Since saving American manufacturing has become my main mission in life and the focus of this blog, I have reviewed the Republican’s “A Pledge to America” with that viewpoint in mind.
The Republican pledge includes five major plans that they will work to achieve if they take over control of Congress and the U. S. Senate as a result of the upcoming elections in November.
These plans are:
- A plan to create jobs, end economic uncertainty, and make America more competitive – includes a pledge to permanently stop all tax increases, give small businesses a 20% tax deduction, repeal the mandate to report purchases that run more than $600 to the IRS included in the health care reform, and require congressional approval of any new federal regulation that has an annual cost to our economy of $100 million or more.
- A plan to stop out-of-control spending and reduce the size of government – includes canceling unspent “stimulus” funds, blocking attempts to extend the timeline for spending “stimulus” funds, rolling back government spending to pre-stimulus levels, setting strict budget caps to limit federal spending annually, cutting Congress’ budget, holding weekly votes on spending cuts (YouCut initiative), ending TARP (Troubled Asset Relief Program, ending government control of Fannie Mae and Freddie Mac, and imposing a net federal hiring freeze on non-security employees.
- A plan to repeal and replace the government takeover of health care – includes repeal of the Health Care Act of 2010 and replacing it with medical liability reform, allowing consumers to purchase health insurance across state lines, expand Health Savings Accounts (HSAs), and make it illegal for insurers to deny coverage to someone with prior coverage on the basis of a pre-existing condition, eliminate annual and lifetime spending caps, and prevent insurers from dropping coverage when a person gets sick.
- A plan to reform Congress and restore trust – includes pledge to publish the text of a bill online for at least three days before it comes to a vote in the House, require each bill moving through Congress to include a clause citing the specific constitutional authority upon which the bill is justified, allow any lawmaker, Democrat or Republican, to offer amendments to reduce spending, and end the practice of packaging unpopular bills with “must-pass” legislation by advancing major legislation one issue at a time.
- A plan to keep our nation secure at home and abroad – includes passing “clean troop funding bills (not attached to other policy issues or pork-barrel projects), prevent the government from importing terrorists onto American soil, ensure that foreign terrorists are tried in military, not civilian court, fully fund missile defense, require tough enforcement of sanctions against Iran, establish operational control of the border, work with state and local officials to enforce immigration laws, and strengthen Visa security.
The merits of the specific plans in the Republicans “Pledge” will be hotly debated in the future, but the urgent need to prevent tax hikes from going in effect on January 1, 2011 will be decided by the “lame duck” Congress after the election. Who’s to say they will do what’s right? These tax hikes will not only hurt businesses, especially small businesses, but millions of average Americans. An analysis by Deloitte Tax LLP shows that a family of four with a household income of $50,000 a year will pay $2,900 more in taxes in 2011, and the same family making $100,000 a year will see its taxes rise by $4,500. Even more crucial is to eliminate the restoration of the exorbitant 55% Death Tax, which would be the death knell to family-owned small businesses when the principal owner dies and the survivors have to sell the business to pay the taxes.
There is no need to “reinvent the wheel” to determine what is needed to create jobs. Manufacturing jobs are the foundation of our economy, and we need to restore our manufacturing base to create jobs. Not all of the recommendations of the Manufacturing Initiative reported in the 2004 “Manufacturing in America: A Comprehensive Strategy to Address the Challenges to U S. Manufacturers” have been implemented. The Interagency Working group set up by this Initiative released a report on topics for the federal government’s manufacturing research programs in March 2008, “Manufacturing the Future – Federal Priorities for Manufacturing R & D.” Many more recommendations of how to restore America’s manufacturing base are summarized in chapter 10 of my book, Can American Manufacturing be Saved? Why we should and how we can.
The U. S. tax system needs to be improved to make U. S. businesses more competitive in the global economy. On July 26, 2007, the Treasury Department hosted a conference on Global Competitiveness and Business Tax Reform that brought together distinguished leaders to discuss the topic. As follow-up to this conference, on December 20, 2007, the U. S. Department of the Treasury released a 124-page report titled “Approaches t Improve the Competitiveness of the U. S. Business Tax System for the 21st century. None of the recommendations have been passed by Congress since the report was released so this report should be dusted off and used as a starting point for revamping our tax system.
In addition, the first plan speaks about “…repealing job-killing policies…” Does this include repealing ruinous one-sided free trade agreements where American workers are expected to compete with foreign workers making a tiny fraction of what an American worker makes in order to survive in America? As long as China, India, and other cheap labor countries are permitted to wage unrestricted economic warfare against the America worker in the form of predatory mercantilism, we will continue to witness ever-increasing unemployment in our country. There is nothing in the “Pledge” that addresses this problem.
While Democrats drive jobs overseas from excessive regulation and taxation, Republicans have enticed jobs overseas by promoting free trade agreements. It is a policy that benefits consumers in the short run, until they lose their jobs. But, it greatly benefits international business interests in the long run, which profit handsomely at the expense of American workers. Will Republicans remain in lock step with the pied pipers of free trade by insisting on negotiating more free trade agreements? Will Republicans continue to ignore the damage to the competitiveness of American companies from Chinese currency manipulation? Will Republicans continue to allow China to impose tariffs and other restrictions on U. S. imports to their country without imposing tariffs on Chinese goods?
Just last week, on September 26th, Chinese government officials said that it would slap a hefty tariff on U. S. chicken imports to combat what it says are unfairly low prices. New import duties ranging from 50.3% to as much as 105.4% took effect the next day and will last for five years. The tariffs apply to chicken parts and whole birds, but not to live chickens or cooked products such as chicken sausage. China was the largest importer of U. S. chicken in 2009 at $752.5 million.
The Republican “Pledge” is a good start to getting our country back on track, but it’s not enough to save American manufacturing. It would undo much of the damage done by the Obama administration and Democratic controlled Congress and Senate in the last 20 months, especially if they succeed in repealing the Health Care Act of 2010.
We need to stop the downhill slide of our economy that has been occurring since the year 2000 when China became part of the World Trade Organization after being granted Most Favored Nation status by the United States. While we’ve lost 5.5 million manufacturing jobs in the U. S. since the year 2000, 3.5 million occurred before the Obama administration came into power. The end result has been an unsustainable escalation of the U. S. trade deficit with China and an equally unsustainable national debt to China from our staggering budget deficits.
Republicans need to go beyond the proposed actions in the “Pledge” to make real changes in our national policies with regard to trade so that American manufacturers have a more level playing field in which to compete in the global economy. We can’t continue to export our wealth and be able to remain a first-world country. We must restore our manufacturing base and help small businesses succeed and grow to create the jobs we need to remain a sovereign nation. How you vote this fall will determine the course of our nation. I urge you to make the right choice.