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Jobs & The Economy
“America’s economy is getting stronger. I am optimistic about our future, not only because of what I see today, but because of what I know we have overcome.”
-President George W. Bush, Remarks at Central Piedmont Community College, Charlotte, North Carolina, April 5, 2004
Strengthening the Economy – The economy is strong and getting stronger. The President’s pro-growth policies have helped drive the economy and move the recovery forward, putting more money in the pockets of America’s families and laying a foundation for robust growth and job creation now and for years to come.
The economy has grown 4.8% in the past year, as fast as any year in nearly two decades.
Productivity grew at the fastest 3-year rate in more than 50 years.
Providing bold and active leadership to end the recession and helping people find work – Something a lot of people seem to forget is that from 2000 to 2003, America’s economy experienced an unprecedented combination of shocks: the stock market bubble bursting; an economic recession; the terrorist attacks of September 11th and subsequent War on Terror including the war in Iraq; and the discovery of corporate accounting scandals, years in the making, that undermined confidence in corporate America.
President Bush acted promptly and aggressively to address these shocks. He enacted tax relief to help America’s workers by putting more money in family pockets while encouraging businesses to grow and invest. The President’s tax relief allowed families to keep more of what they earn by cutting tax rates across the board, doubling the child credit to $1,000 and reducing the marriage penalty. For America’s small businesses, the President’s tax relief reduced tax rates, quadrupled small business expensing and phased out the death tax.
According to an analysis conducted by the Treasury Department after the tax relief was implemented last year, economic growth would have been more than 3 percent lower and 2 million fewer Americans would have been working at the end of last year.
Creating Jobs – The President acted decisively to help create jobs and get Americans back to work. Just one year after the President signed the Jobs & Growth bill, there is widespread evidence his policies have worked.
Since last August, over 1.5 million new jobs have been created.
The unemployment rate has fallen from 6.3 to 5.6 percent, below the average of the 1970s, 1980s and 1990s.
This job growth is widespread – employment over the last year was up in 41 of the 50 states, and the unemployment rate was down in 47 of the 50 states.
Raising America’s standard of living – The President’s economic policies have allowed Americans to weather the stock market bubble, the recession, the terrorist attacks and the corporate scandals, and have resulted in higher incomes and living standards for American workers.
Real after-tax incomes are up by 11 percent since December 2000. This increase is mostly due to the President’s tax relief and is substantially better than those following the last recession.
Homeownership rates are at record levels – nearly seven out of ten American families own their own home today.
Consumer confidence is up from the levels seen at this time last year and is in the upper third of its historical range.
Inflation remains low by historical standards, as do mortgage rates.
Helping prepare workers for 21st Century jobs – Many of the new jobs being created require new skills. The President is committed to helping American workers acquire the skills necessary to access higher-paying jobs. His budget commits $23 billion for job training and employment assistance in programs throughout the government. He has proposed more than $500 million for his Jobs for the 21st Century initiative to help prepare U.S. workers to take advantage of the better skilled, higher-paying jobs of the future. This initiative includes $250 million for America’s community colleges to train workers for industries that are creating new jobs today, as well as funding for new secondary education programs to better prepare high school students for the jobs of the 21st Century.
More work to be done – The President's policies are working, but he will not rest until every American who wants to work can find a job. The President has outlined a six-point plan to reduce costs to America’s job creators and guarantee that America remains the best place in the world to do business. His plan includes making health care costs more affordable and predictable; reducing the burden of frivolous lawsuits on our economy; ensuring an affordable, reliable energy supply; streamlining regulations and paperwork requirements; and opening new markets for American products and services. Finally, the President proposes making the tax cuts permanent to enable families and businesses to plan for the future with confidence and certainty.
The choice for America – We can move forward with the President’s pro-growth economic policies that are creating jobs, increasing incomes and opening new markets for American goods. Or, we can go back to the tired old policies of tax and spend, economic isolationism and economic pessimism – a proven recipe for economic disaster. America cannot afford to return to the failed policies of the past – raising taxes on American families and small businesses will only hurt economic recovery and future job creation. We must continue to move forward with pro-growth policies that are growing our economy and fueling the creation of new jobs.
