Tax Reforms

Recently, Obama presented Congress with a blueprint for an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.

When, Obama took office, our auto industry was on the verge of collapse. Million of jobs were at stake. Although, Mitt Romney wrote an article for the New York Times entitled: “Let Detroit Go Bankrupt,” our President refused to let that happen.

In exchange for help, Obama demanded responsibility. They got workers and automakers to settle their differences. The industry retooled and restructured. General Motors is back on top as the world’s number-one automaker. Chrysler has grown faster in America than any major car company. And, Ford is investing billions in American plants and factories. The entire industry has added nearly 160,000 jobs.     

Today, companies get tax breaks for moving jobs and profits overseas. But, the companies that choose to stay in America get hit with one of the highest tax rates in the world. 

Obama said, that those business that want to outsource jobs, shouldn’t get a tax deduction for doing it. No American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. He wants every multinational company to pay a basic minimum tax.  And, every penny should go towards lowering taxes for companies that choose to stay here and hire Americans.     

Congress should double the tax deduction, companies get for making products here. Companies that want to relocate in a community that haa been hit hard after a factory left town, should get help financing a new plant, equipment, or training for new workers.  

Obama wants Congress to start rewarding companies that create jobs right here in America.  He urged: “Send me these tax reforms, and I will sign them right away.” 

No Going Back

Long before, this recession, jobs and manufacturing began leaving America. Technology made businesses more efficient, but also made some jobs obsolete. People at the top saw their incomes rise like never before, but most hardworking Americans struggled, because paychecks weren’t growing, and personal debt kept piling up.

In 2008, the house of cards collapsed. Mortgages had been sold to people who couldn’t afford or understand them.  Many banks made huge bets with other people’s money, while regulators looked the other way, because they didn’t have the authority to stop irresponsible behavior.

Our economy plunged into a crisis that put millions out of work, saddled our country with more debt, and left innocent, hardworking Americans holding the bag. In the six months, before Obama took office, America lost nearly 4 million jobs.
Another 4 million jobs we’re lost before Obama’s policies took effect.

In the State of the Union Address, Obama announced that in the last 22 months, businesses had created more than 3 million jobs. Last year, more jobs were created than any year, since 2005. For the first time since the late 1990s, our manufacturers are hiring and creating jobs. Congress has agreed to cut the deficit by more than $2 trillion.  And it has put in place new rules to hold Wall Street accountable, so a crisis like this never happens again. 

Obama won’t allow America to return to an economy of phony financial profits. He announced that he’ll fight obstruction with action, and will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.  He directed his Attorney General to create a special unit of federal prosecutors and to expand investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. 

They Set An Example

After praising the success of our military, Obama urged Congress: “Imagine what we could accomplish if we followed their example. Think about the America within our reach:  A country that leads the world in educating its people.  An America that attracts a new generation of high-tech manufacturing and high-paying jobs.  A future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world.  An economy built to last, where hard work pays off, and responsibility is rewarded.

“We can do this.  I know we can, because we’ve done it before.  At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known. My grandfather, a veteran of Patton’s Army, got the chance to go to college on the GI Bill.  My grandmother, who worked on a bomber assembly line, was part of a workforce that turned out the best products on Earth.
 
“The two of them shared the optimism of a nation that had triumphed over a depression and fascism.  They understood they were part of something larger; that they were contributing to a story of success that every American had a chance to share -- the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.” 

Our country wasn’t built by one political party. America became great because our elected representatives worked as a team. No mission is too hard, as long Americans join together in common purpose and maintain a common resolve. America’s future can again be hopeful, and the state of our Union will remain strong.

Too Big To Exist

In 2006, when Democrats were still in the minority, Rep. Barney Frank raise the question of executive pay. The top decision makers on Wall Street were able to take risks and if the risks paid off, they made lots of money. However, if these top decision makers took risks, that went terribly wrong, they didn’t lose any of their own money.

The banks were allowed to decided how much cash they had to keep on hand, and that new rule was pushed by Henry Paulson, who eventually, became Bush’s treasury secretary. In 2008, while Bush was still President, Paulson decided how the first half of the $700 billion in TARP funds were spent.

Risk structure was one of the reasons that Wall Street got in trouble 2008. In 2009, House Democrats passed a bill, that called for all regulators of any financial institution; banks, the bank regulators, and the Security Exchange Commission to put in rules, that do not allow the kind of bonus structure, that provides an incentive to take a lot of risks.

There have even been cases, where the risk appeared to pay off within a short period of time and people make a lot of money. However, if the deal later turned sour, they didn’t have to give any of the money back. Regulations have to spell out, that top decision makers cannot have one-way bonuses. Heads they win, tails they break-even, because it is leads Wall Street scoundrels to take too many risks, and that endangers our society.

