Business leaders cautiously optimistic
By Caleb Taylor | PA Independent
HARRISBURG — President Barack Obama is getting a mixed response from Pennsylvania public officials and business owners in regards to his plan to spur job growth in a stagnant American economy.
In the speech, Obama proposed increasing infrastructure spending to fund improvements to roads, bridges and schools. He also offered to give tax credits to businesses that hire workers or increase wages while also cutting payroll taxes in half.
“Overall, I liked that he was issuing a call to action,” said Dave Wise, vice president of finance for the Chamber of Business and Industry of Centre County, which represents businesses in north central Pennsylvania. “Infrastructure spending is good, because we have deficient bridges and roadways. Short term, it helps put people back to work in the construction industry, and long term, it opens regions up to commerce.”
Wise said he is still “cautious” about the plan and “hopes it doesn’t add to the deficit.”
Kevin Shivers, Pennsylvania state director of the National Federation of Independent Businesses, a lobbying organization for small businesses, said the president's plan was a "disappointment" that "fell short" of the leadership small business owners in Pennsylvania were looking for from Obama.
"Tax credits are great, but if you don't have customers coming in to buy stuff, few businesses are going to make more investments," said Shivers.
The federal American Jobs Act will cost $447 billion. Obama said he wants to pay for the plan primarily by eliminating tax deductions and exemptions for individuals earning more than $200,000 and families earning more than $250,000. The plan would cut the payroll tax in half to 3.1 percent for employers.
According to the White House, the president’s plan would spend $1.37 billion on “modernizing” infrastructure in Pennsylvania while possibly supporting 17,900 jobs in the state. The reductions in payroll taxes would save a typical Pennsylvania household — making the state median of $48,000 annually — about $1,500 in taxes.
“We can reduce this deficit, pay down our debt, and pay for this jobs plan in the process,” Obama said in his speech to Congress last week. “But in order to do this, we have to decide what our priorities are. We have to ask ourselves, ‘What’s the best way to grow the economy and create jobs?’”
In 2009, the Democratic-controlled Congress passed and Obama approved the federal American Recovery and Reinvestment Act to try to keep the unemployment rate below 8 percent with a $787-billion stimulus package made up of infrastructure spending, tax credits and funds for state and local governments.
According to the federal Bureau of Labor Statistics, the unemployment rate for the nation stands at 9.1 percent. The rate is 7.8 percent in Pennsylvania, but has climbed in each of the past two months.
Rob Fuller, a spokesman for Lockheed Martin, an aeronautics technology corporation that employs about 5,000 Pennsylvanians, said the main obstacle Lockheed Martin faces is that its customers “are being forced to do more with less every day.”
“We’ve scrubbed capital,” said Fuller. “We’ve reduced expenses. We’ve frozen the salaries of our senior most executives and we’ve been critically examining every process, every purchase and every transaction that we engage in to try to get as lean, as focused, and as agile as we can possibly be.”
Richard Bloomingdale, president of the Pennsylvania AFL-CIO, a union that represents about 900,000 workers in the state, said the president's plan would put more Pennsylvanians back to work, allowing them to spend more money, which would lead to further job creation.
"In Washington, (D.C.), people forget that we are in a demand-side recession," Bloomingdale said. "You don't get out of a recession by cutting spending. You get out of a recession by spending, and sometimes that has to be the government that does" the spending.
Obama sent the jobs bill to Congress today and urged federal lawmakers to pass it without any political delays. The president also plans to travel the country building support for the plan in the coming weeks.
Even if the divided Congress passes the jobs bill, it could change, eliminate or add provisions to the plan. Getting the bill through the Republican-controlled House may prove difficult.
U.S. Sen. Pat Toomey, R-Pa., said the president should focus on cutting the deficit, not increasing spending.
“Right now, we need to be focused on the joint goals of reducing our deficits and creating jobs, but tonight I heard the president call for hundreds of billions of dollars in increased spending,” Toomey said in a statement. “President Obama has tried massive stimulus spending, and it hasn’t worked.”
On the other side of the aisle, U.S. Sen. Bob Casey, D-Pa., said the proposal was imperfect, but having ideas on the table was important.
“I agree with some, I disagree with others and I have ideas of my own that I will continue to push,” Casey said in a statement. “I have repeatedly called for the Administration to crack down on China’s currency manipulation that puts Pennsylvania workers at a disadvantage and is stifling Pennsylvania manufacturing.”
Pennsylvania tea party groups were quick to jump on the president’s plan for more stimulus spending, which they hailed as “completely irresponsible.”
"Government job creation is not the answer. At best, it can offer a temporary fix, which will, most likely, come at the expense of permanent private-sector employment,” said Teri Adams, president of the Independence Hall Tea Party, a Philadelphia-based group. "We've been down this road before, spending trillions to stimulate the economy, and instead of experiencing an economic recovery, we're facing another recession.”
