From The Heritage Foundation (Morning Bell), October 7, 2011 – Yesterday at the White House, President Barack Obama faced the media to once again plug the American Jobs Act–his plan for more stimulus spending, paid for with even more taxes on America’s job creators. And this morning, not a day later, America received a reminder of why a continuation of the President’s tried-and-failed policies is not a prescription for success: In September, the U.S. unemployment rate held steady at a dismal 9.1 percent with 14 million Americans still out of work. About 103,000 jobs were added, but 45,000 of those were simply Verizon strikers returning to work, and the number of long-term unemployed (27 weeks or more) increased by 208,000.
For those keeping score, the unemployment rate has hovered around 9 percent for all of 2011, was over 9 percent for all of 2010 and most of 2009, and will remain above 8 percent until 2014 according to the Congressional Budget Office (and that’s a generous estimate that didn’t account for the most recent economic slowdown). If you demand more and want to see full employment in America (about 5 percent unemployment), you’ll have to wait until 2018, and that will happen only if employers regain their confidence and begin hiring at 176,000 jobs per month–much higher than the rate seen in September and, for that matter, all year.
The President, though, does not accept any of the blame for America’s continued stagnation or the economy’s unsteady recovery, even though a staggering 55 percent of Americans disapprove of his job performance. In his press conference yesterday, the president was asked to comment on Federal Reserve chairman Ben Bernanke warning to Congress this week that the economic recovery is “close to faltering.” The President’s answer? Laying the blame as far away from his doorstep as possible, pointing the finger at everything from the tsunami in Japan to the GOP in Congress:
I think people were much more optimistic at the beginning of this year. But the combination of a Japanese tsunami, the Arab Spring, which drove up gas prices, and most prominently Europe I think has gotten businesses and consumers very nervous. And we did not help here in Washington with the debt ceiling debacle that took place, a bit of game-playing that was completely unnecessary, completely unprecedented in terms of how we dealt with our responsibilities here in Washington.
And while the President denies any responsibility for America’s sagging economy, he has also attempted to dress up his plan in an imaginary cloak of bipartisanship, claiming, “Every idea that we’ve put forward are ones that traditionally have been supported by Democrats and Republicans alike.” Not so, as even The Washington Post points out.
A key component of the President’s plan is taxes–and plenty more of them. The President’s proposal would impose $1.5 trillion in permanent tax hikes over 10 years that would fall mostly on families and businesses earning more than $250,000 a year–hardly a proposal that has the backing of conservatives. (Meanwhile in the Senate, Majority Leader Harry Reid [D-NV] has proposed a 5.6 percent tax on earnings above $1 million per year.)
The President says he’s “asking millionaires and billionaires to pay their fair share,” which by implication means that those Americans aren’t paying enough. But the President’s sense of “fairness” doesn’t take into account the reality that the top 10 percent of income earners already pay 70 percent of federal income taxes. Heritage’s Curtis Dubay explains how those numbers break down:
According to the IRS, the top 1 percent of income earners–those earning more than $380,000 in 2008–paid more than 38 percent of all federal income taxes while earning 20 percent of all income. The top 10 percent ($114,000 and above) earned 45 percent of income and paid 70 percent of all taxes. At the same time, the bottom 50 percent of income earners–those earning less than $33,000–earned 13 percent of all income and paid less than 3 percent of federal income taxes.
Now the President wants to pile another tax burden on their heads, and that will lead to fewer jobs for all Americans, including middle- and low-income workers. Those who would pay these new taxes under Obama’s plan include investors who provide capital for businesses to expand, thereby creating more jobs for American workers, as well as entrepreneurs who use capital to start new enterprises. And because many businesses pay their taxes through their owners’ individual income tax returns, the President’s new tax hike will directly target those employers. If the President wants to create more jobs in America, confiscating money from job creators in order to fund more government spending isn’t the way to do it.
Senator Reid knows that the President’s plan is indefensible and proved it by going out of his way to change the rules of the Senate last night to avoid forcing his caucus to vote on it. Senate Democrats don’t want to be on record supporting the President’s latest stimulus, so now the legislative body is at an unprecedented standstill.
Americans are suffering. Some are taking their frustrations to the street; others are at home struggling to find new jobs and make ends meet. Fourteen million who would like to work simply can’t do so, and 6.2 million of those jobless Americans have been out of work for 27 weeks or more. But instead of recognizing that bigger government, more spending, and more burdens on America’s job creators simply has not worked, President Obama is continuing his myopic focus on more of the same with none of the blame. That’s not the answer Americans are looking for.