Guest Post from The Heritage Foundation
This Wednesday in Pittsburgh, President Barack Obama defended his administration’s economic policies telling the audience at Carnegie Mellon University: “Now, I’ve never believed that government has all the answers. Government cannot and should not replace businesses as the true engine of growth and job creation.” But that is exactly what the President’s big government policies are doing. Last week, USA Today reported that in the first quarter of 2010, thanks to President Obama’s failed $862 economic stimulus, paychecks from private business shrank to their smallest share of personal income in U.S. history while government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high.
And now the Labor Department’s Bureau of Labor and Statistics released its monthly jobs report today showing that the economy added 431,000 jobs in May. But don’t let that number fool you. Of those 431,000 jobs, 411,000 jobs were temporary government Census jobs. In fact, private sector job growth actually fell in May, from 231,000 new private sector jobs in April to just 41,000 new private sector jobs in May. Combining the private and public sectors–the nation’s unemployment rate fell to 9.7% as 286,000 workers left the labor force. In total the U.S. economy has now lost a net of 2.2 million jobs since President Barack Obama signed his stimulus bill and his administration is now 7.2 million jobs short of what he promised the American economy would support by 2010. [# More #]
While there is little doubt our resilient economy is finally recovering, it is also becoming increasingly clear that this administration’s policies are making it difficult for private sector firms to produce robust job growth. Obamacare not only raises taxes by $503 billion through 2019, but it also burdens small businesses with new 1099 IRS paperwork every time they do more than $600 in business with another entity, and it imposes an employer mandate which makes it harder for small businesses to hire new workers. Then there is Obama’s budget which raises taxes on the small businesses that earn 72% of all small business income, raises capital gains taxes to 20%, and raises taxes on dividends to 39.6%. And don’t forgot the recently passed tax bill in the House which manages to add billions in debt while adding on a job-killing tax on American corporations that compete overseas and a job-killing tax on innovation-creating venture capital partnerships.
But the Obama administration does not plan on stopping there. Desperate to shift the focus from their lack of leadership, President Obama used the Deepwater Horizon oil spill Wednesday to renew his call for further regulation of the energy industry. Since the Kerry-Lieberman cap and tax bill called for now verboten increased oil development, Majority Leader Harry Reid (D-NV) is signaling he wants pursue a renewable-energy-only path like Sen. Jeff Bingaman’s (D-NM) American Clean Energy and Security Act (ACELA) which would mandate that electricity sellers produce a growing percentage of their power from renewable energy sources every two years. The Heritage Foundation’s Center for Data Analysis has crunched the numbers and found that at an RES would: 1) Raise electricity prices by 36 percent for households and 60 percent for industry; 2) Cut national income (GDP) by $5.2 trillion between 2012 and 2035; 3) Cut national income by $2,400 per year for a family of four; 4) Reduce employment by more than 1,000,000 jobs; and 5) Add more than $10,000 to a family of four’s share of the national debt by 2035.
The Census jobs obtained by 411,000 Americans last month are temporary jobs. That means by the end of this year, those 411,000 Americans will be through with temporary government work and will be looking for real work in the private sector. But the private sector will not be able to adsorb them. Not when the Obama administration is forcing them to pay higher taxes, higher health care costs, and higher energy costs. Our economy will continue to bounce back from the recession. But thanks to Obama we can expect near double-digit unemployment rates for a long time to come.