The Senate budget proposal prepared by Sen. Patty Murray (D-WA) calls for raising taxes by more than $975 billion over the next decade. This would cripple the economy and cost hundreds of thousands of jobs, according to a report by The Heritage Foundation’s Center for Data Analysis.

The plan would slow the economy by hiking business and investment taxes, Heritage’s Rea Hederman and John Ligon explain. “The slowdown in business investment and capital in the U.S. economy contributes to a slowdown of $1.4 trillion in real economic output and an average 853,000 U.S. jobs over the 10-year forecast period.” Continue Reading »

Rep. Wally Herger (R–CA) has introduced an important Medicare reform proposal, one that’s very similar to The Heritage Foundation’s Medicare reform outlined in our Saving the American Dream plan.

Medicare reform is long overdue. It has been a decade since any major Medicare reform proposal was introduced to Congress, and Obamacare did little to fix it. And while Heritage continues to push for Obamacare repeal, we also continue to advocate for fixes to strengthen Medicare and other programs.

Heritage expert Rea Herderman explains how Herger’s proposal would work: Continue Reading »

Nearly every American believes in the American Dream. It’s the platform upon which candidates of both parties run their campaigns, and it’s the dream millions of immigrants chase into America.

But the left’s perception of the American Dream directly contrasts with its true meaning.

The Heritage Foundation’s Rich Tucker summarizes the formula for the American Dream: “economic freedom + culture of work = prosperity and opportunity.” Nothing in the liberal conception of the American Dream matches this equation.

Heritage experts David Azerrad and Rea Hederman use a metaphor to illustrate the difference between the liberal vision of entitlement and the conservative view of earned success. Tucker explains: Continue Reading »

The Taxmageddon tax increases are “the equivalent of doubling a family’s grocery store bill for an entire year,” Heritage Foundation economist Rea Hederman said this morning on C-SPAN.

Uncertainty about how Congress will deal with Taxmageddon, the $494 billion tax hike set to go into effect Jan. 1, is already dragging down the economy, Hederman said.

Watch the video below:

Do you think Congress will act to stop Taxmageddon?

Three years ago, the Obama administration predicted that its trillion-dollar “stimulus” program would keep the unemployment rate below eight percent and lead to a thriving economy.

But the March job report from the Bureau of Labor Statistics was a bleak reminder of unrealized dreams. The figures showed an increase in employment, but the new-jobs numbers still fell 80,000 short of expectations. And the unemployment rate remains stubbornly above eight percent.

Heritage Foundation economist Rea Hederman comments on the disappointing report:

While the labor market has continued to improve, the state of the recovery is troubling and disappointing. Many workers simply have not re-entered the labor market, and as a result, the unemployment rate’s decline conceals the overall weakness. While jobs were added in March, job growth was much slower than earlier in the year, which indicates that a truly robust recovery has not yet taken hold.

What do you think? Is the economy recovering?

Click to enlarge.

The U.S. economy added 227,000 jobs in February, according to the Bureau of Labor Statistics. Unemployment remains at 8.3 percent.

Encouragingly, the private-sector saw the biggest growth, with 233,000 new jobs, while government employment decreased by 6,000. The labor force participation also increased by 0.2 percentage points.

Despite this good news, Heritage Foundation economists Rea Hederman and James Sherk report, the economic recovery is still slower than previous recoveries and better policies are needed to allow economic activity to reach its full potential:

In the context of an already good economy, February’s employment figures would be excellent news. In the context of the recovery from the worst recession of the postwar era, they are only encouraging. Certainly, job growth is better than continued stagnation, but the U.S. economy has great underlying resilience. It will eventually recover from a recession. The important questions are how long until that happens and how quickly the economy grows.

Read their full analysis here.

To ensure growth, Hederman and Sherk urge the government to skip the massive tax hikes set to go into effect after December 31. They encourage policymakers to instead enact pro-growth policies by reducing regulations and tax hikes.

Are you confident job growth will continue?

The economy added 243,000 jobs in January, according to the Bureau of Labor Statistics. That’s 108,000 more than the forecast of 135,000.

As a result, the unemployment rate fell from 8.5 percent to 8.3 percent, the lowest level since February 2009.

