Dems’ Spending Addiction Could Leave Millions of Americans Jobless

Democrats Vow to Use “Weapon” of Small Business Tax Hikes and Devastating Defense Cuts To Feed Their Spending Spree, Despite Risk of Another Recession 

• Employers yesterday warned of the devastating economic impact of the Democrats’ proposed Defense cuts, which according to a recent study could result in more than three million lost jobs.
• Democrats want to use the looming threat of these defense cuts as a “weapon” to force new tax hikes on small businesses that will help fuel the Democrats’ spending addiction. Those tax hikes, meanwhile, are predicted to destroy more than 700,000 jobs.
• Federal Reserve Chairman Ben Bernanke has warned that if Democrats stay on this path they will drive our economy over a cliff. One estimate pegs the total number of lost jobs at 10 million. 

Employers yesterday warned of the devastating economic impact of the Democrats’ plan to gut defense, which according to a recent study could result in more than three million lost jobs:

NATIONAL ASSOCATION OF MANUFACTURERS: 3.44 MILLION JOBS COULD BE DESTROYED BY SEQUESTER FROM 2012 – 2022: (“Defense Spending Cuts: The Impact on Economic Activity and Jobs,” National Association of Manufacturers, Accessed 7/18/2012)

DELLA WILLIAMS, PRESIDENT AND CEO OF WILLIAMS PYRO: “If small business—and I would submit even further, manufacturing— is an engine for economic growth, why are we making decisions that will inevitably stall that engine? … Williams Pyro presently has 89 employees, including machinists, assemblers and R&D engineers experienced in mechanical, electrical, software, firmware, hardware and manufacturing. These jobs are in jeopardy. What is being billed as a stop-gap budget fix will have lasting effects on our defense capabilities for years to come. The switch will not just get flipped back on to reverse that trend.” (Remarks from Della Williams, “Testimony of Della Williams, President and CEO, Williams Pyro,”House Armed Services Committee, 7/18/2012)

LOCKHEED MARTIN CHAIRMAN AND CEO ROBERT J. STEVENS: IMPACT “WOULD BE DEVASTATING”: “The impact on industry would be devastating, with a significant disruption to ongoing programs and initiatives, leading to facility closures and personnel reductions that would significantly disrupt advanced manufacturing operations, erode engineering expertise and accelerate the loss of skills and knowledge.” (Robert J. Stevens, “Statement of Robert J. Stevens, Chairman and Chief Executive Officer, Lockheed Martin Corporation,” House Armed Services Committee, 7/18/2012)

AEROSPACE INDUSTRIES ASSOCIATION CHAIRMAN DAVID HESS: ALREADY “COMPANIES ARE LIMITING HIRING AND HALTING INVESTMENTS”: “As an industry, we are already seeing the impacts of potential sequestration budget cuts today. Companies are limiting hiring and halting investments – largely due to the uncertainty about how sequestration cuts would be applied.” (David Hess, “Testimony of David Hess, President, Pratt & Whitney,” House Armed Services Committee, 7/18/2012)

NATIONAL DEFENSE INDUSTRIAL ASSOCIATION CHAIRMAN: “Small business suppliers tell us that they are already preparing to trim payrolls, that they are not creating new jobs because of the anticipation of sequestration and that many are gearing up to leave the federal and defense market space all together.” (Sean O’Keefe, “The Impact of Sequestration on the U.S. Aerospace and Defense Industry,” House Armed Services Committee, 7/18/2012)

Democrats want to use the looming threat of these defense cuts as a “weapon” to force new tax hikes on small businesses that will help fuel the Democrats’ spending addiction. Those tax hikes, meanwhile, are predicted to destroy more than 700,000 jobs:

NO. 2 SENATE DEMOCRAT: TAX HIKES AND CUTS TO DEFENSE ARE A LOADED “WEAPON”: “Democrats believe Republicans might be willing to compromise once the spending cuts and tax increases are felt.

“‘That may be the only way to bring some Republicans into a position of talking,’ Sen. Richard J. Durbin of Illinois, the assistant Democratic leader, said late last week. ‘We’re not going to unload our weapons at this point.’” (Lisa Mascaro, “Congressional Democrats Dig In on Fiscal Cliff Scenario,” Los Angeles Times, 7/16/2012)

“DEMOCRATS THREATEN TO GO OVER ‘FISCAL CLIFF’ IF GOP FAILS TO RAISE TAXES”: (Lori Montgomery, “Democrats Threaten to Go Over ‘Fiscal Cliff’ if GOP Fails to Raise Taxes,” The Washington Post, 7/16/2012)