Frequently Asked Questions
Does the Administration support outsourcing?
The President is concerned about the loss of any job. His priority is to focus on creating jobs in this country, while ensuring that American workers have the skills they need to access those jobs.
That is why he three times led the Congress to pass major tax relief bills to help the economy create more jobs, and why he has worked to open foreign markets to American made goods and services. Those policies are working. Tax burdens are down and exports are up. We have seen 1.5 million jobs created since August, while exports have grown at their fastest rate in almost a decade.
With job creation accelerating, the President believes it is critical to ensure American workers have the skills they need to access those jobs. The President’s budget calls for $23 billion to be spent on job training programs throughout the government next year.
The President will not allow the United States to retreat into economic isolationism. American workers and American products are the best in the world, and the President has acted aggressively to open foreign markets to U.S. products and services. Today, 12 million American jobs depend on exports.
Open trade with the world encourages foreign companies to locate their plants here and to hire American workers. Foreign firms provide paychecks to 6.4 million Americans. Increased foreign investment means more factories and more jobs.
A retreat into economic isolationism would jeopardize these jobs. The answer to outsourcing is to make Americans more competitive in the global marketplace, not isolate ourselves from it. The President’s pro-growth and job training polices are helping American companies and workers to do just that.
Where did the jobs go?
Nearly 70 percent of the job loss we have experienced occurred during the 2001 recession and immediately after the attacks of September 11th. The attacks were a serious blow to our economy, closing the New York Stock Exchange for nearly a week and shutting down U.S. airspace for the first time ever. In the three months after September 11th, the economy lost nearly one million jobs.
We are also living in a changing economy. Much of our job growth will be found in high-skilled fields like health care and biotechnology. So the President is responding by helping more Americans gain the skills necessary to find good jobs in our new economy. He proposed more than $500 million for his Jobs for the 21st Century initiative to help train U.S. workers for industries that are creating the most new jobs.
How does cutting taxes create jobs?
First, the President’s tax relief allowed American families to keep more of what they earn. When families have more money to spend, they will demand a good or service in the market place. When there is more demand, businesses have to produce more goods and services, and they are more likely to hire additional workers.
Second, by cutting rates, President Bush reduced the tax burden on the 90 percent of small businesses organized as S corporations, partnerships or sole proprietorships and who pay their taxes at the individual income tax rates. Small businesses create 7 out of 10 jobs in our economy. Cutting marginal income tax rates allows small businesses – America’s job creators – to invest more of their money in their businesses to expand and create more jobs.
Third, the President’s tax relief gave America’s businesses, large and small, an increased incentive to make the investments they need to stay competitive and to create more jobs. His tax relief quadrupled the limit on small business expensing to $100,000 and offered larger businesses 50 percent bonus depreciation. These tax provisions reduce businesses’ upfront costs when they purchase new computers, trucks and other equipment to make their employees more productive. More productive employees means higher wages and more job opportunities for the companies that make the new equipment.
Some argue that the new jobs being created are replacing good paying jobs with low paying jobs. Is that true?
There is no data to support this claim. The data only tells us what industries produced jobs and we know that over the past several months, we’ve seen across-the-board growth in the various sectors, including traditionally high-paying sectors such as information, construction, financial activities and professional and business services.
Total compensation – wages and benefits – has increased 3.8% during the last year.
What is the difference between the payroll survey and the household survey of unemployment?
Both the payroll survey and the household survey contain valuable information about economic conditions but there are more important differences. While the payroll survey is larger, it also excludes many areas of job growth such as new business startups and the self-employed. The household survey may do a better job of capturing these areas of job creation.
Most important, however, is what they have in common – both surveys indicate that the economy has turned around and jobs are on the rise. According to the payroll survey, we have added 1.5 million new jobs since last August.
