America's Jobs Boom and the GOP's Growth Agenda
By Chairman Erik Paulsen, R-Minn.
America's robust economic potential slumbered in the eight years following the 2008-2009 recession because her greatest resource—American workers and job creators—were sidelined by a pessimism that pervaded federal tax and regulatory policy. Now, with the passage of the most significant tax reform since 1986 and a rollback of the federal regulatory burden, we have an optimistic economic policy that believes in the American worker.
Look at the U.S. economy today: the first two months of 2018 have added 550,000 new jobs, which follows on the heels of the economic resurgence that began in 2017 with the creation of 2.2 million new jobs. What could account for such change? The answer is simple: Republicans' growth-oriented policies are getting government out of the way and once again allowing Americans to do what they do best.
It is rare that economic improvements from changes to federal policy show results so quickly. Yet the results indicate Congress and the new Administration have had a deep impact thanks to the Tax Cuts and Jobs Act and ongoing efforts to eliminate senseless and wasteful, job-choking regulations.
Take business optimism, which according to the National Federation of Independent Businesses is surging for the first time in over 10 years. Consumer sentiment is at its highest level since 2004, Americans are seeing more take-home pay, and many will spend less time preparing their taxes next year.
Earlier this month, the Bureau of Labor Statistics announced the 5th straight month of 4.1% unemployment, which is the lowest since the year 2000, and the number of new unemployment claims is at historic lows. In the last six months, nearly 1.2 million more prime working-age men were able to find employment despite what Obama Council of Economic Advisers Chair Jason Furman said about the declining trend in the prime-age male employment rate and the need for more assistance.
In response to tax reform, businesses are giving their employees raises, paying bonuses, repatriating offshore earnings, and investing more in the United States. The list of Americans benefiting from TCJA is long and getting longer every day.
In my home state, we are seeing results among big and small businesses alike. Hormel Foods, Inc. has increased its starting wage for new employees and has pledged to make capital investments in its business. Data Sales Co. has given $1,000 bonuses for all 80 employees. U.S. Bancorp gave $1,000 bonuses for 60,000 employees, a base wage hike to $15 per hour, and a $150 million charitable contribution. House Minority Leader Nancy Pelosi dismisses these moves as crumbs, yet these decisions to invest in America mean more opportunity here at home over a longer term.
This wouldn't have happened were it not for the new course the Trump Administration and Congress are setting. Research by my staff at the Joint Economic Committee shows that America's recovery from the 2008 recession fell far short of past recoveries, and even the Obama administration's own expectations.
Each of the eight years President Obama was in office, the Congressional Budget Office downgraded the economy's potential output. We were told this would be the "new normal," and it may have been, had we allowed government-first policies to continue.
The Obama administration's policy gave us a prolonged recession because the challenges facing the market economy were amplified by attempts to increase federal control over it. President Obama's tax hikes discouraged domestic investment and incentivized U.S. corporations to move their headquarters overseas. By ignoring the more favorable tax treatment in other countries, our government drove investment and jobs away, and with it, Americans' ability to rebuild the economy.
Worse, as the economy struggled to grow, regulatory costs mounted thanks to the Obama regulatory surge. The supposed justification for the regulatory onslaught was that the benefits greatly exceeded the costs. Yet the Office of Information and Regulatory Affairs never calculated whether claimed benefits would raise GDP.
Meanwhile, the U.S. business startup rate dropped precipitously, and still needs more revival. As each startup creates an average of six jobs, and firms less than a year old account for nearly all net new job creation, elevating the business startup rate is of great importance.
Reversing the Obama policy approaches, as we have started to do, has already yielded encouraging results — both in job creation and in accelerating the lackluster recovery. Going forward, we must pursue sound economic policy to help increase the economy's potential for growth. This is vitally important in the face of long-term challenges like the aging of the population, keeping America's promises on Social Security and Medicare, and reducing the size of the public debt in relation to the economy.
By seizing on the momentum from the Tax Cuts and Jobs Act and pursuing a regulatory overhaul that will lift barriers to job creators, we will succeed in putting Americans — rather than the government — back in the driver's seat of the economy.
Paulsen, a Republican, is chairman of the Joint Economic Committee. He represents the Third District of Minnesota.