“SENIOR DEMOCRATS” ARE READY TO “PLUNGE THE NATION BACK INTO RECESSION” IF THEY DON’T GET THE TAX HIKES THEY WANT: “Emboldened by signs that GOP resistance to new taxes may be weakening, senior Democrats say they are prepared to weather a fiscal event that could plunge the nation back into recession if the new year arrives without an acceptable compromise.” (Lori Montgomery, “Democrats Threaten to Go Over ‘Fiscal Cliff’ if GOP Fails to Raise Taxes,” The Washington Post, 7/16/2012)

“RESULTING BLOW TO THE ECONOMY NEXT YEAR COULD BE ENORMOUS”: “…economy-shaking consequences if no deal is reached… resulting blow to the economy next year could be enormous.” (John Bresnahan and Manu Raju, “The Democrats Play Hardball,” Politico, 7/16/2012)

CBO: BLOW OF TAX HIKES AND SEQUESTER COULD PUSH COUNTRY INTO RECESSION: “The potential changes are part of the $607 billion so-called fiscal cliff of automatic spending cuts and tax increases that the Congressional Budget Office has warned could push the country into a recession.” (Richard Rubin, “Senate Democrats Split From Obama On Taxing Dividends,” Bloomberg, 7/15/2012)

710,000 JOBS COULD BE DESTROYED BY DEMOCRATS’ TAX HIKE PLAN: (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012, Appendix C)

JOINT COMMITTEE ON TAXATION: 940,000 SMALL BUSINESSES TO GET HIT BY DEMOCRATS’ LATEST TAX HIKE: “Congress’s Joint Tax Committee—not a conservative outfit—estimates that in 2013 about 940,000 taxpayers will have enough business income to meet Mr. Obama’s tax increase threshold.” (Editorial, “Off the Tax Cliff He Goes,” The Wall Street Journal, 7/10/2012)

EMPLOYERS HIRING 25% OF WORKFORCE WOULD BE HIT BY TAX HIKES UNDER DEMOCRATS’ PLAN: (Susan Eckerly, “Letter Urging Congress to Hold a Vote Extending All of the Current Individual Tax Rates,” NFIB, 9/21/2010)

MORE THAN HALF OF NET BUSINESS INCOME WILL BE HIT BY HIGHER TAX RATES UNDER OBAMA PROPOSAL: “And of the roughly $1.3 trillion in net business income, about 53% will get hit with the higher tax rates. This is because millions of businesses report their income as sole proprietors and subchapter S corporations that file under the individual tax code.” (Editorial, “Off the Tax Cliff He Goes,” The Wall Street Journal, 7/10/2012)  

$201 BILLION HIT TO THE ECONOMY: (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012, Appendix C)

1.8% DROP IN WAGES: “Real after-tax wages would fall by 1.8%, reflecting a decline in workers’ living standards relative to what would have occurred otherwise.” (Robert Carroll and Gerald Prante, “Long-Run Macroeconomic Impact of Increasing Tax Rates on High-Income Taxpayers in 2013,” Ernst & Young, July 2012)

Federal Reserve Chairman Ben Bernanke has warned that if Democrats stay on this path they will drive our economy over a cliff. One estimate pegs the total number of lost jobs at 10 million:

STUDY: 10 MILLION JOBS COULD BE LOST FROM DEMS’ FISCAL CLIFF: “The negative fiscal shock exceeds Gross Domestic Product (GDP) growth in any year over the past two decades, and when considering economic multipliers, the contraction could approach ten percent, which would amount to the biggest year-to-year decline since 1932. This upper-bound estimate would result in a loss of 10 million jobs, according to the administration’s methods.” (“New Study Examines Economic Effects of the Fiscal Cliff,” American Action Forum, 7/17/2012)

FEDERAL RESERVE CHAIRMAN BEN BERNANKE: ECONOMY “COULD BE ENDANGERED” BY DEM TAX HIKES, DEFENSE CUTS: “…fiscal decisions should take into account the fragility of the recovery. That recovery could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken.” (U.S. Senate, Committee On Banking, Housing, And Urban Affairs, Hearing, 7/17/2012)

“RECESSION WOULD OCCUR EARLY NEXT YEAR”: “The Congressional Budget Office has estimated that, if the full range of tax increases and spending cuts were allowed to take effect–a scenario widely referred to as the fiscal cliff–a shallow recession would occur early next year…” (Bernanke testimony before the Senate Banking Committee, Federal Reserve Web site, 7/17/2012)

“ADDITIONAL NEGATIVE EFFECTS LIKELY TO RESULT FROM PUBLIC UNCERTAINTY”: “These estimates do not incorporate the additional negative effects likely to result from public uncertainty about how these matters will be resolved.” (Bernanke testimony before the Senate Banking Committee, Federal Reserve Web site, 7/17/2012)