By Rep. Adrian Smith
This week, as I visited a number of Third District communities, several major economic indicators were published, confirming what we already know: President Biden’s inflation hasn’t ended, and a radical change of direction in Washington’s fiscal policy is needed to remedy an ailing economy.
This week, the U.S. Department of Commerce reported America’s gross domestic product for the first quarter of 2024 grew by a mere 1.6 percent and core inflation—which leaves out the more dynamic fluctuation of food and energy prices—rose by 3.7 percent. As both these numbers came out much less favorable than projections, it’s not surprising small business optimism has reached its lowest level since 2012, according to the National Federation of Independent Business.
To make matters worse, the workforce participation rate remains well below its pre-pandemic level. As discouraged workers have yet to return from the sidelines of the economy, I continue to hear from Third District employers about the difficulty of filling positions for which they are hiring.
Hope for the nation’s economic recovery rests on inflation cooling to 2 percent, which would provide the Federal Reserve with the chance to cut interest rates currently on a 23-year-high. Ominously, Fed Chair Jerome Powell recently said it is taking “longer than expected” to reach this target.
However, the path to making life more affordable for American families and small businesses is not a mystery. Under President Joe Biden, Democrats have added trillions of dollars to our debt through their wasteful Green New Deal, Build Back Better, and “Inflation Act” agenda. To call these spending sprees “sugar highs” for our economy would be generous. They have been disastrous, adding more than $1000 per month to the average Nebraska household costs since January 2021 while earnings failed to keep up.
In contrast to the irresponsible policies coming from the White House, we need a strategy to fight inflation and incentivize steady, robust economic growth. This can only come through a long-term vision which recognizes the diverse economic circumstances for households and businesses across our country, rejects overregulation, and restores of the dignity of work and opportunity to give Americans a path to prosperity.
Contrary to the shortsighted Biden agenda, the 2017 Tax Cuts and Jobs Act (TCJA) grew real wages for American workers, outperformed federal revenue projections, and benefited Americans across the income spectrum. We did this through our efforts to ensure the tax code rewarded farms, ranches, and small businesses who invested in productivity and adding jobs. We also did this by ensuring our tax cuts rewarded working families the most—doubling the guaranteed deduction to ensure the first $24,000 a married couple earns is tax free (now $29,200 thanks to inflation adjustments) and doubling the child tax credit to $2,000 per child to help working parents meet their everyday expenses. A bill we passed out of the Ways and Means Committee and the House at the start of this year, which is currently being held up in the Senate, would index the 2017 version of the child tax credit for inflation while allowing the parents of larger families who work to claim the credit for each child concurrently, rather than consecutively as they are currently required to.
Because of the success of TCJA, Republicans on the Ways and Means Committee announced this week we have formed ten teams to hold listening sessions with American families and job creators and promote both proven and innovative tax policies. I will chair the committee’s Rural America Tax Team, which will meet with rural Americans and produce recommendations for the next generation of tax reform in 2025. I am very glad that Reps. Randy Feenstra, from across the river in Iowa’s 4th District, and Michelle Fischbach, who represents the largest agriculture district in Minnesota will be helping lead the effort as vice-chairs.
Ensuring our tax code reflects the unique challenges facing the wide spectrum of Americans, including those of us in rural communities, can mean the difference between solvency or insolvency for family farms and small businesses. To secure prosperity for the future, we must preserve and build on the gains of TCJA.