President Obama began and ended his speech last Thursday by correctly identifying America's unemployment problem as a crisis that deserves urgent action by Congress. After two and a half years, it's encouraging that the President finally recognizes the true magnitude of our job shortage. Unfortunately the President's proposal was a predictably disappointing iteration of the failed economic prescriptions he offered in 2009.
The President gave several similar speeches during his recent round of taxpayer-funded campaign stops. When those speeches received a less-than-enthusiastic response, the President took the unusual step of calling for a joint session of Congress—apparently hoping to create the perception that he had formulated a new approach to promoting job creation.
Those wanting to hear something other than a tax-and-spend agenda were surely disappointed. In fact, it's difficult to believe that much thought went into the jobs speech beyond copying his 2009 address, which outlined the failed $800 billion stimulus package. In 2009, the President insisted that Congress devote nearly a trillion dollars to a stimulus package designed to create new jobs in construction, green energy, and rail projects, while giving hiring incentives to employers.
The President now claims once again that more spending will lead to new jobs for construction workers, as well as (this time) teachers and veterans. He also promised there would be similar incentives for businesses that hire new employees.
The President was wrong in 2009. Americans understandably have little confidence that pursuing the same failed policies will work this time. Adding a trillion dollars to our staggering national debt hasn’t significantly affected the employment rate, and short-term tax incentives do not create the kind of certainty employers need to create jobs. A small, short-lived bump in employment may give rise to a comparably small, short-lived bump in the President's approval rating, but will have little if any lasting influence on the overall health of our economy. We need real solutions now.
Instead of lecturing Congress to pass yet another stimulus package “right away,” the President should be focusing on ways to minimize the federal government's burden on individuals and job creators, giving them more money in their pockets and more freedom to invest, save, innovate, and prosper. A pro-growth jobs agenda would include:
(1) Enforceable spending restrictions. Immediate spending cuts will reduce the deficit and national debt, and signal to businesses, investors and the credit-rating agencies that the federal government is serious about balancing its budget. It will also significantly reduce our debt-service costs, which over the next decade are expected to balloon to $1 trillion per year. Whatever one's vision of government may be – vast and expansive or limited and defined – interest payments of this magnitude will severely limit our ability to finance current government programs.
The Cut, Cap, and Balance Act, which I sponsored in the Senate and was later passed in the House, proposes the most comprehensive and serious spending reform in the last two decades. Passage of the CCB Act would create the kind of certainty the market needs to create jobs across the economy.
Furthermore, fiscal discipline will encourage improved monetary policy and help reverse the ruinous trend of a rapidly depreciating currency.
(2) Restrictions on regulatory overreach. While all Americans expect clean air, clean water and competitive business practices, very few believe it is necessary (much less desirable) to have 165,000 pages of regulations to achieve those goals. Such regulations cost businesses $1.75 trillion annually and have a chilling effect on economic growth and job creation. Congress should immediately pass S. 1438, the Regulation Moratorium and Job Preservation Act, and S. 299, the REINS Act. The former would place a moratorium on all new regulations until unemployment reaches 7.7%, the rate at which unemployment stood when the President took office.
The latter would restrict Congress’s pernicious practice of delegating its authority to unelected, unaccountable executive branch bureaucrats from assuming the power of legislators. Regardless of how competent these public servants might be, individuals who are neither elected by nor accountable to voters cannot be entrusted with the sensitive task of making major rules and regulations carrying the force of federal law—at least not without Congress's explicit approval.
(3) Encourage domestic energy production. The President should reverse his assault on the productive sector of our domestic energy industry and remove excessive barriers to increased energy production. America has vast quantities of untapped oil and gas resources primarily because the regulations surrounding their development require an unnecessarily prolonged and restrictive federal regulatory approval process. Congress should act on legislation such as S. 706, the Domestic Jobs, Domestic Energy, and Deficit Reduction Act, to encourage on- and off-shore energy exploration.
Enacting another stimulus package would be the wrong approach to promoting job growth. We need bold, transformative proposals to get Americans working again. By focusing on getting government out of the way of those who actually create jobs, Congress may pursue a more promising and prosperous agenda than what the President outlined in his speech.