Senate Minority Leader Mitch McConnell (R., Ky.) said in order to spur job creation and economic growth, government needs to “quit doing what we’ve been doing.”
“It’s obvious that the stimulus — borrowing all that money and spending it basically on government employees — didn’t do any good,” McConnell told Bob Schieffer on CBS’s Face the Nation, citing the rise of “bureaucrats on steroids” who are stifling job creation by imposing burdensome regulations that discourage new hiring and investment. “These people are busily at work trying to regulate every aspect of American life — in health care, financial services, through the Environmental Protection Agency,” he said.
In response to a question from Schieffer about the “Republican plan” for job creation, McConnell said the president had the ability to undo many of these stifling regulations without any action by Congress. “What we’re doing is encouraging the president to quit doing what he’s doing — overspending and overregulating the American economy,” said McConnell.
On the ongoing debt talks led by Vice President Joe Biden, the Republican leader said lawmakers would have an opportunity “very soon” for a deal. “This is the time to come together and hopefully in connection with the debt ceiling we can do that,” he said.
The important question, McConnell said, is “not whether we’re going to raise the debt ceiling but whether we’re going to do something about our annual deficit and the debt.” And the package must include “large, comprehensive” measures, specifically regarding entitlement reform. In fact, he added, this was effectively a deal-breaker on the GOP side — if a long-term deal is going to be agreed, meaningful entitlement reform must be included. “If we can’t do that then we’ll probably end up with a very short-term proposal over a few months and we’ll be back have the same discussion again in the fall,” McConnell said. It is an approach he has been pushing for several weeks.
On the issue of tax expenditures, McConnell said that while Republicans are interested in comprehensive reform of the tax code, it would be very difficult to accomplish over the next several weeks. This is the standard (and noticeably indirect) GOP denial that closing tax loopholes will be included in an eventual deal to reduce the deficit (More here). “We need to [reform the tax code], but it’s hard to squeeze that into this time frame that we have in connection with the deficit,” he said. “We need to concentrate on cutting spending. We’re discussing everything in the context of raising the debt ceiling, but the biggest problem is the spending problem.”
Sen. Chuck Schumer (D., N.Y.), who also appeared on the program, told Schieffer that Democrats planned to unveil a “jobs first” agenda in the coming months. “Deficit reduction is necessary but not sufficient,” he said. “There hasn’t been enough focus on jobs and job creation.” Last month’s employment report, which indicated that only 54,000 job were created in May, was a “shot across the bow.”
Schumer said there were two mandates from 2010 election: reduce the deficit and create jobs. In order to accomplish the latter, Schumer proposed a two-part strategy: 1) massive new spending on infrastructure and 2) “some kind of encouraging of employment.”
He said that government should sponsor massive new infrastructure projects to repair and rebuild our highway system, for example, as well as “new types of infrastructure” like a national power grid and universal broadband connectivity. As for “encouraging employment,” Schumer floated the idea of a payroll tax holiday for employers as something that Republicans would be likely to support as well. GOP lawmaker, however, are not exactly keen on the idea. “We don’t need short term gestures, we need long term strategies,” Sen. Lamar Alexander (R., Tenn.) told reporters last week. But Schumer seems to be daring Republicans to oppose the measure. “If they’re against a business tax cuts to help employment,” he said, “you got to wonder, maybe they don’t want the economy to grow.”
Schumer put forward a new goal for deficit negotiators — that for every $1 trillion in deficit reduction, to create 1 million jobs in the short term. Scheiffer then asked the obvious question: How do Democrats plan to pay for these “grandiose” infrastructure projects and new tax breaks? Schumer only said that they “should be factored in to the 10-years deficit reduction plan.”
Per Jonah’s latest column, Schumer’s “goal” has the trappings of a very expensive proposal:
Perhaps that’s why Obama’s real economic agenda never changed to fit the economic crisis. During the campaign he promised to reform health care and fight for a green economy. After the financial crisis, the “pragmatist” stuck to his outdated agenda, saying — surprise! — what the economy needs is the same agenda he promised before. So while he kept saying he was obsessed with job creation, he spent all of his political capital on health-care reform and energy. All the while, the White House tries to spin its agenda as something it’s not.
For instance, you know where this jobs-council meeting took place? At Cree Inc., an LED lightbulb maker. Under the supposedly jobs-boosting stimulus, Cree received $5.2 million. According to Recovery.gov, that $5.2 million created 3.02 jobs. That’s $1,716,171 per job.
In other words, to save the economy and create jobs, all we need to do is spend roughly $1.7 trillion for every $1 trillion we reduce the deficit. Why didn’t we think of that before?