What do the strategy behind President Obama’s recently unveiled $447 billion stimulus bill and $3 trillion deficit plan have in common with the strategy behind Harry Truman’s 1948 presidential campaign? Both rely on deflecting blame.
By framing delays on major federal issues as the fault of a “do nothing Congress,” President Truman was able to pull off a come-from-behind victory. Now, more than a few pundits (one, two, three) are saying that the current incumbent will likely lift a page from “33’s” playbook.
The White House already knows many of the policies it has reheated for its new jobs plan don’t work economically. Following the 2009 stimulus, sweeping financial regulations, and unprecedented health care legislation, national unemployment still hovers above nine percent. But the latest bill the president has given to Congress includes some additional leftovers: tax hike proposals that have (thankfully) proved non-starters for lawmakers on both sides of the aisle.
One contentious issue is an increase in energy taxes. Our oil and gas firms already support 9 million U.S. jobs. And if lawmakers allow our energy sector to increase domestic production, it could create 250,000 jobs in the short run and then add $73 billion in economic growth annually. Conversely, boosting the tax burden borne by these companies could actually lead to a net loss of $53.5 billion in tax revenue over 10 years due to reduced activity on their part.
Other warmed-over tax threats have emerged as well, including higher taxes on carried interest earnings and restrictions on itemized deductions (which have already raised alarm bells among charities, some of them sympathetic to the Administration’s goals). There’s even a scheme to raise the “Passenger Facility Charge” that will make the already onerous double-digit tax burden on airline tickets even heavier.
Given the gridlock the administration must be anticipating from its latest plan, will economic and fiscal policy become nothing more than a hostage to campaign politics for the next fifteen months? Not necessarily.
For example, recently the left-leaning U.S. Public Interest Research Group (U.S. PIRG) and the more conservative National Taxpayers Union (NTU) developed a bipartisan plan for Congress’s deficit-reduction “Super Committee” that would cut more than a trillion dollars in government spending.
Although NTU and U.S. PIRG still disagree on many aspects of tax and regulatory policy, the consensus they reached on federal program reductions and terminations shows that Washington can work together for positive change.
Job creation is the top priority for U.S. voters. Congress and the executive branch must work together to alleviate the economic pressures which are leaving business owners reluctant to hire. They must also put the federal government’s finances on a more sustainable course now, or risk major economic woes in the not-too-distant future.
Sepp serves as Executive Vice President for the 362,000-member National Taxpayers Union, a nonpartisan citizen group founded in 1969 to work for lower taxes and smaller government at all levels.