Economy

The U.S. economy has experienced a dramatic decline since the end of 2007. After a deep and protracted recession, economic indicators are currently mixed. Some recent signs of growth in the economy are contrasted by the persistence of high levels of unemployment and lingering weakness in the housing market in Connecticut and throughout the rest of the country.

Senator Lieberman has played a leading role in the U.S. Senate in halting the economic slide and restoring the country to a path of economic stability and growth. In the fall of 2008, with the nation’s financial markets in turmoil because of the collapse of the housing market and the looming failure of certain major U.S. financial institutions, Senator Lieberman supported the Emergency Economic Stabilization Act (EESA), also known as the Trouble Asset Relief Program (TARP). TARP played a key role in stabilizing our financial markets through capital injections into a number of financial institutions and the purchase of troubled assets to clean up the banks’ balance sheets. Senator Lieberman also helped secure passage of the American Recovery and Reinvestment Act (ARRA) at the beginning of 2009. This bill included a variety of critical measures to stabilize the economy, including: (1) tax cuts that have benefited over 100 million families; (2) expansion of federal aid to states for healthcare, education, and unemployment benefits, (3) infrastructure investments to improve Connecticut’s roads, bridges, and transit options; and (4) investments in energy efficiency and renewable energy.

A recent study by economists Alan Blinder of Princeton and Mark Zandi of Moody’s Economy.com estimates that without the passage of TARP and ARRA, our economy would have 8.5 million fewer jobs than it currently does, and the nation’s Gross Domestic Product (GDP) in 2010 would be about 11.5% lower. The economy would also likely have been sucked into a deflationary spiral that could have easily turned into another Great Depression instead of the recession from which we are slowly beginning to recover.

Creating Jobs

Senator Lieberman has supported a number of initiatives to spur economic growth, create jobs, and support America’s manufacturing base.

Senator Lieberman has consistently led the bipartisan effort to provide needed funding for the Manufacturing Extension Partnership (MEP), a leading public-private program for helping small and medium-sized American manufacturers use innovation to grow their businesses, increase their profitability, and expand into new markets globally.

Examples of other initiatives that Senator Lieberman has supported to strengthen the economy include the Worker, Homeownership, and Business Assistance Act, which was signed into law on November 6, 2009 (P.L. 111-92) and the Hiring Incentives to Restore Employment Act (HIRE Act), which was signed into law on March 18, 2010 (P.L. 111-147). Among other provisions, the Worker, Homeownership, and Business Act: (1) extended the availability of eligibility for the homebuyer tax credit to reduce the inventory of unoccupied homes, spur construction, and support the housing market; (2) extended small businesses’ ability to carry back their net operating losses for tax purposes to help them preserve capital and save and create jobs; and (3) expanded the availability of the net operating loss carry-back deduction to businesses and firms with gross receipts greater than $15 million for the same reason. The HIRE Act is designed to stimulate job growth and put out of work Americans back to work by doing several things: (1) allowing employers to take a payroll tax credit of 6.2 percent for hiring workers who have been unemployed for at least 60 days; (2) providing employers an additional $1,000 tax credit for each such newly hired worker the employer retains for 52 weeks; (3) allowing small businesses to write-off up to $250,000 of new investments through 2011; and (4) extending the Build America Bonds program for school construction and energy projects.

But while Senator Lieberman has supported these efforts to stop the recession from getting worse, he has repeatedly stressed that government actions alone cannot fully revive the economy. For America to regain its economic strength - creating new jobs that pay good wages – the private sector must regain its vitality. For that to happen, Washington must figure out how to reduce the federal deficit and the national debt and pursue pro-growth, fiscally responsible, business-friendly policies that will provide a solid foundation for new and existing businesses and the next generation of American entrepreneurs.

The Federal Budget and National Debt

Tough decisions lie ahead on federal spending, including the projected growth in entitlement spending, interest on the national debt, and the rising cost of health care – one of the leading causes of America’s fiscal imbalance. Rather than avoid these difficult political issues, Senator Lieberman has worked across the aisle to find solutions. For example, he has partnered with Senator Judd Gregg (R-NH) to introduce the Second Look at Wasteful Spending Act, which would give the President the ability to identify wasteful federal spending proposals and send them back to Congress for review and possible elimination.

Senator Lieberman has also joined Senator George Voinovich (R –OH) to offer legislation to address our nation’s unsustainable deficits and debt, and he cosponsored a similar measure

offered at the end of the year by Senator Kent Conrad (D-ND) and Senator Judd Gregg (R-NH). These measures would have created a national commission to examine America’s tax and entitlement systems and present long-term solutions to place the United States on a fiscally sustainable course while working to ensure the solvency of entitlement programs for future generations. Congress would have been required to swiftly vote yes or no on the commission’s recommendations, with procedural safeguards to prevent delays by those reluctant to make the difficult but necessary choices to secure our nation’s continued economic well being. Although the Conrad-Gregg measure came before the Senate for a vote at the beginning of 2010, it was unfortunately narrowly defeated.

Senator Lieberman is looking forward, however, to receiving the recommendations of the bipartisan National Commission on Fiscal Responsibility and Reform that has since been established by President Obama. The Commission has been directed to make recommendations to Congress by the end of the year about measures that can be implemented to restore balance to the federal budget and to get the nation’s mounting debt levels under control. Senator Lieberman will carefully review the Commission’s proposals and the rationale behind them and will work with colleagues from both sides of the aisle to bring the best recommendations up for prompt consideration by the Senate.