Congress Should Focus on Boosting Private Sector Growth in the Economy
WASHINGTON D.C. – During a hearing on economic growth, Senator Mike Enzi (R-WY), Chairman of the Senate Budget Committee, today said it is important for Congress and the federal government to focus on policies that promote private sector growth instead of increasing regulations that could hinder the economy.
“It is critical for Congress and the federal government to focus on policies that actually promote private sector growth,” said Chairman Enzi. “As we enter into a period of historically higher than normal debt, with projected economic growth below average, Congress must work to encourage business growth without raising our spending deficits. The good news is hardworking families finally have a Congress and a president focused on addressing these critical issues. As policy makers consider the daunting task of getting our overspending under control, growth policies must pay an important role.”
Enzi noted that a new study from George Mason University finds that regulation reduces innovation and creates a drag on the economy. The study found that over a period of 35 years, regulation has reduced the country’s average annual Gross Domestic Product (GDP) growth rate by 0.8 percent. But had regulation been held constant at levels observed in 1980, the US economy would have been about 25 percent larger. The nation’s uncompetitive and complex tax code also restricts growth. The Joint Committee on Taxation (JCT) has consistently shown potential economic growth when studying past comprehensive tax measures, including proposals that have show no loss of revenue to the federal government. In fact, according to the Congressional Budget Office (CBO), one-tenth of a percentage in productivity growth could reduce the deficit by $273 billion over a 10-year period.
“As a former small business owner myself, I know firsthand the risks and rewards of entrepreneurship. Tough economic times makes business investment more risky and the uncertainty surrounding government policies makes it difficult to implement a surviving business strategy,” Chairman Enzi said. “We cannot spend our way out of these fiscal challenges. Instead we must look to the private sector to create long-term growth, and often the policies needed to encourage business investment are as simple as getting out of the way. Regulatory relief, tax reform and simplification, and reducing uncertainty in government policies can promote business investment and private sector growth.”
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