When financial institutions get to big to fail. They’ve become to big to exist. In 1999, Congress killed the Glass-Steagall Act, which had erected the wall between regulated Main Street banks and unregulated investment banks. Congress needs to reinstate the Glass-Steagall Act.

Economic Progress

When, Obama took office, we we’re in the middle of the worst economic crisis since the Great Depression.  America had lost 650,000 jobs in December 2008.  An additional 700,000 jobs were lost in January, the month Obama was sworn in. Twenty-four days after Obama took office the Recovery and Reinvestment Act was passed, without a single Republican vote in the House and only 3 Republican votes in the Senate.  By doing so, they prevented the worst financial crisis from getting worse and turned the economy from contraction to expansion. 

By December 2009, employment in the private sector had risen by 1.1 million, and every months since we've seen job growth. The Obama administration has created many more jobs, than Bush did in 8 years. 

By early 2010, the DOW was up 11%, and we had seen a 10% growth in private sector jobs.  Recently, corporate profits as a percentage of U.S. economic growth reached their highest level in the three decades.  Profits had plummeted to the lowest point ever, when the recession hit, but in January corporate profits reached their highest point ever as a share of GDP. 

After three years, General Motors is once again the number one car maker in the world. Three years ago, Obama engineered an $80 billion loan for the automobile industry. He took a huge risk, and it is paying off, and no congressional Republicans supported the loan. In fact, Mitt Romney wrote an article entitled, “Let Detroit Go Bankrupt.” 


Recently, we’ve learned jobless claims fell to a four-year low, the lowest levels since April 2008. Jobless claims have fallen ever since Obama’s stimulus package went into effect and the stock market has risen more than 50%. The unemployment is now at 8.6%, and economist see a slow, but steady improvement. 

Security and Exchange Commission

The SEC consists of five Commissioners appointed by the President with the advice and consent of the Senate. Their terms last five years and are staggered so that one Commissioner's term ends on June 5 of each year. To ensure that the SEC remains non-partisan, no more than three Commissioners may belong to the same political party. The President also designates one of the Commissioners as Chairman, the SEC's top executive. However, the President does not possess the power to fire the appointed commissioners, a provision that was made to ensure the independence of the SEC.

The nonpartisan Wall Street Watch project revealed that deregulation was purchased by Wall Street executives, by paying politicians for unprecedented freedom from oversights of banks, security firms, private equity and hedge funds, insurance and real estate.

In the past 10 years, Wall Street lobbyists spent more than $5 billion to influence regulators. In 2008, a total of 2,996 lobbyists spent $1.7 billion on direct campaign contributions.

In 1998, Citibank was allowed to merge with the insurance giant, Travelers, even though it was against the law. The following year, Congress killed the landmark depression era Glass-Steagall Act, which had erected the wall between regulated Main Street banks and unregulated investment banks.  Without that wall, the stage was set for firms to merge until they were “too big to fail.” Regulators allowed firms to hide those risky investments off their books which meant they didn’t have to keep enough money on hand to cover possible losses. Those practices were permitted by the Financial Accounting Standards Board in rules pushed for by the bank executives.

In 2004, Bush’s Securities and Exchange Commission scrapped a 20-year-old rule that made banks keep a certain amount of cash on hand to cover investment losses.

Land of Opportunity

We’re coming out of the worst financial crisis since the Great Depression the likes of which most Americans haven’t seen in their lifetime. The changes taking place in the Middle East, Eastern Europe and Asia that are extremely challenging.

Over the last three years, the Obama administration has sought to solve those challenges, while making sure that we didn’t slip into an other Great Depression. Economic growth is promising and we’ve now had 22 straight months of private sector job growth. The economy is on the mend, but it’s not nearly where it needs to be.

Obama has end a war in Iraq and start managing a transition out of Afghanistan. Historic health care legislation was passed and it’s already having an impact on 2.5 million young people who now have health insurance. Congressional Democrats have ended practices like “don’t ask, don’t tell,” that was fundamentally contrary to who we are as a country.

Obama is dealing with problems that have been building up for decades. Our education system isn’t where it needs to be to make sure that our young people can compete in the 21st century. Our tax code isn’t fair and equitable, and hardworking Americans know that the very wealthy are playing by a different set of rules. Currently, our financial system is stable and conducive to economic growth, but congressional Republicans are determined to re-deregulate Wall Street.

The contrast couldn’t be sharper than it is this year. Our children and grandchildren and future generations may again be able to proudly say that America continues to be the land of opportunity, and continues to be the one indispensable nation around the world that people look to for leadership and clarity of values.

The only way we’re going to accomplish this mission is to win in November.