GOP's jobs ideas: Keep Bush tax cuts, freeze regulations
Employers won't create jobs until they have a clear sense of what comes next in taxes and regulation, say Republicans. House GOP leader John Boehner proposes a moratorium on new government regulations for a year and keeping the Bush tax cuts.
As President Obama prepares to sign the second historic reform bill of his administration – health care in March, finance reform next week – Republicans are offering their own answers to why jobs have not recovered and enlisting business groups to help make their case.
Above all, employers need something they’re not getting from Washington these days, Republicans say, that is, reasonable expectations about what’s coming next in taxes and government regulation.
All of the antibusiness rhetoric coming out of Washington scares employers, said House Republican leader John Boehner, after meeting with 16 business groups in the Capitol Friday morning. It’s also not knowing whether the 2001 and 2003 Bush tax cuts will be allowed to expire on Dec. 31, as mandated by current law, or how the new employer mandates on health care or financial regulation will affect their business, he adds.
“It’s clear that the path we’ve been on the last 18 months has not worked and is not working,” said Mr. Boehner at a briefing with reporters. These are the barriers to job creation, and if the Obama administration is serious about private-sector job creation, it needs to listen to the private sector, he added.
Responding to a reporter’s question, Boehner endorsed a proposal at Friday’s meeting to have a moratorium on all new government regulations for a year.
Boehner: Moratorium on regs 'a great idea'
“I think having a moratorium on all new federal regulation is a great idea,” he said. It would be “a wonderful sign to the private sector that they’re going to have some breathing room.”
In response, Speaker Nancy Pelosi fired back in a blog on Friday afternoon: “Instead of standing up for American workers, their families and small businesses who have been burned by Wall Street, Big Banks and Big Oil – Boehner wants to give ‘breathing room’ to the special interests. The Bush-Republican decision to take the referee off the field is what led to the most serious fiscal crisis since the Great Depression.”
The moratorium on regulations would derail new rules to protect children from unsafe bassinets and cradles, new consumer protections for air travelers, and establishment of a public website disclosing federal contract information, she said.
Boosted by recent polls giving them a shot at taking back the House in November elections, Republicans are convinced that a 10 percent unemployment rate will eclipse all other aspects of the Obama agenda. GOP candidates are focusing their campaigns around jobs and the economy – an issue they say Democrats have sidelined in their rush to overhaul health care and Wall Street regulation.
“I’m on the House Ways and Means Committee, and the tax code for 2010 is not yet completed,” says Rep. Peter Roskam (R) of Illinois, who attended the Friday session. “When people don’t know what the government rules are, they’re reluctant to create jobs or put capital at risk.”
On Tuesday, Republicans on the Senate Finance Committee called on Chairman Max Baucus (D) of Montana to begin marking up legislation on the expiring 2001 and 2003 tax cuts before Congress leaves for the August recess. That panel held its first hearing on the expiring tax cuts on Wednesday.
Trillions of dollars waiting to be invested
“Businesses are sitting on more than a trillion dollars of cash waiting to be invested,” wrote the 10 Republicans on the Senate Finance panel in a letter to the chairman released Thursday. “Until businesses and consumers can be confident that their taxes won’t rise next year, they will continue to refrain from investing, job growth will be stagnant, and as a result consumer spending will remain subdued,” they wrote.
House and Senate Democratic leaders have discussed letting the tax cuts expire for the highest earners, that is individuals earning more than $200,000 or families earning more than $250,000 a year. But Republicans and business groups often make the case that many small businesses would also count in that higher-income bracket and would face stiff losses if the law is allowed to expire.
“The biggest obstacle to economic recovery and job creation is the policy uncertainty created by Washington,” they wrote. “Small business owners don’t know what their effective tax rate will be in January. Business owners of all sizes don’t know what to expect from the next wave of government regulations. Investors and lenders, who are essential to getting credit moving again, don’t know what the new rules will be and cannot calculate their return on investment.”