|GUEST VIEWPOINT: Rebuilding — not tax cuts — creates jobs|
Last month’s dismal job creation numbers confirm that the aftereffects of the 2008 Wall Street meltdown continue to be a huge drag on our economy.
Real unemployment is a staggering 18% when you count the underemployed and discouraged Americans who have stopped looking for work. The steps taken by the federal government- some very expensive- have proven ineffective in stimulating sustained job creation and growth.
Since President Obama agreed to jettison infrastructure and school construction in the stimulus bill for $340 billion in tax cuts, the administration has failed to break from the policies that have proved disastrous for our country.
In May we “celebrated” the 10year anniversary of the Bush tax cuts. With those tax cuts, we saw the worst job creation numbers in any decade since World War II.
Yet with one vote in December, Congress added over $800 billion to the deficit in just two years by extending the Bush tax cuts. Even worse, President Obama added a Social Security payroll tax “holiday” that drained $100 billion from the Social Security Trust Fund. As a result the federal government had to borrow money to make the Trust Fund whole again.
This payroll tax holiday put $15 a week back in the pockets of those fortunate enough to have jobs. While working families could use an additional $15 a week, it did nothing to help the 20 million people who are unemployed. This was yet another example of a failed attempt to generate jobs through tax cuts.
It hasn’t worked, it didn’t create jobs, and now the Obama Administration wants to double down.
According to recent news reports, the administration plans to extend and expand the payroll tax holiday on Social Security for another year, adding an estimated $220 billion to the 2012 deficit. We do not have the money to pay for these tax cuts. The federal government would be forced to borrow another $220 billion to make the Social Security Trust Fund whole again.
Earlier this week, I sent a letter to the President with a different proposal that is a proven strategy that will create millions of jobs in industries which suffer from 20% unemployment.
The Department of Transportation estimates that for every $1 billion invested in transportation infrastructure, we create or sustain over 34,000 private sector jobs and produce $6.2 billion in economic activity. If instead of doubling down on FICA tax cuts we invested $200 billion in our crumbling transportation infrastructure, we would create approximately 7.5 million jobs and $1.3 trillion in economic activity.
The jobs created are not just construction jobs. These private sector jobs are in industries like architecture, steel, engineering, and manufacturing. It would also have a ripple effect, helping businesses that supply materials for the projects. Strong Made in America requirements would further ensure that jobs and products would be created here at home.
If we invest in transit systems, we create jobs for civil engineers, software engineers, manufacturing, and high tech. If we build a bridge or a highway, we need American made steel and concrete, more engineers, architects, designers, and we create thousands of construction jobs.
Credible economists attribute 25 percent of today’s deficits to lost revenue from high unemployment, the cost of unemployment, and other necessary benefits. Thus putting people back to work could lower the deficit by 25 percent.
Over 150,000 of the bridges in our National Highway system are structurally deficient or functionally obsolete. Our major city transit systems have an investment backlog of over $70 billion not to mention more than $220 billion in proposed unfunded new transit projects. Across the country, trucks are rerouted due to weight restriction on bridges, and Americans waste time and money on high-priced gasoline idling in traffic congestion.
If we take that $220 billion for payroll tax cuts and instead invest in the future of this country, we will be more competitive, more productive, and more efficient. This investment would go a long way toward eliminating the backlog of work that must be done to maintain and improve our transportation infrastructure.
The burden of our debt doesn’t lie with us, but our kids and our grandkids. Let’s invest in projects that will put millions back to work and benefit future generations. As I told the President in that letter, let’s do away with the dubious payroll tax reduction and use that $220 billion to rebuild our crumbling infrastructure and put people to work.