A bumpy ride for business

OPINION:

The U.S. Chamber of Commerce began an ad campaign last week to promote free enterprise, which it warned was in danger of being drowned by a tsunami of government regulations, controls and taxes that would inhibit economic growth and jobs for years to come.

The Chamber, which represents more than 3 million businesses and organizations, said the country will need 20 million new jobs over the coming decade just to re-employ workers who have been laid off in the recession and to keep pace with a growing population.

The ad campaign is aimed at what the Chamber believes are dangerous attempts by the Obama administration and the Democratic Congress to blanket the economy with draconian taxes and controls over virtually every part of the private sector, suffocating the economy’s legendary ability to create millions of new enterprises and jobs.

“The government can support a few jobs in the short run. But over the long run, only the private sector - powered by free enterprise - can keep America working,” said Chamber President Thomas J. Donohue.

You never hear President Obama, his administration’s leaders or czars talk about free enterprise, which they consider a hostile idea that needs to be chained down by government regulations. To paraphrase President Reagan, their economic agenda can be summed up in three sentences: “If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.”

Indeed, while the Chamber was calling for free-enterprise policies to power up the U.S. economy at full throttle, the Obama administration and dozens of committees and subcommittees on Capitol Hill were working hard to apply the brakes on the engine of growth through tax and regulatory rules that will grow the government, not the economy.

“There are plans afoot to weigh down America’s once vibrant capital markets with excessive regulations and to raise taxes on our most productive citizens,” Mr. Donohue said.

Take health care reform. The bill coming out of Democratic Sen. Max Baucus’ Finance Committee would create taxpayer-subsidized, government-created insurance exchanges in every state to compete, unfairly, with private insurance companies, which would have to bend to costly federal mandates that would put many of them out of business (which Mr. Obama’s critics say is their ultimate goal).

Medicare and Medicaid, on the brink of insolvency, would be expanded to provide medical care to the uninsured. To pay for it all, the bill would levy a sea of taxes, fines and fees on costlier private insurance plans (the kind of plans organized labor won for its workers), the uninsured and small businesses. Budget officials acknowledge that would raise health care costs, not lower them.

“Is it true that these additional fees ultimately would be passed down to the health care consumer and be reflected in not lower insurance premiums but higher insurance premiums?” Texas Sen. John Cornyn asked Douglas W. Elmendorf, director of the Congressional Budget Office, at a Finance Committee hearing on Sept. 22.

Mr. Elmendorf replied: “As you read from the letter, Senator, our judgment is that that piece of the legislation would raise insurance premiums by roughly the amount of the money collected.”

In his letter to the committee, estimating the costs of the legislation that the panel passed last week, Mr. Elmendorf wrote that “premiums in the new insurance exchanges would tend to be higher than the average premiums in the current-law individual market.”

One of the bill’s key provisions would tax medical devices used for home care, hospitals and other health care providers to the tune of $39 billion. Fourteen Democratic senators complained that the tax “could threaten jobs in our states” and reduce access “to lifesaving medical devices for patients.”

Few if any business sectors in the American economy have been more successful than the health care industry in producing jobs, even through much of the two-year economic downturn. The administration and Democratic leaders seem intent on putting a stop to that in the belief that the federal government can run the health care industry better, more fairly and more efficiently than the private sector.

The energy industry is another sector that the administration and the Democrats have in their cap-and-trade regulatory cross hairs.

But Mr. Elmendorf testified last week that the government’s attempts to mandate greenhouse-gas caps and replace fossil-fuel industries with new low-carbon industries would slow the economy and eliminate jobs.

CBO estimates the administration’s House-passed climate-change plan would shrink economic growth by up to 0.75 percent by 2020 and by 3.5 percent in the years to come. Mr. Elmendorf further warned that the plan’s “uncertainties are very large” and will “get larger over time.”

“The net effect of that we think would likely be some decline in employment during the transition because labor markets don’t move that fluidly,” Mr. Elmendorf told the Senate Energy and Natural Resources Committee.

“The fact that [green] jobs turn up somewhere else for some people does not mean there aren’t substantial costs borne by people, communities, firms and affected industries,” he said.

These are just a few of the disturbing economic consequences of the bills being passed by Congress. Brace yourself; free enterprise is in for a bumpy ride.

Donald Lambro is chief political correspondent of The Washington Times.