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A better idea than the Obama job bill

A better idea than the Obama job bill

A lot better idea than President Obama’s job bill is below:

Morning Bell: The Tale of Two Jobs Plans

Mike Brownfield

September 15, 2011 at 9:51 am

It’s been one week since President Barack Obama announced his latest “stimulus” plan, and despite a cross-country road show aimed at selling his proposals to the American people, the commander in chief is finding that his message of more taxes and spending isn’t hitting home. Meanwhile, House Budget Committee Chairman Paul Ryan (R-WI) has outlined a markedly different way to help the U.S. economy get back on track.

According to a new National Journal/United Technologies poll, only one in six Americans think that the President’s plan will decrease unemployment “a lot,” while one-quarter doubted that the plan would affect unemployment at all. Then there are the 39 percent who think that the President’s policies have made unemployment even worse (twice as many as those who say he’s made unemployment better). Now The New York Times is raining on the President’s parade, too, reporting that Democrats are “balking at Obama’s jobs bill” and “say there is little chance they will be able to support the bill as a single entity, citing an array of elements they cannot abide.”

Though it might be surprising that the President is struggling even among his own party to garner support for the plan that he has demanded they pass, it’s no wonder that the country doubts his plan for job growth. After all, with its $447 billion sticker price and reliance on big government spending, it looks much like what he has tried and failed for the duration of his presidency. In short, it calls for more borrowing, spending and higher taxes–none of which is going to help America create more jobs.

Rather than take a stab at making government bigger, Ryan says in a new video that there’s a better path forward–pro-growth tax reform that makes the tax code fairer, competitive, and simpler, all of which will help unleash the creative power of America’s private sector. In an exclusive interview with The Heritage Foundation, Ryan explained why the tax code is so desperately in need of reform:

[The tax code] penalizes all those qualities that make us great and make our economy grow–saving, investing, risk taking. It penalizes those things.

It’s basically a crony capitalist creation, where Congress has decided to put itself in the role of picking and choosing winners and losers in the economy through the tax code.

When you carve out all these preferences to benefit one industry or business over others, you have to raise tax rates higher than you otherwise would have to, which makes it harder for the economy to grow, for businesses to become created.

Ryan says that the tax code has become “an economic incumbent protection plan” that ultimately leads to higher taxes across the board, leaving the United States less competitive in the global economy. His solution? Level the tax code playing field:

What we want to do is get all the social engineering and crony capitalism loopholes out, so we can lower the tax rates and let businesses keep their money in the first place–let people keep their money in the first place–and that way the determining factor of whether a business succeeds or fails will be based upon merit, will be based upon achievement, will be based about innovation, will be based upon whether they’re pleasing customers or not, and not whether they have access to people in Congress or the federal government.

Don’t confuse Ryan’s call for fairness in the tax code with President Obama’s calls for “shared sacrifice” — which for him means higher taxes on America’s job creators. Ryan says there is an inherent difference in aspiration and philosophy about the role of government in the economy:

I aspire to achieve a culture, an economy, a society where we promote equal opportunity, so people can prosper and make the most of their lives. I would argue with the President’s rhetoric and actions–he’s aspiring to a society where the government sees its role as equalizing the results of our lives. It’s a way of looking at the economy and the society as if the pie were fixed, and therefore the government has to have as its role redistributing the slices of the pie more equitably in the name of fairness or equality. That’s not how the world works. That’s not how the economy works.

Our goal is to grow the pie, not have the government figure out how to redistribute slices from some to others–which ends up putting a penalty or a hurdle on growth and innovation and prosperity–but grow the pie itself. I will grant the President that class warfare can make for really good politics, but it doesn’t make for good economics.

Ryan is on the right track. Whereas President Obama wants to keep increasing spending and paying for it with higher taxes, Ryan is advocating a much-needed revamp of the tax code. Whereas the President’s policies would permanently increase taxes, increase the size of government, and make America’s unemployment picture even worse, Ryan looks to make government smarter and fairer, allowing businesses to grow, compete, and thrive. The former is a recipe for continued failure; the latter offers some much-needed hope to a country that has been struggling for too long.

President Obama still loves big government policies but our problem is the overspending.

President Obama wants to extend unemployment benefits again and he would love to spend more money, but he says they are not “big government proposals.” He still does not get it. It is the spending and we will not always be a triple A country if we keep spending like this.

Rory Cooper

August 8, 2011 at 10:42 am

On Friday evening, Standard & Poor’s (S&P) downgraded the U.S. credit rating from AAA to AA+. As we and other conservatives warned, the spending reductions in the deal negotiated by President Obama to raise the debt ceiling were inadequate, and S&P reacted as we predicted but sooner. Neither Moody’s nor Fitch, two other rating agencies, have downgraded federal debt yet, but they are not providing much rosier outlooks.

Decades of over-spending and over-borrowing by the federal government have damaged America’s creditworthiness. Congress after Congress, President after President, the federal government spent every penny it took in—and borrowed over $14 trillion on top of that—to try to keep happy the voters to whom the government made promises it could not afford. The government kept shifting the burden of paying the bills forward onto future generations.

Well, the future has arrived, and it is bleak. Our economy is weak, millions of Americans are out of work, and America is so deep in debt that we have lost our good credit rating. Our nation needs to drive federal spending, including our ever-growing entitlement programs, down toward a balanced budget while maintaining our ability to protect America and without raising taxes. That is the sound path forward to a stronger economy with smaller government and more real jobs.

The White House’s first reaction to this news was to blame S&P itself, claiming that their math was wrong as spokesmen pointed out S&P’s past rating failures. Correcting the math didn’t correct the problem, however, and so S&P went ahead with its downgrade. Debating S&P’s credibility misses the more important point, which is there for all to see: Projected deficit spending properly raises questions about U.S. credit quality.