Does the President support another Unemployment Insurance extension?
The Administration has extended Federal unemployment benefits three times, providing over $23 billion to help 7.8 million American workers. Over the last 10 months, we have seen over 1.5 million jobs created, and the unemployment rate has fallen from its peak of 6.3 percent last June to 5.6 percent this year, and we expect that trend to continue. The Administration will continue to work with Congress on this issue.
Does the President support a minimum wage increase?
New jobs are being created. The economy has added over 1.5 million jobs since August. The President is focused on policies that will keep the economy growing.
The Administration will continue to work with Congress to study the various minimum wage proposals.
What more can the President do to increase job creation?
The economy is strong and getting stronger. The economy has added over 1.5 million jobs since August and the growth is expected to continue.
To create more jobs, we must make sure America remains the best place in the world to do business.
Tax relief was vital to getting the economy moving again, and for the sake of job creation, it must be made permanent.
We need to reduce the number of regulations so business owners can focus on their business rather than spending hours on paperwork.
We need legal reform to cut down on frivolous lawsuits. Even the threat of frivolous lawsuits puts a damper on job creation, investment and expansion.
To address the high cost of health care and to help the uninsured gain coverage, the President has proposed association health plans, health savings accounts and medical liability reform.
We need affordable and reliable supplies of energy so we can reduce our dependence on foreign oil.
Finally, we need to open more foreign markets to U.S. products and services.
As we create more jobs, we must help workers gain the skills needed to fill those jobs. That is why the President has proposed an aggressive agenda to help workers retrain for jobs in high-demand occupations:
The President proposed $23 billion overall for job training and employment assistance in his FY2005 budget – $2.5 billion (12.5 %) more than in 2001;
The President has set a goal to double the number of workers receiving job training by reforming the Workforce Investment Act to eliminate unnecessary overhead costs by $300 million to train 100,000 additional workers and by proposing $250 million in his Jobs for the 21st Century Initiative to help America’s community colleges train 100,000 additional workers for the industries that are creating the most new jobs.
The President’s FY 2005 budget includes $50 million Personal Reemployment Account pilot program to help those Americans who have the hardest time finding work.
A pro-growth economic agenda and help for American workers to gain the skills to secure good jobs, are the right ways to respond to the challenges of our growing and changing economy.
Does the budget deficit threaten to harm the economy and job creation in the long run?
Our budget reflects the country’s most important priorities: fighting the war on terror and ensuring economic growth and recovery. We’ll continue to provide whatever it takes to defend our country, protect our homeland and promote economic security.
The President’s budget calls for cutting the deficit in half over the next five years. His plan is to continue with pro-growth policies that will increase revenues into the Treasury while holding the line on Federal spending.
Economic growth and good stewardship of taxpayers’ dollars will help us meet the President’s goal of cutting the budget deficit in half in five years.
Will Congress reject the President’s call to make tax cuts permanent?
The budget under consideration by the House and Senate would ensure that taxes on America’s families will not increase next year. These are important steps toward ensuring that all the tax relief signed into law by the President will continue to assist America’s families and small businesses.
Failure to extend the President’s tax cuts permanently would mean a massive tax hike on America’s families. For example, in 2005, the tax burden on a family of four earning $40,000 would increase by $915. Raising taxes on the American people would hurt families and hurt our economic recovery.
What are you doing to help manufacturers specifically?
President Bush recognizes that the manufacturing sector has been especially hard hit. That is why he pushed for tax relief to spur business investment. Because he acted, many manufacturers have been able to take advantage of lower tax rates, the increased small business expensing limit and the 50% bonus depreciation. This tax relief has helped encourage increased business investment in durable goods and other equipment and spurred growth and job creation in our manufacturing sector over the past four months.
