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Congressman
Paul Ryan
Strong Economic Growth Continues.
The nation’s economy has experienced robust economic growth over the past three years. Millions of new jobs have been created, unemployment and jobless claims are down, and the stock market is approaching record levels. The driving force for all of this growth was the passage of the Jobs and Growth Tax Relief Reconciliation Act in May 2003, which cut taxes on incomes, capital gains, dividends, and families with children, and led to a significant increase in business investment. This, in turn, led to the creation of millions of new jobs and put unemployed Americans back to work.
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Looking at our nation’s economic performance directly before and directly after the 2003 tax cuts illustrates the strong impact that this action had on our economy. In the two and a half years leading up to the tax cuts, we lost 2.6 million jobs, or an average job loss of nearly 100,000 jobs per month. In the three years since taxes were cut, we have gained more than 5.2 million jobs, or an average job gain of 149,000 jobs per month. Similarly, in the 9 quarters leading up to the tax cuts, the average Gross Domestic Product (GDP) growth was only 1.3%. By contrast, in the 11 quarters after the tax cuts, the average GDP growth has been 4.0%. The trend in business investment paints a similar picture. Prior to the 2003 tax cuts, business investment decreased for 8 straight quarters. Following the tax cuts, business investment increased for 11 straight quarters.
Since the impact of the tax cuts were felt on the economy, the unemployment rate has also dropped significantly. Whereas unemployment was 6.1% in May 2003, it is down to 4.7% today. This is the lowest unemployment rate since July 2001, and this rate is well below the average unemployment rate for the 70’s, 80’s and 90’s. Additionally, jobless claims have been reduced to the level that they were at prior to the 2001 recession.
The value of people’s investments has also risen significantly as a result of the 2003 tax cuts. Since taxes were cut, particularly capital gains and dividend taxes, the Dow Jones Industrial Average (DJIA) has increased by nearly 1/3. In fact, the Dow came within 100 points of the all-time high during the second week of May. It is expected to remain at this level and could even eclipse the record in the near future.
To help lock in this growth and keep the economy growing, I voted in favor of H.R. 4297, the Tax Relief Extension Reconciliation Act of 2005. This legislation will extend the tax cuts on dividends and capital gains that have played such a large role in improving the health of our economy by leading to business investment, thereby creating new jobs for hard-working Americans.
Challenges Ahead in the Manufacturing Sector.
Despite all of this positive news, our economy is still facing challenges, particularly in the manufacturing sector. This part of the economy has not recovered from the recession to the same extent as other industries and requires more congressional attention and action. In Congress, I have made it a priority to strengthen our manufacturing sector. Not only are manufacturing jobs the bedrock of the economy in southeastern Wisconsin, they are the bedrock of our nation’s economy. If we are to continue to enjoy high living standards and maintain a strong and independent national defense, we must have a vibrant manufacturing sector.
To address the loss of manufacturing jobs, I believe that there are two areas on which we must focus. First, we have to stop pushing jobs overseas. This can be accomplished by cutting the cost of doing business in the United States. We must lower health care costs, lower the tax rates on American manufacturers, cut down on regulatory and lawsuit costs, and make energy costs more affordable and more reliable. If these costs are lowered, businesses will remain in the United States and continue hiring American workers.
Second, we must prevent jobs from being taken away unfairly. Specifically, less developed countries like China have not only taken advantage of their lower costs to win manufacturing jobs, but often, they also employ unfair trade practices. For example, China has undervalued its currency, subsidized domestic manufacturing, and disregarded intellectual property law. These practices have hurt U.S. manufacturers and must be stopped.
To prevent China from stealing the jobs of hard working Americans, we need the tools to punish its anti-competitive behavior. China’s participation in the World Trade Organization (WTO) is essential to getting China to play by the rules because it provides the United States Government with a framework to hold China accountable for its behavior. Since China’s ascension to the WTO, we have won an intellectual property case against them, pressured them to make a minor revaluation to their currency, resolved multiple trade disputes, and are in the middle of negotiations on textile policy. If China were not a WTO member, we would have little influence over helping China improve its labor and property rights laws and little recourse for remedy when it violates WTO rules. We now have to use these tools to enforce our trade laws, and we must continue working to ensure China is trading fairly and not stealing American jobs.
Additional Information.
For more information on the economy and jobs, please refer to the following websites.
U.S.
Department of Labor: www.dol.gov
U.S.
Department of Treasury: www.treas.gov
U.S.
Department of Commerce: www.doc.gov |
