WASHINGTON – Senator Chuck Grassley today attended a White House meeting to discuss the economy and job creation with President Barack Obama and Republicans and Democrats from the U.S. Senate and House of Representatives.
Grassley said he made two points during the meeting in the Cabinet Room, which he said lasted about an hour and 25 minutes. Grassley said he thought it would be “very helpful for the President to do what he did a year ago and announce that there won’t be any tax increases because of their detrimental effect. Certainty of tax policy would be very good for the economy, especially in the area of marginal rates,” Grassley said.
The Iowa senator said he also urged the President to move forward on pending trade agreements, especially with South Korea. “There’s too much hesitation and delay on this issue, and while we’re sitting on the sidelines, Europe has negotiated with South Korea and is in a position to go ahead and take the opportunities for exports that the United States will miss. This is very harmful, especially to pork and other areas of agriculture,” Grassley said.
Grassley made an argument for trade to play a big part of economic recovery efforts in a letter he sent last Wednesday to the President, as well. He urged the President to start working to create jobs by expanding access to world markets for goods and services made in the United States. “Trade agreements have proven their value, but pending trade agreements with Colombia, Panama and South Korea have been sidelined. The President could help American workers by taking action to expand world market access for farmers, manufacturing and services,” Grassley said. The text of Grassley’s letter to the President about using international trade for job creation follows this news release.
In a separate letter last week, Grassley also urged the President to get behind the comprehensive small business tax relief bill he introduced in June.
“My bill would leave more money in the hands of small business owners so they can hire more workers, keep paying the salaries of their employees, and make additional investments that will lead to new jobs,” Grassley said. “Small businesses create 70 percent of net new jobs, yet they’ve been left out of every recovery effort so far -- from the bank bailout, to the auto bailout and the stimulus bill. The tax increases and mandates in the health care bill are piling on and creating a very negative environment for small businesses, which doesn’t make sense because small businesses are such an important element for economic recovery.” Grassley’s bill is S. 1381, the Small Business Tax Relief Act of 2009.
The Iowa senator also said that jobs can be created with a continued push to develop renewable, clean-burning energy. He has introduced a bill to extend the tax credit for the production of electricity from wind and open-loop biomass through December 31, 2016. It would increase the amount of bond authority for new clean renewable energy bonds. For all businesses, Grassley’s bill would extend bonus depreciation for one year, so that businesses are able to deduct half of the value of any property placed in service in 2010. “This tax cut for businesses that invest in 2010 will spur investment, and that will create badly needed jobs,” Grassley said. This bill is S. 2826, the Clean Renewable Energy Advancement Tax Extension Jobs Act of 2009, or the CREATE Jobs Act of 2009.
Separately, Grassley said he’s been urging the Environmental Protection Agency to act on biodiesel regulations in the RFS-2. “The EPA’s delay has had negative repercussions, resulting in the loss of tens of thousands of jobs. The agency can start to reverse this very negative economic impact by implementing an enforceable biodiesel mandate,” Grassley said. Grassley is also working in the Senate to extend both the biodiesel tax credit and the small agri-biodiesel credit, which are scheduled to expire at the end of the year.
Grassley has warned about the downside of the national debt, which is rising three times faster than it did under the previous administration, and the dark side of deficit spending for economic recovery. “Continuous deficit spending restricts available revenue for other priorities and throttles private investment in the workforce, innovation and technology,” Grassley said. “Financing chronic federal deficits risks higher interest rates and higher inflation, and excessive federal borrowing weakens the dollar and international competitiveness.”
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December 2, 2009
The Honorable Barack H. Obama
President of the United States
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear President Obama:
I am writing with respect to the jobs summit that you are hosting tomorrow at the White House.
I strongly support this focus on job creation. With unemployment levels projected to remain at unacceptably high levels next year, it is urgent that we work together to implement policies that will have an immediate impact on reducing unemployment and strengthening the long-term competitiveness of the U.S. workforce in our globalized economy. One such policy is to expand opportunities for international trade.
But, to effectively accomplish that, we must move beyond political rhetoric and engage in sober economic discourse. I understand that you will convene a discussion group on export-oriented businesses during your jobs summit. That is a good start, but those businesses need meaningful access to foreign markets in order to thrive.
Our experience implementing recent trade agreements is instructive. Following the implementation of our trade agreements with Chile, Morocco, Bahrain, Oman, and the countries of Central America and the Dominican Republic, we saw our respective bilateral trade deficits with those countries convert into trade surpluses. In addition, the implementation of our trade agreements with Singapore, Australia, and Peru increased our bilateral trade surpluses with those countries—substantially so in the cases of Singapore and Australia.
There is no reason to believe that the outcome would be any different with respect to our pending trade agreements with Colombia, Panama, and South Korea. Indeed, the independent U.S. International Trade Commission (ITC) has studied these trade agreements and found that, with respect to Colombia and South Korea (countries with which we currently have bilateral trade deficits), implementation would likely result in a net increase in U.S. exports and an overall increase in our gross domestic product (GDP) measured in the billions of dollars. In the case of Panama, the ITC found that exports of specific U.S. products would likely increase as much as 145 percent.
The Department of Commerce once estimated that 20,000 American jobs are created for each one-billion dollar increase in U.S. exports. The opportunities presented by our three pending trade agreements will have a real impact on sustaining and creating good-paying jobs here in the United States.
Moreover, further delay is not without cost. While we have been standing still, our trading partners have been busy negotiating new trade liberalizing agreements among themselves. South Korea recently initialed a trade agreement with the European Union that should enter into force next year. Colombia has done the same with Canada, and it too is in negotiations with the European Union. And Panama recently concluded its own trade negotiations with Canada. If we fail to implement our pending trade agreements promptly, we will place our producers and their workers at a serious competitive disadvantage. It would be both senseless and irresponsible for us to do so.
On a broader level, you are no doubt aware that the private U.S. savings rate has risen this year. With greater savings comes decreased domestic consumption—leaving U.S. producers more reliant on overseas markets to sustain and grow their sales. Yet, the United States lags our major trading partners in terms of the contribution that exports make to GDP. Exports are a double digit percentage of GDP for Canada, South Korea, Mexico, China, Russia, Japan, and the European Union. In the United States, it is less than 10 percent. The point is, we have room for improvement, and that starts with seizing the opportunities at hand.
It is urgent that we break the political gridlock over trade and take immediate action to help American workers. I began this Congress with that commitment, and I am proud of my work with Chairman Baucus, Chairman Rangel, and Ranking Member Camp to produce the largest overhaul of our trade adjustment assistance programs in over 30 years. That was the first step. The next step is to seize the new market access opportunities that await American farmers, manufacturers, service providers, and their workers, in Colombia, Panama, and South Korea, as soon as possible.
I stand ready to work with you to make that happen, and ask that you submit to Congress the implementing legislation for our trade agreements with Colombia, Panama, and South Korea without delay.
Sincerely,
Charles E. Grassley
United States Senator
Ranking Member of the Committee on Finance