TO: Citizens of the 16
th
Congressional District of PennsylvaniaFROM: Congressman Joe PittsDATE: November 9, 2011RE: Creating Jobs and Fixing Our EconomyThe current economic situation is severely harming American families, American businesses,and America’s stature in the world. With unemployment at 9 percent, millions of Americans arestruggling every day to meet the basic necessities of life. When “under-employment” andunreported unemployment are added, that number nearly doubles. Repairing the situation is thesingle most important priority facing our nation and our government.Ideological battles, interest group agendas, and partisanship must take a back seat to actuallyfixing the problem. The price for failure is too high and we have learned too much from pastrecessions to allow any excuses for failing to do the right things.I want to highlight the various bills passed by the House this year to help job creators. It is evenmore important that I explain in detail what further steps we should take to reinvigorate oureconomy and encourage the creation of new jobs.Many of my ideas were first presented in the memo I wrote to you after I voted against the so-called “stimulus” bill on January 28, 2009. I believed then that this exceptionally expensivelegislation would be ineffective at turning the economy around, and I was right. On the day itwas passed, unemployment was at 7.2 percent. Unemployment has increased more than 25%since then and remained high despite the stimulus bill and other efforts. It is essential thatCongress focus on bipartisan solutions we know will work.
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What Doesn’t Work
Prosperity does not come from the government. It comes from the genius, entrepreneurship, andhard work of the American people. Yet, many in Washington believe the key to prosperity ismore government ownership, control, and micromanagement of the economy.
Stealing from the Economy.
Everything thegovernment does costs money. Before the governmentcan spend money it has to take it from someone. Thatsiphons money out of the economy that couldotherwise be invested in new factories, newbusinesses, and new jobs. Even borrowed money stealsfrom job-creators as government debt securitiescompete with Wall Street for investor dollars. Biggovernment is bad for the economy.
Micromanaging the Economy.
Many governmentagencies treat the American people like children,refusing to let business owners and entrepreneurs runtheir businesses without excessively close supervision.The housing bubble and other scandals certainly showus that regulation is necessary to prevent greed andcorruption from running amok, but many governmentagencies go far beyond what is necessary. This is badfor the economy.
Unstable Policies.
Some in Washington don’t seem tounderstand the effect that their rhetoric and policieshave on existing businesses. Increased or even merelyinconsistent tax rates make it impossible for businessesto plan for the future. Similarly, uncertainty aboutfuture regulation makes it impossible for businesses toplan. Not being able to plan means not investing and not hiring. Many American businesses thatmight otherwise have expanded and hired spent all of 2009 and 2010 in “wait and see” mode. In2011, the regulatory machinery of the federal government has continued to put roadblocks infront on job creators.
Deficit Spending.
Recent events in Europe and here at home have illustrated what I have longargued: that high levels of debt and spending are inherently dangerous to the economy.With the passage of the Budget Control Act in July, we have taken a first step toward getting ourfiscal house in order. We reduced spending by $917 billion over the next ten years and a JointSelect Committee of Senators and Representatives is meeting now to come up with an additional$1.5 trillion in deficit reduction. Our debt burden is still growing too fast and we will need totake further action over the years.
Why Government Spending Failed
The stimulus bill focused on massivefederal spending in the belief that hugegovernment outlays to federal, state, andlocal agencies and to federal contractorswould seed the economy with neweconomic activity. Instead, it hasmassively increased the amount of money we owe to China and othercreditors, permanently increased thebaseline of federal spending, and hasdone little to encourage the private sector(the real job creators) to hire. The jobs itsaved were almost exclusively those of government employees. The total cost,including interest (we borrowed all of themoney), was over $1 trillion.At the time, I proposed a plan that wouldencourage entrepreneurs and businessesto invest and hire by reducing their taxburdens, by reducing the price of energy,by limiting their regulatory burdens tothose that make sense, and by openingnew markets.
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What I Believe We Should Do.
The first thing we need to recognize is that the government cannot snap its fingers and createprosperity. Government cannot create wealth. All it can do is move wealth around, robbing fromPeter to pay Paul. Government needs to approach the situation with humility, admitting that thereal power to create prosperity lies outside of Washington. Here are my priorities for addressingour current economic situation and restoring vitality and full employment to our economy.
Help Those Who Need Help.
We must never forgetthat millions of Americans are struggling. We need tohelp the unemployed, but the help we give must bepaid for and not added to our debt. This means toughchoices for politicians, but those choices are notougher than those made by Americans every day.
Extending Unemployment Benefits.
Inresponse to growing unemployment and adeepening recession, I voted to create theEmergency Unemployment Compensationprogram. This was the eighth time in historythat Congress has created such a program.Congress has since expanded or extended theprogram seven times. I supported thoseextensions and expansions when they weredone responsibly. For instance, there was anexpansion of the program in the “stimulus”bill, but I didn’t vote for it because the entirebill added more than $1 trillion to the debt.
Stable and Low Taxation.
One of the greatestimpediments to job growth is the tax code. Constanttinkering with our tax code makes it very difficult foremployers to plan ahead and hire new workers.
Maintain Existing Personal Income TaxBrackets.
In 2001, Congress restructured theincome tax to create a new bottom bracket of 10 percent and to lower each of the existing taxbrackets. Because some senators objected tothe tax cuts, the reductions were enacted foronly ten years.
Reduce Taxes on Employers.
The U.S.effective corporate tax rate is 40 percent, one of the highest rates in the world. This is asignificant disincentive for corporations to set up shop in America and dramaticallydecreases new job growth. I support H.R. 5029 that would reduce the federal corporateincome tax rate to 12.5 percent.
Distractions.
In 2009 and 2010, Democratic leaders inWashington used “job creation” as atalking point for other priorities, ratherthan focusing on job creation itself. Theyused the lure of “job creation” to pushfor every one of their priorities from Capand Trade to Obamacare. The actualcreation of jobs, of course, did nothappen.Even rank and file Democrats inCongress are angry about this. TheWashington newspaper
Roll Call
reported that “one liberal HouseDemocrat [Rep. Raul Grijalva] laughedwhen asked if he thought of the climatechange package as a jobs bill.”Likewise, Rep. Peter DeFazio, a liberalDemocrat from Oregon, blasted the“stimulus” bill, saying, “Those arefantasy jobs. Those aren’t real jobs. They just need to put a cork in it and realizethat some things that have been aroundfor a while are still relevant … like agood transportation network that isn’tfalling apart.”There are certainly many Democrats inWashington who believe the stimulus,healthcare, and cap and trade bills weregood policy. Seemingly few, however,believe they were truly focused on fixingthe economy and creating jobs.
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Jobs Memo from U.S. Rep. Joe Pitts
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