How Congress is harming the economy
At the very time that the Senate is debating whether to spend $800 billion or $900 billion to stimulate the economy, the government is considering other legislative and regulatory initiatives that would impede economic recovery.
By inserting protectionist provisions that require some goods financed by the stimulus bill to be made in America, Congress is risking a trade war with important trading partners in Europe and Asia. A trade war would reduce exports, potentially destroying millions of American jobs.
Cutting Defense Spending
Although Congress is trying to revive the economy by expanding domestic spending, the Pentagon is reportedly facing budget cuts next year. But with President Obama promising to deploy more troops to Afghanistan, America needs more defense spending, not less.
America needs to purchase more weapons, ordnance, vehicles, and body armor so that our troops have the best equipment possible. Defense supplies are generally made in America, and production employs Americans with a wide range of skills.
If America increases regular forces by 100,000 and hires 100,000 more civilians to support them, these individuals would acquire useful skills when they leave the Defense Department for the private sector. Their presence would enable the Pentagon to bring home reserve and National Guard troops, some of whom have been deployed for over a year.
Individual Emissions Standards for States
Earlier this week auto companies revealed that sales had reached a 27-year low. Yet, under a new directive from President Obama, states such as California would be able to set their own emissions standards, which will be—you guessed it—stricter than federal law. This would complicate engineering and production, raise costs, and send the industry into an even greater decline.
Since California is America’s largest car market, companies would have to make lighter, more fuel-efficient cars that consumers might not want to purchase. Domestic companies would be particularly hard-hit because they make larger cars. It makes no sense for Congress to bail out Detroit with loans and give tax deductions for purchases of new cars and trucks, while at the same time decimating the market of the Big Three. More red ink for the auto industry, and more layoffs across America.
Employee Free Choice Act
This misnamed bill would change the law to allow workplaces to be unionized without secret ballots. A workplace could be unionized if a majority of workers sign an open card in favor of unionization — a process known as “card check,” exposing workers to union intimidation. This bill passed the House in the 110th Congress and will be soon brought up in this congressional session.
One of the bill’s House sponsors was House Committee on Education and Labor Chairman George Miller. In 2001, he and five colleagues wrote to the state arbitration board of Puebla, Mexico, saying, “we feel that the secret ballot is absolutely necessary in order to ensure that workers are not intimidated into voting for a union they might not otherwise choose.” If Mexicans deserve a secret ballot, so do Americans.
States where employees do not have to join a union in order to work have lower average unemployment rates than other states, so it would not be surprising if increased unionization would raise unemployment rates.
As well as protectionism, cuts in defense spending, unionization by intimidation, and arbitrary environmental standards, the economic stimulus bill would open the floodgates of deficit spending. The ensuing debt would burden Americans far into the future.
The Democrats, who control both the White House and Congress, should know better. No wonder consumers are scared, financial markets are tumbling, and unemployment continues to rise.
Diana Furchtgott-Roth can be reached at email@example.com. For previous columns, click here.