 jobs.  In addition, “more than 80,000 jobs could be lost due to EPA regulations targeting the cement industry.”  Finally, EPA greenhouse gas regulations could cost 1.4 million jobs.[14]

Job-Destroying Taxes:  The President’s budget for 2012 calls for $1.5 trillion in job-destroying taxes. The President says that the bulk of these tax increases would only impact the rich.  But the fact remains that these tax increases will kill American jobs.  More than 75 percent of America’s small businesses file their taxes as individuals.[15]   Half of them would suffer from a higher tax burden under the President’s proposed tax increases, hurting their ability to hire more workers and pay their current workers more.  An increase in the top two rates would impact small businesses that employ approximately 22.5 million workers.[16]  As the National Federal of Independent Businesses said just months ago, “Raising the top marginal tax rate would have hit small businesses the hardest just when the country needs them to invest, expand and hire new workers.”  Our outdated and complicated tax code, which boasts the second highest corporate tax rate in the world, has destroyed America’s global competitiveness.  According to Cisco Systems CEO John Chambers, "We are dealing with a tax system that is a dinosaur.  Every other government in the world has realized that the U.S. has it wrong. They’re saying, ‘I'm going to have lower taxes, period.’  That's what you see all across Western Europe, that's what you see in Asia in the developed countries.”[17] 

Job-Destroying Spending:  Record spending, deficits, and debt by the Obama administration has created vast uncertainty for job creators and is keeping investors on the sidelines.  In 2007, the last year under a Republican budget resolution, the deficit was $160.7 billion or 1.2 percent of GDP and it had decreased every year since 2004.  According to President Obama’s FY 2012 budget, the deficit for 2011 will be $1.64 trillion or 10.9 percent of GDP.[18]   According to Fed Chairman Ben Bernanke, this runaway spending will destroy jobs and halt economic growth.  Bernanke stated, “Expectations of large and increasing deficits in the future could inhibit current household and business spending—for example, by reducing confidence in the longer-term prospects for the economy or by increasing uncertainty about future tax burdens and government spending—and thus restrain the recovery.”[19]  Sadly, the President wants to double-down on our unsustainable path by borrowing $13 trillion over the next decade and spending $5.7 trillion over the next ten years just to pay the interest on borrowed money.

Where Have the President’s Jobs Policies Taken Us?

 

After more than two years of destructive jobs policies and the constant threat of higher taxes and record deficits, a simple look at our current unemployment data shows that the President’s policies are failing.

• 9.1%:  The unemployment rate for the month of May.

• 28: The number of consecutive months that unemployment has been at or above 8 percent—the level the President said unemployment would never reach if the stimulus passed.

• 19.1%: The rate of underemployment during mid-May according to Gallup’s monthly employment survey.  This accounts for the unemployed, those unable to find full-time work and those discouraged from looking for work.

• 13,914,000: The number of unemployed Americans looking for work in the month of May.

• 44,587,321: The number of Americans receiving food stamps, the highest number of participants in history.

• 39.7: The average number of weeks that job seekers have been unemployed.

• 8,548,000: The number of Americans who are working only part-time because they cannot find full time employment.

• 6,200,000: The number of Americans unemployed and searching for work for more than 27 weeks.

• 2,206,000: The number of unemployed Americans who want work, but who have stopped looking because of the state of the economy.

• 1,231,000: The number of job seekers that are new entrants to the workforce and have yet to find a job.

• 24.2%: The unemployment rate among job seekers between the ages of 16 and 19.

• 16.2%: The unemployment rate among African Americans.

• 11.9%: The unemployment rate among Hispanics and Latinos.

• 14.7%:  The unemployment rate among Americans without high school diplomas.

• 6.8%: The level at which the Obama administration claimed unemployment would be today if the “stimulus” was signed into law.

• 1,908,000: The number of net jobs the economy has shed since the Democrats’ “stimulus” was signed into law in February 2009.

• $1,161,000,000,000:  The total cost of the Democrats’ “stimulus.”  CBO estimates the cost of the bill will reach $814 billion and interest on the debt for the bill will be at least $347 billion. 

 

We Can Reverse Course, Create Jobs, and Grow the Economy Now

 

While the news is gloomy, there is still an opportunity for the nation to change directions.  Republicans in Congress are taking action to create a better environment for job growth immediately and ensure economic growth in the future.  Already the economy is making small gains since Republicans took control of the House.  The modest improvement can be attributed to two factors—the free-market economy is slowly moving toward a recovery from this deep recession, and with Republicans controlling one lever of the lawmaking powers, job creators know the upper limits of the Democrats’ legislative pain is behind them.  While the White House and Senate may refuse to enact our policies, House Republicans’ actions will increase confidence in the private sector by guaranteeing a check on the Democrats’ reckless spending and job-crushing regulations.

The House Republican Plan for America’s Job Creators

Empower Small Business Owners and Reduce Regulatory Burdens: 

• Require congressional review and approval of any government agency regulations that have a significant impact on the economy or burden small businesses.
• Audit existing and pending regulations to identify and address those that hinder economic growth.

Fix the Tax Code to Help Job Creators: 

• Increase American competitiveness by lowering the corporate tax rate to no more than 25 percent in a deficit neutral manner to spur investment and help create more American jobs.
• Allow U.S. businesses that operate around the globe to bring back almost $1.2 trillion in overseas profits at a lower tax rates so they can invest in our economy and create American jobs.
• According to a recent study by the Heritage Center for Data Analysis, the economic agenda in the Republican Budget would create nearly 1 million new private-sector jobs next year, brings the unemployment rate down to 4 percent by 2015, and results in 2.5 million additional private-sector jobs in the last year of the decade

Increase Competitiveness for American Manufacturers: 

• Pass the three pending free trade agreements with Colombia, Panama, and South Korea to create 250,000 jobs.
• Continue to open international markets to American made products.

Encourage Entrepreneurship: 

• Modernize our patent system to protect our nation’s innovators, discourage frivolous lawsuits, and expedite patent reviews.
• Re-Authorize and improve federal programs and approval process to streamline development of new products.
• Remove barriers to building a first class workforce so that the United States can compete in the global marketplace and lead the way in technological development and growth.

Maximize Domestic Energy Production to Ensure an Energy Policy for the 21^st Century:

• Promote lower energy prices through increased domestic production.
• Encourage all forms of energy production.

Pay Down America’s Unsustainable Debt Burden and Start Living Within our Means:

• Implement the House Republicans’ Budget:  The Path to Prosperity.
• Cut $6.2 trillion in government spending over the next decade compared to the President’s budget, and $5.8 trillion relative to the current policy baseline.