Obama's policies hurt new grads
May 17, 2012
Milwaukee Journal Sentinel
This weekend, Wisconsinites across the state will graduate from college, an achievement for which each student should be extremely proud. But as a result of the slowest recovery since the Great Depression, recent college grads are some of the Americans hardest hit by President Barack Obama's failed economic policies.
After three years of Obama's leadership, employers are skittish to hire with the threat of the largest tax hike in history looming on Jan. 1, the uncertainty of runaway deficit spending and a health care law that discourages job creation.
For example, according to a U.S. Chamber of Commerce survey conducted in January, 74% of small businesses said that the health care law makes it more difficult for them to hire and 30% are not planning to hire at all due to the law. Additionally, employers face more costly regulations that take away precious resources. Since the president took office, economically significant regulations - those expected to have an impact of $100 million or greater on the economy - have increased by 52%.
For the second straight month, job creation slowed nationwide. In April, the United States created a meager 115,000 jobs, half of what is needed for a healthy recovery.
As a result, Americans 25 and younger face a more difficult job market. The Associated Press reported that one-half of new college graduates are unemployed or underemployed. According to a recent Gallup poll, the underemployment rate for those ages 18 to 29 is double that of older age groups. This means Americans graduating today, if they can find a job at all, are more likely to have to take a job outside of their field, often at lower pay, to make ends meet.
Graduates who face a difficult job market still must begin paying back their student loans. Congress is debating how to keep student loan rates from increasing this summer, an effort that I supported in the House.
Reduced interest rates on some college loans are scheduled to double from 3.4% to 6.8%. On average, keeping the student loan rate at 3.4% would save an individual $1,000 over the 10-year repayment period for a qualifying graduate.
I continue to support efforts to keep the student rates low, but the president has used the student loan issue as a campaign stump speech to distract the nation from his failed economic record. While he chooses to politicize the frustration of college graduates, House Republicans are determined to focus on job creation and ensure that the Class of 2012 will have the opportunity to succeed.
In an effort to extend the student loan rates, the Democratic-controlled Senate attempted to politicize this issue and pay for the cost with higher taxes on small businesses. The Senate version of the bill would inflict a tax hike on some small businesses and entrepreneurs, filed as an S corporation. Small businesses created two-thirds of the net new jobs in this country over the past 10 years, and taxing them at a higher rate would only hamper their ability to hire more workers.
Following the Obama economic formula to increase taxes and expand the federal government will leave more bright, young Americans unemployed or underemployed, shackled with unprecedented student debt and no way to repay their loans.
The president should work with House Republicans to keep the loan rate low and pass legislation that will reduce the barriers to growing jobs, not put up more roadblocks for job creators. The most important thing Congress can do for the Class of 2012 is to reverse the tax, spend and borrow policies of the past three years and get out of the way of job creators.
We can do better to restore the American promise for our newest members of the workforce.