We cannot waste time shooting the messenger when the message itself is impossible to ignore: It’s the spending.

Unsustainable entitlement programs have been built up over many Congresses and Presidents. Elected officials from both parties over many decades helped push us closer to this point. But the last chance to start correcting the problem before damage to America’s credit occurred was during the recent debate over the debt limit.

Regrettably, President Obama and the Senate liberals refused to allow reforms to any entitlement programs and refused to make significant cuts in other federal spending unless they could raise taxes on America. Conservatives rightly resisted increasing taxes, which is a recipe for economic disaster during an economic slowdown. The resulting deal on the Budget Control Act brought little in the way of spending cuts and lots in the way of increased borrowing, and it was the last straw that cost America its top credit rating. President Obama and his liberal allies on Capitol Hill brought America’s credit down

The White House claims that its tax-hike centered “grand bargain” would have prevented a downgrade, yet they still have not told us what was in that “bargain.” Even as Senate Democrats are nearing three years without a budget, President Obama has offered to the American people rhetoric and class warfare, rather than solutions and responsible leadership.

Other liberals went out of their way this weekend to blame this downgrade on the Tea Party, with Senator John Kerry (D–MA) going as far as calling it the “Tea Party downgrade“ on NBC’s Meet the Press. Former Obama advisor David Axelrod echoed that coordinated spin on Face the Nation. Besides proclaiming for all to see that the liberals have no solutions themselves, this argument ignores the facts.

The Tea Party’s primary focus is our nation’s fiscal health. If it were not for the Tea Party’s positive influence, Congress would still be spending, taxing, and borrowing with little regard for the burden it is placing on future generations. Only months ago, President Obama was demanding a so-called “clean” debt limit increase that would allow him to keep on borrowing without any cuts to spending.

As our colleague J. D. Foster points out in his expert analysis of Friday’s downgrade, the debate over the debt limit was the substantive ideas of the conservatives versus empty political rhetoric of liberals:

In the course of negotiations on the debt ceiling, congressional Republicans tried tirelessly to get the President and Senate Democrats to get serious about cutting spending. All Obama and Senate Majority Leader Harry Reid (D–NV) could do was carp about symbolic tax hikes on the rich, oil companies, and their latest silly affection—corporate jets. To be clear, despite the perilous state of the nation’s finances, the President’s sole objective was ideological and symbolic: Even if Republicans had caved on tax hikes, which they wisely refused to do, the revenue gains would have been inconsequential compared to the spending cuts that are necessary. The President played politics while the nation’s credit rating was set to burn, and now it has.

President Obama, congressional liberals, and their allies believe that if we remain silent on our fiscal future, then markets and credit agencies will not notice our perilous future. Thus we heard from liberal pundits and politicians who called the debt debate a “manufactured crisis”—as if everything would be fine with more blank checks. The problem of federal over-borrowing and over-spending was and is real, as the credit downgrade and market reactions reflect. Congress and the President must fix the problem and fix it now.

Liberals this week will try to equate revenue increases with tax hikes. But that is simply not factual. Government revenues increase when we have greater economic growth and more taxpayers in the workforce. That economic growth is impossible with job-killing tax hikes and increased regulation. Raising taxes on taxpayers earning $250,000 or more hits entrepreneurs, small business owners, and investors, thus slowing economic growth still further.

In the next 10 years, once the economy recovers, revenue will rapidly approach and will likely surpass its historical average of 18.5 percent of GDP, while spending is projected to shoot past its historical average of 20.3 percent to 26.4 percent of GDP. Government spending will have increased by 22 percent just on President Obama’s watch.

Yet some liberals were still calling for more debt and deficits this weekend in the name of new “stimulus.” On Friday evening, Obama’s former economic advisor Christina Romer said the first failed stimulus she helped design should have been bigger and argued for a new and larger stimulus saying: “What I want is more now.”

That is, more of what President Obama has given us in the past—fruitless new spending programs. This would give us a bigger problem, not a solution. With America and the world in the grips of an economic slowdown, we need action to create economic growth and jobs and restore America’s credit. We do not need more government.

As dire is the domestic situation, as Foster notes, the consequences for the global financial crisis may be worse:

In today’s global economy, however, the U.S. credit rating downgrade may prove catastrophic. Prior to the credit rating downgrade, Europe was already teetering on the brink. Last week European stock exchanges plunged 10 percent, their worst weekly losses since November 2008. The long-building government debt crisis in Europe, which had been so unsuccessfully papered over just a few weeks ago by its leaders, is reaching the boiling point, threatening to wash over not just the worst offenders like Greece and Portugal but also some of the pillars of the European Union like Spain and Italy.

We cannot improve domestic or global economic conditions by becoming more like Europe. America can do better by adopting better ideas.

Heritage has offered its fiscal plan, “Saving the American Dream,” which would balance the budget in 10 years and lower our debt-to-GDP ratio to 30 percent (from the 100 percent it reached last week). It would accomplish this through responsible reform of Social Security, Medicare, Medicaid, and the tax code.

As Foster concludes:

A number of sound incremental reforms can garner strong bipartisan support and can substantially improve these program’s sustainability and the nation’s finances. The President must lead his party to join hands with Republicans in the joint select committee to embrace these reforms and be ready to enact them, saving far more than $1.2 trillion and far sooner than November 23. The objective for the nation, the President, and the joint select committee is clear: drive down spending—including and especially on entitlement programs—toward a balanced budget while protecting America and without raising taxes. Properly done, this would lead to economic growth, more jobs, less government, and a restoration of the nation’s credit rating. It can be done.

It can be done.