Our economy has been dealt a terrible blow. Nearly 10% of Americans are out of work; 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.
Before serving in Washington, I owned and operated 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 both encourages and fosters ideas and entrepreneurship.
In Congress I am pushing for 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. As time passes we see that the current agenda is only making the environment for small businesses worse. There are plans to raise taxes on the small businesses that earn 72% of all small business income. Taxes on capital gains will increase 20% while taxes on dividends are set to rise to 39.6%. And 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. I voted to remove this burdensome and costly 1099 reporting requirement.
We must also reduce the cost of health care by passing medical malpractice reform as well as 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 found 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. They also estimate that it would also add 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 benefit greatly from this free trade agreement.
Over the last fifteen years, small business has created 64% of new jobs. But small business continues to face tight credit conditions, preventing them from rehiring workers and shifting the burden of creating jobs to large corporations and to the federal government. With small business losing 2/3 of the jobs in the current recession, this trend must end.
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, but in today’s economy, credit availability is one of the greatest challenges facing small businesses.
One of the most troubling elements of the current economic pullback is the growing ranks of long-term unemployed. Some 44% of the unemployed have been unemployed for six months or more. The sad reality is, many of the jobs these individuals once held will simply not return. New jobs need to be created to reduce unemployment levels, but we must do more than have the unemployed sit on the sidelines waiting and hoping for a return to the old economy. Policies that enable skills development and retraining are essential. Now is undoubtedly the time to incentivize small business to retain and retrain workers.
Every level of government is over-burdened by increasing debt. The federal government has buried hard-working taxpayers in over $13 trillion in debt. In less than two years total federal debt is forecast to exceed our entire $14.2 trillion annual Gross Domestic Product. Burdening our children with this level of debt is irresponsible, pure and simple. Congress currently borrows $0.40 for every dollar it spends. This is the equivalent of a family of four earning $75,000 but spending $125,000. The government's reckless spending must end.
The challenge of tackling our nation's debt problem is real and urgent. There are two competing views on how we address it. One option is to transfer the burden of these debts to the federal government with the expectation that a tax increase will close the gap by redistributing income and savings. Or there is the option I prefer: Empower individuals and small business owners and put money back in their hands, entrusting them to make their own investment decisions and create jobs. Taxing our way out of this debt burden is both impossible and the wrong way to proceed. We must instead grow our economy and our individual incomes to relieve the price that our children and grandchildren will have to pay.
The limited recovery has to date been largely subsidized by massive spending by the federal government. The stimulus and other binges of Congressional spending have not addressed the fundamental challenges facing our economy. Today, uncertainty dominates the economy: Uncertainty over tax rates, regulatory changes, financial and health care reforms, and the growing federal debt. We must change course and make job creation our top task. We must support policies that promote the growth of small businesses and the jobs they can create. This is the way to get our economy back on track.
