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What Recovery?




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June 22, 2012 | 1235 views | 1 comment

By: U.S. Senator Kay Bailey Hutchison

June 20th marked the first official day of summer, which means we are now officially at the two-year anniversary of the “recovery summer” -- meant to showcase that the Administration’s economic policies were working. There isn’t much need to point out that we’re still looking for some economic sunshine.

The President forecast 3 percent economic growth in his budget proposal for the next fiscal year, but the bipartisan Congressional Budget Office recently lowered its 2013 growth estimate to an anemic 0.5 percent. Unemployment is stuck at 8-plus percent -- for 40 straight months and counting. In fact, last month’s jobs numbers were worse; unemployment is actually increasing.

The President recently said, “The private sector is doing fine.” Most Americans, especially the 23 million who are unemployed or underemployed, are scratching their heads, thinking, “What is the definition of ‘fine’?” And they look at his proposals for our economy -- another round of federal borrowing to enable local governments and school districts to do more short-term hiring -- and recognize that this costly, temporary approach has already failed once.

Full implementation of the health care law next year scares both workers and businesses. Families and individuals are worried about losing their current health insurance coverage and losing their doctors. For businesses, the health care law is one huge uncertainty among several -- including higher taxes and more over-regulation -- that is forcing them to hold back on investing and hiring more workers.

I've heard from a small-business owner in Texas who was facing a 44 percent increase in health insurance premiums. This is nothing less than a hidden tax on hiring, and that is before the President’s health care program is fully implemented. Almost half of small-business employers say that the health care law has stopped them from hiring.

Small businesses -- the engines that are responsible for driving most job growth in the country -- are also threatened with huge tax increases. Small businesses are usually organized so they pay income taxes at individual rates, and 53 percent of small businesses’ income is subject to the top two individual income tax rates, which will rise to 36 and 39.6 percent on January 1st, unless Congress and the White House act before the end of this year.

About 25 million middle-income taxpayers will also be hit in January by the Alternative Minimum Tax (AMT). The AMT was introduced in 1969 to target a couple of hundred millionaires who were avoiding taxes. Today it drives up tax bills for millions of Americans, and tens of millions more are threatened next year.

On January 1st, two middle-class tax provisions that I’ve fought hard to enact are set to expire: marriage penalty relief (so that married couples don’t pay higher taxes than if they were single) and state sales tax deduction. The sales tax deduction is particularly important to Texas taxpayers -- an average tax savings of $500 per year -- because we don’t have a state income tax.

America’s economy is trapped in a vicious cycle. The threat of higher taxes and higher costs holds back job creation by our entrepreneurs. Unemployment stays high, deficits soar and the economy continues to stagnate. The White House calls for higher taxes and more stimulus, the deficit goes up and the job-killing environment flourishes.

We cannot go on like this. We need a real, permanent economic recovery, led by an innovative, job-creating private sector. We need long-term solutions: repeal the ruinous health care law, end unnecessary regulations and reform the tax code to promote growth and job creation.

Hutchison, a Republican, is the senior U.S. senator from Texas.
 
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Elaine K.  
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June 22, 2012 12:55pm
 
 
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