Mitt Romney has a solution to America’s unemployment problems. Rather than giving Americans government help when they lose their jobs (help which he says will keep them unemployed), Romney suggests workers pay for their own unemployment insurance. The government, on the other hand, should spend its money spurring companies into making new jobs.
As part of a sharply-worded attack on the Bush tax cut extension compromise published in today’s USA Today, Romney states his case that the extended unemployment insurance contained in the compromise will keep those out of work from looking for new jobs. In its place, Romney suggests “individual unemployment savings accounts over which employees would exercise direct control when they lose their jobs.”
Romney doesn’t detail how the plan would work, but suggests something similar to, say, a health savings account, which employees pay into with their own money and can then draw from tax free when faced with medical costs. Personalized savings account aren’t the only solution Romney offers to solve the unemployment mess.
The other option, he writes, is “putting in place financial incentives for employers to hire and train the long-term unemployed.” Again, Romney doesn’t offer details, but the phrase suggests government spending aimed at companies.
So, to summarize: Romney’s plan to fix unemployment includes workers spending their own money and the government sending checks to companies.
The current system just doesn’t get the job done, Romney writes. Extending unemployment benefits as the tax cut deal prescribes will actually stop out of work workers from seeing gainful employment, he says.
“The indisputable fact is that unemployment benefits, despite a web of regulations, actually serve to discourage some individuals from taking jobs, especially when the benefits extend across years,” Romney writes.
Here’s how Romney would fix the tax cut deal — extend all the Bush cuts permanently, and lose the unemployment benefits part entirely. Fixing the unemployment system will take time, and Romney says it’s a bad idea to keep throwing good deficit spending after bad on the old way of doing things.
“While we cannot rebuild our flawed [unemployment] system overnight, we are surely not required to borrow the funds to pay for it,” Romney writes. “In spending $56.5 billion to extend benefits, the deal is sacrificing the bedrock Republican principle that new expenditures be paid for with offsetting budget cuts.”
Romney’s sticking to his Republican guns on taxes as well. If the Bush cuts aren’t made permanent, he writes, they will have little or no effect on the economy long-term.
“While the tax deal will succeed in temporarily putting more money in the hands of consumers,” he writes, “it will fail to deliver its full potential for creating lasting growth.”
Read the whole op-ed — including Romney’s claim that lowering taxes will actually close the deficit hole — here.