Helping Working Americans and Small Businesses First
This week the House considered a stimulus package estimated to cost nearly $1.1 trillion. Like so many of you, I know that our economy is struggling and working families are rightly concerned about their futures. Getting our economy back on track is my top priority and I believe that we must explore all proactive solutions to promote short-term stability and long-term growth.
As you may know, President Obama called on Congress to pass an economic stimulus package quickly. From rising unemployment to falling home values, families are clearly struggling to make ends meet and we don’t need any more proof that our economy needs a stimulus. I share the President’s concern for the economy, as well as the urgent need to address the challenges facing our nation. I have also heard from many of you on our telephone town hall conference calls and through your calls and e-mails to my office. You have shared the personal challenges you are facing in this environment and it is clear we need solutions to promote economic growth and job creation, not to massively expand government spending.
Recognizing these needs, over the last several weeks I have participated in a working group to craft a solution that focuses on the true engine of economic growth in our country – small businesses and the working Americans they employ. This group solicited feedback from workers, small business owners, state and local governments and many others in order to develop a commonsense proposal designed to promote immediate economic stimulus. Our working group created a five point plan that sets forth important policies critical to quickly and effectively putting our economy back on sure footing.
First we must remove barriers to economic expansion by immediately reducing the tax burden on small businesses that employ 500 people or less. These job creators will be allowed to exclude 20 percent of their income from taxes so that they can have more money to save and create jobs. Second, working families absolutely must be able to meet their needs in the coming months. We achieve this goal by immediately reducing tax rates for the lowest income wage earners. Third, the unfair practice of taxing unemployment benefits has to end and our plan makes these benefits tax-free so that individuals between jobs can focus on providing for their families. Fourth, responsible individuals who purchase a home with at least 5 percent down will be eligible to receive a $7,500 tax credit, ensuring that we can relieve the excess supply of homes that are acting as a drag on values while also providing responsible buyers with an incentive to purchase a home. Finally, at a time when working families are worried about having enough to meet basic needs, we will not raise taxes to pay for more government spending. Any stimulus spending must be offset by reducing government spending in other areas, not saddling American families with a higher tax bill.
While I fought hard to pass this alternative, unfortunately, it was defeated. Instead, the House approved H.R. 1, the American Recovery and Reinvestment Act, which spends $1.1 trillion on expanded government programs and new initiatives that have never been considered before by Congress. I could not support H.R. 1 because it does not sufficiently address the needs of California and it will not work quickly enough or effectively enough to create jobs. As you know, California is the largest state in the U.S. and is among the top 10 largest economies in the world. In spite of the fact that California represents 12 percent of the population in the United States, only 6 percent of the funding in the bill would be sent back to our state. The needs of the California economy are both diverse and unique. A massive expansion of government spending is not the solution we need to create jobs. I also remain concerned with how H.R. 1 plans to spend money on critical needs. In spite of claims that the stimulus bill would provide funding for important infrastructure projects, H.R. 1 allocates a mere 3 percent for these initiatives. Less than 10 percent of the funding for California would be available for critical transportation and water infrastructure needs.
History tells us that we cannot simply spend our way back to prosperity. I believe that being a responsible steward of the taxpayers’ money means eliminating wasteful and unnecessary spending and allowing American families to keep more of their paycheck each month. The commonsense alternative I helped to craft will benefit the small businesses and working families who are most in need and most capable of getting our economy back on track. I will continue to fight for effective ways to give our economy a shot in the arm and provide the stimulus we need.
