Our economy has been dealt a terrible blow. Nearly 10% of Americans are out of work and in Illinois, unemployment is even higher. This is unacceptable. Quality jobs provide the foundation for our economic well-being and for the prosperity of every American family.
I own and operate a small business in Northfield, IL employing just under 100 individuals. I understand the pressures and challenges facing small business owners. Pressure to meet payroll, to provide health benefits for employees and their families, and to invest in equipment and technology to continue being competitive. I also understand the pressures on our working families to work hard and succeed, and to save money for the future and for our children’s education.
Fundamentally, American workers want a stable job in a steady economy. But we also want more. We want innovation and we want new and better ideas about how to deliver goods and services. We need an environment that encourages and fosters ideas and entrepreneurship.
My plan includes five critical elements to promote business growth and create private-sector jobs.
Small business has led the way out of our last seven recessions, creating two out of every three jobs during a recovery. But under the current Administration’s policies government jobs are growing faster than private sector jobs. The current agenda is only set to make the environment for small businesses worse. Plans are to raise taxes on the small businesses that earn 72% of all small business income. Taxes on capital gains are set to increase 20% while taxes on dividends are set to rise to 39.6%. The recent health care reform legislation not only inflicts $503 billion in new taxes by 2019, $87 billion of which come from new employer mandate penalties, but also burdens small businesses with new 1099 IRS paperwork every time they do more than $600 in business with another entity.
We must also reduce the cost of health care by passing medical malpractice reform and implementing transparency in pricing and outcomes to allow more consumer-driven care. Meanwhile we must create a long term energy policy that substantially reduces the costs of energy and our reliance on foreign oil.
I support passage of the pending Free Trade Agreements with South Korea, Panama and Colombia that have stalled in the Democratic-controlled Congress. In Illinois, there are more than 650 manufacturing facilities with ten or more employees and some 80,000 employees in the manufacturing industry. A variety of products are manufactured in the 10th District and sold in the U.S. and throughout the world; approval of these three free trade agreements will expand markets for these businesses and create jobs in the 10th District.
For example, the Office of the U.S. Trade Representative states that the reduction of Korean tariffs and tariff-rate quotas on goods alone would add an estimated $10 billion to $12 billion to annual U.S. Gross Domestic Product and around $10 billion to annual merchandise exports to Korea, the United States’ 8th largest trading partner and one of the most dynamic economies in the Asia Pacific region. The United States exports $27.3 billion dollars of manufactured goods to South Korea, and passage of U.S.-Korea Free Trade Agreement will further open new markets for American manufacturers. Because manufactured goods are approximately four-fifths of U.S. exports to Korea, manufacturers will be the largest beneficiaries of the U.S.-Korea Free Trade Agreement.
Small business created 64 percent of new jobs over the last fifteen years. As small business continues to face tight credit conditions, the burden of creating jobs has been left to large corporations. However, small business has lost 2/3 of the jobs in the current recession.
We simply cannot rely on large business to make up for the loss of this engine of job creation. Credit is the lifeblood of small business and in today’s economy, one of the greatest challenges facing small businesses today is the availability of credit. I support allowing Credit Unions to lend a greater percentage – up to 27.5 percent – of their assets to get more money into the hands of small businesses so they can create jobs for Americans.
One of the most troubling elements of the current economic pullback is the growth in the ranks of the long-term unemployed. Some 44 percent of the unemployed have been unemployed for six months or more. Sadly, many of the jobs these individuals held will simply not be coming back. New jobs will need to be created to reduce the levels of the unemployed. We need to do more than have the unemployed sit on the sidelines hoping for a return to the old economy. We must foster policies that enable skills development and retraining. If there ever was a time to incentivize small business to retain and retrain workers, this is it.
Every level of government has become over-burdened by increasing amounts of debt. The federal government has buried us in over $13 trillion in debt, and in two years total federal debt is forecast to exceed our entire Gross Domestic Product, which currently stands at $14.2 trillion annually. It is irresponsible to burden our children with this level of debt. Congress currently borrows $0.40 for every dollar it spends. This is like a family of four, earning $75,000 and spending $125,000 every year. This reckless spending must end.
This is the challenge we face and the one we must meet. There are two competing views on how we address this challenge: transfer the burden of these debts to the federal government with the expectation that taxes will increase to redistribute income and savings, or put money back in the hands of individuals and small business owners, and entrust them to make their own investment decisions and create jobs. We cannot tax our way out of this debt burden. We must instead grow our economy and our income to begin to relieve the price that children and grandchildren will have to pay.
The limited recovery to date has been largely subsidized by the massive spending on the part of the federal government. The stimulus and other Congressional spending have not served to address the fundamental challenges facing our economy. Today our economy is dominated by uncertainty: uncertainty over tax rates, regulatory changes, financial and health care reforms, and the growth in federal debt. We must change course and put job creation first. We must support policies that promote the growth of small businesses and the jobs they can create. There is a better way to get our economy back on track.
