Economy & Budget

A rising tide of renters

How much value do we place as a society on our ability to house the poor? You have to wonder after suggestions arose during the latest budget compromise about cutting the Low-Income Housing Tax Credit (LIHTC), the only major national program remaining that funds affordable rental development.
In fact, there couldn’t be a worse time to eliminate this meaningful, jobs-creating support. Nearly 100 million Americans pay rent these days, and all signs point to that figure growing in the months and years ahead. People are losing their homes in record numbers, and many that have been foreclosed on have yet to move into rental housing. Analysts expect renters to account for 36 percent of U.S. households by 2015, up from 32.8 percent in 2004, and every percentage-point increase amounts to about 1.3 million more households joining the renting ranks.
Here’s the problem: If current trends hold up, their rental options will dry up fast. Construction starts for multifamily residences are lagging behind demand – at a significant rate. The multifamily market will add an estimated 133,000 new residences this year, well short of the 250,000 to 300,000 needed to keep supply and demand in balance.
With multifamily developers so focused on high-end condos, low-income communities are feeling the shortage the most.


When a tax cut isn't a tax cut

Consider two different U.S. tax worlds:

Today, the U.S. government gets virtually all of its revenue from an income tax, which many Americans believe is unfair, incomprehensive, and an impediment to economic growth. Virtually every American is calling for some kind of reform. 

Tomorrow, the U.S. government gets its revenue from a consumption tax.  Familiar examples are a European Value Added Tax (VAT) or a U.S. retail sales tax.  Implicit are measures to prevent the tax from becoming too regressive and a “money machine.” 

Tomorrow, a zero capital gains tax is not considered a “loophole” or the “poster child” of an inequitable tax system but rather a predicate for entrepreneurship and investment. 

Tomorrow, Americans will invest their hard earned income into IRAs and 40lks without a second thought about tax penalties or repercussions.  It rewards Mr. Thrift rather than Mr. Spendthrift.   Today, they are considered “special tax breaks” or “tax expenditures.”

Tomorrow, a business can expense or immediately deduct the cost of new equipment from its tax bill and be competitive.  Today, it is considered a corporate break.

Is tomorrow’s dream “voodoo” tax policy?  Definitely not.  The U.S. is one of a few global players that relies almost entirely on an income tax for its revenue.  In our current tax system, exempting saving and investment is a tax loophole or tax expenditure rather than a necessity for economic growth. This must change. The time is ripe to do so.


E-Verify best jobs bill

Last week, President Obama gave yet another job creation speech that was aimed at protecting one job—his own.  Two months after President Obama took office, the number of unemployed Americans eclipsed 13 million for the first time in history.  Now, two years after he took office, nearly 14 million Americans are unemployed and another nine million can’t find full-time work.  President Obama has a right to be concerned about his job.

But if President Obama is indeed focused on putting 23 million unemployed or underemployed Americans back to work, there is one element that is missing from his jobs plan: a federal E-Verify requirement.   This is one of the best options available to put unemployed Americans back to work.

E-Verify is a web-based program that quickly identifies individuals working illegally in the United States and protects jobs for legal workers by checking the Social Security numbers of new hires. We could open up millions of jobs for unemployed Americans by requiring all U.S. employers to use E-Verify. 

The “E” in E-Verify could just as well stand for “easy” and “effective.”  It takes only one to two minutes to use per new hire and immediately confirms 99.5 percent of work-eligible employees.  Even though E-Verify is not mandatory, many businesses voluntarily use the program.  Nearly 290,000 American employers use E-Verify and an average of 1,300 new businesses sign up each week. 


Seaports: A key to economic recovery

President Obama’s recent speech outlining his plan for the American Jobs Act focused on several tactics that he believes will put people back to work and get our economy back on track.  However, as the U.S. continues to confront the need for both economic austerity and job creation for the 9.1 percent of unemployed Americans, one of the nation’s oldest and largest economic drivers – seaports – continues to be overlooked.
By increasing our investment in America’s seaports, we can create high-paying, sustainable jobs that will put Americans back to work. Just last year, U.S. exports supported an estimated 9.2 million jobs. This means that for every $1 billion of exported goods,more than 5,000 jobs are supported.
Responsible for handling more than 99 percent of our country’s overseas cargo, seaports are America’s gateway to international trade and economic prosperity. However, many land and water connections are outdated and insufficient, thereby impacting the ports’ ability to move cargo into and out of the U.S. efficiently.


Hawks, doves, or owls?

