Taxes Only Hinder Job Creation

RWRO supports the contention that small business owners (a.k.a. those making $200,000-$250,000 per year and taxed like “millionaires and billionaires”) need economic freedom and government restraint to stimulate job growth, not tax increases.

Where are all the jobs?

By Jennifer Rubin

The July 2011 unemployment numbers are out. The Wall Street Journal notes: “Nonfarm payrolls rose by 117,000 last month as private-sector employers added 154,000 jobs, the Labor Department said Friday. Payroll data for the previous two months were revised up by a total 56,000 to show increases of 46,000 jobs in June and 53,000 in May. The unemployment rate, which is obtained from a separate household survey, dropped to 9.1% last month from 9.2% in June. That still leaves almost 14 million Americans who would like to work without a job.” Moreover, “The jobs report Friday showed 44.4% of unemployed Americans, or 6.2 million people, were out of work for more than six months in July.”

To put this in context, Matt McDonald, a former Bush administration aide and now a communications and governmental affairs consultant, has crunched the numbers and found that in order to get down to 8 percent unemployment by Election Day, we would have to add 272,000 jobs per month. To get down to 8.5 percent, we would need 220,000 jobs per month. There is no indication whatsoever that we are generating jobs anywhere near those amounts.

Each of the presidential contenders is out with a statement blasting the president’s record on jobs. Rep. Michele Bachmann (R-Minn.) had a long statement, including this: “This week the President announced that he would again pivot to focus his attention on jobs. We can only hope he will pivot away from his failed economic policies that have killed growth and put millions of Americans out of work.” Mitt Romney had this: “Today’s unemployment report represents the 30th straight month that the jobless rate has been above 8 percent. The administration promised with their $800 billion stimulus that they would keep unemployment below that number. When you see what this president has done to the economy in just three years, you know why America doesn’t want to find out what he can do in eight.” Jon Huntsman struck a similar theme: “The President has had 2.5 years to turn around the American economy and it is clear he has failed. In less than one day, Americans have witnessed a considerable drop in the stock market and yet another jobs report showing an unemployment rate above 9%. . . . America needs a President who knows how to create an economic environment that allows entrepreneurs to thrive and create jobs. This country will never realize its true economic potential until we enact tax cuts, implement regulatory reform and move toward energy independence.”

Aside from the obvious political peril in which President Obama finds himself, he has a serious policy problem. His itty-bitty job ideas (e.g., patent reform) are laughable. And he keeps telling us that he wants the supercommittee to raise taxes. That seems ludicrous as the economy sputters.

Won’t the weak economic and high unemployment force Obama to quash tax-hike rhetoric? Brad Daypsring, spokesman for House Majority Leader Eric Cantor (R-Va.) isn’t very optimistic on that front. He e-mailed: “It hasn’t stopped him from trying thus far, despite two dozen claims of ‘pivoting to jobs.’ The only period in which the President appeared to stop pushing for tax hikes was between election day 2010 and the New Year.” He explains: “People understand the disingenuousness of the President’s class warfare rhetoric, and understand that when he says ‘millionaires and billionaires,’ he is actually talking about small business owners, entrepreneurs, families, and people making over $200-250,000 per year. The President can’t ‘pivot to jobs’ and then tie the hands and penalize the very people that he expects to create them.”

As to whether Obama will shed his tax-hike fetish, Don Stewart, communications director for Senate Minority Leader Mitch McConnell (R-Ky.) says, “We agree with what the President has said about how a recession is the wrong time to raise taxes, and with what he said in December: lower taxes mean more opportunities for job creation. So if you care about job creation, this is the wrong time to be raising taxes.”

But, for now, the White House has, to put it mildly, a messaging problem. After two and a half years of claims by the White House that Obama “saved or created” millions (!) of jobs, press secretary Jay Carney, now insists, “The White House doesn’t create jobs . . . the government, together — White House, Congress — creates policies that allow for greater job creation.” Well, the White House isn’t doing that either.

Yes, the jobs numbers could have been even worse, but they are bad enough. And Obama has a huge political and policy challenge, namely how to make the economy much better very fast while disclaiming responsibility for the dismal jobs picture.

RWRO is disappointed about the artificial spending cuts in the debt deal and the refusal of Congress to make real changes in the way our government spends and borrows. Until we reform entitlement spending, we will be facing a debt ceiling crisis every two years.

Why I Voted Against the Debt Deal

By Tom Coburn, Published: August 2

The good news out of the debt debate is that Washington is now debating how much we can cut instead of how much we can spend. The American people deserve all the credit for forcing that change. Unfortunately, it’s still all talk in Washington. This deal is a victory for politicians but a defeat for families.

