Today, the House Ways and Means Committee held a hearing focused on “Reaching America’s Potential: Delivering Growth and Opportunity for All Americans.”
Chairman Brady welcomed economic advisors from some of our nation’s most influential policy institutions and said:
“We’re holding this hearing today because we want the American people to clearly understand that members of this committee are focused on their number one concern – the economy.”
Throughout the hearing, the witnesses and members discussed their ideas about the best ways to grow our economy, create jobs and increase paychecks for millions of Americans.
Doug Holtz-Eakin of the American Action Forum warned about the slow growth status quo of the Obama economy and stressed, “the American Dream is disappearing over the horizon.” He went on to explain exactly how anemic economic growth has a direct impact on Americans’ standard of living and their incomes:
“the trend growth rate of postwar GDP per capita (a rough measure of the standard of living) has been about 2.1 percent. […] Put differently, during the course of one’s working career, the overall ability to support a family and pursue retirement would become twice as large. In contrast, the long-term growth rate of GDP in the most recent CBO projection is 2.0 percent. When combined with population growth of 1.0 percent, this implies the trend growth in GDP per capita will average 1.0 percent. At that pace of expansion, it will take 70 years to double income per person.”
And as Steven Moore of the Heritage Foundation said:
“in other words, if the economy had grown as fast under Obama since the recovery began than it did under Reagan’s recovery, we would have $3 trillion more output over the last 12 months. We would also have 5 to 6 million more jobs. The jobs lost from anemic growth are roughly the size of the entire labor force of Ohio.”
After summarizing new evidence published in top economic journals about the relationship between taxes and growth, Kevin Hassett of the American Enterprise Institute discussed what this means in practice:
“The year-ahead forecasts for GDP growth by the Obama Administration erred on the optimistic side for 2013 and 2014 by about 1 percent per year. If the Obama Administration had taken the results [discussed earlier in written testimony] seriously, and factored into their forecast the negative effects of the increase in the top marginal income tax rate implied by the literature, then they would have reduced their forecast significantly. In other words, the forecast error would have been negligible if they had simply accounted for the impact of the tax increase using this latest evidence.”
Mr. Holtz-Eakin also agreed with Ways and Means Committee members that reforming our broken tax code would spur economic growth:
“The U.S. tax code is broadly viewed as broken and in need of repair, and for good reason – it hasn’t been overhauled in 30 years. […] A sound reform of the U.S. tax code is an essential element of any pro-growth strategy, and could substantially increase trend economic growth, boosting the economy and tax revenue.”
In the weeks and months ahead, Members of the Ways and Means Committee will move forward with a pro-growth agenda. We will take action on:
- Tax reforms to boost investment and job creation;
- Welfare reforms to help more people join the workforce and achieve the American dream.
- Health reforms to truly make health care more affordable and accessible;
- Trade expansion to open more foreign markets to American goods and services;
- Entitlement reforms to strengthen Medicare and Social Security for the long haul and;
- Government reforms to boost efficiency and effectiveness instead of stifling jobs and higher wages.