Decebmer 2, 2005

Despite Obstacles, Economy
Continues to Grow

COLUMBUS, OH – Congresswoman Deborah Pryce submitted the following editorial:

Roughly three months ago, Hurricanes Katrina and Rita had ripped through our Gulf Coast, causing billions of dollars in damages and putting an entire region of the country out of work for weeks. The devastation wrought upon our oil industry infrastructure caused an immediate spike in gasoline and natural gas prices, and economists all predicted that energy costs would permeate throughout the economy, force the costs of production and transportation of goods to climb significantly, and halt the economy dead in its tracks.

To everyone’s surprise, the American economy proved to be far more resilient than even the most optimistic of forecasters understood. The United States Department of Commerce announced last week that the nation’s gross domestic product (GDP) increased at 4.3%, a full half percentage higher than prognosticators suggested. Minus the hurricanes, economists believe that the GDP would have grown at more than 5%.

Gross domestic product measures the value of all goods and services produced within the United States, and is generally considered the most significant measure of the strength of an economy. The American economy has sustained a two-and-a-half year stretch of uninterrupted quarterly GDP growth over 3% for the first time since 1986, and 215,000 jobs were created nationally in November alone. Consumer spending is up, inflation is in check, and consumer confidence is soaring. By any objective measure, our nation’s economy is strong and growing stronger. Locally, the news is also good. The three counties of my congressional district – Madison, Union and Franklin – report that the average unemployment rate for the three county region is down from 5.1% last October to 4.7% in October of 2005.

I recognize that there is a cyclical nature to our economy, and that it generally ebbs and flows irrespective of government. When the economy is performing well, public officials bask in its glow; when it is anemic, they feel the wrath of their constituency on Election Day. Having said that, I also believe poor public policy can unquestionably stifle a growing economy, just as smart economic policy can ignite a sluggish one. As we enjoy the benefits of our growing economy, we must categorize the tax cuts from a year ago among the smarter ones.

The tax cuts included in the Jobs and Growth package served as jumper cables to our economic engine, helping to create jobs, boost investor confidence, increase Americans' income, and help businesses move out of the red. Since tax relief was signed into law in May of 2003, over 4.4 million new jobs have been created, GDP growth has remained above 3%, and last week the Treasury Department reported that total revenue in fiscal year 2005 was up $275 billion, a 14.6 percent increase over 2004. This is such an important concept that it bears repeating – in the first full year after cutting taxes, tax revenue increased by $275 billion. Of that $275 billion in new federal revenue, $207 billion came from higher income-tax revenue, meaning the wealthiest of Americans – noteworthy, for a bill demonized by its opponents as being a handout to the rich.

Naturally, I understand that the rising economic tide has not lifted all boats, and that some families are still concerned for their economic security. A nation as strong as ours and with our vast resources should not stand pat until every American who wants a job can find one. To that end, I will continue to work keep the tax burden on American families low and implement policies that will stimulate the economy.  As the economic pie continues to grow, every American family should have a seat at the table.