Governors Send Washington A Message on Taxes, Budgets, Healthcare

June 14, 2012

While states are on the rebound from the recession, the uncertainty coming out of Washington is still inhibiting economic growth, according to a bipartisan panel of the nation’s top governors.

Govs. Dave Heineman (R-NE), Gary Herbert (R-UT), Jack Markell (D-DE) and Scott Walker (R-UT) were in Washington, D.C., to attend the National Chamber Foundation’s Jobs Summit to discuss the policies that are helping their states create jobs and increase competitiveness.

During a panel discussion, the governors pointed to limbo over tax reform, the looming "fiscal cliff,” and the pending Supreme Court decision on the 2010 health care law as factors that are causing businesses to hesitate when it comes to creating jobs or investing in their businesses.

“Any uncertainty, not just government uncertainty, but uncertainty in Europe or anywhere in the world, has an impact,” said Walker, who noted that Wisconsin businesses had just overcome a major uncertainty hurdle with his victory in last week’s recall elections. “In our survey, 87% of our employers said they would add jobs in 2012 but said the biggest thing that was keeping them from doing it was the recall election.”

Walker called on the federal government to make a big move on taxes, similar to what President Reagan did when he signed the Economic Recovery Tax Act in 1981. “They’re thinking too small if they just look at an extension,” Walker told the 200-plus attendees at the Summit. “You have to put money back in the hands of consumers who will spend it.”

Heineman strongly urged Congress to ensure that there are “no tax increases on any Americans at the end of this year and enact a two-year moratorium on all new regulations,” in order to help businesses.

The governors were also critical of Washington's inability to pass a balanced budget and avoid what Federal Reserve head Ben Bernanke has labeled the impending fiscal cliff. “Each of our states are required to have a balanced budget,” said Markell. “Tough decisions are being made at the state level, but not the federal level,” Walker said.

The governors were split on whether the new health care law should stay intact. The Supreme Court is expected to hand down its ruling by the end of this month and could choose to uphold the law, reject the entire package, or reject parts of it, including the requirement that all Americans purchase insurance.

All four governors agreed that regardless of what happens, the nation could not go back to the system it had before the new law. “No one thought that the status quo before the Affordable Care Act was acceptable,” Markell said. “If the Supreme Court rules against it, it's not like we can't go back to the way it was. The way it was was miserable for employers.”

Herbert called on Congress to “push the reset button and start over,” noting that governors were shut out of the original debate. “A new debate would be better than what we have now,” Herbert said.

Walker agreed. “If the health care law were thrown out, it would provide certainty and stability,” he said. “But,” he hedged, “we can’t go back to where we were.”

Despite the federal challenges ahead, the states are doing well, according to the latest edition of the Chamber’s “Enterprising States” report. According to the report, nearly every state enjoyed some overall private sector job growth between January 2011 and January 2012. (Click here to see how your state did on this interactive map)

The governors who were at the Summit all hail from states with unemployment well below the national average. Delaware’s unemployment rate is 6.8%; Nebraska’s is 3.9%; Utah’s is 6%; and Wisconsin’s is 6.7%.

In his opening remarks, Chamber President and CEO Tom Donohue said that the report gave him reason to be optimistic about the country’s economic future.  “Why am I optimistic?” he asked. “First, because we’ve got proof that things are working. The 2012 Enterprising States study shows that the states that foster strong business environments and embrace innovation are bucking all of the national economic trends, they’re growing faster, and they’re adding more jobs.”

The summit included a discussion of growth, jobs and innovation at the local level featuring Denver and Pittsburgh as case studies. Also, public sector partners signed a pledge to take part in the Chamber's Hiring our Heroes' program, which helps veterans and their spouses find meaningful employment.

This post is also available at Free Enterprise.