For the last three months, job creation has averaged 201,000 a month, a sign that a labor market recovery may be truly underway.

Unemployment fell equally for both men and women, and private employers hired 257,000 more people. The service sector alone added 176,000 jobs.

Great news, right?

Unfortunately, this growth comes despite, not because of, the “stimulus” policies Congress has enacted. The two-month payroll tax cut extension didn’t create employment, for example, because employers see the tax change as temporary.

Heritage Foundation economists Rea Hederman and James Sherk point out some disturbing news buried in the jobs report: many people have simply stopped looking for work. Continue Reading »

While the American economy has added jobs over the past few months, there are still far fewer jobs than there could be. Instead of allowing the economy to correct itself, the government remains committed to the same interventionist tactics that caused the recession in the first place.

The Heritage Foundation’s Rea Hederman and James Sherk say that while the increase in jobs should be celebrated, their size indicates that the American economy is holding steady rather than returning to sustainable growth.

“This partly represents good news—the economy appears less likely to slip into a second recession than it did a few months ago,” the pair says. “However, the economy still shows no signs of turning around.”

Sherk and Hederman note that the administration’s policies of “stimulus” spending and economic intervention have contributed to the lack of growth: Continue Reading »

Labor Day means a bit less this year, with 14 million Americans unemployed. While President Obama was preaching to big labor in Detroit on the importance of collective bargaining, millions of Americans were looking for work in an environment where the economy is at a standstill.

It is no surprise that unions are strong allies of the President, whose policies from the stimulus to Obamacare have included privileges for organized labor. Having spent $1.1 billion on politics and lobbying in the last election cycle, unions will continue to hold a prominent seat at the table in 2012.

The labor unions have helped lead to the staggering loss of manufacturing jobs in the United States, and the demands they have made on employers and governments helped create conditions of high unemployment in Detroit and across the country.

In a new report, the Heritage Foundation’s Rea Hederman Jr. and James Sherk explain what it means for a business to unionize:

Continue Reading »

After losing more than 5.5 percent on Monday, followed by huge gains on Tuesday, stocks on Wall Street fell more than four percent on Wednesday. And as goes the market, so goes American confidence.

After a volatile week on Wall Street, a new Gallup poll reports that 77 percent of Americans say the U.S. economy is getting worse. This is up 13 percent since last month and 18 percent since this time last year.

Percentage "Getting Worse" Up Substantially vs. 2010. Source: Gallup

Americans are justifiably concerned. Last month’s employment report shows that the economy is still weak, with just a slight improvement from the previous month’s disastrous report. With unemployment lingering around 9.1 percent,  The Heritage Foundation’s Rea Hederman, Jr. and James Sherk explain in a new analysis that the average duration of unemployment hit a new record, surpassing 40 weeks for the first time ever. And the labor force participation rate (the percentage of working-age persons in an economy who are employed or who are unemployed but looking for a job) is 63.9 percent, the lowest level since 1984.

Americans are justifiably concerned. Last month’s employment report shows that the economy is still weak, with just a slight improvement from the previous month’s disastrous report. With unemployment lingering around 9.1%,  Heritage’s Rea Hederman, Jr. and James Sherk explain in a new paper that the average duration of unemployment hit a new record, surpassing 40 weeks for the first time ever. And the labor force participation rate (the percentage of working-age persons in an economy who are employed or who are unemployed but looking for a job) is 63.9 percent, the lowest level since 1984.

The economy is at risk of falling into a second recession, and the deficit remains on an unsustainable path. As it deals with these problems, Congress should learn from the experiences of other countries. Congress should not attempt to cut the deficit by raising taxes. This often fails while significantly harming the economy.

Anti-deficit measures should instead be comprised largely or exclusively of spending reductions—particularly entitlement spending. The Heritage Foundation’s fiscal plan, “Saving the American Dream,” lays out a framework for Congress to balance the budget by lowering spending and reforming entitlements in ways that assure their survival. History shows that when governments follow such plans, economic growth does not weaken. The government should not do anything to hold the already weak economy back.

Read more of Hederman and Sherk’s paper “Heritage Employment Report: July Jobs Grow Slightly” at Heritage.org. For more solutions to America’s fiscal crisis, visit Savingthedream.org.