In spite of what politicians on both sides are saying, this agreement does not cut any spending over 10 years. In fact, it increases discretionary spending by $830 billion.

I voted against this agreement because it does nothing to address the real drivers of our debt. It eliminates no program, consolidates no duplicative programs, cuts no tax earmarks and reforms no entitlement program. The specter of default or a credit downgrade will still hang over our economy after this deal becomes law.

Politicians on both sides are misleading the country by calling a slowdown in the growth rate of new spending a “cut.” Spending will increase at a time when real cuts are necessary to make us live within our means, repair our economy and preserve our credit rating.

It is true that next year there will be a genuine cut of $7 billion when discretionary spending drops from $1.05 trillion to $1.043 trillion. But with our government borrowing $4.5 billion a day, that $7 billion is enough to fund the government for about 36 hours. And after our day and a half of restraint, spending will increase $830 billion over 10 years.

Supporters say the real savings will come when the joint committee the deal empowers makes recommendations to reduce the deficit by at least $1.2 trillion (as we increase the debt limit by the same amount). But the enforcement mechanism designed to force these hard decisions — across-the-board cuts to defense and nondefense programs — will never work. Congress will easily evade these caps. In the Senate, all it will take is 60 votes — the threshold for passing anything. Some have complained about defense cuts, but everyone in Washington knows those cuts can be avoided through supplemental or “emergency” spending bills.

I proudly served on the president’s debt commission and spent months negotiating with senators of both parties in the Gang of Six. But I took a break from the Gang of Six because we were not offering enough savings, especially in entitlements, to heal our economy. And the truth is that the joint committee is likely to be a step backward from the Gang of Six and the Bowles-Simpson commission.

I am the first to admit that, with this plan, the commission process in Washington has become a farce. The plan’s joint committee has been called a “super” committee because it is anything but.

For our country’s sake, I hope I am wrong. Nothing prevents the congressional committee from recommending deficit reduction far in excess of $1.2 trillion. For that to happen, however, both sides will have to sacrifice their sacred cows and embrace real entitlement reform and tax reform.

Experience has taught me that to achieve real savings, there is no substitute for being specific. In Washington, however, wide is the road that leads to pledges, commissions and caps, and narrow is the road that leads to cuts. That’s why I have targeted specific excesses such as the “Bridge to Nowhere” and the ethanol tax earmark. It’s why I recently released a 620-page report, “Back in Black,” that makes hundreds of recommendations and calls for $9 trillion in deficit reduction. Congress could spend a year eliminating no-brainer examples of waste and duplication, such as our government’s policy of directing unemployment benefits to millionaires.

I understand that Congress is not ready to accept $9 trillion in deficit reduction even though changes of that magnitude are necessary to heal our economy. Congressional leaders are probably correct that this is the best deal they could have gotten. The only recourse the people have, then, is to elect lawmakers who will produce better results.

I was among the first members of Congress to call for using the debt-limit debate as leverage to force spending cuts. I’m glad I did. Even though the cuts didn’t materialize, the debate informed the American people of the scope and magnitude of the problem.

The real debt crisis is not a debate that has been imposed on Washington by Tea Party activists. It is a crisis Washington has imposed on the American people through laziness, incompetence, dishonesty and political expediency. Politicians can talk all they want about how they did something to address the problem. But when the flaws of this plan become apparent, another change election will be coming.

The writer is a Republican senator from Oklahoma.

A Nutshell Explanation for Why the GOP Doesn’t Want to Raise the Debt Ceiling

RWRO has always supported smaller government, eliminating entitlement and government-sponsored programs, and minimal burdens on individual taxpayers. Increasing the debt ceiling to accommodate excessive government spending is analogous to asking for a credit line extension for a maxed out credit card. It’s irresponsible and unsustainable in the long-term.

Spending = The tax burden

By Jennifer Rubin

In the Wall Street Journal yesterday, economist Michael Boskin reminded us: “As Milton Friedman taught decades ago, the true burden on taxpayers today is government spending; government borrowing requires future interest payments out of future taxes.” Or as my brother-in-law likes to say, “The amount you spend is the effective tax burden.”

This explains the frustration among the Democrats: They set the course by piling up the spending, and now Republicans are refusing to do their part, that is, collect the tax necessitated by all that spending.

Jim Pethokoukis has it right when he observes:

Big Taxes to fund Big Government. Decade after decade. See, it’s an almost universal belief among left-of-center journalists, economists, policymakers and politicians that Americans must pay higher taxes in coming years to cover the medical expenses of its aging population — not to mention all sorts of brand new social spending and green “investment.” Dramatically higher taxes. On everybody. And if we have a debt crisis, maybe those tax increases come sooner rather than later.

