It’s bad enough that Congress had to pass a $700 billion rescue bill to clean up the mess that originated with Democrats’ coddling of Fannie Mae and Freddie Mac. But it turns out Democratic leaders were just getting started. Now they are threatening to pass a $300 billion spending bill on top of it, vowing more spending is necessary to provide “stimulus” for our flagging economy.
Speaker Pelosi says Congress must make more “harsh” decisions to further address the economic challenges facing our country. To that end, she and a small group of left-leaning economists held a photo-op in the Capitol to discuss the unsavory options. After what was surely an agonizing discussion, the Speaker emerged to make a somber announcement: Democrats have no choice but to spend as much as $300 billion more of the taxpayers’ money.
This is not a “harsh” decision. It’s more of the same: a business-as-usual approach using taxpayer dollars to feather politicians’ nests.
Nothing being discussed by the majority as a “stimulus” will stabilize the economy or ease our nation’s uncompetitive tax rates. Nothing being discussed will bring a dollar of private capital into our markets to help stabilize and restore American families’ savings and retirement accounts. And nothing being discussed will help small businesses create new jobs.
The majority’s plan isn’t meant to “stimulate” anything except Democratic voter turnout. You can dress a pig in a t-shirt that says “stimulus” — but guess what? It’s still a pig.
There are immediate steps we can take to turn the corner toward real economic growth. I outlined some of these steps in a letter to the Speaker.
We should enact a comprehensive “all of the above” energy strategy that allows new drilling in Alaska and deepwater energy zones, promotes alternative and renewable fuels, and encourages efficiency and conservation. Such reforms would create one million new jobs.
We should suspend the capital gains tax rate (currently 15 percent for individuals and 35 percent for corporations) for equities purchased during the next two years to encourage investment.
We should enact tax relief to encourage home purchases. Currently, people can exclude up to $250,000 of capital gains ($500,000 for married couples filing jointly) on the sale of a home used as a primary residence in at least two of the last five years. We should allow a similar exclusion for other homes purchased in the next 18 months and held for at least 5 years. This could help take foreclosed properties off the market, raising home values.
We should bring home American jobs by lowering the tax rate on profits companies bring back to the United States. Currently, the nearly 10,000 U.S. companies that have overseas subsidiaries must pay a 35-percent tax (the second highest tax rate in the world) on profits earned overseas when they bring those profits home. This encourages companies to leave their earnings overseas, meaning less money is available to keep Americans employed and create new American jobs.
We should lower tax rates for companies that purchase distressed assets to encourage American companies to assist with the financial recovery. Corporations that agree to purchase some distressed assets should receive a temporary 10-percent percentage point cut in their tax rate.
We should help seniors by suspending minimum Individual Retirement Accounts (IRAs) withdrawal rules. Currently, individuals are required to begin withdrawing from their IRAs six months after they reach age 70. We should suspend this requirement to spare investors from being forced to sell their stocks when the market is low.
The American people are hurting. But they’re not asking for pork-barrel spending masquerading as “stimulus.” They’re asking for reforms that create jobs, lower energy costs, and let them keep more of their own paychecks. House Republicans stand ready to work with Democrats to enact such reforms. And we stand equally prepared to fight irresponsible “stimulus” schemes devised by politicians and bankrolled by taxpayers.
— John Boehner is Republican leader of the U.S. House of Representatives.