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Wicker Calls for Job-Creating Solutions to Spur Economic Growth
Federal Reserve Chairman’s Pessimistic Outlook Highlights Failed Policies of the Obama Administration
Monday, July 23, 2012
Federal Reserve Chairman Ben Bernanke issued a bleak report to Congress last week, reflecting lowered expectations for U.S. economic growth and disappointing inactivity this year. His semiannual economic outlook confirms an inescapable truth: The policies of the Obama Administration have failed to bring about the recovery that America needs.
Instead, the Obama Economy continues to stifle job creation, and unemployment remains at chronically high levels. Joblessness has stayed at or above 8 percent for more than 40 consecutive months – refuting White House promises that the nearly $1 trillion stimulus would keep it below that benchmark. In his remarks to Congress, Bernanke said he expects the unemployment rate will still be higher than 7 percent at the end of 2014.
Avoiding the ‘Fiscal Cliff’
The gloomy economic forecast echoes widespread concerns about our country’s unsustainable fiscal situation. Unless current policy is changed, the looming “fiscal cliff” – a term used to describe the tax hikes and sharp spending cuts set to go into effect in January – threatens to inflict serious harm on the already struggling economy.
A new study released by the American Action Forum estimates that the impact of the “fiscal cliff” could trigger between 2.8 million and 10 million in job losses.
The call for Congress to take action could not be clearer. Prolonging the current climate of uncertainty worsens the effect on the economy as households cut back on spending and job creators hold off on hiring in anticipation of the approaching fiscal shock. According to Bernanke, “The most effective way that the Congress could help to support the economy right now would be to work to address the nation’s fiscal challenges.”
The Problem With Tax Hikes
And yet, Bernanke’s sensible recommendation that Congress should act “earlier rather than later” comes on the heels of a troubling admission from some Senate Democrats, who have indicated that they would rather go off the “fiscal cliff” than extend all of the current tax rates. These cuts are set to expire at the end of the year and include measures like the child tax credit and reduced marriage penalty, which provide opportunities for families to save and invest.
Democrats’ threat follows a renewed attempt from President Obama to raise taxes on many of the country’s small businesses. According to a recent report from the accounting firm Ernst & Young, the President’s misguided plan to let the current tax cuts lapse for high-income rates would impact small-business owners and cost more than 700,000 jobs.
Even President Obama has acknowledged that taxes are the wrong approach to economic growth in a weak economy. In 2009, he said, “The last thing you want to do is raise taxes in the middle of a recession.” Now – with the economy still struggling – he is ready to dismiss his own advice.
Certainty Needed for Growth
Playing reckless political games ignores the severity of the current economic situation on American families and job creators. It squanders an opportunity to put good ideas in place that could make a real difference. Americans want a recovery, not ideological rhetoric.
On the Senate floor last week, I suggested fostering an American-made energy policy, removing unnecessary regulations, and alleviating the tax burden on this country’s job creators as pro-growth strategies that Congress should be advancing. After more than three years of the Obama Administration, we know what policies do not work and should change course.
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