Domestic energy production, expanding trade opportunities, and regulatory,immigration and budget reforms, are key areas Washington should focus on this year to speed up U.S. economic growth, U.S. Chamber of Commerce President Thomas Donahue said Thursday
in his annual "State of American Business" address.
The nation's largest business federation is forecasting the U.S. economy will grow 1.5 to 1.75 percent in the first half of the year and gradually accelerate to 2.5 percent by the end of the year. The projected growth rate is about the same as the tepid growth for the first three quarters of 2012, although third quarter Gross Domestic Product grew at an annual rate of 3.1 percent, but would be sufficient to keep the country out of another recession.
Experts say the United States needs much stronger growth to create enough jobs to bring the unemployment rate down from 7.8 percent and put to work the 4.5 million people who still have not found jobs since being laid off during the recession.
"We must get this economy moving faster. Growth of 1.5 or 2 percent is simply not acceptable. It won’t produce the jobs Americans need or the revenues the government must have to reduce trillion dollar deficits," Donahue said. "Congress and the administration must focus their attention on this critical priority. Every bill that is considered, every regulation that is written, every negotiation that is held, everything our elected and appointed officials do or say must be shaped in large part by these simple questions: What does it mean for jobs? What does it mean for growth?"
Donahue noted that the recent legislative deal to avoid the so-called fiscal cliff related to government debt will hit small businesses hard and dampen growth and job creation.
The upcoming deadlines on raising the debt ceiling and automatic spending cuts are creating continued uncertainty for businesses and financial markets.
Slowing the rate of increase in entitlements is the best way to get control of spending that is making the U.S. debt load unsustainable, Donahue said. Reforming the tax code to make U.S. businesses more competitive is a secondary step that would help, he added.
Trade is a major priority of the U.S. chamber. Donahue called for the United States to conclude the Trans-Pacific Partnership Agreement this year, begin talks with the European Union on a trade pact, renew the president's authority to negotiate trade agreements without congressional interference and create policies to attract more foreign direct investment.
Donahue repeated the chamber's complaint that government regulations, especially associated with environmental protections and the new health care law, are choking businesses growth.
He recommended that agencies speed up the permitting process for infrastructure and other projects necessary to support the economy and that Congress pass legislation making regulators more accountable for their rulemakings. He also threatened to step up legal action to block regulations that pose unfair burdens on industry.
"In the difficult environment of divided government, we stand ready to work with both parties and within both parties, with the administration, and with both traditional allies and adversaries, wherever and whenever we can agree. But we will not sugarcoat or shy away from the disagreements that will inevitably arise. We’re going to passionately defend the right of the business community and all Americans to speak freely and participate in the politics and public affairs of our democracy without fear, intimidation, or undue regulation," Donahue said. - Eric Kulisch