Last Friday, we learned that the unemployment rate is still at 9.5%. It would be much higher if the official calculations also looked at the fast-growing number of Americans who have become so discouraged that they have given up looking for work.
So while Congress should be here trying to find ways to get Americans back to work, we are here instead to complete action on another extension of stimulus that will also do nothing to reduce the unemployment rate in this country. In fact, this bill – and the tax increases included in it – will hurt job creation.
According to the methodology of Dr. Christina Romer, the President’s chief economic advisor, the tax increases in this bill will destroy over 140,000 American jobs.
In an open letter to Congress this week, the National Association of Manufacturers warned that “imposing $9.6 billion in tax increases on these companies will jeopardize the jobs of American manufacturing employees and stifle our fragile economy.”
Similarly, the U.S. Chamber of Commerce warned they would “impose draconian tax increases on American worldwide companies that would hinder job creation, decrease the competitiveness of American businesses, and deter economic growth.”
These tax increases are a mistake and as I noted during debate two weeks ago, most of these have never been the subject of any Committee hearing or mark-up. It is possible, that upon review, some of these provisions might make sense if packaged with other changes to address the fact our corporate tax rate is soon to be the highest among all industrialized nations, our international tax system is deeply flawed, and our tax code is increasingly putting our companies and their employees at a tremendous competitive disadvantage.
But we never got the opportunity to hear from American employers or to offer any amendments. That is a truly disappointing breakdown of the Committee system, which is supposed to ensure that policies are carefully vetted and reviewed before passage.
I also want to mention the phantom tax increases that aren’t in this bill but that we will soon see. The Speaker has already indicated that she opposes two of the spending offsets included in this bill. One relates to food stamps; the other is a cut in funding for a renewable energy spending program.
Together, those items total $13.4 billion, more than half the total offsets in the bill. So next month, when the House considers some other legislation, don’t be surprised to see another $13 billion in higher taxes to prevent these spending cuts.