Unfavorable unemployment figures released for April tell us what more than 8.8 million jobless Americans looking for work already know. The U.S. labor market is in pain.
Obviously, the recovering U.S. economy isn’t recovering fast enough. Despite 40-year low interest rates, tepid consumer spending and cautious business investments are dragging out the recovery from the recession that started in March 2001.
In Washington, lawmakers are debating the president’s jobs and growth package to help get the economy rolling again. As chairman of the tax-writing Senate Finance Committee, I’m in charge of steering the plan out of a narrowly divided Senate.
When the president unveiled his proposal in January, I outlined three key objectives. First, it must create the maximum number of jobs and get the most bang for the buck. Two, it must have an immediate effect on consumer spending and business activity. And three, it must have enough bipartisan support to pass a closely divided Senate.
Five months later, my three criteria for a jobs and growth package remain the same. As a fiscal conservative, I’m a tax cutter at heart. But I’m also a deficit hawk. And I appreciate my colleagues who hold concerns about deficit spending. But remember, the sluggish economy is making it harder for the federal and state governments to return to balanced budgets.
Taking less money away from working men and women will free up more investment capital that will help create jobs and enable consumers to spend more. Consumer spending drives two-thirds of the U.S. economy. Letting Americans keep more of their own money will fuel more business activity and create more jobs than if Washington recycled it through the U.S. Treasury.
As the chief tax mechanic in the Senate, I want to make sure lawmakers get the job done as we work underneath the hood to re-charge the economy’s batteries. That brings me back to my original litmus test: keeping enough lawmakers on board to get the boldest plan through the Senate that will help grow the economy and create jobs right now.
That includes a plan that would accelerate income rate reductions, marriage penalty relief, and child tax credits, plus alleviate the double tax on dividend income. A break on dividend taxes would serve as an incentive to help build up investor interest in the stock markets.
As far as the country’s long-term economic health, more work needs to be done to restore confidence in Wall Street and change a culture of greed and wrongdoing among the corporate elite.
When the stock market bubble of the late ‘90s burst, millions of Americans suffered enormous losses. As Wall Street struggles to pick up the pieces left after a string of high-profile corporate governance blunders roiled the markets, government investigators have exposed a sweeping pattern of abuse and misconduct among leading brokerage houses.
As a guardian of taxpayer dollars, the tangled story emerging out of Wall Street underscores for me that a watchdog’s work is never done. In late April, the federal Securities and Exchange Commission (SEC) reached a $1.4 billion global settlement in fines and penalties against 10 Wall Street firms regarding allegations that they deceived investors through tainted stock research.
During the months-long investigation, I kept in touch with the SEC as it exposed wrongdoing among Wall Street analysts that included misleading investors with stock picks engineered to land investment banking business from the companies issuing the stock.
I intended to make sure the Wall Street firms would not be allowed to deduct their fines and penalties against their taxes – which would in effect force taxpayers to pick up part of the tab – or shift the costs to their insurers.
Less than a week after the settlement agreement was announced, the likelihood became clear that some creative people would try to get out of paying what they owed. To prevent companies from deducting penalty payments, I introduced bipartisan legislation that would ensure the financial burden in corporate settlements falls on the offenders, not American taxpayers.
Folks on Wall Street should be smart enough to understand that if it doesn’t pass the smell test on Main Street, it’s going to take longer to restore investor confidence. Feeding taxpayers a line of bull will make it impossible to return to a bull market.
From Capitol Hill, I’ll continue my legislative and oversight duties to broker a jobs-creating package that will help accelerate the economic recovery and rebuild investor confidence in Wall Street.