Polling and punditry present this election as a referendum on “the economy” — here defined as jobs and unemployment. However, “the economy” as an issue and the economy in practice are two very different concepts. While Governor Mitt Romney has been pressing the Obama administration on low job growth and high unemployment, he has not been addressing the changes and potential changes the administration has made or proposed to education, energy, health care and transportation, which affect the unemployment rate and future job growth. Gov. Romney may have the skills to create short-term job growth over the next four years, but the detriments of Romney’s long-term plan far outweigh any short-term growth he would create. The plan of President Obama and the Democrats includes the short-term American Jobs Act and long-term investments in key fields of research, infrastructure, and education to create a strong and vibrant foundation for future generations of Americans. Obama’s plan attempts to return to the successful policies of Bill Clinton.
At this point, the electorate must learn to ignore Republican cries about jobs and unemployment, and Republican obstructionism has actually slowed economic growth and caused S&P to downgrade the U.S. credit rating. The President put forward the revenue-neutral American Jobs Act to improve employment, lower taxes and rebuild infrastructure. The plan helps small businesses through 50 percent payroll tax cuts, no payroll taxes on the first $50 million in new hiring, and reforms and regulatory reductions to improve access to capital. The Act also invests in the National Infrastructure Bank to modernize roads, rail, airports and water routes creating new construction jobs in an industry hit hardest by the recession. While extending unemployment insurance for millions of Americans, the program also includes significant reforms including a $4,000 tax credit to employers for hiring the long-term unemployed. The American Jobs Act includes payroll tax cuts for 160 million workers —providing a $1,500 average tax cut — and the administration’s home loan refinancing policies that would lower rates to 4 percent and give an average of $2,000 per year to American families. The Congressional Budget Office actually estimates that the Jobs Act would reduce the deficit by $6 billion over 10 years. This is not a huge deficit reduction, but the program increases employment, cuts taxes and rebuilds infrastructure with no new debt.
The Democratic Economic Platform brings new ideas to the forefront on immigration and research while also renewing American precedent for transportation and infrastructure funding.
The U.S. must admit high-skilled immigrants (HSI) to boost innovation and productivity. According to economists Adam Ozimek and Noah Smith, “…the economic benefits of HSI are clear… the skills and knowledge of the labor force… is one of the key inputs of GDP.” The Democratic plan focuses reform on increasing quotas, lifting restrictions and refusing to deport illegal immigrants that are educated and productive. President Obama issued an executive order that protects millions of young illegal immigrants from deportation if they are high school graduates, in the military or attending college as a first step towards comprehensive reform.
The President pushed for increased transportation funding to revamp infrastructure that has fallen into disrepair. He requested $50 billion, with $27 billion going towards highway repair and maintenance. The Interstate Highway System massively increased productivity and allows American industry to distribute goods quickly to markets around the nation. Maintaining this system is essential to economic security.
The Democrats also support a permanent version of the Research and Experimentation Tax Credit. This tax credit provides a nonrefundable credit equal to 20 percent of research expenditures stimulating long-term research. A permanent version would provide tax certainty to businesses and guarantee funding for long-term projects in which firms may currently be unwilling to invest. The Tax Policy Center advocates a permanent credit to “give a more realistic picture of its future budgetary costs.”
The President has put forward a number of future goals as well: (1) doubling U.S. exports by 2014, (2) reducing the deficit by $4 trillion over the next decade, (3) creating 1 million manufacturing jobs by 2016, (4) cutting oil imports in half by 2020, and (5) training 2 million workers at community colleges. These goals improve the quality of the American labor force, decrease reliance on foreign imports of goods and energy, and bring our national debt under control. The Obama administration has already made significant progress towards these goals. The U.S. reached the highest level of exports on record in June 2012; the President has decreased the annual budget deficit by $400 billion since taking office — the most since President Clinton; and U.S. oil imports have already decreased to the levels of the late 1990s.
These goals represent necessary economic reform. Since 1980, the U.S. government’s role in the economy has decreased dramatically. Financial and industrial deregulation have been wrapped in the Republican ideology of “personal responsibility” and sold to the American people as a strategy for growing the economy and middle class; however, economic growth is slow and the middle class is shrinking. Financial deregulation led to the biggest economic crisis in almost 100 years and shrunk the average American’s net worth by 40 percent. Industrial deregulation has led to the destruction of American unions and stagnant wages for American workers. Without unions and collective action, workers have lost the bargaining power that created the minimum wage, child labor laws, the 8-hour workday, the 40-hour workweek, employer-provided health care and pensions. Many workers have seen work hours increase, wages decrease, health care costs go up,and pensions disappear.
Big Oil, Wall Street and billionaires control the policies of the Republican Party. They advocate increased drilling, fewer regulations and lower taxes on the rich in exchange for cutting Medicaid, Medicare, welfare, food stamps, the EPA, the Department of Education, green energy programs and housing subsidies. These policies are immoral; they hurt the weakest members of our society to benefit those that need it the least. The ideology disregards socioeconomic inequity and gives the moral high ground to the people with the most money. The average American has already lost an equal political voice due to Citizens United, and now s/he is going to lose needed and deserved benefits if Gov. Romney becomes President.
For the party of evangelicals, the Republicans have quickly abandoned the teachings of Christianity; just remember the words of the Bible, “Speak up for those who cannot speak for themselves, for the rights of all who are destitute. Speak up and judge fairly; defend the rights of the poor and needy.”
Zac Bears is a Collegian columnist and can be reached at [email protected]