POLITICO: A tale of two cities

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By: Rep. Kevin O. McCarthy

August 5, 2010

Observers of life in modern America discover it is truly a tale of two cities.

One American city has experienced revitalization; it is teeming with energy and growth. Money flows like water, since more can always be printed. With trillion-dollar budgets, a million dollars is a rounding error. “It’s not what you know, it’s who you know” is doctrine. The bureaucrats running this city have designed a six-week, paid vacation for themselves every August.

The other American city is in crisis, choked with fear and uncertainty. Money is a precious commodity, and there is never quite enough. Tough financial decisions have to be made and, in some cases, families forgo necessities. The people live by a doctrine of hard work and sacrifice, and their limited vacation days are stockpiled in case of a family emergency. Unfortunately, the revitalization of one city has come at the expense of the other.

The first city is Washington, a city drunk with its own power. Life is good in the D.C. region; the unemployment rate is six percent, well below the national average. Of the 15 largest U.S. cities, Washington has lost the fewest number of jobs since the recession began in 2007. And thanks to President Barack Obama’s $862 billion economic stimulus, the federal government continues to add jobs.

The median household income for the region is $85,824, the highest in the United States. Federal bureaucrats have a nice place to live; Washington receives the highest amount of federal procurement dollars in the country, even when compared with entire states.

Washingtonians are brimming with optimism, as their quality of life has gone virtually unaffected during this recession. A recent survey showed that 74 percent of D.C. elites feel they have been less affected by the economic downturn than the rest of America. According to the Gallup-Healthways Well-Being Index, Greater Washington residents have the second-best feeling of well-being in the nation. Happy times are here again — but only for this select group.

The second city is Main Street, USA — which is to say any other city across our country.

My hometown of Bakersfield, Calif., fits this description. Life is tougher in Bakersfield than in Washington. Our unemployment rate is 15.7 percent, almost three times that of D.C. The median household income is $47,716. And while some D.C. politicians feel obliged not to pay their taxes, the people of Bakersfield are increasingly concerned about the pending tax hikes scheduled for this January. For the average family, these hikes mean their tax burden is likely to increase by $1,637.

For Americans on Main Street, the picture is less optimistic than for the elites in Washington. Recent survey data show that 61 percent of the general U.S. population feels that the country is on the wrong track, compared with just 45 percent of those living in the Washington bubble.

Americans on Main Street are concerned about the economy: 65 percent of survey respondents were worried things are going to get worse, compared with only 46 percent of those in Washington who shared the same view.

Also telling was the statistic about ethics in government. something 64 percent of Americans considered very important, while only 49 percent of D.C. insiders shared the same level of concern.

This disparity has come at a great cost to cities like Bakersfield, as the nation’s leaders have repeatedly failed to prioritize job creation and economic recovery.

Obama and House Speaker Nancy Pelosi’s Democratic majority found the economic crisis to be an opportunity to pass their wish list of programs designed to increase the size and power of the federal government. They did so in great haste, without regard for the constitutionality or the price tag.

Now, faced with record deficits and rising unemployment, the Democratic establishment has again chosen to pass over job creation in favor of raising taxes — a sure-fire way to further stifle economic growth.

The Obama tax hikes will cripple the hiring ability of small businesses, the economic engines of Main Street. According to the Small Business Administration, more than 50 percent of U.S. workers are now employed by small businesses — businesses that may suffer as their tax burden increases.

Tax hikes also impede start-up companies, which are responsible for creating 3 million new jobs every year. Statistically, potential entrepreneurs are up to 20 percent less likely to take the risk of starting a new business when the top tax rate reaches 39.6 percent, according to testimony given by economists before the Senate Committee on Finance.

Higher taxes on businesses will result in less employment, lower incomes, diminished innovation and reduced rates of economic growth for Main Street, while lining the coffers of the bureaucrats in Washington — the same bureaucrats who believe the economy is headed in the right direction and ethics in government is not a high priority.

We must end the exploitation of cities like Bakersfield for the profit of Washington and rewrite this tale of two cities to ensure a happy ending.

Rep. Kevin McCarthy (R-Calif.) is the chief deputy whip and chairman of the America Speaking Out project.

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