It’s been one week since President Barack Obama announced his latest “stimulus” plan, and despite a cross-country road show aimed at selling his proposals to the American people, the commander in chief is finding that his message of more taxes and spending isn’t hitting home. Meanwhile, House Budget Committee Chairman Paul Ryan (R-WI) has outlined a markedly different way to help the U.S. economy get back on track.
According to a new National Journal/United Technologies poll, only one in six Americans think that the President’s plan will decrease unemployment “a lot,” while one-quarter doubted that the plan would affect unemployment at all. Then there are the 39 percent who think that the President’s policies have made unemployment even worse (twice as many as those who say he’s made unemployment better). Now The New York Times is raining on the President’s parade, too, reporting that Democrats are “balking at Obama’s jobs bill” and “say there is little chance they will be able to support the bill as a single entity, citing an array of elements they cannot abide.”
Though it might be surprising that the President is struggling even among his own party to garner support for the plan that he has demanded they pass, it’s no wonder that the country doubts his plan for job growth. After all, with its $447 billion sticker price and reliance on big government spending, it looks much like what he has tried and failed for the duration of his presidency. In short, it calls for more borrowing, spending and higher taxes–none of which is going to help America create more jobs.
Rather than take a stab at making government bigger, Ryan says in a new video that there’s a better path forward–pro-growth tax reform that makes the tax code fairer, competitive, and simpler, all of which will help unleash the creative power of America’s private sector. In an exclusive interview with The Heritage Foundation, Ryan explained why the tax code is so desperately in need of reform:
[The tax code] penalizes all those qualities that make us great and make our economy grow–saving, investing, risk taking. It penalizes those things.
It’s basically a crony capitalist creation, where Congress has decided to put itself in the role of picking and choosing winners and losers in the economy through the tax code.
When you carve out all these preferences to benefit one industry or business over others, you have to raise tax rates higher than you otherwise would have to, which makes it harder for the economy to grow, for businesses to become created.
Ryan says that the tax code has become “an economic incumbent protection plan” that ultimately leads to higher taxes across the board, leaving the United States less competitive in the global economy. His solution? Level the tax code playing field:
What we want to do is get all the social engineering and crony capitalism loopholes out, so we can lower the tax rates and let businesses keep their money in the first place–let people keep their money in the first place–and that way the determining factor of whether a business succeeds or fails will be based upon merit, will be based upon achievement, will be based about innovation, will be based upon whether they’re pleasing customers or not, and not whether they have access to people in Congress or the federal government.
Don’t confuse Ryan’s call for fairness in the tax code with President Obama’s calls for “shared sacrifice” — which for him means higher taxes on America’s job creators. Ryan says there is an inherent difference in aspiration and philosophy about the role of government in the economy:
I aspire to achieve a culture, an economy, a society where we promote equal opportunity, so people can prosper and make the most of their lives. I would argue with the President’s rhetoric and actions–he’s aspiring to a society where the government sees its role as equalizing the results of our lives. It’s a way of looking at the economy and the society as if the pie were fixed, and therefore the government has to have as its role redistributing the slices of the pie more equitably in the name of fairness or equality. That’s not how the world works. That’s not how the economy works.
Our goal is to grow the pie, not have the government figure out how to redistribute slices from some to others–which ends up putting a penalty or a hurdle on growth and innovation and prosperity–but grow the pie itself. I will grant the President that class warfare can make for really good politics, but it doesn’t make for good economics.
Ryan is on the right track. Whereas President Obama wants to keep increasing spending and paying for it with higher taxes, Ryan is advocating a much-needed revamp of the tax code. Whereas the President’s policies would permanently increase taxes, increase the size of government, and make America’s unemployment picture even worse, Ryan looks to make government smarter and fairer, allowing businesses to grow, compete, and thrive. The former is a recipe for continued failure; the latter offers some much-needed hope to a country that has been struggling for too long.
Quick Hits:
- President Obama’s green jobs initiative has been a bust, according to Department of Energy records. Though the $38.6 billion program was supposed to “create or save” 65,000 jobs, it reportedly has created only 3,545 new jobs.
- President Obama likely won’t consider raising the Medicare eligibility age or reducing Social Security benefits as part of debt-cutting measures, though he agreed to those measures this summer.
- Though California was one of the first states to embrace Obamacare, it is now cutting its healthcare safety net more than nearly any other state–despite billions of dollars in aid from Washington–due to budget constraints.
- The Treasury Department is launching its own investigation into Solyndra, the bankrupt company that President Obama said was a green jobs success story. The Obama Administration issued a $535 million loan guarantee to the company.
- Is Social Security a Ponzi scheme? Find out the truth from Heritage’s David John on Foundry.org.
