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Are we more divided as a nation today than we were before? Our new research within the Joint Economic Committee’s Social Capital Project suggests that we are. The findings indicate that Americans are more frequently dividing themselves geographically and along lines of education. Highly educated Americans have increasingly moved to a handful of states over the last several decades, leaving other places behind.
In January, I became the new chairman of the Joint Economic Committee, charged with providing Congress with economic analysis and advice. My advice is not to buy into the story that America's days of strong economic growth are a thing of the past. I refuse to accept the narrative that we are permanently stuck in a "new normal" of slow growth in which most Americans feel they aren't getting ahead. The potential to reclaim our prosperity exists, but for too long it has been constrained by artificial limitations.
Last month, America’s economy added just 38,000 jobs, the weakest growth in five years.

We should expect more than the lackluster 2 percent growth we’ve grown accustomed to under President Barack Obama. Luckily, there is already a successful working model in my home state of Indiana to accomplish this.

Thursday's announcement by the Federal Reserve Board that it would maintain short-term interest rates came after many weeks of intense anticipation and hyperbolic prognostication by financial pundits across the globe. One pundit went as far as to declare that the Fed's decision would determine next year's presidential election.

No doubt, decisions by the Federal Reserve have significant implications for our economy. But the reality is that the power of monetary policy to grow our economy is vastly overestimated. Instead, history tells us that public policy choices have a far greater impact on growing the American economy. And right now, sound public policy decisions are something that are desperately needed -- for America's workers and job creators alike.

This is especially true in light of Thursday's tacit acknowledgment by the Fed of the long season of tepid economic growth we have unfortunately grown accustomed to.

The percentage of Americans participating in the workforce is the lowest it has been since the late 1970s. It takes almost twice as long for the unemployed to find work as it did before the 2008 recession, and those with jobs do not see raises as often as in the past. Overall, new business creation fell by more than 30% during the recession, and the pre-recession pace of growth has yet to be reached since.

Because of these disturbing trends among workers and job creators, Congress should enact sound public policy to jump-start our economy.

First, Congress must end deficit spending. Reckless spending in the past has resulted in perpetual deficit spending in the present. Excessive borrowing and spending threatens economic stability, jeopardizes American power abroad and passes along a mountain of debt to our children and grandchildren. Returning our country to sound fiscal footing will take more than governing via crisis. No more fiscal cliffs, no more deficit spending.

Second, Congress should pass comprehensive tax reform and new trade agreements. Against the headwinds of the slowest recovery since 1960, small business owners are dealing with a tax system that is hopelessly complex, full of provisions that expire every one or two years, riddled with special exemptions, deductions and preferences and filled with new penalties. It is long past time to simplify this byzantine code.

Equally as important to economic growth is trade, which has a clear impact on jobs. Earlier this year, Congress acted to give the President Trade Promotion Authority to negotiate trade agreements with other nations under strict parameters. Congress must now call on the administration to finalize the Trans-Pacific Partnership, submit the agreement for approval in the Senate and engage with other trading partners on additional trade agreements that will create new markets for American businesses.

Finally, Congress must reverse many of the burdensome regulations imposed by the Obama administration. Given that the cost of federally imposed rules approaches nearly $1.9 trillion annually, it should come as little surprise people are slower to start businesses, create jobs and hire new workers.

Chairman Coats and Vice Chairman Brady say "Despite the efforts of the president's report to depict the economic conditions nearly six years into this recovery in the best possible light, our formal response, the 2015 Joint Economic Report, notes that our economy remains stuck in second gear" in recent Op-Ed that appeared in Investor's Business Daily.
President Obama ignited a contest over who will be the next Federal Reserve chairman when he hinted in a June television interview that Ben Bernanke would be replaced when his term expires at the end of January. Lost in the current battle of personalities is what really matters—the policies that the next Fed chairman should follow, and a careful appraisal of the institution's capacity to help or harm the American economy.

Jun 04 2013

OP-ED: Fix growth gap, create prosperity

By U.S. Rep. Kevin Brady

As the federal government once again approaches the upper limit on its legal authority to borrow more money, Congress must carefully consider its options.
America faces an alarming growth gap — a gap between where our economy is in the present recovery compared with where our economy should be in an average recovery. More troubling, many economists now believe America faces a new normal with a permanent growth gap that lowers our future economic growth rate from the robust 3.3 percent of the past 50 years to a projected 2.2 percent.