In addition to tax relief, the President has also proposed a series of proposals aimed at cutting the cost of doing business by making health care more affordable, reforming the legal system to cut down on frivolous lawsuits and enacting a national energy policy that ensures an affordable, reliable supply of energy and reduces our dependence on foreign energy. These proposals are particularly important for our manufacturing sector, which shoulders a higher burden for each of these costs than other sectors of the economy.
The Administration is also working to implement the more than 57 recommendations outlined in the Commerce Department’s Manufacturing Report, which was based on input from manufacturers nationwide.
Manufacturers are already benefiting from the President’s economic policies. Manufacturing activities are near 20-year highs. New orders are up and jobs are starting to come back. We’ve seen over 64,000 new manufacturing jobs created this year.
Kerry is Bad for the Economy
Kerry has a record of voting to send more tax dollars to Washington instead of keeping them in the productive hands of individuals and businesses – He has voted for higher taxes hundreds of times. He voted 98 times for tax increases totaling more than $2.3 trillion. In addition, he has voted 126 times against tax cuts, voted 73 times to reduce the size of tax cuts, voted 67 times for smaller tax cuts and voted 11 times against repealing tax hikes.
Now Kerry wants to raise taxes on successful small business owners and entrepreneurs – 90% of businesses pay taxes through the individual income tax, not the corporate income tax. Kerry’s call to repeal tax cuts for the “wealthy” would increase taxes on nearly 1 million successful small businesses and entrepreneurs who are in the top two individual income tax brackets.
Kerry would have small businesses paying a higher tax rate than corporations – While Kerry would reduce the top tax rate for corporations from 35% to 33.25%, he would increase the top tax rate for small businesses from 35% to 39.6%. Small businesses create 7 out of 10 new jobs. No small business should have to pay more taxes than a corporation. It’s unfair and bad economics.
Kerry’s corporate tax plan would make the U.S. less internationally competitive – Kerry would partially end the deferral of foreign income, making the tax code even more complicated and making U.S. companies less competitive internationally. The Institute for International Economics reports “it would actually tilt the tax field more steeply in favor of foreign MNCs [multinational companies].” (“Senator Kerry on Corporate Tax Reform: Right Diagnosis, Wrong Prescription,” Institute for International Economics, Gary Haufbauer, 4/04)
Kerry’s own advisers admit his plan won’t stop outsourcing – “Campaign officials acknowledged that the new plan would not stop the broader trend of outsourcing jobs to low-wage countries.” (Source: “Kerry to Propose Eliminating a Tax Break on U.S. Companies' Overseas Profits,” The New York Times, 3/26/04)
Kerry’s New Jobs Tax Credit won’t work – Kerry proposes bringing back a tax credit from the Carter era that didn’t work then and won’t work now. It’s complicated and will require more paperwork. It puts good companies that didn’t lay-off their employees during the recession at a competitive disadvantage with companies that did lay-off employees and now hire them back. Even the study Kerry cited in support of the idea concluded it didn’t work: “Most firms either did not know of the program or were not influenced by it, a result which makes this short-run program an imperfect counter-cyclical tool.” (“The New Jobs Tax Credit: An Evaluation of the 1977-78 Wage Subsidy Program,” Jeffrey M. Perloff and Michael L. Wachter, The American Economic Review, May 1979)
Kerry’s economic isolationism would jeopardize millions of U.S. jobs – Kerry’s call for reviewing trade agreements he’s already voted in favor of and for imposing unilateral tariffs could spark a trade war that jeopardizes U.S. jobs. Trade supports about 12 million jobs in the U.S. and investment from foreign companies supports another 6 million jobs.
Kerry won’t reduce the costs of doing business in the U.S. – He has opposed reforms to curb frivolous and costly lawsuits. His health care plan would just shift costs rather than provide incentives to reduce them. His ideas for energy policy would hurt manufacturers. For example, Senator Kerry voted for a Kyoto-like bill that the National Association of Manufacturers characterized as “potentially devastating to economic growth and job creation.” (Source: “NAM Calls for Defeat of S. 139,” press release, 10/29/03)