President Obama visited Chattanooga, Tenn., on Tuesday for another in his series of speeches to fix the economy. Obama is traveling the country, with stops in Illinois, Florida and now Tennessee, to make yet another case for government spending, which he calls "investment."
Alternately boasting and complaining about the economy, Obama proposed restructuring the corporate tax reform and using the revenues to fund middle-class "investments," such as spending on education, infrastructure, and health care.
The president bragged that "this year, we’re off to our best private-sector job growth since 1999."
But in 2013, the number of full-time employees increased by 80,000, fewer than one tenth of a percent. The number of part-time employees increased by 592,000, or 2.2 percent. July numbers are expected Friday from the Labor Department.
The swell in part-timers is a direct effect of the president’s signature achievement, the Affordable Care Act, or Obamacare. Employers are switching to part-timers, those who work fewer than 30 hours weekly, because these workers will not trigger the $2,000-per-employee penalty beginning in 2015 for firms who do not offer approved health insurance.
Obama declared, "I’m willing to work with Republicans on reforming our corporate tax code, as long as we use the money from transitioning to a simpler tax system for a significant investment in creating middle-class jobs. That’s the deal."
It’s not a deal Republicans are likely to accept. They have made it clear that any tax reform, individual or corporate, has to be revenue-neutral, i.e. not raise revenues.
Republicans in Congress passed Budget Committee Chairman Paul Ryan’s fiscal roadmap, "The Path to Prosperity," on March 21.
The plan proposed tax simplification for individuals and corporations, without raising additional revenues, in order to attract companies back to America and increase incentives to work and invest. It proposed reforming Medicare by transitioning towards a system of competing health plans for seniors, and devolving entitlement programs to the states.
Obama wants to spend the additional corporate tax revenues on infrastructure. He said, "Let’s put more construction workers back on the job doing the work America needs done -- vital projects our businesses need, like widening Route 27 here in Chattanooga, or the Jacksonville Port I visited last week."
That’s fine if you’re an unemployed construction worker (who might benefit from approving the Keystone XL pipeline, if Obama signs off), but what about newspaper columnists? Or nurses? Or fast food workers?
Jobs from approving Keystone XL don’t count, apparently. Obama accused Republicans of "putting all your eggs in the basket of an oil pipeline that may only create about 50 permanent jobs."
TransCanada, the owner of the proposed pipeline, estimates that Keystone XL would employ 9,000 construction workers and support the employment of an additional 7,000 manufacturing workers who produce the parts and equipment for the pipeline. Others estimate that the pipeline’s construction would create 2,000 jobs.
Permanent jobs would be created not only to operate the pipeline, but from refineries which would process Canadian oil transported from Alberta. Infrastructure jobs are not permanent either, because workers are laid off when the project is complete.
Furthermore, infrastructure is more expensive when funded by Uncle Sam than by states. Project labor agreements that require the use of union labor, high-road contracting that requires a super-minimum wage, and "Buy America" provisions slow down infrastructure and raise costs. Environmental impact statements can take years.
The Republican approach -- tax simplification and regulatory reform -- would reinvigorate the economy and foster job creation. Tennessee residents, who have elected a Republican governor and a Republican state legislature, know this full well.
