Economy & Budget

How we create a dividend government

With the State of the Union upon us, Republicans and Democrats face a critically-important challenge that poses a genuine risk to our economy and stands to impact Americans’ competitiveness and overall quality of life. Stated simply, this challenge is how we best secure our nation’s global innovation leadership by turning a divided government into a dividend government.

One recent example – the formation of the President’s Council on Jobs and Competitiveness chaired by General Electric CEO Jeffrey Immelt – highlights the type of action America should be taking.

In a dividend government, we must directly challenge ourselves to identify which areas provide the most return on taxpayers’ investment in terms of value: job creation, long-term prosperity, economic growth and global competitiveness. Smart prioritization is key.

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Anticipating President Obama's next budget (Sen. Orrin Hatch)

Senator Orrin Hatch (R-Utah) made the following remarks today on the Senate floor.

Mr./Madam President, in recent months President Obama has frequently discussed our nation’s disturbing fiscal situation. 

He is right to do so. 

Our yearly deficits and accumulated debt hang over the futures of our children and grandchildren like a Sword of Damocles.  

Though he was late to the table on this issue, President Obama seems to have finally recognized the frustration and anger of the American people over our Federal fiscal policy. 

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Diplomatic grains

While China’s President Hu Jintao is in the United States this week for much anticipated meetings with President Barack Obama, many hardworking Americans will be watching closely and trying to read the tea leaves about what 2011 will bring for this crucial trade relationship. At best, leaders from both sides will acknowledge that increased economic cooperation can benefit both countries. At worst, a series of back-and-forth allegations of protectionism will escalate into a full-scale trade war, jeopardizing the jobs of millions of Americans.

No group has a bigger stake in this outcome than American farmers. Agriculture is one of the leading American industries relying on China for new growth opportunities. U.S. farm exports to China have grown nearly tenfold over the past decade, increasing from $1.5 billion in 2000 to $15 billion in 2010 and making China our largest agriculture export market today. Agricultural goods now account for a significant portion of total U.S. exports to China – 15 percent as of 2009. 

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Scapegoating workers

According to an emerging line of argument primarily advanced by Republicans, our current economic problems are caused in large part because government workers, especially those in unions, are doing too well. Ordinary workers and their unions, of course, had nothing to do with causing the housing and financial crisis that sparked the Great Recession. And claims about bloated salaries and overly powerful unions are mostly inaccurate and almost always heavily distorted. 

But merely rebutting the claims would be a fundamental mistake. Sadly, and dangerously, these canards are being pushed with renewed vigor because of what they do for the politicians who advance them, not for the benefit of the American economy. The newly empowered GOP is seeking to divert the public’s anger from their responsibility for the Great Recession while continuing the conservative economic policies that caused it in the first place, and so undermined the middle class they need to appeal to for votes.

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The real damage of China's trade policy (Rep. Linda Sanchez and Rep. Tim Ryan)

The Wall Street Journal, in its January 11, 2011 editorial, “The $6.50 Trade War,” seems to suggest that concern over trade with China arose solely over the $6.50 cost of assembling each iPhone in China.  Not only is the Journal’s suggestion incredibly misguided , it fails to recognize the real damage that China’s trade policy has done and is doing to the United States: American businesses have closed their doors and American workers have lost their jobs due to China’s failure to live up to its promises.
 
Concern about trade with China is real, long-standing, and widespread: 

·         Numerous sources, including staff of the International Monetary Fund and the Peterson Institute of International Economics agree that the Chinese currency has been substantially undervalued for many years.  This undervaluation gives Chinese imports an unfair advantage over U.S.-made products.  American producers  of goods facing unfairly subsidized goods from China and anywhere else are entitled to offsetting remedies under US trade laws and WTO rules.

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The real facts about a fiduciary duty

By January 21, the Securities and Exchange Commission will release a study on the feasibility of applying a uniform fiduciary standard of care to both investment advisers and brokers who provide personalized investment advice to individual retail investors. The results of this study, which was mandated by the Dodd-Frank Act, will have a profound effect on individual retail investors, especially the level of protection they receive and the array of investment choices offered by their financial advisor
 
Brokers and investment advisors work under very different business models and, because of that, are regulated by different laws.  Investment advisors provide only one service -- investment advice for which they normally charge a fee based on the assets under management. Brokers not only provide investment advice, they also underwrite stock and bond offerings, advise institutional clients on mergers and acquisitions, and make markets for certain assets.  Contrary to investment advisors, brokers charge a commission based on the products their clients purchase.