In a polarized political environment, fractured by partisan debate about the debt ceiling, pending decisions about defense spending have been characterized as a contest between hawks and doves.
But what’s needed most aren’t hawks or doves, but “owls,” with the wisdom and vision to balance federal budget constraints against America’s need to defend our national security, preserve our technological leadership, protect our troops, maintain our industrial base and foster middle-class, family-supporting jobs. These are the most fundamental requirements of American government.
The leadership of the defense industry does not dispute the need to cut federal spending of all kinds, nor do we disagree that the Defense Department must share in those reductions. Indeed, the Pentagon has already cut hundreds of billions of dollars from its budget by streamlining bureaucracy, finding efficiencies, and even canceling some critical programs.
However, under a process called sequestration, the Defense Department could face a second round of cuts totaling $600 billion over fiscal years 2012-2021, above and beyond the $350 billion in cuts already in the deal.  U.S. Defense Secretary Leon Panetta expressed grave concerns recently, stating that “We cannot allow that effort to go so far and cut so deep that it jeopardizes our ability to deal with the other very real and very serious threats we face around the world.”


Modernizing USF fund is an important first step in job growth

With the president’s speech this week highlighting the ongoing desperation among American families looking for job creation and economic recovery, Congress should start with the low-hanging fruit: policies and reforms that can get us on the path to recovery immediately and without partisan gridlock.
One widely supported reform that President Obama failed to mention is the proposed transition of the little-known Universal Service Fund (USF), a federal fund that was designed to support the expansion of old-fashioned, wire-line telephone service across America.  Today, we have now achieved virtually universal access to traditional phone service and USF is long overdue for change.
Fortunately, many people with the technology community have offered a very practical solution: transitioning the fund into supporting the expansion of broadband Internet services to millions of Americans in underserved communities.


Social security is insurance you pay for

It’s no secret that Republicans have worked for the better part of the last decade to cut Social Security and Medicare. The party’s roadmaps, plans, and bills all point in the same direction: smaller, privatized Social Security benefits for American retirees and the dismantling of the Medicare guarantee.

Republican House Majority Leader Eric Cantor has said of Social Security, “We’re going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want America to be.”
“Cannot exist.” That’s not tinkering around the edges, that’s radical government. The question is why should we agree to it.
The latest justification – repeated like a mantra to make it sink in – is deficit reduction. So is cutting Social Security and dismantling Medicare the answer to putting our country back on track? Are these programs really the financial elephant in the room, as Republicans claim?


How to increase innovation and jobs in America

This fall the President and Congressional leaders are betting on innovation to spark job creation and economic growth in America.  Next week, they hope to contribute toward this goal with the passage of legislation intended to simplify, streamline, and modernize our patent laws. What is missing from this legislation is the provision to restore the Patent and Trademark Office (PTO) with the funding it needs and rightfully collects, to perform timely reviews of applications that grant innovators the legal protection needed to create new products that stimulate the economy and add new jobs.

Innovators pay user fees to get their patent applications processed at the PTO. Currently, they face a three to five year delay in receiving their patent, in part because Congress has diverted more than $900 million in patent application fees, shifting those funds to pet programs and projects.  

Proposals to reverse this trend and restore the PTO with the full funding it collects from patent applications will be under assault in a time of massive federal budget cutbacks, risking further backlog of applications. 

Robbing the PTO to pay for pork hurts the American economy.


Protecting vulnerable consumers and jobs

On August 31, the Department of Justice (DOJ) definitively hung up on the proposed $39 billion merger between AT&T and T-Mobile.

In a complaint filed in federal court, the DOJ said the deal would “substantially lessen competition for mobile wireless telecommunications services across the United States.”
This is a significant step toward effectively blocking AT&T’s purchase of one of the only major players in the market to offer affordable wireless.

It’s also a major victory for those of us who have been working to save critical jobs in a tough economy. It will protect vulnerable consumers from the higher prices and poorer quality services that would have resulted from the merger.
The DOJ put the facts before politics and made a smart decision that will be in the best interest of consumers. The Federal Communications Commission (FCC) now must follow suit and put a final stop on the proposed merger.


Shale gas can help grow jobs

All eyes will be on President Obama Thursday night as he rolls out another plan to solve the unemployment conundrum.  Based on reports, we’ll probably hear about incentives for “green” industries, new infrastructure projects, extension of unemployment benefits and a payroll tax holiday, among other things.   But what’s likely to be missing, and what’s been missing from nearly every recent “jobs” plan, is a specific mention of one of the most promising developments for new American manufacturing jobs in at least a decade – shale gas.
By now, many Americans may have heard of shale gas.  They may even appreciate that a new abundant supply of domestic natural gas means we’re more energy secure and our electric and heating bills could be lower in coming years.  What most Americans don’t realize is that these new affordable natural gas supplies from shale have kick-started our nation’s manufacturing sector and revitalized America’s industrial heartland.