And conversely, the connection between high taxes and big government is precisely why conservatives are so adamant about not raising taxes. Every dollar obtained by a tax hike is a dollar not cut from federal expenditures.

So it is not simply that conservatives fear an increased tax burden will hobble the economy. It is not simply that the prospect of a double-dip recession increases their determination to protect employers from additional tax burdens. The root of their concern here is that the huge uptick in discretionary spending and a new entitlement (ObamaCare) will become permanent fixtures unless they stand firm on tax hikes.

This is a perfectly legitimate battle between the two parties. The Democrats want bigger government and are willing to tax Americans, regardless of economic conditions, to keep it as big as possible. The Republicans want smaller government and are unwilling to provide the taxes to fuel an expansion of federal power. Unfortunately for the Democrats, poll after poll shows the public would rather have smaller government with fewer services and fewer taxes than bigger government with more services and more taxes. And that is precisely the issue on which the Republican presidential nominee and Republican House and Senate candidates will run on in 2012. It is the foundation of the Tea Party movement. And, at least for now, it is a winner with critical independent voters.

Taking a Stand Against the Media’s Portrayal of Female Candidates

RWRO believes it is important for female candidates and lawmakers of each and every political party to be treated in the media with the same respect and reverence as their male counterparts. Whether or not you support the candidate, women should stand up against demeaning, sexist commentary which only blocks our path to achieving success in leadership positions.

Does Bachmann’s gender matter?

By Jennifer Rubin

The hardest stories to cover in politics are the dogs that don’t bark, that is figuring out why something isn’t happening. When it comes to Rep. Michele Bachmann (R-Minn.) the dog that isn’t barking, at least not yet, is her gender. Hillary Clinton’s campaign was “historic,” and the press thrilled to story after story about the potential for a woman president. Supreme Court Justices Sonia Sotomayor and Elena Kagan were likewise hailed as models of feminist achievement. But there is scant mention of the fact that a Republican woman, emphasis on woman, is zooming to the top of the polls in Iowa and may be the first GOP woman ever to win a caucus or primary.

That doesn’t mean her gender doesn’t matter. To the contrary, the sneers that greeted her announcement that she was running, and the propensity to lump her in with Sarah Palin (two conservative women must be two peas in a pod, right?), suggest that, at least in the mainstream media, gender politics and bias are very much alive. When GOP consultant Mike Murphy took to Twitter during the first debate to slam Bachmann’s appearance, we knew that the double standard for evaluating candidates is alive and well. Vin Weber, a Tim Pawlenty supporter, had to apologize after referring to Bachmann as “sexy,” a remark Bachmann cheerfully let roll off her back. But Bachmann as a role model or as a breakthrough in the GOP, which liberal pundits insist remains “anti-woman,” is not a story that’s drawn coverage, even in the conservative media.

Doug Sachtleben, a spokesman for the campaign told me, “Congresswoman Bachmann doesn’t make it about gender or herself. This election is about the need for a constitutional conservative in the White House. The best candidate happens to be a woman.”

Some observers agree that it has to do with Bachmann’s decision not to run as a gender-identity candidate. Gail Heriot, a professor at the University of San Diego law school and a member of the U.S. Commission on Civil Rights, thinks the rules are different for Republican women. “Bachmann hasn’t yet won a primary, so I am not surprised that nobody is celebrating her as any kind of a “first,” Heriot said. “More fundamentally, however, she is a Republican. In general, Republicans don’t seem to back particular candidates on account of their race or sex. Identity politics is not really a conservative thing. Her campaign, therefore, is under no pressure to use her sex as a selling point. Nor is it under any pressure to make a case for why her sex shouldn’t matter.”

Others think the lack of interest in Bachmann’s gender is itself evidence of bias, and not simply that Clinton’s campaign made gender a non-issue in politics, argues, Diana Furtchgott-Roth, a senior fellow at Hudson Institute. “Look at MSM portrayals of Kagan and Sotomayor as women who have broken barriers. And that was after Hillary. Feminizing Bachmann would be making her likeable.”

And still others think that she’s only recently been taken seriously by the media (perhaps due to sexism). A Republican woman communications guru tells me that “the MSM doesn’t take her that seriously yet. When it does, we’ll probably notice it more.”

Of course, the lack of interest in her gender may be a combination of all of these factors. But what is clear is that Bachmann’s gender is no barrier within the Republican electorate. (In a recent Quinnipiac poll, Bachmann had the support of 14 percent of Republicans (15 percent of men and 12 percent of women.)

Right Turn will have more on Bachmann and gender as the campaign plays out, but for now, for whatever reason, liberal feminist groups sure aren’t celebrating her candidacy, and Republican Tea Partyers are welcoming her with open arms. Just saying.