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Bankruptcy works: Why Congress should consider bankruptcy for states

In 1975, New York City was on the brink of bankruptcy. The City did not have the cash to make municipal bond payments and continue to pay for vital services or its public retiree and healthcare benefits. Consequently, New York City was on the verge of defaulting on its municipal bonds. In the face of this reality, New York City pursued three options: seeking aid from the federal government, negotiating a deal with its public unions or filing for bankruptcy. The federal government rebuffed New York City’s request for a bailout. Faced with the option of a municipal bankruptcy, the unions agreed to invest $2.5 billion of their pension funds in municipal bonds, which were used to bail the City out. The unions’ investment put the pensions of thousands of public employees and retirees at risk, but it enabled New York City and the unions to avoid bankruptcy and positioned the City to build a strong, long-term fiscal foundation. New York City avoided bankruptcy because it had the option to file for bankruptcy. 

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It's time for small business owners to walk the halls of Congress

When an entrepreneur or a small business owner has a problem, what does he or she do? The answer is simple; they usually roll up their sleeves and handle the problem themselves. With that approach, America's small business owners and entrepreneurs are now rolling up their sleeves and solving America's problems in Congress.

Small business owners are moving to our nation's capital to make a difference. In the 2010 elections, 33 small business owners were elected to Congress from both major parties. In the 2008 elections, 24 incoming members of Congress had some small business experience according to the Small Business Advocate, a monthly newsletter published by the SBA's Office of Advocacy. With the current state of America's economy and the role small businesses play as the economic engine that runs our country, it is small businesses and entrepreneurs that tend to lead our nation out of recessions and perennially lead job creation and growth.  According to SBA, small businesses employ over half of all private-sector employees. As more former small business owners and entrepreneurs walk the halls of Congress, their imperative to get things done will be felt, as will their commitment to making decisions that impact Main Street job creation. 

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How we get past our China 'identity crisis'

When it comes to dealing with China, the United States has experienced nothing short of an identity crisis: from big stick diplomacy, to use of (at times) a bigger carrot, to somewhere in the middle. The twenty-one gun salute slated to greet President Hu Jintao upon his arrival in Washington this week should serve as a wake-up call for U.S. policymakers. Indeed, Paul Revere’s words of warning from 1775 seem apt. China is coming, and as was the case with Great Britain, it’s now up to the U.S. to develop a well thought-out plan.

Considering recent economic events, this is arguably for good reason. As U.S. prospects for growth remain sluggish, China quickly recovered from the global recession and is experiencing meteoric 9.3 percent growth. It recently passed Japan and is now the world’s second largest economy, is the third largest holder of foreign debt reserves, is leading the way in developing trade relationships with emerging markets in Asia, Africa, and Latin America. China is also leading the world in investing in alternative energy and nano-sensory diagnostics, while securing the rare-earth materials necessary to develop innovative technologies of the future. 

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It starts with jobs

The election that polarized our country is behind us and a new Congress is back in Washington to address the many challenges facing our nation. While the number of Democrats and Republicans in each chamber has changed, one thing has not: more than 14 million Americans need jobs.

People like Robert Baker, a Milwaukee construction worker who specializes in elevators. He is one of the millions of long-term unemployed workers in America. Despite his specialized skill set, he hasn't been able to find work for more than a year. Robert, a proud man in his sixties, has been collecting unemployment benefits to survive, but would much rather have a permanent job.

Robert’s situation isn’t unique. With an estimated one job for every four unemployed workers, there’s little sign of any relief for our families and communities. Every minute, two more families lose their homes to foreclosure. Every 20 seconds, another American files for bankruptcy. Yesterday, nearly one in four kids in our country went to bed hungry. One in six Americans looked for work and, in just the first week of 2011, the number of Americans filing for unemployment benefits for the first time rose to 445,000.

America can do better.

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