Rep. Joe Pitts: Where Did the Jobs Go?

Where Did the Jobs Go?

By Congressman Joe Pitts

About 8.5 percent of Pennsylvania's workforce is unemployed. Nationally, nearly one in ten workers is unemployed. All of us know people who have lost their jobs and are struggling to pay their bills. This is the real face of the recession, and Congress has done a poor job addressing it.

At the start of the year, Congress passed a $787 billion "stimulus" bill, which President Obama promised would create or save 8 million jobs. I doubted it at the time, and I'm sorry to say that I was right. For that amount of money, the government could simply have given 8 million people $98,000 each. It is indeed a huge amount of money. If you spent $1 million every day, seven days a week, it would take more than 2,000 years to reach the price of the "stimulus" bill. Sadly, much of that colossal sum has been spent on corporate welfare, state government bailouts, and pet projects. Apparently forgotten, the unemployed are still out of work. Unemployment has only increased, and is projected to keep climbing.

If the "stimulus" didn't work, what should we have done? That's a fair question to me and other critics of the President's spending. To answer that, we have to be clear about where jobs come from in the first place and why they disappear when times get bad.

Frame's Motor Freight is a 140-year-old trucking company in Chester County. It was founded in 1870 when freight was still hauled in wagons pulled by horses. Frame's announced this week that it was going out of business. The reason? The West Chester Daily Local News reported that Bud Temple, Frame's owner, said the sour economy was "part" of the reason — "as well as the rising cost of insurance, the cost of fuel and the overcapacity of the trucking companies compared to the amount of freight that needs to be hauled."

Running a successful business is difficult. Every business wants to grow and add jobs, but to do so they must first navigate a long list of obstacles: taxes, liability insurance, regulation, the costs of things like fuel and raw materials, and competition.

Short of hiring more postal workers and park rangers, the government cannot simply "create" new jobs. What it can do is make it easier, or harder, for businesses to prosper and hire. I'm sorry to say the actions of Congress and the White House this year have provided a strong disincentive to adding jobs.

The national energy tax or "cap and trade" bill passed by the House; the current push for federally run, regulated, and mandated health insurance; and the expiration of the 2001 tax cuts are the political equivalents of standing on Main Street with a bullhorn shouting: "Do not hire!" Each throws gasoline on the fire of unemployment.

When the "cap and trade" bill was introduced, a bipartisan majority of the Pennsylvania Utilities Commission sent a memo to Congress warning, "We are far from convinced that the negative impacts this legislation could have on our state's economy are fully understood." They predicted the bill could cost the Commonwealth 66,000 jobs as the price of electricity shoots up. (Go to www.house.gov/pitts to see my ideas for protecting the environment through clean energy.)

The health "reform" bill the House of Representatives may soon pass would give struggling businesses a Hobson's choice between offering a benefit they can't presently afford or paying an eight percent payroll tax they can't afford either. Either way, many will be forced to layoff workers to comply. (There are better ways to make sure their workers can get health insurance.) The bill also does absolutely nothing to reign in frivolous and excessive litigation, keeping insurance costs high and preventing job creation.

In 2001, Congress reduced taxes for every American — including those wealthy enough to start and expand businesses and create jobs. Eager for more money to spend, Congress and the President plan to let those tax cuts expire next year. This will amount to the largest single tax increase in American history and create yet another strong disincentive to entrepreneurship and job creation.

Jobs are not created by government. Prosperity isn't either. Jobs and prosperity are created by risk-taking entrepreneurs, successful businesses, and hardworking Americans who take pride in what they do. Government can make this process easier or government can make this process harder. Sadly, this President and this Congress have made it much harder at a time when America could least afford it.

Rep. Joe Pitts is a Republican who represents Pennsylvania's 16th Congressional District, which includes parts of Berks, Chester and Lancaster counties.