Creating Jobs for Pennsylvania

Written by Joe Pitts on June 09, 2011, 01:37 PM

I’m concerned that our number-one national priority, job creation, is being ignored in Washington. Washington is too distracted by scandals, partisanship, and other things that simply aren’t as important. America is still faced with an unemployment crisis, and Washington needs to stay focused on it.

Government statistics tell us Pennsylvania’s unemployment rate is 7.5 percent, more than a point lower than it was a year ago. That’s not the number I’m most interested in. The number that matters to me is 477,113. That’s the number of Pennsylvanians who don’t have jobs. Almost half a million of our neighbors can’t find work.

But even that number is misleading. It doesn’t count people who have settled for low-paying or part-time jobs. It doesn’t count those who have given up looking. Pennsylvania’s “effective unemployment rate,” which counts these people, is far higher than 7.5 percent: it’s 14.4 percent. That means nearly a million Pennsylvanians are out of work or have taken low-paying jobs out of desperation.

A key reason voters gave Republicans a second chance last year was America’s belief that the trillion-dollar “stimulus” and the multi-billion-dollar bailouts were little more than expensive failures. I and many others pushed hard for better approach.

In January of 2009, and again a year ago, I proposed a path to job creation based on six core principles. If we did each of these things, businesses could quickly begin to invest in new jobs:


Congress cannot force employers to hire. But Washington can create an environment that encourages businesses to hire. Amazingly, Washington has not only failed to act in these areas, it has actually done the opposite of what is necessary to spur job creation. Here’s an update on each of the six action items.

Action Item 1: Helping Right Now

While the best solution to unemployment is a good job, I’ve done my part to help those who need assistance in the meantime. I voted repeatedly to extend unemployment benefits throughout the recession, but I also insisted that they not be paid for with more government IOUs.

Status: When Pennsylvania’s unemployment rate dropped below 8.5 percent, we no longer qualified for these extensions. That makes it even more important that we act quickly to create jobs for people whose benefits have run out.

Action Item 2: More and Cheaper Energy

Every part of our economy runs on energy: from driving to work to turning on the lights when you get there. Manufacturing, a key driver of middle-class job creation, is particularly dependent on energy. When energy sources like electricity, diesel, gasoline, and natural gas are expensive, companies have less money to spend on people. It is essential that we make energy as inexpensive as possible, without endangering the environment.

Status: Continued opposition to domestic energy production is hurting our economy. The Administration’s policy of keeping the dollar weak has also led to high gas prices. The House of Representatives has passed several bills to increase domestic energy production from all sources. If passed by the Senate and signed by the President, we would lower energy prices for everyone and lessen our dependence on imported fossil fuels from unstable parts of the world.

Action Item 3: Low and Stable Taxes

Jobs don’t come from the government. Jobs come from successful business that grow, take risks, and hire. For years, our tax code has been a major disincentive to hiring. Our corporate tax rate is one of the highest in the world (though loopholes do allow some businesses to avoid paying their share.) But only half of American businesses pay corporate taxes. The other half pay taxes the way you and I do: using a 1040 form. These are usually the small, entrepreneurial businesses that are the real engines of our economy. Seesawing tax rates and frequent talk of raising taxes on the “rich” (who are often actually just struggling businesses) has made it impossible for employers to plan for the future and hire.

Status: A month after the election last year, a bipartisan agreement was reached to extend the current tax rates for two years. This averted what would have been the largest tax increase in history. While job creators still can’t plan for the long term, they at least know what to expect for the next two years.

Action Item 4: Open New Markets

New markets for American goods would very quickly create tens of thousands of new jobs. Three already-negotiated trade agreements have been left unratified by Congress for almost four years. South Korea, Panama, and Colombia are just three of the countries that are eager to buy more of our goods, but they can’t until Congress acts. That has cost jobs.

Status: While these agreements have been languishing, our competitors have been moving ahead. The European Union ratified its own trade agreement with South Korea on February 17. If we don’t act quickly, Europe, China, and others will beat us to the punch, leaving American employers at a disadvantage. That will cost jobs. Four years of inaction has already cost 250,000 jobs, according to Obama Administration numbers.

Action Item 5: Balance the Budget

Our government is more than $14 trillion in debt. About 40 cents of every dollar our government spends is borrowed. We have over $100 trillion in binding commitments we have no plan to pay for. This is extremely dangerous to our current and future prosperity. It has to stop. In a sign of how serious this is, S&P downgraded its outlook on America’s credit rating to “negative” in April, expressing pessimism that we will get our fiscal house in order. Moody’s Investor Services warned on June 2 that its rating will “depend on the outcome of the negotiations on deficit reduction.”

Status: Politics and demagoguery are the primary reasons for inaction. The truth is, if we raised the top tax bracket to 100 percent and completely shut down the Department of Defense, the budget still would not be balanced. We must save, strengthen, and fix Medicare and other entitlement programs to solve this problem. Until both parties can work together on this, progress won’t happen.

Action Item 6: Wise and Consistent Regulation

“Cap and trade,” increased government control of healthcare, and many of the other initiatives from the last Congress promised major disruptions to America’s regulatory structure. Businesses weren’t only waiting to find out what would happen to their taxes—they were also waiting to find out what new regulations were going to cost them. In the meantime, they didn’t hire. Regardless of the merits of these proposals, the timing of them was terrible.

Status: The President’s healthcare plan is now law, but that has not ended the uncertainty. The Department of Health and Human Services is working overtime to write sweeping regulations that will affect nearly every employer in America. At the same time, the law’s continued unpopularity and a strong challenge to its constitutionality make it uncertain whether the law will survive at all.

Looking Ahead

Despite Washington’s errors, the economy seems to be improving slowly. I believe there is good reason for optimism as we look ahead. Long-term, the American people won’t stand for a government that ignores our nation’s biggest challenges. But we must deal with the situation we are faced with now, and that means doing everything we can to make sure every American—and every Pennsylvanian—who wants a job can find one. This is my top priority.