This is the second installment of a two-part series running this week. To read the first essay, visit here.
I wrote Wednesday about how the actions of this Congress have hurt job creation in America. I said that the Washington area is doing well and has low unemployment while the rest of the nation is suffering. Since then I have heard amazing stories about how the health-care law has affected employers as it makes keeping their own health-care plans more difficult. I have heard about how an IRS requirement buried in the health care bill is a ticking time-bomb nightmare for every business in America, as it mandates reporting of every $600 hotel, service, consultant and product purchase. Small businesses must capture and report information, including the employer identification numbers, from every seller of anything over $600. I have spoken with business leaders of their lowered economic expectations due to the payroll taxes which kick in January 1, 2011, and the added uncertainty because new higher taxes are likely coming. I have learned that one Democrat-friendly pollster found that more than two of every three Americans do not want federal-government spending to create jobs. I have learned that in the Gallup 2010 Confidence in Institutions poll Congress ranked dead last out of the 16 institutions rated this year - behind both big business and organized labor. Only one in 10 Americans say they have "a great deal" or "quite a lot" of confidence in Congress.
If the next Congress and the President want a pro-jobs and pro-business agenda, a few simple, no-cost changes make sense: 1. Repeal the $600 reporting requirement of every business in America. At least eliminate the employer identification number requirement and have it done electronically on a voluntary or test basis. Capture business revenue with more sophisticated means.
2. Lead by example. Congress should cut its staffing budget. The federal government should freeze government pay, end defined-benefit pensions and impose a hiring freeze. The President should set the tone by restricting some of the presidential perks such as entourage vacations. 3. Choose priorities and then budget. Every viable business has a strategy with priorities and a budget. Congress promises and funds everything, has no clear strategy, and amazingly this year doesn't even have a federal budget. Trillion dollar deficits are unacceptable and will poison our future. Congress should lower every appropriating Committee's budget by 10 percent and force decision making.
4. Freeze rulemaking and force regulators to consider the impact of each new rule on U.S. entrepreneurs, jobs, manufacturing and competitiveness -- especially compared to overseas competitors not bound by the same rules. 5. Require all legislation and rules to have specified measurable time-specific goals and triggers which if not met will cause the legislation to sunset. Currently, costly government programs get put into motion without any follow-up as to whether they make sense years later. Meanwhile business and the economy pay a price for every new law and rule.
6. Pass the trade agreements. The Administration's recent and admirable goal of doubling exports in the next five years requires an aggressive pro-trade agenda. Passage of Colombia, Panama and Korea free trade agreements will create American jobs and spur exports. Leaders in the Administration must stop the lip service and push Congress to vote on the agreements. Every day Congress fails to pass these agreements means American businesses will suffer as our competitor nations finalize trade deals and realize high double-digit gains in exports.
7. Allow repatriation of U.S. headquartered companies' overseas profits to the U.S. without imposing a double tax. The United States stands alone in the developed world as imposing a second tax on its domestic businesses. This one decision alone will flow billions of dollars immediately into the U.S. economy stimulating further economic activity.
8. End the litigation tax. Every U.S. business struggles with huge costs imposed by the one million U.S. lawyers. We can no longer afford the business tax that lawyers put on our system. Simply going to a "loser-pays" system, adding litigation reform, and providing clear and reasonable laws would reduce the huge burden faced by U.S. businesses.
9. Stop demonizing business. American business competitors in China, Japan and Europe have the government working side by side with their native businesses. Although President Obama admirably meets privately with corporate leaders, he sets the tone by publicly bashing business. Many of his political appointees follow his lead and treat business as the enemy.
In my world of promoting small businesses and exports through trade shows, I see German Chancellor Angela Merkel help promote our German competition while we struggle to get our political leaders to help us host the 25,000 international guests who attend our Las Vegas trade show, International CES.
Businesses, not government, create jobs, and we don't need special tax breaks or bailouts. Just create a supportive environment!
10. Encourage innovation and support American's leading companies. Recognize that our national strength and best hope for the economy is our innovative industries in technology, the Internet, medicine, data, research, motion pictures, music and content creation. America is home to many of these leading companies, and as a matter of common sense, our government should be supporting rather than attacking them through pro-innovation policies.
Our nation and economy are in deep trouble. Recent positive earnings reports or modest stock market gains are deceptive, as we tend to compare them against the 2009 recession and come from expense cuts including lay-offs. Top-line revenue is well below 2007 peaks, and the 2011 outlook is challenging at best. Our weakened economy is not due to a lack of creativity or entrepreneurial spirit of the American people. We are hurting from misguided government policies that have imposed disincentives to hire workers and impose huge costs on job creators. A strategy favoring job creation and innovation is essential . We have to pivot quickly to make this the best of times for every American, not just for those of us lucky enough to be part of the Washington economy. Gary Shapiro is the president and CEO of the Consumer Electronics Association.