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Washington, D.C. -
The unemployment rate in Ohio has been hovering around 10% for some time. Many areas of the Second Congressional District have rates that are much higher. So I was hopeful a few weeks ago when President Obama came to our state to talk about his plans to get the economy moving again.
I was disappointed by what I heard.
The President’s plan calls for still more federal “stimulus” spending and tax cuts that would be offset by tax increases. Congress gave the President more than $800 billion on a so-called “stimulus” bill. However, a full third of that -- $259 billion -- is still unspent. And, by any measure, that bill has failed to stop our economic downturn. Now, the President wants Congress to provide another $50 billion on infrastructure projects, even though he hasn’t used the money already set aside.
The President has also proposed to permanently extend the research and development tax credit and to allow businesses that purchase new machines and other equipment to write those costs off immediately rather than over time. The President should be commended for finally recognizing the stimulative effect of tax cuts. But, these tax cuts, while good ideas generally, are not likely to induce many businesses to begin hiring again.
The employers who talk to me about doing business in the Second Congressional District really aren’t asking for government money to help them put people on the payroll. They want to feel confident that if they extend a job offer, they’ll have the cash flow to make good on that paycheck. They want to know that the government is not going to make it more expensive to make payroll. Simply put, they are asking for some certainty about what their costs and burdens are going to be.
About the same time that the President was announcing his plans, House Republicans offered an alternative. Our plan would begin to clear up the uncertainty that has been hampering economic growth. It would stop any tax increases in the middle of a recession by extending the tax policies begun in 2001 and 2003 for at least two more years. And, to begin to get our fiscal house in order, it would reduce all non-defense discretionary spending to 2008 levels.
There is no magic wand that will instantly turn our economy around. But, at the very least, Congress can act to make sure that government policies are not hindering economic growth. When employers feel confident that they have a good idea of what their future employment costs are going to be, they will extend more job offers.
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