The sluggish American economy has been at the forefront of the public’s fears for two years. It is well known that we’re in tough times, which is why comments from White House adviser Lawrence Summers on This Week this past Sunday are troubling. Do the President and his team understand what the rest of us have known for over a year?
“We’re in a very different place than we were a year ago. … Now, the progress in job creation has started. We expect that it will accelerate. But we’ve got to do more … We’re in no position to rest, or to be complacent, just because of this jobs report. … We’ve got to focus particularly on small business. If you’ll look at the data, the situation with large businesses is serious. But the situation with small business is devastating. … My expectation would be that the trend is going to be upward. … The first quarter [is] hardly satisfactory, but it is running somewhat ahead of what the administration was forecasting, because our forecasts were conservative. And I’d expect continued progress in job creation.”
Larry, we’re in the same place we were a year ago: Record unemployment. Stagnant Growth. Little optimism. And we are not seeing meaningful job creation. Let’s look at the Department of Labor’s job report for March. Plenty of counting jobs, but not jobs people can count on.
The nation added 162,000 jobs in March, 48,000 of which were census jobs, the Labor Department reported Friday. The unemployment rate remained stuck at 9.7 percent for the third month in a row, largely because more people entered the work force.
The St. Petersburg Times estimates 292,000 jobs need to be created each month until 2015 to reach the pre-recession unemployment rate of 4.9%. We’re far off this pace, but we must get there. To begin, America’s small business owners deserve to be heard and represented in Washington. The $17.5 billion HIRE Act the President signed into law in March is his second failed attempt to boost the economy. Let’s look the two main provisions, one good, one bad:
- Delayed Payroll tax relief: A boon for tax accountants, but will do little to spur hiring. Here’s why:, to qualify, the hire must be unemployed for two months; must remain on the payroll for one year; and must submit a signed form attesting all conditions have been met to the IRS. Then, the employee can seek out the tax relief – but only relief from a portion of all payroll taxes – likely not seeing any benefit for two years from now, at the earliest. Not now, when it is needed.
- A sliver of hope. Allowing firms to fully expense new equipment purchases is a wise move. Exactly why American Solutions included it in the Jobs Here, Jobs Now, Jobs First plan we unveiled in July 2009.
The President has also suggested temporary capital gains relief to a portion of small employers. Temporary tax relief is like offering everyone in one section of a baseball stadium a discount on two hour sun block, while everyone else burns. We need instead across the board and permanent tax relief.
These are band-aids when the economy needs a tourniquet. On Thursday, American Solutions will hold its fifth Real Jobs Summit. We were meeting with Small Business owners in December 2009 at the same time President Obama was holding a White House Summit refusing to include some of the nation’s top employers – small firms. Along with our General Chairman Newt Gingrich, American Solutions has visited Ohio, Mississippi, California and Florida, and on Thursday we will be in Louisiana. At each stop small business owners have been perfectly clear: Get out of our way and stop making it so hard to succeed.
Here’s the plan written by Small Business Owners, for Small Business Owners:
- An immediate two year 50% reduction in payroll taxes for every worker and every business.
- Lower the corporate income tax to 12.5%, match China’s capital gains rate of zero to draw new investment into the United States and stop jobs from going overseas, abolish the capital gains tax, and permanently abolish the death tax.
- Implement a constitutional amendment to balance the federal budget to stop Congress from spending money we don’t have.
We’re urging candidates throughout the country, from both parties, to take up our plan and demand the interests of small businesses are represented in Washington.
We hope you’re listening, Larry.