Diana Furchtgott-Roth: GOP's agenda counters Obama's big-spending anti-growth strategy

Less than a month after House Minority Leader John Boehner, R-Ohio, called on President Obama to fire his economic team, the White House announced that National Economic Council Director Larry Summers would be leaving, following the departures of budget director Peter Orszag and Council of Economic Advisers Chairwoman Christina Romer.

Now, if only Obama would follow Mr. Boehner's economic policy plan, described in the Republican Pledge for America, released yesterday in Sterling, Va.

Rather than tax increases in 2011, the Republican plan would make all current tax rates permanent, to reduce uncertainty for consumers and employers.

It would cut non-security discretionary spending to 2008 levels. Cuts include ending the Troubled Asset Relief Program; rolling back this year's 5.8 percent increase in Congress' budget; and placing a hiring freeze on all non-security government workers.

In addition, Republicans suggest reforming the congressional budget process to make it easier to cut spending. Current rules are rigged to make it easy to spend money unnecessarily, and not so easy to cut spending.

New proposed rules include a mandatory three-day online review period for all bills, and changes to rules to make it easier for members of Congress to get a vote on amendments that would cut spending.

Many businesses across America would applaud repealing the new health care law, freeing them of the upcoming requirement to pay $2,000 per worker per year beginning in 2014 if they don't offer the right kind of health insurance.

Since the rule applies only to businesses of more than 50 workers, every 50-person business is trying to figure out how not to hire any more workers, and every 55-person business is trying to figure out how to lay off five workers. With a 9.6 percent unemployment rate, that's precisely the opposite of what's needed.

The Republicans would end the new requirement, effective 2012, to file a tax form every time they spend more than $600 per year at any one company, such as an office supply store or a gas station.

The Republican plan is well-timed because just this week the National Bureau of Economic Research officially declared the recession was over — in June 2009.

But 15 months later, with the unemployment rate near double digits and 42 percent of the unemployed out of work for six months or more, no one believes the recession is over, or that hiring new lieutenants will get the Titanic off the iceberg.

The problem is that the administration's policies are anti-business, and changing personnel isn't going to have any effect unless policies change.

In contrast to the Republican plan, Obama calls for raising taxes and additional mandates on employers.

Obama assumes that government can tax the most productive people in the economy without negative consequences for others — that actions of top income groups don't affect the well-being of people making less.

This is clearly incorrect. High earners, as well as buying goods and services, own or manage businesses that employ other Americans — 48 percent of small-business income on individual returns accrues to unincorporated businesses making more than $250,000 per year. They have capital investments that fund businesses that create jobs.

In 2007, the latest year available, the top 1 percent of tax filers earned 23 percent of adjusted gross income but paid 40 percent of federal income taxes, money that is distributed to lower-income families through government benefits.

Obama's anti-growth agenda is the main reason why unemployment is stubbornly high, job growth has been weak, and the percentage of Americans who report they are working or looking for a job has declined to 1985 levels.

America's economy needs more than a new economic team. It needs a new direction, and the Pledge for America is the place to start.

Examiner Columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.

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